SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") effective as of March 31, 1995, is
by and between CARALOE, INC., a Texas corporation ("Seller"), and EMPRISE
INTERNATIONAL, INC., a Texas corporation ("Buyer"),
WITNESSETH:
WHEREAS, Seller desIres to sell to Buyer, and Buyer desires to purchase
from Seller, bulk aloe xxxx mucilaginous polysaccharide (hereinafter referred to
under the product name of "MANAPOL-TM-") in the quantities, at the price, and
upon the terms and conditions hereinafter set forth; and
WHEREAS, simultaneously with the execution of this Agreement, Seller and
Buyer are entering into a Trademark License Agreement of even date herewith (the
"License Agreement") pursuant to which, among other things, Seller is granting
to Buyer a license to use the product name MANAPOL-TM- in connection with the
labeling, advertising and sale of products manufactured by or for Buyer that
contain MANAPOL-TM-;
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 April 1, 1995, and
shall end at midnight on March 31, 2000, unless sooner terminated as provided
herein (the "Term"). This Agreement shall terminate automatically upon the
expiration or termination of the License Agreement.
2. SALE AND PURCHASE.
(a) Subject to the terms and conditions of this Agreement, Seller shall
sell to Buyer, and Buyer shall purchase from Seller, during each year of the
Term, not less than the quantity of MANAPOL-TM- specified for such year below:
YEAR QUANTITY
---- --------
From April 1, 1995 to March 31, 1996 Not less than 225 kilograms per month
From April 1, 1996 to March 31, 1997 Not less than 225 kilograms per month
From April 1, 1997 to March 31, 1998 Not less than 270 kilograms per month
From April 1, 1998 to March 31, 1999 Not less than 324 kilograms per month
From April 1, 1999 to March 31, 2000 Not less than 388 kilograms per month
(b) Buyer agrees that all MANAPOL-TM- purchased by it hereunder or under
the Supply Agreement between the parties dated May 16, 1994 (the "Prior Supply
Agreement") shall be used only as an additive in human health food products, new
products to include skin care, cosmetics, health care products, those mutually
agreed upon by the parties, and all those currently being sold by Buyer; and
manufactured by or for Buyer that are intended for sale to
the ultimate consumer in the United States or elsewhere, subject to compliance
with Buyer's obligations under the License Agreement, including without
limitation Buyer's obligations under Article III thereof. All food products
manufactured by or for Buyer that contain MANAPOL-TM- purchased by Buyer from
Seller (under this Agreement or the Prior Supply Agreement) are herein called
"Buyer Products".
(c) During the Terms Buyer shall have the exclusive right to purchase
MANAPOL-TM- from Seller or its affiliates for use as an additive in human health
food products that are intended for sale to the ultimate consumer in the United
States, Canada and Mexico.
3. QUALITY. Seller warrants to Buyer that all MANAPOL-TM- sold by Seller
pursuant to this Agreement will conform to the quality specifications set forth
in EXHIBIT A to this Agreement, EXCEPT AS PROVIDED IN THIS PARAGRAPH 3, 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 MANAPOL-TM- TO BE SOLD HEREUNDER,
AND NONE SHALL BE IMPLIED BY LAW.
4. 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 MANAPOL-TM- to be delivered to it hereunder, (i) as to the
quantities of MANAPOL-TM- 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 MANAPOL-TM- for such year (provided that such forecast
for the initial year of the Term shall be provided to Seller by April 15, 1995),
and (b)on a quarterly basis at least 30 days prior to the end of each
three-month period of the Term a forecast acceptable to Seller (which shall be
binding on Buyer) of Buyer's minimum and maximum delivery requirements for
MANAPOL-TM- for each month of the three-month period (provided that such
forecast for the initial three-month period of the Term ending on June 30, 1995,
shall be provided to Seller by April 15, 1995). The quantities of MANAPOL-TM-
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-month period a quantity of MANAPOL-TM- 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 MANAPOL-TM- 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.
The MANAPOL-TM- delivered to Buyer hereunder shall be packaged in 3 kilogram or
10 kilogram containers. All deliveries of MANAPOL-TM- to Buyer hereunder shall
be made by Seller F.O.B. at the facilities of Seller or its affiliates located
in Dallas or Irving, Texas.
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5. PURCHASE PRICE.
(a) All MANAPOL-TM- to be purchased by Buyer under this Agreement shall be
purchased by it, during the first two years of the Term, at a price of $1,200
per kilogram and, during the last three years of the Term, at the price per
kilogram agreed upon by the parties for such three-year period pursuant to the
provisions of Paragraph 5(b) hereof. Buyer shall bear all freight, insurance and
similar costs, and all sales taxes, with respect to such purchases. The purchase
price of MANAPOL-TM-, together with all related freight, insurance and similar
costs, and sales taxes, shall be paid by Buyer to Seller within 30 days after
the date of invoice.
(b) Not later than February 1, 1997, Seller and Buyer shall commence good
with negotiations to determine and agree upon the price of MANAPOL-TM- to be
purchased by Buyer hereunder during the last three years of the Term. If the
parties are unable to so agree on such price by March 15, 1997, this Agreement
shall terminate effective at midnight on March 31, 1997. Nothing contained in
this Paragraph 5(b) shall be deemed to (i) obligate the parties to agree upon
such price, (ii) obligate a party to negotiate with the other party regarding
such price if such other party is then in breach of or in default under this
Agreement or the License Agreement or (iii) limit the rights of the parties
under Paragraph 9 hereof.
6. ROYALTIES.
(a) As additional consideration for the rights granted to Buyer pursuant
to Paragraph 2 hereof, Buyer shall pay to Seller a royalty in an amount equal to
three percent (3%) of the net sales price of all Buyer Products sold by or on
behalf of Buyer or its affiliated companies or their respective distributors on
or after April 1, 1995 that receive "Bonus Volume" as that term is defined in
schedule 1 attached hereto and made a part hereof. Generally, however, the term
"Bonus Volume" shall mean the dollar amount assigned by Buyer to Buyer Products
for the purpose of paying commissions or bonuses to its distributors. It shall
be presumed that all products listed on schedule 1 shall remain thereon unless
both parties mutually agree to their deletion and it shall be further presumed
that all new products shall be added to the schedule unless the parties agree
that they should not. Generally, sales aides, brochures, and travel related
programs are presumed not to be included. Sales Kits will be excluded except
that product listed on schedule 1 will be given a mutually agreed upon
discounted value and a royalty shall be paid on these product inclusions into a
sales kit;
(b) Buyer hereby agrees that payment of royalties to Seller pursuant to
Paragraph 6(a) shall be made with respect to each calendar quarter, and shall be
made within 30 days following the end of each calendar quarter, with respect to
all Buyer Products sold during such calendar quarter. Payment of royalties shall
be accompanied by a report of Buyer to Seller setting forth in reasonable detail
the calculation of such royalties and containing such other information as
Seller may reasonably request in connection with such calculation Buyer agrees
that it will at all times keep complete, separate and accurate books of account
with respect to the sale of Buyer Products in sufficient detail to permit the
accurate preparation of such reports and to enable Seller to ascertain the
royalties accruing and payable hereunder. Buyer further agrees
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to permit Seller and its authorized representatives to have access to such books
of account during ordinary business hours for the purpose of verifying the
accuracy of Buyer's reports.
(c) The Buyer shall buy the 225 kilograms per month. Buyer shall provide
Seller with the total usage on a monthly basis. When the monthly use of
MANAPOL-TM- exceeds 225 kilograms per month Buyer shall pay Seller a 3% royalty
on all product sales.
7. CONFIDENTIALITY. In the performance of Seller's obligations Pursuant
to this Agreement or the License Agreement, Buyer may acquire from Seller or its
affiliates technical, commercial, operating or other proprietary information
relative to the business or operations of Seller or its affiliates (the
"Confidential Information"). Buyer shall maintain the confidentiality, and take
all necessary precautions to safeguard the secrecy, of any and all Confidential
Information it may acquire from Seller or its affiliates. Buyer shall not use
any of such Confidential Information for its own benefit or for the benefit of
anyone else. Buyer shall not publicly disclose the existence of this Agreement
or the terms hereof without the prior written consent of Seller.
8. FORCE MAJEURE. Seller shall not have any liability hereunder 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 Seller's obligations, so far as may be necessary, shall be
suspended during the period of such Force Majeure and shall be canceled in
respect of such quantities of MANAPOL-TM- as would have been sold hereunder but
for such suspension. Seller shall give to Buyer 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 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 wider this Agreement.
9. RIGHTS UPON DEFAULT.
(a) SELLER'S RIGHTS UPON DEFAULT. If Buyer (i) fails to purchase the
quantities of MANAPOL-TM- 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 5 days (in the case of a failure to make a payment) or 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 or observed under the License Agreement when required to be performed
or observed, and such failure continues after the applicable grace period, if
any, specified in the License 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 Seller to
recover damages, as are available to Seller under applicable law or otherwise.
If Buyer
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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
MANAPOL-TM- 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 with in 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 MANAPOL-TM- 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.
10. 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's 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 or the License Agreement.
11. EQUITABLE RELIEF. A breach by Buyer of the provisions of Paragraph
2(b) 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.
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12. SURVIVAL. The expiration or termination of the Term shall not impair
the right or obligation of either party hereto which shall have accrued
hereunder prior to such expiration or termination. The provisions of Paragraphs
2(b), 6, 7, 9, 10 and 11 hereof, and the rights and obligation 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. 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 and the License Agreement constitute
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, including the Prior Supply Agreement. 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. This Agreement
is separate from and, except for the License Agreement, unrelated to any other
agreement between the parties hereto and has been entered into for separate and
independent consideration, the sufficiency of which is hereby acknowledged by
the parties.
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
If to Buyer: Emprise International, Inc.
0000 Xxxxx Xxxxxxx 000
Xxxxx Xxxxxxx, Xxxxx 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
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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 an 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: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------
Title: Chief Operating Officer
-----------------------------
EMPRISE INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
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