Product Reseller Agreement
This Product Reseller Agreement (the “Agreement”) is made and entered into as of the date that a separately executed Purchase Order indicating Reseller’s acceptance of the terms of this Agreement (the “Effective Date”) is entered by and between Skinny, Inc., a Delaware Corporation (“Supplier”), and Reseller, the entity on whose behalf this Agreement is deemed accepted and executed (“Reseller”). Supplier and Reseller may be referred to separately as “Party” or collectively as the “Parties”. (“Reseller”, and together with Supplier, the “Parties”, and each, a “Party”).
WHEREAS, Supplier is in the business of distributing the Products (as defined below);
WHEREAS, Reseller is in the business of marketing and reselling products that are similar in kind and/or quality to the Products;
WHEREAS, Reseller wishes to purchase the Products from Supplier and resell these Products to End Users (as defined below) and other Qualified Retailers (as defined below), subject to the terms and conditions of this Agreement;
WHEREAS, Products sold by Supplier, whether consumable, topical or in some other form, may contain CBD (cannabidiol), other cannabinoids, and other ingredients derived from industrial hemp;
WHEREAS, the Food and Drug Administration has not evaluated the Products offered by Supplier, and the Supplier makes no claims as to any benefits from the use of its Products; and
WHEREAS, Supplier wishes to sell the Products to Reseller and appoint Reseller as a non-exclusive reseller of Products under the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions set out herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
Capitalized terms have the meanings set forth below unless defined elsewhere in this Agreement.
“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena, or investigation of any nature, whether civil, criminal, administrative, regulatory, or other, and whether at law, in equity, or otherwise.
“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, this Person.
“Business Day” means any day except Saturday, Sunday, or a federal or California holiday.
“Claim” means any Action made or brought against a Person entitled to indemnification under ARTICLE XVII.
“Control” (and with correlative meanings, the terms “Controlled by” and “under common Control with”) means, regarding any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of another Person, whether through the ownership of voting securities, by contract, or otherwise.
“Defective” means not conforming to the warranties in Section 16.02.
“Defective Goods” means goods that are Defective, which for the avoidance of doubt, includes any Nonconforming Goods accepted by Reseller under Section 9.04.
“Delivery Point” means the street address specified in the applicable Purchase Order.
“End User” means the final purchaser that (a) has acquired a Product from Reseller for (i) its own or its Affiliate’s internal use and not for resale, remarketing, or distribution or (ii) incorporation into its own products and (b) is an individual or entity, other than any federal, state, or local agency, office, or division, located in the Territory.
“Excess Product” means a Product that, when counted together with all other Products having the same SKU and received by Reseller under the same Purchase Order, is in excess of the quantities of the Products ordered under that Purchase Order.
“Governmental Authority” means any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of the government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of this organization or authority have the force of Law), or any arbitrator, court, or tribunal of competent jurisdiction.
“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, award, or determination entered by or with any Governmental Authority.
“Indemnified Party” means, as the context requires, Supplier Indemnified Party ir Reseller Indemnified Party.
“Indemnifying Party” means, as the context requires, Supplier Indemnifying Party or Reseller Indemnifying Party.
“Initial Term” has the meaning set out in Section 14.01.
“Intellectual Property Rights” means all industrial and other intellectual property rights comprising or relating to: (a) Patents; (b) Trademarks; (c) internet domain names, whether or not Trademarks, registered by any authorized private registrar or Governmental Authority, web addresses, web pages, website, and URLs; (d) works of authorship, expressions, designs, and design registrations, whether or not copyrightable, including copyrights and copyrightable works, software and firmware, [application programming interfaces, architecture, files, records, schematics,] data, data files, and databases and other specifications and documentation; (e) Trade Secrets; [(f) semiconductor chips, mask works and the like;] and [(f)/(g)] all industrial and other intellectual property rights, and all rights, interests, and protections that are associated with, equivalent or similar to, or required for the exercise of, any of the foregoing, however arising, in each case whether registered or unregistered and including all registrations and applications for, and renewals or extensions of, these rights or forms of protection under the Laws of any jurisdiction throughout in any part of the world.
“Law” means any statute, law, ordinance, regulation, rule, code, constitution, treaty, common law, Governmental Order or other requirement or rule of law of any Governmental Authority.
“Nonconforming Goods” means any product received by Reseller from Supplier under a Purchase Order that: (a) is not a Product; (b) does not conform to the SKU listed in the applicable Purchase Order; or (c) on visual inspection, Reseller reasonably determines are otherwise Defective.
“Notify” means to give Notice.
“Patents” means all patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions, and extensions thereof), patent applications, and other patent rights and any other Governmental Authority-issued indicia of invention ownership (including inventor’s certificates, petty patents, and patent utility models).
“Person” means any individual, partnership, corporation, trust, limited liability entity, unincorporated organization, association, Governmental Authority or any other entity.
“Personnel” means agents, employees, or subcontractors engaged or appointed by Supplier or Reseller.
“Products” means those products that are identified in a separately executed Purchase Order, as Supplier may amend in accordance with Section 7.02. For the purposes of ARTICLE IX, Products are deemed to include Nonconforming Goods.
“Purchase Order” means Reseller’s then-current standard form purchase order.
“Purchase Order Transaction Terms” means any one or more of the terms specified by Reseller in a Purchase Order under Section 8.022. For the avoidance of doubt, the term Purchase Order Transaction Terms does not include any general terms or conditions of any Purchase Order.
“Qualified Retailer” means any duly licensed and authorized retailer or business that is in compliance with all applicable laws of the United States, its state(s) of operation, and/or its local municipality within the Territory to sell goods like or substantially similar to the Products directly to End Users at a physical or e-commerce retail location. The designation of a business or retailer as a Qualified Retailer is subject to the conditions set out in Section 2.02 and Section 2.03.
“Representatives” means a Party’s Affiliates, employees, officers, directors, partners, shareholders, agents, attorneys, third-party advisors, successors, and permitted assigns.
“Reseller Contract” means any material contract or agreement to which Reseller is a party or to which any of its material assets are bound.
“Supplier’s Intellectual Property Rights” means all Intellectual Property Rights owned by or licensed to Supplier.
“Supplier’s Trademarks” means all Trademarks owned by or licensed to Supplier [and set out in Schedule 2].
“Trademarks” means all rights in and to US and foreign trademarks, service marks, trade dress, trade names, brand names, logos, trade dress, corporate names, and domain names and other similar designations of source, sponsorship, association or origin, together with the goodwill symbolized by any of the foregoing, in each case whether registered or unregistered and including all registrations and applications for, and renewals or extensions of, these rights and all similar or equivalent rights or forms of protection in any part of the world.
“Trade Secrets” means all inventions, discoveries, trade secrets, business and technical information and know-how, databases, data collections, patent disclosures, and other confidential and proprietary information and all rights therein.
“US” means the United States of America, including its territories, possessions, and military bases.
“Warranty Period” has the meaning set out in the written warranty statement provided by Supplier to End User as described in Section 16.02.
Appointment as Reseller
- II.1.Non-Exclusive Appointment. Supplier hereby appoints Reseller, and Reseller accepts the appointment, to act as a non-exclusive reseller of Products to End Users and Qualified Retailers located in the Territory during the Term and the Post-term Resale Period solely in accordance with the terms and conditions of this Agreement. Supplier may in its sole discretion sell the Products to any other Person, including resellers, retailers, and End Users in and outside the Territory. Reseller may not sell Products to anyone other than End Users or Qualified Retailers without the written consent of the Supplier. Reseller may not sell or advertise Products on any website without the express written condition of the Supplier. This is including but not limited to Amazon.com, Ebay.com, Alibaba.com, etc…
- II.2.Limitation on Right to Resell to Qualified Retailers. All Resales made by Reseller to Qualified Retailers are subject to the prior express written approval of Supplier before any agreement is entered into between Reseller and the Qualified Retailer for the purchase of Products. Reseller agrees to only sell the Products to Qualified Retailers who will market the Products making no unsubstantiated claims, or structure and function claims, as per FDA 21 CFR 111 about the Product, including, but not limited to, by way of example, website URL, advertising promotions, printed materials, social media posts or Product descriptions.
- II.3.Agreements to be Entered Between Reseller and Qualified Retailers. Reseller shall enter into agreements with each Qualified Retailer, pursuant to which each Qualified Retailer will agree that it will not take or fail to take any action that, if taken or not taken by Reseller, would constitute a breach by Reseller of this Agreement. Each such agreement will provide that Supplier is an intended third-party beneficiary of such agreement. Reseller shall provide copies of all such agreements to Supplier at Supplier’s request. Reseller agrees that it shall be liable to Supplier for any act or failure to act, as the case may be, of a Qualified Retailer that would constitute a breach of this Agreement by Reseller if such act or failure to act occurred with respect to Reseller.
- II.4.Right to Resell Competitive Products. This Agreement does not preclude either Party from entering into an agreement (a “Competitive Transaction”) with any other Person related to the sale, resale, or distribution of goods or products, including those that are the same as or similar to or competitive with the Products.
No Franchise or Business Opportunity Agreement
- III.1.No Franchise or Business Opportunity Agreement. The Parties are independent contractors and nothing in this Agreement will be deemed or constructed as creating a joint venture, partnership, agency relationship, franchise, or business opportunity between Supplier and Reseller. Neither Party, by virtue of this Agreement, will have any right, power, or authority to act or create an obligation, express or implied, on behalf of the other Party. Each Party assumes responsibility for the actions of its personnel under this Agreement and will be solely responsible for their supervision, daily direction and control, wage rates, withholding income taxes, disability benefits, or the manner and means through which the work under this Agreement will be accomplished. Except as provided otherwise in this Agreement, Reseller has the sole discretion to determine Reseller’s methods of operation, Reseller’s accounting practices, the types and amounts of insurance Reseller carries, Reseller’s personnel practices, Reseller’s advertising and promotion, Reseller’s customers, and Reseller’s service areas and methods. The relationship created hereby between the Parties is solely that of Supplier and Reseller. If any provision of this Agreement is deemed to create a franchise relationship between the parties, then Supplier may immediately terminate this Agreement, or, within the sole discretion of the Supplier, the Parties shall negotiate in good faith to modify this Agreement so as to effect the Parties’ original intent as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as a product reseller agreement and not as a franchise agreement.
Terms of Agreement Prevail Over Reseller’s Purchase Order
- IV.1.Terms of Agreement Prevail Over Reseller’s Purchase Order. This Agreement is expressly limited to the terms of this Agreement and the Purchase Order Transaction Terms contained in the applicable Purchase Order. The terms of this Agreement prevail over any terms or conditions contained in any other documentation related to the subject matter of this Agreement and expressly exclude any of Reseller’s general terms and conditions contained in any Purchase Order or other document issued by Reseller.
General Reseller Performance Obligations
- V.1.Marketing and Reselling Products. Reseller shall, in good faith and at its own expense:
- market, advertise, promote, and resell the Products to End Users or Qualified Retailers located in the Territory consistent with good business practice, in each case using its best efforts to maximize the sales volume of the Products;
- only resell or offer to resell the Products that Reseller that have been ordered from Supplier and which order has been accepted by Supplier as available for delivery to Reseller, unless Reseller has received prior written authorization from Supplier;
- develop and execute a marketing plan sufficient to fulfill its obligations under this Agreement;
- have sufficient knowledge of the industry and products competitive with each Product (including specifications, features and benefits) so as to be able to explain in detail to the End Users:
- the differences between the Product and competing products; and
- information on standard protocols and features of each Product;
- observe all reasonable directions and instructions given to it by Supplier in relation to the marketing, advertisement, and promotion of the Products, including Supplier’s sales, marketing, and merchandising policies as they currently exist or as they may hereafter be changed by Supplier, to the extent that these marketing materials, advertisements, or promotions refer to the Products or otherwise use Supplier’s Trademarks;
- in any and all contact between Reseller and any End User, identify to the End User Reseller’s full legal name, trade name, or both;
- market, advertise, promote and resell Products and conduct business in a manner that reflects favorably at all times on Products and the good name, goodwill, and reputation of Supplier; and
- promptly Notify Supplier of any complaint or adverse claim about any Product or its use of which Reseller becomes aware; provided, that nothing in this Agreement requires Reseller to reveal proprietary pricing information.
- V.2.Authority to Perform Under this Agreement. Reseller shall, at its own expense, obtain and maintain required certifications, credentials, licenses, insurance, and permits necessary to conduct business in accordance with this Agreement.
- V.3.Limited End User Support. On and after the Effective Date, for a reasonable period following the sale of a Product to any End User, Reseller shall, at its own expense:
- have sufficient knowledge of the industry and products competitive with the Product (including specifications, features, and benefits) so as to be able to explain in detail to the End Users the differences between the Product and competing products;
- ensure that an adequate number of trained, capable, and qualified technical Personnel with sufficient knowledge of the Product are available during normal business hours to assist End Users; and
- respond to the End Users regarding the general operation and use of the Product, including:
- acting as a liaison between the End User and Supplier in matters requiring Supplier’s participation;
- providing general Product information and support on standard Product protocols, uses and features; and
- collecting relevant technical problem identification information.
Except as explicitly authorized in this Agreement or in a separate written agreement with Supplier, Reseller may not service, repair, modify, alter, replace, reverse engineer, or otherwise change the Products it sells to End Users.
- V.4.Government Approval. If at any time during the Term or the Post-term Resale Period any notification, registration or approval is required for giving legal effect in any applicable jurisdiction to this Agreement or the transactions contemplated under this Agreement, Reseller shall:
- immediately take whatever steps may be necessary to properly notify, register or obtain approval;
- be responsible for any charges incurred in connection with notifying, registering or obtaining this approval; and
- keep Supplier currently informed of its efforts regarding this Section 5.04.
Supplier is not obligated to ship any Products or other materials to Reseller under this Agreement until Reseller has provided Supplier with satisfactory evidence that this approval, notification or registration is not required or that it has been obtained.
- V.5.Prohibited Acts. Notwithstanding anything to the contrary in this Agreement, neither Reseller nor Reseller Personnel may:
- make any representations, warranties, guarantees, indemnities, similar claims, or other commitments:
- actually, apparently, or ostensibly on behalf of Supplier, or
- to any End User regarding the Products, which representations, warranties, guarantees, indemnities, similar claims, or other commitments are additional to or inconsistent with any then-existing representations, warranties, guarantees, indemnities, similar claims, or other commitments in this Agreement or any written documentation provided by Supplier to Reseller;
- engage in any unfair, competitive, misleading, or deceptive practices respecting Supplier, Supplier’s Trademarks or the Products, including any product disparagement or “bait-and-switch” practices;
- separate any accessories sold, bundled, or packaged with any Product from the Product or sell, license, or remove, translate, or modify the contents or documentation of or related to the Product or accessories, including, without limitation, any end user license agreements or warranty statements;
- sell or offer to sell any of the Products or other Supplier-branded products, other than the Products purchased by Reseller from Supplier or from a distributor authorized by Supplier to sell the same to Reseller;
- sell, without the express written approval of Supplier which shall not be unreasonably withheld, either directly or indirectly, or assign or transfer, any Products to any Person when Reseller knows or has reason to suspect that the Person may resell any or all of the Products to a third party, including any third party reseller or distributor; or
- during the Term and the Post-term Resale Period manufacture, promote, market, sell, or distribute Products using promotional information and material, unless the promotional information or material was approved by Supplier under Section 6.01(c) or provided by Supplier under Section 6.01(d).
- V.6.Government Contracts. Reseller may not resell Products to any Governmental Authority or its respective agencies without express written approval from Supplier. Unless otherwise separately agreed to in writing between Supplier and Reseller, no provisions required in any US government contract or subcontract related thereto will be a part of this Agreement, imposed on or binding on Supplier, and this Agreement is not deemed an acceptance of any government provisions that may be included or referenced in Reseller’s request for quotation, Purchase Order, or any other document.
Supplier Performance Obligations
- VI.1.Supplier and Reseller Performance Obligations. During the Term and the Post-term Resale Period:
- Supplier shall provide any information and support that may be reasonably requested by Reseller regarding the marketing, advertising, promotion, and sale of Products sold to Reseller under this Agreement;
- Supplier shall allow Reseller to participate, at its own expense, in any marketing, advertising, promotion, and sales programs or events that Supplier may make generally available to its authorized resellers of Products, provided that Supplier may alter or eliminate any program at any time;
- Supplier shall approve or reject, in its sole discretion, any promotional information or material submitted by Reseller concerning the Products purchased by Reseller for Supplier’s approval within TEN (10) Business Days of receipt; and
- Supplier shall provide promotional information and material at Reseller’s sole cost and expense, if any, for use by Reseller in accordance with this Agreement.
- Reseller agrees to cooperate with Supplier to assist with marketing activities whereunder Skinny elects to advertise and/or market the fact that Reseller is Reseller of Supplier’s products. Marketing activities may include press releases, trade press interviews, internet articles, and promotional videos under this Agreement, and the use of Reseller’s logo. Each party agrees to use only official spokespeople for the other party to speak on behalf of such party at any live press conference or in reference account activities. Reseller agrees that Supplier shall have make the ultimate decision regarding the content all such marketing activities. Reseller shall not use Supplier’s nor any Supplier Clients’ name, logo, any trademarks or service marks in any print or electronic advertising or promotion or in any manner without Skinny’s prior written consent.
- Reseller hereby grants Skinny a non-exclusive, non-transferable right to display Reseller’s name and/or logo (collectively, the “Reseller Trademarks”), for the purpose of Supplier displaying Reseller’s Trademarks to users of Supplier’s the website and marketing materials. This trademark license may be terminated by Reseller upon advance written notice at any time.
Agreement to Purchase and Sell the Products
- VII.1.Terms of the Sale. Supplier shall sell Products to Reseller at the Prices and on the terms and conditions set out in this Agreement.
- VII.2.Availability/Changes in Products. Supplier may, in its sole discretion:
- remove Products from availability without Notice to Reseller; and
- add to the Products availability on without Notice to Reseller; and
- without Notice to Reseller, make changes to any Products or parts/accessories/formulations/designs/contents/ingredients thereto (except where continued availability is required by Law),
in each case, without obligation to modify or change any Products previously delivered or to supply new Products meeting earlier specifications. For the avoidance of doubt, this provision does not expand the rights of Supplier under Section 8.04(a) to cancel shipment under a Purchase Order.
- VIII.1.Purchase Order. Reseller shall issue all Purchase Orders in written form via email, Supplier website order, or US mail, and cause all Purchase Orders to contain the Purchase Order Transaction Terms. By placing a Purchase Order, Reseller makes an offer to purchase Products under the terms and conditions of this Agreement, including the Purchase Order Transaction Terms, and on no other terms. Except regarding the Purchase Order Transaction Terms, any variations made to the terms and conditions of this Agreement by Reseller in any Purchase Order are void and have no effect.
- VIII.2.Purchase Order Transaction Terms. Reseller shall specify the following information (collectively, the “Purchase Order Transaction Terms”) in each Purchase Order:
- a list of Products to be purchased, including SKU;
- quantities ordered;
- Delivery Point.
There are no minimum Purchase Order quantities required under this Agreement; provided, however, that, Supplier may charge Reseller its then-standard small order handling charge for any Purchase Order requiring Supplier to ship Products in less than its standard box-lot quantities.
- VIII.3.Supplier’s Right to Accept or Reject Purchase Orders. Supplier may, in its sole discretion, accept or reject any Purchase Order. Supplier may accept any Purchase Order by confirming the order (whether by written confirmation, invoice, or otherwise) or by delivering the Products, whichever occurs first. No Purchase Order is binding on Supplier unless accepted by Supplier as provided in this Agreement.
- VIII.4.Cancellation of Purchase Orders.
- Supplier may, in its sole discretion, without liability or penalty, cancel any Purchase Order placed by Reseller and accepted by Supplier, in whole or in part:
- if Supplier discontinues its sale of Products or reduces or allocates its inventory of Products;
- if Supplier determines that Reseller is in violation of its payment obligations under or has breached or is in breach of this Agreement; or
- pursuant to Supplier’s rights under Section 10.04.
- With the exception of Reseller’s right under Section 9.03 to cancel a Purchase Order, Reseller has no right to cancel or amend any Purchase Order it submits.
Shipment and Delivery
- IX.1.Shipment. Unless expressly agreed to by the Parties in writing, Supplier shall select the method of shipment of and the carrier for the Products. Supplier may, in its sole discretion, without liability or penalty, make partial shipments of Products to Reseller. Each shipment constitutes a separate sale, and Reseller shall pay for the units shipped, whether the shipment is in whole or partial fulfillment of a Purchase Order.
- IX.2.Delivery. Unless expressly agreed to by the Parties, Supplier shall deliver the Products to the Delivery Point, using Supplier’s or manufacturer’s standard methods for packaging and shipping the Products. All shipping prices are FOB at the shipping point, charged back to Reseller on associated invoices.
- IX.3.Late Delivery. Any time quoted for delivery is an estimate only; provided, however, that Supplier shall use commercially reasonable efforts to deliver all Products on or before the requested delivery date. Subject to Section 19.19, Supplier is not liable for or in respect of any loss or damage arising from any delay in filling any order, failure to deliver or delay in delivery. No delay in the shipment or delivery of any Product relieves Reseller of its obligations under this Agreement, including accepting delivery of any remaining installment or other orders of Products.
- IX.4.Inspection. Reseller shall inspect Products received under this Agreement within FIVE (5) Business Days of receipt of the Products (the “Inspection Period”) and either accept or, if any Products are Nonconforming Goods or Excess Products, reject these Products. Reseller will be deemed to have accepted the Products unless it Notifies Supplier in writing of any Nonconforming Goods or Excess Products during the Inspection Period and furnishes written evidence or other documentation as reasonably required by Supplier. If Reseller timely Notifies Supplier of any Nonconforming Goods or Excess Products, Supplier shall determine, in its sole discretion, whether the Products are Nonconforming Goods or Excess Products. If Supplier determines that the Products are Nonconforming Goods or Excess Products, it shall either, in its sole discretion:
- if the Products are Nonconforming Goods, (i) replace the Nonconforming Goods with conforming Products, or (ii) refund the Price for the Nonconforming Goods, together with all shipping expenses incurred by Reseller in connection therewith; or
- if the Products are Excess Products, refund the Price for the Excess Products, together with all related shipping and handling expenses incurred by Reseller in connection therewith.
Reseller shall ship, all Nonconforming Goods and Excess Products to Supplier’s designated facility. If Supplier exercises its option to replace Nonconforming Goods, Supplier shall, after receiving Reseller’s return shipment of Nonconforming Goods, ship to Reseller, at Reseller’s expense and risk of loss, the replaced Products to a location designated by Reseller.
Reseller acknowledges and agrees that the remedies set out in Section 9.04(a) and Section 9.04(b) are Reseller’s exclusive remedy for the delivery of Nonconforming Goods or Excess Products, subject to Reseller’s rights under Section 16.02 and Section 16.04 regarding any Nonconforming Goods for which Reseller has accepted delivery under this Section 9.04.
- IX.5.Limited Right of Return. Except as provided under Section 9.04, Section 16.02 and Section 16.04, all sales of Products to Reseller under this Agreement are made on a one-way basis and Reseller has no right to return Products purchased under this Agreement.
- IX.6.Title and Risk of Loss.
- Title to Products shipped under any Purchase Order passes to Reseller upon full payment by the Reseller of the invoice for the Products ordered by the Reseller.
- Risk of loss to Products shipped under any Purchase Order passes to Reseller upon Supplier’s shipment of such Products to the carrier at the place of shipment. In the event a shipment or any part of it is received in damaged condition, Supplier shall not have any liability, and the sole remedy of the parties shall be against the carrier. For the avoidance of doubt, the Uniform Commercial Code as adopted by the State of California (hereafter the “UCC”) shall determine the rights and obligations of the Parties with respect to the risk of loss. The UCC terms for FOB place of shipment shall apply to the risk of loss once the Products have been transferred to the carrier at the place of shipment.
Price and Payment
- X.1.Price. Reseller shall purchase the Products from Supplier at the prices set out in Supplier’s reseller price list in effect when Supplier accepts the related Purchase Order (“Prices”).
- X.2.Shipping Charges, Insurance and Taxes. Supplier or Reseller shall pay for shipping charges and insurance costs in accordance with the commercial terms selected by the Parties under ARTICLE IX. All Prices are exclusive of all sales, use, and excise taxes, and any other similar taxes, duties, and charges of any kind imposed by any Governmental Authority on any amounts payable by Reseller under this Agreement. Reseller is responsible for all charges, costs, and taxes; provided, that, Reseller is not responsible for any taxes imposed on, or regarding, Supplier’s income, revenues, gross receipts, personnel, or real or personal property or other assets.
- X.3.Payment Terms. Payment is due at the time of order unless otherwise agreed upon in writing. Supplier reserves the right to withhold shipment of Products until such payment is received. Supplier may issue invoices to Reseller for all Products ordered in the previous calendar month. Reseller shall pay all invoiced amounts due to Supplier within five (5) Business Days from the Reseller’s receipt of the invoice, except for any amounts disputed by Reseller in good faith. Reseller shall make all payments in US dollars by cash, check, credit card, or wire transfer.
- X.4.Unsatisfactory Credit Status. Each issuance of a Purchase Order to Supplier constitutes Reseller’s representation and warranty that Reseller can pay for the Products identified in the Purchase Order in accordance with the terms of this Agreement. Reseller shall furnish Supplier with such statements accurately and fairly evidencing Reseller’s financial condition as Supplier may, from time to time, reasonably request. Throughout the term, Reseller shall comply with all loan covenants and other obligations to its lenders. Reseller shall Notify Supplier immediately of any and all events that have had or may have a material adverse effect on Reseller’s business or financial condition, including any change in management, sale, lease or exchange of a material portion of Reseller’s assets, a change of Control or ownership, or breach of any loan covenants or other material obligations of Reseller to its lenders. If, at any time, Supplier determines in its sole discretion that Reseller’s financial condition or creditworthiness is inadequate or unsatisfactory, then in addition to Supplier’s other rights under this Agreement, at law or in equity, Supplier may without liability or penalty, take any of the following actions:
- on FIVE (5) Business Days’ prior Notice, modify the payment terms specified in Section 10.03 for outstanding and future purchases, including requiring Reseller to pay cash in advance or cash on delivery;
- reject any Purchase Order received from Reseller;
- cancel any previously accepted Purchase Orders;
- delay any further shipment of Products to Reseller;
- stop delivery of any Products in transit in the possession of a common carrier or bailee and cause the Products in transit to be returned to Supplier;
- on FIVE (5) Business Days’ Notice, terminate this Agreement; or
- accelerate the due date of all amounts owing by Reseller to Supplier.
No actions taken by Supplier under this Section 10.04 (nor any failure of Supplier to act under this Section 10.04) constitute a waiver by Supplier of any of its rights to enforce Reseller’s obligations under this Agreement including the obligation of Reseller to make payments as required under this Agreement.
- X.5.Invoice Disputes. Reseller shall Notify Supplier in writing of any dispute with any invoice (along with substantiating documentation within FIVE (5) Business Days from Reseller’s receipt of the invoice. Reseller will be deemed to have accepted all invoices for which Supplier does not receive timely Notice of disputes, and shall pay all undisputed amounts due under these invoices within the period set out in Section 10.03. The Parties shall seek to resolve all disputes expeditiously and in good faith in accordance with the dispute resolution provisions set out in Section 19.177. Notwithstanding anything to the contrary in this Agreement, Reseller shall continue performing its obligations under this Agreement during any dispute, including, without limitation, Reseller’s obligation to pay all due and undisputed invoice amounts in accordance with the terms and conditions of this Agreement.
- X.6.Late Payments. Except for invoiced payments that Reseller has successfully disputed, Reseller shall pay interest on all late payments, calculated daily and compounded monthly, at the lesser of the rate of TEN (10) percent per month or the highest rate permissible under applicable Law. Reseller shall also reimburse Supplier for all costs incurred in collecting any late payments, including, without limitation, attorneys’ fees. In addition to all other remedies available under this Agreement or at Law (which Supplier does not waive by the exercise of any rights under this Agreement), Supplier may (a) suspend the delivery of any Products if Reseller fails to pay any undisputed amounts when due under this Agreement and (b) terminate this Agreement under the terms of Section 14.03(a).
- X.7.No Set-off. Reseller shall perform its obligations under this Agreement without setoff, deduction, recoupment, or withholding of any kind for amounts owed or payable by Supplier whether under this Agreement, applicable law, or otherwise and whether relating to Supplier’s breach, bankruptcy, or otherwise and whether under this Agreement, any Purchase Order, any other agreement between (a) Reseller or any of its Affiliates and (b) Supplier or any of its Affiliates, or otherwise.
- X.8.Security Interest. To secure Reseller’s prompt and complete payment and performance of any and all present and future indebtedness, obligations, and liabilities of Reseller to Supplier under this Agreement, Reseller hereby grants Supplier a first-priority security interest, prior to all other liens and encumbrances, in all inventory of products purchased under this Agreement (including Products, Nonconforming Goods, and Excess Products), wherever located, and whether now existing or hereafter arising or acquired from time to time, and in all accessions thereto and replacements or modifications thereof, as well as all proceeds (including insurance proceeds) of the foregoing. Reseller acknowledges that the security interest granted under this Section 10.08 is a purchase-money security interest under California law. Supplier may file a financing statement for the security interest, and Reseller shall execute any statements or other documentation necessary to perfect Supplier’s security interest in the products. Reseller also authorizes Supplier to execute, on Reseller’s behalf, statements or other documentation necessary to perfect Supplier’s security interest in the products. Supplier is entitled to all applicable rights and remedies of a secured party under applicable Law.
Resale of the Products
- XI.1.Reseller’s Credit Risk on Resale to End Users. Reseller is responsible for all credit risks regarding, and for collecting payment for, all products (including Products) sold to third parties (including End Users), whether or not Reseller has made full payment to Supplier for the Products. The inability of Reseller to collect the purchase price for any Product does not affect Reseller’s obligation to pay Supplier for any Product.
- XI.2.Reseller’s Risk on Resale to Qualified Retailers. Reseller is responsible for all credit risks regarding, and for collecting payment for, all products (including Products) sold to third parties (including Qualified Retailers), whether or not Reseller has made full payment to Supplier for the Products. The inability of Reseller to collect the purchase price for any Product does not affect Reseller’s obligation to pay Supplier for any Product. Reseller is solely responsible for any and all remuneration, compensation, benefits and reimbursement as may be due or become due to any Qualified Retailer, whether financial or otherwise.
- XI.3.Resale Prices. Reseller and Qualified Retailers unilaterally establish their own resale prices and terms regarding products it sells, including Products. Such price shall not be less than the highest price listed in this agreement unless agreed upon by the Supplier.
Compliance with Laws
- XII.1.General Compliance With Laws Representation and Warranty. Reseller represents and warrants to Supplier that it is in material compliance with all Laws and Reseller Contracts applicable to this Agreement, the Products and the operation of its business.
- XII.2.General Compliance With Laws Covenant. Reseller shall at all times comply with all Laws except to the extent that the failure would not, in the aggregate, reasonably be expected to have a material adverse effect on Reseller’s ability to comply with its obligations under this Agreement. Without limiting the generality of the foregoing, each Party shall at all times, at its own expense, obtain and maintain all certifications, credentials, authorizations, licenses, and permits necessary to conduct that portion of its business relating to the exercise of its rights and the performance of its obligations under this Agreement.
Intellectual Property Rights
- XIII.1.Ownership. Subject to the express rights and licenses granted by Supplier in this Agreement, Reseller acknowledges and agrees that:
- any and all Supplier’s Intellectual Property Rights are the sole and exclusive property of Supplier or its licensors;
- Reseller shall not acquire any ownership interest in any of Supplier’s Intellectual Property Rights under this Agreement;
- any goodwill derived from the use by Reseller of Supplier’s Intellectual Property Rights inures to the benefit of Supplier or its licensors, as the case may be;
- if Reseller acquires any Intellectual Property Rights in or relating to any product (including any Product) purchased under this Agreement (including any rights in any Trademarks, derivative works or patent improvements relating thereto), by operation of law, or otherwise, these rights are deemed and are hereby irrevocably assigned to Supplier or its licensors, as the case may be, without further action by either Party; and
- Reseller shall use Supplier’s Intellectual Property Rights solely for the purposes of performing its obligations under this Agreement and only in accordance with this Agreement and the instructions of Supplier.
- XIII.2.Supplier’s Trademark License Grant. This Agreement does not grant either Party the right to use the other Party’s or their respective Affiliates’ Trademarks except as set out under this Section 13.02. Subject to the terms and conditions of this Agreement, Supplier hereby grants to Reseller a non-exclusive, non-transferable, and non-sublicensable license to use Supplier’s Trademarks in the Territory during the Term and the Post-term Resale Period solely on or in connection with the promotion, advertising, and resale of the Products in accordance with the terms and conditions of this Agreement. Reseller will promptly discontinue the display or use of any Trademark to change the manner in which a Trademark is displayed or used with regard to the Products when requested by Supplier. Other than the express licenses granted by this Agreement, Supplier grants no right or license to Reseller, by implication, estoppel, or otherwise, to the Products or any Intellectual Property Rights of Supplier.
- XIII.3.Prohibited Acts. Reseller shall not:
- take any action that interferes with or may interfere with any of Supplier’s rights in or to Supplier’s Intellectual Property Rights, including Supplier’s ownership or exercise thereof;
- challenge any right, title, or interest of Supplier in or to Supplier’s Intellectual Property Rights;
- make any claim or take any action adverse to Supplier’s ownership of Supplier’s Intellectual Property Rights;
- register or apply for registrations, anywhere in the world, for Supplier’s Trademarks or any other Trademark that is similar to Supplier’s Trademark] or that incorporates Supplier’s Trademarks in whole or in confusingly similar part;
- use any mark, anywhere, that is confusingly similar to Supplier’s Trademarks;
- engage in any action that tends to disparage, dilute the value of, or reflect negatively on the products purchased under this Agreement (including Products) or any Supplier Trademark;
- misappropriate any of Supplier’s Trademarks for use as a domain name without prior written consent from Supplier; and
- alter, obscure, or remove any of Supplier’s Trademarks or trademark or copyright notices or any other proprietary rights notices placed on the products purchased under this Agreement (including Products), marketing materials, or other materials that Supplier may provide.
- XIII.4.Supplier’s Trademark Notices. Reseller shall ensure that all Products sold by Reseller, all related quotations, specifications, and descriptive literature, and all other materials carrying Supplier’s Trademark, are marked with the appropriate trademark notices in accordance with Supplier’s instructions.
- XIII.5.No Continuing Rights. On expiration or earlier termination of this Agreement, subject to Reseller’s rights under the Post-term Resale Period:
- Reseller’s rights under Section 13.02 will cease immediately; and
- Reseller shall immediately cease all display, advertising, promotion, and use of all of Supplier’s Trademarks and shall not thereafter use, advertise, promote, or display any trademark, trade name, or product designation or any part thereof that is similar to or confusing with Supplier’s Trademarks or with any trademark, trade name, or product designation associated with Supplier or any Product.
- XIII.6.Trademark Use. Neither Party shall use the other Party’s Trademarks, service marks, trade names, logos, symbols, or brand names, in each case, without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed.
- XIV.1.Initial Term. The term of this Agreement commences on the Effective Date and continues for a period of 2 years unless and until earlier terminated as provided under this Agreement or applicable law (the “Initial Term”).
- XIV.2.Renewal Term. On expiration of the Initial Term, this Agreement automatically renews for additional successive 1 year terms unless and until either Party provides Notice of nonrenewal at least 60 Days before the end of the then-current term, or unless and until earlier terminated as provided under this agreement or applicable Law (each a “Renewal Term” and together with the Initial Term, the “Term”). If the Term is renewed for any Renewal Term(s) pursuant to this Section, the terms and conditions of this Agreement during each such Renewal Term will be the same as the terms in effect immediately before such renewal, subject to any change in Prices payable for the Products and payment terms during the applicable Renewal Term or changes to or in availability of the Products as set out in Section 7.02. If either party provides timely Notice of their intent not to renew this Agreement, then, subject to Section 14.01, unless earlier terminated in accordance with its terms, this Agreement will terminate on the expiration of the then-current Term.
- XIV.3.Supplier’s Right to Terminate. Supplier may terminate this Agreement by providing Notice to Reseller:
- if Reseller fails to pay any amount when due under this Agreement (“Payment Failure”) and the failure continues for five (5) Business Days after Reseller’s receipt of Notice of nonpayment;
- if within any FOUR (4) month period, TWO (2) or more Payment Failures occur;
- if Reseller breaches any provision of this Agreement (other than a Payment Failure), and either the breach cannot be cured or, if the breach can be cured, it is not cured by Reseller within ten (10) Business Days after Reseller’s receipt of Notice of such breach;
- under and in accordance with Section 3.01 and Section 10.04;
- if Reseller becomes insolvent or files, or has filed against it, a petition for voluntary or involuntary bankruptcy or under any other insolvency Law, makes or seeks to make a general assignment for the benefit of its creditors or applies for, or consents to, the appointment of a trustee, receiver, or custodian for a substantial part of its property, or is generally unable to pay its debts as they become due;
- if Reseller fails to observe or perform any term, covenant, or condition of Reseller’s under any agreement with Supplier, other than this Agreement, and the default continues beyond any grace period set out in the other agreement for the remedying of the default; or
- if Reseller:
- sells, leases, exchanges, transfers, or disposes of a material portion of Reseller’s assets;
- merges or consolidates with or into any other Person; or
- undergoes a change of Control, in any case without Supplier’s prior written consent.
Any termination under this Section 14.03 is effective on Reseller’s receipt of Supplier’s Notice of termination or any later date set out in the Notice.
- XIV.4.Reseller’s Right to Terminate. Reseller may not exercise any rights arising under Law to terminate this Agreement, if any, until each of the following events has occurred:
- Reseller has provided Notice to Supplier identifying in reasonable detail the factual and legal basis for the contemplated termination; and
- Within a commercially reasonable time thereafter (but in all cases at least THIRTY (30) days), Supplier has not cured, or otherwise compensated Reseller for, any breach that is not subject to a good faith dispute by Supplier.
- XIV.5.Effect of Expiration or Termination.
- The Term’s expiration or earlier termination does not affect any rights or obligations that:
- are to survive the expiration or earlier termination of this Agreement under Section 19.03; and
- were incurred by the Parties before the expiration or earlier termination; provided that if Supplier terminates this Agreement all indebtedness of Reseller to Supplier of any kind is immediately due and payable on the effective date of the Term’s expiration or earlier termination without further notice to Reseller.
- Any Notice of termination under this Agreement automatically operates as a cancellation of any deliveries of Products to Reseller that are scheduled to be made after the effective date of termination, whether or not any orders for the Products had been accepted by Supplier. Regarding any Products that are still in transit on termination of this Agreement, Supplier may require, in its sole and absolute discretion, that all sales and deliveries of the Products be made on either a cash-only or certified check basis.
- Subject to Section 14.06, on the expiration or earlier termination of this Agreement, Reseller shall promptly:
- cease to represent itself as Supplier’s authorized reseller regarding the Products, and shall otherwise desist from all conduct or representations that might lead the public to believe that Reseller is authorized by Supplier to sell the Products;
- destroy all documents and tangible materials (and any copies) containing, reflecting, incorporating or based on Supplier’s Confidential Information;
- permanently erase all of Supplier’s Confidential Information from its computer systems, except for copies that are maintained as archive copies on its disaster recovery backup systems, its information technology backup systems, or both. Reseller shall destroy any such copies on the normal expiration of its backup files; and
- certify in writing to Supplier that it has complied with the requirements of this Section 14.05.
- Subject to Section 14.05(a), the Party terminating this Agreement, or in the case of the expiration of this Agreement, each Party, shall not be liable to the other Party for any damage of any kind (whether direct or indirect) incurred by the other Party by reason of the expiration or earlier termination of this Agreement.
- XIV.6.Post-term Resale Period. Subject to Section 14.07, on the expiration or earlier termination of this Agreement, except for termination by Supplier under Section 14.03(a), Section 14.03(b), Section 14.03(c), Section 14.03(d), Section 14.03(e), Section 14.03(f), or Section 14.03(g) Reseller may, in accordance with the applicable terms and conditions of this Agreement, sell off its existing inventories of Products for a period of SIX (6) months following the last day of the Term (the “Post-term Resale Period”).
- XIV.7.Supplier’s Buy-back Right. Within TWENTY (20) Business Days following the Term’s expiration or earlier termination, Reseller shall Notify Supplier in writing of the description/make/model number/UPC/SKU and quantity of all Products in Reseller’s remaining inventory. In the Notice, the Reseller shall separately identify which of those Products Reseller is then contractually obligated to resell to one or more End Users or Qualified Retailers (“Committed Products”). On or before the FIFTH (5th) Business Day after Supplier receives the Notice, Supplier may, in its sole discretion, offer to purchase all or a portion of any remaining inventory (other than Committed Products) free of all liens, claims, or encumbrances, at a price equal to the lesser of Reseller’s cost therefor and Supplier’s then prevailing reseller price. Reseller must accept Supplier’s offer and promptly deliver, at Supplier’s expense, the ordered Products to Supplier’s designated carrier for delivery to Supplier. Repurchased Products must be returned in their original packaging, unopened and undamaged. Supplier shall pay the repurchase price to Reseller either by:
- the issuance of a credit against any indebtedness of Reseller to Supplier; or
- if the repurchase price exceeds the indebtedness, by payment of the excess to Reseller within TWENTY (20) Business Days after delivery to Supplier.
- XIV.8.End of Term Purchase Restrictions. During the Term’s last month, Reseller shall purchase Products in quantities that are no greater than the amount that Reseller reasonably determines is necessary to meet End User or Qualified Retailer demand in that period.
- XV.1.Protection of Confidential Information. From time to time during the Term, Supplier (as “Disclosing Party”) may disclose or make available to the other Reseller (as “Receiving Party”) information about its business affairs, goods and services, confidential information, and materials comprising or relating to Intellectual Property Rights, trade secrets, third-party confidential information, and other sensitive or proprietary information; such information, as well as the terms of this Agreement, whether transmitted orally or in written, electronic, or other form or media, and whether or not marked, designated, or otherwise identified as “confidential” constitutes “Confidential Information” hereunder. Confidential Information excludes information that, at the time of disclosure:
- is or becomes generally available to and known by the public other than as a result of, directly or indirectly, any breach of this ARTICLE XV by Receiving Party or any of its Representatives;
- is or becomes available to Receiving Party on a non-confidential basis from a third-party source, provided that such third party is not and was not prohibited from disclosing such Confidential Information;
- was known by or in the possession of Receiving Party or its Representatives before being disclosed by or on behalf of Disclosing Party;
- was or is independently developed by Receiving Party without reference to or use of, in whole or in part, any of Disclosing Party’s Confidential Information; or
- must be disclosed under applicable Law.
Receiving Party shall from receipt of such Confidential Information:
- protect and safeguard the confidentiality of Disclosing Party’s Confidential Information with at least the same degree of care as Receiving Party would protect its own Confidential Information, but in no event with less than a commercially reasonable degree of care;
- not use Disclosing Party’s Confidential Information, or permit it to be accessed or used, for any purpose other than to exercise its rights or perform its obligations under this Agreement; and
- not disclose any such Confidential Information to any Person, except to Receiving Party’s Representatives who must know the Confidential Information to assist Receiving Party, or act on its behalf, to exercise its rights or perform its obligations under this Agreement.
Receiving Party is liable for any breach of this ARTICLE XV caused by any of its Representatives. The provisions of this ARTICLE XV shall survive termination or expiration of this Agreement for any reason for a period of one year after such termination or expiration. The Reseller shall not make, duplicate, license, or reverse engineer similar and/or competing products.
In the event of any conflict between the terms and provisions of this ARTICLE XV and those of any other provision in this Agreement, the terms and provisions of this ARTICLE XV will prevail.
Representations and Warranties
- XVI.1.Reseller’s Representations and Warranties. Reseller represents and warrants to Supplier that:
- it is a duly organized entity, validly existing and in good standing in the jurisdiction of its incorporation, organization, and / or formation;
- it is duly qualified to do business and is in good standing in every jurisdiction in which such qualification is required for purposes of this Agreement;
- it has the full right, power and authority to enter into this Agreement, to grant the rights and licenses granted under this Agreement and to perform its obligations under this Agreement;
- the execution of this Agreement by its Representative whose signature is set out at the end hereof has been duly authorized by all necessary actions of Reseller;
- when executed and delivered by each of Supplier and Reseller, this Agreement will constitute the legal, valid and binding obligation of Reseller, enforceable against Reseller in accordance with its terms; and
- Reseller is allowed to purchase, import, possess, distribute and/or resell the Products in compliance with all applicable laws in the state and local jurisdictions in which it operates.
- XVI.2.Limited Product Warranty. Subject to the provisions of Section 16.03, Section 16.04, Section 16.05 and Section 16.06, Supplier shall make certain limited warranties regarding the Products (“Limited Warranties”) solely to and for the End User’s benefit, which will either be:
- included in a written warranty statement with the Product; or
- Supplier’s standard limited warranty in force when the Product is delivered by Reseller to End User.
No warranty is extended to Reseller under this Agreement. Reseller may not provide any warranty regarding any Product other than the Supplier warranty described in this Section 16.02.
- XVI.3.Warranty Limitations. Limited Warranties do not apply where the Product:
- has been subjected to abuse, misuse, neglect, negligence, accident, improper testing, improper installation, improper storage, improper handling, abnormal physical stress, abnormal environmental conditions, or use contrary to any instructions issued by Supplier;
- has been reconstructed, repaired, or altered by Persons other than Supplier or its authorized Representative; or
- has been used with any Third Party Product, hardware or product that has not been previously approved in writing by Supplier.
- XVI.4.Extent of Liability. During the Warranty Period, regarding any Defective Goods:
- notwithstanding anything in this Agreement to the contrary, Supplier’s liability under any Limited Warranty is discharged, in Supplier’s sole discretion and at its expense, by:
- repairing or replacing the Defective Goods; or
- crediting or refunding the Price of the Defective Goods, less any applicable discounts, rebates, shipping costs, or credits.
- Reseller is responsible for all costs and risk of loss associated with the delivery of Defective Goods to Supplier (subject to change on receipt of Notice from Supplier) for warranty repair or replacement;
- Supplier is responsible for all costs and risk of loss associated with the delivery of repaired or replaced products to the Delivery Point; and
- Reseller is responsible for all costs and risk of loss associated with the delivery and return of the repaired or replaced Products to End User.
All claims for breach of a Limited Warranty must be received by Supplier no later than TEN (10) Business Days after the expiration of the limited warranty period of the Product.
Reseller has no right to return for repair, replacement, credit, or refund any Product except as set out in this Section 16.04 (or if otherwise applicable, Section 9.04, Section 16.02, Section 16.04 and ARTICLE XVII). Reseller may not reconstruct, repair, alter, or replace any Product, in whole or in part, either itself or by or through any third party.
THIS SECTION 16.04 SETS FORTH RESELLER’S SOLE REMEDY AND SUPPLIER’S ENTIRE LIABILITY FOR ANY BREACH OF ANY WARRANTY RELATING TO THE PRODUCTS.
Except as explicitly authorized in this Agreement or in a separate written agreement with Supplier, Reseller shall not service, repair, modify, alter, replace, reverse engineer, or otherwise change the Products it sells to End Users.
- XVI.5.Warranties Disclaimer; Non-reliance. EXCEPT FOR THE LIMITED EXPRESS WARRANTIES DESCRIBED IN SECTION 16.02, (A) NEITHER SUPPLIER NOR ANY PERSON ON SUPPLIER’S BEHALF HAS MADE OR MAKES ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WHATSOEVER, INCLUDING ANY WARRANTIES OF: (i) MERCHANTABILITY, (ii) FITNESS FOR A PARTICULAR PURPOSE, (iii) TITLE, (iv) NON-INFRINGEMENT, OR (v) THE LEGALITY OF SKINNY’S PRODUCTS UNDER FEDERAL, STATE AND LOCAL LAW; WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED AND (B) RESELLER HAS NOT RELIED ON ANY REPRESENTATION OR WARRANTY MADE BY SUPPLIER, OR ANY OTHER PERSON ON SUPPLIER’S BEHALF, EXCEPT AS SPECIFICALLY DESCRIBED IN SECTION 16.02 OF THIS AGREEMENT.
- XVI.6.Third Party Products. Products purchased by Reseller under this Agreement may contain, be contained in, incorporated into, attached to or packaged together with the products manufactured by a third party (“Third Party Products”). Third Party Products are not covered by the Limited Warranty. For the avoidance of doubt, Supplier makes no representations or warranties regarding any Third Party Products.
- XVII.1.Reseller General Indemnification. Reseller (as “Reseller Indemnifying Party”) shall indemnify, hold harmless, and defend Supplier and its parent, officers, directors, partners, members, shareholders, employees, agents, affiliates, successors and permitted assigns (collectively, “Supplier Indemnified Party”) against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable attorneys’ fees, fees, and the costs of enforcing any right to indemnification under this Agreement and the cost of pursuing any insurance providers, incurred by Supplier Indemnified Party in a final non-appealable judgment (collectively, “Losses”), arising out of or relating to any Claim of a third party:
- relating to a breach or non-fulfillment of any representation, warranty, or covenant under this Agreement by Reseller Indemnifying Party or Reseller Indemnifying Party’s Personnel;
- alleging or relating to any negligent or more culpable act or omission of Reseller Indemnifying Party or its Personnel (including any recklessness or willful misconduct) in connection with the performance of its obligations under this Agreement;
- alleging or relating to any bodily injury, death of any Person or damage to real or tangible personal property caused by the willful negligent acts or omissions of Reseller Indemnifying Party or its Personnel;
- relating to a purchase of a Product by any person or entity purchasing directly or indirectly through Reseller Indemnifying Party and not directly relating to a claim of Limited Warranty breach;
- relating to any failure by Reseller or its agents to materially comply with any applicable Laws of their jurisdiction(s), including, but not limited to, any applicable consumer protection laws or laws concerning the import, purchase, distribution, sale, or possession of the Products; or
- alleging that the Reseller Indemnifying Party breached its agreement with a third party as a result of or in connection with entering into, performing under or terminating this Agreement.
- XVII.2.Exceptions and Limitations on General Indemnification. Notwithstanding anything to the contrary in this Agreement, no Indemnifying Party is obligated to indemnify or defend an Indemnified Party against any claim (whether direct or indirect) if the claim or corresponding Losses arise out of or result from, in whole or in part, the Indemnified Party’s or its Personnel’s:
- gross negligence or more culpable act or omission (including recklessness or willful misconduct);
- bad faith failure to materially comply with any of its obligations set out in this Agreement; or
- use of the products purchased under this Agreement (including Products) in any manner that does not materially conform with the then-current usage instructions, guidelines or specifications provided by Supplier.
- XVII.3.Sole Remedy. ARTICLE XVII SETS FORTH THE ENTIRE LIABILITY AND OBLIGATION OF EACH INDEMNIFYING PARTY AND THE SOLE AND EXCLUSIVE REMEDY FOR EACH INDEMNIFIED PARTY FOR ANY LOSSES COVERED BY ARTICLE XVII.
Limitation of Liability
- XVIII.1.No Liability for Consequential or Indirect Damages. EXCEPT FOR OBLIGATIONS TO MAKE PAYMENT UNDER THIS AGREEMENT, LIABILITY FOR INDEMNIFICATION, LIABILITY FOR BREACH OF CONFIDENTIALITY, OR LIABILITY FOR INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS, IN NO EVENT IS SUPPLIER OR ITS REPRESENTATIVES LIABLE FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR ENHANCED DAMAGES, LOST PROFITS OR REVENUES OR DIMINUTION IN VALUE, ARISING OUT OF OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF: (A) WHETHER THE DAMAGES WERE FORESEEABLE; (B) WHETHER OR NOT SUPPLIER WAS ADVISED OF THE POSSIBILITY OF THE DAMAGES; AND (C) THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT OR OTHERWISE) ON WHICH THE CLAIM IS BASED, AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE.
- XIX.1.Further Assurances. On Supplier’s reasonable request, Reseller shall, at its sole cost and expense, execute and deliver all such further documents and instruments, and take all such further acts, reasonably necessary to give full effect to this Agreement.
- XIX.2.Entire Agreement. Subject to ARTICLE IV, this Agreement supersedes all prior discussions and agreements between the Parties and/or their Affiliates with respect to the subject matter hereof and contains the sole and entire agreement between the Parties and their Affiliates with respect to the subject matter hereof..
- XIX.3.Survival; Limitation of Actions. Subject to the limitations and other provisions of this Agreement the representations and warranties of the Parties contained herein and related exceptions, limitations, or qualifiers survive the expiration or earlier termination of this Agreement for a period of TWELVE (12) months after the expiration or termination.
Notwithstanding any right under any applicable statute of limitations to bring a claim, no lawsuit or other action based on or arising in any way out of this Agreement may be brought by either Party after the applicable survival period’s expiration; provided, however, that the foregoing limitation does not apply to the collection of any amounts due to Supplier under the Agreement; and provided, further, that any claims asserted in good faith with reasonable specificity and in writing by Notice before the applicable survival period’s expiration is not thereafter barred by the relevant period’s expiration, and these claims survive until finally resolved.
Notices. Any notice, request, demand, Claim, or other communication hereunder will be in writing and will be deemed delivered: (a) three business days after it is sent by U.S. mail, certified mail, return receipt requested, postage prepaid; or (b) one business day after it is sent via a reputable nationwide overnight courier.
A Party may give any notice, request, demand, claim, or other communication hereunder by personal delivery, electronically, or fax, but no such notice, request, demand, claim, or other communication will be deemed to have been duly given unless and until it is actually received by the Party for whom it is intended. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving notice to the other Parties in the manner herein set forth.
- XIX.4.Interpretation. For purposes of this Agreement: (a) the words “include,” “includes”, and “including” are deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; (c) the words “herein,” “hereof,” “hereby,” “hereto”, and “hereunder” refer to this Agreement as a whole; (d) words denoting the singular have a comparable meaning when used in the plural, and vice-versa; and (e) words denoting any gender include all genders. Unless the context otherwise requires, references in this Agreement: (x) to sections, exhibits, schedules, attachments, and appendices mean the sections of, and exhibits, schedules, attachments, and appendices attached to, this Agreement; (y) to an agreement, instrument, or other document means the agreement, instrument, or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means the statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. The Parties drafted this Agreement without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted. The exhibits, schedules, attachments, and appendices referred to herein are an integral part of this Agreement to the same extent as if they were set out verbatim herein.
- XIX.5.Headings. The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement.
- XIX.6.Severability. If a dispute between the Parties arises out of this Agreement or the subject matter of this Agreement, the Parties would want a court or arbitrator to interpret this Agreement as follows:
- With respect to any provision held to be unenforceable, by modifying that provision to the minimum extent necessary to make it enforceable or, if that modification is not permitted by law or public policy, by disregarding the provision;
- if an unenforceable provision is modified or disregarded in accordance with this Section 19.06, by holding the rest of the Agreement will remain in effect as written;
- by holding that any unenforceable provision will remain as written in any circumstances other than those in which the provision is held to be unenforceable; and
- if modifying or disregarding the unenforceable provision would result in a failure of an essential purpose of this Agreement, by holding the entire Agreement unenforceable.
Upon the determination that any term or other provision of this Agreement is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible..
- IV.7.Amendment and Modification. The Parties may amend any provision of this Agreement only by a written instrument signed by both Parties.
- IV.8.Waiver. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver will be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving the term or condition. No waiver by any Party of any term or condition of this Agreement, in any one or more instances, will be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by Law, are cumulative and not alternative.
- IV.9.Cumulative Remedies. All rights and remedies provided in this Agreement are cumulative and not exclusive, and the exercise by either Party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or later be available at law, in equity, by statute, in any other agreement between the Parties or otherwise. Notwithstanding the previous sentence, the Parties intend that Reseller’s rights under Section 9.03, Section 9.04, Section 16.04 and each of the Parties’ rights under ARTICLE XVII are the Party’s exclusive remedies for the events specified therein.
- IV.10.Equitable Remedies. Each Party acknowledges and agrees that (a) a breach or threatened breach by such Party of any of its obligations under ARTICLE XV would give rise to irreparable harm to the other Party for which monetary damages would not be an adequate remedy and (b) in the event of a breach or a threatened breach by such Party of any of these obligations, the other Party shall, in addition to any and all other rights and remedies that may be available to such Party at law, at equity, or otherwise in respect of this breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction, without any requirement to post a bond or other security, and without any requirement to prove actual damages or that monetary damages do not afford an adequate remedy. Each Party agrees that it will not oppose or otherwise challenge the appropriateness of equitable relief or the entry by a court of competent jurisdiction of an order granting equitable relief, in either case, consistent with the terms of this Section 19.100.
- IV.11.Assignment. Reseller may not assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of Supplier. Any purported assignment or delegation in violation of this Section is null and void except, (i) either party may assign its rights or obligations hereunder to a parent entity or a subsidiary in which it or its parent holds a 50% or greater equity interest without the consent of the other party; and (ii) either party may assign its rights and obligations hereunder in connection with any transaction involving the sale of 50% or more of all of its assets without the consent of the other party. No assignment or delegation relieves the assigning or delegating Party of any of its obligations under this Agreement.
- IV.12.Successors and Assigns. This Agreement is binding on and inures to the benefit of the Parties and their respective permitted successors and permitted assigns.
- IV.13.No Third-Party Beneficiaries.
- Except as set out in Section 19.13(b), this Agreement benefits solely the Parties to this Agreement and their respective permitted successors and permitted assigns and nothing in this Agreement, express or implied, confers on any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
- The Parties hereby designate the Parties’ parent, officers, directors, partners, members, shareholders, employees, agents, affiliates, successors, and permitted assigns as third-party beneficiaries of ARTICLE XVII of this Agreement having the right to enforce ARTICLE XVII.
- IV.14.Choice of Law; Illegality. This Agreement is governed by and construed and enforced in accordance with the laws of the State of California, without giving effect to any conflict or choice of law provision that would result in imposition of another state’s Law. THE PARTIES ACKNOWLEDGE THAT (A) CALIFORNIA HAS PASSED AMENDMENTS TO THE CALIFORNIA CONSTITUTION AND ENACTED CERTAIN LEGISLATION TO GOVERN THE MARIJUANA INDUSTRY AND (B) THE POSSESSION, SALE, MANUFACTURE, AND CULTIVATION OF MARIJUANA IS ILLEGAL UNDER FEDERAL LAW. THE PARTIES WAIVE ANY DEFENSES BASED UPON INVALIDITY OF CONTRACTS FOR PUBLIC POLICY REASONS AND/OR THE SUBSTANCE OF THE CONTRACT VIOLATING FEDERAL LAW.
- IV.15.Choice of Forum. Each Party irrevocably and unconditionally agrees that it will not commence any action, litigation, or proceeding of any kind whatsoever against the other Party in any way arising from or relating to this Agreement, including all exhibits, schedules, attachments, and appendices attached hereto and thereto, and all contemplated transactions, including contract, equity, tort, fraud, and statutory claims, in any forum other than the courts of the State of California sitting in Los Angeles County, and any appellate court from any thereof. Each Party agrees that litigation of issues arising from this Agreement or from the purchase of Products from Supplier shall only be litigated in the Courts of the State of California, County of Los Angeles, after all mandatory dispute resolution measures set forth in Section 19.17 of this Agreement have been exhausted. Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of these courts and agrees to bring any action, litigation, or proceeding only in the courts of the State of California sitting in Los Angeles County. Each Party agrees that a final judgment in any action, litigation, or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.
- IV.16.Waiver of Jury Trial. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND WITH RESPECT TO ANY COUNTERCLAIM THEREIN.
- IV.17.Mandatory Dispute Resolution. In the event of any dispute, claim, question, or disagreement arising from or relating to this Agreement or the breach thereof, the Parties hereto shall use their best efforts to settle the dispute, claim, question, or disagreement. To this effect, the Parties shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a just and equitable solution satisfactory to both Parties.
If the dispute cannot be settled through negotiation within a period of seven (7) days, the Parties agree to attempt in good faith to settle the dispute through mediation, administered by a mediator mutually agreeable to both Parties, before resorting to arbitration.
If the Parties do not reach such a solution upon the conclusion of mediation, or an agreed upon mediator cannot be identified, within a period of thirty (30) days, then, upon notice by either Party to the other, all disputes, claims, questions, or differences shall be finally settled by arbitration administered by the American Arbitration Association, in Los Angeles, California, in accordance with the provisions of that organization’s Commercial Arbitration Rules. The dispute shall be heard and determined by a panel of three (3) arbitrators. In such case, each Party shall each select one (1) arbitrator. The arbitrator selected by the claimant and the arbitrator selected by respondent shall, within ten (10) days of their appointment, select a third neutral arbitrator. In the event that they are unable to do so, or if for any reason the three (3) arbitrators are not timely empaneled, the Parties, or either of them, or their attorneys, may request that the American Arbitration Association appoint the third or any other necessary arbitrator. Prior to the commencement of hearings, each of the arbitrators appointed shall provide an oath or undertaking of impartiality. The United States Arbitration Act shall govern the interpretation, enforcement, and proceedings pursuant hereto. Notwithstanding any provision hereof, any applicable law or public policy considerations, including without limitation any possible illegality or unenforceability of this Agreement or any portion hereof due to the subject matter hereof, the arbitrators shall interpret this Agreement giving full effect to the terms and provisions hereof. All charges of the American Arbitration Association or any mediator shall be borne equally by the Parties, and each Party hereby agrees to pay all such charges promptly upon request therefor, and if any Party shall fail to do so, the other Party shall be permitted to apply towards such charges any amounts otherwise due to the non-paying Party. The Parties to the arbitration proceeding shall bear their own respective expenses incurred in connection therewith, including, but not limited to, legal fees and expenses.
- IV.18.Counterparts. This Agreement may be executed in counterparts, each of which will be an original and all of which, when taken together, will constitute one instrument notwithstanding that all parties have not executed the same counterpart. Signatures that are transmitted electronically or by fax will be effective as originals, so long as the actual original signature is delivered to the other Party.
- IV.19.Force Majeure. No Party shall be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations to make payments to the other Party under this Agreement), when and to the extent the failure or delay is caused by or results from acts beyond the impacted Party’s (“Impacted Party”) control, including the following force majeure events (“Force Majeure Events”): (a) acts of God; (b) flood, fire, earthquake, or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot, or other civil unrest; (d) requirements of Law; (e) actions, embargoes, or blockades in effect on or after the date of this Agreement; (f) action by any Governmental Authority; (g) national or regional emergency; [(h) strikes, labor stoppages or slowdowns or other industrial disturbances; and (i) shortage of adequate power or transportation facilities. The Impacted Party shall give Notice within FIVE (5) Business Days of the Force Majeure Event to the other Party, stating the period of time the occurrence is expected to continue. The Impacted Party shall use diligent efforts to end the failure or delay and ensure the effects of the Force Majeure Event are minimized. The Impacted Party shall resume the performance of its obligations as soon as reasonably practicable after the removal of the cause. In the event that the Impacted Party’s failure or delay remains uncured for a period of THIRTY (30) Business Days following Notice given by it under this Section 19.19, Either Party may thereafter terminate this Agreement on FIVE (5) Business Days’ Notice.
- IV.20.Confidentiality. This Agreement is confidential and will not be disclosed by Reseller to any third party (other than the Parties’ affiliates, attorneys, accountants, auditors, Governmental Authorities, or other advisors) except as required for tax purposes, or as required by Law. Any Party receiving a request for this Agreement shall promptly notify the other Party to afford it the opportunity to object or seek a protective order regarding this Agreement or information contained herein.
IN WITNESS WHEREOF, the Parties hereto are deemed to have accepted and executed this Agreement as of the Effective Date.