Standard terms and conditions for procurement

Dokument ID: AFS-08001E Revisjon nr.:

02

Revisjonsdato 10.05.2013

1.

General These conditions apply to all procurements/orders from Autronica Fire and Security as, hereinafter called the Customer, unless special agreements have been written into the contract, or the order. In the event that conditions arise which are not covered by these terms, NL-01 "General terms of delivery for the delivery of machines or other mechanical equipment" for Denmark, Finland, Norway and Sweden applies. For other countries the "General conditions for the Supply for Plant and Machinery for Export no.188" drawn up with the assistance of the UN Commission for Europe, Geneva, March 1953 including the "Addendum to General Conditions ECE 188, Marine equipment 81" applies. These conditions can only be changed if the parties agree to do so in writing. Definitions:

2.

"Frame agreement":

An agreement of supply of the Customers requirement for special product(s) during an agreed period.

"Call off":

Message from the Customer that a certain quantity goods covered by a frame agreement shall be delivered at a specified time.

"Order form":

The Customers standard form for issuing purchasing orders.

"Special terms and conditions":

Special terms and conditions agreed in agreement between the Customer and the Supplier

" Agreement":

Frame agreement or other agreement between the Customer and the Supplier consisting of Special terms and conditions, these Standard terms and conditions and specifications as applicable.

Delivery a. Delivery requirements in terms of date, quantity and location are defined on the Customer's order form. Any commitment concerning a total volume of delivery during a defined period in time shall be explicit agreed in the special terms and conditions. If a frame agreement is established the delivery requirement can be established by a call off sent by fax or other agreed means. b

Delivery is considered to be made when item(s) to be delivered, together with the prescribed documentation, are accepted by the Customer , at the agreed place of delivery. If the Customer rejects any item because it does not conform to the contract requirements, no delivery shall be considered as having taken place. Any compensation for late deliveries or for additional cost due to late deliveries or deliveries not according to specification as set forth in the special terms and conditions will be applied in the above-mentioned situation. Reference is also made to paragraph 9 (c) (iii).

c.

The trade terms DDP, CIP, FOB, Ex works etc. shall be interpreted in accordance with the rules described in " Incoterms 2000" issued by the International Chamber of Commerce.

d

As soon as the Supplier realises, or has reason to believe that the delivery will be delayed, he shall immediately notify the Customer in writing( by telefax), and state expected delay, the

Utarbeidet av: Marie Elisabeth Sveri Revidert av: Frank R Walstad Godkjent av: Jan Arve Gullvåg

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Standard terms and conditions for procurement

Dokument ID: AFS-08001E Revisjon nr.:

02

Revisjonsdato 10.05.2013 reason for the delay and action taken to minimise the delay and to reduce the consequences for the Customer. e

In the event of delay in delivery not attributable to the Customer and not attributable to force majeure, the Customer has the right to apply any compensation for late deliveries as set forth in the special terms and conditions without any obligation to prove that loss has been incurred unless a compensation for actual loss incurred due to late or deviating deliveries has been agreed.

f

If delivery is delayed by more than 4 weeks, the Customer has the right without cost or any other obligation to cancel the order. The Customer shall in this case inform the Supplier why the intention of the purchase is no longer reasonably met (The Customers customer has cancelled due to late deliveries, other supply sources or alternative products have been used to minimise delay etc.)

g

3.

Deliveries made ahead of schedule are normally not accepted. If delivery is accepted the acknowledged date of delivery shall be regarded as the date of delivery in terms of transfer of risk and date of payment. Prices Unless otherwise agreed in the special provisions of the contract, all prices are all inclusive, firm fixed and include all applicable taxes and duties both in the manufacturing country, any transit countries and in Norway, but exclusive of Norwegian V.A.T. The Customer do not accept any additional charges such as invoice charge, express charge or similar, unless explicit agreed in the special terms and conditions.

4.

Acknowledgement The Supplier shall within 2 working days after receiving the written or faxed order acknowledge the order by telefax. If order acknowledgement is not received within two working days this shall be regarded as the Suppliers acceptance of the delivery dates in the order, and conditions concerning compensation for late deliveries as set out in paragraph 2 in these general conditions and in the special provisions come into force based on the delivery date requested in the order. The order acknowledgement shall contain the following information: The Customer's order no, the number of a frame agreement if applicable, product type number, quantity, the Customer product type number, unit price and day of delivery.

5.

Changes/cancellation The Customer can, without cost, change or cancel orders according to a frame agreement up to 4 weeks before confirmed day of delivery. Changes or cancellation shall be done in writing and shall be confirmed by a new order acknowledgement, ref. point 4. The Customer can, without cost, change delivery date for any order where a frame agreement has not been established up to two weeks before agreed date of delivery. If the Customer cancel later than the above mentioned time limits, the Customer shall pay the Suppliers documented cost, however maximised to 25% of the agreed purchase value of the goods cancelled.

6.

Payment Terms of payment are net 60 days from end of the month that material and duly certified

Utarbeidet av: Marie Elisabeth Sveri Revidert av: Frank R Walstad Godkjent av: Jan Arve Gullvåg

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Standard terms and conditions for procurement

Dokument ID: AFS-08001E Revisjon nr.:

02

Revisjonsdato 10.05.2013 invoices, included any attachments and certificates required by the contract, are received. All invoices, statements and other correspondence relating to the Goods and/or Services ordered must state the Customer's official order number and other material codes or part numbers stated on the order. Payment shall not become due and will not be paid unless the Customer receives correct completed invoices. The Customer shall inform the Supplier of incorrectly completed invoices without undue delay upon detection by the Customer. Any agreed exchange rate adjustments shall be invoiced/credited together with the invoice for the goods. 7.

Force majeure Force majeure is in this context defined as events like but not limited to, act of war, or preparations for such, earthquake or other national declared state of emergency, strike or lock-out, that are outside the control of the contracting parties and cause problems in fulfilling the contract.

8.

Segregation of materials and components etc. paid by the Customer All materials, components and equipment etc. for which the Customer has paid, directly or indirectly, shall be specially marked, or otherwise segregated to ensure traceability. If the Customer has paid advance payments and/or progress payments, the title to such materials components and equipment shall vest in the Customer as far as payments have been made. Tools that has been written off by the Supplier just on deliveries to the Customer according to a quantity agreed in the Special terms and conditions is in this context regarded as paid by the Customer to the same percentage as the actual delivered quantity compared to the write off quantity agreed.

9.

Quality a.

All requirements of this contract are subject to Quality Assurance to the satisfaction of the Customer.

b.

The Suppliers Quality Assurance In general the Supplier’s should have a QA System according to ISO 9001:2000. For the ATEX products Supplier’s must have a ISO 9001:2008 Certified QA System. Additionally Supplier`s have to meet the requirements in EN 13980:2002. The Supplier of ATEX products must agree upon that the Customer and the Notified Body have the right to at any time carry out an audit.

c.

The Customer's quality assurance i The Customer or its customers shall have the right at its own cost, to inspect and observe the development and production of equipment covered by this contract at any time. ii The Customer has the right to perform quality control/tests in connection with receipt, and/or in connection with its own production. iii

In case any item or product delivered or to be delivered under the contract does not conform with the requirements of the contract, the Customer shall have the right to reject such item or product. If so permitted by the specifications, the Supplier may correct the

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Standard terms and conditions for procurement

Dokument ID: AFS-08001E Revisjon nr.:

02

Revisjonsdato 10.05.2013 rejected item or product and resubmit it for acceptance as a formerly rejected and subsequently corrected item or product. Notwithstanding the above, the Customer has the right when rejecting an item or product, to refuse correction and re submittal under the contract. 10.

Warranties

a)

Supplier warrants to Customer that good title to Products, free from any security interest or other lien or encumbrance, shall be conveyed to the Customer, that the Products will be delivered free of any rightful claim of any third person by way of infringement, that the Products will conform to the descriptions, specifications and other requirements contained in this Agreement and in Releases; that the Products will be free from defects in materials and workmanship; and, if the Products are designed by Supplier, that the Products will be free from defects in design. If U.S. government safety and/or other regulations are applicable to the Products, Supplier warrants that the Products conform to such governmental standards. b) Supplier warrants that all services performed under this Agreement shall be performed in accordance with current, sound and generally accepted industry practices by appropriately licensed personnel who are experienced in the appropriate fields. c) Inspection, test, acceptance or use of the Products shall not affect these warranties. d) Supplier agrees, in addition to rights and remedies provided by applicable law, to promptly repair or replace, without charge, any Products that fail to conform to the warranties and should any of the services be defectively performed by Supplier, Supplier shall re-perform or correct such defective services at no additional charge.

11.

Insurance a) Supplier shall maintain insurance covering its liability to its employees and to Customer. The insurance coverage required by the Agreement shall the following: (i) Workers’ Compensation Insurance in accordance with the laws of the state or country, as applicable, in which the Agreement is performed and Employer’s Liability Insurance, in the amount required by such Norwegian Laws .Commercial /Product General Liability Insurance including contractual liability. b) Certificates. Certified copies of policies or certificates evidencing insurance coverage and naming Customer as an additional insured shall be filed with Customer within thirty (30) days after the date of this Agreement and within a reasonable time after any renewal or changes to such policies are issued. Such certificates shall provide that there shall be no cancellation, non-renewal or material reduction for such coverage without thirty (30) days prior written notice to Customer. All such insurance policies will be primary in the event of loss arising out of Supplier’s performance of this Agreement. Supplier’s failure to provide copies of policies or certificates shall not be deemed a waiver by Customer of such coverage or a waiver of the obligation of Supplier to obtain such coverage. To the extent permitted by law, Supplier and its insurer(s) agree that subrogation rights against Customer are hereby waived and will be reflected in any certificates required under this Agreement.

12.

Indemnity Supplier agrees to indemnify and hold Customer harmless from any and all damages, liability, and costs arising from Supplier’s acts or omissions in any respect or from any breach hereunder. Under no circumstances shall Customer be liable to Supplier for special, indirect, or consequential damages

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Standard terms and conditions for procurement

Dokument ID: AFS-08001E Revisjon nr.:

02

Revisjonsdato 10.05.2013 13.

Patents and rights The Supplier shall indemnify the Customer, its customers and employees against any and all liabilities, including all costs and expenses, for infringements upon any patent, copy right or trade mark right, arising from the performance of the contract, including, but not limited to subcontracts hereunder, or from the use or disposal of the products supplied.

14.

Configuration control a. If the product covered by the contract is not designed by the Customer, but based on the Suppliers specification at the time of the agreement, the Supplier shall give the Customer information about any changes in configuration of the product. If the change in any way affects the performance, mechanical or electrical interface or the reliability of the product supplied to the Customer, the Customer shall approve the change in writing before the Supplier implements it. b. If the product covered by the contract is according to design made by the Customer, the Supplier can at any time suggest changes in design, drawings or specification that he considers will result in improved manufacturing process, improved performance, delivery time and/or reduced cost. The Supplier shall not, however, commence any work which involves the suggested change until the Customer has accepted the suggestion by issuing a written change order.

15.

Material and Equipment etc. provided by the Customer Materials, equipment, components, tools etc. which are provided, or paid by the Customer, may be used for the performance of the contract only and remain the property of the Customer, and shall at all times be stored in a safe and separate manner to ascertain segregation and identification. Material, equipment etc. except that which has been installed or incorporated in the items to be delivered under the contract shall upon request be returned to the Customer in the same condition as received, normal wear and tear excepted.

16.

Precedence a. The special and general provisions of the contract take precedence over any bid, tender, quotation offer or proposal, which the Supplier has submitted, including the Supplier's general sales conditions, terms or provisions (even if they are written on a later order acknowledgement issued by the Supplier). The rights and obligations of the parties to the contract shall be subject to and governed by the terms and provisions of the contract inclusive of plans and specifications. b. In the event of any inconsistency between the Special contract provisions and these General terms, the Special provisions shall prevail. In the event of any inconsistency between the drawings and specifications on the one hand and the Special provisions in the contract, the Special provisions in the contract shall prevail. In the event of any inconsistency between the specifications and the drawings, the specifications shall prevail. c.

17.

Silence in the specification relative to any detail shown in the drawing, or failing of the drawings to depict all details covered by the specification, shall not be considered as an inconsistency. Confidentiality

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Standard terms and conditions for procurement

Dokument ID: AFS-08001E Revisjon nr.:

02

Revisjonsdato 10.05.2013 The Supplier hereby acknowledges that all or any information given to it by the Customer in the course of negotiating and executing the order relating to the trade, business, customers and marketing strategies of the Customer or to the Customer's current or future products or the design, composition, manufacture and specification thereof has been given on a confidentially basis and solely for the purposes of the order. The Suppliers hereby warrants that it has not disclosed such information to any third party and undertakes that it will not hereafter disclose or use same and undertakes if the Customer reasonably so requires to obtain confidentiality undertakings from individual employees in a form previously agreed with the Customer. 18.

Declaration of conformity The Supplier confirms that all equipment delivered to the Customer according to this agreement, confirms to the EMC directive 89/336/EEC, Safety (low voltage) directive 73/23/EEC and Machine directive 89/392/EEC including future revisions as applicable and therefore will carry a CE- mark. All costs and penalties to the Customer or its distributors/customers related to nonconformance or the Supplier will pay lack of documentation for CE mark on products supplied by the Supplier.

19.

Publicity The Supplier shall not without the prior written consent of the Customer disclose to any third party for the purposes of advertising or promoting or for any other purpose the existence or any details of the contract.

20.

Disputes The parties to the contract shall try to solve by negotiations any disagreement that may arise in connection with the contract. In case of a dispute arising after negotiations have failed the dispute shall be brought before the court, unless the parties have mutually agreed in writing to arbitration. In the purpose of construing and interpreting this contract, this agreement shall be governed by Norwegian Law, and the venue shall be Trondheim.

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