Exhibit 10(f)
PRODUCT LICENSE AND DISTRIBUTION AGREEMENT
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This Agreement ("this Agreement") is made and entered into as of May 3, 2000, by
and between CARIBBEAN PACIFIC INTERNATIONAL, INC., a Florida corporation, with
its principal place of business located at 1308 Rose Blvd., Orlando, FL 32839
("CPI") and CARIBBEAN PACIFIC NATURAL PRODUCTS, INC., a Delaware corporation,
with its principal place of business located at 396 Broadway, Suite 1001, New
York, NY 10013 ("CPNP").
WHEREAS, CPI is the owner of and has the right to grant licenses with respect to
certain Technology (as hereinafter defined), the Trademark (as hereinafter
defined), and the Products (as hereinafter defined);
WHEREAS, CPI wishes to grant CPNP and exclusive license to the Technology and
the Trademark solely for using and selling the Products in the Territory (as
hereinafter defined) related to the Licensed Use (as hereinafter defined), and
CPNP wishes to receive such a license, on the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, CPI and CPNP hereby agrees as follows:
1. Definitions
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1.1 "Affiliate" of a party means any corporation or other business entity
directly or indirectly controlled by, or under common control with, such party;
as used herein, the tern "control" means possession of the power to direct, or
cause the direction of the management and policies of a corporation or other
entity whether through the ownership of voting securities, by contract or
otherwise.
1.2 "Licensed Use" means use of the Products by consumers for any purpose
including by not limited to skin care and sun protection.
1.3."Products" means CPI's current Product List as attached hereto as Exhibit
"A", and any current or future modification to or brand extensions of the
Products, including any new products designed or formulated by CPI prior and
subsequent to the date of this Agreement.
1.4 "Technology" means CPI's information and know-how related to the Products,
which is relevant to the promotion, marketing and sale of the Products for the
Licensed Use in the Territory, and which is provided to CPNP by CPI pursuant
this Agreement.
1.5 "Territory" means, throughout the World, both retail and wholesale sales
outlets, including retail stores, mail order, Internet sales, hotels and
resorts, sports and entertainment facilities, convention and group sales, mass
merchandise outlets, and any all other types of marketing and distribution.
1.6 "Trademark" means the marks "Caribbean Pacific", "Surf `n Sol", "Ski `n
Sol", "Sportsol", "Golf `n Sol", "Solcreme", "Virgin Sol", "Sabate", and "Coral
Sol", and any pending or future trademarks obtained in the future by CPI.
2. Exclusive License
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2.1 Pursuant to the terms of this Agreement, CPI hereby appoints CPNP as the
exclusive licensee: (a) to manufacture, market, sell and distribute the Products
in the Territory, and (b) use the Trademark and Technology in the Territory
solely in connection with manufacturing, marketing, selling and distributing the
Products, both solely for the Licensed Use in the Territory.
2.2 For the purposes of this Agreement, "exclusive" shall mean that CPI will not
directly or indirectly manufacture, market, sell and distribute the Products to
any other person or entity in the Territory for the Licensed Use in the
Territory. CPI's retained rights in the Territory are limited to the right to
conduct any research and development activity and shall not create product in
competition with Products licensed to CPNP or created in the future by CPNP.
2.3 If, during the term of this Agreement, CPI, CPNP, or jointly CPI and CPNP,
develop new products or otherwise azquire any modifications to the formulation
of the Products that are able to be sold or licensed, such new products or
modification shall be the sole and exclusive property of CPI; provided, that
CPNP shall become CPI's exclusive licensee in the Territory with respect to
those modifications, under the same terms as those herein. Any products
developed by CPNP shall be the sole property of CPNP and shall not be subject to
the terms and conditions of this Agreement.
3. Technology, Regulation and the Market
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3.1 CPNP shall manufacture, promote, market, distribute and sell the Products
for the Licenses Use in the Territory. CPI shall from time to time furnish CPNP
with Technology as ans to the extent CPI reasonably determines to assist CPNP's
efforts to manufacture, promote, market, distribute and sell the Products for
the Licensed Use in the Territory.
3.2 CPI shall also furnish such additional Technology as CPNP may reasonably
request in connection with any regulatory compliance regarding the manufacture,
promotion, marketing, distribution or sale of the Products for the Licensed Use
in the Territory.
3.3 CPI shall be responsible for all decisions and actions regarding regulatory
matters relating to or involving products. CPI shall, with respect to any such
regulatory matters, (a) act as a liaison with the FDA or other governmental
authority; (b) prepare and make all submissions regarding the regulatory matter;
(c) monitor all studies pertinent to the regulatory matter; and (d) obtain
regulatory approvals, as reasonably deemed necessary by CPI. CPNP shall promptly
cooperate with CPI with respect to such regulatory matters by providing data and
information at CPI's reasonable request. Nevertheless, CPNP shall maintain its
own counsel for FDA or other regulatory matters, for the sole purpose of
advising CPNP with regard to such regulatory matters
and to any data, information, or suggestions that CPNP may provide to CPI,
either at CPI's request or at CPNP's discretion.
3.4 Each of the parties shall promptly notify the other party in writing of any
technical or clinical advances, useful modifications, side effects, or new
government regulations relating to the Products that shall come to its
knowledge. CPNP must promptly inform CPI of all actions and communications (even
if believed by CPNP to be without foundation) by or threatened by a regulatory
or other governmental authority in the Territory relating to the Products.
3.5 CPNP shall notify CPI promptly in writing of any new market trends in
relation to the Products that shall come to its knowledge and of any new
Products which might be competitive with the Products together with full details
thereof including prices and copies of any known promotional material.
4. License Royalty Payment
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4.1 A License Royalty Payment equal to 5% of the Collected Gross Sales of the
Products sold by CPNP shall be payable to CPI for a period of four (4) years
from the date of this Agreement. Such Payment shall be made on or before the
fifteenth (15th) calendar day of each month for the calendar month immediately
preceding for sales actually collected by CPNP in accordance with generally
accepted accounting practices during such calendar month.
5. Maintenance of Quality
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5.1 Manufacturing Standards
CPNP shall be responsible for maintaining commercially acceptable quality
control standards in all manufacturing relating to the Products.
5.2 Use of Trademark
5.2.1 CPNP agrees to use the Trademark in accordance with good customary
trademark practice, and to avoid taking any action that would in any manner
impair or detract from the value of the Trademark or the goodwill and reputation
of CPI. CPNP acknowledges CPI's ownership of the Trademark and related goodwill
in the Territory. CPI specifically acknowledges and consents to the use of the
Trademark "Caribbean Pacific" in the corporate name of CPNP.
5.2.2 Quality and Maintenance of Standards. CPNP agrees that the nature and
quality of all of CPNP's advertising, promotional, and other related uses of the
Trademark pursuant to this Agreement shall conform to standards which shall be
from time-to-time mutually agreed upon by CP and CPNP. CPNP agrees to cooperate
with CPI in facilitating CPI's control of such nature and quality, and to supply
CPI with specimens of all uses of the Trademark.
6. Confidentiality
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During the term of this Agreement CPNP shall keep confidential and not disclose
to others or use for any purpose other than as expressly authorized herein, any
confidential information supplied by CPI or its employees or representatives and
identified as confidential ("Confidential Information"). CPNP shall ensure that
its employees and agents shall likewise maintain the secrecy of Confidential
Information, and shall comply with the confidentiality and non-use provisions of
this Section. The obligation of confidentiality shall not apply to the extent
that CPNP can establish that the Confidential Information at issue: (i) entered
the public domain without CPNP's breach of any obligation owed to the disclosing
party; (ii) was permitted to be disclosed by CPI's prior written consent; (iii)
had become known to CPNP from a source other than CPI, other than by breach of a
confidentiality obligation owed to CPI; (iv) was disclosed to CPI to a third
party without Agreement. Further, disclosure may be made pursuant to a
requirement of law, or of judicial or administrative process, provided that CPNP
shall promptly inform CPI in advance of such disclosure so that CPI may seek a
protective order regarding the disclosed Confidential Information.
7. Representations, Warranties, and Covenants
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7.1 CPI Representations, Warranties and Covenants
CPI hereby represents, warrants and covenants the following:
7.1.1 CPI is a corporation duly organized, existing and in good standing under
the laws of Florida, with full right, power and authority to enter into and
perform this Agreement and to grant all of the rights, powers, and authorities
herein granted.
7.1.2 The execution, delivery and performance of this Agreement do not conflict
with, violate, or breach any agreement to which CPI is a party, or CPI articles
of incorporation or bylaws.
7.1.3 This Agreement has been duly executed and delivered by CPI and is a legal,
valid and binding obligation enforceable against CPI in accordance with its
terms.
7.1.4 CPI shall comply with all applicable laws, consent decrees and regulations
of any federal, state, or other governmental authority.
7.1.5 To the best of CPI knowledge and belief as of the date of this Agreement,
there are no issued or pending patent or trademark applications relating to the
Products that would prevent CPNP from using or selling the Products in the
Territory for its Licensed Use.
7.2 CPNP's Representations, Warranties and Covenants
CPNP hereby represents, warrants, and covenants the following:
7.2.1 CPNP is a corporation duly organized, existing and in good standing under
the laws of the
State of Delaware, with full rights, power, and authority to enter into and
perform this Agreement and to grant all of the rights, powers and authorities
herein granted.
7.2.2 The execution, delivery and performances of this Agreement do not conflict
with, violate or breach any agreement to which CPNP is a party, or CPNP's
articles of incorporation or bylaws.
7.2.3 This Agreement has been duly executed and delivered by CPNP and is a
legal, valid and binding obligation enforceable against CPNP in accordance with
its terms.
7.2.4 CPNP shall comply with all applicable laws, consent decrees, and
regulations of any federal state or other governmental authority.
7.2.5 CPNP shall in good faith make its best efforts and make reasonable
expenditures to market and promote sales of the Products for its Licensed Use in
the Territory.
7.2.6 During the term of this Agreement CPI and its Officers, Directors and key
employees that are deemed to have material knowledge of proprietary technology
shall not, without CPNP's prior written consent, directly or indirectly
manufacture, promote or sell any other products for use in the Territory which
compete in any manner with the Products.
8. Indemnification
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8.1 CPI shall at all times during and after the term of this Agreement be
responsible for, and shall defend, indemnify, and hold CPNP harmless from and
against any and all losses, claims, suits, proceedings, and expenses,
recoveries, and damages, including reasonable legal expenses and costs including
attorneys' fees, arising out of any claim by a third party relating to the
Products, or any aspect of the performance of this Agreement, to the extent such
liability results from the negligence or willful misconduct of CPI, or any
breach of a representation or warranty given herein by CPI; provided, however,
that CPNP shall give CPI prompt notice of any such claim or lawsuit and,
provided further, that CPI shall have the right to compromise, settle, or defend
such claim or lawsuit.
8.2 CPNP shall at all times during and after the term of this Agreement be
responsible for, and shall defend, indemnify and hold CPI harmless from and
against any and all losses, claims, suits, proceedings, expenses, recoveries and
damages, including reasonable legal expenses and costs including attorney's
fees, arising out of any claim by a third party relating to any aspect of the
performance of this Agreement, to the extent such liability results from the
negligence or willful misconduct of CPNP, or any breach of a representation or
warranty given herein by CPNP; provided, however, that CPI shall give CPNP
prompt notice of any such claim or lawsuit and provided further, that CPNP shall
have the right to compromise, settle, or defend such claim or lawsuit.
8.3 Each party shall maintain a comprehensive Products liability insurance
policy with respect to the Products, in an amount of not less than One Million
Dollars ($1,000,000) per occurrence with a deductible of not more than Ten
Thousand Dollars ($10,000). Each party shall name the other party as an
additional insured under such policy, the terms of which shall be reasonably
acceptable to the other party. Each party shall promptly provide the other party
with a certificate from the applicable insurance company verifying the above and
undertaking to notify the other party directly at least thirty (30) days prior
to the expiration or termination of such coverage.
9. Term and Termination
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9.1 This Agreement shall commence as of the date first written above (the
"Effective Date"), and, unless sooner terminated as provided herein, this
Agreement shall continue in force for twenty-five years (25) from the Effective
Date.
9.2 Termination
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9.2.1 Termination by Mutual Consent. This Agreement shall terminate upon the
mutual written agreement of the parties.
9.2.2 Termination for Material Breach. If either party breaches or defaults in
the performance or observance of any of the material provisions of this
Agreement, and such breach or default is not cured within thirty (30) days after
the giving of notice by the other partly specifying such breach or default, the
non-defaulting party shall have the right to terminate this Agreement, effective
with ten (10) days further notice to the defaulting party.
9.2.3 In the event of any occurrence giving rise thereto shall not constitute
waiver of the rights in the event of any subsequent occurrence.
9.3 Surviving Provisions
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9.3.1 The provisions of Sections 1, 6, 7, 8, 9.3, 10 and 11 hereof shall survive
any expiration or termination of this Agreement, except as otherwise provided
herein.
9.3.2 Except as otherwise provided in this Agreement upon any expiration or
termination of this Agreement:
(a) All rights, privileges and licenses shall immediately terminate and
revert to CPI, and CPNP shall not thereafter make any use whatsoever of any
Technology or the Trademark, and shall not further market, sell or distribute
the Products;
(b) CPNP shall promptly return or provide CPI all Technology and other
similar information regarding the Products;
(c) CPNP shall promptly destroy or transfer to CPI at CPI's election,
all marketing, labeling or advertising materials relating to the Products or
Trademark; and
(d) CPNP shall promptly pay to CPI all amounts due to CPI pursuant to
the terms of this Agreement.
10. Force Majeure
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Neither party shall be liable for any default or delay in such party's
performance if such default or delay is caused by any event beyond the
reasonable control of such party, including but not limited to: act of God; war
or insurrection; civil commotion; destruction of essential facilities or
materials by earthquake, fire, flood or storm; labor disturbances; epidemic; or
other similar event; provided, however, that the party so affected will give
prompt notice of such event, and shall use its best efforts to avoid, remove, or
alleviate such causes of nonperformance and shall continue performance hereunder
with the utmost dispatch whenever such causes are removed.
11. Miscellaneous
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11.1 Entire Agreement - Modifications
This Agreement sets forth and constitutes the entire agreement and understanding
between the parties with respect to the subject matter hereof, and supercedes
any and all prior agreements, understandings, promises and representation,
whether written or oral, between the parties with respect to the subject matter
hereof. This Agreement may not be released, discharged, amended or modified in
any manner except by an instrument in writing, making specific reference to this
Agreement and signed duly by authorized representatives of both parties.
11.2 Relationship of the Parties
The relationship hereby established between CPI and CPNP is solely that of
independent contractors. This Agreement shall not create agency, partnership,
joint venture or employer/employee relationship, and nothing hereunder shall be
deemed to authorize either party to act for, represent or bind the other except
as expressly provided in this agreement.
11.3 Severability
If and solely to the extent that any provision of this Agreement shall be
invalid or unenforceable, or shall render this entire Agreement to be
unenforceable or invalid, such offending provision shall be of no effect and
shall not affect the validity of the remainder of this Agreement or any of its
provisions; provided, however, the parties shall use their respective reasonable
efforts to renegotiate the offending provisions to best accomplish the original
intentions of the parties.
11.4 Assignment
Neither party may assign any right or obligation hereunder without the written
consent of the other party. This Agreement shall be binding upon and inure to
the benefit of the parties' respective successors and assigns. Any attempted
assignment in violation of this provision shall be void and of no effect.
11.5 Choice of Law
This Agreement is deemed to have been entered into in the State of New York, and
its interpretation, construction and remedies for its enforcement or breach are
to be applied pursuant to and in accordance with the laws of the State of New
York.
11.6 Waiver
No waiver of any right under this Agreement shall be deemed effective unless
contained in writing and signed by the party charged with such waiver, and no
waiver of any right shall be deemed to be a waiver of any future right or any
other right arising under this Agreement. All rights, remedies, undertakings,
obligations, and agreements contained in this Agreement shall be cumulative and
none of them shall be a limitation of any other remedy, right, undertaking,
obligation or agreement.
11.7 Headings
Headings in this Agreement are included for ease of reference only and shall
have no legal effect.
11.8 Notice
Any notice, consent, or approval permitted or required under this Agreement
shall be in writing and shall be sent by registered or certified mail, postage
pre-paid, or by overnight courier, or by facsimile or telex (confirmed by mail)
to the addresses set forth above or to such other address in the United States
that the parties may hereafter specify. All notices shall be deemed to be
effective on the date of receipt.
11.9 Publicity
Neither party shall issue any press release or other publicity materials, or
make any presentation with respect to the existence of this Agreement or the
terms and conditions hereof without the prior written consent of the other
party, which consent shall not be unreasonably withheld. This restriction shall
not apply to disclosures required by law or regulation, including as may be
required in connection with any filings made with the Securities and Exchange
Commission or by the disclosure policies of a major Stock Exchange.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date and year written above.
CARIBBEAN PACIFIC INTERNATIONAL, INC.
By: Bob R. Hamner
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Name: /s/ Bob R. Hamner
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Title: President
CARIBBEAN PACIFIC NATUREAL PRODUCTS, INC.
By: William J. Reilly
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Name: William J. Reilly
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Title: Secretary
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