1. Definitions
1.1 Unless the context otherwise requires, the following terms are used in this.
The agreement shall have the following meanings:
“Customer” means the customer identified in the price quote attached hereto as
Exhibit A (the “Price Quote”).
“Customer Supplied Component” shall mean any material or component of a Product or its packaging that (i) is manufactured by Customer or by a third party under an agreement between Customer and such third party or (ii) that Zephyr Naturals, is directed to use or incorporate into the Product by Customer.
“Effective Date” means the date the parties fully execute this Agreement. “Intellectual Property Rights” means all intellectual property rights anywhere in the
world, including, without limitation, any invention, patent, design, copyright,
trademark, service mark, database rights, commercial or confidential information, know how or trade secrets, and any other rights of a similar nature whether or not any of the same are registered, and the rights to apply for any such right.
“Zephyr Naturals,” means Zephyr Naturals, LLC, with a principal place of business at 3075 S 1030 W Ste3075 South Salt Lake, Utah 84119
“Products” means the products identified on the Price Quote.
“Customer Exclusion” means any failure of a Product to meet the Specifications that arises out of or relates to (i) a Customer Supplied Component; (ii) an act or omission of a Customer; (iii) a modification of a Product by Customer; or (iv) artwork or labeling provided by Customer to Zephyr Naturals,
“Specifications” means the then-current Product bill of materials and Product quality control records, which shall be maintained and stored at Zephyr Naturals,’s facility. Non-confidential information related to the Specification and a certificate of conformance for each Product shall be made available to the Customer upon request.
2. Manufacture and Delivery
2.1 Manufacture. Zephyr Naturals shall manufacture and sell the Products to the Customer. Zephyr Naturals, shall manufacture the Products by the Specifications. Zephyr Naturals, retains title to and ownership of all Intellectual Property Rights concerning the Products, unless otherwise agreed upon in writing. Compliance by Zephyr Naturals, with the Specifications shall constitute complete and final performance by Zephyr Naturals,.
2.2 Specification Changes. Zephyr Naturals shall implement as soon as commercially reasonable any change or modification to the Specifications that Customer requests; provided, however, that nothing in this Agreement shall require Zephyr Naturals to implement any such change or modification unless (i) Zephyr Naturals has separately agreed in writing to implement such change or modification and (ii) Customer agrees to reimburse Zephyr Naturals, for all costs incurred as a result of such change or modification. In the event of any revisions to the Specifications, Customer shall purchase from Zephyr Naturals, at Zephyr Naturals’s documented cost, all components, materials, or any other product that was purchased by or on behalf of Zephyr Naturals for manufacturing under the prior Specifications and that is no longer required as a result of the agreed upon revisions to the Specifications.
2.3 Purchase Orders. Customer shall place orders for Products using a purchase order, and Zephyr Naturals shall supply such Products so ordered, provided Customer’s purchase order does not deviate from the minimum order requirement and annual purchase requirement outlined in the Price Quote (as applicable). Zephyr Naturals shall confirm acceptance of each purchase order within five (5) business days from the receipt of the purchase order. If Zephyr Naturals fails to confirm acceptance of any issued purchase order within five (5) business days, the purchase order shall be deemed rejected. Zephyr Naturals shall ship Products within the timeframe outlined in the applicable confirmation. Any failure of Zephyr Naturals, to meet a shipment date caused by (i) a Customer request or (ii) delay in delivery of or any other issue with a Customer Supplied Component, shall not breach this Agreement. Zephyr Naturals shall be entitled to deliver and invoice Customer for up to ten percent (10%) more. Zephyr Naturals will provide a credit for ten percent (10%) less than the quantity identified in the applicable purchase order. In the event of a conflict between the terms of this Agreement and the terms of a purchase order, the terms of this Agreement shall govern.
2.4 Canceled Purchase Order. Customers cannot cancel or modify a confirmed purchase order without the written approval of Zephyr Naturals; in the event Zephyr Naturals agrees to such modification or cancellation, Customer shall reimburse Zephyr Naturals, for all loss (including loss of profits), costs (including the cost of all labor and materials and disposal of the Products), damages, and any other expense incurred by Zephyr Naturals, in the performance of this Agreement or as a result of Customer’s modification or cancellation. Zephyr Naturals will not agree to cancellation or modification of a confirmed Purchase Order due to failure to deliver FOB Zephyr Naturals if such loss is due to supply chain, shipping delays, material shortages, and other circumstances beyond Zephyr Naturals’s control.
2.5 Delivery. Zephyr Naturals shall deliver the products to FOB Salt Lake City, Utah. The customer shall pay all applicable freight and insurance charges, third-party handling charges, and all applicable taxes, customs, duties, or other costs relating to the retrieval and delivery of the Product from Zephyr Naturals’s facility. Risk of loss shall lie with the Customer upon delivery of the Products to the carrier at Zephyr Naturals’s facility, provided, however, that title to the shipment shall remain with Zephyr Naturals until Zephyr Naturals receives full payment. If Customer is responsible for delivery, Customer shall have 72 hours from the time Zephyr Naturals delivers to Customer the Certificate of Analysis relevant to the Purchase Order for the Products to have its carrier pick up the product for shipment at Zephyr Naturals’s facility. If the Products are not picked up within 72 hours, Zephyr Naturals has the right to ship the Products to Customer or another facility at Zephyr Naturals’s discretion, with Customer bearing the shipping costs.
2.6 Storage. The customer shall pay a $50 per pallet fee per month for storing any raw or finished goods that Zephyr Naturals agrees to hold on the Customer’s behalf. Customers will be invoiced monthly. Whether to store such goods and for how long shall they be at Zephyr Naturals’s sole discretion. Zephyr Naturals may demand that the Customer pay to have such goods removed, and should the Customer refuse, Zephyr Naturals shall be entitled to sell or otherwise dispose of such goods at Zephyr Naturals’s sole discretion.
2.7 Inspection. Customer shall have ten (10) days after receipt of any shipment of the Product to inspect such Product for compliance with the Specifications and to notify Zephyr Naturals of any non-compliant Product (the “Testing Period”). Product shall only be determined non-compliant if it fails to meet the Specifications, and such failure is not the result of a Customer Exclusion. If Zephyr Naturals’s testing confirms a failure to meet the Specification, Zephyr Naturals shall have the option to replace the nonconforming Product or to provide the Customer a refund/credit of the amount paid for such Product. Failure of Customer to give Zephyr Naturals, notice of any noncompliance within the Testing Period, or distribution of the Product for commercial sale by Customer, shall constitute acceptance by Customer of the Product and a waiver of any claims for non-compliance of such Product with the Specifications.
3. Payment and Termination
3.1 Price. Subject to the terms and conditions of this Agreement, Customer shall purchase Products from Zephyr Naturals at the prices outlined in the Price Quote, and as such, prices are adjusted under this Agreement. The customer shall also pay Zephyr Naturals for all other services performed by Zephyr Naturals, as outlined in the Price Quote or as otherwise agreed upon in writing by the parties. The prices outlined in the Price Quote are valid for 15 days from the date that Zephyr Naturals provides the Price Quote to the Customer, subject to Section 3.2 below.
3.2 Price Adjustments. Zephyr Naturals may make additional price adjustments at any time in the event of a change in the Specifications or a change in Zephyr Naturals’s costs and expenses associated with the manufacture of the Product.
3.3 Payment Terms. The customer shall pay Zephyr Naturals by the payment terms outlined in the Price Quote. Late payment or nonpayment shall be considered a material breach of this Agreement. Zephyr Naturals shall have the right to take any of the following actions: (1) charge interest at the annual rate of eighteen percent (18%) per year, one and one-half percent (1.5%) per month, calculated daily and assessed monthly; (2) suspend all further deliveries of Products to Customer under this Agreement or any other contract; and (3) terminate this Agreement and charge Customer for all losses (including loss of profits), costs (including the cost of all labor and materials and disposal of the Products), damages, charges, and any other expenses incurred by Zephyr Naturals, in connection with its performance of this Agreement or as a result of the termination thereof.
3.4 Term. This Agreement shall become effective at the time Zephyr Naturals, accepts the Customer’s Purchase Order by issuing a Zephyr Naturals, Sales Order and shall be valid for a period of one (1) year after delivery FOB Zephyr Naturals,. This Agreement shall be automatically extended for successive one (1) year terms unless notice of non-renewal is provided in writing no less than ninety (90) days before the expiration date.
3.5 Termination. Suppose Zephyr Naturals agrees to cancel any Purchase Order for any reason. In that case, the parties shall reasonably cooperate to transfer to the Customer all materials, components (including those ordered but not yet delivered to Zephyr Naturals), finished goods, and inventory related to the Product. The customer shall reimburse Zephyr Naturals for the documented cost incurred by Zephyr Naturals in procuring and manufacturing such materials. All obligations of both parties, including obligations of confidentiality, indemnity, and any accrued financial obligations hereunder which expressly or by their nature survive the expiration, termination, or assignment of this Agreement, shall continue in full force and effect after, and notwithstanding such expiration, termination or assignment, until they are satisfied or, by their nature, expire.
4. Regulatory, Recalls and Labeling
4.1 Product Clearances. Customer shall obtain and maintain, at its sole cost, all regulatory approvals from any regulatory authorities necessary for the marketing, sale, and distribution of the Product. Zephyr Naturals shall reasonably cooperate with Customer, at Customer’s expense, in obtaining such regulatory approvals, provided that Zephyr Naturals shall not disclose information deemed by Zephyr Naturals to be proprietary or confidential.
4.2 Recalls. The customer shall be responsible for all of the costs and expenses related to a Product recall or market withdrawal except to the extent such recall or market withdrawal is directly caused by the Product’s failure to meet the Specifications (so long as the loss is not attributable in any way to any Customer Exclusion).
4.3 Labeling. The customer shall be responsible for ensuring that all labeling, content, artwork, and instructions for use comply with all applicable laws in the territories where the Customer markets, sells, or otherwise distributes the Product.
5. Warranties, Liability, and Indemnification
5.1 Zephyr Naturals, Warranties. Zephyr Naturals represents and warrants that the Products shall comply with the Specifications at the time of delivery (other than to the extent any failure to meet the Specification results from a Customer Exclusion).
5.2 Customer Warranties. Customer represents and warrants that (i) it has and shall maintain an internal quality system that complies with all applicable laws in the territories where Customer markets, sales, or otherwise distributes the Product; (ii) it owns or controls all Intellectual Property Rights, including patents, trademarks, and copyrights necessary to manufacture, test, label, package, store, and distribute the Products by this Agreement and now grants to Zephyr Naturals, a non-exclusive license to utilize such Intellectual Property Rights necessary for the manufacture and supply of the Products for the benefit of Customer; and (iii) Zephyr Naturals,’s fulfillment of the terms of this Agreement will not infringe the Intellectual Property Rights of any third party.
5.3 WARRANTY DISCLAIMER. EXCEPT FOR THE EXPRESS WARRANTIES CONTAINED HEREIN, NO OTHER WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE (INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND MERCHANTABILITY), SHALL APPLY TO THE MANUFACTURING OF THE PRODUCTS OR ANY OTHER SERVICES PERFORMED BY ZEPHYR NATURALS, UNDER THIS AGREEMENT. ALL SUCH WARRANTIES ARE NOW DISCLAIMED.
5.4 Limitation of Liability. The entire liability of Zephyr Naturals and the exclusive remedy of Customer for any damages arising from or relating to this Agreement and the sale of the Product by Zephyr Naturals to Customer shall be limited to, at Zephyr Naturals’s option, either (i) replacement of the Product for which damages are claimed or (ii) return of the purchase price paid by Purchaser for such Product. Any action by Customer for such damages must be commenced within one (1) year after the cause of action has accrued. Zephyr Naturals, shall not be liable to Customer for any special, indirect, incidental, or consequential damages, including, without limitation, loss of profits, regardless of whether Zephyr Naturals, has been advised of the possibility of such damages.
5.5 Indemnification. Customer shall indemnify, defend, and hold harmless Zephyr Naturals and its affiliates from and against any losses, liabilities, damages, costs, expenses and judgments of any kind (including attorneys’ fees) (“Damages”) that may be incurred by Zephyr Naturals, in connection with a claim, action, or proceeding of any kind made or brought by a third party as a result of the manufacture, use, or sale of the Product (including a claim that the Product infringes a third party’s Intellectual Property Rights), except for Damages incurred as a direct result of the failure of the Product to meet the Specifications (other than to the extent any such loss is the result of a Customer Exclusion).
6. Miscellaneous
6.1 Confidentiality. The parties agree that the Product formulae, recipes, ingredients (and details as to their sourcing), manufacturing information, customer lists, pricing, information, Specifications, and any other information that Zephyr Naturals deems confidential are confidential and shall not be used or disclosed to any third party without the disclosing party’s prior written consent, given by an authorized representative. This Agreement, by reference, incorporates all prior confidentiality agreements, if any, executed by Zephyr Naturals and Customer, as though fully set forth herein. In the event of a conflict between this Agreement and the prior confidentiality agreement, the provision that best protects the confidential information of the disclosing party shall govern.
6.2 Force Majeure. No party shall be liable for delay or failure to perform its obligations hereunder due to any contingency directly impacting such party’s delay or failure to perform and beyond its reasonable control after reasonable efforts to exercise such authority, including, but not limited to epidemic or pandemic, war (declared or undeclared), riot, political insurrection, rebellion, revolution, acts or orders of or expropriation by any government (whether de facto or de jure), prohibition of the import or export of the Product, lack of availability or shortage of suppliers, of necessary materials, equipment or production facilities, quarantine restrictions, fuel shortage, strike, lock-out or other labor troubles which interfere with the manufacture, sale or transportation of the Product or with the supply of raw materials necessary for their production, or fire, flood, explosion, earthquake, tornadoes or other natural events.
6.3 Governing Law. The parties agree that all questions of the validity, interpretation, or performance of the terms of this Agreement or any rights or obligations of the parties related in any way to this Agreement shall be governed by the laws of Utah without regard to principles of conflict of laws. Any litigation to enforce this Agreement must be brought exclusively in state or federal courts in Salt Lake County, Utah. Each party expressly consents to the jurisdiction of the state or federal courts in Utah and now further irrevocably waives any objection to jurisdiction or venue based on lack of personal jurisdiction, place of residence, improper venue, or forum nonconvenient in any such action.
6.4 Waiver. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.6.5 Entire Agreement. This Agreement and attachments contain the entire understanding among the Parties and supersede any prior agreements, understandings, and arrangements, whether written or oral, concerning the matters in this Agreement. No amendments, changes, modifications, or alterations of the terms and conditions of this Agreement shall be binding upon any party unless in writing and signed by an authorized representative of each party. Any terms and conditions, or any other provision in any purchase order used by Purchaser or acknowledgment document used by Supplier that may be different or inconsistent with this Agreement shall be entirely inapplicable. This Agreement shall take precedence over all other releases, acknowledgments, or other documents which may be used in the implementation or the administration of this Agreement.
6.6 Severability. If individual provisions of this Agreement become wholly or partially invalid as evidenced by a ruling of a court of competent jurisdiction, the effectiveness of the remaining provisions shall not be affected to the extent severable. The Parties undertake in good faith to replace an invalid provision with a valid one which most closely corresponds with the economic intention of the court ruling regarding the invalidity.