Terms and Conditions of Equipment Sale

Scope. THE FOLLOWING TERMS AND CONDITIONS OF SALE (EQUIPMENT) (THESE “TERMS”) SHALL APPLY TO ALL EQUIPMENT AND SERVICES SOLD BY SHORR PACKAGING CORP. (“SHORR PACKAGING”). ANY PROPOSAL, QUOTE OR ORDER ACKNOWLEDGMENT IS AN OFFER SUBJECT TO AND EXPRESSLY CONDITIONED UPON THE BUYER’S (“CUSTOMER”) ASSENT TO THESE TERMS AND ANY TERMS INCLUDED ON SHORR’S PROPOSAL, QUOTE OR ORDER ACKNOWLEDGMENT, WHETHER ASSENT IS IN WRITING OR BY CONDUCT. ACCEPTANCE OF OR PAYMENT FOR ANY PRODUCTS OR SERVICES SHALL CONSTITUTE SUCH ASSENT. ANY CONTRARY PROVISION, TERM OR CONDITION, OTHER THAN THOSE STATED IN THE APPLICABLE PROPOSAL, QUOTE OR ORDER ACKNOWLEDGMENT AND THESE TERMS, INCLUDING, BUT NOT LIMITED TO, IN ANY PURCHASE ORDER, ACKNOWLEDGEMENT OR OTHER DOCUMENT SUBMITTED BY CUSTOMER TO SHORR PACKAGING, OR ANY COURSE OF DEALING OR COURSE OF PERFORMANCE BETWEEN THE PARTIES, OR ANY TRADE PRACTICES, ARE HEREBY REJECTED BY SHORR PACKAGING, AND OF NO FORCE AND EFFECT.

Definitions. “Equipment” means all machinery, parts accessories and attachments, sold by Shorr Packaging to Customer, including, without limitation, any replacements, additions, improvements, alterations, spare parts, attachments or repairs. The sale or furnishing of any replacements, additions, attachments, accessories or repairs to the Equipment which are made or delivered subsequent to the sale of the Equipment shall not cause or create any extension of the guarantees or warranties made herein with respect to the Equipment nor shall they change the effective date on which the Equipment is delivered by Shorr Packaging. “Code” means the Illinois Uniform Commercial Code as in force as of the date hereof.

Specifications. Any Equipment specifications provided to Customer are subject to change without notice by the Equipment manufacturer.

Security Agreements. As collateral security for the full payment of the purchase price, Shorr Packaging shall retain, and Customer hereby grants to Shorr Packaging, a lien on and security interest in the Products, wherever located, and whether now existing or hereafter arising or acquired from time to time, all proceeds and insurance proceeds thereof, if any, and all increases, substitutions, replacements, additions and accessions thereto. The security interest granted under this provision constitutes a purchase money security interest under the Code. Customer further agrees to execute any other documents to perfect said security interest at the request of Shorr Packaging and hereby appoints Shorr Packaging its agent to execute all documents and do all things on its behalf in order to perfect and give full effect to the security interests of Shorr Packaging pursuant to this Section and to maintain such rights or interests enforceable against third parties in all jurisdictions where the Equipment and other goods may be situated (including but not limited to filing UCC-1 Financing Statements in all appropriate jurisdictions). Customer shall obtain from Customer’s landlord, if any, a waiver of any priority created by federal, state or local law or other governmental regulation which would subordinate any of Shorr Packaging’s rights in the Equipment to any rights of Customer’s landlord.

Method of Payment. Payment shall be made in United States currency without discounts, setoffs or other deductions of any kind and, at the sole option of Shorr Packaging, shall be made in cash or by good certified or bank check or against irrevocable and confirmed letter of credit. Checks and letters of credit shall be drawn against United States banks. Without prejudice to Shorr Packaging ‘s other rights, if Customer defaults in the payment of any part of the purchase price, interest will be charged on all amounts in default at the legal maximum rate in the applicable jurisdiction. Customer shall reimburse Shorr Packaging for all costs incurred in collecting any late payments, including, without limitation, attorneys’ fees and expenses

Taxes. Customer shall pay all local, state and federal taxes.

Delivery, Transportation and Insurance Costs; Risk of Loss. Shorr Packaging shall use commercially reasonable efforts to make delivery at the time specified in the proposal and shall give Customer prior notice of delivery. Delivery shall be deemed to have been made when Shorr Packaging or the Equipment manufacturer places the Equipment in the possession of a carrier selected by Customer or, in the absence of such selection, by Shorr Packaging or the manufacturer. After the Equipment is delivered to the carrier all risk of loss or damage to the Equipment shall be borne by Customer. Title to Equipment shall pass to Customer only upon payment in full by Customer. Until title to the Equipment passes to Customer, Customer shall obtain and maintain insurance coverage at full replacement value to cover all risks of loss and damage to the Equipment which policy shall name Shorr Packaging Corp. as an additional insured and loss payee to the extent that its interest may appear. Before the time that the Equipment is delivered to the carrier, at the request of Shorr Packaging, Customer shall deliver a certificate by the insurance company certifying that such insurance is in effect and shall not be cancelled or revoked without fifteen (15) days prior written notice to Shorr Packaging until the purchase price of the Equipment is paid in full.

Delays and Force Majeure. Shorr Packaging shall not be liable for any costs, expenses or damages or be deemed to be in default of this agreement as a result of any delays in the delivery, repair or replacement of the Equipment or any part thereof or any other failure of performance hereunder caused by any events or conditions beyond its control including but not limited to fire, flood, storms, or other acts of God, epidemic, pandemic or disease, strikes, lockouts, slowdowns or other labor troubles, inability to obtain or shortages of energy supplies, materials, labor or transportation, delays or defaults of suppliers or sub contractors, insurrections, riots, war, national emergencies or governmental controls, defects in parts or equipment of whatever cause, or any other cause, delay, defect, or default of whatever nature or kind.

Packing for Delivery. The price includes standard packing for normal shipment. Special packing shall be undertaken only upon Customer’s written instructions and at Customer’s expense.

Storage Charges. In the event of Customer’s failure to take timely delivery of the Equipment or other delay by Customer, Customer shall pay all reasonable storage charges and care and maintenance expenses for the Equipment. This clause shall not, however, impose any liability or duty on Shorr Packaging Corp. to provide or arrange for or otherwise take any actions with respect to such care and maintenance.

Customer’s Credit Standing. If, in the judgment of Shorr Packaging, Customer’s financial standing or condition does not justify continuance of production or shipment on the terms specified, Shorr Packaging shall have the right to require Customer to provide such additional security to Shorr Packaging as Shorr Packaging may require, including requiring Customer to execute additional security agreements and Code financing statements in such form as Shorr Packaging shall deem appropriate, or to make full or partial payment of the balance of the price. If Customer shall fail to provide adequate security, Shorr Packaging shall be entitled to cancel this agreement without incurring any liability to Customer and without prejudice to its claim for damages against Customer.

Default. The occurrence of any of the following shall constitute a default (“Default”) by Customer: (a) Failure by Customer to make any payment when due; (b) Failure by Customer to comply with or perform any provision of these Terms; (c) False or misleading representations or warranties made or given by Customer in connection with this agreement; (d) Assertion of any lien, levy or other judicial process against the Equipment or any other diminishment or impairment of Customer’s rights in or to the Equipment; (e) Voluntary or involuntary commencement of any proceeding to which Customer is subjected or that seeks relief under any bankruptcy or insolvency proceeding or any other action pursuant to any governmental statute, regulation or proceeding, whether federal, state or local, foreign or domestic, or commencement of any insolvency proceeding by or against Customer. For the purpose of this clause Customer shall include both Customer and any guarantor of or surety for Customer’s obligations; (f) Any act of Customer which results in the substantial reduction in the value of the Equipment or imperils the prospect of full performance or satisfaction of Customer’s obligations hereunder; or (g) Any alterations, modification or change in the Equipment made without Shorr Packaging’s prior written consent.

Remedies. Upon the occurrence of any Default of Customer, (i) at the option of Shorr Packaging, all sums payable under this agreement shall immediately become due and payable in full without notice or demand; and (ii) Shorr Packaging shall have, in addition to all other rights provided herein or by law, all rights and remedies of a secured party under the Code (regardless of whether the Code is the law of the jurisdiction where the rights or remedies are asserted and regardless of whether the Code applies to the affected collateral), and further Shorr Packaging may, without demand and without advertisement, notice, hearing or process of law, all of which the Customer hereby waives, at any time or times, sell and deliver all or any part of the collateral at public or private sale, for cash, upon credit or otherwise, at such prices and upon such terms as Shorr Packaging deems advisable, in its sole discretion. In addition to all other sums due Shorr Packaging hereunder, the Customer shall pay Shorr Packaging all costs and expenses incurred by Shorr Packaging, including reasonable attorneys’ fees and court costs, in obtaining, liquidating or enforcing payment of collateral or the obligations of Customer herein or in the prosecution or defense of any action or proceeding by or against Shorr Packaging or the Customer concerning any matter arising out of or connected with this agreement or the collateral or the obligations of Customer herein, including, without limitation, any of the foregoing arising in, arising under or related to a case under the United States Bankruptcy Code (or any successor statute). Any requirement of reasonable notice shall be met if such notice is personally served on or mailed, postage prepaid, by first class mail to the Customer at least 10 days before the time of sale or other event giving rise to the requirement of such notice; provided however, no notification need be given to the Customer if the Customer has signed, after a Default has occurred, a statement renouncing any right to notification of sale or other intended disposition. Shorr Packaging shall not be obligated to make any sale or other disposition of the collateral regardless of notice having been given. Shorr Packaging may be the purchaser at any such sale. The Customer hereby waives all of its rights of redemption from any such sale. Shorr Packaging may postpone or cause the postponement of the sale of all or any portion of the collateral by announcement at the time and place of such sale, and such sale may, without further notice, be made at the time and place to which the sale was postponed or Shorr Packaging may further postpone such sale by announcement made at such time and place.

Cancellation.
14.1. Orders for any Equipment may not be cancelled by Customer once placed. In the event Shorr Packaging permits an order cancellation by Customer prior to shipment, without limiting any of Shorr Packaging’s other rights and remedies, Customer shall pay Shorr Packaging an equitable adjustment for costs Shorr Packaging incurs due to such cancellation, including but not limited to all incurred costs and committed costs, plus a reasonable contract profit.
14.2. Orders may be cancelled by Shorr Packaging or by the applicable manufacturer of the ordered Equipment at any time prior to shipment for any reason. In the event of such cancellation, Customer’s sole and exclusive remedy will be the return of any deposits paid by Customer to Shorr Packaging with respect to such order.

Third Party Financing. In the event Customer shall elect to lease the Equipment from or secure financing of the purchase price from a third party, and such third party shall thereby purchase and take title to the Equipment from Shorr Packaging for subsequent lease or conditional sale to Customer, the obligations of Customer to Shorr Packaging under this agreement shall continue in full force and effect and shall be enforceable in all respects as if Customer and not such third party had purchased the Equipment from Shorr Packaging. In no event shall Customer take by assignment from such third party any rights or remedies against Shorr Packaging other than those contained herein.

Start Up. Shorr Packaging shall furnish a qualified technician for such period of time as Shorr Packaging, in its sole discretion, shall deem necessary to perform the Start Up commitments of Shorr Packaging as shown in the Start Up page of the Proposal. If Customer desires to utilize the services of Shorr Packaging ‘s technician for any additional period, Customer shall pay for such services at Shorr Packaging’s standard rate for field service. Customer shall perform all commitments of Customer as shown in the Start Up page of the applicable Proposal, Quote or Order Acknowledgment, and as otherwise agreed by the parties.

Finish. The Equipment shall be finished in the manufacturer’s standard finish, unless otherwise agreed to by the parties at the time of execution of this agreement and specified herein.

Safety Appliance and Pollution Control. The cost of all safety appliances and air and noise pollution control devices which are not expressly specified as part of the Equipment sold hereunder and the cost of compliance with all federal, state, local and other governmental electrical, safety, pollution, and sanitary codes and regulations are not included in the purchase price hereunder and shall be borne by Customer. Customer shall provide all plans and specifications for the installation of any equipment that may be required on account of such codes and regulations. Customer shall be responsible for ascertaining and complying with such codes and regulations and Shorr Packaging shall not be liable for any damages resulting from non compliance with such codes and regulations in the installation or use of the Equipment. Customer shall indemnify and hold Shorr Packaging harm¬less from any penalties or damages incurred as a result of violations of such codes and regulation including any fees, charges, legal fees or other costs incurred by Shorr Packaging.

Models, Samples, Technical Literature, Illustrations or Catalogues. If any models, samples, technical literature, illustrations, catalogues or other documents have been shown to Customer, they shall not give rise to any express or implied warranty except to the extent that such warranties are specifically set forth in writing in this agreement. Samples, prototypes and other development products or equipment are sold “AS IS” and without any warranty, express or implied.

WARRANTY LIMITS AND DISCLAIMER.
20.1. Shorr Packaging warrants that any services it performs hereunder will conform in all material respects to the applicable requirements set forth in the applicable Proposal, Quote or Order Acknowledgement and will be performed in a professional and workmanlike manner. Shorr Packaging‘s warranty is conditioned upon start-up of the Equipment by Shorr Packaging’s technicians and the performance by Customer of all of Customer’s obligations in accordance with the start-up page of the applicable Proposal, Quote or Order Acknowledgment. Shorr Packaging shall not be liable for any defects which result from customer’s failure to comply with this condition. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, SHORR PACKAGING HEREBY DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.
20.2. EQUIPMENT MANUFACTURED BY A THIRD PARTY. CUSTOMER ACKNOWLEDGES THAT (I) SHORR PACKAGING IS ACTING AS A RESELLER OR DISTRIBUTOR OF EQUIPMENT AND IS NOT A MANUFACTURER OF ANY EQUIPMENT, (II) ANY WARRANTIES ON SUCH EQUIPMENT ARE THE MANUFACTURERS’ WARRANTIES, AND (III) ALL EQUIPMENT SOLD, OBTAINED OR FURNISHED BY SHORR PACKAGING SHALL CARRY WHATEVER WARRANTY, IF ANY, SUCH MANUFACTURERS HAVE CONVEYED TO SHORR PACKAGING AND WHICH CAN BE PASSED ON TO CUSTOMER. ALL THIRD PARTY PRODUCTS ARE SOLD BY SHORR PACKAGING “AS IS” AND SHORR PACKAGING MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO ANY THIRD-PARTY PRODUCT, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND/OR NON-INFRINGEMENT, WHETHER EXPRESS OR IMPLIED BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE.
20.3. IN NO EVENT SHALL SHORR PACKAGING BE LIABLE FOR LOSSES BASED UPON DOWNTIME, OVERHEAD, THE NEGLIGENCE OF CUSTOMER OR ANY OF ITS EMPLOYEES OR AGENTS, LOST LABOR, DAMAGES TO MACHINERY, SPOILAGE, LOST PRODUCTION OR PROFITS OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THIS TRANSACTION OR THE SALE USE, MAINTENANCE OR OPERATION OF THE EQUIPMENT. SHORR PACKAGING SHALL NOT BE LIABLE FOR ANY PARTS REPLACED, OR REPAIRS, ALTERATIONS, MODIFICATIONS OR CHANGES MADE BY CUSTOMER WITHOUT THE CONSENT OF SHORR PACKAGING OR FOR ANY DAMAGES OR DEFECTS RESULTING FROM SHIPMENT OR IMPROPER INSTALLATION OR OPERA¬TION, OR INADEQUATE MAINTENANCE. IN NO EVENT SHALL SHORR PACKAGING’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO ANY PROPOSAL, QUOTE OR ORDER, THESE TERMS OR THE PERFORMANCE OF WORK THEREUNDER, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED THE TOTAL OF THE AMOUNTS PAID OR PAYABLE BY CUSTOMER TO SHORR PACKAGING FOR THE SERVICES PROVIDED OR PRODUCTS SOLD UNDER SUCH APPLICABLE PROPOSAL, QUOTE OR ORDER ACKNOWLEDGMENT. CUSTOMER SHALL HAVE NO RIGHT TO MAKE ANY CLAIM AGAINST SHORR PACKAGING IN CONNECTION WITH THE PERFORMANCE OF ANY THIRD PARTY PRODUCT, IT BEING ACKNOWLEDGED BY CUSTOMER THAT CUSTOMER’S SOLE REMEDY FOR SUCH WILL BE AGAINST THE MANUFACTURER OF SUCH THIRD PARTY PRODUCT.

On-Site Services; Indemnification. Services to be provided by Shorr Packaging may include inspection and installation services to be performed on-site at Customer’s location, and from time to time, Customer may require that Shorr Packaging personnel (whether employees or contractors) use property provided by Customer, which may include, without limitation, tools and forklifts. Unless otherwise stated, any installation services quoted are for services to be performed during regular business hours, under ambient conditions. Customer shall maintain a safe on-site working environment and keep the installation area and staging area free and clear of all debris and hazards. Unloading of Products for on-site services is to be performed by the Customer, unless otherwise stated. If Shorr Packaging uses any property provided by Customer, then (i) Customer agrees to indemnify, defend, and hold Shorr Packaging, its affiliates, and their respective owners, managers, directors, officers, agents, employees and subcontractors (collectively, “Shorr Indemnified Parties”) harmless from and against all claims, actions, liabilities, losses, damages, costs and expenses (including reasonable attorneys’ fees, expenses and costs), including, without limitation, claims related to personal injury or property damage (collectively, “Losses”), arising from or related to the use of such property provided by Customer (including, without limitation, claims related to product liability or product malfunction). Customer further agrees to indemnify, defend and hold the Shorr Indemnified Parties harmless from all Losses arising from or relating to Customer’s negligence, willful misconduct or breach of these Terms.

Integration. These Terms and the applicable proposal, quote or order constitutes the entire understanding and agreement between Customer and Shorr Packaging regarding the subject matter hereof, and all oral understandings, agreements, representation or warranties between Shorr Packaging and Customer have been merged into this agreement. Shorr Packaging shall not be liable for or on account of any understanding, agreement, representation, or warranty except those set forth herein. There are no oral conditions precedent to the effectiveness of this agreement. No alterations, modifications, deletions, additions or changes in or to this agree¬ment whether by Customer’s purchase order or otherwise shall be binding unless embodied in a writing signed by both parties.

Assignment and Waiver. Neither this agreement nor any right or interest in this transaction may be assigned by Customer without the written consent of Shorr Packaging. Shorr Packaging’s failure at any time to insist upon strict performance of any term or condition of this agreement shall not be construed as a waiver of any subsequent breach of any term or condition

Severability. The invalidity or unenforceability of any provision of this agreement shall not affect the other provisions hereof, and this agreement shall be construed in all respects as if the invalid or unenforceable provision had been omitted.

Compliance with Applicable Laws. Customer shall comply with all applicable laws, regulations and ordinances. Customer shall maintain in effect all the licenses, permissions, authorizations, consents and permits that it needs to carry out its obligations under these Terms.

Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Illinois without regard to any conflicts of law principles.

Arbitration. If a dispute arises under these Terms, the parties shall promptly attempt in good faith to resolve the dispute by negotiation in good faith. In the event the parties cannot resolve on an informal basis a question that arises concerning these Terms, the parties agree to give up any right either of them might otherwise have to a jury trial and to submit such question to arbitration before a single Arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “Rules”). The decision of the Arbitrator in such proceeding shall be final, binding on the parties, and may be entered as an order or judgment in a court of competent jurisdiction. The Arbitrator will be chosen in accordance with the Rules. The arbitration shall be held in Chicago, Illinois. Each party shall pay for its own attorneys’ fees and costs including, without limitation, costs of any experts, in such arbitration. No award of any arbitration shall include punitive or exemplary damages or attorneys’ fees or costs. Each party will pay one-half of the costs of the American Arbitration Association and of the Arbitrator. The Arbitrator shall determine any controversy over whether a dispute is an arbitrable dispute or as to the interpretation or enforceability of this Section with respect to such arbitration. Both parties agree that these Terms is to be construed broadly in favor of final and binding arbitration except, and only to the extent, that such remedy is prohibited by applicable federal or state laws.

Limitation Actions. Any arbitration proceeding by Customer arising out of or in connection with this transaction, including, without limitation, any claim for Shorr Packaging’s breach of contract, must be commenced within one (1) year after delivery of the Equipment.

Notices and Consents. All notices and consents required hereunder shall be in writing. Notices shall be sent to the party concerned by overnight courier delivery or registered or certified mail, return receipt requested, except notice of delivery which may be sent by ordinary first-class mail, e-mail or fax.

Confidential Information. Shorr Packaging may furnish to Customer certain non-public information and materials relating to the Equipment, Shorr Packaging, or its affiliates (“Materials”). Customer shall not disclose such Materials except to its employees who may require use of the Materials in the performance of their duties, and Customer may use such Materials only as authorized by Shorr Packaging. Customer’s obligations with respect to such Materials shall continue indefinitely after receipt of the Materials. For the avoidance of doubt, the confidentiality obligations hereunder are in addition to and not in lieu of any obligations which the parties may have under any separate non-disclosure or confidentiality agreement. Upon Shorr Packaging’s request, Customer shall promptly return all Materials received from Shorr Packaging. In addition to all other remedies available to it, Shorr Packaging shall be entitled to seek injunctive or other equitable relief for any violation of this Section. This Section shall not apply to information that is: (a) in or becomes part of the public domain without any breach of this agreement; or (b) rightfully obtained by the Customer on a non-confidential basis from a third party.

Customer Name. Customer acknowledges and agrees that Shorr Packaging may publicly identify Customer (by name and location) as a customer of Shorr Packaging in Shorr Packaging’s marketing and sales materials.

Relationship of the Parties. The relationship between the parties is that of independent contractors. Nothing contained in these Terms shall be construed as creating any agency, partnership, franchise, business opportunity, joint venture or other form of joint enterprise, employment or fiduciary relationship between the parties, and neither party shall have authority to contract for or bind the other party in any manner whatsoever. No relationship of exclusivity shall be construed from these Terms.

Revised 10-1-2020