Version: 01.04.2015

based on the standard terms and conditions of the German textile industry in the version dated 01.01.2015

§ 1 Scope of application

1 The Standard Terms and Conditions apply exclusively between merchants.

2. the following General Terms and Conditions of Sale, Delivery and Payment of ALTEX Gronauer Filz GmbH & Co. Kg (Seller) shall apply exclusively to all deliveries and services of the Seller. The seller does not recognize the buyer’s general terms and conditions unless the seller has expressly agreed to their validity in writing. This shall also apply if the Seller performs the services without reservation in the knowledge of conflicting terms and conditions or terms and conditions that deviate from these Standard Terms and Conditions.

§ 2 Place of performance, delivery and acceptance

1. the place of performance for all services arising from the delivery contract shall be the place of the seller’s commercial establishment.

2. the goods shall be delivered ex domestic works. These shipping costs are borne by the buyer. The buyer can determine the carrier. The goods are to be sent uninsured. A delivery notification can be agreed.

3. packaging costs for special packaging shall be borne by the buyer.

4. sorted and, in the case of combinations, saleable partial shipments must be made promptly and must be announced in advance. Unsorted goods are only permitted with the buyer’s consent.

5. if acceptance does not take place on time due to the fault of the buyer, the seller shall be entitled, at his discretion, after expiry of a grace period of 12 calendar days to be set, either to invoice the goods with immediate maturity (invoice in arrears) or to withdraw from the contract or to claim damages.

§ 3 Place of jurisdiction

The place of jurisdiction (also for actions on bills of exchange and cheques) is, at the plaintiff’s discretion, the location of a German commercial branch of one of the parties or the registered office of the specialist or cartel organization responsible for the seller (Wuppertal). The court first seized has jurisdiction.

§ 4 Contractual content

1. the goods are delivered on specific dates (working day or a specific calendar week). All sales are only concluded for specific quantities, articles, qualities and fixed prices. Both parties are bound by this. Commission transactions are not carried out.

2. block orders are permitted and must be limited in time when the contract is concluded. The acceptance period may not exceed 12 months.

§ 5 Interruption of delivery

1. in the event of force majeure, labor disputes for which one of the contracting parties is not responsible and other operational disruptions for which it is not responsible and which have lasted or are expected to last longer than one week, the delivery or acceptance period shall be extended without further ado by the duration of the hindrance, but by no more than 5 weeks. The extension shall only take effect if the other party is informed immediately of the reason for the hindrance as soon as it becomes clear that the delivery or acceptance deadline cannot be met.

2. if the delivery or acceptance takes place within the periods specified in para. 1, the other party to the contract may withdraw from the contract after the expiry of a grace period of 12 calendar days.

3. claims for damages are excluded in the cases of para. 1 is excluded if the respective contracting party fails to fulfill its obligation pursuant to § 1. Item no. 1 was sufficient.

§ 6 Subsequent delivery period

1. after expiry of the delivery period, a subsequent delivery period of 12 calendar days shall be set in motion without declaration. After expiry of this period, the buyer may withdraw from the contract by written declaration. If the buyer wishes to claim damages instead of performance, he must set the seller a 4-week deadline in writing after the agreed delivery period has expired.

2. for stock goods ready for dispatch and NOS goods – “Never-out-of-Stock” – the subsequent delivery period is 5 working days. In the event of non-delivery, the buyer must be informed immediately. In all other respects, the provisions of para. 1.

3. prior to the expiry of the subsequent delivery period, claims of the buyer due to delayed delivery are excluded, insofar as § 8 para. 2 and 3 do not apply.

§ 7 Notice of defects

The buyer must check whether the delivered goods have the contractually agreed quality and are suitable for the use stipulated in the contract. If this inspection is omitted, not carried out to the required extent or if recognizable defects are not reported to the seller immediately, but at the latest within 12 days of receipt of the goods, the goods shall be deemed to have been approved with regard to such defects.

1. notices of defects must be sent to the seller within 12 calendar days of receipt of the goods at the latest. The Buyer shall notify the Seller of any hidden defects immediately after their discovery without further delay.

2. after cutting or otherwise commenced processing of the delivered goods, any complaint about obvious defects is excluded.

3. minor, technically unavoidable deviations in quality, color, width, weight, finish or design may not be objected to. This also applies to deviations customary in the trade, unless the seller has declared in writing that the delivery is true to the sample.

The agreed weight tolerance for needled or needled and heat-set nonwovens is +/-12 % for a weight of up to and including 80 g/m² and +/- 10 % for nonwovens over 80 g/m², measured on an original roll of at least 25 m². A dimensional difference of +/- 3 %, but at least +/- 2 cm, shall be deemed agreed for rolls or cut-to-size pieces of needled or needled and heat-set nonwovens. A tolerance of -100/ +200 mm is agreed for the roll width of such nonwovens and a tolerance of +/- 10% for the roll length. The agreed delivery quantities are “approximate quantities” for which an over- or under-delivery of up to 10% is permissible. Short rolls with a length of at least 50% of the nominal length are permitted. The agreed tolerance for the material thickness is +/- 0.25-1.5 mm for nonwovens with a volume of 1-10 mm, +/- 2.0 mm for nonwovens with a volume of 11-20 mm and +/- 3 mm for nonwovens with a volume of > 20 mm, in each case measured before packaging.

4. in the event of justified complaints about obvious defects, the buyer has the right, at the seller’s discretion, to rectification or delivery of defect-free replacement goods within 12 calendar days of receipt of the returned goods. In this case, the seller shall bear the freight costs. If the supplementary performance has failed, the buyer shall only have the right to reduce the purchase price or withdraw from the contract, unless § 8 para. 2 and 3 apply.

5. in the event of a hidden defect, the buyer shall only have the right to reduce the purchase price or withdraw from the contract, unless § 8 para. 2 and 3 apply.

6. if the notice of defects is not made in due time, the goods shall be deemed approved.

§ 8 Compensation

1. claims for damages by the buyer are excluded, unless otherwise stipulated in these terms and conditions.

2. the exclusion in para. 1 shall not apply in the event of liability under the Product Liability Act, in the event of intent, gross negligence on the part of owners, legal representatives and executives, in the event of fraudulent intent, non-compliance with an assumed guarantee, culpable injury to life, limb or health or culpable breach of material contractual obligations; material contractual obligations are those whose fulfillment characterizes the contract and on which the buyer may rely. However, a claim for damages for breach of material contractual obligations shall be limited to the foreseeable damage typical of the contract, unless another of the aforementioned cases applies.

3. a change in the burden of proof to the detriment of the buyer is not associated with the above provisions.

§ 9 Payment

1. the invoice shall be issued on the day of delivery or provision of the goods. Postponement of the due date (value date) is generally excluded.

2. invoices are payable:

1. within 10 days of invoicing and dispatch of goods with 2 % express account

2. from the 11th to the 30th day after invoicing and dispatch of goods with net cash, without deduction.

3. if bills of exchange are accepted by the seller instead of cash, check or bank transfer, a surcharge of 1 % of the amount of the bill of exchange shall be charged upon acceptance of the bill of exchange according to the net destination on the 31st day after invoicing and dispatch of the goods.

4. changes to the method of regulation must be announced 3 months in advance.

5. payments are always used to settle the oldest debt items due plus the default interest accrued thereon.

6. the final credit entry on the seller’s account is decisive for the timeliness of the payment.

§ 10 Payment after the due date

1. interest of 9 percentage points above the respective base interest rate within the meaning of § 247 BGB shall be charged for payments after the due date. Otherwise, § 288 BGB shall apply.

2. the seller shall not be obliged to make any further deliveries under current supply contracts before full payment of invoice amounts due, including interest. We reserve the right to assert claims for damages caused by delay.

3. in the event of a significant deterioration in financial circumstances, such as imminent insolvency or default in payment, the seller may refuse to perform its obligations under all delivery contracts based on the same legal relationship or withdraw from these delivery contracts after setting a grace period of 12 calendar days. Otherwise, § 321 BGB applies. § Section 119 InsO remains unaffected.

§ 11 Offsetting and retention

The offsetting and retention of due invoice amounts is only permitted with undisputed or legally established claims, insofar as these are not claims for damages that are closely related to the buyer’s claim for defect-free fulfillment of the contract.

§ 12 Retention of title

1. the goods shall remain the property of the seller until full payment of all claims arising from deliveries of goods from the entire business relationship, including ancillary claims, claims for damages and redemption of checks and bills of exchange. The retention of title shall remain in force even if individual claims of the seller are included in a current account and the balance is drawn and recognized.

2. if the reserved goods are combined, mixed or processed by the buyer to form a new movable item, this is done on behalf of the seller without the seller being obliged to do so. By combining, mixing or processing, the buyer does not acquire ownership in accordance with the provisions of the German Civil Code. §§ 947 ff. BGB to the new item. In the event of combination, mixing or processing with items not belonging to the seller, the seller shall acquire co-ownership of the new item in the ratio of the invoice value of his reserved goods to the total value.

3. if a central settlement agent is involved in the business transaction between the seller and the buyer, who assumes the del credere, the seller transfers the title upon dispatch of the goods to the central settlement agent subject to the condition precedent of payment of the purchase price by the central settlement agent. The buyer is only released upon payment by the central payer.

4. the buyer is only entitled to resell or process the goods subject to the following conditions:

a) The buyer may only sell or process the reserved goods in the ordinary course of business, provided that his financial circumstances do not subsequently deteriorate significantly.

b) The buyer hereby assigns the claim with all ancillary rights from the resale of the reserved goods – including any balance claims – to the seller. The seller accepts this assignment.

c) If the goods have been combined, mixed or processed and the seller has acquired co-ownership in the amount of its invoice value, it shall be entitled to the purchase price claim in proportion to the value of its rights to the goods.

d) If the buyer has sold the claim as part of genuine factoring, the buyer assigns the claim against the factor replacing it to the seller and forwards its sales proceeds to the seller in proportion to the value of the seller’s rights to the goods. The buyer is obliged to disclose the assignment to the factor if he is more than 10 calendar days overdue with the payment of an invoice or if his financial situation deteriorates significantly. The seller accepts this assignment.

e) The buyer is authorized to collect the assigned claims as long as he meets his payment obligations. The authorization to collect shall expire if the buyer is in default of payment or if the buyer’s financial circumstances deteriorate significantly. In this case, the seller is hereby authorized by the buyer to inform the customers of the assignment and to collect the claims himself. In order to assert the assigned claims, the buyer must provide the necessary information and allow this information to be checked. In particular, he shall, upon request, provide the seller with a precise list of the claims to which he is entitled, including the names and addresses of the customers, the amount of the individual claims, invoice date, etc.

5. if the value of the security existing for the seller exceeds the seller’s total claims by more than 10%, the seller shall be obliged to release securities of his choice at the buyer’s request.

6. pledging or transfer by way of security of the reserved goods or the assigned claims is not permitted. The seller must be informed immediately of any attachments, stating the name of the attaching creditor.

7. if the seller takes back the delivery item in exercising his right of retention of title, this does not automatically constitute a withdrawal from the contract. The seller may satisfy his claims from the repossessed goods subject to retention of title by private sale.

8. the buyer shall store the reserved goods for the seller free of charge. He must insure them against the usual risks, such as fire, theft and water, to the customary extent. The Buyer hereby assigns to the Seller its claims for compensation to which it is entitled against insurance companies or other parties liable for compensation arising from damage of the above-mentioned type, in the amount of the invoice value of the goods. The seller accepts the assignment.

9. all claims as well as rights arising from the retention of title to all special forms stipulated in these terms and conditions shall remain in force until full release from contingent liabilities (check/bill of exchange) which the seller has entered into in the interest of the buyer. In the case of sentence 1, the buyer is generally permitted to engage in factoring for its accounts receivable. However, he must inform the seller before entering into contingent liabilities.

§ 13 Applicable law

The law of the Federal Republic of Germany shall apply. The United Nations Convention on Contracts for the International Sale of Goods of 11.04.1980 is excluded.

Gronau, April 01, 2015

ALTEX Gronauer Filz GmbH & Co KG