LICENSE AND DISTRIBUTION AGREEMENT
THIS LICENSE AND DISTRIBUTION AGREEMENT (this "AGREEMENT") is effective as of
August 26, 1998, between VMM ENTERPRISES, INC. ("WE" or "US" or "OUR"), and
LightTouch Vein, Laser & Hair Center, Inc. ("YOU" or "YOUR") (collectively,
you and we are referred to as the "PARTIES" and individually sometimes
referred to as a "PARTY").
BACKGROUND INFORMATION
Along with the inventor, Xxxxxxxx Xxxxxx, we have developed various
techniques, methods and proprietary materials, systems, products, processes,
solutions and knowledge (collectively, the "SYSTEM") which when properly
utilized and applied enable customers to improve their appearance by reducing
inches. We have also developed a number of associated and compatible products
and solutions for use when providing services associated with the System and
for retail sale (the "PRODUCTS"). Many of these Products incorporate
confidential and proprietary formulas, contents and materials and constitute
our trade secrets. We consider both the System and the various ingredients
and solutions in the Products as our confidential and proprietary information
(the "CONFIDENTIAL INFORMATION"). You want to utilize the System to provide
services to customers and to sell them the Products. We are willing to train
you regarding use of the System and to sell you the Products at our standard
published wholesale prices on the conditions described in this Agreement. You
want to obtain the Products from us in order to secure a continuous source
of supply.
OPERATIVE TERMS:
Accordingly, you and we agree as follows:
1. GRANT OF LICENSE.
(a) APPOINTMENT: We appoint you as our licensee for use of the System.
In consideration for the appointment and our initial training, you agree to
pay us an initial fee of $9,950.00 when you sign this Agreement. In
consideration, we will provide you with our standard initial training in the
use of the System. It is further understood that the initial fee, and/or any
deposit, are not refundable.
(b) SALES EFFORTS: You agree to use your best efforts to market, promote
and sell the services associated with the System and the Products at retail.
You further agree to commence business activities by beginning to perform
wraps to customers before the end of the 4th calendar month following the
effective date. We may market and sell similar products on a wholesale or
retail basis to anyone else and to or from any other location, regardless of
the location, except as stated below.
(c) EXCLUSIVITY: Exclusive rights for the operation of the System or
sale of the Products are granted as follows:
(i) From the effective date of this Agreement until the end of 4
calendar months, we will not grant a license to anyone else within a
geographic area surrounding your location that contains a population
of 50,000 based on the contiguous zip codes and street boundaries
based on currently available information in our possession (the
"TRADE AREA");
zip codes: 45103, 45102, 45157, 45106, 45176
Total pop - 54,453 See Exhibit A.
paid an add'l $500 for extra pop
JJ
CH
(ii) After that time period, if you attain the sales level of 100
body wraps per month and continue to maintain that
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level on an average basis during each calendar quarter, we will not
grant a license for anyone to operate a similar business within that
Trade Area. If you no longer achieve the minimum threshold average
of 100 wraps per month during any calendar quarter, we reserve the
right to open the area for additional License sales.
We will notify you of our intention to open up your area and you will
be given 60 days to meet your 100 wraps per month minimum. If you
feel you have a legitimate reason for not meeting this minimum the
Board will consider a written request for extension. If such
extension is denied the 60 day period will go into effect the date
of the denial.
2. TERM. This Agreement is effective as of August 26, 1998 (regardless of
the actual date of signature) and continues perpetually.
3. CERTAIN ACKNOWLEDGMENTS. To induce us to enter into this Agreement, you
represent and warrant to us the following:
(a) You have conducted an independent investigation of your proposed
business and have determined that its success involves business risks that
are dependent entirely upon your own business abilities. You have had the
opportunity to consult with your own legal and other advisors in connection
with starting your business under this Agreement. You acknowledge that
determining the application of, and complying with, federal, state and local
laws, rules and regulations to the sale of the system and the operation of
your business are solely your responsibility. We are not responsible for
rendering any legal advice regarding the sale of the System or the operation
of your business.
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(b) You acknowledge that we have not made and you have not received or
relied upon any guarantee, express or implied, as to the revenues, profits or
success of your business as a result of entering into this Agreement.
(c) Whereas we have an interest in your success, and are willing to give
assistance from time to time, it is understood, that you are not relying on
us to furnish any advice, guidance or assistance with respect to the
established or continuing operation of your business in the form of marketing
assistance or advice or any other business assistance.
(d) You are not relying on, nor have you received, any representations
or warranties from us as to whether:
(i) your business will earn, can earn, or is likely to earn any
profits or income;
(ii) there is a market for the services you plan to offer; or
(iii) we will provide, or assist you in finding any locations (or
locator companies) for you to operate your business.
(e) You understand and acknowledge that we will not be exercising any
control over your method of operations or give you any significant
assistance. Specifically, we have no control over and have no obligation to
provide any assistance with respect to, any of the following activities:
(i) site approval or selection, and site design or appearance;
(ii) hours of operations;
(iii) production techniques;
(iv) accounting practices or establishing accounting systems;
(v) personnel, policies or practices; and
(vi) promotional campaigns.
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(f) You understand that we have not furnished you with any directives or
required of you our approval with respect to selecting the location of your
business, its appearance, the fixtures and equipment utilized, the format and
design of your business location, uniforms of employees, hours of operation,
housekeeping and similar items.
(g) We have not placed any restrictions on the geographic area or
territory in which you may advertise to promote the Products, or solicit
customers, except that you are restricted to operating from one fixed
location within the Trade Area.
(h) You are solely responsible for the development and implementation of
your own training, marketing and sales programs.
(i) You understand that we are not required to repurchase any of the
Products from you if you are either unsatisfied with their nature and
quality or you are dissatisfied with the business or financial results of
your business. However, if this Agreement terminates or expires, we have the
right to repurchase all or any portion of the Products we have sold to you,
at our option, at the price you paid.
4. TRADEMARKS AND SERVICE MARKS. You must not use the service marks,
trademarks or trade name "SUDDENLY SLENDER" or any of our other service marks
(the "MARKS") in any manner whatsoever, including as a part of any other
trade name, service xxxx or trademark. Our Marks are for our exclusive use.
You acknowledge that your use of the Marks would constitute an infringement
of our rights and cause confusion with the public. You may distinguish our
wrap system as, "the body wrap process invented by Xxxxxxxx Xxxxxx".
5. THE SYSTEM. We grant you the right and license to use the System in your
business. You acknowledge and agree that the success of the System depends
not only on your utilizing the methods and techniques that we impart to you
in training buy also the solutions and Products associated with it. The
license is personal to you. You will not sublicense, or permit
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anyone else to use the System unless we otherwise specifically approve. You
acknowledge that we own the System. You will not in any manner represent that
you have any ownership in any portion of it. You will not, directly or
indirectly, at any time, do or cause to be done, any act or thing contesting
or in any way impairing or intending to impair any part of our right, title
and interest in and to the System or its validity.
(a) CONFIDENTIALITY: You acknowledge and agree that the System and the
ingredients in the Products are proprietary, confidential and constitute our
trade secrets. Accordingly, you must not, directly or indirectly, sell,
grant, pledge, hypothecate, assign, convey, transfer, publish, display, make
available or in any other manner disclose to any third party, the System or
the components of the Products. Should you hear or know of any one else using
or duplicating the formula, you are contractually obligated to notify us
immediately or be in danger of your License as such non-disclosure could
damage VMM Enterprises, Inc. and the value of all Licenses. You must keep our
training manuals and other information that we designate as confidential in a
secure place and use sufficient restrictions to prevent unauthorized
disclosure to unauthorized persons. If you fail to do so, we may terminate
this Agreement. If you neglect or fail to protect the confidentiality of the
System, or permit any unauthorized disclosure of it to a third person, we may
terminate this Agreement and exercise any and all other rights and remedies
available to us, including equitable or injunctive relief.
(b) LABELING: You must not remove, deface or substitute any labels,
brands or other items on any of the Products we sell to you.
6. PRODUCT REQUIREMENTS.
(a) REQUIREMENTS: You will purchase from us, and we will sell to you,
all of your requirements for the Products. You may, at your option, sell
other products at your location.
(b) PRICING: We will sell the Products to you at our published wholesale
prices as in effect at the time of sale. We will give you 15 days
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advance notice of any changes to our price schedule. You agree to pay us the
purchase price for the Products in full prior to shipment. We will ship the
Products to the location you designate. You are responsible for paying all
handling, shipping, transportation and insurance costs for delivery of the
Products to the location you designate.
(c) RESALE OF PRODUCTS: You understand that you may resell the Products
at any price you determine. We may suggest certain retail prices for the
Products to you as well as certain pricing strategies. Nevertheless, the prices
at which you sell the Products are to be determined solely by you. You must
not engage in any wholesale business involving the Products.
7. WARRANTIES. We pride ourselves on prompt service and high quality
products. WE HAVE NO LIABILITY WITH RESPECT TO THE PRODUCTS UNDER THIS
AGREEMENT FOR CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES OR LOST PROFITS,
EVEN IF WE HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. In no case
will our liability exceed the cost of the Products on which a claim for
damages is based.
We undertake no obligation regarding, and offer no, warranty to you, whether
express or implied, including an implied warranty of merchantability or
fitness for a particular purpose as to the Products that we sell to you. The
Products are sold on an "as is" basis. You bear the entire risk as to the
quality of the Products.
8. SHIPMENT AND ALLOCATION. To place an order for the Products, you agree to
notify us in accordance with our standard procedures. No orders will be
effective unless we have communicated acceptance to you or have commenced
shipment to you. We will ship all of the Products to you F.O.B. Clearwater,
Florida from our facility located at 000 X. Xxxxxxx, Xxxxxxxxxx, Xxxxxxx
00000 (or such other location we determine from time to time). We make no
representation to you regarding the timing of shipments of Products to you
from the time we accept your order. You recognize that timing can vary based
on a multitude of factors, many of which are beyond our control.
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9. INSPECTION AND ACCEPTANCE. You agree to inspect the Products immediately
when you receive them and promptly notify us in writing of any evident
Product defects. The Products will be deemed accepted by you if we have not
received any claim of defect from you within 5 business days of your receipt
of them. We will pay reasonable return transportation costs if we receive
defective merchandise from you within 10 business days after you receive them.
10. RISK OF LOSS. Risk of loss, casualty or damage to the Products passes to
you as soon as we deliver the Products to the carrier for shipment. We will
not be liable, or under any obligation to you whatsoever, for failure to
deliver under, or for delay in making delivery pursuant to, any purchase
orders from you that we have accepted; if such failure or delay results from
causes not directly attributable to, or controlled by, us.
11. REPORTS AND RECORDS. By the 10th day of each month, you agree to send us
fully completed reports of your sales for the immediately preceding calendar
month on forms we prescribe from time to time. You agree to keep accurate
business records and keep them at your business location. You further agree,
we may inspect them at any time after giving you reasonable notice.
12. TRANSFER. You may only transfer your rights under this Agreement to a
person we have approved who agrees to be bound by all of its terms. We may
require the transferee to sign and deliver our then-current standard form as a
condition of our approval. We will charge a then-current transfer fee
(currently $3,800) to cover our training, administrative, legal and
evaluation costs.
13. RELATIONSHIP OF THE PARTIES. You and we are independent contractors.
Neither you nor we are agents, legal representatives, subsidiaries, joint
ventures, partners, employees or servants of the other for any purpose.
Neither you nor we will be obligated by, or have any liability under, any
agreements or representations made by the other, nor will we be obligated for
any damages to any person or property directly or
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indirectly arising out of the operation of your business, whether or not
caused by your negligence or willful action or failure to act. We also have
no liability for any sales, use, excise, gross receipts, property, income or
other taxes, that you incur in connection with the operation of your business
or otherwise.
14. INDEMNIFICATION. You agree to indemnify, defend and hold us (and our
affiliates, stockholders, directors, officers, employees, agents and assigns)
harmless from and against and reimburse them for, any losses, liabilities,
claims, fines, penalties, charges, obligations, taxes or damages (actual or
consequential) arising out of any claim or proceeding (including governmental
actions or proceedings), and all reasonable costs and expenses of defending
any claim or proceeding brought against any of them or any action or
proceeding in which any of them is named as a party (including, without
limitation, attorneys' fees and litigation expenses), which any of them may
suffer, sustain or incur directly or indirectly, by reason of, arising from
or in connection with, the operation of your business.
15. TERMINATION.
(a) BY YOU: You may terminate this Agreement only if we materially
breach this Agreement and fail to correct such breach after 60 days prior
written notice detailing the nature of the breach and a suggested method for
cure. Our cure period will be extended a reasonable time if the breach cannot
be cured within such 60 days. We will be excused if our ability to cure is
restricted by our good faith efforts to comply with any applicable law,
ordinance, rule, regulation or other requirement of a governmental authority
or any agency.
(b) BY US: We may terminate this Agreement on 30 days advance written
notice to you if:
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(i) you breach any of the provisions of this Agreement and fail to
cure such breach within 30 days after notice from us;
(ii) you fail to continuously open and operate the business utilizing
the System and the Products;
(iii) you fail to pay us when due amounts due us for purchases of
the Products or otherwise, or you breach any other agreement between
you and us;
(iv) you file a petition of bankruptcy or reorganization, or have
an involuntary petition filed against you, that is not discharged
within 30 days, or you are adjudicated bankrupt or insolvent, have a
receiver or trustee appointed for your affairs, or engage in any
assignment for the benefit of creditors;
(v) you violate any law, regulation or ordinance that we consider
may detrimentally affect our reputation; or
(vi) you fail to start business by performing wraps for customers by
the end of the 4th month following the effective date.
16. POST-TERMINATION OBLIGATIONS. If this Agreement expires or is otherwise
terminated, you and we, respectively, agree as follows:
(a) PAYMENT: You will immediately pay us all amounts owed to us.
(b) PENDING ORDERS: We may cancel any or all of your pending orders for
Products. We will not be responsible to you (or any customer) for Products
ordered prior to, but to be delivered after, termination. However, at our
option, we many continue to ship Products to you on our then-standard terms
and conditions.
(c) RETURN OF MATERIALS: You will immediately return to us all
information, brochures, documents and other materials relating to the
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Products and the System. Your obligations of confidentiality and
indemnification survive any termination or expiration of this Agreement.
(d) REPURCHASE OF PRODUCTS: We may, at our option, require you to sell
us all, or any part, of the new, unused, undamaged and unaltered Products in
original packaging remaining in your inventory. The purchase price for
repurchase of such Products will be the price you paid us, exclusive of all
freight and handling charges for transporting the Products from you to our
designated location.
17. COMPETITIVE RESTRICTIONS. During the term of this Agreement and for a
period of 2 years after its termination or expiration, unless we otherwise
permit in writing, you agree not to, directly or indirectly (whether as an
owner, partner, associate, member, manager, trustee, independent contractor,
agent, consultant, employee, stockholder, director, officer or otherwise of
another or on your account) do any of the following within the Trade Area or
(i) within 25 miles of the location of our business; or (ii) within 25 miles
of any other business utilizing the System and selling the Products under a
license, distribution or other agreement with us:
(a) SIMILAR SERVICES: You agree not to engage in, or render the same or
similar services or contribute your knowledge to, any work or activity that
relates to or involves the System or the Products or that is in any way
competitive with the sale of the Products or any person utilizing the System.
(b) COMPETITIVE BUSINESS: You agree not to operate a business which (i)
markets, sells or promotes methods, techniques and services similar to the
System, including the provision of body wrap services (a "COMPETITIVE
BUSINESS"); or (ii) grants or has granted franchises or licenses, or
establishes or has established partnerships or joint ventures, or sells
distributorships or business opportunities, for the development and/or
operation of a Competitive Business.
(c) NO SOLICITATION: You agree not to induce, or attempt to induce, or
solicit any of our employees, licensees, distributors, representatives,
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vendors, subcontractors or suppliers to accept employment or an affiliation
involving work that may be for a Competitive Business with another firm or
corporation of which you are an employee, owner, partner, shareholder,
consultant or agent.
(d) NO INTERFERENCE: You agree not to solicit, divert, contact, take
away or interfere with any of our (or that of any of our licensees)
customers, suppliers, licensees, distributors, representatives, clients,
trade or patronage, in existence or that you know or have been contacted or
solicited for business relationships as of the date of termination or
expiration.
18. CONFIDENTIAL INFORMATION. You acknowledge that we have developed a
number of associated compatible products and solutions for use when providing
services associated with the System and for retail sale of Products. Many of
these items incorporate confidential and proprietary formulas, contents and
materials and constitute our trade secrets. We consider both the System and
the various ingredients and solutions in the Products as confidential and
proprietary information (the "CONFIDENTIAL INFORMATION"). You understand that
the System, the ingredients in the Products and Confidential Information are
proprietary, trade secrets and confidential. You agree that you:
(i) will not use the Confidential Information in any other
business or capacity;
(ii) will maintain the absolutely confidentiality of the
Confidential Information during and after the termination or expiration
of this Agreement;
(iii) will not make unauthorized copies of any portion of the
Confidential Information disclosed, whether such copies are made in
written or printed form or in other tangible form or via electronic
medium; and
(iv) will adopt and implement all reasonable procedures that we
prescribe from time to time to prevent unauthorized use or disclosure
of Confidential Information.
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19. NOTICES. Any and all notices necessary or desirable to be served under
this Agreement must be written and must be (a) personally delivered, or (b)
sent by facsimile telecopier to the number indicated for the intended
recipient below, or (c) sent by reputable airborne courier (i.e., Federal
Express) or (d) sent by certified mail, postage pre-paid, return receipt
requested, addressed to the intended recipient as follows:
(i) IF TO US:
VMM Enterprises, Inc.
000 X. Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Fax No.: (000) 000-0000
(ii) IF TO YOU:
LIGHTTOUCH VEIN, LASER & HAIR CENTER, INC.
00000 XXXXXXXXXX XXXX, XXXXX XXXXX
XXXXXXXXXX, XXXX 00000
Attention: XXXXX XXXXXXXX
Fax No.: (000) 000-0000
or to such other address as any party may indicate for itself in a written
notice sent to the other parties in accordance with this Agreement. Any
notice sent by: (1) personal service or by facsimile telecopier is deemed
delivered when actually received by the intended recipient; (2) mail is
deemed delivered on the 5th business day after the postmark date; and (3)
reputable airborne courier is deemed delivered 2 business days after deposit
with the courier.
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20. MISCELLANEOUS.
(a) SEVERABILITY: If any of the provisions of this Agreement are held
invalid for any reason, the remainder will not be affected and will remain in
full force and effect in accordance with its terms.
(b) LITIGATION OR ARBITRATION EXPENSES: In any action or dispute, at law
or in equity, that may arise under or otherwise relate to the terms of this
Agreement, the prevailing party will be entitled to full reimbursement of its
litigation or arbitration expenses from the other party. Litigation or
arbitration expenses include attorneys' fees, defense costs, witness fees and
other related expenses including paralegal fees, travel and lodging expenses
and court costs. Reimbursement is due within 30 days of written notice after
prevailing.
(c) WAIVERS: No waiver of any provision of this Agreement will be valid
unless in writing and signed by the person against whom it is sought to be
enforced. The failure by either party to insist upon strict performance of
any provision will not be construed as a waiver or relinquishment of the
right to insist upon strict performance of the same provision at any other
time, or any other provision of this Agreement.
(d) ARBITRATION: Any dispute or claim between you and us must be
submitted to binding arbitration to the office of the American Arbitration
Association (the "AAA") closest to our headquarters. The arbitration will be
conducted in accordance with the AAA's rules, except that they must follow
applicable law. All arbitration proceedings must be conducted on an
individual basis and not on a class-wide or consolidated basis with anyone
else.
(e) GOVERNING LAW: This Agreement is governed by Florida law. The courts
of Pinellas County, Florida have exclusive venue and jurisdiction in any
controversy relating to or arising out of this Agreement. All parties waive
any objections to venue in Pinellas County.
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(f) ENTIRE AGREEMENT: This Agreement is the entire agreement between the
parties relating to its subject matter, and supersedes all prior agreements,
proposals, representations and commitments, oral or otherwise. This Agreement
may only be amended by an instrument signed by the authorized representatives
of both parties.
(g) BACKGROUND INFORMATION: Both parties agree that the background
information at the beginning of this Agreement is accurate.
(h) EFFECTIVE DATE: The effective date of this Agreement is August 26,
1998, regardless of the actual date of signature. This Agreement is not
effective until accepted and signed by us.
(i) CONSTRUCTION: The headings of sections are for convenience only and
do not define, limit or construe the contents of such sections. In computing
periods from a specified date to a later specified date, the words "FROM" and
"COMMENCING ON" or "BEGINNING ON" (and the like) mean "FROM AND INCLUDING"
and the words "TO," "UNTIL" and "ENDING ON" (and the like) mean "TO BUT
EXCLUDING." "INCLUDING" means "INCLUDING, BUT NOT LIMITED TO." "A OR B" means
A or B or both.
(j) CONTINUING OBLIGATIONS: All obligations of the parties which
expressly or by their nature survived the expiration or termination of this
Agreement continue in full force and effect subsequent to and regardless of
the expiration or termination of this Agreement and until they are satisfied
or by their nature expire.
(k) COUNTERPARTS: The parties may sign this Agreement in counterparts.
Each signed counterpart will be an original; and all of them constitute one
and the same agreement.
(l) PRONOUNS: All words used in this Agreement, regardless of the
number or gender in which they are used, will be construed to include any
other number, singular or plural, in any other gender, masculine, feminine or
neuter, as the context of this Agreement may require.
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(m) CUMULATIVE REMEDIES: Any and all remedies available to the parties
in the event of a breach of this Agreement by the other party will be
cumulative. The exercise of any particular remedy will not be exclusive to
the ability to seek other remedies for any breach of this agreement.
(n) TIMING: Time is of the essence of this Agreement. However, whenever
the time for the performance of any action or condition contained in this
Agreement falls on a Saturday, Sunday or legal holiday, such time will be
extended to the next business date. Indications of time of day mean time at
Clearwater, Florida.
Intending to be bound, the parties sign below:
VMM ENTERPRISES, INC.
/s/ LIGHTTOUCH VEIN, LASER & HAIR CENTER, INC.
----------------------------------------------
(Signature)
By: /s/ Xxxxxx Xxxxxx /s/ Xxxxx Xxxx MD, COO
----------------------------- ----------------------------------------------
Name: Xxxxxx Xxxxxx XXXXX XXXX MD, COO
--------------------------- ----------------------------------------------
(Print Name)
Title: Deputy Executive Director
--------------------------
Date: 9/21/98 Date: Aug/26/98
--------------------------- -----------------------------------------
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