Norwegian National Rail Administration

Appendix C

General Terms and Conditions for Manufacturing Sales

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Table of contents
1. Introductory provisions ................................................................................................ 4
1.1 The Norwegian Sale of Goods Act to apply .......................................................... 4
1.2 Definitions ................................................................................................................... 4
2. Scope of Contract Work ............................................................................................... 4
2.1 General........................................................................................................................ 4
2.2 Information about HSE, etc..................................................................................... 4
2.3 Contracts entered into following negotiations ....................................................... 4
2.4 Contracts entered into based on tender competition ........................................... 4
3. Reporting to The Central Office – Foreign Tax Affairs (COFTA) ....................... 5
4. Organizational provisions ............................................................................................ 5
4.1 Transfer of contractual obligations.......................................................................... 5
4.2 Use of Subcontractors .............................................................................................. 5
4.3 Party representatives—power of attorney ............................................................. 5
4.4 Meetings and inspections......................................................................................... 6
4.5 Language requirements............................................................................................ 6
5. The parties’ cooperation and mutual obligations.................................................. 6
5.1 Duty to cooperate ...................................................................................................... 6
5.2 Obligation of confidentiality ...................................................................................... 6
6. The Contractor’s obligations ...................................................................................... 6
6.1 Performance of the Contract Work ......................................................................... 6
6.2 Organization of the Contract Work ......................................................................... 7
6.3 Quality assurance system, inspection and audit .................................................. 7
6.4 The Contractor’s need for information etc. ............................................................ 7
6.5 Cooperation with other parties ................................................................................ 7
6.6 Safety procedures ..................................................................................................... 7
6.7 TransQ registration – liquidated damages ............................................................ 7
6.8 Minimum wage requirement and working conditions........................................... 8
6.9 Social responsibility ................................................................................................... 8
6.10 Environment ............................................................................................................... 8
6.10.1 General ................................................................................................................ 8
6.10.2 Hazardous and noxious substances ............................................................... 9
6.10.3 Tropical timber and timber from protected forests ........................................ 9
6.10.4 Packaging ........................................................................................................... 9
6.11 Public law requirements ........................................................................................... 9
6.11.1 General ................................................................................................................ 9
6.11.2 The Contractor obtaining permits .................................................................... 9
6.11.3 Obligation to assist the Customer in obtaining permits ............................... 9
6.11.4 Amendments to laws and regulations........................................................... 10
7. Changes .......................................................................................................................... 10
7.1 The Customer’s right to order changes................................................................ 10
7.2 The Contractor’s right to perform changes .......................................................... 10
7.3 The Contractor’s obligation to notify etc. ............................................................. 11
7.4 Adjustment of the remuneration to take account of changes ........................... 11
8. Progress – notice of delay ......................................................................................... 12
9. Extension of time limit ................................................................................................ 12
9.1 Circumstances relating to the Customer.............................................................. 12
9.2 Circumstances beyond the Contractor’s control................................................. 12
9.3 The extent of the extension of time ...................................................................... 12

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9.4 Notice ........................................................................................................................ 13
10. Delay ................................................................................................................................ 13
10.1 When delay occurs .................................................................................................. 13
10.2 Remedies .................................................................................................................. 13
10.2.1 Right to performance ....................................................................................... 13
10.2.2 Termination ....................................................................................................... 13
10.2.3 Damages ........................................................................................................... 13
10.2.4 Liquidated damages ........................................................................................ 13
11. Defects ............................................................................................................................ 14
11.1 When there is a defect ............................................................................................ 14
11.2 Remedies .................................................................................................................. 14
11.2.1 Rectification and delivery of substitute goods ............................................. 14
11.2.2 Reduction in price ............................................................................................ 14
11.2.3 Damages ........................................................................................................... 14
11.3 Notice of defect ........................................................................................................ 15
12. Customer’s duty to cooperate .................................................................................. 15
12.1 Customer’s materials and decisions..................................................................... 15
12.2 Duty to coordinate ..................................................................................................... 15
13. The Contractor’s rights in the event of the Customer's breach of contract 15
13.1 Delayed or insufficient cooperation ...................................................................... 15
13.2 Interest ...................................................................................................................... 15
14. Remuneration ................................................................................................................ 15
14.1 Rates ......................................................................................................................... 15
14.2 Expenses .................................................................................................................. 15
15. Payment .......................................................................................................................... 16
15.1 Invoice ....................................................................................................................... 16
15.2 Payment terms ......................................................................................................... 16
15.3 The Customer’s right of retention.......................................................................... 16
16. Insurance ........................................................................................................................ 16
16.1 Liability insurance .................................................................................................... 16
16.2 Insurance policy ....................................................................................................... 16
17. Prepayments .................................................................................................................. 16
17.1 Security ..................................................................................................................... 16
17.2 Marking of the Customer’s goods ......................................................................... 17
18. Cancellation ................................................................................................................... 17
19. Termination .................................................................................................................... 17
20. Liability for damage to the Customer’s property................................................. 18
21. Disputes .......................................................................................................................... 18

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1. Introductory provisions
1.1 The Norwegian Sale of Goods Act to apply
The Norwegian Sale of Goods Act of 13 May 1988 no. 27 shall apply subject to the provisions of
this Contract.

1.2 Definitions
The following definitions shall apply to the Contract:

• “Contract” shall mean this contract as defined in clause 1 of the Contract Agreement
• “Contract Agreement” ” shall mean the document signed by both parties confirming the
conclusion of a contract
• “Contract Documents” shall mean the documents of the Contract as defined in clause 2 of
the Contract Agreement
• “Customer” shall mean the person who has ordered the Contract Work
• “Contract Work” shall mean the delivery specified in Appendix E
• “Contractor” shall mean the party to the Contract who is to carry out the Contract Work
• “Subcontractor” shall mean a third party who has entered into an agreement to carry out
some of the obligations that the Contractor has undertaken pursuant to his Contract with
the Customer
• “Contract Price” shall mean the originally agreed remuneration for the Contract Work,
inclusive of VAT

2. Scope of Contract Work

2.1 General

The Contract Work includes the work described in Appendix E. If the Contract Work excludes
work that within the industry is usually connected with the type of work in question, this shall be
explicitly stated in the Contract.

The Contract Work shall be suitable for the purpose stated in the Contract and shall be adjusted
to the conditions where the Contract Work will be used.

The Contractor shall deliver all documentation necessary for the use, maintenance and approval
of the Contract Work. Inadequate or insufficient documentation shall be considered a defect
pursuant to clause 11.

2.2 Information about HSE, etc.

The Contractor is responsible for informing the Customer about all relevant information regarding
HSE and the safety of the product and the user during use.

2.3 Contracts entered into following negotiations

When the Contract has been entered into following negotiations, it is the Contractor’s
responsibility to clarify the scope of the Contract Work with the Customer if, in the circumstances,
the Contractor ought to have understood that this was imperative.

2.4 Contracts entered into based on tender competition

When the Contract has been entered into on the basis of a tender competition, the Customer
shall have the responsibility for any lack of precision in the tender documents and for any
inaccuracies in the description of the content and scope of the Contract Work.

If the Contractor ought to have discovered the lack of precision or inaccuracy in the tender
documents, the Contractor shall bear the risk of the consequences thereof.

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3. Reporting to The Central Office – Foreign Tax Affairs (COFTA)

If the Contractor as part of the Contract is to carry out work in Norway, he shall as soon as
possible, and within a week of the commencement of the Contract Work, report to the Customer
if foreign undertakings or foreign employees are used in the performance of the Contract.

The Contractor shall report to COFTA in accordance with the Norwegian Tax Assessment Act
section 6-10 and appurtenant regulations, no later than 14 days after the work is started.

The duty to report includes the Contractor’s and Subcontractor’s contracts, subcontracts in
descending order and the employees used in connection with the work. The duty to report also
includes all agreements that provide for building and installation work on land in Norway to be
performed by a company that is not domiciled in Norway, employees who are not Norwegian
citizens who are engaged in Norway, and employees who are Norwegian citizens and who are
hired or engaged by a company that is not domiciled in Norway.

The form RF-1199 shall be used by employees and the form RF-1199 shall be used for contracts
and subcontracts.

When contracts are amended, or engaged employees are changed, updated reporting data shall
be submitted no later than 14 days after the amendment/change is made.

The Contractor is responsible for ensuring reporting at all levels, and shall send copies of all
reports to the Customer.

Any fines or other sanctions imposed on the Customer as a consequence of the Contractor’s
failure to comply with these provisions shall be paid or reimbursed by the Contractor.

4. Organizational provisions
4.1 Transfer of contractual obligations
The Contractor may not transfer his rights or obligations under the Contract without the prior
written consent of the Customer.

The Customer may transfer his rights and obligations under the Contract provided that the new
Customer provides reasonable security, or security in accordance with industry practice, for his
obligations.

4.2 Use of Subcontractors

The Contractor may enter into subcontracts with suitably qualified Subcontractors for the
performance of parts of the Contract Work that are routine in nature or of minor importance to the
Contract Work. Any other use of Subcontractors shall require the prior written consent of the
Customer.

The Subcontractors listed in Appendix E shall be regarded as approved.

4.3 Party representatives—power of attorney

Each party shall appoint one person (a “Representative”) to represent it. Replacement of a
Representative shall be notified in writing.

A Representative shall have authority to act on behalf of its party in all matters concerning the
Contract that are necessary to carry out the Contract Work without undue delay.

The Contractor may not enter into contracts with third parties on behalf of, or which may
otherwise be binding upon, the Customer, without an express written power of attorney.

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If unforeseen circumstances arise making it necessary to take action before the Customer is able
to assess the situation, the Contractor shall nevertheless be entitled and obliged to act on behalf
of the Customer. The Contractor shall take reasonable action to safeguard the Customer’s
interests in order to prevent any loss or damage. Such action shall not exceed that which is
necessary until such time as the Customer can decide what action to take.

4.4 Meetings and inspections

The parties shall be entitled to participate in all meetings that are relevant to the performance of
the Contract Work, and shall be obliged to participate in such meetings when summoned to such
meetings at reasonable notice.

In the event of disagreement, the Customer shall decide which meetings the Contractor is obliged
to attend.

Each party may require that a schedule of meetings and inspection be prepared.

4.5 Language requirements

If the Contractor or any of his Subcontractors use foreign-speaking employees in the
performance of the Contract Work , the Contractor shall ensure that a system of communication
is established which ensures that such employees are informed at all times of any and all
circumstances of relevance to their particular work, including HSE, SHW, drawings, descriptions,
etc.

5. The parties’ cooperation and mutual obligations

5.1 Duty to cooperate
The parties shall cooperate in good faith in the performance of the Contract Work.

They shall inform each other in a timely manner of any matter that they ought to understand may
be relevant to the Contract Work and, to the extent necessary, furnish each other with copies of
minutes, correspondence and other materials that are relevant to the other party`s performance
of the Contract.

5.2 Obligation of confidentiality

The parties shall keep confidential any and all information that they may receive concerning the
other party’s commercial activities or personnel.

The provisions of the preceding paragraph shall not prevent such information from being
provided to others when necessary for the performance of the Contract Work . The same shall
apply to information that is necessary for subsequent operation and maintenance.

In addition, the obligation of confidentiality does not apply when as a result of laws or government
resolutions pursuant to law, a contract party is obligated to provide information or if the
information is already in the public domain.

6. The Contractor’s obligations

6.1 Performance of the Contract Work
The Contract Work shall be performed in accordance with the Contract, rationally, efficiently and
to a high professional standard.

The Contractor shall notify the Customer without undue delay if he becomes aware of or ought to
understand that the Contract Work cannot be performed within the agreed cost limits or functional
requirementse. Any loss incurred by the Customer as a result of the Contractor’s failure to give
notice pursuant to this provision shall be borne entirely by the Contractor.

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6.2 Organization of the Contract Work
The Contractor shall use only personnel that possess the necessary professional qualifications,
and shall have an organization that is appropriate for the performance of the Contract Work.

If the Contract appoints key Contractor personnel, such personnel may only be replaced with the
prior written consent of the Customer. Consent shall not be unreasonably withheld. Training of
new personnel shall be for the account of the Contractor.

The Contractor shall at his own expense ensure that personnel who act in an improper manner or
who are unsuitable to perform services covered by the Contract are replaced immediately.

6.3 Quality assurance system, inspection and audit

The Contractor shall be able to document that he has a quality assurance system that is
appropriate for the nature and scope of the Contract Work .

The Customer or personnel authorized by him shall have the right to undertake inspections and
audits of that part of the Contractor’s quality system that is relevant to the performance of the
Contract Work. The right to undertake inspections and audits shall also include those parts of the
Contractor’s control systems that may be relevant to the Contractor’s performance of the
Contract. The Contractor shall provide reasonable assistance in connection with such inspections
and audits free of charge. The right to undertake inspections and audits shall expire three years
after final payment for the Contract Work has taken place.

The Contractor shall ensure that the Customer has a corresponding right to undertake
inspections and audits of his Subcontractors, unless the delivery in question is of minor
importance to the Contractor’s ability to fulfill his obligations towards the Customer.

6.4 The Contractor’s need for information etc.

The Contractor shall, as soon as possible, notify the Customer of the information, underlying
documentation and decisions he requires to perform the Contract Work, and the dates by which
these must be available.

The Contractor shall notify the Customer if the need arises for variations in the Contract Work,
further evaluations or supplemental investigations.

6.5 Cooperation with other parties

The Contractor shall cooperate with the Customer’s organisation and other contractors and shall
perform the Contract Work in such a way that it is adapted both technically and in terms of
progress to the work of these parties.

6.6 Safety procedures

The Contractor shall comply at all times with the safety regulations and procedures established
by the Customer.

When using Subcontractors, the Contractor shall extend corresponding terms and conditions to
them.

6.7 TransQ registration – liquidated damages

If the Contract has been assigned to the Contractor via TransQ, the Contractor is obliged to
maintain his registration in TransQ throughout the term of the Contract.

If the Contractor does not maintain his registration in TransQ, the Contractor shall pay liquidated
damages of NOK 500 per day. Liquidated damages apply from four weeks after Contractor’s
receipt of written notice from the Customer, until new registration has taken place.

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6.8 Minimum wage requirement and working conditions
The Contractor shall ensure that the wages and working conditions of his and any
Subcontractors’ employees directly involved in the performance of the Contract Work are not
inferior to those contained in national collective agreements or that are normal within the same
industry at the place where the Contract Work is being performed. If there are no national
collective agreements, the decision of what is considered normal conditions may be based upon
national collective agreements for comparable work.

The Customer is entitled to supervise and inspect the Contractor, and shall have access to the
necessarry documents in order to ensure that the Contract’s requirements for minimum wage and
working conditions are met. Upon request, the Contractor shall provide copies of employment
contracts for labor directly involved in the performance of the Contract Work, their pay slips and
hour lists, as well as documentation on orderly living conditions. In addition, the Customer may
claim access to accommodation premises for employees.

The Contractor shall extend the conditions of the first and second paragraph to his
Subcontractors. The Customer’s right to documentation and inspection in the second paragraph
shall also apply to Subcontractors.

If the conditions of this clause is breached, the Customer may retain 10 % of the Contract Price
until the Contractor documents that the breach has been remedied for the whole Contract period.
If documentation is not provided or the breach is not remedied within the finalization of the
Contract Work, the amount retained shall be deducted from the Contractor's claim for
remuneration for the Contract Work. Any retention pursuant to this clause shall not prevent the
Customer from terminating the Contract in accordance with clause 19 below.

The Contractor shall have the burden of proving that the obligations in this provision have been
complied with.

6.9 Social responsibility

The Contract Work shall be consistent with the fundamental requirements of human rights,
employee rights and environmental protection set forth in applicable law at the place of
manufacture, and with the following conventions:

• UN Human Rights Declaration

• UN Convention on the Rights of the Child art. 32
• ILO Conventions No. 29, 87, 98, 100, 105, 111, 138 and 182.

Any violation of this provision shall be deemed a fundamental breach of contract, entitling the
Customer to terminate the Contract. Alternatively the Customer may demand replacement
delivery, regardless of the cost associated with such replacement delivery, together with
damages for loss resulting from the breach.

The Contractor shall have the burden of proving that no violation of this provision has occurred.

The Contractor shall impose corresponding obligations and requirements on his Subcontractors.

6.10 Environment
6.10.1 General
The Contractor shall have due regard for the environment in the performance of the Contract
Work. The Contractor thus undertakes to avoid unnecessary production of waste and to choose
environmentally friendly products. The Contract Work shall be adapted to accommodate solutions
that result in as small amounts of waste, as little resource consumption and as little use of
hazardous and noxious substances as possible.

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The Contractor shall comply with all national and international environmental statutes and
regulations. The Contractor shall obtain any necessary discharge permits.

6.10.2 Hazardous and noxious substances

If the Contract Work contains, or if the performance of the Contract Work involves use of,
products or chemical substances that may be hazardous to health or the environment, by inter
alia disturbance of ecosystems, pollution, waste, noise or inefficient energy consumption, the
Contractor shall evaluate the possibility of replacing the substance with a less hazardous
alternative (obligation to substitute), cf. the Norwegian Product Control Act, section 3a.

When requested by the Customer, the Contractor shall document how the evaluation according
to the first paragraph was done.

If any of the products in the Contract Work contain more than the at all times applicable
concentration limit of substances listed in the list of candidates in the approval scheme in
REACH, cf. regulation 30 May 2008 no. 516 on the registration, evaluation, authorization and
restriction of chemicals (REACH), the Contractor shall provide the Customer with information
about the legal and environmental proper handling of waste of the products in question.

6.10.3 Tropical timber and timber from protected forests

The Contract Work shall not contain any tropical timber or timber from protected forests.

If the Contract Work contains such timber the Customer may require the Contractor at his own
cost to rectify or redeliver with timber that fulfills the requirements in the Contract. Any
disassembly and installation in this connection shall be at the Contractor’s own cost. In addition
the Contractor shall pay a fine to the Customer in the amount of 10% of the value of the actual
material according to the prices in the Contract excluding VAT.

The Contractor shall have the burden of proving that the obligations in this provision have been
complied with.

6.10.4 Packaging
The Contractor shall be connected to a packaging recycling system or have his own packaging
collection system where the final treatment ensures that packaging is disposed of in an
environmentally sound manner. Packaging that does not meet the fundamental packaging
requirements in EU Directive 94/62 with amendments shall not be used.

Norwegian Contractors who use packaging shall participate in a recycling scheme such as Grønt
Punkt Norge or equivalent.

6.11 Public law requirements

6.11.1 General
The Contractor shall perform the Contract Work in accordance with the at all times applicable
laws, regulations and individual administrative decisions.

The Contractor shall, in consultation with the Customer, maintain necessary contact with public
authorities and notify the Customer of any orders or imposts from public authorities relating to the
performance of the Contract Work that are addressed directly to the Contractor.

6.11.2 The Contractor obtaining permits

The Contractor shall obtain permits from the public authorities that are necessary for the
performance of the Contract Work, and that can be obtained in the name of the Contractor.

6.11.3 Obligation to assist the Customer in obtaining permits

The Contractor shall give the Customer the necessary documentation and assistance in
connection with the Customer obtaining permits from public authorities.

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Approval by the Norwegian Railway Authority

If the Contract Work requires approval by the Norwegian Railway Authority and such approval is
not granted, the Customer may terminate the Contract if the lack of approval is due to
circumstances that are within the scope of the Contractor’s obligations according to the Contract.
This does not apply when approval is refused due to amendments to laws or regulations after the
Contract is entered into, provided however that the Customer shall not lose the right to terminate
the Contract if the Contractor should have taken the amendments into consideration at the time
when the Contract was entered into or if he later should have avoided the results of the
amendments.

The Customer’s approval of the Contract Work before the application for approval is submitted
shall not prejudice the Customer’s right to terminate the Contract pursuant to the first paragraph.

If the Customer wishes to avail himself of the right to terminate pursuant to the first paragraph,
the Contractor may require the Customer to reapply for approval after it has remedied the cause
for rejection. The Contractor shall in such case pay all the expenses connected with the new
application and the processing of it. The Contractor cannot require the Customer to reapply if
reapplication would be a major inconvenience to the Customer.

6.11.4 Amendments to laws and regulations

If amendments to laws and regulations after the Contract is entered into require that the Contract
Work must be changed compared to the agreed specifications, the Contractor shall perform such
change even if no change order is given. Such change shall be considered a change according
to clause 7, unless the Contractor should have taken the amendments into consideration at the
time when the Contract was entered into or if he should have avoided the results of the
amendments.

The limitations in the Contract regarding the Customer’s right to order changes to the Contract
Work, cf. clause 7.1, shall not apply if changes to the Contract Work are necessary due to
amendments to laws and regulations after the Contract is entered into.

7. Changes
7.1 The Customer’s right to order changes
The Customer may order the Contractor to make changes in the Contract Work.

A change may consist of work in addition to or instead of that which has been agreed, a reduction
in the scope of work, or a requirement that work be carried out pursuant to a changed delivery
schedule or other binding time limit. The change must be within the Contractor’s area of
professional knowledge, be related to the Contract Work, and not be unreasonably onerous for
the Contractor to perform.

A change order shall be in writing and shall clearly state that it contains a change and what the
change involves. The Contractor shall give a written notice if he wishes to maintain that the
change order falls outside the scope of work that he is obliged to perform under the Contract.

All changes shall be agreed in writing and signed by both parties. Agreed changes shall then be
added to the list of changes as a binding part of the Contract.

7.2 The Contractor’s right to perform changes

The Contractor has the right to perform changes in the Contract Work to the extent that the
changes are related to the Contract Work and are not of a significantly different type, provided he
has the necessary capacity and professional expertise.

However, the Customer has the right to engage others to perform changes which do not directly

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encroach upon the Contractor's Contract.

7.3 The Contractor’s obligation to notify etc.

The Contractor shall notify the Customer in writing if he is ordered to perform work that falls
outside the scope of the Contract Work, and the order is not given in a change order pursuant to
clause 7.2. The same shall apply if the Contractor becomes aware that new or amended laws
and regulations come into force after the Contract is entered into, making it necessary to change
the Contract Work. Within a reasonable time thereafter, the Contractor shall specify his claim in
detail and give reasons for the claim

The notice shall state that the Contractor is of the opinion that the work he is ordered to perform
falls outside the scope of the Contract, and that he therefore will demand additional payment
and/or an extension of time. The notice shall also state whether or not the change affects the life
cycle costs (LCC), approval by the Norwegian Railway Authority, and the effect on the process in
accordance with EN 50126 (RAMS).

The provisions of the first paragraph also apply if other circumstances for which the Customer is
liable make it necessary to perform work that is not part of the Contractor’s obligations under the
Contract.

The Contractor shall also give notice in accordance with the first and second paragraph if he
intends to demand additional remuneration as a result of delay or defect in the Customer’s
deliveries or other obligations.

The Contractor shall lose the right to invoke a change if he fails to notify the Customer within the
time limits stated above. This does not apply if the Customer ought to have understood that a
change existed.

The Customer shall notify the Contractor of his views without undue delay. If he fails to do so, he
cannot later deny that a change exists. This does not apply if the Contractor ought to have
understood that the claim in question is groundless.

7.4 Adjustment of the remuneration to take account of changes

If the Contract does not contain provisions on remuneration for changes, the remuneration shall
be adjusted as follows:

a) A change to the scope of work

If there is an increase or decrease in the scope of the Contract Work, a proportional amount
shall be added to or deducted from the agreed remuneration. If the Contractor’s remuneration
is based on fixed hourly rates or other unit prices, these rates shall be used.

If the changes, the number of changes, the date of the changes or similar significantly alter
the assumptions on which the remuneration was agreed, both parties are entitled to demand
an adjustment of the remuneration based on the increase in costs or savings caused by the
altered assumptions.

If the Contractor’s scope of work is reduced, the adjustment shall take account of the effects
on the Contractor’s fixed costs.

b) Changes to the delivery schedule or other binding time limit

If the Customer orders changes to the delivery schedule or other binding time limit, the
Contractor is entitled to coverage for any increased costs resulting from the changes,
together with a reasonable profit markup.

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If the Contractor’s total final remuneration after deductions and additions is reduced by more than
25% of the Contract Price, the reduction shall be treated as a partial cancellation, cf. clause 18.

Obligation to perform in the case of a dispute

If the Contractor’s change notice is rejected, he shall notwithstanding perform or continue to
perform the disputed change. The same applies if the dispute relates to the extent of the
extension of time or adjusted remuneration.

The Customer may order the Contractor to postpone the work until the dispute is clarified.

8. Progress – notice of delay

The Contractor shall perform the Contract Work in accordance with the time limits stated in the
Contract.

If there is no time limit stated in the Contract, the Contractor shall start the Contract Work as soon
as possible after the Contract is entered into or a call-off order is issued, and perform the
Contract Work with reasonable progress and without unnecessary interruptions.

The Contractor shall notify the Customer immediately in writing if agreed time limits or progress
cannot be met. The notice shall state the reason for the delay, the probable duration of the delay,
and what measures have been or will be implemented to reduce the delay and the effect of it.
Any loss incurred by the Customer as a result of the Contractor’s failure to give notice pursuant to
this clause shall be borne by the Contractor.

Delivery prior to the agreed delivery date must be approved by the Customer.

9. Extension of time limit

9.1 Circumstances relating to the Customer
The Contractor is entitled to an extention of time if progress of the Contract Work is delayed as a
result of impediments that may be attributed to circumstances for which the Customer is liable,
such as changes, lack of cooperation, etc.

9.2 Circumstances beyond the Contractor’s control

The Contractor is entitled to an extension of time if he proves that progress is impeded by
circumstances beyond his control, such as provisions in industry-wide trade union agreements,
strikes, lockouts or public orders.

However, the Contractor is not entitled to an extension of time if he ought to have taken the
impediment into account at the time the Contract was entered into, or was able to avoid or
overcome the consequences of the impediment.

If the impediment in delivery is caused by a Subcontractor, the Contractor is only exempt from
liability if the Subcontractor would also have been exempt according to the provisions of the
above paragraphs.

9.3 The extent of the extension of time

The extension of time shall be equal to the delay to the Contract Work caused by the
impediment, taking into account such things as necessary interruptions of and restart of the work.
Any decrease in the scope of the Contract Work shall also be taken into account when
calculating the extension of time.

The Contractor shall attempt to prevent and limit the harmful effects of the impediment that has
given rise to the delay.

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9.4 Notice
If the Contractor requires an extension of time, he must give notice to the Customer without
undue delay. Within a reasonable time thereafter, the Contractor shall specify his claim in detail
and give reasons for the claim.

The Contractor shall lose his right to require an extension of time if notice is not given or is given
too late according to the first paragraph.

The Customer shall examine the basis for the Contractor’s claim without undue delay. If he fails
to do so, the Customer loses the right to claim that the Contractor is not entitled to an extension
of time. This does not apply if the Contractor ought to have understood that claim for an
extension of time was groundless.

10. Delay
10.1 When delay occurs
Delay occurs if the Contract Work has not been completed by the agreed time limits, with such
adjustments as may follow from clause 9 on extension of time.

10.2 Remedies
10.2.1 Right to performance
In the event of a delay, the Customer may affirm the Contract and require performance. This
does not apply if there is any impediment which the Contractor is unable to overcome, or to the
extent that the impediment would entail inconvenience or cost to the Contractor which is
substantially disproportionate to the Customer’s interest in the Contractor’s performance.

10.2.2 Termination
The Customer may terminate the Contract when the delay amounts to a fundamental breach of
contract or if the Contractor does not deliver within a reasonable extension of time for
performance that the Customer has determined.

If the Contract Work is to be manufactured specifically for the Customer according to his
specifications, and if the Contractor cannot otherwise dispose of the Contract Work without
substantial loss, the Customer may only terminate if the delay substantially frustrates his purpose
in concluding the Contract.

10.2.3 Damages
The Customer may claim damages for the loss he sustains as a consequence of the Contractor’s
delay. However, this does not apply to the extent that the Contractor shows that the delay was
due to an impediment beyond his control which he could not reasonably be expected to take into
account at the time the Contract was entered into or to avoid or overcome the consequences of.

Contractor’s liability for damages comprises all losses which could reasonably have been
foreseen as a possible consequence of the delay.

If the Customer fails to mitigate the loss by taking reasonable measures, the Customer must bear
the corresponding part of the loss.

10.2.4 Liquidated damages

If liquidated damages have been agreed, the Contractor shall pay liquidated damages for delay
according to the rates stipulated in the Contract.

If Contractor fails to meet a time limit that is subject to liquidated damages, the Customer cannot
claim damages for the delay in addition to or instead of liquidated damages. This does not apply

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if the Contractor or any of the Contractor’s employees or contract helpers has acted with intent or
gross negligence. In this case, liability is not limited to the maximum liquidated damages.

If the Customer has become entitled to be paid maximum liquidated damages and delivery still
has not taken place, the Customer may terminate the Contract and claim damages for the loss he
sustains in excess of the maximum liquidated damages.

An agreement on liquidated damages shall not prevent the Customer from terminating the
Contract if there is a fundamental breach of contract. When the Contract is terminated, the
Customer may claim damages for the loss sustained in excess of liquidated damages paid.

11. Defects
11.1 When there is a defect
The Contract Work is deficient when it is not in accordance with the requirements set forth in the
Contract.

11.2 Remedies
11.2.1 Rectification and delivery of substitute goods
If there is a defect and this is not due to the Customer or circumstances on his part, the Customer
may demand rectification at the Contractor’s own cost, unless the Contractor wishes to deliver
substitute goods. Rectification shall be performed at the place where the Contract Work is
located, or at the closest location that has the necessary facilities to perform the rectification
unless the Contractor arranges transportation to another location at his own cost.

If the defect is serious, or if rectification will be of substantial inconvenience to the Customer, the
Customer may demand the delivery of substitute goods.

Contractor shall bear the costs of necessary disassembly and installation in connection with
rectification or delivery of substitute goods.

The Customer may demand that the Contract Work shall be tested or checked in the presence of
both parties after rectification or delivery of substitute goods is performed.

11.2.2 Reduction in price

The Customer may demand a reduction in price if rectification or delivery of substitute goods is
not performed within a reasonable time after the Customer complained of the defect. The
reduction in price shall be equal to the cost of rectifying the defect.

11.2.3 Damages
The Customer may claim damages for the loss he sustains as a consequence of the defect.
However, this does not apply to the extent that the Contractor shows that the defect was due to
an impediment beyond his control which he could not reasonably be expected to take into
account at the time the Contract was entered into or to avoid or overcome the consequences of.

Contractor’s liability for damages comprise all losses which could reasonably have been foreseen
as a possible consequence of the defect, including but not limited to loss as a result of the
Contract object being taken out of service for rectification or delivery of substitute goods.

The Contractor's liability shall be reduced proportionally if parts of the defect can be traced back
to circumstances relating to the Customer or if he has contributed in a negligent manner to the
financial loss.

If the Customer fails to mitigate the loss by taking reasonable measures, the Customer must bear
the corresponding part of the loss

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11.3 Notice of defect
The Customer loses his right to invoke a defect if he fails to give notice of the defect to the
Contractor within a reasonable time after he discovered or ought to have discovered it.

Such notice must have been given no later than two years after delivery. If the whole of or part of
the Contract Work is intended to last considerably longer, the notice period for defects shall be
five years.

12. Customer’s duty to cooperate

12.1 Customer’s materials and decisions
The Customer shall provide the materials and make the decisions that he understands are
necessary for the performance of the Contract Work.

12.2 Duty to coordinate

If the Customer has engaged co-suppliers or other persons on whom the Contractor is dependent
for his performance of the Contract Work, the Customer shall ensure that their respective
activities are coordinated to the extent necessary to enable the Contractor to comply with his duty
to cooperate with others pursuant to clause 6.5.

13. The Contractor’s rights in the event of the Customer's breach of contract
13.1 Delayed or insufficient cooperation
If the Customer’s deliveries or cooperation is delayed or deficient, and this results in increased
costs for the Contractor or hinders his progress, the Contractor shall be entitled to an adjustment
of the remuneration and an extension of time. The same applies if other circumstances occur for
which the Customer is responsible. The Contractor shall take reasonable measures to limit and
prevent such costs.

If circumstances occur which in the opinion of the Contractor entitle him to an adjustment of the
remuneration and an extension of time, the claim shall be notified and processed in accordance
with the rules in clause 7 and 9.

13.2 Interest
If the Customer is late in making payments, the Customer shall pay interest according to the
Norwegian Act of 17 December 1976 no. 100 relating to Interest on Overdue Payments, etc.

14. Remuneration
14.1 Rates
Unless otherwise agreed, the rates shall cover all of the Contractor’s costs in performing the
Contract Work.

Unless otherwise agreed, the rates shall be fixed for the duration of the Contract.

All rates are exclusive of VAT.

If rates for reimbursable work have not been agreed, payment shall be based on the hourly rates
normally used by the Contractor for similar work.

14.2 Expenses

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The Contractor shall be entitled to reimbursement of necessary expenses when this is agreed
beforehand.

15. Payment
15.1 Invoice
The Contractor's invoices shall be specified and documented so that they are capable of
verification by the Customer. Disbursements and expenses shall be specified separately.

Invoices shall as a minimum state the cost center, project number and contract number.

The Contractor is entitled to demand a part payment of the remuneration as the Contract Work is
carried out, but not more often than once a month. Such payment does not imply any approval of
the basis for the invoice.

The Customer can require the Contractor to submit invoices as electronic invoices via the
Customer’s reporting partner.

15.2 Payment terms

The Customer shall pay within 30 days after receipt of a correct invoice.

15.3 The Customer’s right of retention

The Customer is entitled to retain as much of the payment due that he has sufficient security to
cover a specified and justified claim.

If a claim for compensation is disputed, the Custmer shall not be entitled to retain or offset any
amount if the Contractor provides adequate security in the form of a guarantee from a bank or
other financial institution. A declaration from an insurance company stating that the alleged
damage is covered by the insurance shall be deemed to be sufficient security.

16. Insurance
16.1 Liability insurance
Unless otherwise agreed, the Contractor shall maintain liability insurance on normal terms. The
insurance shall cover compensation for damage that he and his Subcontractors may inflict on the
Customer or third party’s person and property in connection with the Contract Work.

The amount insured shall not be less than NOK 150 G (the Norwegian National Insurance basic
amount).

16.2 Insurance policy

The insurance policy shall contain information about the insurance terms and the amount of no-
claims. The insurance policy shall not contain provisions that reduce the Customer’s right to
make a direct claim against the insurers, or which may reduce his claim due to circumstances
related to the insured after the insurance event has occurred.

The insurance policy and insurance terms and conditions shall be submitted to the Customer for
verification no later than one week before the Contract Work commences. The Customer’s
control shall not relieve the Contractor of the risk of sufficiency of the insurance. The Customer is
not obliged to pay remuneration pursuant to the Contract before evidence of insurance has been
submitted.

17. Prepayments
17.1 Security

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If a payment is paid in advance, as an installment or as progress payment, the Contractor shall
provide an on demand guarantee issued by a Norwegian bank or other approved financial
institution, for the amount of the payment together with any default interest accrued from the date
when the payment was made.

The guarantee shall be valid until the Contract Work is completed, but can be reduced in
accordance with the Customer’s approval of parts of the Contract Work that have been
completed. The Contractor shall bear all costs in connection with the issuance of a guarantee.

17.2 Marking of the Customer’s goods

Any part of the Contract Work that is paid for by the Customer before delivery shall be marked
with the name of the Customer immediately after such advance payment.

18. Cancellation
The Customer may at any time until delivery cancel all or part of the Contract Work by giving
notice to the Contractor in writing.

Following cancellation pursuant to this clause, the Customer shall pay a cancellation fee of 5% of
the Contract Price unless another cancellation fee is agreed. If only part of the Contract Work is
cancelled, the cancellation fee shall be calculated on the cancelled part of the Contract Price.

If Contract Work that is manufactured specifically for the Customer is cancelled, and the
Contractor is unable to otherwise dispose of the Contract Work without loss, the Customer shall
reimburse the Contractor’s documented losses limited to the Contract Price. In such case, no
cancellation fee shall be paid. If the Contractor fails to mitigate the loss by taking reasonable
measures, the Contractor must bear the corresponding part of the loss.

19. Termination
Either party is entitled to terminate the Contract if the other party is in material breach of its
contractual obligations, or it is clear that such a breach will occur. Before the termination takes
place, a reasonable period of time to remedy the situation shall be given.

The Client may also terminate the Contract in writing if the Contractor is declared bankrupt, or if
he is proven insolvent or declares insolvency, unless without undue delay it is demonstrated that
the delivery will be completed in accordance with the Contract.

The Client may in any case terminate the Contract if the Contractor after contract award is
convicted in a court of law of participation in a criminal organisation or of corruption, fraud or
money laundering.

The Contract may also be terminated if the Contractor after contract award is found guilty in a
court of law of criminal offences relating to professional conduct, or in his work has been guilty of
serious negligence of professional or ethical standards in the industry concerned.

The Client may also terminate the Contract if it can be demonstrated beyond reasonable doubt
that the Contractor is guilty of an offence referred to in the third and fourth paragraphs.

If the Contract has been fulfilled in part or in whole by either party, the items received may be
required to be returned. The Client may choose to keep all or part of what has been delivered,
against payment for such part of the deliverables.

If the deliverables are wholly or partly installed in or built into the Client's property,
the Client may upon termination due to a breach by the Contractor require the
Contractor at his own expense to remove the installed or built-in part of the deliverables.

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The Client is entitled to receive and use project material that has been paid for, in accordance
with the provisions in Section D. If the Contractor has unpaid project material to which the Client
would be entitled under the provisions of Section D if the Contract was implemented, the Client
may take this over in whole or in part for a reasonable payment. The party which terminates the
Contract may demand compensation for losses incurred as a result of the breach. If daily
liquidated damages are stipulated, the accrued and paid liquidated damages shall be deducted
from the compensation for the Contractor’s delay.

20. Liability for damage to the Customer’s property

The Contractor is strictly liable for any damage to property belongong to the Norwegian Rail
Administration that is attributed to the Contractor, Subcontractors or anyone else for whom
Contractor is responsible.

21. Disputes
The parties shall attempt to resolve any disputes that arise between them amicably.

Disputes that cannot be resolved amicably shall be determined according to Norwegian law. The
legal venue shall be the Oslo City Court.

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