GENERAL TERMS AND CONDITIONS OF PRODUCTION AND SALE-PURCHASE

UAB BAGFACTORY
GENERAL TERMS AND CONDITIONS OF PRODUCTION AND SALE-PURCHASE

1. APPLICATION OF THE GENERAL TERMS AND CONDITIONS OF PRODUCTION AND SALE-PURCHASE
   1.1. These UAB Bagfactory, legal entity code 302842562, a firm duly incorporated and existing under the laws of the Republic of Lithunia (the “Seller”) General Terms and Conditions of Production and Sale-Purchase (the “Terms”) shall apply to all sales transactions concluded between the Seller as the Seller of production and its client as the buyer (the “Buyer”) where the Terms have been referred to in the relevant order confirmation by the Seller, price offer or any other notification sent by the Seller to the Buyer.
   1.2. The Terms are also applicable when The Seller, verbally or in writing, refers to them. The conditions in the Terms are then valid for all purchases and connected businesses until The Seller directs to other conditions.
   1.3. When ordering or in other way negotiating a purchase from The Seller, The Buyer approves to the Terms and accepts to be bound to them.
   1.4. Conflicting or divergent terms of purchase or other restrictions of the Buyer will not be accepted unless and to the extent the Seller has given its express in written consent in each individual case.
   1.5. The Seller shall sell certain production (the “Products”) to the Buyer pursuant to the terms and conditions agreed under these Terms. Confirmed order, accepted price offer or other agreement incorporating the Terms by way of reference in these Terms shall jointly be referred to as the “Order”.
   1.6. These Terms shall apply to the confirmed Order having reference to these Terms whether indicated on the Order confirmation or by any other means of notification engaged by the Seller, and they shall overrule any prior agreements or arrangements between the Seller and the Buyer in respect of the confirmed Order. Conflicting or divergent terms of purchase or other restrictions of the Buyer will not apply unless and to the extent the Seller has given express written consent in each individual case.
2. PRICES, ORDER AND ORDER HANDLING PROCEDURE
   2.1. The actual quantities delivered and/or services performed will be charged for at the Seller’s prices indicated to the Buyer or valid at the time when the Buyer submits the Order to the Seller, provided such Order is confirmed by the Seller with the Order confirmation.
   2.2. The Buyer shall pay for the Products according to the payment terms agreed in the Order.
   2.3. EUR – shall be the payment currency while handling and performing the Order, unless agreed otherwise before the Order confirmation.
   2.4. The Buyer may request from the Seller a price quote valid for the Products intended to be ordered prior to the submission of the Order. If Value Added Tax (VAT) applies, it will be added to each Order on top of the indicated prices. In case of manifest error in price quote or price confirmation, the Seller is free to adjust its quoted price to the price that was actually applicable at the time when the Order was submitted by the Buyer.
   2.5. Any offers/quotations by the Seller in respect of prices, quantities, delivery times and availability are not binding until confirmed by the Seller. The Buyer places Order for the Products via an e-mail address of the Seller’s representative with whom the Buyer communicates directly regarding the particular Order or via other means indicated by the Seller. Any Order shall become binding to the Seller and the Buyer after the Seller has sent to the Buyer a written confirmation of the Order (which may include an invoice or any other document). The Seller and the Buyer consider confirmation via e-mail to be equal to a written confirmation.
3. QUALITY AND TECHNICAL INFORMATION REGARDING THE PRODUCTION
   3.1. The Seller shall make its best efforts to ensure that the delivered Products are free from defects resulting from faulty workmanship and use of defective materials. Quality of the Products only refers to the quality, grade and properties described in the Seller’s technical/production information and data sheet. Any public comments, recommendations or advertising shall not constitute any quality data concerning the Products purchased.
   3.2. Upon respective request of the Buyer or without it, the Seller may provide to the Buyer certain technical documentation/production information and data sheet which may include typical production values, specifications, measurements or other kinds of technical information about the Products. The Buyer is prohibited to use such documentation for any other purposes than for the fulfilling of the Order and may not reproduce, copy or convey in any manner such documentation to third persons without a separate written consent of the Seller.
   3.3. The Products may consist materials of plastic, paper, fabric and cotton that are ”alive”, which means that latter materials might cause variation in luster, color intensity, opacity, nuance, etc, between, for example, when a repeat production (othet batch) of the Products is compared to the former one. In most cases a repeat production of the Products is identical to the earlier. The production is made in same way.
   3.4. Offered sizes and/or sizes presented in samples by the Seller might be different from the following ordered Products due to technical reasons in the production. Prospectuses and catalogues shall not be binding to the Seller. For details as handles, handle knots, buttons, zippers, welcro fastening, strip seal, welding, eyelets, cardboard reinforcements etc. the Seller shall use factory standard products and production method. Any samples (by the Seller, the Buyer, third person, etc.) are approximate references. If no specific requirements are given for details, standard will be used. Requirements for specific details shall be clarified in the Seller’s offer, order in writing from the Buyer and in Order confirmation from the Seller. The Buyer is entitled to verify the accuracy of the offer and Order confirmation compared to Order/demands of specific details.
   3.5. Some Products are partly hand made. That requires higher toleration of movement in bottom-side gussets and die cuts which in turn can affect the print on the Products and the Products theirself visually.
   3.6. The size of the Products (length, width, depth) may wary approximately 2 (two) centimeters from the measurments stated in the Order and those variations are not considered to be deviations from the measurements stated in the Order as latter deviation in the measuremens of the Products can occur in almost every production of the Products due to the technical aspects.
   3.7. Products related variations in quantity of up to 10% (ten percent) and technically unavoidable quality tolerances shall be permissible. In particular, Products tolerances indicated in Seller’s technical documentation/production information and data sheet for particular Products are permissible and shall not be regarded as non-conformities of the delivered Products. Unless specifically indicated by the Buyer, the Seller establishes Products parameters in accordance with its technical documentation/production information and, where such parameters are not set, upon its discretion.
   3.8. The Products print setup and size might diverge from approved in the Order. The print may slightly move horizontally and vertically. There might also be a color deviation between the different colors. This may vary throughout the production of the Products.
   3.9. Printed Products might have unprinted fields along sides and in bottom. If printed above handles (die cut handles) the color might dissolve and come of in hands. For turn over reinforcement and in bottom gusset the welding of the Products might crack open but only as far as the reinforcement/gusset reaches and without any strength loss. For some Products a white stripe can be visible in bottom when printed.
   3.10. Production with inside print can have protecting varnish or lamination applied if wanted and when possible. Lamination is a more solid protection but neither varnish nor lamination is a full protection, print colors might come off due to attrition and must not be an issue for complaint.
   3.11. Due to the technological aspects the paint on the inside and outside of the Products may stain for an indefinite period of time, i.e. the paint on the Products during its usage might get transfered to the clothes, shoes, other matterials or tems. This attribute, called the “blue jeans effect”, shall not in any ways deemed to be determined as as defect or flaw of the Products and the Seller under no circumstances shall be liable to the Buyer if paint of any of the Products stain any items or the matterials belonging to the Buyer, its retailer, wholsesaler or the end-user of the Products. Therefore, in order to avoid any confusions or misinterpretations, the Buyer is obliged to notify its retailer, wholesaler or the end-user of the Products about the above stated matter regarding the usage of the Products. The Seller shall not be liable neither to the Buyer, its retailer, wholesaler nor to the end-user of the Products if the “blue jeans effect” occurs during the usage of the Products and any damages that might occur to the Buyer, its retailer, wholesaler or the end-user of the Products due to the “blue jeans effect” shall not in any ways be borne by the Seller.
   3.12. All raw material that are commonly used in the production of the Products: colors, glues, paper, plastic etc. has a certain smell that it might be more or less appearing. This attribute does not in any ways compromise the quality and useage of the Products.
   3.13. In order to image a print artwork on the Products printing plates are needed. A proof sample is made from the artwork to be printed on the Products. The Seller may send one proof sample for new orders to the Buyer. For some orders an additional, final, proof sample is sent to the Buyer. The proof sample is vital and essential for the look of the final Products. The Buyer must carefully read and inspect the proof sample, check layout & data and verify that it all is accurate to the Order.
   3.14. Registration and trim marks might be visible as small dots in the Products. These marks are necessary to position the layout of the print in the production of the Products.
4. DELIVERY OF THE PRODUCTS, TRANSFER OF THE TITLE
   4.1. The Seller indicates and confirms the delivery date in the Order confirmation. The Seller unilaterally is entitled to extend delivery date for up to 4 weeks.
   4.2. The standard delivery of the Productts shall be under the following terms of INCOTERMS 2020: EXW (“Ex-Works”) – the Buyer shall pick up the Products from the location specified in the Order (warehouse, store, etc.). If a different delivery terms of INCOTERMS 2020 are agreed between the Seller and the Buyer in the Order confirmation and if the delivery of the Products is organized by the Seller, the Buyer is obliged to pay all costs related to the freight and transportation of the Products to the Buyer and also provide the Seller with shipping address, delegated person to receive the Products and other information needed for the shipment and delivery of the Products.
   4.3. The date of the delivery of the Products to the Buyer shall be deemed a date of the transference of the Products to the Buyer under CMR waybill, transfer-acceptance act, invoice or other document accompanying the Products.
   4.4. The Seller has the right to refuse from delivering the Products if the Buyer has not fully paid the amount of the agreed prepayment (or payment) in the Order or if the Buyer has overdue invoices in any amount.
   4.5. The date of manufacturing of the Products may be indicated on the Products label or other means chosen by the Seller (transfer-acceptance act, invoice, e-mail, etc.).
   4.6. The Products are stored in packages/boxes that are suited to fit standard boxes or bags. If a given quantity per box or bag is agreed it must be noted in the Order confirmation. The Products can be sqeezed in the packages/boxes or bags and upon opening of the packages/boxes or bags Products can be folded, crinkly but those attributes shall not affect the quality and usage of the Products.
   4.7. The overall risk of damage or accidental loss of the Products passes to the Buyer from the moment of the delivery of the Products to the Buyer.
   4.8. The property rights for the Products are transferred from the Seller to the Buyer from the moment of full payment of the amounts stated in the Order, invoice, or in case of default, after fulfillment of other monetary provisions submitted to the Buyer by the Seller.
   4.9. The Seller retains title to the delivered Products until the said Products have been paid for in full and the Buyer has performed all his existing obligations arising from his business relations with the Seller stated in the Order or any other document.
   4.10. The Buyer is prohibited from pledging the Products that are in the possession of the Buyer, but which are still the property of the Seller. The Seller may prohibit the Buyer to use or dispose of the Products that are still owned by the Seller and the Buyer is obliged to cover the Seller’s damages (direct and indirect) that occurred due to the Buyer’s failure to meet the latter references.
5. INSPECTION OF THE PRODUCTS
   5.1. Upon delivery, the Buyer must verify the documents accuracy and compare them with Order, requirements/demands.
   5.2. The Buyer has an obligation to verify that the delivered Products (including, without limitation, the information printed on the Products) and quantities conform to the confirmed Order and the invoice (if it is included), as well as for the intended use by the Buyer and/or third parties.
   5.3. Upon delivery, the Buyer must immediately inspect and verify that the delivered Products are free of any external or otherwise visible damage. Also upon the delivery the Buyer must immediately inspect the quantity, quality, assortment, packaging and documentation of the Products. In case of visible damage of the Products or inaquiracies regarding the quantity, quality, assortment, packaging and documentation of the Products the Buyer must note the latter discrepancies on the delivery documents (on the CMR waybill, transfer-acceptance act, invoice or other document accompanying the Products).
   5.4. Any claims of non-conformity regarding the Products made from the Buyer to the Seller after the delivery of the Products to the Buyer shall not be accepted by the Seller and shall deemed to be unfounded. Therefore, if the Buyer fails to submit the complaints within the indicated time period, i.e. upon delivery of the Products to the Buyer, the Products supplied are deemed to have been accepted by the Buyer and deemed to be corresponding to the information stated in the confirmed Order. The Buyer shall not be entitled to raise any further claims based on faulty delivery, especially claims for damages, and shall not have the right to terminate the confirmed Order. If the Buyer uses or processes/converts Products, such Products shall be deemed to have been accepted.
   5.5. The Products which have been complained about shall not be returned to the Seller until the Seller receives the material samples for inspection of such Products and confirms in writing that such Products are defective and may be returned and/or destroyed, unless the Seller decides otherwise and informs the Buyer about such decision. In case the Seller and the Buyer disagree whether the Products are in fact defective, an independent expert shall be appointed by the mutual consent of the Seller and the Buyer and the respective expenses shall be borne with the party in whose disfavour such expert provides an opinion. The direct and factually grounded expenses related to the return and/or destruction of the defective Products shall be borne with the party in whose disfavour such expert provides an opinion for quality of the Products.
   5.6. In the event of any non-conformity the Seller’s liability shall be limited to repair or replacement of the Products in question. The Seller’s liability does not extend to further use, application, processing or conversion of the Products, as well as using the Products for manufacturing other products, and/or the damages caused to such other products, unless there is a proven breach by the Seller of the terms and conditions of the confirmed Order and/or the relevant technical documentation of the Seller.
6. INVOICING AND PAYMENT
   6.1. The Buyer undertakes to pay to the Seller for the ordered Products in accordance with the invoice issued by the Seller and the agreed payment term indicated in the Order confirmation or on the invoice issued by the Order. The Seller may issue invoices already before delivery and also has the right to demand prepayment.
   6.2. The Buyer must also pay for the shipping costs of delivering the Products to the Buyer and the Seller is entitled to invoice the Buyer for such shipping costs if the Seller has paid for such shipping costs.
   6.3. If the Buyer is in delay of any payments, then the Buyer is obliged to pay a late payment interest of 0.05% from the amount not paid in due time for each delayed day.
   6.4. If there are justified doubts as to the solvency or creditworthiness of the Buyer and if the Buyer, despite requests to do so, is not willing to make payment in advance or concurrently upon delivery or to provide appropriate collateral for the performance of his obligations within a reasonable period prior to delivery, then the Seller shall be entitled to rescind or postpone the execution of the Order, regardless if the Products (or part of them) has been made or delivered to the Buyer. In this case, the Buyer is obliged to pay the Seller all the remaining due amount of the Products stated in the Order or invoice.
   6.5. The Seller shall use payments received to discharge the oldest invoice items due plus the accrued default interest and expenses in the following order: expenses, interest, and principal claim. Any divergent repayment provisions by the Buyer shall be disregarded.
   6.6. The Buyer shall only have the right of retention if and when its claim/counterclaim has been recognized by the court’s judgement. The same applies to set-off rights.
   6.7. Payments shall not be deemed to have been effected until the payable sum is credited to the bank account in the Seller’s name.
   6.8. All bank transfer fees and any related money transfer costs are borne by the Buyer.
7. STORAGE OF THE PRODUCTS
   7.1. The Products are stored in the warehouses of the Seller until the Products delivery to the Buyer.
   7.2. In case the Products are delivered to the Buyer in a way that the Buyer, its representative or delegated person shall collect the Products from the Seller’s warehouse or other indicated place in the Order, the Buyer must collect the Produts duly in the terms stated in the Order, invoice, or other information provided to the Buyer by the Seller without any delays on time.
   7.3. The storage facility in the Seller’s warehouse is limited. Therefore, in case the Buyer does not collect the Products stored in the Seller’s warehouse on time, then the Buyer is obliged to pay a penalty of 0.05% from the whole Products amount sum stated in the Order for each delayed day until every unit of the Products are collected by the Buyer from the Seller’s warehouse or other indicated place in the Order. The latter amount shall be deemed to be a compensation for the warehouse storage costs, incurred by the Seller, since the prolonged storage of the Products causes inconvenience for the Seller due to the shortage of space in the warehouse to store the Seller’s items and tools needed for the business activity and contractual obligations with other third parties.
   7.4. If the Buyer does not collect the Products (whole or in parts) pursuant to the terms stated in the Order, invoice, or other information provided to the Buyer by the Seller after 6 (six) months of Products manufacture date, then the Seller is entitled not to store the Products in the Seller’s warehouse anymore and is entitled to destroy the Products, recycle the Producs or use the Products (its materials or the whole Products without the useage of trademark printed on the Producs) for fulfillment of other contractual obligations between the Seller and third partys. In the event if the Seller executes the rights stated in this article of the Terms, the monetary sums that have been received by the Seller from the Buyer for the fulfillment of the Order are not returned to the Buyer and the execution of the Seller’s rights stated in this article of the Terms in any ways shall not relieve the Buyer from the fulfillment of the obligation to pay the full amount of the Products sum stated in the Order, if the full amount sum of the Products stated in the Order has not already been paid by the Buyer.
8. INTELECTUAL PROPERTY
   8.1. By submitting the Order, the Buyer confirms that the Buyer (its representative) has all rights and permissions (licences, agreements, confirmations, etc.) to reproduce, use and provide the trademark that is bound to be printed (reproduced) on the Products to the Seller in order to execute the Order. The latter permission must have statements that the owner of the trademark (the Buyer or any other third person) gives its consent for the reproduction of the trademark on the Products and is entitled to assign the Seller to make the Products with a trademark. The Seller is entitled to ask the Buyer to provide supporting documents and the Buyer obliges so. In case the Buyer does not provide the latter documentation regarding the trademark, the Seller is entitled to reject the Order without any detailed explanation.
   8.2. If the Order has been confirmed and the Products are being made or have been made, the Seller does not warrant that all legal regulations relevant to the Buyer’s field of activity are observed as regards the labelling/marking and handling of the Products, nor does the Seller warrant that Order executed to meet the Buyer’s requirements and specifications do not violate the rights of third parties. The Buyer’s requests and specifications are observed without obligation to verify and the Seller shall not be liable for complying with any instructions and/or indications provided by the Buyer.
   8.3. By Order confirmation the Buyer grants the Seller the right to use the name and logo of the Buyer or the Prodcut’s reproduction (image) for the Seller’s promotional purposes. These promotional purposes refer to the publication of photographs and videos on the Seller’s website, on social networks and in the Seller’s print materials, providing reference samples to third parties, using the Buyer’s company business name, title or name as a basis for reference in the Seller’s negotiations and on all types of promotional materials of the Seller.
   8.4. Should any third party assert a claim against the Seller in respect of protective intelectual property rights relating to the execution of the Order, the Buyer shall compensate the Seller for any disadvantages and/or damages caused to the Seller by such claim.
9. TERMINATION
   9.1. The Seller is entitled to terminate the Order in writing with immediate effect if the Buyer fails to comply with the material terms and conditions of the Order and fails to remedy any such breach within 2 (two) days after receipt of the Seller’s respective written notice. In any case, the Buyer shall collect and pay for the Products which have already been ordered and the manufacturing process started, provided that the Seller is capable to fulfil the confirmed Order or a part of such Order.
   9.2. The Seller may terminate the Order immediately at any time by giving written notice if: (i) the Buyer ceases or threatens to cease to carry on its business or goes into liquidation, if bankruptcy proceedings are initiated against the Buyer or if an administrator or liquidator is appointed over any part of the Buyer’s assets; or (ii) if the execution of the obligations under the Order is not possible as a consequence of legal acts or Government actions.
10. LIABILITY
    10.1. The liability of the Seller is limited to direct damages caused to the Buyer as a result of a breach of the Order. The Seller is liable for the damage only if the Seller is culpable of the non-performance. Under no circumstances shall the Seller be liable for loss of profit of the Buyer or any other indirect or consequential damages, or any other losses of speculative or unforeseeable nature. The Seller shall neither be liable for any damages caused to the subsequent products when the Products is being processed and/or used in the manufacturing/packaging processes by the Buyer or any third parties unless such damage can be attributed directly and solely to the quality defects of the Products which do not correspond to the allowed tolerances indicated in section 3 of these Terms.
    10.2. Compensation claims, including non-contractual claims, by the Buyer shall be excluded in case of slight neglect of duty (minor breach) by the Seller, the Seller’s staff or other persons involved by the Seller in the performance of Seller’s duties, unless the neglected duty concerned is of substantial significance for attaining the purpose of the Order.
    10.3. To the maximum extent permitted under applicable laws the Seller shall not be liable for any third party (e.g. end customers or users of the Buyer) claims in relation to the Products, including the claims of the parties to whom the Products have been resold or transfered by the Buyer. In instances the liability for any third party claims can be legally attributed to the Seller, the Buyer shall have an obligation to immediately, and in no case later than within 1 (one) business day from the receipt of such claim, notify the Seller in writing about such claim. Failure to notify the Seller about any third party claim relieves the Seller from any form of liability despite it being legally attributable to the Seller.
    10.4. The Seller is only liable to the Buyer for the proper execution of confirmed Order in accordance to the instructions/specifications of such Orders, which shall be based on the quality, quantity, assortment, grade and properties described in the Seller’s technical documentation/production information and data sheet.
    10.5. The Seller shall not be liable to the Buyer or any third parties for damages caused by the Buyer’s or third parties’ subsequent improper use of the Products or the use of the Products not in the line with specifications for such Products available in the Seller’s technical documentation/production information and data sheet (not intended purposes), unless the Seller has expressly and only in respect to a particular Order confirmation in question confirmed that the Products are suitable for the use/exact customer application indicated by the Buyer in writing.
    10.6. Application-related technical advice given by the Seller orally, in writing and/or by way of trials is given in good faith, but can only be regarded as non-committal information, and this also applies where proprietary rights of third parties may be involved. It does not relieve the Buyer from testing the Products supplied by the Seller as to their suitability for the intended processes and purposes. The application, use and processing of the Products are beyond the Seller’s control and therefore entirely the Buyer’s own responsibility.
    10.7. The maximum amount of the Seller’s liability toward the Buyer for breach of the Order shall be limited to the price of the Products out of which the claim arose and further limited to the amount that has actually been paid to the Seller for such Products prior to becoming aware of the non-performance.
11. FORCE MAJEURE
    11.1. The Seller and the Buyer shall not be liable for any failure to comply with the Order if such failure results from conditions beyond their control including changes to legislation, regulations, action of any state authority, state administration or municipality institution, riots, military operations, natural disasters, express and implied sanctions towards the country of origin of the Products or their matterials or other force majeure conditions. The Seller and the Buyer shall have to continue performing their contractual obligations immediately after the end of force majeure occurrence. Should a circumstance of force majeure last more than 30 (thirty) days, the Seller and the Buyer may by issuing a written notice to terminate the Order.
    11.2. Deficiency of financial resources as well as fire, flooding, theft, act of vandalism, damage to the property or similar events shall not be considered as force majeure if it has been caused by the acts or negligence (failure to act) of the Buyer or if a third person is liable for such events to the Buyer.
12. CONFIDENTIALITY, APPLICABLE LAW, OTHER PROVISIONS
    12.1. Content of the Order and the information that has become known or provided between the Seller and the Buyer before and after the confirmation of the Order shall be kept confidential by the Seller and by the Buyer and will not be disclosed to any third party without the prior written consent of the other party, unless such disclosure is required under the applicable laws or necessary for proper fulfilment of the commitments stated in the Order. Confidentiality requirement does not apply to publicly available information.
    12.2. Law of the Republic of Lithuania shall be applied to the implementation and interpretation of the Terms and the Orders. All disputes arising from the Orders or relating hereto the Seller and the Buyer shall resolve amicably. In case of failure to settle the disputes, disagreements or claims in the way of negotiations, they must be considered in court in Vilnius city, in the Republic of Lithuania, following the laws of the Republic of Lithuania.
    12.3. All notices, requests, and other correspondence shall be made in English language and must take place by e-mail, or delivered personally (by courier etc.), or by registered mail.
    12.4. The Seller and the Buyer are not entiled to assign to third persons any rights or obligations under the Order without the prior written consent of the other party, exept the Seller may assign claims it has against the Buyer for debt collection purposes (e.g. use debt collection services) to third persons.
    12.5. The Seller may change the Terms unillateraley and shall inform the Seller about the ammendments of Terms.

Dated 2023.12.13