PARTICIPATING VENDOR STANDARD TERMS AND CONDITIONS

THESE PARTICIPATING VENDOR STANDARD TERMS AND CONDITIONS (this “STAC”) is entered into as of the date specified as the Effective Date on page 1 of the Participating Vendor Agreement, by and between EMPOWERY eCOMMERCE COOPERATIVE, INC., a Minnesota cooperative association (“Empowery Co-Op”) and the Participating Vendor identified in the Agreement.  These STAC are an integral part of and are incorporated into the Agreement by this reference.

RECITALS:

1. Empowery Co-Op and its members (“Members”) desire to enter into an arrangement with Participating Vendor for the purchase and sale of the Product (defined below) to Participants (defined below).
2. Empowery Co-Op is entering into this Agreement for its benefit and the benefit of its Members, Management (defined below) and other participants.  Participating Vendor acknowledges that the Members, other participants and Management (defined below) are third-party beneficiaries with respect to this Agreement.
3. The Participating Vendor who executes this Agreement is a Non-Member Participating Vendor if it has not executed a Membership Agreement to become a Member of the Empowery Co-Op.  Execution of this Agreement does not entitle the Participating Vendor to become a Member of the Empowery Co-Op.  Such grant of Membership is only granted via a separate membership Agreement and by the purchase of stock in the Empowery Co-Op.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows:

1. Purchase and Sale of Product.  Effective as of the Effective Date, the terms and conditions set forth in this Agreement apply to all purchases of product or services designated in this Agreement (Page 1, Section VI) (“Product”) from Participating Vendor by (a) Empowery Co-Op and its Members (b) other participating vendors (who are also Members), and (c) any Non-Member Participants and/or Non-Member customer participants to the Empowery Co-Op (“Non-Member Participants”).  
2. Pricing and Payment.  
   1. Negotiation of Purchase Price.  Empowery Co-Op and Participating Vendor will use their best efforts to negotiate the purchase price for the Products sold and purchased hereunder at a price and on terms mutually agreeable to Empowery Co-Op and the Participating Vendors (the “Negotiated Terms”).  Such Negotiated Terms will be available to Empowery Co-Op, its Members, other third-party Participating Vendors and Non-Member Participants (individually and collectively, “Participants”) regardless whether ordering via the Empowery Co-Op or in their individual capacities.  Negotiated Terms may, upon the mutual agreement of the parties, differ between types of Participants:  The parties may from time to time mutually agree on Negotiated Terms for existing or new Product.  Any and all rights and duties of the Co-Op hereunder may be delegated to a management company designated by the Co-Op (“Management”).  Currently, the Management is Duvall Cooperative Management Company.
   2. Purchase Price for Product Not Negotiated by Empowery Co-Op and Participating Vendor.  To the extent that a Participant purchases Product for which a purchase price has not been negotiated by Empowery Co-Op and Participating Vendor, Participating Vendor shall make such Product available to Participants at a purchase price and other Negotiated Terms equivalent to terms offered to its best customers of similar size and credit worthiness as the purchasing Participant.
   3. Marketing Fee Percentage.  Participating Vendor will, on a monthly basis by the 15th of each month, pay Empowery Co-Op a marketing/merchandising fee (the “Marketing Fee”) equal to the percentage of gross sales of Product purchased by Participants for the prior month as set forth in this Agreement (Page 1, Section V).  Empowery Co-Op will periodically update Participating Vendor with respect to a complete list of Participants.  The Marketing Fee Percentage is calculated and due as of the end of the first month following execution of this Agreement.  However, at the Empowery Co-Op’s option, and upon notice to Participating Vendor, the Marketing Fee may be paid on a quarterly basis, on the 15th day of the month following the end of the quarter.
3. Ordering.  Participants may order Product from Participating Vendor by submitting a purchase order to Participating Vendor, either by hard copy or online.  Such purchase order governs the terms of each individual purchase by such Participants and is incorporated into this Agreement by reference.  Empowery Co-Op may require all Participants to order the Product through Empowery and/or establish other protocols.  In such case, Empowery Co-Op will notify Participating Vendor of the same.
4. Shipping and Delivery.  Terms of shipping and delivery to Participants shall be governed by this Agreement provided that if shipping and delivery terms of this Agreement are different from those specified in the applicable purchase order, the applicable purchase order shall control. 
   1. Shipping prior to the ship date or shipping after the cancel date without prior written approval may result in the return of merchandise at the Participating Vendor’s expense.  
   2. Backorders or over-ships will be returned to the Participating Vendor, at the Participating Vendor’s expense if not pre-authorized.
   3. When defective merchandise is shipped back the supplier must issue a call tag or provide their UPS shipping number with a return authorization number.
   4. All shipments must include the invoice for order.
   5. Product shipped must match the purchase order (style #, quantity, sizes, color).
5. Representations and Warranties.  Participating Vendor represents and warrants to Empowery Co-Op and each of the other Participants, that:
   1. Compliance with Law.  All Product was produced and processed in strict compliance with all applicable federal, state and local laws, regulations and ordinances of both the country of origin and the country of destination, including but not limited to environmental or hazardous substance, labor, and wage and hour laws and regulations.
   2. Infringement.  The Product and the Negotiated Terms do not infringe or violate any intellectual property or other proprietary rights, including without limitation any patent, trademark, service mark, trade dress, trade name, copyright, trade secret or other right.  
   3. Labeling.  The Product is accurately labeled and clearly identifies the country of origin. 
   4. Defects.  The Product is not defective and is as represented by Participating Vendor and is merchantable and fit for the purpose for which it was intended.  
   5. Quality.  The Product has no quality or safety defects and has not been recalled for any reason.  
6. Indemnification.  Participating Vendor hereby indemnifies and holds Empowery Co-Op, Management, and each Participant, and each of Empowery Co-Op, Management and each Participant’s owners, officers, directors, agents and employees (individually and collectively, “Co-Op Indemnified Parties”) harmless from, against and in respect of and covenants never to sue Co-Op Indemnified Parties in connection with the operation of the Co-Op, the activities of Management in connection with the Co-Op and/or Participant’s breach of this Agreement or Participating Vendor’s representations and warranties hereunder.  
7. Marketing Fees.  
   1. Schedule.  Participating Vendor shall pay monthly Marketing Fees to Empowery Co-Op with respect to all purchases of Products by the Participants.  
   2. Marketing Fee Payments.  All Marketing Fees payable to Empowery Co-Op shall be paid monthly by the 15th of each month with respect to purchases of Product by Participants during the prior month (or quarter).  Late payments of Marketing Fees shall bear an interest penalty of 1.5% per month.  
   3. Reporting and Audit Rights.  Participating Vendor shall submit to Empowery Co-Op at the same time as the payment of the last Marketing Fee due for the fiscal year a Marketing Fee report showing total purchases of Product by Participants in reasonable detail acceptable to Empowery Co-Op.  Empowery Co-Op may, but shall not be required to, audit the Marketing Fee reports provided by Participating Vendor.  To the extent that such audit does not repeal any underpayment by Participating Vendor, the cost of such audit shall be borne by Empowery Co-Op.  To the extent that such audit reveals an underpayment by Participating Vendor, the cost of such audit shall be paid by Participating Vendor and, in addition, the Participating Vendor shall immediately pay any unpaid Marketing Fee and, in addition, a fee in the amount of two times the amount of unpaid Marketing Fee as liquidated damages to cover the Empowery Co-Op’s costs and damages associated therewith.
   4. No Circumvention.  During the term of this Agreement and for a period of six months after its termination or expiration for any reason, Participating Vendor will not circumvent this Agreement by creating alternate accounts to avoid paying Marketing Fees or otherwise selling to Participants outside the scope of this Agreement.  Participating Vendor will not assist, advise or facilitate any Participant’s efforts to circumvent their obligations to the Empower Co-Op.  Participating Vendor will not alter accounts owned by Empowery Co-Op or other Participants or sell to Participants, except pursuant to this Agreement.
      Returns.  Any paid Marketing Fees with respect to returned Product may be deducted from the amount returned.  
   5. Nonpayment by Member.  If a Participant fails to pay Participating Vendor in a timely manner, Participating Vendor may request a Marketing Fee refund from Empowery Co-Op not to exceed the unpaid amount by Participant, provided, however, that if the Participant later pays the Participating Vendor, such Marketing Fee must be repaid to Empowery Co-Op within 5 days of notice to Participating Vendor.
8. Term and Termination.  This Agreement shall continue in force for one year from the date hereof and shall renew automatically for successive periods of one year each, unless cancelled in writing by either party hereto with 90 days’ written notice to the other party.  Upon termination of this Agreement by Participating Vendor, Participating Vendor shall continue to pay Marketing Fees to Empowery Co-Op for qualifying purchases of Product by any Participants during the 6-month period after the effective date of the termination.
9. Miscellaneous.  
   1. Jurisdiction.  This Agreement shall be construed and governed in accordance with the laws of the State of Minnesota.
   2. Amendment.  This Agreement may not be amended except in writing and signed by all parties hereto.
   3. Dispute Resolution.  In the event of a dispute concerning the formation, interpretation or enforcement of this Agreement, such dispute shall be resolved in accordance with the commercial rules of arbitration of the American Arbitration association, such arbitration to be venued in Hennepin County, Minnesota.  In any such arbitration, the party determined by the arbitrator(s) to have prevailed in such arbitration shall be entitled to recover its costs and reasonable attorneys’ fees incurred in the course of such dispute and arbitration.
   4. Confidentiality.  Participating Vendor acknowledges that that the terms of this Agreement are proprietary to Empowery Co-Op and agrees to keep the existence and content of this Agreement confidential and not to disclose such to any third party except as required by law.