DISTRIBUTORSHIP AGREEMENT
THIS DISTRIBUTORSHIP AGREEMENT ("Agreement") is made as of the 22nd day of
December, 2000, by and between Famous Fixins, Inc. ("Famous Fixins"), a New York
corporation, having its principal place of business at 000 Xxxx 00xx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000, and NutraMax Products Inc. ("NutraMax"), a
Delaware corporation having a principal place of business at 00 Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000-0000.
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the meanings
indicated, meanings to be applicable to both the singular and plural forms of
the terms defined:
Section 1.1. Licensed Rights shall mean such propriety rights, including
trademarks (registered or unregistered), tradenames, symbols, slogans, signs,
emblems, insignias, logos, designs, copyrights or other proprietary rights or
marks owned or licensed by MLB or by Famous Fixins as such propriety rights are
more fully set forth in Schedule A.
Section 1.2. Products mean adhesive bandages bearing any of the Licensed
Rights.
Section 1.3. Territory means the following geographic area or areas: United
States of America, and Puerto Rico.
Section 1.4 Term shall mean two (2) years from the date of this Agreement,
unless earlier terminated as provided in accordance with this Agreement.
Section 1.5. Package shall mean an individual unit of Products as sold by
NutraMax.
Section 1.6. NutraMax shall include NutraMax and its parents, subsidiaries
and affiliates.
Section 1.7 Net Number of Packages shall mean the total number of Packages
sold less any credit for returns or damaged goods.
Section 1.8. Agreement means this Distributor Agreement, together with
the Rebate Agreement, and any and all amendments thereto.
Section 1.9 Sales Payment shall be the amount due to Famous Fixins on a
monthly basis.
Section 1.10 Rebate Payment shall mean the amount due to NutraMax on a
monthly basis under the Rebate Agreement.
Section 1.11 MLB License shall mean the license agreement between Famous
Fixins and Major League Baseball Properties, Inc. for the license period
beginning April 1, 1999 and any renewals, amendments, and modifications thereto.
Section 1.12 MLB shall mean Major League Baseball Properties, Inc. and
includes the Office of the Commissioner of Baseball, the American League of
Professional Baseball Clubs, and the National League of Professional Baseball
Clubs.
ARTICLE II
APPOINTMENT OF NUTRAMAX
Section 2.1. Appointment. Famous Fixins hereby appoints NutraMax as Famous
Fixins' sole and exclusive distributor of Products in the Territory, and
NutraMax accepts that appointment.
Section 2.2. Sale of Products by NutraMax. NutraMax agrees to exercise its
best efforts to develop the largest possible market for the Products in the
Territory and shall offer, advertise, demonstrate and otherwise promote the sale
of Products in the Territory.
Section 2.3. Manufacturing Advertising and Sale. NutraMax shall be
entitled, during the term of this Agreement and any extension thereof, to have
Products manufactured, to advertise and hold itself out as an authorized
distributor of the Products and to sell and offer to sell the Products. At all
times during the term of this Agreement and any extension thereof, NutraMax
shall use the Licensed Rights in all Products, packages, advertisements,
promotional promotional materials and other activities conducted by NutraMax to
promote the sale of the Products. NutraMax shall submit representative examples
of all packaging, marketing, advertising, and promotional materials related to
Famous Fixins or the Products for Famous Fixins' prior inspection and prior
approval. NutraMax shall not, pursuant to this Agreement or otherwise, have or
acquire any right, title or interest in or to the Licensed Rights. NutraMax
understands that MLB shall have absolute approval of the Products and of all
packaging, advertising and promotional material at all stages. Famous Fixins
shall promptly review such representative samples and obtain any required
approval from MLB without undue delay.
Section 2.4. Storage Facilities. NutraMax shall, at its expense, store and
maintain its inventory of Products.
Section 2.5. Delivery, Title and Risk of Loss. NutraMax shall bear title to
and risk of loss of Products at all times.
Section 2.6. Confidential Information. Confidential information relating to
the Product and to Famous Fixins' other products, processes, technologies,
strategic and development plans, financial condition, budgets, projections,
business plans, business records, customer lists, business manuals and employee
lists are recognized by NutraMax to be secret and confidential and to be the
property of Famous Fixins. Those items shall at all times and for all purposes
be held by NutraMax in a confidential capacity and shall not, without the prior
written consent of Famous Fixins, (i) be disclosed by NutraMax to any person,
firm or corporation, excepting those employees of NutraMax who are required to
utilize such items in connection with the sale, promotion or servicing of
Products during the term of this Agreement or any extension thereof, or (ii) be
disclosed to any person, firm or corporation, or copied or used by NutraMax, its
employees or agents at any time following the expiration or termination of this
Agreement or any extension thereof.
Section 2.7. Covenant Not to Compete. NutraMax agrees that it shall not
enter into a license agreement with MLB for rights in connection with the
manufacture, promotion or sale of adhesive bandages during the Term of this
Agreement and for a period of five (5) years from the termination of this
agreement. If the MLB License is terminated due to failure by NutraMax to comply
with the terms of this Agreement. However, if the MLB license is terminated for
any other reason, NutraMax shall be free to enter into such a license agreement
with MLB.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND OBLIGATIONS
Section 3.1 Famous Fixins warrants and represents that it has not engaged,
and will not engage, any third party to be its exclusive distributor for the
Products during the term of this Agreement.
Section 3.2 Famous Fixins warrants and represents that (a) it has the right
to grant NutraMax the rights granted hereunder, , (b) NutraMax will not infringe
the intellectual property rights of any third party by reason of NutraMax
exercising any right granted hereunder and (c) all of the provisions of this
Agreement are consistent with and authorized by the provisions of the MLB
License.
Section 3.3 Famous Fixins has taken no steps and shall take no steps to
compromise or undermine Famous Fixins right to grant the rights conveyed by this
Agreement.
Section 3.4 NutraMax acknowledges that MLB and Famous Fixins are the
beneficial owners of all right, title and interest in and to their respective
Licensed Rights and the goodwill attached to the Licensed Rights. NutraMax will
not commit any act or omission, which will adversely affect any rights of MLB or
Famous Fixins in the Licensed Rights.
ARTICLE IV
TERM, SALES PAYMENTS AND SALE OF PRODUCTS
Section 4.1. Term. This Agreement shall be effective for a term of two
years from the date of this Agreement. NutraMax shall have the option to renew
this Agreement for successive one-year periods. NutraMax shall provide Famous
Fixins with written notice of its intent to exercise its option to renew this
Agreement no later than ninety (90) days prior to expiration of the then
effective Term or renewal period.
Section 4.2. Sales Payments. NutraMax shall pay Famous Fixins a Sales
Payment of $0.915 for each of the Net Number of Packages sold by NutraMax less
the Rebate Payment and less any credit for returned Products and/or damaged,
outdated or spoiled Products. Sales Payments are due within 30 days of the end
of each month during the term of the Agreement for the Net Number of Packages
sold during the prior month. NutraMax shall also deliver to Famous Fixins within
30 days of the end of each month during the term of the Agreement statements
indicating sales volume of each Product.
Section 4.3 NutraMax shall keep full, true and accurate books of account
containing sufficient detail to determine (and verify) all sales of Products
made, and all Sales Payments, hereunder, including invoices, correspondence and
banking, financial and other records. NutraMax shall retain these books of
account for five (5) years following the close of the calendar year.
Section 4.4 NutraMax shall use reasonable efforts to assist Famous Fixins,
at Famous Fixins expense, in preparing a detailed statement certified by Famous
Fixins' independent accountants showing the sales volume of each Product
distributed and/or sold by NutraMax.
Section 4.5 Famous Fixins shall have the right, at its expense and upon
reasonable notice, but not more frequently than once a year, to have independent
accountants, reasonably acceptable to NutraMax, examine NutraMax's books of
account and records relating to sales made and the royalties payable pursuant to
this Distributorship Agreement. The final results of any such examination shall
be communicated to Famous Fixins and NutraMax, and may be communicated to MLB,
if required by the MLB License but all financial and proprietary information
examined by or disclosed to the independent accountants shall be kept
confidential and shall not be disclosed to Famous Fixins or anyone else. The
right of examination afforded to Famous Fixins must be exercised within one (1)
year of the close of the calendar year for which examination is sought. If such
inspections show an underreporting and underpayment in excess of five percent
(5%) for any period, then NutraMax shall bear all costs and expenses incurred by
Famous Fixins in connection with such examination. NutraMax shall be responsible
for payment of any deficiency, together with interest at the then current prime
rate of Chase Manhattan Bank or its successor from the date such amount became
due until the date of payment.
ARTICLE V
INFRINGEMENT, LIABILITY AND INDEMNIFICATION
Section 5.1. In the event that a suit arises concerning any of the Licensed
Products, or any other rights, granted hereunder, each of the parties agree to
assist the other herein, including joining as a nominal party in such suit, if
needed. Famous Fixins shall have the exclusive right to take legal action
against any actual, threatened or suspected action by a third party or parties
which constitutes or is likely to constitute an infringement of the Licensed
Rights or Products. If Famous Fixins decides not to take action against any
third party or parties that are known to be actually infringing the Licensed
Rights or Products, NutraMax shall be released of its obligation to pay Famous
Fixins $0.915 per Package sold unless Famous Fixins takes diligent action to
stop such infringement.
Section 5.2. Indemnity. NutraMax shall indemnify and hold Famous Fixins
harmless from all loss, reasonable expense or damages, of whatever nature, which
may be incurred by Famous Fixins as a result of any claims or actions by third
parties: (1) for negligence, whether active or passive, or for product liability
of whatever specie, including, without limitation, claims or actions for strict
liability, improper design or breach of warranty, express or implied, wherever
such claims or actions may be asserted and regardless of where the events on
which such claims or actions are based occurred; and (2) relating to the sale,
furnishing or distribution of any Products by NutraMax. That indemnification
shall include, without limitation, attorneys' fees and other costs of defense
(including prosecution of necessary third-party actions). Famous Fixins does
hereby indemnify NutraMax and its affiliates, and their officers, directors,
authorized retail dealers, independent representatives, servants, contractors,
agents or employees against and save and hold them harmless of and from any and
all losses, liabilities, damages and expenses (including reasonable attorneys'
fees and expenses) which they incur or for which they may become liable or be
compelled to pay in any action or claim against them, from or attributable to
Famous Fixins' breach of any representation or warranty set forth in this
Agreement. NutraMax shall give prompt notice to Famous Fixins of any claim,
action or suit that may give rise to liability hereunder.
Section 5.3. Insurance. NutraMax shall obtain, at its own cost and expense,
comprehensive general liability insurance, including product liability
insurance, from an insurance company acceptable to Famous Fixins, providing
adequate protection for Famous Fixins and for MLB against any claims or suits
arising out of any of the following circumstances for which insurer is able to
provide insurance, in an amount of at least five million dollars ($5,000,000)
per incident or occurrence, or NutraMax's standard insurance policy limits,
whichever is greater, and with a reasonable deductible in relation thereto:
unauthorized use of or infringement of any Licensed Rights in connection with
the Products covered by this Agreement; alleged defects or deficiencies in the
Products or the use thereof, or false advertising, fraud, misrepresentation or
other claims related to the Products not involving a claim of right to the
Licensed Rights; unauthorized use of the Licensed Rights or any breach by
NutraMax of this Agreement; libel or slander against, or invasion of the right
of privacy, publicity or property of, or violation or misappropriation of any
other right of any third party; and/o agreements or alleged agreements made or
entered into by NutraMax to effectuate the terms of this Agreement. Such
insurance shall remain in force at all times during the Term and any renewals
thereof and for a period of five years thereafter. Within thirty (30) days from
the date hereof, NutraMax shall submit to Famous Fixins a fully paid policy or
certificate of insurance naming Famous Fixins and MLB as additional insured
parties and required that the insurer shall not terminate or materially modify
such policy or certificate of insurance without written notice to Famous Fixins
and to MLB at least thirty (30) days in advance thereof.
ARTICLE VI
TERMINATION
Section 6.1. Termination. Notwithstanding Section 3.1, either party may
terminate this Agreement, effective upon the delivery of written notice of such
termination to the other party, if, after the effective date of this Agreement
and excluding the case of In re NutraMax Products, Inc., et al., Case No.
00-1838 (MFW): (i) the other party becomes insolvent, is generally not paying
its debts as such debts become due, makes an assignment for the benefit of
creditors, is the subject of any voluntary or involuntary case commenced under
the federal bankruptcy laws, as now constituted or hereafter amended (which, in
the case of involuntary bankruptcy, is not dismissed within 90 days), or of any
other proceeding under other applicable laws of any jurisdiction regarding
bankruptcy, insolvency, reorganization, adjustment of debt or other forms of
relief for debtors, has a receiver, trustee, liquidator, assignee, custodian or
similar official appointed for it or for any substantial part of its property,
or is the subject of any dissolution or liquidation proceeding; or (ii) there is
a continued and material breach by the other party of any of the terms and
conditions of this Agreement, provided that the party not at fault has given the
other party 30 days prior written notice of such breach, such other party has
not remedied the breach and it is possible for the defaulting party to take such
remedial action.
Section 6.2. Nonexclusive Remedy. The right of either party to terminate is
not an exclusive remedy, and either party shall be entitled, under appropriate
circumstances, alternatively or cumulatively, to damages for breach of this
Agreement, to an order requiring performance of the obligations of this
Agreement, or to any other remedy available under the laws of any applicable
jurisdiction.
Section 6.3 NutraMax shall have 90 days from the date of termination of the
Agreement to sell any existing inventory of Products or to fill any outstanding
order for Products.
ARTICLE VII
MISCELLANEOUS
Section 7.1 This Agreement shall form part of and be read together with the
Rebate Agreement attached as Exhibit A.
Section 7.2. This Agreement is of a personal nature and, therefore, neither
this Agreement nor the grants granted hereunder may be assigned or transferred
by either party, except upon the prior written consent of the other party. This
Agreement shall otherwise inure to the benefit of and shall be binding upon the
parties and permitted successors and assigns.
Section 7.3. This Agreement constitutes the entire agreement and
understanding between the parties and supersedes all previous communications,
memoranda, understandings or agreements, either oral or written, between the
parties with respect to the subject matter hereof. This Agreement may only be
modified or amended by written agreement signed by both parties.
Section 7.4. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to provisions
regarding conflict of laws. This Agreement shall be enforced in the City, County
and State of New York.
Section 7.5 The failure of either party to insist, in any one or more
instances, on the performance of any terms or conditions of this Agreement shall
not be construed as a waiver or relinquishment of any rights granted hereunder
or of the future performance of any such term or condition, and the obligations
of the non-performing party with respect thereto shall continue in full force
and effect. In the event that any party to this Agreement is nevertheless found
to have waived any of its rights under this Agreement, such waiver or waivers
shall not constitute a continuing waiver as to any rights under this Agreement
and shall not affect that party's rights to later fully enforce any provision of
this Agreement.
Section 7.6. If any provision of this Agreement is held to be void, the
remaining provisions shall remain valid and shall be construed in such a manner
as to achieve their original purposes in full compliance with the applicable
laws and regulations.
Section 7.7. NutraMax is an independent contractor and is not the legal
representative or agent of Famous Fixins for any purpose and shall have no right
or authority (except as expressly provided in this Agreement) to incur, assume
or create in writing or otherwise, any control over any of Famous Fixins'
employees, all of whom are entirely under the control of Famous Fixins, who
shall be responsible for their acts and omissions. Nothing contained in this
Agreement shall be deemed to create any partnership or joint venture
relationship between the parties
Section 7.8. All notices, requests, demands and other communications made
in connection with this Agreement shall be in writing and shall be delivered
personally, or sent by certified mail, return receipt requested, or by Federal
Express or similar overnight service, prepaid delivery, and shall be deemed to
have been duly given upon actual receipt. Notices to the parties shall be
delivered to the address set forth on the first page of this Agreement or at
such other address as shall be designated by such party in a written notice to
the other party.
Section 7.9. The section and article headings contained in this Agreement
are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
Section 7.10. This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed by
its duly authorized representative effective as of the day and year first above
written.
FAMOUS FIXINS, INC. NUTRAMAX PRODUCTS INC.
By: /s/ Xxxxx Xxxxx 1/3/01 By: /s/ Xxxxxxx X. Xxxxx 12/22/00
Authorized Person: Xxxxx Xxxxx Authorized Person: Xxxxxxx X. Xxxxx
Title: President Title: Chief Executive Officer
REBATE AGREEMENT
This Rebate Agreement ("Rebate Agreement") is hereby entered into on this
22 day of Dec. 2000 ("Agreement Date") by and among Famous Fixins, a New York
corporation of having a principal place of business at 000 X. 00xx Xxxxxx, Xxxxx
0000 and NutraMax Products Inc. ("NutraMax"), a Delaware corporation having a
principal place of business at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000-0000.
WITNESSETH
WHEREAS, Famous Fixins and NutraMax have simultaneously entered into a
Distributorship Agreement ("Distributorship Agreement") to which this Rebate
Agreement is attached as Exhibit A; and
WHEREAS, the parties agree that NutraMax will incur certain expenses in
connection with the sale of the Licensed Products:
and
WHEREAS, the parties agree that Famous Fixins shall bear a part of such
selling expenses; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by the parties, the parties covenant and
agree as follows:
1. The Definitions set forth in the Distributorship Agreement shall equally
apply to the terms of this Rebate Agreement.
2. Famous Fixins agrees to pay NutraMax a Rebate Amount of $0.625 for each
of the Net Number of Packages sold.
3. The Rebate Payment to be paid by Famous Fixins shall be applied as a
credit to the Sales Payments due by NutraMax under the Distributorship
Agreement.
4. This Rebate Agreement shall be coterminus with the Distributorship
Agreement and shall automatically expire with the termination of the
Distributorship Agreement.
5. This Rebate Agreement shall form part of and be read together with the
License to which the Rebate Agreement is attached.
IN WITNESS WHEREOF, each party has caused the Rebate Agreement to be
executed in duplicate originals by its duly authorized representative effective
as of the day and year first above written.
FAMOUS FIXINS NUTRAMAX
By: Xxxxx Xxxxx By: Xxxxxxx X. Xxxxx
Title: President Title: Chief Executive Officer
Dated: /s/ Xxxxx Xxxxx 1/3/01 Dated: /s/Xxxxxxx X. Xxxxx 12/22/00
