1. Order Acceptance Policy. Intelligent Blends (“Producer”) receipt of Purchase Order (“PO”) does not signify acceptance of Customer’s order. Producer reserves the right at any time after receipt of PO, to decline Customer’s order, up until the time Customer has received written confirmation regarding order fulfillment and customer delivered all required supplies and deposits to Producer.
2. Order Fulfillment Timeline. Standard order fulfillment times, subject to delays outside the control of Intelligent Blends (“Producer”), are 45 to 60 days from the date Customer has (a) delivered written acceptance of the Order Confirmation Sheet, (b) submitted all artwork, (c) delivered all materials to be supplied by Customer (“Customer-Supplied Materials”), and (d) paid the amount due at the beginning of the Job (“Customer Deposit”).
3. Payment Terms. Production: Customer shall pay 50% deposit required to reserve and schedule production time for product. Remaining balance due upon order completion to schedule and release shipment of product. Lidding/Empty Bags/Litho Cartons: Customer shall pay 50% due prior to placement of custom order. Remaining balance due upon receipt of packaging. In the instance Customer is past due, for a period of 60 days, in a payment to Producer, Producer may, without notice, sell Customer’s Products and raw materials to pay such past due amount and all other costs and expenses of collection and sale of such Products/raw materials.
4. Order Cancellation Period. Should Customer cancel or reduce an order within 60 days of the scheduled production date, Customer shall be responsible for payment of the total amount of the Order (“Order Pricing”). Upon such an occurrence, Order Pricing is due in full from Customer within 5 days issuance of invoice by Producer.
5. Scrapping of materials: Producer orders materials required per Customer Purchase/Sales Order and does not store excess materials due to space requirement and quality degradation. Excess cartons that do not meet minimum production runs will be scrapped immediately following production. Excess lidding and empty bags will be stored for up to nine (9) months, at which time Producer will scrap or return to customer.
6. Product Specification. Product will be produced, labeled, packaged and stored in accordance with the Customer’s specifications (“Specification”). Customer understands Producer’s automated machines have a weight tolerance of plus or minus 5% per finished unit which weight tolerance is deemed an acceptable variance from the Specification. Product Production: Customer is obligated to accept +/- 10% production from ordered quantity on any Production order.
7. Delivery of Product. Unless otherwise agreed upon in writing by Producer, all Product will be delivered to Customer F.O.B. Producer’s loading dock at its San Diego, California facilities. Producer will notify Customer by e-mail or such other means as the parties may agree from time to time, 48-hours prior to the Product being ready for pick-up, and Customer will arrange for pick-up to be accomplished within two (2) weeks after receipt of notice from Producer that all blends are complete. Customer may elect for Producer to store completed Product beyond the two (2) week period provided for above. Should Customer elect for Producer to store such completed Product, the fee for such storage shall be $25.00 per pallet for each month of storage or any part thereof.
8. Producer’s Warranties. Provided that Customer performs its obligations, Producer warrants that (a) Producer will produce, label, package and store Product, and perform all of its other responsibilities [i] in accordance with the applicable provisions of the Specification, and [ii] in accordance with all applicable local, state and federal laws, regulations, rules, guidelines and procedures; and (b) The Producer-Supplied Materials will, upon delivery of associated Product to Customer [i] conform to the Specification, with allowance for the weight tolerance provided for in Paragraph 3 above, [ii] if applicable, not be adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act (“Federal Act”) or within the meaning of any state statutes which have adulteration and misbranding provisions similar to those found in the Federal Act, nor articles which may not be introduced into interstate or intrastate commerce under the Federal Act or any such state statutes, and [iii] be free from defects in materials and workmanship. Except, in each case, to the extent attributable to the Customer-Supplied Materials.
9. Customer’s Warranties. Customer warrants that [i] Customer-Supplied Materials will, upon delivery to Producer, conform to the Specification, [ii] Customer-Supplied Materials will, upon delivery to Producer, not be adulterated or misbranded within the meaning of the Federal Act or within the meaning of any state statutes which have adulteration and misbranding provisions similar to those found in the Federal Act (collectively, “Federal Act or Similar Statutes”), nor articles which may not be introduced into interstate or intrastate commerce under such statutes, [iii] Customer-Supplied Materials will, upon delivery to Producer, not be articles which may not be introduced into interstate or intrastate commerce under the Federal Act or Similar Statutes, [iv] Customer-Supplied Materials will, upon delivery to Producer, be free from defects in materials and workmanship, and [v] Customer has the right to grant Producer the right to use Customer’s Intellectual Property and Customer-Supplied Materials, and such use by Producer shall not interfere with, infringe upon, misappropriate and/or violate any intellectual property rights of any third party, and as of this date, no third party has made such claim.
10. Other Warranties. THE EXPRESS WARRANTIES SET FORTH IN PARAGRAPH 6 ABOVE ARE EXCLUSIVE AND IN LIEU OF ANY OTHER EXPRESS OR IMPLIED WARRANTIES WITH RESPECT TO THE GOODS AND SERVICES DESCRIBED THEREIN, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE IN CONNECTION THEREWITH.
11. Remedy for Warranty Breaches by Producer. As Producer’s sole obligation, and Customer’s sole remedy, for any breach of the warranties in Paragraph 6 above, Producer will issue to Customer a credit for all charges to the extent associated with the affected Product delivered to Customer hereunder; Material to be credited at actual cost to Customer and cost of freight. IN NO EVENT SHALL PRODUCER BE LIABLE FOR ANY OTHER OBLIGATIONS OR LIABILITIES, WHETHER DIRECT, INCIDENTAL OR CONSEQUENTIAL, AND WHETHER ARISING OUT OF BREACH OF WARRANTY OR OTHER CONTRACT BREACH, NEGLIGENCE OR OTHER TORT OR ON ANY STRICT LIABILITY THEORY.
12. Indemnification. Customer shall fully indemnify, defend and hold harmless Producer, its directors, officers, agents, insurers and employees from and against all actions, claims, demands and liabilities asserted against Producer by any party not affiliated with Producer, to the extent arising out of or relating to [i] Producer’s production of Products to the Specification, [ii] any breach of Customer’s warranties hereunder, or [iii] the marketing, sale and/or distribution of Product by the Customer.
13. Limitation as to Indemnification Liability. PRODUCER’S MAXIMUM AGGREGATE LIABILITY FOR CLAIMS MADE PURSUANT TO PARAGRAPH 9 SHALL NOT EXCEED THE AMOUNT OF PRODUCER’S INSURANCE COVERAGE. PRODUCER CARRIES AN UMBRELLA POLICY IN THE AMOUNT OF $5,000,000.00, BUSINESS INTERRUPTION INSURANCE IN THE AMOUNT OF $10,000,000.00, PLUS LIABILITY COVERAGE IN THE AMOUNTS OF $1,000,000.00. IN NO EVENT SHALL PRODUCER BE LIABLE FOR ANY OTHER OBLIGATIONS OR LIABILITIES, WHETHER DIRECT, INCIDENTAL OR CONSEQUENTIAL, AND WHETHER ARISING OUT OF BREACH OF WARRANTY OR OTHER CONTRACT BREACH, NEGLIGENCE OR OTHER TORT OR ON ANY STRICT LIABILITY THEORY.
14. Non-Payment. Producer may terminate this Purchase Order at any time, without further notice, if Customer fails to make any payment due hereunder within fifteen (15) days after written notice from Producer that such payment is overdue.
15. Performance Excused. Producer shall not be liable for any losses or damages as a result of any delay or failure to perform any of its obligations due to any cause beyond Producer’s reasonable control, including but not limited to any act of God, act or omission of Customer, embargo or other governmental act, regulation or request, fire, accident, strike, slowdown, war, act of terrorism, riot, delay in transportation, or inability to obtain necessary labor, materials, equipment or manufacturing facilities, including but not limited to failure of a third party vendor selected by Producer as the required supplier of material or equipment to be used in Producer’s performance hereunder that is not supplying such material or equipment as is reasonably required by Producer to perform its obligations hereunder.
16. Governing Law; Selection of Forum; Submission to Jurisdiction. This Purchase Order shall be governed by and construed in accordance with the laws, without reference to principles of conflicts of laws, of the State of California. Any action arising out of or relating to this Purchase Order will be determined exclusively by the applicable Court for San Diego County, California or the U.S. District Court for the Southern District of California and, in the event of an appeal or petition for review or certiorari, by the courts having jurisdiction to review the decisions of the courts specifically identified above. The parties consent to in personal jurisdiction and to venue exclusively in said courts; and Customer hereby appoints the Secretary of State of California as its agent for service of process in California.
17. Customer understands that Raw Materials, either purchased by Producer on behalf of Customer, or by Customer directly, have a to be used by expiration date (“Raw Materials Expiration Date”). In no instance is Producer responsible for any Raw Materials that are past the Raw Materials Expiration Date and can no longer be used in producing Customer’s Products. In addition thereto, other than for damage caused Raw Materials caused solely by gross negligence of Producer, Producer shall not be responsible for any damaged Raw Materials.
18. All Pricing valid for 90 days from time quoted to customer