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Manufacturing And Supply Agreement

Manufacturing Agreement

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 This Manufacturing Agreement involves

CornerStone Research Development, Inc | LifeVantage Corporation

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Title: MANUFACTURING AND SUPPLY AGREEMENT
Date: 10/28/2009
Industry: Major Drugs     Sector: Healthcare

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Exhibit 10.21

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:

 

 

 

 

 

LifeVantage Corporation

 

and

 

CornerStone Research & Development, Inc.

6400 South Fiddler’s Green Circle

 

 

 

218 South 200 West, P.O. Box 617

Suite 1970

 

 

 

Farmington, Utah 84025

Greenwood Village, CO 80111

 

 

 

(“Manufacturer”)

(Customer)

 

 

 

 

Customer and Manufacturer are sometimes hereinafter referred to as “Party” or “Parties.”

RECITALS:

A.

 

Customer is in the business of marketing nutritional products;

 

B.

 

Manufacturer is in the business of manufacturing, packaging, and supplying nutritional products.

 

C.

 

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.

AGREEMENT

NOW, THEREFORE, for and in consideration of the promises and agreements that follow, the Parties agree as follows:

 

1

 

DEFINED TERMS . As used in this Agreement:

 

1.1

 

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.

 

 

1.2

 

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.

 

 

1.3

 

Confidential Information shall include any formulae, revisions of formulae, know-how, processes and methods, business plans, financial data, product development plans,

1


 

 

 

 

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.

 

 

1.4

 

Dollars or $ shall mean the legal tender of the United States of America.

 

 

1.5

 

Person shall mean an individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization, or other entity.

 

 

1.6

 

Product(s) shall mean those Products specified on Schedule 1, as said schedule may be amended from time to time as provided herein.

 

 

1.7

 

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.

 

 

1.8

 

Third Party shall mean any Person who is not a Party to this Agreement.

 

 

1.9

 

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.

 

2

 

TRADEMARKS .

 

 

2.1

 

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.

 

 

2.2

 

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.

 

3

 

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.

 

 

4

 

PURCHASE .

 

 

4.1

 

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.

 

 

4.2

 

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:

2


 

 

4.2.1

 

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.

 

4.3

 

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.

 

 

4.4

 

The Products will be manufactured, tested, and delivered, in accordance with agreed upon Specifications. Any changes to Specifications must be agreed to in writing by both Parties.

 

 

4.5

 

Subject to pre-existing contractual obligations, Manufacturer’s compliance with this Agreement and Manufacturer’s capacity, during the term of this Agreement, Customer covenants and agrees to purchase from Cornerstone a minimum of 100% of Customer’s requirements of the type of Products and reformulations of or improvements to those Products described in Schedule 1.

 

 

5

 

NEW PRODUCTS

 

5.1

 

During the term of this Agreement, Manufacturer and Customer may work together to develop new products and new technology, or to make improvements to existing Products. In addition, Customer may desire from time to time to terminate a supply relationship with another manufacturer for an existing product of Customer. Such new or other products may be added to this Agreement and to Schedule 1 upon the mutual written agreement of the Parties regarding issues such as pricing, manufacturing, packaging, reimbursement to Manufacturer for costs of research and development, etc.

 

 

5.2

 

When a product is added to Schedule 1, its manufacture and sale by Manufacturer to Customer shall be subject to all of the terms and conditions of this Agreement for the remaining term of this Agreement, except as otherwise specified in writing by the Parties

 

 

6

 

RESEARCH AND DEVELOPMENT

 

 

 

 

Unless otherwise contractually prohibited, if at any time during the term of this Agreement Customer desires to offer for sale new or additional dietary supplements or natural healing products in tablet, capsule, effervescent ‘fizzy’ or dry-powder stick-pack dosage form, or if Customer desires to discontinue a supply relationship with another manufacturer for an existing product of Customer, Customer hereby grants to Cornerstone a first right of negotiation with respect to such product as follows:

3


 

 

6.1

 

Customer shall give Cornerstone a written product specification and formulation sheet as notice of the product which Customer is interested in marketing or with respect to which product Customer desires to discontinue a supply relationship with another manufacturer (the “First Notice”). The First Notice shall describe the product in reasonable detail and shall include detailed information about any previous relationship with another manufacturer for said product, including product formulation, product specifications, etc.

 

 

6.2

 

Within 30 days after receiving the First Notice, Cornerstone must give written notice of Cornerstone’s desire to supply said product to Customer (the “Second Notice”). If Cornerstone fails to give the Second Notice within said 30-day period, its first right of negotiation hereunder shall expire. If Cornerstone timely gives the Second Notice, then the parties shall enter into good faith negotiations for the manufacturing and pricing of said product with the intent that it be added to the list of Products in Exhibit A to this Agreement. For a period of 45 days after the date of the Second Notice, Customer shall refrain from contacting or negotiating with any other potential manufacturer for the product which is the subject of the Second Notice. If the parties are unable to reach a mutual agreement on manufacturing and pricing terms for said product within said 45-day period, then Cornerstone’s right to negotiate to supply said product hereunder to Customer shall expire.

 

 

6.3

 

When a product is added to Exhibit A, its manufacture and sale by Cornerstone to Customer shall be subject to all of the terms and conditions of this Agreement for the remaining term of this Agreement, except as otherwise specified in writing by the parties.

 

 

7

 

MANUFACTURING, PACKAGING, LABELING, AND SHIPPING .

 

 

 

 

Manufacturer shall manufacture, package, label, and ship the Products in compliance with the Specifications, applicable provisions of the Federal Food, Drug, and Cosmetic Act and applicable regulations found in Title 21 of the Code of Federal Regulations, and any other applicable industry, state or federal regulations.

 

7.1

 

Manufacturing . In consideration of Customer’s willingness to enter into this Agreement, Manufacturer agrees to purchase from Customer any raw ingredients and packaging materials that Customer may have already purchased and held in storage with another Manufacturer for each purchase order received. Customer agrees to provide such ingredients and materials to Manufacturer at the same price as Customer originally paid. Manufacturer will accept said raw ingredient and packaging materials at the cost Customer originally paid to the extent the costs do no exceed the current cost of like raw ingredients and packaging materials used in quoting the specified product(s). Customer further agrees to certify to Manufacturer that such raw ingredients and packaging materials shall meet all of Customers specifications for the manufacture of the Products and agrees to hold Manufacturer harmless for its use of such materials as long as the provisions of this Section 7 are otherwise complied with. To the extent that such ingredients and materials are insufficient for Customer’s requirements, Manufacturer shall furnish all raw ingredients and provide all labor, materials and equipment to manufacture the Products unless mutually agreed otherwise.

 

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