HERBALIFE TERMS AND CONDITIONS OF PURCHASE
Last Revised: July 22, 2015
1. CONTRACT. The purchase order (“PO”), and these terms and conditions (collectively the “Agreement”), constitute the entire and exclusive agreement between the Herbalife entity identified in the PO (“Herbalife”) and the seller identified in the PO (“Seller”) if, and only if, there is no formal written agreement, signed by both parties governing this purchase. Modifications, specifications, drawings, instructions, attachments or exhibits will be made part of this Agreement only if authorized by Herbalife and Seller in writing. Seller’s signature, electronic acceptance, or acknowledgement of the PO, or commencement of performance constitutes its acceptance of the Agreement. The PO does not constitute a firm offer within the meaning of Section 2205 of the California Commercial Code, and may be revoked at any time prior to acceptance. In the event of any inconsistency between these terms and conditions and any supplemental conditions, these terms and conditions shall prevail unless otherwise expressly agreed to by Herbalife. Notwithstanding anything to the contrary, Herbalife has the right to cancel this PO and receive a full refund of all payments, minus any documented and provable expenses, within fifteen (15) days of issuance.
2. PRICE. The price to be paid hereunder for all tangible goods purchased (“Products”) and services to be provided (“Services,” together with Products, the “Work”) is listed on the PO. Unless otherwise specified in the PO, the price for the Work includes all taxes and other charges such as shipping and delivery charges, duties, customs, tariffs, imposts and government-imposed surcharges, which will be itemized on all invoices. Seller will use its best efforts to legally minimize Herbalife’s taxes resulting from the performance of this Agreement. Herbalife may deduct any amounts owed by Seller against any amounts Herbalife owes to Seller or any of its affiliated companies.
3. DELIVERY & TITLE. Time is of the essence in Seller’s performance of its obligations hereunder. Seller will immediately notify Herbalife if Seller’s timely performance is or is likely to be delayed. Herbalife’s receipt or acceptance of Seller’s notice of delay will not constitute Herbalife’s waiver of any of Seller’s obligations. If Seller’s delivery is late, Herbalife may treat this Agreement as repudiated by Seller, in which case it may cancel any outstanding deliveries, without prejudice to its rights to damages or any other remedy provided by law, and may recover damages under the Rejection provision below.
4. INSPECTION. Herbalife shall have the right to inspect the Products and any places relating to the Products or the Services for conformance with Herbalife's specifications. Any inspection or audit performed shall be paid for by Seller if Seller is not in compliance with this Agreement.
5. REJECTION. Herbalife may reject any or all of the Work which does not conform to the applicable specifications, is late, or does not meet Herbalife’s standards. Herbalife may (i) return the rejected Work to Seller for a refund; (ii) require Seller to replace the rejected Work; or (iii) Herbalife may accept the Work contingent on Seller providing a refund in an amount Herbalife reasonably determines to represent the diminished value of the non-conforming or substandard Work. Any costs resulting from Herbalife’s rejection of the Work, including but not limited to, fines, penalties, interest, storage, shipping, transportation charges, quality inspection costs, loss of product resulting from Seller or its Subcontractors issuing incorrect shipping documentation, failing to issue all necessary shipping documentation, loading incorrect product or incorrectly marked product shall be payable by Seller. Herbalife’s payment to Seller for Work prior to Herbalife’s timely rejection of such Work will not be deemed acceptance by Herbalife.
6. REPRESENTATIONS AND WARRANTIES. Seller hereby represents and warrants to Herbalife that: (i) it has the full power to enter into the Agreement and to perform its obligations hereunder; (ii) it will comply with any and all laws, regulations, rules and orders in any and all jurisdictions applicable to or affecting its obligations hereunder (“Laws”); (iii) the Products will be manufactured, packaged, labeled, supplied and delivered (a) in a professional, clean, safe and sanitary manner, with all reasonable care and skill; (b) in accordance with Herbalife’s specifications, all Laws and Seller’s SOP, which will meet prevailing industry standards (including GMP standards if applicable); and (c) free from defect, contamination, adulteration or misbranding; (iv) the Products will be merchantable by Herbalife and fit for Herbalife’s intended use; and (v) the Work, and Herbalife’s use of the same, do not and will not infringe upon any third party’s intellectual property rights, right of publicity or privacy, or any other proprietary rights.
A. If Seller is providing Herbalife with ingredients, packaging components or is a contract manufacturer supplying an ingestible or topical, this Section 7.A shall apply. Seller shall maintain, in full force and effect, at its sole cost and expense, insurance with financially sound and established reputable insurers of the type and quantity (and with such risk retention) generally maintained by the companies of established repute in the nutritional products line of business, such insurance to include, without limitation, products liability insurance in an amount no less than five million U.S. dollars (U.S. $5,000,000.00) per occurrence; provided, however that Seller may self-insure with respect to its obligations hereunder up to one million U.S. dollars (U.S. $1,000,000.00).
B. If Seller is providing Herbalife with any other goods or services, this Section 7.B shall apply. Seller shall maintain, in full force and effect (i) general liability insurance in an amount no less than five million U.S. dollars (U.S. $5,000,000.00) per occurrence;(ii) automobile liability insurance in an amount no less than five million U.S. dollars (U.S. $5,000,000) per occurrence; (iii) workers’ compensation insurance in an amount no less than one million U.S. dollars (U.S. $1,000,000) per occurrence; and (iv) errors and omissions insurance or professional liability insurance in an amount no less than two million U.S. dollars (U.S. $2,000,000) per occurrence.
C. Seller will maintain all insurance policies with companies that maintain A.M. Best's ratings of A- VII or greater. Seller must provide Herbalife with at least thirty (30) days prior written notice if Seller (i) reduces the types of coverage provided under a policy; (ii) reduces the amount of coverage under a policy; (iii) terminates a policy; or (iv) changes the name of the insured entity on a policy and any such changes (i-iv) must be approved, in writing, by Herbalife. Prior to the full execution or during the negotiation of this Agreement, Seller shall provide Herbalife with a copy of any documentation relating to any such insurance, including a Certificate of Insurance (“COI”) showing Herbalife named as an additional insured beneficiary, with Herbalife able to claim thereunder as primary beneficiary and without offset or deduction whatsoever as a result of any insurance obtained by Herbalife. Once this Agreement is fully executed and effective, Seller shall provide Herbalife with the COI on an annual basis throughout the duration of the Term and at any time, as requested by Herbalife. The purchase of such insurance or furnishing of such certificates shall not replace or satisfy any of Seller’s other obligations listed in this section or in any other part of this Agreement.
8. DUTY DRAWBACK INFORMATION. If applicable, Seller will provide, to Herbalife or its designated agent, all U.S. Customs entry data, which Herbalife determines, is necessary for Herbalife to qualify for duty drawback ("Duty Drawback Information"). A nondisclosure agreement in a form acceptable to Herbalife will be signed by the designated agent to protect the Seller of all proprietary information shared during this exchange of Duty Drawback Information. Such data shall include information and receipts for duties paid, directly or indirectly, on all Items, which either are imported or contain imported parts or components. This data will be provided to Herbalife within fifteen (15) days after the end of each calendar quarter and shall be accompanied by a completed Certificate of Delivery of Imported Merchandise or Certificate of Manufacture and Delivery of Imported Merchandise (Customs Form 331) as promulgated
pursuant to U.S. 19 CFR 191.
9. ANTI-BRIBERY. Seller will not (directly or indirectly) pay, offer, give or promise to pay or authorize the payment of, any monies or other things of value to an officer or employee of any government instrumentality or public international organization; any political party or official thereof; any candidate for political office; any sub-contractor or supplier, any of Herbalife’s partners, or any other person for purposes of influencing official actions or decisions or securing any improper advantage in order to obtain or retain business, or engage in acts or transactions otherwise in violation of any applicable anti-bribery legislation, including the OECD Convention on Combating Bribery in International Business Transactions (as amended from time to time), and comparable or related local laws. Seller shall maintain reasonably complete and accurate books and records and to devise and maintain reasonably sufficient systems of internal accounting controls sufficient to comply with all applicable anti-bribery law.
10. INDEMNIFICATION. Seller agrees to indemnify, defend and hold Herbalife, its members and customers, its subsidiaries, affiliates, and controlling companies, and all of their respective directors, officers, agents and employees, harmless from and against any and all liability, actions, claims, demands, liens, suits, losses, costs, damages, judgments and expense, including reasonable attorney's fees (collectively, “Losses”) arising from: (a) personal injury, including death therefrom, or property damage resulting from the furnishing, use or operation of the Products or the Work; (b) breach of Seller’s representations, warranties, covenants and agreements and the terms and conditions herein; (c) infringement of patent, trademark, copyright or other intellectual property rights or (d) Seller’s negligence or willful misconduct. Seller will be responsible for defending all such actions, claims, demands and suits, and will pay all costs and charges resulting therefrom, provided that Herbalife may, at its option, participate in the judgment, order or decree at Seller’s expense. Seller shall keep Herbalife fully informed of material developments in all actions, claims, demands and suits being defended by Seller hereunder, including quarterly written status reports
11. OWNERSHIP OF WORK. Unless otherwise agreed in writing, Herbalife is the sole and exclusive owner of all Work and Seller hereby irrevocably assigns and transfers to Herbalife all of its worldwide right and title to, and interest in, the Work, including all associated intellectual property rights. This includes, but is not limited to, any software, programs, designs, plans, or other information required to modify, add, or reproduce any of the Work and all negatives, engravings, electros, dyes, sketches, notes, working papers, drafts or the like. If the Work is to be performed in accordance with designs, drawings or blueprints furnished by Herbalife, Seller will return the same to Herbalife upon completion or cancellation of this PO and Seller will treat such items as Confidential Information. Herbalife owns, reserves and retains any and all rights to its trademarks, servicemarks, tradenames, and logos. Seller may not use, the name “Herbalife” (either alone or in conjunction with or as part of any other word or name) or any fanciful characters, designs, or other properties of Herbalife, its parent, affiliated or subsidiary companies, to express or imply any endorsement by Herbalife except as otherwise agreed to in writing.
12. ASSIGNMENT AND DELEGATION. Seller may not assign or delegate its obligations under this Agreement, in whole or in part, without Herbalife’s prior written consent. Herbalife may void any attempted assignment or delegation undertaken without Herbalife's prior written consent and Seller will indemnify, defend and hold Herbalife harmless from any and all Losses associated with the same.
13. INSOLVENCY. Herbalife may cancel this Agreement if Seller files a voluntary petition under Federal or State Bankruptcy Act, or is adjudicated a bankrupt, or if Seller becomes insolvent or commits an act of bankruptcy.
14. CONFIDENTIAL INFORMATION. Seller acknowledges and agrees that “Confidential Information” means any non-public information or material, whether written, oral, or in any other form, received or obtained at any time, whether before, on or after the date hereof, that is described as (or provided under circumstances indicating it is) confidential or proprietary. Confidential Information includes, but is not limited to, know-how, product prices, marketing surveys and plans, flow charts, technical documentation, design specifications, patterns and information concerning the design, specifications and methods for the development, manufacture, packaging, supply, marketing, distribution and sale of products, in addition to the terms and conditions of this Agreement. Seller agrees to hold in confidence and not to disclose to any person any Herbalife Confidential Information without the clear and express prior written consent of a duly authorized representative of Herbalife. In the event that Seller is directed to disclose any portion of any Herbalife’s Confidential Information in connection with a judicial proceeding or material performance of its obligation under the Agreement, Seller shall immediately notify Herbalife in writing and shall provide Herbalife with reasonable cooperation and assistance in obtaining a suitable protective order and/or in taking any other steps to preserve confidentiality of the Confidential Information. Upon termination, expiration or non-renewal of this Agreement, Seller shall immediately cease and desist from using and certify the return and/or return of all Herbalife’s Confidential Information.
15. RELATIONSHIP OF THE PARTIES. No employment, joint venture, partnership, or agency relationship is created or intended to be created by the Agreement.
16. GOVERNING LAW. The Agreement will be construed in accordance with and governed by the laws of the State of California, without regard to its conflict of laws provisions. Seller irrevocably consents to the personal jurisdiction of the state and federal courts in and for Los Angeles County, California, and irrevocably waives any claim it may have that any proceedings brought in such courts have been brought in an inconvenient forum. The parties specifically waive application of the UN Convention on Contracts for the International Sale of Goods.
17. SEVERABILITY. If any court of competent jurisdiction holds that any provision of the PO is illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining provisions of the PO will not be affected thereby.
18. NOTICE. Any notice to be given under the Agreement will be in writing and addressed to the party at the address stated in the front of the Agreement. Notices will be deemed given and effective (i) if personally delivered, upon delivery; (ii) if sent by an overnight service with tracking capabilities, upon receipt; (iii) if sent by fax or electronic mail, at such time as the party which sent the notice receives confirmation of receipt by the method of transmittal; or (iv) if sent by certified or registered mail, within five days of deposit in the mail.
19. SURVIVAL. Any obligations or duties which, by their nature, extend beyond the expiration or termination of the Agreement, including but not limited to Sections 6, 7, 10, 14, 16,and 20 shall survive the expiration or termination of the Agreement.
20. ATTORNEYS FEES. Should either party commence any legal action or proceeding in order to enforce or interpret any term or provision of this Agreement, the prevailing party shall recover its reasonable costs and attorney’s fees.