EXHIBIT 10.5
MARKETING RIGHTS AGREEMENT
FOR
TEN STATE REGIONS
This Marketing Rights Agreement ("Agreement") is made and entered into as of the
____ day of __________, 2003 (the "Effective Date") by and between AmeriGroup,
Inc. (the "Company"), a Nevada corporation, and Itzyourmall _______________
Region, LLC. and/or nominee (jointly the "Region Owner"), who intend by this
Agreement to establish an arrangement between the parties that allows Region
Owner the exclusive right to sell and distribute the products identified in
Exhibit A (the "Products") within the Region identified in Exhibit B (the
"Region"). For the purposes of this Agreement, the _____________ Region is a
geographic area comprised of ten U.S. States as set forth in Exhibit B.
Accordingly, the parties agree as follows:
1. APPOINTMENT AND TERM
1.1 Upon payment for the marketing rights for each portion of the
Region as set forth on Exhibit B, the Company appoints Region Owner as an
exclusive distributor for the Products in that portion of the Region. The
Region Owner's appointment is for a term that shall be perpetual as long as
minimum distribution standards are met or unless otherwise terminated as
provided in this Agreement.
1.2 The appointment of Region Owner is personal to Region Owner and
accordingly: (i) the rights, duties and privileges of Region Owner under this
Agreement are not assignable in any way whatsoever without the prior written
consent of the Company, which consent will not be unreasonably withheld,
conditioned, or delayed; and (ii) Region Owner may not appoint, delegate to,
-
authorize or in any way whatsoever empower any other party to act on Region
Owner's behalf under this Agreement without the prior written consent of the
Company, which consent will not be unreasonably withheld, conditioned, or
delayed. The Company's consent shall be conditioned solely on the Company's
approval of the general reputation of the proposed assignee.
1.3 During any period of time that this Agreement is in effect, Region Owner
shall have a first right of refusal to act as Region Owner within the Region for
any product sold by the Company or any of its subsidiaries, pursuant to terms
and conditions negotiated between the parties but not less favorable than terms
and conditions offered by the Company for the distribution of the same products
in any other Region.
2. REGION OWNER RESPONSIBILITIES AND LIMITATIONS
2.1 Both parties acknowledge that open communications and the sharing
of information are important to fully develop the market, gain insight into the
market's needs and develop appropriate market strategies. It is a further desire
of the Company to facilitate an open and direct communication between the
end-user customer ("Customer") and the Company. To this end, the parties agree
to cooperate and openly communicate
with each other in furtherance of these
objectives, and Region Owner further agrees to use its best efforts to
facilitate such communication and contact between Customer and the Company.
2.2 Region Owner will use its best efforts to develop the Region market and
promote the sales of Products within the Region. Region Owner will not without
the Company' prior written consent, advertise or sell the Products outside the
Region.
2.3 The Company does not authorize Region Owner to make, nor will
Region Owner make, any guaranty or warranty with respect to any Product except
as the Company expressly authorizes in writing.
2.4 Without the prior written authorization of the Company, Region Owner
shall not for the entire term of this Agreement and for a period of two years
following the termination of this Agreement, represent, market or sell any
products which are in competition with the Products. The Company, in its sole
discretion, will determine whether any products offered or to be offered by
Region Owner competes with the Products.
In addition, Region Owner will provide to the Company from time to time and upon
the Company's request, any information regarding:
(a) the infringement, perceived infringement, unauthorized manufacture, use
or misuse of the Company' intellectual property, Proprietary Information and/or
Products;
(b) activities within the Region marketplace that affect the sales of the
Products;
(c) any inquiries or orders for any of the Products to be delivered outside
the Region or for delivery in the Region for ultimate use outside the Region;
and
(d) any observations concerning recurrent issues with the Products.
2.5 Region Owner will maintain information regarding the sale of each
Product. Region Owner will also maintain all books of accounts, documents,
correspondence, records, and the like, relating to any action involving the
Products.
2.6 Region Owner agrees to carry out all of its obligations to the Company
promptly and in good faith.
2.7 Region Owner agrees to keep and maintain, during the term of this
Agreement and following its termination, all information, materials and
documents provided by the Company that are not of a public nature as
confidential. Region Owner agrees that it will not disclose any such
information that comes into its possession or knowledge to any person other than
with the prior written consent of the Company.
3. RESPONSIBILITIES AND LIMITATIONS OF THE COMPANY
3.1 The Company will provide technical and marketing information to Region
Owner, as the Company deems appropriate in its sole discretion.
3.2 The Company will provide Region Owner training in the use and technical
aspects of the Products as the Company deems appropriate in its sole discretion.
3.3 The Company agrees to carry out all its obligations to the Region Owner
promptly and in good faith, and in every respect support Region Owner's sales
efforts in the REGION.
------
3.4 The Company agrees not to establish either a Company-owned distribution
affiliate or another distribution arrangement within the Region without the
written permission of the Region Owner, unless a material default occurs in the
Region Owner's obligations pursuant to this Agreement. Further, the Company
agrees not to operate a Company owned or controlled distribution affiliate or
grant distribution rights for the operation of a business to be operated within
Region Owner's Region, which Company-owned business would sell products carried
by or similar to or competitive with the Products sold by the Region Owner.
3.5 In addition to the Region granted the Region Owner, the Region Owner
shall be granted the right of first refusal of any new territories created in
the contiguous areas of the Region. The Company covenants that no marketing
arrangements will be created in these areas until thirty days after the Region
Owner has been given written notice of the terms on which the Company intends to
create such arrangements and until the Region Owner has refused or failed to
exercise the option created in this provision.
4. MINIMUM NET SALES
Region Owner shall meet the minimum sales requirements set forth in Exhibit C.
In the event Region Owner does not achieve the agreed upon minimum sales, Region
Owner shall be in breach of this Agreement. Upon such breach, the Company shall
have the right but not the obligation to acquire the Region or portion thereof
to which the breach relates back from the Region Owner upon payment back to the
Region Owner of all consideration paid by Region Owner for the Region or portion
thereof. This repurchase right shall exist in the Company for a period of six
months. If the Company does not exercise its repurchase right, the Region Owner
may cure the default during such six month period by completing the minimum
sales requirement. If the default is not cured within the six month time
period, the Company may allow the marketing rights to continue with the Region
Owner for the Region or portion thereof or to terminate the same upon 30 days
written notice, without any termination payment to the Region Owner.
5. PRODUCTS, PRICING, PACKING, TITLE
5.1 The Company may, in its sole discretion, effect any change with respect
to the Product on Exhibit A, provided, that with respect to any material change
the Company shall provide Region Owner with thirty (30) days prior written
notice.
5.2 Prices for Products and the commissions to the Region Owners for the
Products sold will be as set forth in the Region Owner price list (the "Region
Owner Price List") as set forth on Exhibit D hereto and as may be amended by the
Company from time to time. The Region Owner Price List may be changed without
prior notice, and will be effective as of the effective date indicated thereon.
Notwithstanding the right of the Company to make changes to the Region Owner
Price List, in the event there is a change in any price to be charged to the
Customer for any product, there shall be a pro rata change in the commission to
be paid to the Region Owner for the sale of the product so that the commission
remains the same percentage of the sales price.
6. RELATIONSHIP BETWEEN THE PARTIES
Both the Company and Region Owner are independent contractors, and no agency or
other
joint relationship is to be created or construed from this Agreement.
7. NO CONFLICTS BY REGION OWNER
Region Owner warrants and represents that Region Owner is not subject to any
contractual obligation or restraint that will interfere with Region Owner's
right and ability to perform pursuant to the terms of this Agreement.
8. DEFAULTS; REMEDIES; AND TERMINATION
8.1 The Region Owner may terminate this Agreement at any time by sending
written notice to the Company.
8.2 If either party breaches any commitment contained in or arising from
this Agreement
and fails to remedy the breach within sixty (60) days from the date of written
demand to cure, the breaching party shall be deemed to be in default hereunder.
Upon default, the non-defaulting party may do any of the following: (i) declare
any unpaid sums owed to the non-defaulting party immediately due and payable;
(ii) suspend further performance by the non-defaulting party; and/or (iii)
terminate this Agreement.
8.3 Termination of this Agreement terminates all further rights and
obligations of the Company and Region Owner hereunder other than the following
rights and obligations, all of which shall survive any termination of this
Agreement:
(a) Neither the Company nor Region Owner shall be relieved of their respective
obligations to pay any money due the other party;
(b) The Company and the Region Owner shall not be relieved of any obligations as
regards to maintaining Confidentiality and any Intellectual Property Indemnity;
and
(c) For as long as the Company continues to supply the product sold by the
Region Owner, the Region Owner shall be entitled to arrange for the annual
renewal of any customer originally acquired by Region Owner and receive
associated Region Owner fees for such renewal which shall be equal to the
commission set forth on Exhibit D for obtaining the original sale.
8.4 Upon termination of this Agreement for whatever cause, Region Owner will
immediately: (a) cease to engage in marketing and distribution activities as a
distributor for the Company, and (b) cease representing in any manner that it is
a distributor of the Company Products, including the termination of all use of
the Company trademarks, service marks, or trade names. Nothing in this Section 8
shall change the rights and obligations of the parties stated elsewhere in this
Agreement regarding default and termination.
9. INTELLECTUAL PROPERTY INDEMNIFICATION
9.1 Region Owner agrees that the Company has the right to, and the Company
agrees that it will at its expense, defend or at its option, settle any claim,
suit, proceeding, or other action brought against Region Owner or its Customers
for infringement of any United States or Canadian copyright, trademark, or other
United States or Canadian intellectual Property right related to the Products or
their use, subject to the limitations set forth in this Section. The Company
must have sole control of any such proceeding or settlement negotiations in
order to be held liable. The Company will not be liable for any costs,
settlements or expenses incurred without its prior written authorization. The
Company will pay any final judgment entered against Region Owner or its
Customers based on such infringement so long as, and only if, the Company had
complete control of all aspects of the legal proceeding.
9.2 The Company will be relieved of its obligations under Section 9.1 unless
Region Owner or its Customers notify the Company promptly, in writing, of such
action and gives the Company full information and assistance to settle and/or
defend any such action. If relieved of its obligation under Section 9.1, the
Company may assume such obligation upon written notice to the Region Owner.
9.3 The Company assumes no responsibility or liability for, and Region Owner
agrees to indemnify and hold the Company harmless for any liability against the
Region Owner or the Company caused by representations or actions by the Region
Owner that go beyond representations and actions allowed by the Company or as
Region Owner would reasonably believe to be allowed by the Company under the
circumstances.
9.4 In the event of dissolution of Itzyourmall, Inc., the affairs of the
Corporation shall be managed in accordance with the laws of Nevada. Any and all
liability for product development and delivery shall be the sole and exclusive
responsibility of Itzyourmall, Inc.,
who shall indemnify any Region Owner from
third party claims based upon lack of performance by Itzyourmall, Inc.
10. GENERAL PROVISIONS
10.1 Entire Agreement. This Agreement, which includes the Exhibits, sets
forth the entire agreement and understanding of the parties relating to the
subject matter herein and supersedes all prior discussions between them whether
written or oral.
10.2 Assignment. Region Owner may not assign its rights under this
Agreement without the
prior written consent of the Company.
10.3 Modifications and Waiver. With the exception of Exhibit D
which may be unilaterally amended by the Company, this Agreement may not be
modified except in writing, signed within the authority granted by each party,
and shall not be modified, varied, superseded or construed in a particular
manner due to any course of conduct, trade usage, custom or dealing or any
statute or common law. It is expressly agreed and understood that the waiver by
a party of its rights, or any portion of its rights, under this Agreement in any
particular instance or instances, whether intentional or otherwise, shall not be
construed us a continuing waiver which would prevent the subsequent enforcement
of such rights, or as a waiver of any other rights hereunder.
10.4 Heading . The headings of this Agreement are for
convenience of reference only, and are not intended to be part of, nor to
affect, the meaning or interpretation of this Agreement.
10.5 Notice. All notices under this Agreement shall be deemed
sufficient if sent by certified or registered mail (postage prepaid) with return
receipt requested, overnight or air courier, facsimile, telex, or cable to the
other party. Any such notice shall be deemed to have been received on the next
business day if delivered by facsimile, telex, cable or overnight or air
courier, and on the third business day after sending if by certified or
registered U.S. or Canadian mail, return receipt requested.
10.6 Severability. Whenever possible, each provision of the
Agreement shall be interpreted in such a manner as to make it effective and
valid under applicable law, but if any provision of the Agreement should be
prohibited or invalid, in whole or in part, under applicable law, such
provisions shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
10.7 Governing Law. This Agreement shall be governed by the substantive laws
of the State
of Nevada, U.S.A.
10.8 Attorney Fees. If any action is brought for the enforcement of any
provision of this Agreement, the prevailing party shall be awarded its costs and
reasonable attorney
fees.
10.9 Time of Essence. Time is of the essence with respect to the
performance of duties under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized representatives or officers, effective as of the
day and year indicated above.
REGION OWNER
Itzyourmall _______________ Region, LLC
_____________________________________
By:
ITZYOURMALL, INC.
_____________________________________
By: Gary Whiting
Its: President