EXHIBIT 10.2
FULFILLMENT SERVICES AGREEMENT
------------------------------
This Agreement made and entered into this 22 day of July, 2000 by and between
Mannatech/TM/, Incorporated ("Mannatech") with its principle place of business
at 000 X. Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 and Xxxxxx X. Xxxxxx,
President of ALT*MED/TM/ Lactoferrin Products Company ("ALT*MED") with its
principle place of business located at 00000 Xxxxxxx Xxxxxxxxx, Xxxxxxx, XX
00000 hereinafter collectively referred to as the "Parties".
RECITALS
--------
WHEREAS, Mannatech develops and sells proprietary nutritional supplements and
topical products ("Products") through a network marketing system throughout the
United States, Canada, Australia, the United Kingdom and Japan by distributors
referred to as Independent Associates ("Associates");
WHEREAS, ALT*MED proposes to supply an edible product containing the patented
ingredients Colostrum, Lactoferrin and Beta 1316 and other raw materials in a
lozenge form ("ALT*MED Product") intended for human consumption of which
Mannatech intends to add to its product line;
WHEREAS, Mannatech is desirous of securing and exclusive licensing and
fulfillment agreement for the ALT*MED Product and ALT*MED is willing to supply
Mannatech with all the ALT*MED Products (lozenges) required;
NOW THEREFORE, promises considered, and in consideration of the covenants,
releases, and obligations of the Parties herein, the Parties agree as follows:
1. Term.
----
1.1 Primary Term. Unless terminated by either Party as outlined herein,
------------
this Agreement shall be effective for a period of twelve (12) months
("Initial Term") unless earlier terminated in accordance with
Paragraph 10 commencing on the date of this Agreement. After the
Initial Term, this Agreement may extend for five successive twelve
(12) month terms, upon mutual written agreement of the Parties,
provided ALT*MED has performed all of the covenants and undertakings
as required hereunder. The Parties agree that at the conclusion of the
Initial Term, Mannatech shall conduct a review of the sales of the
ALT*MED Product to determine whether such sales warrant continuing the
Agreement into the Secondary Term under which royalties shall be paid
as contemplated in paragraph 3
1
hereunder. Either Party may terminate this Agreement in the event that
regulatory requirements, including but not limited to quality
assurance, good manufacturing practices and legality for sale are not
met regarding product and manufacturing, such determination at its
sole discretion.
1.2 Secondary Term. If at the end of the Primary Term, Mannatech
--------------
determines continued ordering of the ALT*MED Product is warranted.
The Parties may enter into five (5) successive series of twelve month
("Individual Term"), hereinafter, collectively the Secondary Term
("Secondary Term"). Mannatech shall have the option to review ALT*MED
Product sales as contemplated in paragraph 1.1 within thirty (30) days
of the conclusion of each Individual Term. Mannatech may choose to
terminate this Agreement at its discretion without further obligation
to ALT*MED.
2. Duties.
------
(a) ALT*MED shall at all times be considered an independent contractor
("Independent Contractor") of Mannatech as to the duties and
responsibilities contemplated hereunder. As such, ALT*MED agrees that
during the term of this agreement, ALT*MED will remit and pay all
required amounts attributed to any compensation paid to ALT*MED as
required herein to any and all taxing authorities as required by law.
ALT*MED agrees that during the course of this Agreement on behalf of
Mannatech, ALT*MED shall not engage in any conflicting activities,
including operating a Mannatech Associate position or hold a downline
position nor shall any of its principals or affiliates.
(b) ALT*MED shall develop a Product exclusively for Mannatech (hereinafter
defined as "Product Development") containing a combination of the
patented ingredients Colostrum, Lactoferrin and Beta 1316. The Parties
acknowledge that ALT*MED has or may have previously marketed a product
containing Colostrum and Lactoferrin, but such products have not
contained Beta 1316. For the purposes of this paragraph, "new" shall
be defined as a proprietary formulation not previously produced, or
marketed by ALT*MED or any of its subsidiaries.
(c) Contemporaneously with such Product Development, ALT*MED shall provide
to Mannatech all required scientific data, efficacy studies necessary
to substantiate any and all purported Product Development claims.
ALT*MED and Mannatech shall further ensure all aspects of the Product
Development as contemplated hereunder comports with regulatory
guidelines in place
2
by the Food and Drug Administration ("FDA") during the term of this
agreement.
(d) ALT*MED in cooperation with Mannatech shall bear all responsibility
for product and quality control for all ALT*MED Product as
contemplated hereunder. Mannatech shall determine the appropriate
criteria associated with shipment of ALT*MED Product and shall
instruct ALT*MED accordingly.
(e) The Parties agree that any idea, technology, know-how, process,
patent, formula, product, composition, publication, tape, iteration,
use, information, or other intellectual property ("Intellectual
Property") which shall come to ALT*MED and/or be researched and
developed related to the ALT*MED Product shall be the sole and
exclusive property of Mannatech, and any compensation therefore shall
be embraced within the compensation stated in paragraph 3 herein.
ALT*MED specially represents and warrants that any of the Intellectual
Property that is researched and developed for Mannatech is of
independent, and novel origin, and does not rely in any aspect on
other technologies and ideas that ALT*MED has, in the past, conceived,
researched and/or developed for ALT*MED or others. Further ALT*MED
hereby represents and warrants as follows:
- That none of the Intellectual Property of which ALT*MED
conceives, researches or develops, and ultimately conveys to the
Corporation shall violate or infringe any patent, copyright,
right of privacy, nor constitute the misuse of misappropriation
of any trade secret or confidential information which is the
subject of an agreement or legal requirement involving a third-
party;
- That ALT*MED shall take reasonable steps to identify and secure
any approvals or permissions required in connection with the
production, manufacture, use or exploitation of the Intellectual
Property to the effect that the same have been or will have been
obtained prior to any transfer of the Intellectual Property to
Mannatech (or if not reasonably obtainable, identified to
Mannatech in writing), and that to the extent the same are
secured, such shall remain in full force and effect with respect
to such Intellectual Property during the period of ownership by
Mannatech.
- ALT*MED agrees to execute any document, accurately prepared by
counsel of Mannatech,
3
which shall serve to preserve the rights to the Intellectual
Property of Mannatech, including patent applications and related
documents, and transfers and evidences of ownership of such
rights in Mannatech. The obligation to acknowledge ownership of
the Intellectual Property in Mannatech and to participate in the
execution of documents to obtain, evidence and secure rights
pertaining to the same, shall survive this agreement, and shall
bind ALT*MED and its successors, and if applicable, assigns.
Accordingly, ALT*MED affirm that any rights which might vest in
it with regard to any Intellectual Property which shall come to
ALT*MED and/or be researched and developed during the term of
this Agreement for Mannatech, including without limitation the
rights to manufacture, reproduce, use, publish, distribute,
market, sell, license or otherwise exploit, shall be transferred,
at various times, at the request of Mannatech, to it, as its sole
property, with no rights, except to the right of compensation,
set forth herein, remaining within your ownership.
(f) Mannatech has the right to inspect and test all ALT*MED Product as
contemplated herein, to the extent practicable, at all places and
times, including the period of manufacture, and in any event prior to
acceptance thereof. Mannatech shall perform inspections and tests for
quality assurance in a manner that will not unduly delay the
production of the ALT*MED Product. Mannatech may require repair,
reformulation or replacement of nonconforming ALT*MED Product, those
constituting, without limitation of the foregoing, unacceptable
formulation(s), scientific validation, safety, efficacy, shelf life
and nonconformity with FDA regulations. Mannatech reserves the right
to run adequate tests to determine whether the ALT*MED Product conform
to the specifications as contemplated hereby. Use of a portion of the
ALT*MED Product shall not constitute acceptance thereof.
(g) All books and records maintained by ALT*MED with respect to the
ALT*MED Product shall be available at all reasonable times for
inspection and verification by Mannatech or any of its designated
agents or representatives. Mannatech reserves the right, at any time,
to examine ALT*MED's books and records related to the ALT*MED Product
at Mannatech's expense, and ALT*MED shall cooperate with any person
making such examination on behalf of Mannatech.
(h) Mannatech may, from time to time request Xxxxxx Xxxxxx'x appearance
for promotional purposes at
4
Mannatech-sponsored events ("Events"). Such appearances and
compensation thereof shall be embraced within the terms of this
Agreement. Mannatech agrees to reimburse ALT*MED for reasonable out of
pocket unanticipated expenses ("Expenses") incurred as a result of
attendance at such Events at Mannatech's request. Such Expenses shall
be subject to approval solely by Mannatech such approval may be
withheld at any time.
3. Compensation.
------------
As compensation for the licensing of the ALT*MED Product and compensation
for fulfillment of Mannatech product orders as outlined herein and provided
all terms and conditions are met hereunder, Mannatech shall pay ALT*MED
according to the payment schedules as evidenced and attached hereto as
Exhibit "A" - "ALT*MED Product Payment Schedules". Compensation shall
encompass all costs related to product manufacture, quality control,
shipping, import and export taxes and royalty payments. All funds payable
in U.S. dollars. ALT*MED shall be responsible for the payment of any and
all taxes including calculation and remittance of backup withholding
related to the payment schedules as outlined in this Agreement.
4. Exclusivity.
-----------
The Parties agree that as an inducement to Mannatech to enter into this
Agreement, ALT*MED agrees that it will not develop, market, distribute and
sell any other similar products for one (1) year after initiation of
product sales by Mannatech. ALT*MED agrees to grant Mannatech the exclusive
right to the product formulations and marketing rights as contemplated
herein.
Mannatech acknowledges that ALT*MED may have agreements in place with other
companies at the time this Agreement is executed. The Parties hereto
stipulate that Mannatech and the Agreement contemplated hereby, shall not
henceforth have any impact, influence, or determination as to whether or
not ALT*MED chooses to continue such other agreements as in place at this
time.
The Parties further agree that as an inducement for Mannatech to enter this
agreement and pay the funds hereunder, it shall have worldwide marketing
rights to the ALT*MED Product as Mannatech expands into other countries,
whether through the expansion within the normal course of marketing through
its Associates or through a Personal Consumption Program, whatever the case
may be. ALT*MED agrees that Mannatech shall always have the sole right to
sell the ALT*MED product, and as such, ALT*MED will structure any other
licensing agreements with third-parties to reflect Mannatech's right to
exclusively market the ALT*MED Product. In the event Mannatech commences
5
sales within a specified country, ALT*MED will take all legal action
necessary to ensure the third-party discontinues sales of the ALT*MED
product.
5. Trademarks and Tradenames.
-------------------------
(a.) The Parties recognize that the name and/or respective marks of the
other are valuable and that all goodwill associated with use of such
names and marks shall inure to the benefit of the other. Mannatech
shall have the right to terminate this Agreement immediately in the
event that ALT*MED acts in a manner which would negatively impact the
reputation of Mannatech and/or of its name or marks ("Mannatech
Marks") and/or would infringe or dilute the value of Mannatech's marks
or which is not in compliance with applicable law in the United States
or any other country in which Mannatech conducts business as the case
may be.
(b.) Mannatech shall be the sole owner and shall have perpetual use and
control of all Promotional Materials produced for Mannatech bearing
its trade name and/or Mannatech Marks related to the ALT*MED Product.
Mannatech shall be free to dispose of and treat in any way all
Promotional Materials under this Agreement, including but not limited
to selling, advertising, distributing, and permitting their use in
other mediums, whether for profit or otherwise. ALT*MED has no right
or license to use any of the trademarks or tradenames owned by,
licensed to or associated with the Mannatech Marks during the term of
this Agreement without prior approval and express permission from
Mannatech, such approval and permission is within the sole discretion
of Mannatech and may be withheld at any time.
6. Confidential Information.
------------------------
The Parties recognize and acknowledge that their respective tradename(s),
trademarks, copyrights, marketing plans, identity and related information
regarding Associates, product formulations and other proprietary product
information contemplated hereby and any information of either relating to
the management/operations of the other or designated by the other as
confidential and/or proprietary (as to each, "Confidential Information") is
the sole property and trade secret of the party to whom it belongs. Each
party agrees that the Confidential Information of the other shall not be
used, sold, disclosed or assigned by such party for any purpose, except to
the extent necessary to the performance of this Agreement. Upon termination
of this Agreement, each party agrees to return to the other party all
written materials, software, customer/member/representative lists and other
information that contain Confidential Information of such other party and
further agrees not to use such Confidential Information. In the event of
breach or
6
threatened breach of this Section by either Party, the non-breaching party
will be entitled to an injunction restraining the other party from
disclosing, in whole or in part, any Confidential Information to any
person, firm, corporation, association or other entity to whom the non-
breaching party's Confidential Information, in whole or in part, has been
disclosed or threatened to be disclosed. Nothing contained herein will be
construed as limiting the non-breaching party from, or prohibiting the non-
breaching party from, pursuing any other remedies available to it for such
breach, or threatened breach, including recovery of damages from the
breaching party. This section shall survive the termination of this
Agreement.
7. Indemnification by Mannatech and ALT*MED.
----------------------------------------
(a) ALT*MED hereby agrees to indemnify and save Mannatech and hold
Mannatech harmless in respect of all causes of action, liabilities,
costs, charges and expenses, loss and damage (including consequential
loss) suffered or incurred by Mannatech (including legal fees) arising
from any willful or grossly negligent act or omission of ALT*MED or
its employees, servants and agents and arising from contravention by
ALT*MED of any of its employees, servants, and agents of any of the
terms and conditions imposed on ALT*MED pursuant to this Agreement.
(b) No party shall be liable to any other party hereunder for any claim
covered by insurance, except to the extent that the liability of such
party exceeds the amount of such insurance coverage. Nothing in this
clause (b) shall be construed to reduce insurance coverage to which
any party may otherwise be entitled.
(c) ALT*MED hereby agrees to indemnify and save Mannatech and hold
Mannatech harmless in respect of all causes of action liabilities,
costs, charges and expenses, loss and damage (including consequential
loss) suffered or incurred by Mannatech (including legal fees) arising
from the infringement of other marks and affects of using marks and
contents without prior review as required herein.
8. Representations and Warranties of ALT*MED.
-----------------------------------------
The following representations and warranties are made by ALT*MED and are
true and correct and shall remain true and correct during the term of this
Agreement and have been made to induce Mannatech to enter into this
Agreement.
(a) Organization. ALT*MED is a corporation duly organized, validly
------------
existing and in good standing under the laws of its state of
incorporation as to the United States and as to the region in which it
does business
7
and has full power and authority to carry on its business as now being
conducted.
(b) Authorization and Agreement. The execution, delivery and performance
---------------------------
of this Agreement by ALT*MED has been authorized by all necessary
corporate action on its part. The consummation of the transactions
contemplated by this Agreement will not result in the breach of, or
constitute a default under, any indenture, mortgage, note, agreement
or other financing agreement to which ALT*MED is a party or to which
it or its properties or rights are subject and will not be in
violation of the rights of any other party.
(c) No Consent. No consent of any party and no consent, license, approval
----------
or authorization of, or exemption by, or registration or declaration
with, any governmental authority, bureau or agency is required in
connection with the execution, delivery, validity or enforceability of
this Agreement with respect to ALT*MED and the consummation of the
transactions contemplated hereby.
(d) Insurance. Exhibit "B" - "Insurance" attached hereto provides a
---------
complete list and brief description (specifying the insurer, the
policy number or covering note number with respect to binders, and
describing each pending claim thereunder) of all policies or binders
of product liability insurance held by or on behalf of each of ALT*MED
or in which it is listed as a co-insured or loss payee respecting the
ALT*MED Product or any constituent component of any such ALT*MED
Product. Such policies and binder shall be and shall continue in full
force and effect, unless Mannatech shall be notified as to their
cancellation at least thirty (30) days prior to the same. ALT*MED
shall cause Mannatech to be listed as loss payee or co-insured on each
such policy set forth on Exhibit "C" upon the development of the
ALT*MED Product, and to continue on such policy in such capacity
during the term of this Agreement.
(e.) Validity and Enforceability. This Agreement is valid and enforceable
---------------------------
against ALT*MED in accordance with its terms, except as enforcement
may be limited by applicable bankruptcy, insolvency or other laws
affecting the rights of creditors generally. The execution, delivery
and performance of this Agreement by ALT*MED does not violate any law
or rule or regulation or give rise to a cause of action in favor of
any person which will result in any liability to any of the Parties.
(f.) No Breach. Neither the execution and delivery of this Agreement nor
---------
the consummation of the transactions contemplated hereby will (i.)
violate any provision of the Articles of Incorporation or By-Laws of
ALT*MED
8
(ii.) violate, conflict with or result in the breach or termination
of, or otherwise give any other contracting party the right to
terminate or constitute a default (by way of substitution, novation or
otherwise) under the terms of any mortgage, lease, bond, indenture,
agreement, franchise or other instrument or obligation to which
ALT*MED is a party or by which it may be bound or by which any of the
property or assets of ALT*MED may be bound or materially affected,
(iii.) result in the creation of any lien, charge or encumbrance upon
the assets or properties of ALT*MED as it relates to its business or
the pending business of Mannatech to the terms of any such mortgage,
bond, indenture, agreement, franchise or other instrument or
obligation, (iv.) violate any judgement, order, injunction, decree or
award of any court, arbitrator, administrative agency or governmental
body against, or binding upon ALT*MED or upon the property, assets or
business of ALT*MED or (v.) constitute a violation by ALT*MED of any
law or regulation of any jurisdiction as such law or regulation
relates to it or to the property or business of ALT*MED.
(g.) Tax Matters. ALT*MED has filed all income tax, excise tax, sales tax,
-----------
use tax, gross receipts tax, franchise tax, employment, payroll and
withholding tax, real and personal property tax, and all other tax
returns which ALT*MED is required to file, and has paid or provided
for all taxes shown on such returns and all deficiencies or other
assessments of tax, interest or penalties which have been served on or
delivered to ALT*MED. No penalties or other charges are, or will
become due with respect to the late filing of any such return.
Reserves for current and deferred taxes of ALT*MED are sufficient to
cover the payment of all Federal, local, county, foreign and other
taxes and all employment, payroll and withholding taxes, including any
penalties or interest thereon, whether or not measured in whole or in
part by net income and whether or not assessed or disputed, which are
hereafter found to be, or to have been, due with respect to the
conduct of they business of ALT*MED. There are no claims pending with
respect to Federal, state, local, county, foreign or other taxes
against ALT*MED. The Federal income tax returns of ALT*MED have never
been audited by the Internal Revenue Service. No unassessed tax
deficiency has been proposed or threatened against ALT*MED. There are
not in force any extensions of time with respect to the dates on which
any tax return was or is due to be filed by ALT*MED any waivers or
agreements by ALT*MED for an extension of time for the assessment of
payment of any tax.
9
(h.) Compliance with Laws. The business and operations of ALT*MED and any
--------------------
of its other affiliates and subsidiaries, if any have not been, and
are not, conducted in violation of any applicable judgement, order,
injunction, award, tariff or decree. ALT*MED has not received notice
of, nor does ALT*MED have any knowledge of or any reasonable grounds
to know after due inquiry that the business and its operations have
not been and are not, conducted in violation of any Federal, state or
local law, ordinance, regulations, or any other requirement of any
governmental body, court or arbitrator applicable to ALT*MED or
pursuant to which they conduct their business and operations. ALT*MED
has all permits, licenses, orders, authorizations or approvals of any
Federal, state, local or foreign governmental or regulatory body to
carry on its business in the places and in the manner now and
heretofore conducted, and all such licenses, authorizations and
permits are in full force and effect. ALT*MED has neither received
notice of nor have any knowledge of or any reasonable grounds to know
after due inquiry that the business and operations of ALT*MED have not
and are not, conducted in material violation of any such licenses,
authorizations and permits, and no proceeding is pending or threatened
to revoke or limit any such license, authorizations or permits.
(i.) Contracts and Benefits. Except as disclosed on Exhibit "C," "Contracts
----------------------
and Benefits" attached hereto, ALT*MED is not party to any agreement
which is similar in scope or content with any third-party, it being
the intent of the Parties that this agreement be exclusive as to
Mannatech with respect to the product formulations of the ALT*MED
Product.
(j.) Actions and Proceedings. Except as listed on Exhibit "D" - "Actions
-----------------------
and Proceedings", there are no actions, suits claims or legal,
administrative, regulatory or arbitration proceedings or
investigations (whether or not the defense thereof or liabilities in
respect thereof are covered by policies of insurance) pending or, to
the knowledge of ALT*MED, against, involving or affecting ALT*MED,
their officers or directors, or any of them or any of their property
or assets of ALT*MED, which, individually or in the aggregate, might
have a material adverse affect on the assets, property, operations,
business or financial condition of ALT*MED, and there are no
outstanding orders, writs, injunctions or decrees of any court,
governmental agency or arbitration tribunal against, involving or
affecting ALT*MED as to the conduct of its development of products,
sales and distribution for other entities. None of the actions, suits,
claims, proceedings or investigations listed on Exhibit "E",
individually or
10
together with any other, will have a material adverse effect on the
operations, business or financial condition of ALT*MED. There is no
litigation pending or threatened which would give rise to any right of
indemnification from ALT*MED or any director, officer or shareholder
of ALT*MED, or partner or joint venturer of any of the same, or his
heirs, executors or administrators. No suit, action or other
proceeding or investigation is threatened or pending before any court
or governmental agency to restrain or prohibit, or to obtain damages,
a discover order or other relief in connection with, this Agreement or
the consummation of the transactions contemplated hereby or of any
similar nature. This representation and warrant shall specifically
survive the execution, performance and termination of this agreement
and ALT*MED shall notify Mannatech in the event that such governmental
or legal action is threatened or undertaken.
(k.) Suppliers and Customers. The relationships of ALT*MED with its
-----------------------
suppliers and customers is generally good. No material customer or
supplier has cancelled or otherwise terminated, or threatened to
cancel or otherwise terminate its relationship with ALT*MED or has
actually notified that it will decrease its services or supplies to
ALT*MED.
(1.) Accurate Disclosure. All documents and the Schedules delivered or to
-------------------
be delivered by or on behalf of ALT*MED to Mannatech in connection
with this Agreement and the transactions contemplated hereby are true
and complete, and all such documents are authentic, valid, and binding
on ALT*MED in accordance with their terms. The information required to
be furnished by or on behalf of ALT*MED pursuant to this Agreement and
in connection with the transactions contemplated hereby does not
contain any untrue statement of a material fact required to be stated
therein or necessary to make the statements contained therein not
false of misleading.
(m.) Experience. ALT*MED hereby represents and warrants that it has
----------
substantial, successful, favorable experience in providing services
such as the Duties set forth in Paragraph 2 hereof with respect to
product development, sales and distribution for other companies.
(n.) Exhibits. ALT*MED have caused Exhibits "B" - "D" to be attached and
--------
incorporated into this Agreement. All statements of fact set forth in
such Exhibits shall be deemed additional representations and
warranties of ALT*MED as to the veracity of content and as to the
existence of the subject matter of the same.
11
9. Default.
-------
In the event any Party to this Agreement shall fail to timely perform or
keep any undertaking to which it has agreed herein, then the other party
may, upon ten (10) days notice in writing, during which period the party
against whom such default is contended may cure such contended default
without affecting any other provision of this Agreement, after which, if
such default has not been cured, such party may, should it so elect, cancel
this Agreement and xxx for damages.
10. Termination
-----------
Either party may terminate this agreement at any time upon written notice
("Notice") delivered to the other thirty (30) days in advance of the date
noticed for termination.
Mannatech shall require the immediate cessation of production of ALT*MED
Product in its notification to ALT*MED, in which case ALT*MED shall
immediately cease production to be rendered under this Agreement and return
all materials and Confidential Information to Mannatech.
11. Notice.
------
Any notice or other communications between the Parties hereto shall be
sufficiently given if sent by Federal Express or by telecopy, if to
Mannatech addressed to it at 000 Xxxxx Xxxxx Xxxx, Xxxxx 000 Xxxxxxx, Xxxxx
00000, or if to ALT*MED addressed to it at 00000 Xxxxxxx Xxxxxxxxx,
Xxxxxxx, Xxxxx 00000 or to other such addresses hereafter designated in
writing by one party to the other. Such notice or other communications
shall, if sent by telecopy, be deemed to be given upon receipt of the
confirmation of its proper transmission and if outside the hours of 9:00
a.m. to 5:00 p.m. on any business day in the jurisdiction of the addressee,
shall be deemed to be given at 9:00 a.m. on the next business day. Notices
sent by Federal Express shall be deemed to be received (3) days after the
date of forwarding the same. For the purposes of this Agreement, "business
day" shall refer to a day in which trading banks are open for business.
12. Attorney's Fees.
---------------
In the event any party hereto shall institute an action, including
arbitration pursuant to Section 15 of this Agreement, to enforce any rights
hereunder, the prevailing party in such action shall be entitled, in
addition to any other relief granted, to reasonable attorneys' fees and
costs.
13. Severability.
------------
Any portion of this Agreement which may be prohibited or unenforceable in
any applicable jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability, but shall not
invalidate the
12
remaining portions of such provisions or the other provisions hereof or
affect any such provisions or portion thereof in any other jurisdiction.
14. Modification.
------------
This Agreement and the Exhibits attached hereto may be revised from time to
time and can be modified by mutual written agreement of the Parties.
15. Waivers.
-------
Any failure by any of the Parties to comply with any of the obligations,
agreements or conditions set forth in this Agreement may be waived by the
other party, but any such waiver will not be deemed a waiver of any other
obligations, agreement or conditions contained herein.
16. Counterparts.
------------
This Agreement may be executed in one or more counterparts, each of which
will be deemed an original but all of which together will constitute one
and the same document.
17. Compliance.
----------
Each party will comply with all laws relating to the performance of this
Agreement including federal, state and Japanese laws, rules and regulations
and represents and warrants that execution of this Agreement and
performance of its obligations under this Agreement does not and will not
breach any other agreement to which it is or will be a party, including but
not limited to any agreements with its customers.
18. Arbitration.
-----------
Any controversy between the parties to this Agreement or the breach
thereof, shall be adjudicated by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in
Dallas County, Texas, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having competent jurisdiction
thereof.
19. No Agency.
---------
Neither party shall purport or shall be deemed an agent, employee, partner,
or joint venture with the other party.
21. Governing Law.
-------------
The Parties hereto agree that this Agreement shall be enforced and governed
by the laws of the State of Texas without regard to the conflicts of law
principals. Each party consents to personal jurisdiction in Dallas County,
Texas, for any action to enforce arbitration including any further rules
provided for emergency or extraordinary relief, as to this Agreement.
13
22. Authority.
---------
The Parties represent that they have full capacity and authority to grant
all rights and assume all obligations they have granted and assumed under
this Agreement.
23. Assignment.
----------
This Agreement and the rights hereunder may not be assigned by any party
(except by operation of law) without prior written consent of the other
party, but, subject to the foregoing limitation, this Agreement shall be
binding and inure to the benefit of the respective successors, assigns, and
legal representatives of the Parties.
24. Force Majeure.
-------------
In the event that any party shall be prevented from performing any of its
obligations due under the terms of this agreement by an act of God, by acts
of war, riot, or civil commotion, by an act of the State, by strikes, fire,
flood, or by the occurrence of any other event beyond the control of the
Parties hereto, that party shall be excused from any further performance of
the obligations and undertakings set forth under the terms of this
Agreement.
25. Captions.
--------
The headings of the sections in this Agreement are intended solely for
convenience of reference and are not intended and shall not be deemed for
any purpose whatsoever to modify or explain or place constriction upon any
of the provisions of this Agreement.
26. Entire Agreement.
----------------
This Agreement constitutes the entire agreement between the Parties hereto
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understanding of the Parties, and there are
no representations, warranties, or other agreements between the Parties in
connection with the subject matter hereof except as specifically set forth
herein. No supplement, modification, amendment, waiver or termination of
this Agreement shall be binding unless executed in writing by the Parties
hereto.
14
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date
first written above.
Mannatech/TM/ Incorporated
By:
-----------------------------------
Xxxxxx X. Xxxxx
Its: Chief Executive Officer
ALT*MED Lactoferrin Products Company
By:
-----------------------------------
Xxxxxx X. Xxxxxx, CPA
Its: President
15
EXHIBIT "A" - ALT*MED PRODUCT PAYMENT SCHEDULES
All Amounts in U.S. Dollars
1. Initial Term.
------------
Mannatech agrees to pay ALT*MED the sum of $____________ ("Payment") per
month, beginning September 1, 2000 for the exclusive licensing and
fulfillment of the ALT*MED Product until the end of the Primary Term. In
consideration of this Payment, ALT*MED agrees to ship to Mannatech or its
designated manufacturer the equivalent of _________ of the ALT*MED Product
per month, beginning October 1, 2000. For the purposes of this Agreement,
one (1) product shall be the equivalent of 60 ALT*MED lozenges.
Mannatech agrees to submit purchase orders ("Orders") to ALT*MED, on a
monthly basis the actual number of ALT*MED Products required. In the event
Mannatech requires more than ___________ ALT*MED Products per month,
ALT*MED shall be compensated an addition $______ for each ALT*MED product
ordered.
2. Secondary Term.
--------------
In the event the Parties agree to enter into the Secondary Term of this
Agreement, Mannatech agrees to pay ALT*MED a royalty of $________
("Royalty") for each ALT*MED Product sold by Mannatech. Such payment shall
be tendered to ALT*MED only for those Products sold by Mannatech to
consumers and/or Independent Associates ("Associates") or others who may
from time to time purchase the Products for use, collectively "Purchasers".
For purposes of this Agreement, a Product shall be deemed sold only if
Mannatech has received payment for the Product from the respective
Purchasers. ALT*MED shall not be entitled to receive Compensation for any
ALT*MED Product donated by Mannatech, distributed gratuitously by Mannatech
in an effort to promote sales or for those ALT*MED Products reserved for
internal purposes or use.
In during the course of this Agreement, Mannatech exceeds five million
ALT*MED Product orders from ALT*MED, ALT*MED agrees to an adjusted royalty
of .80 per ALT*MED Product. In the event Mannatech exceeds ten million
ALT*MED Product orders from ALT*MED, ALT*MED agrees to an adjusted royalty
of .60 per ALT*MED Product. For purposes of computation, all ALT*MED
products purchased by Mannatech during the Primary Term shall be included
in this accounting.
16
On the fifteenth (15/th/) of each month, Mannatech shall compute the total
number of ALT*MED Products sold during the prior month and, on making that
determination, shall remit promptly the Royalty and a copy of the
compensation statement ("Statement") fifteen (15) days after the
computation date and on a monthly basis, on the same date each month
throughout the term of this Secondary Term to ALT*MED or its appointed
agent. If ALT*MED, for any reason, objects to any Statement submitted by
Mannatech, ALT*MED shall set forth the objection with specificity in
writing and submit it to Mannatech within thirty (30) days from the date of
the Statement. Any objection ALT*MED may have to any Statement shall be
deemed waived unless it is transmitted in accordance with the terms of this
paragraph.
17
Exhibit "B" - Insurance
18
Exhibit "C" - Contracts and Benefits
19
Exhibit "D" - "Actions and Proceedings"
20