Teleste General Terms and Conditions

GENERAL CONDITIONS FOR PURCHASING (TPC 2.0)

1 SCOPE

These General Conditions for Purchasing (“General Conditions”) shall apply to all orders and purchases of goods and products (“Products”) by Teleste Corporation and companies within the same group of companies as Teleste Corporation unless otherwise expressly agreed in writing. The company within Teleste group of companies making an order or making the contract of purchase is hereinafter referred to as “Teleste”. Such group company is solely responsible for any order issued by it and the Supplier shall invoice directly such group Company. The other party is hereinafter referred to as “Supplier”.

2 FORMATION OF CONTRACT

A contract (“Contract”) shall be deemed to have been entered into when (i) the Supplier has accepted Teleste’s order, (ii) Teleste has confirmed the Supplier’s offer in writing or (iii) the parties have signed a contract of purchase. Amendments to an offer, an order confirmation or other documents shall be in writing in order to be valid. Any references to or use of the Supplier’s standard terms or similar terms referenced in the Supplier’s offer, invoice or otherwise are hereby excluded.

3 SOFTWARE

If a Product is a software product or the Product contains embedded software, Teleste shall by virtue of the Contract in relation to said software be deemed to have received the perpetual, irrevocable, worldwide, unlimited and royalty-free right to (i) use and utilize such software, (ii) take any actions to adapt the software to enable its interoperability with other products and software programs of Teleste and/or a third party, and (iii) deliver, and assign the software to third parties, as well as other rights based on applicable law. Such right includes also the right to amend, modify, further develop, duplicate for back-up purposes and sub-license the software. To the extent not otherwise agreed in writing, the Supplier is responsible for all third party software provided by it and the terms and conditions of this Contract shall also apply to such software.
The Supplier must inform Teleste if the Product contains any open source software. In such case, the Supplier shall, at Teleste’s request, replace such open source software with other software. If any open source software is agreed to be included in the Products, the Supplier shall provide the license terms applicable to such open source software to Teleste in advance.

4 ORDERS AND PURCHASE FORECASTS

Unless otherwise agreed, the order shall be deemed accepted by the Supplier unless the Supplier has rejected it within two (2) working days from its receipt. The Supplier’s receipt of the order shall be deemed to have taken place on the next working day after it has been sent to the Supplier by e-mail or as otherwise agreed between the parties.
Any estimates or forecasts for delivery of the Products submitted by Teleste shall, unless otherwise agreed in writing, be non-binding and given for production planning purposes only.

5 GENERAL RESPONSIBILITIES OF THE SUPPLIER

The Supplier agrees to comply with applicable laws and regulations and conduct its business in accordance with high ethical standards. The Supplier shall continuously monitor and measure the quality of the Products and shall comply with any quality and security standards and procedures agreed or that may be reasonably required taking into account the nature of the Products.
The Supplier shall perform its obligations under the Contract in a workmanlike manner and with professional diligence, skill, prudence and foresight.

6 DRAWINGS AND TECHNICAL DOCUMENTS

All drawings, technical documents and other technical information relating to the Products or their manufacture or development submitted by one party to the other, prior or after the formation of the Contract, remains sole property of the submitting party. During the term of the Contract and three (3) years thereafter, drawings, technical documents or other technical information received by one party from the other party, shall be kept confidential by such receiving party and shall not, without written consent of the other party, be copied or disclosed to any third party or be used for any other purpose than for which they were submitted. Teleste receives perpetual, irrevocable, worldwide, unlimited and royalty-free license to use all the drawings, technical documents and other technical information submitted by the Supplier. For the avoidance of doubt, Teleste has right to assign all such documents and information to third parties together with the Products.
The Supplier shall, without extra cost, provide Teleste with drawings and other technical documents in sufficient detail to permit installation, commissioning and maintenance of all parts of the Products.

7 ACCEPTANCE TESTS

Acceptance tests shall take place only to the extent agreed between the parties in writing. Agreed acceptance tests shall be carried out in accordance with the general practice in the industry concerned.
If Teleste is not represented at the acceptance test, the test report shall be sent to Teleste immediately after such acceptance test and shall be deemed to have been accepted as accurate, unless otherwise informed by Teleste within 20 working days.
The Supplier shall bear all costs for carrying out the acceptance tests. Teleste shall however bear all travelling and living expenses for its representatives in connection with such tests.

8 DELIVERY, TITLE

All references to delivery term shall be construed in accordance with Incoterms 2010. Unless otherwise agreed in writing, delivery term is DDP, Littoinen or another location as requested by Teleste.
The title to the Products is transferred to Teleste at the same time as the transfer of risk in accordance with the applicable delivery term.
The delivery time is of the essence. Teleste is not obliged to take the Products into its possession before the agreed time of delivery. Teleste has the right to postpone a delivery with a prior notice to the Supplier.
If it is probable that the Supplier cannot deliver the Products at the agreed delivery date, the Supplier shall, as soon as it becomes aware of the anticipated or actual delay, inform Teleste thereof in writing, including also cause for such delay and new delivery time, and shall, at Teleste’s request and at the Supplier’s own cost, expedite the delivery of the Products in question.
If a delivery is delayed, Teleste shall be entitled to liquidated damages. The liquidated damages shall be payable at the rate of 5 % for each commencing week of delay up to a maximum of 25 %. The liquidated damages shall not exclude Teleste’s right to compensation for any damage and loss incurred by Teleste.
In case of delay, the Supplier shall deliver the Products to Teleste by the quickest possible transportation and the Supplier shall be solely responsible for the costs of such expedited delivery.
If the delay exceeds three (3) weeks, and the delay is not caused by reasons as set out in Clause 14 (Force Majeure), Teleste is entitled at its sole discretion to terminate and/or cancel the Contract and/or the respective purchase order and the Supplier shall pay full compensation for the damage and loss Teleste has suffered for the delay.

9 PRICES AND PAYMENT

The prices for the Products exclude VAT but include any other associated costs, government fees, duties, taxes and the cost of packaging, unless otherwise agreed in writing. The agreed prices are valid for all orders and purchases of Products for the time period agreed by the parties and also thereafter, unless the Supplier has provided Teleste with at least six (6) months prior written notice of price change. No price increase shall affect any quotes or orders already submitted. Further, the Supplier shall aim to lower its prices and costs to Teleste constantly and the parties shall discuss at least twice per year on lowering the prices to Teleste.
The payment shall be made in Euro unless otherwise agreed in writing. Invoices in electrical form are the most recommended. In the invoice, the Supplier shall specify Teleste’s order number, order confirmation number or Contract number. Every individual order shall have an individual invoice. Teleste does not accept any invoices with several purchase order numbers or delivery batches. The Supplier warrants that the prices for the Products are not less favorable than those extended to any other customer for similar goods in equal or lesser quantities. Unless otherwise agreed in writing, Teleste shall pay the purchase price for a Product within three (3) calendar months following the end of the calendar month during which the delivery of that Product has taken place, Teleste has accepted the delivery of the Product and the correct invoice has been received by Teleste. Any payment by Teleste shall be without prejudice to any claims or rights, which Teleste may have against the Supplier and shall not constitute any admission by Teleste as to the performance by the Supplier of its obligations under the Contract.
If Teleste fails to pay by the stipulated date, the Supplier shall be entitled to interest from the day on which the payment became due. The rate of interest shall be 6 per cent per annum. The interest is the Supplier’s sole remedy for delays in payment. All other claims are excluded.
Notwithstanding the above, Teleste has a right to withhold payment for deliveries until possible notices of defects have been solved. During this period, the Supplier is not entitled to interest.

10 LIABILITY FOR DEFECTS, WARRANTY PERIOD

The Supplier warrants that the Products are free from defects in materials, workmanship and design and conform to the specifications and requirements included in the quotation, the order confirmation and/or the Contract and that they fit for the agreed intended purpose and are merchantable. Further, Supplier warrants that any software included within the Products does not contain any open source software, unless specifically otherwise agreed in writing with Teleste.
Unless expressly otherwise agreed in writing, the Supplier’s liability for
a) defects and conformity is thirty-six (36) months and
b) repeated defects in Products that likely are due to the same root cause
sixty (60) months,
is in each case, calculated from the date on which the title of the Products is transferred to Teleste (each period separately and together “Warranty Period”).
When a defect or a non-conformity in a Product has been remedied, a new Warranty Period for the said Product shall begin. In addition, the Warranty Period shall be extended for other Products by a period equal to the period during which the said Products have been out of operation as a result of the defect or non-conformity of a Product.
If any Product or part thereof fails to meet the foregoing warranties, the Supplier shall, without prejudice to other rights of Teleste as set forth hereunder and in addition to paying all costs and damages incurred by Teleste as a consequence of such breach of warranty, within a reasonable time set by Teleste at the Supplier’s cost, either (i) replace the defective Product with a non-defective Product or (ii) repair the Product or part in question.
If the defective Product that fails to meet the foregoing warranties has been delivered to Teleste’s customer, the Supplier shall also cover the related costs for remedying the defective Product, such as costs of dismantling, replacing and installing the related Product(s) or any part, at customer location, in the field and/or elsewhere, as the case may be. Further, in case of repeated defects in Products that likely are due to the same root cause, the Supplier agrees to work with Teleste to assist Teleste in determining the root cause of and developing a plan for remedying that failure and shall offer to inspect, repair and replace as requested by Teleste, at the Supplier’s expense, all Products already delivered by the Supplier irrespective of the location of the Products and whether the Products have exhibited the defect.
In addition to the above-stated, if the Supplier does not fulfil its obligation to replace or to repair in accordance with above, or if, due to the circumstances, replacing or repairing of the Product would cause unreasonable inconvenience to Teleste or Teleste’s customers, Teleste may either: a) itself undertake or employ a third party to undertake necessary remedial works and/or have new parts manufactured at the risk and expense of the Supplier, or b) claim a pro rata reduction of the purchase price of the Product, or c) terminate the Contract.
The Supplier is aware and agrees to that the Products intended for sale to third parties (as part of Teleste products or otherwise) are not examined as to their quality by Teleste before their sale to the customer, and waives the requirement for Teleste to examine the Products or cause them to be examined.
The Supplier shall indemnify and hold harmless Teleste Corporation and its subsidiaries and their customers from any claim, damages, loss, liability and expense arising out of or related to breach of warranty.

11 PRODUCT LIABILITY

The Supplier shall indemnify and hold harmless Teleste Corporation and its subsidiaries and their customers from any claim, damages, loss, liability and expense arising out of or related to product liability. The Supplier shall keep Teleste timely informed of all product liability related risks relating to the Products known to the Supplier.

12 SPARE PARTS AND OBLIGATION TO INFORM

The Supplier is obliged to up to eight (8) years after the delivery of the last unit of the Products to keep available spare parts for the Products.
The Supplier warrants that any Product or production change shall not negatively affect form, fit or function of the Products and their performance characteristics during the validity of this Contract. In case of changes in specifications, the Supplier notes down all modifications and sends them and a sample for Teleste’s consent. In case the Supplier will stop producing or selling Products delivered to Teleste, the Supplier provides a written notification about it at least twelve (12) months earlier and shall in any case fulfill all its obligations and commitments during the notice period in question and after the expiry thereof, as applicable, and shall further grant Teleste a right for the last order for the Products at the end of the notice period in question.

13 INTELLECTUAL PROPERTY RIGHTS

The Supplier warrants that the Products supplied to Teleste hereunder do not infringe any patents or any other intellectual property rights, trade secrets or knowhow of any third party. The Supplier shall indemnify, defend and hold harmless Teleste Corporation and its group
companies and their customers from any claim, damages, loss, liability and expense arising out of infringement or alleged infringement, direct or indirect, of any patent or any other intellectual property right, trade secrets or knowhow of a third party arising out of or relating to the sale or use of the Products or otherwise.
The Supplier shall at its own expense defend and settle any claim against Teleste Corporation and its group companies and their customers alleging that the use of the Products infringes intellectual property rights of a third party, provided that Teleste notifies the Supplier of such claim promptly upon receipt of the notice thereof and provides its reasonable assistance with respect to such proceeding or settlement to Supplier at Supplier’s cost. If the Supplier fails to act against such claims or actions, Teleste shall have the right to take appropriate legal action and shall be repaid any and all expenses in so doing. In addition, promptly upon Teleste’s request in case of an infringement and/or alleged infringement, the Supplier shall without inconvenience to Teleste and/or its end-customer: a) obtain for Teleste and/or the end-customer the right to use the Product(s) consistent with this Contract; b) modify the Product(s) in question so that it becomes non-infringing provided that as modified the Product(s) in question substantially meet(s) all applicable Product specifications previously agreed by the parties; or c) substitute an equivalent product(s) acceptable to Teleste and extend this indemnity to the equivalent product(s).

14 FORCE MAJEURE

Neither party shall be liable for failure to duly fulfill its obligations, if the failure results from reasons beyond its reasonable control, including, but not limited to fire, lightning, natural catastrophe, general mobilization, import, export or currency restriction or embargo, act (including failure to act) of any governmental authority, port congestion, war, riot, revolution, power failure, failure of telecommunications and general shortage of materials.
The above-described circumstances shall constitute force majeure only if their effect on performance of the Contract could not be foreseen at the time of formation of Contract.
The party claiming to be affected by a situation of force majeure shall notify the other party in writing without delay on the intervention as well as on the cessation of such situation.
Regardless of what might otherwise follow from these General Conditions, a party shall be entitled to terminate the Contract by notice in writing to the other, if the other party’s performance of the Contract is suspended under this clause for more than one (1) month.

15 EXPORT AND CUSTOM REGULATIONS

The Supplier warrants that the supply, use and reshipment of the supplied Products are not against any export regulations. If any of the supplied Products are subject to any export regulations, the Supplier shall provide Teleste written and detailed information thereof. The
Supplier shall indemnify Teleste Corporation and its subsidiaries and their customers against any claim, damages, loss, liability and expense arising out of or relating to the Supplier’s failure to comply with this clause.
The Supplier shall provide promptly and at its cost, proof of the Product’s origin, the EU customs classification number of the Product and a unit weight, if requested by Teleste.

16 INSURANCES

The Supplier undertakes to have insurances with a reputable insurance company to cover product liability and other liabilities it may incur in connection with the performance of its obligations under the Contract up to a minimum amount of three (3) million Euros. The Supplier shall present a certificate of the validity of the insurances upon request by Teleste.

17 ENVIRONMENTAL REQUIREMENTS

The Products must be packaged in an environmentally conscious manner with recyclable material and so that the Products are adequately protected during storage and delivery. The Supplier shall comply with the instructions that may be given by Teleste from time to time as
regards to the packaging.
The Supplier shall ensure that none of the Products supplied to Teleste contain any restricted substance defined in EU directive 2011/65/EU and 2015/863/EU (RoHS II and RoHS III directive), nor any restricted chemical defined in EU directive 2006/1907/EC (REACH directive) and that they meet the requirements of said directives, as updated from time to time, and fully comply with them and with other applicable regulatory compliance standards.
The Supplier shall indemnify Teleste Corporation and its subsidiaries and their customers against any claim, damages, loss, liability and expense arising out of or relating to the Supplier’s failure to comply with this clause.
The Supplier agrees to assume full legal responsibility for the proper removal, control, collection, recycling, disposal, and documentation of disposal for end-of-life Products. The disposal must be in accordance with sound environmental principles including, if applicable, any local legislative requirements. If local legislation specifies that such end-of-life obligations (including but not limited to financing) may be allocated to either party depending on the contractual agreement of the parties, this clause should be interpreted as contractually allocating that responsibility to the Supplier.

18 SOCIAL RESPONSIBILITIES AND ETHICAL DEALINGS

The Supplier, including its supply chain, shall comply with all laws and regulations and international conventions and declarations on forced and child labor, non-discrimination, freedom of association and the right to free negotiations, working environment and terms of employment.
The Supplier, including its supply chain, shall strictly comply with all laws and regulations on bribery, corruption, and prohibited business practices. The Supplier has not and will not, for the purpose of influencing or inducing anyone to influence decisions in favor of it, offer, promise or make or agree to make, directly or indirectly, any contributions of any kind or any payments or gifts to or for the benefit of any person or his/her family members. The Supplier, including its supply chain, acknowledges Teleste’s Supplier Code of Conduct and agrees to comply with all of the terms set forth in the Teleste’s Supplier Code of Conduct, as amended from time to time. The Supplier, including its supply chain, acknowledges Teleste’s Anti-Counterfeiting Statement, as amended from time to time, and agrees not to use or otherwise promote counterfeit components in its own business.
The Supplier and its suppliers shall adhere to the Electronic Industry Citizenship Coalition (EICC) code of conduct and only source minerals from responsible sources and to provide written evidence of the sources of the minerals promptly upon Teleste’s request.
The Supplier shall indemnify Teleste Corporation and its subsidiaries and their customers against any claim, damages, loss, liability and expense arising out of or relating to the Supplier’s failure to comply with this clause.

19 TERMINATION OF THE CONTRACT

Notwithstanding the term of the Contract, either party has the right to
terminate the Contract in writing forthwith:
a) if the other party enters into liquidation, bankruptcy or administration proceedings or takes or suffers any similar action as a consequence of a debt; or
b) if the other party is in material breach of any of its obligations under the Contract and has failed to remedy such breach within forty-five (45) days after having received written notice thereof.
Teleste shall have the right at any time to terminate the Contract for convenience with six (6) months prior written notice.
If the Contract is terminated, a party is obliged to return to the other party all confidential information and material originally supplied by the other party.
Any terms and conditions that by their nature or otherwise reasonably should survive an expiry or a termination of the Contract shall also be deemed to survive.

20 AUDITS

Teleste and/or Teleste’s customer (or third party auditor as appointed by Teleste) is entitled, during the entire term of the Contract and 3 years thereafter, to carry out or have carried out an audit at the Supplier’s and its subcontractors’ premises, of the Supplier’s performance and
compliance with the Supplier’s obligations under the Contract. The Supplier shall fully cooperate with any such audit. The auditor shall conduct its work with due care, adhering to professional audit standards. Teleste shall bear its own and external auditors costs for such audits, unless the audit reveals a significant breach of the Contract by the Supplier, in which case the Supplier shall bear all costs for the audit. The Supplier shall always bear its own costs for the audit.

21 CONFIDENTIAL INFORMATION

Each party (“Receiving Party”) shall keep confidential and use for the intended purpose only any and all information (“Confidential Information”), including but not limited to information relating to businesses, products, techniques and processes, received in any form from the other party (“Disclosing Party”) in connection with the business transaction covered by these General Conditions (“Purpose”).
The aforementioned obligation shall in relation to a particular Confidential Information expire three (3) years after the receipt by the Receiving Party of such information and shall not include information which: (i) can be proved to have been in the Receiving Party’s possession before its disclosure by the Disclosing Party; or (ii) is in or becomes to the public domain through no fault of the Receiving Party; or (iii) is received by the Receiving Party from a third party without a duty of confidentiality to the Disclosing Party; or (iv) can be proved to be independently developed by the Receiving Party without recourse to the Confidential Information; or (v) is disclosed by the Disclosing Party after the Disclosing Party receives a written notification from the Receiving Party that the Receiving Party will not accept any further information in confidence in relation to the Purpose.

22 MISCELLANEOUS

If any provision of these General Conditions is declared void or unenforceable, this shall not nullify the remaining provisions of these General Conditions, which shall remain in full force and effect. The void and unenforceable provision shall be deemed to be automatically amended and replaced without necessity of further action by such a provision as to form, substance, time, measure and jurisdiction shall come as close as possible to the void or unenforceable provision.
Teleste may assign any of its rights or obligations without the prior written consent of the Supplier to an affiliate that assumes the business operations relating to the Products. Without a written consent of Teleste, the Supplier is not entitled to transfer the Contract to a third party.
Teleste may use subcontractors for the performance of its rights without the Supplier’s consent. The Supplier may use subcontractors for the performance of its obligations only subject to Teleste’s prior written consent in Teleste’s discretion after receiving from the Supplier the proposed list of its subcontractors, and notwithstanding such consent, the Supplier shall be fully liable for any acts or omissions of a subcontractor. For clarity, any new subcontractor and/or change to the accepted subcontractor(s) of the Supplier requires Teleste’s prior written consent.
The Supplier has no right to use Teleste as a reference or use Teleste´s name for any marketing purposes without Teleste’s prior written approval.

23 GOVERNING LAW, SETTLEMENT OF DISPUTES

These General Conditions as well as all quotations, order confirmations and the Contract shall be construed under, governed by and interpreted in accordance with the laws of Finland without a reference to the conflict of laws regulations thereof. The United Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to these General Terms or the supply relationship.
Any dispute, controversy or claim arising out of or relating to any of the above or to the validity, breach or termination of the Contract shall be finally settled by arbitration in Helsinki, Finland, by a sole arbitrator in accordance with the Arbitration Rules of the Finland Chamber of Commerce. The arbitration shall be conducted in the English language. Judgment upon the award rendered may be entered in any court having jurisdiction or application may be made to such court for a juridical acceptance of the award and an order of enforcement, as the case may be.

© June 2019. Teleste Corporation