STANDARD TERMS AND CONDITIONS OF PURCHASE ORDER
FOR EL SOL FOODS, LLC.
Supplier hereby agrees to provide goods and/or services to El Sol Foods, LLC (“Customer”) pursuant to these term and conditions (“Terms and Conditions”). These Terms and Conditions are hereby incorporated into and made a part of Customer’s purchase order between you, the Supplier (the “Supplier”) and Customer. Customer and Supplier are sometimes each referred to as a “Party” or together as the “Parties.”
1. Acceptance. Supplier’s commencement of work on the products or services described on
the purchase order (collectively, the “Product” or “Products”) or shipment of the Products, whichever occurs first, shall be deemed acceptance of Customer’s offer to purchase Products identified in this purchase order (“PO”). The only manner to accept this PO is with these Terms and Conditions which are hereby incorporated into and made a part of the PO (collectively, the Terms and Conditions and the PO are referred to herein as the “Order” or the “Agreement”). Acceptance of the Order is strictly limited to the express Terms and Conditions contained herein and any proposal for additional or different terms in Supplier’s acceptance is hereby rejected and shall not apply. Acceptance of the Products by Customer does not constitute acceptance of any of Supplier’s terms and conditions and does not serve to modify or amend these Terms and Conditions. This Order terminates and supersedes all prior discussions, agreements and understandings with respect to the subject matter hereof between the Parties, whether written, oral or implied (subject to Section 2 below). No agreement or understanding to modify this Order shall be binding upon Customer unless in writing and signed by Customer’s authorized agent. All specifications, drawings, and data submitted to or by Supplier are hereby incorporated herein and made a part of the Order.
2. Prior Signed Agreement. Notwithstanding Section 1 above, to the extent that the Parties
have signed a written agreement setting forth different terms and conditions for the purchase and sale of Products, with express terms intentionally superseding these Terms and Conditions, then these Terms and Conditions shall be superseded and rendered null and void and the Parties’ signed written agreement shall control the Order. In such event, the Parties shall disregard and give no effect to these Terms and Conditions.
3. Prices. The prices and terms stipulated upon in this Order apply to this transaction and are
subject to Customer’s right to discounts, deductions, or rebates. Supplier represents and warrants that the price charged for the Products is the lowest price charged by Supplier for similar volumes of similar Products. Supplier agrees that any price reduction made to Products subsequent to the placement of this Order, but prior to delivery, will be applicable to this Order. Supplier warrants that prices shown on this Order shall be complete and final, and no additional charges of any type, including, but not limited to, shipping, packaging, labeling, custom duties, taxes, storage, insurance, boxing, or crating, shall be added without Customer’s express written consent.
4. Delivery. TIME IS OF THE ESSENCE IN THIS AGREEMENT. Unless the time and place of delivery is specified on the face of this Order, Customer retains the right to hereafter specify the time and place of delivery and reserves the right to route all shipments. Any deviation from a specified route which results in excess transportation charges, delays, or claims shall be at the expense of Supplier. The Products may not be transshipped or delivered in installments without the prior written consent of Customer, unless otherwise provided in this Order. Except for delay caused by Customer, if for any reason, Supplier fails to meet the delivery date, Customer may, at its option, terminate this Order by giving Supplier notice without incurring any cost or liability. Supplier shall advise Customer immediately of any shortage or delay in shipment. Customer may, at its option, accept delayed deliveries from Supplier without waiving its right to demand strict compliance with the delivery schedule set forth in all other deliveries. Supplier shall not substitute or back-order Products without Customer’s prior written consent. Supplier shall promptly reimburse Customer for any damages, losses, or penalties incurred by Customer arising from a late delivery caused by Suppler. Title and risk of loss shall remain with the Supplier until FOB point.
5. Invoicing and Payment Terms. Supplier shall submit invoices to Customer at the address designated in the applicable Order. Unless otherwise specified, payment shall be made by Customer within net sixty (60) days of receipt of an undisputed invoice. Customer agrees to not withhold payment for undisputed amounts and will promptly notify Supplier of any disputed amounts. Customer at its sole discretion may issue payment to Supplier via credit card and Supplier will be responsible for payment of any credit card transaction fees. Customer shall have the right to offset or deduct, at its option, from any outstanding amount owed to Supplier by Customer.
6. Inspection. Customer has the right to request and receive samples of finished Products for testing at Supplier’s cost. All Products are subject to inspection by Customer upon or after arrival at destination, even though payment may have been made prior to such arrival. If upon inspection, the Products fail to conform to the requirements of this Order, Customer shall be entitled to reject the defective or nonconforming Products and return the same to Supplier, and Supplier shall refund to Customer any part of the purchase price paid for said defective or nonconforming Products, together with all charges incurred by Customer such as transportation, handling and storage arising therefrom.
7. Packaging. Customer will pay no charge for cartons, wrapping, packing, boxing, crating,
delivery, drayage, or other extras, unless agreed to in writing by Customer. If applicable, all packages and Products must be packed and marked by Supplier at its own expense in accordance with Customer’s instructions. All Products, wrappers and containers must bear markings and labels required by applicable federal, state, local laws, and regulations. Any packages or Products that do not comply with this Section may be returned to Supplier, at Supplier’s risk and expense. On the date of the shipment, Supplier shall promptly forward to Customer complete sets of duly executed Supplier’s invoice, shipping documents, certifications, packing list, and any other documents required to be furnished by Supplier.
8. Warranty. Supplier hereby represents, warrants and guarantees to Customer that: (a) all Products shall be furnished in a timely and workmanlike manner; strictly conform to the specifications, drawings, or other descriptions furnished to or specified by Customer; be of merchantable quality; be free from defects in materials and workmanship; and be safe and fit for the intended purpose, including if applicable, fit for human consumption; (b) if the Products consist of services, Supplier shall perform the services using personnel of required skill, experience, and qualifications in accordance with best industry standards for similar services and shall devote adequate resources to meet its obligations under this Agreement; (c) there shall be no variance in the quantity, size, or quality of the Products unless authorized by Customer in writing; (d) all Products shall comply with all federal, state, and local laws, regulations, and requirements and shall be free of any and all contamination of any type, whether chemical, biological, or otherwise, within the standards established by the Food and Drug Administration or other regulatory agency; (e) the Products shall not be adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act or consist of an article which may not be introduced into interstate commerce; (f) Customer will receive good and valid title to all Products and Work Products, free and clear of all encumbrances and liens of any kind; (g) the Products shall not infringe upon or misappropriate any third-party intellectual property, privacy, or proprietary rights; (h) all warranties of Supplier shall run in favor of Customer, its owners, affiliates, successors, assigns, distributors, brokers, customers and consumers; and (i) all necessary permits and certifications will be secured by Supplier for the Products. The representations and warranties set forth herein shall survive any inspection, delivery, acceptance, or payment by Customer of the Products or termination of this Order. In the event any Products do not conform to the warranties set forth herein, Customer may, at Customer’s option, and without limiting Customer’s remedies under this Order or applicable law: (1) obtain a full refund of the price paid plus any transportation, storage, and handling charges for such non-conforming Products; or (2) return such non-conforming Products to Supplier for correction or replacement, at Supplier’s sole cost and expense. The above warranties shall be in addition to any other warranties, express or implied, that shall apply to the Products, goods or services provided by Supplier pursuant to this Order.
9. Order Changes. Customer shall have the right at any time to make changes in the drawings, designs, specifications, quantity, delivery schedules, methods of shipment or packing and place of inspection, acceptance and/or point of delivery of any item to be furnished or services to be rendered under this Order. Supplier cannot change the Order without Customer’s prior written consent. Once changed, Supplier shall proceed diligently to supply the Products contracted for under the changed Order as agreed upon by Customer. If after consent is provided by Customer and such change causes a delay or an increase or decrease in expense to Supplier, Supplier shall immediately contact Customer to negotiate a reasonable adjustment. No claim for such reasonable adjustment by Supplier will be valid unless submitted to Customer in writing within thirty (30) days from the date of receipt of such notice of change accompanied by an estimate of charges resulting from such changes.
10. Audit. Customer and/or its agents or representatives shall have the right, from time to time,
to audit Supplier’s fields, facilities, manufacturing processes and products. In addition, Supplier shall provide Customer with a copy of sanitation, pest control, and regulatory inspections, including those undertaken by employees, contractors, or agents of Supplier, upon request. Further, at Customer’s request, Supplier shall at its sole expense hire a Customer approved independent third-party auditor to conduct an annual facility and food safety systems audit. Promptly following completion of the audit, Supplier must provide Customer with the audit report, report summary, list of deficiencies, score (if applicable) and a reasonable plan for addressing all deficiencies identified in the audit.
11. Confidentiality. Supplier agrees Customer’s Confidential Information (as defined below) constitutes valuable confidential information of Customer and others. It and its employees will: (a) use Confidential Information only in furtherance of its performance of this Order and for no other purpose; and (b) maintain in strict confidence and not disclose Customer’s Confidential Information to any third-party without Customer’s prior written consent. Supplier agrees to have its employees sign a non-disclosure agreement no less restrictive than this Agreement to protect Customer’s Confidential Information. Supplier’s obligations concerning a specific item of Confidential Information shall continue until such time, if any, as that item of Confidential Information becomes generally known to the public, in its reasonably exact form, by means not related directly or indirectly to Supplier or due to any improper disclosure of the Confidential Information, or both. If requested by Customer, Suppler will sign and return Customer’s standard non-disclosure agreement which will control the subject of confidentiality between the Parties hereto.
For purposes hereof, Customer “Confidential Information” means any information that falls within one or more of the following categories: (a) information relating to manufacturing, operations and business matters, sales and marketing, finance, products, or the confidential business affairs of Customer, including by way of illustration and not limitation: (i) manufacturing information, processes, modifications, methods, techniques, devices, equipment, equipment modifications, machinery, and the configuration of devices, formulas, recipes, product specifications, research and development, strategies, vendors, costs, and know-how; (ii) sales information, projections, forecasts, customer business information, quantities, prices, delivery schedules, product distribution information, customer lists, vendor lists, retailer lists, cost and cost structure, business strategies, growth strategies, brand strategies, marketing, consumer and market information; (iii) software, firmware and computer programs and elements of design relating thereto (including, for example, programming techniques, algorithms, inference structures, and the construction of knowledge bases); (iv) intellectual property, designs, drawings, and formulae; (v) financial information, statements, projections, forecasts, operational, and other business information relating to Customer; (vi) personnel or personally identifiable information of employees; (vii) non-public information that is of value to Customer, and (vii) any information disclosed to Customer by any third party which Customer has agreed, or is otherwise obligated, to treat as confidential or proprietary; (b) any information that would be considered a trade secret under the California Uniform Trade Secrets Act; or (c) any information that would be considered a trade secret under the Defend Trade Secrets Act of 2016.
12. Ownership of Work Product. All deliverables, inserts, materials, information, works of authorship, plans, sketches, recipes, formulae, designs, patterns, documents, devices, source codes, data, methods, strategies, procedures, ideas, methods, techniques, drawings, specifications, reports, studies, maps, work sheets, photographs, and other work product, including any derivative works thereto, developed or prepared by Supplier for Customer in connection with this Agreement (collectively, the “Work Product”) shall be the sole property of Customer and to the extent that such Work Product is a copyright, it shall be deemed a Work Made for Hire under the U.S. Copyright Act of 1976. All Work Product shall be promptly disclosed and delivered to Customer when prepared. To the extent that the Work Product does not constitute a Work Made for Hire, Supplier hereby irrevocably assigns, and shall cause Supplier’s personnel to irrevocably assign to Customer, without separate compensation, all right, title, and interest in and to the Work Product, together with all associated United States and foreign patent, trademark, copyright, trade secret, and proprietary rights, and agrees to execute for no additional compensation, all necessary documents to evidence such assignment. Supplier shall cause Supplier personnel to irrevocably waive, to the extent permitted by applicable law, any and all claims such Supplier personnel may now or hereafter have in any jurisdiction to so-called “moral rights” or rights of droit moral with respect to the Work Product.
13. Indemnification. Supplier shall defend, indemnify and hold harmless Customer, its parents, subsidiaries, affiliates, and customers, and each of their respective officers, directors, agents, servants, representatives, and employees from and against all losses, loss of use, damages, claims, demands, settlements, judgments, liability, fines, penalties, actions and proceedings, and all costs and expenses connected therewith, including all attorneys’ fees, related to or arising out of or from: (1) any damage to or loss or destruction of any property, or injury to or death of any person, arising directly or indirectly out of or in connection with the Products or the Work Product or Supplier’s performance of this Order, including the design, manufacture and sale of any Products or Work Product; (2) claims that the Products or Work Products infringe upon any patents, trademarks, copyrights, trade secrets, or other intellectual or proprietary rights of a third party; (3) claims and liens of all persons based upon the furnishing of labor or materials in connection with the performance of work related to the design or manufacture of any Products or Work Products; or (4) Supplier’s negligence, willful misconduct, errors, omissions, non-compliance with this Order, non-performance of this Order or breach of this Order. Supplier, at Supplier’s sole cost and expense, shall take over the defense of any such suit against Customer with counsel reasonably acceptable to Customer and all legal settlements must be approved in writing by Customer and such approval will not be unreasonably withheld.
14. Insurance. Supplier shall comply with Customer’s standard Supplier Insurance Requirements and submit a valid Certificate of Insurance to Customer’s Director of Risk Management.
15. Product Recalls. If any Products provided hereunder are subject to a product recall or product withdrawal for any reason, Supplier shall immediately notify Customer by telephone and e-mail. Supplier shall notify Customer prior to any public announcement of a recall or market withdrawal involving the Products, and such notification shall, in all events, occur within six (6) hours of Supplier’s decision to recall or announce such market withdrawal. Supplier shall be responsible for all recall communications, including communications with government agencies. Without limiting Customer’s remedies, Supplier shall at Customer’s option and Supplier’s expense (including all freight, shipping, and transportation charges), promptly replace all withdrawn or recalled Products or refund the price paid therefor, and shall promptly reimburse Customer for all restocking, handling, disposal and other costs and expenses incurred as a result of any recalled Products. Supplier shall promptly reimburse Customer for all losses, costs, expenses, and damages incurred by Customer as a result of the recall.
16. Termination. In the event: (a) Supplier fails to use due diligence in proceeding with the performance of the work required, or fails to perform upon any of the terms herein, or breaches this Order; (b) Supplier files a petition for bankruptcy or reorganization under the Bankruptcy Act; or (c) Supplier fails to pay when due any charge for labor, Products, materials, or services incurred in connection with this Order, Customer may, in addition to any other remedies that it has under the law, immediately terminate this Order upon written notice to Supplier.
17. Limitation of Liability. IN NO EVENT SHALL CUSTOMER OR ITS PARENT, RELATED, SUBSIDIARY OR AFFILIATE COMPANIES (AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS, OWNERS, REPRESENTATIVES AND EMPLOYEES) BE LIABLE TO THE SUPPLIER UNDER THIS AGREEMENT FOR CONSEQUENTIAL, SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, OR EXEMPLARY DAMAGES OF ANY KIND OR NATURE WHATSOEVER (INCLUDING LOST PROFITS, LOST REVENUES, BUSINESS INTERRUPTION, OR LOSS OF GOOD WILL), REGARDLESS OF THE FORM OF ACTION, DAMAGE, CLAIM OR LIABILITY, WHETHER IN CONTRACT, STATUTE, TORT, OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE OR SUCH DAMAGES COULD HAVE BEEN REASONABLY FORESEEN BY SUCH PARTY (COLLECTIVELY, “INDIRECT DAMAGES”). CUSTOMER’S TOTAL LIABILITY TO THE SUPPLER FOR ALL DAMAGES ARISING UNDER THIS AGREEMENT SHALL NOT EXCEED THE VALUE OF ANY ORDER WHICH GIVES RISE TO A CLAIM. IF SUPPLIER BECOMES AWARE OF ANY BREACH OF THIS ORDER BY CUSTOMER, SUPPLIER SHALL GIVE NOTICE TO CUSTOMER NO LATER THAN 5 DAYS AFTER DISCOVERY.
18. Force Majeure. This Order and the performance of the Parties hereunder are subject to all contingencies beyond the control of either Customer or Supplier, including, but not limited to, acts of God, fire, flood, war, rules, laws, and orders of any government restricting export from the United States or restricting import into any foreign country, accidents, strikes or labor disputes, and other causalities and contingencies beyond the control of either Party or otherwise unavoidable. In any such event, Customer shall have the right at its election and without any liability to Supplier to: (i) cancel all or any portion of the Order, or (ii) accept performance of the Order so restricted or modified and Supplier shall perform the Order as so restricted or modified, or (iii) accept performance within a reasonable time after the causes for nonperformance or delay have terminated.
19. Compliance with Laws. Supplier shall comply with all applicable state, federal, and local laws, codes, rules ordinances, opinions, guidelines, regulations, and best industry practices in its performance of this Order.
20. Applicable Law and Binding Arbitration. This Order shall be governed by, and interpreted in accordance with, the laws of the State of California without regard to conflicts of laws principles or 18 U.S.C. § 1832 et seq. Any and all disputes, claims, or proceedings between the Parties arising out of or relating to the nature, terms, or enforceability of the Order, including but not limited to any alleged breach of the Order, shall be resolved by binding and final arbitration held before a single mutually agreed upon arbitrator from JAMS. If the parties cannot agree upon an arbitrator, the arbitrator will be selected pursuant to the rules of JAMS. Each Party agrees and consents to arbitration being held in Los Angeles, CA. The arbitrator shall also have the power to impose any sanction (but not attorneys’ fees or costs) against either Party. The arbitration decision shall be final. However, if the arbitrator issues an arbitration decision to a party in excess of $250,000, the entire decision shall be subject to the JAMS appeal process. The Parties agree to adopt and implement the JAMS Optional Arbitration Appeal Procedure (as it exists on the effective date of this Agreement) with respect to any final arbitration decision arising out of or related to this Agreement. Judgment on any arbitration decision may be entered in any state or federal court in the United States of America. All arbitration costs and expenses payable to JAMS and/or the arbitrator shall be split evenly between the Parties. Nothing contained herein shall preclude either Party from seeking or obtaining injunctive relief or equitable or other judicial relief to enforce the provisions hereof or to preserve the status quo pending resolution of any claim or controversy hereunder. Any such court litigation arising between the Parties hereto shall be filed and tried exclusively in Los Angeles County, California. The Parties hereto expressly consent to personal jurisdiction in the State of California and the state and federal courts located in the State of California for any legal action resulting from this Order.
21. Waiver. Neither any failure nor any delay on the part of either Party to exercise any right,
remedy, power, or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or of any other right, remedy, power, or privilege. If any provision of this Order is determined to be invalid or unenforceable, in whole or in part, that determination will not affect any other provision of this Order and the provision in question will be modified so as to be rendered enforceable. None of the Parties will be entitled to have any provisions of this Agreement construed against any of the other Parties in accordance with any rule of law that would require interpretation of any ambiguities in this Agreement against the Party that has drafted it. The Parties expressly waive the benefit of state and federal law to the same effect, which provides that, in cases of uncertainty, the language of a contract should be interpreted most strongly against the Party who caused the uncertainty to exist.
22. Assignment and Subcontracting. No right or interest in this Order shall be subcontracted
or assigned by Supplier without the prior written consent of Customer, and no delegation of any obligation owed, or of the performance of any obligation by Supplier, shall be made without the written consent of Customer. Any attempted assignment or delegation not in compliance with this section shall be wholly null and void.
23. Notice. Any notice required or contemplated by this Order shall be in writing, delivered in
person, or email or by fax with the original copy thereof sent immediately thereafter by established overnight courier service on a priority basis addressed to the Parties, at such addresses as may from time to time be provided by the Parties.
24. Survivability. This Order is binding upon and inures to the benefit of the Parties hereto and their successors and assigns. The provisions of this Order, which by their nature survive the final acceptance of the Products, including Sections 6, 8, 10-15, 17, 20-24 and any representations, warranties and covenants set forth herein, shall remain in full force and effect even after the termination of this Order.
25. Prop 65. All Products subject to each Order hereunder will comply in all respects with the
requirements of the California Safe Drinking Water and Toxic Enforcement Act of 1986 and the regulations thereunder (“Proposition 65”), as amended from time to time, and no exposure to a chemical determined thereunder to cause cancer or reproductive toxicity shall occur from any such Product within the meaning of Proposition 65, unless Supplier first gives written notice of such fact to Customer and the amount by which the level of chemical exceeds the levels established pursuant to Proposition 65.
26. Ethical Business Practices. Neither Party will offer or provide to the employees, agents, or other representatives of the other Party any favors, gratuities, gifts, payments, employment, or anything of value, nor enter any other business transactions which might create a conflict of interest, whether or not in an attempt to influence such person’s administration of the provisions of this Agreement or to otherwise gain unfair advantage individually and/or relative to competing suppliers or vendors. Additionally, each Party will immediately report to the other Party any requests made for favors, gratuities, gifts, payments, or anything of value by employees, agents or other representatives of such Party or any employment relationships or business transactions between the Parties and/or their employees, agents or other representatives which might create any conflict of interest, and will cooperate with respect to any inquiry or investigation being conducted related to such activities or alleged activities.
Supplier is hereby notified that even if conduct is legal in the location in which it takes place, if it is a legal violation in the country into which the products are transported or sold, then it is prohibited. Supplier must conduct its business ethically and with integrity. Supplier is notified that certain practices are not acceptable, including bribery, forced labor, use of prison labor, trafficked labor, underage labor, and violations of the law that could cause Customer to violate the law. Supplier must comply with applicable trade, conflict minerals, permissible harvest, and animal welfare laws, and regulations. Supplier is responsible for complying with these standards while supplying Products to Customer. Violations of these standards may subject Supplier to consequences including termination of business with Customer. Customer reserves the right to audit and inspect Supplier at any time to determine if Supplier is complying with these standards.