TERMS AND CONDITIONS

These terms and conditions are effective for the all orders manufactured by SDC Nutrition, Inc.

Definitions.  In addition to the definitions set forth elsewhere in these terms and conditions, the following terms shall have the meanings set forth below:

  1. “COMPANY” shall mean SDC Nutrition, Inc.
  2. “CUSTOMER” shall mean the entity doing business with SDC Nutrition, Inc.
  3. “Products” shall refer to all products packaged by SDC Nutrition as a Contract Manufacturer for CUSTOMER as listed in individual Purchase Orders submitted and confirmed with each sales order.
  4. “Purchase Order“ means CUSTOMER’s written request on formal Purchase Order (PO) issued to COMPANY.
  5. “Specifications” shall mean all specifications set forth in individual COMPANY generated Finished Product Specification Sheet(s) signed by CUSTOMER.
  6. Price and terms shall be dictated by each Sales Order sent by COMPANY confirming the purchase order sent by the CUSTOMER. The terms and conditions of CUSTOMER’s Purchase Order shall apply to the sale of Products to the extent that such terms and conditions do not conflict with COMPANY’s terms and conditions listed herein. Any conflict in terms on the CUSTOMER purchase order and the standard terms and conditions of SDC Nutrition, Inc. will be based on the terms set forth herein unless otherwise negotiated in writing.
  7. “Payment Terms” are approved by COMPANY for each individual CUSTOMER. If CUSTOMER does not follow approved terms there may be a delay in manufacturing of CUSTOMER products. If a deposit is required, the production date will not be given until the deposit is received.
  8. “Quantity Yield” and “Yield Target” means that each order has the possibility of a ten percent (10%) over/under +/- fluctuation for the final quantity of product manufactured. The CUSTOMER acknowledges that this fluctuation is in accordance with industry standard and the CUSTOMER is responsible for the cost associated with this fluctuation regardless of the size of the order. Purchase Orders will be closed if final quantity of product delivered is within the Yield Target.

COMPANY’S Responsibilities:

  1. Service Requirements. COMPANY shall prepare, manufacture, process, package and load for shipping the Products ordered by CUSTOMER in accordance with the customer signed specifications.
  2. Billing of Products Produced. Upon release of goods by COMPANY’S quality control department COMPANY will bill the units produced.
  3. Distribution of Products. COMPANY shall facilitate and provide logistics support relative to arranging for direct shipments of CUSTOMER products and scheduling these shipments for full or partial truck load shipments. Shipment terms are Freight on Board (FOB) Origin, wherein CUSTOMER accepts title at point of shipment, unless otherwise negotiated in writing.  CUSTOMER will pay all freight charges incurred through the shipment of CUSTOMER products unless otherwise negotiated in writing.
  4. Warehousing of Products. COMPANY may provide direct warehousing or shall provide CUSTOMER with best sourcing for local warehousing of CUSTOMER Products if requested by CUSTOMER for the longer of 5 business days or until original due date, if products manufactured early.  To extent CUSTOMER desires a longer period of time, COMPANY will charge $25/pallet/week for any product that is warehoused by COMPANY.  CUSTOMER agrees to bear the responsibility of insuring all CUSTOMER ordered finished product stored at COMPANY facilities.  COMPANY retains the right to liquidate inventory at COMPANY’s location, if CUSTOMER does not make payment by 3 months after the agreed upon due date.   Any amount recovered by liquidation will be applied to balance owed by CUSTOMER and CUSTOMER will not be released from owing the remainder of balance.
  5. Raw Materials and Packaging. Raw materials and packaging will be procured and paid for by COMPANY, subject to the following exceptions:
    1. Printing fees which include plate charges, artwork preparation time, and custom artwork design will be charged to CUSTOMER.
    2. Certain high $/unit raw ingredients which CUSTOMER is able to procure better than COMPANY if approved by COMPANY’s Quality Department in writing.
    3. Labels and packaging which the CUSTOMER desires to provide and ship to COMPANY. These items are the responsibility of the CUSTOMER and may be subject to storage fees, if CUSTOMER maintains more than 10% of open sales order quantity at the COMPANY’s facilities.

CUSTOMER’S Responsibilities:

  1. CUSTOMER is responsible to review and sign COMPANY generated Specification Sheet for each product it wishes to have COMPANY manufacture. Delay in signing specification sheets can cause delay in production.   COMPANY provided lead times  begin upon receiving all required CUSTOMER signatures.  If the CUSTOMER ever wishes to change a product formula or design that COMPANY has a signed specification form for then the CUSTOMER needs to address changes prior to submitting a new purchase order, so that COMPANY can ascertain if pricing is still accurate as well as if new product specifications are able to be met. If changes are not addressed prior to submitting a new purchase order then the CUSTOMER is responsible for any costs that COMPANY may be subject to.
  2. CUSTOMER is responsible to perform any stability studies needed to substantiate any length of time claim of effectiveness.
  3. CUSTOMER is responsible to hold inventory in appropriate climate conditions outlined on the packaging slips and maintain records of proper storage conditions.
  4. Any CUSTOMER supplying pre-printed labels must deliver the pre-printed labels to COMPANY designated address, according to COMPANY specifications, within fifteen (15) business days of the due date specified on the Purchase Order. If labels are not received within fifteen business days of the due date specified on the Purchase Order, COMPANY has the right to reschedule CUSTOMER’s order at COMPANY’s discretion. Any CUSTOMER who provides artwork for labels that are ordered by the COMPANY, must have final artwork to the COMPANY prior to 20 business before the date specified on the Purchase Order.
  5. If the CUSTOMER directs COMPANY to produce and hold unlabeled product:
    • CUSTOMER will be charged a storage fee of $25.00/week/pallet until either labels arrive and are applied by COMPANY or CUSTOMER takes receipt of unlabeled product.
    • CUSTOMER will be charged an additional $1,500 processing fee per SKU to complete labeling due to the additional time incurred to start/stop and move the unlabeled product.
  6. CUSTOMER shall be financially responsible for all raw materials, packaging and labels procured by COMPANY solely for use on CUSTOMER’s products. COMPANY is responsible to notify CUSTOMER of the minimum order quantity prior to ordering, so that CUSTOMER can decide if it wishes to make a change or accept potential liability.   If CUSTOMER does not continue to order product to utilize the minimum quantity purchased then CUSTOMER will owe COMPANY the cost of the unused raw materials, packaging or labels.  For purpose of clarity, the lack of an order for 6 months will constitute “does not continue to order”.
  7. CUSTOMER shall inspect order within 3 days of receipt in order to provide a valid claim for any shortages. Also, if freight was procured by COMPANY, any visual damage needs to have digital pictures taken and sent to COMPANY specified email within three (3) days so that a proper claim can be made with the carrier.   If this timeframe is not met, COMPANY is not liable to provide a credit to the CUSTOMER, since COMPANY may no longer have ability to get a credit against the carrier. CUSTOMER is responsible also to notify COMPANY if an overage is received so that the proper amount is billed.

Termination. 

  1. Termination Due To Breach. COMPANY shall have the right to terminate any order upon written notice to the Customer in the event that the Customer fails to comply with any of its material representations, warranties, covenants or obligations set forth in the sales orders or in these terms and conditions, and such failure has not been cured within a reasonable period of time after receiving written notice describing such failure with reasonable specificity.  Such circumstances shall constitute good cause for termination.
  2. Termination Due To Financial Condition. Each party shall have the right to terminate a sales order upon written notice to the other party in any of the following events, each of which constitutes good cause for termination (i) the other party files a petition for bankruptcy or is otherwise adjudicated bankrupt, (ii) a petition for bankruptcy is filed against the other party and such petition is not dismissed within ninety (90) days, or (iii) such other party becomes insolvent, discontinues its business or voluntarily submits to, or is ordered by the Bankruptcy Court to undergo, liquidation pursuant to Chapter 7 of the Bankruptcy Code.
  3. No Release. Termination of a sales order shall not release either party from any obligation accrued prior to the date of such termination or from any obligations continuing beyond the termination of the sales order.

Title: Risk of Loss.  Title to, and risk of loss of, Products sold hereunder shall pass to CUSTOMER upon the earlier of: (a) tender of possession of Products to CUSTOMER, if CUSTOMER receives shipment at COMPANY facility located at 170 Industry Drive, Pittsburgh, Pennsylvania, or (b) tender of possession of Products to a carrier, if the Products are to be delivered by a carrier arranged or approved by CUSTOMER or COMPANY.

Warranty; Correction of Defective Product; SDC Nutrition Permits and Compliance With Laws.

  1. Warranty. COMPANY warrants that the goods delivered hereunder will be manufactured in accordance with applicable Good Manufacturing Practices (cGMP) of the United States Food and Drug Administration as per Title 21 Code of Federal Regulations Part 111 cGMP in Manufacturing, Packaging, Labeling or Holding Operations for Dietary Supplements, conform to the agreed upon specifications for the goods, in all material respects, free of defects within acceptable quality limits (AQL) and inherent color/flavor/texture variability for natural raw material sources, and be free of contaminants that would cause the Products not to be appropriate for human consumption at the time of delivery to CUSTOMER.  Except for a breach by COMPANY of the previously referenced warranty, CUSTOMER acknowledges and agrees that CUSTOMER is solely responsible for all aspects of the goods, including but not limited to, their safety, efficacy, legality (including product recall), design, the formula, any label content, packaging materials, and all marketing and promotional claims made about the goods in any forum or media.  Additionally, CUSTOMER assumes sole responsibility for analyzing and determining the suitability of any good supplied by COMPANY and CUSTOMER agrees that it is not relying on COMPANY in making such determination even if COMPANY provided assistance, guidance or design.  CUSTOMER agrees to store and use all goods in a safe manner.  Specifically, it is up to the CUSTOMER to calculate levels of contaminants in daily dose stated on label and to make sure such dose meets both state and federal requirements including California Proposition 65 warnings, should goods be offered for sale in the USA.  CUSTOMER bares sole responsibility to meet Proposition 65 rules.  Should contaminants not meet Prop 65, CUSTOMER certifies that they will label all products sold to the state of California with a sticker reading “WARNING:  This product contains a chemical known to the state of California to cause birth defects or other reproductive harm.”  CUSTOMER will make sure the dose they recommend will not cause overdose or adverse reactions in individuals, including but not limited to vitamins that accumulate in the body.  CUSTOMER will include all appropriate and/or legally required warnings on labels and supporting websites and literature with regard to concerns of side effects/adverse reactions. COMPANY makes no representation or warrantee that the goods are appropriate for CUSTOMERs intended use and COMPANY shall have no liability for any damages or claims resulting from CUSTOMER use of goods.  COMPANY shall not be responsible for any loss or liability arising out of or resulting from customer’s possession or sale of the products.
  2. Expiration dates: The expiration date of a good can only be determined by doing a stability study.  If a stability study is not conducted, a “Date of Manufacturing” will be issued for each good.  If an expiration date is issued without a stability study, this will be done only per the CUSTOMER’s request and is at CUSTOMER’s own risk and COMPANY is not liable.  CUSTOMER certifies that the goods and packaging has been stability tested in accordance with industry standards prior to ordering and that the goods and packaging specifications provided by CUSTOMER are identical to the specifications used for stability testing.  COMPANY is not responsible for stability testing the goods unless agreed upon in writing and signed by an officer of COMPANY. In the event that CUSTOMER’s goods and/or packaging specifications have not been stability tested, or the specifications provided to COMPANY deviate from those used in the stability test, CUSTOMER agrees to hold COMPANY harmless and to fully indemnify COMPANY against any and all claims for damages or loss arising out of goods becoming unstable, unmarketable, less effective than claimed or intended, or otherwise deviating from the specifications, which occurred as a result of the good’s instability after manufacturing.
  3. Inspection. CUSTOMER shall inspect Products received under any sales order within three (3) business days of receipt of such Products (“Inspection Period”) and either accept or, only if any such Products are not made to the customer signed specifications (“Nonconforming Goods”), reject such Products. CUSTOMER will be deemed to have accepted Goods unless it provides COMPANY with written Notice of any Nonconforming Goods including pictures within 3 business days following the Inspection Period, stating with specificity all defects and nonconformities, and furnishing such other written evidence or other documentation as may be reasonably required by COMPANY (including the subject Goods, or a representative sample thereof, which CUSTOMER contends are Nonconforming Goods). All defects and nonconformities that are not so specified will be deemed waived by CUSTOMER, such Products shall be deemed to have been accepted by CUSTOMER, and no attempted revocation of acceptance will be effective. If CUSTOMER timely notifies COMPANY of any Nonconforming Goods, COMPANY shall determine, in its reasonable discretion, whether the Products are Nonconforming Goods. If COMPANY determines that such Goods are Nonconforming Goods, COMPANY shall, in its sole discretion, either:
    • replace such Nonconforming Goods with conforming Goods; or
    • refund to CUSTOMER such amount paid by CUSTOMER to COMPANY for such Nonconforming Goods returned by CUSTOMER to COMPANY.
  4. Correction of Defective Products. Without limiting any other rights or remedies available to CUSTOMER under these standard terms and conditions, at law or in equity, if any Products do not meet CUSTOMER Specifications or any other warranties set forth above (“Defective Products”), then CUSTOMER will notify COMPANY of any deficiencies within the inspection period, and COMPANY shall use its reasonable best efforts to correct those deficiencies to CUSTOMER’s reasonable satisfaction on a mutually agreed upon time schedule.  CUSTOMER shall not be deemed to have accepted any Defective Products, whether or not title to such Defective Products has transferred to CUSTOMER in accordance with the provisions of these standard terms and conditions.  COMPANY also agrees that it shall replace, without cost to CUSTOMER, any Defective Products delivered to CUSTOMER; provided, however, that COMPANY will have no obligation to replace any Products which become defective through the negligence or fault of CUSTOMER.  Moreover, recalls occurring due to COMPANY’s vendor misrepresentation of a supplier guarantee or COA will be pursued jointly by COMPANY and CUSTOMER with expense and remedies being shared equally between COMPANY and CUSTOMER.
  5. CUSTOMER shall ship, at COMPANY’s expense and risk of loss, all Nonconforming Goods to COMPANY’S facility located at 170 Industry Drive, Pittsburgh, PA 15275 or to such other location as COMPANY may instruct CUSTOMER in writing. If COMPANY exercises its option to replace Nonconforming Goods, COMPANY shall ship to the Delivery Location, at COMPANY’s expense and risk of loss, the replacement Goods.
  6. THE REMEDIES SET FORTH IN THIS SECTION ARE CUSTOMER’S EXCLUSIVE REMEDY FOR THE DELIVERY OF NONCONFORMING GOODS. EXCEPT AS PROVIDED UNDER THIS SECTION, CUSTOMER HAS NO RIGHT TO RETURN GOODS SHIPPED TO CUSTOMER PURSUANT TO THESE STANDARD TERMS AND CONDITIONS.

Inspection; Audit.  COMPANY shall provide CUSTOMER with samples of Products upon CUSTOMER request and shall provide copies of applicable production and quality control records with such samples.  COMPANY shall retain all production and quality control records related to the Products for at least two (2) years from the date of delivery.  If any such inspection discloses any deficiencies, COMPANY shall implement, document and demonstrate the effectiveness of specific corrective actions that meet all applicable requirements and shall incorporate such corrective actions into its standard operating procedures.  It is understood and agreed that CUSTOMER shall have no obligation to conduct any such inspections, and neither CUSTOMER’s exercise nor its failure to exercise any of the rights set forth in this Section shall relieve COMPANY of any of its responsibilities or obligations for the Products to be in compliance with all applicable laws, rules, regulations and ordinances as well as all the terms and conditions of these standard terms and conditions.

Indemnification.

  1. CUSTOMER, its owners, shareholders, members, agents, employees, and representatives, shall indemnify and hold harmless COMPANY and all related or affiliated entities, their officers, directors, shareholders, members, employees, agents and attorneys, from all claims, losses, damages, liabilities, costs, and expenses (including all attorney’s fees and costs) of personal injury, property damage or advertising liability (not caused by the sole negligence or intentional acts by COMPANY) resulting from (i) CUSTOMER’s modification of products, (ii) unauthorized representations regarding products or services provided by COMPANY, and/or (iii) any claims or suits arising from or related to an alleged or actual defect in any product where the product has been manufactured based upon formulations or specifications of the CUSTOMER.
  2. Each party hereby acknowledges and agrees that (a) it is not an employee, agent or representative of the other party, and (b) it is not authorized to assume or create any obligation or responsibility on behalf of the other party, including but not limited to obligations based on representations, warranties or guarantees. Neither party, nor any of its employees, agents or representatives, shall misrepresent its status or authority.
  3. In the event that CUSTOMER breaches all or any portions of these standard terms and conditions and/or fails to remedy the breach before the expiration of any cure period offered by COMPANY, CUSTOMER shall be liable for all of COMPANY’s costs and expenses (including, without limitation, attorneys’ fees, court costs, process server fees, and all related disbursements) incurred by COMPANY to enforce COMPANY’s rights. Any action arising out of a breach of the Terms and Condition of Sale shall be brought exclusively in the Supreme Court of the Commonwealth of Pennsylvania, County of Allegheny, and the Parties hereby consent to the jurisdiction of such Court for that purpose, agree that it is a convenient forum, and unconditionally waive all rights to make any argument to the Court based on the doctrine of forum non conveniens, removal, or any similar doctrine. All sales orders shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to any choice of principles.
  4. All sales are subject to these standard terms and conditions.

Intellectual Property.  CUSTOMER shall own all intellectual property relating to the Products if and to the extent that such intellectual property arises out of or relates to the confidential business information or trade secrets of CUSTOMER including but not limited to the Specifications (“Formulations”). COMPANY, unless otherwise agreed to in writing, owns all the propriety information related to the flavor system of powder products.

Protection of Confidential Information.   COMPANY and CUSTOMER each agree to be bound by the general terms of any confidentiality agreement whereas neither party will disclose any proprietary information to a third party without written consent by the other.

ForceMajeure.  Neither party shall be liable for failure or delay in its performance hereunder to the extent such failure or delay is caused, directly or indirectly, by fire, flood, riot, explosion, strike, war, act of terrorism or order or act of any government or branch or agency thereof.  These force majeure provisions will excuse performance on a day-to-day basis to the extent of such interference, provided that the applicable party shall use all commercially reasonable efforts to remove such causes of non-performance.  The party affected by a force majeure event shall give written notice to the other party of the occurrence of a force majeure event as soon as is commercially practicable.

Last updated on July 24, 2019.