1
10.44 Agreement with Xxxxxxx Design Brillenvertrieb GmbH, dated February 6, 2000
35
2
DISTRIBUTION AGREEMENT
This Agreement is made and entered into as of the 6th day of February, 2000 by
and between Xxxxxxx Design Brillenvertrieb GmbH ("Xxxxxxx Design"), and
XXXXX.XXX, Inc., a Nevada corporation ("XDOGS"),
WHEREAS, Xxxxxxx Design produces and sells eyewear under the Lumen trademark;
WHEREAS, Xxxxxxx Design desires to grant the right to distribute Lumen(TM)
products in North America to XDOGS.
NOW, THEREFORE, in consideration of the representations, warranties, covenants
and mutual promises set forth in this Agreement, the parties agree as follows:
DEFINITIONS:
"BASE PRICE" shall mean Xxxxxxx Design's cost of manufacturing the Products plus
the cost of shipping Products to XDOGS. Xxxxxxx Design's price list for Products
is attached to this Agreement as Exhibit A.
"Net Sales" shall mean the gross sales of XDOGS to its customers, less (i)
quantity discounts to the extent customarily granted by the industry, (ii)
customer returns actually credited during the applicable period, and (iii) any
value added or similar tax.
"Products" shall mean and include all Lumen(TM) Eyeware products.
"Resellers" shall mean all wholesale and retail outlets, one stops, rack
jobbers, military, wholesale clubs, and sales to subdistributors and any other
third parties that would customarily purchase through a distributor.
"TERRITORY" shall mean Canada, Mexico, the United States and the Caribbean
basin.
I. APPOINTMENT AND SCOPE.
1.1. _T=. This Agreement will be effective as of 1999 (the "Effective
Date") and terminate five (5) years from the Effective Date (the "Initial
Term"). Any party may terminate this Agreement effective at the expiration
of the Initial Term or any extension thereof by giving the other party
ninety (90) days' prior written notice. If such notice of termination is
not given, the term of this Agreement shall be automatically extended
thereafter for additional one (1) year terms unless terminated by any party
giving the other party the required ninety (90) days' notice.
Notwithstanding the foregoing, this Agreement may be terminated prior to
the expiration of a term as set forth in Section 10 of this Agreement.
36
3
1.2. Exclusive Distribution. Xxxxxxx Design appoints XDOGS as its exclusive
distributor in the Territory for the sale and distribution of the Products.
Xxxxxxx Design will not sell Products to any Reseller who would re-sell or
advertise Products in the Territory, including sales via the Internet to
customers located in the Territory.
1.3. Trademark. Xxxxxxx Design hereby grants XDOGS the right to use trademarks
in relation to the Products in the Territory.
2. XDOGS OBLIGATIONS.
2.1. XDOGS shall use its best efforts to promote and sell the Products in the
ordinary course of its business.
2.2. XDOGS shall maintain suitable offices, warehousing facilities and adequate
staffing for the performance of its duties under this Agreement. XDOGS shall
conduct its business in its own name and shall pay all of its own costs and
expenses.
2.3. XDOGS shall promptly pay Xxxxxxx Design according to the payment provisions
of this Agreement.
2.4. XDOGS will guarantee accumulated Net Sales as follows:
Year ended December 31, 2000 100,000
Year 2001 600,000
Year 2002 1,500,000
Year 2003 3,000,000
Year 2004 5,000,000
provided, however, that Xxxxxxx Design has the capacity for supplying the
requisite quantities of the Products.
2.5. XDOGS shall pay 50% of any expenses required to register and/or protect the
Lumen(TM) trademark in North America, the other 50016 to be paid by Xxxxxxx
Design.
3. XXXXXXX DESIGN'S-OBLIGATIONS.
3.1. Xxxxxxx Design will not allow its Resellers or other customers to re-sell
or advertise Products in the Territory.
3.2. Xxxxxxx Design will allow XDOGS access to and permission to use any and all
Lumen(TM) artwork for the purpose of advertising and marketing Products.
3.3. Xxxxxxx Design will allow XDOGS to have access to all of Xxxxxxx Design's
celebrity sponsors, to the extent permitted by such sponsors' contracts.
3.4. Xxxxxxx Design undertakes to make sure that the spirit and conditions of
this Agreement are also adhered to by any Reseller. In case one of them
infringes or breaches any provision of this Agreement, Xxxxxxx Design shall make
all possible efforts to eliminate this infringement or breach.
3.5. Xxxxxxx Design undertakes to furnish XDOGS with a list of it's Resellers
forty-five days after the end of each calendar quarter.
4. PRICING: PAYMENT
4.1. Pricing. In consideration of the rights granted hereunder and the
obligations and covenants of the parties set forth herein, XDOGS shall pay
Xxxxxxx Design the base price for products, plus 10%.
4.2. Invoices. Xxxxxxx Design will issue an invoice to XDOGS upon each delivery
of products.
4.3. Payments. The payment of invoices shall be made via letter of credit within
60 days of the receipt of Products in Minneapolis, Minnesota; provided, however,
that the payment of any invoice totaling less than $5,000 shall be made via wire
transfer within 60 days form the date of receipt of Products in Minneapolis,
Minnesota.
5. SALES BY XDOGS
5.1. XDOGS is authorized to sell the Products to it's customers in the
Territory.
5.2. Xxxxxxx Design will ship Products for delivery to XDOGS, as reasonably
required to maintain adequate inventory, based on the order requests issued to
Xxxxxxx Design by XDOGS.
6. ADVERTISING AND MARKETING
6.1. XDOGS agrees to conduct marketing and promotional efforts supporting the
sales of Products at its expense.
6.2. Xxxxxxx Design shall provide to XDOGS artwork, free of charge, to be used
in advertisements, and other suitable promotional materials for XDOGS.
6.3. XDOGS may produce its own advertisements or promotional materials for the
Products. XDOGS plans to use both traditional and electronic media to advertise
and market the Products.
6.4. XDOGS may indicate that it is an authorized distributor of Xxxxxxx Design
and of the Products in advertising, pamphlets, letterhead or other media
approved in writing by Xxxxxxx Design prior to use and/or dissemination of the
same. In this
37
4
connection and within the above-mentioned limits, XDOGS can use the Lumen
trademark.
6.5. At the commencement of this Agreement, and for each contract year
thereafter, XDOGS will provide to Xxxxxxx Design a marketing plan for the
distribution of the Products within the Territory which marketing plan is to be
approved by Xxxxxxx Design. The marketing plan for each contract year of this
Agreement other than the first contract year is to be agreed upon three months
prior to each contract year. Xxxxxxx Design will not unreasonably withhold its
approval of or agreement to any marketing plan presented by XDOGS.
7. BOOKS AND RECORDS. Within forty-five (45) days of the end of each quarter
XDOGS shall provide to Xxxxxxx Design a report showing:
7.1. Details of all sales of each of the Products made during that quarter to
include the quantities of each type of the Products sold and a breakdown of such
sales by country and distribution channel together with details of the
computation from gross sales to net sales;
7.2. Estimates of anticipated sales of each of the Products for such period as
Xxxxxxx Design may request;
7.3. Details of the quantity and value of all returns of Products received
during that quarter.
Within ninety (90) days of the end of each contract year XDOGS shall provide to
Xxxxxxx Design a report showing a summary of the data-set out above for the
relevant contract year.
8. REPRESENTATIONS AND WARRANTIES OF XDOGS.
8.1. As an inducement for Xxxxxxx Design to enter into this Agreement, XDOGS
hereby warrants and represents to Xxxxxxx Design as follows:
8.1.1. XDOGS is a Nevada corporation, duly organized and validly existing in the
State of Nevada, and is fully qualified to do business and in good standing in
the State of Minnesota, and in every other jurisdiction wherein the nature of
its businesses or the character of its properties makes such qualification
necessary, and has all requisite power and authority to carry on its businesses
as now conducted and as presently proposed to be conducted.
8.1.2. XDOGS has full power and authority to execute and deliver this Agreement.
38
5
8.1.3. XDOGS's Board of Directors has taken all action required by the law of
its jurisdiction of incorporation, its articles of incorporation, bylaws or
similar constituent documents or otherwise, to authorize execution of this
Agreement and the consummation of the transactions contemplated hereby.
8.1.4. No consent, approval, order or authorization of any governmental
authority or any third party is required in connection with the execution and
delivery of this Agreement, or any of the agreements or instruments herein
mentioned, or the carrying out or performance of any of the transactions
required or contemplated hereby or thereby or, if required, such consent,
approval, order or authorization has been obtained by XDOGS prior to the date
hereof.
8.1.5. This Agreement is a valid and binding Agreement by XDOGS and enforceable
against it in accordance with its terms.
8.1.6. Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby will violate any statute or law or any
judgment, decree, order, regulation or rule of any court or governmental agency
or authority in the Territory.
8.13. During the Term of this Agreement, XDOGS will not sell eyewear products
other than eyewear included in the Products; provided, however, that XDOGS shall
be allowed to maintain its existing distribution relationships with Oxbow, S.A.
and Berghaus Limited and shall continue to sell eyewear in accordance with those
relationships.
9. ACCEPTANCE AND CLAIMS.
9.1. All claims for alleged defects which may be discovered by visual inspection
or missing items shall be reported in writing to Xxxxxxx Design as soon as
possible, but in any event no later than thirty days after the date of arrival
of the Products in the Territory and, if not so reported, such claims shall be
waived and the Products shall be deemed to have been accepted by XDOGS.
9.2. At Xxxxxxx Design's request, XDOGS shall promptly either (i) deliver the
allegedly defective within 30 days after receipt Xxxxxxxx.xx Xxxxxxx Design or
its agent or (ii) give Xxxxxxx Design some other evidence of deficiency which
Xxxxxxx Design shall specify. Credit for defective Products shall be issued only
if and to the extent that Xxxxxxx Design's examination shall confirm XDOGS's
claim.
9.3. Xxxxxxx Design shall, at its sole discretion:
39
6
9.3. 1. replace, at Xxxxxxx Design's charge, Products found to be defective or
short in quantity with such quantity of Products to satisfy XDOGSs order
requirements; or
9.3.2. repair or let the defective Products be repaired at Xxxxxxx Design's
charge for material costs; or
9.3.3. issue a credit note to XDOGS for the amount of corresponding to the
defective Products.
10. TERMINATION.
10.1. TERMINATION FOR BREACH. This Agreement may be terminated by either party
upon one hundred eighty (180) days written notice in the event of any material
breach by the other party of any covenant or provision of this Agreement or upon
failure of such other party to make any payment due to the terminating party
hereunder or arising out of the distributor relationship as and when such
payment is due and payable, unless such breach is cured within thirty (30) days
of receipt of notice of termination. Failure to terminate upon an occurrence of
a breach shall not constitute a waiver of such breach or of any damage resulting
from such breach.
10.2. EFFECT OF TERMINATION. In the event of termination of this Agreement,
XDOGS shall discontinue the sale of the Products and all other activities on
behalf of Xxxxxxx Design in the Territory, except for the reasonable disposition
in the normal course of business of any inventory of Products held by XDOGS at
the time of such termination. XDOGS may, at its option, return to Xxxxxxx Design
all Products in its possession at the time of termination of this Agreement, and
Xxxxxxx Design shall reimburse XDOGS for the, price paid for all such Products
within sixty (60) days of receipt of the Products. Neither Xxxxxxx Design nor
XDOGS shall, by reason of any termination or expiration hereof, be liable to the
other for compensation, reimbursement, or damages on account of the loss of
present or prospective profits on sales or anticipated sales, or for goodwill or
loss thereof, or on account of expenditures, investments, leases or any other
commitments made in connection with the business of either party. Such
termination shall not, however, affect the rights or liabilities of Xxxxxxx
Design or XDOGS with respect to any indebtedness or obligation which, prior to
termination, had accrued or was owing by either to the other.
11. RELATIONS OF THE PARTIES. Neither party to this Agreement is the employee,
agent or legal representative of the other for any purpose whatsoever.
12. NOTICES. All notices from one party to the other hereunder will, unless
herein indicated to the contrary will be in writing and shall be served by
mailing a copy thereof, postage prepaid, certified or registered mail, return
receipt requested, address as specified below or such other address as may be
substituted by written notice from either party to the other:
40
7
To XDOGS: XXXXX.XXX, Inc.
00 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
To Xxxxxxx Design: Xxxxxxx Design VertriebsGeseHschaft GmbH
Xxxxxx Xxx. 000/0
X-0000, Xxxx
Xxxxxxx
Notices will be deemed complete when said notice is deposited in any United
States mailbox and the date of such mailing shall constitute the date of notice.
13. GENERAL PROVISIONS
13.1. Governing Law. This Agreement shall be governed by the laws of the State
of Minnesota, without regard to any conflict of law provisions that may
otherwise apply. Any dispute arising out of this Agreement shall be brought and
prosecuted in a court within Hennepin County Minnesota.
13.2. Assignment. This Agreement may not be assigned by either party without the
written consent of both parties and said consent will not be unreasonably
withheld. Said assignment shall not unreasonably impair the rights of the
nonassigning party and shall not be on terms less favorable than the terms set
forth in this Agreement.
13.3. No Franchise, Severability and Modification. The parties agree that this
Agreement shall not constitute a franchise under Minnesota law or any other
applicable state law. If the parties relationship is deemed to be a franchise by
a court of law or other judicial body, the parties hereto expressly waive all
rights and remedies which either of them may have due to any status as a
franchiser or franchisee or pursuant to the application of any franchise laws,
rules or regulations.
13.4. Third Party Beneficiaries. No parties, other than Xxxxxxx Design and
XDOGS, are intended to be a beneficiary of this Agreement.
13.5. Entire Agreement. This Agreement supersedes all prior oral or written
proposals and communications between the parties related to this Agreement, and
shall not be modified, rescinded, waived or otherwise changed except with the
written consent of the parties. This Agreement and the Schedules attached hereto
set forth the entire agreement between the parties with respect to the subject
matter hereof.
13.6. No Inducement. Each party confirms that no inducements, promises or
representations, not written herein, caused it to enter into this Agreement.
41
8
13.7. Waiver. No waiver of any provision or default under this Agreement shall
affect XDOGS's or Xxxxxxx Design's rights, as the case may be, thereafter to
enforce such provision or to exercise any right or remedy in the event of any
other default whether or not similar.
13.8. Headings. The captions preceding the text of the various provisions of
this Agreement are inserted solely for reference and shall not constitute a part
of this Agreement nor affect its meaning, construction or effect. Every word or
phrase defined herein shall, unless herein specified to the contrary, have the
same meaning throughout this Agreement. As used herein, whenever applicable, the
singular shall include the plural and the plural shall include the singular, the
masculine shall include the feminine and the feminine shall include the
masculine.
13.9. FORCE MAJEURE. In the event of any act of God or force majeure, such as
strikes, lockouts, accidents, fires, delays in manufacturing, delays in delivery
of materials, labor controversy, government actions, war or any other causes
beyond their control, neither party shall be responsible for delay in
performance hereunder nor shall incur liability to the other due to the
resulting inability to perform provided that the party relying on such events of
force majeure gives notice to the other party relying on such events of force
majeure gives notice to the other party of the cause and anticipated duration,
within thirty (30) days of the occurrence. In the event the conditions continue
for a period in excess of six (6) months then either party may terminate this
Agreement.
13.10. Validity . If any part of this Agreement shall be determined to be
invalid or unenforceable by a court of competent jurisdiction or by any other
legal constituted body having the jurisdiction to make such determination, the
remainder of this Agreement shall remain in fWI force and effect provided the
part of this Agreement thus invalidated or declared unenforceable is not
essential to the intended operation of this Agreement.
13.11. Counterparts. This Agreement may be executed in any number of
counterparts which, when take together, shall constitute one and the same
instrument.
42
9
The parties, by the actions of their authorized representatives, have executed
this Agreement, including the attached Schedules, as of the date first mentioned
above.
XXXXX.XXX, INC. XXXXXXX DESIGN
BriBen r1eb Gmb
/s/ /s/
Signature Signature
Typed/Printed Name Typed/Printed Name
Title Title
V
-9
43
