TERMS OF PURCHASE

This Purchase Order is placed subject to the following terms and conditions which may not be varied without the written consent of Russell Stover Candies, Inc., hereinafter referred to as "Russell Stover."

Acceptance:

1. This Purchase Order is a contract that becomes effective when the Sellers written acknowledgement is approved by Russell Stover at Kansas City, Missouri. In the absence of Sellers written acceptance, any performance by the Seller shall constitute acceptance of this contract in accordance with the terms and conditions herein stated.
2. None of the terms and conditions contained in this Purchase Order may be added to, modified, superseded or otherwise altered except by a written instrument signed by an authorized representative of Russell Stover and delivered by Russell Stover to Seller. Each shipment received by Russell Stover from Seller shall be deemed to be only upon the terms and conditions contained in this Purchase Order except as they may be added to, modified, superseded or otherwise altered, notwithstanding any terms and conditions that may be contained in any acknowledgement, invoice or other form of Seller and notwithstanding Russell Stovers act of accepting or paying for any shipment or similar act of Russell Stover.

Warranties:

1. Seller warrants that all articles, goods or products furnished hereunder shall be free from defects in workmanship and material; shall comply with the terms of this Purchase Order, the Product Specification, the General Specification and any drawings, samples, specifications and other descriptions incorporated herein or therein. If any article delivered hereunder does not comply with any implied or expressed warranties; Russell Stover may require the Seller to correct, at no cost to Russell Stover, or return such defective or non-conforming article to the Seller and recover from the Seller the contract price thereof.
2. Seller warrants that the articles, goods or products covered by this Purchase Order are of merchantable quality and fit and safe for the purpose intended. Acceptance of this Purchase Order shall constitute an agreement upon Sellers part to indemnify and hold Russell Stover harmless from all liability, loss, damage and expense, including reasonable counsel fees incurred or sustained by Russell Stover by reason of the failure of the goods to conform to such warranties. Such indemnity shall be in addition to any other remedies provided by law.
3. Seller warrants to Russell Stover that the use or sale of the articles, goods or products delivered hereunder shall not infringe the claims of any patent or copyright covering the goods themselves, and Seller agrees to indemnify Russell Stover against liability for any such infringement.
4. Seller warrants that the articles, goods, products and/or services covered by this Purchase Order have been manufactured and/or performed in accordance with the requirements of the Fair Labor Standards Act and all other applicable federal, state and municipal laws, rules and regulations.
5. If the goods and/or products covered by this Purchase Order are food products or ingredients, Seller warrants to Russell Stover that none of such products or ingredients, nor any constituent part thereof, was grown, processed, manufactured or sourced in China.
6. Seller warrants that the labeling of articles, goods or products furnished hereunder shall comply with applicable industry guides specified by the Federal Trade Commission.
7. Seller warrants that all articles, goods, products and services covered by this Purchase Order meet or exceed the safety standards established and promulgated under the Federal Occupational Safety and Health Law (Public Law 91.956) and its regulations in effect or proposed as of the date of this Purchase Order.
8. Seller warrants that all articles, goods or products delivered under this Purchase Order comply with all regulations, rules and requirements promulgated or established by all applicable governmental agencies, including the U.S. Food and Drug Administration and the U.S. Department of Agriculture; and with all applicable State statutes, regulations, rules and requirements, including, without limitation, all requirements or recommendations issued by the FDA, the USDA or any State in any applicable guidelines or guidance documents applicable to the articles, goods or products sold and delivered by Seller hereunder.
9. Seller will indemnify and hold Russell Stover harmless from and against any loss, damage, cost, liability, cause of action, penalty, or other expense of any kind, including reasonable attorneys fees and all court costs, arising directly or indirectly out of Sellers breach of the warranties set forth herein or Seller's failure to comply with any of the requirements set forth in this Purchase Order.

Inspection:

1. Any article purchased hereunder shall be subject to inspection and test by Russell Stover to the maximum extent practicable at all times and places, including the period of manufacture, and, in any event, prior to final acceptance. Final inspection and acceptance of articles shall be made by Russell Stover after delivery or as otherwise indicated in this Purchase Order and shall be conclusive except as regards latent defects and the Sellers warranty obligations. No inspection and acceptance shall relieve the Seller from responsibility for defects or other failure to meet the requirements of the Purchase Order. Rejected materials may be returned at Sellers expense.

Changes:

1. Russell Stover may at any time, by a written change order issued by an authorized purchasing representative, make changes within the general scope of the Purchase Order in any one or more of the following: (1) drawings, designs or specifications incorporated in this Purchase Order where the items to be furnished are to be specifically manufactured for Russell Stover; (2) method of shipment or packing; (3) place, time or manner of delivery; and (4) quantities. An equitable adjustment in price shall be made as a result of the above.

Invoices:

1. Invoices shall be submitted in duplicate and shall contain the following information:
   (i) Purchase Order Number, (ii) Item Number, (iii) Description of Articles, (iv) Sizes, (v) Quantities, (vi) Unit Prices and (vii) Extended Totals.
2. INVOICES MUST COINCIDE WITH TERMS OF PURCHASE ORDER AND MUST INCLUDE OUR PURCHASE ORDER NUMBER, ITEM NUMBER(S) AND YOUR VENDOR NUMBER. ONLY ONE INVOICE PER LOCATION PER PURCHASE ORDER IS ACCEPTABLE. FAILURE TO COMPLY WILL CAUSE POSSIBLE DELAY IN PAYMENT.

Default:

Time of delivery is the essence of this Purchase Order. Russell Stover may, by a written notice of default to the Seller, cancel the whole or any part of this Purchase Order if the Seller:

1. Fails to make delivery of the articles or to perform the services within the time specified herein, or any extension thereof by change notice;
2. Fails to replace or correct defective articles in accordance with the provisions of the paragraph entitled "Warranties";
3. Fails to perform any of the other provisions of this Purchase Order or fails to make progress so as to endanger performance of this Purchase Order; or
4. Becomes bankrupt or insolvent or makes an assignment for the benefit of creditors; or
5. Breaches any of the warranties set forth above.

Termination:

1. Russell Stover may at any time, by written notice, terminate this contract or any part thereof at its convenience, and, except when termination is due to default by Seller, Russell Stover shall be liable for payment of reasonable cancellation charges. In no event, however, shall Russell Stover be liable for cancellation charges in excess of the contract price, or for anticipated profit.

Shipment:

1. All articles are to be packed in accordance with sound commercial practice unless otherwise specified in this Order.
2. A complete packing list shall be enclosed with all shipments hereunder. Russell Stover’s count will be accepted as final and conclusive on all shipments not accompanied by packing list.
3. The Seller shall mark all containers with the necessary shipping information, including the Russell Stover Purchase Order Number, dates of shipment, and address of consignor, consignee and the Seller with whom the Order was originally placed.
4. Direct shipments by other than the Seller as shown on the Purchase Order may not be made without prior notification and approval by Russell Stover.
5. All shipments must be on new 40" x 48," 4-way entry, GMA-style pallets. Shipments arriving on pallets not meeting this requirement will be refused.
6. Vendors are allowed to ship up to 5% over, but 0% under for each item ordered. If more than 5% of an item ships, the vendor will not be paid for the overage.
7. IF THERE WILL BE FREIGHT, PLEASE CALL BEFORE SHIPPING WITH THE EXACT FREIGHT CHARGES AND SHIPPING INSTRUCTIONS.

Proprietary Rights:

All technical information in the nature of designs, blueprints, specifications, engineering data for production or product know-how, which is supplied to the Seller by Russell Stover to facilitate or assist in the performance of this contract, shall, unless otherwise agreed, be considered and kept confidential by the Seller, and the Seller will use and cause its employees and agents to use extreme caution not to disclose any such information either directly or by incorporation of such information in or its use in manufacturing products for others. Additionally, Seller agrees to assign to Russell Stover and not otherwise make use of any invention, improvement or discovery (whether or not patentable) conceived or reduced to practice in the performance of this contract by an employee of the Seller or other person working under Seller’s direction, and such assignment shall be considered as additional consideration for the making of this contract. Upon completion of performance of this contract, the Seller shall deliver to Russell Stover any and all information relating to any such invention, improvement or discovery, and shall cause employees or others subject to Seller’s instructions to sign as appropriate all documents necessary or convenient to enable Russell Stover to file applications for patents throughout the world and to obtain title thereto.

Services:

If this Purchase Order covers the performance of labor or services for Russell Stover, Seller agrees as follows:

1. Seller is an independent contractor, free of control or supervision by Seller as to the means or manner of performing such work.
2. Seller agrees to indemnify and hold Russell Stover harmless against all liability, claims or demands for injuries or damages to any person or property arising out of the performance of services under this Purchase Order. Seller further agrees to furnish Insurance Carrier’s Certificate showing that Seller has adequate insurance coverage in the following minimum amounts:
   1. Workman’s Compensation – Statutory limits for State or States in which the work is to be performed;
   2. General Public Liability $100,000/300,000 and Property Damage $50,000; and
   3. Automobile Public Liability $50,000/100,000 and Property Damage $50,000

Child Labor:

Russell Stover will not tolerate the use of child labor in the manufacture of products it sells nor will it accept products from vendors that use in any manner child labor in their contracting, subcontracting or manufacturing. The definition of child will first be derived from the national laws of the country in which the vendor is doing business. If the laws of that country do not provide such a definition or the definition includes individuals under the age of 15, Russell Stover will define "child" for the purpose of determining use of illegal child labor as anyone who is less than 15 years of age or younger than the compulsory age to be in school in the country in which the vendor is doing business, if that age is higher than 15. Russell Stover does support legitimate workplace apprenticeship education programs for younger persons.

General:

1. Russell Stover assumes no responsibility for any materials or goods shipped without a signed Purchase Order having been issued.
2. When furnished or made by Russell Stover, tools or dies, together with incidental fixtures and materials necessary for the manufacture of goods ordered, shall remain the property of Russell Stover, be used in production of goods for Russell Stover and kept in repair by the Seller for the reasonable life expectancy of the tools or dies. In the event that Russell Stover does not reorder goods produced by such tools or dies for a period of two years, Seller shall have the right to dispose of such tools at Russell Stover’s direction.
3. This Purchase Order shall be governed by the Uniform Commercial Code as adopted in the State of Missouri as effective and in force on the date of this Purchase Order. This contract may not be assigned by Seller without Russell Stover’s written consent.
4. Russell Stover is a United States Government Contractor and, in accordance with the requirements contained in the various Federal Executive Orders relating to government contractors, including, without limitation, all Executive Orders and all other federal laws relating to equal employment opportunity, Seller agrees that it will not discriminate against any employee or applicant for employment because of race, religion, color, age, national origin, military veteran status, sex or handicap (except where sex or lack of handicap is a bona fide occupational qualification).

REV. 9-07