a. Beginning on the Effective Date, ProCaps shall not manufacture

Transcription

a. Beginning on the Effective Date, ProCaps shall not manufacture
©Copyright Prop 65 News. All Rights Reserved.
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (this "Agreement") between Environmental
Research Center, Inc. ("ERC") and Your Vitamins, Inc. dba ProCaps Laboratories ("ProCaps")
is made effective on the date ERC provides notice to ProCaps that the Agreement is fully
executed (the "Effective Date"). ERe and ProCaps are hereinafter referred to individuaIJy as a
"Party" and collectively as the "Parties." The Parties agree as follows:
1.
This Agreement is intended to fuI1yresolve all claims, demands, and allegations set forth
in, or which could have been set forth in, or related to the Notice of Violation of California
Health & Safety Code §25249.5, et seq. ('''Proposition 65'')1 that ERC served on ProCaps on
August 29, 2014 (the ....
Notice") with regard to each of the products as set forth in the Notice
(referred to hereinafter individually as a "Covered Product" or collectively as the "Covered
Products"), collectively, the ....
Claims":
•
•
•
•
•
•
•
•
•
ProCaps Laboratories All-Solar
Replacement Peanut Butter
ProCaps Laboratories All-Solar
Lime Flavor
Pro Caps Laboratories All-Solar
ProCaps Laboratories All-Solar
ProCaps Laboratories All-Solar
ProCaps Laboratories All-Solar
ProCaps Laboratories All-Solar
ProCaps Laboratories All-Solar
ProCaps Laboratories AII-Solar
Lessman's Founder's.
Manufacturing
Secure Complete Meal
Manufacturing Daily Fiber Benefits LemonManufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Complete Joint Effort
CholestaCare Plus Fibermucil
Fibermucil
Glucosamine Sulfatc-1SOO
Maximum Joint Effort
Glucosamine with Chondroitin
Women's Life ax Andrew
2.
The Parties enter into this Agreement to settle the Claims and to avoid litigation. By
entering into this Agreement neither Party admits any fact, issue of law, or violation of law.
ProCaps expressly denies it violated any law by selling Covered Products to California
consumers. The Parties agree that this Section shall not diminish or otherwise affect the
obligations, responsibilities, and duties of the Parties under this Agreement.
3.
In consideration of the following covenants contained in this Agreement, the Parties
agree as follows:
a.
Beginning on the Effective Date, ProCaps shall not manufacture for sale to
consumers in the State of California, "Distribute into the State of California," or directly sell in
the State of California (excepting products transshipped through the state and not sold to
California consumers), any Covered Product which exposes a person to a "Daily Lead Exposure
Level" of more than 0.5 micrograms, of lead per day when taken as directed on the Covered
1
The Parties intend that references to "Proposition 65" herein include the statute and its implementing regulations.
Initi81SOC ~
SETTLEMENT AGREEMENTAND RELEASE
1
©Copyright Prop 65 News. All Rights Reserved.
Product's label unless a "clear and reasonable" warning within the meaning of Propositi on 6S is
provided. The following warning shall be deemed "clear and reasonable" under this Agreement:
"WARNING: This product contains lead, a chemical known to the State of
California to cause [cancer and] birth defects or other reproductive harm."
The Parties agree that proposed amendments to Proposition 65, if adopted, may compel or allow
certain warning text, and that nothing in this Agreement shall require ProCaps to act contrary to
law, and that, ifProposition 65 is amended to require or allow a change to the warning text,
ProCaps may utilize the wording required or allowed by any such amendments.
i. As used in this Agreement, the term "Distribute into the State of California" shall
mean to directly ship a Covered Product into California for retail sale in California or to
sell a Covered Product to a distributor that ProCaps knows will sell the Covered Product
in California.
ii. For the purposes of this Agreement the term "Daily Lead Exposure Level" shall mean
the following: micrograms oflead per gram of product, multiplied by grams of product
per serving of the product, multiplied by the recommended serving or servings on the
label of the product for a single day, which equals micrograms of lead exposure per day.
For the avoidance of doubt, the serving size stated on the "Supplement Facts" panel,
exemplars of which are attached hereto as Exhibit At sha11be deemed the relevant
serving size for purposes of this Agreement.
iii. The phrase "cancer and" must be included in the warning only if the Daily Lead
Exposure Level exceeds 15 micrograms.
b.
If a warning is required, ProCaps may elect to warn on the product or its
immediate packaging, or on an invoice, or via the internet, as set forth herein. The warning
statement required by Section 3b. shall be prominent and displayed securely on either the cap,
the unit packaging, the label or by a sticker securely affixed to the Covered Product, on the
invoice, or on the website with such conspicuousness, as compared with other words, statements,
or designs so as to render it likely to be read and understood by an ordinary individual. The
warning shall be at least the same size as the largest of any other health or safety warnings
correspondingly appearing on the cap, label, container, invoice or website as applicable, and the
word "WARNING" shall be in capital1etters and in bold print. For invoice warnings, ProCaps
shall include a "clear and reasonable" warning on invoices of shipments of Covered Products
sent to California addresses. The warning on the invoice shall be near either the individual
Covered Product to which the warning applies or near the total cost of the order. If near the
total cost of the order, then the specific Covered Products to which the warning applies shall be
identified. ProCaps agrees California consumers may return any Covered Product without
charge to the consumer if the consumer rejects the Covered Product due to the Proposition 6S
warning. For internet warnings, ProCaps shall tender a "clear and reasonable" warning to
internet purchasers who supply a California shipping address, so long as the warning is delivered
prior to completion of check out in a manner which requires the purchaser to
rsr=
InitialS~L
SETTLEMENT AGREEMENT AND RELEASE
2
©Copyright Prop 65 News. All Rights Reserved.
receipt. Nothing in this Agreement shall require ProCaps to tender warnings in a manner
contrary to law.
c.
ProCaps represents that, in response to ERC's issuance of the Notice of Violation,
it has invested in the installation and operation of laboratory testing equipment, including the
hiring of new personnel, to conduct lead testing. ProCaps shall test the Covered Products, or
ingredients therein, for lead in the ordinary course of business in accordance with a sampling
program, which program may be adjusted from time to time. ProCaps has expended
approximately $210,886.00 on testing equipment, set up, training and associated start up
expenses for a total budget of $342,585.00 for heavy metals testing in 2015. The costs which
will reincur annually are approximately $82,500.00 for a chemist's annual salary, $7,300.00 for
management supervision, $35,920.00 for overhead, maintenance and associated laboratory
operating costs and $5,979.00 for gases, reagents and other laboratory materials. The Parties
agree these expenditures directly benefit consumers in the State of California.
d.
Nothing in this Agreement shall preclude ProCaps from asserting any and all
applicable defenses available to it in any future proceeding by any person under Proposition 65
or otherwise, including without limitation any defense available under 27 Cal. Code Reg. Section
27501, or any defense based on the actual frequency of consumer use of any Covered Product.
ERC agrees in its capacity as a private enforcer that compliance with this Agreement constitutes
compliance with Proposition 65 with respect to the Covered Products. Nothing in this Section
3.d. shall impair enforcement ofthis Agreement in accordance with its terms.
4.
ProCaps shall make a total settlement payment of $59,000.00 (UTotal Settlement
Payment") by wire transfer to ERe's escrow account within 5 days of the Effective Date, for
which ERe will give ProCaps the necessary account information. The Total Settlement Payment
shall be allocated as follows and ERC agrees to disburse the amounts to the payees within fifteen
(J 5) days of receipt:
a.
$38,327.38 shall be considered a civil penalty pursuant to California Health and
Safety Code §25249.7(b)(I). ERC shall remit $28,745.54 (75%) of the civil penalty to the
Office of Environmental Health Hazard Assessment ("OEHHA") for deposit in the Safe
Drinking Water and Toxic Enforcement Fund in accordance with California Health and Safety
Code §25249.12(c). ERe will retain the remaining $9,581.84 (25%) of the civil penalty.
b.
$3,420.17 shall be considered a reimbursement to ERC for its costs incurred as a
result of bringing this matter to ProCaps' attention and negotiating a settlement.
c.
$17,252.45 shall be considered reimbursement of all attorney fees and costs for
purposes of this Agreement; the distribution of these funds will be $10,800.00 to Michael Freund
and $6,452.45 to ERe.
d.
In the event that ProCaps fails to remit the Total Settlement Payment owed under
Section 4 of this Settlement Agreement on or before the due date, ProCaps shall be deemed to be
in material breach of its obligations under this Agreement; provided, hower[_RC
Initial
SETTLEMENT AGREEMENT AND RELEASE
3
shall
~
©Copyright Prop 65 News. All Rights Reserved.
provide written notice if it does not timely receive the payment and if a cure is effected in three
business days after notice of the breach ERC shall take no further action respecting the breach.
5.
Except as expressly set forth in Section 4, the Parties shall bear their own costs, expenses,
and attorneys' fees related to the Notice and this Agreement.
6.
Binding Effect; Claims Covered and Released
a.
ERC, on behalf of itself and its respective owners, principals,
shareholders, officers, directors, employees, agents, parents, subsidiaries, successors, assigns,
and legal representatives fully releases ProCaps and its respective owners, principals,
shareholders, officers, directors, employees, agents, parents, subsidiaries, successors, assigns,
and legal representatives, and its ingredient or product suppliers, importers, manufacturers,
distributors and retailers from any and all claims for any violations of Proposition 65, expressly
including the Claims, respecting the Covered Products up through and including the Effective
Date.
b.
The Parties, on behalf of themselves and their respective owners,
principals, shareholders, officers, directors, employees, agents, parents, subsidiaries, successors,
assigns, and legal representatives, further waive and release any and all claims they may have
against each other for all actions taken or statements made or undertaken in the course of seeking
or opposing enforcement of Proposition 65 in connection with the Notice and this Agreement up
through the Effective Date.
c.
It is possible that other claims not known to ERC arising out of the facts
alleged in the Notice and relating to the Covered Products or with other dietary supplements
manufactured, distributed or sold by ProCaps will develop or be discovered. ERC in its
capacity as a private enforcer only releases all such claims and acknowledges that this
Settlement Agreement is expressly intended to cover and include al1 such claims up through
and including the Effective Date, including all rights of action therefore, and further
acknowledges that the claims released in Section 6 may include unknown claims, and
nevertheless waives California Civil Code section 1542 as to any such unknown claims.
California Civil Code section 1542 reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FA VOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MUST HAVE MA TERIALL Y AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR.
ERe in its capacity as a private enforcer only acknowledges and understands the significance
and consequences of this specific waiver of California Civil Code Section 1542. ERC also
represents and warrants that ERe has no pending investigations under Proposition 65
respecting ProCaps products other than the Covered Products.
Initial~~
SETILEMENT AGREEMENT AND RELEASE
4
©Copyright Prop 65 News. All Rights Reserved.
7.
ERe covenants not to sue ProCaps in any proceeding alleging a violation of Proposition
65 during the term of this Agreement, excepting enforcement of this Agreement. This
covenant not to sue encompasses Covered Products and non-Covered Products. This
Agreement shall terminate eighteen (lS) months after the Effective Date; provided, however, as
to any Covered Product ProCaps discontinues and ceases to sell to California consumers prior
to the expiration date, this Agreement shall continue in effect until the expiration of the statute
of limitations governing any claim respecting such discontinued product. If requested in
writing after termination of this Agreement, ProCaps shall provide ERC with the last lot
number and expiration date for each of the Covered Products manufactured as of that date, as
necessary for ERC to verify compliance.
8.
Nothing herein shall be construed as diminishing ProCaps' continuing obligations to
comply with Proposition 65.
9.
In the event ERC alleges that any Covered Products fails to comply with the terms of this
Agreement, then ERe shall inform ProCaps' ill a reasonably prompt manner of its test results,
including information sufficient to permit ProCaps to identify the Covered Products at issue.
ProCaps shall, within thirty days following such notice, provide ERC with testing information
and any other necessary information demonstrating compliance with the Consent Judgment. The
Parties shall first attempt to resolve the matter prior to ERC taking any further legal action.
10.
After execution ofthis Agreement, ERC will submit to the California Attorney General a
Report of Settlement. In addition, ERC will provide to the California Attorney General a signed
copy of this Agreement.
11.
This Agreement contains the entire agreement between the Parties with regard to
settlement of the Notice and Claims, and the additional claims released herein, and supersedes all
prior or contemporaneous agreements or understandings, written or oral, with regard to the
matters set forth in this Agreement. This Agreement may be amended or modified in whole or in
part at any time only by an agreement in writing executed by the Parties.
12.
This Agreement shall be binding upon and shall inure to the benefit of the Parties and
their respective owners, principals, shareholders, members, managers, officers, directors,
employees, agents, successors, and assigns.
13.
No inference, assumption or presumption shall be drawn, and no provision of this
Agreement shall be construed for or against either of the Parties, based upon the fact that one of
the Parties and/or one of the Parties' attorneys prepared and/or drafted all or any portion of this
Agreement. It is conclusively presumed that the Parties participated equally in the preparation
and drafting of this Agreement.
14.
If any provision, term, or section of this Agreement is found to be invalid, illegal, or
unenforceable, then all remaining provisions, terms, or sections shall continue in full force and
effect and remain binding on the Parties. lfany provision, term, or section of this Agreement is
determined to be unenforceable, then such provision, term, or section may
so that
m_ed
Initial
SETTLEMENT AGREEMENT AND RELEASE
5
~
©Copyright Prop 65 News. All Rights Reserved.
the unenforceable provision, term, or section is enforceable to the greatest extent possible.
1s.
This Agreement shall be deemed to have been entered into in the State of California, and
governed and interpreted by the laws of the State of California, regardless of the physical
locations of the individuals executing this Agreement at the time of execution.
The Parties acknowledge that they have a right to consult an attorney and they have
consulted their attorneys with respect to the terms and conditions of this Agreement. The Parties
further acknowledge that they fully understand this Agreement and the effect of signing and
executing this Agreement.
) 6.
17.
The Parties are entering into this Agreement in good faith and in an effort to settle all
Claims related to the Notice and as otherwise expressly set forth herein ..
18.
Any legal action to enforce this Agreement shall be brought in Alameda County of the
State of California. which is deemed to be the proper venue for such legal action.
19.
This Agreement may be signed in counterparts, and each counterpart, as well as any
facsimile, e-mail, copy of this Agreement, or any other counterpart, shall be deemed to be an
original.
20.
Each of the individuals who execute this Agreement represents and warrants he or she
has the authority to execute this document and bind the respective Parties to the terms and
conditions of this Agreement, and have read all of the terms and conditions in this Agreement.
DATED:
~~
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By:
Title:
c... e.. ~
.
DATED: ----~7~~/~-----~~//S-
INC.
t1If"
Initials!)/J_
SETTLEMENT AGREEMENT AND RELEASE
6
©Copyright Prop 65 News. All Rights Reserved.
EXHIBIT A
©Copyright Prop 65 News. All Rights Reserved.
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SUGGESTED USE Consumo
~no or more oapsllies dally with
load or SII dlroctad by e health
Joro profosolonal. According to
:lInlool studio!!, optimum le~ults
are achlovod by con&umlnB the
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rhlll produot Is mosl etta otlva
511 part Dr II hoolthy dlot ond
,otlvo lifostyle, along with ene of
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SUGGESTEb USE To Ol:hh,."Bthe
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©Copyright Prop 65 News. All Rights Reserved.
SUGGESTED
USE
CIln9ume one
01
mere capDuloDdollywlth (Dodor 09
dirocladtr/ IIhealth cere profOB510nol.
Aocordlngtocllnlcol studios. opllmum
rDliullO010aohlovOli by consuming
(OUI CIlPIUIDIl dally with meals. Tllili
prulluull~ most ejreeuve a8 part of
II hl!lIlIlIy diet and DIlUVOIItostyle.
olongwllh one 01 ANDht.'\V L£SS~JI\N'S
mul~I-vIIQmlll.tnl"orillformulas. For
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about tho UI6
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QUESTIONS? RE·ORDERS?
CAl.L800.800.120D
WWW.PROCAPsLABS.com
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our Joints ....henllhy or not, GlucosB",ine Sui/ate Is always tho first Uno(II darunao forJoint 11'!lIlQII.tIIll.llnJ.! !:Hrllnllty
products. we rafuooto US1lo"oBpcr. unproven GlucDlIDmlnoHCI(flydrochlorldal. We Dnlyuee tlla rorAlofO;/Il8omlnli
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1.5DOMG GLUCOSAMINE SULFATE
Sullsle. which ellmlnlllcs lho Sodium prosont In olhorjolnl Plod~ol5. OU(lipllclol CUlolum ChondtalUn 8ulfnlolllllln81011
tne riGl1Sof Sodium and Instend plovldos tlto bBnaflts 0(60111&of essemtel Clllillum. S8dly.lyplCllljQfnt JlI:jur,\~11'"
1,200MG CHONDROITIN SULfATE
inlorlor sources ur 1I0lhGlucosamlnc DndChondroitin. which do not P0a8C'5 tho ro,oDrch·om\8bll~hod:lnOfltli Of
Glucosamlne SUlfale and ChondrDltln Sulretu.ln IIhorl. bolh GII,I~Q'8mlne~cI Chondroitin. olon8WJlhIh~ul'ur'tal1'
thelr Sulfalll forms prevlao throe cssonUal strucwral
InilfcdlcnlD thnt DIUtho vltol ·bulldlng blDcks· or tho Supplement Faots
very ·brlc:ks and mortar" 01our Ielnts. By prD~ldlllg San/lnll &1&0" DlP.uh,.
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those cG500tlai structurnl molllQulcs in tholr optimum AmountPorSorvln~
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maxtmurn bcnonls to Joint structure, health anti Vitamin C(oDancDr~IITolIIl"tOll!l
1;!Out It%
Itlnctlon. No other bodypart endures moro dally abusa Calcium (!remealDlUmchondtnllinMurratO)
1hi\n our Joints and chJc(1samlnll wltll Cl\onC!rolUn PotBBslllm(lllltll ool!JlttumlllunoJon'in"!Iulflllill . ~atJIB 1?b
delivers the proper tool5 Cit their proven IByels and
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In tholr ideal forms to holp combat and (opalr thQ Glucosemlne Sulrale
Aft PO\atlelurtlGIuC){lllcmin!l81!1lBla :I,OODflIII
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©Copyright Prop 65 News. All Rights Reserved.
©Copyright Prop 65 News. All Rights Reserved.
;- -,-j~w~~1\1I;r,'
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SUGGES'(EO USEToachieve the -'
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optimum levels of Glucosamlne
Sulfate established
by the
r.llnlcol research on Joint health,
consume three capsules dally
with food, This product is most
effective as part of a healthy
diet and acuva lifestyle, along
with
ANDREW
LESSMAN'S
1.500MG GLUCOSAMINE SULFATE
100% SULFATEfORM ONLY
COMPLETE'· multl-vitarninmineral formulas,Fo, answersto
questions about the use ofthls
..aIl600.80B.73:tl.
ToReorder
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AU-SOLAR
H:'J1U1"'C1UIUHO
:170 E:\SY-lo,SwOlllow Capsules
Andre«. Lcs5rnulI~ GLlICOSAMINI:: SliLFATE·t500 provldes1h<: optimum pOlenoy and the Ideal form
(All Sulf2lte)of the most Important Ingredlentforthe maintenance and repairof heDllhYJolnl tlSflUQ,
Glucosamlne Is not a medlolne that works on joint tlssun, but Is B vllal structural molaculQ ruqulratl
forourjoints toretilln their elasticity and healthysuucture lie we age. Not surprfslnf.(ly,the bonllfllf1.of
Gluoosamlnellave been shown to extend beyond joint tissue and are slsoes&llntlal for tho r£lIIl1lency
and ftexibinty of other ~elastlc· tissues In the body.suehns the 91<1n,crterlGtJ,yelnS gna noart valvell.
Glucosamine Sulfate is always the first line of defense for Joint tissues, but unlike ordinary prod~IQt5,
we refuse to use unproven GII,IC090mlne Hel (HydrochlorIde). we only U911tile tcnn of Gluco8l1mln()
established in thousands of studies - Glucosarnlno Sulfate. QluCQSamln" Sultete-16QO elso pravl(loo
bonus levels of Potasslum, which is essential for heart, nervous system and brain 'onotlon. NQothllr
body part endures mora daily abuse than our Joints and Gluoosamlna Sulfate has al~1I eeen the
first choice of experts as a natural tool to help combat end repair the DOnflaquonOttB01 illifatime of
wear and tear. As Weage, we become more aware ofourjolntB' Inabllltyt.oparlQrm IIIHhGy dietIn cur
youth. Glucosamlne sulrate-1500 provldos the most
Important structural moleoulo required for oUrbodyt() suP"lement Faots
SmllIC III:lOmlllu
aanln~ll'cll:lJnlllnlleO
combat the normal erosion of these vllal tlssues over AIIIvunlPll &artln,
1t6~
time. Every day. we place enormous demands an aur Vllllmln r: (DU!COlbyl PGlmllAll})
IlJmlt
17~
joints and just as Calcium is essential tor bones, It POtos"lum
~QQ mg '1t
only makes sense to provide the same basic structural
(1l1li11
glutQS4l11lnozullolpflOlo:J,$luliI~)
requirements to ourjoints with our gentle, yet ultra-hlgh Qfu~oSlminDSulfite
1 IIDQmJ: (.
~ PolD:l!lum (jfuCQSn/llIno Sulfole
Il14
potency G1ucosamlneSulfate·i500.
lldsltllo.'WIlt.I$I9lIxcnMl14It4lttllltI'DOO .11(1 Dru,4IGlDlnlllraUI1\.1!IiIpllcMI
Is mlliio..udl<>~"".In!2I.C'JI1I"pll'j1ll11ll11YalrllLlt.
COIffAlHSNO MM,'01. )'O"sl. aim,.......
al. e.lutcn, .odlUm,.nll. SUfllT.
(at, thok5~l.tDIo!; p18sorvalIvllor m;llluraclUrlng 8~lttw.
OOM'AIIiS ND AoolnVES OF ANY KL.. C,
2.m
• 1'8!~~IIIOf(IyVOkl"~.~~~rJbnIDdqftO 2,OUOfGlOfj~tI1tl
t Il!III1VaJullUlI C510b hr
D!h.'In,rldl.nb;a'I'I~'CPPlult.
I!UIII"'IIISanln«fr:rlllnldplllld.~UIIIII:Gonrf
IRI~rtrrall'ol'ln~U"
vI sh,lIl1ln "nlimp.tta~ Dnlcr~wl~nl,