{VEO469444.DOC;1/60577.042001/}
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("AGREEMENT") IS MADE AND EFFECTIVE AS OF MARCH 9, 2001
BY AND BETWEEN XXXXXXXXXXXXXXX.XXX CORP., A NEVADA CORPORATION ("GRANTOR"), AND
XXXX XXXXXX ("LICENSEE"), WITH REFERENCE TO THE FOLLOWING FACTS:
1. Grantor owns and operates an Internet marketing system for vitamins,
minerals, nutritional supplements, and other health and fitness products
(the "Products") in which Grantor offers Products for sale from various
suppliers on Grantor's Web Site.
2. Licensee desires to market the Products to medical professionals,
alternative health professionals, martial arts studios and instructors,
sports and fitness trainers, other health and fitness practitioners,
school 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
Grantor'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
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through Grantor'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 Grantor'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 Licensee or Customers. Pricing may be amended
from time to time on the Web Site, and in the event of a conflict between
the pricing on the Web Site and the pricing in Exhibit A, the price
posted on the Web Site at the time of order shall obtain. 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.
2. Grant of License; Territory. Territory shall be the Maritime Provinces
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in Canada. Grantor grants to Licensee the exclusive rights to market the
Products in the Territory through the Web Site.
3. Consideration. Licensee shall pay Grantor the sum of Thirty-five Thousand
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US Dollars (US $35,000) for the License.
4. Manufacture of Products. All Products marketed through Grantor's Web
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Site 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.
5. 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.
6. 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"). Grantor 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 Grantor, and the price posted on the Web Site at time of
order shall obtain.
7. Shipping. Shipping shall be by UPS ground unless Customer requests and
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pays for overnight shipping by UPS. Grantor 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.
8. 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 posted at the time
of order shall obtain. Terms are payment by credit card or electronic
funds transfer at time of purchase.
9. Minimum Order Quantities for Vitamin, Mineral, and/or Nutritional
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Supplements. The minimum order quantity is 100 bottles per formulation
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for standard Products. Customer Formulas, as defined herein, shall have
minimum order quantities of 5,000 units.
10. Web Site Maintenance; Fees. Grantor shall maintain Grantor's Web Site
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(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. Grantor shall
maintain the Web Site in a manner that ensures secure Internet financial
transactions. Licensee shall pay Grantor a maintenance fee of $500
yearly, beginning on the anniversary date of this Agreement, for
maintenance of the Web Site.
11. 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
Grantor. Upon receipt of order, Grantor 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."
12. Sharing of Profits; Sales Reports. Licensee and Grantor shall each
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receive one-half of the profit on all sales made through the Web Site by
Licensee. Grantor agrees to pay supplier for the Product purchased upon
receipt of cleared funds. Grantor 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. Grantor 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. Grantor will e-mail the
Monthly Sales Report to Licensee by the tenth day of the month following
such sales.
13. Warranties and Indemnification. Grantor 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. Grantor warrants that all Custom Products shall be
manufactured in accordance with Customer's specifications. Grantor
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. Grantor 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. Grantor
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 Grantor's breach of its product warranties
as set forth herein.
14. Nature of Relationship. (a) This Agreement does not constitute nor
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empower the Licensee as the agent or legal representative of Grantor 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.
15. 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 Grantor formula. Grantor 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 Grantor and Customer jointly create a formula
("Joint Formula"), such Joint Formula will be jointly owned by
the parties. Grantor 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
Grantor without written permission from Customer. In the event
that Customer fails to order a specific Joint Formula Product for
a period of 3 months, Grantor shall be free to sell products
containing the Joint Formula to other customers.
16. Term of Agreement; Breach of Agreement. This Agreement shall continue
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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 Grantor. 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 Grantor be required to accept or deliver
product under any purchase order if Grantor 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 Grantor.
17. Trade Secrets. Grantor 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, agent, 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.
18. Governing Law; Dispute Resolution. This Agreement shall be governed by
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Washington law in accordance with the Dispute Resolution Agreement
attached hereto as Exhibit B.
19. 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.: Xxxxx X. Xxxxxxxxx
XX Xxx 0000
Xxxxx, XX 00000-0000
If to Licensee: Ornali Group Inc.
0000 X. Xxxxxx Xxxxxx, #X000
Xxxxxx Xxxx, XX 00000
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.
XXXXXXXXXXXXXXX.XXX CORP.
A NEVADA CORPORATION
/s/ By: /s/
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Xxxx Xxxxxx Xxxxx X. Xxxxxxxxx
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: ______________
EXHIBIT B
DISPUTE RESOLUTION AGREEMENT
THIS DISPUTE RESOLUTION AGREEMENT ("DISPUTE RESOLUTION AGREEMENT") IS
ENTERED INTO AND EFFECTIVE AS OF MARCH 9, 2001 BY AND BETWEEN
XXXXXXXXXXXXXXX.XXX CORP., A NEVADA CORPORATION, AND ORNALI GROUP INC., A
WASHINGTON 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 March 9, 2001 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
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resolved 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,
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then the 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
Grantor'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
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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 Seattle, Washington. 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.
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 Seattle, Washington pursuant to the
provision of R.C.W. 7.04. Procedurally, the arbitration will be conducted
in conformity with Washington Mandatory Arbitration Rules 5.1 - 5.4 and
the following provisions, which shall supersede the R.C.W. 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
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 Washington, or federal law, in those instances in which
federal law applies.
F. Designation of Witnesses/Exhibits; Duration of Arbitration
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Process; Written Decision. At least thirty (30) days before the
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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
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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
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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
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to 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.
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
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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 King, Washington, or the federal court
for the Western District of Washington.
H. Notice. Any notice or communication required to be given hereunder
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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.
Xxxxxxxxxxxxxxx.xxx Corp.: Xxxxx X. Xxxxxxxxx, President
XX Xxx 0000
Xxxxx, XX 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
Ornali Group Inc.: Xxxx Xxxxxx
0000 X. Xxxxxx Xxxxxx, #X000
Xxxxxx Xxxx, XX 00000
Phone: (000) 000-0000
I. Acknowledgment of Legal Effect of this Dispute Resolution Agreement. By
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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 under the authority of the Washington Mandatory
Arbitration Rules. 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.
IN WITNESS WHEREOF, the parties have entered into this Dispute Resolution
Agreement as of the date first above written.
XXXXXXXXXXXXXXX.XXX CORP.
A NEVADA CORPORATION
/s/ By: /s/
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Xxxx Xxxxxx Xxxxx X. Xxxxxxxxx
