DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT ("Agreement"), is made and entered into as of
October 1, 1999 ("Effective Date") by and between HOLLYWOOD XXXXXXXX.XXX, INC.,
a Delaware corporation ("Company"), and VITAFORT INTERNATIONAL CORPORATION, a
Delaware corporation ("Distributor").
RECITAL
WHEREAS, Company desires to engage Distributor to perform certain sales,
marketing, promotion and distribution services for it, and Distributor desires,
subject to the terms and conditions of this Agreement, to perform these services
for the Company, the parties hereto agree as follows:
1. ENGAGEMENT.
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Company hereby grants the Distributor the exclusive worldwide rights to
promote, distribute and market the products on Exhibit A to all classes of
trade. The Distributor hereby accepts the appointment and agrees to use its
best efforts to promote, distribute and sell the Company's products in a manner
so as to promote and enhance the reputation and goodwill of the Company and its
products.
2. TERM.
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The term of this Agreement shall be October 1, 1999 through October 1, 2003
unless terminated or extended in accordance with provisions of this Agreement.
3. COMPANY COMPENSATION.
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In consideration for the distribution rights of the Company's products, the
Distributor will pay the Company a ten percent (10%) royalty fee against net
sales.
4. PAYMENT OF COMPENSATION.
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Distributor shall pay amounts due to Company within thirty (30) days after
the end of the calendar quarter, together with an accounting showing the
calculation of the amount due to Company by product and by customer. The
accounting shall be certified by the principal accounting officer of
Distributor.
5. RIGHT TO AUDIT.
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Company shall have the right to audit the amount due from Distributor to
Company on a once per year basis. Distributor agrees to cooperate with any audit
request from Company, and make
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available personnel and records on a timely basis. If the audit results in
amounts due to the Company in excess of $10,000, Distributor shall pay the
reasonable costs of the audit to Distributor.
6. COMPANY OBLIGATION.
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It is the responsibility of the Company to pay all product license fees to
the appropriate entities according to the respective licensing agreements. The
company is also responsible for all costs associated with the development of the
finished product ("Exhibit B-Product Development"). Company represents that it
has all rights necessary for Distributor to market the products, and that the
products do not infringe on the rights of others.
7. DISTRIBUTOR OBLIGATIONS.
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The Distributor agrees to use its best efforts, including but not limited
to, the use of advertising, direct mail, or similar activities, to promote and
sell the Company's products. The Distributor also agrees to maintain a work
force and staff sufficient to perform the duties necessary to distribute, market
and promote the Company's products on an on-going basis.
8. NON-COMPETITION.
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The Distributor shall not engage in the manufacture, promotion, sale,
distribution or servicing, either directly or indirectly, of any product similar
or competitive with the products during the term of this Agreement.
9. CONFIDENTIALITY
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Distributor recognizes that during the course of Distributor's activities
on behalf of the Company, they will accumulate certain proprietary and
confidential information and trade secrets used in the Company's business and
will have divulged to them certain confidential and proprietary information and
trade secrets about the business, operations and prospects of the Company, which
constitute valuable business assets of the Company. Distributor hereby
acknowledges and agrees that such information, except for information which is
in the public domain prior to Distributor's receipt thereof, or which
subsequently becomes part of the public domain other than by Distributor's
breach of a confidentiality obligation, or which Distributor can clearly
demonstrate was in his possession prior to receipt thereof from the Company and
was developed by Distributor or received by Distributor from a third-party
without breach of such third-parties confidentiality obligations with respect
thereto ("Proprietary Information") is confidential and proprietary and
constitutes trade secret information and the Proprietary Information belongs to
the Company
10. TERMINATION
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This Agreement may be terminated on the occurrence of any one of the
following events:
10.1 The expiration of the Term hereof;
10.2 By the Company "with cause," effective upon delivery of written
notice to
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Distributor given at any time (without any necessity for prior notice) if any of
the following shall occur:
(a) A material breach of this Agreement by Distributor, which breach
has not been cured within thirty (30) days after a written demand for such
performance is delivered to Distributor by the Company that specifically
identifies the manner in which the Company believes that Distributor has
breached this Agreement;
(b) Any material act or event, which inhibit Distributor from fully
performing their responsibilities to the Company in good faith, such as
bankruptcy.
(c) Failure to meet sales quotas by Distributor for any product will
give Company the right to terminate Distributor's rights to distribute that
product provided that Company notifies Distributor through ninety (90) days
advance written notice.
11. SALES QUOTAS
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The Distributor and the Company will work in good faith to establish sales
quota's for the Company for all new products developed by the Company including,
but not limited to the Gravity Bar.
The distributor and the Company will work together in good faith to
establish reasonable and customary sales quotas for all products on Exhibit A.
12. GENERAL PROVISIONS.
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12.1 Governing Law and Jurisdiction. This Agreement shall be governed by
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and interpreted in accordance with the laws of the State of California. Each of
the Parties hereto consents to such jurisdiction for the enforcement of this
Agreement and matters pertaining to the transaction and activities contemplated
hereby.
12.2 Attorneys' Fees. In the event a dispute arises with respect to this
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Agreement, the party prevailing in such dispute shall be entitled to recover all
expenses, including, without limitation, reasonable attorneys' fees and expenses
incurred in ascertaining such party's rights, in preparing to enforce or in
enforcing such party's rights under this Agreement, whether or not it was
necessary for such party to institute suit.
12.3 Complete Agreement. This Agreement supersedes any and all of the
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other agreements, either oral or in writing, between the Parties with respect to
the subject matter hereof and contains all of the covenants and agreements
between the Parties with respect to such subject matter in any manner
whatsoever. Each Party to this Agreement acknowledges that no representations,
inducements, promises or agreements, oral or otherwise, have been made by any
Party, or anyone herein, and that no other agreement, statement or promise not
contained in this Agreement shall be valid or binding. This Agreement may be
changed or amended only by an amendment in writing signed by all of the Parties
or their respective successors-in-interest.
12.4 Binding. This Agreement shall be binding upon and inure to the
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benefit of the successors-in-interest, assigns and personal representatives of
the respective Parties.
12.5 Notices. All notices and other communications provided for or
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permitted hereunder
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shall be made by hand delivery, first class mail, telex or telecopied, addressed
as follows:
Party: Company: Hollywood Xxxxxxxx.xxx, Inc.
----- 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxx, President
Distributor: Vitafort International Corporation
1800 Avenue of the Stars
Xxxxx 000
Xxx Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx, President
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five (5) business days
after deposit in any United States Post Office in the continental United States,
postage prepaid, if mailed; when answered back, if telexed; and when receipt is
acknowledged or confirmed, if telecopied.
12.6 Unenforceable Terms. Any provision hereof prohibited by law or
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unenforceable under the law of any jurisdiction in which such provision is
applicable shall as to such jurisdiction only be ineffective without affecting
any other provision of this Agreement. To the full extent, however, that such
applicable law may be waived to the end that this Agreement be deemed to be a
valid and binding agreement enforceable in accordance with its terms, the
Parties hereto hereby waive such applicable law knowingly and understanding the
effect of such waiver.
12.7 Execution in Counterparts. This Agreement may be executed in several
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counterparts and when so executed shall constitute one agreement binding on all
the Parties, notwithstanding that all the Parties are not signatory to the
original and same counterpart.
12.8 Further Assurance. From time to time each Party will execute and
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deliver such further instruments and will take such other action as any other
Party may reasonably request in order to discharge and perform their obligations
and agreements hereunder and to give effect to the intentions expressed in this
Agreement.
12.9 Incorporation by Reference. All exhibits referred to in this
--------------------------
Agreement are incorporated herein in their entirety by such reference.
12.10 Miscellaneous Provisions. The various headings and numbers herein
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and the grouping of provisions of this Agreement into separate articles and
paragraphs are for the purpose of convenience only and shall not be considered a
party hereof. The language in all parts of this Agreement shall in all cases be
construed in accordance with its fair meaning as if prepared by all Parties to
the Agreement and not strictly for or against any of the Parties.
13. INDEMNIFICATION.
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Both Parties shall indemnify, defend and hold the other Party harmless
against any and all claims, loss, cost, liability, or expense (including,
without limitation, reasonable attorneys' fees and costs) incurred, sustained
and/or paid by either Party arising out of (i) any breach by either Party of any
of its representations, warranties or covenants made under or in connection with
this Agreement, or (ii) the gross negligence or willful misconduct of either
Party in its performance under this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the day and year first above written.
"COMPANY" "DISTRIBUTOR"
Hollywood Xxxxxxxx.xxx, Inc. Vitafort International Corporation
By: /s/ Xxx X. Xxxxxxx /s/ Xxxx Xxxxxxxxx
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Xxx X. Xxxxxxx Xxxx Xxxxxxxxx
President President
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EXHIBIT A
PRODUCT LIST
The Wizard of Oz Marshmallows
The Wizard of Oz Collectors Tins
Gravity Games Energy Bars
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EXHIBIT B
PRODUCT DEVELOPMENT
Including, but not limited to:
Research and development
Product sourcing
Raw material sourcing
Packaging sourcing
Artwork development
Packaging development
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