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Exhibit 10.1
Form 10-SB
Xx. Xxxxxxxxxxx'x Original Formulas Inc.
File No.:
REVISED AND RESTATED MARKETING RIGHTS AGREEMENT
This Agreement, signed on July 1, 2000, is effective as of the
29th day of December, 1999, and is between Xxxxxxxxxxx
Enterprises, Inc a Utah corporation, hereinafter "Enterprises",
and Xx. Xxxxxxxxxxx Original Formulas, Inc., a Utah Corporation,
hereinafter "Marketing".
Whereas, Enterprises desires to become solely a manufacturer of
herbal formulas and remedies and supply to a marketing company
the exclusive rights to market its products, and,
Whereas, Marketing is a company formed to provide all marketing
and fulfillment functions, and desires to market all the products
of Enterprises on an exclusive basis, therefore,
It is hereby mutually agreed between the parties that:
1. TRANSFER OF RIGHTS AND OBLIGATIONS.
a. Enterprises does hereby transfer and assign to Marketing an
exclusive right to sell, use, advertise and market all of Xx.
Xxxxxxxxxxx'x original formulas, all of the Xxxxx Xxxxxxxxxxx
formulas and products, and all other products currently being
produced, marketed, and/or sold by Enterprises or any of their
agents.
b. Enterprises does hereby transfer and assign to Marketing an
exclusive right to use Xx. Xxxxxxxxxxx'x name and likeness, all
registered trademarks and proprietary information in conjunction
with all Xx. Xxxxxxxxxxx formulas and products currently being
produced, marketed, and sold by Enterprises or their agents,
including all trademarks and proprietary information in
conjunction with Xxxxx Xxxxxxxxxxx'x formulas and products
currently being produced, marketed, and sold by Enterprises or
their agents, or any other product that is affiliated with
Enterprises.
c. Enterprises agrees that all products will be sold to
Marketing at a mutually agreed upon cost plus basis. These
products include, but are not limited to, all the products stated
in section a. and b. above.
d. Enterprises agrees to supply and ship all products to
Marketing on a timely basis.
e. Enterprises agrees to provide product liability insurance
and name Marketing as additional insured.
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f. Marketing agrees to purchase all the products stated in
section 1.a. and 1.b. above from Enterprises. Marketing also
agrees to refrain forever from competing with Enterprises during
the life of this Agreement and after this Agreement ceases to
exist.
g. Marketing agrees to provide and maintain ongoing liability
insurance naming Enterprises and its subsidiaries as additional
insured.
2. COOPERATION. It is understood and agreed that there is a
high level of trust and confidence between the parties. Every
effort will be made by both parties to maintain the relationship
so that both parties may benefit to the fullest extent possible
and so that the work Xx. Xxxx X. Xxxxxxxxxxx started can be
perpetuated for generations to come.
3. DURATION. The term of this agreement is for 5 (five) years.
The Agreement will be automatically renewed for an additional 5
(five) year period based on an annual increase of gross sales by
Marketing of at least 25% (twenty-five percent) per year for the
first 5 (five) years of the Agreement. The baseline for
computation shall be $2,500,000.00 (two and a half million
dollars). Therefore, the acceptable amount of gross annual sales
by the end of the fifth year is $7,630,000.00 (seven million six
hundred and thirty thousand dollars). Thereafter, each renewal
will be based on the acceptable performance of the previous year.
a. In the event of non-renewal, all rights granted hereunder to
Marketing shall terminate and the obligation of Marketing to pay
monthly license fees under section 4, below, accruing from and
after the date of termination shall terminate. Marketing shall
cease using all trademarks and remove same from all products
within 90 days of said non-renewal. In the event of such non-
renewal, Marketing shall deliver to Enterprises a complete copy
of the then current customer list for the products covered by
this Agreement in consideration of a lump sum payment based on
the current value of such list or, at the option of Enterprises,
in consideration of a promissory note payable to Marketing in the
principal amount equal to the current value of such list bearing
interest at the rate of five percent per annum payable in equal
monthly installments over a term of three years.
4. PAYMENT FOR RIGHTS. For and in consideration of the
marketing rights conveyed hereunder, Marketing shall pay to
Enterprises $450,000.00 (four hundred fifty thousand dollars).
Such payment shall be made in the form of a note issued July 1,
2000, bearing interest at the rate of 5% per annum due on June
30, 2003, in the principal amount of $450,000. In addition,
marketing shall pay to Enterprises a monthly license fee of
$8,333.33 commencing July 1, 2000, and continuing through June 1,
2010.
5. CONFIDENTIALITY. The parties shall keep secret and shall
not, without the prior written approval from the other party,
divulge, transmit or otherwise disclose or permit the
transmission, publication or disclosure at any time during the
term of this agreement or thereafter, of any information acquired
during the term of this agreement
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which shall or may adversely affect the business of the other
party, including, but not limited to, any present or past
customers, finances, earnings, sales volume, outlets, methods,
systems, practices, plans, processes and all similar and related
information of any kind, nature or description whatsoever
relating to or connected with the business of the parties,
without regard to whether any or all of the foregoing matters are
confidential, the parties agreeing that as between them at all
times such shall be deemed important, material, confidential and
directly affecting and related to the effective and successful
conduct of their businesses and its goodwill, and that breach of
the terms of this paragraph shall be considered material breach
of this agreement.
6. TERMINATION. This Agreement may be terminated for cause by
the lack of performance by either party. The party desiring to
terminate must give written 30 days notice of intent to
terminate. Said notice must include the just cause of
termination and allow the other party reasonable time, but no
longer than 90 days, to correct the cause. If the cause is not
remedied, the termination shall be effective 90 days from the
date of the written termination notice. In the event that either
party breaches this agreement, it shall be liable to the other
party for all loss, costs, damages and expenses, including
reasonable attorneys' fees, incurred as a result of any such
breach. In the event that Enterprises terminates this contract
due to a lack of performance or breach by Marketing, all rights
granted hereunder shall be returned to Enterprises, including the
complete customer database, and Marketing shall immediately cease
using all trademarks. However, in the event of such termination,
Marketing shall receive just compensation for any increase in the
customer database based on the current value the customer list as
determined by an independent accounting firm selected by mutual
agreement of the parties.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior
Agreements and understandings, oral and written, between the
parties relating to the subject matter hereof. No change,
addition to or waiver of any of the terms or the provisions of
this Agreement shall be binding upon the parties hereto unless
approved in writing by the parties hereto or their authorized
representatives.
8. MULTIPLE COPIES. This Agreement may be executed
simultaneously 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, without necessity of production of
the others. In the event parts of this Agreement are found to be
void, the remaining provisions of this Agreement shall
nevertheless be binding with the same effect as though the void
parts were deleted.
9. WAIVER. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach.
10. CONTINUITY. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, their respective
successors, executors, administrators, heirs and assigns.
Nothing in this Agreement, expressed or implied, is intended to
confer on any
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other person, sole proprietorship, partnership, corporation,
trust or other entity, other than the parties hereto, any rights,
remedies, obligations or liabilities under or by reason of this
Agreement unless otherwise provided.
11. GOVERNING LAW. This Agreement shall be construed pursuant
to the laws of the State of Utah.
Executed this 1st day of July 2000.
XX. XXXXXXXXXXX'X ORIGINAL FORMULAS, INC
By /s/ Xxxxxx Xxxxx, President
XXXXXXXXXXX ENTERPRISES, INC.
By /s/ Xxxxxx Xxxxxxx, President
/s/ Xxxxxx Xxxxxxx, Owner
/s/ Xxxx Xxxxxxxxxxx Xxxxxxx, Owner
/s/ Xxxxx Xxxxxxxxxxx, Owner
/s/ Xxxx Xxxxxxxxxxx, Owner
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