LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("AGREEMENT") IS MADE AND EFFECTIVE AS OF APRIL 10, 2000
BY AND BETWEEN XXXXXXXXXXXXXXX.XXX CORP., A NEVADA CORPORATION ("GRANTOR"), AND
XXXX XXXXXXX ("LICENSEE"), WITH REFERENCE TO THE FOLLOWING FACTS:
1. Grantor owns and operates an Internet marketing system for vitamins,
minerals, nutritional supplements, and other health and fitness products
(the "Products") in which Grantor offers Products for sale from various
suppliers on Grantor's Web Site.
2. Licensee desires to market the Products to medical professionals,
alternative health professionals, martial arts studios and instructors,
sports and fitness trainers, other health and fitness practitioners, school
and other fund raising programs and other similar types of customers
("Customer(s)") in the Territory, as hereinafter defined. Customers will be
able to buy the Products on a continuing basis through Grantor's Web Site.
NOW THEREFORE, in consideration of the mutual promises, warranties and covenants
herein contained, the parties hereby agree as follows:
1. Scope of Agreement.
--------------------
This Agreement shall govern all Products sold through Grantor's Web Site to
Customer(s). Exhibit A contains detailed information regarding
specifications, quality control, pricing and other terms relating to the
Product(s) to be ordered through Grantor's Web Site. The parties agree that
Exhibit A will be amended to include similar information with respect to
any future orders of the same product or any future Product ordered by
Licensee or Customers. Pricing may be amended from time to time on the Web
Site, and in the event of a conflict between the pricing on the Web Site
and the pricing in Exhibit A, the price posted on the Web Site at the time
of order shall btain. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF
THIS AGREEMENT AND ANY PURCHASE ORDER SUBMITTED BY CUSTOMER, THE TERMS OF
THIS AGREEMENT WILL CONTROL.
2. Grant of License; Territory.
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Territory shall be the states of Nevada and Utah. Grantor grants to
Licensee the exclusive rights to market the Products in the Territory
through the Web Site.
3. Consideration. The parties acknowledge that this License is granted in
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consideration for the mutual promises, warranties and covenants contained
in that certain Settlement Agreement by and between the parties and others,
dated April 10, 2000.
4. Manufacture of Products. All Products marketed through Grantor's Web
-------------------------
Site shall be manufactured, packaged, prepared, and shipped in accordance
with the specifications and requirements described on Exhibit A hereto as
it may be modified from time to time. Quality control standards relating to
the Product's weight, color, consistency, micro-biological content,
labeling and packaging are also set forth on Exhibit A. In the event that
Exhibit A is incomplete, Products shall be manufactured and shipped in
accordance with industry standards.
5. Labeling; Packaging. Products shall be labeled with Standard Labels,
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except for Private Label Products, as described herein. Standard labels
shall contain all information necessary to conform to regulatory and
industry requirements.
6. Private Label Products. Vitamins, minerals, herbs, and nutritional
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supplement products may be available for sale with labels customized for
the Customer ("Private Label Products"). Grantor shall cause supplier to
affix to Private Label Products labels furnished by Customer which are
consistent with supplier's labeling equipment and meet all federal and/or
state labeling requirements for the Product(s) ordered. Pricing for Private
Label Products shall be as determined by supplier and posted on the Web
Site by Grantor, and the price posted on the Web Site at time of order
shall obtain.
7. Shipping. Shipping shall be by UPS ground unless Customer requests and
--------
pays for overnight shipping by UPS. Grantor will post shipping and handling
fees for overnight shipping on the Web Site. The price posted at the time
of order shall obtain. All orders from supplier's stock shall be shipped
within seventy-two (72) hours of receipt of the order. Items not in stock
(back orders) shall be shipped on a timely basis, but not later than four
to six weeks from time of order.
8. Products and Pricing. The initial pricing for the Product(s) is set forth
--------------------
on Exhibit A. The price may be amended from time to time, and such
amendments will be posted on the Web Site. The price posted at the time of
order shall obtain. Terms are payment by credit card or electronic funds
transfer at time of purchase.
9. Minimum Order Quantities for Vitamin, Mineral, and/or Nutritional
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Supplements. The minimum order quantity is 100 bottles per formulation for
standard Products. Customer Formulas, as defined herein, shall have minimum
order quantities of 5,000 units.
10. Web Site Maintenance; Fees. Grantor shall maintain Grantor's Web Site
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(the "Web Site"). The Web Site shall post current prices for all Products.
Customers will be able to obtain unique identification codes ("Userid(s)")
and select passwords on the Web Site. Grantor shall maintain the Web Site
in a manner that ensures secure Internet financial transactions. Licensee
shall pay Grantor a maintenance fee of $500 yearly, beginning on the
anniversary date of this Agreement, for maintenance of the Web Site.
11. Orders. All Products shall be ordered through the Web Site. In
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jurisdictions in which sales tax would be collected on retail sales of the
Products, Licensee shall ensure that each Customer provides a sales tax ID
number for exemption from sales tax. Licensee shall assist its Customer to
register on the Web Site. Each Customer shall be issued a Userid and shall
select a password upon registration. Upon ordering, Customer must pay for
Product by credit card, debit card, or by electronic funds transfer
("e-check") and all funds will be remitted to Grantor. Upon receipt of
order, Grantor will email the supplier to purchase the Product(s) ordered.
Supplier will drop-ship the order directly to the Customer in accordance
with Section 7, "Shipping."
12. Sharing of Profits; Sales Reports. Licensee and Grantor shall each
-------------------------------------
receive one-half of the profit on all sales made through the Web Site by
Licensee. Grantor agrees to pay supplier for the Product purchased upon
receipt of cleared funds. Grantor will retain its one-half share of the
profit and will remit the balance to Licensee by the tenth day of the month
following sales. Grantor further agrees to provide Licensee with a Monthly
Sales Report of all sales made by Licensee through the Web Site detailing
the purchases from each Customer. Grantor will e-mail the Monthly Sales
Report to Licensee by the tenth day of the month following such sales.
13. Warranties and Indemnification. Grantor warrants that all Products,
--------------------------------
including Joint Formula Products but not including Customer Formula
Products, shall be fit for the purpose for which produced and shall be in
full and complete compliance with all local, state, and federal laws
applicable thereto. Grantor warrants that all Custom Products shall be
manufactured in accordance with Customer's specifications. Grantor warrants
that all non-Private Label Products shall be correctly and accurately
described on each label affixed thereto, and that all labeling affixed
thereto shall be in full and complete compliance with all local, state, and
federal laws applicable thereto. Grantor warrants, covenants and certifies
that its supplier(s)' manufacturing facilities comply with applicable
federal, state, city, county, and municipal laws, rules, regulations,
ordinances, and codes in all material respects. Grantor hereby agrees to
indemnify, hold harmless and defend Licensee, its Customers, Buyers,
affiliates, directors, officers, agents and representatives from and
against any loss, claim, and expense (including attorneys fees and costs,
and costs of a recall of Product) incurred or suffered as a consequence of
Grantor's breach of its product warranties as set forth herein.
14. Nature of Relationship. (a) This Agreement does not constitute nor
------------------------
empower the Licensee as the agent or legal representative of Grantor for
any purpose whatsoever. Licensee is and will continue to be an independent
contractor.
(b) The arrangement created by this Agreement is not, and is not
intended to be, a franchise or business opportunity under the United
States' Federal Trade Commission Rule: Disclosure Requirements and
Prohibitions Concerning Franchising and Business Opportunity Ventures and
is not a franchise, business opportunity or seller assisted marketing plan
or similar arrangement under any other federal, state, local or foreign
law, rule or regulation.
(c) Licensee is not prohibited by this Agreement from pursuing other
business opportunities or other employment.
15. Rights in Formulas.
--------------------
(a) Customer Formulas. Any formula provided exclusively by Licensee's
Customer shall be owned by Customer ("Customer Formula"), provided
that such Customer Formula does not substantially duplicate an
existing Grantor formula. Grantor agrees not to sell products to other
customers using any Customer Formula during the period in which
Customer is ordering products containing the formula and for so long
as Customer continues to purchase products containing the Customer
Formula.
(c) Joint Formulas. If Grantor and Customer jointly create a formula
("Joint Formula"), such Joint Formula will be jointly owned by the
parties. Grantor agrees not to sell products to other customers using
the Joint Formula during the period in which Customer is ordering
products containing the Joint Formula from Grantor without written
permission from Customer. In the event that Customer fails to order a
specific Joint Formula Product for a period of 3 months, Grantor shall
be free to sell products containing the Joint Formula to other
customers.
16. Term of Agreement; Breach of Agreement. This Agreement shall continue
-----------------------------------------
for three (3) years, and shall be automatically renewed unless one of the
parties provides ninety (90) days written notice of termination to the
other party. Licensee may terminate this Agreement for any reason at any
time upon ninety (90) days written notice to Grantor. In the event of a
material breach of this Agreement, the non-breaching party may provide
written notice of breach. Upon notice from the non-breaching party, the
breaching party shall have fourteen (14) days to cure the breach, after
which period, if not cured, the Agreement shall be automatically
terminated. In no event shall Grantor be required to accept or deliver
product under any purchase order if Grantor has not received the
outstanding balance due on any previous purchase order in a timely manner.
Failure to so perform shall not be deemed a breach of this Agreement by
Grantor.
17. Trade Secrets. Grantor and Licensee(s) are the owners of certain
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products, technology, information, customer lists, services, processes,
financial information, pending or prospective transactions/proposals,
operating and marketing plans and procedures, designs, product formulas,
specifications, manufacturing methods, ideas, prototypes, software, patent,
trademark and copyright applications or registrations and other similar
data relating to each party's business which data is not publicly known and
derives economic value from not being publicly known (collectively "Trade
Secrets"). Each party agrees that it will not use or disclose to third
parties any Trade Secret it receives from the other, except as may be
contemplated by this Agreement. Each party agrees that it will take all
reasonable precautions to assure that no Trade Secret is conveyed to any
officer, employee, agent, manufacturer or other third party who does not
have a need to know such Trade Secret. The obligations created by this
Section 10 shall survive the termination of this Agreement or any business
relationship between the parties. Any Trade Secret contained in any writing
will be returned to the other party promptly upon written request, together
with any reproductions thereof.
18. Governing Law; Dispute Resolution. This Agreement shall be governed by
-----------------------------------
Washington law in accordance with the Dispute Resolution Agreement attached
hereto as Exhibit B.
19. Miscellaneous Provisions. This Agreement constitutes the entire
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Agreement between the parties and supersedes any prior or contemporaneous
agreements, oral or written. This Agreement may only be amended by a
writing signed by both parties. Any notice required or permitted to be
given under this Agreement shall be in writing and sent by telecopy,
personal delivery or certified mail, return receipt requested, as follows:
If to Xxxxxxxxxxxxxxx.Xxx, Inc.: Xx. Xxxxx X. Xxxxxxxxx
XX Xxx 0000
Xxxxx, XX 00000-0000
If to Licensee: Dynamic Ventures Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxxxx, XX X0X 0X0
Xxxxxx
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.
XXXX XXXXXXX XXXXXXXXXXXXXXX.XXX CORP.
A NEVADA CORPORATION
/s/ By: /s/
----------------------------------- --------------------------
Xxxxx X. Xxxxxxxxx
EXHIBIT A
PRODUCT SPECIFICATIONS
In the event of any inconsistency between the terms of Customer's purchase order
and this Product Specification Sheet, this Sheet and the terms of the
Manufacturing Agreement shall control.
Short Product Name: _____________________________
Exact Product Ingredients and Percentages:
Other Product Specifications:
Color: ___________ Tablet Type: ____________ Consistency:______________
Weight: _______ Bottle Size/Color:____________ Bottle Count: ___________
Cotton Insert:____ Bottle Seal:____ Shrink Wrap Neck Band:___ Silicon Pack:____
Micro-biological content: Customer to specify any requirements, if none
specified, product will be manufactured to industry standards.
Labels: Labels and/or boxes to be provided by Customer [identify any size] _____
Labels/Boxes to be Received by [date] _____ to ensure timely delivery
Master Pack/Wrapping/Palleting Requirements (if any):_________________________
Ship to Address: _________________________________________________
Order Quantity: (minimum 5,000 BOTTLES): ________
Price: _____________ FOB IFM's facility in San Diego, CA.
Delivery Dates(s): _______________________________________
Terms of Sale: 50% with submission of purchase order; 50% due upon completion of
manufacturing, unless otherwise specified _________________________
Purchase Order Number: ________________
Date of Purchase Order: ________________
EXHIBIT B
DISPUTE RESOLUTION AGREEMENT
THIS DISPUTE RESOLUTION AGREEMENT ("DISPUTE RESOLUTION AGREEMENT") IS
ENTERED INTO AND EFFECTIVE AS OF APRIL 10, 2000 BY AND BETWEEN
XXXXXXXXXXXXXXX.XXX CORP., A NEVADA CORPORATION, AND DYNAMIC VENTURES INC., A
WASHINGTON 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 the
Manufacturing Agreement dated April 25, 2000 between the parties
("Agreement"). As used in this Dispute Resolution Agreement, the term
"dispute" is used in its broadest and most inclusive sense and shall
include, without limitation, any disagreement, controversy, claim, or cause
of action between the parties arising out of, related to, or involving the
Agreement or the transactions evidenced by the Agreement (collectively
"Dispute").
2. NEGOTIATION. It is the intent of the parties that any Dispute be
----------- 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 their representatives shall meet on
at least one occasion and attempt to resolve the matter. Such meeting
shall occur not later than thirty (30) days from the parties' last
correspondence. If the parties are unable to agree on the location of
such a meeting, the meeting shall be held at Grantor's corporate
offices. Should this meeting not produce a resolution of the matter,
then either party may request mandatory mediation (as provided below)
by written notice to the other party.
3. MEDIATION.
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A. Selection of Mediator. There shall be a single mediator. If the
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parties cannot agree upon an acceptable mediator within ten (10) days
of termination of the negotiation, each party shall select one
mediator from a list of not less than five (5) mediators provided by
the other party. These two mediators shall select a third mediator
who shall serve as the sole mediator.
B. Subject to the availability of the mediator, the mediation shall occur
not more than thirty (30) days after the request for mediation. The
mediation shall be held in Seattle, Washington. The cost of mediation
shall be borne equally by the parties. The mediation process shall
continue until the Dispute (or any part thereof) is resolved or until
such time as the mediator makes a finding that there is no possibility
of resolution short of referring the parties to final and binding
arbitration.
4. FINAL AND BINDING ARBITRATION. Should any Dispute (or part thereof)
-----------------------------
remain between the parties after completion of the negotiation and
mediation process set forth above, such Dispute shall be submitted to
final and binding arbitration in Seattle, Washington pursuant to the
provision of R.C.W. 7.04. Procedurally, the arbitration will be
conducted in conformity with Washington Mandatory Arbitration Rules
5.1 - 5.4 and the following provisions, which shall supersede the
R.C.W. in the event of any inconsistency:
A. Selection of Arbitrator(s). There shall be a single arbitrator,
except in the case where the amount in dispute exceeds $100,000,
in which case there shall be three arbitrators. If the parties
cannot agree upon acceptable arbitrator(s) within ten (10) days
of the termination of the mediation, each party shall select one
arbitrator from a list of not less than five (5) arbitrators
provided by the other party. These two arbitrators shall select a
third arbitrator who shall serve as the sole arbitrator or the
third arbitrator, as the case may be. The determination of a
majority of the arbitrators or the sole arbitrator, as the case
may be, shall be conclusive upon the parties and shall be
non-appealable.
B. Discovery. No discovery shall be permitted, absent a showing of
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good cause. Any discovery request should be reviewed with
the knowledge that this dispute resolution process was mutually
agreed upon and bargained for by the parties with the
intent to provide a cost-effective and timely method of resolving
disputes. Any discovery granted by the arbitrator should be
limited to that necessary to protect the minimum due process
rights of the parties.
C. Equitable Remedies. Any party shall have the right to seek a
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temporary restraining order, preliminary or permanent injunction
or writ of attachment, without waiving the negotiation, mediation
and arbitration provision hereof. Any other form of equitable or
provisional relief and all substantive matters relating to the
Dispute shall be determined solely by the arbitrator(s).
D. Attorney's Fees; Arbitration Costs. Each party may be represented
-----------------------------------
by an attorney or other representative selected by the party. The
costs of the arbitration shall be borne equally by the parties.
Each party shall bear its own attorneys'/representatives' fees
and costs; provided that if the arbitrator(s) find either party
has acted in bad faith, the arbitrator(s) shall have discretion
to award attorneys' fees to the other party.
E. Scope of Arbitration; Limitation on Powers of Arbitrator(s);
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Applicable Law.
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No party may raise new claims against the other party in the
arbitration not raised in the mediation. The arbitrator shall
have the power to resolve all Disputes between the parties. The
arbitrator(s) shall not have the power to award treble, punitive
or exemplary damages and the parties hereby waive their right to
receive treble, punitive or exemplary damages, to the extent
permitted by law. The arbitrator(s) shall only interpret and
apply the terms and provision of the Agreement and shall not
change any such terms or provisions or deprive either party of
any right or remedy expressly or impliedly provided for in the
Agreement. The arbitrator(s) shall apply the law of the State of
Washington, or federal law, in those instances in which federal
law applies.
F. Designation of Witnesses/Exhibits; Duration of Arbitration
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Process; Written Decision.
--------------------------
At least thirty (30) days before the arbitration is scheduled to
commence, the parties shall exchange lists of witnesses and
copies of all exhibits intended to be used in arbitration. The
arbitration shall be completed within 90 days of the selection of
the first arbitrator. The arbitrator(s) shall render a written
decision, which contains findings of fact and conclusions of law,
within 30 days of the conclusion of the arbitration and shall
specify a time within which the award shall be performed.
Judgment upon the award may be entered in any court of competent
jurisdiction.
5. MISCELLANEOUS
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A. Enforcement of Negotiation/Mediation Provisions. If a party
-------------------------------------------------- demanding such
compliance with this Agreement obtains a court order directing
the other party to comply with this Dispute Resolution Agreement,
the party demanding compliance shall be entitled to all of its
reasonable attorneys' fees and costs in obtaining such order,
regardless of which party ultimately prevails in the matter.
B. Severability. Should any portion of this Dispute Resolution
------------
Agreement be found to be invalid or unenforceable such portion
will be severed from this Dispute Resolution Agreement, and the
remaining portions shall continue to be enforceable unless to do
so would materially alter the effectiveness of this Dispute
Resolution Agreement in achieving the stated intent of the
parties.
C. Confidentiality.
---------------
The parties agree that they will not disclose to any third party
that (1) they are engaged in the dispute resolution process
described herein, (2) the fact of, nature or amount of any
compromise resulting herefrom, or (3) the fact of, nature or
amount of any arbitration award. This confidentiality obligation
shall not extend to the party's employees, spouses, accountant,
bankers, attorneys or insurers or in the event that disclosure is
otherwise required by law.
D. Time to Initiate Claims. An aggrieved party must mail and the
--------------------------
other party must receive the correspondence which initiates
negotiation proceedings in connection with a Dispute as specified
in Paragraph 2(A) (1) within one (1) year of the date the
aggrieved party first has, or with the exercise of reasonable
diligence should have had, knowledge of the event(s) giving rise
to the Dispute (the "One Year Statute of Limitations"). No
Dispute may be raised under this Dispute Resolution Agreement
after the expiration of the One Year Statute of Limitations.
E. Entire Agreement. These dispute resolution provisions express the
----------------
entire agreement of the parties and there are no other
agreements, oral or written, concerning dispute resolution,
except as provided herein. Any ambiguity in the provisions hereof
shall not be construed against the drafter. This Dispute
Resolution Agreement may only be modified in a writing signed by
both parties.
F. Successors. This Dispute Resolution Agreement is binding upon
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and inures to the benefit of the parties, their agents, heirs,
assigns, successors-in-interest, and any person, firm or
organization acting for or through them.
G. Venue and Jurisdiction. Venue and exclusive jurisdiction for any
-----------------------
action arising out of or related to this Dispute Resolution
Agreement (including, but not limited to, equitable actions
contemplated by Section 4 (C) and actions brought to enforce or
interpret this Dispute Resolution Agreement) shall be in the
state courts for the County of King, Washington, or the federal
court for the Western District of Washington.
H. Notice. Any notice or communication required to be given
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hereunder shall be in writing and shall be mailed via the United
States Postal Service by Certified Mail or Registered Mail,
Return Receipt Requested, or by Federal Express or other
overnight courier which can document delivery, to the address of
the party to be served as shown below (or such other address as
the party shall from time to time notify). Such notice shall be
deemed to have been served at the time when the same is received
by the party being served.
Xxxxxxxxxxxxxxx.xxx Corp.: Xxxxx X. Xxxxxxxxx, President
XX Xxx 0000
Xxxxx, XX 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
Dynamic Ventures Inc.: Xxxx Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxxxx, XX X0X 0X0
Xxxxxx
Phone: 000-000-0000
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 are
giving up any rights they may possess to have Disputes litigated in a court and
are hereby waiving the right to a trial by jury. The parties further acknowledge
that they are agreeing to a one year statute of limitations regarding all
Disputes and that they are giving up their judicial rights to discovery and to
appeal, unless such rights are specifically set forth above. The parties
acknowledge that if they refuse to submit to the provisions of this Dispute
Resolution Agreement they may be compelled to do so under the authority of the
Washington Mandatory Arbitration Rules. The parties acknowledge that they have
had the opportunity to consult counsel regarding the meaning and legal effect of
this Dispute Resolution Agreement and enter into it knowingly and voluntarily.
IN WITNESS WHEREOF, the parties have entered into this Dispute Resolution
Agreement as of the date first above written.
XXXX XXXXXXX XXXXXXXXXXXXXXX.XXX CORP.
A NEVADA CORPORATION
/s/ By: /s/
-------------------- ---------------------------------
Xxxxx X. Xxxxxxxxx
