1. PURCHASER’s Acceptance of Agreement. PURCHASER has read and understands the terms of this sales agreement (the “Agreement”) and, by ordering goods from North American Textile Company, LLC, a California limited liability company (hereinafter referred to as “NATCO”), PURCHASER accepts all of the terms and conditions of this Agreement, which shall apply to all purchases of goods by PURCHASER from NATCO. Any additional terms not contained herein shall not be considered as part of this Agreement, unless expressly assented to in writing by an officer of NATCO or set forth on the ProForma Invoice or an official document prepared by NATCO .

2. Payment Guidelines. Payment of the purchase price for the goods shall be made in immediately collectible funds equal to 100% of the Purchase Order upon the execution of this Agreement and prior to NATCO commencing production of the goods, unless otherwise expressly assented to in writing by an officer of NATCO or set forth on the ProForma Invoice or on an official document prepared by NATCO. Payment of the entire balance of the order in full shall be condition precedent to any and all obligations of any kind or nature which NATCO may owe to PURCHASER. In the event that NATCO shall commence any work towards the completion of the Purchase Orders prior to receiving the initial 100% payment, such commencement of work shall not constitute a waiver of the condition precedent. All payments shall be made in U.S. dollars. No offset or deduction of any kind shall be permitted without a returned goods authorization or credit memo signed by an officer of NATCO. Notwithstanding the foregoing, any partial payments received by NATCO may be applied by NATCO in its discretion, without consulting an accord and satisfaction of PURCHASER’s liability, notwithstanding any notation on the payment or other writing from PURCHASER or any Designee. Any payment not made when due shall be subject to an interest charge at 10% per annum or the maximum rate permitted by law, whichever is greater. No payment terms contrary to those set forth in this paragraph shall be binding, even if communicated to PURCHASER by an employee of NATCO, unless otherwise expressly assented to in writing by an officer of NATCO or set forth on the ProForma Invoice or on an official document prepared by NATCO.

3. Installment Delivery. NATCO may ship the goods identified on the ProForma Invoice in installments with the final installment delivered to PURCHASER in a timely manner as identified in Paragraph 10 herein. In such a case where NATCO chooses to deliver the goods in installments, NATCO shall be entitled to payment pursuant to the guidelines set forth in Paragraph 2 herein. In cases where NATCO and PURCHASER agree that payment or partial payment is required before delivery, the scheduled completion of the first installment of goods shall make such payment due.

4. Cost of Goods. The unit cost of the goods shall not include any storage, insurance, shipping or other service, unless expressly set forth on the ProForma Invoice.

5. No Liability of NATCO for Delay or Non-Delivery if Payment not Timely Made. PURCHASER and NATCO agree that payment by PURCHASER is required and shall be made pursuant to the Payment Guidelines set forth in Paragraph 2 of this Agreement prior to NATCO’s delivery of the goods to PURCHASER. In such a case where PURCHASER fails to fully comply with the Payment Guidelines outlined in Paragraph 2 prior to delivery, NATCO shall not be liable to PURCHASER or any person to whom PURCHASER may be liable or contractually required to deliver products in which the goods identified in this Agreement were to have been included, for damages, including but not limited to, consequential or incidental damages incurred arising from the failure to deliver goods, or from delay of delivery, or for any other damages which are specifically limited in Paragraph 15.

6. No Liability of NATCO for Delay or Non-Delivery if Information Necessary for Production Not Timely Provided. PURCHASER and NATCO agree that PURCHASER will deliver to NATCO all information and materials that are necessary to properly complete production of the order in addition to any information NATCO may request that is reasonably required to complete production of the entire order. In such a case where PURCAHSER fails to deliver such information to NATCO, notwithstanding payment by PURCAHSER of the full balance of the order, NATCO shall not be liable to PURCHASER or any person to whom PURCHASER may be liable or contractually required to deliver products in which the goods identified in this Agreement were to have been included, for damages, including but not limited to, consequential or incidental damages incurred arising from the failure to deliver goods, or from delay of delivery, or for any other damages which are specifically limited in Paragraph 15.

7. Creditworthiness. All orders are subject to credit approval by NATCO. Such approval, if granted, may be revoked or modified at any time prior to delivery. PURCHASER shall at all times provide all information and documentation reasonably requested by NATCO in order to evaluate PURCHASER’s creditworthiness. PURCHASER will promptly advise NATCO of any adverse change in its creditworthiness or financial condition. In the event that NATCO reasonably believes that PURCHASER’s creditworthiness or financial condition has declined after performance has begun, NATCO shall in its discretion have the right to demand payment in advance for the goods or other accelerated payment terms or adequate assurance of performance before further manufacturing, finishing, or shipment of any goods, notwithstanding any due date or terms set forth on the front of this Agreement.

8. Delivery and Acceptance. Unless otherwise expressly assented to in writing by an officer of NATCO or set forth on the ProForma Invoice, all sales are EXW Los Angeles. In such cases where the sale is EXW Los Angeles, PURCHASER agrees and is aware that “delivery” is completed at the time NATCO makes the goods ready for collection at its premises in Glendale, CA and notifies PURCHASER that the goods are ready for collection. In cases where NATCO and PURCHASER expressly agree, in writing, to transportation terms other than EXW Los Angeles and where, after the goods are ready for delivery, there is a subsequent lack of shipping instructions from PURCHASER or a Designee or if PURCHASER or a Designee requests that NATCO hold the goods, PURCHASER agrees that “delivery” is completed at the time NATCO notifies PURCHASER that the goods are ready for delivery. In any case, NATCO and PURCHASER agree that Risk of Loss shall transfer upon “delivery.”
NATCO shall have no responsibility for any failure of PURCHASER’s carrier or agent to pick up the goods when made available. An overage or underage of less than five percent (5%) as to any quantity, color, size, style, or otherwise shall also be deemed acceptable. NATCO shall have the right to make delivery of any order in partial shipments as specified in Paragraph 3 of this Agreement.
PURCHASER or its Designee or their agents are responsible for inspecting the goods promptly upon “delivery,” as it is defined in this paragraph. Notice in writing shall be given within 10 calendar days after delivery of any defects or omissions.

Failure to give notice of any defects or omissions within 10 calendar days after “delivery” shall constitute an irrevocable acceptance of the goods.

9. Rejection or Revocation. Any rejection or revocation must be made by written notice to NATCO within ten (10) calendar days after acceptance of the goods by PURCHASER or a Designee. In the event of any rejection or revocation of goods by PURCHASER or a Designee, NATCO shall have the right to substitute other goods for those rejected or revoked or to withhold or delay shipment of any other goods covered by this Agreement, in addition to all other remedies of NATCO. If PURCHASER or a Designee timely rejects or revokes acceptance of any goods it shall segregate such goods and store them in a secure place pending instructions on disposition from NATCO. PURCHASER or Designee shall allow NATCO and its representatives to inspect the goods at any time following any rejection or revocation. No goods shall be returned to NATCO without a returned goods authorization signed by an officer of NATCO.
PURCHASER acknowledges that the goods are likely to have minor defects and variations innate to mass production. No rejection or revocation shall be permitted for shrinkage, bleeding, fraying, fading, or failure or defect of a product due to the physical properties of a specific material and not due to NATCO’s workmanship unless NATCO has expressly warranted against such problem in accordance with Paragraph 20 of this Agreement. All returned goods must be in the same condition and packaging as when delivered to PURCHASER or its Designee. Any goods returned to NATCO without authorization shall be at PURCHASER’s expense and risk.

10. Delivery Dates. Any finished by, shipment or delivery date set forth on the ProForma Invoice or set forth on any individual order or communicated to PURCHASER by a NATCO officer or employee is an estimate only in the following cases: (1) PURCHASER has not signed and returned the ProForma Invoice to NATCO, (2) PURCHASER has not satisfied payment or failed to comply with the payment guidelines of this Agreement according to Paragraph 2, (3) PURCHASER has failed to adequately provide NATCO’s requested pre-production approvals of the order, when applicable, or (4) PURCHASER has failed to provide NATCO with all information and materials that are necessary to properly complete production of the order as well as any information NATCO has requested that is reasonably required to complete production of the entire order.

11. Trademarks and Intellectual Property. PURCHASER or a Designee, or any of their subsidiaries, affiliates, licensees or their agents hereby grant NATCO a nonexclusive royalty – free license to place or incorporate their registered trademarks and/or any other form of intellectual property identified on the ProForma Invoice on the goods manufactured by NATCO for PURCHASER and to sell such goods with the registered trademarks or intellectual property thereon. PURCHASER hereby warrants that it has properly acquired the permissions and authorizations necessary to grant NATCO such a license, and hereby agrees to hold NATCO harmless against any and all claims arising out of NATCO’s manufacture of goods which incorporates any registered trademark or intellectual property provided to it by PURCHASER.

12. Force Majeure. NATCO shall not be liable for any loss, damage, delays, changes in shipment schedules or failure to deliver caused by accident, fires, floods, labor disputes or shortages, riots, civil commotion, insurrection, war, terrorism, sabotage (including, but not limited to computer viruses), the elements, embargo, failure of carriers, extended mechanical failure, shortages of utilities, raw materials, equipment or transportation, government action, acts of God, or public enemy, or any other causes or contingencies beyond NATCO’s control.

13. Further Assurances. PURCHASER shall on request provide such information and documentation as NATCO may require to enable NATCO to comply with applicable laws and regulations regarding the goods and the sale thereof to PURCHASER.

14. Remedies. In the event PURCHASER or any Designee breaches any provision of this Agreement, dissolves, merges, becomes the subject of any bankruptcy or insolvency proceeding, admits its inability to pay its debts when due or suffers a change in control, NATCO shall be entitled, at its option and without any liability, to do any one or more of the following: (a) cancel the order and/or withhold, stop or delay any shipments; (b) insist on PURCHASER’s performance under this Agreement and offset the cost by any actual or reasonably estimated losses incurred by NATCO; (c) accelerate any payment due under this Agreement or any other agreement between NATCO and PURCHASER; (d) sell any goods at private or public sale; (e) recover any and all damages, including but not limited to costs to dispose of any unsold goods, attorneys’ fees and penalties; (f) deem any property of PURCHASER in NATCO’s possession to constitute security for PURCHASER’s obligations hereunder and dispose of the same in accordance with the California Uniform Commercial Code; and/or (g) offset any amounts due PURCHASER by any actual or reasonably estimated losses incurred by NATCO. NATCO’s remedies herein shall not be exclusive but shall be in addition to any other remedies available to NATCO at law or in equity. Under no circumstances shall NATCO be liable to PURCHASER or any Designee for any special, incidental, reliance, punitive, or consequential damages, regardless of whether such damages may be foreseeable.

15. Limitation of Liability. In no event shall NATCO be liable for any incidental, consequential or other damages, including but not limited to, lost profits, goodwill, additional freight or any other compensatory damages and attorney’s fees, even if it has been advised of the possibility of such damages. The remedies of PURCHASER set forth below in Paragraph 20 are the sole and exclusive remedies of PURCHASER relating to the products purchased from NATCO hereunder. The total liability of NATCO with respect to any contract, or anything done in connection therewith such as the performance or breach hereof, or from the manufacture, sale, delivery, resale, installation or use of any products, whether arising out of contract, negligence, strict tort, or under any warranty, or otherwise shall not exceed the purchase price of the products upon which liability is based.

16. Indemnification. PURCHASER agrees to indemnify, defend, and hold NATCO and its affiliates, and their respective mangers, members, shareholders, directors, officers, employees, and agents (each, a “NATCO Indemnified Party”) harmless from and against any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including interest and penalties, reasonable attorneys fees, costs of investigation and any other expenses or costs (collectively “Losses”) incurred or suffered by any NATCO Indemnified Party for any breach of this Agreement by PURCHASER or any actions or omissions by PURCHASER or a Designee giving rise to Losses by any NATCO Indemnified Party.

17. Severability. Each paragraph and provision hereof is severable and if any provision is held invalid or unenforceable the remainder shall nevertheless remain in full force and effect.

18. Governing Law. This Agreement shall in all respects be governed by and construed in accordance with the laws of the State of California (including without limitation Division 2 of the California Uniform Commercial Code), without regard to its conflicts of law principles. In the event of any dispute, claim or controversy arising out of or otherwise relating to this Agreement or regarding the interpretation or enforcement hereof, the matter shall be resolved exclusively by the State Courts of the State of California in Los Angeles County, California or the U.S. District Courts for the Central District of California. PURCHASER hereby consents to the jurisdiction of the State of California with respect to all claims, disputes, contracts, interpretations, or remedies of every kind and actions arising out of or relating to this Agreement.

19. Miscellaneous. Nothing contained herein shall be construed as creating any agency, partnership or other form of joint enterprise between the parties. There are no third party beneficiaries under this Agreement, including but not limited to any Designees. Unless the context clearly states otherwise, each and every act to be performed by PURCHASER hereunder shall be performed at PURCHASER’s sole cost and expense. This Agreement sets forth the entire Agreement between the parties regarding this transaction. The terms of this Agreement shall control regardless of whether or when PURCHASER has submitted its own offer, counteroffer, contract, confirmation, acknowledgement or other writing. No course of dealing or usage of trade or course of performance may be used to supplement or explain the terms of this Agreement or the obligations and rights of the parties to this Agreement.

20. Limited Warranty. All statements, technical information and recommendations about NATCO products are based upon tests believed to be reliable but do not constitute a guarantee or warranty. All NATCO products are sold with the understanding that PURCHASER has independently determined the suitability of such products for its own purposes. Any product shown, using NATCO’S testing methods, to be not in material compliance with the specifications set forth on the front of this Agreement shall be replaced without charge or NATCO may issue a credit in such amount as it deems reasonable; Replacement of the defective labels constitutes NATCO’s sole liability and the exclusive remedy for any claim relating to the goods. NATCO will not be liable for incidental or consequential damages even if NATCO’s attempt to repair the defect fails, but in such a case the Buyer will be entitled to a refund of monies paid to NATCO under this contract. In no event shall NATCO be responsible for claims beyond the purchase price paid for the defective product or in any way liable or responsible for consequential or incidental damages as described above in Paragraph 15.

THE REMEDIES SET FORTH ABOVE ARE EXCLUSIVE AND IN LIEU OF ANY OTHER REMEDIES, WHETHER IN LAW OR EQUITY. NO EXPRESS WARRANTIES AND NO IMPLIED WARRANTIES, WHETHER OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR USE, NON-INFRINGEMENT OF ANY STATUTORY OR COMMON LAW INTELLECTUAL PROPERTY INTEREST, INCLUDING ANY PATENT, TRADEMARK, COPYRIGHT, TRADE DRESS, TRADENAME, OR TRADE SECRET INTEREST, OR OTHERWISE, EXCEPT AS SET FORTH ABOVE (WHICH IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES) SHALL APPLY TO PRODUCTS SOLD BY NATCO. NATCO MAKES NO REPRESENTATIONS OR WARRANTIES AGAINST INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS, EVEN IF NATCO HAS BEEN MADE AWARE OF SUCH RIGHTS OR INFRINGEMENT. NATCO SPECIFICALLY DISCLAIMS AND EXCLUDES ALL OTHER SUCH WARRANTIES. NATCO SHALL NOT BE LIABLE TO PURCHASER FOR INDIRECT DAMAGES, INCLUDING ANY LOST PROFITS OR OTHER INCIDENTAL OR CONSEQUENTIAL, EXEMPLARY OR SPECIAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY ARISING OUT OF THIS AGREEMENT. NO WAIVER, ALTERATION, ADDITION OR MODIFICATION OF THE FOREGOING CONDITIONS (INCLUDING, WITHOUT LIMITATION, ANY TERMS CONTAINED ON ANY PURCHASE ORDER WHICH CONFLICT WITH THE TERMS CONTAINED HEREIN) SHALL BE VALID UNLESS MADE IN WRITING AND SIGNED BY AN OFFICER OF NATCO.

No salesman, representative, or agent of NATCO is authorized to give any guarantee, warranty or make any representation contrary to the above.