EXHIBIT 10.1
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("AGREEMENT") IS MADE AND EFFECTIVE AS OF FEBRUARY 14,
2000 BY AND BETWEEN XXXXX X. XXXXXXXXX & ASSOCIATES, A TEXAS GENERAL PARTNERSHIP
("DRM"), AND XIT XXXXXXXXX.XXX INC., A NEVADA CORPORATION ("LICENSEE"), WITH
REFERENCE TO THE FOLLOWING FACTS:
A. On June 29, 1999, DRM and Licensee entered into an agreement granting
Licensee certain rights for the use of DRM's oxygen-enriched water
product (the "Water Rights"). In consideration therefor, Licensee issued
DRM 2,000,000 shares of Licensee's common stock (the "Shares").
Subsequent to the grant of the Water Rights, the underlying contract
granting DRM the rights to the technology to produce the oxygen-enriched
water came into dispute. In order to enable Licensee to conduct a
business and to preserve the value of the Shares, DRM desires to grant
additional rights to Licensee which are not in dispute.
B. DRM is the holder of certain rights to an Internet marketing system for
vitamins, minerals, nutritional supplements, and other health and fitness
products (the "Products") pursuant to an agreement between
Xxxxxxxxxxxxxxx.xxx Corp. ("Vita"), a Nevada corporation, appended hereto
as Exhibit C, which rights include the right to grant licenses for use
of the system in various territories.
C. Licensee desires to market the Products to medical professionals,
alternative health and fitness practitioners, martial arts studios and
other fund raising programs and other similar types of customers
("Customer(s)") in the Territory, as hereinafter defined. Customers will
be able to buy the Products on a continuing basis through Vita's Web
Site.
NOW THEREFORE, in consideration of the mutual promises, warranties and covenants
herein contained, the parties hereby agree as follows:
1. Scope of Agreement. This Agreement shall govern all Products sold through
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Vita's Web Site to Customer(s). Exhibit A contains detailed information
regarding specifications, quality control, pricing and other terms
relating to the Product(s) to be ordered through Vita's Web Site. The
parties agree that Exhibit A will be amended to include similar
information with respect to any future orders of the same product or any
future Product ordered by Vita by DRM, Licensee, or Customers. Pricing
may be amended from time to time on the Web Site. The price posted on the
Web Site at the time of order shall prevail. IN THE EVENT OF ANY CONFLICT
BETWEEN THE TERMS OF THIS AGREEMENT AND ANY PURCHASE ORDER SUBMITTED BY
CUSTOMER, THE TERMS OF THIS AGREEMENT WILL CONTROL.
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2. Grant of License; Territory. Territory shall be the country of Spain.
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DRM grants to Licensee the exclusive rights to market the Products in the
Territory through the Web Site.
3. Manufacture of Products. All Products marketed through Vita's Web Site
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shall be manufactured, packaged, prepared, and shipped in accordance with
the specifications and requirements described on Exhibit A hereto as it
may be modified from time to time. Quality control standards relating to
the Product's weight, color, consistency, micro-biological content,
labeling and packaging are also set forth on Exhibit A. In the event that
Exhibit A is incomplete, Products shall be manufactured and shipped in
accordance with industry standards.
4. Labeling; Packaging. Products shall be labeled with Standard Labels,
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except for Private Label Products, as described herein. Standard labels
shall contain all information necessary to conform to regulatory and
industry requirements.
5. Private Label Products. Vitamins, minerals, herbs, and nutritional
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supplement products may be available for sale with labels customized for
the Customer ("Private Label Products"). DRM shall cause supplier to
affix to Private Label Products labels furnished by Customer which are
consistent with supplier's labeling equipment and meet all federal and/or
state labeling requirements for the Product(s) ordered. Pricing for
Private Label Products shall be as determined by supplier and posted on
the Web Site by Vita, and the price posted on the Web Site at time of
order shall obtain.
6. Shipping. Shipping shall be by UPS ground unless Customer requests and
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pays for overnight shipping by UPS. Vita will post shipping and handling
fees for overnight shipping on the Web Site. The price posted at the time
of order shall obtain. All orders from supplier's stock shall be shipped
within seventy-two (72) hours of receipt of the order. Items not in stock
(back orders) shall be shipped on a timely basis, but not later than four
to six weeks from time of order.
7. Products and Pricing. The initial pricing for the Product(s) is set forth
--------------------
on Exhibit A. The price may be amended from time to time, and such
amendments will be posted on the Web Site. The price shall be the price
posted at the time of order shall obtain. Terms are payment by
credit card or electronic funds transfer at time of purchase.
8. Minimum Order Quantities for Vitamin, Mineral, and/or Nutritional
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Supplements. The minimum order quantity is 100 bottles per formulation
for standard Products. Customer Formulas, as defined herein, shall have
minimum order quantities of 5,000 units.
9. Web Site Maintenance; Fees. Vita shall maintain Vita's Web Site (the "Web
--------------------------
Site"). The Web Site shall post current prices for all Products.
Customers will be able to obtain unique identification codes
("Userid(s)") and select passwords on the Web Site. Vita shall maintain
the Web Site in a manner that ensures secure Internet financial
transactions. Licensee shall pay Vita a maintenance fee of $500 yearly,
beginning on the anniversary date of this Agreement, for maintenance of
the Web Site.
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10. Orders. All Products shall be ordered through the Web Site. In
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jurisdictions in which sales tax would be collected on retail sales of
the Products, Licensee shall ensure that each Customer provides a sales
tax ID number for exemption from sales tax. Licensee shall assist its
Customer to register on the Web Site. Each Customer shall be issued a
Userid and shall select a password upon registration. Upon ordering,
Customer must pay for Product by credit card, debit card, or by
electronic funds transfer ("e-check") and all funds will be remitted to
Vita. Upon receipt of order, Vita will email the supplier to purchase the
Product(s) ordered. Supplier will drop-ship the order directly to the
Customer in accordance with Section 7, "Shipping."
11. Sharing of Profits; Sales Reports. Licensee and Vita shall each receive
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one-half of the profit on all sales made through the Web Site by
Licensee. Vita agrees to pay supplier for the Product purchased upon
receipt of cleared funds. Vita will retain its one-half share of the
profit and will remit the balance to Licensee by the tenth day of the
month following sales. Vita further agrees to provide Licensee with a
Monthly Sales Report of all sales made by Licensee through the Web Site
detailing the purchases from each Customer. Vita will e-mail the Monthly
Sales Report to Licensee by the tenth day of the month following such
sales.
12. Warranties and Indemnification. DRM warrants that all Products,
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including Joint Formula Products but not including Customer Formula
Products, shall be fit for the purpose for which produced and shall be in
full and complete compliance with all local, state, and federal laws
applicable thereto. DRM warrants that all Custom Products shall be
manufactured in accordance with Customer's specifications. DRM warrants
that all non-Private Label Products shall be correctly and accurately
described on each label affixed thereto, and that all labeling affixed
thereto shall be in full and complete compliance with all local, state,
and federal laws applicable thereto. DRM warrants, covenants and
certifies that its supplier(s)' manufacturing facilities comply with
applicable federal, state, city, county, and municipal laws, rules,
regulations, ordinances, and codes in all material respects. DRM hereby
agrees to indemnify, hold harmless and defend Licensee, its Customers,
Buyers, affiliates, directors, officers, agents and representatives from
and against any loss, claim, and expense (including attorneys fees and
costs, and costs of a recall of Product) incurred or suffered as a
consequence of DRM's breach of its product warranties as set forth
herein.
13. Nature of Relationship.
------------------------
(a) This Agreement does not constitute nor empower the Licensee as
the agent or legal representative of DRM for any purpose
whatsoever. Licensee is and will continue to be an independent
contractor.
(b) The arrangement created by this Agreement is not, and is not
intended to be, a franchise or business opportunity under the
United States' Federal Trade Commission Rule: Disclosure
Requirements and Prohibitions Concerning Franchising and Business
Opportunity Ventures and is not a franchise, business opportunity
or seller assisted marketing plan or similar arrangement under
any other federal, state, local or foreign law, rule or
regulation.
(c) Licensee is not prohibited by this Agreement from pursuing other
business opportunities or other employment.
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14. Rights in Formulas.
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(a) Customer Formulas. Any formula provided exclusively by Licensee's
Customer shall be owned by Customer ("Customer Formula"),
provided that such Customer Formula does not substantially
duplicate an existing Vita formula. Vita agrees not to sell
products to other customers using any Customer Formula during the
period in which Customer is ordering products containing the
formula and for so long as Customer continues to purchase
products containing the Customer Formula.
(c) Joint Formulas. If Vita and Customer jointly create a formula
("Joint Formula"), such Joint Formula will be jointly owned by
the parties. Vita agrees not to sell products to other customers
using the Joint Formula during the period in which Customer is
ordering products containing the Joint Formula from Vita without
written permission from Customer. In the event that Customer
fails to order a specific Joint Formula Product for a period of 3
months, Vita shall be free to sell products containing the Joint
Formula to other customers.
15. Term of Agreement; Breach of Agreement. This Agreement shall continue
-----------------------------------------
for three (3) years, and shall be automatically renewed unless one of the
parties provides ninety (90) days written notice of termination to the
other party. Licensee may terminate this Agreement for any reason at any
time upon ninety (90) days written notice to DRM. In the event of a
material breach of this Agreement, the non-breaching party may provide
written notice of breach. Upon notice from the non-breaching party, the
breaching party shall have fourteen (14) days to cure the breach, after
which period, if not cured, the Agreement shall be automatically
terminated. In no event shall Vita be required to accept or deliver
product under any purchase order if Vita has not received the outstanding
balance due on any previous purchase order in a timely manner. Failure to
so perform shall not be deemed a breach of this Agreement by Vita.
16. Trade Secrets. Vita and DRM and Licensee(s) are the owners of certain
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products, technology, information, customer lists, services, processes,
financial information, pending or prospective transactions/proposals,
operating and marketing plans and procedures, designs, product formulas,
specifications, manufacturing methods, ideas, prototypes, software,
patent, trademark and copyright applications or registrations and other
similar data relating to each party's business which data is not publicly
known and derives economic value from not being publicly known
(collectively "Trade Secrets"). Each party agrees that it will not use or
disclose to third parties any Trade Secret it receives from the other,
except as may be contemplated by this Agreement. Each party agrees that
it will take all reasonable precautions to assure that no Trade Secret is
conveyed to any officer, employee, manufacturer or other third party who
does not have a need to know such Trade Secret. The obligations created
by this Section 10 shall survive the termination of this Agreement or any
business relationship between the parties. Any Trade Secret contained in
any writing will be returned to the other party promptly upon written
request, together with any reproductions thereof.
17. Governing Law; Dispute Resolution. This Agreement shall be governed by
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Texas law in accordance with the Dispute Resolution Agreement attached
hereto as Exhibit B.
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18. Miscellaneous Provisions. This Agreement constitutes the entire
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Agreement between the parties and supersedes any prior or contemporaneous
agreements, oral or written. This Agreement may only be amended by a
writing signed by both parties. Any notice required or permitted to be
given under this Agreement shall be in writing and sent by telecopy,
personal delivery or certified mail, return receipt requested, as
follows:
If to Xxxxxxxxxxxxxxx.Xxx, Inc.: Xx. X. X. Xxxxxxx
0000 XX 000 Xxx 000
Xxxxxxxx XX 00000-0000
If to Xxxxx X. Xxxxxxxxx & Associates: Xxxxx X. Xxxxxxxxx, President
P. O. Xxx 0000
Xxxxx, XX 00000-0000
If to Licensee: XIT Xxxxxxxxx.xxx inc.
P. O. Xxx 0000
Xxxxx XX 00000-0000
Notice shall be deemed effective upon receipt if made by confirmed
telecopy, personal delivery or 48 hours after deposit in the United
States mail with the required postage.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above written.
XIT XXXXXXXXX.XXX INC., XXXXX X. XXXXXXXXX & ASSOCIATES,
A NEVADA CORPORATION A TEXAS GENERAL PARTNERSHIP
By: /s/ X.X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------ ---------------------------------------
X.X. Xxxxxxx, President Xxxxx X. Xxxxxxxxx, General Partner
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EXHIBIT A
PRODUCT SPECIFICATIONS
In the event of any inconsistency between the terms of Customer's purchase order
and this Product Specification Sheet, this Sheet and the terms of the
Manufacturing Agreement shall control.
Short Product Name: ______________________________
Exact Product Ingredients and Percentages:
Other Product Specifications:
Color: ____________ Tablet Type: ____________ Consistency: ____________
Weight: ____________ Bottle Size/Color: ____________ Bottle Count: ____________
Cotton Insert: ____ Bottle Seal: _____ Shrink Wrap Neck Band: _____ Silicon
Pack: _____
Micro-biological content: Customer to specify any requirements, if none
specified, product will be manufactured to industry standards.
Labels: Labels and/or boxes to be provided by Customer [identify any size]
__________
Labels/Boxes to be Received by [date] ____________________ to ensure timely
delivery
Master Pack/Wrapping/Palleting Requirements (if any):
Ship to Address: _________________________________________________
Order Quantity: (minimum 5,000 BOTTLES): __________
Price: ____________ FOB IFM's facility in San Diego, CA.
Delivery Dates(s): ________________________________________________
Terms of Sale: 50% with submission of purchase order; 50% due upon completion of
manufacturing, unless otherwise specified ____________________________
Purchase Order Number: ______________________________
Date of Purchase Order: _______________________________
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EXHIBIT B
DISPUTE RESOLUTION AGREEMENT
THIS DISPUTE RESOLUTION AGREEMENT ("DISPUTE RESOLUTION AGREEMENT") IS ENTERED
INTO AND EFFECTIVE AS OF FEBRUARY 14, 2000 BY AND BETWEEN XXXXX X. XXXXXXXXX &
ASSOCIATES, A TEXAS GENERAL PARTNERSHIP, AND XIT XXXXXXXXX.XXX INC., A NEVADA
CORPORATION.
1. INTENT OF PARTIES. The parties desire to establish a quick, final and
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binding out-of-court dispute resolution procedure to be followed in the
unlikely event any dispute arising out of or related to the Manufacturing
Agreement dated February 14, 2000 between the parties ("Agreement"). As
used in this Dispute Resolution Agreement, the term "dispute" is used in
its broadest and most inclusive sense and shall include, without
limitation, any disagreement, controversy, claim, or cause of action
between the parties arising out of, related to, or involving the
Agreement or the transactions evidenced by the Agreement (collectively
"Dispute").
2. NEGOTIATION. It is the intent of the parties that any Dispute be resolved
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informally and promptly through good faith negotiation between the
parties. Therefore, in the event of a Dispute between the parties, the
following will apply:
A. Correspondence. Either party may initiate negotiation proceedings
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by writing a certified or registered letter, return receipt
requested, to the other party referencing this Dispute Resolution
Agreement, setting forth the particulars of the Dispute, the
term(s) of the Agreement involved and a suggested resolution of
the problem. The recipient of the letter must respond within ten
(10) days after its receipt of the letter with an explanation and
response to the proposed solution.
B. Meeting. If correspondence does not resolve the Dispute, then the
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authors of the letters or their representatives shall meet on at
least one occasion and attempt to resolve the matter. Such
meeting shall occur not later than thirty (30) days from the
parties' last correspondence. If the parties are unable to agree
on the location of such a meeting, the meeting shall be held at
DRM's corporate offices. Should this meeting not produce a
resolution of the matter, then either party may request mandatory
mediation (as provided below) by written notice to the other
party.
3. MEDIATION.
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A. Selection of Mediator. There shall be a single mediator. If the
parties cannot agree upon an acceptable mediator within ten (10)
days of termination of the negotiation, each party shall select
one mediator from a list of not less than five (5) mediators
provided by the other party. These two mediators shall select a
third mediator who shall serve as the sole mediator.
B. Subject to the availability of the mediator, the mediation shall
occur not more than thirty (30) days after the request for
mediation. The mediation shall be held in Houston, Texas. The
cost of mediation shall be borne equally by the parties. The
mediation process shall continue until the Dispute (or any part
thereof) is resolved or until such time as the mediator makes a
finding that there is no possibility of resolution short of
referring the parties to final and binding arbitration.
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4. FINAL AND BINDING ARBITRATION. Should any Dispute (or part thereof)
--------------------------------
remain between the parties after completion of the negotiation and
mediation process set forth above, such Dispute shall be submitted to
final and binding arbitration in Houston, Texas. The arbitration shall be
governed by the laws of the State of Texas and the following provisions,
which shall supersede the Texas rules of civil procedure in the event of
any inconsistency:
A. Selection of Arbitrator(s). There shall be a single arbitrator,
except in the case where the amount in dispute exceeds $100,000,
in which case there shall be three arbitrators. If the parties
cannot agree upon acceptable arbitrator(s) within ten (10) days
of the termination of the mediation, each party shall select one
arbitrator from a list of not less than five (5) arbitrators
provided by the other party. These two arbitrators shall select a
third arbitrator who shall serve as the sole arbitrator or the
third arbitrator, as the case may be. The determination of a
majority of the arbitrators or the sole arbitrator, as the case
may be, shall be conclusive upon the parties and shall be
non-appealable.
B. Discovery. No discovery shall be permitted, absent a showing of
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good cause. Any discovery request should be reviewed with the
knowledge that this dispute resolution process was mutually
agreed upon and bargained for by the parties with the intent to
provide a cost-effective and timely method of resolving disputes.
Any discovery granted by the arbitrator should be limited to that
necessary to protect the minimum due process rights of the
parties.
C. Equitable Remedies. Any party shall have the right to seek a
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temporary restraining order, preliminary or permanent injunction
or writ of attachment, without waiving the negotiation, mediation
and arbitration provision hereof. Any other form of equitable or
provisional relief and all substantive matters relating to the
Dispute shall be determined solely by the arbitrator(s).
D. Attorney's Fees; Arbitration Costs. Each party may be represented
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by an attorney or other representative selected by the party. The
costs of the arbitration shall be borne equally by the parties.
Each party shall bear its own attorneys'/representatives' fees
and costs; provided that if the arbitrator(s) find either party
has acted in bad faith, the arbitrator(s) shall have discretion
to award attorneys' fees to the other party.
E. Scope of Arbitration; Limitation on Powers of Arbitrator(s);
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Applicable Law; No party may raise new claims against the other
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party in the arbitration not raised in the mediation. The
arbitrator shall have the power to resolve all Disputes between
the parties. The arbitrator(s) shall not have the power to award
treble, punitive or exemplary damages and the parties hereby
waive their right to receive treble, punitive or exemplary
damages, to the extent permitted by law. The arbitrator(s) shall
only interpret and apply the terms and provision of the Agreement
and shall not change any such terms or provisions or deprive
either party of any right or remedy expressly or impliedly
provided for in the Agreement. The arbitrator(s) shall apply the
law of the State of Texas, or federal law, in those instances in
which federal law applies.
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F. Designation of Witnesses/Exhibits; Duration of Arbitration
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Process; Written Decision. At least thirty (30) days before the
arbitration is scheduled to commence, the parties shall exchange
lists of witnesses and copies of all exhibits intended to be used
in arbitration. The arbitration shall be completed within 90 days
of the selection of the first arbitrator. The arbitrator(s) shall
render a written decision, which contains findings of fact and
conclusions of law, within 30 days of the conclusion of the
arbitration and shall specify a time within which the award shall
be performed. Judgment upon the award may be entered in any court
of competent jurisdiction.
5. MISCELLANEOUS
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A. Enforcement of Negotiation/Mediation Provisions. If a party
--------------------------------------------------
demanding such compliance with this Agreement obtains a court
order directing the other party to comply with this Dispute
Resolution Agreement, the party demanding compliance shall be
entitled to all of its reasonable attorneys' fees and costs in
obtaining such order, regardless of which party ultimately
prevails in the matter.
B. Severability. Should any portion of this Dispute Resolution
------------
Agreement be found to be invalid or unenforceable such portion
will be severed from this Dispute Resolution Agreement, and the
remaining portions shall continue to be enforceable unless to do
so would materially alter the effectiveness of this Dispute
Resolution Agreement in achieving the stated intent of the
parties.
C. Confidentiality. The parties agree that they will not disclose to
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any third party that (1) they are engaged in the dispute
resolution process described herein, (2) the fact of, nature or
amount of any compromise resulting herefrom, or (3) the fact of,
nature or amount of any arbitration award. This confidentiality
obligation shall not extend to the party's employees, spouses,
accountant, bankers, attorneys or insurers or in the event that
disclosure is otherwise required by law.
D. Time to Initiate Claims. An aggrieved party must mail and the
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other party must receive the correspondence which initiates
negotiation proceedings in connection with a Dispute as specified
in Paragraph 2(A) (1) within one (1) year of the date the
aggrieved party first has, or with the exercise of reasonable
diligence should have had, knowledge of the event(s) giving rise
to the Dispute (the "One Year Statute of Limitations"). No
Dispute may be raised under this Dispute Resolution Agreement
after the expiration of the One Year Statute of Limitations.
E. Entire Agreement. These dispute resolution provisions express the
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entire agreement of the parties and there are no other
agreements, oral or written, concerning dispute resolution,
except as provided herein. Any ambiguity in the provisions hereof
shall not be construed against the drafter. This Dispute
Resolution Agreement may only be modified in a writing signed by
both parties.
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F. Successors. This Dispute Resolution Agreement is binding upon and
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inures to the benefit of the parties, their agents, heirs,
assigns, successors-in-interest, and any person, firm or
organization acting for or through them.
G. Venue and Jurisdiction. Venue and exclusive jurisdiction for any
-----------------------
action arising out of or related to this Dispute Resolution
Agreement (including, but not limited to, equitable actions
contemplated by Section 4 (C) and actions brought to enforce or
interpret this Dispute Resolution Agreement) shall be in the
state courts for the County of Xxxxxx, Texas, or the federal
court for the Southern District of Texas.
H. Notice. Any notice or communication required to be given
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hereunder shall be in writing and shall be mailed via the United
States Postal Service by Certified Mail or Registered Mail,
Return Receipt Requested, or by Federal Express or other
overnight courier which can document delivery, to the address of
the party to be served as shown below (or such other address as
the party shall from time to time notify). Such notice shall be
deemed to have been served at the time when the same is received
by the party being served.
If to Xxxxx X. Xxxxxxxxx & Associates: Xxxxx X. Xxxxxxxxx, Gen. Partner
P. O. Xxx 0000
Xxxxx XX 00000-0000
Fax: 000-000-0000
Phone: 000-000-0000
If to XIT XXXXXXXXX.XXX INC.: X.X. Xxxxxxx
0000 XX 000 Xxx 000
Xxxxxxxx, XX 00000-0000
Fax: 000-000-0000
Phone: 000-000-0000
I. Acknowledgment of Legal Effect of this Dispute Resolution
----------------------------------------------------------------
Agreement. By signing this Dispute Resolution Agreement, the
parties acknowledge that they are giving up any rights they may
possess to have Disputes litigated in a court and are hereby
waiving the right to a trial by jury. The parties further
acknowledge that they are agreeing to a one year statute of
limitations regarding all Disputes and that they are giving up
their judicial rights to discovery and to appeal, unless such
rights are specifically set forth above. The parties acknowledge
that if they refuse to submit to the provisions of this Dispute
Resolution Agreement they may be compelled to do so. The parties
acknowledge that they have had the opportunity to consult counsel
regarding the meaning and legal effect of this Dispute Resolution
Agreement and enter into it knowingly and voluntarily.
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IN WITNESS WHEREOF, the parties have entered into this Dispute Resolution
Agreement as of the date first above written.
XIT XXXXXXXXX.XXX INC. XXXXX X. XXXXXXXXX & ASSOCIATES,
A NEVADA CORPORATION A TEXAS GENERAL PARTNERSHIP
By: /s/ X.X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------- ----------------------------------
X.X. Xxxxxxx, President Xxxxx X. Xxxxxxxxx, General Partner
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