Capsugel Belgium NV

CAPSUGEL BELGIUM NV ('CAPSUGEL') – GENERAL TERMS AND CONDITIONS OF SALE

effective as from December 1, 2015

1.    The present general terms and conditions, hereinafter referred to as the 'Terms and Conditions' exclusively apply to all sale agreements in relation to hard capsules, equipment, spare parts and/or services (collectively, the “Products”), concluded with CAPSUGEL, unless CAPSUGEL and the buyer expressly deviate from them in writing by mutual agreement. Any general terms and conditions drawn up or used by the buyer solely apply if CAPSUGEL expressly accepts these in writing. In the absence of such express written acceptance, the Terms and Conditions shall always prevail over the general or special terms and conditions of the buyer. In the event of contradiction between the Terms and Conditions and the special terms and conditions, or terms and conditions of supply or payment that are the subject of the framework or supply agreement, the special terms and conditions, or terms and conditions of sale, supply or payment shall prevail over the Terms and Conditions.

2.    Applicable Conditions.  These Terms and Conditions apply to all sales of all hard capsules, Licaps®, softgels, equipment and spare parts (collectively, the “Products”), by CAPSUGEL to the buyer following receipt of orders made by the buyer and accepted by CAPSUGEL as evidenced by buyer’s receipt of CAPSUGEL’s order confirmation.  Changes to any orders are only effective if to CAPSUGEL in writing and thereafter accepted in writing by CAPSUGEL. Changes to order(s) are only possible with the express written agreement of CAPSUGEL.

3.     Quantity Variance.  Having regard to the specific nature of the production process of the Products, CAPSUGEL reserves the right to supply a greater or smaller quantity of capsules to the buyer than the ordered quantity, with the proviso that the difference between the ordered and supplied capsules can be a maximum 10% (more or less).

4.    Delivery Terms.  Unless otherwise agreed in writing by CAPSUGEL or set forth herein, CAPSUGEL will deliver the Products CIP (Incoterms 2010) CAPSUGEL’s facility; shipment of the Products is at the buyer’s sole cost and risk.  Buyer is responsible for taking out an insurance policy covering loss or damage to the Products or third parties at the time of delivery by CAPSUGEL (the “Delivery Date”).  If CAPSUGEL arranges shipment for the buyer, buyer will pay Capsugel for the cost of insurance and freight prepaid by CAPSUGEL. CAPSUGEL shall use reasonable commercial efforts to meet the requested delivery dates for Products; time for delivery, however, is not of the essence and CAPSUGEL shall not be liable for any failure to meet any such delivery date. CAPSUGEL will indicate to buyer an expected delivery date in its order confirmation, which buyer acknowledges is a good faith estimate. CAPSUGEL expects the actual delivery date to be not more than 14 business days after the expected delivery date indicated in the order confirmation. If it is impossible to deliver within such date, for any reason whatsoever, the buyer- except in case of deliberate intent or deception- is not entitled to have the order dissolved in whole or in part, nor claim compensation for the loss that he has incurred. The buyer expressly waives any other recourse, in particular the award of any form of compensation.

5.    Title.  The Products remain the property of CAPSUGEL until buyer has paid the associated invoices, possibly increased by interest and costs. Until such time as title to the Products has been transferred to the buyer, it is prohibited for the buyer to dispose of, pledge or encumber the Products with any right for the benefit of third parties, except for processing and sale by the buyer in the context of his normal business operations.

6.    Specifications.  CAPSUGEL warrants that the Products comply with the quality standards at the time of the order as described in the 'Technical Reference File' for hard capsules on the delivery date. With respect to empty capsules, CAPSUGEL warrants that at the date of delivery the empty capsules will comply with the quality standards set forth in CAPSUGEL’ s general specifications in the Capsugel Technical Reference.  The ideal storage conditions are a relative humidity of 50% and a temperature of 20°C. Capsugel recommends that the Products be stored in the closed containers in which they are dispatched in areas where the ambient temperature is 15°C to 25°C and the relative humidity 35% to 65%. Capsugel shall not be liable for any defective or non-conforming Products if the above storage conditions are not followed. With respect to equipment and spare parts, CAPSUGEL warrants that at the date of delivery the equipment and/or spare parts shall conform to the specifications stated in the operating manual for the equipment subject, where applicable, to accepted variations within industry standards, and shall be equal in quality to similar equipment and parts.  EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH, CAPSUGEL GIVES NO WARRANTIES, GUARANTEES, CONDITIONS OR REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, AND CAPSUGEL HEREBY DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  The Products are sold on the condition that buyer or any other user shall be responsible for all intellectual property decisions concerning the finished product and buyer shall carry out its own independent tests to determine the suitability of the Products for its purpose and that all risks arising out of the use of the Products are assumed by the buyer and the user, since the conditions of use are beyond CAPSUGEL’s control.  CAPSUGEL is therefore not liable for damage caused by unsuitable or injudicious use of the Products.

7.     Defective Products.  Any complaints in relation to visible defects in the Products must- on pain of nullity - be notified in writing to the Customer Services Department of CAPSUGEL within 10 days after the Products were delivered to the buyer. Any complaints in relation to hidden defects in the Products must- on pain of nullity - be notified in writing to the Customer Services Department of CAPSUGEL within 90 days from the delivery date. Products may not be returned without the prior examination of a representative sample and without CAPSUGEL’s express, prior, written authorisation. The buyer is always responsible for the risks of any return. Buyer’s sole and exclusive remedy, and CAPSUGEL’s sole and exclusive liability, for defective Products, or for its breach of these Terms and Conditions shall be, at CAPSUGEL’s discretion, (i) replacement of the Products; or (ii) refund of the purchase price of the Products in relation to which the non-conformance or breach has occurred.

8.     Trademarks.  Whether empty capsules with the color combinations, text or logo specified by the buyer are free to be used for marketing as such or with any products is beyond CAPSUGEL’s knowledge, control and responsibility.  No warranty, guaranty or representation is given by CAPSUGEL as to the absence of any trademark, patent or other intellectual property right or concerning compliance with regulatory requirements.  No statement made by CAPSUGEL shall be construed to be a recommendation or approval to infringe any patent or trademark or as an opinion regarding non-infringement of any patent or trademark or other intellectual property.  Buyer is not permitted to use CAPSUGEL’s trademarks without CAPSUGEL’s express written consent.

9.    Force Majeure.  Either party shall be excused from the performance of its obligations in the event such performance is prevented by conditions constituting force majeure (including but not limited to acts of God, regulation or law of any government, war, civil commotion, strike or other labor disturbance, epidemic, failure of production facilities by fire, earthquake or storms, or non-availability of raw materials), and such excuse shall continue so long as such conditions continue.

10.  Buyer Representations and Warranties.  Buyer represents and warrants that (a) it will comply with all present and future laws; (b) the Products will not be used in the production, encapsulation, packaging or marketing of any product which is in violation of any federal, state or local law or with any person or entity on any applicable government sanction, restricted party or denial list without a license or otherwise in violation of applicable law or regulation; (c) it is responsible for communicating with any governmental authority concerning Products, including without limitation with respect to the registration, classification or notification of Products, or the use, packaging, labeling, distribution, marketing, labeling, promotion, sale or disposal of the same or any adverse events related to Products (for the avoidance of doubt, CAPSUGEL may interact with governmental authorities for the purpose of fulfilling its obligations hereunder); (d) storing and handling Products in appropriate conditions following its delivery; (e) determining that the specifications for Product to permit its sale in each country in the world and (f) it is not, and will not, in connection with any Product, do business with or sell directly or indirectly to the Government of Iran, the Iranian Military or Iranian military or law enforcement purchasers or importers, Iran’s petroleum sector or Iran’s development of weapons of mass destruction, Iranian Specially Designated Nationals, or entities considered by the U.S. to be supporters of terrorism or proliferators of weapons of mass destruction (which entities can be identified by accessing the U.S. Office of Foreign Asset Control “Blocked Persons and Specifically Designated Nationals List” https://sdnsearch.ofac.treas.gov/); and it is aware of and, hereby confirms its compliance with, all applicable economic sanctions, including, without limitation, any applicable U.S. economic sanctions. Buyer shall conduct all such activities at all times in compliance with applicable laws. The parties acknowledge and agree that CAPSUGEL has no control, role, or other form of influence in Buyer’s use, packaging, labeling, distribution, marketing, promotion, sale and disposal of Products, nor does it control or influence over any payments or transfers of value that may be made by buyer to health care professionals, health care institutions, or any other customer or third party.  Buyer is responsible for participation and compliance in all government health care programs and any rebate liability, mandatory pricing, or reporting obligations resulting therefrom.

11.    Liability and Indemnity.  Except in the event of fraud or deliberate intent, in no event shall CAPSUGEL or its affiliates be liable to buyer or its affiliates for any incidental, indirect, punitive, exemplary, special or consequential damages of any kind however caused (including fault or negligence) arising out of or in connection with any purchase order related to the subject matter hereunder, including without limitation, loss of profits, goodwill or business interruption. CAPSUGEL’s aggregate liability arising out of or in connection with any purchase order related to the subject matter hereunder shall be limited to the aggregate fees received by CAPSUGEL under the purchase order creating such liability.  Further, buyer agrees to unconditionally indemnify, defend and hold harmless CAPSUGEL and its officers, directors, employees, agents, consultants, successors and assigns from and against any losses, damages (including statutory damages), liabilities, obligations, (including without limitation incidental, consequential, special or indirect damages (including loss of revenue, diminution in value or any damages based on any type of multiple)), deficiencies, actions, judgments, suits, interest, awards, penalties, forfeitures, fines, levies, disbursements, costs or expenses of whatever kind, including reasonable attorneys' fees and expenses (“Claim”) that may be imposed on, incurred by, appropriated from or asserted against CAPSUGEL in any way relating to or arising out of (a) the violation of any third party’s trade secrets, trademarks, copyright, patent or other proprietary rights related to the subject matter hereunder; (b) any misrepresentations, omissions or breach of any warranty of buyer herein; (c) the gross negligence or willful misconduct of buyer or (d) the manufacture, packaging, sale, marketing, labeling, promotion, use, distribution or disposal of the finished product; except, in each case, to the extent such Claims are attributable to the gross negligence or willful misconduct of CAPSUGEL.

12.    Confidentiality.  Buyer acknowledges that CAPSUGEL’s information relating to empty capsules, equipment and capsule filling that CAPSUGEL shares with buyer is confidential and proprietary to CAPSUGEL, and buyer agrees to maintain the confidentiality of any such information disclosed by CAPSUGEL for a period of ten (10) years from the date of disclosure and to use such information only for the purpose of filling CAPSUGEL capsules.  Buyer will safeguard and protect CAPSUGEL’s confidential and proprietary information in the same manner it protects its own similar information, and in no event utilizing less than reasonable industry practices.

13.    Intellectual Property.  All rights and title to inventions and intellectual property conceived and reduced to practice by CAPSUGEL in the course of performing its obligations hereunder shall belong to CAPSUGEL. For purposes of clarity, the term “inventions” shall encompass, without limitation, any new process, systems, equipment, or any improvement thereon, and components and/or intermediate substances, whether patentable or not, made by CAPSUGEL in connection with or related to the Products.

14.    Price.  The price for the Products and conditions of sales are subject to review from time to time by CAPSUGEL to reflect any changes in the costs of energy, materials and labor and market conditions.  Prices invoiced will be those in effect at the time of shipment. Notwithstanding the foregoing, in the event the date of delivery of Products is later than four (4) months from the order date, CAPSUGEL reserves the right to adjust prices in the event raw material prices increases by greater than five percent (5%).

15.    Payment.  All Products shipped and invoiced shall be payable to CAPSUGEL within thirty (30) days from the date of invoice.  CAPSUGEL reserves the right to invoice buyer for the Products on or after the date Products are available for delivery to buyer (the “Sale Date”); provided however that CAPSUGEL shall be responsible for taking out an insurance policy covering loss or damage to the Products from the Sale Date to, but not including, the Delivery Date. Payment shall be made in the currency shown on the invoice.  CAPSUGEL reserves the right to charge buyer for warehousing products held for buyer beyond the agreed upon delivery date and shall issue a separate and additional invoice for such warehousing to buyer. If the buyer fails to pay the invoice by its due date, the buyer will automatically and without formal notice:

a)     be liable for late payment interest calculated from the due date of the invoice, in accordance with the Act of 2 August 2002 on combating late payment in commercial transactions.

b)     be liable for a lump sum compensation of 10% of the total invoice amount with a minimum of EUR 50.

Payments made by the buyer will in the first place be used to pay the costs due from the buyer, then the interest payments and only in the final instance to pay the principal. If the buyer continues to fail to pay a due and payable invoice, then all outstanding invoices will automatically fall due and become payable without the need for prior formal notice, the foregoing without prejudice to the right of CAPSUGEL to dissolve the agreement without recourse to a court of law without prior notice of default against the buyer and to claim compensation. In the event that the buyer ceases payments or becomes bankrupt, every obligation to supply by CAPSUGEL shall cease and all outstanding invoices shall automatically fall due. CAPSUGEL is entitled to transfer its claims against the buyer to third parties. Setting-off of debts by the buyer is expressly excluded. CAPSUGEL may at any time and even if there are concurrent claims, including in the event of bankruptcy or judicial restructuring of the buyer, proceed to set off all or some reciprocal credits or debts existing between CAPSUGEL and the buyer. Such set-off may be performed regardless of the form or the object of the debts and claims, regardless of the currency or regardless of whether the  reciprocal debts or claims are due or not.

16.   Severability.  If any provision or part of a provision in these Terms and Conditions or the sales agreement to which these Terms and Conditions apply is null and void or unenforceable, the remaining provisions of these Terms and Conditions or the sales agreements to which the Terms and Conditions apply shall remain in force undiminished. If the case arises, the parties shall in good faith agree on a provision that approaches as closely as possible the intended legal effect of the provision or part thereof that has been declared null and void or unenforceable.

17.   Governing Law.  These Terms and Conditions and the orders, quotations and sales agreements to which these Terms and Conditions apply are governed by Belgian law, to the exclusion of the Vienna Sales Convention. In case of disputes concerning these Terms and Conditions, orders, quotations and sales agreements to which these Terms and Conditions apply, the courts of Brussels shall have exclusive jurisdiction.