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EXHIBIT 99.7
JOINT VENTURE AGREEMENT
This JOINT VENTURE AGREEMENT ("Agreement") is entered into on this _____ day of
July, 2001, by and between DB CAPITAL MANAGEMENT, INC., a Nevada corporation and
wholly owned subsidiary of Digital Bridge, Inc., a Nevada corporation
(collectively, "DB"), whose principal place of business is located at 00000
Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx, 00000, and TARGETED MEDICAL FOODS, LLC
("TMF"), a California limited liability company with its principal place of
business located at 0000 Xxxxxxx Xxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000.
RECITALS
1. TMF is a biomedical company in the business of developing medical
foods, dietary supplements, and pharmaceutical applications.
2. DB is an international business architect which creates sales
distribution channels, marketing initiatives, and Internet enterprise
solutions through a suite of applications and professional services.
3. TMF and DB desire to work together in a joint venture to create
and manage a new company for the purpose of marketing, selling, and
distributing the TMF Product Line throughout the world, to be called
"Parmula Therapeutics, Inc." or such other name as the parties shall agree
("Parmula").
5. The parties enter into this Agreement to clearly set forth the
resources and personnel to be contributed by each party to create, manage,
and administer Parmula, and to define each party's percentage of ownership
of thereof.
NOW, THEREFORE, in consideration of the mutual covenants and conditions as
set forth herein, and other valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
AGREEMENTS
SECTION 1. DEFINITIONS
1.1 DEFINITIONS: The parties agree that, for the purposes of this Agreement,
the following words shall have the following meanings:
(a) "TMF PRODUCT LINE" or "PRODUCTS" refers to specific dietary
supplement amino acid proprietary blend formulas assembled utilizing
a methodology known as "targeted cellular technology" that allows
for an increase in
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neurotransmitter synthesis, that are manufactured or purchased by or
for TMF and/or any subsidiaries or affiliates thereof.
(b) "INITIAL PRODUCT LINE" or "INITIAL PRODUCTS" shall refer to the TMF
Products designated Apptrim and Nutra Smokeless.
(c) "PARMULA" refers to the joint venture corporation to be created
pursuant to this Agreement for the purpose of marketing, selling,
and distributing the TMF Product Line throughout the United States
and to all other markets throughout the world.
(d) "LICENSE" refers to the exclusive and perpetual license granted to
Parmula by TMF pursuant to the Product Distribution Agreement, which
grants Parmula the right to market, sell, and distribute selected
TMF products into the worldwide dietary supplement/nutritional
markets.
(e) "INITIAL LICENSE" refers to the exclusive and perpetual license
granted to Parmula by TMF to market, sell, and distribute the
Initial Product Line (Apptrim and Nutra Smokeless) throughout the
world.
(f) "JOINT VENTURE" refers to the joint undertaking by TMF and DB to
form Parmula. "Joint Venture" does not refer to the form of the
Parmula business entity, which shall be a corporation or similar
limited liability entity.
(g) "FOUNDER'S STOCK" refers to shares of Parmula common stock issued to
TMF and DB in consideration for their respective contributions to
Parmula, as set forth in Section 2.2 of this Agreement.
(h) "CONFIDENTIAL INFORMATION" shall mean any information, not generally
known in the trade or industry, which was obtained from the parties
to this Agreement, or which was learned, discovered, developed,
conceived, originated, or prepared during or as a result of any
performance hereunder and which falls within the following general
categories:
(i) information relating to trade secrets of the parties;
(ii) information relating to existing or contemplated products,
services, technology, designs, computer systems, computer
software and research, or developments of the parties;
(iii) information relating to business plans, sales or marketing
methods, methods of doing business, customer lists, customer
usages and/or requirements, names of sales representatives,
and supplier information of the parties;
(iv) information relating to proprietary computer software not
generally known to the public; and
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(v) any other confidential information that the parties may wish
to protect by patent, copyright, or by keeping such
information secret and confidential.
(i) "INTELLECTUAL PROPERTY" shall mean all: (i) software; (ii) hardware
and designs therefor; (iii) all patent and inventor rights in the
United States and other countries and applications therefor; (iv)
all copyrights and all other literary property and author rights,
whether or not copyrightable; (v) all know-how, whether or not
protectible by patent, copyright, trade secret or other intellectual
property right, and (vi) all materials incorporating, embodying, or
representing any of the intellectual property, including computer
tape(s) and disks, printouts, notebooks, and other documentation
belonging to either party to this Agreement.
(j) "ANCILLARY AGREEMENTS" shall mean the Product Distribution and
License Agreement, the Development, Maintenance, and Management
Agreement and such other documents as the parties, in their mutual
discretion, may deem necessary.
SECTION 2. THE PARMULA CORPORATION
2.1 FORMATION OF CORPORATION: Within fifteen (15) days following the execution
of this Agreement, the parties shall establish a corporation called
"Parmula Therapeutics, Inc." (or such other name as the parties shall
mutually agree), which shall be a general purpose corporation whose
business model is dedicated to the marketing, sale, and international
distribution of the TMF Product Line. Within the time frame set forth
above, the parties shall execute any and all documents necessary to
register Parmula as a corporation with the proper governmental offices in
the jurisdiction of its incorporation (which the parties currently
contemplate to be the State of Delaware). As set forth in Section 4
hereof, DB shall be responsible for the costs associated with the
establishment of Parmula, including legal, administrative, and filing
costs (to be reimbursed by Parmula as set forth elsewhere herein). Each
party shall contribute to the initial capitalization and property of
Parmula as set forth in this Agreement.
(a) ORGANIZATIONAL STRUCTURE: Parmula shall be controlled by a Board of
Directors to be initially comprised of two (2) representatives
appointed by TMF, two (2) representatives appointed by DB, and one
(1) unaffiliated representative to be agreed to by both parties. It
is understood and agreed that Parmula may grant additional Board
seats to persons appointed by outside investors; provided, however,
that Board seats shall be staggered in odd numbers up to the maximum
number of Board seats allowable in accordance with the corporate
bylaws, which shall also set forth a reasonable term for the
Director position.
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(b) COMMITTEES: In addition to any other committees it may establish,
the Board of Directors shall establish a Product Distribution
Committee, a Product Review Committee, a Finance Committee and an
Audit Committee, with the duties of each as set forth herein, or
otherwise to be defined by the Board.
(i) PRODUCT DISTRIBUTION COMMITTEE: The Product Distribution
Committee shall plan, establish, and refine the distribution
plan for the Initial Product Line and TMF Product Line. The
Product Distribution Committee shall be comprised of two (2)
individuals, with one appointed by each party. The Committee
shall meet every three (3) months, and after each meeting
shall provide a report to the Board of Directors detailing the
following: (1) the current status of Product sales
distribution; (2) a revised timeline for future sales and
distribution; (3) product planning suggestions; and (4) any
other matter discussed in the Product Distribution Committee
meeting.
(ii) PRODUCT REVIEW COMMITTEE: The Product Review Committee shall
review the TMF Product Line and shall make suggested changes
so as to increase overall sales. In addition, the Product
Review Committee shall review all medical research reports and
testimonials concerning the Initial Product line and the TMF
Product Line and the components thereof, and shall discuss the
inclusion of outside medical advisors for any Medical Advisory
Committee established by the Board of Directors. The Product
Review Committee shall be comprised of two (2) individuals,
with one appointed by each party. The Committee shall meet
every three (3) months, and after each meeting shall provide a
report to the Board of Directors detailing the following: (1)
suggested changes to the TMF Product Line, if any, and the
reasons behind such suggestions; and (2) any other matter
discussed in the Product Review Committee meeting.
(iii) FINANCE COMMITTEE: The Finance Committee shall review all
existing and proposed capital expenditures and make long and
short term recommendations with regard to Parmula capital
requirements. The Finance Committee shall be comprised of two
(2) individuals, with one appointed by each party. The
Committee shall meet every three (3) months, and after each
meeting shall provide a report to the Board of Directors
detailing its recommendations with regard to capital
expenditures and requirements.
(iv) AUDIT COMMITTEE: The Audit Committee shall oversee the
auditing of Parmula's financial records, and shall work with
any internal or external auditor to ensure the proper and
accurate auditing of corporate records. The Audit Committee
shall meet on an as needed basis.
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(v) SAFETY COMMITTEE: The Safety Committee shall review and analyze
product safety issues. In addition, the Safety Committee shall
review world literature pertaining to reports of adverse events
concerning dietary supplements, and, in particular the Initial
Products and any additional Products to be distributed by
Parmula. The Safety Committee shall be comprised of four (4)
individuals, with two appointed by each party. The Committee
shall meet every three (3) months, and after each meeting shall
provide a report to the Board of Directors detailing its
recommendations with regard to matters pertaining to the safety
of the Products.
(c) CAPITAL STRUCTURE: The Parmula corporation shall be authorized to
issue a minimum of One Hundred Million (100,000,000) common (voting)
shares, Five Million (5,000,000) Series "A" preferred (nonvoting)
shares, at .001 par value, and One Thousand (1,000) Series "B"
preferred (nonvoting) shares. Common shares and Series "B" preferred
shares shall be distributed to each party as founders' stock in
accordance with the equity distribution set forth in Section 2.2
hereof. The disposition of any remaining shares shall be subject to
the will of the Board of Directors and in accordance with applicable
state law.
(i) CAPITAL CONTRIBUTIONS: As set forth in Sections 3 and 4 below,
the parties shall make significant contributions to the initial
capitalization of Parmula. The parties shall receive the
percentage of stock ownership set forth in Section 2.2 hereof in
consideration for these contributions.
(ii) DIVIDENDS: The Board of Directors shall have the discretion to
authorize dividends to holders of common and/or preferred stock
at such intervals as may be determined by the Board in the best
business judgment of its members.
(d) BUSINESS PLAN: DB shall prepare a comprehensive Business Plan for
Parmula in accordance with Section 4 hereof. The Parmula Business
Plan shall serve as a guide for the Board of Directors for planning
the overall strategic direction of the Parmula Corporation. However,
the parties understand and agree that the Board of Directors shall
not be required to follow the Business Plan if their best business
judgment dictates otherwise.
(e) DIRECTOR DECISIONS: Notwithstanding the percentage of share
ownership of Parmula, the following specific matters shall be
subject to the unanimous approval of the directors: (i) amending the
articles of incorporation; (ii) the sale or transfer of all or
substantially all of the corporate assets; (iii) mergers; (iv)
consolidations; (v) voluntary dissolution; (vi) capital
contributions; (vii) capital
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distributions; and (viii) any change, alteration, or adjustment in
and to the licensing rights granted to Parmula.
2.2 FOUNDERS STOCK DISTRIBUTION: Founders Stock shall be distributed to
the parties in accordance with the following:
(a) TO TMF: Following execution of this Agreement and the incorporation
of Parmula, TMF shall be issued an amount of Founders Stock
equivalent to Forty Eight percent (48%) of the initial issued and
outstanding stock of the Parmula corporation. When so issued to TMF,
the Founders Stock shall be considered fully paid and nonassessable,
and shall be represented by a certificate or certificates issued in
accordance with TMF's instructions and duly authorized by the
Parmula Board of Directors. All Founders Stock shall be subject to
the antidilution protection set forth in Section 2.3.
(b) TO DB: Following execution of this Agreement and the incorporation
of Parmula, DB shall be issued an amount of Founders Stock
equivalent to Forty Eight percent (48%) of the initial issued and
outstanding stock of the Parmula corporation. When so issued to DB,
the Founders Stock shall be considered fully paid and nonassessable,
and shall be represented by a certificate or certificates issued in
accordance with DB's instructions and duly authorized by the Parmula
Board of Directors. All Founders Stock shall be subject to the
antidilution protection set forth in Section 2.3.
(c) TO DYNASTY CONSULTING: Following execution of this Agreement and the
incorporation of Parmula, Dynasty Consulting, Inc. shall be issued
an amount of Founders Stock equivalent to four percent (4%) of the
initial issued and outstanding stock of the Parmula corporation in
consideration for the services provided by Dynasty Consulting in
connection with the organization of the Parmula Joint Venture. When
so issued to Dynasty Consulting, the Founders Stock shall be
considered fully paid and nonassessable, and shall be represented by
a certificate or certificates issued in accordance with Dynasty
Consulting's instructions and duly authorized by the Parmula Board
of Directors. All Founders Stock shall be subject to the
antidilution protection set forth in Section 2.3.
2.3 ANTIDILUTION OF FOUNDERS STOCK: The Founders Stock issued to the parties
in accordance with this Agreement shall be subject to antidilution
protection, such that the actual amount of common shares issued to the
parties may increase from time to time throughout the term of this
Agreement to account for additional common stock issuances to third
parties. Notwithstanding the foregoing, the parties recognize the need for
dilution to account for equity issuance to third party investors.
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(a) EQUAL DILUTION: The parties agree that they shall share in any
dilutive effects caused by additional stock issuances to third
parties equally, such that each parties' equity interest is subject
to the same percentage of dilution as the other party, and their
relative equity stake remains constant.
(b) MAXIMUM DILUTION: At no time during the term of this Agreement shall
the parties combined equity interest in Parmula fall below Fifty One
percent (51%) as a result of dilution. Parmula shall issue
additional stock to each party to maintain the minimum equity stake
in accordance with this antidilution provision on a quarterly basis,
at the commencement of each calendar quarter
2.4 DAY-TO-DAY MANAGEMENT: The Parties understand and agree that DB shall
handle the day-to-day business operations of Parmula, although overall
strategic direction shall be undertaken by the Board of Directors.
(a) BUSINESS AGREEMENTS: TMF and DB shall each enter into certain
business agreements with the Parmula corporation that will provide
for product distribution and day to day management, which are set
forth in greater detail in Section 5 of this Agreement.
(b) INSURANCE: As soon as practicable following the formation of
Parmula, the Board of Directors shall obtain D&O, Product Liability,
and any other insurance policies applicable to the business of
Parmula.
2.5 SALE OF TMF PRODUCTS: Parmula shall have the exclusive right to market,
sell, and distribute the Initial Products, which right is granted pursuant
to the License contemplated in Section 3.1 of this Agreement.
SECTION 3. RESPONSIBILITIES OF TMF
3.1 LICENSE TO DISTRIBUTE TMF INITIAL PRODUCTS: Upon formation of Parmula and
the fulfillment of all initial obligations of the parties hereto, TMF
shall enter into the Initial License Agreement, under terms which are
mutually satisfactory to the parties hereto, to grant to Parmula an
exclusive, continual, and worldwide License to market, sell, and
distribute any and all elements constituting the Initial Product Line
throughout the United States and all other markets throughout the world.
(a) LICENSE EXTENSION TO ADDITIONAL PRODUCTS: Should annual sales of
either of the Initial Products or any additional Products meet or
exceed the sum of $1,000,000 at any time during the course of the
Joint Venture, the exclusive rights granted to Parmula pursuant to
Section 3.2 this Agreement shall extend to one (1) additional
Product of the TMF Product Line (at Parmula's sole discretion).
Parmula shall
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have the right to select a product from the TMF product line that is
available and not currently licensed to any other Licensee.
(b) LICENSE FEE: It is understood and agreed that, within ten (10) days
following the formation of the Parmula corporation, Parmula shall
pay to TMF a one time License Fee in the total amount of $50,000 for
the Licensed Products, in consideration for the License set forth
herein.
3.2 EXCLUSIVE DISTRIBUTION AGREEMENT/PRODUCT DELIVERY: As contemplated in
Section 8.1, the Parties shall negotiate in good faith the terms of an
Exclusive Distribution Agreement between Parmula and TMF, which shall
provide for the sale, purchase, and delivery of all TMF Initial Products
required by Parmula.
(a) FIXED PRICE GUARANTEE: The TMF Exclusive Distribution Agreement
shall set forth a fixed price for the TMF Initial Product Line that
is equal to the direct cost of manufacturing and packaging plus
________ percent (__%). The Product prices established by the
Exclusive Distribution Agreement shall be effective for a period of
two (2) years, after which the prices shall be subject to a
reasonable rate of increase to be agreed to by the parties, as
detailed in the Executive Distribution Agreement.
(i) AUDITS: Upon the advance written request of the Parmula Board
of Directors, TMF shall provide Parmula with an audited
financial statement of TMF's finances for the preceding year.
Such audited financial statement shall be prepared at
Parmula's expense. In addition, during ordinary business
hours, Parmula's representatives shall have the right, with
reasonable prior notice, to inspect TMF's books and records as
they pertain to this Agreement.
(b) MINIMUM PURCHASE GUARANTEE: The TMF Exclusive Distribution Agreement
shall set forth a minimum of $500,000 worth of each Initial Product
units to be purchased by Parmula on an annual basis ($125,000 per
quarter). Parmula will purchase a minimum of $125,000 per quarter
commencing 45 days after the signing of the Agreement and continuing
every 90 days thereafter. With the issuance of any product order,
Parmula shall advance a deposit of fifty percent (50%) of the cost
of the order to TMF, with the remainder due within seven (7) days of
product delivery. Once Parmula has purchased a minimum of $500,000
worth of product in any calendar year, the minimum purchase
requirement will have been satisfied for that calendar year. The
minimum purchase guarantee shall be effective for a period of two
(2) years, after which period the minimum purchase amount may be
adjusted as agreed to by the parties.
(c) PAYMENT METHOD: The TMF Exclusive Distribution Agreement shall
provide for payment to TMF within thirty days after delivery of any
products.
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(d) CLINICAL TRIALS: TMF shall provide Parmula with all information
pertaining to the results of two (2) double blind clinical trials
supportive of claims for the Initial Products, AppTrim and Nutra
SmokeLess. It is understood and agreed that Parmula shall fund an
additional double blind clinical trial for AppTrim and Nutra
SmokeLess, provided that the nature and cost of the clinical trial
is first approved by the Parmula Board of Directors.
3.3 ASSIGNMENT OF EXISTING SALES AGREEMENTS: Upon the formation of Parmula and
the satisfaction of all conditions set forth in Section 8.1, TMF shall
assign any and all existing and/or contemplated sales contracts for the
sale of the Initial Product Line to Parmula for and purpose of the
exclusive License granted herein. Following the execution of this
Agreement, TMF shall refer all future sales inquiries to Parmula.
3.4 SUPPORT AND TRAINING: Upon the formation of Parmula and the satisfaction
of all conditions set forth in Section 8.1, TMF shall enter into an
agreement to provide support and training in certain minimum amounts as
Parmula may, from time to time request. The nature and extent of any
required support and/or training shall be mutually agreed upon between the
parties as required, and shall be provided at the sole expense of Parmula.
TMF shall provide Parmula employees with support and training in the
benefits, use, and operation of the Products that comprise the TMF Product
Line.
(a) WEB SITE CONTENT: TMF shall provide DB with any product-related
information requested by DB to be included as content for the
E-Commerce Web Site referenced in Section 4.5 of this Agreement
within a reasonable time after receiving the request. TMF shall
examine, approve, or otherwise request changes to all
Product-related Web site content in a timely fashion.
3.5 RESEARCH AND DEVELOPMENT: Throughout the term of the Joint Venture, TMF
shall engage in research, development, and enhancement of the TMF Product
Line on a continual basis to ensure that the Products keep pace with the
latest scientific advancements and remain competitive.
(a) DEFENSE OF PATENTS: TMF shall defend any and all challenges to the
legitimacy or validity of any TMF patents, copyrights, or other
intellectual property rights associated with the licensed TMF
Products. Both TMF and Parmula shall have the right (but not the
obligation) to take any legal action necessary to enforce TMF
patents, copyrights, or other intellectual property rights and to
take all steps necessary to protect such intellectual property from
and against infringement by any third party. Should Parmula
undertake to pursue such legal action, TMF shall grant Parmula such
authority as its attorney-in-fact.
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(b) R&D BUDGET: TMF shall establish an internal budget for research and
development, and may request additional funding grants from the
Parmula Board of Directors for specific R&D purposes.
3.6 NO LIMITATION ON OTHER TMF BUSINESS: This Agreement shall in no way limit
TMF's right to conduct its business, apart from the exclusive rights
granted to Parmula herein.
SECTION 4. RESPONSIBILITIES OF DB
4.1 CAPITAL CONTRIBUTION: Following the execution of this Agreement, DB shall
offer investors a total of one million (1,000,000) shares of Digital
Bridge, Inc. Convertible Preferred Stock at the rate of $2.50 per share
(or such other rate as market conditions permit, in sole discretion of DB)
for the purpose of capitalizing Parmula. Each share of Convertible
Preferred Stock shall be convertible to one share of Parmula common stock,
or a number of DB common shares, at the discretion of the Investor.
(a) AMOUNT AND TIME OF ANTICIPATED CAPITAL CONTRIBUTION: DB contemplates
raising up to $2.5 million over the course of 180 days following the
execution of this Agreement as follows:
(i) Up to $200,000 within sixty (60) days following the execution
of this Agreement. The amount raised within the initial sixty
(60) day period shall establish an overall initial valuation
for Parmula;
(iii) Up to $2.5 million within 180 days following the execution of
this Agreement (including all amounts previously infused);
(b) USE OF PROCEEDS: The Parties agree that all proceeds raised for or
on behalf of Parmula (less cost of sales) shall be utilized for the
initial capitalization and to further the business of Parmula,
including (but not limited to) the following expenditures: (i) the
purchase of TMF Products for distribution as set forth in (c) below;
(ii) the purchase and/or development of marketing materials and
sales collateral; (iii) management fees; (iv) distribution channel
development; and (v) any other expenditure calculated to further the
business of Parmula, in the best business judgment of the Board of
Directors.
(c) INITIAL PURCHASE: Within forty five (45) days following the
execution of this Agreement, Parmula shall forward to TMF the sum of
$125,000 for each Product representing the Initial Product Line,
which shall be for the purpose of the initial purchase of inventory
for distribution. Following the initial purchase, Parmula shall
purchase a minimum of $125,000 worth of each product for each
quarter during the first two (2) years of the Joint Venture.
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4.3 FACILITIES AND EQUIPMENT: Upon the formation of Parmula and the
satisfaction of all conditions set forth in section 8.1, DB shall enter
into an agreement, upon terms mutually acceptable to all parties hereto,
to provide to Parmula, for a period of two (2) years, (the "Startup
Period"), office facilities, communications equipment, computer equipment,
utilities, and any other equipment or facilities necessary to carry out
the expressed business purpose of the Parmula corporation as set forth in
this Agreement. Such facilities and equipment shall be detailed in a
Development, Maintenance, and Management Agreement to be executed by DB
and Parmula, the terms of which shall be negotiated in good faith by the
Parties as set forth in Section 8.1. All facilities and equipment shall be
provided at Parmula's sole expense, but not to exceed DB's actual cost,
during the course of the Startup Period. Within ninety (90) days prior to
the expiration of the Startup Period, DB and Parmula shall commence
discussions on and thereafter agree to the future disposition of the
facilities and equipment (i.e., the sale and/or lease thereof).
4.4 PERSONNEL: The Development, Maintenance, and Management Agreement shall
also require DB to provide Parmula with the management, accounting, sales,
marketing, and technical personnel necessary to carry out the expressed
business purpose of the corporation as set forth in this Agreement and the
exhibits thereto. Parmula shall be solely responsible for the payroll,
taxes and benefits of all DB contractors and employees utilized by the
Parmula corporation during the Startup Period, the details of which shall
be set forth and agreed upon in the Development, Maintenance, and
Management Agreement. The cost to Parmula shall not exceed DB's actual
cost. Within ninety (90) days prior to the expiration of the Startup
Period, DB and Parmula shall commence discussions for the future
disposition of the DB personnel then being utilized by Parmula. The
personnel provided by DB for the joint venture shall be responsible for
the following management services:
(a) INCORPORATION OF PARMULA: Within fifteen (15) days following the
execution of this Agreement, DB shall draft or have drafted all
documents necessary to incorporate Parmula in a jurisdiction
advantageous to its operations. Copies of all incorporation and
organization documents shall be submitted to TMF for examination and
approval in advance of filing. Following approval of the form of the
documents, DB and its legal counsel shall take all steps necessary
to file the documents in the appropriate jurisdiction and commence
the legal existence of the Parmula corporation. Immediately
following the successful incorporation of Parmula, stock
certificates or other indicia of ownership shall be issued to TMF
and DB representing their respective ownership of the issued shares
of Parmula as set forth in Section 2 of this Agreement. Parmula
shall be responsible for payment of all costs necessary to establish
the Parmula Corporation, and shall reimburse DB for any such costs
incurred.
(b) PROMOTION OF ONLINE SERVICE: DB shall be primarily responsible for
publicizing and promoting the Parmula Online Service to potential
users, and shall employ
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any and all reasonable means to attract and bring users to the
Parmula Online Service, including (but not limited to) advertising
campaigns in print, radio, and televised media, and other
promotional efforts.
(i) PROMOTIONAL PLAN: DB, together with the Parmula Board of
Directors, shall establish a promotional plan to guide its
promotional and advertising efforts for the Parmula Online
Service, and shall coordinate its promotional efforts with the
other parties.
(c) BUSINESS CASE ANALYSIS AND IMPLEMENTATION SERVICES: DB shall create
a detailed business plan, which shall include a detailed Executive
Summary, technology assessment, market analysis, marketing plan,
financial pro-formas, and other matters normally associated with
sophisticated business plans.
(a) DEVELOPMENT OF CORPORATE STRATEGY: DB shall develop the core
components and structure of a corporate strategy for Parmula through
focused collaborative strategy meetings with the Parmula Board of
Directors. Elements of the corporate strategy shall be incorporated
into the business plan and investment presentations. Elements of the
recommended corporate strategy to be delivered by DB are as follows:
(i) COMPETITIVE ANALYSIS: DB shall identify key competitors,
competing products, and competitors' market focus and market
share. DB shall also develop a competitor matrix and identify
Parmula's core competencies in light of the competitive
analysis.
(ii) EVALUATION OF MARKET POTENTIAL: DB shall develop a
comprehensive definition of Parmula's current target market,
assess future market growth by geographical region and
industry, and identify potential strategic alliances and
partners.
(iii) FINANCIAL ANALYSIS AND VALUATION: DB shall determine Parmula's
current financial requirements and prepare financial
projections for a minimum of three (3) years. Further, DB
shall evaluate Parmula's funding requirements over time in the
context of its long-term market goals.
(e) JOINT VENTURE AND STRATEGIC ALLIANCE ANALYSIS SERVICES: DB shall
utilize its extensive industry network connections to seek out and
negotiate joint ventures and strategic alliances (in accordance with
the corporate strategy) so as to rapidly increase the market
presence and overall revenue potential of Parmula.
(f) ACCOUNTING, BOOKKEEPING, AND FINANCIAL SERVICES: DB shall provide
Parmula with any and all required accounting, bookkeeping, and
similar financial services. DB shall provide the required services
in accordance with GAAP, and shall provide financial reports to the
Board of Directors in accordance with a
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schedule to be established thereby. DB shall also arrange for and
coordinate, in conjunction with Parmula's audit committee, Parmula's
annual audit.
(f) INVESTMENT PRESENTATION PREPARATION SERVICES: DB shall prepare
investment presentations, including computer slide presentations,
Internet flash presentations, and written materials tailored to
specific investor groups on a continual basis throughout the term of
this Agreement.
(g) BUSINESS DOCUMENT PREPARATION SERVICES: DB shall provide Parmula
with any and all business contracts required by Parmula to conduct
its business throughout the term of this Agreement (i.e., Letters of
Intent, Joint Venture Agreements, Sales Distribution Agreements,
Service Agreements, Subscription Agreements, licenses, etc.). DB
shall draft and present all such documents following consultation
with Parmula executive management concerning the nature of the
business arrangement that is the subject of the document.
(h) CORPORATE BRANDING SERVICES: DB shall create logos, slogans, and
other trademarks and service marks on behalf of Parmula. It is
understood and agreed that all trademarks and service marks created
by DB for Parmula in accordance with this Agreement shall become the
intellectual property of Parmula once selected.
(i) MARKETING MATERIALS: DB shall be responsible for the creation of all
outbound marketing materials (one-sheets, business cards, collateral
packages, b2b program send outs, etc.) on behalf of Parmula.
(k) MARKETING CAMPAIGN: Following identification and clarification of
the corporate position and strategy, DB, in cooperation with TMF,
shall devise a strategy for broadcasting and target marketing
Parmula as a company and a product. It is understood and agreed that
this process may involve certain outside parties, including those
who conduct surveys, publish demographic information or otherwise
assist DB in providing services that are not inherently part of DB
operations.
4.5 FULLY FUNCTIONAL E-COMMERCE WEB SITE: The Development, Maintenance, and
Management Agreement shall also provide for the design, development,
construction, hosting and operation of a fully functional e-commerce
Internet site for the purpose of promoting, selling, and distributing the
TMF Product Line on behalf of Parmula. The Parmula Web site shall be
designed, created, and maintained in accordance with the Development and
Maintenance Agreement, with all costs to be borne by Parmula. TMF shall
provide and/or approve all content for the Web Site as set forth in
Section 3.4(a) of this Agreement.
4.5 NO LIMITATION ON OTHER DB BUSINESS: This Agreement shall in no way
limit DB from conducting any other aspect of its business.
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SECTION 5. REVENUES AND BUSINESS RELATIONSHIPS
5.1 REVENUES: The parties anticipate reinvesting all Parmula revenues into
Parmula so as to grow the business as rapidly as possible.
5.2 TMF/PARMULA BUSINESS AGREEMENTS: Immediately following the establishment
of the Parmula Corporation, TMF and Parmula shall enter into the following
business agreements:
(a) EXCLUSIVE PRODUCT DISTRIBUTION AND LICENSE AGREEMENT: TMF and
Parmula shall execute an Exclusive Product Distribution and License
Agreement governing the sale of TMF products to Parmula. The
Exclusive Product Distribution and License Agreement shall provide
for the exclusive distribution by Parmula of the Apptrim and
NutraSmokeless products constituting the Initial Product Line, and
shall also provide for the purchase of a minimum of $500,000 worth
of each product for each contract year during the first two years of
the Distribution Agreement ($125,000 per quarter for each product as
defined in Section 3.2 (b).
5.3 DB/PARMULA BUSINESS AGREEMENTS: Immediately following the establishment of
the Parmula Corporation, DB and Parmula shall enter into the following
business agreements:
(a) DEVELOPMENT, MAINTENANCE, AND MANAGEMENT AGREEMENT: DB and Parmula
shall execute a Development, Maintenance, and Management Agreement
governing the day-to-day management of Parmula, together with the
development and maintenance of the Parmula Online Service.
SECTION 6. ADVERTISING AND PROMOTION
6.1 ADVERTISING AND PROMOTIONAL CLAIMS: The parties shall undertake all
necessary steps to ensure that Parmula makes or allows to be made no false
or misleading statements regarding the efficacy or safety of the Products.
For the purposes of this Section, "false and misleading statements" shall
be as defined by the Federal Trade Commission and Food and Drug
Administration Policy Statements as published from time to time. The
parties shall further ensure that Parmula undertakes to include this
provision in any agreements that Parmula shall enter into with third
parties for the purpose of manufacturing or distributing the Licensed
Products. In addition, the parties shall further ensure that Parmula
obtains the prior written consent of TMF for all claims which Parmula
proposes to make in connection with the sale of the Licensed Products. All
advertising and promotional materials intended for use in connection with
the sale or distribution of the Licensed Products shall be approved
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for use, in writing, by TMF. Parmula shall have the right, in the sole and
absolute discretion of TMF, to require the modification of any advertising
or promotional materials proposed by TMF to be used in connection with the
sale or distribution of the Licensed Products. In the event that Parmula
shall elect not to make the modifications as required by TMF, then the
materials shall not be use for any purpose whatsoever in connection with
the Licensed Products. Notwithstanding anything to the contrary contained
in this Agreement, for so long as TMF has approved the use of material by
Parmula in Parmula's advertising and promotional materials in accordance
with the provisions of this Section, Parmula shall have no liability to
TMF for any damages which may result from or be incurred by TMF as a
result of the authorized use of such approved advertising and promotion
materials.
SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 BY TMF: TMF hereby represents and warrants that: (1) it has full and
absolute right, title, and interest in and to all elements of the TMF
Product Line licensed to Parmula, including all Intellectual Property
Rights associated therewith; (2) TMF has not granted a distribution
license for the Initial Product Line to any third party prior to the
execution of this Agreement, except as set forth in subsection 7.1(a); (3)
the TMF Product Line has been designed and manufactured in accordance with
all applicable federal, state, and local laws and regulations pertaining
to such design and manufacture; (4) all elements of the TMF Product Line
(including the Initial Product Line) have been tested for safety and
efficacy prior to distribution, (6) the Licensed Products manufactured and
sold to Parmula shall meet the highest standards of quality, workmanship,
and materials; and (6) all Licensed Products shall conform to and comply
with in all respects to all federal, state and local laws, rules, and
regulations governing the design, quality and safety of the Licensed
Products.
(a) It is understood and agreed that TMF has entered into a
non-exclusive licensing agreement for the AppTrim Product with
TruDynamics to market AppTrim in the United States, Asia, and
Europe. It is further understood and agreed that, upon the execution
of this Agreement, TMF shall completely assign any and all of its
rights, benefits, and obligations associated with the aforementioned
License Agreement to Parmula.
(b) OWNERSHIP OF PATENT APPLICATION AND LICENSED PRODUCTS: TMF
represents and warrants that it is the sole owner of all rights,
title and interest in and to the Patent Application(s) associated
with the Products, and, to the best of its knowledge, is the sole
owner of the trade secrets associated with the Licensed Products.
The parties agree that neither DB nor Parmula shall, directly or
indirectly, seek for itself, or assist any third party to use or
acquire, any rights,
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proprietary or otherwise in the Patent Application and or trade
secrets, without the prior written authorization of TMF.
7.2 BY DB: DB represents and warrants that it will provide all products and
services (including, but not limited to the Parmula Online Service) to
Parmula as set forth in Section 4 of this Agreement, and that all products
and services will be provided in a good and workmanlike manner in
accordance with industry standards.
7.3 NO CIRCUMVENTION: At no time shall any Party to this Agreement undertake
any action that has the effect of circumventing the rights of Parmula or
any Party to this Agreement as granted herein, or otherwise fail to act
affirmatively when such failure has a similar affect of circumvention.
Such prohibited actions and/or inactions include (but are not limited to)
the creation of additional corporate entities to which rights and/or
obligations may be assigned, or the deliberate failure to provide any and
all rights, products, and/or services to Parmula as required hereby.
SECTION 8. INDEMNIFICATION
8.1 DB INDEMNIFICATION: DB hereby agrees to indemnify and hold harmless TMF,
including its affiliates, subsidiaries, successors, assigns, officers,
directors, agents, and employees, from and against any and all
liabilities, damages, losses, expenses, claims, demands, suits, fines, or
judgments (including, but not limited to, attorneys' fees, expert witness
costs, court costs, and expenses) that may at any time be threatened
against, suffered by, accrued against, charged to, or recoverable against
them in any forum, by reason of DB's inexcusable failure to perform any
material covenant set forth herein for the establishment of the TMF
Distribution Program. For the purposes of this section, DB's failure to
perform shall be considered excusable if such failure is due to
circumstances beyond DB's influence or control (i.e., a force majeure
event). With the exception of any liability to TMF for personal injury or
death caused by DB's negligence, DB's liability under this Agreement shall
not exceed the value of the Founders' Stock received by DB, determined as
of the time of the event giving rise to indemnification.
8.2 TMF INDEMNIFICATION: TMF hereby agrees to indemnify and hold DB harmless,
including its affiliates, subsidiaries, successors, assigns, officers,
directors, agents, and employees, from and against any and all
liabilities, damages, losses, expenses, claims, demands, suits, fines, or
judgments (including, but not limited to, attorneys' fees, expert witness
costs, court costs, and expenses) that may at any time be threatened
against, suffered by, accrued against, charged to, or recoverable against
them in any forum by reason of any undisclosed alleged defect in the TMF
Product Line, including (but not limited to) a failure to design and
manufacture the TMF Product Line in accordance with applicable federal,
state, and local regulations; TMF's failure to obtain or maintain all
permits and licenses required under law in
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relation to the manufacture of the Product Line or this Agreement, and any
financial loss, injuries or death of persons or loss of, damage to, or
destruction of property (including loss of use thereof) arising directly
out of the distribution of TMF products by or through Parmula unless such
loss results from false claims made by Parmula or if Parmula fails to
maintain a Safety Committee. With the exception of any liability to DB for
personal injury or death caused by TMF's negligence, TMF's liability under
this Agreement shall not exceed the value of the Founders' Stock received
by DB, determined as of the time of the event giving rise to
indemnification.
8.3 NOTIFICATION OF CLAIM: Each party shall give prompt written notice to the
others of the receipt of any Claim or the commencement of any action which
is or may be covered by the indemnities set forth above. Upon receipt of
such notice, the party notified of the claim shall assume the defense
thereof and the other party shall, if required for the purpose of such
proceedings, lend its name thereto. The notifying party shall co-operate
fully with the notified party in defending or settling such Claim, and
shall perform all acts, execute all documents, and provide all information
and documents as are reasonably necessary for the notified party to
perform its obligation. The notifying party shall not compromise or settle
any such Claim or any proceedings pursuant thereto without the notified
party's prior written consent.
SECTION 9. TERM OF AGREEMENT
9.1 CLOSING OF JOINT VENTURE: This Agreement shall close concurrently
with the Ancillary Agreements.
9.2 EFFECTIVE PERIOD:
(a) This Agreement shall become effective as of the date last set forth
below and shall remain in effect for ninety (90) days following the
establishment of the Parmula Corporation (provided, however, that the
Licenses referenced herein shall remain in full force and effect in
perpetuity in accordance with their terms). However, the parties
understand and agree that, following the establishment of the Parmula
Corporation, most of their rights and responsibilities with respect to
the Parmula Corporation and each other shall be set forth in and
superseded by the bylaws, shareholders' agreements, and business
agreements described elsewhere in this Agreement. Any rights and/or
responsibilities not specifically superseded shall remain in full force
and effect during the effective term of this Agreement or as otherwise
set forth herein.
9.3 TERMINATION: Notwithstanding the effective period of this Agreement as set
forth in this Section 8, the parties may mutually agree in writing to the
early termination of this Agreement and the Joint Venture created thereby,
at any time during the
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effective period hereof. A termination under this Section or under Section
8.1 shall not constitute an Event of Default as set forth in Section 8.4.
9.4 DEFAULT: The occurrence of any one or more of the following events shall
constitute an event of default (the "Event of Default") pursuant to the
terms of this Agreement:
(a) Any party fails to timely, fully, and properly perform any material
covenant, agreement, obligation, term, or condition contained
herein, and such failure continues for a period of thirty (30) days
after receipt by the defaulting party of written notice thereof from
the other party.
(b) Any party: (i) ceases to do business; (ii) takes any action or
otherwise commences legal proceedings to declare bankruptcy, or to
wind-up, liquidate, dissolve, or reorganize (other than a
reorganization while solvent), or (iii) has appointed on its behalf
a receiver, trustee, or similar officer.
9.5 RIGHTS UPON DEFAULT: Upon the occurrence of an Event of Default, the
non-defaulting party shall have the right to: (i) continue this Agreement
without the defaulting party; (ii) terminate this Agreement and the joint
venture set forth herein; (iii) retain a third party to take on the
responsibilities of the defaulting party as set forth herein until the
default is cured; and/or (iv) seek all legal and equitable remedies to
which it is entitled, including without limitation all actual and direct
damages it may have suffered by virtue of the breach. In the event Parmula
fails to make the minimum quarterly product purchase as defined in this
Agreement, TMF upon written notice, shall have the right to convert the
License described herein to one that is non-exclusive. In addition, at TMF
shall have the right (in TMF's discretion) to terminate all agreements
with Parmula and DB within 60 days. In the event Parmula receives a
written default and termination letter from TMF and Parmula purchases the
minimum quarterly product purchase prior to the 60 day termination date,
TMF will consider the default by Parmula cured and not terminate said
agreements.
9.6 LIMITATION OF LIABILITY/CONSEQUENTIAL DAMAGES: Under no circumstances
shall either party be liable to the other for lost profits, revenues,
savings, or data, and any other consequential, indirect, special, or
incidental damages that may arise from: (i) the creation and/or operation
of the Parmula Corporation as set forth in this Agreement; and (ii) a
breach or default of the terms of this Agreement, including any damages
which may arise under indemnities provided by either party under this
Agreement, regardless of the parties' prior awareness of the potential for
such loss.
SECTION 10: ASSIGNMENT
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10.1 NO ASSIGNMENT: Except as specifically set forth in this Agreement, neither
party shall sell, assign, license, franchise, sub license, or otherwise
transfer or convey all or any part of this Agreement or the rights or
obligations associated with the Joint Venture created hereby; or the
services provided hereunder to any third person or entity without the
express written consent of the other party in advance.
10.2 LIMITED RIGHT TO ASSIGN: Notwithstanding the preceding paragraph, any
party may, upon thirty (30) days prior written notice to the other
parties, assign this Agreement, in whole or in pertinent part, to any
person or entity succeeding to the business of the assigning party whether
by merger, acquisition, joint venture, or otherwise; provided that such
person or entity shall have the financial and technical capacity to
perform those obligations being assigned in the non-assigning parties'
reasonable opinion. Upon assignment of this Agreement, appropriate
modifications will be made where necessary to give effect to the terms of
this Agreement.
SECTION 11. CONFIDENTIALITY
11.1 CONFIDENTIAL INFORMATION: The party which receives confidential
information from the other party agrees to maintain such information in
secrecy at all times, and to take reasonable steps, including such steps
as it takes to protect its own proprietary information, prior to and after
termination of this Agreement, to prevent the duplication or disclosure of
any such confidential and proprietary information, other than by or to its
own employees or agents who must have access to such information to
perform such party's obligations hereunder. Information of either party
shall not be subject to the obligations imposed by this Section if such
information is publicly available or is lawfully obtained by the
disclosing party from another source free of restrictions or is
independently developed by the disclosing party.
11.2 NON-DISCLOSURE: Neither party shall use, sell, transfer, publish,
disclose, display, or otherwise make available the confidential
information of the other party to any third person, except as permitted or
intended by the terms of this Agreement, or as may be required by
applicable law, in which case the party from whom disclosure is sought
shall:
(a) Promptly notify the other party;
(b) Use reasonable and lawful efforts to resist making any disclosure of
confidential information not approved by such other party;
(c) Use reasonable and lawful efforts to limit the amount of
confidential information to be disclosed pursuant to any such
disclosure not approved by such other party; and
(d) Use its best efforts to obtain a protective order or other
appropriate relief to minimize the further dissemination of any
confidential information to be disclosed pursuant to any such
disclosure not approved by such other party.
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Each party shall ensure that all its employees and agents recognize that
the confidential information of the other party is subject to this
non-disclosure obligation.
11.3 RETURN OF CONFIDENTIAL INFORMATION: Upon termination of this Agreement for
any cause or reason: (i) each party shall deliver to the other party all
of such other party's confidential information (including all copies
thereof) then in its or in its agents' or affiliates' possession, and
shall purge any copies thereof encoded or stored on magnetic or other
electronic media or processors.
11.3 FINANCIAL INFORMATION: It is understood and agreed that, in light of DB's
standing as a public company, any financial information pertaining to
Parmula (regardless of whether such information constitutes Confidential
Information) shall not be released to any third party or to the public at
large without the prior written consent of DB's Chief Financial Officer.
11.4 NO ADEQUATE REMEDY AT LAW: Each party acknowledges and agrees that the
other party will have no adequate remedy at law if there is a breach or
threatened breach of this Section and, accordingly, that the other party
shall be entitled to an injunction against such breach. Nothing herein
shall be construed as a waiver of any other legal or equitable remedies
which may be available to either party if the other party breaches this
Section.
11.5 PRESS RELEASES AND OTHER PUBLIC ANNOUNCEMENTS: It is understood and agreed
that the execution of this Agreement and the establishment of the Joint
Venture shall not be considered Confidential Information, and each party
shall have the right to issue press releases and other public
announcements concerning its involvement with the same, provided, however,
that any press release which references any other Party to this Agreement
shall be subject to the prior written approval of the party so referenced,
which approval shall not be unreasonably upheld.
SECTION 12. INTELLECTUAL PROPERTY RIGHTS
12.1 OWNERSHIP: The parties understand and agree that, notwithstanding any
licenses or other rights granted elsewhere herein, any and all rights
associated with Intellectual Property developed by TMF and/or DB,
including, but not limited to, the TMF Product Line, and any software,
computer hardware, source code, object code and machine executable code
are and shall remain the sole property of TMF and/or DB. The parties
understand and agree that all other Intellectual Property rights
associated with the establishment, development, and operation of the
Parmula Corporation, including any trade names, trademarks, trade dress,
service marks, logos, slogans, software, computer hardware, processes,
printed materials, and/or
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voice/television/internet advertising materials that are developed in
connection therewith, shall become the property of the Parmula
Corporation.
12.2 FURTHER AGREEMENTS PERTAINING TO INTELLECTUAL PROPERTY: The parties
further agree that, upon expiration or termination of this agreement (and
any ancillary agreements) for any reason whatsoever, any additions,
alterations, or improvements which have been used in connection with the
Licensed Products, and or the Provisional Application, the Patent
Application or any issued patent, is and shall remain the sole property of
TMF. The parties further agree that upon termination all trademarks or
trade names developed by Parmula which relate to the Licensed Products
are, and shall remain the sole property of TMF, and Parmula shall have no
right title or interest of any nature whatsoever in the said trademarks or
trade names developed by Parmula. Notwithstanding the foregoing, in the
event that this Agreement shall be terminated for any reason whatsoever,
Parmula shall not be entitled to use said trademarks or trade names in
connection with a different product used in connection with appetite
suppression or fat burning or the reduction of cigarettes smoked.
12.3 USE OF INTELLECTUAL PROPERTY: Each party shall have the right, without
prior approval, to utilize the other parties' name, logo, and other
Intellectual Property in connection with the marketing and promotion of
Parmula to third parties. The parties hereby agree to take reasonable
steps to protect the Intellectual Property of the other party, including
such steps as it takes to protect its own Intellectual Property, while
promoting and marketing Parmula.
SECTION 13. GENERAL PROVISIONS
13.1 NOTICES: Any notice or communication required under this Agreement to be
made to either party shall be typewritten in English and shall be
considered delivered when personally delivered, delivered by registered
mail with confirmed receipt (postage prepaid), or delivered by overnight
courier to the address of the party as set forth above. A notice sent by
facsimile transmission shall be deemed to have been delivered on
transmission provided that a copy of such notice was also sent via
registered mail with confirmed receipt.
13.2 TITLES AND CAPTIONS: All article and section titles or captions in this
Agreement are for convenience only. They shall not be deemed a part of
this Agreement, and in no way define, limit, extend, or describe the scope
or intent of any of its provisions.
13.3 BINDING EFFECT: This Agreement shall be binding upon and inure to
the benefit of the Parties and their successors, legal
representatives, and permitted assigns.
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13.4 ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between
the parties hereto, and supersedes all prior and contemporaneous
agreements, arrangements, negotiations, and understandings between the
parties hereto relating to the subject matter hereof. There are no other
understandings, statements, promises or inducements, oral or otherwise,
contrary to the terms of this Agreement. No representations, warranties,
covenants, or conditions, express or implied, whether by statute or
otherwise, other than as set forth herein have been made by any party
hereto.
13.5 NO WAIVER: 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 any such waiver
constitute a continuing waiver, and no waiver shall be binding unless
executed by the party making such waiver.
13.6 PARTIES IN INTEREST: Nothing in this Agreement (whether express or
implied) is intended to confer upon any person other than the parties
hereto and their respective successors and permitted assigns, any rights
or remedies under or by reason of this Agreement, nor is anything in this
Agreement intended to relieve or discharge the liability of any other
party hereto, nor shall any provision hereof give any entity any right to
subrogation against any party.
13.7 NO RELATIONSHIP BEYOND JOINT VENTURE: The relationship between the parties
shall be limited to the performance of the terms and conditions of this
Agreement. Nothing herein shall be construed to create a general
partnership between the parties, or to authorize any party to act as a
general agent for another, or to permit any party to bind another other
than as set forth in this Agreement, or to borrow money on behalf of
another party, or to use the credit of any party for any purpose.
13.8 BRANDING: Either party may use the other's Intellectual Property for
advertising purposes with prior written approval, which shall not be
unreasonably withheld.
13.9 COUNTERPARTS: This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13.10 INVALIDITY OF PROVISIONS: If any provisions of this Agreement is or
becomes wholly or partly invalid, illegal, or unenforceable:
(a) the validity, legality, and enforceability of the remaining provisions
shall continue in force unaffected, and
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(b) the parties shall meet as soon as possible and negotiate in good faith
upon a replacement provision that is legally valid and that as nearly as
possible achieves the objectives of the Agreement and produces an
equivalent economic effect. A replacement provision shall apply as of the
date that the replaced provision had become invalid, illegal, or
unenforceable.
13.11 TRANSACTION EXPENSES: Each party shall pay its own fees and
expenses (including legal and accounting fees) incident to the
preparation and execution of this Agreement.
13.12 FORCE MAJEURE: Neither party shall be liable to the other in the event and
to the extent that performance is delayed or prevented by any cause
reasonably beyond such party's control, including, but not limited to,
acts of God, public enemies, war, civil disorder, fire, flood, explosion,
labor disputes, or any acts or orders of any governmental authority,
inability to obtain supplies or materials (including, without limitation,
computer hardware) or any delay or deficiency caused by the electrical or
telephone line suppliers or other common carriers (herein referred to as
"Force Majeure"). A party's failure to perform due to the existence of a
Force Majeure event shall be excused only for so long as the Force Majeure
event continues.
13.13 GOVERNING LAW/ARBITRATION: This Agreement shall be construed and governed
in accordance with the laws of the United States and the State of Arizona.
Any controversy or claim arising out of or relating to this agreement
shall be determined by arbitration in accordance with the International
Arbitration Rules of the American Arbitration Association. The number of
arbitrators shall be three (3) and the place of arbitration shall be
Phoenix, Arizona, and the language of the arbitration shall be in English.
Arbitration proceedings shall take no more than three (3) days, and no
party shall be entitled to conduct discovery in connection with any such
arbitration.
13.14 FURTHER DOCUMENTS: The parties agree to execute such other
documents as may be necessary to effectuate the purposes of this
Agreement as set forth above.
IN WITNESS WHEREOF, the parties have executed the Agreement as of the date last
written below.
TARGETED MEDICAL FOODS, LLC DB CAPITAL MANAGEMENT, INC.
BY:_____________________________ BY:___________________________________
NAME:___________________________ NAME:_________________________________
TITLE:__________________________ TITLE:________________________________
DATE:___________________________ DATE:_________________________________
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