COMMERCIAL SUPPLY AGREEMENT
THIS COMMERCIAL SUPPLY AGREEMENT (this “
Agreement
”) is made as of January 31, 2014 (the “
Effective Date
”) by and between LifeVantage Corporation, a Colorado corporation having a place of business at 9815 South Monroe Street, Suite 100, Sandy, Utah 84070 (“
Company
”) and Deseret Laboratories, Inc., a Utah corporation having a place of business at 1414 East 3850 South, St. George, Utah 84790 (“
Manufacturer
”). Each of Company and Manufacturer is referred to as a “
Party
” and, collectively, the “
Parties
”.
WITNESSETH:
WHEREAS
, Company develops, sells and distributes unique nutritional supplements and personal care products;
WHEREAS
, Company desires that Manufacturer manufacture and supply certain products of Company’s based on Company’s formulas and specifications on the terms set forth herein; and
WHEREAS
, Manufacturer desires to manufacture and supply such products on the terms set forth herein.
NOW, THEREFORE
, in consideration of the premises and the mutual promises and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, Company and Manufacturer agree as follows.
Article 1
DEFINITIONS
The following words and phrases when used herein with capital letters shall have the meanings set forth or referenced below.
1.1
“
Adverse Supply Event
” shall have the meaning set forth in
Section 4.2(b)
.
1.2
“
Affiliate
” shall mean any corporation or other entity which controls, is controlled by, or is under common control with a Party to this Agreement at any time during the Term. A corporation or other entity shall be regarded as in control of another corporation or other entity if it owns, or directly or indirectly controls, in excess of fifty percent (50%) of the voting stock or membership interests of the other entity or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation or non-corporate business entity, as applicable.
1.3
“
Applicable Law
” shall mean the Federal Food, Drug and Cosmetic Act and all other applicable laws, rules, regulations, guidelines, and standards, including, without limitation, cGMPs.
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1.4
“
cGMP
” shall mean the current good manufacturing practices required by the FDA and set forth in the United States Federal Food, Drug and Cosmetic Act or FDA regulations, policies or guidelines in effect at any time during the Term applicable to the Products, and all corresponding industry standards and requirements of each applicable Regulatory Authority.
1.5
“
Company IP
” shall mean intellectual property, including but not limited to: (i) Company’s rights and interests in and to issued patents and pending patent applications, including, without limitation, all provisional applications, substitutions, continuations, continuations-in-part, divisionals, and renewals, all letters patent granted thereon, and all re-issues, re-examinations and extensions thereof, and supplemental protection certificates relating thereto, which relate to Product; (ii) all Technology related to Product; and (iii) any Improvements to the foregoing.
1.6
“
Company Project IP
” shall have the meaning set forth in
Section 9.2
.
1.7
“
Confidential Information
” shall mean the proprietary and confidential information of a Party disclosed under this Agreement, part of a prior disclosure, or developed hereunder, except any portion thereof which:
(a)
is known to the recipient at the time of the disclosure, as evidenced by its written records or other competent evidence;
(b)
is disclosed to the recipient by a third person lawfully in possession of such information and not under an obligation of nondisclosure;
(c)
is published or generally known to the public, either before or after the date of disclosure through no act or omission on the part of the recipient;
(d)
is developed by or for the recipient independently of Confidential Information disclosed hereunder as evidenced by the recipient’s written records or other competent evidence; or
(e)
is required by law to be disclosed by the recipient, to defend or prosecute litigation or to comply with governmental regulations, provided that the recipient gives the other Party hereto prompt prior written notice of such legal requirement, such that such other Party shall have the opportunity to apply for confidential treatment of such Confidential Information, and reasonably cooperates therewith. The Confidential Information of Company shall be deemed to include all information concerning the terms and existence of this Agreement, as well as all Technology, Company IP, Company Project IP, Company’s Other Project IP and other information relating to the Products.
1.8
“
Customer Representative in Plant
” shall have the meaning set forth in
Section 7.5
.
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1.9
“
Equipment
” shall mean, as applicable, all equipment used to prepare, process, manufacture, blend, store, transport and package the Product.
1.10
“
FDA
” shall mean the United States Federal Drug Administration.
1.11
“
Firm Purchase Order
” shall have the meaning set forth in
Section 5.2
.
1.12
“
Force Majeure
” shall have the meaning set forth in
Section 12.1(a)
.
1.13
“
Improvements
” shall mean any and all new developments by a Party, excluding Project IP, related to Product, Materials, manufacture or packaging, including, but not limited to, the Product’s use, composition, formulation, development, or processing.
1.14
“
Initial Term
” shall have the meaning set forth in
Section 10.1
.
1.15
“
Materials
” shall mean all active raw materials used to prepare, process, manufacture, blend and package the Product.
1.16
“
Other Project IP
” shall have the meaning set forth in
Section 9.2
.
1.17
“
PAC
” shall mean the Product Advisory Committee as set forth in
Section 3.1
.
1.18
“
Product
” or “
Products
” shall mean the products set forth on Exhibit A and other proprietary products purchased by Company under Firm Purchase Orders pursuant to this Agreement to be blended, manufactured, tableted and inspected, bottled, labeled, sealed, and packaged by manufacturer in accordance with the Product Specifications.
1.19
“
Product Specifications
” shall mean those product specifications identified on the Purchase Order; provided that any modification or amendment to the Product Specifications shall be mutually agreed on in writing by the Parties.
1.20
“
Project IP
” shall mean any developments, inventions, Improvements or Technology developed or conceived by the Company or Manufacturer pursuant to or in connection with this Agreement, or using, based on or derived from Company IP or Company Confidential Information.
1.21
“
Purchase Order
” shall mean written orders from Company to Manufacturer, which shall specify: (a) the quantity of Products ordered; (b) delivery dates; and (c) delivery destinations.
1.22
“
Quality Agreement
” shall have the meaning set forth in
Section 7.2
.
1.23
“
Regulatory Authority
” shall mean, with respect to the Territory, any federal, state or local or international regulatory agency, department, bureau or other governmental entity, including, without limitation, the FDA.
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1.24
“
Renewal Term
” shall have the meaning set forth in
Section 10.1
.
1.25
“
Technology
” shall mean and include any and all unpatented proprietary ideas, inventions, patents, patent applications, discoveries, Confidential Information, trade secrets (including, without limitation, ingredient profiles, flavor profiles and flavors), data, formulae, designs, specifications, methods, processes for mixing, blending, preparing and manufacturing the Products, ingredient and flavor formulations, regulatory information, techniques, ideas, know-how, technical information, process information, control, manufacturing data and materials.
1.26
“
Territory
” shall mean all countries and jurisdictions in the world.
1.27
“
Term
” shall have the meaning set forth in
Section 10.1
.
1.28
“
Third Party
” shall mean a party other than Manufacturer or Company and their respective Affiliates.
Article 2
PRODUCT; ADDITIONAL SERVICES
2.1
Purchase and Sale of Products.
Pursuant to the terms and conditions of this Agreement and for the duration of this Agreement, Manufacturer shall manufacture, sell and deliver to Company all Product ordered by Company, and Company shall purchase and take delivery from Manufacturer Product ordered by Company in Firm Purchase Orders. Company shall have the right at all times to obtain Products from one or more second sources.
2.2
Additional Services.
During the Term, the Parties may agree that Manufacturer shall provide to Company the additional services agreed in writing by the Parties and annexed as an Exhibit hereto.
Article 3
PRODUCT MANAGEMENT COMMITTEE
3.1
Product Advisory Committee.
Within thirty (30) days after the Effective Date, the Parties shall establish a Product Advisory Committee (the “
PAC
”) to coordinate key Product issues including, without limitation, Product development, manufacturing process, ingredient procurement, quality and testing, and logistics relating to this Agreement. The PAC shall be composed of two (2) senior, qualified representatives from each Party (or from a Party’s Affiliate), with representatives having experience in product development, finance, supply chain logistics, and manufacturing. A Party may replace one or both of its PAC representatives from time to time upon written notice to the other Party. The PAC shall exist during the Term, unless the Parties otherwise agree in writing. Each Party shall appoint one of its representatives on the PAC as its secretary. The secretary shall be responsible for scheduling meetings of the PAC and agendas for such meetings (at least ten (10) days before such meetings). The PAC secretary shall be responsible for having minutes of each PAC meeting prepared and circulated among
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the PAC members within five (5) days after each meeting. For clarity, the PAC is an advisory committee, and Company shall maintain all final decision-making authority related to the Product and its development and manufacture.
3.2
PAC Meetings
. The PAC shall meet at least once every calendar quarter during the Initial Term (and more frequently, if mutually agreed by a majority of the PAC members) and annually thereafter. Meetings may be held by telephone or video-conference; provided that at least one (1) meeting per year shall be held in person. Meetings of the PAC shall be effective only if at least one (1) PAC representative of each Party participates in the meeting (in person or by telephone or video conference). Each Party shall be responsible for expenses incurred by its PAC representatives in attending or otherwise participating in PAC meetings. If only one PAC representative of a Party is present at a meeting, then that representative shall have the right to cast the vote of the absent Party representative.
3.3
PAC Responsibilities
. The PAC shall facilitate open communication, collaboration and cooperation between the Parties with respect to the Products and manufacturing thereof, and shall promote the prompt and reasonable resolution of issues or problems that may arise in connection therewith. The principal functions of the PAC are to foster a collaborative relationship between the Parties to expedite the efficient manufacturing and delivery of Product, discuss new Product development, discuss Product and manufacturing developments and challenges and work on solutions, disclose Project IP and process developments; and identify forecasting and sales trends.
Article 4
MANUFACTURE AND SUPPLY OF PRODUCTS
4.1
Manufacture.
Manufacturer shall fulfill all Firm Purchase Orders in accordance with this Agreement. In the event of any supply interruption, Manufacturer agrees to promptly notify Company with full details and to use its best efforts to restore supply of Product to the levels forecasted and as contemplated in this Agreement as soon as possible, provided that such notice shall not change in any manner Manufacturer’s obligations under this Agreement.
4.2
Failure and Shortfalls.
(a)
In the event that Manufacturer fails to deliver by the relevant delivery date at least ninety five percent (95%) of Product meeting the requirements of this Agreement under Firm Purchase Orders, Company may cancel the amount of the shortfall from the relevant Firm Purchase Orders and have the shortfall manufactured by one or more second sources.
(b)
In the event that (i) Manufacturer has been given notice from a regulatory, governmental agency or Company indicating a significant regulatory deficiency or safety concern related to the Materials, the manufacture of Product or a Product-related facility, (ii) a Manufacturer facility has experienced a Force Majeure that prevents or materially curtails, or would reasonably be expected to prevent or materially curtail, the manufacture
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and delivery of Product as contemplated hereunder, or (iii) Manufacturer is unable to comply, or has not complied, with a change in the manufacturing process that is required by a Regulatory Authority or by the Company, notwithstanding Company agreeing to pay the reasonable actual costs attributable to such change (each, an “
Adverse Supply Event
”), and Manufacturer cannot, or will not, remediate the circumstances of the Adverse Supply Event so that manufacture and delivery of Product can continue and/or resume under this Agreement as contemplated herein within thirty (30) days after the occurrence of the Adverse Supply Event, then Company may cancel relevant outstanding Purchase Orders, whether or not such Purchase Orders have been accepted by Manufacturer, and have all such Product manufactured by one or more second sources from the period beginning on the date of the Adverse Supply Event, or date that supply of Product ceased. Manufacturer shall use its best efforts to resume Product manufacture after any Adverse Supply Event including, without limitation, promptly complying with any reasonable manufacturing process changes requested by Company.
4.3
Regulatory Approval
. Manufacturer shall reasonably assist Company in obtaining any necessary governmental and regulatory approvals for the Products in any country in the Territory (“
Regulatory Approval
”). Manufacturer shall use its commercially reasonable efforts to successfully perform all activities requested by Company in order to obtain Regulatory Approvals for the Territory, which shall include, without limitation, performing all tasks in a timely and professional manner and adhering to all timelines required to obtain such approvals as quickly as practicable. Manufacturer shall be reasonably reimbursed, if said activities are excessive according to industry standards.
Article 5
ORDERS
5.1
Purchase Orders.
(a)
Company shall submit each Purchase Order for Product to Manufacturer at least sixty (60)
days prior to the delivery date for the Products set forth therein. Company shall deliver to the Manufacturer the Materials needed for the manufacture of the Product no fewer than forty-five (45)
days prior to such delivery date. Late deliveries of needed Materials will result in a corresponding adjustment to the delivery date.
(b)
Each Purchase Order or any acknowledgment thereof, whether printed, stamped, typed, or written shall be governed by the terms of this Agreement and none of the provisions of such Purchase Order or acknowledgment shall be applicable except those specifying Product and quantity ordered, delivery dates, special shipping instructions and invoice information.
(c)
Manufacturer shall deliver Product on the delivery dates set forth in each Firm Purchase Order, provided delivery may be up to thirty (30)
days before or fifteen (15)
days after any such delivery date. In the event that Manufacturer believes it may miss a
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delivery date in a Firm Purchase Order submitted by Company, Manufacturer shall promptly give Company written notice of the same specifying in detail the reasons for the late delivery.
5.2
Purchase Order Confirmation.
As soon as practicable but no later than five (5) days after receipt of Company’s Purchase Orders issued in accordance with this Agreement, Manufacturer shall confirm to Company its receipt of the Purchase Order, delivery date and quantity of product order by Company. Any Purchase Order shall be deemed accepted by Manufacturer if not rejected within five (5) business days of its receipt by Manufacturer. A Purchase Order shall be deemed a “
Firm Purchase Order
” after it has been accepted, or deemed to have been accepted, by Manufacturer in accordance with this Section 5.2.
5.3
Other Firm Purchase Order Changes or Cancellations.
If Company requests other changes to Firm Purchase Orders, Manufacturer shall attempt to accommodate the changes within reasonable manufacturing capabilities and efficiencies. If Manufacturer can accommodate such change, Manufacturer shall advise Company of the costs associated with making any such change and Company shall be deemed to have accepted the obligation to pay Manufacturer for such costs if Company indicates in writing to Manufacturer that Manufacturer should proceed to make the change. If Manufacturer cannot accommodate such change, Company shall be bound to the original Firm Purchase Order. If Company cancels a Firm Purchase Order, Manufacturer shall be relieved of its obligation to manufacture Product under such Firm Purchase Order, and Company shall be obligated to pay Manufacturer its reasonable and documented costs associated with its fulfillment of such Firm Purchase Order prior to cancellation including, but not limited to, any costs associated with Materials purchased by Manufacturer to be used in the Manufacture of Products that cannot be reasonably used for future manufacture of Products or the manufacture of another party’s products. The Company will then own said material it paid for under this Section.
5.4
Materials.
(a)
Supply.
Manufacturer shall manufacture the Products for Company from Materials that Company shall purchase and supply at its sole cost including, without limitation, any replacement Materials (unless such replacement is required due to an act or omission of Manufacturer). Company may store with the Manufacturer a reasonable safety stock of Materials and Manufacturer shall at all times remain responsible for the safety stock including, without limitation, the storage, rotation, security and insurance thereof. The Company shall be solely responsible for any defect or contamination in the Materials if such defect or contamination existed in the Materials at the time Company supplied it to Manufacturer and such defect or contamination would not be expected to be discovered by Manufacturer through the exercise of ordinary due care. Manufacturer will at its expense perform any testing on the Materials under this Agreement, the Quality Agreement and as the Parties may mutually agree from time to time, and Manufacturer shall notify Company of any out of specification test results.
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(b)
Company Title.
Company shall retain title to such Materials at all times; provided, however, risk of loss or damage to the Materials shall remain with Manufacturer while in its possession or control except for ordinary and expected degradation and expiration of such Material supplied by the Company for which Company shall be responsible. If requested by Company any or all Materials or Product in process will be delivered to Company or its designee at the Company’s expense.
5.5
Equipment.
Manufacturer shall pay the cost of all Equipment used to perform its obligations under this Agreement, unless special prior arrangements are made and agreed on in writing by the Parties. During the Term, Manufacturer shall be responsible for cleaning, maintaining, servicing, replacing and insuring such Equipment.
5.6
Product Labeling and Packaging.
Manufacturer shall be solely responsible for ensuring that the final packaging complies with Product Specifications. Manufacturer shall provide Company with samples of all such final packaging or labeling materials upon request.
5.7
Lot and Date Coding; Sub-Lots.
Lot and date coding are to be applied on all outer packaging for all Products as directed by Company. Should Company desire Manufacturer to split a manufacturing lot of the Products into several sub-lots during packaging, there shall be no split fees. Expiration dates are to be as determined by Company unless otherwise agreed on by the Parties in writing.
5.8
Waste.
Manufacturer shall be responsible for the costs of disposal in accordance with all Applicable Laws of all waste related to the Product except for waste caused by Material supplied by Company that is defective or contaminated at the time it is supplied to Manufacturer. If necessary, Manufacturer shall hire, and direct a contractor to remove all waste from Manufacturer’s manufacturing facility for the Products.
5.9
Delivery.
Manufacturer shall deliver the Products to Company pursuant to instructions provided by Company from time to time and will include shipping charges on the invoice for each shipment of Products. Risk of loss for the Products shall pass to Company, F.O.B. Manufacturer the time when they are delivered as set forth above. Title to the Product and all Product in process shall at all times remain in Company. Shipment shall be via a carrier designated by Company. For shipments to destinations outside the United States, Company shall be the exporter of record.
If requested by Company, Manufacturer agrees to make multiple shipments of Products per lot at no charge to Company other than shipping costs.
5.10
Batch Failure/Acceptance of Products/Replacement of Nonconforming Shipment
.
(a)
In the event of a batch failure during preparation for manufacture or during manufacture, or the discovery by Manufacturer of out-of-specification Product prior to shipment, written notice of the same shall be promptly provided to Company with full details and, with the consent of Company, the batch of Product shall be replaced by Manufacturer as quickly as possible thereafter at Manufacturer’s cost and expense; provided, however,
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Company shall be responsible for such costs to the extent such costs result from Material supplied by Company that is defective or contaminated at the time it is supplied to Manufacturer. If directed by Company, Manufacturer agrees promptly to conduct an investigation and report to Company its findings, as well as take any corrective actions that are appropriate in light of the findings of the investigation or as are reasonably requested by Company.
(b)
After discovery that the Products fail to conform to the Product Specifications or other requirements of this Agreement, Company may reject a quantity of Products upon notice to Manufacturer. Manufacturer shall promptly replace all rejected Product, as soon as reasonably possible. If Company rejects such shipment, it shall also provide to Manufacturer samples of such Product for evaluation. If Manufacturer evaluates such Product and determines that it did conform to the Product Specifications and all other requirements of this Agreement, the Parties shall submit samples of such Product to a mutually acceptable independent laboratory or consultant, or both, as appropriate for evaluation. If such independent laboratory determines that the Product conformed to the Product Specifications and all other requirements of this Agreement, Company shall bear all expenses for the evaluation. If Manufacturer or such independent laboratory confirms that such shipment did not meet the Product Specifications and/or the other requirements of this Agreement, Manufacturer shall, in addition to promptly replacing, at no cost to Company, the Product which does not conform. Any nonconforming Product shall be destroyed as directed by Manufacturer, at Manufacturer’s expense unless such Product is nonconforming due to Company supplying Materials that is defective or contaminated at the time it is supplied to Manufacturer. Company shall not be required to pay Manufacturer for any Product which has been correctly rejected pursuant to this Section 5.10.
Article 6
PRICE AND PAYMENT
6.1
Price.
Manufacturer shall invoice Company for the Products delivered by Manufacturer at the prices set forth on
Exhibit A
. Prices are firm through the Term of this Agreement;
provided
,
however
, the prices set forth on
Exhibit A
may be adjusted to the extent (a) Manufacturer and Company agree to changes in the manufacturing process that increase or decrease the cost of manufacturing the Product, or (b) the cost of raw materials purchased by Manufacturer increases. Notwithstanding the foregoing, price adjustments pursuant to Section 6.1(b) shall not be made more frequently than once in any twelve (12) month period.
6.2
Payment.
Manufacturer shall invoice Company upon shipment of the Products following release by Manufacturer’s Quality Assurance department in accordance with the Quality Agreement. Company shall make payment net thirty (30) days from the date of receipt of Manufacturer’s invoice. Company may, at its option, pre-pay fifty percent (50%) of the purchase order for a one percent (1%) discount off the Purchase Order amount.
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6.3
Taxes.
Any federal, state, county or municipal sales or use tax, excise, customs charges, duties or similar charge, or any other tax assessment (other than that assessed against income), lawfully assessed or charged on the purchase by Company of the Products sold pursuant to this Agreement shall be paid by Company.
Article 7
QUALITY
7.1
Quality Control.
Manufacturer shall apply its quality control procedures and in-plant quality control checks on the manufacture of the Products for Company in the same manner as Manufacturer applies such procedures and checks to products similar to the Products manufactured for sale by Manufacturer. In addition, Manufacturer shall test and release the Products in accordance with its standard test methods mutually-agreed upon by Company and Manufacturer to ensure that the Products conform to the Product Specifications. Manufacturer shall not change the formula or manufacturing process for Product without the prior consent of Company.
7.2
Quality Agreement.
If requested by Company, the Parties shall negotiate in good faith to enter into a quality agreement relating to the quality of the Products delivered under this Agreement (the “
Quality Agreement
”).
7.3
Audit Rights.
(a)
Company shall have the right, upon twenty four (24) hour prior written notice to Manufacturer, to conduct, at its expense and during normal business hours, a quality assurance audit and inspection of Manufacturer’s records and production facilities relating to the manufacturing, assembly and/or packaging of the Products. Except as provided in
Section 7.3(b)
, such audits shall, assuming the full cooperation of Manufacturer, not be conducted more frequently than three (3) times per calendar year unless there is a reasonable basis for additional audits. Any auditors that are not employees of Company shall be required to enter into confidentiality agreements with Manufacturer and Company containing terms of confidentiality that require them to keep confidential Manufacturer’s Confidential Information.
(b)
Company shall have the right to conduct additional audits in response to incidents/deviations associated with the manufacture/testing of the Products, given that a reasonable advanced notice is provided to Manufacturer. Visits by Company to Manufacturer production facilities may involve the transfer of Confidential Information, and any such Confidential Information shall be subject to the terms of
Article 11
hereof. The results of such audits and inspections shall be considered Confidential Information under
Article 11
and shall not be disclosed to Third Parties, except to the extent required by law or otherwise in connection with regulatory or governmental compliance and only then upon prior written notice to Manufacturer, to the extent practicable. In the event that any audit or inspection reveals that Manufacturer failed to meet cGMPs or the Product Specifications, Manufacturer shall be responsible, at Manufacturer’s expense, for: (a)
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conducting an investigation to define the probable causes for the failure; (b) providing an acceptable cGMP investigation report and remediation plan to Company for review and, with respect to the remediation plan, approval; and (c) achieving compliance with cGMPs and the Product Specifications.
(c)
Company shall have the right, upon ten (10) days’ prior written notice to Manufacturer, to conduct, at its expense and during normal business hours, a quality assurance audit and inspection of all suppliers and vendors of Materials. Manufacturer shall ensure that each of its agreements with vendors and suppliers of Materials provides for both Manufacturer’s and Company’s right to audit their facilities and processes. Manufacturer shall provide Company written notice of its intent to audit a subcontractor or vendor of Materials no less than thirty (30) days prior to a scheduled audit, and shall offer Company an opportunity to attend and participate in such audit. Subcontractor and vendor audits shall, assuming the full cooperation of Manufacturer and the subcontractor or vendor at issue, (a) be limited to not more than two (2) auditors for a duration of two (2) days or, at the option of Company, one (1) auditor for three (3) days appointed by or representing Company and (b) may be conducted not more than one (1) time per calendar year, without a reasonable basis for additional audits. To the extent practicable Company shall coordinate its audits with Manufacturer so they can be completed simultaneously.
7.4
Notification of Inspection.
In the event the FDA or other Regulatory Authority notifies Manufacturer that it intends to visit or inspect its facilities relating to the manufacture of Product, the following shall apply: (a) Manufacturer shall immediately provide notice of such visit or inspection to Company; (b) Manufacturer shall permit a representative of Company to be present at the facility during such visit or inspection; (c) Manufacturer shall permit such representative of Company to be present at, and participate in, each daily wrap up session for such inspection and the post-inspection wrap up session for such inspection; (d) Manufacturer promptly shall provide Company with copies of all written materials received by Manufacturer relating to such inspection; (e) Manufacturer shall provide Company with advance copies of all proposed responses, shall permit Company reasonable opportunity to review and comment on each such response, shall reasonably consider Company’s reasonable comments thereon and shall provide Company with copies of each such response as submitted; and (f) Manufacturer agrees to allow the FDA or other relevant Regulatory Authorities to conduct such audit and reasonably cooperate with the FDA and other Regulatory Authorities in connection therewith. In addition, Manufacturer shall advise Company immediately if an authorized agent of the FDA or other Regulatory Authority visits any Manufacturer facilities relating to the manufacture of Product without prior notice. Manufacturer shall furnish to Company the report by such agency of any such visit within thirty (30) days of Manufacturer’s receipt of such report.
7.5
Customer Representative in Plant
. Company, at its own expense, shall have the right to appoint a technician to be assigned to each Manufacturer facility where any Product or component thereof is manufactured, assembled or packaged (“
Customer Representative in Plant
”) at such times and for such periods as, in the opinion of Company, is necessary to monitor compliance with this Agreement, or to coordinate and advise on the proper manufacture of the
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Products by Manufacturer. While at the Manufacturer facility, the Customer Representative in Plant shall have access solely to such areas of the Manufacturer facility in accordance with Manufacturer’s Customer Representative in Plant guidelines that are: (i) reasonably related to the manufacture of the Product; (ii) food-service areas; (iii) designated office space (with internet and phone service) as allocated to the Customer Representative in Plant by Manufacturer; (iv) public areas within the facility; or (v) as otherwise authorized by Manufacturer. The Customer Representative in Plant shall comply with all applicable Manufacturer policies and procedures (including, without limitation, all Manufacturer security policies and procedures and the Customer Representative in Plant guidelines) as provided to Company in writing. Company hereby represents that any and all of its employees visiting the Manufacturer facility shall be bound by terms of confidentiality.
7.6
Notification of Complaints.
Company shall notify Manufacturer promptly of any Product complaints involving Manufacturer’s manufacture or packaging so as to provide, to the extent practicable, sufficient time to allow Manufacturer to evaluate the complaints and assist Company in responding to such complaints.
7.7
Product Recalls.
In the event: (a) any Regulatory Authority or other national government authority issues a request, directive or order that the Products be recalled; (b) a court of competent jurisdiction orders such a recall or withdrawal; or (c) Company or Manufacturer reasonably determines that the Products should be recalled or withdrawn, the Parties shall take all appropriate corrective actions, and shall cooperate in any governmental investigations surrounding the recall. In the event that such recall results from the breach of Manufacturer’s express warranties under this Agreement or its negligence or willful misconduct, Manufacturer shall be responsible for promptly replacing the quantity of Products that were recalled at no cost to Company, which replacement of Products shall not limit the remedies available to Company.
Article 8
WARRANTIES; COVENANTS AND INDEMNIFICATION
8.1
Company’s Warranties
.
Company represents and warrants to Manufacturer that Company’s performance of its obligations under this Agreement shall not result in a material violation or breach of any agreement, contract, commitment or obligation to which Company is a Party or by which it is bound and shall not conflict with or constitute a default under its corporate charter or bylaws.
8.2
Manufacturer’s Warranties and Covenants
.
(a)
Manufacturer represents and warrants to Company that the Products Manufacturer delivers to Company pursuant to this Agreement shall: (i) at the time of delivery, not be adulterated within the meaning of the United States Federal Food, Drug and Cosmetic Act (the “
Act
”) or within the meaning of any applicable state or municipal law in which the definitions of adulteration are substantially the same as those contained in the
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Act, as the Act and such laws are constituted and effective at the time of delivery; (ii) shall be an article which may under the provisions of Section 404 of the Act be introduced into interstate commerce. Notwithstanding the foregoing, it shall not be a breach of this Section 8.2(a) if Product is adulterated within the meaning of the Act as a result of Material supplied by Company being defective or contaminated at the time of delivery to Manufacturer and Manufacturer has, with respect to such defective or contaminated Material, complied with the provisions of this Agreement relating to the testing and inspection.
(b)
Manufacturer further represents and warrants to Company that the Products Manufacturer delivers to Company pursuant to this Agreement shall, at the time of delivery, be free from defects in material and workmanship and shall have been manufactured: (i) in accordance and conformity with the Product Specifications and all the provisions of this Agreement; and (ii) in compliance with all Applicable Law. Notwithstanding the foregoing, it shall not be a breach of this Section 8.2(b) if Product is defective as a result of Material supplied by Company being defective or contaminated at the time of delivery to Manufacturer and Manufacturer has, with respect to such defective or contaminated raw material, complied with the provisions of this Agreement relating to the testing and inspection of raw material.
(c)
Manufacturer further represents and warrants to Company that Manufacturer’s performance of its obligations under this Agreement shall not result in a material violation or breach of any agreement, contract, commitment or obligation to which Manufacturer or its Affiliates is a party or by which it is bound and shall not conflict with or constitute a default under its Certificate of Incorporation or corporate bylaws. Manufacturer shall obtain and maintain all licenses and permits useful or necessary in order to meet its obligations hereunder.
(d)
Manufacturer further represents and warrants that it has in place facilities and processes necessary to protect the Confidential Information and ensure Product security, including without limitation restricted areas, workplace notices, and 24-hour on-site security personnel.
(e)
Manufacturer further represents and warrants that it shall perform all obligations hereunder in compliance with all Applicable Laws, Manufacturer’s standard operating procedures, and consistently high standards of workmanship and professionalism. With respect to Product delivered hereunder, Manufacturer has, and shall have, all the rights necessary to manufacture and sell the Product.
8.3
Indemnification by Manufacturer.
Manufacturer shall indemnify, defend and hold harmless Company, its Affiliates, officers, directors and employees from and against all claims, causes of action, suits, costs and expenses (including reasonable attorney’s fees), losses or liabilities of any kind related to this Agreement and asserted by Third Parties to the extent such claims arise out of or are attributable to: (a) Manufacturer’s breach of this Agreement; or (b) any negligent or wrongful act or omission on the part of Manufacturer, its employees, agents,
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sub-contractors or representatives, or (d) any latent defect in the Products, such as contamination or adulteration, to the extent not solely attributable to the Materials as supplied on the date of supply by Company.
8.4
Indemnification by Company.
Company shall indemnify, defend and hold harmless Manufacturer, its Affiliates, officers, directors and employees from and against all claims, causes of action, suits, costs and expenses (including reasonable attorney’s fees), losses or liabilities of any kind related to this Agreement and asserted by Third Parties to the extent such claims arise out of or are attributable to: (a) Company’s breach of this Agreement; (b) any negligence or willful misconduct of Company or its employees, agents or sub-contractors; or (c) any latent defect existing in the raw materials supplied by Company at the time such materials are delivered to Manufacturer if Manufacturer has, with respect to such defective or contaminated Material, complied with the provisions of this Agreement relating to testing and inspection.
8.5
Conditions of Indemnification.
If either Party seeks indemnification from the other hereunder, it shall promptly give notice to the other Party of any such claim or suit threatened, made or filed against it which forms the basis for such claim of indemnification and shall cooperate fully with the other Party in the investigation and defense of all such claims or suits. The indemnifying Party shall have the option to assume the other Party’s defense in any such claim or suit with counsel which is reasonably satisfactory to the other Party. No settlement or compromise shall be binding on a Party hereto without its prior written consent, such consent not to be unreasonably withheld.
8.6
Limitations.
(a)
EXCEPT AS OTHERWISE SET FORTH HEREIN, A PARTY SHALL NOT BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES RELATED TO THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, IN EXCESS OF THE AMOUNT OF ANY INSURANCE PROCEEDS RECOVERABLE UNDER THE LIABLE PARTY’S INSURANCE POLICIES, WHICH POLICIES SHALL INCLUDE COVERAGE NOT LESS THAN THAT CONTEMPLATED IN SECTION 12.9; PROVIDED, HOWEVER, THE FOREGOING SHALL NOT APPLY TO DAMAGES OR LOSSES RELATED TO THIRD PARTY CLAIMS; BREACHES OF
ARTICLES 9
OR
11
; OR WILLFUL MISCONDUCT, GROSS NEGLIGENCE, NEGLIGENT OR INTENTIONAL MISREPRESENTATION OR FRAUD.
(b)
FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS SECTION SHALL BE INTERPRETED TO LIMIT THE INDEMNIFICATION OBLIGATION OF A PARTY IN CONNECTION WITH A THIRD PARTY CLAIM EVEN IF THE RELATED DAMAGES ARE CHARACTERIZED AS BEING SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR OTHER LIKE DAMAGES OR LOSSES.
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Article 9
INTELLECTUAL PROPERTY RIGHTS
9.1
Transfer of IP.
Manufacturer acknowledges that, as between the parties, Company is the sole and exclusive owner of the Company IP. Company hereby grants a non-exclusive license during the Term to Manufacturer under the Company IP, Company Project IP and Company’s interest in Other Project IP solely to the extent necessary for Manufacturer to fulfill its obligations to the Company under this Agreement. Manufacturer covenants that it shall not use the Company IP, Company Project IP, or Other Project IP owned by Company for any purpose beyond the scope of the license granted in the foregoing sentence.
9.2
Project IP
.
Company shall be the sole and exclusive owner of all Project IP (i) related to the Product, including, without limitation, its development, specifications, testing, ingredient contents and ratios, manufacture process, formulation, and ingredient profiles, or (ii) based on, derived from or using any Company IP or Company Confidential Information (“
Company Project IP
”). Manufacturer hereby assigns to Company all of its right, title and interest in and to all Company Project IP. Manufacturer agrees to execute such documents and take such actions as Company may from time to time reasonably request to effect the foregoing assignment. Ownership of all Project IP other than Company Project IP shall be owned by the developing party (“
Other Project IP
”). Manufacturer hereby grants to Company a worldwide, irrevocable, royalty-free nonexclusive license for any purpose to the Other Project IP in which it has any right, title or interest.
Article 10
TERM AND TERMINATION
10.1
Term.
Unless earlier terminated as permitted herein, this Agreement shall commence on the Effective Date and shall expire three (3) years thereafter (the “
Initial Term
”) and shall automatically extend for additional one (1) year terms (if any, a “
Renewal Term
” and, together with the Initial Term, the “
Term
”), unless either Party provides written notice of non-renewal no less than ninety (90) days prior to the expiration of the Initial Term or any Renewal Term.
10.2
General Termination Rights.
Either Party may terminate this Agreement as follows:
(a)
immediately by providing written notice upon the bankruptcy of the other Party, which bankruptcy is not resolved or withdrawn within ninety (90) days of its filing; or
(b)
by giving to the other Party sixty (60) days prior written notice upon the material breach of any representation, warranty or any other provision of this Agreement by the other Party if the breach is not cured within sixty (60) days after written notice thereof to the Party in default.
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10.3
Termination.
(a)
Company and/or Manufacturer may terminate this Agreement at any time by giving three (3) months’ prior written notice to the other Party;
provided
,
however
, termination by Manufacturer pursuant to this
Section 10.3(a)
shall not relieve Manufacturer of its obligation to fulfill any outstanding Firm Purchase Orders.
(b)
Company or Manufacturer shall have the right to terminate this Agreement upon written notice to the other Party should any Adverse Supply Event continue for more than three (3) months or due to a continuing Force Majeure as contemplated in
Section 12.1
.
(c)
Company or Manufacturer shall have the right to immediately terminate this Agreement upon the breach by the other Party of its noncompetition obligations under this Agreement, as set forth in
Section 11.6
.
10.4
Termination/Accrued Obligations.
Termination of this Agreement shall not relieve either Party of any liability which has accrued prior to the effective date of such termination, nor prejudice either Party’s right to obtain performance of any obligation provided for in this Agreement, which by its express terms or context survives termination, provided that (i) with respect to a termination by Company pursuant to
Section 10.2
or
10.3(a), (b) or (c)
, Company shall not be obligated to purchase any further Product, but if Manufacturer is capable of manufacturing Product as required by this Agreement within three (3) months thereafter, it may require Manufacturer to fill all outstanding Firm Purchase Orders as of the date of termination and for such longer period required for transfer of Product manufactured to another manufacturer, and (ii) with respect to a termination by Manufacturer pursuant to
Section 10.2
, or a termination by Company pursuant to
Section 10.3(a)
, Company shall be obligated to purchase all Product ordered pursuant to Firm Purchase Orders, assuming that production of Product shall be wound down promptly and ceased as soon as reasonably practicable by Manufacturer. In any event, Manufacturer shall, at its own cost and expense, return to Company any Materials in Manufacturer’s possession.
10.5
Survival.
Expiration or early termination of this Agreement shall not relieve either Party of any obligations that it may have incurred prior to expiration or early termination and all covenants and agreements contained in this Agreement, which by their terms or context are intended to survive, shall continue in full force and effect, including without limitation,
Articles 7
through
12
, as well any relevant provisions of the Quality Agreement.
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Article 11
CONFIDENTIAL INFORMATION
11.1
Nondisclosure.
It is contemplated that in the course of the performance of this Agreement each Party may, from time to time, disclose Confidential Information to the other. Manufacturer agrees that, except as expressly provided herein, it shall not disclose Confidential Information received from Company, and shall not use Confidential Information disclosed to it by Company, for any purpose other than to fulfill Manufacturer’s obligations hereunder. Company agrees that, except as expressly provided herein, it shall not disclose Confidential Information received from Manufacturer, and shall not use Confidential Information disclosed to it by Manufacturer, for any purpose other than to fulfill Company’s obligations hereunder. Company shall have the right to share the terms of this Agreement and this Agreement with its current and potential collaborators, partners, and investors who are obligated to keep its terms confidential. Without limiting the generality of the foregoing, Manufacturer hereby agrees that it shall disclose the cost of Materials and Product pricing only to such of its senior management personnel who have a need to know such information. Manufacturer shall protect the Products from unauthorized copying, reproduction, dissemination or disclosure and from other unauthorized use including, without limitation, unauthorized use during any manufacturing or scrap processes.
11.2
Exceptions to Duty of Nondisclosure.
Notwithstanding the above, nothing contained in this Agreement shall preclude Company from utilizing Confidential Information as may be necessary in prosecuting patent rights related to Product, obtaining governmental marketing approvals, or complying with other governmental laws and regulations or court orders (provided that the Party disclosing such information uses reasonable efforts to seek confidential treatment of such information). The obligations of the Parties relating to Confidential Information shall expire ten (10) years after the termination of this Agreement. In addition, if either Party, based on the advice of its counsel, determines that this Agreement, or any of the other documents executed in connection herewith, must be filed with the Securities and Exchange Commission, then such Party shall have the right to file this Agreement (or such other documents) with the Securities and Exchange Commission, provided that such Party notifies the other Party reasonably in advance of such filing and uses commercially reasonable efforts to obtain confidential treatment of the material terms and conditions of this Agreement (consistent with Applicable Law).
11.3
Return of Confidential Information.
Upon termination of this Agreement, the receiving Party shall, if so requested by the disclosing Party, promptly return to the disclosing Party the originals and all copies of any Confidential Information (including all extracts, summaries and derivatives thereof) then in the receiving Party’s possession or under the receiving Party’s control. Notwithstanding the foregoing, the receiving Party may retain one (1) copy of such Confidential Information for legal archival purposes, provided that such copy shall be kept confidential after the termination or expiration of this Agreement.
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11.4
Handling and Reconstruction of and Access to Confidential Information
. Each Party shall maintain the originals or electronic copies of all documents containing disclosing Party’s Confidential Information according to its own internal quality procedures, cGMP and Applicable Laws. Accordingly, each Party shall ensure that such procedures incorporate and maintain appropriate safety and facility procedures, data security procedures and other safeguards against the destruction, loss, or alteration of the disclosing Party’s Confidential Information in the possession of the receiving Party, including procedures for the recovery and reconstruction of lost Confidential Information. At no time shall the receiving Party store or hold the disclosing Party’s Confidential Information in a form or manner not promptly accessible to the disclosing. Each Party agrees that it shall not withhold from the other any Confidential Information as a means of resolving a dispute.
11.5
Public Announcements.
Neither Party shall make any public announcement concerning the transactions contemplated herein, or make any public statement which includes the name of the other Party or any of its Affiliates, or otherwise use the name of the other Party or any of its Affiliates in any public statement or document without the prior written consent of the other Party, except as may be required by law, regulation, including SEC regulation, or judicial order, in which case the Party required to make the public announcement or public statement shall use commercially reasonable efforts to obtain the approval of the other Party as to form, nature and extent of the public announcement or public statement prior to issuing the same.
11.6
Noncompetition
. Manufacturer shall not manufacture, produce, develop, solicit or market the Product or any product using or incorporating the Company’s proprietary Technology utilized hereunder, other than for Company pursuant to the terms of this Agreement. Manufacturer shall not manufacture, produce, develop, solicit or market any product that is substantially similar to the Product during the Term and for three (3) years thereafter, without the prior written consent of Company.
11.7
Injunctive Relief.
In the event of a breach or threatened breach by a Party of any provision of this Section, the other Party shall be authorized and entitled to obtain from any court of competent jurisdiction equitable relief, whether preliminary or permanent, in addition to any other rights or remedies to which such Party may be entitled in law or equity.
Article 12
MISCELLANEOUS
12.1
Force Majeure and Failure of Suppliers
.
(a)
Excusable Delay.
Any delay in the performance of any of the duties or obligations of either Party hereto (except the payment of money) shall not be considered a breach of this Agreement and the time required for performance shall be extended for a period equal to the period of such delay, provided that such delay has been caused by or is the result of any acts of God, acts of a public enemy or other terrorist acts, insurrections, riots, embargoes, labor disputes, including strikes, lockouts, job actions, boycotts, fires,
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explosions, floods, shortages of material or energy, or other unforeseeable causes beyond the control and without the fault or negligence of the Party so affected, but not an Adverse Supply Event (a “
Force Majeure
”). The effected Party shall give prompt notice to the other Party of such cause and a good faith estimate of the continuing effect of the Force Majeure condition and duration of the affected Party’s nonperformance, and shall take promptly whatever reasonable steps are necessary or appropriate to relieve the effect of such cause(s) as rapidly as possible. Subject to the provisions of
Section 12.1(b)
, if a Force Majeure prevents Manufacturer from manufacturing Products ordered by Company hereunder for more than three (3) months, then Company may terminate this Agreement immediately without further obligation to Manufacturer.
(b)
Transfer of Production.
If Manufacturer becomes subject to a Force Majeure event which prevents or substantially interferes with manufacture of the Products at Manufacturer’s manufacturing facility, the Parties shall mutually agree on implementation of an agreed-upon action plan to transfer production of the Products to another Manufacturer facility or another manufacturer. The Parties shall, after the execution of this Agreement and at the request of either Party, meet to discuss and define such an action plan.
(c)
Suppliers.
With respect to any components or materials supplied by Manufacturer in connection with this Agreement, the Parties understand and agree that Company shall approve in advance the suppliers chosen by Manufacturer. Manufacturer shall be fully responsible for the timely and complete performance of all the suppliers it utilizes in connection herewith and the satisfaction of the Product Specifications and other requirements except for those materials supplied by the Company.
12.2
Notices.
All notices hereunder shall be delivered as follows: (a) personally; (b) by facsimile and confirmed by first class mail (postage prepaid); (c) by registered or certified mail (postage prepaid); or (d) by overnight courier service, to the following addresses of the respective Parties:
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|
|
|
If to Company:
|
With a copy to:
|
LifeVantage Corporation
9815 S. Monroe Street
Sandy, Utah 84970
Attention: General Counsel
Telephone: (801) 432-9000
Facsimile: (801) 906-7097
|
Kirt Shuldberg
Sheppard, Mullin, Richter & Hampton LLP
12775 El Camino Real
San Diego, CA 92130
Telephone: (858) 720-8900
Facsimile: (858) 509-3691
|
If to Manufacturer:
|
With copy to:
|
Deseret Laboratories, Inc.
1414 East 3850 South
St. George, Utah 84790
Attn: Mark H. Gubler
Telephone: (435) 628-8786
Facsimile: (435) 673-1202
|
Deseret Laboratories, Inc.
1414 East 3850 South
St. George, Utah 84790
Attn: Scott A. Gubler
Telephone: (435) 628-8786
Facsimile: (435) 673-1202
|
Notices shall be effective upon receipt if personally delivered or delivered by facsimile and confirmed by first class mail, on the fifth business day following the date of registered or certified mailing or on the first business day following the date of or delivery to the overnight courier. A Party may change its address listed above by written notice to the other Party.
12.3
Choice of Law/Venue/Jurisdiction.
This Agreement shall be construed, interpreted and governed by the laws of the State of Utah, excluding its choice of law provisions. The United Nations Convention on the International Sale of Goods is hereby expressly excluded. Any legal suit, action or proceeding arising out of or relating to this Agreement shall be commenced in the state or federal courts located in the City of Salt Lake City, Utah and each Party hereto irrevocably submits to the exclusive jurisdiction and venue of any such court in any such suit, action or proceeding.
12.4
Assignment.
Manufacturer acknowledges that the rights granted by Company to Manufacturer in this Agreement are unique to Manufacturer. This Agreement may not be assigned or transferred, in whole or in part, by Manufacturer, by operation of law or otherwise, without the prior written consent of Company, which consent may be withheld in Company’s sole discretion. Notwithstanding the foregoing, this Agreement shall be freely assignable by Company. Manufacturer agrees, upon request, to execute, acknowledge and deliver to such successor any additional documents that such successor may deem necessary to effectuate or evidence such assignment. No assignment shall relieve any Party of its responsibility hereunder.
12.5
Entire Agreement.
This Agreement, together with the Exhibits referenced and incorporated herein, constitute the entire agreement between the Parties concerning the subject matter hereof and supersede all written or oral prior agreements or understandings with respect thereto.
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12.6
Severability.
This Agreement is subject to the restrictions, limitations, terms and conditions of all applicable governmental regulations, approvals and clearances. If any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein.
12.7
Waiver-Modification of Agreement.
No waiver or modification of any of the terms of this Agreement shall be valid unless in writing and signed by authorized representatives of both Parties. Failure by either Party to enforce any such rights under this Agreement shall not be construed as a waiver of such rights, nor shall a waiver by either Party in one or more instances be construed as constituting a continuing waiver or as a waiver in other instances.
12.8
Insurance.
Manufacturer shall, at its own cost and expense, obtain and maintain in full force and effect the following insurance during the Term: (A) Commercial General Liability, including personal and advertising injury insurance and contractual liability insurance, with a per occurrence limit of not less than One Million Dollars per occurrence and aggregate (this limit can be satisfied using a primary general liability policy in combination with an umbrella policy); (B) Products and Completed Operations Liability Insurance with a per occurrence limit of not less than One Million Dollars and (C) Worker’s Compensation and Employer’s Liability Insurance with statutory limits for Workers’ Compensation and Employer’s Liability insurance limits of not less than One Million Dollars
per accident. In the event that any of the required policies of insurance are written on a claims-made basis, then such policies shall be maintained during the entire Term and for a period of not less than two (2) years following the expiration or termination of this Agreement. Upon written request, Manufacturer shall furnish certificates of insurance to Company as soon as practicable after the Effective Date and within thirty (30) days after renewal of such policies. Manufacturer shall name Company as an additional insured party under its insurance policies of said types evidencing the required insurance policies to Company. Each insurance policy that is required under this Agreement shall be obtained from an insurance carrier with an A.M. Best rating of at least A-VII.
12.9
Exhibits.
All Exhibits referred to herein are hereby incorporated by reference.
12.10
Further Actions.
The Parties shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments, and to do and cause to be done such further acts that may be necessary to carry out the provisions and purposes of this Agreement, notwithstanding any expiration or termination of this Agreement.
12.11
Subcontracting.
Manufacturer shall not assign, subcontract or delegate any of its rights or obligations under this Agreement without the express prior written authorization of Company. Manufacturer shall cause any such authorized subcontractor to be subject by contract to the same restrictions, exceptions, obligations, reports, termination provisions, confidentiality provisions, and other provisions contained in this Agreement as are applicable to Manufacturer.
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Manufacturer shall remain primarily obligated for all acts and omissions of any of its subcontractors as if Manufacturer had performed the subcontracted obligations itself, and shall guarantee the performance of the same.
12.12
Successors; Assigns.
This Agreement shall be binding upon and inure to the benefit of the Parties hereto and to each of their respective successors and permitted assigns.
12.13
Independent Contractor.
This Agreement shall not be deemed to create any partnership, joint venture, or agency relationship between the Parties. Each Party shall act hereunder as an independent contractor, and its agents and employees shall have no right or authority under this Agreement to assume or create any obligation on behalf of, or in the name of, the other Party. All persons employed by a Party shall be employees of such Party and not of the other Party, and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.
12.14
Counterparts.
This Agreement may be executed by original or facsimile signature in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
12.15
Headings.
The headings used in this Agreement are for convenience only and are not a part of this Agreement.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF
, the Parties intending to be bound by the terms and conditions hereof have caused this Agreement to be signed by their duly authorized representatives as of the date first above written.
|
|
|
LIFEVANTAGE CORPORATION
By: /s/ Douglas C. Robinson
Name: Douglas C. Robinson
Title: President and Chief Executi
ve Officer
|
DESERET LABORATORIES, INC.
By: /s/ Scott A. Gubler
Name: Scott A. Gubler
Title: President and Chief Executi
ve Officer
|
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EXHIBIT A
Product Pricing
|
|
|
|
|
Product
|
LifeVantage Item Number
|
Manufacturer Item Key
|
Price
|
Protandim Mexico 30 ct
|
3010MX
|
LIF-05
|
[***]
|
Protandim US 30 ct
|
3010US
|
LIF-06
|
[***]
|
Protandim US Bulk Tbs/M
|
100160
|
LIF-06T
|
[***]
|
Canine Health US 30 ct
|
1500US
|
LIF-07
|
[***]
|
Protandim Japan 30 ct
|
3015JP
|
LIF-09
|
[***]
|
Protandim JP Bulk Tbs/M
|
100185
|
LIF-09T
|
[***]
|
Protandim Hong Kong 30 ct
|
3010HK
|
LIF-10
|
[***]
|
Protandim Canada 30 ct
|
3010CA
|
LIF-12
|
[***]
|
Canine Health Japan 30 ct
|
1500JP
|
LIF-13
|
[***]
|
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This amended and restated employment agreement (the “
Agreement
”) is entered into by and between Douglas C. Robinson (“
you
” or “
your
”) and LifeVantage Corporation, a Colorado corporation, (the “
Company
”). This Agreement amends, restates and supersedes that certain Employment Agreement between you and the Company dated March 11, 2011 and effective as of March 15, 2011, as previously amended to date, including pursuant to the Amendment thereto dated as of March 23, 2012 (the “
Prior Agreement
”). This Agreement has an effective date of March 25, 2014 (the “
Effective Date
”) and will automatically terminate on June 30, 2016 (the “
Expiration Date
”) unless extended by mutual written agreement of the Company and you on or prior to the Expiration Date. In consideration of the mutual covenants and promises made in this Agreement, you and the Company agree as follows:
1.
Position and Responsibilities.
As of the Effective Date, you will continue serving as a full-time employee of the Company as the Company’s President and Chief Executive Officer (“
PCEO
”). You shall report directly to the Company’s Board of Directors (the “
Board
”). You shall have the duties, responsibilities and authority that are customarily associated with such position and such other senior management duties as may reasonably be assigned by the Board. You will devote your full time, efforts, abilities, and energies to promote the general welfare and interests of the Company and any related enterprises of the Company. You will loyally, conscientiously, and professionally do and perform all duties and responsibilities of his position, as well as any other duties and responsibilities as will be reasonably assigned by the Company. At the request of the Company, you will also serve as an officer and/or member of the board of directors of any Company affiliate, without additional compensation. Your primary workplace will be located at the Company’s Utah office, currently located at 9785 S. Monroe Street, Suite 300, Sandy, Utah 84070. Nothing herein shall preclude you from (i) serving, with the prior consent of the Board, as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations, (ii) engaging in charitable activities and community affairs, and (iii) managing your personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii) and (iii) shall be limited by you so as not to materially interfere, individually or in the aggregate, with the performance of your duties and responsibilities hereunder.
2.
Base Salary.
During your employment as PCEO and while this Agreement is in effect, you will be paid an annual base salary of $565,000.00 (the "
Base Salary
") for your services as PCEO, payable in the time and manner that the Company customarily pays its employees and subject to increase or decrease at the discretion of the Board (or committee of the Board).
3.
Bonuses.
During your employment as PCEO and while this Agreement is in effect, you will be eligible to participate in any annual incentive bonus plan as approved by the Board (or committee of the Board). Any such bonus shall be paid to you during the first three months of the fiscal year that follows the applicable performance fiscal year. The bonus will be deemed to have been earned on the date of payment of such bonus and you must remain an employee of the Company through the date of payment in order to receive the bonus.
4.
Long-Term Incentive Plan.
While you are an employee of the Company, you will be eligible to receive grants of stock options (or other grants of Company equity) to purchase shares of the Company’s common stock. Such equity grants, if any, will be made in the sole discretion of the Board (or committee of the Board) and will be subject to the terms and conditions specified by the Board (or committee of the Board), the Company’s stock plan, the award agreement that you must execute as a condition of any grant and the Company’s insider trading policy. If required by applicable law with respect to transactions involving Company equity securities, you agree that you shall use your best efforts to comply with any duty that you may have to (i) timely report any such transactions and (ii) to refrain from engaging in certain transactions from time to time. The Company has no duty to register under (or otherwise obtain an exemption from) the Securities Act of 1933 (or applicable state securities laws) with respect to any Company equity securities that may be issued to you. Any equity compensation awards that were granted to you before the Effective Date shall continue to be governed by their applicable terms and conditions.
5.
Expense Reimbursement; Financial Planning and Compliance.
During your employment and while this Agreement is in effect, you will be reimbursed for all reasonable business expenses (including, but without limitation, travel expenses) upon the properly completed submission of requisite forms and receipts to the Company in accordance with the Company’s expense reimbursement policy. In addition, during your employment and while this Agreement is in effect, the Company will pay up to $20,000 annually to cover costs incurred by you for professional assistance with respect to personal financial and tax planning and compliance.
6.
Employee Benefit Programs.
During your employment with the Company, and except as may be provided under an employee stock purchase plan, you will be eligible to participate, on the same terms as generally provided to senior executives, in all Company employee benefit plans and programs at the time or thereafter made available to Company senior executive officers including, without limitation, any savings or profit sharing plans, deferred compensation plans, stock option incentive plans, group life insurance, accidental death and dismemberment insurance, hospitalization, surgical, major medical and dental coverage, vacation, sick leave (including salary continuation arrangements), long-term disability, holidays and other employee benefit programs sponsored by the Company. The Company may amend, modify or terminate these benefits at any time and for any reason. Any change in any employee benefit program or programs applicable to all covered employees shall not constitute a material breach of the terms of the Agreement or constitute Good Reason as defined below.
7.
Termination of Employment.
Unless the Company requests otherwise in writing, upon termination of your employment for any reason, you understand and agree that you shall be deemed to have also immediately resigned from all positions as an officer (and/or director, if applicable) with the Company (and its affiliates) as of your last day of employment (the “
Termination Date
”). Upon termination of your employment for any reason, you shall receive payment or benefits from the Company covering the following: (i) all unpaid salary and unpaid vacation accrued pursuant to the paid time off policy through the Termination Date, (ii) any payments/benefits to which you are entitled under the express terms of any applicable Company
employee benefit plan, (iii) any unreimbursed valid business expenses for which you have submitted properly documented reimbursement requests, and (iv) your then outstanding equity compensation awards as governed by their applicable terms (collectively, (i) through (iv) are the “
Accrued Pay
”). You may also be eligible for other post-employment payments and benefits as provided in this Agreement. To the extent needed to comply with Internal Revenue Code (the “
Code
”) Section 409A, you must as a condition of payment have experienced a “separation from service” within the meaning of Code Section 409A with respect to certain payments to be made to you on or after your Termination Date.
(a)
At-Will Employment.
Your employment with the Company is at-will and either you or the Company may terminate your employment at any time upon written notice to the other party (except that your employment shall automatically be terminated without notice upon your death) and for any reason (or no reason), with or without Cause or Good Reason (as each are defined below), in each case subject to the terms and provisions of this Agreement.
(b)
For Cause.
For purposes of this Agreement, your employment may be terminated by the Company for “
Cause
” as a result of the occurrence of one or more of the following:
(i)
a charge, through indictment or criminal complaint, entry of pretrial diversion or sentencing agreement, or your conviction of, or a plea of guilty or nolo contendere to, a felony or other crime involving moral turpitude, dishonesty or fraud, or any other criminal arrest (for example D.U.I.) which the Company, in its discretion considers inappropriate or harmful to its interests;
(ii)
your refusal to perform in any material respect your duties and responsibilities for the Company or a Company affiliate or your failure to comply in any material respect with the terms of this Agreement and the Confidentiality Agreement and the polices and procedures of the Company or a Company affiliate;
(iii)
fraud or deceptive or illegal conduct in your performance of duties for the Company or a Company affiliate;
(iv)
your material breach of any material term of this Agreement; or
(v)
any conduct by you which materially injurious to the Company or a Company affiliate or materially injurious to the business reputation of the Company or a Company affiliate.
In the event your employment is terminated by the Company for Cause you will be entitled only to your Accrued Pay and you will be entitled to no other compensation from the Company.
(c)
Without Cause.
The Company may terminate your employment without Cause at any time and for any reason with notice. If your employment is terminated without Cause and while this Agreement is in effect then, in addition to your Accrued Pay, you will be
eligible to receive payments equal in the aggregate to your then annualized Base Salary. The payments shall be paid to you in cash, in substantially equal monthly installments payable over the twelve (12) month period following your Termination Date, provided, however, the first payment (in an amount equal to two (2) months of Base Salary) shall be made on the sixtieth (60th) day following the Termination Date. As a condition to receiving (and continuing to receive) the payments provided in this Section 7(c) you must: (i) within not later than forty-five (45) days after your Termination Date, execute (and not revoke) and deliver to the Company a Separation Agreement in a form prescribed by the Company and such Separation Agreement shall include without limitation a release of all claims against the Company and its affiliates along with a covenant not to sue and (ii) remain in full compliance with such Separation Agreement.
(d)
Voluntary Termination.
In the event you voluntarily terminate your employment with the Company, you will be entitled to receive only your Accrued Pay. You will be entitled to no other compensation from the Company.
(e)
Death or Disability.
In the event your employment with the Company is terminated while this Agreement is in effect due to your Disability, death or presumed death, then you or your estate will be entitled to receive your Accrued Pay. For purposes of this Agreement, “
Disability
” is defined to occur when you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.
(f)
Resignation for Good Reason.
You may resign your employment from the Company for “Good Reason” subject to the terms and conditions set forth below. Your resignation for Good Reason will only be effective if the Company has not cured or remedied the Good Reason event within 30 days after its receipt of your written notice (such notice shall describe in detail the basis and underlying facts supporting your belief that a Good Reason event has occurred). Such notice of your intention to resign for Good Reason must be provided to the Company within forty-five (45) days following the initial existence of a Good Reason event. Failure to timely provide such written notice to the Company or failure to timely resign your employment for Good Reason means that you will be deemed to have consented to and waived the Good Reason event. If the Company does timely cure or remedy the Good Reason event, then you may either resign your employment without Good Reason or you may continue to remain employed subject to the terms of this Agreement.
(i)
You have incurred a material diminution in your responsibilities, duties or authority;
(ii)
You have incurred a material diminution in your Base Salary; or
(iii)
The Company has materially breached a material term of this Agreement.
The foregoing Good Reason provisions in this Section 7(f) are intended to (and shall be interpreted to) comply with the Good Reason safe harbor afforded by Treasury Regulation Section 1.409A-1(n)(2)(ii).
If you resign your employment for Good Reason, then in addition to your Accrued Pay, you will be eligible to receive payments equal in the aggregate to your then annualized Base Salary. The payments shall be paid to you in cash, in substantially equal monthly installments payable over the twelve (12) month period following your Termination Date, provided, however, the first payment (in an amount equal to two (2) months of Base Salary) shall be made on the sixtieth (60th) day following the Termination Date. As a condition to receiving (and continuing to receive) the payments provided in this Section 7(f) you must: (1) within not later than forty-five (45) days after your Termination Date, execute (and not revoke) and deliver to the Company a Separation Agreement in a form prescribed by the Company and such Separation Agreement shall include without limitation a release of all claims against the Company and its affiliates along with a covenant not to sue and (2) remain in full compliance with such Separation Agreement.
(g)
Termination Within Twelve (12) Months after a Change in Control.
The provisions of this Section 7(g) set forth certain terms of an agreement reached between you and the Company regarding your rights and obligations upon the occurrence of a Change in Control of the Company while this Agreement is in effect. These provisions are intended to assure and encourage in advance your continued attention and dedication to your assigned duties and your objectivity during the pendency and after the occurrence of any such event. Except if a termination of your employment by the Company without Cause or a Good Reason event has occurred during the twelve month period after a Change in Control, these provisions shall terminate and be of no further force or effect beginning on the first anniversary of the occurrence of a Change in Control.
(i)
“Change in Control”
shall mean the occurrence of any one or more of the following: (A) any merger, consolidation or business combination in which the shareholders of the Company immediately prior to the merger, consolidation or business combination do not own at least a majority of the outstanding equity interests of the surviving parent entity, (B) the sale or other disposition of all or substantially all of the Company's assets, (C) the acquisition of beneficial ownership or control of (including, without limitation, power to vote) a majority of the outstanding shares of the Company’s capital stock by any person or entity (including a "group" as defined by or under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”)), (D) the dissolution or liquidation of the Company, (E) a contested election of directors, as a result of which or in connection with which the persons who were directors of the Company before such election or their nominees cease to constitute a majority of the Board, or (F) any other event specified by the Board.
(ii)
If within twelve (12) months after a Change in Control, your employment is terminated by the Company without Cause, then subject to your compliance with the terms of Section 7(c), the Company shall pay you those benefits described in Section 7(c) above.
(iii)
If within twelve (12) months after a Change in Control, a Good Reason event has occurred and you resign your employment for Good Reason, then subject to your compliance with the terms of Section 7(f), the Company shall pay you those benefits described in Section 7(f).
(iv)
Unless otherwise provided in the applicable option agreement or stock-based award agreement, all outstanding stock options and other stock-based awards granted to you by the Company shall immediately accelerate and become exercisable or non-forfeitable as of the date of Change in Control, and you shall be entitled to any other rights and benefits with respect to stock-related awards, to the extent and upon the terms provided in the employee stock option or incentive plan or any agreement or other instrument attendant thereto pursuant to which such options or awards were granted.
8.
Limitation on Golden Parachute Payments.
Notwithstanding any other provision of this Agreement or any such other agreement or plan, if any portion of the Total Payments (as defined below) would constitute an Excess Parachute Payment (as defined below) and therefore would be nondeductible to the Company by reason of the operation of Code Section 280G relating to golden parachute payments and/or would be subject to the golden parachute excise tax (“
Excise Tax
”) by reason of Section 4999 of the Code, then the full amount of the Total Payments shall not be provided to you and you shall instead receive the Reduced Total Payments (as defined below).
If the Total Payments must be reduced to the Reduced Total Payments, the reduction shall occur in the following order: (1) reduction of cash payments for which the full amount is treated as a Parachute Payment; (2) cancellation of accelerated vesting (or, if necessary, payment) of cash awards for which the full amount is not treated as a parachute payment; (3) cancellation of any accelerated vesting of equity awards; and (4) reduction of any continued employee benefits. In selecting the equity awards (if any) for which vesting will be reduced under clause (3) of the preceding sentence, awards shall be selected in a manner that maximizes the after-tax aggregate amount of Reduced Total Payments provided to you, provided that if (and only if) necessary in order to avoid the imposition of an additional tax under Section 409A of the Code, awards instead shall be selected in the reverse order of the date of grant.
For the avoidance of doubt, for purposes of measuring an equity compensation award’s value to you when performing the determinations under the preceding paragraph, such award’s value shall equal the then aggregate fair market value of the vested shares underlying the award less any aggregate exercise price less applicable taxes. Also, if two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis. In no event shall (i) you have any discretion with respect to the ordering of payment reductions or (ii) the Company be required to gross up any payment or benefit to you to avoid the effects of the Excise Tax or to pay any regular or excise taxes arising from the application of the Excise Tax.
All mathematical determinations and all determinations of whether any of the Total Payments are Parachute Payments that are required to be made under this Section 8 shall be made by a nationally recognized independent audit firm selected by the Company (the “
Accountants
”), who shall provide their determination, together with detailed supporting
calculations regarding the amount of any relevant matters, both to the Company and to you. Such determination shall be made by the Accountants using reasonable good faith interpretations of the Code. The Company shall pay the fees and costs of the Accountants which are incurred in connection with this Section 8.
“
Excess Parachute Payment
” has the same meaning provided to such term by Treasury Regulations section 1.280G-1 Q/A-3.
“
Parachute Payment
” has the same meaning provided to such term by Treasury Regulations section 1.280G-1 Q/A-2.
“
Reduced Total Payments
” means the lesser portion of the Total Payments that may be provided to you instead of the Total Payments. The Reduced Total Payments shall be the maximum amount from the Total Payments that can be provided to you without incurring Excess Parachute Payments.
“
Total Payments
” means collectively the benefits or payments provided by the Company (or by any person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets within the meaning of Section 280G of the Code and the regulations thereunder) to or for the benefit of you under this Agreement or any other agreement or plan.
9.
Proprietary Information and Inventions Agreement; Confidentiality.
You will be required, as a condition of your employment with the Company, to timely execute and comply with the Company’s form of proprietary information and inventions agreement as may be amended from time to time by the Company (“
Confidentiality Agreement
”).
10.
Assignability; Binding Nature.
Commencing on the Effective Date, this Agreement will be binding upon you and the Company and your respective successors, heirs, and assigns. This Agreement may not be assigned by you except that your rights to compensation and benefits hereunder, subject to the limitations of this Agreement, may be transferred by will or operation of law. No rights or obligations of the Company under this Agreement may be assigned or transferred except in the event of a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the Company provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company and assumes the Company’s obligations under this Agreement contractually or as a matter of law. The Company will require any such purchaser, successor or assignee to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such purchase, succession or assignment had taken place. Your rights and obligations under this Agreement shall not be transferable by you by assignment or otherwise provided, however, that if you die, all amounts then payable to you hereunder shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate.
11.
Governing Law; Arbitration.
To the extent not preempted by federal law, this Agreement will be deemed a contract made under, and for all purposes shall be construed in
accordance with, the laws of Utah. Any controversy or claim relating to this Agreement or any breach thereof, and any claims you may have arising from or relating to your employment with the Company, will be settled solely and finally by arbitration in Salt Lake City, Utah before a single arbitrator and judgment upon such award rendered by the arbitrator may be entered in any court having jurisdiction thereof, provided that this Section 11 shall not be construed to eliminate or reduce any right the Company or you may otherwise have to obtain a temporary restraining order or a preliminary or permanent injunction to enforce any of the covenants contained in this Agreement before the matter can be heard in arbitration.
12.
Taxes.
The Company shall have the right to withhold and deduct from any payment hereunder any federal, state or local taxes of any kind required by law to be withheld with respect to any such payment. The Company shall not be liable to you or other persons as to any unexpected or adverse tax consequence realized by you and you shall be solely responsible for the timely payment of all taxes arising from this Agreement that are imposed on you. This Agreement is intended to comply with the applicable requirements of Code Section 409A and shall be limited, construed and interpreted in a manner so as to comply therewith. Each payment made pursuant to any provision of this Agreement shall be considered a separate payment and not one of a series of payments for purposes of Code Section 409A. While it is intended that all payments and benefits provided under this Agreement to you will be exempt from or comply with Code Section 409A, the Company makes no representation or covenant to ensure that the payments under this Agreement are exempt from or compliant with Code Section 409A. The Company will have no liability to you or any other party if a payment or benefit under this Agreement is challenged by any taxing authority or is ultimately determined not to be exempt or compliant. In addition, if upon your Termination Date, you are then a “specified employee” (as defined in Code Section 409A), then solely to the extent necessary to comply with Code Section 409A and avoid the imposition of taxes under Code Section 409A, the Company shall defer payment of “nonqualified deferred compensation” subject to Code Section 409A payable as a result of and within six (6) months following your Termination Date until the earlier of (i) the first business day of the seventh (7th) month following your Termination Date or (ii) ten (10) days after the Company receives written confirmation of your death. Any such delayed payments shall be made without interest. Additionally, the reimbursement of expenses or in-kind benefits provided pursuant to this Agreement shall be subject to the following conditions: (1) the expenses eligible for reimbursement or in-kind benefits in one taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year; (2) the reimbursement of eligible expenses or in-kind benefits shall be made promptly, subject to the Company’s applicable policies, but in no event later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
13.
Entire Agreement.
Except as otherwise specifically provided in this Agreement, this Agreement (and the agreements referenced herein) contains all the legally binding understandings and agreements between you and the Company pertaining to the subject matter of this Agreement and supersedes all such agreements, whether oral or in writing, previously discussed or entered into between the parties including without limitation the Prior Agreement and any term sheets regarding your continued employment with the Company. As a material
condition of this Agreement, you represent that by entering into this Agreement or by continuing as a Company employee you are not violating the terms of any other contract or agreement or other legal obligations that would prohibit you from performing your duties for the Company. You further agree and represent that in providing your services to the Company you will not utilize or disclose any other entity's trade secrets or confidential information or proprietary information. You represent that you are not resigning employment or relocating any residence in reliance on any promise or representation by the Company regarding the kind, character, or existence of such work, or the length of time such work will last, or the compensation therefor.
14.
Non-Competition and Non-Solicitation.
(a)
Non-solicitation of employees and consultants.
During your employment and for a period of two years after your employment terminates, you will not directly or indirectly solicit or induce, or attempt to solicit or induce, any employee or consultant of the Company to quit their employment or cease rendering services to the Company, unless you are specifically authorized to do so by the Company.
(b)
Non-solicitation of Customers.
To the extent permitted under applicable law, and in order to protect the Confidential Information and preserve the Company’s relationships with its prospects and customers, you agree that for a period of two (2) years after your employment with the Company ends for any reason, you will not directly or indirectly solicit any business consisting of nutritional supplements or any other product or service of the Company at the time of your termination with any prospect or customer of the Company.
(c)
Non-Competition.
You shall not, for a period of one (1) year after your employment with the Company ends for any reason, engage in, advise or consult with, or accept employment with any company, business or any entity, or contribute your knowledge to any work or activity that involves a product, process, provision of services or distribution channel (network marketing) as offered by the company, the development and/or sales of nutritional supplements, or any other product or service of the Company which is competitive with and the same as or similar to a product, process, or provision of services or distribution channel (network marketing) on which you worked or with respect to which you had access to confidential information while with the Company. Following expiration of said one-year period, you shall continue to be obligated under the confidentiality provisions of this Agreement and of your proprietary information and inventions agreement not to disclose and/or use confidential information so long as it shall remain proprietary or protectable as confidential or trade secret information. You acknowledge that this restraint is reasonable as to time and geographic limits and is necessary to protect the Company’s confidential information, and that it will not unduly restrict your ability to secure suitable employment after leaving the Company.
(d)
Modification By Court.
If any court or arbitrator determines that any post-employment restrictive covenant is unreasonable in any respect, you agree that the Court may modify any unreasonable terms and enforce the agreement as modified.
(e)
Extension of Non-Compete.
For any period of time in which you are found to be in violation of any of the above non-compete or non-solicitation agreements, that
period of time shall be added on to the length of the restriction or period of protection for the Company.
(f)
Notice to Subsequent Employers.
You agree that the Company may provide notice of your obligations under any provision of this Agreement to any company or future employer of yours should the Company consider it necessary for the enforcement of those obligations.
15.
Covenants.
As a condition of this Agreement and to your receipt of any post-employment benefits, you agree that you will fully and timely comply with all of the covenants set forth in this subsection (which shall survive your termination of employment and termination or expiration of this Agreement):
(i)
You will fully comply with all obligations under the Confidentiality Agreement and further agree that the provisions of the Confidentiality Agreement shall survive any termination or expiration of this Agreement or termination of your employment or any subsequent service relationship with the Company;
(ii)
Within five (5) days of the Termination Date, you shall return to the Company all Company confidential information including, but not limited to, intellectual property, etc., and you shall not retain any copies, facsimiles or summaries of any Company proprietary information;
(iii)
You will not at any time make (or direct anyone to make) any disparaging statements (oral or written) about the Company, or any of its affiliated entities, officers, directors, employees, stockholders, representatives or agents, or any of the Company’s products or services or work-in-progress, that are harmful to their businesses, business reputations or personal reputations;
(iv)
You agree that during the period of your employment with the Company and thereafter, you will not utilize any trade secrets of the Company in order to solicit, either on behalf of yourself or any other person or entity, the business of any client or customer of the Company, whether past, present or prospective. The Company considers the following, without limitation, to be its trade secrets: Financial information, administrative and business records, analysis, studies, governmental licenses, employee records (including but not limited to counts and goals), prices, discounts, financials, electronic and written files of Company policies, procedures, training, and forms, written or electronic work product that was authored, developed, edited, reviewed or received from or on behalf of the Company during period of employment, Company developed technology, software, or computer programs, process manuals, products, business and marketing plans and/or projections, Company sales and marketing data, Company technical information, Company strategic plans, Company financials, vendor affiliations, proprietary information, technical data, trade secrets, know-how, copyrights, patents, trademarks, intellectual property, and all documentation related to or including any of the foregoing; and
(v)
You agree that, upon the Company’s request and without any payment therefore, you shall reasonably cooperate with the Company (and be available as
necessary) after the Termination Date in connection with any matters involving events that occurred during your period of employment with the Company.
(b)
You also agree that you will fully and timely comply with all of the covenants set forth in this subsection (which shall survive your termination of employment and termination or expiration of this Agreement):
(i)
You will fully pay off any outstanding amounts owed to the Company no later than their applicable due date or within thirty days of your Termination Date (if no other due date has been previously established);
(ii)
Within five (5) days of the Termination Date, you shall return to the Company all Company property including, but not limited to, computers, cell phones, pagers, keys, business cards, etc.;
(iii)
Within thirty (30) days of the Termination Date, you will submit any outstanding expense reports to the Company on or prior to the Termination Date; and
(iv)
As of the Termination Date, you will no longer represent that you are an officer, director or employee of the Company and you will immediately discontinue using your Company mailing address, telephone, facsimile machines, voice mail and e-mail;
(c)
You agree that you will strictly adhere to and obey all Company rules, policies, procedures, regulations and guidelines, including but not limited to those contained in the Company’s employee handbook, as well any others that the Company may establish including without limitation any policy the Company adopts on the recoupment of compensation.
16.
Offset.
Any severance or other payments or benefits made to you under this Agreement may be reduced, in the Company’s discretion, by any amounts you owe to the Company provided that any such offsets do not violate Code Section 409A.
17.
Notice.
Any notice that the Company is required to or may desire to give you shall be given by personal delivery, recognized overnight courier service, email, telecopy or registered or certified mail, return receipt requested, addressed to you at your address of record with the Company, or at such other place as you may from time to time designate in writing. Any notice that you are required or may desire to give to the Company hereunder shall be given by personal delivery, recognized overnight courier service, email, telecopy or by registered or certified mail, return receipt requested, addressed to the Company’s General Counsel at its principal office, or at such other office as the Company may from time to time designate in writing. The date of actual delivery of any notice under this Section 17 shall be deemed to be the date of delivery thereof.
18.
Waiver; Severability.
No provision of this Agreement may be amended or waived unless such amendment or waiver is agreed to by you and the Company in writing and such amendment or waiver expressly references this Section 18. No waiver by you or the Company of the breach of any condition or provision of this Agreement will be deemed a waiver of a
similar or dissimilar provision or condition at the same or any prior or subsequent time. Except as expressly provided herein to the contrary, failure or delay on the part of either party hereto to enforce any right, power, or privilege hereunder will not be deemed to constitute a waiver thereof. In the event any portion of this Agreement is determined to be invalid or unenforceable for any reason, the remaining portions shall be unaffected thereby and will remain in full force and effect to the fullest extent permitted by law.
19.
Voluntary Agreement.
You acknowledge that you have been advised to review this Agreement with your own legal counsel and other advisors of your choosing and that prior to entering into this Agreement, you have had the opportunity to review this Agreement with your attorney and other advisors and have not asked (or relied upon) the Company or its counsel to represent you or your counsel in this matter. You further represent that you have carefully read and understand the scope and effect of the provisions of this Agreement and that you are fully aware of the legal and binding effect of this Agreement. This Agreement is executed voluntarily by you and without any duress or undue influence on the part or behalf of the Company.
20.
Key-Man Insurance.
The Company shall have the right to insure your life for the sole benefit of the Company, in such amounts, and with such terms, as it may determine. All premiums payable thereon shall be the obligation of the Company. You shall have no interest in any such policy, but you agree to cooperate with the Company in taking out such insurance by submitting to physical examinations, supplying all information required by the insurance company, and executing all necessary documents, provided that no financial obligation is imposed on you by any such documents.
ACKNOWLEDGED AND AGREED:
This 26th day of March, 2014. This 26th day of March, 2014.
LIFEVANTAGE CORPORATION
/s/ Garry Mauro
/s/ Douglas C. Robinson
By: Garry Mauro Douglas C. Robinson
Title: Chairman of the Board of Directors
Signature Page to Amended and Restated Emplyment Agreement