General Terms and Conditions of Delivery

1 Purpose and Scope

1.1 These General Terms & Conditions for Procurement (“Terms”) govern all purchases and other acquisitions of goods, components, materials, software, embedded firmware, tooling and services (collectively “Goods”) by Kontron, d.o.o., Ljubljanska cesta 24A, 4000 Kranj, Slovenia, registered under registration number 5293162000 and VAT ID SI 49029827, as buyer (“Buyer”), from any third-party supplier (“Supplier”).

1.2 These Terms apply to all purchase orders, releases, call-offs, long-term supply arrangements, annual article lists, forecasts, delivery schedules and any other procurement-related arrangements issued or initiated by the Buyer, whether agreed in writing, electronically, through EDI, through a supplier portal or by other means of communication approved by the Buyer. These Terms apply irrespective of delivery method or whether Goods involve physical items or services.

1.3 These Terms apply irrespective of any Supplier quotations, confirmations, order acknowledgements, invoices, dispatch notices, catalogues, delivery notes, declarations of conformity or other Supplier documents. Any terms contained in such documents are excluded and have no legal effect unless expressly agreed in a written agreement signed by both Parties. Any reference to or acceptance of Supplier documents, including technical specifications, catalogues or price lists, shall not be construed as acceptance of any Supplier contractual terms contained therein. Silence or failure to object does not constitute acceptance.

1.4 These Terms take precedence over any terms proposed by the Supplier, including those contained in quotations, proposals, order confirmations, invoices, delivery notes, catalogues, general terms and conditions or other Supplier documents. Any Supplier terms that deviate from, supplement or conflict with these Terms are expressly rejected and have no legal effect unless explicitly accepted in a separate written agreement signed by authorised representatives of both Parties. The Buyer is not required to object to Supplier terms in each instance.

1.5 If the Buyer and the Supplier enter into a separate written supply agreement, frame supply agreement, annual article list, statement of work or special aerospace supply conditions (together “Special Conditions”), such documents apply in addition to these Terms. In the event of inconsistency, the following descending order of precedence applies:

1. Purchase orders issued by the Buyer.
2. Special Conditions signed by authorised representatives of both Parties.
3. Aerospace or AS/EN 9100 specific annexes or quality requirements, if applicable.
4. These Terms.
5. Supplier offers, quotations, order acknowledgements, terms or confirmations.

Unless expressly stated otherwise in the Special Conditions, these Terms continue to apply and are not replaced or waived.

1.6 The Buyer may update these Terms from time to time. The updated version applies to all purchase orders issued after the date on which the updated Terms are published and made available to the Supplier. The Supplier is deemed to have notice of the updated Terms as of the date of publication. Updated Terms do not apply to purchase orders already accepted by the Supplier or to signed Special Conditions unless agreed in writing.

1.7 If the Supplier accepts or performs any purchase order issued after the publication of updated Terms, such acceptance or performance constitutes acceptance of the updated Terms for that purchase order.

1.8 Silence, inaction, failure to object or performance without reservation shall not be interpreted as acceptance of any Supplier terms or deviations from these Terms. Acceptance of deliveries, invoices, documentation or performance by the Supplier does not constitute acceptance of Supplier terms. Any deviation from these Terms is valid only if expressly agreed in a separate written agreement signed by authorized representatives of both Parties.

1.9 Each purchase order issued by the Buyer constitutes an offer to contract on the basis of these Terms. A binding contract arises only when the Supplier expressly accepts the purchase order in writing or begins performance without reservation. Each accepted purchase order constitutes a separate and independent contract that incorporates these Terms in full as referenced in the purchase order. The Parties acknowledge that these Terms are made available to the Supplier on a continuous basis and incorporation does not require physical attachment to each purchase order.

1.10 If a purchase order is issued without explicit reference to these Terms due to clerical error, these Terms apply to that purchase order provided the Supplier had access to them at the time of acceptance.

1.11 These Terms do not create a framework supply agreement, long-term supply obligation or minimum purchase commitment. No course of dealing, historical ordering pattern, forecast, communication or business practice creates any obligation on the Buyer to continue purchasing from the Supplier. The Supplier acknowledges that the Buyer has no obligation to order specific quantities or to continue any business relationship unless expressly agreed in a written agreement signed by authorized representatives of both Parties. No signature, stamp or formal execution is required for these Terms to apply to individual purchase orders.

1.12 Capitalized terms used in these Terms have the meanings set out in Section 2, unless a specific provision expressly defines a term differently for the purposes of that provision.

1.13 Where Goods are supplied for aerospace, defence or space applications, the Additional Aerospace & Defense Conditions in Appendix 1 (“Aerospace Appendix”) apply in addition to these Terms and form an integral part of any Contract formed under these Terms. In the event of inconsistency between the Aerospace Appendix and these Terms, the Aerospace Appendix prevails unless expressly agreed otherwise in writing. The Supplier is responsible for identifying whether supplied Goods fall under aerospace, defence or space classification and for notifying the Buyer in accordance with Section 3.3.

2 Definitions

The following terms have the meanings set out herein. Capitalized terms have consistent meaning throughout these Terms unless expressly defined otherwise in this Section. Definitions provided in this Section prevail over definitions contained in other Sections.

2.1 “Buyer” means Kontron, d.o.o., acting through its business units, branches or authorized representatives.

2.2 “Supplier” means any legal entity that supplies Goods to the Buyer under these Terms.

2.3 “Goods” means any goods, components, materials, hardware, software, embedded firmware, documentation, deliverables, services, tooling or other items supplied under these Terms.

2.4 “Order” means any purchase order, call-off, release, delivery instruction or similar document issued by the Buyer.

2.5 “Confirmed Order” means an Order that the Supplier accepts in writing or is deemed accepted under these Terms.

2.6 “Contract” means the binding legal relationship formed when the Supplier accepts an Order in accordance with these Terms. Each accepted Order constitutes a separate and independent Contract formed under these Terms. These Terms apply to all Contracts and also govern obligations that apply irrespective of a specific Contract, including compliance, confidentiality, intellectual property, export control and audit rights.

2.7 “Special Conditions” means any separate written supply agreement, framework supply agreement, annual article list, statement of work or aerospace-specific supply conditions signed by authorized representatives of both Parties.

2.8 “Article List” means an agreed list specifying items, quantities, pricing, lead times, safety stock levels and related commercial terms.

2.9 “Forecast” means a non-binding projection of the Buyer’s anticipated future requirements. A Forecast does not constitute an Order or create any purchase obligation unless expressly stated otherwise.

2.10 “Safety Stock” means the minimum quantity of specific Goods that the Supplier must hold available for the Buyer, as specified in an applicable appendix, Article List or written agreement.

2.11 “Critical Components” means Goods designated by the Buyer as critical or priority components subject to enhanced supply, stock, traceability, or change-control obligations, as specified in an Article List, Order or other written agreement.

2.12 “Aerospace Requirements” means requirements applicable to aerospace, defence or space programs, including AS/EN 9100 or comparable standards, and any applicable regulatory, contractual or customer-specific requirements.

2.13 “Specifications” means technical, functional, environmental, quality, safety, cybersecurity, packaging and other requirements applicable to the Goods, whether referenced in an Order, drawing, standard, annex, Article List or communicated in writing.

2.14 “Documentation” means drawings, certificates, declarations of conformity, test reports, inspection records, software documentation, material data, production records and any other documents required under these Terms.

2.15 “Delivery Date” means the date agreed in the Order for delivery of Goods to the Buyer.

2.16 “Confidential Information” means all information disclosed by either Party that is confidential by nature or designated as confidential, regardless of form or method of disclosure.

2.17 “Contractual Penalty” means a monetary remedy agreed in advance for specific breaches under these Terms, without limiting the Buyer’s right to recover damages exceeding the contractual penalty.

2.18 “Claims” means any third-party claims, losses, damages, liabilities, penalties, fines, costs or expenses, including legal fees, whether in contract, tort, product liability, IP infringement or otherwise.

2.19 “Party” means either the Buyer or the Supplier, and “Parties” means both of them collectively.

3 Incorporation of Codes, Standards and Policies

3.1 The Supplier shall comply with the Buyer’s Supplier Code of Conduct, as amended from time to time. The Supplier Code of Conduct is incorporated into these Terms by reference and forms a binding part of every Contract. The applicable version is the version published in the Buyer’s or the Kontron Group policy repository on the date of acceptance of the relevant Order. The Supplier shall regularly monitor the published version and ensure ongoing compliance.

3.2 Where Goods are supplied for aerospace, defence or space applications, the Supplier shall comply with AS/EN 9100 or standards that are demonstrably comparable in scope, coverage and rigour. The Supplier shall assess whether the Goods are intended for aerospace, defence or space applications and shall notify the Buyer without delay if such classification is reasonably foreseeable based on documentation, intended use, industry application or regulatory context. Compliance under this Section applies in addition to and does not replace any specific aerospace requirements expressly communicated by the Buyer.

3.3 The Supplier shall ensure that any sub-suppliers providing Goods or processes also comply with the requirements set out herein and shall flow down applicable requirements in full.

3.4 Supplier shall provide evidence of certifications on request and notify Buyer immediately if any certification is suspended, revoked or downgraded.

3.5 The Supplier shall comply with applicable laws and internationally recognized standards relating to environmental protection, responsible sourcing, labour rights, occupational health and safety and corporate governance. The Supplier shall implement and maintain policies and controls addressing human rights, anti-slavery, anti-forced labour, non-discrimination, fair working conditions and environmental impact reduction in accordance with recognized standards or comparable frameworks. Upon request, the Supplier shall provide evidence of such compliance, including audit reports, declarations and due diligence documentation.

3.6 The Supplier shall ensure that Goods do not contain materials sourced from conflict-affected or high-risk areas in violation of Regulation (EU) 2017/821 or other applicable regulations governing responsible mineral sourcing. Upon request, the Supplier shall provide full material declarations and due diligence documentation to allow the Buyer to demonstrate regulatory compliance.

3.7 The Supplier shall ensure that Goods comply with all applicable EU and national laws governing chemical substances, environmental safety and product composition, including Regulation (EC) 1907/2006 (REACH), Directive 2011/65/EU (RoHS) as amended, and any comparable regulations in applicable jurisdictions. The Supplier shall provide Safety Data Sheets, declarations of conformity and material composition information upon request. The Supplier shall notify the Buyer without delay of any Substances of Very High Concern present in Goods and of any regulatory changes affecting compliance. Compliance under this Section applies regardless of the final destination of the Goods or the jurisdiction of their ultimate end use, unless the Buyer expressly agrees in writing that specific regulatory requirements do not apply to a particular delivery.

3.8 Where required by applicable law, the Supplier shall ensure that Goods bear CE marking or comparable certification and shall provide all supporting documentation, including EU Declarations of Conformity, technical files, test reports and risk assessments, upon request. Documentation shall be provided in English unless otherwise agreed.

3.9 The Supplier shall notify the Buyer in advance of any change that may affect compliance with this Section, including changes to composition, manufacturing process, certification scope, regulatory status or sub-supplier selection. The Supplier shall not implement such changes without written approval from the Buyer if the Goods are used in regulated, safety-critical or aerospace applications.

3.10 Where the Supplier processes data, provides services or delivers Goods that are relevant for systems, services or operations subject to Directive (EU) 2022/2555 (NIS2) or to the Slovenian Information Security Act (ZInfV-1), the Supplier shall implement and maintain appropriate technical and organizational security measures consistent with obligations applicable to operators of essential or important services, or measures that are demonstrably comparable in scope, coverage and rigor. The Supplier shall cooperate with the Buyer in ensuring compliance, including incident reporting, security assessments, supply-chain risk management and provision of information required by competent authorities. The Supplier shall notify the Buyer immediately of any security incident, breach or vulnerability that may affect Goods or services supplied under these Terms.

3.11 The Buyer may audit, or require third-party audit of, the Supplier’s compliance with this Section. The Buyer may suspend Orders or terminate any Contract with immediate effect if the Supplier fails to comply with the obligations of this Section or refuses to cooperate with security or compliance assessments.

3.12 The Supplier shall grant the Buyer, its customers, and competent regulatory or certification authorities reasonable access to facilities, processes, systems, documentation, records, and relevant personnel for the purpose of auditing, inspection, compliance verification, or investigation of non-conformities. The Supplier shall cooperate fully, provide requested documentation, and implement corrective actions agreed with the Buyer. Unreasonable refusal of access constitutes a material breach and may result in suspension of Orders or termination under Section 19. Audit rights apply only to activities relevant to the Goods and shall not extend to unrelated information of the Supplier.

3.13 Where the Goods are subject to aerospace, defence or space end-use, additional requirements in Aerospace Appendix apply in addition to Section 3. In the event of inconsistency, Appendix 1 prevails unless expressly agreed otherwise in writing.

4 Orders, Forecasts and Order Acceptance

4.1 Forecasts are non-binding and do not constitute Orders, minimum purchase commitments or volume guarantees. The Supplier shall not produce Goods, procure materials or incur costs based on a Forecast unless expressly authorized in writing by the Buyer. Any such production is at the Supplier’s sole risk and expense.

4.2 Supplier shall confirm each Order in writing within five (5) business days of receipt. Failure to confirm constitutes unconditional acceptance of the Order without modification. Any proposed deviation is valid only if expressly accepted by the Buyer in writing. Delivery dates in the Order are binding upon acceptance.

4.3 The Supplier warrants that all technical, regulatory and compliance-related information provided in quotations, proposals or in connection with Orders is accurate, complete and correct. Misstatements constitute non-conformity under these Terms.

4.4 The Buyer may cancel an Order free of charge up to four (4) weeks before the Delivery Date, provided the Supplier has not commenced procurement or production that is custom, non-cancellable or not reasonably saleable to third parties. The Supplier shall not incur costs in advance of standard lead times without prior written approval.

4.5 Within four (4) weeks before the Delivery Date, the Buyer may postpone delivery for up to six (6) months without cost. The Supplier shall store the Goods at its own cost and risk and may not invoice until delivery. Postponement does not constitute delivery or transfer of title or risk. Any extension requires written agreement.

5 Safety Stock, Critical Components and Allocation

5.1 Where Safety Stock requirements apply under an Order, Article List, quality annex or other written agreement, the Supplier shall maintain the agreed minimum Safety Stock level at all times at its own premises or another location approved by the Buyer in writing.

5.2 Safety Stock remains the property of the Supplier and at the Supplier’s cost and risk until delivery under the applicable Incoterms clause. Safety Stock may not be invoiced or encumbered prior to delivery.

5.3 Safety Stock shall be used exclusively for fulfilment of Buyer Orders. Any draw-down shall be replenished without delay to the required level.

5.4 Safety Stock must consist only of conforming Goods meeting current Buyer-approved Specifications, traceability, storage, shelf-life and regulatory requirements, including aerospace or other regulated applications where applicable.

5.5 Upon expiry or termination of the business relationship, the Buyer may, at its sole discretion:

1. purchase Safety Stock at the contracted price;
2. approve disposal or resale; or
3. require return or repurposing at Supplier cost.

Nothing in this Article obliges the Buyer to purchase Safety Stock absent an express written agreement.

5.6 Deliveries from Safety Stock shall occur within ten (10) days of call-off unless a shorter period is agreed in writing.

5.7 For Goods designated as Critical Components in an Article List, Order or other written agreement:

1. Delivery occurs upon Buyer call-off, unless the call-off period expires without postponement or cancellation;
2. Buyer may postpone call-off for ninety (90) days, or once for up to six (6) months with thirty (30) days’ notice, subject to shelf-life limits;
3. Supplier shall maintain Safety Stock at its cost unless expressly designated as Buyer-owned stock in writing.

5.8 If Goods become subject to allocation, restricted supply, end-of-life or similar constraints, Supplier shall notify Buyer immediately with evidence. Supplier shall fulfil Orders to at least the quantity allocated to it. Buyer may source elsewhere at its discretion.

5.9 Supplier shall not extend lead times, reduce allocation or modify delivery schedules due to allocation without Buyer’s prior written consent.

6 Delivery Terms, Incoterms and Risk

6.1 Unless agreed otherwise in writing:

1. for deliveries originating within the EU, delivery is DDP Buyer’s facility in Slovenia (Incoterms 2020);
2. for deliveries originating outside the EU, delivery is CIP Buyer’s facility in Slovenia (Incoterms 2020), with Supplier responsible for export formalities and insurance to destination.

6.2 The Supplier bears all costs, transport, insurance, customs formalities and duties until delivery under the applicable Incoterms clause.

6.3 Title transfers to the Buyer only upon physical delivery at the agreed location. Risk transfers only upon written acceptance under these Terms. Delivery, unloading, payment or use do not constitute acceptance.

6.4 Rejected Goods remain Supplier property and risk. Supplier shall collect them without delay or, if agreed, Buyer may return them at Supplier cost.

6.5 Supplier shall package, store and transport Goods appropriately for their nature and regulatory classification, including compliance with applicable ESD, MSL, safety-critical and aerospace standards. Goods must be traceable to batch, date code and revision level unless agreed otherwise.

6.6 Each shipment must include delivery documentation sufficient for identification, traceability, customs and regulatory compliance. Documentation must be in English unless agreed otherwise.

6.7 Early, partial or split deliveries require prior written approval. Unapproved early deliveries may be refused or returned at Supplier cost and do not accelerate invoicing, title transfer or risk transfer.

6.8 Only quantities ordered by the Buyer are binding. Excess quantities may be rejected, returned at Supplier cost, or kept without obligation to pay absent express written agreement.

6.9 The Supplier shall notify the Buyer immediately in writing if any delay is anticipated, stating the cause, expected duration, and proposed corrective actions. Notification does not relieve the Supplier of its obligations or prevent application of contractual penalties, damages or other remedies.

6.10 In case of supply disruption, Supplier shall take remedial measures at its cost unless caused solely by Buyer.

6.11 Supplier shall not modify lead times, delivery schedules, logistics or packaging without Buyer’s prior written approval.

7 Delays, Contractual Penalty and Replacement Procurement

7.1 The Supplier shall immediately notify the Buyer in writing of any actual or anticipated delay, including cause, expected duration and proposed mitigation. Such notice does not relieve the Supplier of liability.

7.2 If delivery is delayed for reasons attributable to the Supplier, the Buyer may either cancel the delayed delivery at the Supplier’s cost or accept the delay and charge a contractual penalty, calculated as follows:

1. Days 1–3 of delay: 0,50% of the value of the delayed delivery per day;
2. Days 4–7 of delay: 1,00% of the value of the delayed delivery per day;
3. Days 8–14 of delay: 1,5% of the value of the delayed delivery per day;
4. From day 15 onward: 2,0% of the value of the delayed delivery per day.

The total contractual penalty shall not exceed twenty percent (20%) of the value of the delayed delivery. This does not limit the Buyer’s right to claim damages exceeding the contractual penalty.

7.3 For Goods designated by the Buyer as aerospace, defence, space, safety-critical or otherwise regulated, the contractual penalty shall be five percent (5%) per commenced week of delay, up to a maximum of twenty-five percent (25%) of the value of the delayed delivery. The Supplier shall bear all additional costs imposed by authorities, certification bodies or end-customers arising from delays affecting such Goods.

7.4 Accrual or payment of contractual penalties does not release the Supplier from its obligation to deliver unless the Buyer expressly cancels the delivery in writing under these Terms.

7.5 If delivery is delayed beyond the agreed delivery date, or if the Buyer cancels the delivery due to delay, the Buyer may procure replacement goods on the open market and charge the Supplier the difference between the replacement cost and the contractual price, plus all reasonable associated costs including expediting, qualification, testing, logistics and integration.

7.6 The contractual penalties under this Section do not limit the Buyer’s right to claim full damages, including consequential and indirect losses, loss of production, loss of sales, recall costs, field failure costs and statutory remedies.

8 Prices, Taxes and Payment

8.1 Prices are firm and fixed for the duration of the applicable Contract. Prices include all costs associated with manufacture, packaging, labelling, handling, insurance, freight, duties, transport and delivery under the applicable Incoterms clause.

8.2 Prices include all taxes, duties, levies, fees and charges arising from manufacture, export, import, transport, sale or delivery of the Goods, including sales, use, service, excise, customs, environmental and withholding taxes, regardless of jurisdiction, except value added tax (VAT), which shall be charged separately where applicable.

8.3 If any withholding tax applies, prices shall be deemed gross amounts and the Supplier shall bear the withholding tax so that the Buyer pays no more than the agreed net amount. The Buyer shall have no obligation to reimburse or compensate the Supplier for any tax other than VAT expressly charged in accordance with applicable law.

8.4 The Supplier may not increase prices, impose surcharges, or modify commercial terms without prior written agreement signed by the Buyer. Changes due to currency fluctuations, material cost changes, market conditions or allocation shall not justify price increases unless expressly agreed in writing.

8.5 Unless agreed otherwise in writing, payment term is ninety (90) days from receipt of a valid invoice and delivery of conforming Goods. Payment shall not constitute acceptance. If Goods are later found non-conforming, the Buyer may withhold payment, demand refund, or set off any paid amount against other sums due.

8.6 If the Buyer elects to pay earlier than the contractual due date, the Buyer may deduct a three percent (3%) early-payment discount from the net invoiced amount excluding VAT. No prior approval from the Supplier is required. Early payment shall not constitute acceptance of the Goods, accelerate transfer of risk, or affect warranty rights.

8.7 Invoices must reference the Order number, item numbers, quantities, delivery note, date codes or batch IDs where applicable, and must be consistent with the delivery documentation. Incorrect invoices may be rejected, and payment terms restart upon receipt of a corrected invoice.

8.8 The Supplier shall not charge minimum order fees, administrative fees, restocking fees, storage charges or cancellation costs unless expressly agreed in writing.

8.9 Prices are stated in the currency of the Order. The Supplier shall bear all exchange rate risks.

9 Warranty and Quality

9.1 The Supplier warrants that all Goods:

1. conform to specifications, drawings, BOM, technical requirements and approved samples;
2. comply with applicable laws and standards, including any requirements for safety-critical, aerospace, defence, ITAR/EAR-controlled, medical or other regulated end-uses designated by the Buyer;
3. are free from defects in design, materials, workmanship, contamination, integration and processes (including latent defects);
4. are new, unused, genuine and traceable; and
5. are fit for their intended and reasonably foreseeable purpose.

9.2 The warranty period shall be thirty-six (36) months from the date of delivery or twenty-four (24) months from installation or first use by the Buyer or its customer, whichever occurs later. For repaired or replaced Goods, a new warranty period shall apply starting from the date of replacement or completion of repair.

9.3 The Supplier shall provide technical support, documentation updates, product lifecycle information, notices of end-of-life at least twelve (12) months in advance, and maintain form, fit, and function-compatible replacement capability for at least seven (7) years after expiry of the warranty period, unless otherwise agreed in writing.

9.4 Supplier may not change design, materials, components, manufacturing processes, equipment, sites, sub-suppliers, software/firmware versions or quality controls without Buyer’s prior written approval. Changes require advance notice and Supplier bears requalification/implementation costs. This applies only to Goods supplied to Buyer.

9.5 The Supplier shall maintain documented return-material authorization (“RMA”), failure analysis and corrective-action procedures consistent with applicable standards. Such procedures do not limit Buyer’s rights. Unless Supplier proves non-Supplier causation using traceable analysis, all returns, repairs, logistics and related costs are Supplier’s responsibility.

9.6 Supplier shall maintain a counterfeit-prevention and traceability programme consistent with industry standards (incl. AS/EN 9100 where applicable), source only from OEM/authorized channels, retain authentication records and immediately notify Buyer of suspected counterfeit parts. Suspect items shall be quarantined, replaced or disposed of at Supplier’s cost.

10 Liability and Indemnification

10.1 The Supplier warrants it holds all rights, licenses and permissions required to manufacture, sell and deliver the Goods, and that their delivery and use by the Buyer, its affiliates and customers does not infringe intellectual property rights, including patents, copyrights, design rights, trade secrets and semiconductor topographies.

10.2 The Supplier shall indemnify, defend and hold harmless the Buyer, its affiliates, customers and end users from all losses, damages, fines, penalties, recall costs, field-failure costs, corrective actions, rework, testing, legal fees, expert fees and third-party claims arising out of or in connection with:

1. defects or non-conformity of the Goods;
2. breach of these Terms, warranties or specifications;
3. breach of law, standards or regulatory requirements;
4. IP infringement;
5. counterfeit, grey-market or unauthorized sourcing; or
6. failure to comply with change-control obligations.

10.3 If any regulatory authority, certification body or enforcement agency requests information, access, corrective action or cooperation relating to the Goods, the Supplier shall fully cooperate at its own cost and reimburse the Buyer for costs arising from Supplier non-compliance.

10.4 The indemnity does not apply to the extent losses are caused solely and directly by:

1. Buyer modifications after delivery that materially alter the Goods and were not reasonably foreseeable;
2. use contrary to clear written instructions provided prior to use; or
3. defects resulting solely from Buyer-provided design specifications.

Standard EMS processing, integration, programming, reflow, assembly and similar operations remain foreseeable use.

10.5 No limitation of liability, exclusion of indirect damages or contractual penalty cap applies to liabilities arising under this Section, unless agreed in writing by authorised representatives of both Parties.

10.6 Obligations under this Section survive termination, cancellation, delivery, payment and expiry of warranty.

10.7 Design Responsibility and Buyer-Supplied Specifications:

1. The Supplier remains fully responsible for conformity, workmanship, materials, manufacturing processes, integration and regulatory compliance, even where Buyer provides technical documentation.
2. The Buyer is responsible only for correctness of functional design contained in Buyer-supplied documentation.
3. The Supplier shall review Buyer-supplied documentation and notify the Buyer in writing of errors, omissions, safety issues or non-compliance reasonably detectable by a competent supplier. Failure to notify constitutes acceptance.
4. Where failure results from combined causes, liability is apportioned to the Supplier to the extent attributable to its performance.
5. The Supplier may not rely solely on Buyer-supplied documentation without conducting reasonable professional review.

10.8 Goods containing software, firmware or network-capable components must be free of known vulnerabilities, malicious code, backdoors or unauthorised data collection. The Supplier shall promptly notify the Buyer of vulnerabilities and provide patches, mitigation or replacement at its cost. Indemnification applies to losses caused by insecure design, inadequate patching or non-compliance with security obligations.

10.9 The Buyer’s liability to the Supplier under these Terms or any Contract is limited to direct damages caused by the Buyer’s proven gross negligence or wilful misconduct. “Direct damages” means reasonable costs to cure the immediate breach and excludes loss of profit, production interruption, loss of business, reputational harm, data loss or third-party claims. This limitation does not apply to:

1. breach of confidentiality;
2. breach of Supplier IP or proprietary rights;
3. breach of personal data protection obligations; or
4. liability that cannot be limited under mandatory law.

This Article does not limit the Supplier’s obligations or the Buyer’s rights under this Section.

11 Anti-Corruption

11.1 The Parties warrant that the conclusion and performance of these Terms or any Contract is not, and will not be, the result of any reward, gift, payment, promise, inducement or benefit offered, provided, requested or received, whether directly or through intermediaries, for the purpose or effect of improperly influencing decision-making.

11.2 Each Party shall comply with all applicable anti-bribery, anti-corruption and anti-money-laundering laws and shall not engage or authorize third parties to act in violation of such laws.

11.3 Each Party shall notify the other without delay of any suspected breach and shall fully cooperate with internal inquiries and lawful investigations. The Buyer may suspend performance pending investigation.

11.4 The Buyer may terminate any Contract and affected Orders with immediate effect and seek full damages if the Supplier breaches this Section or refuses to cooperate.

11.5 The Supplier shall maintain adequate controls, records and compliance policies relating to anti-corruption and shall, upon reasonable request, provide evidence of such controls.

12 Confidentiality

12.1 Each Party shall keep confidential all information disclosed in connection with these Terms or any Contract, regardless of form, including technical, commercial, financial, operational, organisational information, specifications, drawings, software, source code, samples and pricing, whether marked confidential or reasonably understood as confidential.

12.2 Each Party shall protect Confidential Information with at least the same care it applies to its own confidential information, and no less than a reasonable standard. Access shall be limited to personnel and approved third parties who need access for performance and are bound by equivalent confidentiality obligations. No public statements relating to any Contract may be made without prior written approval of the other Party.

12.3 Confidential Information remains the disclosing Party’s property. The receiving Party shall use it solely for performance under these Terms or any Contract. Upon request, Confidential Information shall be returned or destroyed, except copies retained solely for legal, regulatory or archival purposes, which remain confidential.

12.4 These obligations do not apply to information the receiving Party proves:

1. was lawfully known before disclosure without confidentiality duties;
2. was independently developed without use of Confidential Information;
3. was lawfully obtained from a third party without breach of confidentiality;
4. becomes public through no breach; or
5. must be disclosed under law or binding order, provided disclosure is limited to what is legally required and the disclosing Party is notified where lawful.

12.5 These obligations survive termination indefinitely.

13 Personal Data Protection

13.1 The Parties shall only use personal data obtained for and in connection with the implementation under these Terms or any Contract for the purpose of implementing under these Terms or any Contract. The Parties shall ensure that individuals whose personal data they have acquired are afforded all rights under applicable law, including rights to access, transcribe, copy, amend, correct, block or delete their personal data, all in accordance with Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 (General Data Protection Regulation) and the Personal Data Protection Act (Zakon o varstvu osebnih podatkov – ZVOP-2). Each Party shall implement appropriate technical and organizational measures to protect such personal data against unauthorized access, alteration, loss or disclosure.

13.2 The Supplier shall not process personal data on behalf of the Buyer and shall not act as a processor. If processing on behalf of the Buyer becomes necessary, the Parties shall first conclude a separate data-processing agreement compliant with GDPR Article 28. Incidental access to business contact information or correspondence necessary for performance does not constitute processing on behalf of the Buyer.

13.3 If disclosure of personal data is required by law or binding decision of a competent authority, the disclosing Party shall notify the other Party where legally permissible and disclose only the minimum necessary data. Each Party shall notify the other without undue delay of any confirmed personal-data breach affecting data obtained under these Terms, where such notification is legally required.

13.4 These obligations survive termination of these Terms or any Contract.

14 Subcontracting

14.1 The Supplier may not assign, transfer or otherwise dispose of any rights or obligations under these Terms or any Contract, nor subcontract performance of any part thereof, without the Buyer’s prior written consent. Any consent applies only to the specific approved transaction and does not constitute general or continuing approval.

14.2 Any assignment, transfer or subcontracting in breach of this Section is void and constitutes a material breach of these Terms and the relevant Contract. Unapproved subcontracting does not release the Supplier from its obligations.

14.3 The Supplier remains fully liable for the performance of any approved subcontractors or assignees and shall ensure they are bound by obligations no less stringent than those under these Terms and the relevant Contract.

15 Intellectual Property and Tooling

15.1 All intellectual property, documentation and materials provided or paid for by the Buyer (“Buyer IP”) remain the exclusive property of the Buyer. The Supplier may use Buyer IP solely for performance under these Terms or any Contract and may not disclose it to third parties without the Buyer’s prior written consent.

15.2 Tooling, materials, components, semi-finished goods, documentation and other items provided by or paid for by the Buyer (“Buyer Property”) remain the Buyer’s exclusive property regardless of location or incorporation into Goods. The Supplier shall store Buyer Property separately, clearly mark it as Buyer property, and protect it against loss, damage, deterioration, misuse, commingling or third-party claims. Buyer Property may not be retained, withheld, pledged, assigned or otherwise encumbered. The Supplier shall return Buyer Property immediately upon request, and in any event upon completion or termination of the applicable Contract.

15.3 All intellectual property created or developed specifically for the Buyer in connection with the Goods (“Foreground IP”) shall be the exclusive property of the Buyer unless expressly agreed otherwise in writing. Unless expressly agreed otherwise, all costs of creating and transferring Foreground IP are included in the agreed pricing, and no royalties or licence fees shall apply.

15.4 To the extent the Goods contain Supplier background IP, software or firmware, the Supplier grants the Buyer a perpetual, worldwide, irrevocable, royalty-free licence to use, reproduce, integrate, repair, maintain, test, resell and distribute the Goods and to provide such rights to the Buyer’s affiliates and customers as necessary for installation, use, resale, support and field service. Source code access, escrow or additional rights shall be agreed separately where required for long-term support.

16 Compliance, ESG and Ethical Standards

16.1 The Supplier shall comply with all applicable laws and regulations governing the manufacture, export, import, delivery and use of the Goods, including laws relating to product safety, labour, environmental protection, sanctions, export controls, customs, competition, anti-trust and anti-money laundering.

16.2 The Supplier shall comply with the Kontron Group’s Supplier Code of Conduct and Code of Conduct, each incorporated by reference and applicable as published in the Kontron policy repository on the Order acceptance date. These obligations apply in addition to Section 3.

16.3 The Supplier shall maintain policies, controls and due-diligence processes addressing sanctions compliance, responsible sourcing, human rights, anti-slavery, ethical business conduct and environmental sustainability, including supply-chain screening against embargoes, sanctions lists and restricted party lists.

16.4 The Supplier shall notify the Buyer without delay of any actual or suspected breach of law, regulatory enforcement action, compliance failure, safety concern or integrity incident affecting the Goods, the supply chain or the Supplier.

16.5 In case of overlap with Sections 3, 8, 9, 10 and 17, the stricter obligation applies.

17 Export Control and Trade Compliance

17.1 The Supplier shall comply with all applicable export control, sanctions, embargo and trade laws in the jurisdictions of manufacture, shipment, transit, destination, including, where applicable: (a) Regulation (EU) 2021/821 (EU Dual-Use Regulation); (b) applicable national export-control legislation implementing EU dual-use rules, including Slovenian law where relevant, and UN Security Council sanctions regimes; and (c) to the extent the Goods are subject to U.S. export and re-export controls, (EAR).

17.2 Performance under these Terms or any Contract is conditional on the absence of legal impediments under applicable export control or sanctions laws. If a binding legal impediment arises, the Supplier shall notify the Buyer without delay, specifying the legal basis and expected duration. Suspension is permitted only to the extent required by law and only for the duration of the impediment. If caused by Supplier non-compliance, the Buyer may terminate the affected Orders or Contract with immediate effect.

17.3 Before accepting any Order, the Supplier shall inform the Buyer in writing if the Goods, software, technology, documentation, tooling or related services are subject to export licensing or transfer restrictions. Export-related restrictions may not be imposed retrospectively. The Supplier shall obtain all authorisations necessary for delivery to the Buyer.

17.4 The Supplier shall provide complete and accurate trade compliance data, including export control classification number (ECCN) US and EU, customs tariff code, origin, preferential status- Upon request, if needed by the Buyer’s customer, the Supplier shall provide complete de minimis calculations and licence conditions.

17.5 The Supplier warrants that Goods are not sourced from sanctioned parties and shall screen its supply chain against applicable sanctions and restricted-party lists.

17.6 The Buyer shall not be required to provide end-use statements except where required by law and only to the extent the Buyer has actual knowledge of final end-use. Standard EMS integration, resale or incorporation into assemblies does not constitute a breach.

17.7 If lawful export to the Buyer becomes permanently prohibited, the Contract and/or Orders terminate only for the affected Goods. The Supplier shall refund all payments for undeliverable Goods. This does not relieve the Supplier of liability for prior breaches or misclassification.

17.8 The Supplier shall bear all penalties, costs, enforcement actions and third-party claims arising from Supplier non-compliance, without prejudice to Section 10.

17.9 In case of overlap with Section 16, the stricter obligation applies.

18 Force Majeure

18.1 A Party is not liable for failure to perform obligations under these Terms or any Contract to the extent caused by an event beyond its reasonable control that could not reasonably have been prevented or mitigated. The affected Party shall notify the other Party in writing without delay, specifying cause, expected duration and mitigation measures.

18.2 Events are not Force Majeure if they arise from the Supplier’s internal business circumstances, including labour disputes at the Supplier or its sub-suppliers, shortage of materials or capacity, failure of subcontractors, predictable market fluctuations, allocation, insolvency of suppliers, cybersecurity incidents arising from inadequate security, or regulatory non-compliance.

18.3 The affected Party shall resume performance as soon as the event ceases and shall mitigate its effects, including sourcing alternatives, expediting or reallocating capacity where within its control. Force Majeure does not relieve the Supplier from obligations that could reasonably be satisfied through alternative sourcing or capacity.

18.4 If the event continues for more than sixty (60) days, the Buyer may terminate any Contract or affected Order in whole or in part without liability.

19 Termination

19.1 The Buyer may terminate any Contract or Order, in whole or in part, with immediate effect by written notice if:

1. the Supplier becomes subject to insolvency, bankruptcy, compulsory settlement, winding-up or comparable proceedings, or is reasonably likely to do so;
2. the Supplier breaches these Terms or any Contract, including warranty, confidentiality, compliance, cybersecurity, export control, sanctions, anti-corruption or ethical obligations, and such breach materially affects regulatory compliance, product integrity, security, safety or lawful use of the Goods;
3. the Supplier undergoes a change of control or ownership, including acquisition by a competitor or entity with conflicting strategic interests, where this materially affects the Buyer’s legitimate commercial or security interests;
4. the Supplier ceases operations, disposes of key assets required for performance, or otherwise becomes unable to perform.

19.2 Upon termination, the Supplier shall immediately deliver all Buyer Property, documentation, data, work-in-progress and other items owned or paid for by the Buyer. Confidential Information shall be returned or destroyed per Section 12.

19.3 Termination does not affect rights accrued prior to termination, including damages, contractual penalties, indemnities, recalls or non-conformities.

19.4 The Buyer’s right to terminate for convenience remains unaffected (see Section 4).

19.5 The Supplier may terminate only where continued performance would violate binding law and no lawful mitigation exists.

20 Governing Law and Dispute Resolution

20.1 These Terms and any Contract are governed by the laws of the Republic of Slovenia, excluding its conflict-of-law rules.

20.2 The United Nations Convention on Contracts for the International Sale of Goods (CISG) does not apply.

20.3 Any dispute arising out of or in connection with these Terms or any Contract shall be finally resolved by the competent court in Kranj, Slovenia.

20.4 Notwithstanding Article 20.3, the Buyer may elect, by written notice, to refer any dispute to arbitration under the Rules of the Vienna International Arbitral Centre (VIAC). The seat of arbitration shall be Vienna, Austria; the language shall be English; the tribunal shall consist of one arbitrator unless the Buyer elects otherwise.

20.5 The Supplier irrevocably submits to the jurisdiction of the court under Article 20.3 and to arbitration commenced under Article 20.4 and shall not contest venue or jurisdiction. If the Buyer elects arbitration after court proceedings have commenced, the Supplier shall cooperate to stay or dismiss such proceedings.

21 Miscellaneous

21.1 Any amendment or modification to these Terms must be in writing and signed by authorised representatives of both Parties. No conduct, silence or course of dealing modifies these Terms.

21.2 Notices shall be in writing and delivered by email to designated contacts, unless these Terms require verifiable delivery. Notices relating to termination, breach, legal claims, compliance or export-control matters shall be sent by registered mail or other verifiable means and are deemed delivered on receipt or refusal. Email notices are deemed delivered when sent unless transmission failure occurs.

21.3 If any provision is invalid or unenforceable, the remainder remains in force. The invalid provision shall be replaced with a valid provision that best reflects the original intent.

21.4 These Terms enter into force and become binding upon the Supplier upon acceptance of the first Order referencing these Terms, including acceptance by performance pursuant to Section 4.

21.5 These Terms are drafted in English. Translations may be provided for convenience only. In case of inconsistency, the English version prevails.

21.6 No failure or delay to exercise a right constitutes a waiver. A waiver is valid only if expressly made in writing.

Appendix 1 – Additional Aerospace & Defense Conditions (AS/EN 9100)

1 Scope

These additional requirements apply to all suppliers delivering products, materials, or services intended for the aerospace, space, or defense sectors, regardless of Kontron’s internal classification.

2 Quality Management System

Suppliers must operate a quality management system compliant with AS/EN 9100 or equivalent.

3 Traceability and Documentation

Suppliers shall maintain full traceability of materials, components, and processes. All relevant records, including CoC, FAI, test reports, and process documentation, must be retained for at least 10 years or longer if required by law or customer agreement.

4 Flow-Down of Requirements

Suppliers shall ensure all applicable customer, statutory, and regulatory requirements are flowed down to all sub-tier suppliers, including:

1. traceability and product conformity,
2. counterfeit part prevention,
3. key process controls,
4. ethical and environmental compliance (REACH, RoHS, ITAR, EAR).

Evidence of such flow-down must be retained for a minimum of five (5) years.

5 Non-Conforming Product Control

Suppliers shall immediately notify Kontron of any non-conforming product that may have been delivered.
Rework, repair, or deviation from specification may only occur with written approval from Kontron.

6 Right of Access and Audit

Kontron, its customers, and regulatory authorities shall have the right of access to the supplier’s facilities, documentation, and quality records at any time during contract execution.

7 Record Retention

All quality, test, and process records shall be retained for a minimum of 10 years unless otherwise specified by contract.

8 Ethics

The Supplier shall ensure that all personnel involved in the performance of aerospace, space or defense work act in accordance with high standards of ethical conduct, including integrity, accuracy of records and traceability of documentation.