Quality Agreement

QS036en

QS036en/20.06.2012

Quality Agreement

By and between

FTE automotive GmbH

Andreas Humann Str. 2
96106 Ebern
Germany

hereinafter FTE

and

Indo-US MIM Tec Pvt. Ltd.

# 45 (P), KIADB Industrial Area, Hoskote
Bangalore 562114
India

hereinafter Supplier

QA011/0402.2003

the following is agreed:

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FTE automotive GmbH Postfach 1180 D-96104 Ebern Telephone 09531/81-0 Telefax 09531/813711
All rights reserved. Circulation or reproduction without express written approval is prohibited.

Quality Agreement

QS036en

QS036en/20.06.2012

1.

Introduction/Scope
Products of the FTE automotive Group are primarily used for the automotive industry and thus have to
comply with highest requirement standards (also considering the possible severe loss consequences
notably resulting from production stops, warranty cost, product liability cases and recalls). This
requires correspondingly high quality, competitiveness as to prices and delivery reliability regarding
Suppliers manufactured and / or delivered samples, initial samples, series production parts,
production materials (including raw materials and starting materials), and, where applicable, also
regarding tools and equipment, as well as any other services (collectively also the Supply or the
Supplies).
The FTE automotive Group companies, in addition, are aiming at concentrating on few, strategically
important suppliers in future.
To this end and for an intensive and close technical and logistical cooperation between FTE including
the FTE automotive Group companies that are hereby represented by FTE and listed below
(collectively also FTE) and Supplier, the following quality agreement is entered into.
The terms and conditions agreed in this Quality Agreement (hereinafter this Agreement) shall
automatically be applicable to and form an integral part of any Supply related master agreements,
supply agreements, tooling agreements, purchase orders, contracts or other agreements (collectively
also the Individual Agreement) between Supplier and the respective companies of the FTE
automotive Group. The following are the companies of the FTE automotive Group:
FTE automotive GmbH
Andreas - Humann -Strae 2
96106 Ebern, Germany

FTE automotive Slovakia s.r.o.

Vrobno-logistick arel IPEC Poin
Mal ari 486
08001 Presov, Slovak Republic

FTE automotive systems

Pascalstrae 1
96106 Ebern / Fischbach, Germany

FTE automotive (Taicang) Co.Ltd.

No.105 East Shanghai Road
Taicang Economic Development Zone,
Taicang
Jiang Su Province, 215400, China

FTE automotive Mve GmbH

Zu den Katzentreppen 7
99974 Mhlhausen, Germany

FTE automotive Czechia s.r.o.

Hlubany 124
44101 Podboany, Czech Republic

All companies in future being affiliated to FTE

automotive GmbH in the sense of section 15 AktG
(German Stock Corporation Act), for the respective
company structure refer to the FTE website
www.fte.de (unless otherwise specifically agreed to,
FTE companies in North and South America are not
covered by this Agreement).
Supplier shall not be entitled to deduce any claim relating to the supply of parts to FTE from the
conclusion of this Agreement.
This Agreement shall also apply to Suppliers affiliated or associated companies (Supplier
Companies) that are rendering Supplies to FTE pursuant to the terms of respective master
agreements or Individual Agreements.
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FTE automotive GmbH Postfach 1180 D-96104 Ebern Telephone 09531/81-0 Telefax 09531/813711
All rights reserved. Circulation or reproduction without express written approval is prohibited.

Quality Agreement

QS036en

QS036en/20.06.2012

2.

Duties of the Supplier

Supplier shall be fully responsible for the quality of its Supplies and services for FTE, including
materials and services of its own suppliers. In this respect, Supplier shall at least comply with the
characteristics agreed to in the technical documentation (refer to Section 3). Compliance with the
provisions of this Quality Agreement, however, shall not relieve and exempt Supplier from further or
additional statutory or contractual responsibilities for its Supplies and services.
Supplier shall ensure that he applies and permanently enhances an efficient quality assurance
system, complying with the latest state of-science and technology, such quality assurance system at
any time assuring a permanently high quality for Supplies to FTE and aiming at continued
improvement of the criteria of quality, price and service. Thus, Supplier shall be committed to the zerodefect - target. If the parties agree on ppm levels, such levels qualify as threshold levels that are
permitted on a timely limited basis only. The compliance with or remaining below such ppm levels
shall neither relieve and exempt Supplier from its obligation to handle any and all complaints, nor
relieve and exempt Supplier from its obligation for continuous improvement. Likewise, the compliance
with or remaining below such threshold levels shall neither relieve and exempt Supplier nor affect
Suppliers warranty and liability for defects and for claims for damages or recourse of FTE due to
Suppliers defective Supplies or services.
In the scope of the contract review, Supplier shall perform a producibility analysis. To this end,
Supplier shall upon receipt review any and all technical documentation, including but not limited to
specifications, requirement specifications, drawings, parts lists or CAD drawings, with regard to
completeness, clarity, faults, mistakes and feasibility and shall notify FTE promptly of any and all
identified defects and risks, as well as of any potential improvement. All of Suppliers respective offers
include (whether separately accounted for or not) all cost and expenses for the avoidance of defects.
Any and all cost and expenses for subsequent corrective actions for reaching the specified
requirements of the Supplies shall be borne by Supplier.
Unless otherwise agreed, the parties agree that weighted characteristics stated on the drawing shall
constitute guaranteed quality and guaranteed data respectively.
Supplier shall implement and maintain a system for the advanced planning of product quality for any
and all FTE parts and components.
Supplier covenants to ensure the traceability of its parts and components down to the starting
materials (also by inclusion of the parts and components of its suppliers). To this end, Supplier shall
ensure that on the occurrence of defects it is possible to trace, localise and narrow any and all
defective parts and components of Supplier and its suppliers as close as possible.
Supplier shall maintain a reasonable product liability and recall insurance cover covering the risks
from producer and product liability (collectively Product Liability) and from recall-, field action- or
service campaigns (collectively Recall) with a minimum coverage of 5 million for each Product
Liability and Recall and covering both Supplier and its Supplier Companies. Supplier shall thereby
take into account that FTE products will be directly or indirectly installed in vehicles that are operated
in all countries of the world. Supplier shall evidence the respective insurance coverage upon FTEs
request at any time.
Any and all materials, parts and components used for the manufacture of the Supplies must not
exceed the threshold values specified in the attached FTE-TL 033, or, if so, must not be used. In
addition, Appendix TL 042 relating to technical cleanliness shall apply to Suppliers Supplies.

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FTE automotive GmbH Postfach 1180 D-96104 Ebern Telephone 09531/81-0 Telefax 09531/813711
All rights reserved. Circulation or reproduction without express written approval is prohibited.

Quality Agreement

QS036en

QS036en/20.06.2012

3.

Technical Documents
The quality characteristics of Supplies for FTE that are to be complied with by Supplier are recorded in
technical documents; the parties agree that these documents shall form part of the respective
contractual agreements between FTE and Supplier. Technical documents in this sense include, but
shall not be limited to drawings (including CAD drawings), technical terms of delivery, specifications
and requirements specifications, as well as any other regulations and standards referred to in any of
the foregoing. In addition, and even without respective agreement, as a minimum standard any
generally applicable state of science and technology standards and regulations, and in case of
Suppliers own development and design any respective Suppliers documentation relating to the
relevant part, as approved and released by FTE, shall also form part of these mandatory technical
documents; however, no releases or approvals by FTE shall relieve and exempt Supplier from its
responsibility to supply products without any defects.
Based on such technical documents, Supplier shall prepare internal production drawings, production
and test plans, technical specifications, FMEAs, as well as instructions in the required scope. In the
sense of preventive quality planning, Supplier shall also comply with the provisions of Section 2,
paragraph 3 of this Quality Agreement.
Supplier shall assure that all parts and components are always manufactured and tested in
accordance with the available and most recently agreed and FTE-released technical documents.

4. Testing, Submission and Release of Series Samples

In this respect, Appendix TL 007 shall apply.
Supplier, in addition, undertakes to enable an initial sample acceptance by FTE and FTEs customers
at Suppliers site. This shall include the monitoring of a one days production prior to the start of the
series production. After having consulted with FTE, this can be done, monitored and evaluated by
Supplier. In such case, Supplier shall manufacture such number of parts as required by FTE.
FTE shall under no legal theory be obliged to Supplier to undertake any initial sample acceptance
procedures or to test, verify or check in the course of such initial sample acceptance procedures
certain characteristics or functions of the Suppliers initial samples. In addition, FTE shall be entitled to
accept series deliveries based on approvals of samples that are not initial samples.

5.

Quality Assurance System

On entering into each relevant Individual Agreement, Supplier undertakes to do anything possible in
accordance with the respective state of science and technology for Suppliers Supplies being free
from defects, for their compliance with the contractual agreements and for the Supplies being
continuously improved. Supplier shall assure this by its quality assurance system that at least satisfies
the applicable standards of DIN EN ISO 9000 et seqq. Supplier shall aim at the introduction of the
requirements according to ISO TS 16949 in any of its most recent revisions. In particular, Suppliers
quality management shall ensure that

at least a quality assurance system complying with ISO 9000 et seqq. and including the obligation
of the zero-defect target and continuous improvement exists and is maintained by Suppliers
subsuppliers important for the Supplies of raw materials, products and services to FTE. The

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FTE automotive GmbH Postfach 1180 D-96104 Ebern Telephone 09531/81-0 Telefax 09531/813711
All rights reserved. Circulation or reproduction without express written approval is prohibited.

Quality Agreement

QS036en

QS036en/20.06.2012

quality management systems of Suppliers suppliers also comply with the requirements according
to ISO TS 16949 and ISO 14001, both in any of their most recent revisions. FTE may require
respective evidence from Supplier that Supplier has satisfied itself of the efficiency of such quality
assurance systems. In the event of quality problems, Supplier shall procure for FTE the
opportunity to perform an audit at Suppliers supplier.
-

raw materials, products and services procured by Supplier shall only be finished, processed or
installed upon establishment of their suitability and compliance with the technical documents;

satisfactory machine and process capabilities according to VDA Part 4 Qualittskontrolle in der
Automobilindustrie Sicherung der Qualitt vor Serieneinsatz (most recent version) exists for all
production processes and machines involved in the manufacture of the Supplies for FTE.

Suitable processes shall be applied by Supplier for ensuring the quality. This includes, but is not
limited to:
-

Test planning;

Failure Mode and Effect Analysis (process FMEA) and for Suppliers own designs (design FMEA)
according to TL 036 (Appendix).

Statistic Process Control (SPC) and Simple Process Control (EPR) for all weighted characteristics
according to TL 036 (Appendix).
These processes are subjected to the standards acknowledged by the automotive industry, e.g.
Q-DAS or FORD. In particular, Supplier shall observe and comply without undue delay with the
following:
On an occurrence of systematic influences, the causes shall be analysed and relevant
remedial actions shall be initiated and documented;
Normal distribution test, and a further process analysis is required in case of not normally
distributed processes;

Establishing of the process and machine capability factors: Refer to TL 036, Matrix
(Appendix).
Any and all tests shall be designed according to the degree of the process capability reached, the
significance of the respective quality characteristics and the possible consequences of defects, and
shall be fully documented in test plans.
The test equipment listed in the test plans shall be designed in terms of kind and scope in a way that
all agreed quality characteristics can be tested. The test equipment shall be monitored in fixed
intervals so as to ensure its compliance with the dimensional accuracy. Capability of the test
equipment applied shall be evidenced by an analysis of the measuring system. On monitoring the test
equipment, traceability to the relevant standard must be assured.

6. Compliance, Management System for Environment and Occupational Safety

FTE is aware of its responsibility towards employees and environment. The establishment of a
management system relating to environmental protection and to occupational safety, the obligation to
compliance with any and all pertinent laws and regulations, as well as good cooperation with
governmental agencies and the public form part of the FTE automotive Group objectives.
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FTE automotive GmbH Postfach 1180 D-96104 Ebern Telephone 09531/81-0 Telefax 09531/813711
All rights reserved. Circulation or reproduction without express written approval is prohibited.

Quality Agreement

QS036en

QS036en/20.06.2012

In order to accomplish these objectives in a systematic manner, it is necessary to actively involve also
the Suppliers especially in the environmental protection and occupational safety. All FTE suppliers
shall therefore aim at an environmental management system according to ISO 14001 and an
occupational safety management system according to OHSAS 18001.
To this end, Supplier submitted to FTE a true and correct self-disclosure on environmental
management (refer to form QQ181, Appendix).
7. Quality Deviation
As a matter of principle, Supplier shall only deliver to FTE such Supplies that do not deviate from the
agreed requirements (including the technical documentation stated in Section 3) and specifications. In
the scope of a documented deviation procedure, Supplies deviating from the required quality shall
only be delivered or rendered respectively, upon FTE having approved the same in writing. Such
Supplies, as well as any delivery documents shall be conspicuously and unambiguously marked with
a note referring to the approval of deviation issued by FTE. No approvals of deviation by FTE shall
relieve and exempt Supplier from Suppliers responsibility for defect-free supply parts and also in this
respect, Supplier herewith waives any statutory or other objections regarding the purchase or
acceptance of defective supply parts in knowledge of defects.

8. Conservation and EDPM Rubber Compatibility, Packaging, Transport and Storage

Appendices TL 117 and TL 028 shall apply thereto.

9. Part and Process Changes

Changes to parts must only be made in compliance with changes to the technical documents that have been
expressly and in advance released and approved by FTE in writing. Any and all changes to Suppliers own
designs shall as well require FTEs written approval prior to their implementation. No deviation from the
contractual technical documents shall be permitted without prior written approval. After implementation of any
approved changes, an initial sampling procedure according to Section 4 shall be performed before the next
delivery of series production parts.
Any relocations of production sites and any changes of production flows, as well as means of
production (including replacement tools) shall be notified by Supplier to FTE in writing and require
FTEs prior, explicit and written approval. Any and all changes shall also require an initial sampling
procedure according to Section 4.
No releases or approvals by FTE shall relieve and exempt Supplier from Suppliers responsibility for
defect-free supply parts (also refer to Section 2 paragraph 1).

10. Documentation
Any and all quality-assuring measures (quality assurance system) shall be documented by Supplier in
a manual of quality assurance, or, as the case may be, in supplementary internal
regulations/instructions on quality assurance.
Any and all test protocols and acceptance documents, as well as any and all test documentation
communicated by Supplier shall be stored by and kept on file at Suppliers site at least throughout the
period of series deliveries to FTE, and, with regard to parts or components subject to a documentation
requirement, for 15 years after the last series delivery.
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FTE automotive GmbH Postfach 1180 D-96104 Ebern Telephone 09531/81-0 Telefax 09531/813711
All rights reserved. Circulation or reproduction without express written approval is prohibited.

Quality Agreement

QS036en

QS036en/20.06.2012

Furthermore, any and all results from tests regarding raw materials, parts and services, as well as any
and all results from the monitoring of the test equipment and from approval procedures for deviations
at FTE shall be stored by and kept on file at Suppliers site for at least 15 years after the last series
delivery.
Upon agreement with FTE, Supplier shall submit the certificates and documents according to EN 10204.
With regard to Supplies designed and / or engineered by Supplier or Suppliers suppliers, any and all
additionally existing documents on first trials shall be stored by and kept on file at Suppliers site for
the duration of the series deliveries to FTE, and for 15 years thereafter with regard to parts and
components subject to a documentation requirement.
Any and all documents stored and kept by Supplier shall be submitted at any time to FTE upon FTEs
request.

11. Auditing
FTE and FTEs representatives, as well as FTEs customers if so required for FTE, shall be entitled to
reasonably inform themselves on the manufacturing and quality assurance system of Supplier by
visits announced on good time and to access the production sites, testing sites, storages and adjacent
areas. On the occasion of such audits, Supplier shall be obligated to allow FTEs representatives and
FTEs customers to inspect the following:
-

Suppliers manufacturing processes applied for the production of the FTE parts and components;
Any and all quality assuring measures and organisational units;
The quality assurance manual;
The documentation according to Section 10;
Suppliers management system relating to environmental matters and occupational safety.

With regard to necessary and reasonably protection of business secrets, FTE will respect restrictions
to the right to information.

12. Incoming Goods Inspection at FTE, Complaints

FTEs incoming goods inspection is limited to reasonable sampling of externally recognisable transport
damages and the compliance with the quantity and identity of the parts and components ordered. FTE
shall notify Supplier on any complaints noted thereby maximum 5 working days upon the goods being
received. Supplier shall align its quality management system and measures to this reduced incoming
goods inspection; Supplier in this respect waives any and all statutory or other objections of delayed
inspection or complaint available to Supplier. To the extent, FTE, in the regular course of the
business, identifies defects only later, Supplier shall be notified about them maximum 5 working days
upon discovery. In this respect, Supplier herewith waives as well any and all statutory or other
objections of delayed inspection or complaint available to Supplier.
The following provisions of this Section 12 shall not relieve and exempt Supplier from Suppliers
potential other contractual or statutory liability towards FTE:
If Supplier becomes aware that Supplier is not capable of complying with the agreements, including
but not limited to quality characteristics, delivery deadlines or delivery quantities, then Supplier shall
promptly inform FTE and disclose to FTE any and all data and information to enable an expedited
solution. If Supplier, in exceptional cases, is not capable of supplying supply parts in compliance with
the contractual agreements, then Supplier shall apply for and obtain a special release from FTE prior
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FTE automotive GmbH Postfach 1180 D-96104 Ebern Telephone 09531/81-0 Telefax 09531/813711
All rights reserved. Circulation or reproduction without express written approval is prohibited.

Quality Agreement

QS036en

QS036en/20.06.2012

to any further delivery. FTE shall not be obliged to issue a special release or approval, however, the
issuance of such special release or approval by FTE shall not relieve and exempt Supplier from its
liability and warranty for former or future defective Supplies of parts and components. Also in this
respect, Supplier herewith waives any statutory or other objections regarding the purchase or
acceptance of defective supply parts in knowledge of defects.
If, by the delivery of parts that do not comply with the contractual agreements, any production
stoppages at FTE or FTEs customer threaten to occur, Supplier, after respective agreement with
FTE, shall promptly take suitable remedial actions with cost to be borne by Supplier (e.g. replacement,
sorting, rework, special shifts, express delivery etc).
If Supplier, by complaints or in any other way, learns that Suppliers parts and components may be
defective, Supplier shall analyse such parts and components without undue delay and inform FTE
about the cause of the deviation and remedial and preventive actions initiated, as well as their
efficiency. Supplier, in the scope of Suppliers capability and under Suppliers responsibility, shall take
into due consideration any proposals from FTE regarding the improvement of quality and processes
(also as a consequence of possible audits); to this end, Supplier shall prepare action plans, implement
them in due time and inform FTE thereof respectively.

13. Supplier Rating and Evaluation

All FTE suppliers will be subjected to regular supplier evaluations. This periodic evaluation will be
performed in order to determine the quality of the parts supplied and services rendered and to be able
to assess Suppliers quality management system. Supplier shall make available to FTE any required
information and grant access rights. The results of the assessments shall not relieve and exempt
Supplier from its warranty and/or liability.

14. Term of the Agreement/Termination

This Agreement shall become effective on the date of the last signature and shall remain in effect for
an indefinite period of time. This Agreement may be terminated by either party in proper order by
giving 12 months notice to the end of each calendar year.
FTE shall be entitled to terminate this Agreement extraordinarily at any time with immediate effect if
Supplier stops payments, bill-of-exchange or cheque court actions are pending against Supplier,
liquidation is initiated, an insolvency or similar action on Suppliers assets is applied or (to the extent
permitted by law) opened or refused due to lack of assets.
Each party may terminate this Agreement for good cause and with immediate effect in cases where a
party breaches a material contractual obligation in a way that the other party cannot be reasonably
expected to keep the contract and an appropriate period of grace expires without the breach having
been remedied within such period.
Termination of Individual Agreements shall not affect the further effectiveness of this Agreement. This
Agreement, furthermore, shall remain in effect for Individual Agreements entered into prior to its
termination, also to the extent to which supplies are continued after the termination of this Quality
Agreement. Any and all claims shall continue that by their nature are not affected by the termination of
this Agreement or by any Individual Agreement, this shall in particular apply to Sections 10, 12 and 15
through 19 of this Agreement.
Any termination shall be made in writing.

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FTE automotive GmbH Postfach 1180 D-96104 Ebern Telephone 09531/81-0 Telefax 09531/813711
All rights reserved. Circulation or reproduction without express written approval is prohibited.

Quality Agreement

QS036en

QS036en/20.06.2012

15. Place of Jurisdiction; Applicable Law

Any and all disputes arising out of or in connection with this Agreement or any Supplies subject hereto
shall be finally decided according to the Rules of Arbitration of the International Chamber of
Commerce by one or several arbitrators nominated according to these rules. The place of arbitration
shall be Munich, Germany. The arbitration language shall be English. FTE, however, in FTEs
discretion, shall also be entitled to sue Supplier at Suppliers general place of jurisdiction at ordinary
courts.
This Agreement shall be subject to the laws of the Federal Republic of Germany, by excluding its
conflict of law principles and by including the United Nations Convention on Contracts for the
International Sales of Goods.
16. Other Applicable Documents
Supplier confirms that it is familiar with the following documents that are integral parts of this
Agreement and that Supplier shall comply with the requirements resulting there from.
TL 007 - Initial Sampling of purchased parts
TL 028 - State of packing and delivery of purchased parts
TL 033 - Avoidance of Hazardous Substances for Materials and Components
TL 036 - Identification of Characteristics
TL 042 - Technical Cleanliness of Components, Parts and Subassemblies
TL 117 - Conservation EPDM Rubber compatibility
QQ181 Self-Information on Environnemental Management

17. Written Form, Entire Agreement

Any amendments and supplements to this Agreement, including this written form requirement, shall
require the written form. This Agreement and including all other applicable documents shall be the
entire agreement between the parties related to the purpose of this Agreement and shall replace any
prior commercial offers, negotiations or agreements related to the purpose of this Agreement, except
for agreed technical documents and procedures and except for the technical documents and
characteristics referred to in Section 3 hereof.

18. Severability
Should any of the provisions of this Agreement be or become invalid or void, the validity of the other
provisions shall not be affected. The parties shall then replace the invalid provision by a valid
provision coming as close as possible to the purpose of the invalid provision. The same shall apply to
the filling of contractual gaps.

19. Negotiated Contract

FTE and Supplier worded or changed respectively any and all clauses of this Agreement after
thorough discussions on any problems that may occur. Any and all clauses of this Agreement have
therefore been negotiated within the meaning of 305 paragraph 1 sentence 3 BGB (German Civil
Code) that makes this Agreement a negotiated and individual contract.

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FTE automotive GmbH Postfach 1180 D-96104 Ebern Telephone 09531/81-0 Telefax 09531/813711
All rights reserved. Circulation or reproduction without express written approval is prohibited.

Quality Agreement

QS036en

QS036en/20.06.2012

Ebern, this 26.03.2013

FTE automotive GmbH

Indo-US MIM Tec Pvt. Ltd.

i.V. Gabriele Beyer-Wenzel

Head of Supplier Quality

i.A. Sandra Burkard

Commodity Purchasing

i.A. Bernhard Kurz

Advanced Purchasing

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FTE automotive GmbH Postfach 1180 D-96104 Ebern Telephone 09531/81-0 Telefax 09531/813711
All rights reserved. Circulation or reproduction without express written approval is prohibited.