General Terms and Conditions of the Halbmond Teppichwerke GmbH

§ 1 Application, Coverage

1.1 We perform our deliveries and services exclusively based on the general terms and conditions. The general terms and conditions are valid for any business with merchants, body corporates organized under public law or public separate assets.

1.2 Contrary or additional terms and conditions of our contractual partner which amend our terms are not applied even if we have not disagreed to them specifically.

1.3 These general terms and conditions are also valid for all future businesses with our contractual partners if those are similar legal acts.

§ 2 Conclusion of the Contract / Terms of Delivery / Place of Performance

2.1 Our offers are subject to change and solely represent the request to our contractual partner to submit an offer. A contract is only concluded if we accept the binding offer by sending an order confirmation.

2.2 All the periods of delivery and service performance are approximate and non-binding if they are not clearly agreed upon as being binding in written form.

2.3 The delivery of the ordered goods is executed ex works if no other terms of delivery have been agreed upon. Means of transportation, dispatch route and packaging can be chosen by us for the lack of a specific agreement.

2.4 The place of performance is the place of our business if nothing else has been agreed upon in a written way.

2.5 If desired by our contractual partner, the purchased goods can be sent to him at his expense. According to § 447 BGB, the risk of accidental perishing or loss and accidental damage – if not cause by us - is passed over to our contractual partner as soon as the goods have been handed over to a forwarding agent, a carrier or another person or institution which is entitled to perform the shipment of the goods.

§ 3 Terms of Payment

3.1 The goods are invoiced on the day of delivery.

3.2 If not agreed otherwise in writing, the amount of debits from the invoice generally is due net within 30 days after issuing of invoice without any deductions. Our contractual partner is also in default if the amount of debits from the invoice is not fully credited on our bank account at the settlement date - even if no reminder has been sent. In case of default, default interest accrues amounting to 8 % above the current basic interest rate according to § 288 act 2 BGB.

3.3 In case of a default of payment, we are authorized to refuse the further fulfilment of this or future contracts without any compensation for damages.

3.4 In case the debt claim has to be handed over to a debt collection agency after the final reminder, the contractual partner bears the complete fees and costs charged by the debt collection agency.

3.5 If our contractual partner defaults the pick-up of the goods for more then ten working days, we are authorized to invoice the goods in advance.

3.6 Our contractual partner is only entitled to balance debt claims with counterclaims if those have been ascertained in a legally binding way or are beyond dispute.

§ 4 Title Retention

4.1 We retain the ownership of the delivered goods until the amount of debits from the contract has been settled completely. This is also valid for all future deliveries even if this is not mentioned again clearly.

4.2 Our contractual partner is obliged to deal with the goods carefully and to insure them against the usual damages e.g. fire, theft and water on a usual scale as long as he has not gained complete ownership. As long as our contractual partner has not gained ownership of the goods, he has to inform us immediately in written form if the delivered goods have been distrained or are subject to the interference of third parties. As long as the third party is not able to repay the judicial and extra-judicial costs of a claim according to § 771 ZPO, our contractual partner is liable for the default that resulted for us.

4.3 If a centrally regulating institution is involved in the handling of business which takes over the contingency reserves, we transfer the ownership to the centrally regulating institution when shipping the goods. This is linked to the delayed condition of payment of the goods by the central regulator. Our contractual partner is only released from his obligations when the central regulator has effected payment.

4.4 Our contractual partner is authorized to sell the goods which are delivered with retention of title in the normal course of business. Our contractual partner assigns the claim of the purchaser from the sales of the goods which were delivered with retention of title to us already now. Claims amount to the absolute value of the commercial invoice (incl. VAT); we accept this assignment already now. This assignment is valid independent from the sales of the goods before or after processing. Our contractual partner remains authorized to collect the claim also after the assignment. Our authorization to collect the claim remains unaffected. However, we are not going to collect the claim if our contractual partner fulfills his obligations of payment from the collected turnover, if payment is not defaulted and no request has been made to open insolvency proceedings or if payments are ceased.

4.5 The treatment and processing of the goods by our contractual partner is effected on behalf of us as long as the full invoiced amount has not been balanced. This does not result in any obligations for us. In this case, the remainder of the goods or the processed goods of our contractual partner continues. If the goods are connected to other items which do not belong to us, we gain co-ownership of the new goods in relation of the objective value of our goods to the other treated goods at the time of processing. The same is valid in case of blending. If blending is done in the way that the goods of our contractual partner are the main goods, it is agreed that our contractual partner transfers a proportional co-ownership to us and retains the resulting whole ownership or co-ownership for us. For securing our claims against our contractual partner, our contractual partner also assigns those claims to us which he receives against a third party by connecting the goods which were delivered with retention of title to premises; we accept this assignment already now.

§ 5 Guarantee / Notification of Defects

5.1 Warranty claims prescribe within 12 months after effected delivery of the goods to our contractual partner. This is not valid if the law determines mandatorily longer periods according to § 438 ch. 1 no. 2 BGB (buildings and goods for buildings), § 479 ch. 1 BGB (contribution claim) and § 634 a ch. 1 BGB (building defects).

5.2 If the goods are deficient, we can choose to repair them or deliver replacement goods. In case of legitimate notifications of defects, the customer is obliged to active contribution and cost minimisation when processing the defect.

5.3 Claims of defects are not accepted in case of natural wear-off or abrasion as well as damages which are caused after the passage of risk by deficient or inattentive use, excessive strains, unsuitable equipment, deficient construction work, unsuitable building ground or due to considerable external influences which are not assumed according to contract. If our contractual partner or third parties perform maintenance work or modifications to the goods, there are no claims of defects for them and their consequences.

5.4 Any complaint about open defects is excluded after cutting or processing the delivered goods.

5.5 It is agreed that the following are not considered defects:

• deviations, e.g. in colour, measurements, thickness, weight, equipment and patterning, which are conditioned by manufacturing and which are permitted according to the valid DIN-standards;

• production-caused drafts of length-of-fabric materials which do not exceed the tolerance limits of the DIN CEN/TS 14159;

• colour deviations which are rated 2 > 3 according to the grey scale DIN EN 20105 – A 2 > 3;

• polar compressions or dislocations which occur during storage, transport and / or use;

• carpets with small patterns as well as COC-items. Those tend to show so called zipper effects in the area of the seams which cannot always be avoided due to production or laying technology;

• Shading because of the reversion of the piles (Shading) which might not be avoidable in rare cases in case of velour carpets due to the material or construction technology.

Notifications of defects are also excluded in case of deliveries of second quality-goods, residual goods or special items.

5.6 Warranty rights of our contractual partner assume that he has properly fulfilled his investigation and reprimand obligations according to § 377 HGB. The reprimand according to § 377 HGB requires written form.

5.7 Notifications of defects do not justify suspension of payments.

5.8 The over-deliveries agreed upon in the contract have to be accepted by the customer.

§ 6 Compensation for Damages

6.1 We are generally liable according to the legal regulations as long as no other rule is agreed upon.

6.2 In case of a slight negligence of us, our employees, our legal representatives or auxiliary people, we are only liable if a fundamental contractual obligation (cardinal obligation) was breached. Fundamental contractual obligations are those which make the proper fulfillment of the contract possible and whose fulfilment the contractual partner trusted in. This liability is limited to the contract-typical and predictable damage.

6.3 The liability for breaching a contractual or non-contractual obligation of us, our employees, our legal representatives or auxiliary people when endangering life, body or health of people is not regarded by figure 6.2 and remains unaffected. This is also valid for the compulsory liability according to the Product Liability Act if a defect has been fraudulently concealed or a guarantee for the texture of the goods was accepted.

§ 7 Choice of Law / Court of Jurisdiction / Final Provisions

7.1 This contract as well as all legal relationships of the parties are liable to the Law of the Federal Republic of Germany to the exclusion of the United Nations Convention on Contracts for the International Sale of Goods (CISG).

7.2 Modifications and amendments to the contractual relationship of the parties must be in written form. This is also valid for the modification of this written form clause.

7.3 The exclusive court of jurisdiction is the official business location of the Halbmond Teppichwerke GmbH for all disputes.

7.4 In case single clauses of those general terms and conditions are or become invalid, the remaining regulations are still valid. The parties are obliged to make a legal agreement in lieu of the invalid regulation which is closest to the economic purpose of the invalid regulation or which can fill this gap.

State: May, 2011