Vendor Terms and Conditions of Purchase

Terms and Conditions of American International Foods Inc. Purchase Order

American International Foods Inc. Purchase Orders are made subject to the following Terms and Conditions, in addition to those stated or referenced on the Purchase Order, and include any specifications, schedules, exhibits or other writings referenced or otherwise relied upon by Buyer in issuing its Purchase Order (“Related Documents”). As used in the Purchase Order and these Terms and Conditions, “Buyer” means American International Foods Inc.; “Seller” means the party named on the Purchase Order from whom Buyer will purchase products; and “UCC” means the Uniform Commercial Code in effect from time to time in the State of Michigan.

1. Agreement. In consideration of Buyer agreeing to buy the products identified on the Purchase Order (“Products”), the Seller agrees to sell such Products as follows: The Purchase Order and these Terms and Conditions, together with any Related Documents constitute the agreement between the parties (the “Agreement”). Seller agrees to each and every term contained in the Agreement as a precondition to Buyer’s performance. Buyer objects to and excludes from the Agreement any term or condition proposed by Seller (whether in any invoice, acknowledgment, or otherwise) that differs from or is contrary to the terms and conditions contained in the Agreement, regardless of the materiality of such term or condition. No other terms or conditions not set forth in the Agreement shall apply unless expressly agreed to in a written acknowledgment issued by Buyer.

2. Seller’s Acceptance. Acceptance of the Purchase Order is expressly limited to the Terms and Conditions contained herein as modified by the express terms of the Purchase Order and Related Documents. Any additional or different terms or conditions proposed by Seller shall constitute a rejection of Buyer’s offer and shall be Seller’s counteroffer to Buyer. Seller may accept the Agreement created by a Purchase Order, Related Documents, and these Terms and Conditions by providing an acknowledgment of the Purchase Order, providing other written notice of acceptance, or commencement of performance. Buyer reserves the right to cancel or withdraw its Purchase Order at any time prior to Buyer’s notice of Seller’s acceptance of the Purchase Order or any time at all if Buyer has not received notice of Seller’s acceptance of such Purchase Order within a time period specified on the Purchase Order.

3. Purchase Order Changes. Buyer may, at any time, by written notice to Seller, make changes in any one or more of the following: (i) applicable specifications, delivery schedules, exhibits or other writings forming a part of the Purchase Order; (ii) method of shipment or packing; or (iii) place of delivery. If any such change causes a decrease in the cost or the time required for performance of the Purchase Order, an equitable adjustment shall be made in the price or delivery schedule, or both, and the Purchase Order shall be modified in writing to reflect such changes. If any such change causes an increase in the cost or the time required for performance of the Purchase Order, in order for Seller to be able to recover such increase, Seller must immediately notify Buyer of its claim for such an increase. Buyer may then request from Seller an estimate of the increase in the cost or the time required for performance of any change prior to ordering the same, whereupon Seller shall promptly submit to Buyer a firm bid in writing stating the amount of any increase or decrease. Seller shall not proceed with the change for which any such estimate has been requested unless and until Buyer gives written notice to Seller to make such change.

4. Identification. Identification of the goods shall occur upon Seller’s acceptance of the Purchase Order or as soon thereafter as the goods are identifiable as contemplated by the UCC.

5. Delivery. Time is of the essence in the Purchase Order. Seller is responsible for all costs of delivery of goods and/or performance of services. Should Seller fail to comply with the delivery or performance terms of the Purchase Order, without limitation of Buyer’s other remedies, Buyer may terminate the Purchase Order in whole or part and may buy replacement products from Seller or another vendor and charge Seller any additional expense incurred thereby. Buyer expressly retains all its rights and remedies provided by law in the case of such default, and no action on the part of the Buyer shall constitute a waiver or election of any right or remedy.

6. Risk of Loss. All Products are shipped F.O.B. Buyer’s facility or other location identified on the Purchase Order. Without limitation, risk of loss shall be upon the Seller until receipt of the goods by Buyer at the location identified on the Purchase Order or at such other location identified by Buyer.

7. Seller Warranties. Seller warrants that the Products: (i) will conform to all applicable specifications and samples furnished or accepted by Buyer; (ii) will conform to any representations or statements made by Seller to Buyer; (iii) will consist of only first-class workmanship (if applicable) and materials (all of which materials shall be new unless otherwise specifically allowed by notation by Buyer on the Purchase Order); and (iv) will be free from any foreign material, defects, latent or patent, in material, design, or workmanship. Seller acknowledges that Buyer has relied on representations or statements made by Seller to Buyer, and that Buyer is relying on Sellers’ expertise, knowledge, skill, and judgment. Seller also warrants that it has complied, and the Products will comply, with all applicable federal, state and local laws, rules, regulations and orders that or affect the manufacture and/or sale of the Products. Seller will furnish Buyer with guarantees and assurances in accordance with the applicable provisions of any such law, rule, regulation or order which provide a specific written guarantee or assurance to be given by Seller with respect to such Products. Seller warrants that it has, or will have, at the time of delivery, good title to the Products, and that it has a right to transfer such Products, free from any security interest, lien or encumbrance. Before final payment, Seller shall, if requested, satisfy Buyer by affidavits or otherwise, that there is no outstanding security interest, lien or encumbrance for labor or material against the Products. Seller is lawfully organized and in good standing and has the authority to enter into this Agreement. Seller has not entered into any agreement with any third party which restrains or prevents Seller in any way from accepting the Purchase Order and entering into and performing the Agreement.

8. Disclaimers and Limitation of Liability Ineffective. Any attempt by Seller to disclaim any warranties, including those specified under the UCC, shall be ineffective. Seller shall remain liable for any indirect, special, incidental, consequential or punitive damages caused by Seller, and any attempt by Seller to limit Seller’s liability as to Buyer shall be ineffective.

9. Price. The price of the Products shall be as stated on the Purchase Order and Buyer is not responsible for any amount not appearing on the Purchase Order.

10. Invoices and Payment. An invoice for goods and/or services, with evidence of shipment properly signed by carrier’s representative, if applicable, shall be submitted to Buyer for each shipment of Products. Error or omissions on invoices or delay in the receipt of invoices shall entitle Buyer to withhold payment without penalty or loss of any discount. Payment shall be made per the payment terms on the Purchase Order. Except as otherwise provided herein, an invoice is not payable until (i) after arrival of Products at the destination ; (ii) after Buyer’s inspection and acceptance of the Products; (iii) after receipt of the appropriate and correct invoices; and (iv) insofar as final payment is concerned, after Seller has complied with all of its obligations to Buyer. Buyer shall have the right to set off against the Purchase Order any amounts that Seller may owe to Buyer. Payment by Buyer shall not be a defense or waiver of any rights or claims of the Buyer, including, without limitation, claims for defects or other breaches of warranties or the Agreement.

11. Right of Inspection. Buyer shall have the right to inspect the Products before paying for or accepting them. However, Buyer does not have a duty to inspect and neither inspection nor lack of inspection by Buyer shall be a defense or waiver of any rights or claims of the Buyer, including, without limitation, claims for defects or other breaches of warranties or the Agreement.

12. Buyer’s Property. (a) Any property furnished by Buyer to Seller in connection with the Purchase Order shall be and remain Buyer’s property and Seller shall be deemed to be an insurer thereof. (b) Seller shall segregate, clearly mark and maintain complete inventory of all such property and will notify Buyer of any loss or destruction of or damage to such property. (c) Upon termination or completion of the Purchase Order Seller shall deliver any such property to Buyer, in good condition subject to ordinary wear and tear and normal manufacturing losses, in accordance with Buyer’s instructions, or shall otherwise handle such property as directed by Buyer. (d) Seller shall maintain fire insurance with extended coverage and theft insurance for any such property and provide evidence of such coverage upon request.

13. Indemnification. Seller shall indemnify, defend and save Buyer harmless from any liability, loss, cost, penalty, damage or expense, including attorneys’ fees, which Buyer may incur as a result of any claim, damage, injury, cause of action, proceeding, citation, or work stoppage arising out of or in any way connected with Products provided by Seller or ordered and agreed to be provided by Seller pursuant to an Agreement. This indemnity includes all costs and attorney’s fees, regardless of whether litigation is filed or arbitration demanded. This indemnity survives the termination or completion of the Purchase Order. This indemnity also includes all claims for patent infringement or any intellectual property claims.

14. Confidential Information. Seller acknowledges that any formulae, customer data, or other information disclosed by Buyer to Seller in connection with the Purchase Order is confidential and proprietary to Buyer and that use of or disclosure of this information other than as may be required in the course of Seller’s performance of the Purchase Order will be detrimental to Buyer. Seller, therefore, covenants not to use or disclose any such information. Further, Seller shall not in any manner use, advertise, publish or release any information concerning any Purchase Order or Agreement without the prior written consent of Buyer, except as may be required by law. In the event that Seller is determined by a court of competent jurisdiction to be in breach of any covenants to act (or refrain from acting) in a particular manner, Seller agrees that it will not be possible to adequately measure the loss suffered by Buyer, and that because of the competitive nature of Buyer’s industry, the injury to Buyer resulting from a breach of the Agreement will be irreparable. Therefore, Buyer will be entitled to a temporary restraining order and preliminary and permanent injunctive relief to halt any actual or threatened violation of this Agreement, as well as any measurable damages sustained, and Buyer will not be required by Seller to post a bond as security for any such equitable relief.

15. Insurance/Bonding. The Seller must maintain and pay for insurance coverage of the types and with the limits not less than what is set forth in this section and its subsections. Seller agrees and acknowledges that Buyer is entering into this Agreement in reliance on Seller’s representation that the policies of insurance contemplated by these provisions will be in place, with all premiums paid.

Such coverage must be maintained in a form and with insurers acceptable to Buyer and must, notwithstanding the requirements of this section, cover all indemnification obligations under the Agreement as well as insuring against bodily injury, and property damage including, without limitation, liability for defects in the Products.

Each policy of insurance must name Buyer as an additional named insured, on a primary and non-contributory basis, which may not be limited and must include completed operations coverage for a minimum of three (3) years after completion of the contractual relationship between Buyer and the Seller, and must provide that the same may not be canceled or altered, except upon thirty (30) days prior written notice to Buyer.

In the event any policy or policies of insurance that Seller is required to maintain is written on a “claims made” insurance form, each policy must have a “retroactive date” which is not later than the date on which the parties entered into their Agreement. Furthermore, should insurance coverage be written on a “claims made” basis, Seller’s obligation to provide insurance must be extended for an additional period equal to the statute of limitations for such claims in the State of Michigan, plus one year.

By entering into this Agreement, and thereafter upon request, Seller agrees to provide to Buyer a certification, signed by an authorized agent of Seller and sworn to before a notary public under penalty of law, of the following: Seller hereby certifies that it has not cancelled and that Seller has not delivered, sent by overnight courier, mailed, faxed, sent by telegram, or transmitted by any other means any notice of cancellation of the Policies.

Certificates evidencing coverage by the policies of insurance identified in the provisions of this Agreement (the “Policies”), for instance in the form for a certificate for Additional Insured for Ongoing and Products/Completed Operations or its equivalent, must be delivered to Buyer prior to the delivery of any product and from time to time thereafter at Buyer’s request. and the delivery to Buyer of current certificates is an absolute condition precedent to any obligation by Buyer to Seller.

Buyer and Seller waive all rights against each other, including, but not limited to, rights of subrogation for damages caused by fire and other perils to the extent covered by the insurance required to be maintained hereunder.

Prior to any performance by Buyer or Seller, Seller must provide Certification of Insurance from an Insurance Company with an A.M. Best rating of A- or better evidencing coverage in amounts reasonable considering Seller’s assets and activities.

The terms and requirements relating to insurance coverage are subject to change at any time and from time to time by Buyer in its sole discretion and Seller covenants and agrees to promptly comply with such changes.

16. Independent Contractors. The parties shall conduct all of their business activities under this Agreement as independent contractors, and nothing in this Agreement is intended to make either party an agent, legal representative, subsidiary, joint venturer, employee, partner, or servant of the other for any purpose whatsoever. The parties agree that all persons utilized by them in connection with their business shall be deemed to be their employees and agents and each party alone shall be responsible for all expenses incurred by it and its employees and agents in connection with the performance of the obligations of this Agreement.

17. Assignment and Transfer. Seller shall not assign or transfer any of its rights or obligations under the Purchase Order without the express prior written consent of Buyer.

18. Remedies. Without limitation, Seller shall immediately, at no charge to Buyer, replace any Products that are in breach of any warranty provided in the Agreement upon Buyer’s request. Additionally, Buyer and Seller shall have all of the remedies afforded by the UCC, as well as any other remedies which may be provided under these Terms and Conditions or otherwise provided by law. All of Buyer’s remedies are cumulative.

19. Costs of Breach. In the event Seller shall breach in any way Seller’s obligations under this, or any other agreement, to Buyer, Seller shall be liable to Buyer for all of Buyer’s costs of remedying the breach or otherwise enforcing this Agreement, including, but not limited to, attorney’s fees and expenses

20. Waiver. Failure of Buyer to insist upon strict adherence to any term of the Purchase Order on any occasion shall not be considered a waiver or deprive Buyer of the right thereafter to insist upon strict adherence to that term or any other term of the Purchase Order. Any waiver must be in writing and signed by an authorized representative of Buyer.

21. Force Majeure. If Seller claims that its performance of this Agreement or any obligation by Seller is prevented, restricted or interfered with by reason of weather, fire, or other casualty or accident, labor disputes, unavailability of power or supplies, war or other violence, any governmental or intergovernmental law, order, proclamation, regulation, ordinance, demand or other requirements or any other act or condition whatsoever beyond the control of Seller, the Seller must immediately provide written notice to the Buyer of the cause and anticipated duration of delay. Buyer shall be entitled to cancel any part or all of its obligations to purchase Products that are the subject of the Purchase Order and to purchase those Products from other sources. Buyer retains all right to compensation from the Seller for cover or otherwise.

22. Governing Law. The Purchase Order and Agreement shall be governed by and construed in accordance with the laws of the State of Michigan without regard to its conflict of law doctrine.

23. Entire Agreement. The Purchase Order, Related Documents, and the terms and conditions hereof, contain the complete agreement of the parties as to its subject matter, supersede all prior agreements with respect to their subject matter, and may not be amended or discharged except in writing signed by the duly authorized representatives of both parties.