MANUFACTURING AGREEMENT
THIS MANUFACTURING AGREEMENT ("Agreement") is made and effective as of
June 21, 2000 , by and between Ives Formulation Co., an Oklahoma corporation
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("Ives Formulation Co."), and Xxxxxxxxxxxxxxx.xxx, Inc., a Nevada Corporation
("Customer") with reference to the following facts:
1. Customer intends to market directly or through its licensees ("Licensees")
vitamin, mineral and nutritional supplement products and alternative health
products to buyers such as medical professionals, alternative health
professionals, martial arts studios and instructors, sports and fitness
trainers, school and other fundraising programs, and other similar types of
buyers ("Buyer(s)") via the Internet, offering the Buyers the ability to
individualize or "private label" such products;
2. Ives Formulation Co. is in the business of manufacturing and producing
vitamin, mineral, and nutritional supplement products and alternative
health products (the "Products") and has the capability of "private
labeling" the Products;
3. The parties desire to define and establish their respective rights, duties
and interests regarding the Products formulated and/or manufactured by Ives
Formulation Co. for Customer and its Licensees.
NOW THEREFORE, in consideration of the mutual promises, warranties and covenants
herein contained, the parties hereby agree as follows:
1. Scope of Agreement. This Agreement shall govern all Products manufactured
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by Ives Formulation Co. for, or sold by Ives Formulation Co. to, Customer
or its Licensees.
2. Products and Pricing.
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IVES FORMULATION CO.'S STANDARD PRODUCTS. Customer and its Licensees
may purchase from Ives Formulation Co. certain Products from Ives
Formulation Co.'s standard product line, as defined by Ives FormuLation Co.
("Standard Ives Formulation Co. Products"). Ives Formulation Co. shall
manufacture, package, label and prepare Standard Ives Formulation Co.
Products for shipment in accordance with all federal and state laws, rules
and regulations, and industry standards. Pricing for Standard Ives
Formulation Co. Products shall be in accordance with pricing schedules
provided to Customer by Ives Formulation Co., which may be changed from
time to time. Ives Formulation Co. may vary the unit cost for Srandard Ives
Formulation Co. Products to provide discounts for larger volume purchases.
Ives Formulation Co. shall provide
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Customer with updates to its prices, which shall be implemented by Customer
within 24 hours of receipt from Ives Formulation Co. Ives Formulation Co.
shall honor the prices quoted on Customer's website, so long as such quotes
are in accordance with those provided by Ives Formulation Co.
CUSTOM PRODUCTS. Customer and its Licensees may also order from Ives
Formulation Co. Products custom-manufactured to Customer's or Licensee's
specifications ("Custom Products"). Ives Formulation Co. shall manufacture,
package, label and prepare Custom Products for shipment in accordance with
Customer's written specifications, which shall be provided to Ives
Formulation Co. in a form substantially similar to Exhibit A of this
Agreement. Pricing for Custom Products shall be as determined by Ives
Formulation Co. Ives Formulation Co. may vary the unit cost for Custom
Products to provide discounts for larger volume purchases.
JOINT FORMULA PRODUCTS. Customer or its Licensees and Ives Formulation
Co. may also jointly create formulas for products ("Joint Formula
Products"). Ives Formulation Co. shall manufacture, package, label and
prepare Joint Formula Products for shipment in accordance with all federal
and state laws, rules and regulations, industry standards, and the parties'
agreed upon specifications. Pricing for Joint Formula Products shall be as
determined by Ives Formulation Co. Ives Formulation Co. may vary the unit
cost for Joint Formula Products to provide discounts for larger volume
purchases.
PRIVATE LABEL PRODUCTS. Customer and its Licensees may purchase from
Ives Formulation Co. products that have labels customized for the Customer
or its Licensees ("Private Label Products"). Ives Formulation Co. shall
affix to Private Label Products labels furnished by Customer or its
Licensees which are consistent with Ives Formulation Co.'s labeling
equipment and meet all federal and/or state labeling requirements for the
Private Label Products ordered, or shall assist Customer or its Licensees
in preparing the technical portion of the customized labels. Pricing for
Private Label Products shalt be as determined by Ives Formulation Co. In no
event shall Ives Formulation Co.'s name appear on Customer's label, unless
Ives Formulation Co. has consented thereto in writing.
3. Orders and Payments. Orders shall be e-mailed to Ives Formulation Co. by
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Customer's web master daily. There shall be no purchase quantity
requirements for Customer, its Licensees or Buyers with respect to the
Standard Ives Formulation Co. Products. All orders for Standard Ives
Formulation Co. Products shall be prepaid including shipping and handling
charges by wire transfer to Ives Formulation Co.'s bank in full at the time
of order placement. Customer's web master will fax confirmation of wire
transfer upon placement of order. Buyers must furnish the state tax numbers
or other evidence of sales tax exempt status prior to shipment of orders.
There shall be a 1,000 bottle purchase quantity requirement for Customer,
its Licensees or Buyers with respect to Custom Products, Joint Formula
Products and Private Label Products. Fifty percent (50%) of all order for
Custom Products, Joint Formula Products and Private Label Products shall be
paid upon submission of a purchase order. The remaining fifty percent (50%)
shall be due upon completion of manufacturing.
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4. Shipping. Shipping shall be by UPS ground unless Buyer requests and pays
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for overnight shipping by UPS. Customer will be responsible for charging
Buyer shipping and handling fees for payment to Ives Formulation Co.
according to the fee schedule provided by Ives Formulation Co. and updated
from time to time. Ives Formulation Co shall ship all orders for Standard
Ives Formulation Co. Products which are in stock within seventy-two (72)
hours of receipt of the order. Custom Products, Joint Formula Products and
Private Label Products shal be shipped on a timely basis, but not later
than six weeks from acceptance of the purchase order.
5. Rights in Formulas.
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(a) Standard Ives Formulation Co. Products. Ives Formulation Co. shall
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own the formula for all Standard Ives Formulation Co. Products.
(b) Custom Products. Customer shall own the formula for Custom Products.
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Ives Formulation Co. agrees not to manufacture products for other Customers
using any Custom Products formula during the period in which Customer is
ordering such Custom Product and for so long as Customer continues to sell
such Custom Products.
(c) Joint Formulas. If Ives Formulation Co. and Customer or Licensee create
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a Joint Formula Product, then such Joint Formula will be jointly owned by
the parties. Ives Formulation Co. agrees not to manufacture products for
other customers using the Joint Formula during the period in which Customer
is ordering products containing the Joint Formula from Ives Formulation Co.
Customer and its Licensees agree not to retain a third party to manufacture
products containing the Joint Formula(s). In the event that Customer fails
to order a specific Joint Formula Product for a period of 3 months, Ives
Formulation Co. shall be free to sell products containing the Joint Formula
to other customers.
6. Warranties and Indemnification. Ives Formulation Co. warrants that all
--------------------------------
Standard Ives Formulation Co. Products and Joint Formula Products shall be
fit for the purpose for which produced and shall be in full and complete
compliance with local, state and federal laws applicable thereto. Ives
Formulation Co. warrants that all Custom Products shall be manufactured in
accordance with Customer's specifications. Ives Formulation Co. warrants
that the technical information on all non-Private Label Products shall be
correctly and accurately described on each label affixed thereto and in
full and complete compliance with all local, state and federal laws
applicable thereto. Ives Formulation Co. warrants, covenants and certifies
that its manufacturing facility complies with applicable federal. state,
city, county and municipal laws, rules, regulations, ordinances, and codes
in all material respects. Ives Formulation Co. hereby agrees to indemnify,
hold harmless and defend Customer, its Licensees, Buyers, affiliates,
directors, officers, agents and representatives from and against any loss,
claim, and expense (including attorneys' fees and costs, and costs of a
recall of Product) incurred or suffered as a consequence of Ives
Formulation Co.'s breach of its product warranties as set forth herein.
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7. Trade Secrets. Ives Formulation Co. and Customer are the owners of
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certain products, technology, information, customer lists services,
processes, financial information, pending or prospective transactions,
proposals, operating and marketing plans and procedures, designs, product
formulas, specifications, manufacturing methods, ideas, prototypes,
software, patent, trademark and copyright applications or registrations and
other similar data relating to each party's business which data is not
publicly known and derives economic value from not being publicly known
(collectively "Trade Secrets"). Each party agrees that it will not use or
disclose to third parties any Trade Secret it receives from the other,
except as may be contemplated by this Agreement. Each party agrees that it
will take all reasonable precautions to assure that no Trade Secret is
conveyed to any officer, employee, agent, manufacturer or other third party
who does not have a need to know such Trade Secret. The obligations created
by this Section 7 shall survive the termination of this Agreement or any
business relationship between the parties. Any Trade Secret contained in
any writing will be returned to the other party promptly upon written
request, together with any reproductions thereof.
8. Term of Agreement; Breach of Agreement.
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TERM. This Agreement shall continue for three years, and may be renewed by
Customer for an additional three-year term, unless the Agreement shall be
terminated for cause, as hereinafter defined.
BREACH. In the event of a material breach of this Agreement, the
non-breaching party may provide written notice of such breach to the
breaching party. Upon receipt. the breaching party shall have thirty (30)
days to correct such breach, after which the termination shall be effective
if not so corrected. In the event of termination by Customer prior to
delivery of Product for which a purchase order has been submitted, Customer
shall reimburse Ives Formulation Co. for the cost of all raw materials,
work in process and costs of returning any Customer boxes and labels. In no
event shall reimbursement of these amounts limit Ives Formulation Co.'s
legal right to seek compensation for the amount of its profit or any other
damages accrued under any canceled purchase order. In no event shall Ives
Formulation Co. be required to accept or deliver product under any purchase
order if Customer has failed to timely pay the outstanding balance due on
any previous purchase order. Failure to so perform shall not be deemed a
breach of this Agreement by Ives Formulation Co.
OTHER TERMINATION FOR CAUSC. In the event that Customer shall file a
voluntary petition in bankruptcy or for reorganization of indebtedness, or
that Customer should, for a period of more than ninety (90) days, be the
subject of any involuntary bankruprcy proceeding or receivership over all
or substantially all of Customer's assets, or that any Officer or Director
of Customer should be found guilty of a felony or crime involving moral
turpitude, then Ives Formulation Co. may immediately, upon delivery of
written notice to Customer, terminate this Agreement.
Upon termination, Ives Formulation Co. agrees that Customer's Licensees may
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buy Products directly from Ives Formulation Co.
9. Assignability. This Agreement may not be assigned without the written
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consent of the other party provided that this Agreement may be assigned
without consent to an entity acquiring all or substantially all of the
assets of either party; and provided further, it is understood by the
parties that Customer intends to sell rights to certain territories to
other entities, and Ives Formulation Co. acknowledges that such sales of
territories shall not be construed as an assignment of the rights under the
Agreement.
10. Insurance. During the term of this Agreement, Ives Formulation Co. agrees
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to maintain, at its expense, product liability insurance of not less than
one million dollars ($1,000,000). Customer may request evidence of
insurance at any time.
11. Governing Law; Dispute Resolution. This Agreement shall be governed by and
---------------------------------
construed in accordance with the laws of the State of California. Any
dispute arising under this Agreement shall be resolved pursuant to the
terms of the Dispute Resolution Agreement attached hereto as Exhibit B.
12. Miscellaneous Provisions. This Agreement constitutes the entire Agreement
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between the parties and supersedes any prior or contemporaneous agreements,
oral or written. This Agreement may only be amended by a writing signed by
both parties. Any notice required or permitted to be given under this
Agreement shall be in writing and sent by telecopy, personal delivery or
certified mail, return receipt requested, as follows:
If to Ives Formulation Co.: Xx. Xxxxxx Xxxxxx, COO
0000 Xxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
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If to Customer: Xx. Xxxxx Xxxxxxxxx, CEO
Xxxxxxxxxxxxxxx.xxx, Inc.
X.X. Xxx 0000
Xxxxx, XX 00000-0000
Fax: (000) 000-0000
Notice shall be deemed effective upon receipt if made by confirmed telecopy,
personal delivery or 48 hours after deposit in the United States mail with the
required postage.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above written.
Ives Formulation Co., an Oklahoma corporation
By: /s/ Xxxxxx Xxxxxx
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Dcnnis Xxxxxx, COO
Xxxxxxxxxxxxxxx.xxx, Inc., a Nevada Corporation
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X Xxxxxxxxx, President
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EXHIBIT A
PRODUCT SPECIFICATIONS
In the event of any inconsistency between the terms of customer 's purchase
order and this Product Specification Sheet, this Sheet and the terms of the
Manufacturing Agreement shall control.
Short Product Name:
Product Ingredients and Amounts:
Other Product Specifications:
Color: Tablet Type: Consistency:
Weight: Bottle Size/Color: Tablet count per bottle:
Cotton Insert: Bottle Seal: Shrink Wrap Neck Band:
Silicon Pack: Other specifications:
Microbiological content: Customer to specify any requirement, if none specified,
product will be manufactured to industry standards. Microbiological content
specifications:
Labels: Labels and/or boxes to provided by Customer [identify size]:
Labels/Boxes to be received by [date]:
Master Pack/Wrapping/Palleting Requirements:
Ship to Address:
Order Quantity: (minimum 1,000 bottles):
Price: FOB Ives Formulation Co.'s facility in San Diego, CA
Delivery Dates:
Terms of Sale: 50% with submission of purchase order; 50% due upc'n
completion of manufacturing
Purchase Order No.:
Date of Purchase Order:
Ives Formulation Co. approval:
Customer approval:
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EXHIBIT B
DISPUTE RESOLUTION AGREEMENT
THIS DISPUTE RESOLUTION AGREEMENT ("Dispute Resolution Agreement") is entered
into and effective as of June 21, 2000 by and between Ives Formulation
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Co., an Oklahoma corporation, and Xxxxxxxxxxxxxxx.xxx. Inc., a Nevada
Corporation.
1. INTENT OF PARTIES. The parties desire to establish a quick, final and
binding out-of-court dispute resolution procedure to be followed in the
unlikely event any dispute arising out of or related to thc Manufacturing
Agreement dated June 21, 2000 between the parties ("Agreement"). As used in
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this Dispute Resolution Agreement, the term "dispute" is used in its
broadest and most inclusive sense and shall include, without limitation,
any disagreement, controversy, claim, or cause of action between the
parties arising out of related to, or involving the Agreement or the
transactions evidenced by the Agreement (collectively "Dispute").
2. NEGOTIATION. It is the intent of the parties that any Dispuie be resolved
informally and promptly through good faith negotiation between the parties.
Therefore, in the event of a Dispute between the parties, the following
will apply;
A. Correspondence. Either party may initiate negotiation proceedings by
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writing a certified or registered letter return receipt requested to the
other party referencing this Dispute Resolution Agreement, setting forth
the particulars of the Dispute, the term(s) of the Agreement involved and a
suggested resolution of the problem. The recipient of the letter must
respond within ten (10) days after its receipt of the letter with an
explanation and response to the proposed solution.
B. Meeting. If correspondence does not resolve the Dispute, then the
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authors of the letters or thcir representatives shall meet on at least one
occasion and attempt to resolve the matter. Such meeting shall occur not
later than thirty (30) days from the parties' last correspondence. If the
parties are unable to agree on the location of such a meeting, the meeting
shall be held at Ives Formulation Co.'s corporate offices. Should this
meeting not produce a resolution of the matter, then either party may
request mandatory mediation (as provided below) by written notice to the
other party.
3. MEDIATION. Subject to the availability of the mediator, the mediation shall
occur not more than thirty (30) days after the request for mediation. If
the parties cannot agree upon acceptable mediator within ten (10) days of
the request for mediation, each party shall select one mediator from a list
of not less than three (3) mediators provided by the other party. These two
mediators shall select a third mediator who shall serve as the sole
mediator. The mediation shall be held in San Diego, California. The cost of
mediation shall be borne equally by the parties. The mediation process
shall continue until the Dispute (or any part thereof) is resolved or until
such time as the mediator makes a finding that there is no possibility of
resolution short of referring the parties
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to final and binding arbitration.
4. FINAL AND BINDING ARBITRATION. Should any Dispute (or part thereof) remain
between the parties after completion of the negotiation and mediation
process set forth above, such Dispute shall be submitted to final and
binding arbitration in San Diego, California. The arbitration shall be
governed by the provisions of the California Code of Civil Procedure
("CCP"), and the following provisions, which shall supersede the CCP in the
event of any inconsistency.
A. Selection of Arbitrator(s). There shall be a single arbitrator, except
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in the case where the amount in dispute exceeds $100,000, in which case
there shall be three arbitrators. If the parties cannot agree upon
acceptable arbitrators(s) within ten (10) days of the termina tion of the
mediation, each party shall select one arbitrator from a list of not less
than five (5) arbitrators provided by the other party. These two
arbitrators shall select a third arbitrator who shall serve as the sole
arbitrator or the third arbitrator, as the case may be. The determination
of a majority of the arbitrators or the sole arbitrator, as the case may
be, shall be conclusive upon thc parties and shall be non-appealable.
B. Discovery. No discovery shall be permitted, absent a showing of good
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cause. Any discovery request should be reviewed with the knowledge that
this dispute resolution process was mutually agreed upon and bargained for
by the parties with the intent to provide a cost-effective and timely
method of resolving disputes. Any discovery granted by the arbitrator
should be limited to that necessary to protect the minimum due process
rights of the parties.
C. Equitable Remedies. Any party shall have the right to seek a temporary
----------------------
restraining order, preliminary or permanent injunction or writ of
attachment, without waiving the negotiation, mediation and arbitraton
provision hereof. In so doing, such party shall not be required to meet the
requirement of California Civil Code Section 1281.8. Any other form of
equitable or provisional relief and all substantive matters relating to the
Dispute shall be determined solely by the arbitrator(s).
D. Attorney's Fees; Arbitration Costs. An attorney may represent each party
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or other representative selected by the party. The costs of the arbitration
shall be borne equally by the parties. Each party shall bear its own
attorneys'/representatives' fees and costs; provided that if the
arbitrator(s) find either party has acted in bad faith the arbitrator(s)
shall have discretion to award attorneys' fees to the other party.
E. Scope of Arbitration; Limitation on Powers of Arbitrator(s); Applicable
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Law. No party may raise new claims against the other party in the
---
arbitration not raised in the mediation. The arbitrator shall have the
power to resolve all Disputes between the parties The arbitrator(s) shall
not have the power ro award treble, punitive or exemplary damages and the
parties hereby waive their right to receive treble, punitive or exemplary
damages, to the extent permitted by law. The arbitrator(s) shall only
interpret and apply the terms and provisions of the Agreement and shall
Page 9
not change any such terms or provisions or deprive either party of any
right or remedy expressly or impliedly provided for in the Agreement. The
arbitrator(s) shall apply the law of the State of California (excluding
California's conflict of law rules), or Federal law, in those instances in
which federal law applies.
F. Designation of Witnesses/Exhibits; Duration of Arbitration Process;
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Written Decision. At least thirty (30) days before the arbitration is
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scheduled to commence, the parties shall exchange lists of witnesses and
copies of all exhibits intended to be used in arbitration. The arbitration
shall be completed within 90 days of the selection of the first arbitrator.
The arbitrator(s) shall render a written decision, which contains findings
of fact and conclusions of law, within 30 days of the conclusion of the
arbitration and shall specify a time within which the award shall be
performed. Judgment upon the award may be entered in any court of competent
jurisdiction.
5. MISCELLANEOUS
A. Enforcement of Negotiation/Mediation Provisions. If a party demanding
----------------------------------------------------
such compliance with this Agreement obtains a court order directing the
other party to comply with this Dispute Resolution Agreement, the party
demanding compliance shall be entitled to all of its reasonable attorneys'
fees and costs in obtaining such order, regardless of which party
ultimately prevails in thc matter.
B. Severability. Should any portion of this Dispute Resolution Agreement be
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found to be invalid or unenforceable such portion will be severed from this
Dispute Resolution Agreement, and the remaining portions shall continue to
be enforceable unless to do so would materially alter the effectivencss of
this Dispute Resolution Agreement in achieving the stated intent of the
parties.
C. Confidentiality. The parties agree that thcy will not disclose to any
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third party that (1) they are engaged in the dispute resolurion process
described herein, (2) the fact of, nature or amount of any compromise
resulting herefrom, or (3) the fact or; nature or amount of any arbitration
award. This confidentiality obligation shall not extend to the party's
employees, spouses, accountant, bankers, attorneys or insurers or in the
event that disclosure is otherwise required by law.
D. Time to Initiate Claims. An aggrieved party must mail and the other
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party must receive the correspondence which initiates negotiation
proceedings in connection with a Dispute as specified in Paragraph 2(A) (1)
within one (1) year of the date the aggrieved party first has, or with the
exercise of reasonable diligence should have had, knowledge of the event(s)
giving rise to the Dispute (the "One Year Statute of Limitations"). No
Dispute may be raised under this Dispute Resolution Agreement after the
expiration of the One Year Statute of Limitations.
E. Entire Agreement. These dispute resolution provisions express the entire
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agreement of the parties and there are no other agreements, oral or
written, concerning dispute resolution, except as provided herein. Any
ambiguity in the provisions hereof shall not be construed against the
drafter. This Dispute Resolution Agreement may only be modifled in a
writing signed by both parties.
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F. Successors. This Dispute Resolution Agreenient is binding upon and
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inures to the benefit of the parties, their agents, heirs, assigns
successors-in-interest, and any person, firm or organization acting for or
through them.
G. Venue and Jurisdiction. Venue and excitisive jurisdiction for any action
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arising out of or related to this Dispute Resolution Agreement (including,
but not limited to, equitable actions contemplated by Section 4 (C) and
actions brought to enforce or interpret this Dispute Resolution Agreement)
shall be in the state courts for the County of San Diego, California or the
federal court for the Sourhern District of California.
H. Notice. Any notice or communication required to be given hereunder shall
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be in writing and shall be mailed via the United States Postal Service by
Certified Mail or Registered Mail, Return Receipt Requested, or by Federal
Express or other overnight courier which can document delivery, to the
address of the party to be served as shown below (or such other address as
thc party shall from time to time notify). Such notice shall be deemed to
have been served at the time the same is received by the party being
served.
Ives Formulation Co.: 0000 Xxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, COO
Fax: (000) 000-0000
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Customer: Xxxxxxxxxxx.xxxx.xxx. Inc.
X.X. Xxx 0000
Xxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxxxx, CEO
Fax: (000)000-0000
I. Acknowledgment of Legal Effect of this Dispute Resolution Agreement. By
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signing this Dispute Resolution Agreement. the parties acknowledge that
they arc giving up any rights they may possess to have Disputes litigated
in a court and arc hereby waiving the right to a trial by jury. The parties
further acknowledge that they arc agreeing to a one year statute of
limitations regarding all Disputes and thnt they are giving up their
judicial rights to discovery and to appeal, unless such rights are
specifically set forth above. The parties acknowledge that if they rcfuse
to submit to the provisions of this Dispute Resolution Agreement, they may
be compelled to do so under the authority of the California Code of Civil
Procedure. The parties acknowledge that they have had the opportunity to
consult counsel regarding the meaning and legal affect of this Dispute
Resolution Agreement and enter into it knowingly and voluntarily.
IN WITNESS HEREOF, the parties have entered into this Dispute Resolution
Agreement as of the date first above written.
Ives Formulation Co. Xxxxxxxxxxxxxxx.xxx, Inc.,
An Oklahoma corporation A Nevada corporation
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxxxx
--------------------- -----------------------
Name: Xxxxxx Xxxxxx Name: Xxxxx Xxxxxxxxx
Title: COO Title: CEO
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