LAUFFENMÜHLE System GMBH, D-79787 LAUCHRINGEN GENERAL CONDITIONS OF EXPORT IN VERSION OF 01.01.2005

1. Scope

1.1 Our General Terms and Conditions for Exports - hereinafter called GTCE - are exclusive in so far as they

are not amended or cancelled by special written agreement with the customer. Each offer, each

acceptance of a bid, each confirmation of an order and the sales of any of our products are subject

to the GTCE..

1.2 Our GTCE shall also apply if we carry out a delivery unconditionally in awarness of the customer's

conflicting terms and conditions, or terms wich differ from GTCE. We reject all customers' conflicting terms

and conditions, and terms differing from our GTCE and do not recognise them unless we have expressly

approved their validity in writing.


2. Completion of the contract, quality

2.1 Our bids are not binding. Customer's order shall only be considered to have been accepted if we have

dispatchd a written confirmation of order - if applicable within the period set by customer.

2.2 Quantity, quality and description and any specification of the goods shall comply with our bid (if it is

accepted by customer) or the customer's purchase order, if this is accepted by us.

3. Prices

3.1 Where nothing else ist stated on our confirmation of order our prices are "ex works" excluding packaging,

unless the goods are being sent as per agreement to a fitter or processor working in Germany.

3.2 The statutory VAT is not included in our prices. This is shown separately on the invoice in the statutory

amount on the day the invoice is created.

3.3 The deduction of discount requires special written agreement.

4. Delivery, transfer of risk

4.1 Our deliveries shall be exclusively ex works Lauffenmühle (ex works (EXW) incoterms®2010) unless

alternative agreements are made in writting.

4.2 Part deliveries are allowed.

4.3 Packaging for transport and other packaging is non-returnable: exceptions are multiple entry pallets and

intermediate storage for yarn. The customer has a duty to see to the disposal of packaging at his own

expense. Our packaging may be recycled.

5. Delivery time, delay, delivery on call

5.1 The delivery period begins when the confirmation of order is sent off, but not before the documents,

licences, approvals and other formalities which the customer has to obtain have been submitted, nor before

the payment of the agreed and due payments.

5.2 If a firm delivery date has been agreed whith us and if we have not delivered whithin the agreed delivery

period (or whithin an extended delivery period) the customer may claim a reduction in price of 0.5 % per

complete week when advising of this in advance in writing, but at most a total of 5.0 % of the price due on

the delayed part, unless it is obvious from the circumstances of the case that the customer is not

experiencing any inconvenience. This limitation shall not apply if a commercial fixed transaction was

agreed,

if the delay is based on an intention or gross negligence on our part (including our representatives or agents

of vicarious liability) or if an important contractual duty has been infringed by us.

5.3 If we are late with delivery and if the delay is not based on an infringement of the contract which is our

responsibility, our liability is restricted to the exclusion of more extensive claims - even under 5.2 of these

GTCE - to damages in the amount of the foreseeable damage which might typically occur. The same shall

apply if a delay in delivery for which we are responsible is based on the culpable infringement of an

important contractual duty.

5.4 Delivery contracts without a fixed delivery date ("on call") require express confirmation in writing giving the

date from which the delivery might take place and/or by which date the goods are to be called for - on our

part. The client shall call for them on time. The goods ordered are available for 8 weeks maximum after the

agreed call period has expired. Our prices rise after this call period ends by 1 % per month. If within this

period no collection takes place we may require payment of the purchase price and flat rate storage costs

of 0.5 % of the appropriate order value per month - but at most 5 % - and/or sell the goods ordered free of

charge for the customer.

5.5 In the case of block orders the customer shall undertake their arrangement in good time within the agreed

arrangement period. If the customer is late with his arrangement we may ourselves arrange them as we see

fit. Where there are several orders we are entitled to deliver the oldest order in full first.

6. Purchase

6.1 The customer undertakes to purchase the goods ordered. The duty to purchase shall be fulfilled at once as

the main duty within the mutual relationship while paying the purchase price at the same time.

6.2 The customer shall bear the costs arising because of this delayed acceptance of the goods in connection

with storage, unsurance, protective measures, etc.

6.3 If the customer finds himself late in taking delivery our claim to the purchase price is not affected. We are

entitled to require compensation for the damages incurrend by us to this extent - including any additional

expenditure - without prejudice to further claims.

7. Payment

7.1 The customer shall make payment within the agreed payment periods. Payment by bill of exchange and

cheque payments are not recognised by us as having fulfilled the duty of payment until the final credit is

received.

7.2 Where no agreements are forthcoming all payments are to be made cash in advance or by placement of an

irrevocable and confirmed letter of credit at least 3 weeks before the delivery date. The "Standard

Guidelines and Customs for Documentary Letters of Credit" shall apply as written by the International

Chamber of Commerce in Paris. All payments where no other currency has been agreed upon shall be in

EUROS

( ), without adjusting for any changes in price of currencies and without any deduction, "free point of

payment" Lauffenmühle.

7.3 If the customer does not fulfil his duty to pay we may choose, without giving up further rights and claims,

to either

- terminate the contract or cancel any further deliveries to the customer

- send the customer notice of default by issuing a reminder to arrive after the due date deviating from

§ 284 Subs 3 BGB. Irrespective of this right available to us the customer is in default if it is agreed the

purchase price should be paid at a time defined according to the calendar, and the customer has not

paid by this date;

- charge the customer interest on the sum unpaid of up to 6 % p. a. above the current base rate

according to §1 of the Discount Rate Transfer Law.

Discount and payment targets do not apply, even if they are shown on our invoice, if the customer does not

pay any one of our invoices by the due date.

8. Guarantee and exclusion of liability

8.1 The customer shall inspect our goods immediately he receives them. In so doing he shall proceed according

to the recognised rules of technology. The customer loses the right to cite violation of the contract if he

does not do this in writing immediately after the period in which he has discovered this, or would have had

to have discovered this. The customer shall take care of securing evidence in agreement with us.

8.2 If the goods are not as per contract we may also remedy the violation of the contract where there are major

defects firstly, if we so desire, through improving or delivering a replacement, within a maximum of 8 weeks

of being asked by the customer.

8.3 If we do not remedy something which is not as per contract under 8.2 by improvement or replacement the

customer may reduce the purchase price accordingly. If this is an important violation of contract the

customer may set a last period for performance and require that the contract be cancelled after this period

has expired without the desired results.

8.4 In so far as they are not controlled by 5.2 or 5.3 of these GTCE we are not responsible for instances of

violation and damage unless the violations of contract can be attributed to intent or gross negligence

or we have infringed other imporant contractual duties. If we are not charged with any

international contractual infringement, our liability to pay compensation is restricted to the foreseeable

damage typically occuring. The same applies if we infringe an important contractual duty culpably. The

vital clauses of products liability law remain unchanged.

AGB-GEW-K-2-XXX.ODT

8.5 Our responsibility for the goods being free from defect does not ectend to parts, equipment or other

components which were made by the customer or on his order unless the manufacturer of these parts

accepts responsibility with respect to us. Similary we are not responsible for the goods being free from

defect if the customer has not followed our instructions for proccesing or using the goods.

8.6 Moreover we do not accept responsibility for defects in goods if the purchase price has not been paid on the

due date.

9. Deviations, quality tolerances, technical terms and conditions

9.1 Deviations in colour, quality, fittings, etc. do not represent defects if they are of the customary kind and

cannot be avoided technically without spending unusually large amounts of money.

9.2 A discrepancy of +/- 5 % per order item (in kg with garns, in m with cloth) is allowed and does not

represent a defect. With coloured yarns a discrepancy of +/- 10 % is allowed per colour and with cloths

with a delivery quantity per order item of up to 500 m.

9.3 The permitted humidity supplement (in kg) on the dry weight for yarn consists of

- Cotton 8,50%

- Flax 12,00%

- Wool and fine animal hair 18,25%

- Rayon 11,00%

- Polyamide fibres (e.g. Perlon, Nylon) 6,25%

- Polyacryl, polyvinyl chloride, polypropylen 2,00%

- Polyester 1,50%

With mixtures the humidity supplements is applied proportionately. Discrepancies

in mumber are only permitted overall for

- yarns containing dry bast, carded wool yarns and half-worsted yarns +/- 5%

- all other yarns +/- 3%

With strong-threaded yarns the number discrepancy has to be calculated from the single yarns of wich the

strong yarn is composes. Where yarns are spun too finely no payment its made. The fact of exceeding the

reliability threshold has to be proven before processing. For Crepon, colour twisted yarn, full effect yarns

and other special yarns the above terms and conditions do not apply.

9.4 If we supply cotton or cotton mix yarns our customer is obliged - since a complete removal of foreign bodies

is not possible in current state of the art - to take steps before and during the reprocessing of these yarns to

prevent any possible damages for himself or third parties arising from this (e.g. by looking at the goods after

preliminary bleaching and with sensitive colours).

10. Liability, period of warranty

10.1 Any further liability than that provided in 8.4 of these GTCE is excluded, without taking account of the

legal nature of claim made. This specially applies to claim for damages arising from a fault when making the

contract, from infringement of the delivery agreement and infringement of constractual or pre-contractual

secondary duties. The same applies to compensation for damage which did not occur in the deliveres object

itself.

10.2 The period of warranty for any customer claims based on violation of the contract is 6 month from the

transfer risk. The period is subject to the statute of limitation and also applies to claim for replacement of

subsequent damage, where no claims are being made based on tort. The statuory period of limitation

applies here.

11. Retention of title

11.1 All goods supplied shall remain our property until full payment of all dues arising from the business

relationship, where such retention of title is valid under governing law. We have the right to ask for return

of the goods, or to sell them or dispose of them in some other way, if all of our claims against the customer

are not paid in full.

11.2 We undertake to free up securities to which we are antitled at the customer's request where the realisable

value of the securities is more than 10 % greather than the debts owed to us. The choice of securities to

be freed up shall be made by us.

11.3 The customer support us on request in all measures required to claim our retention of title or to secure it in

the country concerned. The customer shall inform us if our retention of title is endangered.

11.4 In so far as our goods have not been fully paid for the customer shall preserve the goods as a trustee for

us, separately from his ownership and the ownership of third parties, and at the same time store, secure

and insure them according to regulations and, if necessary, mark them as being our property.

12. Setting off

12.1 The right to set off only belongs to the customer if his counterclaims are made by force of law, are

recognised by us or are not contested. Moreover the customer is only entitled to exercise a right of

retention where his counter claim is based on the same contractual relationship.

13. Other clauses

13.1 Amendments and supplements to these GTCE must be writing. The same applies to sup-agreements.

13.2 A contract made on this basis of these GTCE shall, moreover, remain valid and binding even where

individual regulations within these GTCE are void.

14. Trade marks and protective rights

14.1 The customer may use and apply trade marks, trade names and other commercial protective or mark rights

belonging to us only after prior written approval and only in our interests.

14.2 The customer is responsible for upholding the decisive conditions which apply when products manufactures

in Germany are exported. The customer is also responsible for upholding the pertinent clauses of foreign

trade law (export and import licences, etc.) and the other laws applicable outside of Germany.

15. Place of performance, choise of law, place of jurisdiction

15.1 Place of performance is our head office.

15.2 These GTCE are subject, as are all contracts made while these GTCE apply, to German law including the

UN Convention on Contracts for the International Sale of Goods (CISG) dated 11.4.1980.

15.3 All disputes with our customers arising from contract made while these GTCE apply shall be finally resolved

at our head office, excluding the right to take legal proceedings, according to rules of conciliation and rules

on our court of arbitration of the International Champer of Commerce in Paris, by one ore more judges

named accordingtto these regulations.

15.4 Instead of the court of arbitration under 15.3 the national courts competent for our head office shall decide

exclusively and finally where there are disputes with customers having their head quarters in one of the

member state of the EEC (except Sweden, Finland and Portugal) or in Switzerland, Liechtenstein, Norway,

Israel and Tunisia.

15.5 We are entitled to file an action at the national court competent for our customer or at any other court

which is competent according to national or international law. In this instance the responsibility under 15.3

and 15.4 of these GTCE does not apply.