EXHIBIT 10.87
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement is dated as of October 1, 1999
(the "Effective Date") between, Hollywood Xxxxxxxx.xxx, Inc., a Delaware
corporation ("HLYP") with its principal place of business at 0000 Xxxxxx xx xxx
Xxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 and Vitafort International
Corporation, a Delaware corporation ("Vitafort") with its principal place of
business at 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000
(the "Parties").
WHEREAS, HLYP and Vitafort desire to enter into this Agreement
pursuant to which HLYP will provide certain facilities and services to Vitafort
subsequent to the Effective Date, and Vitafort will provide certain services to
HLYP after the effective date.
NOW, THEREFORE, in consideration of the mutual promises made herein
and subject to the conditions hereinafter set forth, the parties hereto enter
into this Administrative Services Agreement as follows:
ARTICLE I
FACILITIES
1.1 Office Facilities. HLYP shall permit Vitafort to occupy and use
the office facilities (including, without limitation, furniture, office
supplies, telephones, computer equipment and other office equipment) and office
services at 0000 Xxxxxx xx xxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000. These
facilities will be provided to Vitafort per the cost sharing shown at
Schedule A.
1.2 Safety/Security. Vitafort shall, in its use of the facilities,
comply with all reasonable rules and regulations of HLYP, particularly with
respect to safety and security procedures.
ARTICLE II
GENERAL BUSINESS SERVICES
2.1 Data Processing Services.
A. Vitafort shall provide to HLYP all data processing and other computer
services necessary for HLYP to conduct its business. These services shall allow
HLYP to have access to certain hardware and software, at a level of service and
availability (including, without limitation, on-line connection time) to permit
HLYP to continually operate its business. Data processing and other computer
services shall include, without limitation, training, technical support,
computer operators, coordinators, analysts, managers and other personnel
familiar with the use and operation of all computer equipment, maintenance,
information, statements and reports (collectively, the "Data Processing
Services"). These computer services will be provided
1
to HLYP by Vitafort's vendors. These services will be provided to HLYP per a
cost sharing shown at Schedule A.
B. All records, data files (and the data contained therein), input
materials, software, reports and other materials received, computed, developed,
processed or stored by Vitafort or third parties on behalf of HLYP (the "Data")
pursuant to this Section 1.1 will remain the exclusive property of HLYP, and
Vitafort shall not possess any interest, title or right in connection therewith.
HLYP shall have access to the Data during the term of this Agreement. Upon
termination of the rights and obligations provided pursuant to this Section 1.1,
Vitafort shall deliver or cause to be delivered to HLYP, on or prior to the
termination or expiration of this Agreement, all Data (including all copies
thereof) in the form (either magnetic or paper) requested by HLYP. During the
term of this Agreement, Vitafort shall keep in a separate and safe place at
least one additional copy of all Data required to be maintained including
additional tapes or disks necessary to reproduce all such Data. Vitafort shall
use reasonable care to minimize the likelihood of any damage, loss, delays or
errors resulting from an uncontrollable event and shall use its best efforts to
mitigate the effect of any such occurrence.
ARTICLE III
MANAGEMENT SERVICES
3.1. Accounting and Financial Services. Vitafort will furnish to HLYP
all necessary accounting and financial management services, including (1)
payroll and employee benefits -- maintenance of all payroll and employee benefit
and accounting systems; (2) books and records -- review and assistance in the
maintenance of financial and other books and records, including preparation of
any required federal, state or local governmental reports; (3) general ledger
consolidations; (4) audit -- periodic internal audits; (5) treasury --investment
on behalf of HLYP of excess cash balances of HLYP; and (6) advice and assistance
regarding cash management, bank and custodial accounts and debt and equity
financing. These services will be provided to HLYP per a cost sharing shown at
Schedule A.
3.2. Environmental Services. If required, HLYP will furnish to
Vitafort, as Vitafort may from time to time request, environmental services,
including such services as are necessary or desirable to assist HLYP to meet the
reporting requirements of regulatory agencies, including the preparation,
subject to the approval of HLYP, and submission of all necessary reports. HLYP
shall provide these services at cost to Vitafort.
3.3. Employee and Personnel Services. The parties may from time to
time request, employee and personnel services from the other. These services
will be provide per a cost sharing shown at Schedule A.
3.4. Management Information Services. Vitafort will furnish to HLYP,
as HLYP may from time to time request, management information and other system
services. including computer operations, data input systems and programming and
technical support. These services will be provided to HLYP per a cost a cost
sharing shown at Schedule A.
2
ARTICLE IV
ADDITIONAL SERVICES, SOFTWARE, EQUIPMENT
4.1 Additional Services. In addition to the specific services and
facilities described above, the parties acknowledge that there may be additional
services and facilities which have not been identified herein but which HLYP or
Vitafort may require after the Effective Date. If any such additional services
or facilities are identified and requested by Vitafort or HLYP, as the case may
be, th eother Party agrees to use reasonable efforts to promptly provide such
services or facilities; provided that nothing shall require the other Party, as
the case may be, to continue the employment of any person or the leasing or
ownership of any real or personal property which it would otherwise not require.
The cost for these services shall be determined in good faith between the
parties.
4.2 Additional Obligations of Vitafort. Vitafort shall provide HLYP
with training and assistance as reasonably necessary to enable HLYP to use the
Data Processing and Communications Services.
4.3 Access. HLYP shall permit Vitafort to enter Vitafort's
facilities to use the facilities and services specified herein .
4.4 Software. Each Party retains ownership of all software products
licensed in its name, or developed for its own use.
ARTICLE V
PAYMENT AND TERM
5.1 Payment. During the term of this Agreement, as soon as
practicable after the closing of each quarter, HLYP and Vitafort shall reconcile
cross-charges based on this Agreement and the percentages set forth in Schedule
A attached hereto. The parties shall determine amounts owed to each other and
the Party owed a net balance shall invoice the other quarterly for said costs
using the form of invoice attached hereto as Schedule B. The Party owing a
balance due shall pay said sum within fifteen (15) days after receipt of the
invoice from the other Party. Notwithstanding anything to the contrary herein,
the parties agree that if conditions of business change during the Term such
that the services or facilities to be provided hereunder require material
alteration or modification, the Parties will negotiate in good faith to adjust
the description of the services, the compensation and/or the Term accordingly.
5.2 Interest. Interest shall accrue on any balances due from one
Party to the other for any payments not made within 15 days per Section 5.1
above. The interest rate to be used in the calculation of interest under this
section shall be 10% per annum. Interest shall be calculated on the basis of a
365/366 day year and shall be paid monthly.
3
5.3 Term. The term of this Agreement shall be three (3) years
commencing on the Effective Date, subject to the right for either Party to
terminate as set forth below in Section 5.4.
5.4 Termination Either Party may cancel this Agreement upon notice
given to the other Party at least one full reporting quarter in advance of the
date of termination. In addition, either Party may cancel this Agreement if the
other Party, after having been given written notice that it is not complying
with any of the terms of this Agreement, does not come into compliance with such
terms within thirty (30) days of receipt of such notice of noncompliance.
ARTICLE VI
MISCELLANEOUS
6.1 Confidential Information. Each Party shall hold the other
Party's proprietary data and programs in confidence and shall exercise the same
high degree of care for the other Party's proprietary data and programs as it
exercises with its own proprietary data and programs. The Parties shall take
all steps necessary to ensure that all information and records relating to the
business of Vitafort or HLYP are kept secure and strictly confidential by the
other. Notwithstanding the foregoing, the obligations of either Party hereunder
shall not apply to any Confidential Information which: (i) is hereinafter
independently developed by or for such Party and is in no way derived from or
based on the technology of the other Party; (ii) is hereafter disclosed to such
Party on a non-confidential basis by third parties who have the right to so
disclose such Confidential Information; or (iii) is or becomes generally
available to the public unless such public disclosure results from a breach by
such Party hereunder.
6.2 Quality of Services; Liability. The Parties shall use
reasonable efforts to provide the Facility, Data Processing, Communication and
Office Services to the other in accordance with reasonable standards. Each
Party shall indemnify and hold the other Party harmless from and against any
damage, injury, loss, cost or expense incurred by the other Party's employees or
any third Party by reason of the Party's rendering such Services to the other
Party hereunder, unless such damage, injury, loss, cost or expense is caused by
the intentional actions or gross negligence of the Party, its employees or
agents.
6.3 Termination Assistance. Upon termination of this Agreement, the
Parties shall cooperate with one another to maintain an orderly transfer of
functions and shall provide all necessary staff, services and assistance for an
orderly transfer, provided that each Party pays all reasonable costs and
expenses of any transfer of its own property in connection therewith.
6.4 Modification; Waiver; Severability. This Agreement may not be
modified except in a writing executed by each of the parties to this Agreement.
The failure by any Party to exercise or a delay in exercising any right provided
for herein shall not be deemed a
4
waiver of any right hereunder. If any provision of this Agreement is held
invalid or otherwise unenforceable, the enforceability of the remaining
provisions shall not be impaired thereby.
6.5 Remedies. All remedies set forth in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available to
either Party at law, in equity or otherwise, and may be enforced concurrently or
from time to time.
6.6 Notices. All notices, requests and other communications
hereunder shall be in writing and shall be deemed to have been duly given at the
time of receipt if delivered by hand or communicated by electronic transmission,
or, if mailed, three (3) days after mailing registered or certified mail, return
receipt requested, with postage prepaid to the persons and at the addresses set
forth herein; provided, however, if either Party shall have designated a
different address by notice to the other, as provided above, then to the last
address so designated.
6.7 Non-Assignability. This Agreement shall not be assignable by
either of the parties hereto without the written consent of the other.
6.8 Non-Exclusivity. This Agreement is not an exclusive arrangement.
The Parties may provide to others services similar to the Services provided to
the other Party hereunder. Either Party may obtain from other providers
services similar to the Services provided hereunder.
6.9 Other. This Agreement contains the entire agreement of the
parties with reference to the subject matter hereof. This Agreement shall be
construed in accordance with the laws of the State of California. This
Agreement shall be binding upon and inure to the benefit of the successors of
each of the parties.
In witness whereof the parties agree to the above stated.
Hollywood Xxxxxxxx.xxx, Inc. Vitafort International Corporation
/s/ Xxx X. Xxxxxxx /s/ Xxxx Xxxxxxxxx
------------------- -------------------
By: Xxx X. Xxxxxxx By: Xxxx Xxxxxxxxx
President and CEO President
5
Schedule A
Fourth Quarter Allocation Schedule
Vitafort Allocation HLYP Allocation
Facilities
Office Facilities 60% 40%
Parking & Auto Expense 50% 50%
Repairs & Maintenance 50% 50%
General Business Services
Data Processing 50% 50%
ADP 50% 50%
Personnel Services
Executive and Staff Services See Attached See Attached
Additional Expenses
Equipment Rental & Lease 50% 50%
Office Supplies 50% 50%
Postage & Delivery 50% 50%
* This schedule will be adjusted on a quarterly basis so as to most accurately
reflect the cost that should be attributed to the respective companies.
6
Vitafort/Visionary Brands
Employee Expenses 2000 Total Allocation Allocation
% Amount
Xxxxxxx, Xxxx 40.00% 0.00
Xxxxxxxxx, Xxxx 25.00% 0.00
Xxxxxx, Xxxx 40.00% 0.00
Xxxxxxx, Xxxxxx 50.00% 0.00
Xxxxxxxxx, Xxxxxxx 40.00% 0.00
Xxxxxx, Xxxx 40.00% 0.00
Xxxxx, Xxxxx 0.00% 0.00
XxXxxxxx, Xxxxx 0.00% 0.00
Sub Total
Xxxxx, Xxxx 75.00% 0.00
Xxxxxxxx, Xxxxxxx 40.00% 0.00
0.00
