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SUPPLY AND MANUFACTURING AGREEMENT
(TERMS AND CONDITIONS)
Thank you for your order! We value your business.
Please note that your order is subject to the Terms and Conditions (“T&C of Sale”) of Sale outlined below, which is also available on our website. Whether you are tendering a deposit payment, partial payment on account, full payment, automatic debit from your bank account / credit card, or any other payment method, you are acknowledging, agreeing to, and accepting the T&C of Sale, whether you sign the acknowledgement below or not. Additionally, unless these T&C of Sale are modified in writing and signed by both parties, the T&C of Sale shall be applicable to this and all future transactions between COMPANY and CUSTOMER.
WHEREAS, CUSTOMER wishes to have COMPANY, or COMPANY’s designee, manufacture, and package the Products (as defined below) using the formulas upon the terms and conditions set forth in this Agreement; and
WHEREAS COMPANY and CUSTOMER wish to enter into this Agreement to address the terms of their relationship and the manufacture and sale of the Products to CUSTOMER:
NOW, THEREFORE, the parties agree as follows:
1. Definitions. In this Agreement, the following terms shall have the following meanings:
a. “Product” and “Products” mean the item or items ordered by CUSTOMER from COMPANY (which may later be added to Exhibit A) that are manufactured for CUSTOMER by COMPANY or COMPANY’s designee, pursuant to the terms of this Agreement.
b. “Specifications” shall mean the specifications for the manufacture of the Product, including, but not limited to the specifications for raw materials, packaging materials, labeling, and formulations for the Products, all as modified from time to time by written agreement of the parties. The Specifications for each Product shall be mutually agreed to by the parties and added to this agreement as part of Exhibit B, which shall be attached hereto and are incorporated herein by this reference.
2. Purchase and Sale of Products.
General. During the term of this Agreement, COMPANY shall be CUSTOMER’s supplier of the Products. COMPANY shall use reasonable efforts to supply such Products to CUSTOMER pursuant to orders that are expressly accepted by COMPANY, all in accordance with the terms of this Agreement. COMPANY shall not assign the products’ entire manufacturing process to a third party without informing CUSTOMER and COMPANY shall use commercially reasonable efforts to ensure that there will be no material change in the product’s quality or product safety, or any complication related to manufacturing that affects the CUSTOMER. In the event that a product is banned from sale by the FDA or other governing party, the CUSTOMER is not entitled to a refund of the deposit or final product.
a. Ordering Product. CUSTOMER shall order Products by emailing the COMPANY from time to time and with the information provided by CUSTOMER in such an email, the COMPANY will generate a sales order for approval. Once the sales order is approved by email, a deposit invoice outlining the specific products ordered and the amount of deposit required for the order (“Deposit Invoice”) will be sent electronically. Each order of Product must be made in accordance with the minimum order quantities stated by the COMPANY. Notwithstanding any provision of this Agreement.
b. Effectiveness of Purchase Orders. Upon payment of the Deposit Invoice, CUSTOMER shall be obligated to purchase the Products from the COMPANY specified in the Deposit Invoice and COMPANY shall use commercially reasonable efforts to supply the Products to CUSTOMER in the quantities agreed to by the parties. If there are any deviations from the Specifications at the testing stage and CUSTOMER is notified and approves of said deviations explicitly or approves the order to go to manufacturing, the CUSTOMER is obligated to pay the remaining balance for the Products ordered.
a. General. COMPANY requires a nonrefundable deposit of 50% of the order total to begin production on any order which there shall be no refund. When the ordered product is completed, COMPANY will notify CUSTOMER by sending a final invoice for the remaining 50% of the order, plus any additional charges accrued for artwork, labels, special packaging and freight. Final payment is due upon completion of the Purchase Order and must be received before product can be shipped or picked up or in accordance with specified credit terms. CUSTOMER shall be liable for all charges associated with the order. All invoices that become past due shall be subject to the accrual of interest at the rate of up to 25% annually, which shall be calculated from fifteen (15) days after the invoice is due from CUSTOMER. The interest will continue to accumulate and be added to your monthly statement. The prices for each Product will be set forth in the deposit invoice. All prices do not include any cost for freight. Any costs or charges for freight, insurance or any applicable sales, use, transfer, excise or other taxes, tariffs or custom duties, shall be the responsibility of CUSTOMER.
b. Increases or Decreases in Materials, Other Costs and Changes to Specifications. Notwithstanding Section 4(a), if at any time COMPANY’s documented total cost of a Product, including but not limited to the total cost of all raw materials and other components used in the production of the Product as well as all manufacturing cost to produce a Product, increases by more than five percent (5%), such increased cost, including margin protection, shall be passed on to CUSTOMER in the form of a corresponding price increase for the affected Products. Such price increase shall be reflected in the final Invoice sent to CUSTOMER. Additionally, COMPANY may adjust the price of a Product at any time as a result of agreed upon changes to the Specifications requested by CUSTOMER or required as a result of a change in any state, federal or local law, rule, order, or regulation. COMPANY will provide to CUSTOMER reasonable documentary evidence of such changes in costs on request.
4. Quantities, Delivery and Shipping.
a. Shipping Costs and Terms. All Products shall be shipped FOB Edgewood, New York. Any damage to products while in the possession of the CUSTOMER or a third-party carrier is the sole responsibility of the CUSTOMER. Once shipped from the SMP facilities, the product is wholly owned by the CUSTOMER. The COMPANY is not responsible for shipping/import costs through international customs, or any additional paperwork required for acceptance into other countries. CUSTOMER has the option of electing to ensure the products while the products are in the possession of a third-party carrier, the cost of such insurance will be borne by the CUSTOMER and such costs are in addition to the shipping costs.). CUSTOMER shall be responsible for all costs and expenses incurred in shipping the Products from the COMPANY to the CUSTOMER’s destination(s), even if the COMPANY helps coordinate the shipping. In the event the COMPANY advances payment for such shipping costs or expenses, such costs and expenses shall be added to the COMPANY’s final invoice for the Products and paid for by CUSTOMER. Administration Fees to send shipments from COMPANY are $35 per requested shipment + cost of shipping or CUSTOMER Supplied Shipping Account (preferably UPS).
b. Delivery Dates. Any Delivery dates referenced by COMPANY to CUSTOMER are estimates only and are subject to change and are predicated on conditions existing at the time. COMPANY shall make commercially reasonable efforts to inform CUSTOMER of any known events or conditions that will delay delivery of the Products to CUSTOMER. All orders are to be manufactured or supplied by SMP Nutra, 1 Rodeo Drive, Brentwood, NY, 11717 and shipped in pallets to the warehouse of the CUSTOMER’s choice either using COMPANY’s preferred carrier and paying freight or the CUSTOMER may schedule a pickup at the facility within 72 hours of product completion.
c. Quantities. CUSTOMER agrees that, so long as otherwise in compliance with the applicable Specifications, CUSTOMER shall accept delivery of Products that are within plus or minus ten percent (+/- 10%) of the final quantity specified in the Purchase Order. The CUSTOMER acknowledges that this fluctuation is in accordance with industry standard and the CUSTOMER is responsible for the cost associated with this fluctuation regardless of the size of the order or whether the order is for an initial run. CUSTOMER will be billed for the full number of finished units manufactured, COMPANY will keep four (4) of the units, as the COMPANY needs to keep retainer units for Quality Control as per FDA, CGMP Regulations.
d. Title and Risk of Loss. Title to and risk of loss of the Products shall pass to CUSTOMER upon COMPANY’s delivery thereof to a common carrier at the COMPANY Warehouse.
e. Inspection. CUSTOMER may request a sample of the stock or custom product before shipment of the bulk order. If the CUSTOMER requires more than one sample of a Custom Product, an additional cost will be added to the final invoice. CUSTOMER shall carefully inspect all Products promptly upon the receipt. Any claim for overage, shortage, or visibly damaged Products must be presented to the COMPANY, in writing, within ten (10) business days after Products are delivered to CUSTOMER. Any other claim for breach of warranty or other defect must be presented to the COMPANY in writing, within fifteen (15) business days after receipt of the Products by CUSTOMER and outline the alleged defect in detail. Failure to make a claim within the above specified time periods shall constitute a waiver of any such claim. Claims must be accompanied by supporting documentary proof of the alleged shortage, overage, or defect.
f. Defective Products. CUSTOMER’s claim with respect to defective Products must be made in writing and received by COMPANY within ten (10) business days from the date of discovery. CUSTOMER must also provide COMPANY with a sample of any such defective Product. Once the COMPANY has evidence of the existence of such defect, the COMPANY shall replace defective Product or, at COMPANY’s choice, reimburse CUSTOMER of the product’s cost and any liability supported by evidence arising by such defective product. If the COMPANY learns of any potential safety hazard or unsafe condition relating to any of the products covered by this Agreement, it will promptly advise the other party by the most expeditious means of communication. The COMPANY will promptly communicate all relevant facts to each other and shall cooperatively undertake all appropriate corrective actions necessary to address the safety or quality concern. The parties shall cooperate in communicating with the public and with governmental agencies. Where possible, each party shall consult the other prior to making any statements to the public or to a governmental agency. However, in no event shall anything in this section preclude a party from taking such action as may be required under any applicable state or federal law or regulation. COMPANY warrants that the products shall be free from defects in workmanship and/or materials and shall conform in all material with respect to the products. CUSTOMER shall be responsible for administering consumer complaints or claims relating to the products safety and complications and COMPANY shall cooperate with CUSTOMER requirements. The CUSTOMER agrees to indemnify COMPANY and defend and hold it harmless from and against any third party claims, suits or demands caused by (a) CUSTOMER’s action or inaction after the products have been shipped by COMPANY and/or (b) a defect in the specifications or product literature.
5. Payment and Invoices.
a. Payment. All payments shall be made by check, credit card or wire transfer to the COMPANY’s designated bank account. CUSTOMER shall pay for Products with an initial nonrefundable deposit of 50% of the total Purchase Order (P.O.) price upon P.O. placement, with the remainder due upon completion of the order, and prior to release by the COMPANY. If any amount is not paid in full when due, the COMPANY may seek payment in full of CUSTOMER for any components, raw materials, work in process or finished goods of the Products. Once CUSTOMER pays for such components, raw materials, work in process or finished goods of the Products, the COMPANY will ship same to CUSTOMER at CUSTOMER’s expense. CUSTOMER is responsible for any sales, use, VAT, GST, or other taxes or duties, however designated, except for taxes related to the COMPANY’s net income. If the customer initiates/completes a chargeback on payment made by credit card, the penalty will be the processing fee plus an additional $500 added to the final invoice. CUSTOMER shall be liable for all charges associated with the order.
b. Invoices. The COMPANY shall issue a final invoice to CUSTOMER for Products to be shipped (including any other amounts due to the COMPANY). The COMPANY shall also have the right to issue an invoice on the date the Products are ready for shipment, even if CUSTOMER fails to pick up or take delivery of the Products on such date.
c. Overdue Invoices. In the event CUSTOMER owes any money to the COMPANY for any reason and any such amount remains unpaid to the COMPANY more than 15 days after the due date stated by the COMPANY, CUSTOMER agrees to pay interest on any unpaid amount at a rate of or 25% per annum from the past due date until the amount owed, and all interest associated therewith, is paid in full to the COMPANY. It is provided further that the COMPANY may suspend orders and deliveries under any order until all overdue amounts have been paid in full.
6. All intellectual property rights, or rights that rank on a par with these, to the Products provided by COMPANY to CUSTOMER belong to COMPANY.
a. Notwithstanding Clause 6, to the extent the CUSTOMER provides its own unique formulation, or any other designs or materials created independently prior to, or otherwise than in connection with, the Agreement, the CUSTOMER retains the intellectual property rights in such CUSTOMER materials.
b. The COMPANY shall not use materials of any kind made available by CUSTOMER, including CUSTOMER Trademarks, for any purpose other than manufacturing the Products for supply to CUSTOMER, shall not make available any such materials to third parties and shall return them promptly to CUSTOMER on request. For the avoidance of doubt, COMPANY shall not produce or supply any Products bearing any CUSTOMER Trademarks for any other person whatsoever and shall not produce or supply to any person any products which infringe any CUSTOMER Trademarks or assist any other person to do so.
c. The COMPANY shall not, without CUSTOMER’s prior written approval, offer for sale, sell or supply the Products bearing CUSTOMER Trademarks to third parties under any circumstances, including if the Products are surplus to CUSTOMER’s requirements, or if CUSTOMER has terminated the Agreement relating to these Products, unless otherwise stated in this agreement.
7. CUSTOMER’s Responsibility for Products. Other than a breach by the COMPANY of its warranties in Section 8(a) and 8(b), CUSTOMER acknowledges and agrees that CUSTOMER is solely responsible for all aspects of the Products, including but not limited to, any label content, packaging materials, and all marketing and promotional claims made about the Products in any forum or media. Additionally, CUSTOMER is responsible to see that the Products, including, but not limited to, any Product label, formula, ingredient, component, raw materials, or marketing materials fully comply in every respect with all local, state and federal laws, statutes, rules, orders, and regulations applicable to the Products and their sale in those states, countries or other jurisdictions in which the CUSTOMER sells the Products.
- If COMPANY is printing labels as part of the order, COMPANY will guarantee the label production will coincide with production of the product. The CUSTOMER should make sure they are introduced to a graphic designer so they can work with them hand in hand to make the desired label (s). The CUSTOMER and graphic designer will work with the compliance officer to get the label(s), print ready. The CUSTOMER should have an idea of what they want the label to look like and maybe an example or two.
If COMPANY is not printing labels as part of the order, then the order is to be paid in full when the production of the ordered product is complete. Such payment is not contingent upon label completion or application to the product.
CUSTOMERS supplying artwork for COMPANY to print labels or packaging must tender their ‘print ready’ artwork to COMPANY within two weeks after their order is placed. Failing to provide “print ready” artwork within the two-week timeframe will result in the CUSTOMER’s order incurring additional fees for revisions. A sales representative from the company will send the following for completion once the order is submitted and payment is confirmed: supplement fact panel, die line, and artwork guidelines. In addition, SMP can only print FDA compliant labels. CUSTOMERs supplying artwork will need a compliance officer. CUSTOMER will ensure they are in contact with the compliance officer and send the artwork to the compliance officer when ready. If any changes are to be made after the first submission, the CUSTOMER will ensure that it is done promptly and as accurate as possible to resubmit for approval from compliance. This may take up to three days. COMPANY will not be responsible for any delays resulting from the CUSTOMER’s failure to provide “print ready” artwork within the specified period. In these cases, a final invoice for artwork, special packaging, freight and other extras will be provided when the project is completed and ready to ship. The CUSTOMER is responsible for all copy, directions, warnings or any additional information appearing on the label. COMPANY is only responsible for providing the “Supplemental Facts” panel and label dimension lines.
Once labels are print ready, CUSTOMER will contact the printing department at email@example.com. CUSTOMER must contact the printing department as soon as the label is ready for print. CUSTOMER will inform the printing department what style label they wish to have produced (I.E gloss metallic, spot varnish).
CUSTOMERs supplying pre-printed labels must deliver the pre-printed labels to COMPANY’s offices within eight weeks after placing an order. CUSTOMER will need to tell their print company to use Unwind Position Four (4) for labels to come on a core and wound up correctly for label application. If CUSTOMER fails to provide pre-printed labels within the eight-week time frame, ordered products will be manufactured, packaged, and invoiced without labels. In addition, if CUSTOMER does not provide enough pre-printed labels to complete the order, all units both labeled and unlabeled will be shipped and billed to the CUSTOMER and an additional charge will be added for re-labeling at the CUSTOMERs request. CUSTOMER shall be required to meet the invoice terms requiring full payment within five (5) business days of the invoice. CUSTOMERs requesting to have labels applied to the product after the final invoice is issued will be charged an additional $2.00/label processing fee to reschedule the products for labeling.
b. Raw Materials. COMPANY will accept raw materials supplied by CUSTOMER for the manufacture of CUSTOMER’s product with the understanding that COMPANY is relying completely on the Certificate of Analysis provided with the raw materials to determine the content of the raw materials. COMPANY shall not be required to conduct additional testing to verify the information stated on the Certificate of Analysis. Only at the written request of CUSTOMER, which must include CUSTOMER’s agreement to pay all costs associated with such testing and with an officer’s signature on a separate agreement, will COMPANY test raw materials supplied by the CUSTOMER. COMPANY shall not be responsible for inferior, contaminated, or adulterated raw material or mistakes on the Certificate of Analysis. All CUSTOMER Supplied Raw Materials are subject to a $175 testing fee to pass all cGMP and FDA Requirements If testing of finished product reveals it does not meet specifications due to inferior raw materials supplied by the CUSTOMER, CUSTOMER will hold COMPANY harmless and assume all liability and costs associated with the manufacturing of the product. CUSTOMERs supplying raw materials shall supply enough material to manufacture the product allowing for the overage required in the manufacturing process. COMPANY shall not be responsible for shortages if the CUSTOMER does not supply enough raw materials to complete the project.
c. Custom Product Research and Development.
- Formulas must be submitted for evaluation to the Research and Development team and you sales representative for pricing. Once approved, pricing will be delivered within 5-7 business days. The price will then be confirmed by the CUSTOMER and sample requests will be made. CUSTOMER will be invoiced for up to three (3) rounds of custom samples starting at five thousand dollars ($5,000.00), three thousand five hundred dollars ($3,500.00) to be credited back to the 50% deposit to being a full order and one thousand five hundred dollars ($1,500.00) to be absorbed for the research and development, should the product be successfully created. Approximately 15-20 business days after payment is received, the 1st set of samples will be shipped and each additional sample will take another approximated 15-20 business days. If after three (3) sets of samples are rendered and additional samples are needed it will be priced at five hundred dollars ($500.00) for each additional sample. If the product fails and does not make it into production, the five-thousand-dollar ($5,000) research and development expense will be retained by the COMPANY.
Once the CUSTOMER approves the samples, a Custom Product Specification Sheet is drafted to be approved by the CUSTOMER. Once the specification sheet is approved and signed by the CUSTOMER, a full order invoice will be sent to the CUSTOMER which requires a signature and the remainder of the 50% deposit to be put into production. The CUSTOMER has up to 30 days from the date of the invoice being sent to pay the 50% deposit on the full order or the research and development deposit will be retained by the COMPANY and the project will be cancelled. Once the deposit is paid, the master batch of production will take approximately 12-14 weeks, followed by 2-4 weeks to package, finish final testing, and ship.
d. Communications. The CUSTOMER has 90 days to provide all requested information and respond to all inquiries made by the company for production purposes. If the CUSTOMER does not respond by the allotted 90 days to all communication made by the company, the company reserves the right to cancel the purchase order and retain the deposit provided.
e. Product Expirations.
- A product’s expiration can only be properly determined by conducting a stability study. In the event the CUSTOMER does not provide the results of a stability study, the product will be issued a “manufactured on” date. CUSTOMERs requesting an expiration date be affixed to the product is certifying that the product and packaging ordered has been stability tested in accordance with industry standards prior to placing the order and that the product and packaging specifications provided by CUSTOMER are identical to the specification used for stability testing. COMPANY is not responsible for stability testing the product, unless COMPANY and CUSTOMER agree to the contrary in writing. If CUSTOMER’s packaging and/or product specifications have not been stability tested, or the specifications provided to COMPANY deviate from those used in the stability test, CUSTOMER agrees to hold COMPANY harmless and indemnify fully the COMPANY against any and all claims for damages or loss arising out of the product becoming unstable, unmarketable, less effective than claimed or intended, or otherwise deviating from the specifications, which occurred as a result of the products instability after manufacturing.
The COMPANY will guarantee up to one year of shelf life for ALL stock products ordered. If a longer shelf life is needed when ordering, the CUSTOMER must order a custom build to suit the needs of the shelf life it requires.
f. Storage and Disposal Fees. Storage Fees are not part of the Deposit Invoice or initial Final Invoice. Inactive inventory stored in COMPANY’s warehouse will be billed at the rate of $50.00 per pallet per week, unless otherwise agreed upon. Any materials held longer than 60 days without payment will be considered abandoned and will become the property of COMPANY. The COMPANY has the right to sell goods that are not paid for after 60 days and CUSTOMER waives any and all claims it has or may have against COMPANY for selling the product after it is abandoned. If COMPANY is unable to sell abandoned product, CUSTOMER remains liable for paying all storage fees. In addition, there will be a $250 pallet disposal fee for any abandoned product or is the CUSTOMER goes out of business and requests SMP to dispose of the product. CUSTOMER agrees to all additional storage fees herein. If CUSTOMER abandons finished product at COMPANY’s warehouse for more than one hundred and twenty (120) days, CUSTOMER, hereby, assigns all rights in and to the product’s formula, trademarks, trade dress, product labeling, copyrights and other intellectual property rights (the “IPR”) to COMPANY, without restriction, worldwide. CUSTOMER further agrees to complete a trademark and copyright assignment with the United States Patent and Trademark Office, and U.S. Copyright Office, as applicable, and shall not oppose or interfere with the use by COMPANY or its licensee or assignee of any of the above IPR.
g. Case Labels. For all Fulfilment type request, i.e., printing FBA/UPS/Custom labels and affixing said labels to individual cases, will be a service fee of $2.50 per case/label. This will also apply to Amazon freight requests to print and affix labels to individual cases and then affix a pallet label for Amazon shipping. On all completed orders, there will be a charge of .25 cents per unit on all requests to replace UPC barcodes on individual units as well as a .25 cents per unit fee to add or remove lid stickers.
h. Graphic Designs. We are proud to have the extension of SMP into all our CUSTOMER graphic design needs. We provide full-service designs and graphics for Labels according to our CUSTOMER’s needs. For all services provided by the SMP team, the invoice must be paid in full before the project is initiated. The CUSTOMER may make up to three (3) edits to the final approved graphic. Any additional edits will require payment of one hundred ($100.00) per hour. All CUSTOMER supplied labels that request retouching by the SMP team will be an added one hundred ($100.00) per hour.
i. Returns. Although SMP Nutra does not typically accept product returns directly from consumers or third-party companies, and SMP Nutra reserves the right to refuse any returns from consumers and third-party companies, in the event that a product is returned to SMP Nutra from a consumer or a third party, there will be a five (5) dollar processing fee per individual product. The CUSTOMER will be notified of the return, as well as, the if the product is to be released back to the CUSTOMER or to be destroyed.
8. Product Warranty. The COMPANY warrants to CUSTOMER as follows:
a. Compliance with Specifications. Each Product supplied hereunder shall be manufactured in accordance with GMP Standards, and COMPANY shall conform to CUSTOMER the specifications of all raw material used are sourced from approved manufacturer following strict guidelines for the production, repackaging, control, storage and shipment of cosmetic ingredients, products and raw materials.
b. cGMP. COMPANY shall manufacture all Product(s) in accordance with current Good Manufacturing Practices (hereafter “cGMP”) of the United States (“US”) Food and Drug Administration applicable to the Products.
c. Disclaimer of Warranties. EXCEPT AS PROVIDED IN SECTION 9(a) and 9(b), COMPANY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IT IS THE SOLE RESPONSIBILITY OF CUSTOMER TO DETERMINE THE ADEQUACY OF ALL PRODUCTS FOR ANY INTENDED USE OR SPECIFIC PURPOSE. COMPANY SHALL NOT BE RESPONSIBLE FOR ANY LOSS OR LIABILITY ARISING OUT OF OR RESULTING FROM CUSTOMER’S POSSESSION OR SALE OF THE PRODUCTS, REGARDLESS OF WHETHER SUCH LIABILTY IS BASED IN TORT, CONTRACT OR OTHERWISE AND WHETHER OR NOT SUCH LOSS IS FORESEEABLE. IN NO EVENT SHALL COMPANY, OR ANY OF ITS AGENTS OR AFFILIATES, BE LIABLE TO CUSTOMER OR ANY THIRD PARTIES, FOR ANY INCIDENTAL, INDIRECT, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER SPECIAL DAMAGES, WHETHER OR NOT CAUSED BY OR RESULTING FROM ANY NEGLIGENCE OR BREACH OF ANY OBLIGATIONS HEREUNDER BY COMPANY, SUFFERED BY CUSTOMER, ANY END USER AND/OR OTHER THIRD PARTY THAT IN ANY WAY RELATE TO THE ACTIONS CONTEMPLATED BY THIS AGREEMENT AND/OR RESULTING FROM THE USE OR INABILITY TO USE THE PRODUCTS, LOSS OF GOODWILL OR PROFITS, LOST BUSINESS HOWEVER CHARACTERIZED, AND/OR FROM ANY OTHER CAUSE WHATSOEVER, EVEN IF COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR COMPANY’S GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT, COMPANY’S MAXIMUM LIABILITY TO CUSTOMER UNDER THE AGREEMENT SHALL NOT EXCEED THE AMOUNTS PAID BY CUSTOMER FOR THE PRODUCTS DURING THE PREVIOUS ONE (1) YEAR PERIOD. THE REMEDIES AVAILABLE TO CUSTOMER UNDER THIS AGREEMENT ARE EXCLUSIVE. THE PARTIES AGREE THAT THE PROVISIONS OF THIS AGREEMENT ALLOCATE THE RISKS BETWEEN COMPANY AND CUSTOMER AND THAT COMPANY’S PRICING REFLECTS THIS ALLOCATION OF RISK.
9. Representations and Covenants of CUSTOMER. CUSTOMER represents and warrants to COMPANY and its Affiliates as follows:
a. Compliance with Laws. Each Product shall, if manufactured to the Specifications, comply in all respects with all laws, rules, regulations and orders applicable to Products and their sale in those states, countries or other jurisdictions in which CUSTOMER sells the Products. Also, the labelling of the Products and any requirements in the Specifications for such Products fully comply with all applicable laws, rules, regulations and orders relating to the lawful and safe shipping, handling, storage, sale and use of the Products. COMPANY shall not be responsible for any failure of the Products to comply with such requirements, except as a result of a breach by COMPANY of the warranty stated in Section 8(a) and 8(b).
b. Regulatory for international sales CUSTOMER shall take care of and shall be the only responsible for any approval or registration of the Product(s), Formulation, Labels and/or claims for import, marketing, sale, and/or distribution purposes in accordance with any local Regulatory Authority in the Country of import. COMPANY shall assist CUSTOMER with the required documentation for registration, provided any legalisation cost shall be at the own cost of CUSTOMER.
c. Use of CUSTOMER’s Trade Name. CUSTOMER shall use its own trademarks or trade name(s) in relation to the Products and shall be responsible for obtaining and maintaining at its own expense any registration necessary or appropriate for such trademarks or trade name(s).
d. The COMPANY Name, Emblem or Symbol. CUSTOMER shall not use or make reference to, or authorize others to use or make reference to, the names, logos, symbols, trademarks, trade names, service marks or products of COMPANY or any of its Affiliates in relation to the Products or in any other manner whatsoever.
e. No Intellectual Property Infringement. CUSTOMER is the owner of all right, title and interest in and to, or the licensee of, any trademarks, trade names, service marks, logos, symbols or copyrighted materials or other intellectual property used by CUSTOMER in association with each Product, their labels, packaging, or any marketing or promotional materials and that such use will not constitute an infringement of the intellectual property rights of any third party and CUSTOMER hereby grants to COMPANY the right to use such intellectual property in the manufacture of the Goods. In relation to any such intellectual property associated with the Goods that is licensed from a third party by CUSTOMER, CUSTOMER warrants and represents to COMPANY that the terms of such license permit CUSTOMER to authorize COMPANY to use the same in accordance with this Agreement.
f. Visitation of COMPANY’s Facilities. During the term of this Agreement, CUSTOMER may designate one or more CUSTOMER employees who shall be allowed, upon execution of an appropriate confidentiality agreement, to visit COMPANY’s facility during normal business hours upon reasonable advance notice for the limited purposes of inspecting the quantity and quality of the Products. In the event the Products are produced in a facility not owned by COMPANY, COMPANY will use commercially reasonable efforts to have such facility inspected, upon request.
a. Indemnification by COMPANY. COMPANY agrees to indemnify, defend and hold CUSTOMER, its agents and its employees harmless from and against all claims, liabilities, costs, damages, losses, judgments for damages or expenses (including reasonable attorney’s fees) caused by, arising out of, or resulting solely from a breach by COMPANY of the warranties stated in Section 8(a) and 8(b). Notwithstanding the foregoing, COMPANY shall have no liability to the extent that any claims, liabilities, costs, damages, losses, judgments for damages or expenses are caused, in whole or in part, by CUSTOMER’s breach of this Agreement or the negligence or intentional misconduct of CUSTOMER, its agents or its employees.
b. Indemnification by CUSTOMER. CUSTOMER agrees to indemnify, defend, and hold COMPANY, its officers, directors, shareholders, agents and employees, or any Affiliates thereof, harmless from and against all claims, liabilities, costs, damages, losses, judgments for damages or expenses (including reasonable attorney’s fees) caused by, arising out of, or resulting from (i) any breach of this Agreement by CUSTOMER, (ii) any warranty or representation made by CUSTOMER being incorrect or breached in any respect, or (iii) the marketing, distribution and/or sale of the Products, including but not limited to product liability claims, recalls and class action lawsuits, except to the extent solely caused by COMPANY’s breach of the warranties stated in Section 8(a) and 8(b). Notwithstanding the foregoing, CUSTOMER shall have no liability to the extent that any claims, liabilities, costs, damages, losses, judgments for damages or expenses are caused solely by COMPANY’s breach of this Agreement or the gross negligence or intentional misconduct of COMPANY, its agents or its employees.
c. Procedures. If any action, suit, proceeding or claim is commenced in respect of which a party may demand indemnification, the affected party shall notify the other party to that effect with reasonable promptness. The indemnifying party shall have the opportunity to defend against the action, suit, proceeding or claim. The indemnified party shall have the right to employ its own counsel and participate in the defense of any matter at its own expense. If the indemnifying party fails or refuses to defend a claim for which indemnification is provided under this Agreement, the indemnified party may defend at the expense of the indemnifying party. Each party shall render to the other assistance as may be reasonably required in connection with the defense of any such matter.
11. Insurance. CUSTOMER shall, during the term of this Agreement, purchase and maintain in full force and effect complete company insurance coverage with insurance companies rated A- or better in Best’s Insurance Guide, as provided for below.
a. Product Liability Limits. Initially CUSTOMER shall carry products liability insurance with cumulative limits of not less than One Million Dollars ($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate, insuring against any and all products liability with respect to the Products. Once sales of the Products collectively reach $10,000,000 in one policy year, CUSTOMER shall increase the cumulative limits of the amount of products liability insurance it carries to not less than Five Million Dollars ($5,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the aggregate.
b. General Commercial Limits. General Commercial liability insurance with aggregate limits of not less than One Million Dollars ($1,000,000.00).
c. Additional Insured Endorsement. All CUSTOMER insurance policies required hereunder shall list COMPANY as an additional insured and shall contain a provision that the insurer shall give at least sixty (60) days’ notice to both parties in writing in advance of any cancellation or lapse of any policy. CUSTOMER shall deliver an Additional Insured Endorsement to COMPANY within forty-five (45) days of executing this Agreement. CUSTOMER agrees that its obligations to list COMPANY as an additional insured on the policies described above shall continue for a period of five (5) years after the date of termination of this Agreement. This obligation shall survive the termination of this Agreement.
a. General. During discussions with each other, COMPANY and CUSTOMER will be furnished or may otherwise come upon information that is proprietary to the other, including but not limited to vendor contacts, research, product-development plans, product processes, formulas or other non-public information. Due to each party’s inability to determine when the other’s information may be confidential, both parties covenant to treat as confidential all information which they share or which may otherwise be discovered during contacts with each other (“Confidential Information”). The parties now and forever covenant to keep confidential all exchanged information, and, without the other party’s prior written consent, they covenant not to disclose Confidential Information to any other person in any manner, in whole or in part, directly or indirectly, unless required under a court order or by subpoena (in such event, the parties shall immediately notify the other in writing of such a requirement).
b. Employees. Each party shall inform all of its employees to whom any such Confidential Information is disclosed of the provisions of this Section 12 and shall take reasonable steps to ensure that they observe these confidentiality provisions.
c. Exceptions. The obligations of each party under this clause shall not apply to any information which: (i) is public knowledge at the time of this Agreement or subsequently becomes public knowledge through no act or failure to act on the part of the recipient, its employees, its agents or its Affiliates; (ii) is known to the recipient at the time of disclosure or which is subsequently disclosed to the recipient by a third party who is not under an obligation to maintain the secrecy of the information; (iii) that can be shown by written documentation to have been developed by a party independently of and without reference to the Confidential Information; or (iv) is required to be disclosed by law.
d. Enforcement of Covenants. The parties acknowledge that in the event of a breach of the covenant of confidentiality, the non-breaching party would be irreparably and immediately harmed and could not be made whole by an award of monetary damages. Accordingly, it is agreed that, in addition to any other remedy in law or equity, the non-breaching party will be entitled to seek a temporary restraining order and pre-judgment injunction, to be granted without bond and without proof of actual damages, to halt any improper disclosure of Confidential Information.
13. Term and Termination.
a. Term. This Agreement shall commence on the Effective Date and will continue for a period of one (1) year (the “Initial Term”). Upon expiration of the Initial Term, this Agreement shall automatically renew for successive five-year terms, unless the terminating party gives written notice of its intention not to renew this Agreement no later than ninety (90) days prior to the expiration of the Initial Term or any renewal term.
b. Termination Upon Default. At any time during the term of this Agreement, either party may terminate this Agreement by written notice to the other party if the other party is in material default in the performance of any of its obligations hereunder and fails to remedy such default(s) within: (i) in the case of payment defaults, thirty (30) days after receiving written notice of such payment defaults; or (ii) in the case of any other default, ninety (90) days after receiving written notice of such default(s).
c. Termination for Cause.
- Either party may immediately terminate this Agreement by written notice to the other: (i) if the other party has ceased its business activities or has otherwise begun winding up its business affairs; (ii) if bankruptcy, reorganization, arrangement or insolvency proceedings or other proceedings for relief under any bankruptcy or similar law or laws for the relief of debtors are instituted by or against the other party and are consented to or are not dismissed within sixty (60) days after institution; (iii) if a custodian, liquidator, receiver or trustee is appointed for the other party or the major part of its property and is not discharged within sixty (60) days after appointment; or (iv) if the other party becomes insolvent or bankrupt, is generally not paying its debts as they become due, makes an assignment for the benefit of its creditors or makes any comparable arrangement with its creditors, (v) change in the product’s quality, any other products safety, or any Government investigations or recall of the products.
d. Effect of Termination; Survival of Certain Provisions. Termination for whatever cause of this Agreement shall be without prejudice to the rights of either party arising hereunder or as a result of any default or breach of obligation hereunder that have accrued prior to the date of termination. In the event of termination, CUSTOMER shall receive, and pay COMPANY for, all finished Products ordered and produced up to and including the effective date of termination. With respect to unfinished Products, CUSTOMER shall purchase from COMPANY, at actual cost, all raw materials and packaging components purchased by COMPANY for use in the production of Products. With respect to any work in process started before the day the termination is effective, CUSTOMER shall pay to COMPANY the actual cost of processing (including labor, supplies, utilities, other direct costs, and an allocation of overhead, all as reasonably determined by COMPANY). The termination of this Agreement shall not affect any of the provisions of this Agreement that by their nature are intended to continue after termination.
14. Force Majeure. In the event that either party is unable to perform any of its obligations under this Agreement because of war, acts of terrorism, civil riot or insurrection, natural disaster, actions or decrees of governmental bodies, fire, flood, explosion, pandemic ,strike, labor disputes, labor shortages, shortage or other unavailability of raw materials or packaging components, equipment or tooling failures, picketing, lockout, transportation embargo or failures or delays in transportation, strikes or labor disputes affecting supplies, acts of God or any other event or cause beyond the reasonable control of the affected party (a “Force Majeure Event”), all obligations of the affected party under this Agreement shall be immediately suspended (except for the obligation to make payments on invoices or other amounts due under this Agreement), provided that the affected party promptly gives the other party notice of the occurrence of the Force Majeure Event. If practicable, the affected party shall use reasonable efforts to eliminate the obstacle(s) preventing its performance. Upon cessation of any Force Majeure Event, this Agreement shall continue in full force and effect and each party shall resume its performance under the Agreement as soon as possible. If a Force Majeure Event asserted as a basis of a party’s nonperformance continues to prevent performance for a period of 90 days, the other party may terminate this Agreement by giving written notice to the nonperforming party before the nonperforming party resumes performance.
15. Change of Ownership. Each party shall inform the other immediately in the event of there being any change in the control or ownership of all or a substantial part of the ownership interest in the party or its business.
16. Assignment. CUSTOMER shall not assign, transfer or subcontract this Agreement or any part of this Agreement, directly or indirectly, without COMPANY’s prior written consent (which shall not be unreasonably withheld); provided, however, that CUSTOMER may assign its rights and obligations under this Agreement to any present Affiliate of CUSTOMER without the prior written consent of COMPANY, in which case the CUSTOMER shall not be released from any of its obligations, financial or otherwise, under this Agreement. For purposes of this Agreement, “Affiliate” shall mean any company controlling, controlled by or under common control with the party in question. This Agreement shall be binding upon, inure to the benefit of and be enforceable by and against the respective successors and permitted assigns of each of the parties to this Agreement.
17. Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed to have been duly given upon the earlier of: (i) when personally delivered; or (ii) when sent by express delivery service with charges prepaid and receipt requested to the parties’ respective addresses set forth above, or, if those services are not available, when mailed (postage prepaid) by certified mail with return receipt requested. Any party may change its address by written notice to the other party.
18. Amendments and Waivers. This Agreement may only be amended by a written instrument specifically referring to this Agreement and the term that is being amended, that is signed by each party to this Agreement or, in the case of a waiver, by or on behalf of the party waiving compliance. The failure of any party at any time to require performance of any provision in this Agreement shall not affect the right at a later time to enforce that or any other provision. No waiver by any party of any condition, or of any breach of any term contained in this Agreement, in any one or more instances, shall be deemed to be a further or continuing waiver of that or any other condition or breach. No course of dealing between the parties or usage of trade shall be effective to amend, supplement, modify or otherwise alter, in whole or in part, the express terms of this Agreement.
19. Severability. This Agreement shall be interpreted in all respects as if any invalid or unenforceable provision were omitted from this Agreement. All provisions of this Agreement shall be enforced to the fullest extent permitted by law.
20. Entire Agreement. This Agreement, together with its Exhibits, contains the entire agreement and understanding of the parties and supersedes all prior agreements, negotiations, arrangements and understandings relating to the subject matter of this Agreement. No representation, warranty, promise, inducement or statement of intention has been made by any party to this Agreement that is not embodied in this Agreement or the Exhibits and neither party shall be bound by or liable for any other alleged representation, promise, warranty, inducement or statement of intention. COMPANY’s Affiliates are not parties to this Agreement, but such Affiliates are entitled to the protections and rights afforded to them as provided in this Agreement.
21. No Agency. This Agreement does not in any way create the relationship of principal and agent or employer and employee between COMPANY and CUSTOMER. Under no circumstances shall COMPANY or its employees be considered to be the agents or employees of CUSTOMER or visa versa. Neither COMPANY nor CUSTOMER shall act or attempt to act or represent itself directly or by implication, as agent or employee of the other or in any manner, assume or create, or attempt to assume or create, any obligation on behalf of or in the name of the other and will not make any representations, guarantees or warranties on behalf of or in the name of the other with respect to any Product or otherwise.
22. Governing Law and Disputes. The construction, validity and performance of this Agreement shall be governed in all respects by the laws of the State of New York, without regard to its conflicts of laws provisions. Any dispute arising under or affecting this Agreement shall be resolved exclusively by a state or federal court located in Suffolk County, New York. The parties consent to jurisdiction and venue in such courts.
23. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Scanned PDF signatures shall be binding unless or until original signatures are obtained.
24. Interpretation. The section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement.