Terms and Conditions of Sale of Goods and Services.

This Agreement governs the relationship between A.J. Schrafel Paper Corporation (“Seller”) and its customer (“Buyer”) regarding the sale and purchase of goods, including but not limited to paper, and services, including but not limited to processing, storage and handling, (“Products”).

SELLER’S ACCEPTANCE OF AN ORDER FOR PRODUCTS IS EXPRESSLY CONDITIONED ON BUYER’S ASSENT TO SELLER’S TERMS AND CONDITIONS. SELLER SPECIFICALLY REJECTS ANY DIFFERENTIAL OR ADDITIONAL TERMS AND CONDITIONS AND NEITHER SELLER’S PERFORMANCE NOR RECEIPT OF PAYMENT SHALL CONSTITUTE ANY ACCEPTANCE OF THEM. IN THE EVENT THERE IS A CONTEMPORANEOUS WRITTEN AGREEMENT BETWEEN THE PARTIES THAT CONFLICTS WITH THE TERMS OF SET FORTH BELOW, THE TERMS OF THE WRITTEN AGREEMENT CONTROL.

§1. SHIPMENT AND TITLE. All shipping dates are approximate and not guaranteed. Unless otherwise stated, title shall pass from Seller to Buyer once the products are loaded on the first carrier at Seller’s plant.

§2. EXCUSE OF PERFORMANCE. No liability shall result from delay in performance caused by circumstances beyond the control of the Party affected, including but not limited to, acts of God, war, terrorism, riot, fire, labor trouble (including strikes, lockouts and labor shortages), failure of computer systems to operate properly, destruction or loss of electronic records or data, plant shutdowns, unavailability of materials or components, unavailability of or delays in transportation, insufficient production capacity, unavailability of fuel products, explosion, accident, compliance with government requests, laws, regulations, orders or actions, or other unforeseen circumstances or causes beyond such party’s reasonable control. If such event affects Seller, Seller may, without liability, allocate and distribute products among such customers in such proportions as Seller, in its sole discretion, determines.

§3. FINANCIAL RESPONSIBILITY. In the event that Seller determines, at any time in its sole and absolute discretion, that the credit of Buyer or of any person or entity providing credit support for Buyer’s obligations under these Terms and Conditions of Sale is or becomes impaired, or there is any reason to doubt the enforceability or sufficiency of any agreement, instrument or document supporting Buyer’s obligations under these Terms and Conditions of Sale, Seller shall have the right, among any other rights provided by applicable law, to declare immediately due and payable any and all amounts owed by Buyer to Seller whether under these Terms and Conditions of Sale or otherwise, and to suspend and/or terminate further production, shipment, and delivery to Buyer of any order, whether under these Terms and Conditions of Sale or otherwise, until credit arrangements satisfactory to Seller in its sole judgment have been established. If any such credit is provided to Buyer, or performance assurance is required by Seller of Buyer, Buyer will provide to Seller financial information requested by Seller.

§4. PRICES. Unless otherwise expressly specified, all prices are exclusive of taxes, customs, duties, transportation and insurance. Unless otherwise expressly specified in writing by Seller, and all current or future tax or governmental charge applicable to the sale, delivery, shipment or storage of the Products that Seller is required to pay or collect shall be for Buyer’s account and shall be added to the price, and shall not be subject to any reduction.

§5. TERMS OF PAYMENT. Payment terms are clearly stated on acknowledgements and invoices. If the total sale price is not paid in full on or before thirty (30) days from the delivery date, the Buyer agrees to pay a late charge on the delinquent balance, calculated at the lesser of one and one-half percent (1 ½%) per month or the maximum amount allowed by law. If the Buyer does not promptly pay all invoices according to terms or if Seller in good faith deems itself insecure, because of the prospect of payment by Buyer is impaired, then Seller, at its option and without notice, may declare the entire unpaid balance owed to Seller by Buyer to be immediately due and payable. Terms of payment shall be in accordance with Seller’s invoice and shall be subject to change by Seller in the same manner as changes in prices. Seller shall have the right to set-off any amounts owing from Buyer against any amounts payable to Buyer. Buyer agrees to pay in full all costs and expenses incurred by Seller in collecting the amounts owed by Buyer under this Agreement, including any and all court costs and attorneys fees.

§6. CHANGE OF OWNERSHIP. Buyer must promptly notify Seller by certified mail of any change in ownership that would change the party obligated by this debt. Buyer shall be responsible for all charges made to this account until such notice is received by Seller.

§7. LIMITED WARRANTY. Subject to the limitations contained in this Section, Seller warrants that the Products sold to Buyer will conform to the then current specifications of Seller for the specific Products hereunder. Seller reserves the right to source the Products from any source provided that such Products meet the specifications. If Buyer notifies Seller within thirty (30) days of performing a value added process on the Products or if not yet modified, within 180 days following the arrival of the Products at the delivery point applicable hereunder, of any nonconformance of the Products with such specifications, Seller shall, at its option, either replace (solely upon the delivery terms otherwise applicable hereunder) that portion of the Products found by Seller to be nonconforming, or credit the Buyer the purchase price or portion thereof actually received by Seller for the nonconforming portion of the Products. BUYER ACKNOWLEDGES AND AGREES THAT NO CLAIMS MADE AFTER THE THIRTY (30) DAY TIME PERIOD OR 180 DAY TIME PERIOD (UNLESS OTHERWISE PROVIDED IN THE SPECIFICATIONS), AS APPLICABLE, REFERENCED IN THIS SECTION WILL BE VALID OR RECOGNIZED. THE LIMITED WARRANTY EXPRESSLY STATED IN THIS SECTION IS THE ONLY WARRANTY MADE BY THE SELLER, AND SELLER DOES NOT MAKE, AND HEREBY EXPRESSLY DISCLAIMS, ANY AND ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF OR AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. PRODUCTS WHICH HAVE BEEN SOLD WITH THE CONDITION ‘AS-IS’ OR ‘JOB LOT’ MEANS THAT THE PRODUCTS COME WITH NO WARRANTIES AND BUYER MAY NOT CLAIM DAMAGES OF ANY SORT DUE TO NONCONFORMING PRODUCTS.

§8. RISK OF LOSS AND DAMAGE. Unless otherwise stated and provided that Seller selects and arranges for transportation of products to the location specified by Buyer (the “Named Place”), risk of loss and damage to the products shall transfer to Buyer in accordance with the Incoterm 2000, Free Carrier, Named Place, Not Unloaded. If the products are delivered to the Named Place via truck, then Buyer shall note on the bill of lading the damage and obtain driver’s signature on such bill of lading and in all events notify Seller in writing of such damage immediately, but in any event within seven (7) days of receipt of delivery to the Named Place. If the products are delivered to the Named Place via Rail, then Buyer shall immediately (i) notify the rail carrier of the damage; (ii) obtain wavier of inspection or arrange for inspection by the rail carrier; (iii) obtain pictures of each product damaged; and (iv) notify the Seller in writing of such damage in any event within seven (7) days of receipt of delivery to the Named Place. If Buyer notifies Seller in writing of in transit loss of products within sixty (60) days of the expected delivery date, then Seller shall, at its option, either replace (solely upon the delivery terms otherwise applicable hereunder) the lost products, or credit the Buyer’s account the purchase price or portion thereof actually received by Seller for the lost Products. BUYER ACKNOWLEDGES AND AGREES THAT A CLAIM WILL NOT BE VALID OR RECOGNIZED IF SELLER IS NOT NOTIFIED IN WRITING WITHIN THE APPLICABLE TIME PERIOD SET FORTH IN THIS SECTION OR IF, IN THE EVENT OF IN TRANSIT DAMAGE, THE ACTIONS TO BE TAKEN BY BUYER SET FORTH IN THIS SECTION ARE NOT TAKEN.

§9. CLAIMS PROCESS. If Buyer intends to recover from Seller for in transit loss for damage to Products or nonconformance to specifications as provided by these Terms and Conditions of Sale, then Buyer agrees to follow Seller’s claims procedures with respect to any issues related to in transit damage or loss of Goods or nonconformance to specifications. Buyer shall examine the products for nonconformity promptly upon receipt. Buyer must file a claim within thirty (30) days of the date of notification of the underlying claim to Seller. From the date the complaint is submitted, Buyer has sixty (60) days with respect to quality claims and thirty (30) says with respect to transit claims to submit all required information, documents, samples, etc. required to process the claim investigation. If the claim is not filed within such thirty (30) day time period or any required information, documents, samples etc. are not received during sixty (60) day or thirty (30) day time period, as applicable, then the claim will be deemed waived and any claim with respect to such claim will be denied. Buyer waives any and all right to set-off the amount of any claim against charges owed to Seller. Any action for breach of this Agreement based in whole or in part of nonconformity of products must be commenced within one (1) year after the cause of action has accrued.

§10. LIMITATION OF REMEDY AND LIABILITY. THE SOLE AND EXCLUSIVE REMEDY FOR BREACH OF WARRANTY HEREUNDER (AND FOR ANY OTHER CLAIM OF ANY NATURE ARISING FROM THE FAILURE OF THE PRODUCTS TO CONFORM TO THE SPECIFICATIONS REQUIRED BY THESE TERMS AND CONDITIONS OF SALE) AND FROM IN TRANSIT LOSS SHALL BE LIMITED TO REPLACEMENT OR CREDIT OF PURCHASE PRICE (AT SELLER’S OPTION) UNDER THE LIMITED WARRANTY CLAUSE IN §6. IN NO EVENT REGARDLESS OF THE FORM OF THE CLAIM OR CAUSE OF ACTION (WHETHER BASED IN CONTRACT, INFRINGEMENT, NEGLIGENCE, STRICT LIABILITY, TORT OR OTHERWISE), SHALL SELLER’S CUMULATIVE LIABILITY TO BUYER EXCEED THE PURCAHSE PRICE FOR THE SPECIFIC PRODUCTS GIVING RISE TO THE CLAIM OR CAUSE OF ACTION. SELLER SHALL NOT BE LIABLE NOT BE LIABLE FOR DAMAGES CAUSE BY DELAY IN PERFORMANCE. BUYER AGREES THAT IN NO EVENT SHALL SELLER’S LIABILITY TO BUYER EXTEND TO INCLUDE INCIDENTAL, CONSEQUENTIAL, LIQUIDATED OR PUNATIVE DAMAGES. THE TERM “CONSEQUENTIAL DAMAGES” SHALL INCLUDE, BUT NOT BE LIMITED TO, LOSS OF ANTICIPATED PROFITS, LOSS OF USE, LOSS OF REVENUE, AND COST OF CAPITAL.

§11. No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

§12. Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

§13. Governing Language. This Agreement has been negotiated and executed by the Parties in English. In the event any translation of this Agreement is prepared for convenience or any other purpose, the provisions of the English version shall prevail.

§14. Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) 1 business day after being sent to the recipient by reputable overnight courier service (charges prepaid), (iii) 1 business day after being sent to the recipient by facsimile transmission or electronic mail, or (iv) 4 business days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and addressed to the intended recipient.

§15. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York, without regards to the principles of conflicts of laws and choice of laws. The New York State courts of Nassau County, New York, and the Federal Courts having jurisdiction over the same, shall have exclusive jurisdiction and venue over any dispute arising out of this Agreement.

§16. Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed the Sellers. No waiver by any Party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such default, misrepresentation, or breach of warranty or covenant. The failure of any party to enforce any provisions hereof shall not be construed to be a waiver of the right of such party to thereafter enforce any such provision or any other provision.

§17. Submission to Jurisdiction. The Parties hereby consent to the jurisdiction of the courts named in §15. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of any other Party with respect thereto. If any dispute results in a trial, Parties agree to forgo a jury trial. The Parties agree that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or at equity.

§18. Severability. If any provision of this Agreement is found to be in conflict with the law, that provision shall be interpreted in its broadest meaning consistent with the law, and the remaining provisions shall remain in full force.

§19. Entire Agreement. This Agreement represents the entire Agreement between Buyer and Seller. This Agreement may be modified only by a writing signed and executed by an authorized manager of Seller. No sales representative is authorized to make any modifications, extensions, additions or subtractions to this Agreement. A facsimile or digital copy of this Agreement is just as binding as the original thereof.