HB SPECIALTY FOODS’ PURCHASE ORDER TERMS AND CONDITIONS

The following terms and conditions (the “Terms”) shall apply when HB Specialty Foods (HB) is purchasing goods (Goods) and/or services (Services) from a seller (Seller) pursuant to a purchase order (Order). If there is any disagreement between the terms of an Order and a written agreement between HB and Seller, the terms contained in the Order shall control.

1. SELLER’S TERMS EXCLUDED. Seller’s acceptance of an Order is limited to acceptance of these Terms. Any terms and conditions of Seller are expressly rejected by HB. If Seller chooses to accept an Order, Seller shall be deemed to have agreed to these Terms. In no event will HB’s acceptance of Goods or Services constitute an acceptance of Seller’s terms.

2. ACCEPTANCE. An Order must be accepted by Seller within five (5) days of receipt by Seller (a) confirming the Order, (b) commencing work on the Goods and/or Services, or (c) shipping the Goods or delivering the Services.

3. PRICE; PAYMENT TERMS. The price of the Goods and/or Services shall be as stated in the Order and shall be F.O.B. delivered and inclusive of all other fees, costs, and charges, including customs, taxes, delivery, storage, insurance, and other similar charges. In the event the price is not contained in an Order, HB must be notified of the price and accept such price in writing before Seller can accept an Order. Seller warrants that the prices for the Goods and/or Services sold to HB under any Order are as favorable as those currently offered to Seller’s customers for the same or similar Goods and/or Services. HB shall pay all undisputed amounts due and owing under an Order pursuant to the terms set forth on the Order. HB shall have the right to deduct or setoff amounts owed to HB by Seller against amounts payable under any Order. In no event shall HB be required to pay any late charge, surcharge, interest, finance, or similar charge, unless required to do so by law.

4. DELIVERY. Seller shall deliver the Goods and/or Services pursuant to the terms set forth in the Order or as mutually agreed by the parties. Timely delivery is of the essence. If Goods and/or Services are not adequately or timely delivered or are otherwise “Non-Conforming” (as defined herein), HB may, in addition to any other rights it may have, (a) terminate the Order without liability, (b) refuse to accept future Goods or further Services, (c) require Seller to replace or repair the Goods and/or Services, or (d) recover all damages sustained by HB, including, without limitation, recover the difference in price HB incurs to purchase substitute Goods and/or Services. HB shall not be liable for any increased delivery costs, or changes in raw material or labor prices, that are due to no fault of HB. Title to and risk of loss of the Goods will pass to HB upon the actual delivery of the Goods and Services to HB; provided, however, that if the Goods are Non-Conforming, title to and risk of loss of the Goods will remain with Seller at all times.

5. GOODS SPECIFIC PROVISIONS. Seller represents and warrants to HB that the title conveyed on all Goods will be good and marketable and free from any lien or encumbrance. HB shall have the right, but not the obligation, to inspect and/or test Goods produced and delivered pursuant to an Order. Seller expressly represents and warrants to HB, and HB’s successors, assigns, and customers, that all Goods (a) conform in all respects to all samples, specifications, and appropriate standards, (b) meet all specifications or guarantees provided either orally in writing to HB, (c) are free from defects in materials or workmanship, and (d) are merchantable, safe, and appropriate for the purpose(s) for which HB intends to use the Goods, and Seller warrants that the Goods will be fit for such particular purpose. With respect to any food related Goods, Seller represents, warrants, and guarantees that the Goods, including the contents, packaging, and labeling, will (a) comply with the Federal Food, Drug and Cosmetic Act of June 25, 1938, as amended (FFDCA), and all other similar Federal and State laws, including the Food Safety Modernization Act, as amended; (b) be manufactured in accordance with current good manufacturing practices; and (c) not be articles which may not, under the provisions of Section 404 or 505 of the FFDCA, be introduced into interstate commerce. Any Goods that are defective, damaged, or fail to conform to the Order, these Terms, any warranties, representations or guarantees made by Seller (including those made herein), the specifications supplied to HB, or applicable industry standards shall be considered “Non-Conforming” and HB shall be entitled to reject and return such Goods without cost or liability. HB must reject and return Non-Conforming Goods within a reasonable time of discovering the Non-Conformance.

6. SERVICE SPECIFIC PROVISIONS. Services described in an Order shall include all Services that are inherent, necessary, or a customary part of the Services described in an Order. Seller warrants and represents that it is duly authorized to provide the Services and that the Services will be performed in a good and workmanlike manner. Seller will ensure that its personnel, while performing the Services at HB’s facilities will comply with HB’s health, safety, security, and food safety rules and policies. Any Services that fail to conform to the Order, these Terms, any warranties, representations or guarantees made by Seller (including those made herein), the specifications supplied to HB, or applicable industry standards shall be considered “Non-Conforming” and HB shall be entitled to reject such Services without cost or liability.

7. TERMINATION. HB may terminate any Order for convenience at any time upon reasonable notice. HB may also terminate any Order for cause, which includes, among other things, Seller providing Non-Conforming Goods and/or Services or Seller’s failure to comply with the Order or these Terms. If HB terminates an Order for cause, HB shall not be liable to Seller for any costs or damages whatsoever and may recover all damages sustained by HB.

8. INDEMNIFICATION. Seller shall defend, indemnify, and hold harmless HB, including its employees, representatives, offices and owners, from and against any and all claims, demands, actions, losses, damages, penalties, liabilities, costs, obligations, and expenses arising out or resulting in any way from any Seller’s breach of an Order, these Terms, any warranties, representations or guarantees made by Seller (including those made herein), and/or Seller providing Non-Conforming Goods or Services hereunder.

9. GOVERNING LAW; ARBITRATION. The validity, interpretation and performance of this transaction shall be governed by the laws of the State of Idaho. Any dispute, controversy or claim arising out of or relating in any way to this Agreement shall be exclusively resolved by binding arbitration pursuant to the American Arbitration Association, under its Commercial Arbitration Rules. These Terms may only be added to, modified, superseded, or altered, by a written instrument signed by an authorized representative of HB.

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