General Terms and Conditions of Sales

AQUA DYNAMICS (PVT) LIMITED

Effective Date: 1 January 2026           Document Reference: GT-SALES-2026-FINAL

NOTICE: All sales transactions between Aqua Dynamics (Pvt) Limited (hereinafter, the “Seller” or “Company”) and its international business customers (hereinafter, the “Buyer” or “Customer”) are exclusively governed by these General Terms and Conditions of Sales (the “Terms”). These Terms supersede all prior agreements, oral or written, related to the subject matter hereof.

ARTICLE 1: SCOPE, APPLICABILITY, AND DEFINITIONS

1.1. Governing Document: These Terms shall constitute an integral, non-severable part of every sales contract executed between the Seller and the Buyer for the supply of Goods.

1.2. Precedence: These Terms shall prevail over and supersede any conflicting, contrary, or additional terms and conditions contained in any Purchase Order, confirmation, or other document issued by the Buyer, unless such deviation is expressly agreed to in a separate, written instrument executed by an authorized Director of the Seller.

1.3. Scope: These Terms shall apply to all present and future transactions, including, without limitation, initial orders, follow-up orders, schedule expansions, and quantity modifications.

1.4. Definitions:

ARTICLE 2: CONTRACT FORMATION

2.1. Offer and Acceptance: A legally binding contract for the sale and purchase of Goods is formed only upon the issuance of a written Order Confirmation by the Seller in response to a Purchase Order or written request for production submitted by the Buyer.

2.2. Non-Binding Quotations: All quotations issued by the Seller are invitations to treat only and are non-binding. Quotations are subject to change without notice until an Order Confirmation is issued.

2.3. Right of Refusal: The Seller reserves the absolute, unfettered right to reject any Purchase Order or modify the terms thereof at its sole discretion prior to issuing an Order Confirmation.

2.4. Electronic Signatures: Documents transmitted electronically shall constitute valid and enforceable agreements between the Parties.

ARTICLE 3: DELIVERY, RISK, AND STOCKHOLDING

3.1. Delivery Basis (Incoterms): All deliveries shall be executed strictly in accordance with Incoterms® 2020. Notwithstanding any prior arrangement, all shipments shall be made exclusively Ex Works (EXW) from the Seller’s manufacturing facility in Sri Lanka.

3.1.1. Seller-Arranged Shipments and Alternative Incoterms: Notwithstanding the default Ex Works (EXW) basis stated in Clause 3.1, where a Buyer expressly requests the Seller to organize transportation, the Seller may, at its sole discretion, accommodate alternative Incoterms® 2020 arrangements (including but not limited to FCA, CPT, CIP, DAP, DDP, or any other mutually agreed term). In such cases, all associated costs including but not limited to freight, insurance, customs brokerage, duties, port handling, documentation, and any ancillary charges shall be fully borne by the Buyer and added to the commercial invoice. The Seller’s arrangement of shipment on the Buyer’s behalf shall not be construed as a transfer of risk prior to the point stipulated under the applicable agreed Incoterm, nor shall it impose any additional liability upon the Seller in respect of the transportation.

3.1.2 Administration charge: An administration charge of USD 15.00 shall be applied to all shipments where the total invoice value is below USD 5,000.00, respectively 15.00 EUR for shipments below a value of 5,000.00 EUR. This charge covers the Seller’s internal logistics coordination, documentation processing, and administrative overhead.

3.2. Transfer of Risk: Risk of loss or damage to the Goods shall irrevocably transfer to the Buyer upon the handover of the Goods to the carrier or freight forwarder, irrespective of whether the carrier was nominated by the Buyer or arranged by the Seller acting as the Buyer’s agent.

3.3. Buyer’s Responsibility: The Buyer shall be solely responsible for all freight costs, transportation arrangements, insurance coverage, customs clearance, duties, taxes, and import compliance requirements.

3.4. Collection Period: The Buyer shall collect or arrange for the collection of Goods within fourteen (14) calendar days from the date of manufacturing.

3.5. Extended Storage and Stockholding Costs

3.5.1. Risk of Storage: Goods not collected by the Collection Date shall be held at the Buyer’s sole risk and cost. The Seller disclaims all liability for deterioration or loss arising from storage conditions after the Collection Date.

3.5.2. Escalating Charges: Where Goods remain uncollected or unpaid beyond fifteen (15) days from the manufacturing date, escalating stockholding and administrative charges shall apply:

* Weeks 3-4 (Days 15-30): No additional charges (Grace Period).

* Week 5-8 (Days 31-60):  5 USD per product.

* Week 8 onwards: 10 USD per product per started month.

3.5.3. Right to Dispose: If the Goods remain unpaid and uncollected beyond hundred eighty (180) days, the Seller reserves the right to dispose of, destroy, or resell the Goods without liability to the Buyer, applying any proceeds first to outstanding invoices, storage costs, and disposal charges, with the Buyer remaining liable for any resulting shortfall.

ARTICLE 4: PRICES AND PAYMENT TERMS

4.1. Pricing: All prices are quoted net of all taxes, duties, levies, and shipping charges, unless explicitly stated in the quotation.

4.2. Default Payment Requirement: Unless otherwise explicitly agreed in writing, the default payment term is full advance payment prior to shipment.

4.3. Customer Category-Specific Payment Terms

4.3.1. New Customers: The Seller may require an advance payment before production start equivalent to 50% to 100% of the total order value, at the Seller’s sole discretion, particularly for Buyers without an established, satisfactory credit history.

4.3.2. Established Customers: Notwithstanding any prior credit terms, the Seller reserves the right to revoke, reduce, or modify credit terms immediately based on the Buyer’s payment performance or credit risk assessment.

4.4. Late Payment and Interest: Any amounts remaining unpaid after the due date shall bear interest at a rate of eight percent (8%) per annum above the prevailing policy rate of the Central Bank of Sri Lanka, calculated daily from the due date until full payment is received. This is without prejudice to any other rights or remedies available to the Seller.

4.5. Precedence of Documents: In the event of a conflict between contractual documents, the order of precedence shall be: (i) Special Customer Agreement (if executed); (ii) Order Confirmation; (iii) These General Terms of Sale; and (iv) the Purchase Order.

ARTICLE 5: RETENTION OF TITLE (R.O.T.)

5.1. Reservation of Ownership: Notwithstanding delivery of the Goods and transfer of risk, legal and equitable title to the Goods shall remain vested in the Seller until such time as the Seller has received full and unconditional payment for the Goods and all other amounts due from the Buyer.

5.2. Status as Bailee: Until full payment, the Buyer shall hold the Goods as a fiduciary bailee for the Seller, storing them separately and marking them clearly as the Seller’s property.

5.3. Right to Reclaim and Resell: Upon any payment default by the Buyer, the Seller shall have the unconditional right to enter the Buyer’s premises to repossess and resell any unpaid Goods.

ARTICLE 6: WARRANTY AND CLAIMS

6.1. Limited Warranty: The Seller warrants that the Goods shall be free from material and manufacturing defects for a period of one (1) year from the date of manufacture.

6.2. Exclusive Remedy: In the event of a valid warranty claim, the Seller’s sole and exclusive liability shall be, at the Seller’s option, to either:

(i) repair or replace the defective Goods; or

(ii) issue a credit note for the purchase price of the defective Goods.

6.3. Warranty Exclusions: The warranty is voided and does not extend to defects or failures arising from: misuse, improper handling, or negligence by the Buyer; materials supplied or specified by the Buyer; normal wear and tear; or unauthorized modifications or repairs.

ARTICLE 7: LIMITATION OF LIABILITY AND INDEMNITY

7.1. Exclusion of Damages: In no event shall the Seller be liable to the Buyer for any indirect, incidental, special, consequential, punitive, or exemplary damages, including, but not limited to, loss of profits, loss of revenue, loss of goodwill, or loss of business opportunity, howsoever arising, even if the Seller has been advised of the possibility of such damages.

7.2. Maximum Liability: The Seller’s aggregate liability arising out of or related to these Terms or any Purchase Order shall not exceed the total price paid by the Buyer for the specific Goods giving rise to the claim.

7.3. Force Majeure: The Seller shall not be liable for any failure or delay in performance due to causes beyond its reasonable control, including Acts of God, war, labour disputes, and delays by nominated third-party suppliers. Cancellation of orders due to such events shall not be accepted.

ARTICLE 8: INTELLECTUAL PROPERTY AND DEFAULT REMEDIES

8.1. Buyer’s Warranty: The Buyer warrants that it holds all necessary legal rights to its trademarks, designs, and specifications provided to the Seller and agrees to indemnify and hold the Seller harmless against any and all claims, damages, liabilities, and expenses (including legal fees) arising from any actual or alleged infringement of third-party intellectual property rights.

8.2. Resale Right upon Default

8.2.1. In the event of the Buyer’s default (including, but not limited to, non-payment, insolvency, or abandonment of Goods), the Buyer hereby grants the Seller an irrevocable, non-exclusive license and right to:

Resell the Goods to any third party at a price determined by the Seller to recover outstanding amounts owed by the Buyer, including the cost of materials and associated charges.

ARTICLE 9: GOVERNING LAW AND DISPUTE RESOLUTION

9.1. Governing Law: These Terms and the rights and obligations of the Parties shall be governed by, and construed in accordance with, the substantive laws of the Democratic Socialist Republic of Sri Lanka, without regard to its conflict of law principles.

9.2. Arbitration (Mandatory): Any dispute, controversy, or claim arising out of or relating to these Terms, or the breach, termination, or validity thereof, shall be finally settled by binding arbitration administered by the International Chamber of Commerce (ICC).

9.3. Seat and Language: The seat of arbitration shall be Colombo, Sri Lanka. The language of the arbitration shall be English.

 

ARTICLE 10: MISCELLANEOUS PROVISIONS

10.1. Severability: If any provision of these Terms is held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired.

10.2. Amendments: The Seller reserves the right to amend or modify these Terms at any time without prior specific notice. The most recent version of these Terms, as published on the Seller’s official website (www.aquadynamics.lk/general-terms-of-sales/), shall automatically apply to all subsequent Purchase Orders, including follow-up orders and schedule expansions.

10.3. Buyer’s Review Obligation: It is the Buyer’s sole and absolute responsibility to regularly review the General Terms of Sale. Submission of any Purchase Order or acceptance of Goods constitutes the Buyer’s definitive acceptance of the current version of these Terms.

EXECUTION AND ACKNOWLEDGEMENT

BY SUBMITTING A PURCHASE ORDER OR ACCEPTING DELIVERY OF GOODS, THE BUYER HEREBY AFFIRMATIVELY ACKNOWLEDGES THAT IT HAS READ, UNDERSTOOD, AND AGREES TO BE IRREVOCABLY BOUND BY THE GENERAL TERMS AND CONDITIONS OF SALES.

AQUA DYNAMICS (PVT) LIMITED