General Conditions of Supply and Payment of Julius Boos jr GmbH & Co. KG Based on the standard Conditions of the German Textile Industry The Standard Conditions apply exclusively to merchants.

§ 1 Place of Performance, Delivery and Acceptance

1. The place of performance for all goods and services arising from supply contract is the place of the seller’s commercial establishment.
2. The delivery of the goods is effected on an ex works Germany basis. The forwarding charges will be borne by the buyer. The buyer can choose the carrier. The goods will be despatched uninsured. An advice of delivery can be agreed.
3. A fIat-rate warehouse surcharge can be invoiced in the case of an ex warehouse delivery when the warehouse is located in a foreign country.
4. Packing costs for special packaging will be borne by the buyer.
5 Assorted part-deliveries and in the case of combinations ready-for-sale part-deliveries must occur timely and require an advance notice. Unsorted deliveries are only permissible with the buyers’ approval.
6. lf the acceptance does not occur in time due to the buyers‘ fault, the seller is entitled — at the sellers‘ option and after granting a respite of 1 2 days — to issue a statement of account, or to withdraw from the contract or to claim damages.

§ 2 Place of Jurisdiction

The place of jurisdiction (also for legal action on a cheque) is at the plaintiff‘s option either the place of the commercial establishment of one of the parties or the seat of the supplier‘s trade antitrust organisation. The court first applied to is the competent court.

§ 3 Subject Matter of the Contract

1. The delivery of the goods will be made on specific dates (working day or defined calendar week) All sales will only be concluded for specific quantities, products qualities and fixed prices. These are binding for both parties. Commission business will not be transacted.
2. Block orders are permissible and must be limited in time upon contract conclusion. The acceptance period may not exceed 6 months.

§ 4 Suspension of Supply

1. In the event of force majeure, industrial actions and other business disturbances beyond control which have continued or will probably continue for more than a week, the delivery/acceptance period will be automatically extended by the duration of the hindrance, however not more than by five weeks plus the delayed delivery period. The extension only becomes effective if the party concerned immediately notifies the other party of the cause of the hindrance as soon as it has become aware that the delivery/acceptance deadline cannot be met.
2. If the delivery or acceptance did not occur in time, the other party to the contract can withdraw from the contract. It must however give written notification of this at least two weeks prior to exercising the right of rescission.
3. If a party to the contract is not immediately advised, after having requested such, that the delivery/acceptance cannot be performed timely, it can withdraw from the contract immediately provided that the hindrance has lasted for more than five weeks.
4. Claims for damages are excluded if the relevant party to the contract has met its obligations as per §§1 - 3.

§ 5 Delayed Delivery Period

1. After the delivery period has expired, a 12-day delayed delivery period will start without need of explanation/notification. After this delayed delivery period expired, the rescission of the contract is deemed to have been effected to the exclusion of any claims for damages. The rescission of the contract as per §1 sentence 2, does not occur if the buyer declares his insistence of the performance of the contract to the seller during the delayed delivery period. The seller is, however, released from his delivery obligation if the buyer does not state his insistence on the performance of the contract during the delayed delivery period in response to an enquiry by the seller.
2. Transactions for delivery by a fixed date will not be made. If, however, the parties expressly agree in an individual case that the goods are intended for a particular campaign, a fixed delivery date without a grace period can be agreed. If such a delivery date is exceeded, the buyer can demand compensation for special expenditure for the ordered goods, however such compensation may not exceed the purchase price of the ordered goods. Further claims are excluded. The buyer can only reduce the purchase price or withdraw from the contract due to defectiveness of the campaign goods.
3. if the buyer wants to claim damages instead of the performance, the buyer must first set the seller a four-week time limit with a warning that the performance will be declined after this period has expired. This period starts on the one day on which the buyer‘s notice is sent by registered mail. This provision only applies in the case of §1 ‚ sentence 2 instead of the rescission mentioned therein if the buyer‘s time limit notification is received by the seller within the delayed delivery period.
4. The delayed delivery period for stock goods ready for dispatch and „Never-out-of-Stock (NOS)“ goods is 5 working days. The buyer must be notified immediately in the case of non-delivery. The provisions of §§1 and 3 otherwise apply.
5. Claims based on delayed delivery by the buyer prior to the expiry of the delayed delivery period are excluded.

§ 6 Complaint of Defect

1. A complaint of defect must be sent to the seller within 12 days from the receipt of the goods.
2. A complaint of apparent defect(s) after cutting or any other started processing of the supplied goods is excluded.
3. A complaint of insignificant, technically unavoidable deviations from the quality, colour, width, weight, equipment or design is impermissible. This also applies to deviations usual-in-trade unless the seller has confirmed in writing that the delivered goods will conform to the sample.
4. in the case of justified complaint of defect, the seller is entitled to effect rectification or deliver-free of-defect replacement goods within 28 days from the receipt of the returned goods. The freight costs will then be borne by the seller. The buyer is entitled to reduce the purchase price or withdraw from the contract if the subsequent performance failed
5. After expiry of the time limit mentioned in §4, the buyer is only entitled to reduce the purchase price or withdraw from the contract.
6. The buyer must immediately notify the seller of hidden defects as soon as they are detected. The buyer can only reduce the purchase price or withdraw from the contract because of the defect complained about time.

§ 7 Payment

1 The invoice will be made out on the day on which the goods are delivered, respectively, made available. A postponement of the due date (fixing of the value date) is always excluded.
2. Invoices are payable:
  • 1. within 10 days from invoicing and dispatch of goods, with 4 % quick payment discount.
  • 2. from 11th to 30th day following the invoicing and dispatch of goods, with a 2,25 % early payment discount.
  • 3. from 31st to 60th day following the invoicing and dispatch of goods, net.
Default as per §286 II. No. 1 German Civil Code (BGB) starts on the 61st day.
3. The above payment terms can be replaced with the following payment terms if the buyer undertakes to be bound by them at least 12 month:
Invoices dated to be paid with a 4% discount by to be paid with a 2,25% discount by to be paid net by
1st - 10th of a month 15th of the same month 5th of the following month 5th of the month after next
11th – 20th of a month 25th of the same month 15th of the following month 15th of the month after next
21st – last day of a month 5th of the next month 25th of the following month 25th of the month after next

§§ 1 -3 apply analogously for the above payment scheme.
4. Changes in the payment scheme must be notified 3 month in advance.
5. Advance interest is excluded.
6. Payments are always used for the settlement of the oldest liability items plus default interest accrued thereon,
7. The date as postmarked is decisive for the day on which payment was made. In the case of bank transfer, the previous day of the crediting by the seller’s bank is deemed to be the day on which payment was made.

§ 8 Payment after Due Date

1. Interest will be charged at a rate 8 % above the respective base lending rate of the German Central Bank in the case of payments after due date,
2. The seller is not obliged to effect a further delivery under any current contract before full payment of all due invoiced amounts and interest. The right to claim damages for default is reserved.
3. In the case of the buyer‘s default of payment or imminent insolvency or other significant deterioration of the buyer‘s financial condition, the seller is entitled — after having granted a grace period of 12 days — to reserve the period allowed for payment and demand cash payment prior to delivery for outstanding deliveries under any current contract or to withdraw from the contract or to claim damages.

§ 9 Method of Payment

1. The set-off against and the retention of due invoice amounts are only permissible if the claims arc undisputed or have become res judicata. This also applies in the case of the seller’s cessation of payment. Other deductions (e.g. postage) arc not permissible.

§ 10 Reservation of Ownership

1. The goods remain the seller’s property until full payment of all claims from the supply of goods based on the entire business relationship including secondary claims, claims for damages and the honouring of cheques. The reservation of ownership also continues if individual claims of the seller have been included in a current account with the balance struck and acknowledged.
2. If the reservation of ownership goods are incorporated in, mixed with or processed to a new movable item by the buyer, such occurs without any resulting obligation on the seller’s part. The buyer does not acquire ownership of the item pursuant to § 947ff. German Civil Code (BGB) through the incorporation, mixing or processing. In the case of incorporation, mixing or processing of items not owned by the seller, the seller acquires co-ownership of the new item in a ratio of the invoice value of his reservation of ownership goods to the total value,
3. If a central payment agency undertaking the del credere is used for the business transactions between the seller and the buyer, the seller transfers the ownership to the central payment agency upon dispatch of the goods subject to the condition precedent of payment of the purchase price by the central payment agency.
4. The buyer is only entitled to resell or further-process the goods subject to the following conditions.
5. The buyer may only sell or process the reservation of ownership goods in the ordinary course of business and only on the condition that there is no sustainable deterioration of the buyer‘s financial situation.
6. a. The buyer herewith assigns to the seller the claims, with all ancillary rights, and any balance claims arising from the resale of the reservation of ownership goods.
b. If the goods have been incorporated, mixed or processed and if the seller acquired thereof a co-ownership corresponding to his invoice value, the seller is entitled to a share in the purchase price claim corresponding to the value of his title to the goods.
c. If the buyer has sold the claims within the scope of non-recourse factoring, the buyer will assign his resulting claim against the factor to the seller and will pass on to the seller his sale proceeds in proportion to the seller’s title to the goods. The buyer is obliged to disclose the assignment to the factor if he is more than 10 days late in paying an invoice or if his financial situation is significantly deteriorating. The seller accepts this assignment.
7. The buyer is authorized to collect the assigned claims for as long as he meets his payment obligations. The collection authorization expires upon default in payment by the buyer or a significant deterioration of the buyer‘s financial situation. For such case, the buyer herewith authorizes the seller to advise the customers of the assignment and to collect the claims himself. The buyer must provide the information necessary for asserting the assigned claims and allow the verification of such information. In particular, the buyer must, on request provide the seller with an exact list of the claims due to him showing the names and addresses of the customers, the amount of the individual claims, invoice date, etc.
8. If the value of the security available to the seller exceeds the seller’s total claims by more than 10% the seller is obliged on the buyer‘s request, to release to that extent security selectable by the seller.
9. The pledging or assigning as security the reservation of ownership goods or the assigned claims is not permissible. The seller must be advised immediately of any attachments and the name of the attaching creditor.
10. If the seller takes back the goods by exercising his reservation of ownership right, a withdraw from the contract only exists if the seller expressly declares such. The seller can satisfy his claims through the open-market sale of the taken-back reservation of ownership goods.
11. The buyer holds the reservation of ownership goods for the seller without remuneration. He must insure the reservation of ownership goods against the usual risks such as fire, theft and water to the common extent. The buyer herewith assigns his compensation claims resulting from the aforementioned types of damage against insurance companies or other substitute obligors to the seller to an extent corresponding to the invoice value of goods. The seller accepts the assignment.
12. All claims and rights arising from the reservation of ownership in all special forms stipulated in these terms and conditions continue to exist until the full release from contingent liabilities (cheque) which the seller takes on in the buyer‘s interest. In the case of sentence 1 ‚ the buyer is always allowed to use factoring for all his claims. He must, however, inform the seller before taking on any contingent liabilities.

§ 11 Applicable Law

1. The law of the Federal Republic of Germany applies. The United Nation Convention on Contracts for the International Sale of Goods dated 11.04.1980 is excluded

Wuppertal, August 2014
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