I. Conclusion of Contract

1. All contracts for the delivery of goods shall be concluded in terms of the present terms and conditions. Any verbal agreements in contrast thereto shall only be valid if confirmed by the seller in writing. Orders shall only be regarded as bindingly accepted, if confirmed by the seller. For orders placed with a commercial agent, the provisions in terms of § 91 a. HGB (translator's note: Commercial Code) shall apply. Offers shall not be binding.

2. Any business transfer to third parties and the rights resulting from such business shall be subject to the approval by the seller.

II. Samples

Samples for exhibition purposes shall be supplied free of charge as far as small cloth, fleece, cotton or other hand samples are concerned. Larger samples will be charged.

III. Place of Performance, Place of Jurisdiction and Governing Law

1. Place of performance and place of jurisdiction for all deliveries, for payment and all other contractual obligations as well as for actions concerning payment of bills of exchange and cheques shall be Schmallenberg. Regardless of the amount of an object as chosen by the seller either the county court or the district court shall have jurisdiction.

2. For small traders and end users, the legal rules and regulations for the place of jurisdiction shall apply.

3. By sending the invoice to the buyer and making the merchandise available for acceptance or shipment, the risk is transferred to the buyer.

4. We may also sue the seller in his place of jurisdiction. For all legal relations between the seller and our company, the laws of the Federal Republic of Germany shall apply. The provisions in terms of the Hague Convention on Purchasing shall be excluded.

IV. Quantities sold in terms of contract

Concluded contracts stipulate that excess deliveries or short deliveries of up to 5 % may not be objected to.

V. Repeat Orders

1. Repeat orders shall be dealt with as new orders. For such orders, conditions and prices have to be agreed upon anew.

2. Should the seller not accept the goods after being informed of their readiness for acceptance or shipment, the seller may stipulate a period of 8 days for him to act. If this period of time has passed without satisfactory results, the seller shall be entitled to store the goods in a warehouse at the expense and risk of the buyer.

VI. Delivery

1. Particulars as to our scheduled delivery times are not binding. In particular, when the goods are transported by a carrier, the latter will make every effort to comply with the stated delivery time. However, in terms of § 26 KVO ('road haulage regulations') the agreement on a fixed delivery time is not allowed. Thus, neither our company nor our carrier can be held responsible for a delayed delivery. Any claims either due to delay or default shall be excluded.

2. In the event of difficulties occuring in the seller's firm or a company on which he depends for his production, caused by an Act of God, riots, non-supply of raw material, internal company difficulties, strikes or lockouts, lack of workers or by similar circumstances detrimental to the fulfilment of the contract in part or as a whole, the seller shall be obliged to inform the buyer accordingly.

3. If such a disturbance does not last longer than 12 working days the fulfilment of the contract shall be postponed according to the period of disturbance. As for the remainder, the contract shall remain in force as agreed. The seller shall inform the buyer of the end of the disturbance period. He shall be entitled to fix the time of fulfilment according to his productive capacity and subject to his other delivery obligations.

4. If such a disturbance should last longer than 12 days and to the extent that it affects fulfilment, no party is entitled to claim fulfilment of the contract during the time of disturbance. The seller has to inform the buyer of the end of the disturbance. It is up to the contracting parties to agree on a postponement of the delivery times according to the provisions under section 2. If no agreement is reached within a period of 10 days after the arrival of the information on the termination of the disturbance, the seller may withdraw from the contract. At the latest, such withdrawal shall be announced immediately after the expiry of the agreement period and shall be restricted to the quantities of supplies the seller is unable to produce due to the disturbance.

5. If the seller fails to deliver on time, the buyer shall grant him a period for completion of at least 4 weeks, this is also true in case of applies to seasonal products. This period shall be counted from the day the seller receives the message of the buyer by registered mail. If the period for completion expires without a satisfactory result, the buyer shall be entitled to assert his rights regarding the legal consequences due to defaulted delivery (§§ 286 and 326 BGB) (translator's note: BGB = German Civil Code). Where supplies in part are concerned, this applies only to that part of the delivery which the seller failed to deliver on time and not for the order as a whole.

VII. Prices

Unless expressly agreed otherwise, the prices are to be understood as prices ex works. Packaging shall be charged at cost.

VIII. Payment

1. Invoices shall be paid: within 8 days less 2 % discount; within 20 days net cash. Payment shall also be accepted by bank transfer or postal giro transfer and cheques upon crediting, any interest and other cost for cashing to be paid by the buyer. Setting off against controversial counter-claims, retaining due invoiced amounts as well as unauthorized deductions of any kind (e.g. for mailing costs, transfer fees or insurance costs) are not permissible.

2. The acceptance of drafts shall be subject to special agreements. If accepted, payment shall only be deemed to be effected after the bill has been paid. Any bank charges, charges for stamping and encashment shall be at the cost of the buyer.

3. Despite the agreement on time allowed for payment, the seller shall have the right to ask for cash payment by registered mail prior to shipping the goods, if the buyer has failed to pay due invoice amounts as agreed, if he has been in default according to clause VI. section 2, if his financial status deteriorated considerably or his payments are stagnating, or if after a contract for the delivery of goods has been concluded, the seller receives negative information on the solvency of the buyer.

4. The seller shall not be obliged to effect any further deliveries in terms of any current agreement, unless all due invoice amounts are settled in full including interest on arrears.

5. If the buyer fails to pay as agreed, he shall be obliged to pay accumulated interest of 3 % above the currently valid rate of discount from the date of maturity, without any advance reminder.

IX. Retaining Right

1. All goods supplied shall remain the property of our company (as reserved goods) until all debts have been paid regardless of any legal title including all claims arising or conditional in the future, this is also true for contracts concluded at present or in the future. The same shall apply, if payments are effected for specially designated demands.

2. We regard treating or processing of the reserved goods as defined by § 950 BGB without any obligation on our behalf. The processed goods shall be regarded as reserved goods according to clause 1. Should the buyer process, mix or combine the reserved goods with other goods, we shall have the right to co-ownership of the new product with regard to the relation between the invoice value of the reserved goods and the invoice value of the other products used. Should our ownership expire due to combining or mixing procedures, the buyer shall at that stage assign to us the property rights to the new product or matter due to him to the extent of the invoice amount of the reserved goods and shall keep the new product for us free of charge. The rights to co-ownership thus arising shall be considered as reserved goods according to clause 1.

3. The buyer shall only be entitled to sell the reserved goods in the course of usual business transactions and in accordance with his normal terms and conditions as long as he is not in default and provided that the claims resulting from the resale are passed to us according to the clauses 4 and 5. He shall not otherwise be entitled to any disposal of the reserved goods.

4. The buyer's claims resulting from the resale of reserved goods shall already now be assigned to us. Similar to the reserved goods and to the same extent they shall be considered as security. If the reserved goods are sold by the buyer together with other goods not sold to him by our company, the assignment of claims resulting from the resale shall only be valid to the extent of the resale value of the relevant reserved goods sold. Should the buyer place his resale claim into a current account relationship with his client, the claim by the buyer resulting from the current account status shall be assigned to us to the extent of the resale value of the relevant reserved goods sold. With the sale of goods to which we have the right of co-ownership according to clause 2, the assignment of the claim of these co-owned portions shall apply.

5. In the case of payment by cheques the title to the goods shall pass to the buyer as soon as the cheque is credited to the seller's account. If payment is effected by bill of exchange, the buyer shall assign to us in advance the rights arising to him. Handing over of these documents shall then be replaced by the buyer's safe-keeping them for us or, if he does not obtain them directly in assigning to us in advance his claim for possession against third parties. He shall immediately provide us with this document including his endorsement thereon.

6. Should the reserved goods be used by the buyer to fulfill a contract to manufacture or a factory-supply contract, the claims resulting from such contract to manufacture or a factory-supply contract shall be assigned to us in advance to the same extent as provided for in clause 4.

7. The buyer shall have the right to collect debts resulting from the resale, unless we revoke this right which we are permitted to do at any time. Only with our prior approval shall the buyer be entitled to assign claims including the sale of claims to factoring banks. At our request, he shall be bound to inform his clients immediately of the assignment to us - unless we do so ourselves- and to provide us with the information and documents necessary for such collection.

8. If we claim reservation of property, this shall only be regarded as withdrawal from the contract, if we declare so expressly in writing. The right of the buyer to possess the reserved goods shall expire if he fails to fulfill his obligations under this or any other contract.

9. The buyer shall immediately inform us of any attachment or any other prejudice by third parties.

10. Should the value of securities in force exceed the secured claims by more than 10 % as a whole, upon buyer's request we shall be obliged to that extent to release securities of our choice.

X. Notices of Defects

1. Any notice of defect because of lesser weight shall be excluded, if the loss is less than 5 %.

2. Compliance with the agreed or customary dimensions of width and length shall only be ensured for tailor-made clothing within the scope of the textile specific deviations, for all other supplies compliance with the average of the total delivery according to the offer content is ensured.

3. Commercial or technically-unavoidable deviations in quality, colour, width and property cannot be objected to. Defects may only objected to immediately after the arrival of the goods at the place determined by the buyer. Such notice will only be considered if the defect is announced within 10 days after the goods are received by the buyer and his giving notice to the seller in writing. Any objection shall be excluded if the goods have started to be used, or, in the case of hidden defects, if 8 weeks have passed after the arrival of the goods at their place of destination.

4. Any further claims for damages shall be excluded. In particular, the buyer shall not be entitled to any claims for damages, if they were caused by the fact that he failed to use the goods properly or utilized them together with products of other suppliers. Products containing seeds must be watered sufficiently before they are ready for sale according to DIN (translator's note: German Industrial Standard) 18917 section 6.2. Claims for damages shall also be excluded if damages arise due to a peculiar soil property or other circumstances in the field of application. All damages arising as a result of any defect shall be excluded.

5. If the buyer claims for damages caused by a flaw in quality of the goods supplied the seller's liability shall be limited to the purchase price of that portion of his delivery which caused the damage.

6. Goods objected to may only be returned after approval by the seller. In case of a deficient or incorrect delivery the seller shall have the right to send a replacement delivery within the agreed time of delivery plus an allowed period of four weeks for renewed delivery.

XI. Partial Invalidity

Should any provision of these general terms of delivery and payment become invalid in part or wholly, the other terms hereunder shall remain fully effective. Already now the contracting parties agree that such invalid provision shall be replaced by a valid provision which will econmically come closest to the purpose of the arrangement aimed at and acceptable to both parties.