EXHIBIT 10.1
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("AGREEMENT") IS MADE AND EFFECTIVE AS OF FEBRUARY 14,
2000 BY AND BETWEEN XXXXXXXXXXXXXXX.XXX CORP., A NEVADA CORPORATION ("GRANTOR"),
AND KETTLE RIVER GROUP INC., A NEVADA CORPORATION ("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, for ten dollars ($10.00) and other valuable consideration,
including but not limited to 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
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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 shall be the price posted
on the Web Site at the time of order. 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 Great Britain. Grantor
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grants to Licensee the exclusive rights to market the Products in the
Territory through the Web Site.
3. Manufacture of Products. All Products marketed through Grantor's Web Site
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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.
LICENSE AGREEMENT Page 1 of 11
4. Labeling; Packaging. Products shall be labeled with Standard Labels, except
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for Private Label Products, as described herein. Standard labels shall
contain all information necessary to conform to regulatory and industry
requirements.
5. 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 shall be the price posted on the Web Site at
time of order
6. Shipping. Shipping shall be by UPS ground unless Customer requests and pays
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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.
7. Products and Pricing. The initial pricing for the Product(s) is set forth
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on Exhibit A. The price may be amended from time to time, and such
amendments will be posted on the Web Site. The price shall be the price
posted at the time of order. Terms are payment by credit card or electronic
funds transfer at time of purchase.
8. Minimum Order Quantities for Vitamin, Mineral, and/or Nutritional
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Supplements. The minimum order quantity is 100 bottles per formulation for
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standard Products. Customer Formulas, as defined herein, shall have minimum
order quantities of 5,000 units.
9. Web Site Maintenance; Fees. Grantor shall maintain Grantor's Web Site (the
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"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.
10. 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."
11. Sharing of Profits; Sales Reports. Licensee and Grantor shall each receive
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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.
LICENSE AGREEMENT Page 2 of 11
12. Warranties and Indemnification. Grantor warrants that all Products,
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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.
13. Nature of Relationship.
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(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.
14. Rights in Formulas.
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(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.
LICENSE AGREEMENT Page 3 of 11
(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.
15. Term of Agreement; Breach of Agreement. This Agreement shall continue for
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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.
16. Trade Secrets. Grantor and Licensee(s) are the owners of certain products,
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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.
17. Governing Law; Dispute Resolution. This Agreement shall be governed by
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Nevada law in accordance with the Dispute Resolution Agreement attached
hereto as Exhibit B.
18. 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 Xxxxxxxxxxxxxxx.Xxx, Inc.: Xxxxx X. Xxxxxxxxx, President
0000 Xxxx 00 #0000
Xxxxx XX 00000
If to Licensee: Kettle River Group Inc.
P. O. Xxx 0000
Xxxxx XX 00000-0000
LICENSE AGREEMENT Page 4 of 11
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.
KETTLE RIVER GROUP INC., XXXXXXXXXXXXXXX.XXX CORP.,
A NEVADA CORPORATION A NEVADA CORPORATION
By: /s/ By: /s/
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X.X. Xxxxxxx, President Xxxxx X. Xxxxxxxxx, President
Page 5 of 11
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:
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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 11
EXHIBIT B
DISPUTE RESOLUTION AGREEMENT
THIS DISPUTE RESOLUTION AGREEMENT ("DISPUTE RESOLUTION AGREEMENT") IS ENTERED
INTO AND EFFECTIVE AS OF FEBRUARY 14, 2000 BY AND BETWEEN XXXXXXXXXXXXXXX.XXX
CORP., A NEVADA CORPORATION, AND KETTLE RIVER GROUP INC., A NEVADA CORPORATION
("LICENSEE").
1. INTENT OF PARTIES. The parties desire to establish a quick, final and
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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 February 14, 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
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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 authors
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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.
LICENSE AGREEMENT Page 7 of 11
4. FINAL AND BINDING ARBITRATION. Should any Dispute (or part thereof) remain
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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 Houston, Xxxxxx County, Texas. Procedurally, the
arbitration will be conducted in conformity with Texas rules of civil
procedure and the following provisions, which shall supersede the Texas
rules of civil procedure 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 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
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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
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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
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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
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Law. No party may raise new claims against the other party in the
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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 Texas, or federal law, in those instances in which
federal law applies.
LICENSE AGREEMENT Page 8 of 11
F. Designation of Witnesses/Exhibits; Duration of Arbitration Process;
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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
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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
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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
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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
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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
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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.
LICENSE AGREEMENT Page 9 of 11
F. Successors. This Dispute Resolution Agreement 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 exclusive jurisdiction for any
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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
Xxxxxx, Texas, or the federal court for the Southern District of
Texas.
H. Notice. Any notice or communication required to be given hereunder
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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.
If to Xxxxxxxxxxxxxxx.Xxx, Inc.: Xxxxx X. Xxxxxxxxx, President
0000 Xxxx 00 #0000
Xxxxx XX 00000
Fax: 000-000-0000
Phone: 000-000-0000
If to Licensee: Kettle River Group Inc.
P. O. Xxx 0000
Xxxxx XX 00000-0000
Fax: 000-000-0000
Phone: 000-000-0000
I. Acknowledgment of Legal Effect of this Dispute Resolution Agreement.
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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 Texas Rules of Civil Procedure. 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.
LICENSE AGREEMENT Page 10 of 11
IN WITNESS WHEREOF, the parties have entered into this Dispute Resolution
Agreement as of the date first above written.
KETTLE RIVER GROUP INC., XXXXXXXXXXXXXXX.XXX CORP.,
A NEVADA CORPORATION A NEVADA CORPORATION
By: /s/ By: /s/
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X.X. Xxxxxxx, President Xxxxx X. Xxxxxxxxx, President
LICENSE AGREEMENT Page 11 of 11
