PPI PURCHASE ORDER TERMS & CONDITIONS

The terms and conditions herein (the Terms) are a part of, and integral to, the purchase order (the Order) to which the Terms are attached and should be carefully read.A The supplier listed on the Order (Supplier) and POWER PRODUCTION, INC, 201 Mittel Dr., Wood Dale, Illinois, 60191, (PPI) agree, to the fullest extent permitted by law, to be bound by the Terms. Any provisions in Suppliers invoices, billing statements, acknowledgment forms or similar documents that are inconsistent with, or in addition to, the Terms are of no force or effect. This offer expressly limits acceptance by Supplier to the Terms and the Order. Notice of objection to different or additional terms or conditions is hereby given. The Terms constitute a form of terms and conditions intended to apply to both the purchase of tangible goods from, and services to be performed by, Supplier and shall be applied as the context may require.

1. Supplies Acceptance. Upon receipt of the Order, Supplier must send acknowledgement to PPI. PPI’s failure to receive such acknowledgement within 24 hours, shall be acceptance of the Order and the Terms.A Suppliers commencement or promise of shipment of the Goods (as defined below) constitutes Supplieras commitment to deliver the Goods in accordance with the Order and the Terms. Supplier acknowledges that the order does not constitute a requirements contract. Supplier shall follow the shipping and invoicing instructions issued by PPI’s Transportation and Accounting Departments, which instructions are incorporated by reference into the Order.

2. Suppliers Representations and Warranties. Supplier represents and warrants to PPI, in addition to all warranties implied by law, that the fixtures, goods, equipment or services to be performed described on the Order (or telephone Order), together with all related packaging and labeling and other material furnished by Supplier (collectively, the Goods), will: (a) be merchantable and fit and sufficient for the particular purpose ordered and be sold to PPI with marketable title free from any and all encumbrances; (b) be free from defects in design, workmanship and/or materials including, without limitation, such defects as could create a hazard to life or property; (c) conform in all respects with all applicable federal, state and local laws, orders and regulations, including, without limitation, those regarding (i) safety, (ii) content, (iii) flammability, (iv) weights, measures and sizes, (v) special use, care, handling, cleaning or laundering instructions or warnings, (vi) processing, manufacturing, labeling, advertising, selling, shipping and invoicing, (vii) registration and declaration of responsibility, and (viii) occupational safety and health; (d) not infringe or encroach upon PPIs or any third partys personal, contractual or proprietary rights, including, without limitation, patents, trademarks, trade names, copyrights, rights of privacy or trade secrets; and (e) conform to all of PPIs specifications and to all articles shown to PPI as Goods samples.A All warranties shall run to PPI, its successors, assigns and customers and to the user of its products.

3. Suppliers Indemnification of PPI. Supplier agrees to reimburse, indemnify, hold harmless and defend PPI and its subsidiary and affiliate companies against all damage, loss, expense (including reasonable attorneys fees), claim, liability, fine, settlement or penalty, including, without limitation, claims of infringement of patents, copyrights and trademarks, unfair competition, and bodily injury, property damage or other damage, arising out of (i) any use, possession, consumption or sale of the Goods, (ii) any in-house services provided by or on behalf of Supplier with respect to the Goods, (iii) any failure of Supplier to properly fulfill an Order; and (iv) any breach of the provisions in Paragraph 2. Supplier is not relieved of the forgoing indemnity and related obligations by allegations or any claim of negligence on the part of PPI; provided, however, Supplier is not liable hereunder to the extent any injury or damage is finally judicially determined to have been immediately caused by the sole negligence of PPI. Supplier must obtain adequate insurance to cover such liability under the Order and must provide copies of the applicable certificate(s) of insurance annually to PPIs purchasing department (the Purchasing Department).

4. Defective or Nonconforming Goods. If any of the Goods are defective, unsuitable, do not conform to all of the Terms or the Order and all warranties set forth in these Terms or implied by law, then PPI may, at its option, return such Goods to Supplier for full credit or refund of the purchase price or repair such Goods at Suppliers expense, and may charge Supplier such price or expense and the cost of any incurred inbound and outbound freight.

5.PPI’s Right to Cancel.

(a) Default. PPI may, without notice and in addition to all other rights and remedies, cancel, terminate and/or rescind all or part of the Order (and other affected or related Orders) in the event (i) Supplier breaches or fails to perform any of its obligations in any material respect, (ii) Supplier becomes insolvent or unable to pay its debts when due, (iii) proceedings are instituted by or against Supplier under any provision of any federal or state bankruptcy or insolvency laws or Supplier avails itself of any law providing relief from creditors, or (iv) Supplier ceases its operation. Time is of the essence to the Order, and Suppliers failure to meet any delivery date constitutes a material breach of the Order. Supplier agrees to inform PPI immediately in writing of any failure to timely ship all or any part of the Order, and PPIs acceptance of any Goods after the applicable delivery date does not constitute a waiver of, or otherwise limit, any of PPIs rights resulting from the late delivery nor obligate PPI to accept delivery of additional Goods under the Order.

(b) Convenience. PPI, by written notice, may terminate this Order in whole or in part at any time whenever it shall determine that such termination is in its best interests.A Upon receipt of such notice, Supplier shall stop work to the extent that the Order has been terminated.A Within three (3) months of receipt of a notice of termination under this Paragraph 5(b), Supplier shall submit its claim, if any, for the cost of performing the work to the date of termination and for the costs of terminating the work. PPI shall pay for production acceptably completed prior to the termination date at the contract price. PPI and Supplier shall agree on other amounts to be paid Supplier for work performed and costs occasioned by the termination.A Nothing in this clause shall obligate PPI to pay more than the total order price, as reduced by payments made prior to the termination.

6. Special Features: Infringement.

(a) All designs, patents, trademarks and trade names that are supplied by PPI to Supplier or which are distinctive of PPIs private label goods (Special Features) are the property of PPI and must be used by Supplier only for PPI. PPI may use the Special Features on or with respect to goods manufactured by others and obtain legal protection for the Special Features including, without limitation, patents, patent designs, copyrights and trademarks. Goods with Special Features that are not delivered to PPI for any reason must not be sold or transferred to any third party without written authorization of PPI and unless and until all labels, tags, packaging and markings identifying the Goods as PPIs have been removed.

(b) Supplier shall indemnify and hold PPI, its affiliates and its customers harmless from and against all claims, costs, judgments and any other expense resulting from any patent, trademark or copyright infringement claim or suit against either PPI or any of PPIs customers based on the purchase, sale or re-sale by any of PPI or PPIs customers of the Goods. Upon request by either PPI or any of PPIs customers, Supplier shall defend any infringement claim or suit at its sole expense, or alternatively, reimburse or advance, as the case may be, the cost to defend such claims or suits to PPI or PPIs customers.

7. Deductions and Set Off. Any sums payable to Supplier are subject to all claims and defenses of PPI, whether arising from this or any other transaction. PPI may set off and deduct any present and future indebtedness owed by Supplier to PPI against such sums payable to Supplier. PPI will provide a copy of the deduction voucher(s) for debits taken by PPI against Supplieras account as a result of any returns or adjustments. Any deductions shall be binding unless Supplier, within 90 days after receipt of the deduction voucher, notifies PPI in writing as to why a deduction should not be made and provides documentation of the reason(s) given. Such written notice must be directed to the Purchasing Department. PPI is not and shall not be liable to Supplier for any interest or late charges.

8. Illinois Contract and Jurisdiction. THE ORDER, AND ALL OTHER ASPECTS OF THE BUSINESS RELATIONSHIP BETWEEN PPI AND SUPPLIER, SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, EXCLUDING ITS CHOICE OF LAW PROVISIONS.A WITH RESPECT TO ANY LITIGATION THAT RELATES TO THE ORDER OR WHICH OTHERWISE ARISES DIRECTLY OR INDIRECTLY OUT OF OR IN CONNECTION WITH SAID BUSINESS RELATIONSHIP OR ANY TRANSACTION OF ANY NATURE BETWEEN PPI AND SUPPLIER. ANY ACTION SHALL BE COMMENCED EXCLUSIVELY IN (AND SUPPLIER HEREBY CONSENTS TO THE JURISDICTION OF) THE STATE OF ILLINOIS COURTS OF DUPAGE COUNTY, ILLINOIS OR THE UNITED STATES DISTRICT COURT IN WOOD DALE, ILLINOIS.A SUPPLIER SHALL, AND COVENANTS TO, COMMENCE ANY ACTION WITHIN 18 MONTHS FROM THE DATE OF PPIaS LAST ORDER TO SUPPLIER OR THE PERIOD PRESCRIBED BY THE APPLICABLE STATUTE OF LIMITATIONS, WHICHEVER IS SOONER.

9. Miscellaneous. (a) All rights granted to PPI hereunder are in addition to and not in lieu of PPIs rights arising by operation of law. (b) Any provisions of a hard copy of the Order that are typewritten or handwritten by PPI supersede any contrary or inconsistent printed provisions therein. (c) No modification of terms of the Order including, without limitation, any price increase, is valid without the written authorization of PPI. (d) Should any of the provisions of the Order or the Terms be declared by a court of competent jurisdiction to be invalid, such decision does not affect the validity of any remaining provisions, and such remaining provisions shall be enforced to the greatest extent as permitted by law.

10. Assignment. Neither the Order nor any right, duty or obligation thereunder is assignable by Supplier without the prior written consent of PPI, to be given or not in PPIas sole discretion for any reason whatsoever.A Assignment shall include the transfer of the Order to any person other than Supplier, including without limitation any subsidiary, affiliate, successor-by-merger or any person succeeding to Suppliers interest by acquisition of its stock or all, or substantially all, of its assets. PPI may assign the Order or any right, duty or obligation thereunder to a subsidiary or affiliate upon notice to Supplier.A Any prohibited assignment is void.

11. Invoices & Shipping Instructions. (a) Each invoice must include the Order number, Suppliers stock/style number, PPIs stock/style number, and quantity for each item on the invoice.A No substitutions of the Goods may be made without the written authorization of PPI. (b) The Order must be invoiced separately from any other order placed by PPI to Supplier. (c) The Order must not be filled at a price higher than that shown on its face or transmitted without the written authorization of PPI. (d) Unless otherwise expressly set forth on the Order, the price of the Goods is inclusive of all packaging, labeling and shipping costs and expenses.A (e) Payment terms are net sixty (60) calendar days. (f) If freight costs are to be paid by PPI, then Supplier must ship via the method and/or route specified in the instructions provided by PPIs Transportation Department, must make ONE COMPLETE shipment of the Goods and must NOT make PARTIAL shipments without the written authorization of PPI. (g) The applicable bill of lading must be delivered to the delivery address at time of delivery. (h) Supplier must mark the contents of each carton clearly on the outside of the carton, case or package. (i) Goods not packaged or shipped in quantities ordered by PPI may, at PPIs option, be returned to Supplier at Supplieras expense.A Supplier will be charged a handling fee of 7% of the Goods invoice price on all Goods not packaged or shipped as ordered.

12. Risk of Loss. Unless otherwise expressly set forth on the Order or the Agreement, risk of loss shall remain with Supplier until the Goods have been received and approved for acceptance by PPI. PPI shall be responsible for all costs involved in taking the Products from the Suppliers warehouse to PPIs designated facility.

13. Force Majeure. Except with respect to default of subcontractors, neither PPI nor Supplier shall be liable for any delay in or failure of performance if the failure to perform arises out of causes beyond the control and without the fault or negligence of the affected party.A Such causes may include, but are not restricted to, acts of God or of the public enemy, acts of terrorism, acts of the Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather, but in every case the failure to perform must be beyond the control and without the fault or negligence of the affected party. If the failure to perform is caused by the default of a subcontractor, and if such default arises out of causes beyond the control of both the Supplier and subcontractor and without the fault or negligence of either of them, Supplier shall not be liable for any delay or failure to perform, unless the supplies or services to be furnished by the subcontractor were obtainable from other sources in sufficient time to permit Supplier to meet the required delivery schedule.

14 PPI Information/Orders. PPI may, at its option, provide Supplier with certain confidential or proprietary information relating to PPI’s purchase and/or sale of the Goods.A Supplier acknowledges that such information, together with any other information of or pertaining to PPI provided to Supplier by PPI or learned by Supplier as a consequence of the business relationship between PPI and Supplier (the PPI Information), is provided and received in confidence, and Supplier must at all times preserve and protect the confidentiality thereof.A Supplier agrees to take all necessary steps to ensure that the PPI Information is not disclosed to, or used by, any person, association or entity, except Supplieras own employees having a need to know.A PPI MAKES NO WARRANTY WITH RESPECT TO THE PPI INFORMATION OR THE ACCURACY OR COMPLETENESS THEREOF, AND IS PROVIDING SAME ON AN AS IS BASIS; ALL IMPLIED WARRANTIES WITH RESPECT TO THE PPI INFORMATION, INCLUDING THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE EXCLUDED.A Any sales forecasts, quantity purchase estimates or similar projections received by Supplier from PPI are not purchase commitments of PPI, but rather represent estimates for planning purposes only, and that PPI has no obligation to purchase or otherwise compensate Supplier for any of Supplier finished products, or unfinished raw materials, not covered by the Order.