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Terms and Conditions of Sale

Beaulieu Group LLC d/b/a Beaulieu of America (and all divisions)

Beaulieu’s sale to Customer is limited to and expressly made conditional on Customer’s assent to the terms and conditions of sale contained herein, which supersede and reject all prior agreements, representations, discussions or negotiations, whether written or oral, with respect hereto and any conflicting terms and conditions contained in any purchase order or other writing by Customer. By placing any order to Beaulieu, Customer hereby agrees to the following terms and conditions. Any additional terms or conditions set forth in Customer’s purchase order or invoice are not accepted by Beaulieu and are not binding or applicable to any transactions between Beaulieu and Customer.

1. Price: All prices are subject to change or withdrawal without notice and all shipments will be at prices in effect on the date of shipment. Unless otherwise specified or required by law, all prices will be quoted and billed exclusive of all state and local sales taxes, value added tax, import/export charges, taxes and fees related to the production, sale or delivery of material or products provided by Beaulieu. All such taxes, charges and fees, where applicable, shall appear as a separate and additional item on the invoice. Customer is responsible for payment of all such taxes, charges and fees. Where delivered prices are in effect, base shipping point prices are available on request.

2. Transportation and Delivery: All sales are FCA (Beaulieu’s warehouse) Incoterms 2000. All transportation, insurance and other related expenses are at Customer’s expense, unless otherwise agreed by Beaulieu. Shipment shall be made by the method and carrier Customer requests, where Beaulieu agrees. If Beaulieu does not agree to Customer’s request, shipment shall be made by the method Beaulieu deems is appropriate. Any claim for lost, damaged, stolen or otherwise imperiled goods during shipment are Customer’s responsibility and shall be made by Customer. Beaulieu shall not be liable, directly or indirectly, for any delivery that is delayed or fails for any reason, including, without limitation, labor difficulties, shortages, strikes or stoppages of any sort, acts of God, civil insurrection, wars, riots, strikes, terrorist acts, embargoes, fires or other casualties, or any other causes beyond Beaulieu’s control. Beaulieu reserves the right to deliver in installments, and any such installment deliveries do not obligate Beaulieu to make further deliveries. Beaulieu reserves the right to allocate inventories and production when, in its opinion, such allocation is necessary. Beaulieu, at its option, may assess demurrage charges to Customer for any delivery detained for Customer’s convenience beyond the free time allowed, at the rate in effect on the date of shipment as established by the carrier.

3. Terms of Payment: All sums due shall be paid in U.S. Dollars. For payments made from outside the United States, Customer shall be fully responsible for obtaining any governmental approval and taking any action to permit Customer to pay in U.S. Dollars. Payment for shipments released on open account are subject to payment terms established by Beaulieu’s credit department and as stated on the face of any invoice, if at all. No anticipation discount shall be allowed. All shipments are subject to credit arrangements satisfactory to Beaulieu and we reserve the right, at any time, to suspend credit or to change credit terms provided herein, when, in our sole opinion, Customer’s financial condition so warrants. Any payment not made when due shall accrue interest at the rate of 1.5% per month, or the maximum rate allowed by Georgia law, beginning on the date such payment becomes past due, and continuing thereafter until paid in full. Customer shall pay all reasonable costs, including but not limited to, reasonable attorneys’ fees, Beaulieu incurs in collecting any past due amounts. Failure of Customer to make payment according to authorized credit terms shall entitle Beaulieu to suspend deliveries and/or terminate the sale agreement.

4. Set-Off: Beaulieu shall have the right, at its sole discretion, to set-off against any amounts, and withhold from any payment which it may owe to Customer, pursuant to any invoice, purchase order, agreement, sale, or transaction subject to these Terms and Conditions of Sale for any claims, amounts, or other liabilities it may have arising pursuant to any invoice, purchase order, agreement, sale, or transaction to which these Terms and Conditions of Sale apply.

5. Specifications: Except in particulars expressly agreed in writing by Beaulieu, all products shall be produced in accordance with Beaulieu’s standard practices. Specifications are subject to change or withdrawal without notice and are subject to normal manufacturing tolerances. Cut carpet prices do not include makeup or finishing. Ends will be unfinished on all cut orders. Orders for cut carpet or for special sizes or colors may not be cancelled. All other orders can be cancelled upon payment of applicable restocking fees. Orders for multiple rolls of carpet must specify “one dye lot” whenever such is required. The standard roll width tolerance is one (1) inch. Color and texture may vary from any sample or from dye lot to dye lot. Beaulieu reserves the right to substitute or change raw materials to improve quality and/or performance or if supply conditions require such change. Moreover, Beaulieu reserves the right to discontinue any products.

6. Rejection and Revocation: Products shall be deemed to be accepted and Customer’s right to reject or cancel such products because of defect shall expire: (1) when thirty (30) days have elapsed after Customer knows of such defects, or (2) in the case of non-finished goods, when the products have been placed into any converting process. If Customer retains the products in its possession for more than sixty (60) days after delivery to Customer without rejecting them, this shall constitute irrevocable acceptance of the products by Customer, but shall not effect the warranty set forth in Section 6 below. If Customer rejects or attempts to revoke his acceptance of any products delivered pursuant to this agreement, Customer must notify Beaulieu in writing fully specifying all defects and noncomformities. The failure to specify such defect or nonconformity shall constitute a waiver of that defect or nonconformity. No product shall be returned without Beaulieu’s consent.

7. Commercial Warranty: The products sold to end users of Customer and covered under these terms and conditions have a warranty of one (1) year beginning from the date of purchase by the end user. This warranty is against defects in workmanship, material and construction and is effective only if the products have been properly (1) selected and used in accordance with their normal intended use by the end user and (2) properly installed and maintained. Notwithstanding the foregoing or any warranty or other terms set forth in Section 5 and 7, products sold as other than “first quality,” such as irregulars, promotional goods, mill ends, seconds or remnants are sold “AS IS” without any warranty of any kind, and no claims will be considered for such goods. This warranty is not transferable and may not be used as a part of the basis for the bargain between Customer and its purchaser. THIS WARRANTY CONSTITUTES BEAULIEU’S SOLE LIABILITY TO CUSTOMER, AND BEAULIEU MAKES NO OTHER OR FURTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF MERCHANTABILITY.

8. Claims Adjustment Terms: For non-user related claims, adjustments will be limited to claims presented to Beaulieu by Customer in writing within sixty (60) days from the date of Beaulieu’s shipment as indicated by the date on the invoice. Beaulieu claim forms must be used. Claims must identify invoice number and date, style number and color, roll number, yardage involved, alleged defect and location of carpet. Adjustments will be contingent upon Beaulieu’s examination of the product and a determination that the product was defective at the time it was originally shipped to Customer. Beaulieu will only examine claims that, at the time the claim is made, are based on an alleged manufacturer’s defect that IS NOT a result of improper selection or application, improper installation, improper maintenance or cleaning, abuse or alteration, or accident or negligence in the use, storage, handling or transportation of the product. Returns are made only upon written authorization by Beaulieu. Beaulieu shall not be liable for packing and labor costs in connection with the return of products or for labor or other costs involved in site preparation or product installation or removal. CUSTOMER’S EXCLUSIVE REMEDY FOR DEFECTIVE PRODUCTS, OR FOR ANY EXPRESS WARRANTY, SHALL BE LIMITED, AT BEAULIEU’S OPTION, TO REPAIR, REPLACEMENT, OR CREDIT FOR ALL OR AN EQUITABLE PORTION (NOT TO EXCEED THE PRICE PAID BY CUSTOMER FOR PRODUCTS) OF THE AMOUNT(S) CUSTOMER PAID BEAULIEU. BEAULIEU RESERVES THE RIGHT TO SELECT THE METHOD OF ADJUSTMENT AND TO MAKE A REASONABLE USAGE CHARGE FOR INSTALLED CARPET. NO REMEDY WILL BE PROVIDED FOR A PRODUCT CONTAINING VISIBLE DEFECTS THAT IS CUT AND INSTALLED, UNLESS BEAULIEU GAVE WRITTEN AUTHORIZATION FOR INSTALLATION.

9. Disclaimers: IN NO EVENT SHALL BEAULIEU BE LIABLE TO THE CUSTOMER, WHETHER IN CONTRACT, TORT OR NEGLIGENCE FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, LOST PROFITS OR PUNITIVE DAMAGES.

10. Limitation of Liability: EXCEPT IN THE EVENT OF EITHER PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, EACH PARTY’S MAXIMUM LIABILITY ARISING OUT OF OR IN ANY WAY CONNECTED TO THIS AGREEMENT SHALL BE IN THE AGGREGATE AND LIMITED TO AMOUNTS PAID AND PAYABLE BY CUSTOMER IN THE THREE (3) MONTHS IMMEDIATELY PRECEDING THE CAUSE OF ACTION ARISING. IN NO EVENT SHALL EITHER PARTY, ANY PARENT, SUBSIDIARY, AFFILIATE, OR LICENSOR, OR ANY OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, OR REPRESENTATIVES, BE LIABLE TO ANY THIRD PARTY, FOR DAMAGES OF ANY KIND OR NATURE OR IN ANY MANNER WHATSOEVER; OR TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING DAMAGES OR COSTS DUE TO LOSS OF PROFITS, USE OR GOODWILL REGARDING THIS AGREEMENT REGARDLESS OF THE CAUSE OF ACTION OR THE THEORY OF LIABILITY, WHETHER IN TORT, CONTRACT, OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN NOTIFIED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING. THE PARTIES AGREE THAT THE LIMITATION OF LIABILITY SET FORTH IN THIS SECTION 9 SHALL SURVIVE AND CONTINUE IN FULL FORCE AND EFFECT DESPITE ANY FAILURE OF CONSIDERATION OR OF AN EXCLUSIVE REMEDY.

11. Patents: Beaulieu shall indemnify Customer and its purchaser against any judgments rendered against Customer or its purchaser in any suit or proceeding, so far as same is based on any claim that the product Beaulieu sold hereunder infringes any United States patent, unless such product was made in accordance with materials, designs or specifications furnished by Customer, in which case Customer shall indemnify Beaulieu against any judgment for damages and costs which may be rendered against Beaulieu. The party seeking indemnification must provide the indemnifying party notice in writing within 30 days after the party seeking indemnification receives notice of any such claim. The party seeking indemnification shall give the indemnifying party and its counsel all necessary authority and assistance to enable the indemnifying party to defend or settle such claim as it deems appropriate. Neither Beaulieu nor Customer shall in any event be liable to the other for special, indirect, incidental or consequential damages arising out of or resulting from infringement of patents. In no event, shall Beaulieu’s total liability to Customer and its purchaser under the provisions of this paragraph exceed the aggregate sum paid to Beaulieu by Customer for the allegedly infringing product.

12. Statute of Limitations: Any action for breach of these terms and conditions, including warranty claims, or claims for damages on account of the condition, quality or grade of the products must be commenced within 18 months after the cause of action accrues. A cause of action accrues for breach of these terms and conditions when the breach actually occurs, whether or not the parties are aware of the breach at the time. A cause of action for breach of warranty, or a cause of action arising from the condition, quality or grade of the goods, shall accrue on delivery of the products.

13. General Provisions: Time is of the essence in this Agreement. These terms and conditions represent the entire agreement with respect to the terms and conditions of sale. No modification of these terms and conditions shall be binding upon Beaulieu unless made in writing and signed by a duly authorized agent of Beaulieu. A waiver by Beaulieu of any breach or default by Customer of any of these terms and conditions shall not be deemed to be a continuing waiver or a waiver of any other breach or default of any other term or condition, but shall apply solely to the instance for which the waiver is directed. These terms and conditions, and the relationship between Beaulieu and Customer, shall be construed and governed exclusively according to the laws of the State of Georgia without regard to courts conflicts of laws. Each party submits to the exclusive jurisdiction of the courts of the State of Georgia and the United States District Court for the Northern District of Georgia. Each party expressly waives any and all objections such party may have to venue, including, without limitation, the inconvenience of such forum, in any such courts.

Continuing Guaranty under the Textile Fiber Products Identification Act filed with the Federal Trade Commission, where applicable.