INTERNET MARKETING SERVICES AGREEMENT
This Internet Marketing Services Agreement (this "Agreement") is made and
entered into effective as of the 22nd day of August, 2006, by and between
DynaSig Corporation, an Arizona Corporation with a place of business at 1711 W.
Greentree Dr., Ste 116, Tempe, AZ 85284 ("DS" or "Company"), and AXT MEDIA
GROUP, LLC, an Arizona Limited Liability Company with a place of business at
1515 W. University Drive, Ste 103, Tempe, Arizona 85281 ("AXTM").
RECITALS:
A. DS is in the business of manufacturing, distributing and selling
biometric signature technologies and products.
B. AXTM is in the business of managing and operating Internet-based
sales and marketing programs on behalf of product manufacturers and exclusive
distributors.
C. DS desires to engage AXTM, and AXTM desires to be so engaged, to
provide services to market DS products in the above-mentioned areas of
expertise.
AGREEMENT:
Now, therefore, in consideration of the promises and mutual agreements set
forth herein, DS and AXTM hereby agree as follows:
1. ENGAGEMENT
(a) During the term of this Agreement, DS hereby engages AXTM, and AXTM
agrees to be so engaged, as the exclusive provider of online marketing services
for the DS product line. These services (the "Services") include: (i)
developing and executing a strategy for marketing and selling products
manufactured by, manufactured for, licensed to and/or imported by DS (the
"Products") via an integrated Internet-based ecommerce and affiliate marketing
platform; (ii) managing the fulfillment of orders, customer service email
inquiries, processing returns and credits to customer accounts for sales that
arise due to AXTM's marketing efforts. AXTM is solely responsible for
determining the manner in which the Services are to be provided; provided,
however, that AXTM should provide the Services in accordance with standards
reasonably acceptable to DS.
(b) DS acknowledges that AXTM's performance of the Services may be
dependent on timely decisions and approvals by DS and AXTM shall be entitled to
rely on all decisions and approvals of DS in connection with the Services.
Further, DS acknowledges that AXTM will be relying upon the information that DS
provides and DS represents and warrants that such information is and shall be
true, accurate and complete. Because of the importance of such information to
AXTM's satisfactory performance of the Services, DS agrees to release AXTM and
its personnel from any liability and costs relating to the Services attributable
to any false, inaccurate or incomplete information provided by DS.
(c) Title. Title to the Products remains in the name of DS until
transferred to a purchaser. If AXTM is in possession of any of DS's Bio-Pen
inventory to facilitate timely shipping or if AXTM is in receipt of returned
goods including Bio-Pens, AXTM is responsible for such DS inventory and if such
inventory cannot be accounted for, AXTM will pay DS on demand 50% of the MSRP of
a Bio-Pen Lockbox Personal Package. During regular business hours DS will have
the right with reasonable notice to audit any inventory held by AXTM.
2. ENGAGEMENT TERMS
(a) AXTM shall manage online sales and marketing activities as the only
"Company Authorized Online Fulfillment Agent" of DS's standard Products. The
delivery territory is limited to domestic (placecountry-regionU.S. - 50 states)
addresses.
(b) Upon request DS, in its sole discretion, may provide AXTM Product
inventory to facilitate AXTM's engagement. AXTM is responsible for such
inventory including any claims of loss including but not limited to theft,
damage or mysterious disappearance. DS will have the right to deduct any losses
from any fees due AXTM.
(c) DS shall setup an online merchant account for the exclusive use of
AXTM (the "Revenue Account").
(d) AXTM shall cooperate with DS to allow DS to reconcile the Revenue
Account before the 15th day of each month relating to the previous month's
Product sales activities (the "Monthly Reconcilement").
(e) DS shall pay AXTM a service fee (the "Base Service Fee") calculated
to be 50% of the Company's stated MSRP plus any shipping revenues less any AXTM
expenses. In the event that DS offers to wholesale customers and/or retail
distributors a price that is less than 50% of MSRP, then DS will inform AXTM and
evaluate the Base Service Fee. Any volume discounts or inducement discounts or
sample and promotion programs not authorized by DS under paragraph 4(b) below
shall be the responsibility of AXTM.
(f) AXTM shall be able to accept returns based on a DS approved
customary standard returns acceptance policy, unless other terms are agreed to
in writing.
(g) Payment of the Base Service Fee. DS will pay AXTM the Base Service
Fee within five days after the receipt of the Monthly Reconcilement. AXTM will
have access to the Revenue Account detail (online at any time) and the right to
audit the Revenue Account quarterly.
4. EXPENSES
(a) AXTM shall have sole discretion as to the type and nature of
expenses that arise as a result of providing the Services, and DS shall have no
obligation to reimburse AXTM for any out-of-pocket expenses associated with
providing the Services, unless otherwise mutually agreed to by both parties and
evidenced in writing.
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(b) Samples and Promotions. Developing any proposed sample and promotion
programs are the responsibility of AXTM. Any such programs have to be approved
by DS, but regardless should be a reduction in the AXTM Base Service Fee.
5. WARRANTY
(a) AXTM warrants that the Services will be performed in a professional
and workmanlike manner. AXTM does not warrant and will not be responsible for
the performance of any third party product or service. The preceding is AXTM's
only warranty concerning the Services and is made expressly in lieu of all other
warranties and representations, express or implied, including, without
limitation, any implied warranties of merchantability, fitness for a particular
purpose or otherwise.
(b) DS acknowledges and agrees that its ability to achieve the full
benefit of the Services is largely dependent on numerous financial, market and
other factors not within AXTM's control. Accordingly, AXTM does not warrant or
guarantee that the benefits expected to be derived from the Services will
actually be achieved.
6. AXTM'S COVENANTS
(a) AXTM, its employees and agents will comply at all times with all
applicable laws and regulations of any jurisdiction in which Services are
provided and with all applicable DS rules, policies and standards.
(b) AXTM, its employees and agents will comply at all times with all
security provisions in effect from time to time at DS's premises with respect to
access to premises and materials and information belonging to DS.
(c) AXTM is legally authorized to engage in business in the
placecountry-regionUnited States and will provide DS satisfactory evidence of
such authority upon request.
7. CONFIDENTIALITY
During the course of performance of this Agreement, each party may be given
access to information (regardless of whether in oral, written, electronic,
digital, magnetic or other form or media) that relates to the other's past,
present, and future research, development, business activities, customers,
products, services, and technical knowledge, and has been identified as
proprietary or confidential ("Confidential Information"). In connection
therewith, the following subsections shall apply:
(a) Confidential Information of the other party may be used by the
receiver only in connection with the Services.
(b) Each party agrees to protect the confidentiality of the
Confidential Information of the other in the same manner that it protects the
confidentiality of its own proprietary and confidential information of like
kind. Access to the Confidential Information shall be restricted to those of
DS's and AXTM's personnel engaged in a use permitted hereby.
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(c) Confidential Information may not be copied or reproduced without the
discloser's prior written consent.
(d) All Confidential Information made available hereunder, including
copies thereof (regardless of whether in written, electronic, digital, magnetic
or other form or media), shall be returned or destroyed (including deleting such
information from all computer systems) upon the first to occur of (i)
termination of this Agreement or (ii) request by the discloser.
(e) Nothing in this Agreement shall prohibit or limit either party's
use of information (including, but not limited to, ideas, concepts, know-how,
techniques, and methodologies) (i) previously known to it without obligation of
confidence, (ii) independently developed by it, (iii) acquired by it from a
third party which is not, to its knowledge, under an obligation of confidence
with respect to such information, or (iv) which is or becomes publicly available
through no breach of this Agreement.
(f) In the event either party receives a subpoena or other validly
issued administrative or judicial process requesting any portion of the
Confidential Information of the other party, it shall promptly notify the other
party and tender to it defense of such demand. Unless the demand shall have been
timely limited, quashed or extended, the recipient shall thereafter be entitled
to comply with such subpoena or other process to the extent permitted by law. If
requested by the disclosing party, the recipient shall cooperate (at the expense
of the disclosing party) in the defense of a demand.
8. INDEMNIFICATION
(a) Each party (an "Indemnifying Party") shall indemnify and hold the
other party, its employees and agents (each, an "Indemnified Party"), harmless
from and against all claims, demands, loss, damage or expense, including
reasonable attorneys' fees (collectively, "Losses"), to the extent such Losses
are caused by the negligence, willful acts or omissions or breach of this
Agreement of or by the Indemnifying Party and except to the extent such Losses
are caused by the negligent or willful acts or omissions of the Indemnified
Party.
(b) To receive the foregoing indemnity, the Indemnified Party must
promptly notify the Indemnifying Party in writing of a claim or suit and provide
reasonable cooperation (at the Indemnifying Party's expense) and full authority
to defend or settle the claim or suit. Neither party shall have any obligation
to indemnify the other under any settlement made without its written consent.
9. TERM AND TERMINATION
(a) The term of this Agreement shall commence on the date hereof and
shall continue for a period of two years unless sooner terminated in accordance
with the provisions hereof. If not terminated in accordance with the provisions
hereof, the term of this Agreement shall be extended for successive one-year
periods upon the second anniversary hereof and on each one-year anniversary
thereafter.
(b) DS may terminate this Agreement without cause no earlier than six
months after the effective date of this Agreement. In the event that DS elects
to terminate without cause under
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this provision, DS shall be required to provide 30 days written notice, and
continue to accept orders for Products from AXTM until effective date of
termination.
(c) Either party may, upon 30 days written notice identifying
specifically the basis for such notice, terminate this Agreement for breach of a
material term or condition of this Agreement, provided the breaching party shall
not have cured such breach within the 30-day period.
(d) Sections 7, 8, 9, 11 and 12 of this Agreement shall survive
termination of this Agreement for any reason.
10. INDEPENDENT CONTRACTOR
(a) AXTM is and shall remain an independent contractor and AXTM
acknowledges, and confirms to DS, its status as that of an independent
contractor. Nothing herein shall be deemed or construed to create a joint
venture, partnership, agency or employment relationship between the parties for
any purpose, including but not limited to taxes or employee benefits. AXTM shall
be solely responsible for payment of any and all employment related taxes,
insurance and employee benefits with respect to AXTM's personnel.
(b) AXTM shall provide the Services utilizing its owned, leased and/or
licensed equipment, technologies and resources. Nothing herein shall be deemed
or construed to be a transfer of ownership, control or rights to equipment,
technologies, and/or resources from AXTM to DS.
11. GOVERNING LAW; VENUE
This Agreement shall be governed by and construed in accordance with the
laws of the State of placeStateArizona, without reference to choice of law
principles. The parties agree to bring any actions related to this Agreement
only in the state and federal courts sitting in placeCityMaricopa County,
StateArizona.
12. LIMITATION OF LIABILITY
AXTM's maximum liability relating to Services rendered hereunder (regardless of
form of action, whether in contract, negligence or otherwise) shall be limited
to 50% of the MSRP or the Base Service Fee whichever is greater . In no event
shall AXTM be liable for consequential, special, incidental or punitive loss,
damage or expense (including without limitation, lost profits, placeopportunity
costs, etc.) even if it has been advised of their possible existence. The
allocations of liability in this Section 12 represent the agreed and
bargained-for understanding of the parties and AXTM's compensation for the
Services reflects such allocations.
13. SEVERABILITY
If any term or provision of this Agreement shall be found by a court of
competent jurisdiction to be invalid, illegal or otherwise unenforceable, the
same shall not effect the other terms or provisions hereof or the whole of this
Agreement, but such term or provision shall be
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deemed modified to the extent necessary in the court's opinion to render such
term or provision enforceable, and the rights and obligations of the parties
shall be construed and enforced accordingly, preserving to the fullest
permissible extent the intent and agreements of the parties herein set forth.
14. NOTICE
Any notice or other communication given pursuant to this Agreement shall be
in writing and shall be effective either when delivered personally to the party
for whom intended, or five days following deposit of the same into the United
States mail (certified mail, return receipt requested, or first class postage
prepaid), addressed to such party at the address set forth on the initial page
of this Agreement. Either party may designate a different address by notice to
the other given in accordance herewith.
15. FORCE MAJEURE
Neither party shall be liable for any delays or failures in performance due
to circumstances beyond its control.
16. COMPLETE AGREEMENT; AMENDMENT
This Agreement sets forth the entire understanding between the parties
hereto and supercedes all prior agreements, arrangements and communications,
whether oral or written, with respect to the subject matter hereof. No other
agreements, representations, warranties or other matters, whether oral or
written, shall be deemed to bind the parties hereto with respect to the subject
matter hereof. This Agreement may not be modified or amended except by the
mutual written agreement of the parties.
In witness whereof, the parties have duly executed this Agreement as of the
day and year first above written.
AXT MEDIA GROUP LLC
/s/ Mano Miyata
---------------
By: Mano Miyata, President
DYNASIG CORPORATION
/s/ Richard C. Kim
------------------
By: Richard Kim, President
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