TRANSITIONAL SERVICES AGREEMENT
Exhibit
10.05
THIS
AGREEMENT made as of the 29th day of December, 2009 by and between Nutrition 21,
Inc., a New York corporation and Iceland Health, LLC, a New York limited
liability company(hereinafter collectively called "Seller")
and Iceland Health, Inc. a Florida corporation and Nature’s Products,
Inc., a Florida corporation (hereinafter collectively called
"Buyer").
Seller
and Buyer have entered into Asset Purchase Agreements dated December 29, 2009
(the "Purchase Agreements"), each for a sale of a "Business" (as defined in the
Purchase Agreements). This Agreement is the Transitional Services Agreement that
is contemplated by the Purchase Agreements.
In
consideration of the mutual covenants and agreements contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1.
DEFINITIONS
1.1
"Businesses" means collectively the Business referred to in the first Purchase
Agreement and the Business referred to in the second Purchase
Agreement.
1.2 "MIS
Services" shall mean all computer and data-processing services and support
provided to the Business in accordance with recent historical practice, but does
not include use of Seller’s existing EDI Services, such as customer orders
processes, confirmations of shipments, and invoice services.
1.3
"Sales Support Services" shall mean, with respect to the sale of products of the
Business, financial and accounting support, record keeping, customer billing and
collections, order processing, and preparing and reporting of monthly results,
including, without limitation, use of Seller’s credit card sales processing
system.
1.4
"Transitional Services" shall mean the aggregate of all Services including MIS
Services and Sales Support Services, as well as the use of office space and
other services
1.5
Capitalized terms not expressly defined in this Agreement shall have the
meanings ascribed to them in the Purchase Agreement.
2.
PROVISION OF SERVICES
2.1
Subject to Article 7 hereof, Seller shall provide to Buyer such Transitional
Services for a period of up to three months after the Closing Date. The parties
agree that they will attempt to limit the Transitional Services to a period of
eight weeks from the Closing Date, however, Buyer shall have the right to extend
the Transitional Services thereafter on a week-to-week basis for a period not to
exceed such three month period. It is understood by the parties that the
quantity of services to be provided under this Section 2.1 shall be
substantially consistent with recent historical practice, provided that the
Seller shall insure that no less than three full-time employees (initially Xxxx
Xxxxxxx, Xxxxxxxx Xxxxxxx and Xxxxxx Xxxxxxx are assigned on a dedicated basis
to the Transitional Services. Included in the transitional services are the
services of the Seller’s existing executive management team for up to
eight weeks after the Closing date at no charge to
Buyer.
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2.2 With
respect to Sales Support Services, monthly financial reports shall be
provided to Buyer, on a time schedule consistent with recent historical
practice. Such financial reports shall be in substantially the form currently
provided by Seller with respect to sales of the products of the Business, In the
event that modifications to the financial reports are required to meet Seller’s
needs, Seller shall pay for those services. Notwithstanding the
foregoing, Sales Support Services will be provided during normal business hours
by the persons who prior to the Closing under the Purchase Agreements performed
such services on behalf of Seller, or by their successors.
3.
PRICING, BILLING AND PAYMENT
3.1 All
Transitional Services shall be charged for the first eight (8) weeks at a rate
of $5,000 per week, and thereafter at a rate of $10,000 per week.
3.2
Charges for Transitional Services shall be billed monthly by Seller and shall be
payable on the fifteenth day of the month following the month in which such
services are rendered.
3.3
Seller shall hold any proceeds of invoices issued after the Closing Date
relating to the Business, IN TRUST, for the benefit of Buyer. Such remittance
shall be submitted concurrently with the reports specified in Section 2.2
above.
4.
WARRANTY
4.1
Seller shall provide Transitional Services to Buyer in a manner consistent with
the manner they have heretofore been provided to the Business while it was
operated by Seller. Seller makes no other warranties, express or implied, with
respect to the services to be provided to Buyer hereunder.
5. FORCE
MAJEURE
5.1
Seller shall not be responsible for failure or delay in delivery of any
Transitional Service, nor shall Buyer be responsible for failure or delay in
receiving such service, if caused by an act of God or public enemy, war,
government acts, regulations or orders, fire, flood, embargo, quarantine,
epidemic, labor stoppages or other disruptions, accident, unusually severe
weather or other cause similar or dissimilar, beyond the control of the
defaulting party.
6.
PROPRIETARY INFORMATION AND RIGHTS
6.1 Each
party acknowledges that the other possesses, and will continue to possess,
information that has been created, discovered or developed by them and/or in
which property rights have been assigned or otherwise conveyed to them, which
information has commercial value and is not in the public domain. The
proprietary information of each party will be and remain the sole property of
such party and its assigns. Each party shall use the same degree of care that it
normally uses to protect its own proprietary information to prevent the
disclosure to third parties of information that has been identified as
proprietary by written notice to such party from the other party. Neither party
shall make any use of the information of the other which has been identified as
proprietary except as contemplated or required by the terms of this Agreement.
Notwithstanding the foregoing, this Article shall not apply to any information
that a party can demonstrate: (a) was, at the time of disclosure to it, in the
public domain through no fault of such party; (b) was received after disclosure
to it from a third party who had a lawful right to disclose such information to
it; or (c) was independently developed by the receiving party.
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7.
TERMINATION
7.1 This
Agreement and shall be construed as a separate and independent agreement for
each and every service provided under this Agreement. Any termination of this
Agreement with respect to any service shall not terminate this Agreement with
respect to any other service then being provided pursuant to this
Agreement.
7.2 Upon
ten (10) days' written notice, Seller may terminate this Agreement with respect
to any Transitional Service or, at its option, suspend performance of its
obligations with respect thereto, in either case in the event of the failure of
Buyer to pay any invoice within thirty (30) days of the receipt of such invoice
or upon any other material breach by Buyer of this Agreement with respect to
such service, unless Buyer is disputing the invoice in good faith or Buyer shall
have paid the invoice or cured such breach within the ten (10) day notice
period.
7.3 Any
one or more of the Transitional Services may be terminated (a) upon mutual
agreement of Buyer and Seller or (b) at Buyer's option upon 30 days' advance
notice to Seller. All accrued and unpaid charges for Transitional Services shall
be due and payable upon termination of this Agreement with respect to such
services.
7.4
Following any termination of this Agreement, each party shall cooperate in good
faith with the other to transfer and/or retain all records, prepare and file tax
returns and take all other actions necessary to provide Seller and Buyer and
their respective successors and assigns with sufficient information in the form
requested by Seller or Buyer, or their respective successors and assigns, as the
case may be, to make alternative service arrangements substantially consistent
with those contemplated by this Agreement.
8. NO
IMPLIED ASSIGNMENTS OR LICENSES
8.1
Nothing in this Agreement is to be construed as an assignment or grant of any
right, title or interest in any trademark, copyright, design or trade dress,
patent right or other intellectual or industrial property right.
9.
RELATIONSHIP OF PARTIES
9.1 The
parties are independent contractors under this Agreement. Except as expressly
set forth herein, neither party has the authority to, and each party agrees that
it shall not, directly or indirectly contract any obligations of any kind in the
name of or chargeable against the other party without such party's prior written
consent.
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10.
ASSIGNMENT AND DELEGATION
10.1
Neither party to this Agreement may assign any of its rights or obligations
under this Agreement without the prior written consent of the other party
hereto.
11.
NOTICES
11.1 All
notices or other communications hereunder shall be deemed to have been duly
given and made if in writing and (a) if served by personal delivery upon the
party for whom it is intended, on the day so delivered; (b) if mailed by
registered or certified mail, return receipt requested, on the third business
day following such mailing; (c) if deposited for delivery by a reputable courier
service, on the business day following deposit with such courier; or (d) if sent
by electronic facsimile transmission, on the day the facsimile is transmitted
electronically, or if not a business day, the next succeeding business
day to the person at the address set forth below, or such other
address as may be designated in writing hereafter, in the same manner, by such
person:
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To
Seller:
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Chief
Executive Officer
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Nutrition
21, Inc.
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0
Xxxxxxxxxxxxxx Xxxx
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Xxxxxxxx,
XX 00000
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To
Buyer:
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Nature’s Products,
Inc.
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0000
Xxxxxxxx Xxxxxxxxx Xxxxxxx
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Xxxxxxx,
Xxxxxxx 00000-0000
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Facsimile:
(000) 000-0000
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Attention: Xxxx
Xxxxxx, President
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12.
ENTIRE AGREEMENT
12.1 This
Agreement, including the Schedules, together with the Purchase Agreement,
contains the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, oral or
written, with respect to such matters.
13.
PARTIES IN INTEREST
13.1 This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended to confer upon any Person other than Seller or
Buyer or their respective successors or permitted assigns any rights or remedies
under or by reason of this Agreement.
14.
GOVERNING LAW; SUBMISSION TO JURISDICTION
14.1 This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Florida without regard to conflicts of laws principles. Each party
hereto agrees that it shall bring any action or proceeding in respect of any
claim arising out of or related to this Agreement or the transactions contained
in or contemplated by this Agreement, whether in tort or contract or at law or
in equity, exclusively in Broward County, Florida (the "Chosen Courts") and (a)
irrevocably submits to the exclusive jurisdiction of the Chosen Courts; (b)
waives any objection to laying venue in any such action or proceeding in the
Chosen Courts; and (c) waives any objection that the Chosen Courts are an
inconvenient forum or do not have jurisdiction over any party
hereto.
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15.
AMENDMENT; WAIVER
15.1 Any
provision of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
Seller and Buyer, or in the case of a waiver, by the party against whom the
waiver is to be effective. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed and delivered by their
duly authorized officers as of the date first above written.
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BUYER:
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SELLER:
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Iceland
Health, Inc.
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Nutrition
21, Inc.
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By:
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By:
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Name:
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Name:
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Xxxxxxx
Xxxxx, Chief Executive Officer
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Nature’s
Products, Inc.
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Iceland
Health, LLC
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By:
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By:
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Name:
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Name:
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