STANDARD TERMS AND CONDITIONS TO PURCHASE ORDERS FOR PRODUCTS

 
1. Controlling Effect of Terms and Conditions/Definitions.

(a) The following terms and conditions ("Terms and Conditions") shall apply to the provision by a supplier (the "Supplier") of products or services (each, a "Product") that may be used in the McDonald's System pursuant to a written or electronic purchaser order setting forth price, quantities and delivery, payment and other terms (each, a "Purchase Order") issued on behalf of McDonald's Corporation, McDonald's USA, LLC or any of their respective subsidiaries or affiliates (each, as applicable, a "Purchaser"). In the event Supplier has an existing written agreement (each, an "Existing Agreement") with a Purchaser applicable to a Product provided pursuant to a Purchaser Order, Supplier's provision of such Product shall be governed by the terms and conditions set forth in the Existing Agreement and these Terms and Conditions shall not apply to such Purchase Order.

(b) As used herein, the term "Supplier Affiliates" includes all direct or indirect subsidiaries and affiliates and all officers, directors, employees, agents, consultants, independent contractors, subcontractors, representatives or others acting on behalf of the Supplier and such direct or indirect subsidiaries and affiliates. The term "Purchaser Affiliates" includes all direct or indirect subsidiaries and affiliates of a Purchaser, all franchisees in and suppliers (other than Supplier and Supplier Affiliates) to the McDonald's System, and all officers, directors, employees, agents, consultants, independent contractors, representatives or others acting on behalf of a Purchaser and such direct or indirect subsidiaries, affiliates, franchisees and suppliers (other than Supplier and Supplier Affiliates). The term "McDonald's System" means the comprehensive system for the ongoing development, operation and maintenance of McDonald's restaurants and includes among others, McDonald's Corporation, McDonald's USA, LLC, each of their respective subsidiaries and affiliates, franchisees and suppliers.

2. Developments, Prior Developments, Improvements, Off-The-Shelf Products.
(a) Supplier agrees and will cause Supplier Affiliates to agree that (1) Purchaser will be the exclusive owner and will have all proprietary and intellectual property rights to all Developments and Improvements; (2) Purchaser or others designated by Purchaser will have a non-exclusive, irrevocable, perpetual, royalty-free, worldwide license, with right of sublicense, to make, have made, use, or sell all Prior Developments; and (3) Purchaser will pay no separate compensation for the Developments, Prior Developments or Improvements except as set forth in Section 4 below. As used herein, the following terms have the following meanings:
  • "Developments" means all Work Product, other than - Prior Developments, submitted by the Supplier and/or Supplier Affiliates to Purchaser and/or any Purchaser Affiliates in response to any request for proposals by Purchaser and/or any Purchaser Affiliate, or Work Product developed, created, discovered, conceived or reduced to practice, individually by Supplier and/or Supplier Affiliates or jointly with Purchaser and/or Purchaser Affiliates, in connection with any Product.
  • "Work Product" includes, but is not limited to, all products, equipment, compositions, processes, formulas, recipes, techniques, innovations, discoveries, ideas, names, concepts, developments, writings, inventions, technology improvements, trade secrets, trade names, trade marks, service marks, designs and know-how related thereto and all intellectual property and other proprietary rights, whether or not patentable, copyrightable or otherwise subject to intellectual property protection.
  • "Prior Developments" means all Work Product of Supplier or Supplier Affiliates relating to any Product that is in the possession of or owned by Supplier or Supplier Affiliates prior to any contact, discussion or other communication with Purchaser or Purchaser Affiliates relating to such Product provided that Supplier establishes such prior possession or ownership by contemporary documentation reasonably acceptable to Purchaser.
  • "Improvements" means modifications, alterations, changes, improvements, enhancements, adaptations or derivative works of or to any Developments or Prior Developments.

(b) Supplier hereby grants and assigns and will cause Supplier Affiliates to grant and assign to Purchaser or any third party designated by Purchaser, all right, title and interest that Supplier or Supplier Affiliates may have in the Developments and the Improvements, including all proprietary and intellectual property rights, including, but not limited to patent, copyright, trademark, servicemark or trade secret rights, and all goodwill associated therewith. In addition, Supplier agrees and will cause Supplier Affiliates to agree to promptly notify Purchaser of all Developments and Improvements described in Section 2(a) above and sign, and cause Supplier Affiliates to sign, at no charge, such documents, at any time reasonably required by Purchaser, including patent, copyright, trademark applications and assignments, to achieve such intellectual property status as Purchaser deems appropriate to protect, perfect, register, record and maintain Purchaser's rights in the Developments and Improvements.

(c) Supplier agrees, represents and warrants and will cause Supplier Affiliates to agree, represent and warrant that it or they, as applicable, are the sole owners of all rights to the Prior Developments and Work Product (of Supplier and Supplier Affiliates) relating to each Product, or have the authorization of the owners of such rights so as to be able to convey the rights to Purchaser or to a third party designated by Purchaser as set forth in this Section 2. Supplier further agrees, represents and warrants and will cause Supplier Affiliates to agree, represent and warrant that the use of any Prior Developments, Developments or Improvements will not violate or infringe the proprietary or intellectual property rights of any person or entity.

(d) Supplier and Supplier Affiliates will have no rights to disclose, make, have made, use, sell or otherwise exploit the Developments or any Improvements.

(e) Notwithstanding any of the foregoing, "off-the-shelf" Products that are developed by Supplier or Supplier Affiliates independent of Supplier's business relationship with Purchaser shall not be subject to the foregoing subsections

(a) ? (d). With respect to such Products, Supplier shall and hereby agrees, represents and warrants and will cause Supplier Affiliates to agree, represent and warrant that it or they, as applicable, are the sole owners of all rights to such Products or have the authorization of the owners of such rights so as to be able to sell such Products to Purchaser. Supplier further agrees, represents and warrants and will cause Supplier Affiliates to agree, represent and warrant that the use of such Products will not violate or infringe the proprietary or intellectual property rights of any person or entity.

3. Confidentiality.

(a) Supplier agrees and will cause Supplier Affiliates to agree that all Purchaser Confidential Information (defined below) will be held in strict confidence, pursuant to the specific provisions set forth in this Section 3.

(b) "Purchaser Confidential Information" includes, but is not limited to, any and all ideas, information, material, data, documents or other Work Product of Purchaser or any Purchaser Affiliate that have been furnished to Supplier or Supplier Affiliates by Purchaser or any Purchaser Affiliate either orally, in writing, by inspection or by means of computer, tape or other electronic, magnetic, mechanical or visual media and that relate to (1) any proposed or actual Product; (2) the business, assets, financial condition, operations, trade secrets, know-how or prospects of Purchaser or any Purchaser Affiliate; (3) the McDonald's System; or (4) any and all Developments and Improvements. "Purchaser Confidential Information" also includes any analyses, compilations, studies, summaries, extracts or other documents or records (regardless of the format in which maintained) prepared by Supplier or Supplier Affiliates which contain or otherwise reflect or are generated from the foregoing information.

(c) The nature and contents of Purchaser Confidential Information will not be disclosed by Supplier to others (except Supplier Affiliates, subject to the conditions described below) or used in any manner except pursuant to the terms of this Agreement without the prior written permission of Purchaser. Supplier agrees to take all reasonable precautions necessary to keep Purchaser Confidential Information secret and confidential with no less than the degree of care it uses in safeguarding its own confidential information and other proprietary information. With respect to any Purchaser
Confidential Information provided to Supplier, Supplier further agrees that each Supplier Affiliate given access to such Purchaser Confidential Information must have a legitimate need to know and must agree to be bound by this Section 3.
(d) Purchaser Confidential Information does not include any information or data that (1) is already known by Supplier or Supplier Affiliates (through no improper action) prior to receipt, provided that Supplier or Supplier Affiliates, as the case may be, within 30 days of receipt of Purchaser Confidential Information advises Purchaser in writing if any part or all of the Purchaser Confidential Information is already known to it or them and supplies Purchaser with all relevant documents to support its or their position; (2) becomes (through no improper action) generally available to the public; (3) is independently developed by Supplier or Supplier Affiliates without the use of any Purchaser Confidential Information for a party other than Purchaser or Purchaser Affiliates provided, however, that Supplier or Supplier Affiliates, as the case may be, will have the burden of establishing that whomever allegedly worked on the independent development did not have direct or indirect access to any Purchaser Confidential Information; or (4) is approved for release by written authorization from Purchaser.

(e) If Supplier or any Supplier Affiliate is required by applicable law or regulation or as a result of any judicial, administrative or governmental proceeding to disclose any Purchaser Confidential Information, Supplier agrees and will cause Supplier Affiliates to agree to provide Purchaser with written notice of such requirement promptly after learning of the same and to object to the production on the grounds that the information requested is confidential. Subject to the foregoing, Supplier or Supplier Affiliates may furnish that portion of the Purchaser Confidential Information that, in the written opinion of its counsel reasonably acceptable to Purchaser, Supplier or Supplier Affiliates are legally required to disclose. In addition, Supplier agrees and will cause Supplier Affiliates to agree to exercise their best efforts to obtain confidential treatment or a protective order with respect to such Purchaser Confidential Information and allow Purchaser, in its sole discretion, to participate in such action or proceeding.

(f) Supplier agrees and will advise Supplier Affiliates and cause them to agree that (1) Purchaser or any Purchaser Affiliate may engage other parties to work with Purchaser or any Purchaser Affiliate on a project or projects in order to develop products or services that are similar or identical to any Product; and (2) any information, ideas, material, documentation, Work Product or other matter, including Developments, Prior Developments and Improvements, may be shared by Purchaser or any Purchaser Affiliate with such other parties. Purchaser will cause such other parties to be bound by confidentiality provisions similar to those contained herein.

(g) Upon request by Purchaser, Supplier and Supplier Affiliates will immediately return to Purchaser all Purchaser Confidential Information.

(h) Supplier acknowledges that it is aware, and that it will advise Supplier Affiliates and each of their directors, officers, employees and representatives who are informed as to the matters which are the subject of a Purchaser Order or these Terms and Conditions, that applicable securities laws restrict persons with material, non-public information concerning McDonald's Corporation (including, without limitation, Purchaser Confidential Information) from purchasing or selling securities of McDonald's Corporation or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.

4. Costs of Development.
All costs and expenses of development, research and testing that Supplier or Supplier Affiliates incur in connection with any Product (collectively "Development Costs") will be borne by Supplier or Supplier Affiliates and are not subject to any reimbursement by Purchaser or any Purchaser Affiliate. In addition, Supplier understands and agrees and will cause Supplier Affiliates to agree that no Development Costs will be incurred in reliance on securing any other business with Purchaser or any Purchaser Affiliate.

5. Products.

(a) Purchaser strives to maintain quality and uniformity throughout the McDonald's System by identifying standards, procedures, specifications and requirements (collectively "Standards") for the manufacture, distribution and
purchasing, preparation and service of goods, services, supplies, fixtures, equipment and inventory. Purchaser considers these Standards to be of critical importance to the continued success of the McDonald's System.
(b) Supplier understands and agrees and will advise Supplier Affiliates, as applicable, and cause them to agree that (1) a commitment to purchase any Product will arise only at such time that a Purchaser issues a Purchaser Order; (2) neither Purchaser nor any Purchaser Affiliate makes any promises, commitments (except to the extent of valid Purchase Orders issued by and in the name of a Purchaser) or guarantees of sales or profit; and (3) Purchaser Affiliates are not responsible for and do not guarantee payment of any past due invoices or delinquent accounts of any Purchaser.

(c) Supplier represents and warrants and will cause Supplier Affiliates to represent and warrant that each Product will (1) conform to Purchaser's then current Standards; (2) be merchantable; (3) be free from defects in design, construction, workmanship, materials and packaging; (4) be fit and sufficient for the purpose for which it is intended and/or which is stated on any packaging, labeling or advertising; and (5) be equivalent in materials, quality, fit, finish, workmanship, performance and design to samples, if any, submitted to and approved by Purchaser.

(d) Supplier agrees, represents and warrants and will cause Supplier Affiliates to agree, represent and warrant that (1) the manufacture, use, distribution or sale of each Product will not violate or infringe any proprietary or intellectual property rights of any person or entity; (2) each Product will be produced, packaged, tagged, labeled, packed, shipped and invoiced in compliance with the applicable requirements of federal, state and local laws, regulations, ordinances and administrative orders and rules of the United States, its territories and all other countries in which such Product is produced or delivered; (3) they will strictly adhere to all applicable federal, state and local laws, regulations, ordinances and administrative orders and rules of the United States, its territories and all other countries in which each Product is produced or delivered with respect to the operation of their production facilities and their other business and labor practices, including laws, regulations and prohibitions governing the working conditions, wages, hours and minimum age of work force; (4) they will not discriminate based upon gender, race, sexual orientation, national origin or any other basis prohibited by law in their employment practices and that each Product will not be produced or manufactured, in whole or in part, by child labor or by convict or forced labor; (5) upon request from Purchaser, they will provide Purchaser with specific information, in such detail as Purchaser may reasonably request, as to the location(s) and methods(s) of the manufacture of each Product; (6) upon reasonable notice and during regular business hours, Purchaser, its designated representatives and any independent inspectors approved by Purchaser may inspect any production facility at which each Product or any components of a Product are being produced; (7) if Purchaser determines that a Product must be inspected prior to its shipment to the United States or other country, such inspection will be performed at the sole expense of Supplier or a Supplier Affiliate by an independent inspector approved by Purchaser and any inspection or documentation thereof, and corrective actions, if any, taken by Supplier or a Supplier Affiliate with respect to such Product will not be deemed an acceptance of any Product, or a waiver of any nonconformities or defects in any such Product and will not excuse any failure by Supplier or a Supplier Affiliate to deliver such Product in accordance with this Terms and Conditions or the terms of any Purchase Order; (8) they will strictly adhere to the current McDonald's Code of Conduct for Suppliers, as it may change over time, a copy of which is attached hereto as Exhibit A; (9) they will not use any trade name, trademark, service mark or other intellectual property of Purchaser or any Purchaser Affiliate, or any other trade name, trademark or service mark incorporating the "Mc" or "Mac" formative, in any manner whatsoever, including, without limitation, on or in connection with any Product or other products or services, without first obtaining the written consent of Purchaser; (10) they are familiar with the Foreign Corrupt Practices Act ("FCPA"), and will at all times remain in compliance with the FCPA, including its prohibition against taking actions corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give or authorization of the giving of anything of value, either directly or indirectly, to government officials, candidates of political parties, or to any person, while knowing that all or some portion of the consideration given to that person will be offered, given or promised to government officials or candidates of political parties, for the purpose of (i) influencing any act, decision or failure to act by a government official in his or her official capacity; (ii) inducing such official to use his or her influence with a government to affect any act or decision of the government; or (iii) securing an improper advantage in order to obtain, retain or direct business; further, they will not take any actions that would result in a violation of the FCPA by Purchaser, and will not use any part of payments received from Purchaser for any purpose that would constitute a violation of the FCPA; and finally, they are not owned or controlled by government officials or candidates of political parties to whom payments are regulated by the FCPA, or any other persons who might assert illegal influence on their

behalf; and (11) they nor any person or entity that directly owns 10% or greater equity interest in it nor any of its officers, directors or managing members are not, and shall not become a person or entity (each, a "Prohibited Person") with whom
U.S. persons or entities are restricted from doing business under the regulations of the Office of Foreign Asset Control ("OFAC") of the Department of the Treasury (including those named on OFAC's Specially Designated and Blocked Persons List) or under Executive Order 13224 (the "Executive Order") signed on September 24, 2001, and entitled "Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action.

(e) Supplier represents and warrants, and will cause Supplier Affiliates to represent and warrant that they have taken all reasonable steps to test any software developed hereunder (including software modifications) for Disabling Code (as defined below) and that the software is and shall be free of Disabling Code as of the date of delivery by Supplier and/or Supplier Affiliates, and that Supplier and/or Supplier Affiliates shall continue to take such steps with respect to future enhancements or modifications to the software. Supplier and/or Supplier Affiliates shall not invoke any Disabling Code on any systems of Purchaser or any Purchaser Affiliate. The term "Disabling Code" means computer instructions, features or functions that may permit Supplier and/or Supplier Affiliates or a third party to, or may automatically: (i) alter, destroy or inhibit the software and/or the processing environment of Purchaser or any Purchaser Affiliate; (ii) erase, destroy, corrupt or modify any data, programs, materials or information used by Purchaser or any Purchaser Affiliate or store any data, programs, materials or information on Purchaser or any Purchaser Affiliate's computers without the consent of Purchaser or the Purchaser Affiliate; (iii) discontinue Purchaser's effective use or any Purchaser Affiliate's effective use of the software; or (iv) bypass any internal or external software security measure to obtain access to any hardware, software or data (data includes, but is not limited to, any data or information belonging to Purchaser or any Purchaser Affiliate, as well as any data or information belonging to another party that is in the possession of Purchaser or any Purchaser Affiliate) of Purchaser or any Purchaser Affiliate without the written consent of an officer of Purchaser, including, but not limited to, other programs' data storage and computer libraries. Disabling Code includes, but is not limited to, programs that self-replicate without manual intervention, instructions programmed to activate at a predetermined time or upon a specified event, and/or programs purporting to do a meaningful function but designed for a different function. Supplier further covenants, warrants and represents and will cause Supplier Affiliates to agree, represent and warrant that it shall maintain a master copy of each version of the software free and clear of any Disabling Code. Upon Purchaser's request, Supplier and/or Supplier Affiliates agree to make such master copy available to Purchaser, with appropriate provisions for security thereof, for comparison with, and if necessary, correction by Supplier and/or Supplier Affiliates of Purchaser's copy of the software.

(f) To the extent that any computer equipment is used by Supplier and/or Supplier Affiliates in conjunction with any Product and/or Supplier and/or Supplier Affiliates provides software or equipment to Purchaser, Supplier and/or Supplier Affiliates must use up-to-date anti-virus software on all such equipment and systems, which shall constitute commercially reasonable efforts to deliver all software and equipment virus free. As used in the preceding sentence, "upto-date anti-virus software" shall mean that Supplier and/or Supplier Affiliates use virus definition files made available by the anti-virus software publisher no more than seven (7) days prior to the date of the complained of incident. With respect to any Supplier and/or Supplier Affiliate's equipment or software which may interface directly with the network system of Purchaser or any Purchaser Affiliate (the "Corporate Network"), Supplier and/or Supplier Affiliates will provide Purchaser's Technology Assurance & Security group Supplier and/or Supplier Affiliate's standard software load on a representative Supplier and/or Supplier Affiliate's laptop prior to accessing any portion of the Corporate Network or shared resources for a technical review to determine if Supplier and/or Supplier Affiliates is in compliance with Purchaser's standards. Any Supplier and/or Supplier Affiliates hardware or software not in complete compliance with Purchaser standards will not be allowed to access any portion of the Corporate Network or shared resources. If a request is made for Supplier and/or Supplier Affiliates to use remote access to the Corporate Network and Purchaser approves such a request, Supplier and/or Supplier Affiliates shall use only Purchaser approved method(s) for remote access to the Corporate Network. All such requests for remote access must be submitted to Purchaser's Technology Assurance and Security group. Supplier and/or Supplier Affiliates must have approved anti-virus protection software and update virus definition files on a weekly basis, unless a new or variant virus or malicious code is identified by Purchaser and communicated to Supplier and/or Supplier Affiliates and in such case, the updates will occur daily. All storage media will be scanned on a daily basis or files will be scanned on a real time basis by virus protection software as those files are accessed, and any infected files will be immediately deleted. Supplier and/or Supplier Affiliates will be responsible for
making any and all configuration changes or purchases, which may be required, based on the above referenced Purchaser evaluation. Any decision and/or recommendation made by Purchaser's Technology Assurance & Security on the adequacy of the anti-virus protection software used by Supplier and/or Supplier Affiliates, is applicable only to the date of the test and/or statement issued. It is the responsibility of Supplier and/or Supplier Affiliates to ensure timely updates, patches, etc., and to ensure their software and protection remains current (as specified above). With respect to software deliverables, immediately before delivering them to Purchaser, Supplier and/or Supplier Affiliates will scan such deliverables for viruses with the most recent virus definition files available from the anti-virus software publisher. If Supplier and/or Supplier Affiliates fails to perform any obligation set forth in this section and if as a result, the software deliverable or interfacing equipment introduces a virus into the system(s) of Purchaser or any Purchaser Affiliate, Supplier and/or Supplier Affiliates will be responsible for any costs in removing the virus from the affected system(s), in addition to being liable for other damages resulting from such introduction.
(g) Supplier agrees and will cause Supplier Affiliates to agree to obtain and maintain, at its expense, a policy or policies of commercial general liability insurance covering liabilities relating to the Products, including but not limited to products and completed operations coverage, with a broad form vendor's endorsement naming Purchaser and its parent, subsidiaries and affiliates or such other party designated by Purchaser, in such amounts and with such companies and containing such other provisions satisfactory to Purchaser. All such policies will provide that the coverage thereunder will not be terminated or any material changes made without at least 30 days prior written notice to Purchaser. Certificates of insurance evidencing such coverage will be promptly submitted to Purchaser. Approval of any of these insurance policies by Purchaser will not relieve Supplier of any obligation contained herein, including Supplier's defense and indemnity requirements set forth below, even for claims in excess of the policy limits.

(h) Supplier agrees, and will cause Supplier Affiliates to agree, that in addition to all other remedies available to any Purchaser, any Product may be rejected by such Purchaser and abandoned, returned or held at Supplier's or Supplier Affiliate's expense and risk, when such Product (1) is not produced, sold, shipped and/or delivered in compliance with the terms of these Terms and Conditions or the applicable Purchase Order; (2) violates or allegedly violates federal, state and local laws, regulations, ordinances and administrative orders and rules of the United States, its territories and all other countries in which the Product is produced or delivered; or (3) infringes or allegedly infringes any patent, trademark, service mark, trade name, copyright, trade secret or other intellectual or proprietary right.

6. Indemnification.

(a) Supplier agrees and will cause Supplier Affiliates to agree, to protect, defend, indemnify and hold harmless Purchaser and Purchaser Affiliates (each an "Indemnified Person") from and against any and all losses, claims, actions, suits or proceedings and any related judgments, damages, amounts paid in settlement, and any other expenses, costs or fees (including reasonable counsel fees, disbursements costs of investigation) (each a "Loss"), arising from or in any way relating to a Product, including but not limited to (1) any actual or alleged infringement or misappropriation of any patent, trademark, tradename, service mark, copyright, trade secret or other intellectual or proprietary right or any actual or alleged unfair competition relating to any Developments, Prior Developments, Improvements or Products; (2) the death of or injury to any person, damage to any property, or any other damage or loss, by whomsoever suffered, resulting or claimed to result, in whole or in part, from any actual or alleged defect in a Product, whether latent or patent, including actual or alleged improper construction and/or design, or actual or alleged failure of such Product to comply with any Standards or with any express or implied warranties of Supplier or any Supplier Affiliates, or any claim of strict liability (or like theory of law) tort relating to any Product; (3) violation of any federal, state or local laws, regulations, ordinances or administrative orders or rules of the United States or any other country, or political subdivisions thereof, in which any Product is produced, shipped or delivered; (4) defects or alleged defects involving the packaging, tagging, labeling, packing, shipping and/or invoicing of any Product; (5) failure to warn or inadequate warnings and/or instructions relating to a Product; (6) improper or defective displays, assembly or installation of a Product; and (7) the actual or alleged breach by Supplier or any Supplier Affiliates of any of its or their representations, warranties, obligations, undertakings, agreements and covenants given under or pursuant to these Terms and Conditions (collectively "Obligations") or Alteration (as defined below) to these Terms and Conditions pursuant to Section 7.
(b) Promptly after receipt by an Indemnified Person of notice of any claim or the commencement of any action, suit or proceeding (collectively "Proceeding") or within a reasonable period of time after the discovery of facts that an Indemnified Person believes will likely give rise to a claim for indemnification from Supplier or a Supplier Affiliate (the "Indemnitor") hereunder, the Indemnified Person will notify the Indemnitor in writing, giving reasonable detail of the claim or the commencement of the Proceeding. Failure to give, or any deficiency in, any such notice will not relieve the Indemnitor of its indemnification obligations hereunder, except and only to the extent that such failure or deficiency materially prejudiced the ability of the Indemnitor to minimize the Loss. In each case, the Indemnified Person will be entitled to retain counsel and control the defense of the indemnified claim or Proceeding. In its defense of any such claim or Proceeding, the Indemnified Person will act reasonably and in accordance with its good faith business judgment with respect thereto, and will not settle or compromise any third party claim or Proceeding without the consent of the Indemnitor, which consent will not unreasonably be withheld. Alternatively, in the case of a third party demand, claim or Proceeding, the Indemnitor, at the request of the Indemnified Person, will assume the defense of any such demand, claim or Proceeding, employing counsel reasonably satisfactory to the Indemnified Person. In such a circumstance, the Indemnitor will not settle or compromise any such demand, claim or Proceeding without the consent of the Indemnified Person, which consent will not be unreasonably withheld. In any circumstance involving a third party demand, claim or Proceeding in which an indemnity requirement as set forth in this Section 6 is determined not to be enforceable under applicable law, the Indemnitor and Indemnified Person will contribute to the payment of any Loss for which indemnification is not available, in proportion to the comparative degree of culpability of the Indemnitor and the Indemnified Person.


7. Entire Agreement/Waiver/Assignment.

Except as provided in Section 1(a), these Terms and Conditions contain the entire agreement of the parties regarding the subject matter hereof and supersedes all prior oral or written agreements, understandings and negotiations regarding the same including but not limited to any confidentiality and development agreements or business relationship letters. These Terms and Conditions may not be changed, modified, amended, supplemented (each an "Alteration") or waived except by a written instrument to be signed by an authorized representative of each party hereto, in the case of an Alteration, or by an authorized representative of the party waiving compliance herewith, in the case of a waiver; provided, in each case, such written instrument must reference this Agreement and the specific provision subject to the Alteration or waiver. In addition, Supplier agrees and will cause Supplier Affiliates to agree that no Purchase Order, sales confirmation or other like document may eliminate or otherwise limit any of the Obligations of Supplier under these Terms and Conditions or otherwise amend these Terms and Conditions. No failure or delay by Purchaser in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other further exercise thereof or the exercise of any other right, power or privilege hereunder. Supplier may not assign or delegate any of its rights or obligations hereunder without the prior written consent of Purchaser and any attempted assignment or delegation without consent will be null and void. If any portion or portions of these Terms and Conditions are for any reason invalid or unenforceable, the remaining portion or portions are nevertheless valid and enforceable.

8. Choice of Law/Injunctive Relief.

(a) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS. SUPPLIER HEREBY SUBMITS AND WILL CAUSE ALL SUPPLIER AFFILIATES TO SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND/OR STATE COURTS OF ILLINOIS IN CONNECTION WITH ALL SUITS, ACTIONS, PROCEEDINGS OR OTHER DISPUTES RELATING TO THESE TERMS AND CONDITIONS, A PURCHASE ORDER, THE PARTIES' BUSINESS RELATIONSHIP, OR ANY OTHER AGREEMENT BETWEEN THE PARTIES OR SUPPLIER AFFILIATES OR ANY PURCHASER AFFILIATE RELATING TO THE SUBJECT MATTER HEREIN (COLLECTIVELY "ACTIONS"). SUPPLIER AGREES (AND WILL CAUSE SUPPLIER AFFILIATES TO AGREE) TO (1) SUBMIT TO THE PERSONAL JURISDICTION AND VENUE OF THE ILLINOIS COURTS; (2) WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTIONS TO THE JURISDICTION AND/OR VENUE OF THE ILLINOIS COURTS; AND (3) WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION. SUPPLIER FURTHER AGREES (AND WILL CAUSE SUPPLIER AFFILIATES TO AGREE) THAT PROCESS MAY BE SERVED ON THEM BY MAILING THE SAME TO THEM
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, WITH THE SAME EFFECT AS THOUGH SERVED UPON THEM PERSONALLY.
(b) Supplier recognizes and acknowledges that its failure or the failure of Supplier Affiliates to comply with any of the representations, warranties, obligations, undertakings, agreements and covenants under these Terms and Conditions will cause Purchaser and Purchaser Affiliates material and adverse harm for which there is no adequate remedy at law. Accordingly, Supplier agrees and will cause Supplier Affiliates to agree that, in addition to any other remedies that may be available, Purchaser and Purchaser Affiliates will be entitled to immediate injunctive relief against the breach or threatened breach of any representation, warranty, obligation, undertaking, agreement or covenant by Supplier or any Supplier Affiliates, without proof of actual damages and without posting any bond or other security.

9. Third Party Beneficiary.

Purchaser and each Purchaser Affiliate are intended third party beneficiaries of these Terms and Conditions.

10. No Reliance.

Each party hereto agrees and acknowledges that it has not relied on any representation or warranty (whether express or implied, written or oral) that is not expressly set forth in these Terms and Conditions.


EXHIBIT A McDonald's Code of Conduct for Suppliers

McDonald's believes that all employees deserve to be treated with dignity and respect. In each and every aspect of the employment relationship, employers need to act towards their employees as they would themselves want to be treated. The 100% satisfaction of our internal customers ? our employees ? is essential to the 100% satisfaction of our external customers. Moreover, McDonald's is committed to a policy of complying with the law wherever it does business, and to maintaining high standards of business conduct. As a result, McDonald's has established a well-respected record and reputation for business honesty and integrity. These principles apply globally, form the basis for McDonald's own ethical business practices, and are cornerstones to McDonald's success.

McDonald's strongly believes that those suppliers who are approved to do business with the McDonald's System should follow the same philosophy, and, in the best interest of the System, McDonald's will refuse to approve or do business with those who do not uphold, in action as well as words, the same principles. McDonald's recognizes that its suppliers are independent businesses. Indeed, it honors that very independence because it provides strength to the relationship. Nonetheless, actions by those with whom McDonald's does business are sometimes attributed to McDonald's itself, affecting its reputation and the goodwill it has with its customers and others. It is only natural then that McDonald's expects its partners in business to act with the same level of honesty and integrity.

For these reasons, McDonald's has established the following policy. Compliance with this policy is required of all suppliers, and is the responsibility of each individual supplier. Suppliers shall ensure that their Subcontractors comply with this policy for employees working on product supplied to McDonald's. Failure to comply with this policy will be sufficient cause for McDonald's to exercise its right to revoke a supplier's approved status. McDonald's reserves the right, as a condition of continuation of approval, to conduct (or have its designee conduct) periodic, unannounced inspections of suppliers and their facilities and business practices to verify compliance with these standards.

COMPLIANCE WITH APPLICABLE LAWS AND STANDARDS
All business activities of McDonald's suppliers must conform to all applicable national and local legal requirements, customs, and published industry standards pertaining to employment and manufacturing. If statutory requirements and published industry standards conflict, suppliers must, at a minimum, be in compliance with the one which, by law, takes precedence.

EMPLOYMENT PRACTICES
Prison or Forced Labor:
The use of prison or forced labor by a supplier is absolutely forbidden. Likewise, the use of labor under any form of indentured servitude is prohibited, as is the use of physical punishment, confinement, threats of violence or other forms of physical, sexual, psychological or verbal harassment or abuse as a method of discipline or control. Suppliers will not themselves utilize factories or production facilities that force work to be performed by unpaid or indentured laborers or those who must otherwise work against their will, nor shall they contract for the production of products for McDonald's with Subcontractors that utilize such practices or facilities.

Child Labor: The use of child labor by suppliers is strictly prohibited. Suppliers are prohibited from using workers under the legal age of employment for the type of work in the country where the supplier performs work for McDonald's. If the country in which the supplier is doing business does not define "child" for purposes of minimum age of employment, the minimum age of employment shall be 15 years of age, and the employment of any individual in the production of products for McDonald's below that age shall be strictly prohibited. If local law allows the minimum age of employment to be 14 years of age or younger, the minimum age of employment shall be 14 years of age, and the employment of any individual in the production of products for McDonald's below that age shall be strictly prohibited. In either situation, minors between the ages of 14 and 16 may only be employed to work and only be permitted to work during periods of time when they are not required by law to attend school (except as may be permitted under apprenticeship or other similar programs in which the minor is lawfully participating).

Working Hours: Suppliers must ensure that all employees working on products supplied to McDonald's do so in compliance with all applicable national and local laws and with published industry standards pertaining to the number of hours and days worked. Such employees are to be provided with reasonable daily and weekly work schedules and adequate allowance is to be made for time off. Except in extraordinary business circumstances, employees will not be required to work more than either (a) the limits on regular and overtime hours allowed by local law; or (b) 60 hours per week, inclusive of overtime. Adequate time off shall be at least one day off per week, except in extraordinary business circumstances. In the event of conflict between a statute and a published industry standard pertaining to this issue, compliance must be with the one taking precedence under national law.

Compensation: Supplier employees working on product supplied to McDonald's must be fairly compensated and provided with wages and benefits that comply with applicable national and local laws. This includes appropriate compensation for overtime work and other premium pay situations required by applicable national and local laws. If local laws do not provide for overtime pay, suppliers will pay at least regular wages for overtime work.

Non-Discrimination: Suppliers shall implement a policy that conforms to local and national law prohibiting discrimination in hiring and employment practices on the ground of race, color, religion, sex, age, physical ability, national origin, or any other applicable prohibited basis.

Workplace Environment: Suppliers shall provide their employees with safe and healthy working and, where provided, living conditions. At a minimum, potable drinking water, adequate, clean restrooms, adequate ventilation, fire exits and essential safety equipment, an emergency aid kit, access to emergency medical care, and appropriately-lit work stations must be provided. In addition, facilities be constructed and maintained in accordance with the standards set by applicable codes and ordinances.

Notification to Employees: Suppliers shall notify employees of the terms of these standards and post the terms, on the supplier's letterhead and in the local language, in a prominent place accessible to all employees.
INSPECTIONS
By Suppliers: Each supplier shall designate one or more of its management staff to be responsible for monitoring their factories and production facilities, and the production facilities of their Subcontractors used in the production of products for McDonald's, for compliance with the standards set forth herein. Each supplier must conduct such monitoring no less frequently than on an annual basis.
By McDonald's: McDonald's reserves the right to conduct or have its designee conduct unannounced inspections of suppliers' and their business practices, records, facilities, and, where provided by supplier, housing accommodations, as well as private interviews with employees. Suppliers will keep all information necessary to document compliance with these standards readily accessible. Any supplier who refuses to allow such inspections or interviews, or who does not comply with these standards, is subject to immediate termination of its status as an approved supplier.