EXHIBIT 10.1
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement") is made and effective as of April 13, 2000
by and between Xxxxxxxxxxxxxxx.xxx Corp., a Nevada Corporation ("Grantor"), and
Xxxxx X. 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 obtain. 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. Territory shall be the state of Minnesota.
Grantor grants to Licensee the exclusive rights to market the Products in
the Territory through the Web Site.
3. Consideration. Licensee shall pay Grantor the sum of Thirty-five Thousand
US Dollars (US $35,000) for the License, in the form of a promissory note
attached hereto as Exhibit 1, which shall become due and payable upon the
successful completion of an initial public offering of the common stock of
FAR Group Inc. and sale of all registered shares pursuant to such offering.
Far Group Inc. shall use its best efforts to file a registration statement
for an initial public offering with the Securities Exchange Commission and
to cause such registration statement to become effective as soon as
possible after filing.
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,
LICENSE AGREEMENT Page 1 of 1
5. 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.
6. Labeling; Packaging. Products shall be labeled with Standard Labels,
except for Private Label Products, as described herein. Standard labels
shall contain all information necessary to conform to regulatory and
industry requirements.
7. Private Label Products. Vitamins, minerals, herbs, and nutritional
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.
8. 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.
9. 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.
10. Minimum Order Quantities for Vitamin, Mineral, and/or Nutritional
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.
11. Web Site Maintenance; Fees. Grantor shall maintain Grantor's Web Site (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.
12. Orders. All Products shall be ordered through the Web Site. In
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."
LICENSE AGREEMENT Page 2 of 2
13. 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.
14. 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
LICENSE AGREEMENT Page 3 of 3
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 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 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. X. X. Xxxxxxx
0000 XX 000 Xxx 000
Xxxxxxxx XX 00000-0000
LICENSE AGREEMENT Page 4 of 4
If to Licensee: FAR Group Inc.
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.
XXXXX X. XXXXXXX XXXXXXXXXXXXXXX.XXX CORP.
A NEVADA CORPORATION
/s/ X.X. Xxxxxxx /s/ Xxxxx X. Xxxxxxxxx
--------------------------- By: -----------------------------
Xxxxx X. Xxxxxxxxx, President
LICENSE AGREEMENT Page 5 of 5
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: ________________
LICENSE AGREEMENT Page 6 of 6
EXHIBIT B
DISPUTE RESOLUTION AGREEMENT
THIS DISPUTE RESOLUTION AGREEMENT ("Dispute Resolution Agreement") is
entered into and effective as of _________________________, 2000 by and between
Xxxxxxxxxxxxxxx.xxx Corp., a Nevada corporation, and FAR Group 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 _________________, 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
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
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.
A. Selection of Mediator. There shall be a single mediator. If the
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
LICENSE AGREEMENT Page 7 of 7
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 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 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);
Applicable 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 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.
LICENSE AGREEMENT Page 8 of 8
F. Designation of Witnesses/Exhibits; Duration of Arbitration 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
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 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.
LICENSE AGREEMENT Page 9 of 9
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 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.: X. X. Xxxxxxx, President
0000 XX 000 Xxx 000
Xxxxxxxx XX 00000-0000
Fax: 000-000-0000
Phone: 000-000-0000
FAR Group Inc.: Xxxxx X. Xxxxxxx
Xxxxx 000, 000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Xxxxxx
I. Acknowledgment of Legal Effect of this Dispute Resolution Agreement.
By 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.
XXXXX X. XXXXXXX XXXXXXXXXXXXXXX.XXX CORP.
A NEVADA CORPORATION
/s/ X.X. Xxxxxxx
--------------------------- By: ----------------------
X.X. Xxxxxxx, President
LICENSE AGREEMENT Page 10 of 10
