SMP Nutra Vendor Agreement
WHEREAS
Supplement Manufacturing Partner, Inc. d/b/a SMP Nutra, (“SMP”) is engaged in
the manufacture, distribution, and sale of vitamins, dietary
supplements, nutritional products,
and other healthcare products
(hereinafter referred to as “Products”) to Customers.
WHEREAS
Vendor is engaged in the formulation, testing,
manufacture, packaging, and distribution of dietary supplements.
WHEREAS
SMP desires to have Vendor manufacture, package, and supply to SMP the Products
from Vendor’s distribution facility under the following Terms and Conditions.
NOW,
THEREFORE, in consideration of the premises and mutual agreements hereinafter
set forth, the parties hereto, intending to be legally bound, hereby agree as
follows:
1.
Definitions.
1.1 “Act”
shall mean the United States Federal Food, Drug and Cosmetic Act, 21 U.S.C. §§ 100-190 et seq., as
amended, and regulations promulgated thereunder.
1.2 “Party”
or “Parties”. SMP and Vendor may each be referred to herein
individually as a “Party” and collectively as the “Parties”.
1.3 “Third
Party” means any Person other than Vendor or SMP or either of
their related entities or Affiliates.
1.4 “Affiliate” shall
mean, with respect to any given Person, (A) any other Person at the time directly or indirectly controlling, controlled by or under common control with that Person, (B) any
other Person of which that Person at the time owns or has the right to acquire,
directly or indirectly, 10% or more on a consolidated basis of any class of the
capital stock or other ownership interest, or;
(C) any other Person which at the time owns or has the right to acquire, directly
or indirectly, 10% or more of any class of capital
stock or other ownership interest of that Person. For purposes of
this definition, “control” means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
1.5 “Customer” means
(i) any Person and any Affiliate thereof, who is a
customer of SMP, who is not currently a customer of Vendor, and (ii) any Person
and any Affiliate thereof who becomes a customer of SMP or its Affiliates from
the date of execution of this Agreement until the end of the Agreement Term and
is not at that time a customer of Vendor.
1.6 “Facility” means
Vendor’s manufacturing facility used by Vendor in the manufacture, packaging
(including labeling), testing and storage of Products or materials utilized in
the manufacture and packaging of Products (including quality control)
hereunder.
1.7 “FDA” shall
mean the United States Food and Drug Administration in the Department of Health
and Human Services or any successor agency.
1.8 “Governmental Authority” means any court, tribunal,
arbitrator, agency,
commission, official or other instrumentality of the United States, Puerto Rico
or any U.S. State having lawful jurisdiction over the Products and any court,
tribunal, arbitrator, agency, commission, official or other instrumentality of
any other country as may be mutually agreed upon in writing by the parties.
1.9
“Master
Documentation” means collectively the Master Batch
Records, Master Packaging Records, Master Process Controls, Raw Material
Specifications, Packaging Material Specifications, Product (Bulk and Finished)
Specifications, Raw Material Test Methods, Packaging Material Test Methods,
Product Test Methods, Test Method Validation Reports, Manufacturing
Validation Reports, Packaging Validation Reports, Stability Studies supporting
Expiration Dating, Cleaning Validation Reports and any other testing or
documentation prepared in the ordinary course of business in support of the
Product.
1.10
“Price” means the price listed in
Purchase Order(s) which will be charged by Vendor.
1.11
“Products”
means the Products listed in Purchase Order(s) which will
be ordered by SMP, and manufactured, packaged, and supplied by Vendor.
1.12
“Recall”,
with respect to any Product, shall mean a “recall”, “correction”, “stock recovery” or “market withdrawal”, as those terms are defined in 21 CFR 7.3, as the same may be
amended from time to time, and shall include any post-sale warning or mailing
of information regarding such Product, including those warnings or mailings
described in 21 CFR 200.5.
1.13
“Specifications”
mean the specifications for the manufacture of the Products
including, but not limited to the specifications for raw materials, packaging
materials, labeling, and formulations for the Products. The Specifications for
each Product shall be mutually agreed to by the parties and shall be deemed as
a part of this Agreement of Purchase Order.
2. Product Manufacture and Supply.
2.1
Vendor’s Responsibilities. Vendor
shall manufacture and sell Products
to SMP on the terms and conditions set forth herein. Vendor shall, at all times, manufacture,
produce, and supply Products for SMP which meet and comply with the Specifications, FDA, current Good Manufacturing
Practices (“cGMP”), quality requirements and other the requirements set forth
in this Agreement, and any other applicable laws or regulations governing
Vendor’s business and operations.
2.2
Supply
of Raw Materials. Vendor shall be responsible for
ordering, purchasing, testing, and supplying all raw materials necessary for
the manufacture of Products at Vendor’s own expense unless stated otherwise.
Vendor will ensure to use and ship raw materials, components, and Product in
First In First Out (FIFO) order, and for Product with expiration dates, First
Expired First Out (FEFO) order.
2.2.1
Vendor shall be responsible for
inferior, contaminated, or adulterated raw material or mistakes on the
Certificate of Analysis (hereinafter referred to as “COA”) which shall be
provided by Vendor.
2.2.2
In the event that SMP supplies any of
the raw materials, components, or bulk Products which will be used for Products
ordered by SMP, Vendor will store the materials at no cost to SMP and will
store all such materials following the Quality Agreement herein. Vendor shall provide SMP with a monthly
report no later than the fifth (5th) business day of each month, which records
the monthly detailed usage of raw materials provided by SMP and the quantity of
remaining raw materials, until the manufacturing of Products is finished.
2.2.3
Only
at the written request of SMP, which includes SMP’s agreement to pay certain
reasonable costs associated with testing of the raw materials which are
supplied by SMP, will Vendor test such raw materials and send SMP the results.
In the events that Vendor tests the raw materials supplied by SMP without SMP’s
written request, the cost of the testing shall be at Vendor’s own expense and
SMP shall not be billed.
2.2.4
If SMP
supplies raw materials, SMP will supply enough material to manufacture the
Product allowing for the overage required in the manufacturing process. Vendor
shall notify SMP, should SMP not supply enough raw materials to complete the
project, within three (3) business days after the shortage occurs.
2.3
Each
order has the possibility of a ten percent (10%) +/- fluctuation for the final
quantity of Product. SMP acknowledges that this fluctuation is in accordance
with industry standards and SMP 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. SMP will be billed for the full quantity manufactured.
2.4
In the
event that the final quantity produced is less than ninety percent (90%) of the
quantity on Purchase Order(s), Vendor shall notify SMP immediately and SMP
shall have the right to choose to accept the Product or to reject the Product,
at its own discretion. If SMP accepts the Product, The Vendor agrees to provide
SMP with a discount on the Purchase Order, which shall be the percentage that is
received by the percent loss. For instance, if the final quantity delivered to
SMP is seventy-five percent (75%) of the ordered amount, the Vendor shall issue
a discount of twenty-five percent (25%). Consequently, SMP shall be required to
pay fifty percent (50%) of the total amount for the order corresponding to the
seventy-five percent (75%) of products delivered.
2.4.1
In the event that the final quantity produced is
more than one hundred and ten percent (110%) of the quantity stated on the
Purchase Order(s), SMP is
entitled to choose to accept all the Product produced or only accept one
hundred and ten percent (110%) of the Product, at its own discretion. If SMP
chooses to accept all the Product, SMP is entitled to pay fifty percent (50%)
of the price of the Product exceeding one hundred and ten percent (110%) of the
Purchase Order(s). Upon rejection by SMP, Vendor is liable for the costs
associated with the rejected overages including but not limited to material
provided by SMP.
2.5
Purchase Orders. SMP
shall provide Vendor with separate, pre-numbered “Purchase Orders” for all
Products. Purchase Orders are deemed accepted once they are signed by Vendor.
Purchase Orders shall specify quantities of each Product, delivery, shipment,
and due dates. A separate written Specifications sheet will accompany every
Purchase Order. Vendor shall fulfill
all SMP purchases as stated in the Purchase Order and
the Specification, including but not limited to the quantities of
Product produced, shipped and quality requirements, due dates, and other terms
herein. All invoices, packing
slips, and bills of lading must be referenced and consist
with the associated Purchase Order(s). Products shipped must be accompanied
by a
COA, an all-allergen
statement, packing slip and material usage report. If Products shipped without
a COA
and/or an allergen statement, and/or packing slip, and/or material usage report
shall incur a compensation fee which shall be paid by Vendor of one hundred
dollars ($100) per day until all required documents are received by SMP. The
fee is agreed by both parties as a reasonable forecast of SMP’s anticipated
actual damages, not a penalty.
2.5.1
Acceptance of the Purchase Order by Vendor
shall serve as confirmation of the specifications
of Products, quantities, Price, delivery date,
and shipping terms. SMP shall be obligated
to buy, and Vendor shall be obligated to sell,
only those Products that are subject to Purchase Order(s) accepted by Vendor
with the price listed on the Purchase Order(s), provided that there is no other
agreement signed by the representatives of the Parties.
2.6
Modification of Purchase Order. In
the event SMP seeks to modify a Purchase Order which has been confirmed by
Vendor, SMP and Vendor will use reasonable commercial efforts to accommodate
SMP Nutra’s needs. If SMP requires decreases in Production volumes of a
confirmed Purchase Order, SMP shall be responsible for the cost of raw
materials which have been used in the production for SMP’s Purchase Order(s),
on invoices provided by Vendor for the purchase of raw materials of the Product
in excess of the requirements necessary to fulfill SMP’s decreased Purchase
Orders; provided, however, SMP shall not be responsible for the cost of any
materials that are or will be subsequently used by Vendor within the next one
hundred and eighty (180) days.
2.6.1
Modification of Specifications. The
Specifications are provided to Vendor by SMP by way of written documentation
accompanying each Purchase Order. The Specifications may be modified or changed
only if approved in writing by SMP. To the extent that such modification or
change results in an increase or decrease in the cost of manufacturing any
Product or requires additional capital investment, the Parties shall jointly
examine and mutually agree in writing upon the consequences thereof, including
changes to expected or requirement delivery times or cancelation of the
existing Purchase Order. In the event that the Vendor does not follow the
specifications as provided by SMP and without written approval of a necessary
change, Vendor’s action shall be deemed a material breach herein.
2.6.2
Material
Breach. In the
event of a material breach of contract by Vendor, the Vendor shall refund all
payments made by SMP and the market price of the used raw materials supplied by
SMP, return the unused raw materials supplied by SMP (if any) , and shall pay SMP a compensation in the amount of fifty
percent (50%) of the Purchase Order(s)' price without prejudice to the effect
of SMP’s other rights in respect of this Agreement. The amount of the refund
and compensation are agreed by both parties as a reasonable forecast of SMP’s
anticipated actual damages, not a penalty.
2.7
Time is Of the Essence. Time
is of the essence with respect to delivery of the Products on the delivery
dates. If Vendor fails to deliver the Products on the delivery date specified
in the applicable Purchase Order, then, in addition to and not in lieu or
limitation of any other rights or remedies of SMP under this Agreement, at law,
or in equity, SMP is entitled to terminate the applicable Purchase Order, in
whole or in part, and receive a cancellation of all amounts due and a refund of
all amounts paid in connection with the terminated Purchase Order. Also, Vendor
shall refund the amount of payment of the defaulted order(s) in full, and also pay SMP in the amount of
fifty percent (50%) of the Purchase Order(s)' price without prejudice to the
effect of SMP’s other rights in respect of this Agreement, which is agreed by
both party as a reasonable forecast of SMP’s anticipated actual damages, not a
penalty.
2.7.1
In the event SMP does not cancel such
Purchase Order, Vendor shall (i) be fully responsible
for and shall reimburse SMP for all costs associated with rescheduling pickup
and transportation of the Products and for express transportation if necessary
to ensure arrival at the end destination on the same date, and (ii) apply a
discount to the Product Price for the Products in the amount of two percent (2%) per
week upon which conforming Products are not delivered up to ten
(10) days after the delivery date specified in the applicable Purchase Order.
The Parties intend that the foregoing discount constitutes compensation for the
lower quality of service provided as a result of such up to (10) day period of
delay, and not a penalty, and are in addition to all other rights of SMP under
the Agreement and shall not be construed as an exclusive election of remedies
or a waiver of any remedies otherwise available to SMP under this Agreement or
at law or in equity. Without limitation to its other obligations under this
Agreement, Vendor will immediately notify SMP of any delay or potential delay
in delivery of the Products (and include all relevant information concerning
the delay or potential delay) and use its best efforts to prevent, or if
necessary, mitigate the extent and impacts of the delay or potential delay.
2.7.2
Should Vendor be unable to meet the
requirements of a confirmed Purchase Order, Vendor shall notify SMP Nutra no
longer than three (3) days after discovery of the forthcoming breach. In this
event, SMP has the right to either cancel the order and is entitled to the
rights under the
Section 2.7, or source Products from a
third party for the period upon which Vendor is unable to supply in accordance
with confirmed Purchase Orders, or ask Vendor to seek out a third-party
manufacturer, approved in writing by SMP, to supplement the manufacturing of
the Products to meet all SMP requirements. In the second and the third
situations, there will be a new due date of the Products’ delivery.
2.7.3 Whereof the new due date is not postponed:
•
If SMP sources Products from a third
party for the period upon which Vendor is unable
to supply in accordance with confirmed Purchase
Orders. Vendor shall assume
all incremental costs associated with this activity including set up and
development costs and the amount of the third-party manufacturer’s price exceeding the Vendor price.
•
If Vendor seeks out a third-party
manufacturer, Vendor will assume all incremental costs associated with this activity
including set up and development costs and the differential (if any) between
the Vendor pricing
and the pricing
of the third-party
manufacturer. Vendor shall be Jointly and Severally Liable in the event that
the Products supplied by the third party are defective or in the event of a
breach of contract and other legal disputes.
2.7.4
Whereof the
new due date is postponed less than thirty (30) calendar days,
Vendor shall assume all incremental costs associated with this activity
including set up and development costs and the differential (if any) between
the Vendor pricing
and the pricing
of the third-party
manufacturer. Vendor shall give SMP a discount in the amount of two percent (2%) of the Purchase
Order(s) per each week delayed without prejudice to the effect of SMP’s rights
in respect of this Agreement. Discounts may be aggregated and applied cumulatively. The Parties intend that the foregoing
discount constitutes compensation for the lower quality of service, and not a
penalty. If the third-party manufacturer is bought by Vendor, Vendor shall be
liable for Joint and Several Liability in the event that the Products supplied
by the third party are defective or in the event of a breach of contract and
other legal disputes.
2.7.5
Whereof
the new due date is postponed more than thirty (30) calendar days, Vendor’s
action shall be regarded as a material breach of this Agreement, in which case
Vendor shall refund the amount of payment of the defaulted order(s) in full and
pay SMP in the amount of fifty percent (50%) of the Purchase Order(s)' price
without prejudice to the effect of SMP’s other rights in respect of this Agreement,
which is agreed by both parties as a reasonable forecast of SMP’s anticipated
actual damages, not a penalty.
2.8
Monthly Report. Vendor shall provide a monthly report of any inventory
which shall include the quantity of raw materials, work-in-process and/or
finished Product owned by SMP held by Vendor no later than the fifth (5th)
business day of each month with an explanation of any variances greater than
two percent (2%).
2.9
Material Usage and Inventory Report. Following
each complete delivery of Products as specified in the Purchase Order, Vendor
shall provide SMP with a comprehensive report detailing material usage and
inventory levels, which must include, but is not limited to, the quantity and
type of materials used in the production of the delivered products and the
remaining inventory levels of each type of material used in production. The
report shall be submitted to SMP within three (3) days after each delivery. The
report must be provided in a format agreed upon by both parties and must be
accurate and verifiable. Any discrepancies found in the report must be
addressed and corrected by the Vendor within 24 hours of notification by SMP.
Failure to provide the report as specified or inaccuracies
in the report may result in a compensation fee which shall be paid by Vendor of
one hundred dollars ($100) per day until all current
required documents are received by SMP. The fee is agreed
by both parties as a reasonable forecast of SMP’s anticipated actual damages,
not a penalty.
By including this term, both
parties ensure transparency and accountability regarding material usage and
inventory levels, facilitating better management and planning.
2.10
Price. SMP
shall pay Vendor for Products purchased pursuant to this Agreement in
accordance with the Purchase Order(s). All
Purchase Orders previously accepted by Vendor shall remain at the price quoted
at the time the Purchase Order(s) issued. SMP shall make payment
for all deliveries of Product in U.S. dollars, net thirty (30)
days, unless otherwise specifically agreed upon. Vendor shall provide
invoices dated as of the date the Product is shipped
from Vendor or placed in storage with notification to SMP’s financial and
quality department.
2.10.1
The Prices listed in the Purchase
Order(s) are inclusive of all fees of manufacture, formulate, package, label,
test, supply, and timely deliver all Products in the quantities and on the
delivery dates specified by SMP in Purchase Orders and pursuant taxes, duties,
or other assessments.
2.10.2
SMP shall have thirty (30) days from
the time of delivery to inspect (and if applicable, test) all shipments for
accuracy and damages. Should any portion of the shipment be damaged, SMP shall notify the Vendor
and Vendor shall have an additional thirty (30) days to provide replaced
Product or issue SMP a credit for damaged goods at SMP Nutra’s own discretion.
2.10.3
Any defective goods shall be returned
at Vendor’s expense, and a full credit shall be issued to SMP. Materially
incomplete Purchase Orders (more than 10% shortfall), or Purchase Orders which
are more than thirty (30) calendar days late shall be regarded as a material
breach of this Agreement by Vendor. Vendor shall notify SMP immediately and
refund the amount of payment of the defaulted order(s) in full and pay a fee in the amount of fifty percent
(50%) of the Purchase Order(s)' price. The parties agree that
reputational damages and lost future orders caused by late delivery of Purchase
Orders are difficult to calculate, and that the above fees are a reasonable
calculation of SMP’s damages, not a penalty.
2.10.4
SMP
shall have the right to give Vendor written notice of rejection of any shipment
of Product that in whole or in part breaches Vendor’s warranties, covenants and
obligations under this Agreement or fails to comply with the requirements set
forth in the Quality Agreement, which notice shall be given promptly, and in
any event within (thirty) 30 days, after discovery of such breach. If there is
disagreement between the Parties as to whether the Product meets
Specifications, the Parties shall have such Product tested by a mutually agreed
upon third party and such Party’s determination as to whether such Product
meets Specifications shall be binding on the Parties hereto. The expense for
such testing and for any costs associated with the destruction of such Product
shall be borne by Vendor except to the extent it is determined that SMP is
responsible for such failure or breach. At SMP’s option, Vendor shall
immediately replace Product which does not conform with Vendor’s warranties
under this Agreement considering SMP’s production schedule as communicated to
Vendor. SMP shall have the right to set off any refund due to SMP on account of
rejected Product against invoices otherwise due or which become due to Vendor.
The provisions of the Section 2 shall survive termination of this Agreement
with respect to Products supplied by Vendor and prior to any last sale date on
the Product label. Subsequent to the termination or expiration of this
Agreement, SMP, in lieu of having Vendor replace such rejected Products, may elect
to have Vendor reimburse SMP for the purchase Price actually paid for such
Products.
2.11
Purchases of Labels,
Manufacturing of Labels,
Packaging of Products.
2.11.1
SMP may specify the Product
ingredients and formulations, as well as the contents and aesthetics of the
packaging and labeling for the Products to be delivered under this Agreement,
including that the packaging and labeling may contain SMP or other companies’
Trademarks, all of the foregoing as specified in the Purchase Order(s) or
Specifications and otherwise specified by SMP from time to time in writing and
which shall be deemed incorporated into this Agreement. Vendor is responsible
for ensuring that the Labels (i) comply with and
fully implement the applicable Label Specifications and Applicable Laws, and
(ii) where required, have been submitted to FDA and have either not been
objected to or have obtained FDA approval, as applicable. In the event any
Label Specifications specify Labels that Vendor believes do not comply with
Applicable Laws or that Vendor submitted to FDA and which were objected to,
Vendor will promptly notify SMP of the same and will work with SMP in good
faith to ensure the Label Specifications are updated as promptly as reasonably
possible (but in all cases no later than within any timing specified by FDA or
required by Applicable Law) to specify Labels which are no longer objected to
by FDA and comply with all other Applicable Laws. To the extent there are any
updates or changes to Vendor’s existing Authorized Labels for the Products or
there are any new Authorized Labels for the Products, Vendor shall promptly
provide copies of such new/updated Authorized Labels to SMP. In the event any
changes will be required to existing Authorized Labels in order to comply with
Applicable Laws, Vendor will notify SMP as far in advance as possible and will
assist SMP as necessary or as reasonably requested to update the Branded Labels
to ensure they become or remain compliant with all Applicable Laws and
otherwise become or remain Authorized Labels.
2.11.2
If SMP provides written notice to
Vendor requesting any change to the Branded Labels and/or Label Specifications
for new orders, Vendor will revise the Labels and/or Label Specifications
within thirty (30) days of such written notice (subject to Vendor first
confirming compliance with Applicable Laws and obtaining FDA approval if
necessary). SMP may continue to sell
existing stock of the Product with the old Labels until such time that it is
exhausted from SMP’s inventory (including any inventory held by third party
warehousing or other partners for or on behalf of SMP).
2.11.3
Final Branded Label. For the avoidance of any doubt, the form and
manner of SMP’s or
other SMP’s Customers’ Trademarks and Label
Specifications as implemented on the final Branded Labels will be subject to
SMP’s prior written approval. For
this purpose, Vendor will provide SMP with layout, design, black line sketches,
finished art, and sample color proofs in advance of printing and will supply
copies of the final Branded Labels from the first print run and each subsequent
print run (if any changes are made) for SMP’s written approval. Subject to
Vendor ensuring Branded Labels comply with Applicable Laws and have been
submitted to and not been objected to by FDA where necessary, if SMP
disapproves a Label acting reasonably, Vendor will ensure that each copy
thereafter printed will conform in all respects to the changes specified by SMP
in writing.
2.11.4
Labels printed and placed on SMP
Products by vendor will be printed solely from a label printer previously
approved in writing by SMP. Prior to purchasing any labels, Vendor
shall contact the SMP
Purchasing Department to ensure Vendor receives the best possible label prices. In the event Vendor shall self-print labels for SMP Products, Vendor shall submit
physical samples of labels to SMP’s Senior Graphic Artist-Label Specialist, for
approval; and Vendor shall not label or package any SMP Product
using any label
or packaging not approved by SMP
in advance of such labeling or packaging. Vendor must obtain the most current artwork
from SMP’s Senior Graphic Artist-Label Specialist and notify SMP of any label price changes
which affect the finished good cost on each Purchase Order.
2.11.5
The
vendor shall package all Products in case lots/case quantities. All cases must include
authorized SMP box labels
indicating the Product name, a Product code number, lot number, manufactured on, expiration, or best-by date, Purchase
Order number, allergens, and Product quantity. Product package weight shall not exceed 50 lbs. If a shipment
contains fulfillment of multiple Purchase Orders, adequate labeling and
dividers must be used by Vendor to ensure SMP
can adequately distinguish each separate Purchase
Order upon receipt. If multiple boxes or pallets are used, Vendor
must sequentially number
each box or pallet.
Vendor shall include
a Product packing
list with each Product
shipment.
2.11.6
A
Product’s expiration can only be properly determined by conducting a stability
study. In the event SMP does not provide the results of a stability study, the
Product will be issued a “best by” date. If SMP requests a specific expiration
date be affixed to the Product, it 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 SMP are identical to the specification used for stability
testing.
2.12
Storage
Requirements. Vendor shall store all materials and Products in
accordance with the Specifications, cGMPs, and
requirements set forth in the Quality Agreement at Vendor’s own expense.
2.13
Nonconforming Materials. Vendor
shall not use any packaging or other Product materials
that do not comply with the Specifications, cGMPs, requirements set forth in the Quality
Agreement, or applicable laws, rules, or regulations. Vendor shall promptly contact SMP, c/o
Quality Department in the event that Vendor anticipates making changes to any
such material or in the event Vendor considers any such material to be
nonconforming or unacceptable. If
Vendor uses any non-conforming Product material without prior written
approval by SMP, Vendor’s
action shall be deemed as a material breach herein. In this event, Vendor shall
bear the responsibilities under the material breach term according to section 2.4.2.3 , and
shall be responsible for all losses, costs
and expenses suffered or incurred by SMP as a result of such use and any
expenses incurred by Vendor in the correction thereof.
2.14
Purchase
and Installation of Equipment. Vendor shall be responsible
for purchasing, installing, qualifying, and maintaining at its
Facility any and all new or used
equipment necessary for the manufacturing, packaging, labeling, testing,
holding, storage, and shipment of Products hereunder. All costs and expenses
associated with such purchase, installation, qualification, and maintenance shall be borne by Vendor.
The installation, qualification and maintenance of all equipment
shall be conducted in accordance with requirements set forth in the Quality
Agreement, applicable laws, current good manufacturing practices, rules and
regulations and any relevant Specifications.
Visitation
of Facilities. During the term of this Agreement, SMP may designate one or more
of SMP’s employees who shall be allowed, upon execution of an appropriate
confidentiality agreement, to visit Vendor’s facility during normal business
hours upon 1-week advance notice for the limited purposes of inspecting the
quantity and quality of the Inventory or Products.
2.15
Standard
Forms. In ordering and delivering Products, SMP and Vendor may employ their standard
forms, but nothing
in those forms
shall be construed
to modify or amend the terms of this Agreement, and, in the case of any
conflict herewith, the terms of this Agreement shall control.
2.16
Legal and Regulatory Filings and Requests. Vendor and SMP shall
cooperate and be diligent in responding to all requests for information from,
and in making all required filings with, any Governmental Authority having
jurisdiction to make such requests or require such filings. Vendor shall obtain
and comply with all licenses, consents, permits and
regulations which may from time to time be required by appropriate Governmental
Authorities with respect to the performance of its obligations hereunder.
Vendor and SMP agree to supply each other with copies of all regulatory filings
directly or indirectly applicable to the Products.
2.17
Risk
of Loss. All Product sold to SMP pursuant to this Agreement
shall remain the property
of Vendor, who shall assume all risk of loss until: (1)
product delivered with appropriate documentation to SMP, and shipped in pallets to the warehouse of SMP’s choice,
and the transportation and
delivery fees have been paid, or (2) picked up by SMP at Vendor’s
facility at a scheduled time within seventy two (72) hours of Product completion. Any damage to Products
while in the possession of Vendor or a third-party shipping company is the
sole responsibility of Vendor.
2.18
Shipping.
The transportation terms and cost
responsibilities shall be subject to the Purchase order. If in
the purchase order, SMP requires self-pickup of the goods, then Vendor shall
promptly notify SMP and provide all documents related to self-pickup after
producing all Products. If in Purchase Order that Vendor shall provide freight
service, Vendor shall schedule freight pick up, load the carrier’s trailer, and
complete documentation. All shipments shall include a COA, an allergen statement, and a packing slip at the time of shipping and
are included with the shipment. Delivery
of Products shall be on slip sheets and pallets or as otherwise instructed by
SMP and agreed to by Vendor. Products shipped without a COA, and/or an allergic
statement, and/or packing slip shall incur a compensation fee which shall be
paid by Vendor of one hundred dollars ($100) USD per day until all required
documents are received by SMP. The fee is agreed by both parties as a
reasonable forecast of SMP’s anticipated actual damages, not a penalty.
3.
Representations and Warranties; Additional Covenants.
3.1
General
Representations and Warranties. Vendor
hereby represents, warrants and covenants to SMP that Products furnished by
Vendor to SMP pursuant to this Agreement: (i) shall be of the quality
specified in, and shall conform with, the Specifications; (ii) shall be manufactured, held,
processed, and packaged (including labeling), stored and delivered
in conformity with the Specifications, the Quality
Agreement, and all applicable laws, rules and regulations imposed by any
Governmental Authority, including current good manufacturing practices as set
forth in 21 C.F.R. Parts 111 and 117 and the requirements of the Safe Drinking
Water and Toxic Enforcement Act of 1986, codified
at California Health and Safety Code Section 25249.5
et seq. (Prop 65);(iii) shall not contain
any material provided by or on behalf of Vendor, which
material has not been used or stored in accordance with the Specifications or in violation of the Quality
Agreement, or any other
quality assurance standards instructed by SMP and
agreed to by Vendor; (iv) will not contain any material(s) that would cause the Products
to be adulterated or
misbranded within the meaning of the Act.
3.2
Compliance with Laws. Vendor represents, warrants and covenants that as
of the date of execution of this Agreement
(i) Vendor is and shall continue to be,
in full compliance with all applicable laws, rules and regulations including
all applicable labor and employment laws and environmental laws and all other
laws imposed by any Governmental Authority
which Vendor is subject to; and (ii) Vendor
holds all licenses, permits, and similar governmental authorizations necessary
or required for Vendor to conduct its operations and business and perform this
Agreement and the Quality Agreement. All references in this Agreement to
applicable laws, rules and
regulations shall include all current
good manufacturing practices, as set
forth in the Quality Agreement.
3.3
Notice of Material Events.
Vendor hereby agrees
to notify SMP promptly
of any actual or anticipated events which are reasonably likely to have a
material adverse effect on the Products or on Vendor’s ability to produce
Products in accordance with the provisions set forth herein, including, but not
limited to, any fire or natural disaster, customs detention, labor
difficulties, strikes, shortages in materials,
notices of regulatory inspections or deficiencies, plant closings and other
interruptions in activity. The
requirements of this Section are in addition to those set forth in the Quality
Agreement with respect to changes to the manufacturing process that may impact
the quality of any Product.
3.4
Disclaimers. SMP AND VENDOR MAKE NO WARRANTIES WITH RESPECT
TO THE PRODUCTS, LABELING OR PACKAGING,
EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY STATED IN THIS
AGREEMENT. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED.
3.5
Vendor Product Warranties. Vendor represents, warrants, and covenants that performance of this Agreement by
Vendor in accordance with the Specifications will not breach any material law,
rule, or regulation or, to the best of Vendor’s knowledge, infringe any
intellectual property rights of any third parties.
4. Ownership; Trademarks; Proprietary Information.
4.1
Ownership of Intellectual Property.
It is agreed that SMP or its Customers are the sole
owner of the Products and any and all Specifications, and Vendor shall not use
any such Specifications except in connection with its performance under this
Agreement or the Quality Agreement.
4.1.1
Any trademarks, trade names, trade dress,
trade secrets, licenses, brand names, patents,
patent applications, statutory
invention registrations,
inventor’s certificates, rights to obtain, file, and prosecute applications for
patents, slogans, logos, copyrights, Specifications, or other property or
proprietary information and goodwill associated with the Products shall be the
sole and exclusive property of SMP or its Customers (the “Product Intellectual Property”). Vendor shall have no right or license
to use any such Product Intellectual Property at any time before,
during or after
the Term of this Agreement, except as necessary for
Vendor to comply with its obligations under the terms of this Agreement or the
Quality Agreement.
4.1.2
If any improvements or modifications
to the Products or Specifications are developed by SMP or Vendor, either
jointly or severally, such improvements or modifications shall inure to the
benefit and be the exclusive property of SMP and shall be held in confidence by
Vendor for SMP’s sole benefit in the development and/or the operation of
manufacturing processes with respect to the Products.
Vendor shall disclose to SMP and receive the approval
of SMP with respect to all such improvements or modifications relating to the
manufacturing, and/or packaging process of the Products or use of the Products
developed by Vendor.
4.2
Ownership
of Other Property. Except
as otherwise specified herein or agreed in writing, the Vendor is the sole
owner of any-and-all equipment, tools, dies, molds, printing plates, etc. used
by Vendor in connection with the manufacture and packaging of the Products in
accordance with this Agreement. Vendor shall maintain the above in good working order and shall ensure
that they remain free and clear of all liens and encumbrances that would impair
their use under this Agreement. The
processes adopted and employed by Vendor and not provided by SMP in producing Product
shall be the property and sole responsibility of Vendor unless otherwise
agreed in writing.
4.3
Vendor’s Limited Rights to Use. Nothing set forth in this Agreement shall be construed to grant to
Vendor any title, right or interest in or to any trademark, trade name, copyright, patent,
or other proprietary technology owned
by SMP, or any of its Customers, or to which Vendor, or any of its Affiliates
may have rights. Vendor’s
use of such trademarks, trade names, copyrights, patents, or other proprietary
technology shall be limited exclusively to its performance of this Agreement. Any other use of said trademarks, trade
names, copyrights, patents, or other proprietary technology shall constitute an
infringement thereof and/or violation of SMP’s
rights. Notwithstanding the foregoing, with the prior written
approval from SMP, Vendor may be permitted to use SMP’s name and trademarks in
connection with general advertising and promotional activities.
4.4
Vendor’s Manufacture of Other
Products. Any
technology or information owned by SMP and provided by SMP to Vendor in connection with this
Agreement shall not be used by Vendor in the manufacture of any products other than the Products
and shall not be disclosed
or made available to any customers
of Vendor or any third party. All such information shall be deemed
Proprietary Information subject to the provisions of Section 4 of this
Agreement.
5. Indemnification.
5.1
Vendor’s Indemnification of SMP. Vendor shall indemnify, defend and hold SMP, each Affiliate of SMP and the officers,
employees, and agents thereof (each an “SMP Indemnified Party”) harmless from
and against any and all losses, liabilities, damages, claims, expenses, suits,
recoveries, judgments and fines (including reasonable attorneys’ fees and
expenses) (collectively, “Losses”) that may be incurred by any SMP Indemnified
Party arising out of the Manufacture Arrangement or the Distribution
Arrangement, including without limitation (i) for
claims that any Product is not manufactured in accordance with industry standards or not manufactured in accordance with customer specifications (in addition to the
right of SMP Nutra to indemnification hereunder, SMP Nutra shall have the right
from time to time to set off any Losses against any payments due and payable to
Vendor pursuant to the Distribution Arrangement); (ii) any profits or Customers
lost by SMP Nutra, arising
out of or relating to breaches of this Agreement, the T&C of
Purchase Order, Distribution Arrangement, or Quality Agreement, by Vendor, and
for any reputational damages arising therefrom; (iii) any damage to property or
injury or death occurring to any Person arising out of possession, use or
consumption by any Person of any
Product to the extent that such damage,
injury or death was caused
by the failure of such Product to meet Specifications, including the contamination, adulteration, or misbranding of
such Product which occurred prior to the time
such Product came under the control
of SMP; (iv) any damage to property occurring on Vendor’s premises or injury to person or death occurring to any Vendor employees,
subcontractors, agents or any individuals at Vendor’s Facility or otherwise on
Vendor’s premises; (v) any claim, action or proceeding brought by any
Governmental Authority arising out of or resulting from any manufacture,
packaging, holding, labeling, or supply (including quality control requirements
set forth in the Quality Agreement) of Products by Vendor which is not in
accordance with this Agreement or the Quality Agreement; (vi) any breach by
Vendor of any of its obligations, representations or warranties under this
Agreement or the Quality Agreement, including a breach which results in a
recall of Products to the extent that Vendor is responsible for such recall;
(vii) any claim by a third party that the methods, processes, Product component
materials or know-how not provided by SMP infringe the ownership rights of a
third party; or (viii) any other act or omission on the part of Vendor
constituting negligence. The provisions of this Section 5 shall survive
the expiration or earlier termination of this Agreement.
All existing products manufactured before this agreement date, by Vendor for SMP or its affiliates are excluded from the provisions of this agreement.
5.2
SMP’s Indemnification of Vendor. SMP shall indemnify, defend
and hold Vendor, each Affiliate of Vendor and the officers, directors and
employees thereof (each a “Vendor Indemnified Party”) harmless from and against
any and all Losses that may be incurred by any Vendor Indemnified
Party arising out of (i) any damage
to property or injury or death occurring to any person arising out of
possession, use or consumption by any person of any Product to the extent that
such damage, injury or death was
caused by the contamination, adulteration or
misbranding of such Product which occurred when such Product was under the
control of SMP or by any defective Specification furnished by SMP, raw
materials supplied by SMP, or stability testing performed by SMP; (ii) any
claim that the manufacture of any Product by Vendor under this Agreement
infringes the trademark, trade dress, trade secret or other intellectual
property rights of any other Person solely by reason of the use of such
intellectual property by SMP in the specifications, packaging or labeling of the Product; (iii) any breach by SMP of any of its obligations, representations or warranties under this Agreement, including a breach which
results in a Recall of Products or (iv) any other act or omission on the part
of SMP constituting negligence. In the event that testing of the finished
Product reveals that the Product does not meet specifications due to raw
materials supplied by SMP, SMP will hold Vendor harmless and assume all
liability and costs associated with the manufacturing of the Product. If SMP’s
packaging and/or Product specifications have not been stability tested, or the
specifications provided to Vendor deviate from those used in the stability
test, SMP agrees to hold Vendor harmless and indemnify fully the Vendor 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 Product’s
instability after manufacturing.
5.3
Indemnification Procedures. Any
Person that may be entitled to indemnification under this Agreement (an
“Indemnified Party”) shall give written notice to the Person obligated to
indemnify it (an “Indemnifying Party”) with reasonable promptness upon becoming
aware of any claim against such Indemnified Party by a third party or other
facts upon which a claim for indemnification will or is reasonably likely to be
based, but the failure to notify, or delay in notifying, the Indemnifying Party
will not relieve the Indemnifying Party of any liability it may have to any
Indemnified Party except to the extent that the Indemnifying Party demonstrates that it is prejudiced by the Indemnified Party’s failure to give, or
delay in giving, such notice. The
notice shall set forth such information with respect thereto as is then
reasonably available to the Indemnified Party.
The Indemnifying Party shall have the right to participate in the
defense of any proceeding involving a claim asserted by a third party and
(unless the Indemnifying Party is also a party to such proceeding and the
Indemnified Party determines in good faith that joint representation would be
inappropriate) to undertake the defense of any such proceeding with counsel
reasonably satisfactory to the Indemnified Party and the Indemnified Party
shall cooperate in such defense and make available all records, materials and
witnesses reasonably requested by the Indemnifying Party in connection
therewith at the Indemnifying Party’s expense.
If and so long as the Indemnifying Party shall have assumed the defense
of such proceeding with counsel reasonably satisfactory to the Indemnified
Party and is diligently conducting such defense, the Indemnifying Party shall
not be liable to the Indemnified Party for any legal or other expenses (other
than for reasonable costs of investigation) subsequently incurred by the
Indemnified Party in connection with the defense thereof, but the Indemnified Party
shall have the right to participate
in the defense of such proceeding at its own expense. If the Indemnifying Party assumes the defense of a proceeding
involving a third-party claim, it will be conclusively established for purposes
of this Agreement that such claim is within the scope of and subject to
indemnification.
5.3.1
The Indemnifying Party shall not be
liable for any third-party claim settled without its consent, which consent
shall not be unreasonably withheld or delayed.
The Indemnifying Party shall obtain
the written consent of the Indemnified Party prior to
ceasing to defend, settling, or otherwise disposing of any third-party claim.
5.3.2
In no event shall either Party institute, settle or otherwise resolve any claim
or potential claim,
action or proceeding relating to the Products or any trademarks or other intellectual
property rights of the other Party without the prior written consent of such
other Party.
5.3.3
Notwithstanding the foregoing, if SMP
is the Indemnified Party and it determines in good faith that there is a
reasonable probability that a proceeding involving a third-party claim would
materially harm the reputational or other value of the brand of the relevant
Products, then SMP may, by notice to the Vendor, assume the exclusive right to
defend, compromise or settle such proceeding.
5.4
Limitation
of Liability. Neither
Party shall have any liability under this Section 5 or otherwise
for any indirect, special, punitive, or consequential damages or losses, such as loss of profits
or goodwill, which may be sustained by the other Party hereto as a result of
activities under this Agreement, except to the extent such damages have been
recovered from the Indemnified Party by a third party.
6.
Insurance.
6.1.1
Vendor Coverage. Vendor covenants and agrees to
maintain in full force and effect, at its own expense, adequate insurance,
including product liability insurance, in such amounts and with such insurance
companies as is customary in accordance with sound business practices
consistent with the nature of the Products and the responsibilities of Vendor
under this Agreement. For the avoidance of any doubt, during the Term of this
Agreement and, if coverage is on a claims-made basis for no less than three (3)
years after expiration or termination, Vendor shall at all times keep and
maintain the following insurance coverage and limits of liability:
6.1.2
Vendor covenants and agrees to maintain
Commercial General Liability (Occurrence), including Products/Completed Ops,
with limits of not less than $1,000,000 per occurrence and $2,000,000 in the
aggregate (Per Project). Such insurance must provide for broad form contractual
liability coverage.
6.1.3
Vendor further covenants and agrees to
maintain Errors and Omissions liability coverage with a minimum limit of
$2,000,000.
6.2
Vendor
shall name SMP as an additional insured under each such policy and covenants
and agrees to provide SMP with a certificate of insurance from such party’s
insurer within five (5) business days of the date of this Agreement. It is
agreed that the insurance afforded such Additional Insureds shall apply as
primary insurance and that any other insurance carried by SMP shall be excess
only and shall not contribute with this insurance.
7. Relationship of the Parties.
The relationship between SMP and Vendor is that of
independent contractors and nothing herein shall be deemed to constitute the
relationship of partners, joint venturers, nor of principal and agent between
SMP and Vendor. Neither Party shall have any expressed or implied right or
authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other
Party to any contract, agreement
or undertaking with any third party. Except as
otherwise contemplated or permitted
by the Agreement, all persons employed by Vendor in
connection with the manufacturing, packaging (including labeling) and supply
(including quality control) of the Products to SMP shall be employees or agents of Vendor and under no circumstances shall
Vendor or any of its employees
or agents be deemed to be employees or agents of SMP.
8
Proprietary Information.
8.1.1
As
a result of the Distribution Arrangement, Vendor has and will receive
certain proprietary information and confidential records developed and compiled
by SMP Nutra that have great value to SMP Nutra’s business (the “Proprietary
Information”). Proprietary Information includes all information that has or
could have commercial value or other utility in the business in which SMP Nutra
was engaged or contemplated engaging prior to the date of this Agreement, and
all information the unauthorized use or disclosure of which could be
detrimental to the interests of SMP Nutra, whether or not that information was specifically labeled
as confidential or proprietary by SMP Nutra. By way of example,
Proprietary Information includes, without limitation, the following:
8.1.2
The name, address and phone number of
any Customer, vendor, or Affiliate of SMP Nutra, or any information concerning
the transactions, orders, products, prices, strategies, or formulas of any
Customer, vendor, or Affiliate of SMP Nutra.
8.1.3
any information concerning any
product, technology, or procedure employed by SMP Nutra but not generally known to its customers,
vendors, competitors or the public;
8.1.4
any information relating to SMP
Nutra’s pricing or marketing methods, sales margins,
cost of goods, cost of material, capital structure, or
operating results;
8.1.5
any information that is generally
treated as confidential or proprietary in any line of business engaged in by
SMP Nutra; all
materials relating to or embodying any of the foregoing, whether in a handwritten, printed,
graphic, video, audio,
electronic or other medium.
8.2
Vendor agrees
that it will:
8.2.1
use such Proprietary Information
obtained from SMP only in connection with the activities to be undertaken in this Agreement and under applicable
Quality Agreement;
8.2.2
restrict disclosure of such
Proprietary Information within its own organization to only those employees having
a reasonable need to know such Proprietary Information; and
8.2.3
not
divulge to third parties,
without the prior written consent of SMP, any
Proprietary Information obtained from SMP, particularly as it relates to the
transfer of any manufacturing or distribution arrangements with third party
vendors or subcontractors, until such time that any current third-party vendor
is notified by SMP of such transfer of production to Vendor.
8.2.4
protect such Proprietary Information
from unauthorized use, access, or disclosure with the same degree of care, but
no less than a reasonable degree of care, as it uses to protect its own
Proprietary Information.
8.2.5
Vendor acknowledges and agrees that
SMP Nutra disclosed to Vendor, and entrusted Vendor with, Proprietary
Information, and that that Proprietary Information is the exclusive property of
SMP Nutra and its Customers. During the Agreement Term or thereafter, Vendor
shall not, directly, or indirectly, misappropriate, use, make available, sell,
convey, license, or disclose Proprietary Information, except as expressly
permitted by this Agreement, or otherwise communicate any Proprietary
Information to any Person.
8.3
The foregoing confidentiality
obligations shall not apply if and to the extent that:
8.3.1
the
Proprietary Information is known to the receiving
Party prior to obtaining the
same from the disclosing party, as properly demonstrated by the receiving
Party’s written records;
8.3.2
the Proprietary Information is, at the
time of disclosure, in the public domain, or comes into the public domain
without any fault of the receiving Party or its Affiliates; provided, however,
that Customer names, Customer contact information, pricing, and formulas shall
be deemed Proprietary Information, even if such information is publicly
searchable or belongs to a Customer). Vendor acknowledges that information that
is not novel or copyrighted or patented may nonetheless be Proprietary
Information; or
8.3.3
the Proprietary Information is
obtained by the receiving Party from a third party who is not obligated to keep
the Proprietary Information confidential.
8.3.4
Upon
expiration or termination of this Agreement, each Party shall return to the other
Party all Proprietary Information received from the other
Party, except for one copy that may be retained for purposes of
compliance with the terms of this Agreement and applicable law. The provisions of this Section 8 shall
survive the termination or expiration of this Agreement and for a period of
eight (8) years thereafter.
8.4
Vendor agrees not to use or refer to
SMP’s name or this Agreement or the Quality Agreement in any public
statements, whether oral or written,
including but not limited to, annual reports or shareholder reports,
general advertising and promotional activities, statements to other customers
or prospective customers
or other communications, without SMP’s prior written consent.
9 No
Competition.
From the date of this Agreement
until two years from the date on which
Vendor no longer manufactures any Products for SMP Nutra (the “Agreement
Term”), Vendor may not directly
or indirectly (other than for the
benefit of, and at
the direction
of, SMP Nutra or any affiliate of SMP Nutra (“Affiliate”)) do or attempt to do business with or solicit
orders from any Person or entity that is known to be a Customer or prospective Customer of SMP Nutra, nationwide, or otherwise divert or attempt to divert known
Customers or prospective Customers for Vendor’s or a
third party’s benefit, with respect to any Product previously, now, or at any
time hereafter sold or otherwise offered by SMP Nutra or any Affiliate thereof.
Vendor agrees that they will not, directly or indirectly, circumvent, avoid,
bypass, or obviate SMP Nutra with respect to any transactions with third parties introduced by SMP Nutra, including
but not limited
to, buying, selling,
negotiating, or any other
involvement with such third parties,
without the prior written consent
of SMP Nutra. Vendor further
agrees that they will not contract with any entity controlled, owned, or
operated by any previous SMP Nutra employees, officers, or shareholders.
Vendor acknowledges that the provisions of this Agreement
are reasonable and necessary for the protection of SMP. Vendor acknowledges that violation of any of
its obligation under this agreement would cause SMP irreparable damages and
agrees that SMP’s remedies at law for a breach or threatened breach of any of
the provisions of this agreement would be inadequate and difficult to
ascertain, and in recognition of this fact, in the event of a breach or
threatened breach by Vendor of any of the provisions of this Agreement, in
addition to the remedies at law or in equity or otherwise provided for in this Agreement
or otherwise available to SMP, SMP will be entitled to see equitable relief in
the form of specific performance, a temporary restraining order, temporary or
permanent injunction, or any other equitable remedy that may then be available
for the purposes of restraining Vendor from any actual or threatened breach of
its obligations. Without limiting the generality of the foregoing, if Vendor
breaches Section 9, hereof, the breach will entitle SMP to the exclusive remedy
of triple the profit from any sales made in violation of Section 9. Given the
damage to SMP’s relationship with the Customer likely to be caused by such
direct solicitation, Vendor agrees that treble damages are a fair and
reasonable projection of SMP’s future damages, including attorney’s fees and
costs
10
Non-Solicitation
Vendor
agrees not to solicit and hire, without SMP’s prior written approval, during
the term of this Agreement and for five years
thereafter, any SMP employee during the term of this Agreement. If Vendor
solicits and subsequently hires one of SMP’s employees without prior written
approval, then Vendor shall immediately pay SMP fifty thousand ($50,000.00) USD
to offset SMP’s cost of hiring and training a replacement. In the event
consent is given, Vendor
will owe a one-time Fee to
SMP of twenty-five thousand ($25,000.00) USD.
11 Term
and Termination.
11.1
Term.
This Agreement shall become effective upon the acceptance of the
purchase order and shall remain in force
for two (2) years after the acceptance of the most
recent purchase order. Upon the termination of the initial Term, this Agreement
shall automatically renew for successive terms of one (1) year unless either
Party has provided the other with ninety (90) days prior written notice of
intention to terminate. In the event SMP
does not issue any Purchase Orders during any Renewal Term within one (1) year,
Vendor will notify SMP in writing and, in the event SMP does not either (a)
confirm that it wishes to renew the Agreement for an additional Renewal Term,
or (b) issue a Purchase Order in response to such notice, this Agreement shall
automatically terminate at the end of such Renewal Term.
11.2
Termination
by SMP. SMP may terminate this
Agreement at any time by written notice to the Vendor, if:
11.2.1
Vendor’s Facility fails to comply with
the terms of the Quality Agreement, cGMP requirements in the manufacturing,
packaging and storage of the Products and Vendor fails to cure such
noncompliance or breach within thirty (30) days after receipt of written notice
thereof from SMP, FDA or other Governmental Authority,
11.2.2
the continued distribution and sale of
Product becomes commercially impractical as a consequence of changes in
regulatory requirements, lack of consumer demand, scarcity of required
ingredients or other similar
circumstances.
11.2.3
Vendor commits a material breach of
any of the provisions of this Agreement.
11.2.4
At any time and for any reason
whatsoever, in SMP’s sole discretion, with thirty (30) days written notice to
Vendor.
11.3
Termination by either party: the other
Party is dissolved or liquidated, files or has filed against it a petition
under any bankruptcy or insolvency law, makes an assignment to the benefit of
its creditors, has a receiver appointed for all or substantially all of its
property, or has a petition under any bankruptcy or insolvency law filed
against it which is not dismissed within sixty (60) days. Such rights of
termination shall be in addition to any other remedy a non- defaulting Party
may have at law or in equity due to the other Party’s breach of its obligations
hereunder.
11.4
Effect of Termination. Termination of this Agreement, however, shall not affect any
obligation to pay money, indemnify, reimburse, maintain confidentiality, and
compensation resulting from Vendor’s material breach of the Agreement under the Section 2.4.2.3, or
otherwise which either Party hereto may have incurred during the Term hereof.
11.5
Return
of Products and Materials Supplied by SMP. Upon
the effective date of expiration or termination of this Agreement for any
reason whatsoever and after fulfilling its obligations, Vendor shall
immediately deliver to SMP or its designee
all Products, Specifications, artwork, all Product materials
purchased by SMP and all other materials, supplies or equipment provided by SMP. Vendor shall also deliver to SMP or its
designee all Products produced hereunder and shall invoice SMP in accordance
with the terms of this Agreement.
11.6
Access to Master Documentation. Upon the expiration or termination of this Agreement, Vendor shall make available to SMP all documentation including Master Documentation relating to
the production of Product and prepared in the ordinary course of business
during the Term of this Agreement.
12 Recall.
12.1
Vendor will
maintain records necessary to permit a Recall of the Product distributed by
Vendor and delivered to SMP or customers of SMP. Each Party will promptly
notify the other Party of any information that it becomes aware of in relation
to the Manufacture of Product which might affect the marketability, safety, or
effectiveness of the Product or which might result in the Recall or seizure of
the Product. Upon receipt of such information, each Party will stop making any
further shipments of the Product in its possession or control until SMP has
decided whether a Recall or some other corrective action is necessary. The
decision to initiate a Recall or to take some other corrective action, if any,
with respect to the Product will be made by SMP.
12.2
If (a) any
Regulatory Authority issues a directive, order, or written request that the
Product be Recalled, or (b) a court of competent jurisdiction orders a Recall,
Vendor shall provide all assistance reasonably requested by SMP with respect
thereto.
12.3
If a Recall
of the Product results from, or arises out of, a failure of the third-party
Manufacturer the Product in accordance with the Product Requirements, then
Vendor will provide SMP with the contact information and other necessary
information of the Manufacturers of the Product and assist with SMP in any
filing and corrective action with the third-party Manufacturer. The
Manufacturers herein shall be any third-party firm independent from the Vendor,
who does not have any shareholding or affiliation with the Vendor. Vendor and
the third-party Manufacturer shall take joint responsibility for SMP 's
reasonable and documented expenses of the Recall, including attorneys’ fees, of
responding to any regulatory action.
12.4
In all other
circumstances where the Recall for the Product does result from, or arise out
of, a failure by Manufacture of the Product in accordance with the Product
Requirements, recalls or other corrective actions for the Product will be made
at Vendor's cost and expense, including any costs incurred by the Manufacturers
to provide assistance reasonably requested by SMP in connection therewith. If
any government agency makes, with respect to any products packaged, labeled distributed by the each party under this
Agreement any other type of action (other than those specified in above),
Vendor shall notify SMP, the Parties shall cooperate in determining, and will
mutually agree upon, the response, if any, to be made to such action and each
party agrees to cooperate with the other in responding to any communication or
inquiry and/or attempting to resolve any such action.
13 Notices.
Every notice or other communication
required or contemplated by this Agreement must be in writing and sent by one
of the following methods: (1) personal delivery, in which case delivery is deemed to occur the day of delivery; (2) certified or registered mail, postage
prepaid, return receipt requested, in which case delivery is deemed to occur
the day it is officially recorded by the U.S. Postal Service as delivered to
the intended recipient; or (3) next-day delivery to a U.S. address by recognized
overnight delivery service
such as Federal Express, in which case delivery
is deemed to occur one business
day after being sent. In each
case, a notice or other communication sent to a party must be directed
to the party’s mailing address on file. for SMP, that address is as
follows:
Notices to SMP Nutra:
12333 Enterprise Blvd.
Largo, Florida 33773
Attn: Steven Milano
14
Assignment
Neither
this Agreement nor any rights or obligations hereunder may be assigned or
otherwise transferred, directly or indirectly, by operation of law or
otherwise, by Vendor without the prior written consent of SMP. SMP shall be
free to assign or otherwise transfer (including by operation or law or
otherwise), any of its rights or obligations hereunder, in whole or in part,
without Vendor’s consent. This Agreement is binding upon the Parties hereto,
and their respective successors and assigns.
15
No
Restriction on Activities.
The Parties agree that, except the restrictions set forth in Section 9, this Agreement and the relationship of the Parties hereunder is non-exclusive, including in the following non-limiting respects. Nothing provided herein shall in any way limit the Parties from entering into any other business venture or restrict either Party from entering into similar marketing or sales agreements with other persons or entities for the sale and distribution of other products or services. Nothing in this Agreement is intended or shall be construed or deemed to prevent or otherwise inhibit SMP’s right to enter into any license, purchase, supply, or other agreement relating to other products, including products that are competitive with the Products. Further, nothing in this Agreement is intended or shall be construed or deemed to (a) require SMP to order any amount or quantity of Products from Vendor, or (b) prevent or otherwise inhibit SMP’s right to design, develop, manufacture, have manufactured, purchase, market, use, sell, distribute, or take any other action or have any Third Party take any such action on its behalf with respect to any other products, including any products which are competitive with the Products.
16.
Conflicting Terms.
In the event of a conflict between the terms of this Agreement and the terms of any supplementary purchase order, sales order, or supplementary vendor terms, the terms of this Agreement shall control.
If any provision of this Agreement or its application to any person or circumstances is determined by any court of competent jurisdiction to be unenforceable to any extent, that unenforceable provision will be deemed eliminated to the extent necessary to permit the remaining provisions to be enforced, and the remainder of this Agreement, or the application of the unenforceable provision to other persons or circumstances, will not be affected thereby. If any provision of this Agreement, or any part thereof, is held to be unenforceable because of the scope or duration of or the area covered by that provision, the court making that determination shall reduce the scope, duration of or area covered by that provision or otherwise amend the provision to the minimum extent necessary to make that provision enforceable to the fullest extent permitted by law.
18.
Governing Law.
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 law 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.
19.
Headings and Interpretation.
Titles and headings to sections in this Agreement are inserted for convenience of reference only and are not intended to affect the interpretation or construction of this Agreement. The terms “herein,” “hereof,” “hereunder” and similar expressions refer to this Agreement and not to any particular section or other portion hereof. Except as expressly provided otherwise, references herein to “days” are to calendar days. Whenever the words “include”, “includes”, or “including” are used they shall be deemed to be followed by the words “without limitation” whether or not they are in fact followed by those words or words of like import. A reference to any legislation or to any provision or any legislation will include any modifications, amendments, and re-enactments thereof, any legislative provision substituted therefor, and all rules, regulations, and statutory instruments issued or related to such legislation.