Anti-Circumvention Policy: Protecting Our Supply Chain Infrastructure.

1. Prohibited Actions and Bypass Attempts

Upon the execution of an NCNDA, or upon the disclosure of any specific factory data during the quoting process, the client explicitly agrees not to bypass Baytex to engage our manufacturing network directly.

Prohibited actions under this framework include:

• Direct Engagement: Initiating independent contact with any factory, textile mill, or compliance auditor introduced by Baytex to place direct production orders.
• Shadow Brokering: Utilizing third-party agents, trading companies, or subsidiary legal entities to route orders to a Baytex-nominated facility.
• Unauthorized Renegotiation: Attempting to independently renegotiate pricing, line-time, or compliance requirements directly with facility management without Baytex authorization.

2. Commercial Risks and Loss of Sourcing Infrastructure

Brands occasionally attempt to bypass sourcing partners under the assumption that removing the agency fee yields a lower landed FOB price. This fundamentally misunderstands how our supply chain is structured.

Our pricing, line-time guarantees, and compliance leverage are secured because we aggregate production volume across our network. A brand attempting to operate independently within these facilities immediately forfeits:

• Independent Quality Control: You lose our mandatory 3% QC buffer and independent defect rejection, leaving your brand to rely solely on the factory’s internal, biased QC reporting.
• European Contract Accountability: You forfeit the strict legal protection, LC (Letter of Credit) management, and cross-border accountability managed by our Swedish corporate office.
• Compliance Leverage: You lose the operational authority required to force factories to adhere strictly to ESPR, UFLPA, and ESG mandates.

3. Contractual Breach and Financial Recourse

Baytex actively monitors production schedules, raw material bookings, and capacity allocations within our nominated network. Any breach of this Anti-Circumvention Policy constitutes a severe violation of the governing NCNDA.

In the event of circumvention, Baytex and Karvast Advisory enforce full legal and financial recourse:

• Financial Liability: The circumventing party will be held legally liable for the full commission or operational fee equivalent to the total production volume routed around Baytex. This liability applies retroactively and to any future ongoing orders placed with the facility.
• Jurisdictional Enforcement: Enforcement actions will be pursued in the legal jurisdiction established in your Master Services Agreement (MSA), utilizing our European legal presence to ensure cross-border compliance.

4. Formal Requests and Factory Transitions

If a client requires direct communication with a facility’s management or compliance officer for specific corporate ESG auditing or transition purposes, all requests must be formally submitted and routed through Baytex management.