Purchase Order General Terms and Conditions

GENERAL TERMS AND CONDITIONS OF PURCHASE

Santa Monica Seafood Company, a California corporation, ("SMS") has issued its Purchase Order (the "Purchase Order") which constitutes its offer to purchase the types, quality and quantity of items specified therein (the "Goods").  Your delivery or tender of delivery of the Goods constitutes your acceptance the Purchase Order, including these General Terms and Conditions of Purchase ("Terms and Conditions").

1.  GENERAL

(a) SMS' offer is limited to your acceptance of these Terms and Conditions.  Without prejudice to the generality of the foregoing, SMS will not be bound by, and hereby rejects, any different or additional terms furnished by you or on your behalf, including in any sales invoice, bill of lading, packing slip or confirmation of order.
(b) The Purchase Order and these Terms and Conditions constitute the final expression and complete and exclusive statement of the terms and conditions with respect to SMS' purchase of the Goods and may not be modified or supplemented by any previous course of dealing between you and SMS.  Each Purchase Order issued by SMS is a separate and new contract having no relation to other contracts between SMS and you.

2. AMENDMENT; MODIFICATIONS

(a) Neither SMS nor you will be bound by any amendment, modification, variation, waiver of, or addition to these Terms and Conditions except as agreed by SMS and you in writing.
(b) SMS may at any time prior to shipment of the Goods by you, make changes in writing to the Purchase Order in the specifications, method of shipment, quantities, packing or time or place of delivery. If any such change results in an increased cost of, or time required for, the performance of the Purchase Order by you, a reasonable adjustment may be made to the price, delivery schedule or both. Any adjustment to the terms of the Purchase Order by you must be approved in writing by an authorized representative of SMS before you proceed with such changes.
(c) These Terms and Conditions cannot be varied by any person acting or purporting to act as the agent of SMS.
(d) You may not assign any part of your obligations under the Purchase Order or these Terms and Conditions without the prior written consent of SMS.

3. ORDERS; ACCEPTANCE; TERMINATION

(a) Except as to Goods already shipped by you, SMS may cancel the Purchase Order for any reason or no reason within 48 hours of your receipt of the Purchase Order without any liability to you.  Thereafter, SMS may cancel the Purchase Order, in whole or in part, by giving notice to you prior to delivery of the Goods to SMS and in which event SMS' sole liability will be to reimburse you for those actual out-of-pocket expenses, if any, fairly and reasonably incurred by you prior to the time of cancellation.  In no event, will SMS be liable for lost profits, indirect or consequential damages.  Additionally, SMS may at any time cancel the Purchase Order without any liability to you by giving notice to you if:  (i) you breach any term or condition of the Purchase Order or these Terms and Conditions; (ii) you repudiate the Purchase Order; (iii) you fail to provide SMS with adequate assurance of performance in writing within two business days of your receipt of SMS' written demand for such assurance; (iv) any attachment, execution or other legal process is levied upon any material portion of your assets; (v) you enter into any general assignment for the benefit of your creditors; (vi) an order for relief is entered with respect to you under the federal Bankruptcy Code; or (vii) a receiver or administrator is appointed by a court in respect of any material portion of your assets.
(b) Your acceptance of this Purchase Order constitutes acceptance of the specific price and terms specified in the Purchase Order and these Terms and Conditions, as well as the type, quantity, quality, cut and size, packaging and required freshness of the Goods (the "Quality Requirements") as specified in the Purchase Order, and you may not modify or vary the price, terms or Quality Requirements from those specified in the Purchase Order or these Terms and Conditions.
(c) SMS has seventy-two hours from its receipt of your delivery of fresh seafood and seafood products ("Fresh Goods") (the "Fresh Goods Acceptance Period") to inspect the Fresh Goods.  If your tender of delivery fails to conform in any respect to the Purchase Order and these Terms and Conditions, SMS may reject all or may accept any commercial unit and reject the rest of the Fresh Goods at any time within the Fresh Goods Acceptance Period by giving notice to you.  If SMS does not reject any Fresh Goods within the Fresh Goods Acceptance Period, SMS will be presumed to have accepted the Fresh Goods, subject to SMS' rights in respect of any breach by you, including the right to revoke acceptance or obtain damages for breach of warranty.
(d) SMS has three months from your delivery of frozen seafood and seafood products ("Frozen Goods") (the "Frozen Goods Acceptance Period") to inspect the Frozen Goods.  All Frozen Goods, when delivered to SMS, must be within 6 months before their expiration date for Individually Quick Frozen Goods and within 9 months for block frozen Frozen Goods.  If your tender of delivery fails to conform in any respect to the Purchase Order and these Terms and Conditions, SMS may reject all or may accept any commercial unit and reject the rest of the  Frozen Goods at any time within the Frozen Goods Acceptance Period by giving notice to you.  If SMS does not reject any Frozen Goods within the Frozen Goods Acceptance Period, SMS will be presumed to have accepted the Frozen Goods, subject to SMS' rights in respect of any breach by you, including the rights to revoke acceptance and obtain damages for breach of warranty.
(e) Any sample(s) provided by you to SMS and the description(s) of the Goods contained in any price list, catalogue, brochure, leaflet or provided by you in any to SMS will be binding on you and constitute express warranties unless expressly superseded by the terms, conditions and Quality Requirements specified in the Purchase Order.
(f) You agree to reimburse SMS for its actual and reasonable costs of inspection if the Goods are rejected in whole or in part.

4. PRICE AND PAYMENT

(a) All prices quoted by you in any price list, catalogue, brochure, leaflet or given in any other way by you from which SMS placed the Purchase Order are not subject to any sales, excise, VAT or other taxes or charges unless expressly so specified.  The price for the Goods is that stated in the Purchase Order and unless otherwise stated or agreed in writing is inclusive of all charges, including but not limited to packing, shipping, carriage, insurance and delivery of the Goods to the delivery address indicated in the Purchase Order.  No changes in the price nor additional charges are binding on SMS without its prior written consent.
(b) You agree that SMS will be entitled to make deductions or offsets from or withhold any payments due to you for, without limitation, (i) any rejection or revocation of acceptance, in whole or in part, of any of the Goods by SMS; (ii) any rejection or revocation of acceptance of Goods previously ordered from you; (iii) any purchase order adjustment ("POA") issued by SMS to you in good faith in regards to any rejected Goods, acceptance of downgraded Goods from you or Goods of a quality otherwise failed to conform to the Purchase Order and these Terms and Conditions, or pricing errors that have been communicated to and agreed by you; (iv) any billings from SMS to you which remain unpaid for 30 days for your participation in SMS' Responsible Sourcing Development Program, as such program may be amended from time to time by SMS; and (v) any other amounts you may owe SMS.
(c) Unless otherwise provided in the Purchase Order, payment for Goods supplied pursuant to the Purchase Order, and not rejected by SMS as provided herein, will be made in U.S. Dollars, in good funds, and are due thirty (30) days after the date of SMS' acceptance of the Goods.

5. WARRANTIES; INDEMNITIES

(a) You represent and warrant that the Goods are and, as of the date and time of shipment and as of the date and time of delivery, will be, fit and sufficient for the purpose intended, merchantable, of good quality, free from defects, whether patent or latent, in material, design and workmanship, and in full conformity with the Quality Requirements. In addition, you further represent and warrant that you have and, as of the date and time of shipment and as of the date and time of delivery, will have good title to all Goods supplied to SMS and that the Goods are free and clear from all liens and encumbrances.
(b) With respect to Goods covered under the Federal Food, Drug and Cosmetic Act, as amended from time to time, (the "Act"), you represent and warrant (i) as of the date and time of shipment and as of the date and time of delivery, no Goods and no portion of any Goods are adulterated, misbranded, mislabeled or unsafe, as those terms are used in the Act, ; (ii) as of the date and time of shipment and as of the date and time of delivery, no Goods nor any portion of any Goods constitute an article that may not, under the provisions of the Act, be introduced into interstate commerce or is adulterated or misbranded, mislabeled, or unsafe; (iii) all such Goods were produced and furnished in accordance with the terms and requirements of the Act and within the terms and requirements of any applicable Federal, state or local law or ordinance; (iv) as of the date and time of delivery, all Goods possess appropriate documentation to support the country of origin and method of production labeling requirements, or a declaration that the Goods are not a covered commodity under the Farm Security and Rural Investment Act of 2002.
(c) You represent and warrant that all Goods sold to SMS are a true 100 percent net weight in compliance with Section 402(b) of the Act and that the seafood species being sold is the true species for the market name recognized in the U.S. Food and Drug Administration's Regulatory Fish Encyclopedia and not a substitute.
(d) You represent and warrant that any services, including but not limited to delivery, provided by you hereunder will be performed in a first-class, professional manner, with the care, skill and diligence, and in accordance with the terms of the Purchase Order and the applicable standards currently recognized in your industry for first-class suppliers.
(e) You agree that you are in compliance with and continue to operate under all the procedures for the safe and sanitary importation, processing and distribution of Fresh Goods and Frozen Goods as outlined by the U.S. Food and Drug Administration mandating the application of Hazard Analysis Critical Control Points ("HACCP") principles and, upon request by SMS, will provide SMS with a Certification of HACCP Compliance.
(f) You represent and warrant that the Goods have not been imported, exported, transported, sold, received, acquired or purchased in violation of any (i) law, treaty or regulation of the United States; (ii) Indian Tribal Law; or (iii) law or regulation of any state or foreign country.
(g) You represent and warrant that you will maintain at all times and with such limits and deductibles as is prudent for your volume of business and type of operations, product liability, commercial general liability and commercial umbrella liability insurance and, if appropriate to your business with SMS, automobile liability insurance and workers' compensation and employer's liability insurance.  Notwithstanding the prior sentence, you agree to maintain a minimum combined coverage, including general and applicable umbrella liability policies, of $1 million per occurrence.  You agree that annually, at the request of SMS, to deliver to SMS a Certificate of Insurance reflecting the various coverage and limits of insurance carried by you, which Certificate of Insurance must indicate SMS is an additional insured party on such liability policies. However, such insurance coverage and limits will not be deemed a limitation of your liability under the indemnities granted in favor of SMS.
(h) You agree to indemnify, defend and hold harmless SMS, including its affiliates, officers, directors, agents, employees and representatives, from and against any and all liabilities, penalties, claims, costs or expenses, including reasonable attorneys' fees, arising out of or resulting from (i) any claims or actions brought, threatened or asserted against SMS for bodily injury, death, sickness, property damage, or violation of applicable law with respect to the Goods; (ii) any breach by you of the Purchase Order or the Terms and Conditions; or (iii) any other injury or damage if caused by or related to any breach of these Terms and Conditions, including any breach of warranty or representations, or any negligent or intentionally wrongful act or omission of you, except to the extent caused by the negligent act or omission of SMS.

6. DELIVERY; RISK OF LOSS; TITLE; REMEDIES

(a) You agree to transport the Goods at your own risk and expense to the location specified in the Purchase Order, or, if no delivery location is specified, to SMS' facility at 18531 S. Broadwick Street, Rancho Dominguez, CA 90220.  The Goods must be properly packed, clearly labeled, adequately protected against damage and deterioration in transit and, if appropriate, delivered in temperature controlled vehicles. All Frozen Goods, and all Fresh Goods requiring refrigeration, must be maintained at or below proper temperatures at all times during shipment.
(b) The date, time and delivery window for the delivery of the Goods specified in the Purchase Order is of the essence of the contract. SMS will use reasonable commercial efforts to give you written notice of any claim for non-delivery or late delivery of any Goods in writing, including email correspondence, within seven days from the date on which the Goods were to be delivered.
(c) Unless SMS agrees otherwise in writing, containers and packing must be supplied free but will be returned, if required, at your risk and expense.
(d) If Goods are delivered to SMS in excess of the quantities ordered, SMS will not be bound to pay for the excess and any excess will be, and will remain, at your risk and will be returnable at your expense.
(e) Risk of loss and title passes to SMS upon SMS' receipt of the Goods, provided that when your tender or delivery of the Goods so fails to conform so as to give a right of rejection, risk of loss will remain on you until cure or SMS' acceptance of the Goods.  If SMS rightfully revokes acceptance, SMS may to the extent of any deficiency in its effective insurance coverage treat the risk of loss as having rested on you from the beginning.
(f) If SMS rejects all or any portion of the Goods as provided herein, or if any of the Goods are not delivered as required or do not meet the Quality Requirements or are otherwise not of the correct quality or do not comply with their description or are otherwise defective, SMS may, at its option and in addition to any and all other remedies to which SMS may be entitled, (i) withhold payment for any Goods rejected or not delivered as required; (ii) require you to replace the same with equivalent and acceptable replacement Goods; or (iii) require you to allow SMS credit for the invoiced value of the Goods.

7. LAW

These Terms and Conditions are governed by and must be construed in accordance with the internal laws of the State of California, without regard to any conflicts of laws principles, but not including the United Nations Convention on Contracts for the International Sale of Goods.  You and SMS hereby submit to the exclusive jurisdiction of the Superior Court of the State of California in and for the County of Los Angeles.  In the event of any suit or action to construe the contract, the Purchase Order, these General Terms and Conditions of Purchase, or any invoice of you, the prevailing party in such action will, in addition to any and all other rights or remedies to which such party may be entitled, be awarded all costs and expenses incurred in such action, including attorneys' fees.  As used in these Terms and Conditions, the terms "includes" or "including" are terms of enlargement and must not be construed to imply any limitation.  The unenforceability, invalidity or illegality of any provision of these Terms and Conditions will not render the other provisions unenforceable, invalid or illegal.  The section headings contained in these Terms and Conditions are inserted for convenience only and do not affect in any way the meaning or interpretation of these Terms and Conditions.