Exhibit 99.2
MANUFACTURING AGREEMENT
AGREEMENT, entered into as of May 16, 2002, between Garden State
Nutritionals, a division of Vitaquest International, Inc. hereinafter "Garden
State"), a Delaware Corporation, with offices located at 0 Xxxxxxxxx Xxxxx, Xxxx
Xxxxxxxx, Xxx Xxxxxx and American Health & Diet Centers, Inc., a Delaware
Corporation with offices located at 000 Xxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx
00000 (hereinafter "AHDC") and Xxxxxx Tree Construction, Inc., a Delaware
Corporation with offices located at 0000 Xxxxxxxx/Xxxxxxxx Xxxx, Xxxxxxxx, XX
00000 (hereinafter "Xxxxxx");
Whereas, Xxxxxx would like Garden State to manufacture for it certain
private label dietary supplements, foods, and cosmetics as those terms are
defined under the Food, Drug and Cosmetic Act of 1938 and any amendments thereto
(hereinafter "Private Label Product's"); and
Whereas, Xxxxxx would also like to purchase from Garden State products
manufactured by Garden State for AHDC under the "Nutritionary" brandname
("NUTRITIONARY Products") in addition to any of its own Private Label Products;
and
Whereas, Garden State and AHDC are interested in undertaking such
business transactions, under the terms and conditions set forth herein;
Now, therefore, in consideration of the mutual covenants and promises
hereinafter set forth and other good and valuable consideration received, the
Parties agree to the following:
TERMS
1) Garden State shall manufacture Private Label Products for Xxxxxx
on terms mutually agreeable to the parties. Credit levels shall
be established by the parties upon mutual agreement subsequent to
the date of execution. The initial prices for the Private Label
Products shall be as set forth on Schedule A hereto, as amended
from time to time. Garden State may increase its prices, from
time to time, for the Private Label Products unilaterally, upon
ten days (10) written notice to Xxxxxx, as long as it provides
reasonable substantiation, that any of the component ingredients
of the products have sustained significant market price
increases; provided, however, that the prices shall not be
greater than (a) ten percent (10%) higher than the lowest
competitive market price for the same products upon the same
terms and conditions (including without limitation, similar
quantities, similar times, and similar quality) and (b) the
lowest prices offered by Garden State to its other customers for
comparable products upon the same terms and conditions (including
without limitation, similar quantities, similar times, and
similar quality).
2) Payment for the Private Label Products shall be FOB, West
Xxxxxxxx, New Jersey on terms of net 30 from date of shipment.
All such Private Label Product sales shall be final, with Garden
State accepting no product returns, aside from those
manufacturing defects mutually agreed to by the Parties. In the
event that Xxxxxx fails to make any required payment for goods
within terms, and such default fails to be cured within 15 days
of written notice, then Garden State shall be under no obligation
to accept additional purchase orders or make additional product
shipments.
3) Garden State shall warrant that at the time of shipment the
Private Label Products are manufactured in accordance with the
Product formulas provided in writing by Xxxxxx to Garden State,
but shall not bear any liability for any ensuing product defects
or other nonconformities caused in whole, or in part, by Xxxxxx,
its agents or employees, whether in the manner of the storage,
handling, or distribution of the Products, or in any other manner
not more fully specified herein. Moreover, Xxxxxx shall hold
Garden State harmless, and shall indemnify and provide a defense
for Garden State for any such claims or resulting liabilities,
and shall provide Garden State at the time of execution with
copies of all existing insurance policies and a certificate of
insurance naming Garden State as an additional insured
thereunder. This provision shall survive any termination of this
Agreement.
4) Xxxxxx shall bear full responsibility for the text of its Private
Label Product labels, the legitimacy of its intellectual
property, all efforts by its employees and agents in connection
with the marketing, advertising, and distribution of the
Products, and the Product formulation's compliance with all
applicable law and regulatory requirements, and shall hold Garden
State harmless, and shall indemnify and defend Garden State in
connection with any claims, investigations, actions, judgments,
penalties, fines, settlements, connected therewith. Moreover,
Garden State shall receive at execution Certificates of insurance
naming it as an additional insured under any Xxxxxx insurance
policies currently in effect relating to these matters. This
provision shall survive any termination of this Agreement.
5) Garden State, with the consent of AHDC, shall sell Xxxxxx during
the first year of the term of this Agreement NUTRITIONARY
Products in its inventory at prices as set forth on Exhibit B
hereto, which Garden State represents and warrants is no more
than 105% of the price at which the NUTRITIONARY Products are
sold to AHDC. Credit levels shall be established by the parties
upon mutual agreement subsequent to the date of execution. In
consideration for such right to purchase NUTRITIONARY Products,
Xxxxxx expressly covenants to: a) substantially adhere to AHDC's
suggested retail prices for such NUTRITIONARY Products as set
forth on Exhibit C hereto; and b) refrain from selling
NUTRITIONARY Products at existing AHDC locations set forth on
Exhibit D hereto.
6) In connection with the sale of NUTRITIONARY Products Xxxxxx shall
be furnished by AHDC with marketing and promotional materials and
may not utilize any other marketing or promotional materials
without the prior written consent of AHDC, which consent shall
not be unreasonably withheld. Xxxxxx xxx also consult (at no
cost) with AHDC's current Kiosk designer for suggested kiosk
design and configuration.
7) It is expressly recognized and agreed to by Xxxxxx that all AHDC
trademarks and other intellectual property are the exclusive
property of AHDC and no license or rights are granted hereunder,
provided, however, that Xxxxxx shall retain the indefinite right
to use of the name "Nutrition World".
8) The Parties shall treat as Confidential all proprietary
information disclosed during the term of this Agreement,
including but not limited to customer lists, product concepts,
designs, pricing information, marketing concepts, and will not
divulge such information, even upon the termination of this
Agreement, unless such information is within the public
domain (other than by either party's breach), or disclosed by a
third party in lawful possession of such information. Upon the
termination of this Agreement, all such Confidential information
and any copies of such information, shall be returned to the
originating party. If any Party breaches the provisions of this
paragraph, the nonbreaching Party may seek all means of legal
redress, including injunctive relief, and all be reimbursed for
all expenses and legal costs if deemed successful on the merits.
9) The term of this Agreement shall be for five years, and shall be
renewable upon mutual agreement between the parties for
successive periods of three years. If any party materially
breaches this Agreement and fails to cure such breach within
fifteen (15) days, then any party may terminate this Agreement
upon written notice within thirty (30) days. Upon termination of
this Agreement, Xxxxxx and Garden State will honor any existing
orders placed with Garden State and Xxxxxx will purchase any
existing ingredient inventories at the prevailing prices then in
effect between the parties.
10) This Agreement shall be binding upon both Parties, their
predecessors and successors in interest, assigns, existing and
future related entities under common ownership or control.
11) This Agreement shall not be deemed to constitute either Party as
the agent or employee of the other party. In addition, either
Party's hereunder may be excused as a result of a force majeure,
as defined in accordance with traditional legal principles.
12) This agreement is not assignable without the prior written
consent of all parties, which consent may be withheld in any
parties' sole discretion.
13) This Agreement and the Consent Agreement of even date represent
the entire Agreement between the parties, and supersedes any
prior oral or written agreements or negotiations between the
parties. Any modification to this Agreement shall be in writing
and signed by both Parties.
14) This Agreement shall be governed by the laws of the State of New
Jersey. Any controversy or claim arising out of or relating to
this contract, except injunctive relief discussed, shall be
settled by arbitration administered by the American Arbitration
Association, Somerset, N.J. office, under its Commercial
Arbitration Rules, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction
thereof.
15) In the event that for any reason any section or provision of this
Agreement should be held invalid or otherwise unenforceable, it
is agreed that the same shall not effect the other sections of
this Agreement, and the remaining provisions of this Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement, effective as of the date provided above.
AGREED AND ACCEPTED:
BY:
VITAQUEST INTERNATIONAL INC.
/s/ Xxxxx Xxxxxxx May 31, 2002
---------------------- ---------------------
BY: DATE
AMERICAN HEALTH & DIET CENTERS, INC.
/s/ Xxxxx Xxxxxxx
-----------------------------
By:
XXXXXX TREE CONSTRUCTION INC.
/s/ Xxxxxx Xxxxx
----------------------
BY:
SCHEDULE A
TO BE AGREED UPON
EXHIBIT B
TO BE AGREED UPON
EXHIBIT C
TO BE AGREED UPON
EXHIBIT D
TO BE AGREED UPON
