EXHIBIT 10.03
SUPPLY AND DISTRIBUTION AGREEMENT
THIS SUPPLY AND DISTRIBUTION AGREEMENT (the "Agreement") is entered of the
8th day of January, 2001 by and between Imagenetix, Inc., a California
corporation ("Imagenetix"), whose principle place of business is 00000 Xxxx
Xxxxxxxx Xxxx, Xxxxx #000 Xxxxx, Xxxxxxxxxx 00000; and The Enrich Corporation
("Enrich"), whose principal place of business is: 000 Xxxxx 0000 Xxxx, Xxxx,
Xxxx 00000.
WHEREAS, Imagenetix has developed and manufactures a proprietary dietary
supplement soft-gel product containing cetyl myristoleate as an active
ingredient in the compound and known as Celadrin TM (hereinafter the "Product,"
as defined below); and
WHEREAS, Enrich is engaged in the business of marketing and distributing
supplements and desires to market, sell and distribute the Product;
NOW THEREFORE, in consideration for the mutual agreements contained herein
parties agree as follows:
1. Definitions. When used in this Agreement, each of the terms set forth in
this Section have the meanings indicated below:
1.1 "Product" shall mean the uniquely efficacious, proprietary soft-gel
product developed or otherwise discovered by Imagenetix and whose
principal ingredient is cetyl myristoleate. The specifications for the
Product are at hereto as "Exhibit A" and "Exhibit C" and incorporated
herein by this reference.
1.2 "Affiliate" means, with respect to each party, any legal entity that
directly or indirectly controls, is controlled by, or is under common
control or ownership with such party, but only for so long as such
control or ownership shall continue. One entity shall be deemed to
control another entity if such entity has the to direct or cause the
direction of the management or policies of the other entity or owns a
majority of the stock, shares or interest in the other entity. In the
case of Enrich, it shall also specifically mean Rexall Showcase
International, Inc. and its subsidiaries.
1.3 "Intellectual Property" shall mean all ideas, inventions, patents and
patent applications, claims, data, trademarks, trade dress, trade
secrets, instructions, processes, formulas and manufacturing data and
information, owned or controlled by Imagenetix and necessary or useful
to the formulation and or manufacture of the Product, and all
improvements thereto.
1.4 "Licensed Territory" shall be worldwide.
1.5 "Defective Product" means any Product or unit thereof supplied by
Imagenetix in breach of the warranties herein, or that is not in
compliance with the law, or that fails to conform to the
specifications in exhibits A and C herein.
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1.6 "Direct Selling" means that channel of distribution of products and
services that involves face-to-face selling by independent
distributors and may include selling via the Internet (as long as all
sales may be classified as "direct selling" or in the "direct selling
channel of distribution" through Enrich and its Affiliates.
2. Supply and Sale. Imagenetix shall supply and sell to Enrich the Product
described in Exhibit A at the specifications and pursuant to the terms and
conditions described herein.
2.1 Initial Order. Enrich shall order within sixty (60) days hereof and
purchase from Imagenetix a minimum of thirty thousand (30,000) bottles
of the Product. Each bottle shall contain not less than ninety (90)
capsules at five hundred (500) mg. each, as reflected in Exhibit A.
Delivery of the order shall be in multiple lots and at such times as
Enrich may direct; however, Imagenetix shall complete delivery of the
order within ninety (90) days of the delivery of the initial lot to
Enrich.
2.2 Exclusive Supplier. During the term of this Agreement and any renewals
hereof, Imagenetix will supply in the Direct Selling channel of
distribution the Product as described in Exhibit A exclusively to
Enrich.
2.3 Minimum Orders. Each purchase order submitted pursuant to this
Agreement shall be for not less than six thousand (6,000) bottles. The
bottles in a single purchase order may be packaged under various
labels as directed by Enrich. Any purchase order may be delivered in
multiple lots and according to multiple schedules, as directed in the
purchase order.
3. Ordering.
3.1 Purchase Orders. The quantity, description, destination and method of
shipment for all Product to be delivered pursuant to this Agreement
shall be specified by Enrich and transmitted to Imagenetix in the form
of written purchase orders. Imagenetix shall notify Enrich of
acceptance of each order by means of written acknowledgment within two
(2) days of receipt thereof. Any purchase order not formally
acknowledged by Imagenetix within ten (10) days shall be deemed
acknowledged and accepted.
3.2 Invoicing. Following each shipment to Enrich, an invoice shall
immediately be sent to Enrich describing the quantity of Product
shipped, the place where the Product order is scheduled to be
delivered, the date of shipment, and the price.
3.3 Lead Times. Lead times from purchase order placement to shipment shall
be approximately eight (8) but not more than ten (10) calendar weeks.
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3.4 Affiliates Imagenetix shall accept purchase orders from all of
Enrich's affiliates, locations and operations pursuant to the terms of
this Agreement.
3.5 Changes. Enrich reserves the right, by issuing a written amendment to
its purchase order, to make changes to a purchase order, including,
but not limited to, quantity, delivery, or the general scope of work
specified in its order and/or to direct temporary suspension and/or
resumption of scheduled shipment. Changes shall be acknowledged by
Imagenetix within ten (10) days of receipt of notice thereof or the
change shall be deemed accepted. Changes requested after the purchase
order is in production shall be negotiated between the parties.
3.6 Cancellation. Enrich reserves the right to cancel any order Imagenetix
fails to ship within fourteen (14) days of scheduled ship date.
3.6.1 Enrich may cancel for its convenience any purchase order issued
hereunder at no cost, provided that notice of such cancellation
is provided to Imagenetix within fourteen (14) days after order
placement by Enrich.
3.6.2 All amendments to purchase orders for cancellation per this
paragraph and schedule changes per paragraph 3.5 above shall be
confirmed by a written purchase order within two (2) days from
notification of change. Imagenetix shall notify Enrich of
acceptance of amendments within two (2) days from receipt of
purchase order.
4. Price. Prices and applicable discounts for all Product ordered hereunder
shall be in accordance with attached "Exhibit B," which is incorporated
herein by reference. Except as otherwise set forth herein, all prices and
discounts specified in Exhibit B shall be firm for the term of this
Agreement.
4.1 In the event of an increase of five percent (5%) or more in the cost
of raw materials used in the Product, Imagenetix may increase prices
by a percentage equivalent to the increase cost of raw materials upon
sixty (60) days written notice when all of the following conditions
are met:
4.1.1 Imagenetix provides Enrich with written proof of specific price
increases for raw materials in quantifiable amounts; and
4.1.2 Imagenetix provides Enrich its current prices for raw materials;
and
4.1.3 Imagenetix provides Enrich adequate proof of the proposed
effective date of said price increase to Enrich; and
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4.1.4 Imagenetix provides Enrich the specific amount of raw material
per kilogram of bulk Product; and
4.1.5 Imagenetix will not increase prices on accepted, undelivered
purchase orders.
4.2 The Product purchased hereunder are purchased for resale, therefore,
the prices specified herein are exclusive of sales, use or similar
taxes.
4.3 Any and all taxes, excises, assessments, levies, imports, duties,
costs, charges, and penalties, which may be assessed, levied,
demanded, or imposed by any governmental agency in connection with
this Agreement, shall be paid by the party upon which they are imposed
and shall be the sole obligation of such party.
4.4 In paying for purchase orders, Enrich shall be entitled to a one
percent (1%) discount of the total amount of the invoice if the
invoice is paid within ten (10) days of receipt of goods at Enrich's
designated shipping destination. Otherwise, the invoice shall be due
and payable within thirty (30) days of receipt of goods or invoice,
whichever is later.
5. Shipment, Delivery, and Acceptance
5.1 Shipment. Shipment of Product shall be accomplished in accordance with
the required ship dates on the purchase orders as described in
paragraph 3.1 above.
5.1.1. Imagenetix shall maintain an effective performance-to-scheduled
shipments of ninety five percent (95%).
5.1.2. Scheduled purchase order line items shipped on time and filled
to within ten percent (10%) of the ordered amount will be
considered complete.
5.1.3. Backorders exceeding ten percent (10%) of the scheduled
purchase order amount will constitute a past due condition.
5.1.4. In meeting the performance requirements of this paragraph,
Imagenetix will not be liable for delays resulting from acts of
God, or the public enemy, acts of the government in its
sovereign capacity, fires, floods, epidemics, quarantine
restrictions, and freight embargoes.
5.1.5. Shipments shall be made F.O.B. Destination, with risk of loss
or damage passing to Enrich at the time of delivery. The prices
in Exhibit B shall include the shipping costs.
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5.1.6. Packaging and method of shipment utilized by Imagenetix shall
be consistent with the nature of the Product shipped and
hazards of transportation, in order to assure safe transit to
destination.
5.1.6.1 The Product shall be shipped on four (4) way
standard warehouse pallets with height not to exceed
one hundred thirty seven centimeters (13 7cm) and
weight not to exceed one thousand kilograms (1,000 kg).
Pallets will be stretch wrapped and corner boarded to
insure safe transportation.
5.1.6.2 Any trailer, container, pallet, or other means used
for transportation or storage of the Product shall be
suitably constructed for food use, properly cleaned to
prevent possible contamination and shall protect the
Product against deterioration or contamination.
5.1.7 Enrich's purchase order number and item numbers will appear on
all invoices and packing slips and be referenced on all
correspondence regarding such.
5.1.7.1 A packing slip will accompany each individual
shipment and will include: purchase order number,
Enrich's item numbers, total number of cartons and
individual units in the shipment.
5.1.8 Certificates of Analysis shall accompany each shipment for each
lot of Product shipped.
5.2 Delivery and Acceptance. Enrich's acceptance of any Product delivered
hereunder shall be based upon reasonable acceptance testing criteria
in accordance with the intended use of such Product, provided that
such testing criteria shall not exercise the Product beyond limits
specified in Enrich's specification for said Product. Unless notified
within forty-five (45) days, the Product shall be deemed accepted.
5.2.1 Rejection. Enrich reserves the right to return to Imagenetix any
or all Defective Product, at Imagenetix's expense. All returns of
said rejected Defective Product will be for credit or replacement
as detailed in paragraph 14.5 below, except that in the case of
termination all returns shall be reimbursed in cash.
6. Quality and Reliability.
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6.1 Specifications. Imagenetix shall manufacture the Product at the
specifications described in Exhibit A and Exhibit C.
6.2 Responsibility for Inspection. Imagenetix shall maintain and follow
all Good Manufacturing Practices (G.M.P.) procedures to ensure all
materials and Products are inspected and tested prior to shipment at a
level compliant to, or exceeding the requirements of Enrich's
specifications. In addition, Imagenetix agrees to maintain a system of
Statistical Quality Control (or like processes) sufficient to certify
these aforementioned requirements. All data, retention samples, and
documentation pertinent to this function shall be maintained by
Imagenetix and shall be free and available to Enrich or Enrich's
representative for review upon request.
6.3 Record Keeping.
6.3.1 Imagenetix shall keep all records relating the manufacturing of
Product for a minimum of seven (7) years.
6.3.2 Imagenetix shall maintain retained samples of no less than two
(2) units of Product from each lot of Product produced under the
terms of this Agreement for a period of at least four (4) years
beyond the units' dates of expiration.
6.3.3 Imagenetix shall maintain vendor supplied Certificates of
Analysis with full traceability to Product lots produced by
Imagenetix for Enrich under this Agreement for a period of seven
(7) years beyond date of manufacture.
6.3.4 Imagenetix shall maintain results of all assays conducted on raw
material components utilized in the Production of the Product for
a period of seven (7) years.
6.3.5 If required by Enrich, Imagenetix shall provide notarized
documentation required for international registration of the
Product. Documents required may include, but not be limited to,
manufacturer's certificates, formulas, quality certificates,
analytical methodology, etc.
6.4 Source Inspection. Enrich reserves the right to initiate, institute
and perform source inspection (by virtue of a mutually agreeable
schedule with Imagenetix) of Imagenetix's facility and Imagenetix
subcontractor's facilities and their respective processes, and upon
all materials and Products intended for eventual use in the Product.
Imagenetix shall secure approval of Imagenetix's subcontractors to
facilitate inspection of Imagenetix subcontractor facilities by
Enrich. Further, Enrich reserves the right to extend this activity to
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an authorized representative of Enrich at Enrich's discretion. Source
inspection by Enrich or Enrich's representative shall in no way
relieve Imagenetix of the obligation to deliver conforming material or
waive Enrich's right to verify the compliance of said material upon
receipt of material/Products by Enrich. Enrich shall coordinate all
Imagenetix subcontractor inspections through Imagenetix. To support
the timely completion of these efforts, Imagenetix shall supply to
Enrich or Enrich's representative a level of support, facility and
expertise adequate to comply with an agreed upon schedule.
6.5 SOP's. Imagenetix shall provide Enrich copies of Standard Operating
Procedures upon prior written notice to Imagenetix.
6.6 Samples. Imagenetix shall provide Enrich with such samples of the
Product or raw materials and other materials and supplies from which
the Product are produced as Enrich requests.
6.7 Quality Levels. The standard for acceptance or rejection of material
by Enrich for use in the Product or process shall be based upon the
definitions and criteria defined in each Product specification.
6.7.1 Enrich may elect to perform a 100% test/inspection of all
material and/or Product delivered by Imagenetix. Imagenetix
understands that Enrich's election to perform this 100%
test/inspection in no way relieves Imagenetix of Imagenetix's
responsibilities to deliver materials of a sufficient quality
level to comply with the aforementioned standard (i.e., said
test/inspection will not be used as a screening by Enrich to
overcome deficiencies and/or inadequacies of Imagenetix's process
or Product) and that the statistical results of these
inspection/tests (whether or not the material is retained by
Enrich or returned to Imagenetix) shall determine for historical
recordation, and for all other purposes, the acceptability and/or
quality level of the Product received.
6.7.2 Enrich and Imagenetix understand and agree to modify or amend
the requirements of these standards as may be required due to
revisions in regulations or standards of governing agencies or of
sovereign governments controlling the sale or distribution of the
Products.
6.8 Notification. Imagenetix agrees to notify Enrich (by certified Mail)
within thirty (30) calendar days of Imagenetix's recognition of any
problem, anomaly, defect or condition (planned or unplanned) that
would reasonably cause Enrich concern relative to instability,
interchangeability, availability, reliability, maintainability, form,
fit, function, or quality of the Product.
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6.9 Formula Physical Stability. Imagenetix is fully responsible for any
formula physical stability issues arising from the materials used in
the formula(s), the manufacturing process, reaction with bulk shipping
containers, or formula reactions with final packaging material.
6.10 Product Testing. Imagenetix agrees to perform ongoing quality control
Product testing to comply with Enrich's specifications, at
Imagenetix's facility, or any mutually agreed to facility in all cases
where Imagenetix does not perform needed tests. In all cases, for
Imagenetix's tests to comply with this requirement, a sufficient
quantity of the Product and/or time must be applied to the
units/material under test to meet or exceed any existing legal or
regulatory standards.
6.11 Certificate of Analysis. Imagenetix agrees to provide Enrich a
certificate of analysis for each Product in each shipment in
accordance with the example in Exhibit C.
6.12 General Quality Items.
6.12.1 Imagenetix shall make free and available, upon request of
Enrich, any document, listing and/or certificate as may be
required of Enrich by any state, federal, or foreign regulatory
agency.
6.12.2 Imagenetix agrees to provide Enrich with full disclosure of all
ingredients by weight and weight percentage for the Product for
the purpose of verification of compliance to label claim and/or
Enrich supplied Product specifications. Imagenetix agrees that
other proprietary information will be extended to Enrich or
Enrich's representative as may be required by specific instances
related to quality, reliability or functionality, and that such
proprietary information will be subject to the confidentiality
provisions of this Agreement.
6.12.3 Imagenetix extends to Enrich or Enrich's representative limited
discretion related to interpretation of "fitness for use" on any
item that could be classified as minor or insignificant, and that
is not currently categorized, specified or quantified. Enrich
further agrees to exercise this limited discretion based strictly
on a "reasonable man" standard and only as may be required in
select cases not of sufficient magnitude to involve Imagenetix.
6.12.4 These requirements and stipulations do not relieve Imagenetix
of any duty to comply with all laws or waive any express or
implied warranties in this Agreement.
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7. Term and Renewal. This Agreement shall commence upon the date first written
above and shall continue for five (5) years thereafter, unless sooner
terminated pursuant to the provisions herein. This Agreement may be
automatically renewed for additional terms of two (2) years each, unless
either party notifies the other in writing of its intent not to renew,
which notice must be provided within one hundred twenty (120) days of the
renewal period.
8. Indemnity.
8.1. Against Product Liability. Imagenetix agrees to indemnify and hold
Enrich and its Affiliates harmless against any and all claims, losses,
damages, injuries, liabilities or expense, including reasonable
attorneys fees and costs of investigation and suit to defend such
claims, arising out of any allegation, claim or assertion by a
governmental agency or any third party that any of the Products resold
by Enrich is adulterated, misbranded, unsafe or otherwise constitutes
Defective Product. The foregoing indemnity shall include, without
limiting its generality, losses, damages, liabilities and expenses
arising out of a governmental agency recall of Defective Product, and
the consequential damages proximately caused thereby, such as loss of
business, profits and reputation and refunds which Enrich is obligated
to make to its customers as a consequence thereof. Enrich agrees to
give Imagenetix prompt notice of any and all claims made against it in
connection with allegedly Defective Product, and to cooperate with
Imagenetix in defending against such claims. The foregoing warranty
and indemnification shall be binding upon Imagenetix and its
successors and shall inure to the benefit of Enrich and its successors
in connection with Product delivered pursuant to this Agreement.
8.2. Against Intellectual Property Infringement. Imagenetix agrees it will
hold Enrich harmless from any loss, damage, or liability which may be
incurred on account of infringement of patent rights, copyrights, and
all other Intellectual Property licensed or delivered pursuant to this
Agreement, and that Imagenetix will at its own expense, defend any
action suit or claim in which such infringement is alleged with
respect to the sale or use of the Product delivered hereunder,
provided Imagenetix is fully notified as to suits against Enrich, and
provided further that Imagenetix's indemnity as to use shall not apply
to any infringement arising from abnormal use in combination with
other items where such infringement would not have occurred from the
normal use for which the goods were intended.
8.3. Limitation of Liability. The parties agree that neither Imagenetix nor
Enrich shall be liable to each other for incidental or consequential
damages except as defined in this Agreement.
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9. Intellectual Property Ownership Transfer. Enrich, at its option, may
purchase the Intellectual Property through the purchase of the Product.
9.1 The Intellectual Property shall have an initial established value of
Twenty-Five Million dollars ($25,000,000.00). Enrich shall earn credit
toward Intellectual Property ownership at a rate of Fifty cents
($0.50) for each bottle of the Product purchased from Imagenetix.
9.2 To purchase the Intellectual Property, Enrich may at any time tender
the unpaid value of the Intellectual Property, at which time
Imagenetix shall complete all documentation necessary to transfer
title to the Intellectual Property.
9.3 In the event Enrich chooses to exercise its option as described
herein, it shall provide notice of doing so in writing to Imagenetix.
9.4 Said Intellectual Property will include all documentation pertinent to
the manufacture of the Product, such as, but not limited to,
formulations, manufacturing processes, test and validation methods,
and raw material suppliers.
10. Confidential Information.
10.1 Confidential Information, as used herein, means any and all plans,
data, inventions, products, machines, improvements, designs,
discoveries, know-how, concepts, methods, algorithms, programs, trade
secrets, processes, formulas, techniques, data, supplier lists,
distributor lists, genealogies, customer lists, phone logs, marketing
and business plans, financial information (including but not limited
to information, whether actual, estimated or projected), technical or
scientific and all other work products or proprietary information of
any kind or nature, whether patentable or copyrightable or not,
pertaining to the other party, its business or its products, which are
not found in the public domain; and includes any and all records,
reports, manuals, drawings, schematics, diskettes, notes, memoranda,
print-outs, graphs, writings of any kind or nature, tape, films and
either electronic, visual or audio recordings of any kind or nature
containing in whole or in part Confidential Information, whether
originals or copies.
10.2 Imagenetix and Enrich hereby agree not to disclose Confidential
Information to any person(s) or entity, including Enrich's independent
distributors, except to employees or agents who require the same for
purposes of the manufacture of the Products, without the prior written
consent of both parties. Imagenetix and Enrich agree to take every
reasonable precaution to prevent the unauthorized disclosure of
Confidential Information to any third party. Information relating to
the formulation, methodology of manufacturing, assay procedures and
results and any other information requested by duly authorized agents
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of the local, state, federal, or international regulatory agencies
shall be provided by Imagenetix to same with request for full
confidentiality.
10.3 Imagenetix and Enrich agree to hold the terms and existence of this
Agreement in confidence and not to disclose the same except to
employees or agents requiring such knowledge in order to carry out the
terms hereof, to third parties required by law or specifically
authorized in writing by both parties to receive such information, and
to the parties' respective legal counsel and accountants. In no event
shall Imagenetix discuss the existence of its relationship as a
manufacturer of the Product, the Confidential Information, or the
terms of this Agreement with any independent distributor of Enrich.
11. Termination. In addition to the other provisions contained elsewhere in
this Agreement, this Agreement may be terminated on occurrence of any of
the following events, and in the following manner:
11.1 By the non-breaching party at any time if the other party has breached
a material provision contained in this Agreement and has not cured the
breach within thirty (30) days of receipt of written notice thereof.
11.2 If party assigns this Agreement, or any of its rights hereunder
without the written consent of the other party (the word "assign" as
used in this subparagraph shall include, without limiting the
generality thereof, a transfer of a majority interest, or a sale or a
conveyance thereof), except that Enrich may freely assign this
Agreement to any successor entity should it consolidate with its
Affiliate(s).
11.3 If either party petitions for reorganization under the bankruptcy act,
or is adjudicated as bankrupt, or if a receiver is appointed for
either parties' business, or if an involuntary bankruptcy petition is
brought against either party and has not been discharged within thirty
(30) days of the date brought, then the other party shall without
further notice, have the immediate right to terminate this Agreement.
11.4 Pursuant to the provisions of paragraph 7 above.
12. Manufacturing Rights. If at any time prior to the expiration or termination
of this Agreement Imagenetix ceases to manufacture the Product, and the
Product is not available to Enrich on terms and conditions similar to those
provided herein, Imagenetix shall automatically grant to Enrich an
exclusive license to use any patents or trade secrets owned by Imagenetix,
plus all available formulations, manufacturing processes, and documentation
which Enrich may require in order to permit Enrich to make, have made, or
sell the Product.
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13. Distribution Rights & Restrictions. Until Enrich exercises its option and
purchases the Intellectual Property and completes the payment thereof as
described in paragraph 9 above, Imagenetix grants to Enrich an exclusive
license of all rights to market, distribute, and sell the Product in the
Licensed Territory, except as limited in paragraph 13.3.
13.1 Filings and Data. Upon the execution of this Agreement, and without
additional cost, Imagenetix shall promptly provide Enrich with access
to and the right to use all regulatory filings made by Imagenetix or
its Affiliates with respect to the Product and its Intellectual
Property, together with any underlying pre-clinical and clinical data.
Enrich may use and incorporate such filings and data in support of
efforts to obtain regulatory approval of Product in the Licensed
Territory.
13.2 Access to Material. Imagenetix agrees to provide Enrich with full
access to all current marketing materials that are printed, magnetic,
digitized or otherwise for Enrich to modify at its discretion for the
purpose of promoting the Product.
13.3 Limitations on Marketing. Enrich may not market or promote the Product
with claims that the Product is a sports product or a nutritional or
dietary supplement designed or formulated to benefit athletes or
participants in sports.
14. Imagenetix Warranties.
14.1 Imagenetix warrants that all units of the Product sold and delivered
to Enrich are safe and efficacious when taken in the recommended
dosages and that the formula for the Product is exactly the same as
the formula used in conducting studies of the safety and efficacy of
the Product, except to the extent as restricted by government agencies
of different countries; however, in such cases the formula will be
adhered to as closely as possible.
14.2 Imagenetix warrants that all units of the Product sold and delivered
to Enrich shall comply with all of Enrich's specifications relating to
formulations and quality.
14.3 Imagenetix warrants that all units of the Product sold and delivered
to Enrich shall, as of the date of delivery to Enrich, not be
misbranded within the meaning of any laws or regulations.
14.4 Imagenetix warrants that all Products sold and delivered to Enrich
shall be free from adulteration, impurities, defects or any other
material unsafe for human consumption.
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Imagenetix agrees, at its sole cost, to recall and replace all
Defective Product and replace the same with an equal amount of Product
that is conforming and not Defective Product.
14.6 Imagenetix further warrants that:
14.6.1 It is a California corporation duly organized, validly existing
and in good standing under the laws of California;
14.6.2 The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the
part of Imagenetix;
14.6.3 It is the sole and exclusive owner of all right, title and
interest in and to the Intellectual Property of the Product noted
in Exhibit A;
14.6.4 It has the rights and abilities to grant the rights and
licenses granted herein;
14.6.5 The Intellectual Property, and each item or component thereof,
is free and clear of any lien, encumbrance, security interest or
restriction from licensing; and
14.6.6 It has not previously granted, and will not grant in the
Licensed Territory during the term of this Agreement, any right,
license or interest in or to the Intellectual Property of the
Product noted in Exhibit A.
15. Enrich Warranties.
15.1 Enrich warrants that it is a corporation duly organized validly
existing and in good standing under the laws of the State of Utah.
15.2 Enrich warrants that the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action
on the part of Enrich; and
15.3 Enrich warrants that it has not entered into any agreement
inconsistent with the representations and promised referred to herein.
16. Insurance. Imagenetix agrees to carry product and contractual liability
insurance for Enrich's benefit, at Imagenetix's expense, with liability
limits of $ 2,000,000.00 aggregate and $1,000,000.00 per incident, to name
Enrich at Enrich's request, as an additional insured on all such policies
and to deliver to Enrich evidence of such insurance and of Imagenetix's
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compliance with the provisions of this section promptly following the
execution hereof and upon each annual renewal hereof, or upon Enrich's
request for such evidence of insurance.
17. Foreign Market Registration. Imagenetix has registered the Product in
certain foreign markets as identified in Exhibit "D". In the event Enrich
decides to distribute the Product in such foreign markets, Enrich shall
issue a purchase order to Imagenetix for delivery of the Product in the
quantities specified therein to the foreign market and shall request
therein that Imagenetix begin the registration process. Upon receipt of the
purchase order, Imagenetix shall register the Product in the foreign market
on behalf of Enrich and at Imagenetix's expense. Such registrations shall
be done in the name of Enrich or in such a way as to easily permit transfer
to Enrich and shall be the property of Enrich in all respects.
17.1 In the event that Imagenetix fails to secure the registration by the
delivery date of the purchase order for a particular market, Enrich
may cancel the purchase order.
17.2 If in the sole discretion of Enrich, Enrich decides to assume any or
all registration responsibilities, Imagenetix shall cooperate fully to
any extent needed and will deliver to Enrich, upon request, all
documents, correspondence, notices, filings, etc., necessary for
Enrich to assume responsibility for the registrations. Once
registered, Enrich shall pay all import duties, taxes and other costs
of importation.
17.3 In registering the Product, Imagenetix agrees that:
17.3.1 It will provide to Enrich all documentation and correspondence
provided to or received from the governmental agencies with which
the Product is registered; and
17.3.2 It will immediately notify Enrich of any notices from or
adverse actions taken by a governmental agency regarding the
product; and
17.3.3 It will obtain prior approval from Enrich's Worldwide Director
of Regulatory Compliance before submitting any labels to the
government agencies; and
17.3.4 It will comply with the foreign market's laws, regulations, and
policies regarding registration, formulation, labeling, and
packaging; and
17.3.5 It will assist Enrich and will reimburse Enrich for all costs
and fees incurred in the event the Product is detained by the
customs agency of the foreign market for reasons arising from
Imagenetix's duties herein, including registration, formulation,
labeling, and packaging.
18. General Provisions.
Supply and Distribution Agreement
Imagenetix, Inc. and Enrich Showcase International, Inc.
Page 15 of 2l
18.1 Complete Agreement. This Agreement shall become binding on the parties
when signed by authorized representatives of the parties, and shall
constitute the entire and sole agreement of the parties pertaining to
the subject matter of this Agreement mutually withdrawing any and all
oral, written, expressed, or implied agreements or understandings not
set forth in full herein. All exhibits identified herein are
specifically made a part of this Agreement. Any modifications,
additions to, or waiver of any of the terms and conditions herein,
shall not be effective unless in writing and signed by a duly
authorized officer of the party against whom the same is ought to be
enforced. This Agreement shall not be modified or altered by any
subsequent course of performance between the parties.
18.2 Governing Contract. The terms and conditions herein shall govern all
purchase orders placed thereunder, and shall override all printed
terms and conditions contained on the purchase order or
acknowledgement form issued by either Enrich or Imagenetix.
18.3 Notices. Any notices required to be given under the terms of this
Agreement shall be given in writing at the address of the other party
first above written, or such other address as may be specified in
writing from time to time.
18.4 Assignment. This Agreement is not assignable by either party without
written permission from the other party, except that Enrich may freely
assign this Agreement to any successor entity should it consolidate
with its Affiliate(s); except as otherwise expressly stated herein,
any attempt to assign any rights, duties, or obligations which arise
hereunder without such permission shall be void.
18.5 Enforceability. If any provision(s) of this Agreement shall be held to
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
18.6 Governing Law. This Agreement shall be deemed to have been entered
into in the state of Utah, and shall be construed in accordance with
Utah State law.
18.7 Dispute Resolution. In the event of a dispute between Enrich and
Imagenetix arising out of or related to this Agreement the parties
shall set up an initial negotiation meeting to negotiate, in good
faith, a settlement of the dispute. If, within thirty (30) days after
such meeting, the parties have not succeeded in settling the dispute,
they shall submit the dispute to mediation in accordance with the
procedures of a mutually acceptable neutral Alternative Dispute
Resolution provider not affiliated with either party in or near Salt
Lake City, Utah. If the parties are not successful in settling the
dispute within thirty (30) days after the mediation session, then the
dispute shall be submitted in Utah to binding
Supply and Distribution Agreement
Imagenetix, Inc. and Enrich Showcase International, Inc.
Page 16 of 2l
arbitration under a mutually agreed to organization not affiliated
with either party. In the event of a dispute, the prevailing party
shall be reimbursed attorney's fees and reasonable travel and
accommodation costs by the other party.
18.8 Costs. In the event it shall become necessary for either party to
retain the services of an attorney for the purpose of enforcing any of
the provisions of this Agreement, the party against whom judgment is
entered shall pay the costs of court and reasonable attorney's fees of
the other party as awarded by the court.
18.9 Waiver. The failure of either party to insist, in any one of more
instances, upon strict performance of any of the terms of this
Agreement, or to exercise any rights herein conferred shall not be
construed as a waiver of the right to assert or rely on any such terms
or rights on any future occasion.
IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the
date first above written.
IMAGENETIX, INC. THE ENRICH CORPORATION
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxxxxxx
----------------------------- ---------------------------
By: Mr. Xxxxxxx Xxxxxxx By: Xxxxx X. Xxxxxxxxxxx
Its: President Its: President
/s/ Xxx X. Xxxxx
----------------------------- ---------------------------
By: By: Xxx X. Xxxxx
Its: Its: Vice President
Supply and Distribution Agreement
Imagenetix, Inc. and Enrich Showcase International, Inc.
Page 17 of 2l
Exhibit A
Specifications of the Product
CONFIDENTIAL MATERIAL SPECIFICATION
Recommended Servings: Take three (3) to six (6) softgels per day, as needed.
Imagenetix
Finished Product Specification
Customer: Enrich -- Enrich Ops Approval: Specification No:
Product Name: Myriflex/Myristar QC Approval: Effective Date:
Product Code: Pur Approval: Rev. No:
Mrkt Approval: Written By:
Grph Approval:
I -- Components: Unit Item Name Item Code Material Color Dimension/Size/Style
Quantity Each Softgel Capsule (see Exhibit C) Amber
90
1 Each Bottle HDPE White 150cc 38/400
Round
1 Each Cap/Cap Liner Polypropylene (PP) White 38mm
(HS) Heat Induction CRC
1 Each Bottle Filler Cello Clear 4" x 6"
(At Option)
1 Each Label Pressure Sensitive 2 3/8" x 6 1/4"
1 Each Shrink PVC Clear 86mm x 103mm
Each Box
Inches Tape
II -- Packaging Requirements:
A. Capsule / Tablet / Softgel
90 Softgel capsules are filled into each bottle.
B. Bottle / Filler
Use a 150cc White HDPE bottle.
C. Cap / Cap Liner
Each cap is a White, 38mm, CRC, PP cap with a heat induction seal
(HS) liner imprinter with "Sealed For Your Protection"
D. Label and Lot/Exp Coding
One pressure sensitive label, designed by Enrich, is to be
applied to each bottle, centered between the top and bottom
bottle radius with a plus or minus skew of 1/16 of an inch. Lot
Code: 8 digit code (XX year, XX month, XXXX sequential lot number
supplied by softgel manufacturer). Expiration date: 4 digit code
(XX month, XX year). The lot number and expiration date code is
to be printed
Supply and Distribution Agreement
Imagenetix, Inc. and Enrich Showcase International, Inc.
Page 18 of 2l
on each label in the following manner:
**Example Only** 12345678 EXP 03/02
E. Shrink Seal
Each bottle shall have a tamper evident clear shrink Full Body
sleeve with a single perforation.
F. Master Shipper
TBD
G. Pallet
The product shall be shipped on four (4) way standard warehouse
pallets with height not to exceed one hundred thirty seven
centimeters (137cm) and weight not to exceed one thousand
kilograms (1,000 kg). Pallets will be stretch wrapped and corner
boarded to insure safe transportation.
Supply and Distribution Agreement
Imagenetix, Inc. and Enrich Showcase International, Inc.
Page 19 of 2l
Exhibit B
Product Description Unit Price Per Unit
--------------------------------------------------------------------------------
CMC (CeladrinTM bottle $ 5.35
Discounts:
Imagenetix will give a discount of 7.5% to Enrich for single country purchase
orders of 45,000 bottles, or more, of Product. This purchase order will be
delivered within 120 days from the date of placing the purchase order.
Supply and Distribution Agreement
Imagenetix, Inc. and Enrich Showcase International, Inc.
Page 20 of 21
Exhibit C
Certificate of Analysis
CONFIDENTIAL
MATERIAL SPECIFICATION
Method of Analysis: Gas Chromatography equipped with FID (Flame Ionization
Detector) using 3 to 4 calibrations
Product: Amber Softgels
Interior Contents: 350 mg of Proprietary Processed Fatty Acids
(CeladrinTM) Eight Fatty Acid Oils
Cetyl Myristate > 60;
Cetyl Myristoleate > 60
Cetyl Palmitoleate - detectable limits
Cetyl Laurate - detectable limits
160 mg Soy Oil
25 mg Salmon Oil
Exterior Contents: 20 mg Gelatin
55 mg Glycerin
23 mg St. John's Bread
County of Origin: USA
Shelf Life: 3 Years
Suggested Storage: Store in a cool dry place
E. Coli: Negative
Streptococcus: Negative
Salmonella Negative
Heavy Metals: Within regulatory limits
Sorbic acid: <5 ppm (Japan only)
Benzoic acid: <5 ppm (Japan only)
Sulfites: <5 ppm (Japan only)
Artificial colors Negative (Japan only)
Supply and Distribution Agreement
Imagenetix, Inc. and Enrich Showcase International, Inc.
Page 21 of 2l
Exhibit D
Foreign Markets
Countries in which CeladrinTM is registered and in which Imagenetix will take
such action as is necessary to allow Enrich to market the Product there.
Japan
Canada
South Korea
Australia
New Zealand
Countries in which Enrich would like Imagenetix to register product on their
behalf.
Taiwan
Malaysia
Singapore
Venezuela
Hong Kong
