Quality Assurance Agreement for Suppliers of Industry/ Operating equipment/Services (QSL)

Quality Assurance Guideline (QSL)

(Quality Assurance Agreement)

Industry/ Operating equipment/Services (Status 12/2011)

between

Robert Bosch GmbH

Robert-Bosch-Platz 1, D-70839 Gerlingen

also in the name of and on behalf of the subsidiaries, in which BOSCH has direct or indirect majority participation, with the exception of subsidiaries with registered office in the

NAFTA region

– Hereinafter called “BOSCH“–

and

>SUPPLIER<

[Address]

– Hereinafter called “SUPPLIER“–

Quality Assurance Agreement for Suppliers of Industry/ Operating equipment/Services (QSL) Preamble

This agreement is an essential part of the delivery agreement with BOSCH and it is binding for the business relationships between the SUPPLIER and the companies of the Bosch Group (all undertakings, in which Bosch has direct or indirect majority participation, with the exception of the companies with registered office in the NAFTA)). This agreement replaces Bosch quality assurance guideline for suppliers (QSL 06/2004- obligatory agreements) agreed till now between Robert Bosch GmbH and the SUPPLIER and in case of discrepancies, it has priority over other individual quality assurance agreements. The subject of the agreement is all products supplied by the SUPPLIER and services (hereinafter called products).

1 Management systems of the supplier

The SUPPLIER is obliged to introduce and maintain a quality management system at least as per ISO 9001. This includes the obligation on zero-defect target and the continuous improvement of his performances. The compliance with branch- and material field-specific requirements (such as VDA 6.2, CMMI, ISO 17025) should be proven additionally if applicable.

2 Management systems of the sub-suppliers

If, for manufacturing or quality assurance of the products, the SUPPLIER procures production or test equipment, software, services, material or other pre-supply from sub-suppliers, then he will incorporate them in his quality management system or will himself ensure the quality of the pre-supplies with suitable measures.

3 Audit

The SUPPLIER allows BOSCH, to ascertain through audits, whether his quality assurance measures meet the requirements of BOSCH. After prior information, an audit can be held as system, process or product audit. If necessary, the SUPPLIER will facilitate requests for dates at short notice. The SUPPLIER grants on BOSCH and – if required – its customers access to all production units, testing centers, warehouses and adjacent areas as well as quality-relevant documents for inspection. Thereby, necessary and appropriate restrictions of the SUPPLIER are accepted to maintain confidentiality. BOSCH will inform the SUPPLIER about the result of these audits. If measures are required from BOSCH’s point of view, the SUPPLIER is obliged to formulate a plan of action immediately, implement it on time and inform BOSCH about this.

If the SUPPLIER or the sub-supplier has justified objections against the participation of BOSCH and its customers in an audit, then BOSCH is ready to get the audit done on SUPPLIER’s costs through a neutral party, which represents the interests of BOSCH and its customers.

Quality Assurance Agreement for Suppliers of Industry/ Operating equipment/Services (QSL) 4 Information and Documentation

If it is known that concluded agreements such as quality features, dates, delivery quantities cannot be complied with, the SUPPLIER informs BOSCH about this immediately. The SUPPLIER will also inform BOSCH immediately about all deviations detected after delivery. In the interest of a quick solution, the SUPPLIER will submit all required data and facts.

The SUPPLIER is obliged to duly inform BOSCH prior to

• changes in production methods, installations, procedures and materials (even at sub-suppliers)

• changing the sub-supplier

• changes in testing method/ testing equipment

• shifting or setting up production locations

• shifting or setting up production equipment at the location

so that BOSCH can check whether the planned changes may have a disadvantageous effect. There will be no obligation to inform in case of non-Bosch-specific catalog goods or if the SUPPLIER, after careful checking, considers such effects as impossible. The SUPPLIER will manage the implementation of the quality assurance measures, maintain especially the measured values and test results and record and preserve these records and possible samples of the products in an orderly manner. The archiving duration starting with the last delivery of all contract- and product-relevant documents and records is at least 7 years. The documents and records must be preserved and disposed in such a way that they are not accessible to third parties. The SUPPLIER will allow BOSCH, on request, to inspect the records and hand over the samples. The SUPPLIER will control all data and documents (including external documents like standards and customer drawings) in process instructions and implement them effectively.

5 Agreements on product and process

The products must conform to the agreed properties or the ones assured by the SUPPLIER (e.g. specifications, data sheets, drawings, sample). The SUPPLIER will immediately check whether a description submitted by BOSCH (e.g. specification, requirement specifications, data sheets, drawings) is apparently defective, unclear, incomplete or deviating from a possibly agreed sample. If the SUPPLIER finds out that this is the case, then he will inform BOSCH in writing just before starting the production process or carrying out the service. The SUPPLIER will also point out risks and possibilities of improvement to Bosch immediately.

5.1 Development, planning, release

If the order to the SUPPLIER includes development tasks, then the requirements are stipulated by the contractual partners in writing, e.g. in the form of a requirement specification. The SUPPLIER is obliged to operate project management already in the planning phase of products, processes and other inter-divisional tasks and allow BOSCH to inspect on request.

Quality Assurance Agreement for Suppliers of Industry/ Operating equipment/Services (QSL) The SUPPLIER does a process planning (work plans, test plans, production facilities, tools, machines etc.). The SUPPLIER ensures suitability of the production equipment and installations for providing the service. If initial samples are ordered by BOSCH, then the SUPPLIER will submit, prior to start of the series delivery, initial samples of the product, manufactured under series conditions, within the agreed scope and on time. The sampling should be done as per BOSCH-specific sampling requirements and documented so that it can be traced.

5.2 Production, marking of products, traceability

In case of problems in process and quality deviations, the SUPPLIER analyzes the causes, initiates actions for improvement and checks their effectiveness. If the SUPPLIER, in exceptional cases, cannot deliver products as per specification, then he must obtain special approval from BOSCH prior to delivery. Hints and suggestions from BOSCH for improving the quality of the products by changes in production process and in the quality assurance will be considered by the SUPPLIER within the scope of his possibilities in his own responsibility. The SUPPLIER is obliged to take up marking of products, parts and the packaging as per the agreements concluded with BOSCH. He must ensure that the marking of the packed products is legible even during transportation and storage. The SUPPLIER is obliged to ensure traceability of the products delivered by him and, if a fault is found, the traceability and the localization of the defective parts/products/batches etc. As long as BOSCH provides production and testing equipment, especially equipment and installations within the scope of purchase of supplies to the SUPPLIER, they should be marked as property of BOSCH. The SUPPLIER is responsible for intactness and proper function and initiates maintenance and repair.

5.3 Delivery, incoming inspection of goods

The SUPPLIER supplies the products in suitable and - if agreed upon - exclusively in modes of transport approved by BOSCH to avoid damages and quality reductions (e.g. contamination, corrosion, chemical reactions). The incoming goods inspection at BOSCH is limited mainly to externally noticeable transport damages and to finding the correctness of quantity and identity of the ordered products at least with the help of delivery papers. Complaints found here will be reported immediately. Defects, which were not found, will be informed to the SUPPLIER immediately as soon as they are found as per the data of a proper course of business. The SUPPLIER abstains from objecting to the delayed notification of defects to that extent.

The SUPPLIER is obliged to align his quality management system and his quality assurance measures to this reduced goods incoming inspection.

Quality Assurance Agreement for Suppliers of Industry/ Operating equipment/Services (QSL) 5.4 Complaints, measures

If defects are found by BOSCH, the SUPPLIER will immediately conduct a fault analysis, in which BOSCH will provide appropriate support, if required. The SUPPLIER will receive back the products with defects in the agreed scope. He is obliged to analyze every deviation and inform BOSCH at the earliest about the cause of the deviation, the initiated defect remedial measures as well as about the preventive measures and their effectiveness. The complaint should be processed as per the 8D method. If BOSCH or its customers face the risk of production shutdowns due to delivery of products, which do not conform to the specification, then the SUPPLIER in coordination with BOSCH must strive for remedy through suitable immediate measures to be taken by the supplier (substitute supplies, sorting, rework, special shifts, express transportation etc.). The liability of the SUPPLIER due to defective delivery or due to delayed delivery remains untouched by the above regulations. If the SUPPLIER does not succeed in re-establishing the agreed quality level within the agreed period, BOSCH can employ an external service provider at the cost of the SUPPLIER.

6 Environmental protection / health and safety, social responsibility

The SUPPLIER is obliged to adhere to all legal regulations on the environmental protection and to keep the effects on human beings and environment to a minimum through appropriate environmental protective organization and appropriate environmental protection by the management. For this, the introduction and further development of an environmental management system (EMS) as per e.g. ISO 14001 is expected. Part of any delivery contract is the Bosch Standard N 2580 “Prohibition and Declaration of Substances “ (Website: www.bosch.com). The SUPPLIER will follow along with the purchasing conditions of BOSCH the principles of the Global Compact Initiative of the UN. If the SUPPLIER performs work in the premises of BOSCH, then he will follow the appropriate, valid safety and accident preventive regulations of BOSCH and consider arrangements of BOSCH on the behavior in the company premises.

7 Contract duration, notice of termination

This agreement is for an unlimited period. It can be terminated in writing with a period of six months for the year end. The effectiveness of conclusions under this quality assurance agreement remains untouched i.e. the regulations of the quality assurance agreement continue to be valid for such conclusions till the end of the respective period.

The termination for important reason remains untouched.

If important terms of this agreement are violated by the SUPPLIER, BOSCH, in an extraordinary measure, can terminate the existing delivery contracts, after unsuccessful warning, without giving notice. In this case of termination, the SUPPLIER is not entitled to any compensation claims against BOSCH.

Quality Assurance Agreement for Suppliers of Industry/ Operating equipment/Services (QSL) 8 Final clauses

Changes and supplements for this quality assurance agreement including this paragraph number 8 need written form.

If provisions of this quality assurance agreement become wholly or partly ineffective, the effectiveness of the remaining provisions is not touched; in this case the contractual partners will agree upon an effective provision, which comes closest to the economic purpose of the ineffective provision. This applies to any potential loopholes. This agreement is subject to German law with the exclusion of the conflict of laws and the UN Convention on Contracts for the International Sale of Goods (CISG). The jurisdiction for contractual disputes is Stuttgart, if all disputing parties have their registered office in Germany. In this case, the district court Stuttgart (70190 Stuttgart) is competent for proceedings at the district courts. In all other cases, the contractual disputes are decided finally as per the order of the court of arbitration of the International Chamber of Commerce by one or more arbitrators nominated as per this order. Place of arbitration is Zurich, Switzerland unless otherwise agreed by the disputing parties. The language of the arbitration procedure is English. The disputing parties will handle all information confidentially, which they receive as regards the arbitration procedure as per this provision, including the existence of an arbitration procedure. In court and/or arbitration proceedings they will reveal such information only to the extent it is required for comprehending their rights. The chairman or the individual arbitrator must have a nationality, which is different from that of the disputing parties. Unless otherwise decided by the court of arbitration, the disputing partners continue to abide by the contracts concerned with the dispute.

Place………………….., dated……… Place………………….., dated………

………………………………………… ………………………………………..... Robert Bosch GmbH SUPPLIER Company stamp