EX-10.40
NU SKIN
INTERNATIONAL, INC.
AND
BIG PLANET, INC.
LICENSING
AGREEMENT
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS....................................................1
1.1
"Agreement".................................................1
1.2 "Bonus
Payments"............................................2
1.3 "BP
Independent Representative".............................3
1.4 "BP Sales Compensation
Plan"................................3
1.5 "Business
Information"......................................2
1.6
"Distributor Agreement" ....................................2
1.7
"Distributor Lists".........................................2
1.8
"Independent Distributor Network" ..........................2
1.9
"Independent Representative Agreement"......................2
1.10
"Licensed Property".........................................3
1.11
"Net Revenue"...............................................3
1.12
"NSI Independent Distributor"...............................3
1.13
"Products"..................................................3
1.14
"Proprietary Information"...................................3
1.15
"Territory".................................................4
ARTICLE II GRANT OF LICENSE
AND PARTIAL ASSIGNMENT OF
OBLIGATIONS; LICENSE
FEES......................................4
2.1 Assignment
of Big Planet Independent Representatives........4
2.2 Grant of
License............................................4
2.3 NSI's
Interest in Licensed Property.........................4
2.4 Recitals
of Value of Licensed Property......................5
2.5 Warranty
of Title...........................................5
2.6
Modifications...............................................5
2.7 Scope of
License............................................5
2.8 License
Fee.................................................5
ARTICLE III COMPUTATION AND
PAYMENT TERMS..................................5
3.1 Statement
of Net Revenues...................................6
3.2 License
Fee.................................................6
3.3
Records.....................................................6
3.4
Payments
to NSI.............................................6
3.5 Default
Rate................................................6
ARTICLE IV CERTAIN
OBLIGATIONS OF THE PARTIES UNDER
THE
AGREEMENT..................................................7
4.1 Certain
Obligations, Rights and Duties of NSI...............7
4.2 Certain
Obligations, Rights and Duties of BP................7
ARTICLE V
GOVERNMENTAL APPROVALS, LAWS AND
REGULATIONS...................7
5.1 Compliance
with Laws........................................7
5.2 Compliance
with Licensed Property...........................8
ARTICLE VI TERM AND
TERMINATION...........................................8
6.1 Term and
Termination........................................8
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6.2
Termination for Cause.......................................8
6.3
Termination for Insolvency..................................8
6.4 Survival
of Obligations.....................................9
6.5 Reversion
of Rights.........................................9
ARTICLE VII INFRINGEMENT;
INDEMNIFICATION..................................9
ARTICLE VIII
NATURE OF
RELATIONSHIP........................................10
ARTICLE IX
CONFIDENTIALITY...............................................10
ARTICLE X
MISCELLANEOUS.................................................11
10.1
Assignment.................................................11
10.2 Force
Majeure..............................................11
10.3 Governing
Law and Dispute Resolution.......................11
10.4 Waiver and
Delay...........................................12
10.5
Notices....................................................12
10.6 Integrated
Contract........................................13
10.7
Modifications and Amendments...............................13
10.8
Enforceability.............................................13
10.9
Counterparts and Headings..................................13
<PAGE>
LICENSING AGREEMENT
THIS LICENSING
AGREEMENT is effective the 1st day of April, 1998,
between Nu Skin
International,
Inc., a Utah corporation, ("NSI"), and Big
Planet, Inc., a Utah corporation ("BP"). NSI and BP may
collectively be referred
to as the "Parties."
W I T N E S S E T H
A. NSI is engaged in the design, production and marketing of products and
related sales
aids, for multi-national distribution through a network of
independent
distributors. NSI
possesses essential direct selling industry
know-how, proprietary
information and competitive advantages that BP desires to
utilize for its commercial activities.
B. BP desires to make use of such know-how, information and competitive
advantages in the
United States,
Canada and their territories through the
licensed use of NSI's
Licensed Property (as
defined below) to promote the sale
of BP's products,
services, sales aids
and other commercial
activities in the
direct selling industry.
C. NSI is willing to license to BP certain information pursuant to
the terms and
conditions of this Licensing Agreement.
NOW THEREFORE, in consideration of the mutual promises,
covenants, and
warranties hereinafter
set forth and for other valuable consideration, the
sufficiency of which is hereby acknowledged, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following words and terms
shall
have the meaning assigned to them in this Article I:
1.1 "Agreement" shall mean this Licensing Agreement, together with any
attached exhibits and schedules, as the same may be modified,
amended or revised
from time to time pursuant to Section 10.7.
<PAGE>
1.2 "Bonus Payments" shall mean, for any BP Independent
Representative,
all monetary
obligations due to such Representative under the terms of the BP
Sales Compensation Plan.
1.3 "BP Independent
Representative"
shall mean a person or
business
entity that has executed a BP Independent Representative Agreement with BP to
sell Products as of the effective of this Agreement or during the term of
this
Agreement.
1.4 "BP Sales
Compensation Plan"
shall mean the method
BP employs to
calculate Bonus Payments earned by BP Independent
Representatives.
1.5 "Business
Information" shall
mean any information that NSI elects
to provide to BP hereunder, including without limitation, any commercial or
business information,
lists, marketing or
customer service methods, marketing
surveys,
processes,
specifications,
quality control
reports, drawings,
photographs, or any
other information
owned by NSI , whether or not considered
proprietary,
relating to
NSI's network of NSI Independent Distributors,
Distributor Lists,
NSI's sales
compensation plan or other valuable commercial
information related to the direct selling industry and NSI.
1.6 "Distributor
Agreement"
shall mean, for any NSI Independent
Distributors, his/her
contract with NSI by which NSI authorizes the NSI
Independent Distributor to distribute its products.
1.7 "Distributor
Lists"
shall mean any and all individual or
accumulated names,
addresses,
identification
numbers, sponsor names and/or
similar lists of all
present or future NSI
Independent
Distributors that
NSI
elects to provide to BP hereunder.
1.8 "Independent
Distributor
Network" shall mean the network of NSI
Independent Distributors and BP Independent Representatives that
executed either
a Distributor Agreement or Independent Representative
Agreement.
1.9 "Independent
Representative
Agreement"
shall mean, for any BP
Independent Representative, his/her contract with BP by which
BP authorizes the
BP Independent Representative to distribute BP Products.
<PAGE>
1.10 "Licensed
Property" shall mean the Proprietary Information,
Distributor Lists and
Business Information that NSI elects to provide to BP
hereunder.
1.11 "Net Revenue" or "Net Revenues" shall mean, for any period, the
number of Products sold by BP during such period, multiplied by BP's then
current selling
price to its
customers less costs, applicable sales taxes,
returns, or refunds reasonably accepted and credited by BP during
such period.
1.12 "NSI Independent
Distributors"
shall mean a person or
business
entity that has
executed an NSI
distributor agreement
for the purchase and
resale of NSI products.
1.13 "Products"
shall mean those
goods, services and
sales aids that
carry an assigned
point value or other fixed amount of compensation under the
terms of the BP Sales Compensation Plan.
1.14 "Proprietary
Information" shall
mean, without
limitation,
all
information other than
information
made available to the public or
expressly
designated by NSI in writing as non-confidential that NSI elects to provide BP
hereunder, regardless
of the form in which it is disclosed, relating in any way
to the following
property owned by NSI or which NSI has been licensed to use or
sub-license: (1)
proprietary technical information; (2) information respecting
actual or potential customers or customer contacts and customer sales
strategies, names,
addresses, phone
numbers,
identification numbers, database
information and its organization, unique business methods;
(3) market
studies,
penetration data, customers, products, contracts, copyrights,
computer programs,
applications,
technical data,
licensed technology, patents, inventions,
procedures, methods,
designs, strategies, plans, liabilities, assets, cost
revenues, sales costs,
production costs, raw
material sources and other market
information; (4) other
sales and marketing plans, programs and strategies; (5)
trade secrets,
processes and formulae with respect to manufacturing, assembly,
design or processing
products and any component, part or manufacture thereof;
(6) profits,
organization,
employees,
agents, representatives, Distributor
Lists, suppliers,
and services; (7)
other business and commercial practices in
general relating
directly or
indirectly to the
foregoing;
and, (8) computer
disks or other records or documents, originals or copies,
containing in whole or
in part any of the foregoing.
1.15 "Territory"
shall mean the United
States of America,
Canada and
their respective territories.
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ARTICLE II
GRANT OF LICENSE AND; LICENSE FEES
2.1 Assignment
of Big Planet Independent Representatives.
NSI
acknowledges that
BP and the BP Independent Representatives have executed
Independent
Representative
Agreements that
detail the rights, duties and
obligations of the parties. In consideration for the licenses granted in
this
Agreement, Big Planet sells, assigns, and transfers to NSI all its
right, title,
interest, duties
and obligations in and to the Independent Representative
Agreements with
the BP Independent Representatives.
The Big Planet
Representatives shall become part of the Independent Distributor Network, which
is exclusively owned by NSI and is licensed to BP hereunder, with
all concurrent
proprietary rights therein.
2.1.1 As owner of the BP Independent Representatives, NSI
licenses to BP and BP
assumes the
obligation
to perform
all of the
duties and obligations
required under the
Independent
Representative
Agreement with BP Independent Representatives, including the
obligation
to make
commission
and bonus payments to the Independent
Representatives and BP
shall remain liable at all times for such
payments on a
monthly basis pursuant to the terms of BP's sales
compensation plan for BP Independent Representatives.
2.2 Grant of License.
Subject to the terms and conditions of this
Agreement, NSI hereby
grants to BP a non-exclusive license to use the Licensed
Property to sell
Products in the
Territory; provided
that all such uses shall
comply in all material
respects with the terms of this Agreement and; provided
further that BP shall
not grant any right,
title, use or sublicense to the
Licensed Property
except as permitted in
this Agreement in the ordinary course
of business. The
license to use the Licensed Property shall be limited to the
sale of Products in the Territory. BP agrees not to use the
Licensed Property or
to conduct business
outside of the Territory without the prior written
consent
of NSI.
<PAGE>
2.3 NSI's Interest in Licensed Property. NSI hereby retains legal
title
to the Licensed
Property for all
purposes, including
but not limited to,
the
bringing or
defending of any legal action in the Territory which it deems
reasonable to
protect its rights therein. BP agrees to assist NSI in any
reasonable manner to
protect NSI's rights in the Licensed Property.
