Exhibit 10.2
FORMULA AGREEMENT
THIS FORMULA AGREEMENT ("Agreement"), is effective the 12th day of
April, 2006, and is by and between ATLANTIS LABORATORIES, INC., a Texas
corporation ("Atlantis"), XXXX XXXXXX ("XXXXXX"), an individual, XXXXXXX
ADVANCED AESTHETICS INC., a Delaware corporation ("KAA" and together with
Atlantis and Potter, sometimes referred to collectively as the "Parties") and
JPMorgan Chase Bank, N.A., as Escrow Agent.
WHEREAS, Atlantis and Potter have agreed to develop certain formulas
and manufacture certain products for KAA; and
WHEREAS, KAA will purchase said products pursuant to Purchase Orders;
and
WHEREAS, the formulas developed by Atlantis and Potter shall be put
into Escrow to cover certain events and/or contingencies,
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Atlantis, KAA and Escrow Agent hereby agree as follows:
1. The Parties hereby appoint the Escrow Agent as their escrow
agent for the purposes set forth herein, and the Escrow Agent
hereby accepts such appointment under the terms and conditions
set forth herein.
2. Simultaneous with the execution and delivery of this
Agreement, Atlantis and Potter agree that all formulas,
manufacturing procedures and specifications, along with
details of all raw material suppliers and specifications for
the raw materials relating to the products to be products to
be purchased by KAA from Atlantis and Potter and which are now
in existence, ("Confidential Information"), are hereby being
deposited with the Escrow Agent to be held as provided in this
Agreement and that all future formulas, manufacturing
procedures and specifications developed by Atlantis and Potter
for KAA, along with all raw material suppliers thereof
relating to such products ("Future Confidential Information")
shall be deposited with Escrow Agent when developed by
Atlantis and Potter. The Confidential Information and Future
Confidential Information will be deposited with the Escrow
Agent in an envelope bearing the signature of a duly
designated officer of the Atlantis and Potter set forth on
Schedule 1 (a "Designated Officer"). Atlantis and Potter
represents and warrants to KAA that the Confidential
Information and Future Confidential Information is contained
in such envelope ("Escrow Deposit"). The Escrow Agent shall
hold the Escrow Deposit subject to the terms and conditions
hereof. The Escrow Agent will store the Escrow Deposit in its
usual safekeeping facility and will have no duty to keep it in
an environmentally controlled area. The Escrow Agent shall
have no liability for
any damage to the Escrow Deposit, including damage caused by
environmental conditions, such as heat or moisture, or by
exposure to magnetic materials. Each formula, manufacturing
procedure, specification and detail deposited with Escrow
Agent will be independently verified by a third party, who is
not the escrow agent, and who is mutually agreed upon by KAA,
Potter, and Atlantis. Such verification shall confirm that the
formula, manufacturing procedure, specification and detail
being placed into escrow is the correct item that strictly
creates the product that Atlantis and Potter develop and KAA
distributes and sells. Such cost of independent verification
shall be borne by KAA. All materials supplied to the
independent third party verifier shall be returned to Atlantis
and Potter. Atlantis and Potter also shall be allowed to
supervise all independent verification, and at the request of
Atlantis all verification shall be done at Atlantis's facility
or office. Atlantis and Potter agree that it will provide
notice to KAA on each occasion that it provides Confidential
Information and Future Confidential Information to the Escrow
Agent. Atlantis and Potter agree that all of such Confidential
Information and Future Confidential Information shall clearly
indicate the product(s) to which the same relate so that the
Escrow Agent can, if necessary, deliver the appropriate
Confidential Information or Future Confidential Information
(herein collectively the "Information") to KAA as set forth
below and held pursuant to this Agreement. Escrow Agent will
have no responsibility to review the Escrow Deposit to verify
the information in the envelopes.
1. 3. Failure by Atlantis or Potter to place any manufacturing
procedure, specification and detail into escrow will be
considered a breach of the Consulting Agreement by such
parties and a default of the Loan Agreements between KAA and
Atlantis and Potter for the purchase of real estate and for
the facility construction, and KAA will be entitled to all
remedies and rights afforded under such agreements .
2. 4. Escrow Agent shall not disclose, distribute, sell or
otherwise transfer the Information and shall keep all of the
same confidential. Potter and Atlantis shall deliver products
within industry standard time frames. Provided that there are
no circumstances outside the control of Potter and Atlantis,
it is agreed that industry standard shall be 10 weeks for
Potter and Atlantis to manufacture the product once all raw
materials are received. Potter and Atlantis shall take
commercially reasonable steps to obtain all necessary raw
materials. In the event Atlantis is unable to supply bulk
product for an Open Purchase Order to KAA within industry
standards, then Escrow Agent shall deliver that particular
formula and manufacturing procedures to KAA within seven days
from the written request of a Designated Officer of KAA. A
copy of said written request shall be delivered to Atlantis as
well. In addition, in the event of the sale of all or
substantially all of the business, stock or assets of Atlantis
or a change, directly or indirectly of more than 50% interest
in the ownership of Atlantis, all Information shall be
delivered by the Escrow Agent to KAA within 7 days after
written notice from a Designated Officer of KAA provided, that
in the event of the death of Xxxx Xxxxxx and Atlantis is
controlled by his heirs and Atlantis continues to supply KAA
as
required by this Agreement, then the Information need not be
delivered by the Escrow Agent to KAA. Atlantis agrees to
provide prompt written notice to KAA of any of the foregoing
events. If KAA receives any Confidential Information or Future
Confidential Information whether pursuant to this Agreement or
otherwise, KAA agrees to keep confidential such Confidential
Information and/or Future Confidential Information, and such
Confidential Information and/or Future Confidential
Information shall be used solely for and disclosed to the
least extent possible necessary for the of manufacturing the
product(s) related to the Confidential Information and/or
Future Confidential Information.
4. This Agreement may be executed in multiple counterparts,
each of such counterparts so executed shall be deemed an
original. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
3.
5. NOTICES. All communications hereunder shall be in writing
and shall be deemed to be duly given and received:
(i) upon delivery if delivered personally or upon
confirmed transmittal if by facsimile;
(ii) on the next Business Day Days (as used in this
Agreement "Business Day" shall mean any day other
than a Saturday, Sunday or any other day on which the
Escrow Agent located at the notice address set forth
below is authorized or required by law or executive
order to remain closed) if sent by overnight courier;
or
(iii) four (4) Business Days after mailing if mailed by
prepaid registered mail, return receipt requested, to
the appropriate notice address set forth on Schedule
1 or at such other address as any party hereto may
have furnished to the other parties in writing by
registered mail, return receipt requested.
Notwithstanding the above, in the case of communications delivered to
the Escrow Agent pursuant to (ii) and (iii) of this Section 5, such
communications shall be deemed to have been given on the date received
by the Escrow Agent. In the event that the Escrow Agent, in its sole
discretion, shall determine that an emergency exists, the Escrow Agent
may use such other means of communication as the Escrow Agent deems
appropriate.
4.
If to Atlantis:
Mr. Xxxx Xxxxxx
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxxx@xxxxxxxxxxxx.xxx
If to KAA:
Xxxx Xxxxxx, Esq.
Xxxxxxx Advanced Aesthetics, Inc.
000 Xxxxxxx 0, 0xx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxx@XXX.xxx
If to Escrow Agent:
JPMorgan Chase Bank, N.A.
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxxxxx
Telephone:(000) 000-0000
Fax: (000) 000-0000
6. The Escrow Agent undertakes to perform only such duties as are
expressly set forth herein and no duties shall be implied. The Escrow
Agent shall have no liability under and no duty to inquire as to the
provisions of any agreement other than this Agreement. The Escrow Agent
may rely upon and shall not be liable for acting or refraining from
acting upon any written notice, instruction or request furnished to it
hereunder and believed by it to be genuine and to have been signed or
presented by the proper party or parties. The Escrow Agent shall be
under no duty to inquire into or investigate the validity, accuracy or
content of any such document. The Escrow Agent shall have no duty to
solicit the Escrow Deposit. The Escrow Agent shall not be liable for
any action taken or omitted by it in good faith except to the extent
that a court of competent jurisdiction determines that the Escrow
Agent's gross negligence or willful misconduct was the primary cause of
any loss to the Parties. The Escrow Agent may execute any of its powers
and perform any of its duties hereunder directly or through agents or
attorneys (and shall be liable only for the careful selection of any
such agent or attorney) and may consult with counsel, accountants and
other skilled persons to be selected and retained by it. The Escrow
Agent shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled persons. In the event that the
Escrow Agent shall be uncertain as to its duties or rights hereunder or
shall receive instructions, claims or demands from any party hereto
which, in its opinion, conflict with any of the provisions of this
Agreement, it shall be entitled to refrain from taking any action and
its sole obligation shall be to keep safely all property held in escrow
until it shall be directed otherwise in writing by all of the other
parties hereto or by a final order or judgment of a court of competent
jurisdiction. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the
Escrow Agent has been advised of the likelihood of such loss or damage
and regardless of the form of action.
7. The Escrow Agent may resign and be discharged from its duties or
obligations hereunder by giving 10 days advance notice in writing of
such resignation to the other parties hereto specifying a date when
such resignation shall take effect. The Escrow Agent shall have the
right to withhold an amount equal to any amount due and owing to the
Escrow Agent, plus any costs and expenses the Escrow Agent shall
reasonably believe may be incurred by the Escrow Agent in connection
with the termination of the Agreement. Any corporation or association
into which the Escrow Agent may be merged or converted or with which it
may be consolidated, or any corporation or association to which all or
substantially all the escrow business of the Escrow Agent's corporate
trust line of business may be transferred, shall be the Escrow Agent
under this Agreement without further act.
8. The Parties agree jointly and severally to (i) pay the Escrow Agent
upon execution of this Agreement and from time to time thereafter
reasonable compensation for the services to be rendered hereunder,
which unless otherwise agreed in writing shall be as described in
Schedule 2 attached hereto, and (ii) pay or reimburse the Escrow Agent
upon request for all expenses, disbursements and advances, including
reasonable attorney's fees and expenses, incurred or made by it in
connection with the preparation, execution, performance, delivery,
modification and termination of this Agreement.
9. The Parties shall jointly and severally indemnify, defend and save
harmless the Escrow Agent and its directors, officers, agents and
employees (the "indemnitees") from all loss, liability or expense
(including the fees and expenses of in house or outside counsel)
arising out of or in connection with (i) the Escrow Agent's execution
and performance of this Agreement, except in the case of any indemnitee
to the extent that such loss, liability or expense is due to the gross
negligence or willful misconduct of such indemnitee, or (ii) its
following any instructions or other directions from the Parties, except
to the extent that its following any such instruction or direction is
expressly forbidden by the terms hereof. The parties hereto acknowledge
that the foregoing indemnities shall survive the resignation or removal
of the Escrow Agent or the termination of this Agreement. The parties
hereby grant the Escrow Agent a lien on, right of set-off against and
security interest in the Escrow Deposit for the payment of any claim
for indemnification, compensation, expenses and amounts due hereunder.
10. IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT
For accounts opened in the US:
To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions
to obtain, verify, and record information that identifies each person
who opens an account. When an account is opened, the Escrow Agent will
ask for information that will allow us to identify relevant parties.
11. The Parties each represent that its correct Taxpayer Identification
Number ("TIN") assigned by the Internal Revenue Service ("IRS") or any
other taxing authority is set forth on the signature page hereof.
12. The provisions of this Agreement may be waived, altered, amended or
supplemented, in whole or in part, only by a writing signed by all of
the parties hereto. Neither this Agreement nor any right or interest
hereunder may be assigned in whole or in part by any party, except as
provided in Section 7, without the prior consent of the other parties.
This Agreement shall be governed by and construed under the laws of the
State of Texas. Each party hereto irrevocably waives any objection on
the grounds of venue, forum non-conveniens or any similar grounds and
irrevocably consents to service of process by mail or in any other
manner permitted by applicable law and consents to the jurisdiction of
the courts located in the State of Texas. The parties further hereby
waive any right to a trial by jury with respect to any lawsuit or
judicial proceeding arising or relating to this Agreement. No party to
this Agreement is liable to any other party for losses due to, or if it
is unable to perform its obligations under the terms of this Agreement
because of, acts of God, fire, floods, strikes, equipment or
transmission failure, or other causes reasonably beyond its control.
13. In the event that any escrow property shall be attached, garnished
or levied upon by any court order, or the delivery thereof shall be
stayed or enjoined by an order of a court, or any order, judgment or
decree shall be made or entered by any court order affecting the
property deposited under this Agreement, the Escrow Agent is hereby
expressly authorized, in its sole discretion, to obey and comply with
all writs, orders or decrees so entered or issued, which it is advised
by legal counsel of its own choosing is binding upon it, whether with
or without jurisdiction, and in the event that the Escrow Agent obeys
or complies with any such writ, order or decree it shall not be liable
to any of the parties hereto or to any other person, firm or
corporation, by reason of such compliance notwithstanding such writ,
order or decree be subsequently reversed, modified, annulled, set aside
or vacated.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
TAX CERTIFICATION: Taxpayer ID#: 00-0000000
-----------------------------------
Customer is a (check one):
_x_ Corporation __ Municipality ___ Partnership ___ Non-profit or Charitable Org
___ Individual ___ REMIC ___ Trust ___ Other _________________
Under the penalties of perjury, the undersigned certifies that:
(7) the entity is organized under the laws of the United States
(8) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(9) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Investors who do not supply a tax identification number will be subject to
backup withholding in accordance with IRS regulations.
NOTE: THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
XXXXXXX ADVANCED AESTHETICS, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------
Printed Name: Xxxx Xxxxxx
Title: CMO
JPMORGAN CHASE BANK, N.A.
ESCROW AGENT
By: /s/ Oneg Xxxxxxxx
---------------------------
Printed Name: Oneg Xxxxxxxx
Title: Vice President
TAX CERTIFICATION: Taxpayer ID#: 0-00-0000000
-----------------------------------------------
Customer is a (check one):
_x_ Corporation __ Municipality ___ Partnership ___ Non-profit or Charitable Org
___ Individual ___ REMIC ___ Trust ___ Other _________________
Under the penalties of perjury, the undersigned certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Investors who do not supply a tax identification number will be subject to
backup withholding in accordance with IRS regulations.
NOTE: THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
ATLANTIS LABORATORIES, INC.
By: /s/ Xxxx Xxxxxx
---------------------------
Xxxx Xxxxxx, President
TAX CERTIFICATION: Taxpayer ID#: ###-##-####
----------------------------------------------
Customer is a (check one):
__ Corporation ___ Municipality ___ Partnership ___ Non-profit or Charitable Org
__x_ Individual ___ REMIC ___ Trust ___ Other _________________
Under the penalties of perjury, the undersigned certifies that:
(4) the entity is organized under the laws of the United States
(5) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(6) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Investors who do not supply a tax identification number will be subject to
backup withholding in accordance with IRS regulations.
NOTE: THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
XXXX XXXXXX
By: /s/ Xxxx Xxxxxx
---------------------------
Schedule 1
Telephone Number(s) and signature(s) for
Person(s) Designated to give Instructions
If from Atlantis or Potter :
Name Telephone Number Signature
---- ---------------- ---------
1. Xxxx Xxxxxx 000-000-0000 /s/ Xxxx Xxxxxx
---------------------------
2. ______________________ _________________________________________
3. ______________________ _________________________________________
If from KAA:
Name Telephone Number Signature
---- ---------------- ---------
1. Xxxx Xxxxxx 000-000-0000 /s/ Xxxx Xxxxxx
--------------------------
2. Xxxxxxx Xxxxxxxx 203-295-2121 /s/ Xxxxxxx Xxxxxxxx
--------------------------
3. Xxxx Xxxxxx 203-295-2121 /s/ Xxxx Xxxxxx
--------------------------
Schedule 2
[LOGO] JPMORGAN
Minimum Administrative Fee ...........................$2,500
Payable Upon Account Opening and in Advance
for each year in which we act as Escrow Agent
ACTIVITY FEES:
Disbursements
Per Check $ 35
Per Wire U.S. $ 35
International $ 100
Receipts
Per Check $ 35
Per Wire $ 35
Investments
Per directed buy/sell $ 50
1099 Reporting $ 15
LEGAL EXPENSES: At Cost
There will be no legal expense for Chase if Chase's standard form escrow
agreement is employed without substantive amendments.
A one (1) year Minimum Administrative Fee will be assessed for any account which
is funded. The account will be invoiced in the month in which the account is
opened and annually thereafter. Payment of the invoice is due 30 days following
receipt.
The Administrative Fee will cover a maximum of fifteen (15) annual
administrative hours for the Bank's standard Escrow services including account
setup, safekeeping of assets, investment of funds, collection of income and
other receipts, preparation of statements comprising account activity and asset
listing, and distribution of assets in accordance with the specific terms of the
Escrow Agreement.
EXTRAORDINARY SERVICES AND OUT-OF POCKET EXPENSES:
Any additional services beyond our standard services as specified above, such as
annual administrative activities in excess of fifteen (15) hours and all
reasonable out-of-pocket expenses including attorney's fees will be considered
extraordinary services for which related costs, transaction charges, and
additional fees will be billed at the Bank's standard rate.
MODIFICATION OF FEES:
Circumstances may arise necessitating a change in the foregoing fee schedule.
The Bank will attempt at all times, however, to maintain the fees at a level
which is fair and reasonable in relation to the responsibilities assumed and the
duties performed.
ASSUMPTIONS:
o The account will be invoiced in the month in which the account is
opened and annually thereafter.
o Payment of the invoice is due 30 days following receipt.
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All fees quoted are subject to our review and acceptance, and
that of our legal counsel, of the documents governing the
escrow. As a condition for acceptance of an appointment, it is
expected that all legal fees and out-of-pocket expenses
incurred by JPMorgan Chase Bank and our counsel in connection
with our review of the transaction will be paid by the client
regardless of whether or not the transaction closes.
--------------------------------------------------------------
To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial, institutions to obtain, verify,
and record information that identifies each person who opens an account.
What this means for you: When you open an account, we will ask for your name,
address, date of birth (for individuals), and other information that will allow
us to identify you. We may also ask to see your driver's license or other
identifying documents.
