MANUFACTURING AND MARKETING LICENSE AGREEMENT
THIS AGREEMENT dated as of the 19th day of March, 1998.
BETWEEN:
JAZOR LABORATORY GROUP, INC.
Xxx 0000
Xxxxxxx Xxxxx, Xxxxxxx
00000
("Jazor")
OF THE FIRST PART
AND:
MANLOE LABS, INC., a
corporation incorporated pursuant to the laws of the
State of Nevada and having its place of business at
0000 X. Xxxxxxxx Xxxx, Xxxxx #00
Xxx Xxxxx Xxxxxx
00000
("Manloe")
OF THE SECOND PART
AND:
XXXXX XXXXXX
Xxx 0000
Xxxxxxx Xxxxx, Xxxxxxx
00000
("Xxxxxx")
OF THE THIRD PART
WHEREAS:
A. Jazor has developed proprietary polymer based
products, including polymer based products with anti-bacterial
and anti-viral properties marketed under the name "ViroShield"
and "WorkGluv".
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B. Jazor has agreed to grant to Manloe exclusive rights
for the manufacture, marketing, distribution and sale of its
products on the terms and conditions of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the mutual covenants and agreements herein contained, and in
consideration of the sum of $10.00 paid by each party to the
other, the receipt and sufficiency of which is hereby
acknowledged, the parties do hereby covenant and agree each
with the other as follows:
1. Definitions
1.1 Where used herein, or in any schedules or amendments
attached hereto, the following terms will have the following
meanings:
(a) "Exclusive Territory" means the world;
(b) "Future Products" means any products developed by
Jazor or Xxxxxx which are not Products for the
purposes of this Agreement;
(c) "Products" means the following products developed by
Jazor:
(i) Viro-Shield and WorkGluv;
(ii) the Polymer Base;
(iii) all polymer based products developed by Jazor;
(iv) any products superceding or replacing ViroShield,
WorkGluv or Jatex, including any modification to
or products superceding any of ViroShield,
WorkGluv or Jatex; and
(v) any other product developed by Jazor or acquired
by Jazor using the same or substantially similar
polymer base as the Polymer Base;
(d) "Net Revenues" means gross sales of the Products by
Manloe, exclusive of sales taxes, less cost of goods
sold of the Products, each as determined in accordance
with generally accepted accounting principles;
(e) "Polymer Base" means the hydrophilic polymer base
product known as "Jatex" necessary to manufacture the
Products;
(f) "Trademarks" means all trade names, trade marks and
other commercial symbols and related logos, including
the trade names "ViroShield", "Jatex" and "WorkGluv",
owned or used by Jazor in connection with the products;
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2. Grant of Exclusive License and Distribution Rights
2.1 Subject to the provisions of this Agreement and for
the term hereinafter specified, Jazor hereby grants to Manloe
the exclusive right and license to manufacture, distribute,
market and sell the Products (the "License Rights"). In
addition and subject to the terms of this Agreement, Jazor
agrees to assign to Manloe the Trademarks forthwith upon
execution of this Agreement.
3. Term
3.1 The term of this Agreement shall be a non-expiring
term commencing on the date of this Agreement, unless terminated
sooner in accordance with the provisions of this Agreement.
4. License Fee and Royalty
4.1 Manloe will pay to Jazor a one-time license fee equal
to $50,000 (the "License Fee") upon execution of this Agreement
in consideration for the grant of the License Rights.
4.2 In addition to the License Fee, Manloe will pay to
Jazor a royalty (the "Royalty") equal to the greater of:
(a) $6,000 per month; or
(b) 1.5% of Net Revenues realized by Manloe on sales of
the Products,
subject to a cap on total Royalties paid of $2,000,000. Manloe
will pay the Royalty to Jazor by payments of $6,000 per month,
and by a payment on account of any Royalty in excess of $72,000
in each year (the "Royalty Differential") payable on an annual
basis calculated within 60 days of each anniversary of the date
of this Agreement. Upon aggregate Royalties equal to $2,000,000
having been paid by Manloe to Jazor, Manloe will have no further
obligations to make any additional Royalty payments and Jazor
will deliver to Manloe all confidential information, including
formulae, technical data, engineering specifications, trade
secrets necessary to enable Manloe to manufacture all products
independently of Jazor. Manloe will have option to payout
Royalty in advance to acquire this information.
4.3 The Royalty Differential will be payable on a yearly
basis within 90 days of each anniversary of the date of this
Agreement in respect of which the Royalty Differential is
payable.
5. Exclusive Territory
5.1 During the term of this Agreement, Jazor will not
without the written consent of Manloe:
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(a) appoint, nor cause any corporation or entity
associated with Jazor, to appoint another
manufacturor, distributor or licensee for the
Products;
(b) undertake to market or sell the Products by itself,
directly or indirectly;
(c) sell the Products to any other party for re-sale or
distribution within the Exclusive Territory, directly
or indirectly;
(d) sell the rights to manufacture, distribute or sell
the Products within the Exclusive Territory to any
other party; or
(e) take any action which would have the effect of
frustrating the exclusiveness of the License Rights
granted by Jazor to Manloe.
6. Right of First Refusal
6.1 (a) Jazor and Xxxxxx agree that Manloe shall have a right
of first refusal for the manufacture, marketing,
distribution and sale of any Future Product developed
by Jazor and/or Xxxxxx as follows:
(i) Jazor and/or Xxxxxx shall notify Manloe in
writing that a Future Product has been
developed and shall provide Manloe with
sufficient information, including technical and
financial information, on which to make a
decision on whether to manufacture, market,
distribute and sell the Future Product; and
(ii) Manloe acknowledges that Jazor and/or Xxxxxx
is entitled to obtain the most favourable terms
with regard to manufacture, marketing,
distribution and sale of any Future Product and
that in order to do so Jazor and/or Xxxxxx may
provide other interested persons and/or entities
with the same information set forth in 6.1 (d)(i)
and may seek bona fide offers for the Future
Product; and
(iii)in the event that Jazor and/or Xxxxxx receives
any bona fide offers for the manufacture,
marketing, distribution and sale of any Future
Product and an offer is satisfactory to Jazor
and/or Xxxxxx, Jazor and/or Xxxxxx shall give
Manloe the privilege of manufacturing, marketing,
distribution and selling the Future Product on
the terms of the offer so made and shall provide
the terms of such offer to Manloe within ten days
of receipt thereof.
(iv) in the event that Jazor and/or Xxxxxx has not
received other bona fide offers, Jazor and/or
Xxxxxx may make a reasonable offer to Manloe for
the manufacture, marketing, distribution and
sale of any Future Product or Manloe can make a
reasonable offer to Jazor and/or Xxxxxx.
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(b) Manloe shall have 60 days from receipt of the notice
referred to in 6.1 (d) (i) to decide whether to
exercise its right of first refusal.
(c) in the event Manloe elects not to manufacture,
market, distribute and sell the Future Product, then
Jazor and/or Xxxxxx shall be at liberty to do so with
any other person or entity it chooses on monetary
terms no less favourable than offered to Manloe.
(d) in the event Manloe elects to distribute the Future
Product, Jazor or Xxxxxx, as applicable, will grant
to Manloe the exclusive License Rights for the Future
Product on substantially the same terms and
conditions as the License Rights for the Products as
granted to Manloe under this Agreement, with the
exception of those monetary terms and conditions with
respect to any license fee and royalty payments.
7. Purchase of Products
7.1 Jazor will supply Manloe with all Polymer Base
required for Manloe to manufacture the Products. All orders
for the Polymer Base required by Manloe shall be placed by Manloe
delivering written notice to Jazor of the type and quantity of
Polymer Base ordered.
7.2 Each order for Polymer Base will be subject to the
terms and conditions of this Agreement, including the
representations and warranties of Jazor as set forth in this
Agreement.
7.3 Jazor will deliver to Manloe all orders for Polymer
Base placed by Manloe within 30 calendar days of the date Manloe
delivers its order to Jazor. Manloe will provide additional and
reasonable notice for any substantial increase in orders.
Substantial increase is defined as any order that exceeds 25% of
the average.
7.4 Jazor will sell the Polymer Base to Manloe on the
following schedule of prices, with annual adjustment for to
reflect the change in the cost to Jazor of manufacturing the
Polymer Base (arms-length cases only):
Type Quantity of Polymer Base Price of Polymer Base
Jatex 80 100 lbs + $18.50
400 lbs + $17.50
800 lbs + $17.00
1200 lbs + $16.25
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Jatex 88 100 lbs + $19.00
400 lbs + $18.25
800 lbs + $17.50
1200 lbs + $16.75
8. Distribution of the Products
8.1 Manloe will have complete discretion as to the
manufacture, distribution, marketing and sale of the Products
8.2 To enable Manloe to manufacture, market, distribute
and sell the Products, Jazor will:
(a) deliver to Manloe samples and technical information,
at Jazor's expense, as reasonably required to market,
distribute and sell the Products;
(b) take such reasonable measures as are required to
maintain the proprietariness of the patents, the
trademarks and all information and know-how relating
to the Products, including maintaining in confidence
all such information and know-how and including
maintaining all patents and trademarks in respect of
the Products in good standing;
(c) manufacture the Polymer Base at such volumes in order
to enable Jazor to supply Manloe with the volumes of
the Products ordered by Manloe;
(d) assist Manloe in enabling Manloe to conduct clinical
trials to verify the effectiveness of the Products as
claimed in the scientific literature delivered by Jazor
to Manloe
9. Manufacturing
9.1 Jazor and Xxxxxx will provide to Manloe all proprietary
and technical information, including all formulas, manufacturing
information and chemical and other engineering information and
data, required in order to enable Manloe to manufacture the
Products, exclusive of the proprietary information required to
manufacture the Polymer Base. Jazor agrees to deliver into
escrow copies of all required documentation and information
necessary for Manloe to manufacture the Polymer Base (the
"Escrowed Information"). The escrow arrangement will be governed
by an Escrow Agreement to be entered into upon execution of this
Agreement between the attorney for Jazor, who shall be a member
in good standing of the Bar Association of the State of Florida,
(the "Escrow Agent") and each of Jazor and Manloe. The Escrow
Agent will act impartially with duties to each of Jazor and
Manloe. Manloe will be entitled to delivery of the Escrowed
Information upon the occurrence of any of the following events
(each an "Escrow Release Event"):
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(a) the material breach by Jazor of its obligations under
this Agreement;
(b) upon the death of Xxxxx Xxxxxx, irrespective of any
breach by Jazor of its obligations under this
Agreement; or
(c) the entitlement of Manloe to a release of the Escrowed
Information pursuant to Section 4.2.
Manloe shall continue to pay Jazor the Royalty Fee, upon a release
of the Escrowed Information, pursuant to paragraph (a) or (b)
above, subject to the right of Manloe to off-set any damages
against such payments on account of damages incurred by Manloe as
a result of the breach by Jazor of its obligations under this
Agreement.
Manloe will be entitled to have Xx. Xxxxx X. Xxxxxxx, Ph.D. verify
the validity of the escrowed information prior to or simultaneous
with delivery into escrow. The delivery of all information
pursuant to this Section 9. would be subject to the execution by
Manloe or its agent of a confidentiality agreement on reasonable
terms and conditions as required to ensure the proprietary nature
and confidentiality of the information.
Upon the occurrence of an Escrow Release Event, Manloe will be
entitled to deliver a notice to the Escrow Agent requesting a
release of the Escrowed Information (an "Escrow Release Notice").
Upon receipt of an Escrow Release Notice, the Escrow Agent will
forthwith deliver a copy of the Escrow Release Notice to Jazor.
In the event that the Escrow Agent does not receive any notice
form Jazor contesting the release of the Escrowed Information to
Manloe (an "Objection Notice") within 7 days of delivery of the
notice by the Escrow Agent, then the Escrow Agent will deliver
the Escrowed Information to Manloe. In the event the Escrow
Agent receives an Objection Notice from Jazor, the Escrow Agent
will continue to hold the Escrowed Information until directed to
release the Escrowed Information by:
(a) an order of a court of competent jurisdiction or the
order of an arbitrator as contemplated by this
Agreement; or
(b) the written agreement between Manloe and Jazor.
10. Representations and Warranties
10.1 Jazor represents and warrants to Manloe (a) through (p)
set forth below. Xxxxxx represents and warrants that to the best
of his actual knowledge and belief that (a) through (f), (h)
through (k) and (m) through (p) set forth below are true. Both
acknowledge that Manloe is relying upon such covenants,
representations and warranties in entering into this Agreement
and in any contract of purchase and sale of the Products. Manloe
will not have any claim against Xxxxxx individually in the
absence of fraud or intentional misrepresentation.
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(a) Jazor has the right, power and authority to grant the
License Rights to Manloe on the terms and conditions as
set forth in this Agreement.
(b) Jazor is the owner of all rights and intellectual
property rights required to enable Manloe to distribute,
market and sell the Products and to assign the
Trademarks to Manloe in the manner contemplated by this
Agreement.
(c) the Products will have the effectiveness as claimed in
the scientific and promotional literature respecting
the Products which has been provided by Jazor to
Manloe;
(d) ViroShield has been granted classification by the U.S.
Federal Drug Administration as an over the counter
product under classification number 1056112 under
federal regulation code 21, CFR, Section 207.21(a);
(e) ViroShield meets OSHA bloodborne pathogens standard
(CRB 1910-1030);
(f) ViroShield has been assigned NDC No. 00000-000-00,
dated October 27, 1995;
(g) all Polymer Base products sold by Jazor to Manloe will
be in good, usable and merchantable condition and fit
for its intended purpose;
(h) The composition of the Products is proprietary to Jazor,
is not information which is in the public domain and is
information which has been kept and will be kept
confidential at all times by Jazor;
(i) Jazor is the owner of all intellectual property
relating to the Products, including the Trademarks, and
the rights to be granted to Manloe under this Agreement
are not subject to the approval of any party or any
license or similar agreement in favour of Jazor;
(j) Jazor is not party to any court action and has not been
threatened with any court action which could be material
to this Agreement or which could affect the rights
granted to Manloe in this Agreement;
(k) Jazor has taken all reasonable steps, including entering
into confidentiality agreements, to maintain its
ownership of the Products and to maintain the
confidentiality of the composition of the Products;
(l) Jazor is the manufacturer of the Polymer Base and is
capable of manufacturing and delivering the Polymer
Base in sufficient volumes and quantities in order to
satisfy the demands for the Products within the
Exclusive Territory;
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(m) The marketing, manufacture, distribution and sale of
the Products by Manloe as contemplated by this
Agreement will not breach any patents, trademarks or
other intellectual property rights of any party.
(n) The entering into of this agreement and the consummation
of the transactions contemplated hereby will not result
in the violation of any of the terms and provisions of
the constating documents or bylaws of Jazor or of any
indenture, instrument or agreement, written or oral, to
which Jazor may be a party.
(o) The entering into of this agreement and the
consummation of the transactions contemplated hereby
will not, to the best of the knowledge of Jazor,
result in the violation of any law or regulation to
which Jazor or Jazor's business may be subject;
(p) This agreement has been duly authorized, validly
executed and delivered by Jazor.
11. Indemnification
11.1 Jazor will indemnify Manloe from and against any
liability, cost, demands, claims, expenses or court judgments
incurred or suffered by Manloe arising from any defect in any
Polymer Base product or breach of any representation or warranty
herein with respect to any Product purchased by Manloe from Jazor
or any breach of any obligation by Jazor under this Agreement,
provided that such indemnification is conditional upon Manloe
having complied with its obligations under this Agreement with
respect to the purchase and sale of the Polymer Base products in
issue and Manloe not having taken any negligent or fraudulent
action which has given rise to any liability cost or expense.
12. Right to Assign
12.1 Manloe will be entitled to assign all or any interest
in the License Rights granted in this Agreement without the prior
written consent of Jazor.
12.2 For the purposes of enabling Manloe to discharge its
obligations under this Agreement, Manloe shall be entitled to
appoint, by agreements in writing, dealers and retailers within
the Exclusive Territory to ensure full and proper representation
and sale of the Products throughout the Exclusive Territory.
13. Non-Disclosure
13.1 Manloe will not, either before or after the termination
of this Agreement, disclose to any person or corporation any
information of any kind or nature respecting Products or make
known any trade secret of Jazor or the terms of this agreement,
except as required to provide manufacture, distribute, market and
sell the Products.
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14. Legal Relationship
14.1 The legal relationship between Manloe and Jazor created
by this Agreement shall be that of independent contractors. No
relationship of principal and agent, partnership or joint venture
is created between Manloe and Jazor. Jazor shall have not
authority to bind or obligate Manloe to third parties in any
manner whatsoever.
15. Termination
15.1 Jazor will have the right to terminate this Agreement
and the rights granted hereunder upon giving written notice of
such termination upon the happening of any of the following
events:
(a) if Manloe shall breach any of the terms or conditions
of this Agreement and such breach shall continue for a
period of 45 days after written notice thereof has
been given by Jazor to Manloe;
(b) if Manloe makes a general assignment for the benefit
of its creditors or is the subject of an order of
bankruptcy granted by a court of competent
jurisdiction shall institute any proceeding under any
statute or otherwise relating to insolvency or
bankruptcy or if any such proceeding under any statute
is instituted against Manloe;
(c) if a receiver, manager or any other person with like
power shall be appointed to take charge of all of
Manloe's undertaking business, property or assets.
15.2 In the event of termination, Jazor will retain all
License Fees and Royalty Fees paid or payable to the date of
termination, without prejudice to any rights of Manloe.
15.3 Manloe will have the right to terminate this Agreement
upon delivery of 60 days written notice to Jazor.
16. Dispute Resolution.
Any dispute or claim arising hereunder shall be settled by
arbitration. Any party may commence arbitration by sending a
written notice of arbitration to the other party. The notice will
state the dispute with particularity. The arbitration hearing
shall be commenced thirty (30) days following the date of delivery
of notice of arbitration by one party to the other, by the
American Arbitration Association ("AAA") as arbitrator. The
arbitration shall be conducted in Las Vegas, Nevada in accordance
with the commercial arbitration rules promulgated by AAA, and each
party shall retain the right to cross-examine the opposing party's
witnesses, either through legal counsel, expert witnesses or both.
The decision of the arbitrator shall be final, binding and
conclusive on all parties (without any right of appeal therefrom)
and shall not be subject to judicial review. As part of his
decision, the arbitrator may allocate the cost of arbitration,
including fees of attorneys and experts,
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as he or she deems fair and equitable in light of all relevant
circumstances. Judgment on the award rendered by the arbitrator
may be entered in any court of competent jurisdiction.
17. General Provisions
17.1 Any notice to Jazor or Manloe provided for or permitted
to be given hereunder may be given by registered mail, postage
prepaid, or by personal delivery at the addresses set forth on the
first page of this Agreement. Any notice so mailed shall be
deemed, except during the currency of any postal disruption of
which public notice has been given, to have been given or served
the fifth day after it is deposited in any post office. Any party
may change its address for service at any time by notice in
writing to the other.
17.2 Time is of the essence of this Agreement.
17.3 This Agreement shall be binding on and, except as
otherwise provided, shall enure to the benefit of legal successors
or representatives of the parties, and to the permitted assigns of
Jazor and Manloe.
17.4 If any provision of this Agreement is determined to be
illegal, invalid or unenforceable, the provision shall be deemed to
be severable from the remainder of this Agreement and shall not
cause the illegality, invalidity or unenforceability of the
remainder of this Agreement.
17.5 Manloe shall not be liable for any loss, damage, delay
or failure to perform in whole or in part resulting from causes
beyond Manloe's control, including, but not limited to, fires,
strikes, insurrections, riots, embargoes, shortages in supplies,
delays in transportation, or requirements or any governmental
authority.
17.6 Jazor shall not be liable for any loss, damage, delay
or failure to perform in whole or in part resulting from causes
beyond Jazor's control, including, but not limited to, fires,
strikes, insurrections, riots, embargoes, shortages in supplies,
delays in transportation, or requirements or any governmental
authority.
17.7 The failure of either party at any time to require the
performance by the other party of any provision of this Agreement
shall not affect in any way the right to require such performance
at any later time nor shall the waiver by either party of a breach
of any provision hereby be taken or held to be a waiver of such
provision.
17.8 This Agreement may be executed in several counterparts,
each of which is executed or any facsimiles thereof as executed is
deemed an original and the counterpart together form a valid and
binding agreement which may be sufficiently evidenced by any one
such original counterpart.
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17.9 This Agreement sets forth the entire contract between
the parties concerning the subject matter thereof, and supersedes
all prior and contemporaneous written or oral negotiations and
agreements between them concerning the subject matter thereof.
Except as provided for in this Agreement, any modification must be
in writing and signed by both parties.
17.10 This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada and each party
hereby attorns to such jurisdiction.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date first above written.
MANLOE LABS, INC.
by its authorized signatory:
Per: /s/ Xxxxx Xxxxxxx
Authorized Signatory
JAZOR LABORATORY GROUP, INC.
by its authorized signatory:
Per: /s/ Xxxxx X. Xxxxxx
Authorized Signatory
/s/ Xxxxx X. Xxxxxx
XXXXX XXXXXX
in his personal capacity
