EXHIBIT 10.26
AGREEMENT
THIS AGREEMENT is made and entered into by and between D.V. Back Products, Inc.,
a General Partner of Backstroke, Ltd. (Hereinafter called "Backstroke, Ltd.")
and having its principal place of business at, 000 X. Xxxx Xxxxxx, Xxxxxxxxxx,
Xxxx 00000 and Xx. Xxxxx Xxxxx, individually and Flex Marketing, inc.
(Hereinafter called "FMI") , or its assigns, having an address of 0000 Xxxxxxxx
Xxxx, Xxxxxxxxxx, Xxxx 00000.
WHEREAS Xxxxx has a patent, number 5,352,188, for a "Back Massager"
(hereinafter referred to as the "Backstroke") and is/has requested FMI to market
and to further promote the Backstroke; and
WHEREAS, D.V. Back Products, Inc. is the General Partner of Backstroke,
Ltd.; an Ohio Limited Partnership; and
WHEREAS, Xx. Xxxxx Xxxxx has granted Backstroke, Ltd. the right and license
for the use of his patent number 5,352,188 for the (Backstroke); and
WHEREAS FMI will have the licensing and marketing of the patent and
product; and
WHEREAS FMI wishes to manufacture and sell the Backstroke, and wishes to
use the patent; and
WHEREAS Backstroke, Ltd. wishes to utilize the knowledge and marketing
technic of FMI.
WHEREAS Backstroke, Ltd. solely owns the patent; and
WHEREAS Backstroke, Ltd. and FMI wish to be bound by the terms and
conditions of this agreement, now therefor, in considerations of the promises
and mutual covenants hereinafter contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree with each other as follows:
ARTICLE I
DEFINITIONS
For the purpose of this Agreement, the term 'KNOW-HOW" shall mean
engineering drawings, charts, technical reports, photographs and other technical
information exclusively developed for and pertaining to the "Backstroke."
ARTICLE II
PATENT RIGHTS AND ASSIGNED
1) Backstroke, Ltd. hereby grants to FMI all marketing rights, title and
interest in and to the "Backstroke" which he may have in any country and agrees
to execute any and all documents effecting transfer of such rights.
2) FMI agrees to place applicable trademark and patent notices on all
product, packaging and collateral material.
3) FMI further agrees to submit 4 samples of said product, its cartons,
containers and packaging materials to Backstroke, Ltd. of whcih FMI agrees that
Backstroke products will be produc4ed and distributed in accordance with
federal, state and local laws.
4) No further changes in product can be made without further approval by
Backstroke, Ltd., by and through its General Partner, D.V. Back Products, Inc.
5) If FMI does product advancements that involve patent update and/or
changes, Backstroke, Ltd. will be responsible for patent costs. FMI will pay for
trademarks and drawing costs with respect to the Backstroke products.
ARTICLE III
LIQUIDATION OF INVENTORY AND MACHINERY
1) FMI, warrants that it will not further produce any products covered by
this agreement if and when FMI should stop marketing said Backstroke without
written consent from Backstroke, Ltd. FMI will sell all remaining inventory if
any. Backstroke, Ltd. will purchase the inventory at FMI's cost until it is
depleted before any further products are manufactured.
ARTICLE IV
TRANSFER OF PRODUCTION TOOLING
It is agreed that Backstroke, Ltd will make available to FMI any current
production tooling, fixtures and manufacturers used by Backstroke, Ltd to
manufacture the Backstroke covered by this agreement. And FMI agrees to be
responsible for the maintenance of all tooling of Backstroke, Ltd's that is used
in the production of product.
ARTICLE V
HOLD HARMLESS
Backstroke, Ltd agrees to hold FMI harmless for any product claims made by
third parties against Backstroke, Ltd and/or FMI concerning products (Backstroke
and Backstroke Sport) which were manufactured by Backstroke, Ltd or otherwise
under previous licensing agreements or sales in effect prior to the date of this
Agreement.
ARTICLE VI
ASSIGNABILITY
This agreement shall be binding upon Backstroke, Ltd, his successors and
assigns and other interested Partners and shall inure to the benefit of FMI, its
successors and assigns.
ARTICLE VII
TERMS
1) FMI will provide a consulting position for Xx. Xxxxx Xxxxx, to act
solely in an advisory position to talk about and promote the Backstroke. For
this consulting service Xx. Xxxxx Xxxxx will be compensated for expenses
associated with and will receive a set fee of $1,000.00 per day for his
appearance at trade shows and/or other promotional events. FMI will give Xx.
Xxxxx Xxxxx a 30 day advanced notice for such trade shows and/or promotional
events. If FMI gives less than a 30 day notice, Xx. Xxxxx Xxxxx has the right to
refuse to attend.
2) Xx. Xxxxx Xxxxx will be directed by FMI to help promote the Backstroke
line. Xx. Xxxxx Xxxxx will make no other appearances or agreements without
specifically being directed by FMI.
3) FMI will set the price of the Backstroke in order to standardize its
product line. With regards to sales Backstroke, Ltd may have pending and/or in
progress at the time of this Agreement. Backstroke, Ltd will pay wholesale
prices for the Backstroke and sell it as retail as established by FMI.
4) FMI will negotiate all deals upon the signing of this agreement.
ARTICLE X
DEFAULTS
If FMI fails to abide by the obligations of this Agreement Backstroke, Ltd.
shall have the option to cancel this Agreement by providing 45 day(s) written
notice to FMI. FMI shall have the option of preventing the termination of this
Agreement, if corrective action is taken prior to the end of the 45 day time
period. If the default causes a termination of this agreement then ARTICLE XV
will apply.
1) FMI agrees to obtain, at its own expense, liability insurance for a
least 1 million dollars. As proof of such insurance, FMI will submit to
Backstroke, Ltd. a fully paid certificate of insurance naming Backstroke, Ltd.
as an additional insured party.
2) the submission of insurance must be in place before any licensed product
is distributed or sold after this Agreement.
ARTICLE XI
ARBITRATION
All disputes under this Agreement that cannot be resolved by the parties
shall be submitted to arbitration under the rules and regulations of the
American Arbitration Association. Either party may invoke this paragraph after
providing 30 days' written notice to the other party. All costs of arbitration
shall be paid by the loosing party.
ARTICLE XII
TRANSFER OF RIGHTS
This Agreement shall be binding on any assigns or successors of the
parties.
ARTICLE XIII
SEVERABILITY
If any provision of this Agreement shall be held to be invalid or
unenforceable for any reason, the remaining provisions shall continue to be
valid and enforceable. If a court finds that any provision of this Agreement is
invalid or unenforceable, but that by limiting such provision it would become
valid or enforceable, then such provision shall be deemed to be written,
construed, and enforced as so limited.
ARTICLE XIV
WAIVER OF CONTRACTUAL RIGHT
The failure of either party to enforce any provision of this Agreement
shall not be construed as a waiver of limitation of the party's right to
subsequently enforce and compel strict compliance with every provision of this
Agreement.
ARTICLE XV
TERMINATION OF AGREEMENT BY FMI
If FMI terminates this Agreement to sell the Backstroke, due to lack of
"Product Appeal", FMI must provide Backstroke, Ltd with a 30 day advanced notice
prior to terminating FMI's representation of the Backstroke as one of its
product lines.
Since there is no designated termination date to this agreement, this
agreement can be terminated only by FMI. FMI will be deemed to have assigned,
transferred and conveyed to Backstroke, Ltd. all trade rights, good will, titles
or other rights in and to licensed product which may have been obtained by FMI
from Xx. Xxxxx and/or Backstroke, Ltd. originally. Any such transfer of tangible
items will be at cost of specified equipment to be valved at time of termination
minus depreciation, except for the molds, their value will be calculated at cost
less usage.
ARTICLE XVI
MISCELLANEOUS
1) Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Ohio.
2) This Agreement set forth the entire agreement and an understanding
between the parties as to the subject matter thereof and merges all prior
discussions between them.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their behalf, by their respective officers thereunto duly
authorized, to be effective on the last date shown below.
Backstroke, Ltd.
WITNESS: /s/Xxxxxxx Xxxxx By /s/ Xx. Xxxxx Xxxxx
------------------------- ---------------------------
Xx. Xxxxx Xxxxx, President
D.V. Back Products, Inc.
General Partner
Date: 3/10/97
WITNESS: /s/Xxxxxxx Xxxxx By /s/ Xxxxx Xxxxx
------------------------- -------------------------
Xxxxx Xxxxx, President
THG Construction Management, Inc.
Date: 3/10/97
DBA Flex Marketing, Inc.
Attachment A of this Agreement still under draft form, will be used to finalize
all pending issues of this Agreement.
Inventory Shipped April 14, 1997 from New Springfield to
Xxxxxxx Mold and Machine Co., Inc. in Stow Ohio.
Quantity Description
1 Full xxxxxxx of 4-ball sport shafts with 2 ball centers
1 1/2 full xxxxxxx of 4-ball sport shafts with on center balls
1 3/4 full xxxxxxx of 4-ball long bacstroke shafts, center balls
1 1/2 full xxxxxxx of 4-ball long backstroke shafts, no center balls
1 Full xxxxxxx of 4-ball sport shafts with no center balls
1 Full galords of sport unit complete unboxed
9 gaylords of Drilled Frames for the Backstroke, as follows:
43, 56, 46, 62, 86, 82, 60, 95, 61, 74 for total of 583 frames
9 gaylords of undrilled frames for the Backstroke, as follows:
84, 88, 85, 86, 82, 88, 86, 69, 48 for a total of 716 frames
6 Pallets of Boxed Sports 91/pallet = 546 Boxed units
11 Boxes of Palnuts end caps for the shafts 20,000/Box = 220,000
2 Boxes of wheels for the Backstroke unit ? on total number
6 Boxes of ABS Sport Strips 975 total
3 Pallest of metal rods made up of 16", 13", 6" and 5-7/8"
1 Pallet of boxes as follows:
200 Boxes for the Backstroke
950 Boxes for the Sport
18 Boxes plain 16-9/16 x 8-13/16 x 35-3/8 20
Boxes plain 16 x 2-1/2 x 34
2 Sets of Printing Plates for the Backstroke and Sport Sets
2 of Box Dies for both the Backstroke and Sport Pallet of
1 plain cardboard insert for the Video and Neck roller 2,000
1 Pallet of Sports that need cleaned and reboxed 84 total
1 Pallet of Neck roller pieces as follows:
616 - total complete and assembled 843 - Left
ABS single supports 843 - Right ABS single
supports
1 Pallet mixed labels, instruction booklets, warranty cards
1 and videos Pallet of vinyl tubes as follows:
17boxes - 14-3/8 tubes x 1,800/box =30,600 used for
Backstroke 3 boxes - 5 x 1,500/box =4,500 used for
neck rollers 2-1/4 boxes - 12 x 1,800/box = 3,600
+200 = 3,800 tubes presently used for the sport model.
We can cut these down and use them for the neck roller assembly.
Inventory Shipped April 11, 1997 from New Springfield to
Xxxxxxx Mold and Machine Co., Inc. in Stow Ohio.
Quantity Description
16 bags 1/2in foam pads used for the Backstroke 200/bag total 3,200
27 Pallets of Backstroke Sports Boxed 91/pallet x 27 = 2,457
7 Pallets of Backstrokes Boxed 39/pallet x 7 = 273 minus 1 = 272
Inventory Shipped April 15, 1997 from New Springfield to
Xxxxxxx Mold and Machine Co., Inc. in Stow Ohio.
Quantity Description
1 Drill press and bits complete air or electric
3 Boxes of drill press parts and miscellaneous tools 2 air chisels
1 Complete push rod unit for vinyl tubes into rubber balls with
additional air cylinder
1 Stand assembly for mounting shafts into frames
65 Boxes for Backstroke Labeled
1 3/4 full drum of Armorall used to wash completed units
1 Wash tub used in washing units
12 Backstrokes that need repaired
2 Backstroke frames, one broken
11 Other miscellaneous wooden dies used in the assembly process
Attachment A
March 10, 1997
1. Flex Marketing, Inc. will indemnify Xx. Xxxxx Xxxxx against the finders fee
and/or commissions that are due to Xxxxxx Xxxxxx and others for the
Introduction, as per the following understanding. Xx. Xxxxx Xxxxx agreed to pay
Xxxxxx Xxxxxx and others a finder fee and/or commission of 10% of what Xx. Xxxxx
Xxxxx was to receive as a royalty from Flex Marketing, Inc. for a two year
period starting March 10, 1997. It is agreed that Xxxxxx Xxxxxx was to continue
to promote the Backstroke in order to earn this finders fee and/or commission.
Xx. Xxxxx Xxxxx understands that Flex Marketing, inc. has agreements with Xxxxxx
Xxxxxx on other matters and will settle this finders fee and/or commission
directly with Xxxxxx Xxxxxx and others.
2. Backstroke inventory as listed in Attachment B includes the Backstroke Sport.
3. Transfer of Xx. Xxxxx'x 800# for the Backstroke to Flex Marketing.
4. Forward the PO Box to Flex Marketing's PO Box for the Backstroke/Backstroke
Sport.
5. Transfer of sales contracts and possibly sales leads of the
Backstroke/Backstroke Sport.
6. Assigned letter of liability by Xx. Xxxxx stating any claims and/or expenses
filed against the Backstroke/Backstroke Sport that can be classified as
liabilities on the Backstroke/Backstroke Sport.
7. Xx. Xxxxx may use his affiliation with the Backstroke for the benefit of his
practice.
8. A separate letter of a license transfer right from Xx. Xxxxx to Flex
Marketing for the Backstroke/Backstroke Sport.
Date: 3/10/97 Date: 3-10-97
Accepted By: /s/ Xxxxx Xxxxx Accepted by: /s/ Xx. Xxxxx Xxxxx
----------------------------- ----------------------------------
Xxxxx Xxxxx, President Xx. Xxxxx Xxxxx, President
THG Construction Management, Inc. D.V. Back Products, Inc.
DBA: Flex Marketing, Inc. General Partner
