A. Scope.

These terms and conditions (these “Terms”) shall apply to the provision of services (“Services”) and products including tangible and intangible good(s), materials, Software (as defined in Section 4), deliverables, and all tangible results of or work product resulting from the Services (“Products”) provided by the party named or otherwise identified as the supplier, seller or provider (“Supplier”) on any purchase order (each, a “PO”) issued by Sonus faber S.r.l. ( “Sonus faber”) or any Affiliate of Sonus faber. “Affiliate” of an entity means any entity that controls, is controlled by, or is under common control with such entity, where “control” means the power to directly or indirectly direct the management policies of the other entity (whether through ownership of voting securities, contract or otherwise). Sonus faber and Supplier are each referred to herein as a “Party” and collectively as the “Parties”.

B. Acceptance of POs.

Acceptance of a PO is expressly conditioned upon Supplier’s acceptance of and agreement to these Terms. A PO is deemed accepted by Supplier upon the earlier of (i) Sonus faber’s receipt of Supplier’s written acceptance of the PO or (ii) Supplier’ s commencement of performance pursuant to the PO.

C. Changes to POs.

Sonus faber may reschedule, redirect, or change the quantity or delivery locations of Products or Services covered by any PO without charge and without incurring any liability to Supplier, by providing Supplier with notice at least fifteen (15) days prior to the scheduled delivery date of the applicable Products or Services.

D. Order of Precedence.

In the event of a conflict between the documents referred to herein, the order of precedence will be: (i) a written agreement signed by Sonus Faber and Supplier that applies to the provision of Products or Services covered by the PO (a “Main Agreement”), (ii) any written statement of work or scope of work signed by Sonus faber and Supplier that applies to the provision of Products or Services covered by the PO (an “SOW”), (iii) any express terms stated on the the PO, (iv) these Terms and (v) the Supplier Code of Conduct.

E. Integration.

These Terms, the PO and the Supplier Code of Conduct (plus, if applicable, any Main Agreement and SOW) constitute the full and complete agreement of the Parties with respect to the subject matter hereof, and supersede all prior or contemporaneous oral and written communications, agreements, representations, or negotiations between the parties relating to the subject matter hereof. Sonus Faber expressly rejects any terms contained in any proposal, quotation, acknowledgement, invoice, or other document or communication of Supplier that are inconsistent with or in addition to these Terms, which shall not be binding on Sonus faber even if an acknowledgment copy is signed by Sonus faber. Any “click-wrap” agreement, terms of use, electronic acceptance, order confirmation, privacy policy, or other terms that a user may be required to acknowledge or accept or that are otherwise displayed or accessible to a user when downloading, receiving, using, or otherwise accessing the Products or Services or any portion thereof, are of no force and effect with respect to Sonus faber or any party authorized by Sonus faber to use the Products or Services.

A. Prices; Invoices.

The price charged for Services or Products shall be the lower of (i) the price specified on the PO and (ii) the price agreed by Sonus Faber and Supplier in writing. Unless otherwise itemized in the PO, the price is inclusive of all costs including packaging, transportation to point of delivery, material costs (if not EX WORKS), and license fees, and Supplier is solely responsible for all costs it incurs in connection with its performance of the PO. Supplier shall invoice Sonus Faber in the currency stated in the PO for Services that have been provided and Products that have been delivered in accordance with these Terms.

B. Taxes.

Sonus faber is not liable for taxes that Supplier is legally obligated to pay (e.g., any applicable income taxes, withholding taxes, or tax deductions). The price excludes, and Sonus faber shall pay, if required, all excise, sales, use, transfer, or other taxes, state and local, in connection with the sale or delivery of the Products or Services to Sonus faber. Upon request of Sonus faber, Supplier agrees to provide Sonus faber with certificates, data or other information necessary for any tax exemptions, duty drawbacks, or other tax payments or reporting.

C. Payment.

Sonus faber will make payment on properly submitted and undisputed invoices within the terms specified in the order. Sonus Faber shall at all times have the right to set off any amounts due to Supplier against any amounts due to Sonus Faber by Supplier. Failure to submit a correct invoice for amounts owed by Sonus Faber within sixty (60) days after the event giving rise to the payment is a waiver by Supplier of Sonus faber’s liability for the amounts due.

D. Cost Reduction. Supplier agrees to implement a value control and cost reduction program designed to achieve lower costs for Products and Services, consistent with specification and delivery requirements of the PO. Supplier will work with Sonus faber in good faith to pursue opportunities for cost reductions.

A. On-Time Performance.

Supplier shall provide the Services and deliver the Products on-time, in accordance with the volumes and delivery locations specified by Sonus faber. Time, place and rate of delivery are of the essence. If Supplier is unable to provide the Services or deliver the Products on time, Supplier will promptly notify Sonus Faber and assign additional resources as needed to meet the required delivery date. If Products still cannot be delivered on time, Supplier shall notify Sonus Faber of the earliest possible date for delivery and seek Sonus Faber’s prior approval for premium expedited freight delivery, which shall be paid for by Supplier. Notwithstanding any notice of delivery delays, Supplier’s failure to effect conforming delivery shall entitle Sonus Faber to revoke any acceptance without incurring liability to Supplier, to cancel the PO without incurring liability to Supplier, to receive a full refund of any amounts paid, to purchase substitute Products elsewhere, to return at Supplier’s risk and expense all or any part of a non-conforming delivery and to hold Supplier accountable for any loss or additional costs incurred.

B. Quantities.

Supplier must deliver the exact quantities specified in each PO. Sonus faber reserves the right to reject incomplete deliveries and to return, at Supplier’s risk and expense, excess quantities delivered.

C. Delivery.

Supplier is responsible for labeling and packing of all Products for delivery, and for ensuring the Products are suitably and properly packaged and labeled, and that containers and packaging meets all minimum requirements applicable to common carriers or the relevant mode of transportation. Supplier shall, at no charge and upon request, promptly forward to Sonus faber any documents Sonus faber may reasonably require to allow Sonus faber to clear Products through customs. Unless otherwise indicated on the PO, title and risk of loss for Products shall pass to Sonus Faber upon the later of (i) Sonus faber’s acceptance pursuant to Section 3(D) below, or (ii) the Products have been delivered at the destination specified on the PO and are within the physical possession of Sonus Faber or its designee.

D. Acceptance of Products and Services.

All Products and Services shall be received subject to Sonus faber’s inspection, testing, and acceptance. If Sonus faber determines, in its sole discretion, that the Products or Services do not conform to these Terms, Sonus faber may, without waiver of or prejudice to any other right or remedy available to Sonus faber hereunder or at law, reject any nonconforming Products or Services and: (i) suspend payment to Supplier, (ii) return the Products at Supplier’s risk and expense and claim full refund of the price already paid for the rejected Products, (iii) accept the Products at a mutually agreed equitable reduction in price, or (iv) require Supplier to reperform the Services and replace or repair the nonconforming Products, at Supplier’s cost and expense. Sonus faber’s receipt or acceptance of nonconforming Products or Services shall not constitute a waiver of any claim, right, or remedy Sonus faber has under these Terms or applicable law. Acceptance of, or payment for, the Products or Services by Sonus faber shall not release Supplier from any of its obligations, representations or warranties hereunder.

A. Definitions.

When capitalized, as used herein the following terms shall have these meanings:

• i. “Software” means all computer programming code consisting of instructions or statements in a form readable by individuals (source code) or machines (object code), in any form or medium, provided to Sonus faber by or on behalf of Supplier in connection with the PO. For clarity, all Software constitutes a “Product” under these Terms.

• ii. “Cloud Services” means all cloud services, including software-as-a-service, platform-as-a-service, and infrastructure- as-a-service, provided to Sonus faber by or on behalf of Supplier in connection with the PO. For clarity, each Cloud Service constitutes a “Service” under these Terms.

• iii. “Documentation” means all user guides, manuals, installation instructions, and other written materials provided to Sonus faber by or on behalf of Supplier in connection with the Software or Cloud Services.

• iv. “Updates” means updates, bug fixes, patches, enhancements, upgrades, and new versions of or to the Software or the Cloud Services that are provided to Sonus faber by or on behalf of Supplier in connection with the PO.

B. Software License; Restrictions.

Supplier hereby grants to Sonus faber a non-exclusive, irrevocable (except as permitted under Section 12), transferable (to Sonus Faber Affiliates), perpetual, paid-up (subject to payment of any license fees identified in an applicable Main Agreement, SOW or PO), royalty-free, worldwide license to use, import, reproduce, display, perform, distribute, modify, prepare derivative works of, and otherwise exploit the Software and Documentation, and to have others exercise such rights on Sonus faber’s behalf. Sonus faber and its Affiliates shall not reverse engineer, decompile or disassemble the Software. Sonus faber and its Affiliates shall not remove or obscure Supplier’s copyright notice or other proprietary rights notices contained within the Software or Documentation.

C. Cloud Services.

• i. Sonus faber Data. All data entered, stored, transmitted, or processed by Sonus faber using the Cloud Services and all data generated or derived from such data shall be deemed Sonus faber Confidential Information. Upon request by Sonus Faber at any time, including upon expiration or termination of the Cloud Services, Supplier will, at no charge to Sonus faber, provide to Sonus faber, or enable Sonus faber itself to extract (through the use of reasonable and readily available means), all such data contained in the Cloud Services, in a reasonable format.

• ii. Service Levels; Support. Supplier shall provide the Cloud Services in accordance with relevant Documentation and these Terms, including any uptime requirements, incident response times, maximum or average times to repair, reporting, or any other service levels set forth therein, or if not identified in the Documentation, in accordance with industry best practices. In addition to Supplier’s general support obligations set forth in the Documentation or these Terms, Supplier will provide business continuity and disaster recovery for the Cloud Services in accordance with the Documentation, or if not identified in the Documentation, in accordance with industry best practices.

A. Materials.

Unless otherwise specified on the PO, Supplier will procure, at its sole cost and expense, all materials, components, assemblies, packaging, tooling, equipment, software, and other resources required to provide the Products and perform the Services.  Supplier is responsible for the quality of all such resources and their conformity with the warranties in Section 9.  Supplier is responsible for managing the supply, availability and lead time of all such resources to ensure Supplier is able to meet its commitments under the PO.  Upon Sonus faber’s request, Supplier will provide Sonus Faber with information on its suppliers and participate in Sonus faber’s supplier review and audit processes.  In the event that any Products contain Neodymium magnets, Supplier shall procure such magnets only from suppliers who are licensed to manufacture and sell such magnets by Proterial, Ltd. (formerly Hitachi Metals, Ltd.).

B. Supplier Personnel.

Supplier will provide all personnel necessary for its provision of the Products and Services. Supplier is solely responsible for managing Supplier’s personnel (e.g., hiring, firing, designating where and when Supplier’s personnel perform services, work assignments, practices, policies and procedures) and ensuring compliance with all applicable laws and regulations relating thereto.

C. Subcontractors.

In the event that Supplier subcontracts the performance of its obligations to any other party (including its Affiliate or any third party) (a “Subcontractor”), the Supplier shall have entered into an agreement sufficient to ensure that the provisions of these Terms that are relevant to the performance of such obligations shall apply to such Subcontractor to the same extent they apply to Supplier, and to ensure such Subcontractor’s compliance with these Terms, provided that none of the provisions of these Terms has to be interpreted or is or shall be construed as giving rise to any procurement or subcontract contractual relationship between Sonus Faber and the Supplier or the Subcontractor. Supplier shall in all instances remain responsible for the performance of its Subcontractors.  Supplier shall be directly liable for and shall indemnify and hold Sonus faber harmless from and against any liabilities, losses, damages, costs, and expenses, including reasonable attorneys’ fees, incurred by Sonus faber related to any failure of its Subcontractors to comply with these Terms.

A. Definitions.

When capitalized, as used herein the following terms shall have these meanings:

• i. “Intellectual Property” means all ideas, inventions, improvements and discoveries, and all intellectual property rights and proprietary rights of every kind and nature however denominated, throughout the world, including any such rights evidenced by, embodied in or associated with:  (a) any invention or discovery (including but not limited to processes, machines, manufactures, compositions of matter, formulas, techniques, concepts and ideas) whether patentable or not, (b) any moral rights and copyrights in any work of authorship recognized by foreign or domestic law, by statute or at common law or otherwise (including but not limited to databases, software, source code, object code, schematics, flowcharts, designs and drawings), (c) any and all mask works, (d) any trademarks, service marks, domain names, trade names or trade dress and all goodwill related thereto, (e) any trade secrets or other Confidential Information (as defined in Section 7), (f) all other intellectual property rights protectable under any laws or international conventions throughout the world, (g) any improvements to or derivatives from any of the foregoing, (h) the right to apply for registrations, certificates or renewals with respect to any of the foregoing, and (i) the right to prosecute, enforce, obtain damages relating to, settle or release any past, present or future infringement or misappropriation any of the foregoing.

• ii. “Background IP” of a Party means all Intellectual Property (a) owned or controlled by a Party or its Affiliates as of the date of the PO or (b) conceived or acquired (including via third party license) by a Party or its Affiliates outside the scope of its activities under the PO.

• iii. “Project IP” means all Intellectual Property that is conceived, created, discovered, or developed (whether jointly or solely) by or on behalf of Supplier or its Affiliates (a) in connection with its activities under the PO, including in performance of the Services or development of the Products for Sonus Faber, or (b) using Sonus Faber Confidential Information.

B. Intellectual Property Ownership.

Each Party’s Background IP shall remain solely under the ownership or control of such Party or its Affiliates.  Sonus Faber shall own all right, title and interest in and to any Project IP, subject to any Background IP of Supplier or its Affiliates that is embodied therein.  Supplier irrevocably agrees to assign and transfer, and hereby does assign and transfer, to Sonus Faber and its successors and assigns all of Supplier’s and its Affiliates’ rights, title and interest in and to all Project IP.  All such Intellectual Property that is a copyrightable work will be deemed a work made for hire by Supplier for Sonus Faber to the fullest extent permissible under applicable law. 

C. Intellectual Property License.

To the extent any Supplier Background IP is embodied in any Products or Services, or otherwise governs the use, sale or exploitation of the Products or Services, Supplier, on behalf of itself and its Affiliates, hereby grants to Sonus faber and its Affiliates a worldwide, non-exclusive, perpetual, sublicensable, transferable, irrevocable, non-terminable, royalty-free, fully paid-up license to all such Intellectual Property to (a) use, sell and exploit such Products and Services; (b) incorporate such Products and Service as components or features of products or services manufactured or delivered by, for, or on behalf of Sonus faber or its Affiliates; (c) create improvements, variants, and derivatives of such Products and Services; and (d) use any products, services, inventions, works or materials derived, invented or created from such Products or Services.

D. No Other Intellectual Property Rights.

Except as expressly set forth in these Terms, neither Party shall be deemed to have granted, whether by implication, estoppel or otherwise, any other rights, licenses or ownership to such Party’s Intellectual Property, which other rights are hereby reserved by each such Party.

E. Futher Assurances.

Upon Sonus faber’s request and at Sonus faber’s expense, Supplier agrees to execute, verify, acknowledge, deliver and/or file, and will cause its Affiliates, and its and their subcontractors to execute, verify, acknowledge, deliver and/or file, such further assignments, affidavits, patents or patent applications, copyright registrations, recordals and other documents or instruments as may be necessary or desirable to fully and completely assign and transfer all rights in and to any Project IP to Sonus faber and its successors and assigns.  [If Supplier fails to take any such requested action within thirty (30) days after Sonus Faber’s written request, Supplier irrevocably and unconditionally agrees to appoint, and hereby does appoint, Sonus faber and any of its officers as its attorney-in-fact (which appointment will be deemed a power coupled with an interest) with full powers of substitution and delegation, to execute, verify, acknowledge, deliver and file such further document or instrument.]

F. Recordkeeping.

Supplier shall maintain adequate and current written records (in the form of notes, sketches, drawings or otherwise) to document the conception or first actual reduction to practice of any Intellectual Property that is conceived, reduced to practice, or developed by or on behalf of Supplier or its Affiliates in connection with its activities under this Agreement in a secure area reasonably protected from fire, theft and destruction.  Copies of such written records will be available to Sonus faber at all reasonable times.  All records relating to Sonus faber’s Background IP and Project IP shall be the sole property of Sonus Faber and shall constitute Sonus Faber Confidential Information.

G. Governmental or Third-Party Funding.

Supplier agrees that no part of the Services will be carried out using any funding, labor, equipment or materials of any government or third party that would result in such government or third party obtaining any rights in any Intellectual Property conceived, reduced to practice, or developed by or on behalf of Supplier or its Affiliates in connection with its activities under the PO.

H. Creative Works.

Supplier shall obtain all third-party releases and licenses necessary for Sonus faber and its Affiliates to use video content, audio content, graphic designs, artwork, and other similar creative content (excluding software and other underlying technology) that forms part of the Products or Services (“Creative Works”) consistent with the rights granted by Supplier under these Terms, and Supplier shall pay all expenses, royalties, and fees in connection therewith (including with respect to any union or collective bargaining obligations). To the fullest extent permissible under applicable law, Supplier hereby waives, and where applicable shall obtain third party waivers of, all so called “moral rights” or “droit moral” with regards to any and all use of Creative Works by Sonus Faber and its Affiliates.

A.       “Confidential Information” means all information and materials disclosed or furnished to Supplier, directly or indirectly, by on behalf of Sonus faber or its representatives, by any means, in any form (including, without limitation, physical, oral, written, or visual), regardless of any restrictive markings.  Confidential Information includes, but is not limited to, Personal Data, specifications, instructions, material formulations, product concepts, samples, prototypes, technical information, financial information, computer code, customer information, marketing materials, roadmaps, alliances and partnership information, and other information related to Sonus Faber’s business activities. The existence and terms of the PO and any other agreement between the Parties, and the relationship of the Parties, are Confidential Information.

B.       Supplier shall not (i) use or reproduce any Confidential Information except for the performance of its obligations under the PO; or (ii) disclose, or allow access to, any Confidential Information to anyone except employees and contractors of Supplier who have a need to know Confidential Information for Supplier to fulfill its obligations under the PO are who bound by obligations to keep such information confidential and use it solely for purposes of performing Supplier’s obligations under the PO.  Supplier shall be liable for any act or omission by anyone to whom it has disclosed Confidential Information that would violate these Terms if done by Supplier.

C.       Upon Sonus faber’s request, Supplier shall return or destroy all Sonus faber Confidential Information in its possession or in the possession of its Subcontractors.  The Parties agree that remedies at law would be inadequate to protect Sonus faber against any actual or threatened breach of the obligations in this Section 7 by Supplier.  In the event of any such actual or threatened breach, in addition to other remedies which may be available, Sonus faber shall have the right to specific performance and other injunctive and equitable relief without proof of actual damages.

A.       “Sonus faber Assets” means all materials, tooling, equipment, software, systems, and information furnished by or on behalf of Sonus faber (or a Sonus faber customer) to Supplier or its Subcontractors, or paid for by or on behalf of Sonus faber (or a Sonus faber customer), in connection with the PO, including specifications, tooling, equipment, software, documents, instructions, drawings, diagrams, files, models, samples, designs, products, customer information, technical information, data or other items, in any format. 

B.       All Sonus faber Assets are and shall remain the sole and exclusive property of Sonus faber, and Supplier shall use the Sonus faber Assets only for the benefit of Sonus faber and only for purposes of performing its obligations under the PO.  Supplier shall not remove, alter or obliterate any notice or legend of Sonus faber’s or any other entity’s ownership or rights that appears on any Sonus faber Assets, including any logo or trade dress, or any copyright, patent or trademark notice.  Sonus faber Assets are provided to Supplier “as is” and Sonus faber disclaims all warranties, express or implied, including the implied warranty of merchantability and fitness for a particular purpose.

C.       During such time as Sonus faber Assets are in its custody, control or possession, Supplier shall (i) keep the Sonus faber Assets free of all security interests, liens and encumbrances; (ii) not modify or alter the Sonus faber Assets in any way without Sonus faber’s prior written approval; (iii) not remove or cause or permit to be removed, the Sonus faber Assets from the facility or location designated by Sonus faber; and (iv) operate and maintain the Sonus faber Assets in accordance with good business practice and in compliance with all written and verbal instructions provided to Supplier by Sonus faber, or by usage and maintenance documentation applicable to the Sonus Faber Assets.

D.      As between Sonus faber and Supplier, the risk of loss or damage of the Sonus faber Assets in Supplier’s custody, control or possession will be the exclusive responsibility of Supplier.  Supplier will reimburse Sonus faber for the replacement cost of any Sonus faber Assets that are damaged, destroyed, lost, misplaced or stolen while in the custody, control or possession of Supplier.

E.       Upon reasonable notice and during normal business hours, Supplier will give Sonus faber and its representatives access to each facility where Sonus faber Assets are located so they may inspect and audit the Sonus faber Assets.  Immediately upon Sonus faber’s request, Supplier will return the Sonus faber Assets to Sonus faber or allow Sonus faber or its representatives to enter Supplier’s facilities to remove any Sonus faber Assets.  Supplier agrees to return the Sonus faber Assets to Sonus faber in the same condition as they were provided to Supplier, except for normal wear and tear. 

F.       Supplier may not use Sonus faber Assets, Sonus faber Intellectual Property, Sonus faber Confidential Information or Personal Data in connection with any AI Model, including to directly or indirectly customize, train, or improve any AI Model, without Sonus faber’s express prior written consent pursuant to a separate agreement that allocates rights and liabilities relating thereto.  “AI Model” means any artificial intelligence model (including a deep learning or machine learning model) or other technology able to learn from new inputs or designed to simulate intelligent behavior.  Supplier will comply with all applicable laws and industry best practices governing the use of AI Models.

A. General Warranties. 

Supplier represents and warrants to Sonus faber that (i) Supplier’s performance of its obligations under the PO and these Terms will not cause a breach of any contract or agreement or violate or conflict with any order or decree binding on Supplier or its Affiliates; (ii) Supplier has the full right and authority, and has obtained all consents and approvals necessary, for it to enter into and perform its obligations under the PO and these Terms; and (iii) the PO is enforceable against Supplier in accordance with its terms and these Terms.

B. Production Warranties.

With respect to all Products, Supplier represents and warrants to Sonus faber that:

•  i. Supplier will convey to Sonus faber (or its designee) good and marketable title to the Products, free and clear of all security interests, liens and encumbrances;

• ii. the Products will be new and not used or reconditioned, and will be made from new materials suitable for the uses intended and of the grade and quality described in their applicable Specifications. “Specifications” for a Product or Service means all specifications, documentation, and requirements applicable to such Product or Service that are provided by Sonus faber, plus any descriptions, specifications, documentation or requirements for such Product or Service that are provided or published by Supplier;

• iii. Supplier has, with respect to any third-party technology or components in the Products, obtained all necessary rights from the third party to permit Sonus faber to use such technology or components in accordance with these Terms, without payment of any royalties or other payments to such third party or any other restrictions;

• iv. the Products, and Sonus faber’s sale, distribution and use thereof, will not infringe or misappropriate any Intellectual Property rights of any third party;

• v. the Products are safe for any use that is consistent with the Specifications or that is reasonably foreseeable;

• vi. the Products will comply with all applicable laws;

• vii. during the thirty six (36) month period following the date of delivery of the Products (or such longer period that Sonus faber communicates to Supplier in writing) (the “Warranty Period”), the Products will (a) be free from defects in manufacturing, materials and workmanship, (b) be free from defects in design, and (c) conform to all applicable Specifications; and

• viii. the Software (including any Software embedded in or delivered with any tangible Products) will not contain (a) any undocumented disabling code or any computer virus, worm, Trojan horse, spybot, spyware, malware, time-bomb or similar malicious programs or any analogous intrusive monitoring, disabling or destructive computer code that could destroy, disable, compromise the security of or otherwise adversely affect the Products or (b) any Open Source Code unless Sonus faber has given its prior written authorization otherwise.  “Open Source Code” means any software or other works of authorship that are commonly distributed as “free software”, “open source software” or under a similar licensing or distribution model, including the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD Licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL), the Sun Industry Standards License (SISL), the Apache License or any similar license, including those licenses listed at www.opensource.org/licenses.

C. Service Warranties.

With respect to all Services, Supplier represents and warrants to Sonus faber that:

• i. the Services will be free from defects in workmanship and performance;

• ii. the Services will be free from defects in design;

• iii. the Services will conform to their applicable Specifications;

• iv. the Services will be performed in a timely, workmanlike and professional manner consistent with the highest standards in the industry;

• v. Supplier has, with respect to any third-party technology or components in the Services, obtained all necessary rights from the third party to permit Sonus faber to use such technology or components in accordance with these Terms, without payment of any royalties or other payments to such third party or any other restrictions;

• vi. the Services, and Sonus faber’s use thereof, will not infringe or misappropriate any Intellectual Property rights of any third party, and no fees or royalties shall be shall be payable to any third party by Sonus faber or its Affiliates with respect to the use of the Services as contemplated in these Terms; and

• vii. the Services will be performed in accordance with the PO and these Terms, and appliable law.

D. Remedies.

If any Products fail to comply with the warranties in Sections 9(A) and 9(B) above, then, at the election of Sonus faber, Supplier will, at its sole cost and expense, promptly (i) replace such Products with conforming Products, (ii) repair or modify such Products so they comply with such warranties, or (iii) accept the return of and refund any amounts paid for such Products (plus any inspection, test, and transportation charges).  If any Services fail to comply with the warranties in Sections 9(A) and 9(C) above then, at the election of Sonus faber, Supplier will, at its sole cost and expense, promptly (i) reperform the Services such that they comply with such warranties or (ii) refund any amounts paid for such Services.  In addition, if Supplier becomes aware of any third party claim that the Products or Services infringe any Intellectual Property Rights, Supplier shall promptly notify Sonus faber in writing of such claim, and in addition to the foregoing remedies Sonus faber shall, at its option, be entitled to cancel any remaining portion of the PO without penalty and receive a full refund of all amounts paid.  In the event of any refund under this Section 9(D), if the payment price for the nonconforming Products or Services was not itemized, Supplier shall refund the cost for Sonus faber to obtain conforming replacement Products or Services, as applicable.

A. Indemnity.

Supplier shall indemnify, defend and hold harmless Sonus faber, its Affiliates and its and their respective current and former officers, directors, employees, representatives and agents from and against any and all losses, costs, damages and fees (including reasonable attorney and professional fees) sustained, suffered or incurred by any such indemnified party arising out of or in connection with any claim, action or allegation (i) that the Products or Services, or their use by Sonus faber or its Affiliates as contemplated herein, infringe or misappropriate any third party’s Intellectual Property rights, rights of publicity or rights of privacy, (ii) that the Products or Services caused personal injury or property damage, (iii) resulting from the negligence, gross negligence, willful misconduct, reckless misconduct or fraud of Supplier or its Affiliates or Subcontractors, (iv) resulting from a breach by Supplier of these Terms or an applicable PO, Main Agreement, SOW or the Supplier Code of Conduct, or (v) of, or resulting from, any violation or non-compliance with any applicable law by Supplier, its Affiliates, or Subcontractors. 

B. Indemnification Procedures.

Sonus faber shall promptly notify Supplier of any claim, action or allegation for which Sonus Faber believes it is entitled to be indemnified pursuant to Section 10(A).  Sonus faber agrees to cooperate reasonably with Supplier, at Supplier’s sole cost and expense, with respect to such claim, action or allegation.  Unless otherwise instructed by Sonus faber, Supplier must immediately take control of the defense and investigation of such claim at its sole cost and expense.  Sonus faber’s failure to perform any obligations under this Section 10 will not relieve Supplier of its obligations under Section 10(A), except to the extent that Supplier can demonstrate that it has been materially prejudiced as a result of such failure.  Sonus faber may participate in the defense of such claim, action or allegation at its own cost and expense with counsel of its own choosing.  Supplier shall not make any admission of fault or liability by Sonus faber or any other indemnified party.  Supplier may not enter into any stipulated judgment or settlement without the prior written consent of Sonus faber.

A. Limitation of Liability.

 TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, IN NO EVENT SHALL SONUS FABER BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, LOSS OF PROFITS OR OTHER INDIRECT DAMAGES OF ANY KIND, OR FOR EXEMPLARY OR PUNITIVE DAMAGES OF ANY KIND, WHETHER OR NOT SONUS FABER WAS ADVISED OF OR COULD FORESEE THE POSSIBILITY OF SUCH DAMAGES. THE LIMITATIONS IN THIS SECTION 11 SHALL APPLY NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

A. Termination for Cause.

Either Party may terminate the PO upon written notice in the event that (i) the other Party breaches any of its obligations hereunder and such breach is not cured (if capable of cure) within thirty (30) days after the date notice was provided, (ii) a voluntary or involuntary bankruptcy filing by or against the other Party, (iii) the appointment of any trustee or receiver for any substantial portion of the other Party’s assets, (iv) any assignment for the benefit of the other Party’s creditors, (v) the other Party ceases to carry on business in the ordinary course. 

A. Termination for Convenience.

Sonus faber may terminate the PO for convenience upon fourteen (14) days prior written notice to Supplier.  In such case, Sonus faber may require Supplier to deliver, in the manner and to the extent directed by Sonus faber, any completed or partially completed Products or Services, against Sonus faber’s payments of the portion of the price properly allocable to such Products or Services.  Unless otherwise agreed by Sonus faber in writing, Sonus faber shall have no liability for any raw materials or components Supplier has in stock or on firm order.

C. Survival.

The provisions of Sections 1.D, 1.E, 4.A, 4.B, 4.C(i), 5.C, 6, 7, 8, 9, 10, 11, 12.C, 13, 14, 15, 16, 17 and 18 shall survive any termination or expiration of the PO.  In addition, any provision which by its essence and context is reasonably intended to survive beyond termination or expiration of the PO shall so survive.

A. If Supplier accesses, obtains, stores, transmits, modifies, uses, destroys or otherwise processes (“Process”) any information relating to an identified or identified identifiable individual (“Personal Data”) for or on behalf of Sonus faber or its Affiliates or in connection with performing its obligations under the PO:

• i. Supplier shall (a) comply with the security requirements set forth in Section 14, (b) apply data pseudonymization and anonymization practices where appropriate, (c) minimize the collection of Personal Data to what is reasonably necessary and ensure secure and timely disposal of Personal Data, (d) Process the Personal Data only as reasonably necessary for the purpose of providing the Products and Services, or as otherwise directed in documented instructions from Sonus faber, unless otherwise required by applicable law (in which case Supplier shall inform Sonus Faber of the legal requirement before such Processing), and (e) not “sell” Personal Data as such term is defined under applicable law.

• ii. Supplier shall ensure that any individual or entity acting under Supplier’s authority and who has access to Personal Data (a) does not Process the Personal Data except as authorized herein, and (b) is subject to a confidentiality agreement or under a statutory obligation of confidentiality. 

• iii.  Supplier shall provide reasonable assistance and cooperation to Sonus faber (a) in any data protection impact assessment Sonus faber conducts regarding the Processing of Personal Data by Supplier and (b) so that Sonus faber may fulfill its obligation to respond to requests by individuals (or their representatives) for exercising their rights with respect to their Personal Data (for example, access and deletion requests).

• iv. Supplier shall not engage in any cross-border transfer of Personal Data without first notifying Sonus faber in writing and signing Sonus faber’s Data Processing Agreement.

B. Supplier will provide reasonable assistance and cooperation to Sonus faber in identifying, evaluating, documenting and responding to any Personal Data Breach (as defined in Section 14(A)(v)), and reducing the risk to individuals whose Personal Data is involved in a Personal Data Breach.  Without limiting the foregoing, within 48 hours after discovery of a Personal Data Breach, Supplier shall inform Sonus faber of the Personal Data Breach via privacyandsecurity@bose.com.  Supplier will provide reasonable assistance and cooperation to Sonus faber in connection with any consultation Sonus faber makes with supervisory authorities in relation to any Personal Data Breach or Processing of Personal Data by Supplier.

Supplier has implemented and will maintain security controls that are consistent with applicable laws and National Institute of Standards and Technology Security and Privacy Controls (NIST) publication 800-53 (or such other industry standards that are at least as protective), and that satisfy, at a minimum, the requirements described in this Section 14.  Supplier shall notify Sonus faber in writing immediately of any accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to, Sonus faber Confidential Information or Sonus Faber Assets.

A. Information Security Polices and Standards.

Supplier has implemented and will maintain written information security policies, standards and procedures and that are designed and implemented to:

i.      Ensure the security and confidentiality of Sonus faber Confidential Information and Sonus faber Assets;

ii.     Prevent unauthorized persons from gaining physical or electronic access to its systems that store or process confidential information and assets (e.g., access controls);

iii.      Designate one or more of its personnel to coordinate its information security program;

iv.      Prevent its systems that store or process Sonus faber Confidential Information and Sonus Faber Assets from being used without authorization (e.g., logical access control);

v.      Ensure that Sonus faber Confidential Information and Sonus faber Assets cannot be read, copied, modified or deleted without authorization (e.g., data access controls);

vi.      Ensure that all of its systems that store or process Sonus faber Confidential Information and Sonus faber Assets are the subject of a vulnerability management program that includes regular vulnerability scanning and remediation; and

vii.     Ensure its personnel are trained about their security obligations and responsibilities for protecting Sonus faber Confidential Information and Sonus faber Assets; and

viii.      Ensure that any security breach is managed in accordance with appropriate incident response and remediation procedures and applicable laws.

B. Physical Security.

Supplier will maintain reasonable security systems at all of its sites at which an information system that uses or stores Sonus faber Confidential Information is located, and implementing measures to detect, prevent, and respond to intrusions.

C. Network Security.

Supplier has implemented and will maintain reasonable information security policies and procedures addressing network security.

D. Cloud Security.

If Supplier uses any cloud platforms to host, store or transmit any Sonus faber Confidential Information, Supplier will maintain (and ensure its cloud service providers maintain) reasonable information security policies and procedures addressing cloud security.

E. Monitoring.

Supplier will monitor and test its security measures and controls from time to time, and to adjust its security measures from time to time in light of relevant circumstances or the results of any relevant testing or monitoring.

F. Access Control (Governance).

Only authorized Supplier personnel can grant, modify or revoke access to a Supplier information system that stores or processes Sonus faber Confidential Information.  Supplier has implemented and will maintain commercially reasonable physical and technical safeguards to create and protect passwords for Supplier’s information systems.

G. Authorized Personnel.

Supplier will limit access to Sonus faber Confidential Information to its personnel who require access to exercise Supplier’s rights under this Agreement and who are bound by written agreements with Supplier that obligate such personnel to keep the Sonus faber Confidential Information confidential and use it only to perform such duties.  Supplier will maintain a list of such individuals who access the Sonus faber Confidential Information and provide Sonus faber with such list upon written request.

H. Data Loss Prevention.

Supplier will have a data loss prevention program in place that is reasonably designed and implemented to monitor, detect and prevent unauthorized access and transmission of Sonus faber Confidential Information while in motion and at rest.  Such data loss prevention program shall be documented and tested at least annually.

I. Encryption.

Supplier will ensure that all Sonus faber Confidential Information whether stored (i.e., at rest) or transmitted (i.e., in motion) is encrypted with industry standard encryption methods. Supplier will not store any Sonus faber Confidential Information on any mobile computing device (e.g., a laptop computer, USB drive or portable data device), except where there is a business necessity to do so and then only if the mobile computing device is protected by industry-standard encryption software. Encryption keys shall be maintained in a secure manner and replaced annually.  Further, Supplier shall not disable or circumvent any security measure or encryption device related to any Sonus faber Confidential Information and shall notify Sonus faber immediately if Supplier learns that any such security measures or encryption have been compromised.

J. Supplier's Affiliates and Subcontractors.

If Supplier discloses, disseminates or allows access to any Sonus faber Confidential Information by its Affiliates or Subcontractors as permitted under these Terms, Supplier will ensure that each such party complies with the requirements contained in this Section 14.

A. Compliance with Laws.

Supplier shall comply with all applicable laws in the operation of its business, in carrying out all activities related to the PO , and in exercising its rights and performing its obligations hereunder, including without limitation all applicable laws relating to employment, labor (including forced labor and child labor), human rights, data privacy, health and safety, tax, customs, import and export controls, and the environment.  In addition, Supplier will not (i) engage in any practices which constitute or may constitute an offense under any law relating to slavery, servitude, forced or compulsory labor or human trafficking, (ii) knowingly appoint or contract with any party who has been convicted of or prosecuted in any jurisdiction in relation to an offense under any such laws, or (iii) commit any act or omission which causes or could cause Sonus Faber to breach, or commit an offense under, any such laws.  Without limiting the foregoing, upon the request of Sonus faber, Supplier will provide certification of its compliance with applicable laws and any additional information regarding compliance of the Products or Services.

B. Permits, Licenses and Authorizations.

Supplier will obtain and maintain all permits, licenses, approvals, authorizations, registrations, certificates, variances and similar rights required for its business operations and the performance of its obligations under the PO, including any licenses or authorizations required under applicable trade-related laws (including import and export controls), and will provide Sonus faber with copies or evidence thereof upon request.

C. Business Ethics and Anti-Corruption.

Without limiting Section 15(A), Supplier agrees to conduct its business in compliance with all laws relating to the prohibition of corruption, bribery and the offering of inducements to public or semi-public or government officials, including the United States Foreign Corrupt Practices Act, the UK Bribery Act, and any anti-corruption or bribery laws in each jurisdiction where Supplier operates or where Services are otherwise taking place pursuant to the PO.  Without limiting the generality of the foregoing, Supplier shall not, directly or indirectly through another party, offer, authorize, pay, or promise to pay anything of value to any party, including any employee or official of a government, government-controlled enterprise or company, or political party, for the purpose of improperly influencing any act or decision, obtaining any improper benefit, or obtaining, retaining or directing any business.

D. Restricted Parties.

Without limiting Section 15(A), Supplier shall refrain from doing business, directly or indirectly, with Restricted Parties (as hereafter defined) in connection with its activities related to the PO.  Neither Supplier nor any of its Affiliates, and to Supplier’s knowledge none of their officers, directors, managers, employees, agents, Subcontractors or other third parties acting for or on behalf of Supplier in connection with the PO, is or ever has been designated as a Restricted Party.  Supplier has implemented, and will maintain for the duration of its activities under the PO, commercially reasonable policies and procedures to screen all parties (including employees, agents, suppliers, contractors and intermediaries) employed or engaged by Supplier or its Affiliates to verify that such parties are not Restricted Parties.  Supplier shall not use, in any capacity in connection with its activities related to the PO, the services, software, technology, technical information or goods of any party designated as a Restricted Party.  Supplier will immediately notify Sonus faber in the event that Supplier, its Affiliates or any party employed or engaged by Supplier becomes a Restricted Party. “Restricted Party” as used herein means any person or entity (i) that is located in, is a resident of, or is incorporated under the laws of, any country, region or government that is or becomes the target of comprehensive sanctions imposed by any government sanctions authority in the United States or any other applicable jurisdiction; (ii) that is listed in any applicable sanctions or export-related party lists (including, but not limited to, the U.S. Department of the Treasury Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List, the U.S. Department of Commerce’s Entity List, the EU Consolidated Financial Sanctions List, the United Kingdom Consolidated List of Financial Sanctions Targets, or any similar list maintained by the United States, any State of the United States, the European Union, any Member State of the European Union, the United Kingdom, or other applicable jurisdiction), as updated or amended from time to time; (iii) that has any property blocked, or subject to seizure, forfeiture or confiscation, by any order relating to terrorism or money laundering issued by any governmental official or entity of the United States, any State of the United States, the European Union, any Member State of the European Union, the United Kingdom, or other applicable jurisdiction; or (iv) that is, directly or indirectly, individually or in the aggregate, 50% or greater owned or otherwise controlled, or acting on behalf or under the direction of, any party or parties described in any of the foregoing (i) through (iv).

E. Customs Programs.

Supplier shall implement and maintain in effect for the duration of its activities under the PO, in all of Supplier’s supply chains relating to the PO: (i) Minimum Security Criteria (as defined in the U.S. Customs Trade Partnership Against Terrorism (CTPAT) program) to the extent Products will be shipped into the United States in connection with the PO; and (ii) all Authorized Economic Operator (AEO) program requirements to the extent Products will be shipped into the European Union in connection with the PO.

F. Business Continuity.

Supplier agrees to establish, maintain, and follow a business continuity plan (“BCP”) that defines measures reasonably designed to minimize or eliminate interruption in its operations in the event of a business interruption at the facilities of Supplier or its suppliers, including based on an event of force majeure described in Section 18(K).  The BCP shall include policies and processes for Supplier to evaluate business continuity risk, assess risk mitigation procedures, and prioritize risks and mitigation activities at its facilities and those of its suppliers.  The BCP shall establish a plan for quickly restoring the supply of Products and Services following a disruption.  Supplier will provide Sonus faber with a copy of its BCP upon request.

G. Supplier Code of Conduct.

Supplier shall comply with the Supplier Code of Conduct as updated from time to time, which is currently available at https://www.bose.com/esg/responsible-supply-chain. In addition, Supplier shall comply with any supplier code of conduct that Sonus faber is required to comply with (by Sonus faber’s own customers), which Sonus Faber will make available to Supplier from time to time.

H. Flow-down Obligations.

Supplier shall ensure that each of its Affiliates, suppliers, vendors, Subcontractors, employees, agents and representatives engaged in activities relating to the PO comply with the terms of this Section 15.  Supplier shall maintain written contracts with each third party supplier, vendor, subcontractor, agent and representative engaged in activities relating to the PO that obligates such third party to comply with the requirements in this Section 15

I. Information Requests. 

Upon request from Sonus faber, Supplier shall furnish Sonus faber with information concerning compliance with this Section 15 and other compliance and business practice related matters by Supplier and its Affiliates, suppliers, vendors, Subcontractors, employees, agents and representatives engaged in activities relating to the PO.  Requested information may relate to such parties’ compliance and initiatives with respect to (i) ethical principles and behavior, (ii) compliance with laws, (iii) anti-corruption and anti-bribery, (iv) antitrust and fair business practices, (v) labor, human rights and workplace health and safety matters, (vi) environmental, climate and sustainability efforts, (vii) responsible sourcing practices, (viii) international trade compliance, (ix) business continuity, and (x) such other information as Sonus faber may reasonably request.  Notwithstanding anything to the contrary in Section 7 Sonus faber may disclose any such information provided by Supplier (anonymized or aggregated, as appropriate) to its customers, representatives and applicable reporting agencies and platforms.

Supplier shall maintain, at its own expense, health, auto, workers’ compensation, unemployment compensation, disability, general liability, errors and omissions, and other insurance that is required by law or is common practice in Supplier’s industry, whichever affords greater coverage, together with adequate coverage (on a replacement cost basis) for any Sonus faber Assets under the care, custody, or control of Supplier. 

Upon request, Supplier shall provide Sonus faber certificates of insurance or evidence of coverage.

A. Supplier shall maintain complete and accurate books, records and accounts regarding the Services and Products and Supplier’s activities related to the PO.  Supplier agrees to keep such books and records in sufficient detail to enable Sonus faber to verify Supplier’s compliance with these Terms.  Supplier will keep and maintain such books, records and accounts for a period of time not less than seven (7) years after the date of the transaction to which those records relate, or longer if required by applicable law.

B. Sonus faber shall have the right, exercisable at reasonable times and intervals, and on reasonable prior notice and subject to Supplier’s commercially reasonable confidentiality, safety and security policies, to audit Supplier’s records (in all formats) and inspect Supplier’s facilities during normal business hours in order to verify Supplier’s compliance with its obligations under the PO and these Terms, and risks to Sonus faber.  Notwithstanding anything to the contrary herein, Sonus faber shall have the right to delegate these audit activities to third party accounting or other representatives of Sonus faber provided such third parties agree to treat the audit data and audit results as confidential at least to the extent such information is protected in accordance with the confidentiality obligations set forth herein.  Supplier will provide Sonus faber and its representatives with all policies, books, and records reasonably requested by Sonus faber in connection with such assessment, and will make Supplier’s personnel reasonably available to answer questions.  If any material non-conformance is identified by such assessment, Supplier shall promptly deliver to Sonus faber a reasonable corrective action plan to remedy such non-conformance, and following Sonus faber’s acceptance of such plan, Supplier will promptly implement the corrective actions identified therein.