GENERAL TERMS AND CONDITIONS OF PURCHASE

These General Terms and Conditions of Purchase (herein, “Terms and Conditions”) are applicable to all suppliers (collectively, the “Suppliers” and each, individually, a “Supplier”) of Schlegel USA Inc., a Delaware Corporation (“SCHLEGEL”).

Terms and Conditions of Purchase

1. The Supplier shall sell and deliver, and SCHLEGEL shall purchase and accept from Supplier the products (herein, the “Products”) described on or in any confirmed SCHLEGEL order or agreement or any combination thereof (the “Order”), pursuant to the terms and conditions (the “Terms and Conditions”) of the Order and those specified below, which taken together shall constitute the entire agreement between SCHLEGEL and the Supplier regarding the Products (herein, this “Agreement”).
2. No other terms or conditions shall be of any effect unless otherwise specifically agreed to by SCHLEGEL in a separate written agreement duly signed by an officer of SCHLEGEL. The Supplier will be deemed to have assented to all Terms and Conditions if any part of the Products is delivered by the Supplier. Orders are sent to the Supplier via email. The Supplier shall confirm all Orders no later than fourteen (14) days following receipt thereof. If the Supplier finds any Terms and Conditions not acceptable, the Supplier must so notify SCHLEGEL at once and must reject the Order for Products delivered under this Agreement. Any additional or different terms or conditions contained in the Supplier's Order confirmation or response shall be deemed objected to by SCHLEGEL and shall be of no effect.  No general terms and conditions of the Supplier shall at any time form a part of the content of any contract or agreement between the Supplier and SCHLEGEL, even if they are not further expressly rejected by SCHLEGEL.
3. Unless otherwise agreed to in writing or otherwise stated on the quotations, all of the Supplier’s quotations for Products are valid for a minimum period of 90 days from the date of issue.
4. No Order is binding upon SCHLEGEL until the earlier of acceptance of the Order in writing by the Supplier or the delivery of the Products by the Supplier. Notwithstanding any prior acceptance of an Order by the Supplier, SCHLEGEL shall have no obligation if the Supplier is in breach of any of its obligations hereunder or any other agreement between the Supplier and SCHLEGEL, at the time the Supplier’s performance was due.
5. All verbal agreements concerning the terms of any Order, including agreements made by telephone, shall have no force and effect unless and until acknowledged by SCHLEGEL in writing.
6. SCHLEGEL shall be entitled to modify the content of the Order for convenience. The Supplier shall be entitled to reimbursement of reasonable costs arising out of such modification, which shall include reimbursement of material costs and production costs of the Products, provided, however, that the Supplier is unable to otherwise sell the Products to third parties.

Prices

1. Unless otherwise specified in the purchase order, all price quotations are Delivered Duty Paid (DDP; per Incoterms 2010) to SCHLEGEL’s facility at 711 Jefferson Avenue, Cliffside Park, NJ 07010, United States of America (the “Delivery Location”) and include costs for packaging, postage or other freight charges, insurance or taxes, if any.
2. The Supplier shall not be entitled to increase the price of Products by the amount of any new or increased tax or duty (excluding franchise, net income, and excess profits taxes) which SCHLEGEL may be required to pay on the manufacture, sale, transportation, delivery, export, or use of the Products or the materials required for their manufacture or which affects the costs of such materials.
3. SCHLEGEL shall be entitled at all times to set off any amount owing at any time from the Supplier to SCHLEGEL (or any of SCHLEGEL’s affiliates and subsidiaries) against any amount payable at any time by SCHLEGEL (or any of its affiliates and subsidiaries) to the Supplier.

Terms of Payment

1. Unless otherwise agreed to in writing by SCHLEGEL, invoices issued by the Supplier will be paid by SCHLEGEL within thirty (45) days following delivery and acceptance of the Products [subject to a three percent (3 %) discount]. SCHLEGEL shall make payments by check or wire transfer to the account indicated on the invoice.
2. SCHLEGEL may not – without prior notice - change or withdraw extensions of credit at any time. If the Supplier ceases to extend credit terms before shipment, SCHLEGEL’s remedy shall include, but not be limited to, cancellation of its Order. If SCHLEGEL does not receive notice before shipment, SCHLEGEL shall be entitled to reject the Products upon delivery.
3. If the Supplier fails to observe these Terms and Conditions or the terms of any other agreements between SCHLEGEL and the Supplier, or if the Supplier becomes insolvent, all Orders that have been confirmed by the Supplier but not yet delivered shall in such cases become cancelable at the sole discretion of SCHLEGEL.
4. The Supplier does not enjoy a right of set-off under any circumstances.

Delivery, Risk of Loss, Shipment

1. The agreed upon and confirmed delivery date (the “Delivery Date”) placed on the Order is binding between the parties. Based on changing market needs and product requirements, SCHLEGEL reserves the right to change any agreed-upon delivery dates by informing the Supplier in writing.
2. The Supplier shall immediately notify SCHLEGEL in writing of any foreseeable delays in delivery.
3. For all deliveries of Products to SCHLEGEL hereunder, time shall be of the essence. If Seller fails to deliver the Products in full on the Delivery Date, SCHLEGEL may terminate the Order immediately pursuant to Section 8.2 and the Supplier shall be liable to SCHLEGEL for any losses, damages, and costs and expenses attributable to the Supplier's failure to deliver. The Supplier shall be further liable to SCHLEGEL for any damage to Products while in transit, irrespective of whether SCHLEGEL or the Supplier determined the mode of transportation. Unless otherwise informed by SCHLEGEL in writing, the Supplier remains bound to perform even after the expiration of the
agreed-upon Delivery Date.
4. Unless otherwise specified in the purchase order, the Supplier shall pay all freight, transportation, shipping, insurance and handling charges, duties, and taxes, including any applicable VAT, sales, personal property, ad valorem, and other taxes, duties, levies or charges imposed by any governmental authority, irrespective of whether applicable law makes such items the responsibility of the Supplier or SCHLEGEL, but excluding any taxes payable by SCHLEGEL with respect to its net income.
5. The Products shall be packaged as stated in SCHLEGEL’s Order. All deliveries must include accompanying paperwork containing the Order number and position number of Products. SCHLEGEL shall provide the Supplier with any information necessary to comply with special labeling requirements applicable at the Supplier’s place of business.
6. Subject to SCHLEGEL's available facilities, SCHLEGEL shall determine the type of transportation and shall notify the Supplier thereof at the time SCHLEGEL places each Order. SCHLEGEL may select any commercial air, ship, motor or rail carrier or any combination thereof for the transportation of the Products. The Supplier shall deliver the Products in the quantities ordered at SCHLEGEL's requested delivery dates.
7. In cases of deliveries of Products manufactured to SCHLEGEL’s specification (“Special Orders”) and unless otherwise agreed to in writing, all tools, models, plans, blueprints or other devices and/or documents used and/or supplied by SCHLEGEL (the “Tools”) in order to fulfill any Order or Special Order are the property of SCHLEGEL, even if the cost of development and/or manufacturing of such tools, models, plans, blueprints or other devices and/or documents was wholly or partially borne by the Supplier.
8. Unless otherwise specified in the purchase order, the Supplier shall bear all risk of loss to the Products until the delivery is completed and accepted by SCHLEGEL at the Delivery Location (DDP; per Incoterms 2010). Delivery shall be considered complete upon transfer of possession at the Delivery Location of SCHLEGEL and final acceptance by SCHLEGEL, whereupon title to the Products shall pass to SCHLEGEL. Unless otherwise agreed, the Supplier shall not be entitled to make partial deliveries or deliveries prior to the agreed-upon Delivery Date.

Acceptance of Products; Defective and/or Nonconforming Products; Rejection of Products

1. SCHLEGEL shall do its best to inform the Supplier of any apparent defects in the Products as soon as possible from the time at which such defects should be detectable in the ordinary course of SCHLEGEL’s operations.
2. SCHLEGEL’s failure to assert a claim or reserve such claim at the time of delivery and/or payment for the Products shall not be considered as a final acceptance of the Products delivered, nor as an acceptance of the amount invoiced, and shall not, under any condition, be deemed as a waiver by SCHLEGEL of its right to assert any claim in the future in accordance with all applicable laws.
3. SCHLEGEL has the right to reject any or all of the Products that are defective or do not conform. Products so rejected and Products supplied in excess of quantities specified in the numbered Order may, at SCHLEGEL's option, be returned or held for disposition at the Supplier's risk and expense. Payment for any or all of the Products will not, in and of itself, constitute acceptance by SCHLEGEL.
4. If any of the Products fail to meet the warranties contained in these Terms and Conditions, any applicable law or any other written agreement between the parties, SCHLEGEL shall have at any time, without prejudice to the right of SCHLEGEL to terminate this Agreement pursuant to Section 8 or to claim compensatory damages, the option, to: (i) have such Products repaired or replaced immediately by and at the sole expense of the Supplier, who shall have no right to raise any objections or claims regarding the production or delivery schedule; or (ii) otherwise satisfactorily deal with the defective or non-conforming Products in a manner acceptable to SCHLEGEL in its sole discretion, at the Supplier’s sole expense.
5. SCHLEGEL may return the defective Products or part thereof to the Supplier, who shall refund to the Supplier its costs plus freight to SCHLEGEL’s facility and freight for return to Seller.
6. After notice to the Supplier, all defective or non-conforming Products shall be held at the Supplier’s risk. SCHLEGEL may, and at the Supplier’s direction, shall return such Products to the Supplier at the Supplier’s risk, and all sorting and handling charges, as well as transportation, freight, and delivery charges (both to and from the original destination) and any other related expenses, shall be paid by the Supplier.
7. Any payment made by SCHLEGEL to the Supplier for such defective or non-conforming Products shall be immediately refunded by the Supplier, unless and to the extent that the Supplier promptly corrects, repairs replace or otherwise satisfactorily corrects such non-conformity.

Warranty and Limitations

1. The Supplier warrants to SCHLEGEL that for the Warranty Period (as defined below), the Products will be free from material defects in materials and workmanship under normal use, will conform to the Supplier’s published specifications of the Products, including, without limitation, applicable industry standards, will be of merchantable quality and will be fit for the purpose intended. The Supplier further warrants that the Products comply with applicable law, regulations or specifications in any jurisdiction in which the Products may be sold or marketed in any jurisdiction. Any governmental or other approvals necessary in connection with the resale, marketing, distribution or use of the Products shall be the sole responsibility of the Supplier. The Supplier further warrants that the Products do not infringe the intellectual property or other proprietary rights of any third party.  The Supplier is solely responsible for assuring that Special Order Products do not so infringe. In the event that the Product manufactured under a Special Order infringes the intellectual property or other proprietary rights of any third party then the Supplier shall hold SCHLEGEL harmless from any costs and claims in connection with such infringement.
2. The “Warranty Period” begins on the date the Products are delivered and accepted by SCHLEGEL and continues for at least twenty-four (24) month.
3. At the request of SCHLEGEL, the Supplier shall promptly, at no cost to SCHLEGEL, either repair or replace (and prepay all packing and transportation costs of) any Products that do not conform to the foregoing warranty under Section 6.1 during the Warranty Period. The Supplier shall also be liable for all costs, expenses, incidental and consequential damages, penalties and other damage or cost incurred by SCHLEGEL which result from any Products not conforming with the foregoing warranty under Section 6.1 or any other provision of this Agreement, including without limitation, costs incurred in recalling any Product and shipping and redelivery costs. The Warranty Period will be extended automatically by the duration from the notification and the satisfactory remedy of the defects.
4. In the event of failure of the Supplier to correct defects in or replace non-conforming Products promptly, SCHLEGEL, after reasonable notice to the Supplier, may make such corrections or replace such Products and charge the Supplier for the cost incurred by SCHLEGEL in doing so.
5. SCHLEGEL does not authorize any person or party to assume or create for it any other obligation or liability in connection with the Products except as set forth herein.

Limitation of Liability

1. IN NO EVENT SHALL SCHLEGEL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO DAMAGES FOR LOSS OF PROFITS, REVENUE, GOODWILL, OR USE, INCURRED BY SUPPLIER OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT, TORT, STRICT LIABILITY, OR IMPOSED BY STATUTE, OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SCHLEGEL’S LIABILITY FOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL IN NO EVENT EXCEED THE PURCHASE PRICE OF THE PRODUCTS. IT IS AGREED AND ACKNOWLEDGED THAT THE PROVISIONS OF THIS AGREEMENT ALLOCATE THE RISKS BETWEEN SCHLEGEL AND THE SUPPLIER, THAT SUPPLIER’S PRICING REFLECTS THIS ALLOCATION OF RISK, AND BUT FOR THIS ALLOCATION AND LIMITATION OF LIABILITY, SCHLEGEL WOULD NOT HAVE ENTERED INTO THIS AGREEMENT.
2. IN JURISDICTIONS THAT LIMIT THE SCOPE OF OR PRECLUDE LIMITATIONS OR EXCLUSION OF REMEDIES OR DAMAGES, OR OF LIABILITY, SUCH AS LIABILITY FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR DO NOT ALLOW IMPLIED WARRANTIES TO BE EXCLUDED, THE LIMITATION OR EXCLUSION OF WARRANTIES, REMEDIES, DAMAGES OR LIABILITY SET FORTH ABOVE ARE INTENDED TO APPLY TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. SUPPLIERS MAY ALSO HAVE OTHER RIGHTS THAT VARY BY STATE, COUNTRY, OR OTHER JURISDICTION.

Termination for Convenience and Termination for Cause

1. SCHLEGEL reserves the right to terminate this Order or any part hereof for its sole convenience. In the event of such termination, the Supplier shall immediately stop all work hereunder and shall immediately cause any of its suppliers or subcontractors to cease such work. The Supplier shall be paid a reasonable termination charge consisting of a percentage of the order price reflecting the percentage of the work performed prior to the notice of termination, plus actual direct costs resulting from termination. The Supplier shall not be paid for any work done after receipt of the notice of termination, nor for any costs incurred by the Supplier's suppliers or subcontractors that the Supplier could reasonably have avoided.
2. SCHLEGEL may also terminate this Order or any part hereof for cause in the event of any default by the Supplier or if the Supplier fails to comply with any of the Terms and Conditions of this Order. Late deliveries, deliveries of defective or non-conforming Products to Company or any of its customers, and failure to provide SCHLEGEL, upon request, reasonable assurances of future performance, as well as bankruptcy or insolvency of the Supplier shall be, but not limited to, causes allowing SCHLEGEL to terminate this Order for cause. In the event of termination for cause, SCHLEGEL shall not be liable to the Supplier for any amount, and the Supplier shall be liable to SCHLEGEL for any and all damages sustained by reason of the default which gave rise to the termination.
3. This right of termination is in addition to and not in place of any other rights or remedies that SCHLEGEL may have at law or in equity.
4. Should a court of competent jurisdiction subsequently determine that SCHLEGEL’s termination for cause was wrongful or unjustified, then such termination shall be automatically considered a termination for convenience under Section 8.1, and the Supplier shall have all rights under that provision, but no other rights or claims for damages.

Liens and Security Interests

The Supplier shall deliver the Products to the Supplier free and clear of any rights of third parties, including, without limitation, any third-party security interests and liens.

Indemnification:

1. The Supplier agrees to diligently defend, and hold harmless and indemnify, SCHLEGEL, its directors, officers, employees, shareholders, affiliates, representatives and SCHLEGEL’s customers from and against any and all liability, claims, lawsuits, losses, demands, damages, costs and expenses, including, without limitation, reasonable attorney's fees and costs, and court costs, (collectively, the “Losses”) arising from any third party claim (i) infringement of the intellectual property rights of any third party, or (ii) arising out of any breach of any of the Supplier's terms contained in these Terms and Conditions or any contract in which these Terms and Conditions are incorporated or to which these Terms and Conditions are attached or made part of, or (iii) arising out of the improper use, storage, handling, transportation, maintenance, modification or alteration of Products by or on behalf of Supplier or any third party (iv) Supplier’s strict liability, negligence or willful misconduct with respect to any product liability claims or (v) third party rights as described in Section 10 hereof.
2. The Supplier shall notify SCHLEGEL in writing within ten (10) days of the receipt of any claim, suit, or proceeding, including any incidents involving personal injury or damage to property. The Supplier shall cooperate with SCHLEGEL with regard to the defense of any suit or threatened suit. In the event of a claim involving accident or safety issues, the Supplier shall make available all statements, reports, and tests concerning the incident. The Supplier may assume control of the defense of any such claim, proceeding, or suit and shall have the authority to settle or otherwise dispose of any such suit or threatened suit and to appeal any adverse judgment which may be entered, except that the Supplier shall obtain SCHLEGEL's prior written consent to any settlement.

Intellectual Property Rights

1. To the extent that SCHLEGEL contributes or provides any intellectual property, including without limitation any intellectual property contained in drawings, specifications, instructions, or other documents provided in connection with its Order, the Supplier shall not be liable for any claims upon any infringement claims by third parties resulting from such intellectual property, and SCHLEGEL hereby agrees to indemnify and hold Supplier harmless from any such infringement claims.
2. The Supplier grants SCHLEGEL all rights and licenses necessary for SCHLEGEL and its affiliates to use, transfer, pass-through, and sell the Products and to exercise the rights granted under this Agreement.

Insurance

1. The Supplier shall obtain and maintain all applicable and appropriate insurance (including, without limitation, business, workers' compensation, auto, errors and omissions, professional and commercial general and liability insurance) in an amount consistent with the Supplier's industry practice. Each policy shall name SCHLEGEL as a loss payee or additional insured, as appropriate.

Confidentiality

1. Any material, including but not limited to the Tools defined in Section 4.7, and any other information regarding the business of SCHLEGEL that come to the Supplier’s knowledge in connection with this Agreement, especially also information about the extent and the object of the delivery in connection with the purchase of the Products, shall remain SCHLEGEL’s property and be held in confidence by the Supplier. Such information shall not be reproduced or disclosed to others without SCHLEGEL’s prior written consent.

Force Majeure

1. SCHLEGEL shall not be liable to the Supplier or any other person for any failure or delay in the performance of any obligation under this Agreement due to events beyond its reasonable control, including, but not limited to, fire, storm, flood, earthquake, explosion, accident, acts of the public enemy, wars, riots and public disorder, sabotage, strikes, lockouts, labor disputes, labor shortages, work slowdown, stoppages or delays, shortages or failures or delays of energy, materials, supplies or equipment, transportation embargoes or delays, acts of God, breakdown in machinery or equipment, and, except as otherwise set forth in this Agreement, acts or regulations or priorities of the federal, state or local governments.
2. The Supplier shall not be liable to SCHLEGEL or any other person for any failure or delay in the performance of any obligation under this Agreement due to events beyond its reasonable control, including, but not limited to, fire, storm, flood, earthquake, explosion, accident, acts of the public enemy, wars, riots and public disorder, sabotage, strikes, lockouts, labor disputes, labor shortages, work slowdown, stoppages or delays, shortages or failures or delays of energy, materials, supplies or equipment, transportation embargoes or delays, acts of God, breakdown in machinery or equipment, and, except as otherwise set forth in this Agreement, acts or regulations or priorities of the federal, state or local governments.
3. When the event operating to excuse performance by either party shall cease, this Agreement shall continue in full force until all deliveries have been completed.

Publicity:

The Supplier will not use SCHLEGEL's name or logo in publicity, advertising, or similar activity, except with SCHLEGEL's prior written consent. The Supplier will not disclose the existence of this Order or any of its respective Terms and Conditions to any third party without SCHLEGEL's prior written consent.

Dispute Resolution

Any controversy or claim arising out of or relating to this Agreement, or the negotiation or breach thereof, shall be exclusively settled by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association (“AAA”). The award shall be final and binding. Judgment upon the award rendered by the arbitrator or the arbitrators may be entered in any court having jurisdiction thereof. The arbitration shall be held in New York, New York, shall be conducted in the English language, and shall be conducted (i) if the amount in dispute is less than $250,000, before a single arbitrator mutually agreeable to SCHLEGEL and the Supplier, or if no agreement can be reached, then selected by the AAA, or (ii) of the amount in dispute is $250,000 or more, before three (3) arbitrators.   The arbitrator(s) shall make detailed findings of fact and law in writing in support of his, her or their decision, and shall award reimbursement of attorney’s fees and other costs of arbitration to the prevailing party, in such manner as the arbitrator shall deem appropriate.  In addition, the losing party shall reimburse the prevailing party for reasonable attorneys’ fees and disbursements, the costs of the arbitration (including but not limited to the fees and expenses of the arbitrator and expert witnesses) and the costs incurred by the prevailing party in successfully seeking any preliminary equitable relief or judicially enforcing any arbitration award.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without giving effect to principles of conflict of laws thereof or the UN Convention on Contracts for the International Sale of Goods of 1980.

Notices

All notices, consents, claims, demands, waivers and communications hereunder (each, a "Notice") shall be in writing and addressed to the parties at the addresses set forth on the face of this Order or to such other address that may be designated by the receiving party in writing. All Notices shall be delivered by personal delivery, nationally recognized overnight courier (all fees pre-paid), facsimile (with confirmation of transmission) or certified or registered mail (return receipt requested, postage prepaid). A Notice is effective only upon receipt of the receiving party, and if the party giving the Notice has complied with the requirements of this Section 18.

Waiver

Waiver by SCHLEGEL of any breach of any provision contained herein shall not constitute or be deemed to be a waiver of any other breach or of such provision.

Severability

If any provision contained in this Agreement is held to be invalid, illegal or unenforceable, such invalid, illegal or unenforceable provision shall be severed from the remainder of this Agreement, and the remainder of this Agreement shall be enforced. In addition, the invalid, illegal or unenforceable provision shall be deemed to be automatically modified, and, as so modified, to be included in this Agreement, such modification being made to the minimum extent necessary to render the provision valid, legal and enforceable. Notwithstanding the foregoing, however, if the severed or modified provision concerns all or a portion of the essential consideration to be delivered under this Agreement by one party to the other, the remaining provisions of this Agreement shall also be modified to the extent necessary to equitably adjust the parties’ respective rights and obligations hereunder.

Miscellaneous

The parties hereto are independent contractors and nothing in this Agreement will be construed as creating a joint venture, employment or agency relationship between the parties.  Any subcontractor shall agree to be bound by the terms and conditions of this Agreement and the Order.

The Supplier shall not assign, transfer, delegate or subcontract (“Transfer”) any of its rights or obligations under the Order relating to this Agreement without SCHLEGEL’s prior written consent. Any Transfer in violation of this Section 21 shall be null and void. No assignment shall relieve the Supplier of any of its obligations hereunder.

This Agreement, including any Schedules attached hereto, contains the entire agreement of the parties with respect to the subject matter of this Agreement, and supersedes all prior agreements between them, whether oral or written, of any nature whatsoever with respect to the subject matter hereof. This Agreement is binding upon the parties hereto, their successors and permitted assigns. It can only be altered, amended or modified in writing which (i) specifically refers to the provision of this Agreement to be amended and (ii) is signed by both parties.