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.
RECITALS
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.
c. “Custom
Product” means any Product manufactured and/or packaged to CUSTOMER’s unique
formula, Specifications, and branding (including CUSTOMER Trademarks, artwork,
packaging components, and label content), and that is not part of COMPANY’s
standard stock offerings.
d. “Packaging
Completion” means the point at which COMPANY has completed the manufacturing
and packaging operations for the Products in accordance with the Specifications
(including filling/encapsulation/tableting, bottling, capping/sealing,
labeling, secondary packaging, lot/date coding, and counts and label
reconciliation), and has palletized, segregated, and clearly identified the
finished units as belonging to CUSTOMER. Packaging Completion may occur prior to
QC Release and prior to shipment.
e. “QC Release”
means COMPANY’s written Quality Control disposition releasing a lot/batch for
shipment and distribution in accordance with COMPANY’s SOPs and applicable
cGMP, which may include completion of batch record review and review of
required testing results (whether performed by COMPANY or a third-party
laboratory).
f. “Bill-and-Hold
Period” means the period after Packaging Completion during which finished
Products are held in COMPANY’s facility for CUSTOMER at CUSTOMER’s request
and/or for CUSTOMER’s convenience, pending QC Release, CUSTOMER shipping
instructions, carrier scheduling, or pickup.
g. “Work in
Process” or “WIP” means all partially completed Products and all costs incurred
by COMPANY in connection with a Purchase Order, including (without limitation)
raw materials, packaging components, labor, overhead, setup, subcontract costs,
and testing, and includes finished Products held during a Bill-and-Hold Period.
h. “Termination
Charges” means the amounts due under Section 5(d) and Section 13(d) if CUSTOMER
cancels, suspends, delays, or terminates after COMPANY has accepted a Purchase
Order.
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; Firm Purchase Orders.
CUSTOMER shall order Products by emailing COMPANY from time to time. Based on
the information provided by CUSTOMER, 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 required deposit (the “Deposit
Invoice”) will be sent electronically. Each order of Product must be made in accordance
with the minimum order quantities and current lead times stated by COMPANY.
Each Purchase Order becomes firm and non-cancelable when (i) COMPANY accepts
the order in writing (including by email) and (ii) CUSTOMER pays the Deposit
Invoice, except with COMPANY’s prior written consent. CUSTOMER acknowledges
that Products are manufactured and packaged on a custom basis and generally
have no alternative use to COMPANY. If CUSTOMER requests cancellation,
suspension, or delay after a Purchase Order becomes firm, CUSTOMER shall remain
responsible for Termination Charges under Section 5(d) and Section 13(d).
b. Effectiveness of Purchase Orders; Changes;
Deviations. Upon payment of the Deposit Invoice, CUSTOMER shall be obligated to
purchase the Products from COMPANY specified in the Deposit Invoice/Purchase
Order and COMPANY shall begin procuring materials and scheduling manufacturing.
CUSTOMER is responsible for timely delivery of any CUSTOMER-supplied raw
materials, packaging, labels, artwork approvals, and other inputs required to
meet the Specifications.
If any deviations from the Specifications are identified during testing or
manufacturing, COMPANY will notify CUSTOMER. If CUSTOMER approves a deviation
in writing or authorizes the order to proceed, CUSTOMER remains obligated to
pay the full Purchase Order price (including the final invoice at Packaging
Completion), subject to COMPANY’s warranty obligations for nonconforming
Products.
3. Prices.
a. General. COMPANY requires a nonrefundable
deposit of 50% of the Purchase Order total to begin work on any order. When the
Products reach Packaging Completion, COMPANY will notify CUSTOMER and issue a
final invoice for the remaining 50% of the Purchase Order total, plus any
additional charges accrued for artwork, labels, special packaging, storage (if
applicable), and freight. Final payment is due upon Packaging Completion and
must be received before shipment or pickup, unless COMPANY has granted written
credit terms. COMPANY will ship or make Products available for pickup only
after QC Release and receipt of all amounts due.
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 or other written quotation. 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. Unless otherwise
agreed in writing, all Products shall be shipped FOB Mt. Angel, Oregon.
CUSTOMER shall be responsible for all costs and expenses incurred in shipping
the Products from COMPANY to CUSTOMER’s destination(s), even if COMPANY helps
coordinate the shipping. COMPANY may, at CUSTOMER’s request, coordinate
shipping with a third-party carrier; in that case, COMPANY is acting at
CUSTOMER’s direction and any carrier charges advanced by COMPANY will be added
to the final invoice for the Products and paid by CUSTOMER. CUSTOMER may elect
to insure shipments while the Products are in the possession of a third-party
carrier at CUSTOMER’s expense. COMPANY is not responsible for shipping/import
costs through international customs or any additional paperwork required for
acceptance into other countries. Administration fees to send shipments from
COMPANY are $75 per requested shipment plus 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 Highland Laboratories Inc., 110 S Garfield Street,
Mount Angel, Oregon 97362 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 seventy-two (72) hours of
QC Release and payment settlement, unless otherwise agreed in writing.
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 twenty percent (+/- 20%) 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 a statistically relevant
representative sample of the units, per our SOPs,as the COMPANY needs to keep
retainer units for Quality Control as per FDA, CGMP Regulations. Customer will
be billed for these units although they will not receive them. Customer may
request access to these samples and/or further testing at any time during the
useful life of the product.
d. Title and Risk of Loss. Except as provided in
Section 4(g) (Bill-and-Hold), 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 (FOB origin).
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. Customer’s review of any certificate of
analysis (“COA”) or batch documentation is confirmatory; CUSTOMER may reject
Products only for documented failure to meet the Specifications, subject to the
notice periods in this Section 4(e) and Section 4(f).
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.
g. Bill-and-Hold; Custody Pending QC Release.
i. Customer
Requested Hold. CUSTOMER requests and agrees that COMPANY may hold finished
Products after Packaging Completion during the Bill-and-Hold Period pending (A)
QC Release and/or (B) CUSTOMER’s shipping instructions, carrier scheduling, or
pickup appointment. CUSTOMER agrees that this hold is for CUSTOMER’s
convenience and is a substantive reason for the arrangement.
ii.
Identification and Segregation. During the Bill-and-Hold Period, COMPANY will
keep the Products clearly identified as belonging to CUSTOMER (by lot/batch and
customer name) and segregated from other inventory to the extent practicable.
iii. Ready for
Transfer; No Redirection. At Packaging Completion, the Products are finished,
packaged, and ready for physical transfer to CUSTOMER, subject only to routine
QC disposition and shipment/pickup coordination. COMPANY shall not use the
Products or direct them to another customer and shall not substitute other
product for the Products, except as may be necessary after CUSTOMER default
under this Agreement.
iv. Title;
Risk of Loss; Care; Security Interest. For Products held during a Bill-and-Hold
Period, title to the Products transfers to CUSTOMER at Packaging Completion.
Risk of loss transfers to CUSTOMER at Packaging Completion; provided, however,
that COMPANY will exercise reasonable care as a bailee and will remain
responsible for loss or damage caused by COMPANY’s negligence or willful
misconduct. COMPANY retains a purchase money security interest in the Products
until all amounts due are paid in full.
v. QC Release
and Shipment. COMPANY will ship or make the Products available for pickup only
after QC Release and after receipt of all amounts due. CUSTOMER shall provide
shipping instructions or schedule pickup promptly after notice of Packaging
Completion and QC Release.
vi. Storage
Fees. Storage fees, if any, are governed by Section 7(f).
5. Payment and Invoices.
a. Payment. All payments shall be made by check,
credit card (subject to credit card processing fee) 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 Packaging Completion, and
prior to shipment/pickup by COMPANY, unless COMPANY has granted written credit
terms. COMPANY will ship or make Products available for pickup only after QC
Release and receipt of all amounts due. CUSTOMER’s payment obligation is not
contingent on the timing of QC Release, third-party laboratory turnaround, or
carrier pickup.
If any amount is not paid in full when due, COMPANY may seek payment in full
from CUSTOMER for any components, raw materials, WIP or finished goods of the
Products. Once CUSTOMER pays for such components, raw materials, WIP or
finished goods of the Products, COMPANY will ship or otherwise tender the same
to CUSTOMER at CUSTOMER’s expense, subject to QC Release requirements. CUSTOMER
is responsible for any sales, use, VAT, GST, CAT, or other taxes or duties,
however designated, except for taxes related to the COMPANY’s net income. If
the customer initiates or 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. COMPANY shall issue a Deposit
Invoice and may issue one or more progress invoices for materials, WIP,
storage, or other amounts due. COMPANY shall issue a final invoice to CUSTOMER
upon Packaging Completion (including any other amounts due to COMPANY). COMPANY
shall also have the right to issue an invoice on the date the Products reach
Packaging Completion or are ready for shipment/pickup, 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.
d. Right to Payment for Performance Completed to
Date; Cancellation or Suspension. CUSTOMER acknowledges that COMPANY will incur
costs and reserve production capacity in reliance on each firm Purchase Order
and that the Products are custom and not readily saleable to others. Except as
caused by COMPANY’s material breach, CUSTOMER may not cancel, suspend, or
materially delay a firm Purchase Order without COMPANY’s written consent.
If CUSTOMER cancels, suspends, fails to provide required materials/information,
or requests a delay that causes COMPANY to stop or slow work, CUSTOMER shall
pay (i) all costs incurred by COMPANY through the effective date of
cancellation/suspension/delay (including committed and non-cancelable costs,
labor, overhead, testing, and subcontract charges), plus (ii) a reasonable
margin of twenty percent (20%) on such costs, plus (iii) any storage and
disposal fees under Section 7(f), less amounts already paid by CUSTOMER.
COMPANY may invoice these amounts immediately, and may continue to hold the
Products, WIP, and materials until paid.
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.
a. Labels.
- 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
four weeks after their order is placed. Failing to provide “print ready”
artwork within the four-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, Highland 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 their sales or customer service representative. CUSTOMER must contact
their representative 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
your 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), 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
30-45 business days after payment is received, the 1st set
of samples will be shipped and each additional sample will take another
approximated 30-45 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 unless expressly stated. Finished Products may be held during a
Bill-and-Hold Period pending QC Release and shipment/pickup coordination.
Storage fees will begin to accrue on the later of (i) ten (10) business days
after COMPANY notifies CUSTOMER that the Products have achieved QC Release and
are available for shipment/pickup, or (ii) the date CUSTOMER requests COMPANY
to hold Products after QC Release, unless otherwise agreed in writing. 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 Products, materials, or other items held more than sixty (60) days after an
undisputed invoice is due and unpaid will be considered abandoned and will
become the property of COMPANY. The COMPANY has the right to sell goods that
are unpaid after such period 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 if the CUSTOMER goes out of business and requests COMPANY
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 after an undisputed invoice is due and unpaid,
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
do not offer in house graphic design services. All graphic designs must be
prepared by the customer and submitted to the COMPANY for approval prior to
print production.
i. Returns. Although
Highland Laboratories does not typically accept product returns directly from
consumers or third-party companies, and Highland Laboratories reserves the
right to refuse any returns from consumers and third-party companies, in the
event that a product is returned to Highland Laboratories 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 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 legalization
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.
10. Indemnification.
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.
12. Confidentiality.
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 (i) termination by CUSTOMER other than due to
COMPANY’s material breach, or (ii) termination by COMPANY as a result of
CUSTOMER default, CUSTOMER shall receive, and shall pay COMPANY for, all finished
Products ordered and produced up to and including the effective date of
termination.
With respect to unfinished Products, WIP, and other performance completed to
date, CUSTOMER shall pay COMPANY for: (A) all raw materials, packaging
components, and other supplies purchased or committed by COMPANY for use in the
production of Products; and (B) all processing completed and costs incurred
through the effective date of termination (including labor, supplies,
utilities, other direct costs, testing, subcontract costs, and an allocation of
overhead, all as reasonably determined by COMPANY), in each case plus a
reasonable margin of twenty percent (20%), plus any non-cancelable third-party
charges, storage, and disposal fees, less amounts previously paid by CUSTOMER.
Upon payment, COMPANY shall, at CUSTOMER’s request, ship or otherwise tender
the finished Products and any remaining materials or WIP to CUSTOMER at
CUSTOMER’s expense, subject to QC Release requirements. 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 Oregon, 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
Marion County, Oregon. 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.
ALL SALES ARE SUBJECT TO THESE TERMS
AND CONDITIONS. NO REFUNDS ARE AVAILABLE AFTER THE INITIAL DEPOSIT HAS
BEEN MADE.
