1. Title.

Title to and responsibility for all Products will vest in Natural Grocers following: (i) the delivery of such Products to the Natural Grocers place of business identified in this Agreement and (ii) Natural Grocers’ inspection and acceptance of such Products in accordance with the terms hereof. Risk of loss to Products will remain with Supplier until title thereto has vested in Natural Grocers. No damage to or destruction of Products prior to the passage of risk of loss to Natural Grocers will excuse Supplier’s performance hereunder.
 

2. Transportation and Shipment.

(a)    All deliveries will be strictly in accordance with the quantities, schedule and other requirements specified in the Agreement. Supplier may not make any early delivery without Natural Grocers’ prior written authorization. If at any time Supplier has reason to believe that any delivery will not be made as scheduled, Supplier will immediately notify Natural Grocers of the anticipated delay. Natural Grocers reserves the right to cancel any order if the delivery described therein is not made as scheduled.
(b)    Supplier will: (i) deliver all Products to the Natural Grocers place of business identified in the Agreement and (ii) transmit a shipment notification to Natural Grocers within 24 hours after the shipment of any Products (which notification will include the shipment date, transportation carrier and transportation tracking number). Unless otherwise specified in writing, Supplier will pay all transportation, insurance and other shipping charges. 
(c)    Supplier will, at its own cost, prepare for shipment and suitably pack all Products to prevent damage and deterioration. 

3. Acceptance.
(a)    All Products will be subject to final inspection and acceptance by Natural Grocers. Final inspection will be made within a reasonable time (and in any event within 60 days) after delivery of the Products in question. Natural Grocers may reject any or all of the Products that do not strictly conform to the terms of this Agreement. Payment for any Products will not constitute acceptance hereunder. 
(b)    If Natural Grocers rejects any Products, Supplier will, as promptly as practicable and at Supplier’s sole cost, either correct or replace the non-conforming Products. The selection of the foregoing options will be made in Natural Grocers’ sole discretion. The foregoing procedure will be repeated until Natural Grocers, in the exercise of its sole discretion, accepts or finally rejects the non-conforming Products. In the event that Natural Grocers finally rejects any non-conforming Products, Supplier will refund to Natural Grocers all amounts paid by Natural Grocers with respect to such Products.
(c)    Natural Grocers reserves the right to inspect the Services at any time prior to its acceptance thereof. If Natural Grocers is not satisfied with any Service: (i) Natural Grocers will so notify Supplier within 30 days after Supplier's performance of such non-conforming Service and (ii) Supplier will, at its own expense, re-perform the Service as promptly as possible following its receipt of Natural Grocers' notice of non-conformity. The foregoing procedure will be repeated until Natural Grocers, in the exercise of its sole discretion, accepts or finally rejects the non-conforming Service. In the event that Natural Grocers finally rejects any non-conforming Services, Supplier will refund to Natural Grocers all fees paid by Natural Grocers with respect to such Services.
 

4. Invoices and Payments.
(a)    Natural Grocers will pay Supplier for the Products and/or Services in accordance with pricing terms set out in the Agreement.
(b)    If Natural Grocers determines that invoices for the Products and/or Services will be generated by Natural Grocers through its Evaluated Receipt Settlement (“ERS”) system, the invoice for Supplier’s delivery of the Products or Services will be generated by Natural Grocers on Supplier’s behalf following delivery of the Products or performance Services. Any such determination to adopt ERS invoicing will be within Natural Grocers’ sole discretion. In such case, Supplier will be responsible for reviewing the quantity and pricing information, including applicable taxes, set forth in the ERS invoice. Subject to Natural Grocers’ inspection and acceptance rights set forth Section 3 hereof, any undisputed ERS invoice will be deemed final and accepted by Supplier 7 days following the delivery date without further action by Supplier. Other than ERS invoices, Supplier will invoice Natural Grocers, in such form and by such method as Natural Grocers may specify from time to time, within 30 days following Supplier’s delivery of the Products or performance of the Services. Each invoice will contain an itemized description of the Products and/or Services covered by such invoice and all applicable charges and taxes (exclusive of taxes based on Supplier’s income). Supplier will be responsible for ensuring that the correct taxes have been charged with respect to the Products and/or Services identified on each invoice. If any tax claim arises based on a Supplier invoice, Supplier will be responsible for any penalties and interest associated with any additional tax assessment arising therefrom.     
(c)    Natural Grocers will pay the amounts set forth in any undisputed and properly processed invoice within 45 days following its receipt thereof (or such other period as may be mutually agreed to in writing by Natural Grocers and Supplier).  Payment will be made by check or electronic funds transfer, at Natural Grocers’ discretion. Unless otherwise mutually agreed, all invoices will be sent to:
           Vitamin Cottage Natural Food Markets, Inc.
           Attn: Accounts Payable
           12612 West Alameda Parkway
           Lakewood, CO 80228
(d)    Natural Grocers will notify Supplier in writing of any dispute with respect to any invoice. For ERS invoices, Supplier will notify Natural Grocers of any dispute with respect to the invoice within 7 days of the delivery date, after which the invoice will be deemed final. Natural Grocers will not be required to pay any disputed invoice amounts until such dispute is resolved.
(e)    All claims for money due or to become due from Natural Grocers will be subject to deduction or set-off by Natural Grocers by reason of any claim Natural Grocers has against Supplier, regardless of whether such claim(s) relate to this Agreement. Credit memos for any return orders will be generated by Natural Grocers through its ERS system and such claims for credit will be subject to deduction or set-off.
(f)    Should Natural Grocers overpay an invoice, Supplier will return the overpayment to Natural Grocers within 15 days after receipt thereof.
(g)    Credits against future purchases not taken by Natural Grocers within 90 days from issuance will be remitted by check or electronic funds transfer to Natural Grocers.
(h)    Supplier will maintain complete and accurate records of all invoices, charges and taxes under this Agreement, in accordance with generally accepted accounting principles, during the term of this Agreement and for a period of 24 months after the date of termination or expiration. Natural Grocers may inspect and copy Supplier's records upon reasonable notice.
 

5. Representations and Warranties.
Supplier represents and warrants as follows: (i) upon delivery of any Products, Natural Grocers will have good and marketable title thereto, free and clear of any and all liens, encumbrances and other restrictions against transfer; (ii) all Products, when delivered to Natural Grocers, will (A) be free from defects in packaging, labeling, materials, workmanship, design and/or performance, (B) be merchantable and fit for their intended use (and, in the case of food and dietary supplement Products, be fit for human consumption), (C) conform to all applicable specifications (including those set forth in the Agreement) and (D) be produced in accordance with, and conform to, all applicable federal, state and local laws, regulations, rules, and ordinances; (iii) Supplier will pass through to Natural Grocers any warranties received by Supplier from the manufacturer of any component of any Product; (iv) all Services will (A) be performed in a professional and workmanlike manner, consistent with industry standards, to Natural Grocers’ reasonable satisfaction, (B) conform to the specifications set forth in the Agreement, and (C)) be fit and sufficient for the purposes expressed in or reasonably inferred from this Agreement; (v) Supplier has the requisite ownership, rights and licenses to fully perform its obligations hereunder, free and clear from any and all liens, adverse claims, encumbrances and interests of any third party; (vi) there are no pending or threatened lawsuits, claims, disputes or actions (A) alleging that any Products or Services infringe, violate or misappropriate any third party rights or (B) adversely affecting any Products, the Services or Supplier's ability to perform its obligations hereunder; and (vii) neither the Products nor the Services will violate, infringe, or misappropriate any patent, copyright, trademark, trade secret, or other intellectual property or proprietary right of any third party.  The above representations and warranties will: (i) survive inspection, acceptance and payment and (ii) run to the benefit of Natural Grocers and its successors in interest, assigns, agents and customers.  
 

6. Software.
The following provisions will apply to the software, if any, incorporated in any Product (“Software”):
(a)    Supplier hereby grants to Natural Grocers a perpetual, royalty-free, worldwide, transferable, non-exclusive right and license to install, display, perform, use, reproduce, execute and create derivative works from the Software (including all future releases or versions, patches, fixes, corrections, enhancements, improvements, system modifications and updates relating to the Software which are developed or acquired by Supplier). Supplier will, as promptly as practicable and at no charge to Natural Grocers, deliver to Natural Grocers all future releases or versions, patches, fixes, corrections, enhancements, improvements, system modifications and updates relating to any Software provided to Natural Grocers hereunder. The foregoing license grant will apply to Natural Grocers’ employees, agents and third party contractors in a worldwide networked environment. 
(b)    Concurrently with its delivery of any Software, Supplier will provide, at no additional charge, all documentation, user manuals, programs, loading and unloading information and related information relating to the installation, operation and maintenance of such Software (the “Documentation”).
(c)    Notwithstanding anything herein to the contrary, title to and ownership of the Software will remain with Supplier. Without Supplier’s consent, Natural Grocers will not reverse engineer or reverse compile any part of the Software or remove, obscure or deface any proprietary notice or legend contained in the Software or the Documentation. 
(d)    In the event that a trustee or Supplier as a debtor-in-possession in any action under the United States Bankruptcy Code rejects or attempts to reject this Agreement, Natural Grocers may elect to retain its rights to use the Software hereunder, in accordance with the applicable provisions of the Bankruptcy Code. In such event, Natural Grocers will be entitled to retain and use one or more copies of the Software, including computer software and utilities in both source code and object code form, the Documentation and any associated peripheral information. Failure by Natural Grocers to assert its rights or to retain its benefits to the Software pursuant to the Bankruptcy Code under an executory contract rejected by a trustee or Supplier as a debtor-in-possession will not be construed as a termination of Natural Grocers’ right to use the Software.
(e)    Supplier represents and warrants that: (i) all Software will (A) conform to all applicable specifications (including those set forth in the Agreement), (B) operate in compliance with the Documentation, (C) be free from deficiencies in and defects in materials, workmanship, design and/or performance, and (D) contain no malicious or disabling code that is intended to damage, destroy or alter software, hardware, systems or data; (ii) there are no pending or threatened lawsuits, claims, disputes or actions (A) alleging that any Software infringes, violates or misappropriates any third party rights or (B) adversely affecting any Software; (iii) the Software does not and will not violate, infringe or misappropriate any patent, copyright, trademark, trade secret or other intellectual property or proprietary right of any third party; and (iv) the media on which the Software is furnished is and will be free from defects in materials and workmanship.
 

7. Work Product.
(a)    Any deliverable, work product, idea, design, technique, invention, discovery, improvement, software program, methodology or original work of authorship of any kind (whether or not patentable, copyrightable or subject to other legal protection) made, developed, conceived of or reduced to practice by Supplier in the course of or resulting from the performance of its obligations under the Agreement ("Work Product") will be promptly disclosed and furnished to Natural Grocers. All right, title and interest in the Work Product will vest in Natural Grocers. The Work Product will be deemed to be a work made for hire; to the extent it may not be considered a work made for hire, Supplier hereby assigns to Natural Grocers all right, title and interest in the Work Product, including all copyrights, patent rights, patents and applications therefor. 
(b)    Notwithstanding the foregoing, Supplier will retain all right, title and interest in and to all software, software development tools, methodologies, algorithms, databases designs, processes and other original works of authorship that have been developed by Supplier prior to the Effective Date (“Supplier Property”). To the extent the Work Product includes Supplier Property, Supplier hereby grants to Natural Grocers an unrestricted, royalty-free, perpetual, irrevocable license to make, have made, use, market, import, distribute, copy, modify, prepare derivative works of, perform, display, disclose and sublicense such items.   
(c)    Supplier represents and warrants that it has all necessary agreements with its employees, contractors and others in order to convey the ownership and license rights granted herein. Upon request, and without charge, Supplier agrees to reasonably assist Natural Grocers (including by executing assignments and other documents) as may be required to protect, convey and enforce the rights of Natural Grocers in and to the Work Product.
 

8. Confidential Information.
(a)    As used herein, “Confidential Information” means any business or technical information relating to Natural Grocers or a third party that is furnished, disclosed or made accessible by Natural Grocers to Supplier hereunder, whether verbally or in writing, and that is either identified as or would be reasonably understood to be confidential and/or proprietary (including, but not limited to, trade secrets, marketing plans, financial data, specifications, drawings, sketches, models, samples, computer programs and documentation). Confidential Information also includes the terms and conditions of this Agreement and any Work Product. Confidential Information does not include information that Supplier can establish by written evidence: (i) is or becomes known to Supplier from a third party without an obligation to maintain its confidentiality; (ii) is or becomes generally known to the public through no act or omission of Supplier; or (iii) is independently developed by Supplier without the use of Confidential Information. 
(b)    Supplier will: (i) not use Confidential Information for any purpose other than the fulfillment of its obligations under this Agreement; (ii) not disclose Confidential Information to any third party without the prior written consent of Natural Grocers; (iii) not make any copies of Confidential Information without Natural Grocers' prior consent; and (iv) protect and treat all Confidential Information with the same degree of care as it uses to protect its own confidential information of like importance, but in no event with less than reasonable care. Notwithstanding the foregoing, Supplier may disclose Confidential Information to those of its employees and/or agents who: (i) have a "need to know" such Confidential Information for the purpose of performing Supplier’s obligations hereunder; (ii) are informed of the confidential nature of such Confidential Information; and (iii) are bound to observe and act in accordance with the terms of this Section 8. Supplier will be responsible for any breach of this Section 8 by its employees and/or agents. In the event that Supplier is required to disclose Confidential Information pursuant to law, it will: (i) notify Natural Grocers of the required disclosure with sufficient time for Natural Grocers to seek relief; (ii) cooperate with Natural Grocers in taking appropriate protective measures; and (iii) make any such required disclosure in a fashion that maximizes protection of the Confidential Information from further disclosure.
(c)    Upon expiration or termination of this Agreement, or upon Natural Grocers’ request, Supplier will promptly return to Natural Grocers or, at Natural Grocers’ direction, destroy all Confidential Information, in whole or in part, in whatever format, including any copies thereof.
(d)    The provisions of this Section 8 will survive for a period of 3 years following the expiration or termination of this Agreement
(e)    Supplier acknowledges that in the event of any breach of this Section 8 by Supplier or its employees and/or agents, the extent of Natural Grocers' damages would be difficult or impossible to ascertain and there would be available to Natural Grocers no adequate remedy at law. Supplier therefore agrees that in the event of any such breach, Natural Grocers will be entitled to an award of injunctive or other equitable relief, in addition to any other relief to which Natural Grocers may be entitled.  
 

9. Independent Contractor.
(a)    Supplier: (i) certifies that it is engaged in an independent business and will perform its obligations under this Agreement as an independent contractor and not as the agent or employee of Natural Grocers and (ii) acknowledges that it has no authority to act for or bind Natural Grocers. This Agreement does not create a partnership, joint venture or similar relationship between the parties, and neither party will have the power to obligate the other in any manner whatsoever.
(b)    Supplier will be solely responsible for: (i) the hours of work, methods of performance and compensation of its employees and agents; (ii) supplying all labor, tools, equipment and materials necessary to provide the Products, and/or Services; and (iii) payment of all federal and state income taxes with respect to its income under this Agreement.
 

10. Limitation of Liability.
Except for any breach of Section 8 hereof and each party's indemnification obligations hereunder, neither party will be liable to the other for consequential, incidental, indirect, punitive or special damages, including commercial loss and lost profits, however caused and regardless of legal theory or foreseeability, directly or indirectly arising under this Agreement, even if such party has been apprised of the possibility of such damages.
 

11. Indemnification.
(a)    Supplier will indemnify and hold harmless Natural Grocers (including its officers, directors, employees and affiliates) from and against any and all losses, costs, claims, demands, expenses or liabilities of every kind and character (including, without limitation, attorneys’ fees) incurred by Natural Grocers as a result of or arising from: (i) any act, omission, negligence or fault of Supplier or its employees or agents; (ii) any breach by Supplier of its representations, warranties or covenants hereunder; (iii) any claim that any Product, Service, Software and/or Work Product, or its use by Natural Grocers, infringes, violates or misappropriates any copyright, trademark, patent, trade secret  or other intellectual property right of any third party; and (iv) any Product recall or withdrawal or safety notice initiated as a result of a request or order by a government agency, court, local health authority or consumer protection agency.
(b)    In the event of any claim that any Product, Service, Software and/or Work Product, or its use by Natural Grocers, infringes, violates or misappropriates any copyright, trademark, patent, trade secret or other intellectual property right of any third party, Supplier will, at its expense, either obtain the right for Natural Grocers to continue using such Product, Service, Software or Work Product or replace or modify it to be non-infringing and of equivalent functionality. If neither of these alternatives is reasonably possible, Supplier will refund all amounts paid in respect of the infringing Product, Service, Software or Work Product and reimburse Natural Grocers for all reasonable expenses incurred in replacing such Product, Service Software or Work Product.
(c)    Natural Grocers will notify Supplier within a reasonable time after it becomes aware of any indemnification claim hereunder. Provided that Supplier promptly and reasonably investigates and defends any such indemnification claim, Supplier will have control over the defense and settlement thereof. Natural Grocers will furnish, at Supplier’s request and expense, such information and assistance as may be reasonably necessary for such defense.
 

12. Insurance.
Supplier will maintain such product liability/completed operations, commercial general liability, public liability or other insurance as Natural Grocers may require providing, under the terms of the primary policy or by contractual liability endorsement if necessary, coverage in respect of claims involving personal injury, bodily injury, property damage, advertising injury, product recall, or other losses arising out of or in connection with the Products and/or Services. In addition, Supplier will maintain workers compensation/employer’s liability insurance for any Supplier whose employees will be entering any Natural Grocers’ premises with statutory limits or $1,000,000 if no statutory requirement and $1,000,000 in employer’s liability coverage and automobile liability insurance for any Supplier’s employees or agents driving on Natural Grocers’ premises or making deliveries to Natural Grocers’ premises, with minimum limits of $1,000,000 per occurrence.
 

13. Safety, Health and Accident Reports.
The safety and health of Supplier's employees and agents brought on Natural Grocers premises will be the sole responsibility of Supplier. While on any Natural Grocers premises Supplier and its employees and agents will comply with all Natural Grocers rules and regulations and all federal, state and local environmental, health and safety requirements, including those relating to the use and handling of hazardous materials. Supplier will immediately report any accidents, injuries and property damage arising from or during the performance of this Agreement. Supplier will provide Natural Grocers with copies of any safety, health and accident reports that Supplier files with any third party with respect to the performance of its obligations hereunder.
 

14. Termination.
(a)    Unless otherwise mutually agreed in writing, Natural Grocers may terminate this Agreement, in whole or in part, for its convenience upon 30 days’ prior written notice to Supplier, in which event Supplier will be entitled to payment for all Products and/or Services delivered and accepted through the effective date of such termination.  Natural Grocers will have no other liability arising out of termination of this Agreement.
(b)    Either party may terminate this Agreement by written notice to the other in the event that the other party breaches this Agreement and fails to cure such breach to the other party's reasonable satisfaction within 15 days after written notice specifying the breach.
(c)    This Agreement will terminate without notice: (i) upon the institution by or against either party of insolvency, bankruptcy or receivership proceedings; (ii) upon either party’s making an assignment for the benefit of its creditors; or (iii) upon either party’s dissolution of or ceasing to do business.
 

15. Dispute Resolution; Governing Law.
(a)    Any claim, controversy or dispute between the parties, their agents, employees, officers, directors or affiliates ("Dispute") which has not been settled through good faith negotiation by the parties will be resolved by arbitration in the Denver, Colorado metropolitan area in accordance with the then-prevailing commercial rules of the American Arbitration Association (the “AAA”). If the parties cannot agree upon an arbitrator, then the arbitrator will be selected by the AAA.  The arbitrator's decision will follow the plain meaning of this Agreement and will be final, binding and enforceable in a court of competent jurisdiction.  The arbitrator will not have authority to award any damages or awards that are barred by the "Limitation of Liability" provisions of this Agreement.  All costs of arbitration will be borne by the losing party, unless the arbitrator determines there is no prevailing party, in which case such costs should be allocated equally between the parties.  
(b)    Notwithstanding the foregoing, in the event Supplier breaches its obligations under Section 8 hereof, Natural Grocers will immediately be entitled to an award of injunctive or other equitable relief in any court of competent jurisdiction.
(c)    This Agreement will be governed by the laws of the State of Colorado without regard to the conflict of laws principles thereof.
 

16. Notices.
All notices required under this Agreement will be given in writing and sent to the parties at the addresses stated in the Agreement. Notice will be deemed given: (i) on the first day after deposit with an overnight courier, charges prepaid; (ii) 3 days after mailing if sent first class U.S. Mail, charges prepaid, return receipt requested; or (iii) as of the date of transmission if hand delivered or sent by facsimile or electronic mail.
 

17. Compliance With Laws.
Supplier will, at its expense, obtain all permits and licenses, pay all fees and comply with all federal, state and local laws, ordinances, rules, regulations and orders applicable to Supplier's performance hereunder. 
 

18. Advertising; Publicity.
Neither party will use the other party's names, marks, codes, drawings or specifications in any advertising, promotional efforts or publicity of any kind without the prior written permission of the other party.
 

19. Time is of the Essence.
Supplier agrees that time is of the essence with respect to the performance of its obligations hereunder.
 

20. Non-exclusivity.
Natural Grocers’ engagement of Supplier under this Agreement is non-exclusive and will not limit Natural Grocers’ right to engage third parties (including, without limitation, other vendors and/or independent contractors) to supply goods or render services of any nature to Natural Grocers.
 

21. Miscellaneous.
(a)    The rights and obligations of each party will be binding upon and inure to the benefit of its successors and assigns; provided, however, that Supplier may not assign or subcontract this Agreement, in whole or in part, without the prior written consent of Natural Grocers. Any attempted assignment or subcontracting by Supplier without Natural Grocers’ prior written consent will be null and void.
(b)    No waiver of any provision of this Agreement or any right or obligation of a party will be effective unless in writing, signed by the party against whom it is to be enforced. The failure of either party to insist upon strict adherence or to enforce a right hereunder will not constitute a waiver.
(c)    Any modification or amendment to this Agreement will be in writing and signed by both parties.
(d)    The determination that any provision of this Agreement is invalid or unenforceable will not invalidate this Agreement, and this Agreement will be construed and performed in all respects as if such invalid or unenforceable provision was omitted insofar as the primary purpose of this Agreement is not frustrated.
(e)    Each party agrees that it has had the opportunity to fully negotiate this Agreement. In the event an ambiguity or question of intent or interpretation arises, the Agreement will be construed as if jointly drafted by the parties and no presumption, inference or burden of proof will arise favoring or disfavoring a party by virtue of its authorship of any or all of this Agreement’s provisions.
(f)    The provisions in Sections 4, 5, 6, 7, 8, 10, 11, 15, 16, 18, 20 and this Section 21 of these Standard Terms and Conditions will survive any termination or expiration of this Agreement.
(g)    In the event of any inconsistency between these Standard Terms and Conditions and any other schedules or attachments, these Standard Terms and Conditions will prevail.