EXCLUSIVE TRADEMARK LICENSE AND PRODUCT SUPPLY AGREEMENT
THIS EXCLUSIVE TRADEMARK LICENSE AND PRODUCT SUPPLY AGREEMENT
( Agreement ), effective as of July 22, 1997, is made by and between
CARALOE, INC. ( Licensor ), a Texas corporation, having its principal
place of business at 0000 Xxxxxx Xxxx Xxxx, Xxxxxx, Xxxxx 00000, and
NU SKIN INTERNATIONAL, INC. ( Licensee ), a Utah corporation, having
its principal place of business at 00 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxx
00000.
W I T N E S S E T H:
WHEREAS, Licensor and Aloe Commodities, Inc. ( ACI ) have
previously entered into a Supply Agreement (the Supply Agreement )
for the sale by Licensor and purchase by ACI of bulk Aloe xxxx
mucilaginous polysaccharide (a freeze dried Powder produced from the
inner gel of Aloe xxxx L processed pursuant to U.S., Japanese and
other patents) including one particular product (hereinafter referred
to under the product name of Manapol or Manapol Powder) to be used
as one of the ingredients in a drink or drinks manufactured by ACI
a l s o containing other ingredients and substances (the ACI
Manufactured Products ); and
WHEREAS, Xxxxxxxxxx Laboratories, Inc., a Texas corporation
( Xxxxxxxxxx ), is the owner of the Trademark Manapol (the Xxxx
having a Japan Trademark Number of 3,235,669) and has granted to
Licensor a license to use the Xxxx and to license others to use the
Xxxx on an exclusive and/or a non-exclusive basis; and
WHEREAS, Licensee is desirous of obtaining from Licensor, and
Licensor is willing to grant to Licensee, a license to use the
Trademark Manapol (the Xxxx ) in connection with the advertising
and sale of the ACI Manufactured Products and to use the Manapol
Powder subject to the terms, conditions and restrictions set forth
herein; and
WHEREAS, Licensor and Licensee are mutually desirous of insuring
the consistent quality of all products sold in connection with the
Xxxx.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants, promises and agreement set forth herein, and other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby covenant, promise and agree
as follows:
Article 1
LICENSE
1.1 Terms and Conditions. Licensor hereby grants to Licensee
the non-transferable right and exclusive license to use the Xxxx and
associated product, (Manapol Powder), said product being more
specifically defined by the specifications outlined in Exhibit A
attached hereto and made part hereof, in connection with the
manufacturing, labeling, advertising and sale of the ACI Manufactured
Products manufactured and sold by ACI to Licensee during the term of
this Agreement. During the term of this Agreement, Licensee shall
have the exclusive right to use the Xxxx and Manapol Powder in
connection with the ACI Manufactured Products in a drink or drinks
that are intended for sale to the ultimate consumer in Japan; and
Licensee shall not grant any other person or entity the right to use
the Xxxx in connection with the labeling, advertising or sale of any
drink(s) product intended for sale to the ultimate consumer in Japan,
whether said drink(s) products are manufactured by ACI or by another
manufacturer. Also, During the term of this Agreement, Licensee
shall have the exclusive right to use the Manapol Powder in a
drink(s) product that is intended for the sale to the ultimate
consumer in Japan pursuant to the terms set forth herein whether or
not manufactured by ACI.
1.2 License Coterminous With Supply Agreement. The licenses
granted by this Agreement shall run coterminously with the Supply
Agreement, and any actions or events which shall operate to extend or
terminate the Supply Agreement shall extend or terminate this
Agreement simultaneously; upon mutual agreement between Licensee and
Licensor.
1.3 Sublicenses. Licensee shall not have the right without
written permission from Licensor to grant sublicenses with respect to
the licenses granted herein; however, Licensee may engage a third
party or parties to make and affix labels for the ACI Manufactured
Products in compliance with Articles 2, 3, and 4 hereof, and/or to
distribute and sell the ACI Manufactured Products in compliance with
the terms and conditions of this Agreement. Licensee shall be
expressly obligated to ensure full compliance with all terms and
conditions of this Agreement.
1.4 Right of First Refusal. At any time during the term of
this Agreement, Licensee shall have the right to obtain Xxxx and
Manapol Powder use rights and/or licenses, for use in a drink(s)
product as granted herein for the country of Japan, and for the
countries of Taiwan, Hong Kong and Thailand; provided that said
rights and/or licenses have not already been granted to a third
party. In the event Licensor contemplates licensing said rights to
a third party, it shall first offer said rights to Licensee for the
same terms and conditions as set forth herein for Japan; and, in the
event Licensee rejects said offer, Licensor shall then be free to
grant said rights to the third party. Licensee shall have fifteen
(15) days to accept or reject Licensor s offer.
Article 2
CERTAIN OBLIGATIONS OF LICENSEE
2.1 Representations by Licensee. Licensee shall not represent
in any manner that it owns any right, title or interest in or to the
Xxxx. Licensee acknowledges that its use of the Xxxx shall inure to
the benefit of Licensor and shall not create in Licensee s favor any
right, title or interest in or to the Xxxx; provided, however, that
Licensee shall have the right, in order to promote and sell the ACI
Manufactured Product(s), to advertise that it has the exclusive
right, in Japan, to use the Xxxx and the Manapol Powder in drink(s)
products in Japan .
2.2 Discontinuation of Use of Xxxx and Manapol Powder. Upon
the expiration or termination of this Agreement, Licensee will cease
and desist from all use of the Xxxx and Manapol Powder in any manner
and will not adopt or use, without Licensor s prior written consent,
any word or xxxx which is confusingly or deceptively similar to the
Xxxx, except that Licensee may continue to use the Xxxx and Manapol
Powder under the terms and conditions of this Agreement in connection
with any remaining supplies of the ACI Manufactured Products until
such supplies are exhausted.
2.3 Standards. All ACI Manufactured Products on which the Xxxx
is used by Licensee shall be of consistent quality and shall meet or
exceed all reasonable standards set by Licensor from time to time.
Licensee shall have thirty (30) days from the receipt of written
notice of any change in the reasonable standards to comply with any
new requirements; provided, however, that Licensee shall not be
required to rework or remake any packaging or works in progress
2.4 Use of Trademark. Licensee shall not use the Xxxx except
as specifically set forth herein. Without limiting the generality of
the preceding sentence, Licensee shall not use the Xxxx in connection
with the sale or advertising of any products other than the ACI
Manufactured Products.
Article 3
MANUFACTURING AND SALE
3.1 Combination With Other Products. Licensee shall not
combine or cause to be combined Manapol Powder with any product or
substance in any manner which would violate any laws, rules or
regulations of any state, federal or other governmental body.
3.2 Compliance by Third Parties. Licensee shall take all steps
reasonably necessary to ensure that its independent distributors and
any other parties to whom it sells any of the ACI Manufactured
Products for resale, do not relabel, repackage, advertise, sell or
attempt to sell Manapol Powder or any of the ACI Manufactured
Products in a manner that would violate this Agreement if done by
Licensee.
Article 4
LABELS AND ADVERTISING
4.1 Regulatory Compliance of Labels and Advertising. All
labels and advertising relating to the ACI Manufactured Products
offered in connection with the Xxxx must strictly comply with all
applicable laws, rules and regulations in Japan relating to the
product ingredients.
4.2 Mandatory Requirements. Licensee shall cause all labels,
packaging, advertising and promotional materials used by it in
advertising, marketing and selling any ACI Manufactured Product to
c o n t ain (i) the Xxxx, (ii) a statement setting forth the
concentration of Manapol Powder contained in such ACI Manufactured
Product, and (iii) the following legend:
Manapol
As a right, not a mandatory requirement, NSI may print the
Japanese patented number on its ACI Manufactured Products for sale to
consumers in Japan.
4.3 Claims by Licensee. Licensee hereby agrees not to make, or
permit any of its employees or agents to make, and shall take all
steps reasonably necessary to ensure its independent distributors do
not make any claims of any properties relating to Manapol or
Manapol Powder, unless such claims comply with the applicable laws,
rules and regulations of Japan.
Article 5
ROYALTY
5.1 Licensee agrees to pay to Licensor a royalty of twelve and
one-half cents for the first 2,500,000 bottles of ACI Manufactured
Product it purchases from ACI and ten cents ($0.10) per bottle
thereafter.
5.2 It is agreed to by Licensor that Licensee shall make the
royalty payment to Licensor s agent, ACI, within thirty (30) days of
receipt of an invoice from ACI for ACI s Manufactured Products
(drinks) shipped to Licensee or Licensee s affiliate company. And it
is the understanding of the parties that upon receipt of such
payment, ACI shall immediately forward the total royalty payment due
to Licensor to Licensor. Once Licensee issues payment for an invoice
to ACI, it shall be relieved of further liability for the royalty on
the products covered under the invoice and Licensor shall look to its
agent, ACI, for payment.
5.3 Payments made hereunder are to be paid in U.S. currency to
ACI at the following address: 12901 Xxxxxxxxx, Xxxxx 000, Xxxxxxx
Xxxxxx, Xxxxx 00000, Attention :___________________.
5.4 It is agreed that royalties paid on ACI Manufactured
Products that are returned to ACI due to manufacturing defects, may
be recouped by Licensee.
Article 6
MINIMUMS
6.1 In order to maintain the exclusivity granted hereunder,
Licensee agrees to purchase no less than 250,000 bottles of ACI
Manufactured Products from ACI during the first contract year of this
Agreement (July 15, 1997 to July 15, 1998). At least ninety (90)
days before the end of the first contract year, the parties shall
meet to mutually agree upon minimums for the second contract year.
The same procedure shall thereafter be followed for the third
contract year.
6.2 In the event Licensee fails to meet the minimums set forth
above, it will lose the exclusive rights granted herein but may
continue to use the Xxxx and Manapol Powder in ACI Manufactured
Products for the duration of this Agreement and under the same terms
and conditions.
Article 7
INFRINGEMENT, REPRESENTATIONS, WARRANTIES AND INDEMNITY
7.1 Infringement: If either the Manapol Powder patent or the
Xxxx is infringed in Japan by a third party, Licensor shall, at its
expense, take all steps it deems reasonably necessary in order to
terminate or xxxxx the infringement. Licensor shall defend Licensee
against any claims of patent or trademark infringement resulting from
Licensee s use of the Xxxx or the Manapol Powder in Japan as set
forth herein. If any such actions are prosecuted to final judgment,
Licensor shall pay such judgment or judgments including all costs of
suit or suits, including reasonable attorney s fees.
7.2 Patent Invalidity or Lapse: In the event the Japanese
trademark registration for the Xxxx or the Japanese patent protection
for the Manapol Powder, for use in a drink(s), is not maintained in
Japan for whatever reason, including lapse of necessary patent fees
or patent invalidity, then the royalties stated hereinabove for the
continued use of the Xxxx and Manapol Powder in Japan under this
Agreement shall terminate or Licensee may decrease its royalty by
50%.
7.3 Warranties and representations: Licensee warrants and
represents that (i) the party executing this Agreement is authorized
to bind Licensee and that execution of this Agreement does not
contradict or violate any law, ordinance, regulation, Article of
Incorporation or By-Law of Licensee. Licensor warrants and
represents that (i) the party executing this Agreement is authorized
to bind Licensor, (ii) that it has exclusive right, title, and
interest in the Japanese Manapol Powder patent and the Japanese Xxxx
to enable it to grant the rights herein set forth and that it shall
maintain such rights during the term of this Agreement, (iii) that
there are no outstanding agreements, by it or its subsidiary
companies, or any other entity, granting to any other person or
entity any conflicting right relating to the rights herein granted,
(iv) that it is under no contractual obligation, nor is it aware of
any contractual obligation inconsistent with entering into this
Agreement, nor is it a party to any agreement, the breach of which
would have material and/or adverse effects on its ability to perform
in accordance with this Agreement.
7.4 Each party shall indemnify the other against, and hold the
other party harmless, from any loss, expense or damage (including
reasonable attorney s fees) that the other may suffer by reason of
its breach of its respective representations and warranties made in
this Agreement.
7.5 Negation of Warranties, etc. Except as otherwise stated
above, nothing in this Agreement shall be construed or interpreted
as:
(a) a warranty or representation by Licensor that any ACI
Manufactured Products made, used, sold or otherwise disposed of under
the license granted in this Agreement is or will be free of
infringement or the like of the rights of third parties; or
Powder
(b) granted by implication, estoppel or otherwise any licenses
or rights other than those expressly granted hereunder.
7.6 Disclaimer. LICENSOR MAKES NO REPRESENTATIONS, EXTENDS NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS AND FITNESS FOR A
PARTICULAR PURPOSE, AND EXCEPT AS OTHERWISE PROVIDED FOR HEREIN,
ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT TO THE USE, SALE
OR OTHER DISPOSITION BY LICENSEE OR ITS CUSTOMERS, VENDORS OR OTHER
TRANSFEREES, WITH RESPECT TO THE ACI MANUFACTURED PRODUCTS.
7.7 Liability of Licensee for Products. Except as provided in
Section 5.2, as between Licensor and Licensee, Licensee shall assume
all financial and other obligations for the ACI Manufactured Products
made for it and sold by it under this Agreement and Licensor shall
not incur any liability or responsibility to Licensee or to third
parties arising out of or connected in any manner with Licensee s
products made or sold pursuant to this Agreement.
7.8 I n demnity of Licensor. Licensee agrees to defend,
indemnify and hold Licensor, its officers, directors, employees,
agents, harmless against all claims, liabilities, demands, damages,
expenses or losses arising out of or connected with its negligent
use, sale or other disposition of ACI Manufactured Products.
7.9 Trademark Infringement: Licensor shall, however, defend
Licensee against any claims of trademark or patent infringement
resulting from Licensee s use of the trademark Manapol or Manapol
Powder in Japan.
Article 8
TERM AND TERMINATION
8.1 Term. Unless terminated earlier as provided for herein,
this Agreement shall remain in full force and effect for a three (3)
year period ending at midnight on July ___, 2000. This Agreement may
be extended or renewed as provided in Section 1.2, by the written
agreement of the parties, or for successive one year periods at
Licensees sole discretion as long as Licensee continues to met the
minimum purchase requirements set forth herein..
8.2 Breach of Agreement. Except as provided in Section 8.3, if
either party breaches any material provision of this Agreement and
fails to cure the breach within thirty (30) days after receipt of
written notice from the nonbreaching party specifying the breach,
then the nonbreaching party may terminate this agreement upon written
notice to the breaching party, which right of termination shall be in
addition to, and not in lieu of, all other rights and remedies the
nonbreaching party may have against the breaching party under this
agreement, at law of in equity. Failure by either party to give
notice of termination with respect to any such failure shall not be
deemed a waiver of its right at a later date to give such notice if
such failure continues or again occurs, or if another failure occurs.
8.3 Immediate Termination.
8.3.1 Licensor may immediately terminate this Agreement,
upon written notice to Licensee, upon the occurrence of any one or
more of the following events: (i) Licensee breaches any material
p r ovision of Articles 2, 3, or 4; (ii) Powder(ii) Licensee
voluntarily seeks protection under any federal or state bankruptcy or
insolvency laws; (iii) a petition for bankruptcy or the appointment
of a receiver is filed against Licensee and is not dismissed within
thirty (30) days thereafter; (iv) Licensee makes any assignment for
the benefit of its creditors; or (v) Licensee ceases doing business.
8.3.2 Licensee may immediately terminate this Agreement,
upon written notice to Licensor, upon the occurrence of any one or
more of the following events: (i) Licensor breaches any material
provision of Article 7, (ii) Licensor voluntarily seeks protection
under any federal or state bankruptcy or insolvency laws; (iii) a
petition for bankruptcy or the appointment of a receiver is filed
against Licensor and is not dismissed within thirty (30) days
thereafter; (iv) Licensor makes any assignment for the benefit of its
creditors; or (v) Licensor ceases doing business.
8.4 Survival of Provisions. In the event of termination,
cancellation or expiration of this Agreement for any reason, Sections
2.2, 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 9.1 and 9.2 hereof
shall survive such termination, cancellation or expiration and remain
in full force and effect.
Article 9
MISCELLANEOUS
9.1 Equitable Relief. A breach or default by Licensee of any
of the provisions of Article 2, 3, and 4 hereof shall cause Licensor
to suffer irreparable harm and, in such event, Licensor shall be
entitled, as a matter of right, to a restraining order and other
i n j unctive relief from any court of competent jurisdiction,
restraining any further violation thereof by Licensee, 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
Licensor may have, including, without limitation, the recovery of
damages for the breach or default of any of the terms of this
Agreement.
9.2 Confidentiality. No party to this Agreement or any person
acting for or on behalf, including their respective attorneys, shall
directly or indirectly reveal to any person any of the terms or
conditions of this Agreement, or any fact or evidence which supports
or relates to any of the allegations contained in the business
relationship, or release any publicity or make any public statement
with respect thereto, except as may be required by law or court
o r d e r , or by the parties for the reasonable purposes of
administration and the orderly continuance of its operations. In no
event, will Licensor discuss this Agreement with the independent
distributors of Licensee or its affiliate companies without first
obtaining Licensee s prior written approval.
9.3 Amendment. This Agreement may be changed, modified, or
amended only by an instrument in writing duly executed by each of the
parties hereto.
9.4 Entire Agreement. This Agreement constitutes the full and
complete agreement of the parties hereto and supersedes any and all
prior understandings, whether written or oral, with respect to the
subject matter hereof.
9.5 No Waiver. The failure of either party to insist upon
strict performance of any obligation hereunder by the other party,
irrespective of the length of time for which such failure continues,
shall not be a waiver of its right to demand strict compliance in the
future. No consent or waiver, express or implied, by either party to
or of any breach or default in the performance of any obligation
hereunder by the other party shall constitute a consent or waiver to
or of any other breach or default in the performance of the same or
any other obligation hereunder.
9.6 Notices. All notices required or permitted to be made or
given pursuant to this Agreement shall be in writing and shall be
considered as properly given or made when personally delivered or
when duly deposited in the mail, first class, postage prepaid, or
when transmitted by prepaid telegram, and addressed to the applicable
address first above written or such other address or addresses shall
have theretofore specified in a written notice to the notifying
party.
9.7 Assignment. This Agreement or any of the rights or
obligations created herein may be assigned, in whole or in part, by
Licensor. However, this Agreement is personal to Licensee, and,
unless otherwise stated herein, Licensee may not assign this
Agreement or any of its rights, duties or obligations under this
Agreement to any third party without Licensor s prior written
consent, and any attempted assignment by Licensee not in accordance
with this Section 9.5 shall be void.
9.8 Relationship of Parties. Nothing contained herein shall be
construed to create or constitute any employment, agency, partnership
or joint venture arrangement by and between the parties, and neither
of them has the power of authority, express or implied, to obligate
or bind the three in any manner whatsoever.
9.9 Remedies Cumulative. Unless otherwise expressly provided
herein, the rights and remedies hereunder are in addition to, and not
in limitation of, any other rights and remedies, at law or in equity,
and the exercise or right or remedy will not be deemed a waiver of
any other rights or remedy.
9.10 Successor and Assigns. The provisions of the Agreement
shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns, provided., however, that the
foregoing shall not be deemed to expand or otherwise affect the
limitations on assignment and delegation set forth in Section 8.6
hereof, and except as otherwise expressly provided in this Agreement,
no other person or business entity is intended to or shall have
application of the laws of any other state or country.
9.11 Headings. The headings used in this Agreement are for
convenience of reference only and shall not be used to interpret this
Agreement.
9.12 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of
which will constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date
first above written.
CARALOE, INC.
By: __/s/_____________________________
Name: _____________________________
Its: ________________________________
NU SKIN INTERNATIONAL, INC.
By: __/s/_____________________________
Name: _____________________________
Its: ________________________________
EXHIBIT A
TO THAT CERTAIN EXCLUSIVE TRADEMARK LICENSE AND PRODUCT SUPPLY
AGREEMENT DATED JULY 22, 1997 BY AND BETWEEN CARALOE, INC. AND NU
SKIN INTERNATIONAL, INC.
MANAPOL [R] POWDER PRODUCT SPECIFICATION
Source:
Freeze dried Powder produced from inner gel of Aloe Xxxx X.
Processing:
Patented: U.S. and other patents.
Product Specifications:
Appearance Fine white to beige Powder
Complex carbohydrates + - 30% of soluble fraction
Moisture + - 14%
Residue on ignition + - 16%
Microbiological purity Meets U.S.P. specifications
Gel Points approximately 240 mg/oz
Viscosity (cP) @ 4 mg/ml approximately 40
Total acid value
(as malic acid) approximately 0.7% by AOAC method
Fiber content (>5 um) + - 60%
