Document:

Exhibit 10.2

 

GE BUSINESS FINANCIAL SERVICES INC.

Life Science Finance

2 Bethesda Metro Center, Suite 600

Bethesda, MD 20814

 

December 20, 2010

 

Poniard Pharmaceuticals, Inc.
 750 Battery Street, Suite 330
 San Francisco, CA 94111

 

Re:          Payoff Letter

 

Ladies and Gentlemen:

 

Reference is made to (i) the Amended and Restated Loan and Security Agreement, dated as of September 2, 2008 (as amended, restated, supplemented or otherwise modified to date, the “Loan Agreement”; all undefined capitalized terms used herein but not defined herein shall have the meanings given to such terms in the Loan Agreement), among PONIARD PHARMACEUTICALS, INC., a Washington corporation (the “Borrower”), GE Business Financial Services Inc. (“GEBFS”) and SILICON VALLEY BANK (“SVB”) (GEBFS and SVB each individually a “Lender”, and collectively the “Lenders”), and GE BUSINESS FINANCIAL SERVICES INC. in its capacity as agent for the Lenders (in such capacity, the “Agent”), and (ii) the other Loan Documents and all guaranties (including that certain Guaranty Agreement and Security Agreement dated September 2, 2008 from NEORX MANUFACTURING GROUP, INC. (the “Guarantor”) in favor of Agent and Lenders), security agreements, mortgages, pledge agreements, account control agreements, notes and other documents and instruments relating thereto (together with the Loan Agreement, collectively, the “Credit Documents”).  Agent and Lenders understand that on the Payoff Effective Time (as defined below), Borrower will repay in full all obligations and liabilities of Borrower to Agent and Lenders under or in respect of the Credit Documents, including, without limitation, principal, interest, fees, and premiums (the “Obligations”).    Notwithstanding any provision in this letter agreement (this “Agreement”) to the contrary, (a) that certain Warrant to Purchase Common Stock (87,209 shares of common stock) issued by Borrower to VFS Financing Inc. issued on September 2, 2008, (b) that certain Warrant to Purchase Common Stock (109,960 shares of common stock) issued by Borrower to VFS Financing Inc. issued on September 2, 2008,  and (c) any other warrants to purchase any equity interests of Borrower issued by Borrower to Agent, any Lender or any of their affiliates and outstanding on the date hereof (each of the foregoing, a “Warrant” and, collectively, the “Warrants”) and any documents relating to any Warrant or equity interests governed or to be governed by the Warrants (including, but not limited to, any investor rights agreements, voting agreements and shareholder agreements) or any other rights to acquire an equity position in Borrower (the “Warrant Documents”) shall be excluded from the definition of “Credit Documents” and each of the Warrants and Warrant Documents shall expressly survive the payoff of the Payoff Amount (as defined below) and shall not be affected by this Agreement.

 

Upon GEBFS’s receipt and Blank Rome LLP’s receipt (with respect to Legal Fees) (a) a federal funds wire transfer in the amount of $12,352,662.81, subject to per diem adjustment as set forth on Schedule A attached hereto (as so adjusted, the “Payoff Amount”), which amount represents all Obligations as more fully described on Schedule A attached hereto, and (b) a fully executed counterpart of this letter agreement (“Agreement”) signed by Borrower, Guarantor and Lenders (the time at which all of the conditions in the foregoing clauses (a) and (b) shall first be satisfied is herein referred to as the “Payoff Effective Time”), Agent and Lenders agree and acknowledge that: (i) all outstanding Obligations 

 

 

shall be paid and satisfied in full and discharged, terminated and released, other than those obligations therein that expressly survive termination, (ii) all security interests and other liens granted to or held by Agent in any assets and properties of Borrower and Guarantor as security for the Obligations (the “Collateral”) shall be satisfied, released and discharged, without recourse, representation, warranty or other assurance of any kind, (iii) the Credit Documents shall terminate and be of no further force or effect other than those provisions therein that expressly survive termination and (iv) Borrower and Guarantor shall be automatically authorized to file the UCC termination statements attached hereto as Exhibit A evidencing the release of Agent’s security interests and other liens in the Collateral.

 

Further, after the Payoff Effective Time, Agent agrees to take all reasonable additional steps reasonably requested by Borrower as may be necessary to release its security interests in the Collateral.  Borrower agrees to pay Agent for all costs and expenses incurred by Agent in connection with the matters referred to in the previous sentence, and acknowledges that Agent’s execution of and/or delivery of any documents releasing any security interest or claim in any property of Borrower and/or Guarantor as set forth herein is made without recourse, representation, warranty or other assurance of any kind by Agent or Lenders as to Agent’s rights in any collateral security for amounts owing under the Credit Documents, the condition or value of any Collateral, or any other matter.  Borrower hereby confirms that the commitments, if any, of Agent and Lenders to make any advances and any other extensions of credit under the Credit Documents are terminated as of the date of this Agreement, and, as of the date of this Agreement, neither Agent nor Lenders shall have any further obligation, if any, to make any advances or any other extensions of credit to Borrower. Notwithstanding anything to the contrary contained herein or in any of such releases or other documents, the obligations and liabilities of Borrower to Agent and Lenders under or in respect of the Credit Documents insofar as such obligations and liabilities survive termination of the Credit Documents shall continue in full force and effect in accordance with their terms.

 

The Payoff Amount referred to above should be sent by federal funds wire transfer to:

 

To GEBFS (with $6,173,770.44 sent to SVB by GEBFS):

 

	
$12,347,662.81
  	
[Wiring Instructions]
  	
 
  
	
 
  	
 
  	
 
  
	
To Blank Rome LLP for Legal Fees :
  	
 
  
	
 
  	
 
  	
 
  
	
$5,000.00
  	
[Wiring Instructions]
  	
 
  

 

If the Payoff Amount is not received by Agent on or before 3:00 p.m. (New York City time) on December 20, 2010, then this Agreement shall terminate and be of no further force or effect.

 

2

 

Notwithstanding anything herein to the contrary, if at any time on or after the Payoff Effective Time, all or any portion of the Payoff Amount paid to Agent or Lenders is voided or rescinded or must otherwise be returned by Agent or either Lender upon Borrower’s insolvency, bankruptcy, reorganization or otherwise, all as though such payment had not been made, the obligation to pay such amount so voided, rescinded or returned, and the liens securing such amount, shall be reinstated.

 

In addition, effective upon the Payoff Effective Time, Borrower and Guarantor each release the Agent, Lenders and their affiliates and subsidiaries and their respective officers, directors, employees, shareholders, agents, attorneys and representatives as well as their respective successors and assigns from any and all claims, obligations, rights, causes of action, and liabilities, of whatever kind or nature, whether known or unknown, whether foreseen or unforeseen, arising on or before the date hereof, which Borrower and/or Guarantor ever had, now have or hereafter can, shall or may have for, upon or by reason of any matter, cause or thing whatsoever, which are based upon, arise under or are related to the Credit Documents (the “Released Matters”).  Without limiting the generality of the foregoing, Borrower and Guarantor each hereby waive the provisions of any statute or doctrine to the effect that a general release does not extend to claims which a releasing party does not know or suspect to exist in its favor at the time of executing the release, which if known by such releasing party would have materially affected the releasing party’s settlement with the party being released. Borrower and Guarantor acknowledge that the agreements in this paragraph are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Released Matters.  Borrower and Guarantor acknowledge that the release contained herein constitutes a material inducement to Agent and Lenders to enter into this Agreement and that Agent and Lenders would not have done so but for Agent’s and Lenders’ expectation that such release is valid and enforceable in all events.

 

The Payoff Amount has been calculated assuming that the proceeds of all checks or similar instruments for the payment of money (collectively, “Checks”) that have been received by Agent and credited to Borrower’s account with Agent are good collected funds.  In consideration of Agent’s release of the liens and security interests in and to any Collateral, Borrower and Guarantor jointly and severally agree to reimburse Agent and Lenders for all losses and liabilities that Agent and/or either Lender may incur at any time as a result of any nonpayment, claim, refund, or chargeback of any Check together with any expenses or other charges incident thereto.  Further, Borrower and Guarantor jointly and severally agree to reimburse Agent and Lenders for all losses and liabilities that Agent and/or either Lender may incur in connection with any deposit account control agreement, securities account control agreement or similar agreement entered into in connection with the Credit Documents.  The amount of any such losses or liabilities reimbursed hereunder shall be paid to Agent or such Lender, as applicable, promptly by Borrower and Guarantor upon demand therefor, and the amount of such demand shall be conclusive upon Borrower and Guarantor in the absence of manifest error.

 

This Agreement shall be governed by the internal laws of the State of New York.  EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY.  No party may assign its rights, duties or obligations under this Agreement without the prior written consent of the other parties. No rights are intended to be created under this Agreement for the benefit of any Person not a party hereto. This Agreement may not be modified or waived except with the written consent of the parties hereto. This Agreement may be executed in any number of separate counterparts, each of which shall, collectively and separately, constitute one agreement.  Delivery of an executed counterpart of this Agreement by facsimile or electronic transmission shall be equally as effective as delivery of an original executed counterpart.  The undersigned parties have signed below to indicate their consent to be bound by the terms and conditions of this Agreement.

 

[Signature Page Follows]

 

3

 

If you need additional information, please do not hesitate to contact us.

 

	
 
  	
Very truly yours,
  
	
 
  	
 
  
	
 
  	
GE BUSINESS FINANCIAL SERVICES INC., as Agent and a Lender
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Peter Gibson
  
	
 
  	
 
  	
Name: Peter Gibson
  
	
 
  	
 
  	
Title: Duly Authorized Signatory
  

 

ACCEPTED AND AGREED
 AS OF THIS 20th DAY OF 
 DECEMBER, 2010

 

PONIARD PHARMACEUTICALS, INC.,

as Borrower

 

	
By:
  	
/s/ Ronald A. Martell
  	
 
  

Name: Ronald A. Martell

Title: Chief Executive Officer

 

NEORX MANUFACTURING GROUP, INC.,

as Guarantor

 

	
By:
  	
/s/ Ronald A. Martell
  	
 
  

Name: Ronald A. Martell

Title: Chief Executive Officer and President

 

SILICON VALLEY BANK,

as a Lender

 

	
By:
  	
/s/ James Taylor
  	
 
  

Name: James Taylor

Title: Relationship Manager

 

 

SCHEDULE A

 

PAYOFF AMOUNT

 

	
Aggregate outstanding principal balance
  	
 
  	
$
  	
9,857,139.00
  	
 
  
	
Accrued but unpaid interest
  	
 
  	
$
  	
40,578.56
  	
 
  
	
Remaining interest due to be paid in future
  	
 
  	
$
  	
479,823.35
  	
 
  
	
Final Payment
  	
 
  	
$
  	
1,970,000.00
  	
 
  
	
Legal fees of Blank Rome LLP
  	
 
  	
$
  	
5,000.00
  	
 
  
	
Other expenses
  	
 
  	
$
  	
121.90
  	
 
  
	
TOTAL
  	
 
  	
$
  	
12,352,662.81
  	
 
  

 

 

EXHIBIT A

 

[UCC TERMINATION STATEMENTS]

 

2Exhibit 4.3

 

	

  	
VCP - CORPORATE
  	
 
  	
Code
  	
 
  	
PO.03.02.001
  
	
Operational Standard
  	
 
  	
Revision
  	
 
  	
10
  
	
Title:  
  	
 
  	
Area
  	
 
  	
Procurement
  
	
PROCUREMENT
  	
 
  	
 
  	
 
  	
 
  

 

1.        OBJECTIVE / EXPECTED OUTCOMES

 

Establish procedures for the procurement process, ensuring its quality and reliability.

 

2.        DEFINITIONS

 

2.1 -               ABBREVIATIONS

 

RC - Request for purchase.

 

PC - Purchase order.

 

SC - Request for quotation.

 

PO - Purchase order.

 

AF - Supply agreement.

 

PR - Shipping schedule.

 

DC - Procurement document.

 

e-VCP - Supplies B2B e-commerce platform

 

2.2 -               REQUEST FOR PURCHASE (RC)

 

Electronic document filled out and approved via SAP requesting a purchase to the Supplies department.

 

2.3 -                REQUEST FOR QUOTATION (SC)

 

Document issued in order to obtain and register the values proposed for the supply of materials or services.  The quotes requested by VCP can be sent electronically in a PDF file or in a password-protected file, and via e-VCP.

 

2.4 -              PURCHASE ORDER (PC)

 

Document requesting a purchase to the suppliers (domestic market), containing all the information necessary so that the supplier can deliver the material/service according to our needs.

 

2.5 -                PURCHASE ORDER (PO)

 

Document requesting a purchase to the suppliers (import), containing all the information necessary so that the supplier can deliver the material according to our needs.

 

	
Prepared by:  

Ana Carolina Henriques Mendes
  	
 
  	
Confidentiality:  

Internal Business Use
  	
 
  	
Approved by:  

Roberto Bento Vidal
  

 

1

 

2.6 -                SUPPLY AGREEMENT

 

Document containing a price list of materials or services that may be. It does not imply a formal commitment to purchase, but its purpose is to simplify the consumption expectation process.

 

2.7 -                SHIPPING SCHEDULE

 

Document with the same characteristics of the Purchase Order to be used in situations where deliveries occur frequently and in quantities and delivery dates that are established over time. Its purpose is to simplify the repetitive purchasing process of raw materials, packaging, and supplies.

 

2.8 -                PROCUREMENT DOCUMENT

 

Designation for Purchase Order, Supply Agreement, Shipping Program, or Legal Contract.

 

2.9 -        e-VCP

 

An electronic portal for B2B (Business to Business) supplies transactions, that is connected to the SAP system. Its scope of action is determined by the number of suppliers qualified by VCP that have the Internet available to operate.

 

3.        OPERATIONS

 

3.1 -            CONDITIONS AND MATERIALS REQUIRED

 

3.1.1 - MATERIALS AND EQUIPMENT

 

Not applicable.

 

3.1.2 - SAFETY / ENVIRONMENT

 

Not applicable.

 

3.1.3 - OTHERS

 

SAP system available and Internet operating.

 

3.2 -            DESCRIPTION OF ACTIVITIES

 

3.2.1 -       PURCHASE OF MATERIALS OR SERVICES

 

a)         PROCESS FOR GETTING A QUOTE

 

a.1 -               The buyer receives a previously approved electronic RC and runs a critical analysis on it comparing the RC requirements with the material/service specifications, making sure that it allows for the quotation process.

 

2

 

	
R
  	
NOTE 1:            For the supply agreement and shipping schedule, the buyer receives from the producing unit a spreadsheet of consumption materials of the previous period or identifies purchasing opportunities.

 

a.2 -               All purchases must have at least three quotations, except in the following situations:

 

1)    The supplier is chosen for its technical qualification by the requesting area, which means that the supplier’s specific code is stated on the material’s description.

 

2)    The supplier has a corporate agreement with the Votorantim Group.

 

3)    ZU type RCs - urgent requests for purchase at which time the quotation becomes optional.

 

NOTE 2:            The choice of a supplier that does not submit the best price should be formally justified by the area and manager responsible.

 

NOTE 3:            The quotation process should have the following supporting documentation:

 

1)    Electronic file (SAP: e-Votorantim or own control file) or

 

2)    Documents proving the information of the supplier that participated in the bidding process.

 
  
	
 
  	
b) CREATION AND APPROVAL OF PURCHASE DOCUMENT

 

b.1. -           The buyer creates an electronic procurement document in SAP (PC - ME21N, AF - ME31K, or PR - ME31L) with reference to the SC, RC, spreadsheets of consumption, or model document.

 

b.2 -              Buyers issue procurement documents in SAP according to PO.03.02.001 (Procurement) in compliance with the Tolerance caps as stated in LT.03.02.027.

 

b.3 -              The procurement document is approved electronically in the system in accordance with the criteria defined in PC.00.009.

 

NOTE 4:            When there is a renegotiation with the supplier and/or correction of any differences that change the value of the document, the original strategy will be displaced and a new approval process will be started for the PC/AF, or PR.

 

NOTE 5:            When there is a surplus greater than that established by LT.03.02.027, the buyer must ask the requester to issue a new RC - Request for Purchase, which once approved according to procedure rules, should be included in the Procurement Document in order to rectify the surplus.

 

NOTE 6:            If the requester does not approve the surplus, it should be returned to the supplier upon receipt by means of a Return Invoice issued by the physical/fiscal receipt area.
  

 

3

 

NOTE 7:               The administration of the ICMS, IPI, and Replacement Tax exception tables is restricted to the Tax Department. For new additions or changes, the buyers should notify the Tax Department, which analyzes the Agreements and updates the table in accordance with legislation.

 

c)         DISTRIBUTION OF PROCUREMENT DOCUMENTS (DC)

 

c.1 -                When printing procurement documents, the system automatically sends them to the supplier via e-VCP, or they can be sent via fax or mail when necessary.

 

c.2 -                For cases of Purchase Orders, the PO should be issued and sent to its supplier and to the customs clearance agent.

 

d)        SUPPLY AGREEMENTS / SHIPPING SCHEDULES

 

d.1 -               The buyer agrees with the supplier on the commercial terms as well as the forecast of purchase/consumption of the materials/services.

 

d.2 -               The contract manager issues the purchase order based on the supply agreement, and for the shipping schedule the system suggests the division, which is released by the materials scheduler according to the unit’s need.

 

d.3 -               Shipping schedules cannot be issued for items considered to be in development (DMP - samples). Purchase orders must be issued in these cases.

 

e)         UPDATING SHIPPING SCHEDULES / SUPPLY AGREEMENTS

 

The shipping schedules and supply agreements are checked as for their validity date and commercial terms and are updated in the SAP system accordingly.

 

f)           CHANGING THE SUPPLIERS’ LEGAL NAME

 

When there is change in the legal name of a controlled supplier, the buyer must request the unit to revise its respective list of qualified suppliers.

 

3.3 -                ACTIONS IN CASE OF ABNORMALITIES

 

Problems with SAP: SAP help desk.

 

3.4 —       INDICATORS

 

Not applicable

 

4.        ANNEXES

 

Annex 1 - Flowchart of simplified purchase process via e-VCP.

 

4

 

ANNEX 1

 

FLOWCHART OF SIMPLIFIED PURCHASE PROCESS VIA e-VCP

 

 

5

 

ANNEX 1

 

FLOWCHART OF SIMPLIFIED PURCHASE PROCESS VIA e-VCP

 

 

6

 

	

  	
VCP - CORPORATE
  	
 
  	
Code
  	
 
  	
PO.03.02.005
  
	
Operational Standard
  	
 
  	
Revision
  	
 
  	
11
  
	
Title:  
  	
 
  	
Area
  	
 
  	
GGLI/Supplies
  
	
APPROVAL OF VCP SUPPLIERS
  	
 
  	
 
  	
 
  	
 
  

 

1. OBJECTIVE/EXPECTED OUTCOMES

 

Define a system for approving VCP suppliers, taking into account the risks associated with this supply (financial, labor, technical, social, safety, environmental, and commercial).

 

Ensure risks related to such supply are identified and mitigated so as not to compromise the quality of VCP’s final product.

 

2. DEFINITIONS

 

RHF - Request for Approval of Suppliers (FO.03.02.004).

 

RRHF - Request for Re-approval of Suppliers (FO.03.02. 027).

 

3. OPERATIONS

 

3.1 - CONDITIONS AND MATERIALS REQUIRED

 

3.1.1 - MATERIALS & EQUIPMENT

 

Not applicable.

 

3.1.2 - SAFETY & ENVIRONMENT

 

Not applicable.

 

3.1.3 - OTHERS

 

a)      SAP system available, DOL (documents online) system and document scanning Software.

 

b)      Suppliers considered as strategic and that require approval are those that fall into at least one of the following cases:

 

b.1 -      Suppliers with amounts received from VCP with a history of more than R$ 1MM (one million reais) in a year.

 

b.2 -      Suppliers controlled by Technical Lists and from the plants and the logistics department, including the sale of scrap.

 

b.3 -      Listed engineering suppliers (vendor list)

 

b.4 -      Service providers

 

b.5 -      Suppliers based on users demand

 

c)       The following categories will not require approvals:

 

c.1 - Banks, State Enterprises, Votorantim Group Companies, Consulting Companies, and Electric Power Companies.

 

1

 

d) CONDITIONS

 

All approval requests should be sent first to the Supplies Support Team, including Transportation Services.

 

All technical evaluations rated as HIGH RISK in their final assessments shall be reassessed and shall be disapproved if the rating is not lowered.

 

e)        DOCUMENTATION NEEDED FOR INITIAL ASSESSMENT AND REASSESSMENTS BY ACTIVITY

 

e.1 -          Suppliers of raw materials, inputs, packaging, and measurement and calibration services (Manufacturing and Forestry):

 

	
Activity
  	
 
  	
Evaluation
  	
 
  	
Documentation
  	
 
  	
Revaluation
  	
 
  	
Documentation
  
	
Financial Assessment
  	
 
  	
YES
  	
 
  	
Balance Sheet of the last two years or Annex 1 completely filled out (when there is no balance sheet) and SCI and Credit Report (SERASA).
  	
 
  	
YES
  	
 
  	
SCI and SERASA
  
	
Legal/Labor Assessment
  	
 
  	
NO
  	
 
  	
N.A.
  	
 
  	
NO
  	
 
  	
N.A.
  
	
Social Responsibility Assessment
  	
 
  	
YES
  	
 
  	
FO.03.02.026
  	
 
  	
YES
  	
 
  	
FO.03.02.026 filled out
  
	
Technical & Quality Assessment (**)
  	
 
  	
YES
  	
 
  	
Certificates or Checklist (FO.03.02.002) or Brief of development approved by the unit.
  	
 
  	
YES
  	
 
  	
Certificate or Specific Checklist.
  
	
SST Assessment
  	
 
  	
NO
  	
 
  	
N.A.
  	
 
  	
NO
  	
 
  	
N.A.
  
	
Environmental Assessment
  	
 
  	
NO
  	
 
  	
N.A.
  	
 
  	
NO
  	
 
  	
N.A.
  
	
Commercial Assessment
  	
 
  	
YES
  	
 
  	
N.A.
  	
 
  	
YES
  	
 
  	
Note of performance appraisal in SAP
  

 

e.2 -        Suppliers of Internal Services (Industrial and Forestry): NOTE 1: This includes the People Transportation Service.

 

e.2.1 -           Permanent, frequent (more than 2 times/year) or long-term  (more than 5 days).

 

	
Activity
  	
 
  	
Evaluation
  	
 
  	
Documentation
  	
 
  	
Revaluation
  	
 
  	
Documentation
  
	
Financial  Assessment
  	
 
  	
YES
  	
 
  	
Balance Sheet of the last two years or Annex 1 completely filled out (when there is no balance sheet) and SCI and Credit Report (SERASA).
  	
 
  	
YES
  	
 
  	
SCI and SERASA
  
	
Legal/Labor Assessment
  	
 
  	
YES
  	
 
  	
FO.01.03.002
  	
 
  	
YES
  	
 
  	
FO.01.03.002
  
	
Social  Responsibility  Assessment
  	
 
  	
YES
  	
 
  	
FO.03.02.0026
  	
 
  	
YES
  	
 
  	
FO.03.02.026
  
	
Technical & Quality Assessment (**)
  	
 
  	
YES
  	
 
  	
Certificates or Specific Checklist of area
  	
 
  	
YES
  	
 
  	
Certificate or Specific Checklist.
  
	
SST Assessment
  	
 
  	
YES
  	
 
  	
Specific Checklist and Certificates
  	
 
  	
YES
  	
 
  	
Certificate or Specific Checklist.
  
	
Environmental  Assessment (*)
  	
 
  	
YES
  	
 
  	
Certificates or FO.03.02.010
  	
 
  	
NO
  	
 
  	
N.A.
  
	
Commercial  Assessment
  	
 
  	
YES
  	
 
  	
N.A.
  	
 
  	
YES
  	
 
  	
Note of performance appraisal in SAP
  

 

(*) Only for Waste Collection and Disposal.

 

2

 

e.2.2 -             Services that are not Permanent, only once in a while (up to 2 times/year) or of short duration (up to 5 days)

 

	
Activity
  	
 
  	
Evaluation
  	
 
  	
Documentation
  	
 
  	
Revaluation
  	
 
  	
Documentation
  
	
Financial Assessment
  	
 
  	
YES
  	
 
  	
SCI and SERASA
  	
 
  	
YES
  	
 
  	
SCI and SERASA
  
	
Legal/Labor Assessment
  	
 
  	
YES
  	
 
  	
Specific form for area FO.01.03.002
  	
 
  	
YES
  	
 
  	
FO.01.03.002
  
	
Social Responsibility Assessment
  	
 
  	
NO
  	
 
  	
N.A.
  	
 
  	
YES
  	
 
  	
FO.03.02.026
  
	
Technical and Quality Assessment (**)
  	
 
  	
NO
  	
 
  	
N.A.
  	
 
  	
NO
  	
 
  	
N.A.
  
	
SST Assessment
  	
 
  	
YES
  	
 
  	
Checklist, Certificates.
  	
 
  	
YES
  	
 
  	
Checklist & Certificates
  
	
Environmental Assessment (*)
  	
 
  	
YES
  	
 
  	
Certificates or form FO.03.02.010 filled out
  	
 
  	
NO
  	
 
  	
N.A.
  
	
Commercial Assessment
  	
 
  	
YES
  	
 
  	
N.A.
  	
 
  	
NO
  	
 
  	
N.A.
  

 

(*) Only for Waste Collection and Disposal

 

e.3 - Suppliers of Materials with contract and Equipment:

 

	
Activity
  	
 
  	
Evaluation
  	
 
  	
Documentation
  	
 
  	
Revaluation
  	
 
  	
Documentation
  
	
Financial  Assessment
  	
 
  	
YES
  	
 
  	
Balance Sheet of last 2 years or Annex 1  filled out (when there is no Balance  Sheet) and SCI and SERASA.
  	
 
  	
YES
  	
 
  	
SCI and SERASA
  
	
Legal/Labor Assessment
  	
 
  	
NO
  	
 
  	
N.A.
  	
 
  	
NO
  	
 
  	
N.A.
  
	
Social Responsibility Assessment
  	
 
  	
YES
  	
 
  	
FO.03.02.026
  	
 
  	
YES
  	
 
  	
FO.03.02.026 filled out
  
	
Technical and Quality Assessment (**)
  	
 
  	
YES
  	
 
  	
Certificates or Specific Checklist of area.
  	
 
  	
YES
  	
 
  	
Certificate or Checklist
  
	
SST Assessment
  	
 
  	
NO
  	
 
  	
N.A.
  	
 
  	
NO
  	
 
  	
N.A.
  
	
Environmental Assessment (*)
  	
 
  	
NO
  	
 
  	
N.A.
  	
 
  	
NO
  	
 
  	
N.A.
  
	
Commercial Assessment
  	
 
  	
YES
  	
 
  	
N.A.
  	
 
  	
YES
  	
 
  	
Note of supplier’s performance appraisal in SAP.
  

 

e.4 - Providers of Transportation Services:

 

	
Activity
  	
 
  	
Evaluation
  	
 
  	
Documentation
  	
 
  	
Revaluation
  	
 
  	
Documentation
  
	
Financial  Assessment
  	
 
  	
YES
  	
 
  	
Balance Sheet of last 2 years or Annex 1  filled out (when there is no Balance  Sheet) and SCI and SERASA
  	
 
  	
YES
  	
 
  	
SCI and SERASA
  
	
Legal/Labor Assessment
  	
 
  	
YES
  	
 
  	
FO.01.03.002
  	
 
  	
YES
  	
 
  	
FO.01.03.002
  
	
Social Responsibility Assessment
  	
 
  	
YES
  	
 
  	
FO.03.02.026
  	
 
  	
YES
  	
 
  	
FO.03.02.026
  
	
Technical and Quality Assessment (**)
  	
 
  	
YES
  	
 
  	
Certificates or Specific Checklist of area.
  	
 
  	
YES
  	
 
  	
Certificate or Checklist
  
	
SST Assessment
  	
 
  	
YES
  	
 
  	
Checklist or Certificates
  	
 
  	
YES
  	
 
  	
Checklist & Certificates
  
	
Environmental Assessment (*)
  	
 
  	
YES
  	
 
  	
Applicable License and Registrations
  	
 
  	
YES
  	
 
  	
Applicable license and services
  
	
Commercial Assessment
  	
 
  	
YES
  	
 
  	
N.A.
  	
 
  	
YES
  	
 
  	
N.A.
  

 

3

 

e.5 - Suppliers (Clients) of Scrap (Sale of scrap, waste, savings, etc.)

 

	
R
  	
Activity
  	
 
  	
Evaluation
  	
 
  	
Documentation
  	
 
  	
Revaluation
  	
 
  	
Documentation
  
	
Financial Assessment
  	
 
  	
YES
  	
 
  	
Balance Sheet of last 2 years or Annex  1 filled out (when there is no balance sheet) and SCI and SERASA
  	
 
  	
YES
  	
 
  	
SCI and SERASA
  
	
Legal/Labor Assessment
  	
 
  	
YES
  	
 
  	
FO.01.03.002
  	
 
  	
NO
  	
 
  	
N.A.
  
	
Social Responsibility Assessment
  	
 
  	
YES
  	
 
  	
FO.03.02.026
  	
 
  	
YES
  	
 
  	
FO.03.02.026
  
	
Technical and Quality Assessment (**)
  	
 
  	
YES
  	
 
  	
Certificates or Specific Checklist of area.
  	
 
  	
YES
  	
 
  	
Certificate or Checklist
  
	
SST Assessment
  	
 
  	
YES
  	
 
  	
Checklist or Certificates.
  	
 
  	
NO
  	
 
  	
N.A.
  
	
Environmental Assessment (*)
  	
 
  	
YES
  	
 
  	
Applicable License & Registrations
  	
 
  	
YES
  	
 
  	
Applicable license and services
  
	
Commercial Assessment
  	
 
  	
YES
  	
 
  	
N.A.
  	
 
  	
NO
  	
 
  	
N.A.
  

 

3.2 - DESCRIPTION OF ACTIVITIES

 

3.2.1 - PROCESS

 

For the suppliers that must be approved, the buyer can only place an order, shipping schedule, or supply arrangement for those that have an RHF or RRHF in progress or that have a signature from the General Manager.

 

The approval and revaluation process shall follow the flowchart (Appendix 2).

 

a) DEADLINES

 

a.1 - ACTIVITIES

 

All assessments (Financial, Legal/Labor, Social Responsibility, Technical & Quality, Occupational Health & Safety, Environmental, and Commercial) shall be completed within 45 (forty-five) calendar days.

 

a.2 - APPROVAL

 

Each final status of the RHF or RRHF (Pass or Fail) should keep to the following deadlines for re-approval:

 

a.2.1 - Passed: within 2 (two) years.

 

a.2.2 - Failed: CSC will be requested to block the supplier, but it may present the documentation required for a new approval at any time.

 

a.3 - CERTIFICATES

 

The suppliers controlled by Technical Lists and that have certificates with different validity than the approval of the RQF or RRQF should be requested 2 months after their termination date.

 

4

 

b) RESPONSIBILITIES

 

b.1 - ACTIVITIES

 

Assessment reports (Financial, Legal/Labor, Social Responsibility, Technical & Quality, Occupational Health & Safety, Environmental, and Commercial) are the responsibility of the area doing the evaluations according to Table 1 below.

 

Each area doing the evaluations should complete the report with a rating that represents the risk level VCP may face if deciding to buy from this supplier. In support of the rating, the area will submit a report justifying the analysis.

 

TABLE 1

 

	
ACTIVITIES
  	
 
  	
PERSON RESPONSIBLE FOR ANALYSIS
  	
 
  	
POSITION REVIEWED
  
	
Financial Assessment
  	
 
  	
Credit & Collection
  	
 
  	
Director / Manager / Analyst
  
	
Legal/Labor Assessment
  	
 
  	
Relationship with employees (corporate)
  	
 
  	
Lawyer / Analyst
  
	
Social Responsibility  Assessment
  	
 
  	
Communication & Social Responsibility (Corporate)
  	
 
  	
Consultant
  
	
Technical & Quality Assessment
  	
 
  	
Requesting User / Supplies Support Team (*)
  	
 
  	
Managers / Coordinator
  
	
SST Assessment
  	
 
  	
Health & Safety (local and corporate)
  	
 
  	
Coordinator / Engineer / Technician / Assistant
  
	
Environmental Assessment
  	
 
  	
Environment (corporate)
  	
 
  	
Technician / Assistant
  
	
Commercial Assessment
  	
 
  	
Supplies (Category A and Central)
  	
 
  	
Manager / Coordinator / Buyer
  
	
Final approval of RQF or  RRQF
  	
 
  	
Supplies Support Team
  	
 
  	
Coordinator
  
	
Information / Communication with suppliers
  	
 
  	
Supplies Support Team
  	
 
  	
Coordinator / Analyst / Assistant
  

 

(*)            If the Requesting User or person involved does not feel comfortable in doing the technical assessment, he/she should schedule in advance a meeting with technicians, specialists, or whoever is considered necessary for this assessment to be completed.

 

NOTE 2:            In order to avoid problems in contracting suppliers without approval, before sending Invitation Letters to suppliers, the area responsible for issuing the Letters should check with the Support Team the approval’s current status.

 

5

 

b.2 - APPROVAL

 

Every documentation from the supplier shall be the responsibility of the Supplies Support Team, as well as the opening of RHF, sending documentation to the responsible areas, following up on receipts, completing the process, and controlling indicators.

 

The Completion of the process, which means making the final decision to approve or not the supplier, is the responsibility of the Supplies Support Team and shall take into consideration the formula and conditions below:

 

	
 
  	
Sum of Ratings Received
  	
=
  	
> 70% approved
  
	
 
  	
Sum of Total of Maximum Ratings
  	
< or = 70% not approved
  

 

If the supplier is not approved, but it is necessary to keep it as a supplier, the process will be referred to the Approval Committee.

 

The Committee meets twice a month and works in a collegiate format, which means that decisions are taken by consensus of all participants. Even if the summoned participants do not have a project to be submitted, they must contribute by participating in all Committees.  If they are unable to attend, they should send a representative. The Committee’s goal is to discuss the approval or not of suppliers who are currently providing services that are not adapted to be approved by the determined criteria, which means that they have some high risk rating or a total score below 70%. The table lists the participants summoned:

 

	
ASSESSMENT
  	
 
  	
DEPARTMENT
  	
 
  	
POSITION
  
	
· Technical
  	
 
  	
· Corporate Engineering  

· Forestry  

· Factory
  	
 
  	
· General Manager  

· General Manager  

· General Manager
  
	
· Financial
  	
 
  	
· Finance
  	
 
  	
· General Manager
  
	
· Commercial
  	
 
  	
· GGLI
  	
 
  	
· General Manager  

· Manager  

· Manager
  
	
· Legal
  	
 
  	
· Contract Management
  	
 
  	
· Manager
  
	
· Environment  

· SST  

· Social Responsibility
  	
 
  	
· DHO  

· DHO  

· DHO
  	
 
  	
· General Manager
  
	
· Consolidation
  	
 
  	
· Procurement
  	
 
  	
· Coordinator
  

 

c)  CONTROL

 

It is the responsibility of the Suppliers Support Team to issue indicators for the monitoring of suppliers approval.

 

3.2.2 -               Approved suppliers are electronically linked to their materials through the system based on lists of suppliers approved according to PO.03.02.006, preventing purchases from suppliers that are not approved, and this activity is the responsibility of the managers of Technical Lists.

 

6

 

3.3 - ACTIONS IN CASE OF ABNORMALITIES

 

3.3.1 - Problems with SAP’s operations, contact Help Desk.

 

3.3.2 - Problems with access to scanned documents, contact Local IT department

 

3.4 - INDICATORS

 

All indicators are the responsibilities of the Supplies Support Team.

 

3.4.1 - RQFs finished in the month

 

3.4.2 - RQFs on hold, requesting necessary documents

 

3.4.3 - RQFs in progress

 

4. ANNEXES

 

Annex 1 - Financial Statement Report - Supplier Qualification — Financial Data

 

Annex 2 - Flowchart of Supplier Qualification and Re-Qualification Process

 

7

 

ANNEX 1

 

FINANCIAL STATEMENT REPORT - APPROVAL OF SUPPLIERS - FINANCIAL DATA

 

The suppliers management group will send this Statement to the Supplier if it lacks the Balance Sheet.

 

	
 
  	
QUALIFICATION OF SUPPLIERS  Sheet
  	
 
  
	
 
  	
FINANCIAL DATA
  	
1
  
	
 
  	
 
  	
 
  
	
Company:
  	
 
  	
 
  
	
CNPJ:
  	
 
  	
RQF No.
  	
 
  
				

 

ALL FINANCIAL DATA LISTED BELOW IS EXTREMELY IMPORTANT AND SHOULD BE FILLED OUT COMPLETELY FOR A BETTER FINANCIAL ASSESSMENT OF YOUR COMPANY SINCE THE BALANCE SHEET WAS NOT SUBMITTED NOR THE TRIAL BALANCE SHEET.

 

FINANCIAL STATEMENTS OF THE LAST THREE YEARS:

 

 

	
 
  	
 
  	
/   /
  	
 
  	
/   /
  	
 
  	
/   /
  
	
BALANCES:
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
BANKS
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
ACCOUNTS RECEIVABLE
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
INVENTORY
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
LONG-TERM RECEIVABLES/RIGHTS
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
PROPERTY, PLANT, & EQUIPMENT
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
SUPPLIERS
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
LOANS/FINANCING
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
TAXES PAYABLE
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
LONG TERM ACCOUNTS PAYABLE
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
NET WORTH
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
TOTAL:
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
FROM SALES
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
FROM PURCHASES
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
OTHER INCOME
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
OTHER EXPENSES
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
COST OF SALES
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
PROFIT / LOSS FROM OPERATIONS
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
NET PROFIT / LOSS
  	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  

 

	
DOES COMPANY OWN ITS SITE?
  	
CAPITAL: R$
  	
 
  	
 
  
	
YES     NO 
  	
AVERAGE ANNUAL INCOME: R$
  

 

SIGNATURE OF PERSON RESPONSIBLE AND COMPANY STAMP

 

	
NAME:
  	
 
  	
 
  	
SIGNATURE:
  	
 
  

 

8

 

ANNEX 2

 

FLOWCHART OF APPROVAL PROCESS

 

 

9

 

	

  	
VCP - CORPORATE
  	
 
  	
Code
  	
 
  	
PC.01.012
  
	
Corporate Policy
  	
 
  	
Revision
  	
 
  	
01
  
	
Title:  
  	
 
  	
Area
  	
 
  	
CRTS
  
	
Contracting Providers
  	
 
  	
 
  	
 
  	
 
  

 

1. OBJECTIVE

 

Define corporate guidelines for contracting providers by the companies that make up the economic group led by VCP and preserve the company’s interests with notes of preventive actions in order to minimize legal and administrative risks.

 

2. SCOPE

 

Applicable in the following contracting categories:

 

2.1 - Assignment as a contractor for civil construction work

 

2.2 - Assignment as a contractor in general

 

2.3 - Logistics services when executed through the assignment of manpower

 

NOTE: The modality of contracting service providers, which is absent from this document, is included in PO.01.04.013 (Hiring Temporary Staff) or PO.01.04.012 (Hiring staff for a specified period).

 

3. DEFINITIONS

 

3.1 - CIVIL CONSTRUCTION WORK

 

Civil construction work is understood to be the modality of hiring manpower to be used to carry out the services or execute the construction, demolition, or remodeling tasks as per PO.01.03.001. (Contracting Providers - Civil Construction).

 

3.2 - ASSIGNMENT AS A CONTRACTOR IN GENERAL

 

The assignment as a contractor in general is understood to include hiring providers, suppliers of manpower, in the modalities of assignment as a contractor to perform any service that involves carrying out VCP’s “support activity” not included in its own policies.

 

3.3 - LOGISTICS SERVICE PROVIDER (PSL)

 

PSLs are defined as suppliers who operate in providing the following services (domestic or international):

 

a) Road transport

 

b) Rail transport

 

c) River transport

 

d) Brazilian coast shipping (cabotage)

 

e) Cross-oceanic shipping (international)

 

f) Air transport

 

1

 

TOTAL DOCUMENT REVIEW

 

g) Handling of raw materials, intermediate products, and finished products

 

h) Integrated logistics provider

 

i) Handling of lumber

 

j) Customs broker, according to PO.03.03.003 (Contracting of Logistics Service Provider)

 

3.4 - SERVICES DELIVERED BY PROVIDERS

 

Generic term used to identify any contracting of an activity provided through manpower without an employment contract with companies that are part of the economic group led by VCP, except for those provided through temporary workers under the terms of PO.01.04.013.

 

3.5 - ASSIGNMENT OF MANPOWER

 

It is the placement of workers for the use of the contracting party, on their own premises or on those of third parties, for the provision of ongoing services, related or not to the contracting party’s main activity, whatever may be the nature and form of contracting.

 

3.5.1 -         Third-party facilities: those appointed by the contracting party other than their own and that do not belong to the service provider.

 

3.5.2 -         Ongoing services: these services constitute a permanent necessity on the part of the contracting party that are repeated regularly or systematically, whether or not they are related to its main activity, even if its execution is carried out intermittently or by different workers.

 

3.6 - CONTRACTING PARTY

 

Company that is part of the economic group led by VCP.

 

3.7 - CONTRACTED PARTY

 

It is the provider to which the contracting party delegates the execution of tasks or predetermined services agreed upon through service contracts or purchase orders.

 

3.8 - SUBCONTRACTOR

 

This is the term used to designate the outsourcer the provider, with the contracting party’s prior approval, transfers part of a specific task or predetermined service to, and a service and equipment contract is always executed.

 

3.9 - MAIN ACTIVITY AND SUPPORT ACTIVITY

 

The company’s “main activity” is the activity stated in its business purpose, while the “support activity” represents the accessory activities or ones extraneous to them.

 

3.10 -INDEPENDENT WORKER - INDIVIDUAL TAXPAYER

 

Individuals who habitually exercise, without any employment contract, paid professional activity, regularly registered and licensed with the respective municipality and Social Security.

 

2

 

3.11 - GGLI - General Management of Integrated Logistics

 

3.12 - CRTS - Consulting on Labor Relations and Unions

 

3.13 - GJU - Legal Management

 

3.14 - CGP - People Management Cell

 

4. GUIDELINES

 

4.1 - CONTRACTING OF SERVICE PROVIDERS

 

4.1.1 - PRESERVATION OF THE MAIN ACTIVITIES

 

The services contracted cannot coincide in whole or in part with the contracting party’s so called “main activities”.

 

For purposes of this policy, a “main activity” shall be considered the activity stated in the business purpose of the Contract or Company By-laws of Votorantim Celulose e Papel S.A., which means the industry and trade of pulp, paper, cardboard, and any other products derived from these materials.

 

4.1.2 - SUBORDINATION

 

During the term of the contract, the services may be supervised and monitored exclusively by agents or by the owner of the Contracted Party or Subcontractor, where applicable.

 

4.1.2.1 -        The professionals of the contracting party are barred from practicing any acts that could reveal direct or indirect intervention in the performance of the services contracted.

 

4.1.2.2 -        It is up to the Contracted Party and, where applicable its Subcontractor, to select, remunerate, and manage in a sovereign, independent, and autonomous fashion their employees and all other professionals who need to be engaged to perform the services or to execute the work contracted.

 

4.1.3 - TECHNICAL TRAINING

 

4.1.3.1 -        Only legally constituted companies shall be contracted, which are capable of assuming the obligations established by law and directed to the segment in which they operate and that comply with the policies and procedures they have put in place to provide those services.

 

4.1.3.2 -        The Contracted Party must demonstrate to have the aptitude and technical-economic and administrative-financial capacity to carry out the legal or contractual obligations applicable to the services it provides.

 

4.1.3.3 -        GGLI shall keep up to date and make available the report containing the registration of service providers, previously qualified, considering as such only those who meet requirements set for each kind of contracting.

 

3

 

4.2 - CONTRACTING SELF-EMPLOYED INDIVIDUALS

 

Hiring an independent professional or self-employed individual to perform services is permitted provided that they met all of the following requirements:

 

4.2.1 -                 The professionals providing these services must have high technical skills and act with autonomy and independence as consultants, and always for a predetermined period of time.

 

4.2.2 -                 There must be a proven need and strategic convenience for this hiring, defined, identified, and justified by the requesting area, and always for a fixed and predetermined period.

 

4.2.3 -                 The activities or services must have characteristics compatible with this mode of engagement that allows for the provider to act with independence and autonomy.

 

NOTE: The contracting of this kind of provider requires prior approval by the General Manager or Director responsible for the requesting area.

 

4.3 - SUBCONTRACTING

 

4.3.1 -                 Subcontracting part of the services (when necessary) is permitted as long as this condition has been previously indicated by the contractor during the negotiations that preceded and resulted in the execution of the contract.

 

4.3.2 -                 The subcontractor(s) shall be subject to the same conditions, requirements, and obligations imposed on the contracted party, including all clauses, paragraphs, and items contained in the contract executed between VCP and the contracted party.

 

4.3.3 -                 Service providing companies may subcontract the services when necessary, as long as authorized by the VCP areas responsible for the hiring.

 

4.4 - FORMER EMPLOYEES

 

4.4.1 - FORMER EMPLOYEE OF THE CONTRACTING PARTY

 

Contracted Parties or Subcontractors made up in whole or in part by former employees of the contracting party may be hired to perform services in the following conditions:

 

a) They are under a legally constituted entity.

 

b) They have completed a minimum period of six (6) months from the date of termination and the date of being hired to provide the services. Before this period, this person cannot be hired unless it is done so with written approval from the Director of the requesting area.

 

c) They must be treated on equal terms with the competition, and therefore must not be granted any privilege or advantage.

 

4

 

For the purposes of this policy, a privilege or advantage shall be understood as inserting contractual clauses or conditions that directly or indirectly may dispel, reduce, or minimize the business risk for the Contracted Party and transfer it in whole or in part to the Contracting Party.

 

4.4.2 -     FORMER EMPLOYEE HIRED BY CONTRACTED PARTY OR SUBCONTRACTOR

 

The contracting of a service provider that has hired or intends to hire as an employee a worker who has already been employed by the Contracting Party shall be allowed after he/she has been checked by the Contracting Party as for any legal impacts and causes for terminating the former employment contract.

 

4.4.3 -     FORMER EMPLOYEE OF CONTRACTED PARTY OR SUBCONTRACTOR

 

Former employees of Contracted Parties or Subcontractors may be hired by the Contracting Party provided there is no provision against it in the service contract signed between the Contracting Party and the Contracted Party.

 

5. RESPONSIBILITIES

 

5.1 -                The responsibilities of the supplier and its subcontractor (if any) referred to in this policy apply not only to their employees but also their agents and/or representatives that by necessity or demand of the services have been engaged in executing the contract.

 

5.2 —       VCP shall not be liable for any obligation of the supplier, subcontractor, or any staff that is directly or indirectly carrying out the originally contracted.

 

5.3 -                During the execution of the services, it is completely up to the managers and/or supervisors of the service providers or subcontractors to oversee and monitor the manpower in activity on VCP’s premises.

 

5.4 -                The contracted party is subject to Law 9,711/98 (retention) requiring it to withhold 11% as a social security contribution from the gross value on the invoice, bill, or receipt.

 

6. ASSOCIATED BUSINESS RISKS

 

6.1 - COMPLIANCE

 

6.1.1 - EXTERNAL

 

a) Legal

 

b) Regulations

 

6.1.2 - INTERNAL

 

Non adherence to rules and procedures

 

5

 

6.1.3 - AUTHORITY

 

Poorly managed outsourcing

 

6.2 - FINANCIAL RISKS

 

6.2.1 - ASSESSMENT FOR DECISION MAKING

 

a) Inadequate planning and budget

 

b) Inadequate regulated reports

 

6.3 - OPERATING RISKS

 

6.3.1 - PROCESSES

 

a) Dependence on Third Parties

 

b) Product/service failure

 

c) Not meeting customer expectations

 

d) Poor quality of products/services

 

e) Breach of contract

 

f) Inadequate internal communication

 

g) Lack of operational focus

 

6.3.2 - RIGHTNESS / ETHICS

 

a) Illicit acts

 

b) Frauds

 

6.3.3 - ASSESSMENT OF INFORMATION

 

a) Contractual Commitments not assumed

 

b) Inadequate regulated information

 

6.3.4 - HUMAN RESOURCES

 

a) Pressures from Unions

 

b) Inadequate Safety & Health

 

c) Inefficiency

 

d) Lack of manpower

 

e) High turnover

 

6

 

7.        ANNEXES

 

Not applicable

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]