General Terms and Conditions of Hangzhou Langyu Textiles Co., Ltd. 1. Scope of applicability and territory 1.1. Our terms and conditions of sale and delivery (hereinafter: "Terms and Conditions") shall exclusively apply to all deliveries or services; we do not accept any terms and conditions of the customer which conflict with or deviate from our Terms and Conditions, unless we have expressly agreed to their application in writing. Our Terms and Conditions shall apply even if we carry out the delivery to the Customer without any reservation in the knowledge of the Customer's terms and conditions that are contrary to or deviate from our Terms and Conditions of Sale. 1.2. With the first delivery under our Terms and Conditions, the customer acknowledges their exclusive application for all further deliveries or services. The respective current version of the Terms and Conditions can be viewed and downloaded at www.lagoon-limited.com. 1.3. Our Terms and Conditions apply only vis-à-vis businessmen pursuant to § 310 para. 1 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) with a business address in Germany or Austria. 1.4. References to the application of legal regulations have only clarifying function. Even without such clarification, the relevant statutory provisions shall apply, unless they are amended or excluded by our Terms and Conditions. 2. Offers; order confirmations; conclusion of contract 2.1. If the customer's order is to be qualified as an offer in accordance with § 145 BGB, we are entitled to accept such offer within 2 weeks by issuing an order confirmation. The customer will first receive a written confirmation of receipt from us, which shows the date of receipt of the order by us. This confirmation of receipt does not represent an acceptance of an offer by the customer, but only serves to calculate the acceptance period. 2.2. We shall only be bound by orders or contracts of the customer which have been accepted by us by means of an order-confirmation in accordance with the above section 2.1. Subsidiary agreements and modifications or verbal agreements are only binding for us if they have been confirmed in writing. The same applies to the modification or amendment of contracts. 2.3. We hereby reserve the intellectual property rights and ownership rights to samples, specimens, illustrations, drawings and other documents, unless these are provided by the customer; they do not constitute quality guarantees. 3. Production clearance; start of production 3.1. Prior to starting the production of the customer's order, the customer shall declare production clearance to us in writing. This production clearance by the customer shall be issued on the basis, after examination and with reference to a "Golden Sample" which we provide to the customer for this purpose. The characteristics of the respective "Golden Sample" are deemed to be the agreed quality in the sense of § 434 para.1 sentence 1 BGB of the ordered goods. 3.2. If the customer demands the start of production without the issuing a clearance on the basis of a "Golden Sample" as stipulated in sec. 3.1 above, the characteristics of the ordered goods stated in the order confirmation shall be deemed to be their agreed quality within the meaning of § 434 para. 1 sentence 1 BGB. 4. Transfer of risk; delivery periods 4.1. The place of performance is "ex works". 4.2. Compliance with our delivery obligation is subject to the timely and proper fulfilment of the customer's obligations, such as in particular the issuance of production release or the proper fulfilment of the payment obligation for previous transactions. We reserve the right to raise the objection of non-performance of the contract. 4.3. Delivery periods are not binding unless expressly stated otherwise. Binding delivery periods also only apply subject to the correct and timely availability of all data and samples required for the execution of the customer's order 4.4. We are entitled to make partial deliveries and partial services at any time, provided this is acceptable for the customer. 4.5. If the customer is in default of acceptance or if he culpably violates other obligations to cooperate, we are entitled to demand compensation for the damage incurred including any additional expenses. Further claims or rights are reserved. 4.6. In case the prerequisites of section 4.5. are fulfilled, the risk of accidental loss or accidental deterioration of the purchased goods shall pass to the customer at the point in time at which the customer is in default of acceptance or debtor's delay or violates his contractual obligations. 5. Prices; terms of payment; offsetting / right of retention 5.1. Unless otherwise stated in the order confirmation, prices are "ex works", costs for loading, freight, unloading, transport insurance, assembly, customs, other charges and incidental costs are to be borne by the customer. 5.2. The purchase price is due for payment without deduction immediately after invoicing. The deduction of a discount requires a separate written agreement. 5.3. Under certain circumstances, in particular default of payment or deterioration of the customer's financial circumstances, we may demand advance payment from the customer and/or assert a right of retention with regard to further deliveries or the objection of uncertainty pursuant to § 321 BGB. 5.4. Set-off rights can only be granted to the customer, if his counterclaims are legally established or undisputed. The customer shall only be entitled to a right of retention with regard to claims resulting from the same contractual relation. 6. Liability for defects 6.1. All warranty and liability claims of the customer require the proper compliance with the examination and notice obligations of the customer pursuant to German law (§ 377 of the German Commercial Code). 6.2. A delivery that exceeds or falls short of the number of units ordered by the customer and confirmed by us by up to and including 5 percent shall be deemed to be in accordance with the contract. The price shall then be adjusted to the quantity actually delivered. 6.3. In the event of a defect in any purchased item, we shall be entitled, at our discretion, to chose between subsequent performance either by remediation of the defect or delivery of conforming goods. In case of remedy or delivery of conforming goods, we shall be obliged to assume all expenses incurred as a result of the subsequent performance, in particular shipping, transportation, labor and material costs if not augmented by the fact that the goods were transported to a location other than the place of performance. 6.4. If the subsequent performance fails, the customer may, at it its own discretion, rescind the contract or claim reduction of the purchase price. Repayments or reduction of the purchase price shall generally be made by credit note in favor of the customer. 6.5. We shall be liable according to statutory provisions, to the extent the customer claims damages based on intent or 2 gross negligence, including intentional or grossly negligent behavior of our representatives, employees or other auxiliary persons. As far as we are not accused of intentional or grossly negligent breach of contract, our liability for claims for damages is limited to the foreseeable, typical damage. 6.6. In case of a culpable breach of material contractual obligations, we are also subject to statutory liability; however, our liability in this case is limited to the foreseeable, typical damage. 6.7. Insofar as the customer is entitled to compensation for damages instead of performance due to a negligent breach of duty, our liability is limited to compensation for foreseeable, typically occurring damages. 6.8. Liability for culpable injury to life, body or health remains unaffected; this also applies to mandatory liability under the Product Liability Act. 6.9. Unless otherwise regulated above, liability is excluded. 6.10. The period of limitation is 12 months, beginning with the transfer of risk. §§ 478, 479 BGB remain unchanged by the above. 6.11. Any further liability for damages other than that provided for in this sec. 6 is excluded, irrespective of the legal nature of the claim asserted. This applies in particular to claims for damages arising from culpa in contrahendo, other breaches of duty or claims in tort for compensation for property damage in accordance with § 823 BGB. The limitation of liability according to this sec. 6 shall also apply if the customer, instead of a claim for compensation for damages, demands compensation for useless expenses instead of performance. 6.12. Insofar as liability for damages against us is excluded or limited, this shall also apply with regard to the personal liability for damages of our employees, workers, staff, representatives and vicarious agents. 7. Reservation of title 7.1. We retain the right to title to the delivered products until complete settlement of all payment claims from the relevant purchase. In case of contract breaching behavior by customer, e.g. default in payment, we are entitled to take back the reserved goods. Taking back the reserved goods shall be deemed a withdrawal from the contract. The same shall apply if we pledge the reserved goods. Upon taking back the reserved goods, we are entitled to realize their value; the proceeds minus reasonable costs of the realization are to be set-off against the obligations of the customer. 7.2. The customer shall be obliged to treat the reserved goods carefully and to insure them at his own costs against fire, water and theft damages at value as new. Necessary maintenance and inspection works are to be performed by the customer at his own costs. 7.3. In the event of seizure, attachment or other interventions on the delivered products by third parties, the customer shall immediately notify the third party of our title (property) and inform us in writing so that we can file a lawsuit pursuant to § 771 ZPO (German Code of Civil Procedure). Insofar as the third party is not in a position to reimburse us for the judicial and extrajudicial costs of an action pursuant to § 771 ZPO, the customer shall be liable for the loss incurred by us. 7.4. The customer shall be entitled to sell the delivered products in the ordinary course of business; however, he hereby assigns to us all claims in the comprehensive amount of our final invoice (including VAT) accruing to him from the resale against his customers or third parties; we hereby accept this assignment. The customer shall remain authorized to collect these claims even after the assignment. Our right to collect these claims ourselves shall remain unaffected. Nonetheless, we undertake not to collect these claims as long as the customer meets his payment obligations from the proceeds collected, is not in default of payment and, in particular, no application for the opening of composition or insolvency proceedings has been filed or payments have not been suspended. If this is the case, however, we may demand that the customer inform us of the assigned claims and their debtors, provide all information required for collection, hand over the relevant documents and inform the debtors (third parties) of the assignment. 7.5. We undertake to release the securities to which we are entitled at the customer's request to the extent that the realizable value of our securities exceeds the secured claims by more than 10%; the selection of the securities to be released shall be incumbent on us. 8. Applicable law; place of jurisdiction The law of the Federal Republic of Germany shall apply under the explicit exclusion of the United Nations Convention on the International Sale of Goods (CISG) and the conflict-of-law rules of international private law. As far as permissible, the exclusive jurisdiction for all disputes is agreed to be the Munich Regional Court (City).