Exhibit 10.10

 

SUPPLY AGREEMENT

 

This Supply Agreement (“Supply Agreement”) is effective as of December 1, 2003
and is between CARALOE, INC., a Texas corporation (“CARALOE”) with its principal
place of business located at 2001 Walnut Hill Lane, Irving Texas 75038,
MANNATECH, INC. a Texas corporation (“MANNATECH”) with its principal place of
business located at 600 S. Royal Lane, Suite 200, Coppell, Texas 75019 and its
manufacturer (the “Manufacturer”) (The name of the manufacturer has been omitted
pursuant to a request for confidential treatment and the material has been filed
with the Commission separately) . CARALOE, MANNATECH AND its Manufacturer are
hereinafter referred to as “Parties”.

 

WITNESSETH:

 

WHEREAS, CARALOE desires to sell to MANNATECH and MANNATECH desires to purchase
from CARALOE, a bulk aloe vera mucilaginous polysaccharide (hereinafter referred
to under the product name of “Manapol® powder”) in quantities, at the price and
upon the terms and conditions set forth herein; and

 

WHEREAS, contemporaneously with the execution of this Agreement, CARALOE and
MANNATECH are entering into a Trademark License Agreement of even date herewith
(the “License Agreement”) pursuant to which, among other things, CARALOE is
granting to MANNATECH a license to use the product name Manapol® in connection
with the labeling, advertising and sale of products manufactured by or for
MANNATECH that contain Manapol® powder; as one of the ingredients in products
manufactured by or for MANNATECH also containing other ingredients and
substances (the “Manufactured Products”); and

 

WHEREAS, MANNATECH and its Manufacturer are parties to that certain
Manufacturing Agreement dated April 22, 1998 (the “Manufacturing Agreement”),
pursuant to which the Manufacturer has agreed to manufacture, produce and bulk
package for MANNATECH the nutritional products described in the Manufacturing
Agreement; and

 

WHEREAS, the Parties desire to memorialize in this Agreement the arrangement
among the Parties pursuant to which its Manufacturer shall purchase Manapol®
powder directly from CARALOE at the prices set forth herein for the exclusive
purpose of manufacturing the Manufactured Products for MANNATECH;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements contained herein, the Parties hereto agree as follows:

 

1. Term. The term of this Supply Agreement shall be for a period of twelve (12)
months from December 1, 2003 to November 30, 2004 (the “Term”) unless further
extended or sooner terminated as provided herein (such term, as extended herein
called, the “Term”). The Term (including each one-year extension of the Term)
shall be extended automatically for an additional one (1) year period, provided
that, at least thirty (30) days prior to the end of the Term, MANNATECH and
CARALOE mutually agree in writing on the quantity and price of Manapol® powder
to be sold by CARALOE and purchased by MANNATECH hereunder during such
additional one-year period. At least sixty (60) days prior to the end of the
Term, CARALOE and MANNATECH shall commence good faith negotiations to determine
and agree upon such quantity and price for such additional one-year period. If
MANNATECH and CARALOE are unable to so agree on such quantity and price, this
Supply Agreement shall terminate effective at the end of the then-current Term.
Nothing contained in this Paragraph 1 shall be deemed to (i.) obligate MANNATECH
and CARALOE to agree upon such quantity and price, (ii.) obligate a party to
negotiate with the other party regarding such quantity and price is such other
part is then in breach of or in default under this Supply Agreement or the
License Agreement or (iii) limit the rights of MANNATECH and CARALOE under
Paragraph 14 hereof. This Supply Agreement shall terminate automatically upon
the expiration or termination of the License Agreement.

 

2. Sale and Purchase.

 

  2.1 Subject to the terms and conditions of this Supply Agreement, CARALOE
shall sell to MANNATECH and MANNATECH shall purchase from CARALOE, not less than
250 kilograms of Manapol® per month during the Term. CARALOE agrees that
MANNATECH may increase or decrease its monthly orders, incrementally, in amounts
not to exceed 200 Kg difference from the prior month’s order, subject to ninety
(90) days prior written notice to CARALOE. In the event that MANNATECH
reasonably anticipates that it shall require more than 200 Kg more Manapol® than
its prior monthly order, CARALOE will exert its best reasonable effort to
deliver but will guarantee delivery if MANNATECH gives CARALOE at least 180 days
prior written notice thereof.

 

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  2.2 MANNATECH and its Manufacturer agree that all Manapol® powder purchased by
it hereunder shall be used only as an additive in human or animal health food
products (in capsule, powder tablet or liquid form) manufactured by or for
MANNATECH that are intended for sale to the ultimate consumer in the United
States or any other of MANNATECH’S countries of operation in which it conducts
business and subject to compliance with MANNATECH’S obligations under the
License Agreement, including without limitation MANNATECH’S obligations under
Article III thereof.

 

  2.3 Beginning on the date hereof, unless otherwise specified by MANNATECH, and
its Manufacturer agrees to purchase directly from CARALOE all quantities of
Manapol® powder that it requires to manufacture Manufactured Products for
MANNATECH under the terms of the Manufacturing Agreement. CARALOE agrees that
all purchases by its Manufacturer pursuant to this Supply Agreement shall be
credited on a monthly basis against any minimum purchase requirements by
MANNATECH as set forth in this Supply Agreement.

 

  2.4 All sales of Manapol® powder, whether to MANNATECH or its Manufacturer,
shall be subject to payment terms of 1%—10 days, net 30 days. The cash discount
of 1% is allowed on invoices paid within 10 days of date of invoice. Where cash
discount for prompt payment is not taken, the net total amount of invoice is due
30 days from date of invoice.

 

3. Forecast. For each calendar year during the Term, MANNATECH shall provide
CARALOE and its Manufacturer (a) on a quarterly basis commencing on the date
hereof, a binding forecast of the minimum and maximum aggregate quantities of
Manapol® powder to be ordered during such period by either its Manufacturer or
MANNATECH, and (b) a good faith forecast (which shall be binding on MANNATECH)
of the minimum and maximum aggregate quantities of Manapol® powder to be ordered
during such year by either MANNATECH or its Manufacturer (the “Forecast”). The
annual Forecast shall be provided to CARALOE by October 15th of each year during
the Term. MANNATECH shall be permitted to adjust the forecast by the fifteenth
(15th) day following the end of each of the first three (3) calendar quarters
during each year of the Term.

 

4. Purchase Data and Inventory Report. Within five (5) days following the end of
each month during the Term, (a) its Manufacturer shall provide to MANNATECH a
report reflecting its collective purchases of Manapol® powder during the month
then ended, together with its inventory level of Manapol® power as of the end of
such month, and (b) CARALOE shall provide to MANNATECH a report reflecting its
and its Manufacturer purchases of Manapol® powder during the month then ended.

 

5. Quarterly Purchase Report. Within five (5) days following the receipt of the
reports from each of its Manufacturer and CARALOE pursuant to Section 4 above
for each month of the calendar quarter then ending, MANNATECH shall provide to
CARALOE a report with respect to the previous quarter reflecting the collective
purchases of Manapol® powder during such quarter, together with a comparison of
such purchases against purchase requirements set forth in this Supply Agreement
and the Forecast.

 

6. Pricing.

 

  6.1 The price per kilogram payable by its Manufacturer to CARALOE for Manapol®
powder shall be dependent on the total quantity of Manapol® powder purchased
collectively by MANNATECH and its Manufacturer during a calendar month and shall
be as set forth under the terms of this Supply Agreement.

 

  QUANTITY PURCHASED PRICING/KG

 

(This pricing structure has been omitted pursuant to a request for confidential
treatment and the material has been filed with the Commission separately.)

 

Its Manufacturer shall receive a rebate per kilogram, paid quarterly, on each
kilogram of Manapol® powder in excess of 800 kg purchased during a calendar
month.

 

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MANNATECH and/or its Manufacturer, as appropriate, shall bear all freight,
insurance and similar costs, and all sales taxes, with respect to such
purchases. The purchase price of Manapol® powder, together with all related
freight, insurance and similar costs, and sales taxes, shall be paid by
MANNATECH and/or its Manufacturer, as appropriate to CARALOE within thirty (30)
days after the date of invoice.

 

7. Orders; Deliveries. MANNATECH or its Manufacturer shall each instruct CARALOE
from time to time during the Term, by placing a purchase order with CARALOE
reasonably in advance of the date it desires Manapol® powder to be delivered to
it hereunder, as to (a) the quantities of Manapol® powder to be delivered (b)
the specific date of delivery, (c) the specific location of delivery and (d) the
particular carrier or particular type of carrier for such delivery. In no event
shall CARALOE be required to deliver to MANNATECH and/or its Manufacturer in any
three-month period a quantity of Manapol® powder in excess of 125% of the
maximum delivery requirement for such period set forth in the binding Forecast
for such period accepted by CARALOE. The quantities of Manapol® powder ordered
pursuant to this Supply Agreement from time to time shall be spaced in a
reasonable manner, and MANNATECH or its Manufacturer shall each order such
quantities in accordance with the Forecast. Deliveries of Manapol® powder shall
be made by CARALOE under normal trade conditions in the usual and customary
manner being utilized by CARALOE at the time and locations of the particular
delivery. The Manapol® powder delivered hereunder shall be packaged in five (5)
kilogram containers. All deliveries of Manapol® powder hereunder shall be made
by CARALOE F.O.B. at the facilities of CARALOE or its affiliates located in
Irving, Texas.

 

8. Exclusivity.

 

  8.1 MANNATECH’S Manufacturer agrees that any purchases of Manapol® powder from
CARALOE pursuant to the terms of this Supply Agreement shall be used exclusively
in connection with the production of products for MANNATECH pursuant to the
terms of the Manufacturing Agreement. Without limitation, its Manufacturer
agrees that it shall not sell Manapol® powder purchased pursuant to the terms of
this Supply Agreement in bulk or otherwise, or use any purchases of Manapol®
powder purchased pursuant to the terms of this Supply Agreement in connection
with the production of products on behalf of any other party other than
MANNATECH.

 

  8.2 CARALOE and MANNATECH agree that the Supply and License Agreements shall
be exclusive to the extent that CARALOE may not sell or distribute Manapol® in
bulk or wholesale form for sale or otherwise, to anyone whom MANNATECH has by
written notice to CARALOE identified as (and who is), an Independent Associate
of MANNATECH (“Associate”), or whom CARALOE knows or should have known to be an
Associate of Mannatech. For the purposes of this Agreement, an Associate is an
individual or business entity which has been assigned a MANNATECH account
number, is bound by MANNATECH’S Associate Agreement and the terms and conditions
related thereto, and which has placed at least one order for MANNATECH products
during the prior twelve (12) month period. For purposes of this paragraph 8.2,
the words “bulk or wholesale” shall refer only to a sale of one (1) kilogram or
more of Manapol® raw material.

 

  8.3 CARALOE agrees to discontinue making bulk or wholesale sales or
distributions of Manapol® raw material to any Associate within thirty (30) days
after receipt of written notice from MANNATECH identifying such Associate.

 

9. Quality. CARALOE warrants to MANNATECH and its Manufacturer that all Manapol®
powder sold by CARALOE pursuant to this Supply Agreement will conform to the
quality specifications set forth in Exhibit A to this Supply Agreement. EXCEPT
AS PROVIDED IN THIS PARAGRAPH 9, THERE ARE NO WARRANTIES OR REPRESENTATIONS OF
ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS, AND FITNESS FOR A PARTICULAR PURPOSE, MADE WITH
RESPECT TO THE MANAPOL® POWDER TO BE SOLD HEREUNDER, AND NONE SHALL BE IMPLIED
BY LAW. THE FOREGOING NOTWITHSTANDING, CARALOE DOES REPRESENT THAT THE MANAPOL®
POWDER DOES MEET THE SPECIFICATIONS OUTLINED ON EXHIBIT A AND THAT IT IS A FOOD
SUPPLEMENT UNDER THE FOOD & DRUG ADMINISTRATION’S RULES AND REGULATIONS.

 

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10. Insurance. CAROLOE shall maintain comprehensive insurance coverage during
the term of the Supply Agreement, and any extensions thereof, with not less than
the same coverage, endorsements, limits and notice of cancellation as shown in
the insurance certificate. CARALOE shall, within thirty (30) days after this
Supply Agreement is executed by all Parties, provide MANNATECH and its
Manufacturer with a copy of its insurance certificate naming MANNATECH and its
Manufacturer as an additional insured and listing the coverage, endorsements,
limits, and notice of cancellation provisions. CARALOE will not cancel or
materially alter such policy without providing at least thirty (30) days prior
written notice to all named insured. Failure by CARALOE to maintain insurance
coverage according to this article 10 shall constitute a material breach of this
Supply Agreement. It is understood and agreed that the furnishing of such
insurance certificate will not relieve CARALOE of its other respective
obligations under this Supply Agreement.

 

11. Confidential Information.

 

  11.1 CARALOE recognizes and acknowledges that MANNATECH’S trade name(s),
trademarks, copyrights, patents, marketing plans, identity of and related
information regarding its Associates, product formulations and other proprietary
product information and any information relating to the management/operations of
MANNATECH are valuable assets belonging to MANNATECH and as such are the sole
property and may constitute trade secrets of MANNATECH. Prior to and during the
performance of the Supply and License Agreements, CARALOE may have or had access
to certain confidential information pertaining to MANNATECH. CARALOE
specifically agrees CARALOE will not at any time, during or after the
performance of the Supply and License Agreements, in any manner, either directly
or indirectly, use, divulge, disclose, or communicate to any person, firm or
corporation, any confidential information of any kind, nature, or description
concerning any matters affecting or relating to the business of MANNATECH
(hereinafter referred to as “MANNATECH Confidential Information”). MANNATECH
Confidential Information includes but is not limited to: MANNATECH genealogies
(being the information held by MANNATECH or by any current or former Associate
of MANNATECH related to its Associates including without limitation its
relationship with each of its Associates, the Associate’s name, upline and
downline, charts, data reports, proprietary product information which may from
time-to-time be made known to CARALOE, the names or practices of any of
MANNATECH’S customers or Associates; MANNATECH’S marketing methods and related
data; the names of MANNATECH’S vendors or suppliers; costs of materials; costs
of its products generally, the prices MANNATECH obtains or has obtained or at
which it sells or has sold its products or services; manufacturing and sales
costs; lists or other written records used in MANNATECH’s business; compensation
paid to its Associates, details of training methods, new products or new uses
for old products, merchandising or sales techniques, contracts and licenses,
business systems, computer programs, or any other confidential information of,
about, or concerning the business of MANNATECH; its manner of operation or other
confidential data of any kind, nature or description.

 

  11.2 CARALOE agrees to use the MANNATECH Confidential Information only for
MANNATECH business and shall return copies of any written MANNATECH Confidential
Information in CARALOE’S possession to MANNATECH forthwith upon written demand
and upon termination of the Supply and License Agreements for whatever reason.

 

  11.3 Notwithstanding anything to the contrary contained in this Supply
Agreement or the License Agreement,

 

  11.3.1 CARALOE shall have no obligation to maintain in confidence or return to
MANNATECH any information (i) that was known to CARALOE prior to its disclosure
to CARALOE by MANNATECH or any of its current or former Associates and that did
not become known to CARALOE through disclosure by a person who was then known
actually by CARALOE to have obtained such information or made such disclosure in
violation of any obligation to MANNATECH, (ii) that is now in or hereafter
enters the public domain other than due to a breach by CARALOE of this paragraph
11, (iii) that is disclosed to CARALOE by a third party who is not actually
known by CARALOE to have obtained or disclosed such information in violation of
any obligation to MANNATECH, or (iv) that is independently developed by CARALOE
without the aid, application or use of any MANNATECH Confidential information
disclosed to CARALOE; and

 

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  11.3.2 CARALOE may make any disclosure of MANNATECH Confidential Information
(i) that it is necessary or appropriate to make in order to carry out its
obligations under any written agreement with MANNATECH, (ii) that it is required
or permitted to make pursuant to any written consent of or written agreement
with MANNATECH or (iii) that it is required by law to make.

 

  11.4 Each of MANNATECH and its Manufacturer recognize and acknowledge that
CARALOE’S trade name(s), trademarks, copyrights, patents, marketing plans,
product formulations, know-how, compounds, products, processes, designs,
production methods and techniques and other proprietary product information and
any information relating to the management/operations of CARALOE are valuable
assets and confidential information belonging to CARALOE and as such are the
sole property of CARALOE and may constitute trade secrets of CARALOE. Prior to
and during the performance of the Supply and License Agreements, each of
MANNATECH and its Manufacturer may have or had access to certain confidential
information pertaining to CARALOE. Each of MANNATECH and its Manufacturer
specifically agrees it will not at any time, during or after the performance of
the Supply and License Agreements, in any manner, either directly or indirectly,
use, divulge, disclose, or communicate to any person, firm or corporation, any
confidential information of any kind, nature, or description concerning any
matters affecting or relating to the business of CARALOE (hereinafter referred
to as “CARALOE Confidential Information”). CARALOE Confidential Information
includes but is not limited to: the names or practices of any of CARALOE’S
customers; CARALOE’S marketing methods and related data; the names of CARALOE’S
vendors or suppliers; costs of materials; costs of its products generally, the
prices CARALOE obtains or has obtained or at which it sells or has sold its
products or services; manufacturing and sales costs; lists or other written
records used in CARALOE’S business; compensation paid to its Associates, details
of training methods, new products or new uses for old products, merchandising or
sales techniques, contracts and licenses, business systems, computer programs,
or any other confidential information of, about, or concerning the business of
CARALOE; its manner of operation or other confidential data of any kind, nature
or description.

 

  11.5 Each of MANNATECH and its Manufacturer agree to use the CARALOE
Confidential Information only for CARALOE business and shall return copies of
any written CARALOE Confidential Information in its possession to CARALOE
forthwith upon written demand and upon termination of this Agreement for
whatever reason.

 

  11.6 Notwithstanding anything to the contrary contained in this Agreement,

 

  11.6.1 MANNATECH shall have no obligation to maintain in confidence or return
to CARALOE any information (i) that was known to MANNATECH prior to its
disclosure to MANNATECH by CARALOE that did not become known to MANNATECH
through disclosure by a person who was then known actually by MANNATECH to have
obtained such information or made such disclosure in violation of any obligation
to CARALOE, (ii) that is now in or hereafter enters the public domain other than
due to a breach by MANNATECH of this paragraph 11, (iii) that is disclosed to
MANNATECH by a third party who is not actually known by MANNATECH to have
obtained or disclosed such information in violation of any obligation to
CARALOE, or (iv) that is independently developed by MANNATECH without the aid,
application or use of any CARALOE Confidential information disclosed to
MANNATECH; and

 

  11.6.2 MANNATECH may make any disclosure of CARALOE Confidential Information
(i) that it is necessary or appropriate to make in order to carry out its
obligations under any written agreement with CARALOE, (ii) that it is required
or permitted to make pursuant to any written consent of or written agreement
with CARALOE or (iii) that it is required by law to make.

 

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12. Remedies.

 

  12.1 CARALOE acknowledges that MANNATECH has devoted considerable time and
resources in connection with the development of its sales force and products and
establishment of goodwill associated with the same. CARALOE acknowledges that a
breach by CARALOE of paragraphs 8.2 or 11 would cause MANNATECH to suffer
irreparable harm, for which damages would be difficult to assess and further
agrees that MANNATECH shall be entitled to injunctive relief in addition to any
other right or remedy MANNATECH may have, including without limitation, the
recovery of damages for the breach of this or any other surviving provision(s)
in the Supply Agreement and License Agreement.

 

  12.2 Each of MANNATECH and its Manufacturer acknowledge that CARALOE has
devoted considerable time and resources in connection with the development of
its products, production procedures and methods, trade secrets and intellectual
property. Each of MANNATECH and its Manufacturer acknowledge that a breach by it
of paragraphs 2.2, 8.1 or 11 would cause CARALOE to suffer irreparable harm, for
which damages would be difficult to assess and further agree that CARALOE shall
be entitled to injunctive relief in addition to any other right or remedy
CARALOE may have, including without limitation, the recovery of damages for the
breach of this or any other surviving provision(s) in the Supply Agreement or
License Agreement.

 

  12.3 Without limitation, MANNATECH shall be entitled to all remedies available
to it under this Supply Agreement with respect to purchases of Manapol® powder
by its Manufacturer pursuant to this Supply Agreement as though MANNATECH had
made such purchase directly; provided, that such rights and remedies shall not
be duplicative of any rights and remedies held by its Manufacturer hereunder, it
being understood and agreed that CARALOE shall not be required to compensate
both its Manufacturer and MANNATECH for the same breach, incident or claim.
CARALOE shall be entitled to all rights and remedies available to it under this
Supply Agreement with respect to the sales of Manapol® powder to either
MANNATECH or its Manufacturer pursuant to this Supply Agreement (including
without limitation, rights under Force Majeure events, rights upon default or
its Manufacturer and/or MANNATECH and rights of equitable relief) as though
MANNATECH has made such purchase directly and no obligation of its Manufacturer
hereunder shall relieve MANNATECH of any liability or responsibility under this
Supply Agreement.

 

13. Disclaimer and Indemnity.

 

  13.1 To the extent that CARALOE warrants conformity of the Manapol® Powder as
set forth in paragraph 9 herein, MANNATECH shall assume all financial and other
obligations for its products made with Manapol® powder, and CARALOE shall not
incur any liability or responsibility to its Manufacturer, MANNATECH or to third
parties arising out of or connected in any manner with Manufactured Products. IN
NO EVENT SHALL CARALOE BE LIABLE FOR LOST PROFITS, SPECIAL DAMAGES,
CONSEQUENTIAL DAMAGES OR CONTINGENT LIABILITIES ARISING OUT OF OR CONNECTED IN
ANY MANNER WITH THIS AGREEMENT OR THE MANUFACTURED PRODUCTS. MANNATECH and its
Manufacturer shall jointly and severally defend, indemnify and hold harmless
CARALOE and its affiliates, and their respective officers, directors, employees
and agents, from and against all claims, liabilities, demands, damages, expenses
and losses (including reasonable attorneys’ fees and expenses) arising out of or
connected with (i) any manufacture, use, sale or other disposition of
Manufactured Products, or any other products of MANNATECH or its Manufacturer,
by MANNATECH, its Manufacturer or any other party and (ii) any breach by
MANNATECH and/or its Manufacturer of any of their respective obligations under
this Supply Agreement.

 

  13.2 Without limiting in any manner the provisions of section 13.1, CARALOE
shall defend, indemnify and hold harmless MANNATECH and its Manufacturer and
their affiliates, and respective officers, directors, employees and agents, from
and against all claims, liabilities, demands, damages, expenses and losses
(including reasonable attorneys’ fees and expenses) arising out of or connected
with (i) and claim that Manapol® Powder supplied by CARALOE caused injury or
damage to a person or property and (ii) any breach by CARALOE of any of its
obligations under this Supply Agreement.

 

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14. Force Majeure. CARALOE shall not have any liability hereunder if it shall be
prevented from performing any of its obligations hereunder by reason of any
factor beyond its control, including without limitation, fire, explosion,
accident, riot, flood, drought, storm, earthquake, lightening, frost, civil
commotion, sabotage, vandalism, smoke, hail, embargo, act of God or the public
enemy, other casualty, strike or lockout, or interference, prohibition or
restriction imposed by any government or any officer or agent thereof (“Force
Majeure”), and CARALOE’S obligations, so far as may be necessary, shall be
suspended during the period of such Force Majeure and shall be cancelled in
respect of such quantities of Manapol® powder as would have been sold hereunder
but for such suspension. CARALOE shall give MANNATECH prompt notice of any such
Force Majeure, the date of commencement thereof and its probable duration and
shall give a further notice in like manner upon termination thereof. Each party
hereto shall endeavor with due diligence to resume compliance with its
obligations hereunder at the earliest date and shall do all that it reasonably
can to overcome or mitigate the effects of any such Force Majeure upon its
obligations under this Supply Agreement.

 

15. Rights Upon Default

 

  15.1 CARALOE’S Rights upon Default. If either MANNATECH or its Manufacturer
(i.) fail to purchase the quantities of Manapol® powder specified for purchase
by MANNATECH hereunder, (ii.) fails to make a payment hereunder when due, or
(iii.) otherwise breaches any term of this Supply Agreement, and such failure or
breach is not cured to CARALOE’S reasonable satisfaction within five (5) days
(in the case of a failure to make a payment) or thirty (30) days (in any other
case) after receipt of notice thereof by MANNATECH, or if MANNATECH fails to
perform or observe any covenant or condition on its part to be performed or
observed when required to be performed and observed, and such failure continues
after the applicable grace period, if any, specified in this Supply Agreement,
CARALOE may refuse to make further deliveries hereunder and may terminate this
Supply Agreement upon notice to MANNATECH, and in addition, shall have such
other rights and remedies, including the right to recover damages, as are
available to CARALOE under applicable law or otherwise. If MANNATECH or its
Manufacturer become bankrupt, insolvent, or if a petition in bankruptcy is filed
by or against it, or if a receiver is appointed for it or its properties,
CARALOE may refuse to make further deliveries hereunder and may terminate this
Supply Agreement upon written notice to its Manufacturer and MANNATECH, without
prejudice to any rights of CARALOE existing hereunder or under applicable law or
otherwise. Any subsequent shipment of Manapol® powder by CARALOE after a failure
by MANNATECH and/or its Manufacturer to make any payment hereunder, or after any
other default by MANNATECH hereunder, shall not constitute a waiver of any
rights of CARALOE arising out of such prior default; nor shall CARALOE’S failure
to insist upon strict performance of any provision of this Supply Agreement be
deemed a waiver by CARALOE of any rights of CARALOE arising out of such prior
default; nor shall CARALOE’S failure to insist upon strict performance of any
provision of this Supply Agreement be deemed a waiver by CARALOE of any of its
rights or remedies hereunder or under applicable law or a waiver by CARALOE of
any subsequent default by MANNATECH in the performance of or compliance with any
of the terms of this Supply Agreement.

 

  15.2 MANNATECH’S Rights Upon Default. If CARALOE fails in any material respect
to perform its obligations hereunder, and such failure is not cured to
MANNATECH’S reasonable satisfaction within thirty (30) days after notice thereof
by MANNATECH, MANNATECH and its Manufacturer shall have the right to refuse to
accept further deliveries hereunder and to terminate this Supply Agreement upon
notice to CARALOE, and in addition, subject to the provisions of Section 12.3,
shall have such other rights and remedies, including the right to recover
damages, as are available under applicable law or otherwise. Any subsequent
delivery of Manapol® powder to MANNATECH and/or its Manufacturer after any
default by CARALOE under this Supply Agreement shall not constitute a waiver of
any rights of MANNATECH and/or its Manufacturer arising out of such prior
default; nor shall MANNATECH’S and/or its Manufacturer’s failure to insist upon
strict performance of any provision of this Supply Agreement be deemed a waiver
by MANNATECH and/or its Manufacturer of any of its rights or remedies hereunder
or under applicable law or a waiver by MANNATECH and/or its Manufacturer of any
subsequent default by CARALOE in the performance of or compliance with any of
the terms of this Supply Agreement.

 

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16. Further Assurances. The Parties shall execute and deliver such additional
documents and take such additional actions as any Party may reasonably deem to
be necessary or appropriate to more fully consummate the transactions
contemplated by and affect the purposes of this Supply Agreement. All such
additional documents and actions shall be deemed to have been executed,
delivered or taken on the date of this Supply Agreement, except as may otherwise
be appropriate.

 

17. Authority. The Parties represent that they have full capacity and authority
to grant all rights and assume all obligations they have granted and assumed
under this Supply Agreement.

 

18. Succession. The Parties hereto may not assign or otherwise transfer this
Supply Agreement or any of its rights or obligations hereunder (including,
without limitation, by merger or consolidation) without the prior written
consent of the other Parties; provided, however, that CARALOE may assign any of
its rights or obligations hereunder to any affiliate of CARALOE. Subject to the
immediately preceding sentence, this Supply Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
assigns.

 

19. Counterparts. This Supply Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

20. Notices. All notices and other communications with respect to this Supply
Agreement shall be in writing and shall be deemed to have been duly given when
delivered personally or three (3) days following deposit in the mails, first
class mail, postage prepaid, to the address set forth below, or such other
address hereafter specified in like manner by one Party to the others:

 

If to MANNATECH:

 

600 S. Royal Lane, #200

Coppell, Texas 75019

Attention: General Counsel

If to Manufacturer:

  (Name of the Manufacturer has been omitted pursuant to a request for
confidential treatment and the material has been filed with the Commission
separately.)

If to CARALOE:

 

2001 Walnut Hill Lane

Irving, Texas 75038

Attention: President

 

21. Applicable Law; Venue. This Supply Agreement shall be governed by and
construed in accordance with the laws of Texas, without regard to any
conflict-of-law rules that would apply any other law. Venue of any action
brought to enforce or interpret this Supply Agreement shall only be in Dallas
County, Texas.

 

22. Binding Effect. No Party may assign or otherwise transfer this Supply
Agreement or any of its rights or obligations hereunder, including without
limitation, by merger or consolidation, without the prior written consent of the
Party against which enforcement is sought; provided, however, that CARALOE may
assign any of its rights or obligations hereunder to any affiliate of CARALOE.
Subject to the immediate preceding sentence, this Supply Agreement shall inure
to the benefit of and be binding upon the Parties and their respective
successors and permitted assigns. Nothing in this Supply Agreement, expressed or
implied, is intended to confer on any person other than the Parties or their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Supply Agreement.

 

23. Interpretation. If any provision of this Supply Agreement is held to be
illegal, invalid or unenforceable under present or future laws, such provision
shall be fully severable and the remaining provisions hereof shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Supply Agreement.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added as part of this Supply Agreement, a provision as similar in its
terms to such illegal, invalid or unenforceable provision as may be possible and
be legal, valid and enforceable.

 

24. No Inconsistent Actions. Each party hereto agrees that it will not
voluntarily undertake any action or course of action inconsistent with the
provisions or intent of this Supply Agreement and, subject to Section 11 hereof,
will promptly do all acts and take all measures as may be appropriate to comply
with the terms, conditions and provisions of this Supply Agreement.

 

8

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25. Survival. The expiration or termination of the Term shall not impair the
rights or obligations of the Parties which have accrued hereunder prior to such
expiration or termination. The provisions of Paragraphs 2.2, 9, 11, 13, 15 and
16 hereof, and the rights and obligations of the Parties thereunder, shall
survive the expiration or termination of the Term.

 

26. Entire Agreement. Except as otherwise contemplated hereby, this Supply
Agreement and the License Agreement, as amended, constitute the entire agreement
of the Parties, and supersedes all prior agreements and understandings (oral and
written), between or among the parties with respect to the subject matter
hereof.

 

IN WITNESS WHEREOF, the parties hereto have executed this Supply Agreement as of
the date first above written.

 

MANNATECH, INC.,

a Texas corporation

By:   /s/    Terry L. Persinger            

--------------------------------------------------------------------------------

Name:

  Terry L. Persinger

Title:

  President and Chief Operating Officer

 

(The name of its Manufacturer has been omitted pursuant to a request for
confidential treatment and the material has been filed with the Commission
separately.)

 

CARALOE, INC.,

a Texas corporation

By:   /s/    Carlton E. Turner            

--------------------------------------------------------------------------------

Name:

  Carlton E. Turner

Title:

  CEO

 

9

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EXHIBIT A

 

MANAPOL® POWDER PRODUCT SPECIFICATION

 

SOURCE:

 

(The product specifications have been omitted pursuant to a request for
confidential treatment and the material has been filed with the Commission
separately.)

 

10