EX-10.2
2
ex10_2.htm
EXHIBIT 10.2
Exhibit
10.2
[*Designates
portions of this document have been omitted pursuant to a request for
confidential treatment filed separately with the
Commission]
PRIVATE
LABEL SUPPLY AGREEMENT
AND
STRATEGIC ALLIANCE
This
Private Label Supply Agreement and Strategic Alliance (“Agreement”), dated
August 25, 2005 (“Effective Date”), is entered into by NutraCea, a
California
corporation (“NUTRA”), and ITV Global, a Nevada corporation
(“ITV”).
Recitals
A. NUTRA
is engaged in the business of producing and selling various types of nutritional
products.
B. ITV
is engaged in the business of marketing and selling various types of products
via Direct Response advertising.
C. ITV
and NUTRA desire that ITV purchase from NUTRA, and NUTRA sell to ITV, upon
and
subject to the terms and conditions set forth in this Agreement, certain
products mentioned herein.
D. ITV
and NUTRA desire that ITV exclusively market and distribute world-wide certain
products labeled and marketed as the “Xxxx Xxxxx” collection, as described
herein.
Agreement
Whereas,
the parties agree and understand that this Agreement shall supersede any
and all
prior written or oral agreements previously entered into;
In
consideration of the foregoing recitals and the mutual covenants set forth
in
this Agreement, ITV and NUTRA agree as follows:
1. Definitions. As
used in this Agreement, the following terms shall have the following
meanings:
1.1 Affiliate. “Affiliate”,
when used with reference to a specified Person, shall mean (a) the natural
person in ultimate control of such Person; and (b) any Person directly or
indirectly controlling, controlled by or under common control with such
Person.
1.2 Aggregate
Units. Aggregate
units shall mean a combination of all the Products mentioned
herein.
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1.3 Contract
Quarter. “Contract Quarter” shall mean each three (3)
month period beginning on October 1 and ending on December 31, each three
(3)
month period beginning on January 1 and ending on March 31, each three (3)
month
period beginning on April 1 and ending on June 30, and each three (3) month
period beginning on July 1 and ending on September 30.
1.4 Contract
Quarter Minimum. “Contract Quarter Minimum” shall have
the meaning specified in Section 2.6.
1.5 Contract
Year. “Contract Year” shall mean each twelve month
period beginning on Effective Date and ending on 12 months from the Effective
Date .
1.6 Direct
Response Marketing. Shall mean any and all Product
advertising existing now or developed for the Product line during the term
of
this Agreement, including but not limited to infomercials, radio advertisements,
print advertisement, package inserts, network marketing, insert programs
and
internet marketing.
1.7 Force
Majeure Event. “Force Majeure Event” shall have the
meaning specified in Section 12 below.
1.8 Initial
Order. “Initial Order” shall have the meaning specified
in Section 2.6.
1.9 ITV
Marks. “ITV Marks” shall mean all trademarks and logos
owned or claimed by ITV.
1.10
Minimum
Quantity. “Minimum Quantity” shall have the meaning set
forth in Section 2.6.
1.11
Non-Conforming
Product. Shall mean any product that does not meet
ordinary reasonable merchantable standards. By way of example
but not limited to, Non-Conforming products shall mean incorrect amount of
product per bottle, label incorrectly placed on bottle, improper seal, incorrect
formula, no accompanying certificate of analysis.
1.12
NUTRA
Marks. “NUTRA Marks” shall mean all trademarks, service
marks, and other marks or logos owned or claimed by NUTRA. The
parties agree that NUTRA owns and shall retain all right, title and interest
in
the NUTRA Marks, including without limitation the “Xxxx Xxxxx” trademark and the
NutraCea logos, including without limitation the Caduceus logo.
1.13
Person. “Person”
shall mean any individual, partnership, joint venture, corporation, trust,
unincorporated organization or other entity.
1.14
Products. “Products”
shall mean only those products from the “Xxxx Xxxxx” collection listed on
Exhibit A attached to this Agreement. “Products” shall not
include similar or identical products or product formulations, sold and marketed
by Nutra or any third parties under different names or labels.
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1.15 Product
Cost. Product cost shall mean the total
cost to manufacture, assemble, and prepare each product for
market. Such cost shall include, but not be limited to, costs of
encapsulating, bottling and blending the raw materials, costs of packaging
and
the other direct and actual costs to NUTRA of manufacturing, assembling,
and
preparing the Products for market. Product Cost shall be determined
as of the date of the applicable purchase order for the Product. The
Product Cost for SRB shall be the lowest wholesale price at which the SRB
is
commercially sold by NUTRA at any place in the United States of
America.
1.16 SRB. “SRB”
shall mean stabilized rice bran derivatives.
1.17 Transferred
Marks. Transferred Marks means the tradenames
“Flex Protex” and “Rice ‘N’ Shine.”
2. Purchase
and Sale of Products.
2.1 Sale
of Products by NUTRA. During the term of this Agreement,
NUTRA will exclusively, subject to Sections 2.6 and 3 below, sell to ITV,
upon
and subject to the terms and conditions set forth in this Agreement, such
quantities of Products as ITV may order from time to time.
2.2 Packaging;
Labels. The Products to be purchased and sold under this
Agreement will be packaged in such packaging and will bear such ITV Marks
and
NUTRA Marks as is mutually agreed upon by the parties. NUTRA agrees
to private label certain Products exclusively for ITV. ITV shall be responsible
for all costs and expenses relating to the creation and printing of the labels
for the Products and all costs and expenses incurred to affix the labels
to the
Products.
2.3 Production. ITV
reserves the right to reject any Non-Conforming Product from the manufacturer
selected by the parties pursuant to Section 2.4 and shall notify both NUTRA
and
the manufacturer of any such defects. ITV will notify NUTRA of such
as soon as reasonably possible. The parties shall instruct such
manufacturer that all shipments of Product must have an accompanying certificate
of analysis. NUTRA shall provide the manufacturer with a certificate
of analysis for its SRB for each shipment to the manufacturer.
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2.4 Fulfillment
of Product. NUTRA shall contract with one or more third
party manufacturer(s) to manufacture, assemble, package, and label the
Products. The manufacturer shall be a company selected in writing by
NUTRA. The manufacturer must be able to supply Product of at least
equal quality to the Product currently supplied by NUTRA. The
manufacturer shall be obligated to obtain the “RiSolubles” and other SRB
derivatives from NUTRA, and shall utilize the same Product formulations and
raw
material sources of supply as currently utilized by NUTRA, without variations,
except to the extent expressly approved by NUTRA in advance and in writing.
Such
manufacturer shall contract directly with NUTRA to provide the Product and
shall
ship the Product to ITV in accordance with all ITV purchase orders to NUTRA
issued pursuant to this Agreement. ITV shall not place orders directly with
the
manufacturer. ITV shall enter into a written agreement with the manufacturer
to
guaranty payment for all Product produced pursuant to the manufacturing
agreement and such guaranty shall be the sole recourse of
the manufacturer in the event of a payment default under the manufacturing
agreement. The current and future manufacturer must accept ITV as the
sole source of payment under the manufacturing agreement and must agree to
be
paid for each shipment * days following shipment of the Product
order. During the term of this Agreement the parties agree to
evaluate alternate manufacturing options, subject to approval by NUTRA in
its
sole discretion. If, at any time in the future, NUTRA agrees to
utilize a manufacturer approved by ITV and that manufacturer does not agree
to
accept ITV as the sole source of payment under the manufacturing agreement,
ITV
shall pay for the Product on alternate payment terms that protect NUTRA from
liability for the manufacturing costs. All manufacturers must enter into a
nondisclosure and non-circumvention agreement in a form acceptable to NUTRA
prior to obtaining proprietary Product Information, submitting bids, or
commencement of any manufacturing activities.
2.5 Order
Procedure. ITV’s orders for quantities of Products
purchased under this Agreement will be placed by ITV by means of purchase
orders
delivered to NUTRA, each of which shall reference this
Agreement. Each such purchase order must specify a shipment date that
is not less than forty five (45) days from the date of such purchase
order. NUTRA shall have no responsibility for any delays or failures
resulting from the manufacturer approved by ITV pursuant to Section 2.4.NUTRA
agrees to fulfill all purchase orders for the SRB within six (6) weeks of
receiving the purchase order. ITV may issue a standing order to NUTRA, and
each
shipment or installment shall be severable and a distinct purchase order
from
each other. Each purchase order form shall specify the Product name,
formulation, number of Product units, order date and price and shall comply
with
the terms and conditions of this Agreement, and the terms hereof shall supersede
any contrary terms contained in any purchase order. All purchase
orders shall be in a form and content specifically approved in advance by
NUTRA. Except as provided or permitted herein, the purchase
order shall not include any additional or pre-printed terms or
conditions.
2.6 Minimum
Quantity. During the term of this Agreement, after the
Initial Order (defined below), ITV agrees to order and purchase not less
than *
Aggregate Units of the Products per purchase order, except for *, which shall
have a minimum order amount of * (“Minimum Quantity”). In addition to
the Minimum Quantity, ITV agrees to purchase during the term of this Agreement
a
minimum of * Dollars ($*) worth of Product each Contract Quarter (“Contract
Quarter Minimum”). The Contract Quarter Minimum requirement shall be determined
by the sum of all Products ordered at the prices set forth in each purchase
order. Notwithstanding the foregoing, ITV’s initial order, which
may be shipped in installments from the manufacturer, shall be for no less
than
a total of * Dollars ($*) of * (the “Initial Order”).
2.7 Cancellation. NUTRA
shall not be obligated to accept, and ITV shall not be entitled to request
any
delays in delivery or to cancel any purchase order placed by ITV; provided,
that
if a governmental agency notifies ITV in writing that it objects to ITV’s
performance of its obligations under this Agreement, then ITV shall be entitled
to cancel any open purchase orders upon delivery to NUTRA of written proof
of
the notice of governmental objection. Notwithstanding the foregoing, ITV
shall
make all outstanding payments for amounts due to the manufacturer arising
from
any cancelled order.
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2.8 Shipments. All
Products purchased by ITV under this Agreement will be shipped FOB the
manufacturer’s designated facility and risk of loss will pass to ITV upon
shipment. ITV will pay all shipping costs.
2.9 Invoicing;
Terms of Payment.
(a) Except
as
provided in Section 2.9(b) below, the terms of payment shall be * days from
the
date of shipment of the Product from the manufacturer. Any amount not
paid when due shall accrue an additional * percent (*%) per month until
paid. Each payment shall be payable directly into an escrow account
established by NUTRA with Xxxxxxxxx Genshlea Chediak law corporation or an
escrow holder reasonably acceptable to ITV and the deposited funds shall
be used
to immediately make payment to the manufacturer and the balance distributed
to
NUTRA. All other amounts due hereunder shall be paid directly to
NUTRA.
(b) Notwithstanding
the provisions of Section 2.9(a), ITV’s payment to NUTRA for all ordered Product
other than the Initial Order shall be due no later than the earlier of (i)
the
time required under Section 2.9(a), and (ii) * days after the date of the
applicable Product purchase order.
(c) For
the
Initial Order, ITV agrees to receive a minimum shipment of * of the Initial
Order on or before each of the following dates: September 30, 2005 and an
additional * of the Initial Order on each of the October 31, 2005, December
31,
2005, January 30, 2006 and February 28, 2006. Provided that the
required Product is ready for shipment on each of these dates, ITV shall
pay for
the Product on the earlier of * days after shipment or * days after each
of
these dates (whether or not the shipment occurs). Notwithstanding the
foregoing, if on any Initial Order shipment date the Product is not ready
for
shipment and the delay is not caused by ITV, payment shall not be due until
*
days after the date that the Product is available for shipment.
3. Exclusivity
Granted to ITV. During the term of this Agreement, so
long as ITV meets the Contract Quarter Minimum, NUTRA or its successors,
assigns
or designees will not market, distribute or sell the Products to any other
entity and ITV shall be granted the exclusive worldwide license to market
and
distribute all of the Products. Notwithstanding the foregoing, NUTRA,
or its designees may manufacture, distribute, market and/or sell similar
or
identical products under different names or labels. In the event that ITV
does
not meet the Contract Quarter Minimum, and fails to cure such default within
thirty (30) days after the end of the Contract Quarter in which the Contract
Quarter Minimum was not met, this Agreement shall become non-exclusive and
NUTRA
may sell the Products bearing NUTRA Marks to other parties in its sole
discretion.
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4.
Prices.
4.1 Prices. NUTRA
will xxxx up the Product by * percent (*%) of the total finished Product
Cost. The manufacturer selected under Section 2.4 above shall be
directed to provide ITV and NUTRA true and correct duplicate copies of all
invoices submitted by the manufacturer for producing the Product. In no event
will NUTRA sell the Products at a xxxx up greater than * percent (*%) of
the
actual Product Cost and in no event will ITV purchase the Products at a xxxx
up
less than * percent (*%) of the actual Product Cost. The parties
agree and understand that the prices are subject to change due to changes
in
manufacturing and other direct costs, volume and manufacturing discounts
and
minimum requirements, increase in raw material costs, changes in formula
modifications or otherwise. The prices on the Initial Purchase Order
and subsequent purchase orders shall be determined as of the date of the
purchase order and applied to the obligations of the Contract Quarter
Minimums.
4.2 Raw
Materials. NUTRA agrees that if the cost of the SRB
becomes less expensive to NUTRA then it will pass those savings on to ITV
and if
the cost of the SRB becomes more expensive then it will notify ITV in writing,
within thirty (30) days (or as soon as reasonably available, if less) prior
to
the increase of the costs to ITV, all in accordance with this
Agreement.
5. Obligations
of ITV.
5.1 Purchase
Forecasts. ITV will use its best efforts to deliver to
NUTRA a written forecast setting forth ITV’s good faith estimate of ITV’s
anticipated purchases of Products for that Contract Quarter, by month on
a
Product-by-Product basis. Such forecasts will not be binding on ITV,
but ITV will use its best efforts to ensure the accuracy of the
same.
5.2 Compliance
with Law. ITV will comply with all applicable laws,
statutes and regulations relating to the marketing, distribution and sale
of
Products purchased by it under this Agreement. NUTRA will also comply with
all
applicable laws, statutes and regulations relating to the manufacturing of
nutritional products and dietary supplements and abide by good manufacturing
practices.
5.3 Marketing
and Sales Efforts. Throughout the term of this
Agreement, ITV shall use its best efforts to market, distribute and sell
Products bearing one or more of ITV’s and NUTRA’s Marks, including
but not limited to Direct Response Marketing. Upon signing this
Agreement and until the termination of this Agreement, NUTRA shall maintain
on
its website (xxx.xxxxxxxx.xxx) a link to the ITV website and NUTRA shall
not sell any Product other than by directing customers to the ITV
website.
5.4 Up-Selling. ITV
agrees to up-sell the Products first before attempting to up-sell any non
NUTRA
products. ITV will not be prohibited from up-selling any of its
products with NUTRA Products.
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6. Issuance
of Securities. NUTRA agrees to issue to ITV or its
designees an option to acquire up to two hundred and fifty thousand (250,000)
shares of NUTRA restricted common stock at the average of the “bid” and “ask”
market price on the Effective Date, as follows: options to acquire and vest
fifty thousand (50,000) shares upon payment in full of the first Contract
Quarter Minimum, and fifty thousand (50,000) for each Contract Quarter during
the term of this Agreement in which ITV purchases and pays in full in accordance
with the terms and conditions of this Agreement, the Contract Quarter Minimum,
until the aggregate total of options granted under this Section equals two
hundred fifty thousand (250,000). ITV shall have a thirty (30) day
right after the end of each Contract Quarter during the term of this Agreement
to cure any shortfall in failing to purchase the Contract Quarter Minimum
for
the prior Contract Quarter; and if ITV cures any such shortfall it shall
vest in
the options. NUTRA shall have no further obligations under this Section to
grant
options to ITV upon ITV receiving options to purchase an aggregate total
of two
hundred fifty thousand (250,000) shares of NUTRA restricted common
stock. If necessary, the parties agree to amend this Section of the
Agreement in order to comply with all applicable state and federal securities
law. In the event of a breach by ITV of any monetary obligation
hereunder, any and all rights of ITV to any options hereunder that have not
yet
vested shall immediately terminate and be of no further force or
effect. All options issued under this Section shall include a lock-up
restriction, prohibiting the sale of the underlying security until December
31,
2007, except in the event of an acquisition of all or substantially all of
the
assets of NUTRA to an unrelated third party, at which time the lock-up shall
terminate, and all options will vest and be available for exercise and sale
at
the time the acquisition is completed.
7.
INTELLECTUAL PROPERTY.
7.1 Marks. NUTRA
will not use any ITV Xxxx in connection with the marketing, distribution
or sale
of any of the Products unless expressly authorized in writing by
ITV. ITV will not use any NUTRA Marks in connection with the
marketing, distribution or sale of any Products unless expressly authorized
hereunder or in a separate writing by NUTRA. All Product names listed
on Exhibit A are NUTRA Marks; provided, that after five (5) Contract Quarters,
and if ITV has not breached any of its monetary or other obligations hereunder,
NUTRA agrees to convey all of its right and interest in the Transferred Marks
to
ITV and such marks shall thereafter be ITV Marks.
7.2 Labels
and package design. All private labels and packaging
(excluding any NUTRA Marks) developed by NUTRA and exclusively created for
ITV
shall be “work for hire” and owned by ITV.
7.3 Infomercial. The
entire editorial, visual, audio and graphic content of all advertisements
and
promotional materials developed by ITV in connection with the promotion,
marketing and distribution of the Product(s), including without limitation,
(i)
the programs and the performances recorded therein, the promotional segments,
and any other marketing materials prepared in connection with the Product(s),
(ii) all raw footage shot in the course of producing the programs, (iii)
all
trademarks developed for ITV or its affiliates, (iv) all musical compositions
included in the programs, and shall be and remain the sole property of ITV,
(v) and any developed web domains for the Products (“ITV Intellectual
Property”). NUTRA shall not acquire any right, title or
interest in the ITV Intellectual Property by virtue of this Agreement or
otherwise. NUTRA hereby assigns and agrees to assign to ITV all of
NUTRA’s right, title and interest in the ITV Intellectual Property mentioned in
this Section 7.3 and Section 7.2 above. NUTRA shall not in any way or
at any time dispute or attack the validity or harm or contest the rights
of ITV
in or to any of the ITV Intellectual Property. Any unauthorized use
of any of the ITV Intellectual Property by NUTRA shall be deemed an infringement
of the rights of ITV therein.
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7.4 NUTRA
Intellectual Property. During the term of this
Agreement, NUTRA hereby grants to ITV a world wide, royalty-free license
to use
all NUTRA trade marks, copyrights, service marks, and logos provided by NUTRA
for the Products (specifically not including any trade secrets, patented
items,
or software items) solely for use for the Products and all proprietary marks
of
NUTRA solely for use for the Products in conjunction with ITV’s performance
under this Agreement. ITV shall have no right to use any other copyrighted
materials or proprietary marks of NUTRA. This license or rights granted per
this
Section 7.4 shall not be assignable unless agreed upon by NUTRA.
7.5 Confidentiality. All
customer lists, price lists, written and unwritten marketing plans, techniques,
methods and data, sales and transaction data, and other information designated
or deemed either by NUTRA or ITV as being confidential or a trade secret,
shall
constitute confidential information of or NUTRA or ITV, as applicable
(“Confidential Information”). NUTRA and ITV shall
hold all Confidential Information in the strictest confidence and shall protect
all Confidential Information with the same degree of care that NUTRA and
ITV
exercises with respect to its own proprietary information. Without
the prior written consent of the other, NUTRA or ITV shall not use, disclose,
divulge or otherwise disseminate any Confidential Information to any person
or
entity, except for each party’s attorneys and such other professionals as the
companies may retain in order for it to enforce the provisions of this
Agreement. Notwithstanding the foregoing NUTRA and ITV shall have no
obligation with respect to any Confidential Information which (i) is or becomes
within the public domain through no act of NUTRA or ITV in breach of this
Agreement, (ii) was lawfully in the possession of NUTRA or ITV without any
restriction on use or disclosure prior to its disclosure hereunder, (iii)
is
lawfully received from another source subsequent to the date of this Agreement
without any restriction on use or disclosure, or (iv) is required to be
disclosed by order of any court of competent jurisdiction or other government
authority (provided in such latter case, however, that each
company shall timely inform the other of all such legal or
governmental proceedings so that the company may attempt by appropriate legal
means to limit such disclosure, and NUTRA and ITV shall further use its best
efforts to limit the disclosure and maintain confidentiality to the maximum
extent possible).
7.6 Non-Circumvention. During
the term of this Agreement and for a period of one (1) year thereafter, ITV
shall not, directly or indirectly, transact business directly with any
manufacturer, supplier or producer of the Products that ITV becomes aware
of as
a result of this Agreement without NUTRA’s prior written consent. The
provisions of this Section 7.6 shall be deemed to consist of a series of
separate covenants for each Product. The parties agree that the one
(1) year restricted period and the proscribed activities during such one
(1)
year period are reasonable in light of the relevant circumstances as of the
date
of this Agreement. If any such period or activity are adjudged
unreasonable in any final decision of a judge or arbitrator or administrative
agency of competent jurisdiction, then the period or activity shall be reduced
to the extent that they are determined to be unreasonable, so that this covenant
may be enforced with respect to the maximum amount of such
activities and during the maximum time period as is adjudged to be
reasonable.
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8. Warranty,
Etc.
8.1 Limited
Warranty. NUTRA warrants that all Product ingredients
supplied by NUTRA are generally recognized as safe for human consumption
as
formulated. NUTRA further warrants that it is and has complied with
all relevant laws, rules and regulations promulgated by the Food and Drug
Administration.
8.2 Remedies
for Breach of Warranty. In the event of a breach of the
warranty set forth in Section 8.1 above, NUTRA shall be obligated to either,
in
ITV’s sole discretion, (i) replace the Non-Conforming Products; or (ii) refund
the price paid by ITV for the Non-Conforming Products.
8.3 Disclaimer
of Warranty. NUTRA MAKES NO WARRANTIES OR
REPRESENTATIONS AS TO THE PERFORMANCE OF THE PRODUCTS, EXCEPT AS SET FORTH
IN
SECTION 8.1 ABOVE. ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A
PARTICULAR PURPOSE, ARE HEREBY EXCLUDED.
8.4 Consequential
Damages Waiver. IN NO EVENT WILL EITHER PARTY BE LIABLE
OR RESPONSIBLE FOR ANY TYPE OF INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL
DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST REVENUE, OR LOST PROFITS, EVEN
IF
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF OR RELATING TO
THE
PRODUCTS, THIS AGREEMENT, OR ANY PERFORMANCE OR NON-PERFORMANCE BY EITHER
PARTY
UNDER THIS AGREEMENT, WHETHER ARISING UNDER A THEORY OF BREACH OF WARRANTY,
CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR
OTHERWISE.
8.5 Limitation
of Liability. In no event will NUTRA have any liability
or obligation to ITV arising out of or related to the Products, this Agreement
or the performance or non-performance of NUTRA under this Agreement, in an
amount greater than the aggregate amount actually paid by ITV to NUTRA for
the
Products with respect to which such alleged liability or obligation
relates.
8.6 Insurance. For
so long as ITV continues to sell the Product(s), NUTRA shall maintain, at
its
own expense, a blanket liability insurance coverage, including, but not limited
to, coverage for product liability for the Product in an amount not less
than
two million dollars ($2,000,000) in the aggregate and up to one million dollars
($1,000,000) per incident. ITV shall be named as an additional
insured on any such policies. All such insurance shall be placed with
one or more carriers, which are rated "A" or better by A. M. Best's rating
service. NUTRA shall deliver to ITV evidence of (i) the procurement
of such insurance including evidence showing ITV has been named an additional
insured in a form reasonably acceptable to ITV within fifteen (15) days of
such
procurement and (ii) maintenance of such insurance in a form reasonably
acceptable to ITV at each renewal period and at such times as are requested
by
ITV. ITV shall be provided no less than thirty (30) days prior
written notice from NUTRA and its insurer of cancellation of such
policy. The costs associated with the NUTRA Insurance shall be
reimbursed by ITV within five (5) business days of presentment of the invoice
from the insurance company.
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9. Indemnification.
9.1 Indemnification
by NUTRA. NUTRA will defend, indemnify and hold ITV and
its Affiliates, and their respective officers, directors and employees (the
“Indemnified Parties”) harmless from and against, and will reimburse the
Indemnified Parties with respect to, any and all claims, actions, demands,
losses damages, liabilities, costs and expenses, including without limitation
attorneys’ fees, which the Indemnified Parties, or any of them, may suffer or
incur arising, directly or indirectly, out of (a) the allegation by any third
Person that the Products infringe upon any United States patent; or (b) any
claim brought against ITV by a state or federal governmental agency arising
out
of its conduct as permitted and contemplated under this Agreement, except
in
each case to the extent arising from the gross negligence or intentional
misconduct of ITV or its employees or agents.
9.2 Indemnification
by ITV. ITV will defend, indemnify and hold NUTRA, its
Affiliates, and their respective officers, directors and employees (“NUTRA
Indemnified Parties”) harmless from and against, and will reimburse the NUTRA
Indemnified Parties with respect to any and all claims, actions, demands,
losses
damages, liabilities, costs and expenses, including without limitation,
attorneys fees, which the NUTRA Indemnified Parties, or any of them may suffer
or incur arising, directly or indirectly, out of ITV’s breach of any
of its obligations under this Agreement, except to the extent arising from
the
gross negligence or intentional misconduct of NUTRA or its employees or
agents.
9.3 Indemnification
Procedure. Any party claiming indemnification under this
Agreement (“Indemnified Party”) shall provide the other party (the “Indemnifying
Party) prompt notice in writing upon becoming aware of any action, suit,
proceeding, claim, demand, judgment or assessment with respect to which a
right
to indemnification is claimed under Section 9.1 or 9.2 (a
“Claim”). The Indemnifying Party shall thereupon have the right to
assume control of the defense and/or settlement of the Claim, provided that
(a)
the Indemnifying Party promptly undertakes such defense and/or settlement,
and
thereafter pursues the same with reasonable diligence; (b) the Indemnifying
Party keeps the Indemnified Party reasonably informed of the progress of
such
defense and/or settlement; and (c) the Indemnifying Party does not compromise
or
settle the Claim without the Indemnified Party’s prior written consent, which
consent will not be unreasonably withheld, conditioned or
delayed. The Indemnified Party may participate in the defense of a
Claim at its own expense, however, Indemnified Party’s participation shall be
solely as an observer.
10. Relationship
of Parties. This Agreement does not constitute ITV as a
partner, joint venturer, agent or legal representative of NUTRA, or NUTRA
as a
partner, joint venturer, agent or legal representative of ITV for any purpose
whatsoever. Neither party grants any express or implied right or
authority to the other party to assume or create any obligation or
responsibility on behalf of or in the name of the other party, or to bind
the
other party in any matter or thing whatsoever.
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11. Termination.
11.1 Termination
by Either Party. NUTRA and ITV shall each have the
right, at its option, to terminate this Agreement as follows:
(a) By
giving written notice to the other party, effective immediately, in the event
that such other party shall be adjudicated bankrupt or shall petition for
or
consent to any relief under any bankruptcy, reorganization, receivership,
liquidation, compromise, or any moratorium statute, whether now or hereafter
in
effect, or shall make an assignment for the benefit of its creditors, or
shall
petition for the appointment of a receiver, liquidator, trustee, or custodian
for all or a substantial part of its assets, or if a receiver, liquidator,
trustee or custodian is appointed for all or a substantial part of its assets
and is not discharged within thirty (30) days after the date of such
appointment; or
(b) Upon
any default in the performance of or breach of any agreement, covenant,
obligation or undertaking of the other party made in this Agreement (unless
caused by a Force Majeure Event, which shall be governed by Section 12 below,
or
unless the default is a monetary default by ITV, which shall be governed
by
Section 11.2 below), if such default or breach is not remedied to the reasonable
satisfaction of the party giving notice of termination within thirty (30)
days
after written notice of the default or breach has been given to the defaulting
party by the other party.
The
notice of election to terminate this Agreement shall state the grounds upon
which termination is based.
11.2 Termination
Based on Monetary Default by ITV. Following written
notice from NUTRA of a monetary default, ITV’s opportunity to cure such default
will be seven (7) calendar days from receipt of notice. If such
monetary default is not cured within such time, then NUTRA shall have the
right
to immediately terminate this Agreement.
11.3 Survival. The
provisions of Sections 2.9, 7.5, 7.6, 8 and 9, this Section 11.3, 11.4, and
Section 13 shall survive the expiration or termination of this Agreement
for any
reason whatsoever. Further, expiration or termination of this
Agreement for any reason whatsoever shall not relieve or release either party
hereto from any liabilities or obligations that it has incurred prior to
the
date of such expiration or termination.
11.4 Effect
of Termination. Upon termination of this Agreement, ITV shall cease
marketing of the Products immediately. ITV shall return to NUTRA all NUTRA
Confidential Information in ITV’s possession on the date of
termination. ITV shall have no further rights to the Products upon termination
of this Agreement and ITV shall immediately cease airing any and all
infomercials or commercials relating to or referencing the Products. In
the event of a breach by ITV of any of its obligations under this Agreement,
which breach is not cured during any applicable cure period hereunder, all
assignments by NUTRA pursuant to Section 7 herein shall be null and void
and of
no further force or effect. The parties agree that upon termination
for any reason other than a default or breach by ITV, NUTRA will sell to
ITV any
Product that ITV reasonably requires to fulfill continuity and re-orders
from
ITV’s customers. NUTRA will not be obligated to sell any Product to
ITV following any termination due to a default or breach by ITV
hereunder.
11
12. Force
Majeure. If either party is prevented from performing,
or delayed in the performance of, any of its obligations under this Agreement,
except the payment of money, because of an event beyond its reasonable control,
such as, but not limited to, inability to obtain materials or labor, any
act of
God, riot, war, civil unrest, flood, fire or earthquake (but excluding failure
caused by a party’s financial condition or negligence), the affected party shall
be excused from performance (other than the payment of money due hereunder)
for
the duration of the event (a “Force Majeure Event”); provided that the party
whose performance has been impaired by the Force Majeure Event (a) promptly
notifies the other party of the existence and nature of the Force Majeure
Event
and its anticipated effect on the performance of the notifying party under
this
Agreement; (b) promptly undertakes and thereafter diligently pursues any
commercially reasonable action necessary to remove the effect of the Force
Majeure Event, to the extent that the Force Majeure Event in question is
of a
nature such that its effects may be remedied by commercially reasonable action;
and (c) keeps the other party informed during the duration of such Force
Majeure
Event of all facts pertaining thereto, including but not limited to the progress
of the notifying party in remedying the same, if applicable.
13. Miscellaneous.
13.1 Arbitration. In
the event of any dispute or controversy arising out of or relating to this
Agreement, the parties hereto agree to submit such dispute or controversy
to
binding arbitration. The sole arbitrator shall be selected from the
list of arbitrators supplied by the American Arbitration Association following
written request by any party hereto. If the parties hereto cannot
agree upon an arbitrator within thirty (30) days following receipt of the
list
of arbitrators by all parties to such arbitration, then either party may
request, in writing, that the American Arbitration Association appoint an
arbitrator within ten (10) days following receipt of such request (the
“Arbitrator”). If the arbitration is initiated by ITV, the
arbitration shall take place in Sacramento County,
California. If the
arbitration is initiated by NUTRA, the arbitration shall take place in Boston,
Massachusetts. Subject to the foregoing, the arbitration shall be
held at a place and time mutually agreeable to the parties or if no such
agreement is reached within ten (10) days following notice from the Arbitrator,
at a place and time determined by the Arbitrator. Such arbitration
shall be conducted in accordance with the Commercial Arbitration Rules of
the
American Arbitration Association then in effect. The parties hereto
agree that all actions or proceedings arising in connection with this Agreement
shall be arbitrated exclusively in Sacramento County,
California or Boston
Massachusetts, as applicable. The aforementioned choice of venue is
intended by the parties to be mandatory and not permissive in nature, thereby
precluding the possibility of litigation or arbitration between the parties
with
respect to or arising out of this Agreement in any jurisdiction other than
that
specified in this Section. Each party hereby waives any right it may
have to assert the doctrine of forum non conveniens or similar doctrine or
to
object to venue with respect to any proceeding brought in accordance with
this
Section, and stipulates that the Arbitrator shall have in personam jurisdiction
and venue over each of them for the purpose of resolving any dispute,
controversy, or proceeding arising out of or related to this
Agreement. The decision of the Arbitrator shall be final and binding
on all the parties to the arbitration, shall be non-appealable and may be
enforced by any court of competent jurisdiction. In addition to
attorneys’ fees as provided herein, the prevailing party shall be entitled to
recover from the non-prevailing party reasonable costs and
expenses. The costs and fees of the arbitration shall be paid by the
non-prevailing party. The Arbitrator may grant any remedy that the
Arbitrator deems appropriate including, without limitation, injunctive relief
or
specific performance. Prior to the appointment of the Arbitrator, any
party may seek a temporary restraining order or a preliminary injunction
that
shall be effective until a final decision is rendered by the
Arbitrator.
12
13.2 Assignment. This
Agreement may not be assigned by either party without the prior written consent
of the other party; provided, however, that this Agreement may be assigned
by
NUTRA, without the prior written consent of ITV, to any Person which acquires
all or substantially all of the assets of NUTRA.
13.3 Applicable
Law. This Agreement shall be construed and interpreted
in accordance with the internal laws of the State of
California, notwithstanding
its conflict of law provisions.
13.4 Entire
Agreement. This Agreement embodies the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof. No representation, promise, inducement, statement or
intention has been made by any party hereof that is not embodied herein,
and no
party shall be bound or liable for any alleged representation, promise,
inducement or statement not so set forth herein. Terms and conditions
set forth in any of ITV’s purchase orders, or any other forms or documents of
ITV, which are inconsistent with, or in addition to, the terms and conditions
set forth in this Agreement, are hereby objected to and rejected in their
entirety, regardless of when received, without further action or notification
by
NUTRA, and shall not be considered binding on NUTRA unless specifically agreed
to in writing by it.
13.5 Severability. If
any provision of this Agreement or the application of any such provision
to any
party or any circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder
of
this Agreement or the application of such provision to such party or
circumstances other than those to which it is so determined to be invalid
and
unenforceable, shall not be affected thereby, and each provision hereof shall
be
validated and shall be enforced to the fullest extent permitted by
law.
13.6 Waivers;
Modification. No party hereto shall be deemed as a
consequence of any act, delay, failure, omission, forbearance or other
indulgences granted from time to time by any other party hereto: (a)
to have waived, or to be estopped from exercising, any of its rights or remedies
under this Agreement; or (b) to have modified, changed, amended, terminated,
rescinded, or superseded any of the terms of this Agreement, unless such
waiver,
modification, amendment, change, termination, rescission, or supersession
is
express, in writing and signed by the party that is to be bound by such waiver,
modification, amendment, change, termination, rescission or
supersession. No single or partial exercise by any party hereto of
any right of remedy will preclude any other or further exercise thereof or
preclude the exercise of any other right or remedy, and a waiver expressly
made
in writing on one occasion will be effective only in that specific instance
and
only for the precise purpose for which given, and will not be construed as
a
consent to or a waiver of any right or remedy on any future occasion or a
waiver
of any right or remedy against any other party.
13
13.7 Attorneys’
Fees. In the event that any of the parties hereto (or
any successor thereto) resorts to legal action, including arbitration, in
order
to enforce, defend or interpret any of the terms or the provisions of this
Agreement, the prevailing party (as determined by the court, arbitrator or
other
authority before which such suit or proceeding is validly commenced hereunder)
shall be entitled to receive, in addition to such other remedies as shall
be
awarded to it in such legal action, reimbursement from the non-prevailing
party
or parties for all reasonable attorneys’ fees and all other costs incurred in
commencing or defending such action. In addition, the prevailing
party shall be entitled to recover from the non-prevailing party or parties
post-judgment reasonable attorneys’ fees incurred by the prevailing party in
enforcing a judgment against the non-prevailing party or
parties. Notwithstanding anything in this Agreement to the contrary,
the provisions of the preceding sentence are intended to be severable from
the
balance of this Agreement, shall survive any judgment rendered in connection
with the aforesaid legal action, and shall not be merged into any such
judgment.
13.8 Notice. All
notices, requests, demands, and other communications required to or permitted
to
be given under this Agreement shall be in writing and shall be conclusively
deemed to have been duly given (a) when hand delivered to the other party;
or
(b) when received when sent by facsimile at the address and number set forth
below (provided, however, that notices given by facsimile shall not be effective
unless the receiving party delivers a written confirmation of receipt for
such
notice either by facsimile or any other method permitted under this Section;
additionally, any notice given by facsimile shall be deemed received on the
next
business day if such notice is received after 5:00 p.m. (recipient’s time) or on
a nonbusiness day); or (c) three business days after the same have been
deposited in a United States post office with first class or certified mail
return receipt requested postage prepaid and addressed to the parties as
set
forth below; or (d) the next business day after the same have been deposited
with a national overnight delivery service reasonably approved by the parties
(Federal Express and DHL WorldWide Express being deemed approved by the
parties), postage prepaid, addressed to the parties as set forth below with
next-business-day delivery guaranteed, provided that the sending party receives
a confirmation of delivery from the delivery service provider. Each
party shall make an ordinary, good faith effort to ensure that it will accept
or
receive notices that are given in accordance with this Section, and that
any
person to be given notice actually receives such notice. A party may
change the address of such party given below for purposes of this Section
by
giving the other party written notice of the new address in the manner set
forth
above.
14
If
to NUTRA to:
NutraCea
1261
Hawk’s Xxxxxx Xxxxx
Xx
Xxxxxx
Xxxxx, XX 00000
Attention:
Xxxxxxx Xxxxx
If
to ITV to:
ITV
Global Inc.
X.X.
Xxx
0000
Xxxxxxx,
Xx 00000
Attention:
Xxxxxxxxxxx Xxxx
13.9
Headings. The
captions and other headings contained in this Agreement are for convenience
only
and shall not be considered a part of or effect the construction and
interpretation of any provision of this Agreement.
13.10 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the
same
document.
13.11 Term. Subject
to earlier termination as provided below, the term of this Agreement will
commence on the date of this Agreement and shall continue two years (2) from
the
above date. This agreement will automatically renew for an additional
twelve (12) month term following the last day of this Agreement.
13.12 General
Interpretation. The terms of this Agreement have been
negotiated by the parties hereto and the language used in this Agreement
shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent. This Agreement shall be construed without regard to
any presumption or rule requiring construction against the party causing
such
instrument or any portion thereof to be drafted, or in favor of the party
receiving a particular benefit under the Agreement. No rule of strict
construction will be applied against any person.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective
as of the day and year first written above.
|
NUTRACEA®,
|
ITV
GLOBAL, INC.
|
|
A
California Corporation
|
A
Nevada Corporation
|
15
EXHIBIT
A
PRODUCTS
|
Rice ‘n Shine™
|
|
FlexProtex™
|
|
FlexProtex Cream™
|
|
CeaSweet™
|
|
RiceMucil Wafers®
|
|
SuperSolubles®
|
|
ZymeBoost®
|
|
CeaBars™
|
16
