GENERAL TERMS AND CONDITIONS OF PURCHASE
1. Purchase of Products
1.1 During the term of the purchase order to which these terms and conditions of purchase (these “Terms”) are incorporated and made a part (including these Terms, this “Purchase Order”), the seller named on the first page of this Purchase Order (“Seller”) shall supply the products, goods or raw materials (collectively, the “Products”) as described and at the prices specified in this Purchase Order. Nothing herein shall obligate Illes Food Ingredients, Ltd., a Texas limited partnership d/b/a Illes Seasonings & Flavors (together with its affiliates, “Illes”), to purchase the Products exclusively from Seller or to purchase any specific volume of Products from Seller. The terms set forth herein are an integral part of this Purchase Order.
1.2 Seller must accept this Purchase Order on its exact terms. This Purchase Order and the terms set forth herein are the only terms that govern the purchase of the Products by Illes from Seller.
1.3 This Purchase Order constitutes an offer by Illes to purchase the Products from Seller subject to the terms set forth in this Purchase Order. This Purchase Order shall be accepted and confirmed by Seller in the manner set forth on the face of this Purchase Order (or if not specified, by phone, fax, e-mail, mail or other electronic means in the manner specified by Illes), or implied by fulfilling this Purchase Order for the Products. Delivery of the Products by Seller shall be deemed conclusive evidence of Seller’s acceptance of the terms set forth in this Purchase Order.
1.4 Illes reserves the right to revoke or terminate, in whole or in part and from time to time, this Purchase Order at any time. Upon receipt of such notice, Seller shall immediately discontinue work on this Purchase Order, unless such notice otherwise directs. Seller shall deliver to Illes and Illes shall pay for all delivered Products up to the date of notice of termination. The provisions of this paragraph shall not limit or affect Illes’s right to terminate this Purchase Order upon default of Seller.
1.5 Seller shall not substitute products, goods or materials without Illes’s prior written consent. Unless otherwise agreed in writing by Illes, no deviation from the quantities specified with respect to Products shall be accepted. Illes’s count shall be accepted as final on all shipments of Products. Excess Products shipped without Illes’s permission may be returned at Seller’s expense, including transportation both ways and all handling charges.
1.6 Seller shall notify Illes in writing of any allergens present at the facility or facilities where the Products are manufactured, in order that the presence of such allergens may be disclosed by Illes as required by applicable law or industry practice.Seller shall adopt, verify and monitor appropriate preventive controls to prevent allergen cross contact and ensure Products are packaged appropriately and in accordance with Illes’s specifications, if any.Seller promptly shall notify Illes in writing of any changes to the information set forth in any prior notices provided under this provision.
2. Delivery Terms
2.1 Shipments shall be made to meet the date specified in this Purchase Order or the date agreed upon by Illes in writing (the “Scheduled Delivery Date”). The Products shall be delivered on the Scheduled Delivery Date using Seller’s carrier unless another delivery method provided by Illes in this Purchase Order is specified. No additional charge for deviation shall be paid unless Illes’s written pre-approval has been obtained. Illes reserves the right to withhold payment on non-conforming Products until replacement or until the parties have resolved the matter.
2.2 In the event this Purchase Order is not performed to specification, Illes may terminate this Purchase Order. In the event this Purchase Order requires delivery at different times or places, and any such delivery is not made by Seller’s committed date/time as specified, Illes may cancel such delivery while retaining the remainder of the Purchase Order in full force and effect, or may cancel that entire Purchase Order. Seller acknowledges that time is of the essence with respect to Seller’s obligations under this Purchase Order.
2.3 Unless different shipping terms are expressly stated in this Purchase Order, Seller assumes all risk of loss or damage to all Products (and other materials to be furnished by Seller) until such Products are accepted by Illes at the delivery location. All risks of fire, theft, damage, product deterioration or other casualty of any kind to property delivered or to be delivered by Seller for any reason hereunder shall be assumed by Seller, and for as long as such property is in Seller’s or the carrier’s possession, Seller shall keep such property fully insured against all such risks, at Seller’s sole cost and expense, for the benefit of Illes.
3.1 The Products may be inspected and tested by Illes at any time (including after the date such Products are delivered) or place, at Illes’s sole option. If any such inspection or test indicates that the Products, or any portion of the Products, do not conform with this Purchase Order, Illes shall have the right, effective upon notice to Seller, to: (a) rescind this Purchase Order in its entirety; (b) accept the Products at a reasonably reduced price as determined by Illes; or (c) reject the Products and require replacement of the rejected Products. If Illes requires replacement of the Products, Seller shall, at its sole cost and expense, promptly replace the non-conforming or defective Products and pay for all related expenses, including transportation charges for the return of any defective Products or the delivery of replacement Products. Without limiting Illes’s rights hereunder, if Seller fails to deliver replacement Products timely, Illes may replace them with products or goods supplied from a third party and charge Seller the cost thereof and terminate this Purchase Order. Any inspection or other action by Illes under this Section 3 shall not reduce or otherwise affect Seller’s obligations under this Purchase Order, and Illes shall have the right to conduct further inspections. Partial payment (material or deposit or otherwise) for Products of any order prior to inspection shall not constitute acceptance thereof and is without prejudice to any and all claims that Illes may have against Seller.
3.2 Acceptance of Products shall not waive Illes’s right either to cancel this Purchase Order, return the Products (or a portion thereof), as applicable, because of: (a) non-conformity with specifications; (b) defects, whether latent or patent; or (c) breach of representation, warranty, guarantee or default. Failure by Illes to reject non-conforming Products shall not require Illes to accept subsequent Products if such Products have the same or any different non-conformity. Such rights shall be in addition to any other remedies provided by law or equity.
4. Payment Terms
4.1 Seller shall issue accurate invoices to Illes for the Products.Such invoices shall be delivered to Illes in the manner set forth on the face of the Purchase Order (or if not specified, by fax, e-mail, mail or other electronic means in the manner specified by Illes). Unless otherwise expressly stated in this Purchase Order, Illes shall pay accurate and undisputed invoices within 30 days of receipt. No interest shall be due on late payments unless there has been prior written agreement of the parties hereto providing for such payment.
4.2 Illes shall be entitled to set-off any amount Illes reasonably believes to be owing to Illes against any amount due or owing to Seller with respect to any invoice. Seller agrees that any credit balance will be paid to Illes promptly upon written request.
5. Representations, Warranties and Guarantees
Seller represents, warrants and guarantees that:
(a) the Products will comply with all of Illes’s specifications and quality assurance instructions, and will be of equal or better quality as all samples, if any, delivered to Illes;
(b) the Products are genuine and not counterfeit, adulterated, misbranded, falsely labeled or advertised or falsely invoiced within the meaning of any applicable federal, state or local laws or regulations;
(c) the Products shall be delivered in good and undamaged condition and shall, when delivered, be merchantable and fit and safe for the purposes for which the same are intended to be used and free from impurities and defects;
(d) the Products do not infringe upon or violate any patent, copyright, trademark, trade name, trade dress, trade secret or, without limitation, any other rights belonging to others, and all royalties owed by Seller, if any, have been paid to the appropriate licensor;
(e) no applicable federal, state or local laws, rules, ordinances or regulations have been or shall be violated in the production, manufacturing, sale, packaging (including labels) or delivery of the Products, including the Federal Food, Drug, and Cosmetic Act and accompanying regulations and the Food Safety Modernization Act and accompanying regulations;
(f) the Products are not in violation of any other laws, ordinances, statutes, rules or regulations of the United States or any state or local government or any subdivision or agency thereof, including all laws and regulations relating to health, safety, environment, serial and identification numbers, labeling and country of origin designation, toxic substances, California’s Safe Drinking Water and Toxic Enforcement Act of 1986, Health and Safety Code Section 25249.5, et seq. (“Proposition 65”), OSHA and EPA regulations, Federal Meat Inspection Act and Poultry Products Inspections Act (or any other food safety or similar statute), and such Products or the sale or use thereof by Illes do not and will not violate any such laws, ordinances, statutes, rules or regulations;
(g) the Products will be free and clear of all liens, security interests and encumbrances;
(h) Seller is an entity, existing and in good standing under the laws of the state of its organization; and
(i) Seller and its employees, agents, representatives, subcontractors and other parties hired or engaged by Seller shall abide the terms of this Purchase Order.
The representations, warranties and guarantees in this Purchase Order are cumulative and in addition to any other warranty or guarantee provided by law or equity.
6. INDEMNIFICATION. SELLER HEREBY AGREES TO HOLD HARMLESS, DEFEND AND INDEMNIFY ILLES AND ITS AFFILIATES, AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, PARTNERS, MANAGERS, MEMBERS, EMPLOYEES, AGENTS AND INSURERS, FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS, DEMANDS, LAWSUITS, LIABILITIES, LOSSES, DAMAGES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES), INCLUDING THOSE SUFFERED OR INCURRED AS A RESULT OF CLAIMS BY THIRD PARTIES OR CUSTOMERS (INCLUDING PERSONAL INJURY, DEATH OR DAMAGE TO PROPERTY), BASED UPON OR ARISING OUT OF ANY ACTUAL OR ALLEGED: (a) ACCIDENTS, INJURIES OR DAMAGES TO PERSONS OR PROPERTY THAT OCCUR IN CONNECTION WITH ANY DEFECT IN OR CONDITION OF, OR THE USE, SALE OR CONSUMPTION OF, ANY PRODUCTS COVERED BY THIS PURCHASE ORDER, INCLUDING ANY ALLEGATION THAT THE PRODUCTS ARE ADULTERATED OR MISBRANDED, NOT IN COMPLIANCE WITH APPLICABLE LAW, NOT FIT OR SAFE FOR HUMAN CONSUMPTION OR USE, CANNOT BE INTRODUCED INTO INTERSTATE COMMERCE OR, BASED UPON THE NATURE OF THE MATERIAL CONTAINED IN THE PRODUCTS OR DUE TO ANY ACTUAL OR ALLEGED NEGLIGENCE, DISHONESTY, WRONGFUL ACT OR BREACH OF CONTRACT OR VIOLATION OF ANY STATUTE, ORDINANCE, ORDER, RULE OR REGULATION BY SELLER OR ITS AFFILIATES, OF ANY OF THEIR AGENTS, EMPLOYEES, CONTRACTORS OR SUPPLIERS; (b) BREACH OF ANY REPRESENTATION, WARRANTY OR GUARANTEE MADE IN THIS PURCHASE ORDER OR IMPLIED BY LAW OR EQUITY; (c) INFRINGEMENT OR VIOLATION OF THE PATENT, TRADEMARK, COPYRIGHT, LICENSE, RIGHT OF PRIVACY OR ANY OTHER TANGIBLE OR INTANGIBLE PERSONAL OR PROPERTY RIGHT OF THIRD PARTIES; (d) UNFAIR COMPETITION, INCLUDING PRICE DISCRIMINATION AND VIOLATION OF THE TRADE SECRET RIGHTS OF THIRD PARTIES; (e) BREACH OF ANY OF SELLER’S OBLIGATIONS OR COVENANTS UNDER THIS PURCHASE ORDER; OR (f) ANY LITIGATION OR PROCEEDING BASED ON ANY OF THE FOREGOING, OR ANY INVESTIGATION WITH RESPECT THERETO. SELLER’S INDEMNITY OBLIGATIONS DESCRIBED HEREIN SHALL APPLY IRRESPECTIVE OF WHETHER THE CLAIMS, ACTIONS, DEMANDS, LAWSUITS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES ARE ALLEGEDLY CAUSED BY, IN WHOLE OR IN PART, THE NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY OR ANY OTHER UNINTENTIONAL ACT OR OMISSION OF ILLES OR ANY OTHER INDEMNITEE HEREIN. IN ADDITION TO THE INDEMNIFICATION OBLIGATIONS SET FORTH HEREIN, IN THE EVENT OF ANY ALLEGED OR PROVEN CLAIM OF INFRINGEMENT BY THE PRODUCTS, SELLER SHALL, AT ILLES’S OPTION: (X) PROCURE FOR ILLES THE RIGHT TO USE THE AFFECTED PRODUCTS; (Y) REPLACE THE AFFECTED PRODUCTS AT NO COST TO ILLES SO AS TO MAKE THE PRODUCTS NON-INFRINGING; OR (Z) REFUND ALL PAYMENTS MADE BY ILLES WITH RESPECT TO THE PRODUCTS AND TAKE POSSESSION THEREOF AT SELLER’S SOLE EXPENSE.
7. Limitation on Liability
In no event shall Illes be liable to Seller or to any third party for any incidental, indirect, remote, punitive, exemplary, enhanced, special or consequential damages, lost profits or revenues, or diminution of value, arising out of, or in connection with, this Purchase Order or the relationship of the parties, whether or not Illes was advised of the possibility of such damages in advance.
8. Intellectual Property Rights
Any and all inventions, discoveries, patent applications, patents, copyrights, trademarks and trade names, commercial symbols, recipes, formulas and trade secrets existing and owned by Illes, or made or conceived by Illes or its affiliates, or their employees, consultants, contractors or other agents, during the term of any relationship between the parties, shall be and remain the sole and exclusive property of Illes (“Illes Intellectual Property”).Upon termination or completion of this Purchase Order, all Illes Intellectual Property belonging to Illes shall be returned to Illes or disposed of by Seller pursuant to Illes’s instructions. Seller shall hold in confidence any Illes Intellectual Property that has been or will be provided to Seller and shall treat Illes Intellectual Property as Confidential Information (as defined below).
Seller shall at all times carry and maintain occurrence-based Commercial General Liability Insurance with a limit of not less than $1,000,000 per-occurrence and $2,000,000 in the aggregate, with (a) Product/Completed Operation Liability Coverage, and (b) Contractual Liability Coverage.In addition, Seller shall maintain product recall insurance covering the Products. Illes will be an additional insured under all such policies, or the issuer(s) thereof shall waive subrogation rights against Illes.All Certificates of Insurance must state that Illes is to receive 30 days’ notice of any change or cancellation of coverage.The maintenance of (or failure to maintain) such insurance by Seller shall in no way modify, limit or abrogate Seller’s defense, indemnification or hold harmless obligations hereunder.Upon request, Illes will be provided, from time to time, (y) certificates of insurance reasonably acceptable to Illes demonstrating that Seller has obtained and continues to carry such insurance and (z) a true, complete and correct copy of such policies.
10.1 Seller agrees, and agrees to cause its affiliates and their respective employees, contractors, consultants and agents, to maintain in strict confidence, and not to disclose to any third party, any confidential or proprietary information of any nature whatsoever furnished by Illes (in hard copy or electronic form or orally), except for information that is or becomes public knowledge (unless such information becomes pubic knowledge through the breach of this Purchase Order). Except for information that is public knowledge, all information furnished to Seller by Illes shall be considered to be proprietary information, whether or not specifically so designated. The information furnished may include recipes, formulas, patterns, devices, processes, agreements, business plans, contracts, customer data, customer lists, customer names, compilations of information, records, specifications, drawings, designs documents, computer programs, reports, databases, financial data, forecasts or reports including revenue and expense of operations, cost and pricing information, past, present and future research, development, know‑how, ideas, inventions, market information, marketing plans, business activities, products, services, technical knowledge, trade secrets or any other information designated as “confidential,” “proprietary” or some similar designation or otherwise disclosed in a confidential manner (“Confidential Information”).
10.2 Confidential Information may be used by Seller only in connection with the selling of Products to Illes and may only be copied or reproduced to the extent reasonably necessary for Seller to perform its obligations hereunder.
10.3 Seller agrees to protect Confidential Information in the same manner that it protects the confidentiality of its own proprietary and confidential information of like kind, but in no event shall Seller exercise less than reasonable care in protecting such Confidential Information. Access to Confidential Information shall be restricted to Seller and Seller’s personnel engaged in a use permitted hereby and Seller shall be responsible for any breach of the obligations by any and all persons or entities to whom it discloses Confidential Information.
10.4 All Confidential Information made available to Seller, including copies of Confidential Information, shall be returned or destroyed upon request by Illes at any time.
11.1 Entire Agreement. This Purchase Order, together with any exhibits or attachments specifically referenced herein, sets forth the entire agreement and understanding between Seller and Illes as to the subject matter hereof, and merges and supersedes all prior bids, quotes, forms, discussions, agreements and understandings of every and any nature among them; provided, however, that this Purchase Order shall not supersede any provisions of any other agreement between the parties or their affiliates, including Illes’s form of Vendor Indemnity Agreement, providing broader indemnification and other protection to Illes than the similar provisions set forth in this Purchase Order. Notwithstanding any provision herein (or in any oral or written statement) to the contrary, the terms and conditions of any bid, quotation, order acceptance or other document issued by Seller shall have no force or effect.
11.2 Relationship of Parties. Seller will, at all times, be an independent contractor of Illes. Neither party hereto will have any right, power or authority to enter into any agreement for or on behalf of, or to assume or incur any obligation or liability, express or implied, on behalf of or in the name of the other party. This Purchase Order will not be interpreted or construed to create an association, joint venture or partnership between the parties or to impose any partnership obligation or liability upon either party. Each party’s employees, methods, facilities and equipment will at all times be under its respective exclusive direction and control.
11.3 Recall. If Seller voluntarily elects to, or any government or regulatory agency requests or demands that Seller, or if any court orders Seller to, withdraw, discontinue, remove or recall any Product, packaging or labeling (collectively, a “Recall”), because such Product, packaging or labeling is adulterated, misbranded, defective, harmful or misleading in any way, Seller immediately shall notify Illes by telephone and in writing.With respect to any Recall or potential Recall of a Product, Seller shall provide Illes with (a) prompt and timely communication regarding any condition or event that does or could result in a Recall and (b) Seller’s reasonable cooperation.Seller shall (x) provide Illes with reasonable advance written notice of any Recall, (y) work with Illes to coordinate such Recall and, (z) consistent with Seller’s responsibilities, use commercially reasonable efforts to minimize the impact of such Recall on Illes and its customers.
11.4 Governing Law and Venue. This Purchase Order and all matters arising out of this Purchase Order, are governed by, and construed in accordance with, the laws of the State of Texas, without regard to any conflict of laws principles.Exclusive venue for any dispute regarding the relationship between Seller and Illes or this Purchase Order shall be in Dallas County, Texas.
11.5 Cumulative Remedies.Notwithstanding any provision herein to the contrary, all rights and remedies set forth in this Purchase Order (including Sections 2.2 and 3.1) are cumulative and not exclusive of any other rights or remedies that may be available to the parties, whether provided by law, equity or statute, or in any other agreement between the parties, or otherwise.
11.6 Waiver. The waiver by Illes of Seller’s non-compliance with any obligation or responsibility herein shall be ineffective unless given in writing and shall not be deemed a waiver of other instances of non-compliance or of Illes’s remedies for such non-compliance.
11.7 Attorneys’ Fees. If Illes commences any legal suit, action or proceeding to enforce, or relating to, any provision of this Purchase Order, Illes shall be entitled to an award of reasonable attorneys’ fees and reimbursement of such other costs as Illes incurs in prosecuting or defending such litigation.
11.8 Force Majeure. Neither Illes nor Seller shall be liable for delays or defaults in the performance of this Purchase Order due to causes beyond its respective control, including Acts of God, accidents, riots, wars, government interference, non-quota related embargoes, strikes or other labor disputes. Seller shall notify Illes in writing of the cause of any such excusable delay promptly after such delay or delays by Seller. Illes may purchase goods or obtain performance elsewhere and, at Illes’s option, may apply such purchase to reduce the quantity of Products due under this Purchase Order.
11.9 Changes to Terms. Notwithstanding any provision herein to the contrary, Illes may amend the provisions of this Purchase Order at any time without prior notice. All amended provisions of this Purchase Order will take effect automatically once posted or applied to future orders.
11.10 No Third-Party Beneficiaries. This Purchase Order is for the sole benefit of Illes and Seller and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Purchase Order.
11.11 Assignment. Seller shall not assign, transfer, delegate or subcontract any of its rights or obligations under this Purchase Order without the prior written consent of Illes. Any purported assignment or delegation in violation of this Section 11.11 shall be null and void. No assignment, transfer, delegation or subcontracting shall relieve Seller of any of its obligations hereunder. Illes may at any time assign or transfer any or all of its rights or obligations under this Purchase Order without Seller’s prior written consent, including to any affiliate or to any person or entity acquiring all or substantially all of Illes’s assets.
11.12 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder (each, a “Notice”) shall be in writing and addressed to the receiving party at the address set forth on the face of this Purchase Order or to such addresses that may be designated by the receiving party in writing (each, a “Notice Address”). Each Notice shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), e-mail (with confirmation of transmission) or certified or registered mail to the relevant Notice Address (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Purchase Order, a Notice is effective only (a) upon receipt of the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section 11.12.
11.13 Construction. Except as otherwise provided, references to Sections refer to Sections hereof.The word, “including” (in its various forms) means including without limitation.References herein to “parties” or a “party” refer to Seller and/or Illes, as applicable.
11.14 Survival. Provisions of this Purchase Order which, by their nature, should apply beyond their terms will remain in force after any termination or expiration of this Purchase Order, including Sections 5 through 11.