SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") effective as of February
13, 1997, is by and between CARALOE, INC., a Texas corporation
("Seller"), and XXXXX XXXXXXX, doing business as LIGHT RESOURCES
UNLIMITED, ("Buyer"),
WITNESSETH:
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller, Caraloe's AVMP[TM] Powder and/or Manapol[R] Gold[TM]
Powder (hereinafter referred to under the name "Product") in the
quantities, at the price, and upon the terms and conditions hereinafter
set forth; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto agree as
follows:
1. Term. The term of this Agreement shall commence on February
13, 1997, and shall end at midnight on May 12, 2002, unless sooner
terminated as provided herein (the "Term").
2. Sale and Purchase. Subject to the terms and conditions of
this Agreement, Seller shall sell to Buyer, and Buyer shall purchase
from Seller, mutually agreed upon monthly quantities for the first
three months ending May 12, 1997. Thereafter, Buyer shall purchase the
minimum amounts listed on Exhibit A for the respective periods listed.
Seller shall not discontinue the production and sale of the Product
unless it provides Buyer with a reasonable substitute.
3. Sole Distribution Rights. It is the intent of this Agreement
to appoint Buyer as the Sole Distributor of Product to natural health
care practitioners ("NHCP") in the United States and Canada. If
ambiguity exists relative to defining NHCP the parties shall meet to
agree upon a workable definition as defined herein. Buyer and Seller
shall use reasonable best efforts to achieve this objective by i)
Seller not selling simple purchase bulk Product under 10 kilos to
NHCP's in the United States during the first contract year. This
minimum shall increase to 20 kilos for the second contract year and to
30 kilos for the third, fourth and fifth contract years provided Buyer
continually meets its quarterly and yearly purchase requirements.
If the Sole Distributor provision is terminated for failure by
Buyer to make its minimum purchase requirements, Seller agrees to
refrain from selling bulk to the Buyer's Protected Customers, such list
to be provided from time to time and accepted by Buyer; for three (3)
months from the termination date for every full year the Agreement has
been in existence. For example, if the Agreement has been in existence
for two years, then Seller shall not promote bulk product sales to the
Protected Customer list for six (6) months from the termination date.
Additionally, Seller 1) shall agree to protect Buyer's
established NHCP customer base with the United States and Canada once
Seller is notified of such customer and 2) for a period of six (6)
months from the effective date hereof, Seller further agrees to protect
an additional seventy-five (75) large potential NHCP customers provided
by Buyer regardless of purchase minimums.
4. Quality. Seller warrants to Buyer that all Product sold by
Seller pursuant to this Agreement will conform to the quality
specifications set forth in Exhibit B to this Agreement. EXCEPT AS
PROVIDED IN THIS PARAGRAPH 4, THERE ARE NO WARRANTIES OR
REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS AND FITNESS FOR A
PARTICULAR PURPOSE, MADE WITH RESPECT TO THE PRODUCT TO BE SOLD
HEREUNDER, AND NONE SHALL BE IMPLIED BY LAW.
5. Deliveries. Buyer shall instruct Seller from time to time
during the Term, by placing a purchase order with Seller reasonably in
advance of the date Buyer desires Product to be delivered to it
hereunder, (i) as to the quantities of Product to be delivered to
Buyer, (ii) as to the specific date of delivery, (iii) as to the
specific location of delivery and (iv) as to the carrier or particular
type of carrier for such delivery. During the Term, Buyer shall
provide Seller (a) on an annual basis prior to the beginning of each
year of the Term a nonbinding forecast of Buyer's minimum and maximum
aggregate delivery requirements for Product for such year, and (b) on a
quarterly basis at least thirty (30) days prior to the end of each
three-month period of the Term a forecast acceptable to Seller and
Buyer (which shall be binding on Buyer) of Buyer's minimum and maximum
delivery requirements for Product for each month of the next three (3)
month period (provided that such forecast for the initial period of the
Term ending on May 12, 1997, shall be provided to Seller by April 1,
1997). The quantities of Product ordered by Buyer pursuant to this
Agreement from time to time shall be spaced in a reasonable manner, and
Buyer shall order such quantities in accordance with Buyer's binding
forecasts. In no event shall Seller be required to deliver to Buyer in
any three (3) month period a quantity of Product in excess of 125% of
the maximum delivery requirement for such period set forth in the
binding forecast for such period accepted by Seller. Deliveries of
Product shall be made by Seller under normal trade conditions in the
usual and customary manner being utilized by Seller at the time and
location of the particular delivery. All deliveries of the Product to
Buyer hereunder shall be made by Seller F.O.B. at the facilities of
Seller or its affiliates located in Irving, Texas.
6. Purchase Price. All Product to be purchased by Buyer under
this Agreement shall be purchased by it, during the Term of the
Agreement, at a price of $1,600.00 per Kilo, or in accordance with the
volume discount pricing schedule set forth in Exhibit C. Buyer shall
bear all freight, insurance and similar costs, and all sales taxes,
with respect to such purchases. The purchase price of Product together
with all related freight, insurance and similar costs, and sales taxes,
shall be paid by Buyer to Seller within thirty (30) days after the date
of invoice.
7. Labels and Advertising
(a) FDA Compliance of Labels and Advertising. It is Buyer's
obligation to ensure that All labels and advertising relating to the
Product sold hereunder must strictly comply with all applicable rules
and regulations of the FDA and all other applicable laws, rules and
regulations, including but not limited to FDA requirements relating to
product ingredients.
(b) Claims by Light Resources Unlimited. Buyer hereby agrees not
to make, or permit any of its employees, agents or distributors to
make, any claims of any properties or results relating to the Product,
unless such claims have received written approval from the FDA.
(c) FDA Approval of Claims. If Buyer desires to seek FDA approval
as to any specific claims with respect to the Product, Buyer hereby
agrees to (i) notify Seller of the claims and the application prior to
filing and (ii) to keep Seller informed as to the progress of the
application, including but not limited to sending Seller copies of all
communications or notices to or from the FDA, as applicable.
(d) Right to Approve Labels, etc. If Seller so requests, Buyer
shall not use any label, advertisement or marketing material, or
individual spokesman associated with the Product, unless such label,
advertisement or marketing material, or individual spokesman has first
been submitted to and approved by Seller. Seller shall not
unreasonably withhold its approval of any such label, advertisement or
marketing material; or individual spokesperson.
(e) Compliance by Third Parties. Seller shall take all steps
reasonably necessary to ensure that its distributors and any other
parties to whom it sells any of the Product for resale do not relabel,
repackage, advertise, sell or attempt to sell the Product in a manner
that would violate this Agreement if done by Buyer.
8. Confidentiality. In the performance of the Parties
obligations pursuant to this Agreement or the License Agreement, each
may acquire from the other or its affiliates technical, commercial,
operating or other proprietary information relative to the business or
operations of the other or its affiliates (the "Confidential
Information"). Both Parties agree to maintain the confidentiality, and
take all necessary precautions to safeguard the secrecy, of any and all
Confidential Information it may acquire from the other. Neither shall
use any of such Confidential Information for its own benefit or for the
benefit of anyone else.
9. Force Majeure. Neither Party shall have any liability if it
shall be prevented from performing any of its obligations hereunder by
reason of any factor beyond its control, including, without limitation,
fire, explosion, accident, riot, flood, drought, storm, earthquake,
lightning, frost, civil commotion, sabotage, vandalism, smoke, hail,
embargo, act of God or the public enemy, other casualty, strike or
lockout, or interference, prohibition or restriction imposed by any
government or any officer or agent thereof ("Force Majeure"), and both
Parties obligations, so far as may be necessary, shall be suspended
during the period of such Force Majeure and shall be cancelled in
respect of such quantities of Product as would have been sold hereunder
but for such suspension. Each Party shall give to other Party prompt
notice of any such Force Majeure, the date of commencement thereof and
its probable duration and shall give a further notice in like manner
upon the termination thereof. Each Party hereto shall endeavor with
due diligence to resume compliance with its obligations hereunder at
the earliest date and shall do all that it reasonably can to overcome
or mitigate the effects of any such Force Majeure upon its obligations
under this Agreement.
10. Rights Upon Default.
(a) Seller's Rights Upon Default. If Buyer (i) fails to purchase
the quantities of Product specified for purchase by Buyer hereunder,
(ii) fails to make a payment hereunder when due or (iii) otherwise
breaches any term of this Agreement, and such failure or breach is not
cured to Seller's reasonable satisfaction within fourteen (14) days (in
the case of a failure to make a payment) or thirty (30) days (in any
other case) after receipt of notice thereof by Buyer, or if Buyer fails
to perform or observe any covenant or condition on its part to be
performed when required to be performed or observed, and such failure
continues after the applicable grace period, if any, specified in the
Agreement, Seller may refuse to make further deliveries hereunder and
may terminate this Agreement upon notice to Buyer and, in addition,
shall have such other rights and remedies, including the right to
recover damages, as are available to Seller under applicable law or
otherwise. If Buyer becomes bankrupt or insolvent, or if a petition in
bankruptcy is filed by or against it, or if a receiver is appointed for
it or its properties, Seller may refuse to make further deliveries
hereunder and may terminate this Agreement upon notice to Buyer,
without prejudice to any rights of Seller existing hereunder or under
applicable law or otherwise. Any subsequent shipment of Product by
Seller after a failure by Buyer to make any payment hereunder, or after
any other default by Buyer hereunder, shall not constitute a waiver of
any rights of Seller arising out of such prior default; nor shall
Seller's failure to insist upon strict performance of any provision of
this Agreement be deemed a waiver by Seller of any of its rights or
remedies hereunder or under applicable law or a waiver by Seller of any
subsequent default by Buyer in the performance of or compliance with
any of the terms of this Agreement.
(b) Buyer's Rights Upon Default. If Seller fails in any material
respect to perform its obligations hereunder, and such failure is not
cured to Buyer's reasonable satisfaction within thirty (30) days after
receipt of notice thereof by Seller, Buyer shall have the right to
refuse to accept further deliveries hereunder and to terminate this
Agreement upon notice to Seller and, in addition, shall have such other
rights and remedies, including the right to recover damages, as are
available to Buyer under applicable law or otherwise. Any subsequent
acceptance of delivery of Product by Buyer after any default by Seller
under this Agreement shall not constitute a waiver of any rights of
Buyer arising out of such prior default; nor shall Buyer's failure to
insist upon strict performance of any provision of this Agreement be
deemed a waiver by Buyer of any of its rights or remedies hereunder or
under applicable law or a waiver by Buyer of any subsequent default by
Seller in the performance of or compliance with any of the terms of
this Agreement.
11. Disclaimer and Indemnity. Buyer shall assume all financial
and other obligations for Buyer Products, and Seller shall not incur
any liability or responsibility to Buyer or to third parties arising
out of or connected in any manner with Buyer Products. In no event
shall Seller be liable for lost profits, special damages, consequential
damages or contingent liabilities arising out of or connected in any
manner with this Agreement or Buyer Products. Buyer shall defend,
indemnify and hold harmless Seller and its affiliates, and their
respective officers, directors, employees and agents, from and against
all claims, liabilities, demands, damages, expenses and losses
(including reasonable attorneys' fees and expenses) arising out of or
connected with (i) any manufacture, use, sale or other disposition of
Buyer Products, or any other products of Buyer, by Buyer or any other
party and (ii) any breach by Buyer of any of its obligations under this
Agreement.
12. Equitable Relief. A breach by Buyer of the provisions of
Article 7, shall cause Seller to suffer irreparable harm and, in such
event, Seller shall be entitled, as a matter of right, to a restraining
order and other injunctive relief from any court of competent
jurisdiction, restraining any further violation thereof by Buyer, its
officers, agents, servants, employees and those persons in active
concert or participation with them. The right to a restraining order
or other injunctive relief shall be supplemental to any other right or
remedy Seller may have, including, without limitation, the recovery of
damages for the breach of such provisions or of any other provisions of
this Agreement.
13. Survival. The expiration or termination of the Term shall not
impair the rights or obligations of either party hereto which shall
have accrued hereunder prior to such expiration or termination. The
provisions of Paragraphs 8,10,11, and 12 hereof, and the rights and
obligations of the parties thereunder, shall survive the expiration or
termination of the Term.
13. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
Texas.
14. Succession. Neither party hereto may assign or otherwise
transfer this Agreement or any of its rights or obligations hereunder
(including, without limitation, by merger or consolidation) without the
prior written consent of the other party; provided, however, that
Seller may assign any of its rights or obligations hereunder to any
affiliate of Seller and Buyer may assign the Agreement once to a
Corporation he is forming in Oregon and in which he shall own at least
fifty-one percent (51%) of the shares of the Corporation. Subject to
the immediately preceding sentence, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
15. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto relating to the matters covered
hereby and supersede any and all prior understandings, whether written
or oral, with respect to such matters. The terms of this Agreement
shall prevail over any inconsistent terms contained in any purchase
order issued by Buyer and acknowledgment or acceptance thereof issued
by Seller. No modification, waiver or discharge of this Agreement or
any of its terms shall be binding unless in writing and signed by the
party against which the modification, waiver or discharge is sought to
be enforced.
16. Notices. All notices and other communications with respect to
this Agreement shall be in writing and shall be deemed to have been
duly given when delivered personally or when duly deposited in the
mails, first class mail, postage prepaid, to the address set forth
below, or such other address hereafter specified in like manner by one
party to the other:
If to Seller: Caraloe, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: President
If to Buyer: Light Resources, Inc.
00 Xxxx 00xx Xxxxxx, #000
Xxx Xxxx, XX 00000
Attention: President
17. Interpretation. In the event that any provision of this
Agreement is illegal, invalid or unenforceable as written but may be
rendered legal, valid and enforceable by limitation thereof, then such
provision shall be deemed to be legal, valid and enforceable to the
maximum extent permitted by applicable law. The illegality, invalidity
or unenforceability in its entirety of any provision hereof will not
affect the legality, validity or enforceability of the remaining
provisions of this Agreement.
18. No Inconsistent Actions. Each party hereto agrees that
it will not voluntarily undertake any action or course of action
inconsistent with the provisions or intent of this Agreement and,
subject to the provisions of Paragraph 8 hereof, will promptly do all
acts and take all measures as may be appropriate to comply with the
terms, conditions and provisions of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized officers as of the day and year
first above written.
CARALOE, INC.
By:_____________________________
Name:___________________________
Title:__________________________
XXXX XXXXXXX, dba
LIGHT RESOURCES UNLIMITED
By:_____________________________
EXHIBIT A
LIGHT RESOURCES UNLIMITED
Contract Minimum Non-binding
Year Yearly Purchase* Target Sales
-------- ---------------- ------------
1 (Beginning May, 1997) 180 Kilos 300 Kilos
2 350 Kilos 500 Kilos
3 450 Kilos 800 Kilos
4 550 Kilos ** 1,000 Kilos
5 650 Kilos ** 1,500 Kilos
The minimum yearly purchase shall be monitored on a quarterly basis
and minimum monthly purchases shall be mutually agreed upon at the
beginning of each Contract Year. If Buyer fails to purchase less
than 80% of the agreed upon quarterly minimum, Seller may place
Buyer on termination notice. If Buyer fails to purchase 90% of the
agreed upon minimum for the next quarter, Seller may terminate this
agreement's sole distribution provisions at the end of that quarter
and Buyer shall no longer be considered the sole distributor for
the defined market. Buyer shall be free, however, to continue to
purchase bulk product for the remainder of the term of the
Agreement.
** The minimum yearly purchases for Contract Years four and five shall
be the greater of 550 Kilos for the fourth year and 650 Kilos for
the fifth year or year three s actual total purchases plus twenty
percent for year four and year four's actual total purchases plus
twenty percent for year five.
EXHIBIT B
LIGHT RESOURCES UNLIMITED
SPECIFICATIONS
--------------
MANAPOL[R] Aloe xxxx extract
TEST NAME (GOLD[TM]) AVMP[R]
--------- ---------- -----------------
Appearance Fine white to beige powder Fine white powder
Aloe xxxx Complex 35 - 50% 40 - 60%
Carbohydrate
content, wt.%
Water, wt.% <=14% >=9%
Residue on Ignition, <=16% <=10%
wt.%
Microbiological Meets USP Meets USP
Purity Standard Standard
Fiber, wt.% <=55% <=60%
Solubility* 240 mg/oz 240 mg/oz
Gelization
pH Not adjusted Adjusted to 4.0
Fiber Enriched Enriched
Viscosity (cP) 40 50
4 mg/ml solution
Total Acid Value 0.82 0.80
(as malic acid)
Price per gram $1.20 $1.60
1 - AVMP[R] Aloe xxxx xxxxxx-dried extract
