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Terms and Conditions

Terms and Conditions


The following terms shall have the meanings assigned to them, unless a different definition is assigned to them in the Purchase Agreement:


Completion of the delivery of the Equipment, including successful completion of the specified inspections and tests to ensure the equipment meets the requirements set forth in the Purchase Agreement for the quality and workmanship of the equipment.


The materials, equipment and all necessary documentation to be delivered to the Purchaser by Supplier, including any specified services to be performed in connection with the Delivery, such as installation and testing of the Equipment.

The Supplier

"Vendor" as referenced on the individual KONE purchase orders is same as "Supplier".

Purchase Agreement

Contract for the purchase of (goods and services) by KONE including its subsidiaries.

End User

Legal entity responsible for the use of the installed product furnished by KONE and its subsidiaries.

Participating Units

Business unit (including international subsidiaries) within KONE Corporation which participate in the purchase of goods or services covered by the Purchase Agreement.

1. Payment

1.1. Payment Terms

Unless otherwise agreed to in Article 7 of the Annual Purchase Agreement, payment shall be made within forty-five (45) days after delivery of material and receipt of invoice with prices. Under no circumstances shall the Purchaser pay any late, interest, carrying or other charges with respect to any amounts invoiced to the Purchaser for goods ordered under the Purchase Agreement.

2. Equipment

2.1. Scope Of Delivery

The Equipment shall be completed to meet the Specification attached to the Purchase Agreement "Specification" and shall be delivered to the Purchaser within the period allowed for the Delivery. The Equipment shall be deemed to include any equipment and services, which are necessary for the Delivery and the intended use of the Equipment, regardless of whether or not it is specifically identified in the specifications.

Individual deliveries may be changed by the Purchaser from time to time to correspond with the progress of the projects for which goods are ordered hereunder. In accordance with the Purchase Order, the Supplier shall give the Purchaser 24 hours notice of all shipments.

2.2. Modifications

No change or modification of the Purchase Agreement or General Terms and Conditions shall be made without the Purchaser's and the Supplier's specific written consent.

The Purchaser shall have the right to request the Supplier to modify the Specification at any time. Any adjustment to the purchase price and to the delivery time caused by the modification shall be agreed to via a written change order. The rights and obligations of the parties under the Purchase Agreement shall extend to all modifications.

2.3. Documentation

The Supplier shall provide the Purchaser with documentation concerning equipment in accordance with the Purchase Agreement. Upon a reasonable request by the Purchaser, the Supplier shall deliver additional instructions and documentation to enable the orderly use, installation and servicing of the Equipment.

The Purchaser shall have the right to use all documentation that has been placed at his disposal, for any authorized purpose and to place such documents at the disposal of authorities, the End User, or any other third party, as necessary in such connection.

The Supplier shall accept individual Purchase Orders and agree to the terms hereof:

signing and returning the Acknowledgment Copy of the Purchase Order hereof,


furnishing the Purchaser with any other writing indicating its acceptance,


performance by the Supplier in accordance with the Purchase Order.

However, the receipt from the Supplier of any acceptance or any document purporting to be an acceptance of the Purchase Order, or receipt of goods shipped or work performed under the Purchase Order or payment therefore, does not constitute an assent by the Purchaser to any terms which are different from or additional to the instructions, Terms and Conditions on the Face and Reverse Side of the Purchase Order, unless expressly assented to in writing by the Purchaser. The Purchase Order is revocable at any time prior to acceptance. Without limiting the foregoing, the Purchaser's receipt of any invoice from the Supplier, before or after the Supplier's delivery of goods described herein, shall not obligate the Buyer to any terms in such invoice which differ from or are in addition to the terms contained herein.

2.4. Inspections and Quality Control

Both the Purchaser and the End User shall be allowed free access to the facilities of the Supplier at all reasonable times for the purpose of inspecting, expediting, or testing the Equipment and the quality thereof and witnessing tests which may have been agreed upon. The costs of carrying out any tests and inspections shall be borne by the Supplier. The cost of attending shall be borne by the attending party.

In addition, if any goods furnished by the Supplier shall fail to satisfy the requirements of the specifications, or shall prove to be defective in any respect, the Purchaser may, at its option, upon notice to the Supplier, (i) require the Supplier to promptly correct or replace the same at the Supplier's expense; (ii) correct or replace or arrange to correct or replace the same, for which the Supplier shall reimburse the Purchaser immediately upon demand; or (iii) cancel all or any portion of this order. If the Purchaser elects to cancel, the

Purchaser shall hold any goods in its possession affected by the cancellation at the Supplier's risk, to be disposed of in accordance with applicable law, and the Supplier shall refund any payments made on account of the canceled goods. Furthermore, in the event any goods furnished by the Supplier are or become defective in any respect whatsoever or

if the Supplier breaches any of it's warranties or obligations hereunder, the Supplier agrees to indemnify and hold harmless the Purchaser from any or all loss, liability, cost or expense (including court costs and reasonable attorney's fees and expense) by reason of any injury or damage, whether direct or indirect, consequential, incidental or otherwise, including all claims of such injury or damage to persons or property, caused by, relating to or arising from such defect or breach.

No approval of the Supplier's technical documents or drawings, inspection, testing of the Equipment, or supervision of design work or manufacturing, whether by the Purchaser or the End User, shall be construed as implying any limitation on the obligations and liabilities of the Supplier.

2.5. Safety

The Equipment shall include all specified safety devices and the Supplier shall ensure that they fully satisfy the requirements of any applicable safety regulations and standards. If any additional safety devices are required, due to a non-compliance with any regulations and standards, they shall be installed at the cost of the Supplier.

Whenever any work is performed at any facility of the Purchaser, the Supplier shall comply with all applicable safety regulations of the Purchaser and shall follow any other instruction given by the Purchaser concerning the safety.

2.6. Compliance With Other Laws and Regulations

The Supplier shall also ensure that the Equipment fully complies with any other applicable laws and regulations in the end use location for the installed equipment.

2.7. Change In Laws

If any modification of the Specification is necessary due to an unanticipated change in laws after the signing of the Purchase Agreement, the Supplier shall request a modification to be made in accordance with article 3.2.

3. Delivery

3.1. Shipping, Packing, Marking, and Storage

All shipments are to be made as directed on the front page of the individual Purchase Order. Notices must be sent to consignee. Enclose shipping memorandum in each package. For less than carload and truckload shipments, indicate order numbers on all material or packages and packing slips and bills of lading, in space provided on the blanks of the various railroad, truck and express companies.

The Equipment shall be packed in a manner which is appropriate with regard to the means of transport to be used and the nature of the Equipment and in accordance with any instructions given in the Specification as to the manner, size, weight, etc. of the packing.

The Equipment shall be clearly marked by the Supplier and carry information concerning the identity of the recipient and the name of the place of destination together with any specific instructions necessary for handling and storage.

3.2. Early Delivery

No Equipment should be delivered or performed prior to the time agreed in the Purchase Agreement as the earliest time for delivery without the prior written consent of the Purchaser.

3.3. Delay By The Supplier

If the Supplier shall fail or refuse to proceed with this order, or if the Supplier shall fail to make delivery of all items within the specified times agreed upon in the Purchase Agreement or on the Purchase Order, the Purchaser shall have the right to cancel all or any part of this order. Time is of the essence to this contract. The Supplier agrees that if the goods ordered are not delivered at the time and in accordance with the Purchaser's instructions, and the Purchaser pays or incurs any damages, penalty or the charge for a late delivery or performance under the terms of the aforesaid contract(s) on account of the Supplier's late delivery, the Supplier shall immediately indemnify and hold harmless the Purchaser therefore.

3.4. Quantity

The specific quantity ordered on each individual Purchase Order must be delivered in full. Delivery of any unauthorized quantity is subject to the Purchaser's rejection, and such goods shall be held at the Supplier's risk, and Seller shall pay all transportation charges to and from the original destination.

3.5. Transfer Of Risk

The Supplier shall bear the risk of loss of the Equipment until the Delivery of Equipment is complete and written acceptance by the Purchaser, upon which the risk of loss shall be transferred from the Supplier to the Purchaser.

3.6. Right To Withhold

The Purchaser may deduct any amount owed by the Supplier from any payment of the Purchase price. The Purchaser shall pay the undisputed amounts payable pursuant to the Purchase Agreement, however, disputed amounts being payable only after the final settlement of such disputes.

3.7. Waiver

No waiver by the Purchaser of any breach of any provision of the order shall constitute a waiver of any other breach or provision. No act, conduct or failure to act of the Purchaser shall constitute a waiver of any provision contained herein unless such waiver is in writing, executed by the Purchaser and delivered to the Supplier.

4. Other Responsibilities Of The Supplier

4.1. Insurance

The Supplier shall at all times and at the Supplier's cost, maintain a Comprehensive General Liability Policy including bodily injury and property damage coverage and containing a Broad Form Contractual Liability endorsement which specifically covers the indemnity under paragraph 7.2 and the obligation the Supplier has accepted hereunder. This comprehensive General Liability Policy shall be specifically endorsed to name the Purchaser as an additional insured.

4.2. Supply Of Spare Parts

The Supplier guarantees the availability of spare parts for the Equipment for at least ten (10) years after Delivery of the Equipment.

4.3. Special Tools

No charge shall be made for patterns, pattern equipment, and jigs, dies and fixtures or special apparatus used in the manufacture of the Equipment provided by the Supplier.

4.4. Liability for Defects

The Supplier guarantees that the Equipment complies in every respect with the requirements of the Purchase Agreement and that they are free from any defect in design, materials, or workmanship. Any non-compliance appearing during the period of time specified in the Purchase Agreement as the period starting from the delivery of Equipment during which the Supplier shall be liable for any defects in the Equipment ("Warranty Period"), shall be corrected by the Supplier without delay and without any additional cost to the Purchaser or the End User.

If any repair under the warranty obligation is made subsequent to the End User having put the Equipment in service, the warranty period in respect of the affected Equipment in service, shall be renewed starting from the date when the repair work was approved by the End User.

Should the Supplier refuse, or fail to fulfill his obligation to the Purchaser's, or End User's satisfaction, within a reasonable period of time, the Purchaser shall be entitled to have repair or replacement carried out at the Supplier's expense. The same right shall accrue to the Purchaser, if in case of urgency the Purchaser finds it inappropriate to wait for the Supplier to carry out the work.

The Purchaser shall request the consent of the Supplier before carrying out the repair or replacement work, if time permits. If such work has been carried out without the consent of the Supplier, the Supplier will be given opportunity to inspect the repaired or replaced products to evidence the applicability of the Supplier's liability to such work.

The guarantee obligation for the Supplier shall not extend to defects proved to having been directly caused by wrong or negligent operation, overloading or inadequate maintenance.

5. Bonds

The performance bond, if required from the Purchaser, shall be issued by any acceptable surety in any agreed form, for the value set in the Purchase Agreement or Purchase Order to secure the performance of the obligations of the Supplier. The Performance Bond shall be valid until the end of the Guarantee Period.

6. Liabilities Of the Suppliers

6.1. Liability for Damages

As the Purchaser's international operations demand promptness and reliability, it is understood that the Supplier appreciates and accepts the fact that he shall fulfill his entire obligation with particular care and that even a minor breach may cause considerable damage to the End User. The Supplier shall particularly undertake to fulfill his obligations in respect of the timeliness and quality of the equipment. Any direct costs incurred by the Purchaser due to any breach shall be compensated for in full by the Supplier.

If the Supplier fails or neglects to perform, keep and observe any term, provision, warranty or condition contained in the Purchase Agreement, the Purchaser shall have, in addition to any other rights and remedies contained herein or in any other agreements between the parties and applicable law, all of which rights and remedies shall be cumulative, and non exclusive, to the extent permitted by law. The Purchaser may, upon written notice to the Supplier, set-off and deduct all or any part of (i) any obligations owing to the Purchaser by the Supplier hereunder, and/or (ii) any damages sustained by the Purchaser resulting from any breach of this agreement by the Supplier against any part of the price due under any and all agreements now or hereafter in effect between the parties.

6.2. Indemnification and Hold Harmless

The Supplier shall defend, indemnify and hold harmless the Purchaser and the End User against losses and claims for injuries or damage to any person or property which may arise out of or in consequence of the performance of any Purchase Agreement or Purchase Order by the Supplier and against all claims, demands, proceedings, damages, costs, charges, and expenses in respect thereof or in relation thereto. Provided that the Supplier's liability to indemnify and hold harmless the Purchaser as aforesaid shall be reduced proportionately to the extent that the act or neglect of the Purchaser, his servants, or agents may have contributed to the said loss, injury, or damage.

6.3. Patents

The Supplier warrants that the goods furnished under this agreement do not infringe any patent rights. The Supplier shall indemnify and hold harmless the Purchaser, its affiliates and their customers from losses, expenses (including attorneys' fees), claims or liability of any nature arising out of the infringement or alleged goods furnished hereunder except where compliance by the Supplier with specifications prescribed by and originating with the Purchaser constitutes the sole basis of infringement or alleged infringement. The Supplier, at its expense, agrees to defend any suit brought or claim asserted against the Purchaser, its affiliates and their customers on account of any such infringement or alleged infringement upon being notified in writing thereof by the Purchaser. If the use of such goods is enjoined, the Supplier shall at its expense make every reasonable effort to obtain for the Purchaser, its affiliates and their customers, a license to continue to use such goods. If after a reasonable time the Supplier is unable or fails to obtain such license, the Supplier shall, at its expense, either replace such goods with equivalent non-infringing goods or modify such goods in a manner acceptable to the Purchaser so that they become equivalent, non-infringing goods. If the Supplier fails or is unable to do any of the above, the Supplier shall refund to the Purchaser the money or other consideration paid therefore.

6.4. Confidentiality

All drawings and technical documents submitted by the Purchaser to the Supplier prior or subsequent to the Purchase Agreement, shall remain the exclusive property of the Purchaser. They may not, without the Purchaser's express written consent, be utilized by the Supplier or copied, reproduced, transmitted, or communicated to a third party.

The Supplier shall, at the Purchaser's request, immediately return any copies of the drawings or technical documents held by him at the end of the Guarantee Period.

The Supplier shall ensure that no information regarding the Purchase Agreement is brought to the knowledge of any third party without obtaining prior consent thereto from the Purchaser.

7. Miscellaneous

7.1. Notices

Notices shall be deemed to have been validly given if delivered personally in writing, sent by registered mail, or faxed followed by a letter copy, to the addresses set forth in the Purchase Agreement or to any other address of which the parties hereto may have informed to the other party. A notice or document sent by registered mail shall be deemed to have been received on the 7th day after mailing.

7.2. The Representatives of the Parties

All communication between the parties shall be affected through the representatives named in the Purchase Agreement or their substitutes as notified from time to time by either party. However, all communication concerning any specific order of the Participating Unit shall be affected directly between the Participating Unit and the authorized representative of the Supplier.

7.3. Amendments

Amendments to the Purchase Agreements shall only be made in writing with specific reference to the Purchase Agreement and therefore any waiver given by either party to the other in any one instance shall not be deemed an amendment of the Purchase Agreement.

7.4. Entire Agreement

The Purchase Agreement and the documents listed in the Purchase Agreement shall constitute the entire agreement between the parties and it shall precede any other document exchanged between the parties before the date of the Purchase Agreement. No document shall be deemed to be included in the Purchase Agreement without a specific reference.

7.5. Assignment and Subcontracting

The Supplier may not transfer or assign the Purchase Agreement or any part of it without the prior written consent of the Purchaser. The Purchaser may freely assign the Purchase Agreement or any part thereof to any company affiliated with the Purchaser by giving advance notice thereof to the Supplier.

If the Supplier wishes to employ subcontractors, the written consent of the Purchaser must be obtained before the subcontracting work is ordered.

7.6. Termination

In addition to any other rights of termination specified in the Purchase Agreement, the Purchaser has a right to terminate the Purchase Agreement in the event that the Supplier is in serious breach of his obligations under the Purchase Agreement and has failed to remedy such breach within 30 days of written demand thereof by the Purchaser. The Equipment failing to meet the specified time and quality requirements shall always be considered a serious breach of the obligations of the Supplier.

The Purchaser may cancel all or any part of this order at any time without notice of any kind, after acceptance and before complete delivery is made, upon the happening of any of the following: insolvency of the Supplier, however induced; the application by the Supplier for the appointment of receiver, trustee or custodian for the Supplier or any part of its assets; the execution by the Supplier of an assignment for the benefit of creditors; the Supplier becomes insolvent or fails generally to pay its debts as such debts become due.

7.7. Excuse of Performance: Cost of Performance

The occurrence or existence of the following events and circumstances shall not excuse the Supplier from the performance of any of its obligations hereunder: (i) any adverse change in the cost or availability of raw materials, supplies or work in process from the date of this order to the date required. Under no circumstances shall the Purchaser pay or be liable to the Supplier for a price in excess of the price determined in accordance with Price List of the Purchase Agreement hereof due to an increase in the Supplier's cost of performance between the date of this order and the time of the Supplier's performance thereof unless the project designation space on the front page of the purchase order is completed and the general contractor(s) or owner(s) of said project(s) agree(s) to pay such increase.

7.8. Force Majeure

The Terms and Conditions of this agreement shall be subject to force majeure and neither party shall be responsible for any consequences, including damages of the non-fulfillment of the agreement, caused by circumstances beyond his reasonable control, including but not limited to war (whether declared or not), acts of government, export or import prohibitions, fire, explosions, floods, accidents, strikes or other concerted actions of workmen, lockouts, sabotage, civil commotion, riots.

If either party suffers delay in due execution of his contractual obligations due to such circumstances, he shall as soon as possible give the other party notice in writing of the cause of delay, such party shall, however, perform said contractual obligations as promptly as reasonably practicable after removal of the cause and/or its effects. For delays or non-fulfillment of the agreement caused by Force Majeure, neither party shall claim damages or any other compensation from the other party. However, if such inability to perform continue for a period in excess of 30 days, the non-involved party may terminate this agreement upon 30 days prior notice.

8. Time is of the Essence

Time is of the essence to this contract.

9. Language

At the express request of the parties, this document has been drafted in English. À la demande expresse des parties ce document a été rédigé en anglais.


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