EXHIBIT 10.14
FULFILLMENT SERVICES AGREEMENT
This AGREEMENT (the "Agreement") is entered into as of this 19th day of
January, 2004, by and between Advantage Marketing Systems, Inc., an Oklahoma
("AMS ") with its principal place of business at 0000 Xxxxxxxxx Xxxxxxxxxx xxxxx
0000X, Xxxxxxxx Xxxx, XX 00000 and Vita Sales & Distribution Multi-Country
("VITA"), 000 Xxxxx Xxx #0, Xxx Xxxxxxxxx, XX 00000. Hereinafter collectively
referred as the " Parties".
RECITALS
WHEREAS, AMS develops and sells proprietary nutritional supplements through a
network marketing system.
WHEREAS, VITA formulated, developed of nutritional supplements, based on
adaptogenic herbs and supervised its production at a designated manufacturing
facility in Russia.;
WHEREAS, AMS is desirous of securing VITA expertise in the area of developing of
adaptogenic products for inclusion in its products line;
NOW THEREFORE, the PARTIES agrees as follows:
1. DUTIES.
VITA duties the following:
a. Product formulation for mutually agreed upon
nutritional products.
b. Monitoring harvesting, production, quality control
and shipping adaptogen product from designated
suppliers in Russia to assure maximum potency and
effectiveness. Upon AMS request to provide
background support material for each new product
introduced by VITA
c. VITA may provide services of world recognized
experts in herbal medicine, pharmacology,
nutrition and sports medicine.
d. VITA will provide with Dr. Ben Tabacnik
(CONSULTANT) consulting services including:
- Educate the AMS staff (personal meetings and phone
interviews) for the first 6 months following the
introduction of a product. Company may record
presentations and interviews and have all rights for
distribution in any and all formats.
-Providing information for articles for publication
on Company products.
e. Becoming a member of the scientific advisory board
upon request by the AMS.
2. Vita agrees, that AMS can use CONSULTANT name, likeness for internal
use for marketing products or ingredients developed and sold to the
AMS. Consultant must approve use of name and likeness for any material
or information intended for distribution to the public.
This agreement is intended for the CONSULTANT products and/or ingredients
to enhance the COMPANIES weight loss products and for new product formulations
that could replace Prime One and Prime Plus.
3. Term. This Agreement shall commence on the date first set forth above and
shall remain in effect for two years. Thereafter, this Agreement shall be
automatically renewed for an additional two year term unless formal return
receipt written notice is received a minimum 30 days prior to each two year
anniversary date. After the termination of this Agreement, all formulas
developed by VITA during the term of this Agreement which are used, produced and
distributed in products by the AMS, shall continue as the Company's products
with all royalties or overrides paid to VITA per the terms of this Agreement and
other written agreements that PARTIES may reach regarding payment to VITA for
products. The product brand name given to any such products is and will be the
sole property of the AMS and VITA is and shall be prohibited from using any such
names at any time. VITA, upon and after termination of this Agreement, shall
retain his rights to manufacture, license and distribute all formulations and
products developed by Consultant as long as Consultant does not infringe on any
brands and/or trademarks of the Company or use the Company's products' names at
any time.
4. Compensation. The Company shall pay VITA for developed PRODUCTS while
performing duties for the AMS beginning with the first shipment of product to a
purchaser. The Company and Consultant are currently evaluating the key
ingredient (L.O.) for potential use initially in Company weight loss products.
Payment on this product, if the product is approved by the AMS and sold by the
AMS, will be .75 cents per bottle paid by company associates and customers. For
new products where the formula is entirely that of the VITA and approved by AMS,
the royalty will be $1.00 per bottle under the same terms. The same royalty will
be paid for modified and improved existing products Prime1 and Prime Plus.
Payment for royalty will be made within 30 days after the close of each calendar
quarter. Any other royalties for products, ingredients or other formulas
developed by Consultant for use by the Company shall be on a mutually agreeable
basis and in writing, and shall be subject to the terms of this Agreement. AMS
will pay VITA according to the payment schedules as evidenced and attached
hereto as Exhibit "A"- VITA Products Payment Schedules. Payment shall encompass
all cost related to product manufacture, quality control, shipping, export and
import taxes. AMS may also act as a middleman or broker of VITA' s developed
products and formulas outside of the network marketing industry ( upon mutual
agreement )
5. Exclusivity.
The party agree that AMS has the exclusive distribution rights within the
network marketing industry for the key ingredient (L.O.) for weight loss
products for a period of nine months from the initial launch, based on minimum
qualifications AMS must reach a minimum 10,000 bottles sold per month by the
ninth month following the weight loss product launch. Product launch is defined
as AMS introduces the new product to the entire field sales force for sale to
the public. The exclusive will stay in effect once AMS qualifies and maintains
an average minimum of 10,000 bottles sold per month of the weight loss product
currently undergoing testing over each nine month period after the initial nine
month qualification period. In the event the company does not reach and maintain
an average minimum of 10,000 bottles per month then VITA will have the right to
sell the ingredients to third parties but AMS shall retain all rights referred
in paragraph 3 below.
VITA agree that with the introduction of new, improved products (new formula
Prime1 and Prime Plus) by AMS it will not develop, sell any other Adaptogenic
(antistress) and (anticatobolic) product within the network marketing industry
for one year (1) after initiation of product sales by AMS. At
the conclusion of one year, VITA should determine whether AMS has achieved the
criteria as set in Exhibit " B "- AMS SALES.
After AMS introduces at least three (3) products, including weight loss product,
developed by VITA, it will have the first right of refusal for a period of 30
days on any new formulations designed by the VITA for distribution within
network marketing
AMS is informed by VITA that it does not have the right to develop and sell any
new Energy Drink ( beverage).
6. Disclosure or Use of Confidential Information.
(a) As used herein, the term "Confidential Information"
means any and all trade secrets or other confidential information of any kind,
nature or description concerning any matters affecting or relating to the
business of the Company that derives economic value, actual or potential, from
not being generally known to the public or to other persons who can obtain
economic value from its disclosure or use and which is the subject of efforts by
the Company that are reasonable under the circumstances to maintain its secrecy.
Confidential Information includes, but is not limited to, operations and
financial information concerning the Company's business; customer names,
addresses, buying habits, needs and the methods of fulfilling those needs;
supplier names, addresses and pricing policies; the Company's pricing policies,
and product formulas. The term "Confidential Information" does not include
information which (i) becomes generally available to the public other than as a
result of a disclosure by Consultant or his agents or advisors, or (ii) becomes
available to Consultant on a non-confidential basis from a source other than the
Company or its advisors, provided that such source is not known by Consultant to
be bound by a confidentiality agreement with or other obligation of secrecy to
the Company or another party.
(b) Consultant will keep confidential and will not
directly or indirectly divulge to anyone (except as required by applicable law
or in connection with the performance of his duties and responsibilities as a
consultant hereunder), to the extent practicable, or use or otherwise
appropriate for his own benefit, or on behalf of any other person, firm,
partnership or corporation by whom he might subsequently be hired as a
consultant or otherwise associated or affiliated with, any Confidential
Information.
7. Independent Contractor.
(a) The relationship between Consultant and the Company
is that of an independent contractor. The Company shall have no right or
authority to control or direct the manner in which Consultant renders his
services hereunder. In furtherance of this independent contractor relationship,
the only compensation owed by the Company hereunder is that contemplated by
Section 4. The Company shall have no liability or obligation with respect to any
federal, state or local taxation or withholdings with respect to Consultant, all
of which liability and obligation shall be borne solely by Consultant, and
Consultant shall indemnify the Company and hold it harmless against any such
liability.
(b) Consultant acknowledges and agrees that this
Agreement shall not give or extend to Consultant any rights with respect to any
deferred compensation plan, bonus plan or fringe benefit now or hereafter
provided by the Company for the Company's employees.
(c) During the term of this Agreement, Consultant shall
not be precluded from engaging in any other business activity, whether or not
such business activity is pursued for gain, profit, or other pecuniary
advantage.
8. Indemnity. The Company shall indemnify and hold Consultant
harmless against any claim which may be made against Consultant arising out of
the performance by the Consultant of
consulting services pursuant to this Agreement unless it is determined that
Consultant has acted in a negligent manner or with willful disregard of the
consequences of his actions or unless such liability shall arise as a result of
Consultant's breach of a direct contractual obligation or fiduciary duty of
Consultant to the Company or any third party.
9. Entire Agreement and Waiver. This Agreement contains the
entire agreement between the parties hereto with respect to the consulting
services to be rendered to the Company by Consultant, and supersedes all prior
and contemporaneous agreements, arrangements, negotiations and understandings
between the parties relating to the subject matter hereof. No waiver of any
term, provision, or condition of this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or shall
constitute, a waiver of any other provision hereof, whether or not similar, nor
shall such waiver constitute a continuing waiver, and no waiver shall be binding
unless executed in writing by the party making the waiver.
10. Enforcement; Severability. If in any proceeding, a court shall
refuse to enforce any provisions of this Agreement, whether because the
restrictions contained herein are more extensive than is necessary to protect
the business of the Company or for any other reason, it is expressly understood
and agreed between the parties hereto that this Agreement is deemed modified to
the extent necessary to permit this Agreement to be enforced in any such
proceedings. The validity and enforceability of the remaining provisions or
portions of this Agreement shall not be affected thereby and shall remain valid
and enforceable to the fullest extent permitted under applicable laws.
11. Amendments. No supplement, modification or amendment of any
term, provision or condition of this Agreement shall be binding or enforceable
unless executed in writing by the parties hereto.
12. Notices. Any notices to be provided under this Agreement shall
be provided as follows:
To Consultant:
Xxxx Xxxxxxxxx
Address: 000 Xxxxx Xxx #0, Xxx Xxxxxxxxx, XX 00000
Fax No. 000-000-0000
To Company:
Xxxxx X. X. Xxxxxxxxx
President
Advantage Marketing Systems, Inc.
Address: XX Xxx 00000, Xxxxxxxx Xxxx, XX 00000
Fax No. 000- 000-0000
13. Applicable Law. This Agreement and the performance hereunder
and all suits and special proceedings hereunder shall be construed in accordance
with the substantive laws of the State of Oklahoma.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
EXHIBIT " A " - PRODUCTS PAYMENT SCHEDULES
All amounts in U.S. dollars.
1. Key ingredient (L.O.) for Weight Loss product. Price for 1kg
in bulk - $ 350. Price may decline based on higher volume.
2. Blend of adaptogenic herbs extract - liquid. Price for 1 L - $ 45.
Price may decline based on higher volume.
3. Blend of ingredients - anticatabolic powder. Price to be
determined
EXHIBIT " B " - AMS SALES.
1. Weight loss product after first nine (9) months not less then 10000
bottles sold in a months
2. New, improved Prime1 product 10,000 bottles per month after (6) six
months
3. New, improved Prime Plus product 5,000 bottles per month after (12)
twelve months
"Consultant"
Vita Sales & Distribution Multi-Country "Company"
Xxxx Xxxxxxxxx Advantage Marketing Systems,
Inc. an Oklahoma Corporation
/s/ X. XXXXXXXXX By: /s/ XXXXX X. X'XXXXXXXXX
----------------------------------- -------------------------
Xxxxx X. X'Xxxxxxxxx, President
Address: 000 Xxxxx Xxx #0 Advantage Marketing Systems, Inc.
Xxx Xxxxxxxxx, XX 00000
Tel: 000-000-0000
