STANDARD TERMS AND CONDITIONS OF PURCHASE ORDER FOR EL SOL FOODS, LLC.
1. Acceptance. Supplier’s commencement of work on the products or services described on the purchase order (collectively, the “Products”) or shipment of the Products, whichever occurs first, shall be deemed acceptance of El Sol’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 limited to the express Terms and Conditions contained herein. Any proposal for additional or different terms or any attempt by Supplier to vary in any degree any of the terms of this Order in Supplier’s acceptance is hereby rejected and shall not apply. This Order supersedes and cancels all prior discussions, agreements and understandings with respect to the subject matter hereof between the Parties, written, oral or implied (subject to Section 2 below). No agreement or understanding to modify this Order shall be binding upon El Sol unless in writing and signed by El Sol’s authorized agent. All specifications, drawings, and data submitted to Supplier with this Order are hereby incorporated herein and made a part hereof.
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with express terms intentionally superseding these Terms and Conditions, then these Terms and Conditions shall be superseded and rendered null and void and the Parties’ signed written agreement shall control the Order.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 set forth in the Order.
3. Prices. The prices and terms stipulated upon this Order apply to this transaction, subject to El Sol’s right to discounts, deductions, or rebates, if agreed to by the Parties. Supplier represents and warrants that the price charged for the Products is the lowest price charged by Supplier to buyers of a class similar to El Sol under conditions similar to those specified in this Order. 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 El Sol’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, El Sol 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 shall result 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 El Sol, unless otherwise provided in this Order. Except for delay caused by El Sol, if for any reason, Supplier fails to meet the delivery date, El Sol may, at its option, terminate this Order by giving Supplier notice without incurring any liability. Supplier shall advise El Sol immediately of any shortage or delay in shipment. El Sol 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 without prior written consent of El Sol. Any losses sustained or penalties incurred by El Sol resulting from such late delivery shall be paid promptly by Supplier to El Sol when Supplier is responsible for shipment. Title and risk of loss shall remain with the Supplier until FOB point.
5. Invoicing and Payment Terms. Supplier shall submit invoices to El Sol at the address designated in the applicable Order. Unless otherwise specified, payment shall be made by El Sol within net sixty (60) days of receipt of an undisputed invoice. El Sol agrees not to withhold payment for any amounts not in dispute and to promptly notify Supplier of any disputed amounts. El Sol shall have the right to offset or deduct, at its option, from any outstanding amount owed to Supplier by El Sol.
6. Inspection. El Sol has the right to request and receive samples of finished Product for testing at Suppliers cost. All Products are subject to inspection by El Sol upon or after arrival at destination, even though payment may have been made prior to such arrival. If upon inspection, the Products prove not to conform to the requirements of this Order, El Sol shall be entitled to reject the defective or nonconforming Products and return the same to Supplier, and Supplier shall refund to El Sol any part of the purchase price paid for said defective or nonconforming Products, together with all charges incurred by El Sol for transportation, handling and storage.
7. Packaging. El Sol will pay no charge for cartons, wrapping, packing, boxing, crating, delivery, drayage or other extras, unless agreed to in writing by El Sol. If applicable, all packages and Products must be packed and marked by Supplier at its own expense in accordance with El Sol’s instructions. All Products, wrappers and containers must bear markings and labels required by applicable federal, state and local laws and regulations. Any packages or Products not in accordance 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 El Sol 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 El Sol 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 El Sol; be of merchantable quality; be free from defects in materials or workmanship; and be safe and fit for the intended purpose, including if applicable, fit for human consumption; (b) there shall not be any variance in the quantity, size or quality of the Products unless authorized by El Sol in writing; (c) all Products shall comply with all federal, state, country and local laws, regulations and requirements and shall be free of any contamination of any type, whether chemical, biological or otherwise, within the tolerances established by the Food and Drug Administration; (d) 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 introduced into interstate commerce; (e) all Products are free and clear of all liens and encumbrances whatsoever and Supplier has good and marketable title thereto; (f) the Products shall not infringe upon or misappropriate any third-party intellectual property or proprietary right; (g) all warranties of Supplier shall run in favor of El Sol, its owners, affiliates, successors, assigns, distributors, brokers, customers and consumers; (h) this warranty shall survive any inspection, delivery, acceptance, or payment by El Sol of the Products; and (i) in the event any Products do not conform to the warranties set forth herein, El Sol may, at El Sol’s option, and without limiting El Sol’s remedies under this Order or applicable law: (1) obtain a full refund of the price paid 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. El Sol 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. No change shall be effective without the prior consent of El Sol. If such change causes a delay or an increase or decrease in expense to Supplier, Supplier shall immediately notify El Sol and negotiate a reasonable adjustment. However, Supplier shall proceed diligently to supply the Products contracted for under this Order as so changed. No claim for such reasonable adjustment by Supplier will be valid unless submitted to El Sol 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. El Sol 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 El Sol with a copy of sanitation, pest control, and regulatory inspections, including those undertaken by employees or agents of Supplier, upon request. Further, Supplier shall conduct at its expense, an annual Facility and Food Safety Systems audit by hiring an independent third party, subject to the approval by El Sol, to perform an audit for El Sol. Promptly following completion of the audit, Supplier must provide El Sol 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 acknowledges that: (i) any information received by El Sol from third parties which El Sol is obligated to keep confidential, (ii) any information regarding El Sol that is not generally known or readily ascertainable outside of El Sol, whether or not marked confidential and/or (iii) El Sol finances, plans, marketing, customers, vendors, products, programs, techniques, technology, research, recipes, formulae, specifications, design, drawings, methods, strategies, testing, know-how and other activities, that become known to Supplier through disclosure, observation or otherwise (collectively, the “Confidential Information”) constitutes valuable confidential information of El Sol and others. Accordingly, Supplier agrees that it will: (a) not use Confidential Information received from El Sol for any purpose other than the performance of this Order; and (b) maintain in confidence and not disclose the Confidential Information to any person or entity without El Sol’s prior written consent, which consent El Sol may withhold in its sole discretion. Supplier’s obligations under this paragraph shall continue until the Confidential Information is legally in the public domain. Within 30 days of the receipt of the Order or earlier, Suppler will sign and return El Sol’s standard non-disclosure agreement which will control the subject of confidentiality between the Parties hereto.
12. Ownership of Work Product. All deliverables, inserts, materials, information, works of authorship, plans, sketches, recipes, formulae, designs, patterns, documents, devices, data, methods, strategies, procedures, ideas, methods, techniques, drawings, specifications, reports, studies, maps, work sheets, photographs and other work product, including any derivative works thereto, prepared for or on behalf of El Sol in connection with this Order (collectively, the “Results”) shall be the property of El Sol and to the extent that such Results are a copyright, they shall be deemed a Work Made for Hire under the U.S. Copyright Act of 1976. All Results shall be promptly disclosed and delivered to El Sol when prepared. Supplier hereby assigns to El Sol without separate compensation, all right, title and interest in and to the Results, together with all associated United States and foreign patent, trademark, copyright, trade secret and proprietary rights, including without limitation, the right of registration and renewal, and agrees to execute for no additional compensation, all necessary documents to evidence such assignment. All tangible information, including, but not limited to, all summaries, copies and excerpts of any information which come into Supplier’s possession, custody or knowledge or are developed, compiled, prepared, or used by Supplier in the course of or in connection with the Products, and all tangible property in Supplier’s custody or possession relating to the Products and all copies of same, shall be the sole property of El Sol and shall, upon El Sol’s request or in any event upon completion of the Order, be immediately delivered by Supplier to El Sol.
13. Indemnification. Supplier shall defend, indemnify and hold harmless El Sol, its parents, subsidiaries, affiliates and customers, and its and their respective officers, directors, agents, servants, representatives and employees from and against all loss, including loss of use, liability, damages, claims, settlements, judgments, fines, penalties, demands, actions and proceedings, and all costs and expenses connected therewith, including reasonable attorneys’ fees, of whatsoever cause or nature arising out of or on account of: (1) any damage to or loss or destruction of any property, including property of El Sol or injury to or death of any person, arising directly or indirectly out of or in connection with the Products and/or Supplier’s performance of or failure to perform its obligations pursuant to this Order, including the design, manufacture and sale of any Products; (2) claims that the Products infringe upon any patents, trademarks, copyrights 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 (4) Supplier’s negligence, willful misconduct or breach of this Order or any default by Supplier of any of its warranties or other obligations under this Order. Supplier at Supplier’s sole cost and expense, shall take over the defense of any such suit against El Sol with counsel reasonably acceptable to El Sol.
14. Insurance. Supplier shall comply with El Sol’s standard Supplier Insurance Requirements and submit a valid Certificate of Insurance to El Sol’s Director of Risk Management.
15. Product Recalls. If any Products provided hereunder are subject to product recall, Supplier shall immediately notify El Sol by telephone and e-mail in the event that any Product must be withdrawn or recalled for any reason. Supplier shall notify El Sol 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. Supplier shall, at El Sol’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 El Sol for all restocking, handling, disposal and other costs and expenses incurred as a result of any recalled Products. Supplier shall promptly reimburse El Sol for all losses, costs, expenses and damages incurred by El Sol 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 any of the covenants on its part to be performed hereunder, 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, materials, or services incurred in connection with work under this Order, El Sol may, in addition to any remedies which it has at law, terminate this Order upon written notice to Supplier.
17. Limitation of Liability. IN NO EVENT SHALL El SOL OR ITS PARENT, SUBSIDIARY OR AFFILIATE COMPANIES 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”). EL SOL’S TOTAL LIABILITY TO THE SUPPLER FOR DIRECT DAMAGES ARISING UNDER THIS AGREEMENT SHALL NOT EXCEED THE VALUE OF AN ORDER WHICH GIVES RISE TO A CLAIM. IF SUPPLIER BECOMES AWARE OF ANY BREACH OF THIS ORDER BY EL SOL, SUPPLIER SHALL GIVE NOTICE TO EL SOL NO LATER THAN 30 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 El Sol or Supplier, including, but not limited to, act 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, El Sol shall have the right at its election and without any liability on it 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 fully 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 arbitrator from JAMS, 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 award shall be final. Judgment on any arbitration award 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 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.
22. Assignment and Subcontracting. No right or interest in this Order shall be subcontracted or assigned by Supplier without the prior written consent of El Sol, and no delegation of any obligation owed, or of the performance of any obligation by Supplier, shall be made without the written consent of El Sol. 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. The 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, shall remain in full force and effect after such termination to the extent provided in such provisions.
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 El Sol 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.