MARKETING AGREEMENT
This Marketing Agreement (the "Agreement") is made and entered into as
of the 5th day of May, 1997 by and between Compare Generiks, Inc., a Delaware
corporation ("CGI") and Body Dynamics, Inc., an Indiana corporation ("BDI").
W I T N E S S E T H:
WHEREAS, CGI is engaged in the business of marketing and distributing
dietary supplements and over-the-counter non-prescription pharmaceutical
products; and
WHEREAS, BDI is engaged in the business of marketing vitamin, herbs and
non-prescription pharmaceutical products; and
WHEREAS, CGI and BDI wish to enter into an agreement whereby BDI
markets certain products distributed by CGI in the "Xxx Xxxxx" and "HeadsUp"
product ranges; and
WHEREAS, BDI acknowledges that CGI may incur substantial expenses and
may expend significant resources in order to acquire additional equipment, incur
obligations and employ additional personnel in order to fulfill its obligations
to BDI under this Agreement.
NOW, THEREFORE, the parties for good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, agree as follows:
1. Marketing of Products.
(a) Commencing from the date of this Agreement, and during the
term hereof (the "Term"), as defined at paragraph 3 hereof, BDI and its
successors, assigns, subsidiaries and affiliates (collectively, "BDI") shall
market upon the terms of this Agreement the distribution and sale by CGI of all
products in the "Xxx Xxxxx" and "HeadsUp" product ranges as set forth on
Schedule 1(a) hereof (the "Products") for sale to customers solicited by BDI
(the "Customers").
(b) Nothing herein shall restrict or limit in any manner the
right of CGI to sell any other products, to any party, including the Customers,
except as expressly set forth herein.
(c) BDI shall be responsible for all marketing and sales
efforts and all costs relating thereto, including, without limitation, trade
shows, brokers' commissions and advertising expenses.
(d) BDI shall ensure that all terms of this Agreement relating
to the sale and delivery of Products to the Customers are included in any
contract or agreement between the Customers and/or BDI and CGI.
2. Term of Agreement.
(a) The term of this Agreement (the "Term") shall commence on
the date hereof (the "Effective Date") and shall continue for a period of two
(2) years, and thereafter will be automatically renewed for successive one (1)
year terms unless either party provides written notice of intent to terminate
the Agreement as set forth in paragraph 2(b) below and Clause 6 hereof.
(b) CGI may, at its sole option and in its sole discretion,
for any reason whatsoever, give BDI thirty days' written notice to terminate
this Agreement at any time.
3. Placement and Acceptance of Orders.
(a) CGI shall not be obligated to sell to any Customer any
item, and shall have the right to reject any order, in whole or in part, whether
based upon geographic location, Customer identity, regulatory standards,
requirements or concerns or otherwise. In such event, all provisions of this
agreement will continue to remain in full force and effect. BDI is prohibited
from assisting any Customers from obtaining the Products from any other source
during the term of this Agreement.
(b) BDI will not market any Product sold by CGI hereunder to
any party or entity that BDI knows, or has reason to know or reason to be
suspicious, will utilize such product in any manner that is inconsistent with or
contrary to prevailing federal and state regulations or laws, including the
rules and regulations of any state or federal regulatory organization.
4. Obligations of BDI; Payment of Marketing Fee.
(a) BDI agrees to disclose to CGI all information,
documentation and related materials within its possession or knowledge in
connection with the Products, including but not limited to distributor and
customer lists, sales contracts, customer credit history, price, sale terms, any
rebates or other negotiated contracts, either oral or written, verbal promises
or other deals relating to the sale or distribution of the Products, any
existing pending or potential litigation claims relating or involving the
Products, any existing or pending rulings or regulations relating to or
involving the use of the Products, and any other information that CGI may
request in connection with carrying out the terms of this Agreement (the
"Proprietary Information"). CGI agrees to receive such information subject to
the restrictions imposed by all regulatory laws and shall exercise the standards
of care utilized by CGI treating its own information which it does not wish
disclosed outside CGI; provided, however, that this restriction shall not be
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construed to grant any rights to BDI in, to or under the Proprietary Information
under the terms of this Agreement.
(b) BDI hereby agrees and acknowledges that it has, and shall
have, no right, title or interest in the Products, or the Proprietary
Information, including without limitation, any Customer lists or names.
(c) CGI agrees to pay to BDI a marketing fee ("Marketing Fee")
as follows: CGI shall pay BDI the difference between (i) the purchase price for
the Products as billed to the Customer, and (ii) an amount equal to two hundred
percent (200%) of the Material Cost of the Products. "Material Cost" shall mean
the actual material expenses of PDK Labs Inc. ("PDK") incurred in the
manufacture and packaging of the Products. The Material Costs for each item
ordered will be determined, in advance, each forty-five (45) days during the
term of this Agreement. Upon written request from BDI, CGI will provide to BDI
an MRP Schedule reflecting PDK's Material Cost per item. The Marketing Fee is
payable monthly, in arrears, within fifteen (15) days of the end of the month in
which CGI received payment for the related Products and is only payable upon
receipt of the purchase price from the related Customer.
(d) CGI has the absolute right in its sole and absolute
discretion, if an invoice remains unpaid for a period in excess of 150 days to
offset 100% of the Material Cost of the Products delivered pursuant to the
delinquent invoice, against the next installment of the Marketing Fee.
(e) CGI agrees to be responsible for all returns of Products
sold from and after the date of this contract.
(f) If CGI terminates this Agreement pursuant to any of the
provisions hereof, Marketing Fees shall be paid only in relation to any order
placed by a Customer prior to the date of termination of this Agreement. No
Marketing Fees shall be paid from and after such date, including, without
limitation, in relation to any re-orders of Product by any Customer.
5. Indemnification. The parties hereby agree to indemnify and hold one
another, their officers, directors, agents, servants, employees, subsidiaries
and affiliates, harmless from and against any and all claims, suits, demands,
losses, liabilities, damages, court costs, (including reasonable attorneys'
fees), whether based in contract or in tort, arising out of or related to, or as
a consequence of any act or omission of the indemnifying party relating to the
Products.
6. Termination of Agreement.
(a) CGI shall have the right to terminate this Agreement at
its sole discretion, at any time, upon being advised that any regulatory
authority objects to the sale of the Products by CGI to the Customers.
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(b) In addition, in the event any regulatory agency restricts
or denies further use of any trademarks used by CGI in connection with the
Products, all rights and obligations of the parties under this Agreement shall
remain in effect, except that the Products will be marketed under a name or
names mutually acceptable to CGI and BDI, subject to receipt of the prior
written consent of PDK, and consistent with the determination of such regulatory
authorities.
(c) BDI acknowledges that it shall have earned income from its
performance under this Agreement, and that in the event of termination of this
Agreement for any reason, the income earned thereby shall constitute its sole
earnings, and it shall not be entitled to reimbursement, lost profits or
indemnity payments of any kind.
(d) Any failure by either party to terminate this Agreement
pursuant to Clause 2(b) or this Clause 6 by reason of one or more of the
foregoing acts or events shall not constitute a waiver of the right to terminate
this Agreement upon reoccurrence or continuance of such acts or events.
7. Representations and Warranties of BDI. BDI (including all of its
subsidiaries and affiliates) represents and warrants to CGI as follows:
7.1 Organization and Qualification. BDI is a corporation validly
existing and in good standing under the laws of the State of Indiana, and has
all requisite corporate power and authority to (a) own, lease and operate its
properties and assets as they are now owned, leased and operated and (b) carry
on its business as now presently conducted. BDI is duly qualified to do business
in each jurisdiction in which the nature of its business or properties makes
such qualification necessary, except where the failure to do so would not have a
material adverse effect on the business of BDI.
7.2 Subsidiaries and Affiliates. Except as set forth on Schedule 7.2
hereof, BDI has no subsidiaries or affiliates.
7.3 Validity and Execution of Agreement. BDI has the full legal right,
capacity and power and all requisite corporate authority and approval required
to enter into, execute and deliver this Agreement and any other agreement or
instrument contemplated hereby, and to perform fully its obligations hereunder
and thereunder. The stockholders and the board of directors of BDI has approved
the transactions contemplated pursuant to this Agreement. This Agreement has
been duly executed and delivered by BDI and constitutes the valid and binding
obligation of BDI enforceable against it in accordance with its terms.
7.4 No Conflict. Neither the execution and delivery of this Agreement
nor the performance by BDI of the transactions contemplated hereby will: violate
or conflict with (a) any of the provisions of the Articles of Incorporation or
By-laws or other organizational documents of BDI; (b) result in the acceleration
of, or entitle any party to accelerate the maturity or the cancellation of the
performance of any obligation under, or result in the creation or
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imposition of any lien in or upon their respective assets or constitute a
default (or an event which might, with the passage of time or the giving of
notice, or both, constitute a default) under any contract, (c) any order,
judgment, regulation or ruling of any governmental or regulatory body to which
BDI are a party or by which any of its property or assets may be bound or
affected or with any provision of any law, rule, regulation, order, judgment, or
ruling of any governmental or regulatory body applicable to BDI.
7.5 Licenses and Permits. BDI maintains all governmental permits,
licenses, registrations and other governmental consents (federal, state and
local) which are necessary in connection with its operations and properties, and
no others are required. All such permits, licenses, registrations and consents
are in full force and effect and in good standing and shall continue to be in
full force and effect and in good standing following the consummation of the
transactions contemplated by this Agreement.
7.6 Compliance with Laws. BDI has complied in all respects with all
applicable federal, state and local laws, regulations and ordinances or any
requirement of any governmental or regulatory body, court or arbitrator
affecting the business or the assets the failure to comply with which could have
a material adverse effect on the business of BDI.
7.7 Products. There are no statements, citations or decisions by any
governmental or regulatory body that any product marketed or distributed at any
time by BDI is defective or fails to meet in any material respect any standards
promulgated by any such governmental or regulatory body. There have been no
recalls ordered by any such governmental or regulatory body with respect to any
product. To the best knowledge of BDI, there is no (a) fact relating to any
product that may impose upon the Companies a duty to recall any product or a
duty to warn customers of a defect in any product, other than defects about
which BDI has issued appropriate and adequate warnings or (b) latent or overt
design, manufacturing or other defect in any product.
7.8 Survival. All of the representations and warranties of BDI
contained herein shall survive the date hereof until the date upon which the
liability to which any claim relating to any such representation or warranty is
barred by all applicable statutes of limitations.
8. Representations and Warranties of CGI.
8.1 Organization and Qualification. CGI is a corporation validly
existing and in good standing under the laws of the State of Delaware, and has
all requisite corporate power and authority to (a) own, lease and operate its
properties and assets as they are now owned, leased and operated and (b) carry
on its business as now presently conducted. CGI is duly qualified to do business
in each jurisdiction in which the nature of its business or properties makes
such qualification necessary, except where the failure to do so would not have a
material adverse effect on the business of CGI.
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8.2 Subsidiaries and Affiliates. Except as set forth on Schedule 8.2
hereof, CGI has no subsidiaries or affiliates.
8.3 Validity and Execution of Agreement. CGI has the full legal right,
capacity and power and all requisite corporate authority and approval required
to enter into, execute and deliver this Agreement and any other agreement or
instrument contemplated hereby, and to perform fully its obligations hereunder
and thereunder. The board of directors of CGI has approved the transactions
contemplated pursuant to this Agreement. This Agreement has been duly executed
and delivered by CGI and constitutes the valid and binding obligation of CGI
enforceable against it in accordance with its terms.
8.4 No Conflict. Neither the execution and delivery of this Agreement
nor the performance by CGI of the transactions contemplated hereby will: violate
or conflict with (a) any of the provisions of the Articles of Incorporation or
By-laws or other organizational documents of CGI; (b) result in the acceleration
of, or entitle any party to accelerate the maturity or the cancellation of the
performance of any obligation under, or result in the creation or imposition of
any lien in or upon their respective assets or constitute a default (or an event
which might, with the passage of time or the giving of notice, or both,
constitute a default) under any contract, (c) any order, judgment, regulation or
ruling of any governmental or regulatory body to which CGI are a party or by
which any of its property or assets may be bound or affected or with any
provision of any law, rule, regulation, order, judgment, or ruling of any
governmental or regulatory body applicable to CGI.
8.5 Survival. All of the representations and warranties of CGI
contained herein shall survive the date hereof until the date upon which the
liability to which any claim relating to any such representation or warranty is
barred by all applicable statutes of limitations.
9. Force Majeure. CGI shall not be liable for any delay or failure to
perform in accordance with this Agreement if such delay or failure to perform is
a result of a strike, lock-out or other labor dispute; riot, insurrection, civil
disturbance or other hostility; embargo; inability or delay in obtaining fuel,
energy, equipment or power; inability or delay in obtaining labor or materials;
inability or delay in obtaining government approvals, permits or licenses;
inability or delay in obtaining transportation or other services; fire, flood,
lightning, storm, earthquake, or other Act of God; or is a result of causes
beyond CGI's reasonable control including but not limited to governmental
actions or inactions.
10. Injunctive Relief. The parties acknowledge that each party will
incur considerable expenses in connection with the purchase of Equipment and
materials and the employment of personnel in order to fulfill their respective
obligations under this Agreement. The parties further acknowledge that the
obligations of each party hereunder are of a special, unique and extraordinary
character, and would be difficult or impossible to replace and that any breach
of this Agreement by either party would result in irreparable and continuing
damages to the non-breaching party for which there would be no adequate remedy
at law. Accordingly, BDI
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and CGI agree that any breach or threatened breach of this Agreement by either
party shall entitle the non-breaching party, its successors and assigns, to
injunctive relief, and to such further relief as may be proper, including
damages at law and equitable relief, and further agree to hold the non-breaching
party harmless from, and indemnify the non-breaching party from any losses or
damages sustained, including lost profits, and any expenses incurred, including
attorneys fees, arising out of any breach of this Agreement by the breaching
party. The parties understand and intend that each restriction agreed to
hereinabove shall be construed as separable and divisible from every other
restriction, that the unenforceability of any restriction shall not limit the
enforceability, in whole or in part, of any other restriction, and that one or
more or all of such restrictions may be enforced in whole or in part as the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which the
non-breaching party seeks enforcement thereof, such restriction shall be limited
to the extent permitted by law. Nothing contained herein shall waive or limit
any right or remedy which the non-breaching party may have, either in law or
equity, to enforce this Agreement and its rights hereunder.
11. Nondisclosure. Neither party, nor any person controlled by it,
shall for any reason other than fulfilling it obligations hereunder, directly or
indirectly, for itself or any other person, use or disclose any trade secrets or
confidential information, know-how or proprietary information relating to the
other party, except to the extent (i) within the public domain; or (ii) pursuant
to a subpoena, court order or applicable law.
12. Relationship of the Parties. The relationship of the parties
created hereby is that of independent contractors, and neither party shall have
any right or authority to create or assume any obligation of any kind on behalf
of the other.
13. Disclaimer of Warranties. CGI makes no other representations or
warranties except as set forth in this agreement, and CGI expressly disclaims
any implied warranties of merchantability, fitness for use or fitness for a
particular purpose.
14. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
given personally, telegraphed, telefaxed, sent by facsimile transmission or sent
by prepaid air courier or certified, registered or express mail, postage
prepaid. Any such notice shall be deemed to have been given (a) when received,
if delivered in person, telegraphed, telexed, sent by facsimile transmission and
confirmed in writing within three (3) Business Days thereafter or sent by
prepaid air courier or (b) three (3) Business Days following the mailing
thereof, if mailed by certified first class mail, postage prepaid, return
receipt requested, in any such case as follows (or to such other address or
addresses as a party may have advised the other in the manner provided in this
Section 14):
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If to CGI, to:
Compare Generiks, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
If to BDI, to:
Body Dynamics, Inc.
0000 Xxxxx Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx-Xxxxxxx
15. Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Neither party shall assign any of its rights or delegate any of its
duties or obligations hereunder without the prior written consent of the other
party. Notwithstanding the foregoing, the parties hereto do not intend to create
hereby, and this Agreement shall not be read or construed to create or grant,
any rights or benefits in or for any person or entity other than the parties
hereto and any and all such third party rights or benefits are hereby expressly
disclaimed and denied.
16. Governing Laws. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without regard to
principles of conflicts of law, and the parties irrevocably agree to submit any
controversy or claim arising out of or relating to this Agreement to a court of
competent jurisdiction located in the State of New York. The parties agree that
any proceedings arising out of, relating to, or brought for the purpose of
enforcing this Agreement, or remedying any breach thereof shall be instituted in
the courts of the State of New York, and in no other jurisdiction.
17. Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
19. Amendment. This Agreement may be amended only by a writing signed
by all parties hereto.
20. Entire Agreement. This Agreement contains the entire understanding
of the parties hereto with respect to its subject matter and supersedes any
prior arrangements or understandings (written or otherwise) between them.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the first date written above.
COMPARE GENERIKS, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Xxxxxx X. Xxxxx, President
BODY DYNAMICS, INC.
By: /s/ Xxxxx Xxxxxx-Xxxxxxx
-------------------------------
Xxxxx Xxxxxx-Xxxxxxx, President
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