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CAPSUGEL UNITED STATES - GENERAL SALES CONDITIONS
effective as from June 1, 2016
1. CAPSUGEL’S ACCEPTANCE OF THE ORDER PLACED BY THE BUYER IS EXPRESSLY LIMITED TO AND MADE CONTINGENT UPON THE ACCEPTANCE BY THE BUYER TO THE CONDITIONS SET FORTH IN THESE GENERAL SALES CONDITIONS (THE “CONDITIONS”). BUYER WILL BE DEEMED TO HAVE AGREED TO THE CONDITIONS SET FORTH HEREIN UNLESS BUYER OBJECTS IN WRITING TO THE CONDITIONS PRIOR TO THE SHIPMENT OF THE PRODUCTS. CAPSUGEL OBJECTS TO ANY DIFFERENT OR ADDITIONAL TERMS. THESE CONDITIONS CONTROL OVER ANY CONFLICTING OR ADDITIONAL TERMS AND CONDITIONS INCLUDED IN ANY PURCHASE ORDER OR OTHER CORRESPONDENCE USED BY BUYER IN ORDERING PRODUCTS. IN THE EVENT, HOWEVER, OF A CONFLICT BETWEEN THESE CONDITIONS AND ANY SPECIAL CONDITIONS OR TERMS SET OUT IN A WRITTEN SUPPLY AGREEMENT OR PURCHASE AGREEMENT EXECUTED BY CAPSUGEL AND BUYER, THEN SUCH SPECIAL CONDITIONS OR TERMS WILL PREVAIL.
2. Applicable Conditions. These Conditions apply to all sales of all products by Capsugel to the buyer following receipt of orders made by the buyer and accepted by Capsugel as evidenced by buyer’s receipt of Capsugel’s order confirmation. Changes to any orders are only effective if to Capsugel in writing and thereafter accepted in writing by Capsugel.
3. Price. The price for the products and conditions of sales are subject to review from time to time by Capsugel to reflect any changes in the costs of energy, materials and labor and market conditions. Prices invoiced will be those in effect at the time of shipment.
4. Quantity Variance. Owing to the specific character of the manufacturing process of products, Capsugel reserves the right to deliver a quantity of product ten percent (10%) higher or lower than the quantity ordered. For the manufacturing of Licaps® or softgels, materials supplied by buyer will not be reimbursed unless specifically agreed upon in a separate Commercial Supply Agreement based on an industry accepted manufacturing yield for each product not to exceed 95% of the theoretical yield for any such product.
5. Delivery Terms. Unless otherwise agreed in writing by Capsugel or set forth herein, Capsugel will deliver the products F.O.B. Origin/Freight Collect (domestic shipment) or ex works (Incoterms 2011) Capsugel’ s facility; shipment of the products is at the buyer’s sole cost and risk. Buyer is responsible for taking out an insurance policy covering loss or damage to the products or third parties at the time of delivery by Capsugel (the “Delivery Date”). If Capsugel arranges shipment for the buyer, buyer will pay Capsugel for the cost of insurance and freight prepaid by Capsugel. Capsugel shall use reasonable commercial efforts to meet the requested delivery dates for products; time for delivery, however, is not of the essence and Capsugel shall not be liable for any failure to meet any such delivery date.
6. Specifications. With respect to empty capsules, Capsugel warrants that at the date of delivery the empty capsules will comply with the quality standards set forth in Capsugel’ s general specifications in the Capsugel Technical Reference. EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH, CAPSUGEL GIVES NO WARRANTIES, GUARANTEES, CONDITIONS OR REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, AND CAPSUGEL HEREBY DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. The products are sold on the condition that buyer or any other user shall be responsible for all intellectual property decisions concerning the finished product and buyer shall carry out its own independent tests to determine the suitability of the products for its purpose and that all risks arising out of the use of the products are assumed by the buyer and the user, since the conditions of use are beyond Capsugel’s control.
7. Trademarks. Whether empty capsules or filled Licaps® capsules with the color combinations, text or logo specified by the buyer are free to be used for marketing as such or with any products is beyond Capsugel’s knowledge, control and responsibility. No warranty, guaranty or representation is given by Capsugel as to the absence of any trademark, patent or other intellectual property right or concerning compliance with regulatory requirements. No statement made by Capsugel shall be construed to be a recommendation or approval to infringe any patent or trademark or as an opinion regarding non-infringement of any patent or trademark or other intellectual property. Buyer is not permitted to use Capsugel’s trademarks without Capsugel’s express written consent.
8. Force Majeure. Either party shall be excused from the performance of its obligations in the event such performance is prevented by conditions constituting force majeure (including but not limited to acts of God, regulation or law of any government, war, civil commotion, strike or other labor disturbance, epidemic, failure of production facilities by fire, earthquake or storms, or non-availability of raw materials), and such excuse shall continue so long as such conditions continue.
9. Buyer Representations and Warranties. Buyer represents and warrants that (a) it will comply with all present and future Laws; (b) the products will not be used in the production, encapsulation, packaging or marketing of any product which is in violation of any federal, state or local law or with any person or entity on any applicable government sanction, restricted party or denial list without a license or otherwise in violation of applicable law or regulation; (c) it is responsible for communicating with any governmental authority concerning products, including without limitation with respect to the registration, classification or notification of a products, or the use, packaging, labeling, distribution, marketing, labeling, promotion, sale or disposal of the same or any adverse events related to products (for the avoidance of doubt, Capsugel may interact with governmental authorities for the purpose of fulfilling its obligations hereunder); (d) storing and handling products in appropriate conditions following its delivery; (e) determining that the specifications for product to permit its sale in each country in the world and (f) it is not, and will not, in connection with any Capsugel product, do business with or sell directly or indirectly to the Government of Iran, the Iranian Military or Iranian military or law enforcement purchasers or importers, Iran’s petroleum sector or Iran’s development of weapons of mass destruction, Iranian Specially Designated Nationals, or entities considered by the U.S. to be supporters of terrorism or proliferators of weapons of mass destruction (which entities can be identified by accessing the U.S. Office of Foreign Asset Control “Blocked Persons and Specifically Designated Nationals List” https://sdnsearch.ofac.treas.gov/); and it is aware of and, hereby confirms its compliance with, all applicable economic sanctions, including, without limitation, any applicable U.S. economic sanctions. Buyer shall conduct all such activities at all times in compliance with applicable Laws. The parties acknowledge and agree that Capsugel has no control, role, or other form of influence in Buyer’s use, packaging, labeling, distribution, marketing, promotion, sale and disposal of products, nor does it control or influence over any payments or transfers of value that may be made by Buyer to health care professionals, health care institutions, or any other customer or third party. Buyer is responsible for participation and compliance in all government health care programs such as Medicare and Medicaid, and any rebate liability, mandatory pricing, or reporting obligations resulting therefrom. “Laws” shall mean any treaty, law, statute, rule, regulation, judicial opinion or administrative finding, order, regulations, policies and guidelines of all governmental authorities relating to the production, preparation, propagation, compounding, conversion, pricing, marketing, promotion, sale, distribution, coverage, or reimbursement of a drug, including the federal False Claims Act (31 U.S.C. §§ 3729 et seq.), the federal healthcare program anti-kickback statute (42 U.S.C. § 1320a-7b, 42 C.F.R. § 1001.952), the Federal Physician Payments Sunshine Act (42 U.S.C. § 1320a-7h) (the “Sunshine Act”), the healthcare fraud, false statement and health information privacy and security provisions of the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), the federal healthcare program civil money penalty and exclusion authorities (42 U.S.C. §§ 1320a-7 and 1320a-7a), federal statutes related to Health Care Fraud (18 U.S.C. § 1347) and False Statements Relating to Health Care Matters (18 U.S.C. § 1035), the applicable requirements of Medicare, Medicaid and other Governmental Authority healthcare programs, including the Veterans Health Administration and U.S. Department of Defense healthcare and contracting programs, all government price reporting laws such as those pertaining to Average Manufacturer Price, Best Price, Average Sales Price, and non-Federal Average Manufacturer Price that may be applicable to Products, and the analogous laws of any locality, state or country, all as amended from time to time.
10. Warranty. Any claim or complaint regarding products must be communicated to Capsugel’ s Customer Service Department, within ten (10) days from the delivery date; provided that any claim or complaint on the grounds of latent defects related to such products must be raised within ninety (90) days from the delivery date. Buyer’s sole and exclusive remedy, and Capsugel’s sole and exclusive liability, for non-conforming products, or for its breach of these Conditions shall be, at Capsugel’ s discretion, (i) replacement of the products; or (ii) refund of the purchase price of the products in relation to which the non-conformance or breach has occurred. Any claim or complaint regarding equipment or parts must be communicated to Capsugel’s Customer Service Department, within ninety (90) days from the delivery date.
11. Waiver of Consequentials. IN NO EVENT SHALL CAPSUGEL BE LIABLE TO BUYER OR ITS AFFILIATES FOR ANY LOSS OF OPPORTUNITY, LOSS OF PROFITS, LOSS OF ANTICIPATED SALES, OR ANY PUNITIVE, INCIDENTAL, CONSEQUENTIAL, INDIRECT OR SPECIAL LOSSES OR DAMAGES WHETHER OR NOT FORESEEABLE, OR WHETHER OR NOT CAPSUGEL HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OF ANY KIND HOWEVER CAUSED, WHETHER BASED ON CONTRACT, NEGLIGENCE OR OTHER THEORY OF LAW, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (OR THE TERMINATION HEREOF) OR ANY PURCHASE ORDER, AS APPLICABLE.
12. Limitation of Liability. Notwithstanding any other provision in this Agreement or a purchase order, as applicable, the total liability, in the aggregate, of Capsugel and its affiliates, to Buyer and anyone claiming by or through Buyer, for any and all claims, losses, costs, damages or fees, including without limitation, attorneys’ fees resulting from or in any way related to this Agreement or a Purchase Order from any cause or causes shall not exceed the purchase price of the Products with respect to which damages are claimed.
13. Indemnity. Buyer agrees to unconditionally indemnify, defend and hold harmless Capsugel and its affiliates, officers, directors, employees, agents, consultants, successors and assigns from and against any losses, damages (including statutory damages), liabilities, obligations, (including without limitation incidental, consequential, special or indirect damages (including loss of revenue, diminution in value or any damages based on any type of multiple)), deficiencies, actions, judgments, suits, interest, awards, penalties, forfeitures, fines, levies, disbursements, costs or expenses of whatever kind, including reasonable attorneys' fees and expenses (“Claim”) that may be imposed on, incurred by, appropriated from or asserted against Capsugel in any way relating to or arising out of (a) the violation of any third party’s trade secrets, trademarks, copyright, patent or other proprietary rights related to the subject matter hereunder; (b) any misrepresentations, omissions or breach of any warranty of buyer herein; (c) the gross negligence or willful misconduct of Buyer or (d) the manufacture, packaging, sale, marketing, labeling, promotion, use, distribution or disposal of the finished product; except, in each case, to the extent such Claims are attributable to the gross negligence or willful misconduct of Capsugel.
14. Confidentiality. Buyer acknowledges that Capsugel’s information relating to empty capsules, equipment and capsule filling that Capsugel shares with buyer is confidential and proprietary to Capsugel, and buyer agrees to maintain the confidentiality of any such information disclosed by Capsugel for a period of ten (10) years from the date of disclosure and to use such information only for the purpose of filling Capsugel capsules. With respect to filled Licaps® capsules, the Formula Agreement (or equivalent agreement or document) may also contain Capsugel’s confidential information, in particular the combination of ingredients (e.g., excipients) and processes used to formulate the filled Licaps® capsules product. As such, buyer agrees not to share this formulation with a third party or purchase this formulation from a third party. Buyer will safeguard and protect Capsugel’s confidential and proprietary information in the same manner it protects its own similar information, and in no event utilizing less than reasonable industry practices.
15. Intellectual Property. All rights and title to inventions and intellectual property conceived and reduced to practice by Capsugel in the course of performing its obligations hereunder shall belong to Capsugel. For purposes of clarity, the term “inventions” shall encompass, without limitation, any new process, systems, equipment, or any improvement thereon, and components and/or intermediate substances, whether patentable or not, made by Capsugel in connection with or related to empty capsules and/or Licaps®.
16. Payment. All products shipped and invoiced shall be payable to Capsugel, c/o PNC Bank, P.O. Box 640091, Pittsburg, PA 15264-0091, U.S.A. Invoices shall be paid thirty (30) days from the date of invoice. Capsugel reserves the right to invoice buyer for the products on or after the date products are available for delivery to buyer (the “Sale Date”); provided however that Capsugel shall be responsible for taking out an insurance policy covering loss or damage to the products from the Sale Date to, but not including, the Delivery Date. Payment shall be made in the currency shown on the invoice. Capsugel reserves the right to charge buyer for warehousing products held for buyer beyond the agreed upon delivery date and shall issue a separate and additional invoice for such warehousing to buyer. Should the buyer fail to timely pay any invoice, interest shall accrue on all past due amounts at a rate of one and one-half percent (1.5%) per month or the highest rate allowed by law, whichever is lower, from the date when payment becomes due to the date payment is made.
17. Governing Law. These Conditions shall be governed solely by the laws of the State of New York, without reference to its conflicts of law provisions, and shall be subject to the exclusive jurisdiction of Federal and State courts located in New York County, New York (Manhattan), U.S.A., and the parties hereby waive all defenses and objections to the jurisdiction of such courts and such venue, including that of inconvenient forum. THE PARTIES EXPRESSLY WAIVE AND FOREGO ANY RIGHT TO A TRIAL BY JURY.