Terms of Purchase

GENERAL PURCHASE CONDITIONS

1 INTRODUCTION A Contract shall consist of these General Purchasing Conditions (hereinafter referred to as GPC), and a Purchase Order. The Contract applies to all purchases made by the relevant DeLaval company from the supplier (hereinafter the Supplier). If there is any conflict between the provisions of a Purchase Order and the GPC, the Purchase Order shall prevail to the extent of the conflict. No other terms and conditions including without limitation any terms and conditions set out in the Supplier's invoices or other standard form documentation shall apply.

2 QUALITY ASSURANCE AND INSPECTION The products supplied under the Contract (hereinafter the Products) shall be manufactured in compliance with applicable laws, statutory requirements and regulations, including but not limited to FDA and EPA requirements, and in accordance with any specification and other written information given by DeLaval. The Supplier shall provide and continuously update the DeLaval Supplier Portal, available at (https://www.prssystem.se/delaval) or such other web address notified by DeLaval (the “DeLaval Supplier Portal”) with any information requested therein from time to time, which may include, without limitation, information related to Product and other regulatory compliance requirements, quality certificates and test results. The Supplier represents and warrants that the information submitted by the Supplier to the DeLaval Supplier Portal is correct, complete and not misleading. The use or acceptance by DeLaval of any information or documentation provided by the Supplier, does not constitute an acceptance by DeLaval of such information supplied and shall not be deemed to constitute a waiver of any such obligations or liability on the part of the Supplier. The Supplier shall immediately inform DeLaval in writing of any essential condition (including, but not limited to events of delay or other material interruptions in the manufacturing or delivery) which could have a negative effect on the Supplier’s ability regarding the manufacturing and delivery of the Products. DeLaval may at any reasonable time inspect the Supplier's production and test facilities which will or may be used in the performance of this Contract, and inspect and test material and workmanship related to the Products purchased hereunder. DeLaval shall give the Supplier reasonable prior notice of when such inspection will take place. All inspections and tests shall be performed in a manner not to cause unnecessary inconvenience to the work of the Supplier.

3 ETHICS & SUSTAINABILITY The Supplier shall at all times respect and comply with the DeLaval Ethics & Sustainability Principles, available at (www.delaval.com). The Supplier shall avoid, or reduce to a minimum, any negative environmental effects and shall use its reasonable commercial efforts to when possible use packaging material suitable for recycling or reutilization. Without limiting the foregoing, the Supplier shall also take such precautions and institute such procedures as to assure that the standards according to ISO 14001 (or any equivalent standard as a minimum requirement) are met in the production and otherwise.

4 DELIVERY Unless otherwise specified in a purchase order, Products shall be delivered FCA as defined by the ICC INCOTERMS 2010, at the place named in the Purchase Order. Good and marketable title to all Products purchased by DeLaval under this Contract shall pass to DeLaval free and clear of all liens and encumbrances on the date of delivery.

5 DELAY If the Supplier fails to deliver all Products of the Purchase Order within the agreed delivery date, the Supplier shall pay to DeLaval liquidated damages at the following rate: one (1) per cent of the price of the Products in delay for every commenced week of delay, with a maximum limit of compensation of ten (10) per cent of such price. DeLaval also has the right to cancel, in whole or in part, the delayed order in case the delay exceeds twenty (20) business days.

6 TERMS OF PAYMENT DeLaval shall pay the price according to the payment terms set out in the Purchase Order. The Supplier may invoice DeLaval on full and complete delivery. Unless otherwise specified in the purchase order, payment shall be made in US Dollars, sixty (60) days net. The price is fixed and includes freight packaging and labeling. The price excludes value added tax which, if applicable, shall be payable by DeLaval.

7 WARRANTY AND LIABILITY The Supplier warrants that the Products comply with all applicable laws and regulations and that they have the properties and conform to the specifications set out in the Contract or otherwise agreed to. The Supplier warrants that any Products supplied under the Contract are fit for their purpose, have been manufactured with skill and care and in accordance with the highest industry standards. The warranty period for each of the Products shall be twelve (12) months after the date of installation of the Products, or the assembly containing the Product, at DeLaval’s end customer site, or twenty-four (24) months after delivery, whichever occurs first. A new warranty period of twelve (12) months starts for parts, which have been repaired or replaced by the Supplier, but not in any case lasting longer than six (6) months after the end of the warranty period according to the aforesaid. In case of non-compliance during the warranty period with the requirements specified in the warranty given above, the Supplier undertakes, as requested by DeLaval, either refund the purchase price for the defective Product by issuing a credit invoice in an amount equivalent to the original purchase price of the Product or repair or replace the Product or any parts of the Product. Such rectification shall take place at the location/premises reasonably agreed upon between the Supplier and DeLaval and shall be effected promptly following DeLaval’s request. Replaced Products and Products for which the Supplier has made a refund of the purchase price shall become the Supplier's property. DeLaval accepts no liability for storage of such parts, and shall have the right to dispose of such as it wishes should the Supplier not have collected such material within one (1) month from its replacement. In the event rectification must be carried out immediately (to be determined in DeLaval’s reasonable opinion) or if the Supplier fails completely or in part to remedy a defect within a reasonable time, DeLaval may, at its sole discretion, either remedy the defect by its own accord, at the cost of the Supplier, or claim a reasonable reduction of price. If, however, the defect is of such importance that it cannot be remedied within the time period stipulated above, or if the Product cannot be used for its specified purpose or such use is considerably impaired, then DeLaval shall be entitled to refuse acceptance of the defective part and/or, if partial acceptance is not economically justified at the DeLaval’s sole discretion, to terminate the purchase order. The Supplier shall indemnify and hold DeLaval harmless against all costs and losses incurred or paid by DeLaval as a result of or in connection with a breach of any warranty given by the Supplier in relation to the Products, including without limitation, that relate to fault-tracing, inspection, dismantling and reassembling, transportation, labor and travel and hotel costs,. Unless grossly negligent, the Supplier will not be liable for loss of revenue, loss of business or indirect or consequential damages. The Supplier's warranty shall not cover defects caused by normal wear and tear, inadequate maintenance or faulty repair after delivery, failure to observe the operating instructions, building or assembly work not undertaken by the Supplier. To the extent DeLaval might incur product liability towards any third party, having acquired Products from DeLaval, or towards the customers of any such third party, the Supplier shall defend, indemnify and hold DeLaval harmless with respect to such product liability (including reasonable attorney's fees), provided that such product liability is attributable to the Supplier and/or the Product.

8 TERMINATION Without prejudice to any express provision for termination contained herein, this Contract may be terminated immediately by registered letter in case of any material breach of any of its obligations under the Contract and such breach remains unremedied for a period of thirty (30) calendar days after such breach has been brought to breaching Party’s attention in writing. Such termination may also take place where the legal structure or ownership of the Supplier has changed. Either party shall have the right to terminate this Contract with immediate effect if the other party should enter into liquidation, either voluntary or compulsory, or become insolvent, or enter into composition or corporate reorganization proceedings or if execution be levied on any goods and effects of the other party or the other party should enter into receivership or bankruptcy.

9 CONFIDENTIALITY AND INTELLECTUAL PROPERTY RIGHTS The Supplier undertakes not to use or disclose, without DeLaval’s prior written consent, any not publicly known information pertaining to DeLaval, such as technical information, know-how, trade secrets, or customer information in whatever form disclosed to the Supplier. DeLaval’s intellectual property rights and trade secrets are the sole property of DeLaval and may be used by the Supplier solely for fulfilling its obligations according to the Contract. The Supplier warrants that the Products and future developments of the Products, to the Supplier’s best knowledge do not infringe any intellectual property rights of any third party. If at any time it is alleged that marketing, sale, use or import of the Products infringe intellectual property rights of any third party, the Supplier shall at DeLaval’s option and at Supplier’s cost (i) procure for DeLaval the right to continue using the Products, (ii) modify or replace the Products in order to avoid the infringement or (iii) repurchase the Products at the price paid by DeLaval. In addition, the Supplier shall inform, defend, indemnify and hold DeLaval and its customers harmless from any claim arising out of infringement or alleged infringement, direct or indirect, of any intellectual property rights of any third party, including, but not limited to, by reason of the make use, sale or offer for sale or import of the Products, no matter such claim is brought against Supplier, DeLaval or their respective customers. This provision shall remain valid also after the termination of the Contract.

10 MISCELLANEOUS This Contract shall not be assignable in whole or in part by any party without the prior written consent of the other party. Any waiver by either party of a right under this Contract shall not be considered as a waiver of any subsequent or future right under this Contract. If any provision of this Contract is held to be invalid or unenforceable, in whole or in part, the validity of the other provisions of this Contract and the remainder of the provision in question shall not be affected thereby. No alteration or amendment to this Contract shall be valid unless such alteration or amendment is reduced to writing and signed by the duly authorized representatives of both parties. Without limiting the validity of any secrecy agreement between the Parties, this Contract contains the entire understanding between the parties on its subject matter, and annuls and replaces any other agreements or understandings, whether written or oral, which may exist or have existed between the parties on the subject matter hereof. Unless otherwise agreed in writing, the Contract shall be governed by the laws of the State of Illinois and the courts of that state shall have jurisdiction, provided that DeLaval may initiate proceedings before any court of competent jurisdiction.

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