A.S. WATSON (HEALTH & BEAUTY UK) LIMITED
GENERAL CONDITIONS OF PURCHASE (the "Conditions")

Definitions

"Affiliated Companies" means any companies which (directly or indirectly) control, are controlled by and/or are under common control with A.S. Watson (Health & Beauty UK) Limited.

"ASW" means A. S. Watson (Health & Beauty UK) Limited and its Affiliated Companies, who wish to make use of these Conditions.

"Contract" means each agreement in any form for the purchase of Goods by ASW.

"Goods" means goods or services.

"Purchase Order" means ASW’s written instruction to supply the Goods, whether placed by formal purchase order, EDI or other written communication.

"Supplier" means a company, firm or person from which ASW is purchasing Goods (the other party to a Contract).

"Code of Conduct" means the BSCI code of conduct for suppliers attached to these Conditions.

"TTA" means the Trading Terms Agreement between the Supplier and ASW (if any).

Applicability

1. 1. These Conditions alone, including the conditions in the Appendix applicable to Suppliers of Private-Label Products and the TTA, shall apply to each Contract (and Purchase Order). The applicability of general and/or other conditions proposed or stipulated by the Supplier in any form, whether written or oral, is hereby expressly rejected.
   2. The Supplier shall at all times comply with the Code of Conduct.
   3. Once a Purchase Order from ASW is accepted by the Supplier (whether expressly or impliedly) a Contract is deemed to have been concluded incorporating these Conditions. If there is no reaction by the Supplier within five working days of the date on which the Purchase Order is placed, the Purchase Order shall be deemed to have been accepted.
   4. No change to these Conditions or the Purchase Order suggested or made by the Supplier shall be binding unless agreed in writing by an authorised signatory of ASW.
   5. Failure by ASW to demand strict compliance with these Conditions shall not be construed as a waiver of any such Conditions and shall not affect the validity of, or ability to enforce any of the provisions thereof.
   6. In the event that any of the provisions of these Conditions become or are found to be invalid or unenforceable, this shall in no way impair or affect any of the other provisions, all of which shall remain in full force and effect.

Price and Payment

2. 1. The price for the Goods shall be as specified in the Purchase Order and shall be inclusive of all transport and insurance charges and any other applicable taxes, duties and levies other than VAT, unless otherwise agreed by ASW and specified on the Purchase Order, and in accordance with the relevant international trade term (Incoterm) if any. No increase in any such price may be made without 90 days’ prior notice and the written consent of ASW.
   2. Payment shall be made in accordance with the payment term stipulated in the TTA (or in the Purchase Order if no TTA), following receipt of the Supplier’s valid invoice (quoting the Purchase Order number) or the receipt of the delivery of the Goods, whichever is the later, except where ASW raises an objection in good faith (whether as to the amount invoiced or the Supplier’s performance or where ASW returns the Goods to the Supplier pursuant to these Conditions).
   3. Payment shall not constitute any recognition by ASW as to the quality of the Goods and shall not absolve the Supplier from liability in this regard.
   4. ASW shall at all times be entitled to set off any amounts owing to the Supplier, whether or not due and payable, against amounts which the Supplier owes to ASW.

Delivery

3. 1. The Supplier shall deliver the Goods to ASW at the location, or locations, stated in the Purchase Order, or otherwise specified by ASW.
   2. The Supplier shall deliver the Goods on the date and time specified in the Purchase Order or otherwise specified by ASW. Time for delivery shall be of the essence, and therefore if the delivery deadline is not met the Supplier shall immediately be in default, without any proof of default being required, and ASW shall be entitled to refuse the Goods and the provisions of Condition 7 shall apply.
   3. The Supplier shall deliver the Goods in accordance with any other logistical conditions specified by ASW from time to time.
   4. Receipt of the Goods or a signature for receipt by ASW shall not constitute recognition of good quality of the Goods received, nor recognition of the accuracy of the quantities stated on the delivery or packing note.

Ownership and Risk

4. 1. Full and unencumbered title to, and risk in, the Goods shall pass to ASW upon delivery, in accordance with the relevant international trade term (Incoterm) stipulated in the Purchase Order (if any), unless payment is made prior to delivery in which event title shall pass on payment.

Conformity and Quality

5. 1. The Supplier hereby warrants to ASW that:
      1. the Goods to be supplied conform in all respects with the specification or description in the Purchase Order or any sample, catalogue or other documentation provided to ASW, are fit for the purpose intended or arising from the nature of the goods, are ‘safe’ and are not ‘defective’ (as defined in the General Product Safety Directive 2001/95/EC and in the Product Liability Directive 85/374/EEC respectively and subsequent rules and regulations);
      2. the Goods to be supplied, including labelling and packaging, and the production processes are of good quality and comply in all respects with all relevant laws, regulations and industry standards in force from time to time, both of country of origin and destination.
   2. ASW shall have the right to assess the Supplier (itself or through an independent auditor) for social compliance with the Code of Conduct and/or technical compliance with Condition 5(i) at Supplier’s cost.
   3. The Supplier further warrants that it has, and shall at all times during the Contract have, adequate product liability insurance in respect of its potential liabilities hereunder, with a reputable insurance company. Copies of relevant insurance policies shall be provided to ASW on request.
   4. If ASW is obliged by law, or otherwise deems it necessary in its reasonable opinion, to take measures to prevent (further) damage in connection with any breach of the warranties in Condition 5(i), for example by launching a product recall, the Supplier shall be liable for all costs, damages, losses and claims incurred and sustained in connection with such measures, including but not limited to advertising costs, recovery and destruction of the Goods. If the Supplier becomes aware of any circumstances which may lead to a recall of Goods due to health, hygiene, safety or other reasons, then the Supplier must notify ASW immediately.

Intellectual Property

6. 1. The Supplier represents and warrants to ASW that (the sale, delivery or use of) the Goods to be supplied, including labelling and packaging, shall not infringe any patent, copyright, trade or service mark, registered and/or unregistered design rights, database rights or other rights which rank on a par with such intellectual property rights ("Intellectual Property Rights").
   2. The Supplier further represents and warrants that the Goods to be supplied are original and have been placed onto the market in the European Economic Area by the trade mark owner or with its consent.
   3. The Supplier shall be liable for, and shall fully and promptly indemnify ASW against, all costs, damages, losses and claims (including but not limited to the purchase price of the Goods, costs for destruction of the Goods and legal fees) which ASW may suffer or incur as a result of any infringement or alleged infringement of such rights or any breach of the warranties in this Condition 6.

Remedies

7. 1. If the Goods do not conform with the requirements in Conditions 3, 5 or 6, or do not in any other respects comply with the Contract, then ASW shall have the right to:
      1. reject the Goods and return them to the Supplier at its cost and shall give the Supplier the opportunity, within a reasonable period specified by ASW, to remedy any defect in the Goods or to supply replacement Goods or take such other action to ensure conformity with the Contract;
      2. if the Supplier fails to make use of the opportunity referred to in a), or if ASW was unable, acting reasonably, to give such opportunity, then ASW shall be entitled to terminate the Contract, and /or carry out any work necessary to bring the Goods into conformity at the Supplier’s expense;
      3. claim damages in compensation for losses (including lost margins) sustained by ASW as a result of any such defect or non-conformity.
   2. Without prejudice to any other right or remedy available to ASW, the Supplier shall fully indemnify ASW and hold harmless against all costs, damages, losses and claims which ASW may suffer or incur as a result of claims by third parties arising from any defect in the Goods; or arising from the Supplier’s breach of the Code of Conduct.
   3. If either party ("defaulting party") is unable to pay its debts as they fall due, or (being an individual or firm) becomes bankrupt, or (being a company) is subject to an administration order or goes into liquidation, or a receiver is appointed of all or any part of its assets, or the defaulting party takes or suffers any other similar action in consequence of debt, or otherwise ceases or threatens to cease to carry on business, or there is a change of control of the defaulting party which may materially impact its ability to perform its obligations, or the other party reasonably apprehends that any of the events mentioned in this Condition is about to occur (and notifies the defaulting party accordingly) then, without affecting any of the other party’s other rights or remedies such other party is entitled to terminate the Contract or suspend any Purchase Order without incurring liability.
   4. The Supplier shall immediately notify ASW if it is unable to deliver on the due date, or to otherwise perform the Contract, by reason of war, fires, floods or any natural disasters, or any other circumstances beyond its reasonable control. In such event, ASW may suspend, modify or cancel the part of the Contract affected.

General

8. 1. The Supplier shall not without the prior written consent of ASW assign the Contract to any third party. If ASW (at its absolute discretion) consents to an assignment of the Supplier’s rights to receive payment under a Contract to a factoring company or other third party, it may require the Supplier and that person to agree to certain conditions.
   2. The Contract will only confer rights and benefits on ASW and the Supplier, and no third party will acquire any rights or benefits under the Contract.
   3. Neither party shall disclose to third parties any details relating to the other party, including prices and sales figures, technical or commercial details or any other confidential information which has been obtained in connection with the Contract, unless such disclosure is required by law or regulatory authority.
   4. These Conditions shall be governed by and construed in accordance with English law, and the parties irrevocably submit to the non-exclusive jurisdiction of the English courts.
   5. ASW shall have the right to amend these Conditions from time to time on giving reasonable written notice to the Supplier.

These Conditions and the other special trading terms (if any) attached hereto set out all the terms relating to the supply of Goods to ASW by the Supplier and supersede all previous agreements, understandings and representations between the parties.

Appendix

Private-Label Products

This Appendix is applicable to Suppliers of Private-Label and Own-Label Products, in addition to the Conditions. In this Appendix "Private-Label Products" means products for which ASW sets out stipulations regarding the composition, design and/or packaging, and/or to which ASW attaches its brand mark, trade name or other distinguishing feature.

Specification

1. 1. The Supplier undertakes that the composition, design, packaging and labeling of the Private-Label Products ("Specification") shall comply with ASW’s instructions, as well as with all applicable legal stipulations.
   2. The Supplier shall provide ASW with a detailed breakdown of the quantity and identity of the ingredients, country of origin of ingredients and details of suppliers of ingredients upon ASW’s request, and any other information requested by ASW regarding the composition of the Private-Label Products, unless restricted from doing so by law or regulatory authority. The Supplier shall also provide samples of the product, design or packaging as requested by ASW, and in any event before delivery.
   3. Modifications to the Specification shall be allowed only after prior written approval by ASW.

Intellectual Property Rights

2. 1. All Intellectual Property Rights, or rights that rank on a par with these, in the Private Label Products and any packaging, drawings, images, templates, samples or other materials (together the "Materials") provided by ASW to the Supplier, or manufactured by the Supplier as commissioned by ASW, belong to ASW.
   2. The Supplier recognises that all current and future Intellectual Property Rights relating to the Materials belong to ASW. In so far as the Intellectual Property Rights have not yet vested in ASW, the Supplier shall hereby transfer these rights to ASW. If these Intellectual Property Rights are not yet transferable, the Supplier shall transfer them as soon as possible and in the interim the Supplier shall grant ASW an exclusive licence to such Intellectual Property Rights.
   3. The Supplier shall not use materials of ASW’s Materials made available by ASW, including ASW’s Intellectual Property Rights and Trademarks (as defined below), for any purpose other than manufacturing the relevant Private-Label Products for supply to ASW, shall not make available any such materials to third parties and shall return them promptly to ASW on request. For the avoidance of doubt, the Supplier shall not produce or supply any products bearing any of ASW’s Trademarks for any other person whatsoever (except for other members of the ASW Group) and shall not produce or supply to any person any products which infringe any of ASW’s Trademarks, or assist any other person to do so. For the purpose of this Clause, "Trademark" means the trademarks, copyrights, trade names, private labels, symbols, logos, design and registered and unregistered design rights owned by ASW or the ASW Group together with such other trademark or trade names as ASW or ASW Group may from time to time register, adopt or use.
   4. The Supplier shall not, without ASW’s prior written approval, offer for sale, sell or supply Private-Label Products to third parties under any circumstances, including if the Private-Label Products do not meet the Specification, are surplus to ASW’s requirements or if ASW has terminated the Contract relating to these products.
   5. For Private-Label Products the composition, design and/or features of which are provided by the Supplier, the Supplier represents and warrants to ASW that (the sale, delivery or use of) the Private-Label Products to be supplied, shall not infringe any Intellectual Property Rights. The Supplier shall be liable for, and shall fully and promptly indemnify ASW against, all costs, damages, losses and claims (including but not limited to the purchase price of the Private-Label Products, costs for their destruction and legal fees) which ASW may suffer or incur as a result of any infringement or alleged infringement of such rights or any breach of the warranties in this Clause 8.

Inspection and checks

3. 1. Supplier must ensure that it complies with ASW’s quality assurance guidelines in force from time to time.
   2. Access to production and distribution facilities shall be given to ASW, or its designated representatives, upon reasonable notice, for inspection of the Private-Label Products during production, processing and/or storage to ensure that they comply with the Product Specification, applicable legal stipulations and the ASW Code of Conduct.
   3. ASW shall be entitled to have checks carried out at least once a year and whenever ASW deems it reasonably necessary, by an independent research institute or other third party accredited body. This inspection shall focus on the Supplier’s production processes and quality assurance management to ensure they meet industry standards and that the Private-Label Products meet all applicable safety and other relevant requirements. The costs of this inspection shall be notified to the Supplier in advance and shall be for the account of the Supplier.
   4. If at any time it appears, or it is reasonably to be expected, that the Private-Label Products do not comply with the Specification, or any other provision of the Contract (including the requirements set out in Clause 5 of the Conditions), ASW shall inform the Supplier of this immediately and the Supplier shall promptly take all necessary measures to ensure that the Private-Label Products meet the requirements, without prejudice to ASW's right to terminate the Contract or to claim compensation.
   5. The Supplier shall carry out its own quality control checks and batch monitoring and shall take product samples from every production batch. Supplier shall retain these samples and all its inspection reports for at least 24 months after production, or if longer, for the period of the shelf-life of the product, and shall make these available to ASW on request.
   6. All Private-Label Products which have a shelf-life, must be delivered to ASW with at least two thirds of their shelf-life remaining.
   7. Supplier is responsible for any registration formalities with local government or other regulatory authority and must provide all relevant documents and samples. The costs of such registration shall be for the account of the Supplier.
   8. Manufacturing locations for the Private-Label Products will be identified and agreed with ASW and may not be altered by the Supplier without prior written approval of ASW.

General

4. 1. In the event that either party receives any complaints in respect of the Private-Label Products or any claims, investigations or enquiries by any enforcement body or authority, it shall immediately notify the other.
   2. The Supplier shall guarantee the exclusivity for the composition and/or design of the Private-Label Products. In this respect, the Supplier shall not produce or supply any products to third parties with the same composition and/or design of the Private-Label Products.
   3. The Supplier acknowledges that any forecasts or projected sales data provided by ASW does not constitute a firm commitment by ASW to order such quantities from the Supplier until Purchase Order is issued.
   4. Notwithstanding Clause 19 above, Supplier is responsible for maintaining a minimum stock cover of finished Private-Label Products, as reasonably specified by ASW from time to time. ASW will not be responsible for any stock or components in excess of such minimum stock cover.
   5. In the event that Supplier intends to terminate production or otherwise cease supply of the Private-Label Products, a minimum of six months notice in writing must be provided to ASW.