SUPPLY CHAIN AGREEMENT (COMPREHENSIVE-WITH A QUALITY SYSTEM)This Supply Chain Agreement covers customers buying goods from an ongoing supply, subject to quality requirements, and explains the contract year, fiscal quarters, forecasts, purchase orders, quality system, facility, materials, certificates of analysis, quality control, shelf life, customer complaints, recalls, inventory at the end of the term, shortages, ownership, title, risk of loss, acceptance, returns, fees, invoices and taxes, warranties, disclaimers, indemnification, term and termination, force majeure, publicity, and general boilerplate for a supply chain agreement. |
Comments:
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SUPPLY AGREEMENT
This Agreement describes Party-1's purchase of Deliverables from Party-2.
Party-1 and Party-2 therefore agree as follows:
1. DEFINITIONS.
(a) "Contract Year" means any twelve (12) month period during the Term beginning on January 1 and ending on December 31. [QR-65]
(b) "Deliverables" means the products described in this Agreement.
(c) "Facility" means the facility located at this address: TEXTFIELD [QR-66]
(d) "Forecast" has the meaning assigned in the provision entitled "Forecasts and Purchase Orders".
(e) "Government Authority" means any governmental authority or court, tribunal, agency, department, commission, arbitrator, board, bureau, or instrumentality of the United States of America or any other country or territory, or domestic or foreign state, prefecture, province, commonwealth, city, county, municipality, territory, protectorate or possession.
(f) "Law" means all laws, statutes, ordinances, codes, regulations and other pronouncements having the effect of law of any Government Authority.
(g) "Materials" means all raw materials, components, and other items necessary for the manufacture of Deliverables.
(h) "Purchase Order" means a binding commitment in writing to purchase Deliverables.
(i) "Quarter" means any period of three consecutive calendar months ending March 31, June 30, September 30 or December 31.
2. DELIVERABLES. Party-2 agrees to provide the following Deliverables: [QR-43]
3. FORECASTS AND PURCHASE ORDERS.
(a) Forecasts and Purchase Orders Overview. No later than ninety (90) days before the end of each Quarter, Party-1 will advise Party-2 in writing of its estimated requirements for Products for each Quarter of the next succeeding Contract Year, and within thirty (30) days of receipt, Party-2 agrees to either confirm or reject the estimate by notice to Party-1 (once confirmed by Party-2, each such estimate is a "Forecast"). Forecasts do not constitute Purchase Orders or commitments to purchase Products. Party-1 may place Purchase Orders from time to time under the Forecast. Each Purchase Order must specify the quantity of Products ordered, the required delivery date and the shipping address. The delivery date must give Party-2 at least the following number of days after the date of Party-2's receipt of the Purchase Order to make delivery of the Products: [QR-67]
[QR-99]
4. RECALLS. If any Deliverable (or any product incorporating a Deliverable) is recalled, withdrawn or field corrected because of Party-2's breach of this Agreement, then Party-2 will reimburse Party-1 for: (a) all such Deliverables; (b) all costs associated with manufacturing the recalled, withdrawn or field corrected products (if any) containing the Deliverable, including, without limitation, formulation, packaging and distribution expenses; and (c) all other reasonable expenses incurred in connection with such recall, withdrawal or field correction.
5. INVENTORY AT THE END OF THE TERM. At the end of the Term, Party-2 agrees to return to Party-1 within thirty (30) days, at Party-1's expense: (a) any remaining inventory of Materials received from Party-1 or its suppliers (if any); (b) all manufacturing components paid for by Party-1; (c) all Deliverables subject to a Purchase Order, including Deliverables in process (if requested by Party-1 in writing), for the price stated in this Agreement; and (d) any other products or Materials being stored by Party-2 for Party-1 (if any). However, if the Agreement was terminated due to a breach of this Agreement by Party-2, then the inventory must be returned at Party-2's expense. This provision survives this Agreement.
6. SHORTAGES. In addition to and not in lieu of any other remedies under this Agreement, in equity or at Law, if any Deliverables or Materials required to manufacture Deliverables are in short supply, Party-2 agrees to notify Party-1 in writing of such circumstances as soon as possible, explaining the underlying reasons for such shortage, proposed remedial measures, the date the shortage is expected to end and the amount of Deliverables or Materials allocated to Party-1. Party-2 agrees to allocate to Party-1 an amount of Deliverables, or the Materials in question, equal to Party-1's Forecasted amount divided by the total demand of all of Party-2's customers for the shortage period. In making any such allocation, Party-2 agrees to not give any priority to its own requirements.
7. QUALITY SYSTEM.
(a) Materials. Within thirty (30) days of the Effective Date, Party-2 agrees to provide Party-1 with notice of the following: a list of all Materials used to manufacture Deliverables, the specifications, source and location of manufacture for such Materials, and a description of the manufacturing process for all such Materials. Party-2 agrees to maintain all documentation/records regarding its purchase of each Material for a period of seven (7) years.
(b) Process Changes. Party-2 agrees to not change any of the following, except as may be required to comply with applicable Laws, without Party-1's prior written consent: (a) the Agreement; (b) the Materials; (c) the source of Materials; (d) the specifications for Materials; (e) the process for manufacturing Deliverables or Materials, and (f) the test methods used in manufacturing of Deliverables. If Party-1 approves in writing a change to any of the foregoing, Party-2 agrees to provide Party-1 with all information needed to amend any regulatory filings with respect to Deliverables. If Party-2 makes any regulatory filings or otherwise attempts to obtain any Government Authority approvals regarding the Deliverables, Party-2 must immediately notify Party-1 whether such changes have been approved or rejected.
(c) Facility. Party-2 agrees to manufacture all Deliverables under this Agreement at the Facility.
(d) Equipment. Party-2 agrees, at its expense, to operate and maintain the Facility and all equipment used to manufacture Deliverables and to maintain the Facility and equipment in an acceptable state of repair and operating efficiency required for Party-2 to comply with this Agreement. Party-2 must validate the manufacturing equipment (including, without limitation, conducting installation, operational and performance qualification), production, cleaning, packaging, process and any other appropriate steps performed at the Facility. Validation procedures used by Party-2 must: (i) meet applicable Laws; and (ii) be found acceptable by Government Authority inspections.
(e) Certificates of Analysis. Party-2 agrees to provide Party-1 with certificates of analysis for each Deliverable. These certificates will document that each Deliverable received by Party-1 conforms to the Agreement. A copy of each certificate must be included with each Deliverable delivered to Party-1. Party-2 agrees to also provide Party-1 with Government Authority certification, for those countries in which the applicable Government Authority is in the practice of requiring any such certifications.
(f) Quality Control Tests. Party-2 agrees to perform the quality control tests stated in the Agreement (if any). Party-2 agrees to make the results of its quality control tests available to Party-1 on or before the date of delivery of the corresponding Deliverables. Party-2 agrees to not ship Deliverables to Party-1 unless Party-2's quality control tests show the Deliverables comply with the Agreement.
(g) Actions and Inspections. Party-2 agrees to immediately notify Party-1 of any information Party-2 receives regarding any threatened or pending action or inspection by any Government Authority, including, without limitation, any Government Authority non-approval or regulatory action, or any filing requirement. Upon receipt of any such information regarding the Deliverables, Party-2 agrees to consult with Party-1 in an effort to arrive at a mutually acceptable procedure for taking appropriate action; provided, however, that either party is free to make a timely report to any Government Authority or take other action that it deems to be appropriate or required by applicable Law. Party-2 agrees to permit one or more qualified representative(s) of Party-1 to be present at any such inspections (if requested by Party-1). Party-2 agrees to promptly (no later than ten (10) business days) furnish Party-1 summaries of all reports, documents or correspondence regarding any Government Authority requests or inspections of the Facility regarding the Deliverables, as well as a copy of each such report, document or correspondence.
(h) Safety Issues Notice. Party-2 agrees to immediately (and, in any event, within twenty four (24) hours) notify Party-1 of any information of which it is aware concerning Deliverables which may involve health hazards or otherwise affect the safety or efficacy claims regarding or the continued marketing of the Deliverable. Upon receipt of any such information, Party-2 agrees to consult with Party-1 in an effort to arrive at a mutually acceptable procedure for taking appropriate action; provided, however, either party is free to make a timely report of such matter to any Government Authority or take other action that it deems to be appropriate or required by applicable Law. Party-2, at its expense and under Party-1's direction and to Party-1's satisfaction, agrees to generate any other information and documentation related to Deliverable safety or required by applicable Law, including, but not limited to, physical, chemical, and biological characteristics of each of the Deliverables that Party-1 requests as needed for addressing safety issues related to the Deliverable.
(i) Deliverable Issues. Party-2 agrees to promptly notify Party-1 of any lot failure, manufacturing problems or similar issues that may impact Party-1's ability to distribute Deliverables to its customers. Within fourteen (14) days following Party-2's receipt of any response or other notice from Party-1 that a problem has developed with a Deliverable, Party-2 agrees to provide a detailed written response to Party-1 outlining a plan to resolve the problem, to the extent such problem is related to Party-2's manufacture of the Deliverable or obligations under this Agreement.
(j) Shelf Life. Party-2 agrees to ensure that all Deliverables have an expiration date that lasts at least for the following period after the date of delivery of such Deliverable to the carrier for shipment to Party-1's designated site: TEXTFIELD [QR-104]
(k) Customer Complaints. Party-1 is responsible for coordinating any Customer Complaint that it receives concerning any Deliverable. Party-2 agrees to transfer to Party-1 any Customer Complaint that it receives concerning any Deliverable. Party-2 agrees to investigate any Customer Complaint and to implement corrective action where necessary. Party-1 is responsible for communicating with Party-1's customers regarding any Customer Complaint about any Deliverable. "Customer Complaint" means any written, oral or electronic expression of dissatisfaction relative to the use, identity, quality, durability, reliability, safety, effectiveness or performance of a Deliverable, made by a customer of Party-1, including, but not limited to, actual or suspected Deliverable tampering, contamination, mislabeling, or wrong components, and any of the foregoing regarding a Party-1 product incorporating a Deliverable.
8. OWNERSHIP.
(a) Ownership, Title, and Risk of Loss. Ownership of, title to, and risk of loss for the Deliverables passes to Party-1 upon Party-2's delivery of the Deliverables to a nationally reputable carrier, fully insured with a nationally reputable insurer (such insurance may be invoiced to Party-1 at cost). [QR-86]
(b) Pass-Through. Without limiting any other terms and conditions set forth in this Agreement, Party-2 agrees to pass through or assign to Party-1 any third party warranty and any other rights, rebates, discounts or benefits, which Party-2 receives in connection with any Deliverables.
(c) Documentation. Party-2 agrees to deliver with the Deliverables two (2) copies of the documentation and other materials that Party-2 ordinarily provides to purchasers of the Deliverables.
9. ACCEPTANCE.
(a) Acceptance and Testing. If Party-1 claims that any Deliverables did not, at the time of delivery, comply with this Agreement, then Party-1 agrees to notify Party-2. If the parties are unable to agree as to whether these Deliverables comply with this Agreement, the parties agree to have the Deliverables in dispute analyzed by an independent testing laboratory of recognized repute mutually agreed to by the parties in writing. The results of this laboratory testing are final and binding on the parties as to whether the Deliverables comply with this Agreement. If the Deliverables are determined to so comply, then Party-1 must bear the cost of the independent laboratory testing and purchase the Deliverables. If the Deliverables are determined to not so comply, then Party-2 must bear the cost of laboratory testing, and Party-2 must, at Party-1's election, either replace the rejected Deliverables within thirty (30) days of the date of such determination, at no cost to Party-1, or refund to Party-1 the price paid for the rejected Deliverables, plus any applicable delivery charge.
(b) Returns. Any Deliverables which do not comply with this Agreement and which are in Party-1's possession must, at Party-2's option and expense, either be: (i) returned to Party-2; or (ii) destroyed pursuant to Party-2's instructions and with Party-1's approval.
10. FEES. Except as expressly stated in this Agreement, there are no additional fees, charges or expenses incurred. In consideration for Party-2 performing all obligations under this Agreement, Party-1 agrees to pay Party-2 a flat fee of: [QR-53] [QR-56] If any affiliate of Party-1 gives notice to Party-2 of an offer to make a purchase from Party-2 under the same fees, terms and conditions stated in this Agreement, then Party-2 agrees to accept each such offer. Under this Agreement, "affiliate" means: (a) any corporation or business entity of which fifty one percent (51%) or more of the voting stock or voting equity interests are owned directly or indirectly by a party to this Agreement; or (b) any corporation or business entity which directly or indirectly owns fifty one percent (51%) or more of the voting stock or voting equity interests of such party; or (c) any corporation or business entity directly or indirectly controlling or under control of a corporation or business entity described in (a) or (b). [QR-55] If Party-1 pays within ten (10) days of the date of Party-1's receipt of an invoice, then Party-2 will deduct from the next invoice a credit equal to two percent (2%) of the invoiced amount. [QR-113] [QR-59]
11. INVOICES AND TAXES. Party-1 agrees to pay to Party-2 all fees owed under this Agreement within thirty (30) days after the date of Party-1's receipt of a complete invoice. A complete invoice is one that contains the invoice number, invoice date, description of the transaction, total invoice amount with miscellaneous charges listed separately and payment terms consistent with and not additional to any provisions under this Agreement. To the extent that the transactions under this Agreement are subject to any sales, use, value added or any other taxes, payment of these taxes, if any, is Party-1's responsibility. Party-2 is liable for any and all taxes on any and all income it receives under this Agreement.
12. WARRANTIES.
(a) Mutual Warranties. Each party represents, warrants and covenants to the other that:
(i) General. It: (a) is a company duly organized and validly existing and in good standing under the Laws of its jurisdiction of organization; (b) is qualified or licensed to do business and in good standing in every jurisdiction where qualification or licensing is required; and (c) has the corporate power and authority to negotiate, execute, deliver and perform its obligations under this Agreement.
(ii) Law Compliance. It complies with all applicable Laws.
(b) Warranties by Party-2. Party-2 represents, warrants and covenants to Party-1 that:
(i) Warranty Length. For a period of thirty (30) days after receipt, the Deliverables conform to the requirements of this Agreement, are free from any defect in material and workmanship, and are free of all liens, claims and encumbrances of any kind. [QR-83]
(ii) Infringement. The Deliverables do not violate any patent, trade secret, or other intellectual property or proprietary rights of any third party.
(iii) No Litigation. There is no actual or threatened litigation: (a) that affects its ability to comply with this Agreement, or (b) concerning the Deliverables.
(c) Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, PARTY-1 AND PARTY-2 EACH MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR COVENANTS OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
13. INDEMNIFICATION. The term "Claim" means any claim, suit or action by any third party, and the term "Losses" means any damages awarded and fines assessed in any Claim by a court of competent jurisdiction or pursuant to an arbitration proceeding, any amounts due under Claim settlement, and any other costs or expenses incurred in complying with any injunctive or equitable relief or any settlement requirements.
(a) Party Indemnification.
(i) Indemnification by Party-2. Upon receipt of notice from Party-1 requesting Party-2 to do so, Party-2 agrees to indemnify, defend, and hold harmless Party-1 and its affiliates, subsidiaries, shareholders, members, directors, officers, employees, agents, and parents, from and against any Claim, and any associated Losses to the extent caused by violation of any patent, copyright, trademark, trade secret, or other intellectual property or proprietary right due to Party-2 providing the Deliverables (except to the extent a Claim is caused by Party-1's internally created specifications). [QR-81]
(ii) Indemnification by Party-1. Upon receipt of notice from Party-2 requesting Party-1 to do so, Party-1 agrees to indemnify, defend, and hold harmless Party-2 and its affiliates, subsidiaries, shareholders, members, directors, officers, employees, agents, and parents, from and against any Claim, and any associated Losses to the extent caused by violation of any patent, copyright, trademark, trade secret, or other intellectual property or proprietary right to the extent caused by Party-1's internally created specifications or Party-1's use of the Deliverables. [QR-75]
(b) Indemnification Procedures. The term "indemnifying party" means the party assuming indemnification obligations under this Agreement, and the term "indemnified party" means all parties, including any third parties, which the indemnifying party agrees to indemnify under this Agreement.
(i) Notice. The indemnified party must give the indemnifying party prompt written notice of a Claim, provided, however, that failure of an indemnified party to give prompt written notice does not relieve the indemnifying party from its indemnification obligations under this Agreement except to the extent the defense is materially prejudiced by the failure. When the indemnifying party receives notice of a Claim from an indemnified party, the indemnifying party agrees, at its sole cost and expense, to assume the defense of the Claim by representatives chosen by the indemnifying party. The indemnified party may participate in the defense of the Claim and employ counsel at its own expense to assist in the defense of the Claim, subject to the indemnifying party retaining final authority and control over the conduct of the defense.
(ii) Conduct of Defense. The indemnifying party's defense attorneys must be reasonably experienced and qualified in the areas of litigation applicable to the defense. The indemnifying party has the right to assert any defenses, causes of action or counterclaims arising from the subject of the Claim available to the indemnified party and also has the right to settle the Claim, subject to the indemnified party's prior written consent to the extent the settlement affects the rights or obligations of the indemnified party. The indemnified party agrees to provide the indemnifying party with reasonable assistance, at the indemnifying party's expense, as may be reasonably requested by the indemnifying party in connection with any defense, including, without limitation, providing the indemnifying party with information, documents, records and reasonable access to the indemnified party as the indemnifying party reasonably deems necessary.
14. TERM AND TERMINATION.
(a) Term. The term of this Agreement (together with any renewals, the "Term") begins on the Effective Date and expires one (1) year [QR-24] later. Immediately upon expiration this Agreement automatically renews on the same terms and conditions for additional successive periods of one (1) year on each anniversary of the Effective Date, unless either party gives the other party notice that the Agreement does not renew at least thirty (30) days before the end of the then applicable Term. [QR-18]
(b) Survival. The following captioned sections survive any termination, expiration or non-renewal of this Agreement: "Disclaimer", "Indemnification", "Survival", "Publicity" and "General", as well as any other provisions expressly stating that they are perpetual or survive this Agreement.
(c) Termination for Insolvency. If either party is adjudged insolvent or bankrupt, or upon the institution of any proceedings by it seeking relief, reorganization or arrangement under any Laws relating to insolvency, or if an involuntary petition in bankruptcy is filed against a party and the petition is not discharged within sixty (60) days after filing, or upon any assignment for the benefit of a party's creditors, or upon the appointment of a receiver, liquidator or trustee of any of a party's assets, or upon the liquidation, dissolution or winding up of its business (each, an "Event of Bankruptcy"), then the party affected by any Event of Bankruptcy must immediately give notice of the Event of Bankruptcy to the other party, and the other party may terminate this Agreement by notice to the affected party.
(d) Termination for Breach. If either party breaches any provision contained in this Agreement, and the breach is not cured within thirty (30) days after the breaching party receives notice of the breach from the non-breaching party, the non-breaching party may then deliver a second notice to the breaching party immediately terminating this Agreement.
[QR-17]
15. FORCE MAJEURE. Any failure or delay by a party in the performance of its obligations under this Agreement is not a default or breach of the Agreement or a ground for termination under this Agreement to the extent the failure or delay is due to elements of nature or acts of God, acts of war, terrorism, riots, revolutions, or strikes or other factor beyond the reasonable control of a party (each, a "Force Majeure Event"). The party failing or delaying due to a Force Majeure Event agrees to give notice to the other party which describes the Force Majeure Event and includes a good faith estimate as to the impact of the Force Majeure Event upon its responsibilities under this Agreement, including, but not limited to, any scheduling changes. However, should any failure to perform or delay in performance due to a Force Majeure Event last longer than thirty (30) days, or should three (3) Force Majeure Events apply to the performance of a party during any calendar year, the party not subject to the Force Majeure Event may terminate this Agreement by notice to the party subject to the Force Majeure Event.
16. PUBLICITY. Each party agrees to not make, publish or distribute (whether in print, electronically or otherwise) any public announcements, press releases, advertising, marketing materials or promotional materials regarding the execution or performance of this Agreement without the prior written consent of the other party.
17. GENERAL. Entire Agreement and Amendments. This Agreement is the entire agreement between the parties and supersedes all earlier and simultaneous agreements regarding the subject matter, including, without limitation, any invoices, business forms, purchase orders, proposals or quotations. This Agreement may be amended only in a written document, signed by both parties. Independent Contractors, Third Party Beneficiaries, and Subcontractors. The parties acknowledge that they are independent contractors under this Agreement, and except if expressly stated otherwise, none of the parties, nor any of their employees or agents, has the power or authority to bind or obligate another party. Except if expressly stated, no third party is a beneficiary of this Agreement. The parties may not subcontract any of their obligations under this Agreement. [QR-63] Governing Law and Forum. All claims regarding this Agreement are governed by and construed in accordance with the Laws of TEXTFIELD [QR-27], applicable to contracts wholly made and performed in such jurisdiction, except for any choice or conflict of Law principles, and must be litigated in TEXTFIELD [QR-28], regardless of the inconvenience of the forum, except that a party may seek temporary injunctive relief in any venue of its choosing. The parties acknowledge and agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement. Assignment. This Agreement binds and inures to the benefit of the parties' successors and assigns. Either party may assign, delegate, sublicense or otherwise transfer this Agreement, or any right or obligation under this Agreement, to a third party. [QR-46] No Waivers, Cumulative Remedies. A party's failure to insist upon strict performance of any provision of this Agreement is not a waiver of any of its rights under this Agreement. Except if expressly stated otherwise, all remedies under this Agreement, at Law or in equity, are cumulative and nonexclusive. Severability. If any portion of this Agreement is held to be unenforceable, the unenforceable portion must be construed as nearly as possible to reflect the original intent of the parties, the remaining portions remain in full force and effect, and the unenforceable portion remains enforceable in all other contexts and jurisdictions. Notices. All notices, including notices of address changes, under this Agreement must be sent by registered or certified mail or by overnight commercial delivery to the address set forth in this Agreement by each party. Captions and Plural Terms. All captions are for purposes of convenience only and are not to be used in interpretation or enforcement of this Agreement. Terms defined in the singular have the same meaning in the plural and vice versa.
IN WITNESS WHEREOF, the parties execute this Agreement as of the Effective Date. Each person who signs this Agreement below represents that such person is fully authorized to sign this Agreement on behalf of the applicable party.
PARTY-1
By: __________________________________
Print Name: ___________________________
Title: ________________________________
PARTY-2
By: __________________________________
Print Name: ___________________________
Title: ________________________________
Party-1 and Party-2 therefore agree as follows:
1. DEFINITIONS.
(a) "Contract Year" means any twelve (12) month period during the Term beginning on January 1 and ending on December 31. [QR-65]
(b) "Deliverables" means the products described in this Agreement.
(c) "Facility" means the facility located at this address: TEXTFIELD [QR-66]
(d) "Forecast" has the meaning assigned in the provision entitled "Forecasts and Purchase Orders".
(e) "Government Authority" means any governmental authority or court, tribunal, agency, department, commission, arbitrator, board, bureau, or instrumentality of the United States of America or any other country or territory, or domestic or foreign state, prefecture, province, commonwealth, city, county, municipality, territory, protectorate or possession.
(f) "Law" means all laws, statutes, ordinances, codes, regulations and other pronouncements having the effect of law of any Government Authority.
(g) "Materials" means all raw materials, components, and other items necessary for the manufacture of Deliverables.
(h) "Purchase Order" means a binding commitment in writing to purchase Deliverables.
(i) "Quarter" means any period of three consecutive calendar months ending March 31, June 30, September 30 or December 31.
2. DELIVERABLES. Party-2 agrees to provide the following Deliverables: [QR-43]
3. FORECASTS AND PURCHASE ORDERS.
(a) Forecasts and Purchase Orders Overview. No later than ninety (90) days before the end of each Quarter, Party-1 will advise Party-2 in writing of its estimated requirements for Products for each Quarter of the next succeeding Contract Year, and within thirty (30) days of receipt, Party-2 agrees to either confirm or reject the estimate by notice to Party-1 (once confirmed by Party-2, each such estimate is a "Forecast"). Forecasts do not constitute Purchase Orders or commitments to purchase Products. Party-1 may place Purchase Orders from time to time under the Forecast. Each Purchase Order must specify the quantity of Products ordered, the required delivery date and the shipping address. The delivery date must give Party-2 at least the following number of days after the date of Party-2's receipt of the Purchase Order to make delivery of the Products: [QR-67]
[QR-99]
4. RECALLS. If any Deliverable (or any product incorporating a Deliverable) is recalled, withdrawn or field corrected because of Party-2's breach of this Agreement, then Party-2 will reimburse Party-1 for: (a) all such Deliverables; (b) all costs associated with manufacturing the recalled, withdrawn or field corrected products (if any) containing the Deliverable, including, without limitation, formulation, packaging and distribution expenses; and (c) all other reasonable expenses incurred in connection with such recall, withdrawal or field correction.
5. INVENTORY AT THE END OF THE TERM. At the end of the Term, Party-2 agrees to return to Party-1 within thirty (30) days, at Party-1's expense: (a) any remaining inventory of Materials received from Party-1 or its suppliers (if any); (b) all manufacturing components paid for by Party-1; (c) all Deliverables subject to a Purchase Order, including Deliverables in process (if requested by Party-1 in writing), for the price stated in this Agreement; and (d) any other products or Materials being stored by Party-2 for Party-1 (if any). However, if the Agreement was terminated due to a breach of this Agreement by Party-2, then the inventory must be returned at Party-2's expense. This provision survives this Agreement.
6. SHORTAGES. In addition to and not in lieu of any other remedies under this Agreement, in equity or at Law, if any Deliverables or Materials required to manufacture Deliverables are in short supply, Party-2 agrees to notify Party-1 in writing of such circumstances as soon as possible, explaining the underlying reasons for such shortage, proposed remedial measures, the date the shortage is expected to end and the amount of Deliverables or Materials allocated to Party-1. Party-2 agrees to allocate to Party-1 an amount of Deliverables, or the Materials in question, equal to Party-1's Forecasted amount divided by the total demand of all of Party-2's customers for the shortage period. In making any such allocation, Party-2 agrees to not give any priority to its own requirements.
7. QUALITY SYSTEM.
(a) Materials. Within thirty (30) days of the Effective Date, Party-2 agrees to provide Party-1 with notice of the following: a list of all Materials used to manufacture Deliverables, the specifications, source and location of manufacture for such Materials, and a description of the manufacturing process for all such Materials. Party-2 agrees to maintain all documentation/records regarding its purchase of each Material for a period of seven (7) years.
(b) Process Changes. Party-2 agrees to not change any of the following, except as may be required to comply with applicable Laws, without Party-1's prior written consent: (a) the Agreement; (b) the Materials; (c) the source of Materials; (d) the specifications for Materials; (e) the process for manufacturing Deliverables or Materials, and (f) the test methods used in manufacturing of Deliverables. If Party-1 approves in writing a change to any of the foregoing, Party-2 agrees to provide Party-1 with all information needed to amend any regulatory filings with respect to Deliverables. If Party-2 makes any regulatory filings or otherwise attempts to obtain any Government Authority approvals regarding the Deliverables, Party-2 must immediately notify Party-1 whether such changes have been approved or rejected.
(c) Facility. Party-2 agrees to manufacture all Deliverables under this Agreement at the Facility.
(d) Equipment. Party-2 agrees, at its expense, to operate and maintain the Facility and all equipment used to manufacture Deliverables and to maintain the Facility and equipment in an acceptable state of repair and operating efficiency required for Party-2 to comply with this Agreement. Party-2 must validate the manufacturing equipment (including, without limitation, conducting installation, operational and performance qualification), production, cleaning, packaging, process and any other appropriate steps performed at the Facility. Validation procedures used by Party-2 must: (i) meet applicable Laws; and (ii) be found acceptable by Government Authority inspections.
(e) Certificates of Analysis. Party-2 agrees to provide Party-1 with certificates of analysis for each Deliverable. These certificates will document that each Deliverable received by Party-1 conforms to the Agreement. A copy of each certificate must be included with each Deliverable delivered to Party-1. Party-2 agrees to also provide Party-1 with Government Authority certification, for those countries in which the applicable Government Authority is in the practice of requiring any such certifications.
(f) Quality Control Tests. Party-2 agrees to perform the quality control tests stated in the Agreement (if any). Party-2 agrees to make the results of its quality control tests available to Party-1 on or before the date of delivery of the corresponding Deliverables. Party-2 agrees to not ship Deliverables to Party-1 unless Party-2's quality control tests show the Deliverables comply with the Agreement.
(g) Actions and Inspections. Party-2 agrees to immediately notify Party-1 of any information Party-2 receives regarding any threatened or pending action or inspection by any Government Authority, including, without limitation, any Government Authority non-approval or regulatory action, or any filing requirement. Upon receipt of any such information regarding the Deliverables, Party-2 agrees to consult with Party-1 in an effort to arrive at a mutually acceptable procedure for taking appropriate action; provided, however, that either party is free to make a timely report to any Government Authority or take other action that it deems to be appropriate or required by applicable Law. Party-2 agrees to permit one or more qualified representative(s) of Party-1 to be present at any such inspections (if requested by Party-1). Party-2 agrees to promptly (no later than ten (10) business days) furnish Party-1 summaries of all reports, documents or correspondence regarding any Government Authority requests or inspections of the Facility regarding the Deliverables, as well as a copy of each such report, document or correspondence.
(h) Safety Issues Notice. Party-2 agrees to immediately (and, in any event, within twenty four (24) hours) notify Party-1 of any information of which it is aware concerning Deliverables which may involve health hazards or otherwise affect the safety or efficacy claims regarding or the continued marketing of the Deliverable. Upon receipt of any such information, Party-2 agrees to consult with Party-1 in an effort to arrive at a mutually acceptable procedure for taking appropriate action; provided, however, either party is free to make a timely report of such matter to any Government Authority or take other action that it deems to be appropriate or required by applicable Law. Party-2, at its expense and under Party-1's direction and to Party-1's satisfaction, agrees to generate any other information and documentation related to Deliverable safety or required by applicable Law, including, but not limited to, physical, chemical, and biological characteristics of each of the Deliverables that Party-1 requests as needed for addressing safety issues related to the Deliverable.
(i) Deliverable Issues. Party-2 agrees to promptly notify Party-1 of any lot failure, manufacturing problems or similar issues that may impact Party-1's ability to distribute Deliverables to its customers. Within fourteen (14) days following Party-2's receipt of any response or other notice from Party-1 that a problem has developed with a Deliverable, Party-2 agrees to provide a detailed written response to Party-1 outlining a plan to resolve the problem, to the extent such problem is related to Party-2's manufacture of the Deliverable or obligations under this Agreement.
(j) Shelf Life. Party-2 agrees to ensure that all Deliverables have an expiration date that lasts at least for the following period after the date of delivery of such Deliverable to the carrier for shipment to Party-1's designated site: TEXTFIELD [QR-104]
(k) Customer Complaints. Party-1 is responsible for coordinating any Customer Complaint that it receives concerning any Deliverable. Party-2 agrees to transfer to Party-1 any Customer Complaint that it receives concerning any Deliverable. Party-2 agrees to investigate any Customer Complaint and to implement corrective action where necessary. Party-1 is responsible for communicating with Party-1's customers regarding any Customer Complaint about any Deliverable. "Customer Complaint" means any written, oral or electronic expression of dissatisfaction relative to the use, identity, quality, durability, reliability, safety, effectiveness or performance of a Deliverable, made by a customer of Party-1, including, but not limited to, actual or suspected Deliverable tampering, contamination, mislabeling, or wrong components, and any of the foregoing regarding a Party-1 product incorporating a Deliverable.
8. OWNERSHIP.
(a) Ownership, Title, and Risk of Loss. Ownership of, title to, and risk of loss for the Deliverables passes to Party-1 upon Party-2's delivery of the Deliverables to a nationally reputable carrier, fully insured with a nationally reputable insurer (such insurance may be invoiced to Party-1 at cost). [QR-86]
(b) Pass-Through. Without limiting any other terms and conditions set forth in this Agreement, Party-2 agrees to pass through or assign to Party-1 any third party warranty and any other rights, rebates, discounts or benefits, which Party-2 receives in connection with any Deliverables.
(c) Documentation. Party-2 agrees to deliver with the Deliverables two (2) copies of the documentation and other materials that Party-2 ordinarily provides to purchasers of the Deliverables.
9. ACCEPTANCE.
(a) Acceptance and Testing. If Party-1 claims that any Deliverables did not, at the time of delivery, comply with this Agreement, then Party-1 agrees to notify Party-2. If the parties are unable to agree as to whether these Deliverables comply with this Agreement, the parties agree to have the Deliverables in dispute analyzed by an independent testing laboratory of recognized repute mutually agreed to by the parties in writing. The results of this laboratory testing are final and binding on the parties as to whether the Deliverables comply with this Agreement. If the Deliverables are determined to so comply, then Party-1 must bear the cost of the independent laboratory testing and purchase the Deliverables. If the Deliverables are determined to not so comply, then Party-2 must bear the cost of laboratory testing, and Party-2 must, at Party-1's election, either replace the rejected Deliverables within thirty (30) days of the date of such determination, at no cost to Party-1, or refund to Party-1 the price paid for the rejected Deliverables, plus any applicable delivery charge.
(b) Returns. Any Deliverables which do not comply with this Agreement and which are in Party-1's possession must, at Party-2's option and expense, either be: (i) returned to Party-2; or (ii) destroyed pursuant to Party-2's instructions and with Party-1's approval.
10. FEES. Except as expressly stated in this Agreement, there are no additional fees, charges or expenses incurred. In consideration for Party-2 performing all obligations under this Agreement, Party-1 agrees to pay Party-2 a flat fee of: [QR-53] [QR-56] If any affiliate of Party-1 gives notice to Party-2 of an offer to make a purchase from Party-2 under the same fees, terms and conditions stated in this Agreement, then Party-2 agrees to accept each such offer. Under this Agreement, "affiliate" means: (a) any corporation or business entity of which fifty one percent (51%) or more of the voting stock or voting equity interests are owned directly or indirectly by a party to this Agreement; or (b) any corporation or business entity which directly or indirectly owns fifty one percent (51%) or more of the voting stock or voting equity interests of such party; or (c) any corporation or business entity directly or indirectly controlling or under control of a corporation or business entity described in (a) or (b). [QR-55] If Party-1 pays within ten (10) days of the date of Party-1's receipt of an invoice, then Party-2 will deduct from the next invoice a credit equal to two percent (2%) of the invoiced amount. [QR-113] [QR-59]
11. INVOICES AND TAXES. Party-1 agrees to pay to Party-2 all fees owed under this Agreement within thirty (30) days after the date of Party-1's receipt of a complete invoice. A complete invoice is one that contains the invoice number, invoice date, description of the transaction, total invoice amount with miscellaneous charges listed separately and payment terms consistent with and not additional to any provisions under this Agreement. To the extent that the transactions under this Agreement are subject to any sales, use, value added or any other taxes, payment of these taxes, if any, is Party-1's responsibility. Party-2 is liable for any and all taxes on any and all income it receives under this Agreement.
12. WARRANTIES.
(a) Mutual Warranties. Each party represents, warrants and covenants to the other that:
(i) General. It: (a) is a company duly organized and validly existing and in good standing under the Laws of its jurisdiction of organization; (b) is qualified or licensed to do business and in good standing in every jurisdiction where qualification or licensing is required; and (c) has the corporate power and authority to negotiate, execute, deliver and perform its obligations under this Agreement.
(ii) Law Compliance. It complies with all applicable Laws.
(b) Warranties by Party-2. Party-2 represents, warrants and covenants to Party-1 that:
(i) Warranty Length. For a period of thirty (30) days after receipt, the Deliverables conform to the requirements of this Agreement, are free from any defect in material and workmanship, and are free of all liens, claims and encumbrances of any kind. [QR-83]
(ii) Infringement. The Deliverables do not violate any patent, trade secret, or other intellectual property or proprietary rights of any third party.
(iii) No Litigation. There is no actual or threatened litigation: (a) that affects its ability to comply with this Agreement, or (b) concerning the Deliverables.
(c) Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, PARTY-1 AND PARTY-2 EACH MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR COVENANTS OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
13. INDEMNIFICATION. The term "Claim" means any claim, suit or action by any third party, and the term "Losses" means any damages awarded and fines assessed in any Claim by a court of competent jurisdiction or pursuant to an arbitration proceeding, any amounts due under Claim settlement, and any other costs or expenses incurred in complying with any injunctive or equitable relief or any settlement requirements.
(a) Party Indemnification.
(i) Indemnification by Party-2. Upon receipt of notice from Party-1 requesting Party-2 to do so, Party-2 agrees to indemnify, defend, and hold harmless Party-1 and its affiliates, subsidiaries, shareholders, members, directors, officers, employees, agents, and parents, from and against any Claim, and any associated Losses to the extent caused by violation of any patent, copyright, trademark, trade secret, or other intellectual property or proprietary right due to Party-2 providing the Deliverables (except to the extent a Claim is caused by Party-1's internally created specifications). [QR-81]
(ii) Indemnification by Party-1. Upon receipt of notice from Party-2 requesting Party-1 to do so, Party-1 agrees to indemnify, defend, and hold harmless Party-2 and its affiliates, subsidiaries, shareholders, members, directors, officers, employees, agents, and parents, from and against any Claim, and any associated Losses to the extent caused by violation of any patent, copyright, trademark, trade secret, or other intellectual property or proprietary right to the extent caused by Party-1's internally created specifications or Party-1's use of the Deliverables. [QR-75]
(b) Indemnification Procedures. The term "indemnifying party" means the party assuming indemnification obligations under this Agreement, and the term "indemnified party" means all parties, including any third parties, which the indemnifying party agrees to indemnify under this Agreement.
(i) Notice. The indemnified party must give the indemnifying party prompt written notice of a Claim, provided, however, that failure of an indemnified party to give prompt written notice does not relieve the indemnifying party from its indemnification obligations under this Agreement except to the extent the defense is materially prejudiced by the failure. When the indemnifying party receives notice of a Claim from an indemnified party, the indemnifying party agrees, at its sole cost and expense, to assume the defense of the Claim by representatives chosen by the indemnifying party. The indemnified party may participate in the defense of the Claim and employ counsel at its own expense to assist in the defense of the Claim, subject to the indemnifying party retaining final authority and control over the conduct of the defense.
(ii) Conduct of Defense. The indemnifying party's defense attorneys must be reasonably experienced and qualified in the areas of litigation applicable to the defense. The indemnifying party has the right to assert any defenses, causes of action or counterclaims arising from the subject of the Claim available to the indemnified party and also has the right to settle the Claim, subject to the indemnified party's prior written consent to the extent the settlement affects the rights or obligations of the indemnified party. The indemnified party agrees to provide the indemnifying party with reasonable assistance, at the indemnifying party's expense, as may be reasonably requested by the indemnifying party in connection with any defense, including, without limitation, providing the indemnifying party with information, documents, records and reasonable access to the indemnified party as the indemnifying party reasonably deems necessary.
14. TERM AND TERMINATION.
(a) Term. The term of this Agreement (together with any renewals, the "Term") begins on the Effective Date and expires one (1) year [QR-24] later. Immediately upon expiration this Agreement automatically renews on the same terms and conditions for additional successive periods of one (1) year on each anniversary of the Effective Date, unless either party gives the other party notice that the Agreement does not renew at least thirty (30) days before the end of the then applicable Term. [QR-18]
(b) Survival. The following captioned sections survive any termination, expiration or non-renewal of this Agreement: "Disclaimer", "Indemnification", "Survival", "Publicity" and "General", as well as any other provisions expressly stating that they are perpetual or survive this Agreement.
(c) Termination for Insolvency. If either party is adjudged insolvent or bankrupt, or upon the institution of any proceedings by it seeking relief, reorganization or arrangement under any Laws relating to insolvency, or if an involuntary petition in bankruptcy is filed against a party and the petition is not discharged within sixty (60) days after filing, or upon any assignment for the benefit of a party's creditors, or upon the appointment of a receiver, liquidator or trustee of any of a party's assets, or upon the liquidation, dissolution or winding up of its business (each, an "Event of Bankruptcy"), then the party affected by any Event of Bankruptcy must immediately give notice of the Event of Bankruptcy to the other party, and the other party may terminate this Agreement by notice to the affected party.
(d) Termination for Breach. If either party breaches any provision contained in this Agreement, and the breach is not cured within thirty (30) days after the breaching party receives notice of the breach from the non-breaching party, the non-breaching party may then deliver a second notice to the breaching party immediately terminating this Agreement.
[QR-17]
15. FORCE MAJEURE. Any failure or delay by a party in the performance of its obligations under this Agreement is not a default or breach of the Agreement or a ground for termination under this Agreement to the extent the failure or delay is due to elements of nature or acts of God, acts of war, terrorism, riots, revolutions, or strikes or other factor beyond the reasonable control of a party (each, a "Force Majeure Event"). The party failing or delaying due to a Force Majeure Event agrees to give notice to the other party which describes the Force Majeure Event and includes a good faith estimate as to the impact of the Force Majeure Event upon its responsibilities under this Agreement, including, but not limited to, any scheduling changes. However, should any failure to perform or delay in performance due to a Force Majeure Event last longer than thirty (30) days, or should three (3) Force Majeure Events apply to the performance of a party during any calendar year, the party not subject to the Force Majeure Event may terminate this Agreement by notice to the party subject to the Force Majeure Event.
16. PUBLICITY. Each party agrees to not make, publish or distribute (whether in print, electronically or otherwise) any public announcements, press releases, advertising, marketing materials or promotional materials regarding the execution or performance of this Agreement without the prior written consent of the other party.
17. GENERAL. Entire Agreement and Amendments. This Agreement is the entire agreement between the parties and supersedes all earlier and simultaneous agreements regarding the subject matter, including, without limitation, any invoices, business forms, purchase orders, proposals or quotations. This Agreement may be amended only in a written document, signed by both parties. Independent Contractors, Third Party Beneficiaries, and Subcontractors. The parties acknowledge that they are independent contractors under this Agreement, and except if expressly stated otherwise, none of the parties, nor any of their employees or agents, has the power or authority to bind or obligate another party. Except if expressly stated, no third party is a beneficiary of this Agreement. The parties may not subcontract any of their obligations under this Agreement. [QR-63] Governing Law and Forum. All claims regarding this Agreement are governed by and construed in accordance with the Laws of TEXTFIELD [QR-27], applicable to contracts wholly made and performed in such jurisdiction, except for any choice or conflict of Law principles, and must be litigated in TEXTFIELD [QR-28], regardless of the inconvenience of the forum, except that a party may seek temporary injunctive relief in any venue of its choosing. The parties acknowledge and agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement. Assignment. This Agreement binds and inures to the benefit of the parties' successors and assigns. Either party may assign, delegate, sublicense or otherwise transfer this Agreement, or any right or obligation under this Agreement, to a third party. [QR-46] No Waivers, Cumulative Remedies. A party's failure to insist upon strict performance of any provision of this Agreement is not a waiver of any of its rights under this Agreement. Except if expressly stated otherwise, all remedies under this Agreement, at Law or in equity, are cumulative and nonexclusive. Severability. If any portion of this Agreement is held to be unenforceable, the unenforceable portion must be construed as nearly as possible to reflect the original intent of the parties, the remaining portions remain in full force and effect, and the unenforceable portion remains enforceable in all other contexts and jurisdictions. Notices. All notices, including notices of address changes, under this Agreement must be sent by registered or certified mail or by overnight commercial delivery to the address set forth in this Agreement by each party. Captions and Plural Terms. All captions are for purposes of convenience only and are not to be used in interpretation or enforcement of this Agreement. Terms defined in the singular have the same meaning in the plural and vice versa.
IN WITNESS WHEREOF, the parties execute this Agreement as of the Effective Date. Each person who signs this Agreement below represents that such person is fully authorized to sign this Agreement on behalf of the applicable party.
PARTY-1
By: __________________________________
Print Name: ___________________________
Title: ________________________________
PARTY-2
By: __________________________________
Print Name: ___________________________
Title: ________________________________