MARKETING AND SALES AGREEMENT
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This Marketing and Sales Agreement ("Agreement") is entered into this
17th day of September, 1997 between Xxxxxxxx Publications, Inc., a New York
corporation ("Xxxxxxxx") and Premium Cigars International, Ltd., an Arizona
corporation ("PCI").
RECITALS
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WHEREAS, Xxxxxxxx is the publisher of a magazine named "Smoke
Magazine," hereinafter referred to as the "Magazine";
WHEREAS, Xxxxxxxx desires to have the Magazine displayed in retail
outlets with PCI's humidors, cigars and cigar-related products (the "PCI
Products"); and
WHEREAS, PCI desires to receive and Xxxxxxxx desires to grant to PCI
the right to market the Magazine for display with the PCI Products.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Xxxxxxxx and PCI agree as follows:
1. Marketing Rights.
a. Right to Market. Xxxxxxxx grants to PCI the exclusive right
to market the Magazine to all retailers which display or sell the PCI
Products in North America (the "Retailers"). During the term of this
Agreement, neither Xxxxxxxx nor any representatives of Xxxxxxxx shall
be entitled to market the Magazine to any such Retailers. PCI shall
have no duty, right or other obligation to market the Magazine to, or
to maintain any relationship with, any Retailer which has discontinued
and no longer carries the PCI Products. The parties hereto acknowledge
that "Smoke Magazine" is the featured magazine of PCI. However, nothing
contained within this Agreement shall limit PCI's right to market, sell
or distribute any products, including other magazines, with the PCI
Products.
b. Right of First Refusal. PCI shall notify Xxxxxxxx in
writing of its desire to sell the Magazine outside of North America
through any entity other than Xxxxxxxx. Xxxxxxxx shall have thirty (30)
days after the receipt of such notice within which to notify PCI if it
desires to enter a contract with PCI to sell the Magazine outside of
North America.
2. Commission. PCI shall be entitled to receive commissions based on
the number of Magazines sold to Retailers as set forth below:
* Confidential portions omitted and filed
separately with the Commission.
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a. Wholesaler Commission. * (the "Wholesaler Commission").
b. Standard Commission. * (the "Standard Commission"). *
The Standard Commission and the Wholesaler Commission shall
collectively be referred to as the "Commissions." The parties acknowledge that
the current cover price of the Magazine is $4.99 U.S. / $5.99 Canada.
3. Payment of Commissions. Commissions shall accrue immediately upon
the receipt of a Retailer's order by Xxxxxxxx or Xxxxxxxx'x distributor of the
Magazine. All Commissions accrued shall be paid on or before the 30th day after
the "on sale date" of each subsequent issue of the Magazine, and such payments
shall be accompanied by a statement setting forth the number of units sold and
the number of units refunded or credited for that prior issue of the Magazine.
The "on sale date" shall mean the first business day an issue of the Magazine is
offered for sale to the general public through Retailers. If Xxxxxxxx refunds or
grants a credit for the sale of any of the Magazines, no Commission shall be
paid by Xxxxxxxx to PCI for such sale. If the Commission for such sale has
already been paid by Xxxxxxxx to PCI, the amount of the Commission payment shall
be deducted from future Commission payments thereafter payable to PCI. If no
further Commissions are thereafter payable to PCI, such payment shall be
returned to Xxxxxxxx.
4. Additional Compensation. In addition to the Commissions and in order
to entice PCI to enter into this Agreement, Xxxxxxxx agrees to provide the
following:
a. *
b. *
5. Delivery. Xxxxxxxx shall use its best efforts to fill all orders and
deliver the Magazine through Xxxxxx Circulation or another reliable common
carrier, at Xxxxxxxx'x sole expense, in a timely fashion. Prior to the print
order due date, PCI shall provide to Xxxxxxxx an estimate of the number of
Magazines to be sold by or through PCI for such issue of the Magazine. The
parties hereto acknowledge that no assurance can be given as to the accuracy of
such estimate.
6. Term. Subject to the terms set forth in paragraph 7 herein, the term
of this Agreement shall be for two (2) years from the date hereof and shall
automatically be renewed annually for three (3) additional one year periods,
unless one hundred twenty days (120) days prior to the expiration of the
applicable term one party notifies the other party in writing that it intends to
terminate this Agreement. The parties acknowledge that, in the event a Retailer
should cancel its contract with PCI for maintaining a humidor in its store, upon
such cancellation any obligation or duties owed by PCI to Xxxxxxxx would
terminate as to such store.
* Confidential portions omitted and filed
separately with the Commission.
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7. Early Termination of This Agreement.
a. Termination by PCI. PCI shall have the absolute right to
terminate this Agreement upon delivery of written notice to Xxxxxxxx
one hundred twenty (120) days prior to termination in the event that
PCI determines, in its sole and exclusive discretion, that the
Magazine's volume of sales is insufficient to provide PCI with
reasonable profitability.
b. Termination by Either Party. Xxxxxxxx or PCI shall have the
right to terminate this Agreement in the event one or more of the
following events shall occur, provided the non-defaulting party sends
notice of such default to the defaulting party and the defaulting party
fails to remedy such breach within thirty (30) days after receipt of
such written notice of default:
(i) either party makes an assignment for the benefit
of creditors, or a receiver, trustee in bankruptcy, or similar
officer is appointed to take charge of all or any part of such
party's property or business;
(ii) either party is adjudicated bankrupt; or
(iii) either party fails to timely perform or observe
any of its covenants, duties or obligations hereunder.
c. Remedies of the Parties. In the event either party is in
default hereunder and such default has not been cured during the
applicable cure period, the non-defaulting party may pursue all of its
real and equitable rights and remedies against the defaulting party.
8. Acts Upon Termination. Upon termination of this Agreement, Xxxxxxxx
agrees that it shall continue to supply all orders from any Retailers for a
period of two (2) months (the "Continuation Period"). PCI shall be entitled to a
Commission for all sales to Retailers during such Continuation Period.
9. Indemnification. PCI and Xxxxxxxx shall indemnify and hold each
other and their respective officers, directors, shareholders, employees,
representatives and agents harmless from any loss, damages, expenses (including,
without limitation, reasonable attorneys' fees and expenses) resulting from a
breach of terms, conditions and covenants hereunder.
10. Independent Contractor. This Agreement shall in no way be construed
to constitute PCI as an agent or employee of Xxxxxxxx for any purpose
whatsoever, PCI being an independent contractor engaged by Xxxxxxxx to perform
the services set forth herein.
11. Confidential Information. The parties recognize that as a result of
the relationship with each other, the parties have in the past and may in the
future develop, obtain or learn about Confidential Information which is the
property of PCI or Xxxxxxxx or which PCI or Xxxxxxxx
* Confidential portions omitted and filed
separately with the Commission.
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is under an obligation to treat as confidential. Each party agrees to use its
best efforts and the utmost diligence to guard, protect and keep confidential
said Confidential Information, and each party agrees that it will not, during or
after the period of this Agreement, use for its own purposes or others any of
said Confidential Information which either party may develop, obtain or learn
about during or as a result of its relationship with the other party, unless
authorized to do so by the other party in writing.
For the purposes of this Agreement, the term "Confidential Information"
shall include but not be limited to the following: customer lists; financial
statements or information in any form; marketing strategies; business contacts;
business plans; computer software, including all rights under licenses and other
contracts relating thereto; all intellectual property including all patents,
trademarks, trademark registration and applications, service marks, copyrights,
trade secrets, proprietary marketing information and know-how; books and records
including lists of customers; credit reports; sales records; price lists; sales
literature; advertising material; manuals; processes; technology; or any
information of whatever nature which gives to PCI an opportunity to obtain an
advantage over their competitors who do not know or use it. The parties
acknowledge that the sales numbers set forth in the ABC Auditing Report are
reported to Xxxxxxxx'x members and its affiliates. PCI agrees to cooperate in
providing the appropriate sales numbers for an audit. Both parties acknowledge
that PCI, as a public company, shall provide notice of this contract in press
releases and reports filed with the Securities and Exchange Commission.
Xxxxxxxx and its officers, directors, shareholders, employees,
representatives and agents agree that they shall not contact directly or
indirectly any of PCI's customers or companies with which PCI does business, or
are affiliated with in any way, or any third parties which have any direct or
indirect business dealings with PCI without the prior consent of PCI.
Notwithstanding the foregoing, PCI gives Xxxxxx Circulation and its wholesalers
consent to contact PCI customers in connection with the normal course of
business conducted pursuant to the terms of this Agreement.
12. Notices Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be delivered in person, sent by
telefacsimile or sent by
* Confidential portions omitted and filed
separately with the Commission.
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registered mail, charges prepaid, to the parties at the address or facsimile
telephone as set forth on the signature page of the Agreement and a copy sent
to:
If Notice sent to PCI
send a copy to: Xxxx X. Xxxxxxxxx
Xxxxx, Xxxxxxxxx & Xxxxx, P.C.
0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx X-000
Xxxxxxxxxx, Xxxxxxx 00000
(000) 000-0000
Fax: (000) 000-0000
If Notice sent to Xxxxxxxx
send a copy to: Xxxxx X. Xxxxxx, P.C.
Attorney at Law
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
Fax (000) 000-0000
13. Applicable Law. This Agreement shall be construed, interpreted and
enforced in accordance with, and the respective rights and obligations of the
parties shall be governed by, the laws of the State of Arizona, and each party
irrevocably and unconditionally submits to the exclusive jurisdiction and venue
of the courts of Maricopa County, State of Arizona and all courts competent to
hear appeals therefrom.
14. Successors and Assigns. This Agreement shall inure to the benefit
of and shall be binding on and enforceable by the parties and their respective
successors and permitted assigns, as the case may be. Except as provided for
herein, neither party shall have the right to assign its rights hereunder,
without the prior written consent of the other party.
15. Amendment and Waivers. No amendment or waiver of any provision of
this Agreement shall be binding on either party unless consented to in writing
by such party. No waiver of any provision of this Agreement shall constitute a
waiver of any other provision, nor shall any waiver constitute a continuing
waiver unless otherwise provided.
16. Severability. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such determination shall not affect or impair the validity, legality or
enforceability of the remaining provisions hereof and each provision is hereby
declared to be separate, severable and distinct.
17. Attorneys' Fees. In the event of the bringing of any action or suit
by a party hereto against another party hereunder by reason of any breach of any
of the covenants, agreements or provisions on the part of the other party
arising out of this Agreement, then in that event the prevailing party shall be
entitled to have and recover from the other party all costs and expenses of the
action or suit, including reasonable attorneys' fees and costs.
* Confidential portions omitted and filed
separately with the Commission.
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18. Execution and Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto as of the date first written above.
"PCI" "XXXXXXXX"
PREMIUM CIGARS INTERNATIONAL, LTD. XXXXXXXX PUBLICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Illegible
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Its: CEO / President Its: President/Publisher
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Address: Address:
00000 Xxxxx 00xx Xxx 000 Xxxx 00xx Xxxxxx
Xxxxx 0 Xxx Xxxx, XX 00000
Xxxxxxxxxx, Xxxxxxx 00000 Fax: 000-000-0000
Fax: 000-000-0000
* Confidential portions omitted and filed
separately with the Commission.
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