General procurement terms and conditions

Brumberg Leuchten GmbH & Co. KG

§ 1 General - Scope
1. Our Procurement Terms and Conditions shall apply exclusively; contradicting conditions or conditions of the supplier that deviate from our Procurement Terms and Conditions will not be  accepted by us unless we have expressly agreed to their applicability in writing. Any differently phrased and deviating General Terms and Conditions and Terms and Conditions of Delivery of the supplier are herewith rejected and are considered waived, even if they are not once more expressly rejected upon conclusion of the contract or at a later point in time. Our Procurement Terms and Conditions shall also apply when we accept the supplier's delivery without objection while being aware of the supplier's contradicting conditions or Procurement Terms and Conditions
that differ from ours.

2. Our employees are not authorised to agree to any other than these General Procurement Terms and Conditions on delivery slips, delivery receipts and similar documents. These General Procurement Terms and Conditions shall be considered to have been accepted, at the latest with the first partial delivery of goods (items, rights, etc., in an encompassing sense) performed by the supplier, and also for subsequent orders, even if no reference is made to this in them.

3. All agreements made between us and the supplier regarding the execution of this contract shall have to be put down in writing in this contract. Our Terms and Conditions shall also apply to all future business with the supplier.

4. Our Procurement Terms and Conditions shall only be applicable to companies in accordance with § 310 Par. 1 BGB [Bürgerliches Gesetzbuch - German Federal Civil Code].

5. In accordance with § 33 Par. 1 BDSG [Bundesdatenschutzgesetz - German Federal Data Protection Act], as well as § 13 Par. 1 TMG [Telemediengesetz - German Telemedia Act] and statutory regulations to the same effect, the supplier is hereby given notice that its data is formatted in a machine-readable fashion and that it will be processed by computers for tasks that are related to the contractual relationship. If we use third parties for the rendering of contractual services and ancillary services, we are then entitled to pass on the data of the supplier if this is necessary for proper safeguarding in the context of the purpose of the contractual relationship. Supplier consents to the processing of its data as put forth above.

§ 2 Quote - Quotation Documents
1. The supplier's quotes shall be non-binding for us, and free of charge.

2. Only written orders placed by us shall be legally binding. Verbal agreements shall be valid if they have been confirmed by us in writing.

3. Orders must be immediately confirmed by supplier in writing by supplier's signature. We reserve the right to withdraw the order if we do not receive the confirmation within 14 days.

4. In its quote, supplier must adhere to the inquiry or request for bids with respect to quantity, characteristics and design, and in case of a deviation shall have to expressly point it out in writing. Otherwise supplier will forfeit its claim for additional remuneration. Supplier shall be bound by the quote for three months. If differences arise with respect to quantity, dimensions or weight of the delivered goods, the values determined by our incoming goods inspection shall prevail. We reserve the right to accept surplus or shortfall deliveries.

5. We reserve property rights and intellectual property rights in depictions, drawings, calculations and other documents; they must not be made available to third parties without our express written approval. They shall be used exclusively for manufacturing that is based on our order; upon completion of the order, they shall be returned to us without being requested. They shall be kept confidential from third parties, to that extent, the provisions of § 10 shall also apply.

§ 3 Prices - Terms and Conditions of Payment - Invoicing
1. The price listed in the order shall be binding and shall be considered to include any and all ancillary costs. Unless something different has been agreed upon in writing, the price shall include delivery "free domicile", meaning free to our incoming goods area or expressly agreed upon other place of use, and shall also include packaging, insurance, etc. The return of packaging shall require a separate agreement. Unless something different has been agreed upon, the freight and packaging costs shall be advanced by the supplier and shall be listed separately on the invoices. Changes due to any increases in costs, taxes, etc. that occurred subsequently shall be excluded. If the price was not yet specified upon placing the order, we shall be informed of it no later than with the order confirmation. If we do not object within ten workdays, this price shall be considered to have been approved by us. The agreement regarding the place of fulfilment shall not
be affected by the type of pricing system.

2. The statutory turnover tax is not included in the price. The turnover tax shall be listed separately on the supplier's invoices.

3. We can only process invoices if they - in accordance with the specifications stated in our order - state the order number specified therein; the supplier shall be liable for any and all consequences arising from non-compliance with this requirement. Immediately after delivery, the invoice shall be submitted separately, taking into account the statutory and regulatory requirements. Monthly invoices shall also be submitted no later than on the 5th day of the following month after the delivery. The provisions of § 286 Sec. 3 BGB [Bürgerliches Gesetzbuch - German Federal Civil Code], according to which default occurs automatically 30 days after due date and receipt of an invoice, shall be waived.

4. In any case, the due date shall only take force after receiving a typical invoice that is compliant with the UStG (Umsatzsteuergesetz - German Turnover Tax Law), the UStDV (Umsatzsteuer-Durchführungsverordnung - German Turnover Tax Implementing Regulation) and BFH (German Federal Fiscal Court) decision VR 33/01. Unless something else has been agreed upon in writing, we then shall pay the purchase price within 14 days less a 3 % discount, or within 30 days less a 2 % discount, or net 60 days, calculated from the day of delivery and the corresponding receipt of invoice. If the invoice arrives prior to delivery, the date of the receipt of the delivery shall be relevant for the calculation of the discount deadline.

5. We shall have the right of offsetting and retention to the extent allowed under the law. We furthermore shall have the right to offset any and all claims against the supplier that we, the whole Brumberg Group or those domestic companies in which we have a direct or indirect majority stake are entitled to.

6. Supplier shall only be entitled to assign its claims to third parties or have its claims collected by third parties with our written approval.

§ 4 Delivery Schedule - Execution
1. Each and every order shall be confirmed immediately, to include the specified binding delivery schedule. The delivery schedule stated in the order shall be binding. The delivery schedule shall start with the date of the receipt of the order to the supplier. Upon expiration of the delivery deadline, supplier shall be in default without this requiring a reminder. Authoritative for adherence to delivery dates or delivery deadlines shall be the receipt of the goods at the unloading area and/or incoming goods area specified by us.

2. In case of a default on delivery, we shall be entitled to claim a surcharge in the amount of 1 % of the value of the delivery per week started as lump-sum damages due to delay; however, no more than 5 %; we reserve the right to make further claims. Supplier shall have the right to prove to us that no or considerably lower damages were caused due to the delay. In case of supplier's default, we shall be entitled to claim damages instead of the performance and to cancel the contract after a reasonable time has expired unsuccessfully. If we claim damages, supplier shall have to the right to prove to us that supplier was not responsible for the breach of duty.

 3. Supplier shall be required to inform us immediately in writing when circumstance arise or become apparent to supplier, even due to force majeure, that lead to a situation that does not allow for adhering to the agreed upon delivery schedule. In this case, we shall be entitled to either extend the delivery deadline or, if our interest in the delivery is significantly lowered as a result thereof, or to withdraw from the contract in whole or in part and to claim damages, as applicable. Supplier shall not have the right to derive any claims from this. In particular, supplier shall not be entitled to withdraw from the contract or to increase prices in cases of force majeure, etc. at supplier's own discretion.

4. If first/approval samples are requested from us, supplier shall only be allowed to start series production upon written acceptance of the sample and release for series production.

5. We shall be entitled to demand subsequent changes in the quality of the delivery or service within the scope of supplier's technical capabilities. Technical changes and their impact on price, delivery schedule or other conditions shall require the written form in accordance with § 2 of these General Procurement Terms and Conditions.

6. If there are urgent business reasons our company encounters, e. g. due to force majeure, fire, flooding, discontinuation of a product, etc., we shall be entitled to withdraw from the contract with a payment of a reparation in the amount of 5 % of the agreed upon price of the goods not yet delivered from the respective order, without incurring any additional costs. Supplier shall inform us immediately if a delivery is subject to any export restrictions.

7. We have not defaulted in accepting delivery when prevented from doing so by force majeure.

§ 5 Shipping - Transfer of Risk - Documents

1. Unless something else has been agreed upon in writing, delivery shall be to the shipping address / place of use specified in the order. This shall also be the place of performance.

2. The risk shall not transfer to us until the goods have been received. The supplier is liable for all damages, demurrage charges, etc. Acceptance of delivery does not constitute approval of the goods.

3. Supplier shall be required to include a delivery note with each and every shipment, and to specify our order number and our code number exactly on all shipping papers and delivery notes; If supplier fails to do so, supplier shall be liable for any and all delays caused by this.

4. Upon request, supplier shall provide us immediately with proof of origin documents that feature all required information and are properly signed. The same shall apply accordingly to turnover tax documents from cross border and intra-EU deliveries.

5. Partial deliveries shall only be allowed upon written agreement; otherwise we shall be entitled to refuse acceptance. In any case, partial deliveries shall not be considered separate transactions and shall be marked in writing.

6. Transport insurance shall be assumed by supplier.

§ 6 Quality - Inspection for Defects - Liability for Defects

1. Supplier shall expressly guarantee the use of the best, appropriate material, correct and proper execution, for the required force, performance, efficiency as well as absolute adherence of the goods sold by supplier with the pilot products, samples and descriptions provided by supplier. The goods shall be compliant with guidelines, rules and regulations, the RoHS Directive, the DIN standards and the requirements of the property insurers and shall also feature the CE certificate of conformity. If, in individual cases, deviations from the regulations become necessary, supplier shall obtain our written approval for this. This shall not limit supplier's liability. If supplier has concerns regarding the type of execution, supplier shall communicate this immediately in writing.

2. We shall notify supplier of obvious defects if such defects can be identified in the course of conducting normal business. We shall not be required to perform a true incoming goods inspection. In any case, a complaint [of defects] shall be considered as having been delivered on time if it is sent within a period of five workdays from the expiration of the deadline for complaints stipulated in § 377 HGB (German Commercial Code). For goods for which defects can only be detected once they are processed, the deadline for a complaint of defect shall be within one week of identifying the defects. In this respect, supplier shall also waive the objection to a delayed complaint of defects. In any and all cases in which an error rate had been agreed upon with the supplier and if it was exceeded, we shall be entitled to return the whole shipment at supplier's expense and risk. If there is no separate agreement regarding the error quote, we shall be entitled [to the aforementioned action] if a shipment's error quote exceeds 1 % of the respective shipment's quantity.

3. If the delivery or service was performed as contractually agreed upon, or if any defects identified were removed, it shall be accepted by us. If a test run is planned, acceptance shall be pronounced through a joint acceptance protocol upon a faultless trial run. Retesting due to defects identified during previous tests shall be fully at the supplier's expense.

4. We shall be entitled to the statutory claims for defects without restrictions; in any case, we shall be entitled, to demand from supplier, at our discretion, correction of defect or delivery of new product. Supplier shall be required to bear any and all expenses necessary for correcting the defect or delivering a replacement. Furthermore, we shall be entitled to withdraw from or cancel the contract if supplier's assets are subject to (preliminary) bankruptcy proceedings, or if supplier ceases its payments not just temporarily.

5. The right to claims for damages, especially of damages for non-performance shall expressly remain reserved; in particular, supplier must reimburse us for any and all damages, including consequential damages, that arise from the existence of a defect. When reworking has failed for the second time, when there is imminent danger, or if a special urgency exists, we shall be entitled to take care of the correction of the defects ourselves, at supplier's expense. Any payment of the purchase price or parts of the purchase price as well as the acceptance or approval of documents presented (drawings, drafts, models, samples, prototypes, as well as intermediate products, etc.) that occurred before defects were identified shall not constitute an acknowledgement that the goods were delivered free of defects and as contractually agreed upon, and does in this respect not constitute a waiver of claims for correction of defects.

6. For delivered parts that could not remain in operation due to defects, any pending deadline shall be extended by the duration of the interruption of business.

7. Our claims for defects shall expire within 36 months unless there are binding provisions of §§ 478, 479 BGB (German Civil Code) are applicable. However, this period shall start only upon complete and faultless delivery of the goods. Claims for defects can be made at any time prior to expiration of the limitation period, wherein the initial claim for defects shall suspend the period of limitation until correction of any and all claims for defects, unless these are goodwill actions by the supplier or completely negligible defects. We shall be entitled, at seller's expense, to remove the defect ourselves or to obtain a replacement if there is imminent danger or if supplier is in default on the duty to correct the defects.

8. Goods purchased based on a brochure shall be considered to have been purchased on trial and can be provided to supplier within eight days of receipt if they are not fit for the contractual purpose specified by us, without any claims arising to supplier from this.

§ 7 Product Liability - Holding Harmless - Liability Insurance Protection

1. Supplier shall hold us harmless against indirect claims by third parties that they are asserting against us due to poor performance delivered by supplier. Supplier shall have the right to prove contributory causation or contributory negligence to us. The period of limitation for claims arising from this section shall be four years after [such defects] became known or should have been known, but no longer than 15 years after complete delivery.

2. Insofar as supplier is liable for a product damage, supplier shall be required in this respect to hold us harmless against claims for damages, especially with respect to product liability claims, upon first request, to the extent that the cause lies within supplier's sphere of control and organisation and that supplier is liable in the legal relationship with third parties.

3. As part of supplier's liability for damages in the meaning of § 7 Sec. 2, supplier shall also be required to compensate any expenses in accordance with §§ 683, 670 BGB or in accordance with §§ 830, 840, 426 BGB that arise from or are incurred in connection with a recall action performed by us. We will - to the extent possible and reasonable - inform supplier about the content and scope of the recall measures performed and provide supplier with opportunity to comment. Any further legal rights shall remain unaffected.

4. Supplier shall undertake to maintain product liability insurance with coverage of EUR 10 million per person / property damage - flat rate. We shall be furnished with proof of this upon request. If we are entitled to further claims for damages, those shall remain unaffected.

5. The checks we are performing at our end shall not relieve supplier of its obligation to faultless delivery.

§ 8 Industrial Rights

1. In connection with its delivery, supplier guarantees that no third party rights are infringed within the Federal Republic of Germany, especially those relating to patents, designs, trademarks and copyrights. Supplier shall furthermore guarantee that the goods delivered comply with all statutory regulations and regulatory requirements, insofar as supplier was aware of the violation or should have been as specialist company.

2. If, for the aforementioned reasons, claims are brought against us by third parties, then supplier is obligated to indemnify us against these claims at our first request therefor. Supplier is also obligated to indemnify if claims for damages are brought due to the violation of public law provisions.

3. Supplier's obligation to hold us harmless shall include all expenses necessarily arising to us from or in connection with the claims asserted by a third party.

4. The period of limitation for claims for defects shall be 36 months, calculated from the transfer of risk.

5. We shall be entitled, at supplier's expense, to obtain from the owner of the protection rights the necessary permissions for delivery, commissioning, use, sale etc. of the object of delivery, if the costs caused by this are significantly lower than the damages that would arise to both parties in case of a rescission.

§ 9 Reservation of Title - Provisioning - Tools - Rights

1. Upon their transfer to us, after our acceptance, we shall receive immediate and unencumbered full ownership of the goods delivered by supplier. The same shall apply to the documents supplier sent along. Through the transfer, supplier declares that supplier has full disposition rights and that no rights of third parties exist. Should this not be the case, this has to be expressly communicated. In the event that there are thirdparty rights, we shall have a right to retention.

2. If we are providing parts for the supplier to use, we reserve title to them. Supplier shall perform the processing or conversion for us. If the goods to which we reserve title are processed with other objects that do not belong to us, we shall acquire joint ownership in the new goods in proportion to the value of our goods (purchase price plus turnover tax) to [that of] the other objects to be processed at the time of processing.

3. If the goods we are providing are combined with other objects not belonging to us such that they cannot be separated from one another, we then shall acquire joint ownership of the new object in proportion to the value of the goods we reserve title in (purchase price plus turnover tax) to [that of] the other processed objects at the time at which combining took place. If the combining occurs such that supplier's object is regarded as the principal item, then it is deemed agreed upon that supplier shall transfer joint ownership to us proportionally; supplier shall keep safe the sole ownership or joint ownership for us.

4. We reserve title to tools; supplier shall furthermore be required to use the tools exclusively for the manufacturing of the goods we ordered. Supplier shall be required to insure the tools belonging to us at supplier's expense against fire, water and theft at their original value. At the same time, supplier shall already now cede to us any and all claims for compensation from this insurance; we herewith accept the assignment. Supplier shall be required to have all maintenance and inspection work as well as repair work and maintenance work on our tools performed in a timely manner and at supplier's own expense. Supplier shall notify us immediately of any incidents; if supplier culpably neglects to do so, claims for damages shall remain unaffected.

5. Insofar as the security interests we are entitled to in accordance with § 9 Sec. 2 and/or § 9 Sec. 3 do not exceed the purchase price of all not yet paid for goods subject to reservation of title by more than 10 %, we shall - upon supplier's request - be required to release the security interests at our discretion.

6. We reserve all rights in software (including source code), drawings, products or data of different kinds manufactured based on our specifications as well as in processes and inventions developed by us. Copies shall only be permitted insofar as this is indispensable for the manufacturing of the goods we ordered. Supplier shall be required - upon our request - to surrender the documents and to destroy any copies made. Supplier shall not have a right of retention herein.

7. We reserve property rights and intellectual property rights in depictions, drawings, calculations and other documents; they must not be made available to third parties without our express written approval. They shall be used exclusively for manufacturing that is based on our order; upon completion of the order, they shall be returned to us without being requested. They shall be kept confidential from any third party.

§ 10 Confidentiality

1. Supplier shall agree to keep strictly confidential all depictions, technical and business documents, drawings, sketches, calculations and other documents and information supplier received and not use them for supplier's own competitive purposes, unless we expressly consent to this in writing. They may not be disclosed to third parties without our express written approval. For each case this obligation is violated, supplier shall pay us, in commercial business, a contractual penalty of at least 10 % of the agreed upon price, at the most the amount that supplier has gained otherwise through its violation, if it exceeds the minimum amount. The amount of the contractual penalty shall be determined by us in each separate case and at our discretion. This shall not constitute a release from any claims for damages.

2. The obligation to confidentiality shall also apply after this contract has be wound up; it shall cease to apply only if and to the extent that the manufacturing know-how contained in the illustrations, drawings, calculations and other documents has become general knowledge.

3. Supplier shall have to treat the conclusion of the contract confidential. Supplier shall only be allowed to name us as reference to third parties with our written approval.

§ 11 Place of Fulfilment - Place of Jurisdiction - Choice of Law - Severability Clause

1. If supplier is a merchant, then the place of jurisdiction - to the exclusion of all others - is Sundern (Sauerland) for all controversies that arise. However, we are also entitled to bring claims against supplier at its general place of jurisdiction.

2. The laws of the Federal Republic of Germany shall be applicable; the terms of the UN Convention on Contracts for the Sale of Goods shall be excluded.

3. Unless stated otherwise in the order confirmation, the place of performance for all performance and counter-performance by us and supplier, including payment, is the headquarters of Brumberg Leuchten GmbH & Co. KG in Sundern (Sauerland).

4. These General Procurement Terms and Conditions also remain valid if individual clauses thereof prove to be invalid. The invalid clause shall be amended or interpreted by the parties in such a way that the commercial purpose intended by the invalid provision shall be achieved to the greatest extent possible. The same approach shall be taken if in the conduct of the contractual relationship a gap requiring supplementation results. If the invalidity is based upon a definition of performance or time, the statutorily permissible measure shall take its place. If a provision of these General Procurement Terms and Conditions proves to be invalid in regard to mandatory foreign law then, upon request, supplier will reach agreement with us on those contractual supplements and make those declarations to third parties or officials that retain the validity of the affected provision and, if this is not possible, that preserve its economic content even in accordance with foreign law.

5. The German version of the General Procurement Terms and Conditions shall be the authoritative version. In case of translations, it shall prevail over the English translation and is designed based on German law.

January 2018