MANUFACTURING AND SUPPLY
AGREEMENT
THIS MANUFACTURING
AND SUPPLY AGREEMENT (the “Agreement”) shall be
effective on the 1st day of July, 2008 (the “Effective
Date”) by and between:
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and
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CornerStone
Research & Development, Inc.
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6400 South
Fiddler’s Green Circle
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218 South 200
West, P.O. Box 617
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Farmington,
Utah 84025
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Greenwood
Village, CO 80111
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(“Manufacturer”)
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Customer and
Manufacturer are sometimes hereinafter referred to as
“Party” or “Parties.”
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A.
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Customer is in the business of
marketing nutritional products;
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B.
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Manufacturer is in the business of
manufacturing, packaging, and supplying nutritional
products.
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C.
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Customer and Manufacturer mutually
desire that Manufacturer will manufacture, package, and supply
defined products listed on Schedule 1 and that Customer will
purchase defined Products (as hereinafter listed as defined
products in Section 1) in accordance with the terms and
conditions of this Agreement.
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NOW, THEREFORE,
for and in consideration of the promises and agreements that
follow, the Parties agree as follows:
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1
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DEFINED TERMS
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As used in this
Agreement:
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1.1
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Affiliate shall mean any Person that directly
or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, another
Person.
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1.2
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Control shall mean the right to exercise,
directly or indirectly, the power to direct or materially influence
the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or
otherwise.
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1.3
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Confidential Information
shall include any
formulae, revisions of formulae, know-how, processes and methods,
business plans, financial data, product development
plans,
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1
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marketing plans and strategies,
distributor lists, supplier lists, customer lists, vendor lists,
manufacturing methodologies, research data, and similar information
of either Customer or Manufacturer that are valuable, special,
unique and proprietary assets of either Customer or
Manufacturer.
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1.4
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Dollars or $ shall mean the legal tender of the
United States of America.
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1.5
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Person shall mean an individual,
partnership, joint venture, corporation, limited liability company,
trust, unincorporated organization, or other entity.
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1.6
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Product(s) shall mean those Products specified
on Schedule 1, as said schedule may be amended from time to
time as provided herein.
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1.7
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Specifications
shall mean the
specifications set forth in Manufacturer’s “Master
Formula” form for each Product, as agreed upon in writing by
both Parties and as amended from time to time.
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1.8
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Third Party shall mean any Person who is not a
Party to this Agreement.
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1.9
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Trademarks shall mean those trademarks and the
trade names, distinctive package and label designs, electronic and
printed promotional and advertising materials, and all other
communications belonging to Customer used in connection with its
business.
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2.1
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Manufacturer will use (and has the
limited right to use) the Trademarks of Customer in conjunction
with packaging and labeling. The Products will be packaged under
Customer’s label and Trademarks.
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2.2
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This Agreement shall not be
construed to give Manufacturer any vested right, title, or interest
in any of the Trademarks or copyrighted material of Customer except
to the extent and in the manner, time, and places Manufacturer is
authorized and permitted under this Agreement to use the
Trademarks.
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3
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TERM . Subject to other provisions of this
Agreement, the term of this Agreement is two (2) years,
commencing on the Effective Date. Thereafter, the term shall
continue year by year until and unless either Party gives written
notice of termination to the other Party at least 120 days
prior to the end of the then current term.
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4
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PURCHASE
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4.1
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Customer shall order and purchase
the Products (see schedule 1) on an exclusive basis from
Manufacturer. Customer shall provide purchase orders to
Manufacturer for the purchase of Products. Schedule 1 lists me
Products, price and the minimum order quantities which must be
ordered on purchase orders. A purchase order will not be considered
a valid order until Manufacturer receives a hard copy or facsimile-
transmitted copy and until Manufacturer accepts the purchase order
in writing. The terms and conditions of this Agreement shall
supersede any inconsistent terms contained in any purchase order,
order acknowledgement, packing slip, or invoice.
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4.2
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Except for price modifications under
Section 4.2.1 below, pricing for the Products, shown on
Schedule 1, shall remain firm for the initial 12 months
of this Agreement:
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2
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4.2.1
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Manufacturer may increase or
decrease prices at any time during the term of this Agreement to
compensate Manufacturer for increases in the cost of raw materials
or components. However, except in the case of price increases
resulting from an extraordinary increase in raw materials or
components, price changes under this Section 4.2.1 shall not
exceed plus or minus 5% of the then current pricing. If
Manufacturer experiences what it considers to be an extraordinary
increase in raw materials, then Manufacturer shall give written
notice that Manufacturer believes that a price increase in excess
of the 5% limitation is justified, whereupon the parties will
negotiate pricing modifications, in good faith.
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4.3
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Payment terms will be net
30 days. All past-due invoice balances shall bear interest at
the rate of 1.5% per month until paid in full. If at any time
Customer is in default with respect to any of its obligations under
this Agreement, or Customer is insolvent or the subject of an
insolvency or bankruptcy proceeding, then in addition to its other
rights and remedies hereunder for breach Manufacturer may suspend
all production and shipment.
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4.4
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The
Products will be manufactured, tested, and delivered, in accordance
with agreed upon Specifications. Any changes
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