General conditions of purchase

I. Code of Conduct of the Trade Association Textile and Fashion

1. As a company we adhere to the Code of Conduct of the Trade Association “Textile and Fashion” in Berlin, which we follow as a recommendation and guideline for entrepreneurial activity. Information about its content is available under : Code of Conduct of the German Textile and Fashion Industry - Textil+Mode (textil-mode.de) . The content of the Code of Conduct also reflects our expectations towards our business partners and other contractual partners in our supply chains. In this respect, we expect that our delivery partners adhere to the contents of the Code of Conduct or apply a comparable code of conduct and we encourage our business partners to apply these expectations to their contractual partners in their supply chain.
2. We fundamentally rely on long-term, cooperative business relationships. We reserve the right to check the adherence with our expectations with our delivery partners, e.g. through auditing. If serious violations are discovered, we reserve the right to apply adequate contractual measures, including, if necessary, termination of the business relationship. In any case, we expect that any violations that are identified, will be remedied with appropriate preventative or remedial measures.
3. If we are required by our customers to provide information about raw materials, semi-finished products and services used to produce the product or service or about the operating sites of upstream suppliers, we may claim this information from our suppliers and may provide it to our customers, under the condition that the information is required for a risk analysis in regards to a specific and concrete risk or to remedy a breach under the Supply Chain Due Diligence Act. At the same time, we undertake to ensure that the information is treated as a business secret and is only provided upon submission of a corresponding confidentiality agreement.

II. Acceptance of the purchasing conditions

The following purchasing conditions apply to all of our orders and apply to future orders without repeated insertion into the purchase agreement. Differing conditions from the supplier do not bind us, even if we do not expressly object to them or accept the ordered goods in whole or in part and/or make payments. Deviations from our purchasing conditions require an express, written agreement. The validity of these purchasing conditions is not affected by the possible invalidity of individual provisions. In the case of yarn deliveries, these purchasing conditions prevail over the provisions of the German Yarn Contract, provided that these are included in the contract.

III. Order and order confirmation

1. Only orders placed in writing are considered to be legally binding. We are not bound in the event of obvious errors.
2. An order only binds us if it is confirmed in writing by the supplier within 7 days of receipt by the supplier, stating a binding delivery or service date.
3. Changes or additions to our order as well as additional agreements only bind us if they are agreed by us in writing.
4. Illustrations, drawings, calculations and other documents that are handed over to the supplier in connection with the execution of a contract remain our property. The supplier will only use them to fulfill our order. The supplier does not acquire any further rights of use or exploitation. In particular, the documents may not be made accessible to third parties without our express written consent.
5. The supplier will return the documents provided to him and mentioned in Section 4 above after the order has been processed without an express request being necessary. Information contained in these documents that is designated as confidential or that is identifiable as our business or trade secrets due to other circumstances, must be kept secret indefinitely. Unless necessary in fulfillment of the contract, the supplier will neither record, pass on or use them.
6. Specification of order number
   The supplier will state or use the supplier and order number stated in the order letter in all correspondence and especially in invoices. We are not liable for delays caused by failure to provide the order number stated in the order letter. This also applies to the processing of invoices.

IV. Delivery and performance

1. Agreed delivery and service dates must be strictly adhered to, we are otherwise entitled to demand compensation for the damages caused by the delay and withdraw from the contract after setting a reasonable grace period of 7 working days.
2. We must be informed of foreseeable delivery delays immediately.

V. Place of performance, shipping

1. The place of performance for deliveries and services is the place of delivery or execution specified by us in the order. For payments, the place of performance is Emsdetten. Unless otherwise agreed in writing, delivery must be made “free delivery” (“DAP”) at the risk of the supplier.
2. The Incoterms 2020 apply unless otherwise agreed in the order
3. The supplier must bear any costs we incur due to non-compliance with our shipping terms. The same applies to additional costs arising for expedited transport inasmuch as the supplier is responsible for the circumstances that made the expedited transport necessary. We do not recognize additional costs for transport insurance.
4. Truck deliveries are only accepted at our factories from Monday to Friday. The delivery times stated in the order must be observed, as delivery cannot be accepted otherwise. Tank trucks that are not equipped with the officially prescribed overfill protection cannot be emptied at our factory sites.

VI. Quality, acceptance and notification of defects

1. The supplier must strictly comply with the technical data provided by us, the applicable accident prevention regulations and other legal provisions, the VDE regulations and the latest recognized state of the art standard of technology.
2. The supplier must carry out a quality inspection adequate in type and scope, according to the current state of the art, to ensure the quality of its deliveries.
3. The values determined during our incoming goods inspection and quality testing are relevant and decisive for the determination of dimensions, quantities and quality.
4. We are obligated to inspect the incoming goods within a reasonable time after delivery for any deviations in quality or quantity; the notification of any deviation is considered as timely, if the time-period is customary in the normal course of business and is received by the supplier.
5. We are entitled to the statutory warranty claims in full; regardless of our statutory claims, we are entitled to demand at our discretion that notified defects are repaired or replacement delivery is made. A repair is deemed to have failed after the first unsuccessful attempt. In this case, the supplier must bear all expenses necessary to remedy the defect or deliver a replacement. The right to compensation, in particular compensation for non-performance, is expressly reserved. The supplier is fully responsible for the supplies and services he procures and requires for the delivery - even if he is not at fault (full assumption of the procurement risk). In any case, the supplier is responsible for the supplies and services procured by him just as for his own supplies and services, even if he is not at fault. This applies in particular with regard to defects.

VII. RoHS compliance

1. The supplier must fully comply with the environmental requirements in accordance with German and European law, including the EU Directive 2011/65/EU “Restriction of the use of certain dangerous substances in electrical and electronic equipment” (“ RoHS Directive”) and the Electrical Act.
2. Electrical and electronic devices of every device category, as well as components for them, must comply with the substance bans of the EU Directive 2011/65/EU ( RoHS 2) and the laws, regulations, decisions and other provisions issued to implement them. The supplier must provide Schmitz – Textiles GmbH + Co. KG with a written declaration of conformity upon request. These devices must bear the symbol according to Annex IV of the EU Directive 2002/96/EC (WEEE).
3. The supplier guarantees that all products comply with the requirements of the RoHS directive in accordance with paragraph 1 above. The supplier must reimburse Schmitz-Textiles GmbH + Co. KG for all damages and expenses (including legal costs) and all third-party claims that are based on a violation of the RoHS Directive or other applicable environmental regulations for which the supplier is responsible.

VIII. REACH Regulation

1. The supplier is obliged to confirm to us that his products and packaging do not contain any substances on the candidate list in accordance with Article 59 (1) of Regulation (EC) No. 1907/2006 (“REACH”) (see website of the European Chemicals Agency ( EChA) . ) http://echa.europa.eu/chem_data/candidate_list_en.asp) contain over 0.1% by mass. The supplier also undertakes to inform the purchasing department of Schmitz-Textiles GmbH + Co. KG without being asked if a product contains a substance from the continuously updated candidate list in accordance with Art. 59 (1) of the REACH regulation above 0.1% by mass.

IX. Prices and payment

1. Unless expressly agreed otherwise, the agreed prices include packaging, freight and other expenses.
2. If prices are agreed based on weight, the net weight determined by us applies to the price calculation.
3. We are entitled to request a bank guarantee, if we are required to make an advance payment.
4. Claims against us may only be assigned to third party with our written consent.

X. Product Liability – Indemnification – Liability Insurance Coverage

1. If claims are raised against us by third parties in according to Product Liability Laws, the supplier must release us from these claims upon our first request, provided that the supplier is responsible for the product liability damage, because the cause lies within its control and organizational area and he himself is liable towards third party. The supplier releases us from the claims of our customer, which the customer asserts based on advertising statements from the supplier, a sub-supplier of the supplier (as a manufacturer within the meaning of Section 4 Para. 1 or 2 of the German Product Liability Law) or an assistant of these aforementioned parties, if the claims would not exist or would not exist to this extent, if the advertising had not been made. This clause applies regardless of whether the advertising statement is made before or after the conclusion of this agreement.
2. If the conditions stated in Section 1 above are met,, the supplier will reimburse us for the expenses for a recall campaign in accordance with Sections 683 and 670 of the German Civil Code (BGB). The content and scope of the recall measures to be carried out will be communicated to the supplier - as far as possible and reasonable. He will be given the opportunity to render an opinion on the measures taken.
3. The supplier undertakes to maintain a product liability insurance with a coverage amount of € 2.55 million per personal injury/property damage – as a lump sum; If we are entitled to further claims for damages, these remain unaffected.

XI. Intellectual property rights, third party rights

1. The supplier guarantees that no rights of third parties within the Federal Republic of Germany are violated in connection with his delivery.
2. If claims are made against us by a third party due to a violation of third party rights, the supplier must release us from these claims upon first written request; We are not entitled to make any agreements with the third party, in particular to conclude a settlement, without the consent of the supplier.
3. The supplier's obligation to indemnify refers to all expenses that we necessarily incur as a result of or in connection with claims made by a third party.

XII. Retention of title – provision of goods and tools for the production

1. If we provide parts to the supplier, we reserve title to them. Processing or transformation by the supplier is carried out on our behalf. If our reserved goods are processed with other items that do not belong to us, we acquire co-ownership of the new item in proportion to the value of our item to the other processed items at the time of processing.
2. If the item provided by us is inseparably mixed with other items that do not belong to us, we acquire co-ownership of the new item in the ratio of the value of the reserved item to the other mixed items at the time of mixing. If the mixing occurs in such a way that the supplier's item is to be viewed as the main item, it is agreed that the supplier transfers proportional co-ownership to us; the supplier maintains the sole ownership or co-ownership on our behalf.
3. We reserve ownership of tools that we provide; the supplier may use the tools exclusively for the production of the goods ordered by us. The supplier must ensure the tools belonging to us at the value for a new purchase against fire, water and theft damage at his own expense. He must carry out any necessary regular maintenance and inspection work at his own expense. He must report any incidents to us immediately; If he culpably fails to do so, we may claim damages.

XIII. Supplier declarations

1. An essential component of the contracts concluded in accordance with these purchasing conditions is the obligation to submit long-term supplier declarations for goods with preferential origin properties in accordance with the currently valid EC regulation.
2. If the long-term supplier declarations turn out to be insufficiently informative or incorrect, we are to be provided with error-free, complete and customs-certified information sheets about the origin of the goods upon request.
3. If we or our customers are subsequently charged by a customs authority due to incorrect declarations of origin, or if we or our customers suffer any other financial disadvantage as a result and the error is based on an incorrect declaration of origin by the supplier, the supplier must bear all damages resulting therefrom.

XIV. Place of jurisdiction, application of German Law

1. Should a provision in these terms and conditions or a provision within the other, supplementary agreements be or become ineffective, this will not affect the effectiveness of all other provisions or agreements. With regard to any invalid clause, the statutory provisions apply.
2. Place of jurisdiction is Emsdetten.
3. Order and delivery are subject exclusively to the law of the Federal Republic of Germany, excluding the UN Convention on Contracts for the International Sale of Goods.

Special contract requirements for wage labour service providers/external

Every item is subjected to extensive quality tests in-house before being included in our collection. For this purpose, the subcontractor provides an individually agreed sample quantity (at least 50 linear meters) of the processed material. For flame-retardant items, you must ensure that the processed goods meet the following standards regarding flame retardancy (flame stop according to EN 13501 (B s1-d0), (or DIN 4102 (B1)), NF P 92 503-507 (M1) , BS 5867 (Part 2, Type C), Uni 8457 ( class 1)). If chemical aids are used for your production, we expect you to inform us and send us the relevant safety data sheets (according to Appendix 38 to the Federal Republic of Germany's Wastewater Ordinance).

You must answer the following general conditions in full:

• In order to maintain the preferential origin status, an non-formal declaration is required as to the country in which the processing (contract work) will be carried out.

The following quality criteria must be met:

1. Defects in the goods must be marked adequately and compensated for;
2. The delivery must be accompanied by an error report;
3. Gross / net meter indication;;
4. Information on each individual label: Article - No., Lot - No., Piece - No., Date;
5. A maximum of 6 errors per 100 m for curtain goods;
6. A maximum of 8 errors per 100 m for decorative goods, awning fabrics, outdoor fabrics and other qualities
7. Piece lengths approx. 1,500 m (dock production) as far as possible, otherwise according to special agreement

The maximum delivery time for subcontracting wage labor orders must not exceed 8 working days from the order date / receipt of the goods to be processed at your company.

If the goods you process meet our requirements, we will place an initial order with you, which must be able to be manufactured in-house under serial production conditions. This first production will be tested and assessed again after receipt in our company. If the goods from the initial first production order go through the test series without any complaints, the collection can be released.

We retain a sample of this initial delivery as a “master sample” in our quality assurance department. All further deliveries are sampled based on this original sample. All subsequent deliveries of goods must meet the quality standards of the original sample.

Once approval has been given for inclusion in our collection, you will receive the corresponding sample orders from us to position the new item in our sample collections.

Under or over delivery of items>
Under or over delivery cannot be accepted. The quantity delivered may only vary by the amount of the previously determined processing tolerances.

Special contractual requirements for yarn deliveries

The following general conditions must be fully met by yarn suppliers:

• A long-term supplier declaration for goods with preferential origin status must be issued for the goods in accordance with the currently valid (EC) regulation.
• There must be an “Oeko-Tex” certification.
• Supplier must be ISO certified.

The process described below for purchasing yarn or twistings applies to all of our yarn suppliers:

Pattern

The exact sample quantity is determined individually by the purchasing department and ordered accordingly. The supplier is expected to include the safety data sheet (SDS) of the raw material used, as well as the safety data sheet (SDS) and the washing-out recommendation of the spinning preparations used with every sample delivery.

Quality testing

We expect our suppliers to undertake the following tests on their premises (factory test certificate 3.1 according to EN 10204):

Fiber yarns:

• Fineness test
• Rotation test
• Strength test
• Strain test
• Test CV value
• Hairiness test
• Testing thin/thick spots and neps
• Testing preparation/oil application

Filament yarns:

• Fineness test
• Check number of filaments
• Rotation test
• Interminer gelling test
• Strength test
• Elongation test
• Testing E-value
• Testing preparation/oil application

All tests must be carried out according to DIN, DIN EN or ISO standards!

Please note the following minimum values:

• For fiber yarns, the minimum values should be within the 50% guidelines of USTER-STATISTICS for each material and type of production.
• If values are found in the areas of the 75% line, we will complain about the relevant part accordingly.
• The CV values of the individual yarn lots must be below 10%
• The fineness fluctuations may be a maximum of +/-1 Nm or 3.0%
• The weight deviations of the individual spools may be a maximum of 5% within one spinning batch.

A corresponding factory test certificate 3.1 according to EN 10204 must be included with every delivery and be provided with a new yarn lot number!

Release

We will test the average values you provide!
If the result is good, you will receive a sample approval from us and a request to send us an initial delivery (O-series). Only after this release can serial production begin. A master sample is stored internally with us as a master sample. Future samples must correspond to this original master sample!

Confirmation of the order

In addition to the information already outlined above, the following information must be provided on your order confirmation:

• Yarn count
• Exact raw material name (fiber quality)
• Spinning process
• Staple length of the fiber
• Single yarn twist
• Twist
• Bobbin presentation (con. or cyl . dye or cardboard tube, firm or soft winding, diameter, weight, running length, thread reserve)
• Single yarn spliced
• Twine = DD twine (knot-free)
• Electronically cleaned
• UV light check
• Cardboard packaging or foil packaging on Euro pallets depending on the agreemen

If the exact number of coils is ordered, only a maximum of 3 extra coils will be accepted.

Moisture tolerances are generally not accepted for synthetic yarns (e.g. polyester, acrylic, polyethylene and polypropylene).

Delivery note

In addition to the necessary information already defined above, the following information must be noted on the delivery note:

• Number of spools delivered
• Tara
• Lot number
• Presentation of the yarn (tube format, e.g. 10 inches, conical dye tube)
• Delivery in boxes or on EURO pallets
• For natural fiber materials (e.g. cotton): indication of the moisture percentage added to the dry weight.

Before the yarn is delivered to our company, the delivery note must be presented to the relevant purchasing clerk, as the data must be pre-registered before delivery.

The invoice

In addition to the information already defined above, the following information must be noted on the invoice:

• for natural fiber materials (e.g.cotton): indication of the country of origin
• for natural fiber materials (e.g.cotton): indication of the moisture percentage in addition to dry weight

Special contractual requirements for fabric suppliers (raw/semi-finished goods)

Every item is subjected to extensive quality tests in-house before being included in our collection. For this purpose, the supplier provides an individually agreed sample quantity (at least 50 linear meters). As a supplier, you will also receive our technical data sheet. This must be completely filled out and signed by the Schmitz-Textiles purchasing department before an item can be included in our collection. For flame-retardant items, we absolutely need the certificates (issued to Schmitz-Textiles GmbH + Co. KG) that confirm the flame-retardancy (Flamstop EN 13501 (B s1-d0), (or DIN 4102 (B1)), NF P 92 503- 507 (M1), BS 5867 (Part 2, Type C), Uni 8457 (Class 1)). We also expect you to provide us with the relevant wax and sizing recipes and to submit the corresponding safety data sheets (according to Annex 38 to the Federal Republic of Germany's Wastewater Ordinance).

The following general conditions must be fully met:

• Supplier must provide a long-term supplier declaration for goods with preferential origin status in accordance with Regulation (EC) No. 1207/2001 for the goods. An Oeko-Tex certificate must also provided.
• Supplier must be ISO certified.

The following quality criteria for raw/semi-finished goods must be met:

1. Defects in the goods must be compensated accordingly
2. The delivery must be accompanied by an error report
3. Defects must be marked on the goods, clearly visible from the outside
4. Gross / net meter reading
5. Information on the individual label: Item - No., Lot - No., Piece - No., Date
6. A maximum of 6 errors per 100 m for curtain goods and a maximum of 8 errors per 100 m for decorative goods, awning fabrics, outdoor fabrics and other qualities
7. Piece lengths approx. 1,500 m (dock production) if possible, otherwise according to special agreement

The following quality criteria for finished goods must be met:

1. Defects in the goods must be compensated accordingly
2. A maximum of 10 errors per 100 m
3. Defects must be marked on the goods, clearly visible from the outside
4. Gross / net meter reading
5. Information on the individual label: Item - No., Lot - No., Piece - No., Date
6. Piece lengths: 40m, 60m pieces or piece lengths according to individual agreement
7. Presented on sturdy cardboard tubes and neutral packaging
8. Neutral labels must be attached to the outside of the goods
9. The goods must be provided with edge protection
10. The goods must not contain any care symbols/labels
11. Delivery must be foil-wrapped on Euro pallets
12. We expect a discount for short meterage:
    • for pieces under 30 m of 10%
    • for pieces under 15 m of 25%

The maximum delivery time for raw / semi-finished and finished goods must not exceed 20 working days from the order date.

If your goods meet our requirements, we will place an initial order with you, which must be able to be manufactured in-house under serial production conditions. These goods will be tested and assessed again after receipt in our company. If the goods from the initial order go through the test series without any complaints, the collection can be released.

We retain a sample of this initial delivery as a “master sample” in our quality assurance department. All further deliveries are sampled based on this original master sample. All subsequent deliveries of goods must meet the quality standards of the original master sample.

Once approval has been given for inclusion in our collection, you will receive the corresponding sample orders from us to position the new item in our sample collections.

Special contractual requirements for chemical suppliers

Every chemical, dye and aid is subjected to extensive quality and usage tests before being used in our ongoing production. Before a new chemical etc. can be tested in our company, the following general conditions must be fully met:

1. Safety data sheet (SDS) according to EC Directive 91/155/EEC (latest version)
2. For products that produce pollutants relevant to exhaust air, the emission factors must be communicated in advance
3. For products that develop wastewater-relevant pollutants: supplementary information in accordance with Annex 38 for deliveries to the Textile Industry (latest version) must be provided.

Your company must be ISO certified.

If the technical data meets our quality standards, a sample quantity will be ordered. If the sample batch passes the quality tests without any complaints, an initial quantity (O series) is ordered for the production of approx. 5 batches. The goods then produced are also subjected to extensive testing. If no negative properties are found and the quality tests meet our requirements, ongoing production can include the “new” chemical, dye, aid, etc.

All further deliveries must be delivered to us in perfect condition and correspond to the quality standard of the O series delivered.

If there are any changes to the delivered product, a written notification must be made immediately to the Schmitz-Textiles purchasing department. In addition, the safety data sheets and all other relevant information to which the product change relates must be made available to us immediately and include the modifications made.