EXHIBIT 10.22
DISTRIBUTION AND SUBLICENSE AGREEMENT
THIS TERRITORIAL DISTRIBUTION AND SUBLICENSE AGREEMENT (the "AGREEMENT"), is
entered into as of the 1st day of December, 2004 (the "EFFECTIVE DATE"), by and
between ▇▇▇▇▇▇ ▇▇▇▇▇▇, an adult individual residing in the county of San Diego,
State of California (hereinafter referred to as the "Sublicensor") and FEMONE,
INC., a Nevada corporation (hereinafter referred to as the "SUBLICENSEE").
WHEREAS, the Sublicensor has entered into that certain Distribution
Agreement, dated as of February 8, 2002 (the "DISTRIBUTION AGREEMENT", a copy of
which is attached hereto as EXHIBIT A), with Channoine Cosmetics AG
Liechtenstein, a corporation located in the principality of Liechtenstein,
Europe ("CHANNOINE"), pursuant to which Channoine granted the Sublicensor the
exclusive right to distribute Channoine Cosmetic products (the "PRODUCTS") as
listed in Exhibit A attached to the Distribution Agreement throughout North
America (the "TERRITORY");
WHEREAS, the Distribution Agreement grants the Sublicensor the right to
grant a sublicense to a third party in accordance with the terms of the
Distribution Agreement; and
WHEREAS, Sublicensor desires to grant Sublicensee, and Sublicensee
desires to accept a sublicense to distribute the Products through the Direct
Response Television Shopping marketing channel (the "DIRECT RESPONSE TELEVISION
SHOPPING CHANNEL") throughout the Territory, subject to the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of all of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
SECTION 1. DISTRIBUTION RIGHTS. Subject to the terms of this Agreement,
Sublicensor hereby grants Sublicensee an irrevocable, fully paid, exclusive
sublicense (the "SUBLICENSE") to distribute the Products in the Territory.
Unless otherwise agreed to in writing by the parties, the Sublicense granted to
the Sublicensee hereunder is limited to distribution of the Products through the
Direct Response Television Shopping Channel, as defined above.
SECTION 2. DURATION OF CONTRACT
2.1 The initial term of this Agreement shall be for a period of five
(5) years from the date hereof, and thereafter, Sublicensee shall have five (5)
options to renew for additional, consecutive five (5) year terms (the initial
term and each renewal term is collectively referred to herein as the "TERM").
Each option to renew shall be exercisable by the Sublicensee by delivering
written notice of Sublicensee's election to exercise the option to the Licensor
not less than one (1) month prior to the conclusion of the then-current term.
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2.2 Sublicensee may terminate this Agreement at any time, with or
without cause, upon one month's prior written notice to Sublicensor.
2.3 If, during the term of this Agreement, Sublicensee is in material
breach of the terms hereof, Sublicensor may give written notice of such breach
to Sublicensee and Sublicensee shall have an opportunity to cure the breach
within thirty (30) days (the "CURE PERIOD"). If such breach is not cured within
the Cure Period, Sublicensor may immediately terminate this Agreement by
subsequent written notice to Sublicensee.
SECTION 3. PRICING AND TERMS OF PURCHASE.
3.1 QUALITY OF PRODUCTS. Sublicensor shall make available for
distribution by sublicense the same selection, quantity and terms of delivery of
Products that is made available by Channoine to Sublicensor, including the
addition of new Products as set forth in Section 5 of the Distribution
Agreement.
3.2 PRICING OF PRODUCTS. To the extent the Products are directly
provided to Sublicensee by Sublicensor, Sublicensor agrees that such Products
shall be the same selection, quantity and terms of delivery of Products that is
made available to Sublicensor by Channoine, and that Sublicensee shall pay no
more for the Products or delivery thereof than Sublicensor would pay to
Channoine, it being understood and agreed by the parties that Sublicensor shall
not earn any commission, rebate, refund, or any other compensation in connection
with Sublicensee's distribution of Products hereunder (other than as
specifically outlined in this Agreement). Sublicensor shall promptly notify
Sublicensee of any changes to the Products, prices or related terms that are
announced by Channoine.
3.3 QUALITY OF PRODUCTS. Sublicensor makes no representation or
warranty regarding the quality of the Products made available to Sublicensee by
Channoine or any third party hereto.
3.4 QUANTITY OF PRODUCTS. Sublicensor makes no representation or
warranty regarding the ability of Channoine, or any third party hereto to
provide the Products to Sublicensee for distribution in a quantity sufficient to
meet the requirements of Sublicensee, or at all.
SECTION 4. SUPERVISION BY SUBLICENSOR. As required under Section 8 of the
Distribution Agreement, Sublicensor and Sublicensee agree that Sublicensor will
supervise and assure Sublicensee's compliance with Channoine's quality standards
at all times, including without limitation review of all collateral material
used by Sublicensee. In the event that the Sublicensor believes that any
activity by Sublicensee is compromising, or might compromise Channoine's quality
standards, Sublicensor shall immediately notify Sublicensee in writing,
describing in detail the nature of the activity, and provide Sublicensee a
reasonable opportunity to address and rectify the matter.
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SECTION 5. SUBLICENSOR'S COVENANTS, REPRESENTATIONS AND WARRANTIES. Sublicensor
hereby represents, warrants, and agrees:
5.1 that Sublicensor will not willfully or intentionally terminate the
Distribution Agreement prior to the termination of this Sublicense Agreement;
5.2 that Sublicensor will use his best efforts to comply in all
respects with each and every obligation of Sublicensor under the Distribution
Agreement and to keep the Distribution Agreement in full force and effect;
5.3 that Sublicensor will not take or permit others under his control
or direction to take any actions that will or are likely to result in damage to
Channoine's reputation or quality standards;
5.4 that Sublicensor will immediately deliver to Sublicensee a copy of
all notices and correspondences to or from Channoine relating in any way to any
alleged breach or non-compliance by Sublicensor or Channoine under the
Distribution Agreement;
5.5 the Sublicensor will not amend the Distribution Agreement without
first providing notice to Sublicensee of such amendment(s);
5.6 that, upon written request by Sublicensee, Sublicensor will use his
best efforts to act on Sublicensee's behalf with respect to the enforcement of
any rights of Sublicensor under the Distribution Agreement in the event of any
default by Channoine under the Distribution Agreement;
5.7 that, as of the Effective Date, (i) the Distribution Agreement,
attached hereto as EXHIBIT A, is a true, complete and correct copy of the
Distribution Agreement, and there are no other agreements which modify its
terms, (ii) the Distribution Agreement is in full force and effect, and that, to
the best of Sublicensor's knowledge, there exists under the Distribution
Agreement, no default or event of default by either Channoine or Sublicensor,
and (iii) the Products comply with all local, state and federal laws relating to
the distribution and use thereof within the Territory, provided, however,
Sublicensor makes no representation or warranty that the Products or the
labeling thereof comply with the laws of the countries of Canada or Mexico.
SECTION 6. SUBLICENSEE'S COVENANTS, REPRESENTATIONS AND WARRANTIES. Sublicensee
hereby represents, warrants, and agrees:
6.1 that Sublicensee has received and reviewed the Distribution
Agreement and is aware of Sublicensor's obligations thereunder; and
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6.2 without limiting any rights and obligations provided by law,
Sublicensee and/or any affiliated entity will not pursue or avail itself of any
opportunities discovered by or made available to Sublicensee in connection with
the performance of Sublicensee's activities relating to this Agreement, without
first offering such opportunity to Sublicensor to participate in the same.
SECTION 7. TRADEMARKS. The parties acknowledge and agree that Channoine and its
suppliers have acquired various patents, trademarks, trade names, and trade
secrets to the Products, and that matters relating to the manufacture,
production and distribution of the Products constitute confidential information
and trade secrets of Channoine and its suppliers and are not commonly known or
accessible to the trade. Sublicensor hereby grants Sublicensee the right to use
trade names, confidential information or trade secrets for the sole purpose of
furthering the sale of the Products in the Territory. Sublicensee is granted the
right to use or duplicate the same, in part or in whole, for the design and
marketing of sales aids and other collateral, subject however, to Sublicensor's
rights and obligation to supervise and have final approval of Sublicensee's
marketing of the Products as set forth in Section 4 above.
SECTION 8. CONFIDENTIAL INFORMATION.
8.1 DEFINITION OF CONFIDENTIAL INFORMATION. As used herein,
"Confidential Information" shall mean any and all technical and non-technical
information including copyright, trade secret, and proprietary information,
techniques, know-how, processes, equipment, future and proposed products and
services of a party, a party's sales people, suppliers and customers, and
includes without limitation a party's information concerning research, design
details and specifications, engineering, financial information, customer lists,
business forecasts, sales and marketing information.
8.2 NONDISCLOSURE AND NONUSE OBLIGATIONS. Except as permitted in this
paragraph, neither party (the "RECEIVING PARTY") shall use nor disclose the
Confidential Information of the other party (the "DISCLOSING PARTY") except as
necessary to perform its obligations under the Sublicense. The Receiving Party
agrees that it shall treat all Confidential Information with the same degree of
care as the Receiving Party accords to its own Confidential Information of a
similar nature, but in no case less than reasonable care under the
circumstances. . The Receiving Party agrees to inform its own employees, agents
and contractors of the existence of this confidentiality obligation and will
take appropriate measures to ensure their compliance with this obligation. The
Disclosing Party agrees not to communicate any information to the Receiving
Party in violation of the proprietary rights of any third party. The Receiving
Party will immediately give notice to the Disclosing Party of any unauthorized
use or disclosure of the Confidential Information. The Receiving Party agrees to
assist the Disclosing Party in remedying any such unauthorized use or disclosure
of the Confidential Information. A breach of this Section 8.2 ("Nondisclosure
and Nonuse Obligations") by the Receiving Party will cause irreparable harm and
injury to the Disclosing Party for which money damages are inadequate. In the
event of such breach, the Disclosing Party shall be entitled to injunctive
relief, in addition to its legal and other equitable remedies. The Disclosing
Party's nondisclosure and nonuse obligations under this Section 8.2 shall
terminate three (3) years after the termination of this Agreement.
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8.3 EXCLUSIONS FROM NONDISCLOSURE AND NONUSE OBLIGATIONS. The Receiving
Party's obligations under Section 8.2 ("Nondisclosure and Nonuse Obligations")
with respect to any portion of the Confidential Information shall not apply to
any such portion which the Receiving Party can demonstrate, (a) was in the
public domain at or subsequent to the time such portion was communicated to the
Receiving Party by the Disclosing Party through no fault of the Receiving Party;
(b) was rightfully in the Receiving Party's possession free of any obligation of
confidence at or subsequent to the time such portion was communicated to the
Receiving Party by the Disclosing Party; or (c) was developed by the employees
of the Receiving Party independently of without reference to any information
communicated to the Receiving Party by the Disclosing Party. A disclosure of
Confidential Information by the Receiving Party, either (a) in response to a
valid order by a court or other governmental body, (b) otherwise required by
law, or (c) necessary to establish the rights of either party under this
Sublicense, shall not be considered to be a breach of this sublicense or a
waiver of confidentiality for other purposes; shall not be considered to be a
breach of this Sublicense or a waiver of confidentiality for other purposes;
provided, however, that the Receiving Party shall provide prompt prior written
notice thereof to the Disclosing Party to enable the Disclosing Party to seek a
protective order or otherwise prevent such disclosure.
SECTION 9. LIMITATION OF LIABILITY, DISCLAIMER OF WARRANTIES.
9.1 EXCEPT FOR LIABILITY ARISING OUT OF A BREACH OF THE CONFIDENTIALITY
OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY
OTHER PERSON OR ENTITIY FOR THE COST OF SUBSITUTE GOODS OR SERVICES, ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY OR PUNITIVE DAMAGES,
HOWEVER CAUSED, ARISING OUT OF OR RESULTING FROM THIS AGREEMENT OR THE USE OF
THE PRODUCTS, REGARDLESS OF THE FORM OF ACTION, WHETHER FOR BREACH OF CONTRACT,
BREACH OF WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE (INCLUDING
WITHOUT LIMITATION DAMAGES BASED ON LOSS OF PROFITS, DATA, FILES, OR BUSINESS
INTERRUPTION OR OPPORTUNITY), AND WHETHER OR NOT THE PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES. THE LIMITATIONS SET FORTH ABOVE SHALL BE DEEMED
TO APPLY TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND NOTWITHSTANDING
THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDIES SET FORTH IN THIS
AGREEMENT. THE PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE FULLY CONSIDERED THE
FOREGOING ALLOCATION OF RISK AND FIND IT REASONABLE, AND THAT THE FOREGOING
LIMITATIONS ARE AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN THE PARTIES.
9.2 TO THE EXTENT ALLOWABLE BY LAW, NO WARRANTY OF THE PRODUCT IS
PROVIDED EXCEPT AS STIPULATED HEREIN. THE PRODUCT IS PROVIDED "AS IS" WITHOUT
ANY WARRANTY OR CONDITION, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
THE ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE OF THE PRODUCT IS ASSUMED BY
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THE LICENSEE, SUBLICENSEE OR SUB-SUBLICENSEE, AS APPLICABLE, INCLUDING THE RISK
THAT THE PRODUCTS MAY CONTAIN INGREDIENTS, INCLUDING BUT NOT LIMITED TO "SPF",
WHICH HAVE BEEN DETERMINED OR MAY BE DETERMINED IN THE FUTURE BY THE APPROPRIATE
GOVERNMENTAL AGENCY TO BE A CONTROLLED SUBSTANCE REQUIRING REGISTRATION. SHOULD
THE PRODUCT PROVE DEFECTIVE OR REQUIRE REGISTRATION WITH THE APPLICABLE
GOVERNMENTAL AGENCY, THE SUBLICENSEE (AND NOT THE SUBLICENSOR) SHALL ASSUME THE
ENTIRE COST OF ALL NECESSARY SERVICING, REPAIR, CORRECTION OR REGISTRATION.
SECTION 10. INDEMNIFICATION
10.1 SUBLICENSOR'S INDEMNIFICATION. Sublicensor shall indemnify,
protect, defend (with counsel reasonably acceptable to Sublicensee) and hold
Sublicensee, its officers, employees, agents, contractors and subcontractors
free and harmless of and from all liability, judgments, costs, damages, claims,
demands and expenses (including reasonable consultants', attorneys' and experts'
fees and costs) arising out of (i) Sublicensor's failure to comply with or to
perform Sublicensor's obligations under this Agreement, (ii) any act or failure
to act by Sublicensor in a manner which would constitute a breach under the
Distribution Agreement, (iii) any breach by Sublicensor of any of Sublicensor's'
representations, warranties or covenants set forth in this Agreement, and (iv)
Sublicensor's tortuous conduct. Sublicensor's indemnification obligation shall
also cover any liability, judgments, costs, damages, claims, demands and
expenses (including reasonable consultants', attorneys' and experts' fees and
costs) incurred by Sublicensee, in the event the Distribution Agreement is
terminated (A) due to the fault of Sublicensor or (B) due to the Sublicensor's
voluntary termination of the Distribution Agreement prior to the expiration of
the term of the Distribution Agreement.
10.2 SUBLICENSEE'S INDEMNIFICATION. Sublicensee shall indemnify,
protect, defend (with counsel reasonably acceptable to Sublicensor) and hold
Sublicensor, its officers, employees, agents, contractors and subcontractors
free and harmless of and from all liability, judgments, costs, damages, claims
demands and expenses (including reasonable consultants', attorneys' and experts'
fees and costs) arising out of (i) Sublicensee's failure to comply with or to
perform Sublicensee's obligations under this Agreement, (ii) any breach by
Sublicensee of any of Sublicensee's representations, warranties or covenants set
froth in this Agreement, and (iii) Sublicensee's tortuous conduct.
SECTION 11. GENERAL.
11.1 ASSIGNMENT. Sublicensee shall not assign this Agreement in whole
or in part without the prior written consent of Sublicensor.
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11.2 SURVIVAL. The following sections shall survive the expiration or
earlier termination of this Distribution Sublicense Agreement: , 8
("Confidential Information"), 9 ("Limitation of Liability; Disclaimer of
Warranties"), 10 ("Indemnification"), and 11.2 ("survival").
11.3 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of California. Each party will voluntarily appear before
and hereby consents and submits to the jurisdiction of the state and federal
courts in the State of California. In addition, each party consents to venue and
hereby waives objections to venue for any action commenced in such courts. The
prevailing party in any such litigation or dispute shall be entitled to recover
from the other party its costs and fees, including attorneys' fees, associated
with such litigation or dispute. Each party agrees to perform its obligations
and exercise its rights under this Sublicense in accordance with all applicable
laws and regulations.
11.4 WAIVER. The failure of either party to require performance by the
other party of any provision of this distribution Sublicense Agreement shall not
affect the full right to require such performance at any time thereafter; nor
shall the waiver by either party of a breach of any provision of this
Distribution Sublicense Agreement be taken or held to be a waiver of the
provision itself.
11.5 ENTIRE AGREEMENT AND AMENDMENT. This Agreement completely and
exclusively states the agreement of the parties regarding the subject matter set
forth herein. It supersedes, and its terms govern, all prior or contemporaneous
understandings, term sheets, memoranda of understanding, sublicenses,
representations, or other communications between the parties, oral or written,
regarding such subject matter. This Agreement may be executed in counterparts
all of which taken together shall constitute one single agreement between the
parties. This Agreement may be amended only in a written document signed by both
parties.
11.6 HEADINGS. The section headings appearing in this Distribution
Sublicense Agreement are inserted only as a matter of convenience and in no way
define, limit, construe, or describe the scope or extent of such paragraph or in
any way affect such paragraph.
11.7 CONSTRUCTION. This Agreement has been negotiated by the parties
and will be fairly interpreted in accordance with its terms and without any
strict construction in favor of or against any party. Any ambiguity will not be
interpreted against the drafting party.
11.8 FORCE MAJEURE. Neither party shall be liable for nonperformance or
delays, under any circumstances, which occur due to any causes beyond its
reasonable control. These causes shall include, but shall not be limited to acts
of God, wars, riots, strikes, fires, storms, floods, earthquakes, shortages of
labor or materials, labor disputes, vendor failures, transportation embargoes,
acts of any government or agency thereof and judicial actions. In the event of
any such delay or failure of performance, the date of delivery or performance
shall be deferred for a period equal to the time lost by reason of the delay. In
no event shall either party be liable to the other for any delay or
re-procurement costs for failure to meet any shipment or performance date.
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11.9 NOTICE. Any notice required or permitted by this Sublicense shall
be in writing and shall be delivered as follows, with notice deemed given as
indicated: (a) by personal delivery, when delivered personally; (b) by overnight
courier, upon written verification of receipt; (c) by telecopy or facsimile
transmission, upon acknowledgement of receipt of electronic transmission; or (d)
by certified or registered mail, return receipt requested, upon verification of
receipt. Notice shall be sent to the addressed first set forth above or to such
other address as either party may specify in writing
11.10 SEVERABILITY. If any provision of this Sublicense is held by a
court of law to be illegal, invalid or unenforceable, (i) that provision shall
be deemed amended to achieve as nearly as possible the same economic effect as
the original provision, and (ii) the legality, validity and enforceability of
the remaining provisions of this Sublicense shall not be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties have executed this Sublicense as of the
Effective Date and the person signing below represents and warrants that he/she
is duly authorized to sign for and on behalf of the respective party.
SUBLICENSOR SUBLICENSEE
FEMONE, INC., a Nevada corporation
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
CEO
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EXHIBIT A
[Attached Distribution Agreement]
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