NATURE’S VALUE, INC.


468 Mill Road


Coram, New York 11727


 


August 28, 2012


 


Vitacost.com, Inc.


5400 Broken Sound Boulevard


Boca Raton, FL 33487


 


Re:      Manufacturing
Agreement 


 


Dear Gentlemen:


 


With a view toward establishing a mutually
beneficial long term supply relationship, Nature’s Value, Inc. (“Supplier”) is pleased to supply products to
your company (“Purchaser”) as follows:


 


1.            PRODUCTS.
This letter agreement will cover the products listed on Schedule A attached, as same may be modified from time to time as
stated herein (collectively, the “Products”). Additional Products may be added to Schedule A with the mutual
written consent of the parties. Supplier may remove a Product from Schedule A by giving Purchaser three (3) months prior
written notice of its intention to do so. “Products” also include the new products specified in Supplier’s quotations
that have been executed by Purchaser and subsequently verified by Supplier in accordance with Supplier’s new product procedures.
Supplier shall have the right to unilaterally add such new products to Schedule A from time to time.


 


2.            ORDER,
ACCEPTANCE, DELIVERY. From time to time Purchaser may submit purchase orders for Products to Supplier. Each purchase order
issued by Purchaser will comply with the provisions of this letter agreement. In that regard, to the extent terms contained on
purchase orders are in addition to, different from or inconsistent with, the terms of this letter agreement, such terms will not
be applicable nor binding on Supplier. For each order of Products accepted by Supplier (an “Order”), Supplier will
issue an electronic or written order acknowledgement within 5 days of receiving the purchase order in question. Accordingly, each
purchase order is subject to Supplier’s acknowledgment, which is applicable. Each acknowledgement issued by Supplier will
comply with the provisions of this letter agreement. In that regard, to the extent terms contained on acknowledgements are in addition
to, different from, or inconsistent with, the terms of this letter agreement, such terms will not be applicable nor binding on
Purchaser. Supplier will deliver the Products stated in each Order to the applicable shipping point within the lead times specified
on Schedule A for the Products in question.


 


Unless otherwise specified
on Schedule B, all shipments will be delivered (i) for sales having an ultimate destination within the United States and
its territories, “F.O.B. Supplier’s applicable plant”; or (ii) for sales having an ultimate destination outside
the United States or its territories, “ex work’s Supplier’s applicable plant”. Unless otherwise indicated,
the foregoing mercantile symbols shall have the meaning ascribed to them under the New York Uniform Commercial Code for sales within
the United States and its territories, and under the International Commercial Terms – 2000 of the International Chamber of
Commerce for sales outside the United States and its territories.


 


3.            PRICE
AND PAYMENT. The prices for Products shall be as specified on Supplier’s applicable quotes for such products or Formulation
Document as determined by Supplier. These quotes will be issued by Supplier from time to time in connection with this letter agreement
(collectively, “Quotes” and singularly, a “Quote”). Accordingly, Quotes are applicable to this letter agreement.
Subject to the provisions hereof, prices specified in Supplier’s Quotes will be fixed for the period stated in this letter
agreement.


 


4.            PRICING
AND PRICE INCREASES. Subject to the provisions hereof, Supplier will provide guaranteed prices by product that will remain
effective for a six month period.  Such pricing may only be changed in the event (a) the price of the raw material ingredients
of a specific product increases the overall ingredient cost by greater than 10%, or (b) of a change in regulation or legislation
which may, directly or indirectly, impact the overall cost of manufacture, production, maintenance, an sale of the Products by
greater than 10%.  In the event of such a price increase, Supplier will provide 30 days written notice during which time Purchaser
may elect to issue any future orders for the affected Products.  If such price increase is accepted, the new price will
become effective for all orders after the expiration of the aforementioned 30 day notice period, and will remain in effect for
six months, unless additional raw material price changes occur.   If such price increase is rejected, Supplier will complete
the manufacturing of any existing open orders of said product, at which point any pricing will be no longer valid for future orders.


 



    	 



    	 



    

 





Vitacost.com, Inc.


August 28, 2012


Page 2




 


Documentation of any
raw material price increase will be provided by Supplier, upon request, in the form of a vendor invoice, vendor price quote or
if neither is available, any other form acceptable to Purchaser.  


 


5.            MINIMUM
QUANTITY REQUIREMENTS; FORECASTS. The minimum order quantity requirement (“MOQ”) and ordering increments for each
Product are as specified on Schedule A.


 


6.            TERM
AND TERMINATION. (a) Unless earlier canceled as described in this paragraph 6, this letter agreement is effective for a period
of two (2) years commencing on the date of this letter (the “Initial Term”). After the expiration of the Initial Term,
this letter agreement will continue to renew for successive one (1) year terms until either party terminates it pursuant to the
provisions of this paragraph 6.


 


(b) Beginning on a
date which is 60 days from the date hereof and ending on the expiration of the Initial Term, the Purchaser may terminate this letter
agreement (the “Early Termination”) at any time for any reason, upon giving Supplier at least one hundred eighty (180)
days prior written notice of its intention to do so (the “Early Termination Notice”). In the event of an Early Termination,
all then pending Orders issued pursuant to this letter agreement, together with then existing Firm Commitment Orders, will remain
in full force and effect and will continue to be governed by the terms and conditions of this letter agreement until the transactions
contemplated thereby are completed. The Purchaser will have no liability solely for exercising its right to terminate this letter
agreement pursuant to this paragraph 6(b).


 


(c) After the Initial
Term either party may terminate this letter agreement (the “Convenience Termination”) at any time for any reason, upon
giving the other party at least one hundred eighty (180) days prior written notice of its intention to do so (the “Convenience
Notice”). In the event of a Convenience Termination, all then pending Orders issued pursuant to this letter agreement, together
with then existing Firm Commitment Orders, will remain in full force and effect and will continue to be governed by the terms and
conditions of this letter agreement until the transactions contemplated thereby are completed. Neither party shall be liable to
the other on account of exercising the right to terminate this letter agreement for convenience under this paragraph 6(b), except
to the extent otherwise expressly stated herein.


 


(d) In the event a
party materially breaches this letter agreement and, in the case of a non-monetary breach, fails to cure such breach within thirty
(30) days of receiving written notice of such breach, the non-defaulting party may terminate this letter agreement immediately
by giving written notice of its intention to do so. It is expressly acknowledged and agreed that any breach of warranty as per
the provisions of Schedule C annexed hereto shall be deemed to be a non-monetary breach of this letter agreement. The non-defaulting
party will have no liability solely for exercising its right to terminate this letter agreement pursuant to this paragraph 6(d).


 


(e) Both the Supplier
and the Purchaser acknowledge and agree that those certain Commercial Lease Agreement and Equipment Lease Agreement by and between
the Supplier and the Purchaser will automatically terminate on the termination of this letter agreement, regardless of the type
of termination of this letter agreement.


 


7.            CUSTOMER
WARRANTY RIGHTS. Certain warranty and standard terms and conditions are described in Schedule C to this letter agreement,
and along with Schedules A and B, form a part of this letter agreement as if fully set forth in the body of this letter
agreement, and are applicable.


 


8.            MISCELLANEOUS.
(a) This letter agreement, the Quotes and the order acknowledgments for purchases of Products are intended by the parties to be
a final, complete and exclusive statement of their agreement with respect of the subject matter contained herein. All prior or
contemporaneous oral or written statements, agreements, promises or understandings are hereby excluded and are superseded.


 


(b)          This letter
agreement may not be modified or amended except by an instrument in writing signed by the party or parties against whom enforcement
is sought.


 


Once again, Supplier
appreciates the opportunity to establish a long term supply relationship with Purchaser and to support Purchaser as a valued customer.
If you are in agreement with the foregoing, please indicate your acceptance of the terms by signing in the space provided below.
Please retain one original for your files and return the other executed original to the undersigned.


 



    	 



    	 



    

 





Vitacost.com, Inc.


August 28, 2012


Page 3







 


	 	Very truly yours,
	 	 
	 	Nature’s Value, Inc.
	 	 
	 	By:	/s/ Joseph M. Kramer
	 	 	Name: Joseph M. Kramer
	 	 	Title: CFO


 


	ACKNOWLEDGED AND AGREED	 
	to this 28th day of August, 2012	 
	 	 
	Vitacost.com, Inc.	 
	 	 
	By:	/s/ Jeffrey J. Horowitz	 
	Name: Jeffrey J. Horowitz	 
	Title:  Chief Executive Officer	 


 



    	 



    	 



    

 


SCHEDULE A


 


TYPE, VARIETY, QUANTITY AND PRICE
OF PRODUCTS:


 


See Attached.


 



    	 



    	 



    

 


SCHEDULE B


 


DELIVERY AND CREDIT TERMS


 


Delivery:  FOB Shipping Point


 



    	 



    	 



    

 


SCHEDULE C


 


Warranty and Standard Terms 


  


The provisions hereof supplement and constitute a part of the
provisions contained in that certain letter agreement by and between Supplier and Purchaser, to which this schedule is attached
(the “Attached Agreement”). Accordingly (i) all references in this Schedule C to the terms of “this Agreement,”
“hereunder,” “herein,” “hereby” and “hereto” shall be deemed to refer to this Schedule
C and the Attached Agreement; and (ii) all terms not otherwise defined herein shall have the meaning ascribed thereto in the
Attached Agreement.


 


1.          Warranty.
(a) Subject to the provisions and qualifications hereof, Supplier warrants only to Purchaser that on the date of shipment the
Products sold pursuant hereto which are manufactured by Supplier will conform to Supplier’s applicable Formulation Document
(as defined below) in effect on the date of shipment, as may be further amended by Supplier from time to time. Conformance to Formulation
Document will be based on Supplier’s then applicable established test performance criteria and measurement instructions,
as determined by Supplier.  Supplier warrants that facilities, products, and processes will conform
with Applicable Laws (as defined below). The warranty period for Products that are contained in finished Packaging will be for
a period of twelve (12) months after shipment from Supplier’s applicable plant, unless another period is specified by Supplier
in writing. The warranty period for Products that are contained in bulk containers will be the earlier of (i) 2 weeks after shipment
from Supplier’s applicable plant; or (ii) the date the container containing the bulk product is unsealed. The applicable
warranty periods stated above for Products contained in finished Packaging and Products contained in bulk containers are referred
to as the “Warranty Period”, as applicable.


 


For purposes hereof, the term “Formulation
Document” means Supplier’s applicable product specification sheet that identifies the content and relative amounts
of ingredients purposely added and combined by Supplier to manufacture the Products in question, together with approximate, theoretical
average finished weights and fill weights, all subject to Permissible Variations. The Formulation Document shall not be deemed
to specify any performance or other qualitative or quantitative criteria of the Products based on the contents or relative amounts
of ingredients contained in the Products, irrespective of whether such ingredients are in an isolated state or combined with any
other ingredient by mixture, compound, solution, solvent or otherwise (collectively “Implied Performance Attributes”).


 


(b)          IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT Supplier
MAKES NO WARRANTIES WHATSOEVER WITH RESPECT TO (i) Raw Materials (AS DEFINED IN PARAGRAPH 4(a)), (ii) Packaging (AS DEFINED IN
PARAGRAPH 1(c)), (iii) Labeling (AS DEFINED IN PARAGRAPH 3(b)) OR Label Compliance (AS DEFINED IN PARAGRAPH 3(b)), IRRESPECTIVE
OF WHETHER THE ITEMS REFERRED TO IN SUBSECTIONS (i)-(iii) ARE PROVIDED BY Supplier, Purchaser OR ANOTHER Person; AND (v) THE TASTE,
FLAVOR OR FRAGRANCE OF ANY OF THE Products, OR WHETHER SUCH TASTES, FLAVORS OR FRAGRANCES ARE, IN FACT, AS STATED. ACCORDINGLY,
Raw Materials, Packaging AND Labeling ARE PROVIDED “AS IS”, “WITH ALL FAULTS”. Raw Materials and
Packaging WILL CARRY ONLY THE WARRANTY OF THE MANUFACTURER, IF ANY, AND ONLY TO THE EXTENT ANY SUCH WARRANTY IS ASSIGNABLE BY Supplier
TO Purchaser. FURTHER, THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION OF THE EXPRESS TERMS OF PARAGRAPH 1(a).


 


Supplier maintains and up-dates samples
for each Product.


 


(c)          Further,
to the maximum extent permitted by Applicable Laws, Purchaser shall also be barred from any recovery (including, without limitation,
any recovery under the express warranty specified in paragraph 1(a)) on account of the following, and any liability of Supplier
on account of any of the following or the use of related Products is waived: (i) any Products which have been subject to accident,
negligence, alteration, abuse, tampering, misuse, or the like; (ii) any Products which are used for purposes other than for which
they were manufactured, as specified by Supplier or as specified on the label of the Product; (iii) Permissible Variations (as
defined below); (iv) unreasonable use, use of any Products beyond normal fashion or failure to follow instructions; (v) any Products
which are subject to improper storage (including, without limitation, exposure to weather or high or low temperatures, or moisture),
as determined by Supplier; (vi) Packaging Compliance (as defined in paragraph 3(a)) or packaging of the Products including all
related paraphernalia such as pumps and related items (collectively, “Packaging”); (vii) tastes, flavors or fragrances
of any of the Products, or whether such tastes, flavors or fragrances are, in fact, as stated; (ix) any defect or non-conformity
caused in whole or in part by imperfections in Raw Materials; (x) inaccurate expiration dates relating to any of the Products,
whether determined by Supplier or other Person; (xi) Implied Performance Attributes (xii) Label Compliance (as defined in paragraph
3(b)); (xiii) any Purchaser Responsibilities (as defined in paragraph 4(b)); and (xiv) the failure of any of the Products or the
ingredients or formulations contained therein to comply with any domestic or international laws, rules or regulations other than
Applicable Laws (as defined below).


 


For purposes hereof, the term “Permissible
Variations” means (i) Supplier’s standard variations of ingredients and measurements, and (ii) permitted variations
contained in Supplier’s test criteria and measurement instructions. The term “Person” means any natural person,
corporation, division of a corporation, partnership, proprietorship, joint venture, association, trust, estate, foundation, or
any other entity, whether or not incorporated, and any governmental authority, unit or agency. The term “Applicable Laws”
means all applicable U.S. laws, rules and regulations applicable to Supplier. Goods may be deemed non-conforming under this agreement
to the extent Supplier fails to comply with Applicable Laws and such failure affects the salability of goods. Upon reasonable request
Supplier shall provide sufficient information to verify compliance with Applicable Laws.


 


(d)          THE
EXPRESS WARRANTIES SET FORTH IN PARAGRAPH 1(a) ARE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, WARRANTIES CONCERNING INFRINGEMENT OR THE LIKE.


 


(e)         Supplier
MAKES NO WARRANTY WHATSOEVER WITH RESPECT TO Products NOT MANUFACTURED BY IT. Products FURNISHED BY Supplier BUT NOT MANUFACTURED
BY Supplier WILL CARRY ONLY THE WARRANTY OF THE MANUFACTURER, IF ANY.


 


2.          LIMITATION
OF REMEDIES, WAIVER OF CONSEQUENTIAL DAMAGES. (a) EXCEPT AS OTHERWISE EXPRESSLY STATED IN PARAGRAPH 2(b), Supplier’s
SOLE AND EXCLUSIVE OBLIGATION AND LIABILITY HEREUNDER, AND Purchaser’s SOLE AND EXCLUSIVE RIGHTS AND REMEDIES WITH RESPECT
THERETO, SHALL BE THE REPLACEMENT, AT Supplier’s OPTION, OF ANY Products MANUFACTURED BY Supplier WHICH MAY PROVE TO BE DEFECTIVE
WITHIN THE Warranty Period. SUBJECT TO THE PROCEDURES SET FORTH BELOW, Supplier WILL REPAIR OR REPLACE SUCH DEFECTIVE Products,
AS THE CASE MAY BE, FREE OF CHARGE. 


 


In order for Purchaser to be entitled to
receive the rights and remedies contained in this paragraph 2, Purchaser must, during the applicable Warranty Period, notify Supplier
in writing of the existence of possible defective Products within thirty (30) days after discovery thereof or the time Purchaser
should have discovered such possible defect or else such claims shall be deemed waived.  Such notification shall contain
a request for a return material authorization (“RMA”) from Supplier, and Purchaser shall comply with Supplier’s
then applicable RMA procedures and Purchaser agrees that such RMA procedures are applicable to and binding on Purchaser. Supplier
shall have no liability or obligation to Purchaser for loss or damage resulting from the testing, repair, replacement, loss of
use, removal or recall of Products, and any such liability is hereby waived. Supplier’s determination as to whether Products
are defective or are otherwise covered by the express warranties contained in paragraph 1(a) shall be conclusive and binding on
Purchaser. The determination of whether the Products in question are defective will be made by Supplier’s testing
and measurement criteria, including, without limitation, analytical and micro-biological testing, and such results or determination
shall be conclusive and binding on Purchaser. 


 


(b)          IF
AFTER A REASONABLE NUMBER OF ATTEMPTS BY Supplier TO REMEDY A DEFECT PURSUANT TO PARAGRAPH 2(a) AND THE REMEDY FAILS OF ITS ESSENTIAL
PURPOSE OR IS OTHERWISE DEEMED UNCONSCIONABLE OR UNENFORCEABLE IN THE JURISDICTION IN WHICH ENFORCEMENT IS SOUGHT, OR IN THE EVENT
REPAIR OR REPLACEMENT IS NOT APPROPRIATE OR PRACTICAL AS DETERMINED BY Supplier IN ITS SOLE AND ABSOLUTE DISCRETION, Purchaser
SHALL, AT ITS OPTION, EITHER RECEIVE (i) A REFUND OF THE PURCHASE PRICE FOR THE DEFECTIVE Products; OR (ii) A CREDIT IN AN AMOUNT
EQUAL TO THE PURCHASE PRICE OF SUCH Products, IT BEING UNDERSTOOD THAT THE REMEDIES STATED IN THIS PARAGRAPH 2(b) SHALL THEN BE
Purchaser’s SOLE AND EXCLUSIVE REMEDY.


 


(c)         Supplier’s
total obligations and liabilities under this Agreement and the transactions contemplated hereby will be limited to insurance proceeds
actually received under Supplier’s insurance policy for the claim in question. Supplier agrees to carry at least Five Million
Dollars ($5,000,000) of products liability insurance.


 


3.          Purchaser
Responsibilities. (a) Unless otherwise expressly stated in the Attached Agreement, Purchaser acknowledges and agrees that
Purchaser shall be solely responsible (at its sole cost and expense) for the following (i) testing and verifying whether and the
manner and extent to which the active ingredients contained within the Products retain their respective integrity over time, (ii)
ensuring that the Products and ingredients contained therein and the related formulations comply with all Laws (other than Applicable
Laws), (iii) conducting preservative challenge tests and verifying the effectiveness of the preservatives used in all Products;
and (iv) the condition, functionality and appropriateness of the Packaging and ensuring that it is in compliance with all Laws
(collectively, “Packaging Compliance”), and Supplier shall have no liability or responsibility for any of the forgoing
items (i) – (iv), or for the failure of the Products or Packaging to satisfy same, all as more particularly stated in paragraph
1. For purposes of this Agreement, the term “Laws” shall mean all Applicable Laws and all other domestic and international
laws, rules, and regulations.


 


(b)          Unless
otherwise expressly stated in the Attached Agreement or, applicable Quote, Purchaser acknowledges and agrees that it shall be responsible
for providing all labels and other written, printed or graphic matter on, accompanying or affixed to the Products including, without
limitation, ingredients, dosages, instructions and warnings (collectively, “Labeling”). Purchaser shall be solely responsible
for the following (collectively, “Label Compliance”): (i) ensuring that the Labeling of all of the Products is in full
compliance with all Laws; (ii) verifying the truth, accuracy and completeness of the Labeling for all of the Products in accordance
with Laws; and (iii) providing accurate expiration dates and related information to be properly specified and affixed on all of
the Products. Supplier shall have no liability or responsibility for Label Compliance of the failure to achieve such compliance
or for any of the forgoing items (i) – (iii), all as more particularly stated in paragraph 1. Purchaser acknowledges and
agrees that Supplier, at its option and at any time and from time to time, may at Supplier’s cost (i) assist Purchaser in
providing the Labeling or any portion thereof for any of the Products or (ii) assist Purchaser in providing expiration dates for
any of the Products, and such assistance referenced in items (i) and (ii) shall only be as an accommodation as a potential guideline
to Purchaser and without any liability to Supplier, all as more particularity specified in paragraph 1.


 


(c)         Purchaser hereby represents and warrants that any formulation
documents and the contents thereof provided by Purchaser to Supplier hereunder shall not infringe on any third-party’s intellectual
property rights, including, without limitation, any third-party patents, copyright or trade secrets, whether registered or unregistered.


 


4.          Raw
Materials, testing and related issues. (a) From time to time, Supplier may perform certain testing and analysis on Raw
Materials and production batches of Products. Further, these tests may consist of stability, identity and assay tests, among other
tests. Except as required by Applicable Laws or as otherwise expressly stated in the Attached Agreement or applicable Quote, Supplier
is under no obligation to perform any of these tests and it may not perform any at all. Raw Materials and batches of Products that
pass these tests are referred to as “Conforming Products”. Such testing and analysis may be performed by Supplier or
by a Person engaged by Supplier. Tests performed by Supplier will be performed in accordance with Supplier’s then existing
test and analysis procedures, as may be modified by Supplier from time to time. The results of tests performed by or on behalf
of Supplier shall be conclusive and binding upon Purchaser to the extent tests are scientifically valid, performed in satisfaction
of Applicable Laws, and subject to established industry standards. If at a later date, Conforming Products exhibit defects or non-conformities
or other deteriorating or debilitating conditions that are inconsistent with these test results (an “Inconsistency”),
it shall be conclusively presumed that such Inconsistency is the result of Purchaser’s improper storage of the Products in
question, or other improper act or omission of Purchaser, its contractors or customers. Accordingly, Purchaser shall be barred
from any recovery against Supplier (including, without limitation, the express warranty in paragraph 1(a)) by reason of any Inconsistency,
and Supplier shall have no liability therefor, all as more particularly specified in paragraph 1. In this regard, if a test concludes
that there is no micro-organism issue with a particular Conforming Product and it is subsequently discovered that a particular
micro-organism exists in the Conforming Product in question, the initial test shall remain valid, conclusive and binding and no
Inconsistency shall be deemed to exist even if the test was performed prior to placing the Product in Packaging and the test investigated
the presence of the identified micro-organism.


 


For purposes of this Agreement, the term
“Raw Materials” means the ingredients used to manufacture the Products.


 


(b)          The
Purchaser’s responsibilities as specified in paragraphs 3(a) and (b) and paragraph 4(a) are hereby collectively referred
to as the “Purchaser Responsibilities”. Subject to paragraph 5(c), Purchaser’s Orders for the Products may not
be cancelled by Purchaser and such Products are not returnable, except Purchaser may return Products that fail to comply with Supplier’s
express warranty specified in paragraph 1 during the applicable Warranty Period pursuant to Supplier’s return material authorization
policy. Accordingly, subject to paragraph 5(c), Purchaser does not have the right to postpone, reschedule, cancel or otherwise
modify the delivery dates specified in Orders and the related shipment of Products. Purchaser may accelerate delivery dates with
the prior written consent of Supplier.


 


(c)          Subject
to the provisions of this paragraph 4(c), Purchaser may cancel Orders free of charge provided Supplier receives written notice
of Purchaser’s intent to do so prior to coming within the lead time for the Products that are the subject of the cancellation
request; otherwise Purchaser will pay Seller’s then-applicable cancellation fees. Purchaser may reschedule a release of Products
contained within an Order or an entire Order provided Supplier receives written notice of Purchaser’s intention to do so
prior to coming within the lead time for the Products that are the subject of the rescheduling request. The maximum delay in delivery
of any rescheduled release or Order, as the case may be, is ninety (90) days from the original delivery date specified in the particular
Order, subject to any longer period specified by Supplier due to logistics or production commitments made to other customers. Purchaser
shall not have the right to reschedule any particular release or Order more than two (2) times and once a release or Order is rescheduled,
it may not be canceled. In addition, if Purchaser reschedules a release of Products or an entire Order, Supplier shall have the
right to issue an invoice for the cost incurred by Supplier in procuring Raw Materials and Packaging costs (if any) associated
with the rescheduled release or Order in question, together with Supplier’s then applicable handling fees associated with
Raw Materials, Packaging and Labeling. Purchaser shall pay such amounts within 10 days from the date of the invoice in question.


 


(d)         Upon
the expiration or termination of this Agreement, Purchaser shall promptly pay to Supplier the following: (i) Supplier’s cost
of procuring Raw Materials and Packaging that have not been used to fabricate Products; (ii) the cost of finished Products not
associated with then pending Orders; (iii) the cost associated with work in process that will not be used to fulfill then pending
Orders; and (iv) Supplier’s then applicable handling fees associated with the Packaging and Raw Materials referred to in
subparagraph (i) above as well as Labeling. These costs will be reasonably determined by Supplier and such determination shall
be conclusive and binding on the parties hereto.


 


5.          Price.
Except as otherwise specified in the Attached Agreement or on an applicable Quote, the purchase price of the Products includes
Raw Materials and Packaging, but does not include (and Purchaser shall be responsible for) the following: any and all transportation
costs, insurance costs, Labeling costs, and all applicable federal, state and local sales, use, property, excise and other taxes,
duties or governmental charges imposed on or with respect to the Products, except taxes levied on Supplier’s net income.
Except as otherwise expressly stated in an applicable Quote, the price of the Products also excludes costs and expenses associated
with Purchaser Responsibilities. To the extent permissible, New York state sales tax will not be imposed on Products identified
as samples on the face hereof. In the event of new taxes or increased rates which are applicable to the transactions contemplated
hereby, the invoice issued to Purchaser shall be subsequently adjusted if necessary and Purchaser shall immediately pay any difference.
Notwithstanding anything to the contrary contained herein, Supplier reserves the right to modify prices to reflect prices prevailing
at the time of shipment for Products scheduled to be shipped under a particular Order more than six (6) months from the order entry
date on Supplier’s records. In addition, if Purchaser does not issue purchase orders for Products under this Agreement during
any consecutive 6 months period, Supplier shall have the right to issue an invoice for the cost incurred by Supplier for the Raw
Materials and Packaging (if any) for Products, together with Supplier’s then applicable handling fees associated with Raw
Materials, Packaging and Labeling. Purchaser shall pay such amounts within 10 days from the date of the invoice in question.


 



    	 



    	 



    

 


6.           Labeling.
Unless otherwise expressly stated in the Attached Agreement or a Quote, Purchaser shall provide, at its sole cost and expense,
the text for the Labeling for the Products, and same shall be in strict conformity with all Laws. Supplier shall have no liability
for Labeling, as more particularly specified in paragraph 1.


 


7.          Force
Majeure. Notwithstanding any provision herein to the contrary, Supplier shall not be liable or responsible for any delay
in or failure of delivery of the Products or the Packaging of the Products (to the extent such packaging is provided by Supplier)
by reason of force majeure, including, but not limited to, Supplier’s inability to obtain Raw Materials, Packaging or Labeling
from suppliers or Purchaser (as applicable) or to obtain same on a timely basis, or as a result of interruption of transportation,
delays in delivery, governmental regulation, changes in formulation of Products, delays in determining expiration dates, labor
disputes, strikes, war, fire, flood, accidents, acts of God, civil disturbance, quota restrictions, unavailability of Packaging
or necessary Raw Materials, or if any Raw Materials are contaminated in any way (as determined by Supplier pursuant to its Supplier’s
then applicable testing and analysis procedures), or any other cause beyond Supplier’s control, whether or not such cause
be of the same class or kind as those enumerated above, such enumeration being expressly understood to be in addition to other
causes or classes of causes beyond Supplier’s control. In the event of the occurrence of any such causes, Supplier’s
obligations under this Agreement shall be suspended during the time such cause continues to exist. However, if an event of force
majeure prevents Supplier from performing its obligations hereunder for 60 days or more and such event is not caused in whole or
in part by Purchaser’s acts or omissions, Purchaser may at any time thereafter until the event is satisfied, cancel the Orders
subject to the delay by giving written notice of its intention to do so.


 


8.          Design
and Intellectual Property Protection. (a) Except as otherwise expressly stated in the Attached Agreement, other
than with respect to unmodified Non-Supplier Formulas submitted by Purchaser, Purchaser has no right, title or interest in or to
the (i) Formulation Document and other specifications and information furnished by Supplier or supplied by Purchaser and modified
by Supplier concerning Products, or the proprietary information contained in any of the foregoing by reason of the sale of such
Products or otherwise; (ii) the Supplier Formulas; (iii) identification and source of Raw Materials procured by Supplier; (iv)
Product Process Technology; and (v) all related improvements to any of the foregoing (the foregoing items (i) – (v) are collectively
the “Supplier Property”). For purposes hereof, the term “Supplier Formula” means any formula for a Product
that is created, derived or developed by or on behalf of Supplier. The term “Product Process Technology” means the
Intellectual Property associated with the underlying materials, formulas, manufacturing and processes used to make Products or
test Products. The term “Intellectual Property" means intellectual proprietary and property rights of any kind or nature
including, without limitation, know-how, designs, formulas, technical drawings and documents, specifications, bill of materials
documents, processes, developments, improvements, confidential or proprietary information, trade secrets, inventions, patents,
trademarks and copyrights. The term “Non-Supplier Formula” means the precise and discrete raw material formulation
developed by Purchaser based solely upon Purchaser’s Intellectual Property and without the assistance of Supplier. Purchaser,
as a special inducement to Supplier, agrees not to directly or indirectly copy or reproduce any Supplier Property, and further
agrees that it will not disassemble, decompile or reverse-engineer the Products or otherwise misappropriate or utilize the Supplier
Property. The Supplier Property shall be kept confidential by Purchaser and Purchaser shall not disclose same to any third party,
nor shall same be used by Purchaser for any purpose other than to assist Supplier in supplying the Products. All Supplier Property
shall be and remain the exclusive property of Supplier and/or Supplier’s affiliates, as applicable, and such property shall
be delivered to Supplier at Supplier’s request. With respect to designs, or Non-Supplier Formulas owned by Purchaser, such
ownership shall be exclusive of Supplier’s unique designs, specifications, formulas, ingredients, Raw Materials, technologies
and Supplier Property utilized in meeting Purchaser’s design, or Non-Supplier Formula, as the case may be.


 


All improvements to Supplier Property and
the Products and the related intellectual property rights shall remain the exclusive property of Supplier irrespective of whether
the improvements were suggested or made by or on behalf of Purchaser or any other Person.


 


Purchaser hereby acknowledges the validity
of the Supplier Property including, without limitation, patents and patent applications presently pending and Purchaser hereby
agrees that it will not directly or indirectly infringe the Supplier Property or contest or challenge this validity of the Supplier
Property in any way.


 


(b)          Conflicts.
Purchaser hereby acknowledges that Supplier develops, has developed, manufactures, has manufactured, markets, sells and/or otherwise
distributes products that are or may be functionally equivalent or similar to the Products or that may be competitive with or substitutes
for the Products. Notwithstanding anything to the contrary contained herein, Purchaser acknowledges and agrees that such activities
that currently exist and that, without using the precise un-modified Non-Supplier Formulas, may exist hereafter and the development,
manufacturing, marketing, sale and/or distribution of such products, shall not be deemed improper or violative of any duty or obligation
of Supplier hereunder or under applicable Law.


 


9.          Miscellaneous.
(a) Assignability. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Purchaser shall not have the right to assign its rights, benefits or duties hereunder
without the prior written consent of Supplier. Any assignment in contravention of this provision shall be null and void, and of
no legal force or effect.


 


(b)        Notices. All notices made hereunder shall be made in
writing, and shall be deemed adequately delivered if delivered by certified mail, return receipt requested, postage pre-paid or
by a courier service that regularly maintains records of its pick ups and deliveries, addressed to the parties at their respective
addresses set forth above or to any other address designated by a party hereto by written notice of such address change. Mailed
notices shall be deemed given when mailed and notices sent by courier shall be deemed given when delivered to the courier service.
Both mailed and courier service notices shall be deemed received three (3) days after mailing such notice or delivering it to the
courier service, as the case may be.


 


(c)         Captions. The headings and subheadings of this Agreement
are included for convenience and identification only and are in no way intended to describe, interpret, define or limit the scope,
extent, or intent of this Agreement or any provisions hereof.


 


(d)         Language Pre-Emption. The parties have requested that
this Agreement be drafted in English; Les parties ont exiges que cette entente soit redigee en anglais.


 


(e)         Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction on account of unconscionability or otherwise, shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. Further, to the extent that any term or provision hereof is deemed so invalid, void or otherwise unenforceable,
but may be made enforceable by amendment thereto, the parties agree that such amendment may be made so that the same shall, nevertheless,
be enforceable to the fullest extent permissible under the laws and public policies applied in any such jurisdiction in which enforcement
is sought.


 


(f)         Waiver of Breach. Failure by Supplier to exercise any
right, remedy or option hereunder or under Laws, or delay in exercising same, will not operate as a waiver, it being understood
that no waiver by Supplier will be effective unless it is in writing and signed by Supplier, and then only to the extent specifically
stated.


 


(g)        No course of dealing, usage of trade or course of performance
shall be relevant to explain, supplement or modify any express provisions of this Schedule C or the Attached Agreement.


 


(h)        The
provision of this Schedule C shall survive the termination, cancellation or expiration of the Attached Agreement.


 


(i)          In
the event Supplier issued a quote in connection with an Order or the sale of Products, the terms and conditions of that quote are
incorporated by reference herein. However, to the extent there is a conflict between the terms and conditions of this Agreement
and the terms and conditions of such quote, the terms and conditions which are more favorable to Supplier, as determined solely
by Supplier, shall apply.


 


(j)          Purchaser
may request changes to Formulation Document and Supplier will use reasonable efforts to accommodate such changes, which shall include
Supplier’s determination of the feasibility and practicability thereof. All such requested changes shall be subject to Supplier’s
prior written consent. Purchaser shall be responsible and will promptly pay for all costs incurred as a result of a change accepted
by Supplier, including, without limitation, the costs of testing, analysis and verification. Prices for Products subject to a change
will be equitably adjusted based on additional costs incurred by Supplier on account of the change in question, as determined by
Supplier. 


 


(k)          The
parties acknowledge and agree that all questions pertaining to the validity, construction, execution and performance of this Agreement
shall be construed and governed in accordance with the domestic laws of the State of New York (including, without limitation, the
UCC), without giving effect to principles of (i) comity of nations or (ii) conflicts of law, and this Agreement shall not be governed
by the provisions of the U.N. Convention on Contracts for the International Sale of Goods. Any such action or proceeding commenced
in connection with this Agreement will then be brought in the United States of America, State of New York.


 


Any controversy or claim arising out of
or relating to this Agreement, or the breach hereof, shall be settled by arbitration in accordance with the United States Arbitration
Act and administered by the American Arbitration Association in accordance with its commercial arbitration rules, and judgment
on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.


 


The arbitration proceedings shall be conducted
before a panel of three (3) neutral arbitrators. The place of the arbitration shall be in Suffolk County, New York. Any award
in an arbitration initiated under this Agreement shall be in accordance with New York law, as more particularly specified in this
paragraph 11(k). The successful party will be entitled to be awarded all costs, including reasonable attorney’s fees, paid
or incurred by such prevailing party during the course of the arbitration proceedings.





 


In any arbitration initiated under this
Agreement the arbitrators will have no authority to award consequential, exemplary, incidental, indirect or special damages, lost
profits or punitive or other damages not measured by the prevailing party’s actual direct damages, except as may be required
by statute and then only to the extent such requirement cannot, as a matter of law, be waived. Any award shall include no injunction
or direction to any party other than the direction to pay damages in accordance with the provisions hereof.


 


Except as required by law, neither party
nor any arbitrator may disclose the existence, content or results of any arbitration hereunder without the prior written consent
of Supplier and Purchaser.


 





If either party fails to proceed with arbitration
as provided herein or unsuccessfully seeks to stay such arbitration, or fails to comply with any arbitration award, or is unsuccessful
in vacating or modifying the award pursuant to a petition or application for judicial review, the other party shall be entitled
to be awarded costs, including reasonable attorneys’ fees, paid or incurred by such other party in successfully compelling
such arbitration or defending against the attempt to stay, vacate or modify such arbitration award and/or successfully defending
or enforcing the award.