LEXXUS INTERNATIONAL AGREEMENT
This Distributorship Agreement, made and executed on the 1st day of March, 2002,
is between 40 J's L.L.C., a Limited Liability Company, organized and existing
under the laws of the Commonwealth of Kentucky, with its principal office
located at 000 Xxxxxxxxx Xxxxx, Xx. Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxxx 00000
("SELLER"), and LEXXUS INTERNATIONAL, INC. A corporation organized and existing
under the laws of the State of Delaware, with its principal office located at
00000 Xxxxxx Xxxxx, Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000 ("DISTRIBUTOR")
This agreement is intended to replace a prior Distributorship Agreement between
the parties made on July 11, 2001. Upon execution of this agreement the prior
Distributorship Agreement shall be null and void and have no further effect.
In consideration of the matters described above, and of the mutual benefits and
obligations set forth in this agreement, the parties agree as follows:
SECTION ONE
RIGHTS GRANTED
Seller grants the following contingent rights to Distributor:
Exclusive worldwide distribution rights to sell Seller's Product currently known
as "Viacreme"(TM) as defined on Exhibit "A" attached hereto through Multi Level
Marketing channels of distribution. Distributor will develop a new product name
selected by Distributor and Distributor may use this name only for as long as
this Agreement is in effect. Upon termination of this Agreement, Distributor
shall discontinue use, for any purpose, of the new product name or similar name.
Multi Level Marketing (MLM), as referred to in this agreement, shall mean
distribution of Seller's products utilizing a variety of individual, independent
contractors or agents (Independent Distributors), who are appointed, supervised
and/or terminated by Distributor, and who sell such products on a person to
person basis rather than through traditional retail stores or other means of
distribution.
The parties specifically acknowledge that the above grant of distribution rights
only gives Distributor rights to distribute via MLM, and notwithstanding the
above, Distributor shall not have any rights to distribute via MLM or otherwise
in Japan and shall not sell to any parties who may sell Seller's products into
Japan. In the event that 40 J's fails to establish distribution in Japan by
September 1, 2002, then exclusive MLM rights for Japan will revert to Lexxus.
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SECTION TWO
PRODUCT COVERAGE
As used in this agreement, the term "Seller's product" shall mean and be limited
to Seller's product currently known as "Viacreme" as defined on Exhibit "A"
attached hereto or an identical product with a different name selected by
Distributor which is covered under one or more of Seller's patents and patent
applications. Seller represents and warrants that it will enforce Sellers
patents in the United States and shall prosecute patent applications in
international markets.
SECTION THREE
TERMS OF SALE
All sales of Seller's products to Distributor shall be made under and subject to
the provisions of this agreement. Resale prices shall be determined solely by
Distributor.
Distributor agrees to purchase, on execution of this agreement, 375,000 2-ml.
pillows ("Pillows") from current inventory for $75,000. Distributor agrees to
purchase 225,000 Pillows from current inventory and 2 barrels of Seller's
product on March 15, 2002 for $87,500. Distributor agrees to purchase 600,000
Pillows from current inventory on March 30, 2002 for $87,500. Seller and
Distributor understand that the 1,200,000 pillows referenced above have an
expiration date of August 2002. Seller will supply to Distributor documentation
in form satisfactory to Distributor from the manufacturer that the pillows have
an additional life of at least 12 months. Distributor will purchase 74 barrels
of Seller's product @ $22,500 each through the end of 2003 according to the
following schedule. Terms are FOB warehouse located in Columbus, Indiana and
Cash on Delivery (C.O.D.).
Date Quantity
April 30, 2002 Balance of Pillows Approximately
700,000 @ $112,500
June 30, 2002 5 Barrels
August 15, 2003 9 Barrels
2003
January 31, 2003 15 Barrels
April 30, 2003 15 Barrels
July 31, 2003 15 Barrels
September 30, 2003 15 Barrels
After December 31, 2003, the price cannot increase or decrease more than 10% per
calendar year. Distributor can renew this agreement annually for an additional
period of 12 months with a purchase commitment of 15 barrels per quarter. Seller
and Distributor agree to work in good faith during each renewal period to reach
a mutually agreeable price. Distributor agrees to purchase all of Distributors
inventory from Seller and will not sell competitive and/or similar products.
Failure to purchase any of this inventory will result in an automatic
termination of this Agreement. Upon termination, Distributor may continue to use
new product name selected by Distributor if Distributor purchases Seller's
product @ $45,000 per barrel to distribute on a non-exclusive basis, only into
existing markets that have been previously established as of the termination
date. Lexxus must provide proof to 40J's of established markets.
Initials_____________
If Seller decides to market a similar product through means of distribution
other than through MLM the parties understand that the pricing structure for
Seller's product would be similar to competitive products in the industry, i.e.
approximately $24.99 for a 15-ml. product.
Seller represents and warrants that it is the owner of the trademark "Viacreme"
in the United States and will not sell any product, as defined on Exhibit "A"
with the name Viacreme other than to Distributor.
SECTION FOUR
SALES, MARKETING, ADVERTISING & PROMOTION POLICIES
Distributor acknowledges that the sale of Seller's product could be regulated by
the Food and Drug Administration, and other governmental and regulatory agencies
domestically and worldwide. Distributor agrees to comply with all regulations
and will be solely responsible to comply with all governmental and regulatory
requirements in selling, marketing and promoting Seller's product. Distributor
agrees to hold Seller harmless in any and all non-compliance issues.
SECTION FIVE
PRODUCT WARRANTY POLICIES
A. Seller's products are sold to Distributor at prices that contemplate
that such products are free from defect in manufacture and workmanship at the
time of sale. In the event that any product is proved to have been defective at
time of sale, Seller will replace product or refund the original sales price of
such product at its discretion.
B. Seller agrees to protect Distributor and hold Distributor harmless
from any loss or claim arising out of inherent defects in any of Seller's
product existing at the time such product is sold by Seller to Distributor,
provided that Distributor gives Seller notice of any such loss or claim and
cooperates fully with Seller in the handling of the same. Distributor agrees to
protect Seller and hold Seller harmless and indemnify Seller from any loss or
claim arising out of the negligence, nonfeasance, misfeasance or malfeasance of
Distributor, employees or representatives in the installation, use, sale,
servicing or advertising of Seller's products.
Initials________________
SECTION SIX
USE OF SELLER'S NAMES
Neither Distributor nor Independent Distributors shall use, authorize or permit
the use of the name "Viacreme" or any other trademark owned by Seller as part of
its firm, corporate or business name or in any way. Seller will seek to prevent
others from using this name to avoid any confusion relating to Seller's products
and other parties' products.
SECTION SEVEN
RELATIONSHIP OF THE PARTIES
The parties to this agreement recognize each other as independent contractors
and, except as expressly described elsewhere in this agreement, agree to hold
the other harmless for all liabilities associated with their respective actions.
Each party (the "Indemnifying Party") shall hold harmless, indemnify and defend
the other party (the "Indemnified Party"), the Indemnified Party's agents and
employees against any and all claims, causes of actions, injuries and damages
including, but not limited to, personal injury and property damage, caused to
any extent by any act or omission on the part of the Indemnifying Party, its
agents, contractors or employees, related in any manner to the agreement, except
to the extent the same is caused solely by the negligent acts of the Indemnified
Party. This indemnity shall include all costs and disbursements, including
without limitation, court costs, and reasonable attorneys' fees, and shall
survive the expiration or earlier termination of this agreement. Neither party
shall be construed in any manner whatsoever to be an employee or agent of the
other, nor shall this agreement be construed as a contract of employment or
agency.
SECTION EIGHT
TERM OF AGREEMENT
This agreement shall continue in full force and effect from and after the date
as of which this agreement has been executed and continue unless terminated by
either party under the provisions of Section Nine.
SECTION NINE
TERMINATION
A. This agreement shall terminate as to any part if such party (1)
admits in writing its inability to pay its debts generally as they become due;
(2) has a liquidator, receiver, conservator or statutory successor of such party
appointed by any court or governmental authority having jurisdiction over it;
(3) commences a proceeding under any federal or state bankruptcy, insolvency,
reorganization or similar law, or has such a proceeding commenced against it and
either has an order of insolvency or reorganization entered against it or has
the proceeding remain undismissed and unstayed for 90 days; (4) makes an
assignment for the benefit of creditors; or (5) has a receiver or trustee
appointed for it or for the whole or any substantial part of its property.
Initials_________________
B. In the event either party breaches this agreement by materially
failing to perform its duties as required herein (the "Breaching Party"), the
non-Breaching Party may give written notice to the Breaching Party of such
material failure to perform and demand performance. If the Breaching Party fails
to cure such material non-performance required by this agreement within thirty
(30) days of such written notice, the non-Breaching Party may terminate this
agreement without waiver of any rights that such party may have against the
Breaching Party for such failure to perform.
C. Termination of this agreement shall not affect the continuation
of the obligations of either party incurred during the term of
the agreement.
D. This agreement shall also terminate automatically (without any
notice being required) if Distributor fails to purchase inventory
from Seller described in Section Three.
SECTION TEN
OBLIGATIONS ON TERMINATION
On termination of this agreement, Distributor shall cease to be an authorized
Distributor and;
A. All amounts owing by Distributor to Seller shall, notwithstanding
prior terms of sale, become immediately due and payable;
B. All unshipped orders shall be cancelled without liability of either
party to the other;
C. Neither party shall be liable to the other because of such
termination for compensation, reimbursement or damages on account of
the loss of prospective profits or anticipated sales, or on account
of expenditures, investments, leases or commitments in connection
with the business or good will of Seller, Distributor, or
Independent Distributors or for any other reason whatsoever growing
out of such termination.
Initials________________
SECTION ELEVEN
ACKNOWLEDGEMENTS
Each party acknowledges that no representation or statement, and no
understanding or agreement, has been made, or exists, and that in entering into
this agreement the party has not relied on anything done or said or on any
presumption in fact or in law: (1) with respect to this agreement, or to the
duration, termination or renewal of this agreement, or with respect to the
relationship between the parties, other than as set forth in this agreement; or
(2) that in any way tends to change or modify any of the terms of this agreement
or to prevent this agreement becoming effective; or (3) that in any way affects
or relates to the subject matter of this agreement, other than as set forth in
this agreement, and the parties agree that each of the terms of this agreement
are reasonable and fair and equitable.
SECTION TWELVE
TERMINATION OF PRIOR AGREEMENTS
This agreement terminates and supersedes all prior Seller-Distributor agreements
between the parties to this agreement.
SECTION THIRTEEN
ASSIGNMENT
Neither this agreement nor any right under this agreement nor interest in this
agreement may be assigned by Distributor or Seller without the prior express
written approval of the other party, which consent will not be unreasonably
withheld.
SECTION FOURTEEN
NO IMPLIED WAIVERS
Except as provided in this agreement, waiver by either party, or failure by
either party to claim a breach, of any provision of this agreement shall not be,
or held to be, a waiver of any breach or subsequent breach, or as affecting in
any way the effectiveness of such provision.
SECTION FIFTEEN
NOTICES
Any notice required or permitted by this agreement, or given in connection with
it, shall be in writing and shall be given to the appropriate party by personal
delivery or by first-class registered mail, postage prepaid. Notices to Seller
shall be delivered to the office of the Seller at:
Xxxxxx Xxxxxxx
40 J's LLC
00 Xxxxxxx Xxxx Xxxx
Xx. Xxxxxx, XX 00000
Notices to Distributor shall be delivered to the office of the Distributor at:
Xxxx Xxxxxxxx
Lexxus International
00000 Xxxxxx Xxxxx
Xxxxxx, XX 00000
SECTION SIXTEEN
AMENDMENT
This agreement has been signed by Distributor and sent to Seller for final
approval and execution, and will be signed and delivered on behalf of Seller.
The parties to this agreement intend this agreement to be executed as an
agreement made and executed in Kentucky and to be construed in accordance with
the laws of Texas.
The parties have executed this agreement on the day and year first above
written.
SELLER:
40 J's, L.L.C.
By:___________________________________
Xxxxxx Xxxxxxx, President
DISTRIBUTOR:
LEXXUS INTERNATIONAL, INC.
By:___________________________________
Xxxx X. Xxxxxxxx, Chief Financial Officer
Exhibit `A'
Xxxxxxxx Patent Filing Program - VIACREME
Docket No. Title Serial No. Status
--------- ------- ---------- ------
Xxxxxxxx-1 Device to Enhance Clitoral 09/340,227 U.S. Patent
Stimulation During 6,179,755
Intravaginal Intercourse
Xxxxxxxx-2 Medication Delivery and 09/414,250 U.S. Patent
Clitoral Stimulation device 6,224,541
Xxxxxxxx-3 Clitoral Sensitization 09/469,959 U. S. Patent
Arrangement Using 6,322,493
Compound of Menthol
and L-Arginine
Xxxxxxxx-3A Clitoral Sensitization 09/878,583 Pending
Arrangement Using
Compound of Menthol
and L-Arginine
Xxxxxxxx-4 Exp. Clitoral Sensitizing 09/520,110 Pending
Compound with Method
and Apparatus for the
Delivery of those Compounds
Xxxxxxxx-5A Clitoral Sensitizing 09/736,973 Pending
Arrangements
Foreign Filing of Xxxxxxxx-5A Worldwide Pending
