EXHIBIT 10.16

DISTRIBUTION AGREEMENT

Between

OneUp Innovations, Inc., a Georgia corporation, ("OneUp Innovations")

&

Cupido Sensual International (HK) Ltd,

a Hong Kong corporation, ("Distributor")

 

Agreement Data:

 

1. Effective Date: September 15th, 2012 and Term Period: 5 (Five) years(s)

2. Exclusive Territory(ies): China Mainland, Hong Kong and Macau

3. Non-exclusive Territory(ies): Phillipines, Malaysia, Thailand, Vietnam and
Taiwan

3. Special Brands: Liberator

 

4. Notice Information Per Section 5.4:

 

  If to OneUp Innovations: If to the Distributor:   OneUp Innovations, Inc.
Cupido Sensual International (HK) Ltd   2745 Bankers Industrial Drive Unit D3,
4/F, Mai Luen Industrial Building     23-31 Kung Yip Street, Kwai Chung  
Atlanta, GA 30360 New Territories, Hong Kong   Attn: Legal Department Attn:
Miguel Angel Lozada   Telephone:  (770) 246-6440 Telephone: (852)5181-2421  
FAX:  (770) 246-6441  

 

5. Applicable Attachments

 

x OneUp Innovations Distributor Price List (the then-current version list of
Products, which initially will include all those product of OneUp Innovations
that are presented on its Liberator.com)

 

¨ OneUp Innovations Marks Guideline (then-current version of guidelines)

 

Distributor and OneUp Innovations acknowledge that they have read and fully
understand this Agreement and hereby agree to the terms of this Agreement.

 

ONEUP INNOVATIONS: DISTRIBUTOR:   OneUp Innovations, Inc. Cupido Sensual
International (HK) Ltd   By: Michael Kane By: Christy Ho   Title: Executive Vice
President Title: Managing Director   Date: September 1st, 2012 Date: September
1st, 2012   Signature: /s/ Michael Kane Signature: /s/ Christy Ho  

 

 
 

 

I. APPOINTMENT AS A DISTRIBUTOR

1.1 Appointment. Distributor is appointed as a OneUp Innovations Distributor to
resell to its customers located in the Territory only ("Customers") certain
OneUp Innovations products as identified to it by OneUp Innovations (the
"Products"). Such appointment permits Distributor to market, display, promote,
sell, have sold and distribute Products to such Customers. Such appointment also
permits Distributor to import, however the appointment does not allow
Distributor to make, have made and assemble any licensed Products in the
Territory as more expressly authorized herein. Distributor is prohibited from
exporting, or permitting any of its Customers from exporting, any Products from
the Territory except for such Customers personal use of a Product for its
intended purpose. Distributor may appoint or utilize retailers and distributors
for the Products in the Territory (“Resellers”) provided that each such Reseller
agrees in writing with Distributor: (i) to be bound by terms and conditions
substantially similar to the terms and conditions imposed upon Distributor per
this Agreement; (ii) to acknowledge that OneUp Innovations is an interested
third party beneficiary thereof; and (iii) that OneUp Innovations may enforce
such agreement directly against the Reseller provided that OneUp Innovations
shall have no liability to the Reseller under such agreement. Distributor hereby
accepts such appointment and agrees to conduct its business as a OneUp
Innovations Distributor during the term of such appointment in accordance with
the terms of this Agreement. Provided that Distributor fulfils it obligations
per this Agreement and is not in breach, OneUp Innovations agrees to appoint no
third party as a OneUp Innovations Distributor for the Territory.

 

1.2 Purchases of Products. The Distributor shall purchase Products from OneUp
Innovations in such quantities as may be mutually agreed upon during the term of
this Agreement. All purchases of Products by Distributor from OneUp Innovations
shall be made solely pursuant to (i) this Agreement, (ii) the prices and payment
terms set forth on the OneUp Innovations price list applicable to Distributor
from time to time during the term of this Agreement (the "OneUp Innovations
Distributor Price List"), and (iii) the terms of the Distributor's order
required by Section 4.2(a). During the term of this Agreement and for two (2)
years after its termination, Distributor agrees that it will not manufacture,
produce, assemble, market, display, sell, have sold or distribute any products,
items or materials that are competitive, like or similar to the Products.

 

1.3 Independent Contractor. This Agreement does not constitute or appoint
Distributor as an agent of OneUp Innovations. The Distributor is an independent
contractor, and OneUp Innovations shall not be liable for the debts, accounts,
obligations or other liabilities of Distributor or of its agents, employees or
independent contractors.

 

1.4 Discontinuation or Modification of the Products. OneUp Innovations reserves
the right, from time to time, to modify, discontinue, add, adopt or change
(“Revise”) any Product, mark, trade name, design or specification of any
Product, as well as any information, material or service that it provides. With
regard to Revised items, Distributor agrees to follow and take all reasonable
action necessary to comply with and enforce OneUp Innovations instructions for
the discontinuation of rights appointed to it for the previous version of any
such Revised items as of the date specified by OneUp Innovations with such
instructions.

 

1.5 Obligations of Cross Referral. In the event that OneUp Innovations receives
inquiries for the purchase of Product in the Territory, it shall use
commercially reasonable efforts to advise Distributor of such inquiries. In the
event that Distributor receives inquiries for the purchase of Product outside of
the Territory, it shall use commercially reasonable efforts to promptly notify
Distributor of such inquiries.

 

II. OBLIGATIONS OF THE DISTRIBUTOR

2.1 Marketing and Sales of the Products.

(a) Distributor shall use its best efforts to solicit orders, provide marketing
services and promote sales of the Product and try to develop the full sales
potential of the Product in the Territory. During the term of this Agreement,
and for twenty (24) months after its termination for any reason, Distributor
agrees that it will not market, promote, sell, make, have sold, have made,
import, export, distribute or otherwise provide any product or service that is
like, similar or competitive to (or a replacement for) any Product identified as
a Special Brand. Distributor shall only market and distribute Products in the
form of packaging supplied by OneUp Innovations or its designees. Distributor is
free to set or quote any price to Customers regarding the purchase of Products
in the Territory.

 

(b) Promptly following the execution of this Agreement, and then again before
the start of each new calendar year during the term of this Agreement,
Distributor shall develop a comprehensive plan to market the Products to
consumers and resellers in the Territory. Such plan shall be delivered to OneUp
Innovations for its review and input prior to its implementation. In order to
help facilitate Distributors efforts to market and promote the Products, OneUp
Innovations agrees to share with Distributor a copy of generally published
information and materials that it generates, including: (i) new product release
announcements, (ii) happenings, (iii) article and white papers, (iv)
spokesperson endorsements, (v) banner ads and campaign artwork for PPC campaign,
and (vi) camera ready art and photographs for use with the website and printed
materials. Each party agrees to use commercially reasonable efforts to establish
and maintain a link from its website to the other party’s website.

 

(c) Distributor agrees to operate and maintain a consumer / Customer accessible
Internet website where the OneUp Innovation Content may be displayed and
Products can be purchased and ordered within the Territory. Such a website shall
be operated and maintained with sufficient bandwidth and uptime that is
commercially reasonable for selling Products 24/7 via the Internet and manner so
as permit online ordering via a shopping cart.

 

(d) Additionally upon execution of this Agreement, Distributor shall place with
OneUp Innovations an order per a letter of credit for a mix of Products so as to
fill a standard forty foot (40 ft.) volume container, which order and letter of
credit shall be subject to acceptance by OneUp Innovations.

 

(e) In the event that Distributor pursues the development of retail stores per a
franchise model to sell Products in the Territory, OneUp Innovations shall
provide to Distributor with its generally available information and materials
for store layout, a franchise system and a home party concept.

 

2.2 Warranties.

(a) With respect to its resale of the Products, Distributor will give and make
no warrant(y)(ies) or representation(s) as to quality, merchantability, fitness
for a particular use or purpose or any other feature(s) of the Product(s) being
sold, other than those contained in the OneUp Innovations warranty, if any,
given by OneUp Innovations to the original final consumer as set forth in the
warranty literature accompanying and applicable to specific Products.

 

(b) From time to time during the term of this Agreement, OneUp Innovations may
provide to Distributor without charge certain warranty and product labeling
materials and disclosure literature, together with directions for the use,
display and customer availability of such materials and literature, as required
by applicable law and OneUp Innovations' policy. Distributor shall comply with
such directions for the display and customer availability and distribution of
all such materials and literature and with any instructions and procedures
imposed by law or OneUp Innovations policy regarding the safety or recall of any
of the Products.

 

(c) In the events that specific content is required with any label, tag or
literature normally produced by OneUp Innovations with a Product, Distributor
shall so notify OneUp Innovations, who will then use its commercially reasonable
efforts to include such content as a part of the label, tag or literature that
it produces for the Territory. Notwithstanding the terms and conditions of
subsections (b) and (c), Distributor shall ensure that all labels, tags and
literature provided with any Product, whether for its use, production or sale,
comply with all laws, regulations and ordinance of the Territory.

 

2.3 Patents, Copyrights, Trademarks, Trade Names and Other Designations.

(a) OneUp Innovations has registered and may in the future register, and owns or
is licensed to use and sub-license to third parties, certain patents,
copyrights, and marks in the Territory, United States and/or other countries
around the world. Distributor undertakes to reproduce faithfully all such now
and hereafter existing patent and copyright notices as well as trademarks,
service marks, trade names, copyright and other proprietary notices, logos,
slogans, designs and distinctive advertising (herein separately and collectively
the "Marks") as may appear on or in respect of the Products and literature and
shall not tamper with or modify any such notices or any of the Marks.
Distributor shall not use the Marks except as provided for herein. Distributor
may employ OneUp Innovations provided copyrighted and patent items as well as
the Marks in its advertising and promotional materials but only in accordance
with the then current guidelines for use as published by OneUp Innovations.

 

(b) In any jurisdiction where Distributor must be recorded as a registered user
of OneUp Innovations’ Marks in order for use by Distributor to inure to the
benefit of, or be beneficial to, OneUp Innovations, Distributor shall cooperate
with OneUp Innovations to execute such a registered-user agreement in a form
reasonably requested by OneUp Innovations and to have it so recorded for the
term of this Agreement only. Distributor hereby irrevocably appoints OneUp
Innovations its attorney in fact (such appointment to be coupled with an
interest) to act for it and represent it in canceling any registered user
recordation in the event of termination of this Agreement.

 

(c) Except as expressly provided herein, nothing in this Agreement grants
Distributor any right, title, or interest in the patents, copyrights or Marks of
OneUp Innovations or its suppliers. Distributor agrees that at no time during or
after the term of this Agreement will it challenge or assist others to challenge
the patents, copyrights, Marks, or the registration thereof, of OneUp
Innovations or its suppliers, or attempt to register, use, or permit to be used,
any of the other party’s patents, copyrights or Marks, or names, information,
materials or marks infringing upon or confusingly similar to such patents,
copyrights and Marks of OneUp Innovations and its suppliers. All goodwill
associated with the use of the patents, copyrights and Marks of OneUp
Innovations and its suppliers shall inure to the benefit of OneUp Innovations
and its suppliers.

 

2.4 Documentation and Reports.

(a) Distributor shall provide OneUp Innovations with the following documentation
and reports in form and on media satisfactory to OneUp Innovations on a monthly
basis pursuant to a time table established by OneUp Innovations:

 

(i) Information requested by OneUp Innovations concerning the types and
quantities of Products sold by Distributor during that period; and

 

(ii) Non-binding forecasts of quantities of Products designated on the OneUp
Innovations Distributor Price List which Distributor reasonably expects to
purchase during the six-month period following the date of each forecast.

 

(b) Distributor shall maintain and retain all records relating to the contracts,
invoices, accounts, complaints and other transactions which concern OneUp
Innovations or the Products for a period of four (4) years from the date of the
completion of the transaction from which such records arose.

 

(c) Distributor shall permit OneUp Innovations, upon reasonable notice, to
review the accounts, financial records and other information prepared and
maintained by Distributor in connection with its activities hereunder, in order
to verify and determine: (i) Distributor's compliance with the obligations of
this Agreement, (ii) financial condition, in particular if credit or net payment
terms have been extended to Distributor and (iii) the method and manner by which
Distributor is promoting and selling the Products.

 

(d) OneUp Innovations shall hold in confidence and treat as confidential within
OneUp Innovations all confidential information received from Distributor
pursuant to this Section 2.4 and shall only use and disclose such information in
connection with the business relations between OneUp Innovations and
Distributor, for internal financial and planning purposes, and to effect the
terms of this Agreement.

 

2.6 Manufacture and Support of Products.

(a) In those situations where written authorization is provided by OneUp
Innovations allowing Distributor to purchase Products that will either require
assembly or certain manufacturing in order to produce a final good that may be
sold to Customers, Distributor shall be responsible for making, or having made,
such final good at its cost. All such final goods shall only be assembled or
manufactured so as to comply with specification for the good as established by
OneUp Innovations and shall be inspected and tested so as to confirm such
compliance prior to sale or distribution to Customers. OneUp Innovations agrees
to (i) provide training to Distributor following the execution of this Agreement
with regard to the packaging, assembly and grinding of foam, and (ii) use
commercially reasonable efforts to supply CAD drawings, sample foam, and/or
covers prior to or with the shipment of Products purchased that are to be
finally assembled or manufactured by Distributor.

 

(b) Distributor shall employ a sufficient number of trained personnel capable of
providing effective and responsive sales, production and warranty support to
Customers. At least once per calendar year Distributor shall visit the OneUp
Innovations designated factory for training and updates on the Products.
Distributor shall cause designated representatives of its support personnel to
complete training offered by OneUp Innovations in the demonstration,
installation and support of Products. Such training must be successfully
completed within ninety (90) days following the effective date of this
Agreement.

 

2.7 Compliance with Laws. Distributor shall obtain and maintain all permits,
licenses and government registrations necessary or appropriate to perform
hereunder and shall make all filings with governmental authorities required of
this Agreement by applicable law, including without limitation those necessary
to enable Distributor to import Product and make payments to OneUp Innovations
in U.S. Dollars. Upon request, Distributor shall provide OneUp Innovations
written assurances of such compliance.

 

2.8 Indemnity. Distributor shall indemnify and hold harmless OneUp Innovations
and its officers, directors, employees and representatives from any liability,
claim, loss, damage, cost, fine, or expense, including reasonable attorneys'
fees, arising out of any act or omission of Distributor, its Resellers, or its
or their officers, directors, employees or representatives.

 

III. TERM AND TERMINATION

3.1 Term. The initial term of this Agreement shall commence on the Effective
Date and shall continue for the Term Period unless otherwise terminated early as
permitted per this Agreement. At the end of the then current Term Period, this
Agreement shall automatically renew for a separate, successive Term Period that
may likewise be terminated early as permitted per this Agreement. This
Agreement, and Distributors appointment as a OneUp Innovations Distributor, may
be terminated as follows:

 

(a) At any time upon the mutual, written agreement of the parties; or

 

(b) By either party at any time after the occurrence of any one or more of the
following Events of Default:

 

(i) failure of the other party to perform any obligation of the other party
under this Agreement and to cure such failure within thirty (30) days (fifteen
(15) days in the case of a payment default by Distributor) after receipt of
notice thereof from the non-defaulting party;

 

(ii) the entering into or filing by or against the other party of a petition,
arrangement or proceeding seeking an order for relief under any bankruptcy laws,
a receivership for any of the assets of the other party, a composition with or
assignment for the benefit of its creditors, a readjustment of debt, or the
dissolution or liquidation of the other party; or

 

(iii) The insolvency of the other party; or

 

(iv) Failure to meet 85% of the following purchase targets in USD from OneUp
Innovations commencing on the execution date of this contract.

 

·      Year 1$200,000 ·      Year 2$750,000 ·      Year 3$1,500,000 ·      Year
4$2,500,000 ·      Year 5$3,500,000

 

(d) By OneUp Innovations, in the event of a change in the legal structure of
Distributor, or the conveyance, assignment or transfer by Distributor (or
reasonably anticipation of the same) of a substantial portion of Distributor’s
stock (or other evidence of ownership), assets, or interest in this Agreement,
without the prior written consent of OneUp Innovations.

 

3.2 Effect of Termination.

(a) Upon termination of this Agreement, all rights granted under this Agreement
(except for OneUp Innovations’ right to enforce the provisions of Section 2.4(b)
of this Agreement) shall immediately cease and terminate and the entire balance
of any and all monies owed by Distributor to OneUp Innovations shall mature and
become immediately due and payable. OneUp Innovations may withhold shipment of
Product, cancel outstanding purchase orders and/or refuse to accept new purchase
orders once a notice of termination has been given or received by it.
Furthermore, Distributor shall cease all production, assembly, marketing,
promotion, sales and distribution of the Products and shall cause its reseller,
representatives, and independent contractors to do the same. OneUp Innovations
shall not be liable to Distributor for any claim of any kind or character
whatsoever arising from the expiration or permitted termination of this
Agreement or the Revision of any Product, mark, trade name, information or
material, whether such claim arises from the loss of prospective sales, or
expenses incurred or investments made in connection with the establishment,
development or maintenance of Distributor's business, or any other reason
whatsoever.

 

(b) The following provisions shall survive any termination or expiration of this
Agreement: 1.2 (bolded sentence only), 1.4, 2.3 (b) and (c), 2.4, 2.7, 2.8, 3.2,
4.3, 4.5, 4.6, and 5.

 

IV. TERMS OF SALE

4.1 Price and Terms.

(a) Distributor shall pay as the purchase price for each type and quantity of
Products ordered under each order submitted to OneUp Innovations, the price set
forth on the OneUp Innovations Distributor Price List in effect on the date of
shipment of each installment or portion of the Products. Such price shall not be
in excess of OneUp Innovations generally published suggested retail price
(“MSRP”) for a Product and will not be discounted by more that fifty percent
(50%) less Thirty (30%) of the MSRP for finished goods. As a result of the
significant variation that may exist with exchange rates between currencies,
each party reserves the right to request a conference up to once every six (6)
months with the other to review the pricing and sourcing of Products.

 

(b) The aggregate purchase price for all of the Products ordered (the "Price")
shall be paid in United States dollars in the United States by the Distributor
to OneUp Innovations by wire transfer, 25% of Payment shall be due when order is
received from Distributor with the remaining 75% balance payable before the
items leave OneUp warehouse. All shipments are EXW Atlanta, Ga If, at a later
date and in writing OneUp offers distributor credit Payment for invoices that
are more than thirty (30) days after the date shown on OneUp Innovations’
invoice, shall be subject to interest in on the full amount due at the rate of
1.5% per month, or the maximum interest rate as permitted by law, whichever rate
is less. The payment and Price for the Products shall not be subject to any
set-off for claims of the Distributor. In the event OneUp Innovations deems it
necessary to enforce this Agreement (including without limitation, to collect
any amount due to OneUp Innovations) by, through or with the advice of an
attorney, the Distributor shall pay to OneUp Innovations upon demand all costs
and expenses of such enforcement including, without limitation, OneUp
Innovations’ reasonable attorney's fees, and all other associated legal costs.
Failure to pay any invoice or any installment payment when due automatically
makes the full Price and any other amounts payable under this Agreement
immediately due and payable regardless of the other terms herein. Further, in
such instance, OneUp Innovations may withhold subsequent shipments until the
full Price and any other amounts due hereunder are paid in full.

 

(c) OneUp Innovations reserves the right to change at any time and from time to
time the prices charged for and the payment terms in respect of the Products as
set forth in the OneUp Innovations Distributor Price List. However, in the event
of a price increase, the Distributor will be given thirty (30) calendar days
prior written notice of the effective date of any such increase (the "Price
Change Notice Period").

 

(i) In the event of a price increase, the purchase price of any of the Products
ordered under an order accepted by OneUp Innovations prior to the commencement
of a Price Change Notice Period requesting shipment of all or a part of such
Products during the Price Change Notice Period shall be the purchase price in
effect prior to the effective date of such increase for that portion of such
Products with a requested shipment date within the Price Change Notice Period.
The purchase price for all Products with a requested shipment date after the
Price Change Notice Period shall be the purchase price as increased.

 

(ii) In the event of a price decrease, the purchase price of any Products
shipped by OneUp Innovations to the Distributor within the thirty (30) calendar
days prior to the effective date of any price decrease (the "Covered Products")
shall be the price as decreased; provided, however, that all Covered Products
must be existing and verified to be in the Distributor's inventory on the
effective date of such price decrease. The purchase price of all Products
shipped to the Distributor after the effective date of the price decrease shall
be the price as decreased.

 

(d) The amount of any present or future sales, use, VAT, import, excise or other
similar tax or duty applicable to the Products shall be paid by the Distributor,
or in lieu thereof, the Distributor shall provide OneUp Innovations with a tax
exemption certificate acceptable to OneUp Innovations and all applicable taxing
authorities.

 

(e) If OneUp Innovations deems Distributor's financial situation to be insecure,
it may require payment in advance or upon delivery to the carrier. If
Distributor shall at any time be overdue on payments, OneUp Innovations may
withhold shipment of product, cancel outstanding orders, and terminate this
Agreement for breach. Failure of Distributor to timely pay for any shipment
regardless of size shall be deemed a material breach of this Agreement.

 

4.2 Acceptance of Orders; Lead Times; Order Cancellation and Rescheduling.

(a) Each order for the Products submitted by the Distributor to OneUp
Innovations shall be in writing and shall set forth the type(s) and quantity of
the Products ordered and requested shipment date(s) and shipment destination in
accordance with the OneUp Innovations Distributor Price List. Each such order
shall be subject to acceptance by OneUp Innovations and, at any time prior to
the cancellation of that order by the Distributor pursuant to Section 4.2(c),
OneUp Innovations may accept that order (i) by giving notice of acknowledgement
of such order to the Distributor in any manner provided in Section 5.4, or (ii)
by shipping the Products ordered, or any part thereof. Only those terms required
by this Section 4.2(a) shall become part of this Agreement. All other terms and
conditions contained on the Distributor's order or any other document submitted
by the Distributor are expressly rejected by OneUp Innovations.

 

(b) OneUp Innovations shall use commercially reasonable efforts to ship (or
cause to be shipped) all Products by the requested shipment dates, provided such
requested shipment dates allow for the minimum lead times, if any, set forth on
the OneUp Innovations Distributor Price List.

 

4.3 Identification; Delivery; Risk of Loss and Title. Identification of the
Products shall occur when the Products are shipped to the Distributor. Shipment
of the Products will be EXW OneUp Innovations’ facility (the "Shipping Point").
OneUp Innovations shall put the Products in the possession of a carrier at the
Shipping Point, contract with the carrier for the shipment of the Products to
the destination designated in the Distributor's order, and obtain and promptly
deliver to the Distributor the documents, if any, necessary for the Distributor
to obtain the Products. OneUp Innovations shall bear the expense of putting the
Products in the possession of the carrier. The Distributor shall bear all other
costs of transportation and delivery, including without limitation, unloading,
storage, insurance and freight. Title to and risk of loss of the Products shall
pass to the Distributor at the Shipping Point when the Products are put in the
possession of the carrier by OneUp Innovations. Unless the Distributor otherwise
designates and arranges for the carrier, OneUp Innovations may designate such
carrier as it deems appropriate. Under no circumstances shall such carrier be
deemed an agent, employee, or representative of OneUp Innovations.

 

4.4 Shipment; Delay. OneUp Innovations shall use commercially reasonable efforts
to comply with all shipment date(s) requested by the Distributor. OneUp
Innovations may make partial shipments of the Products from time to time prior
to the requested shipment date(s). If OneUp Innovations is unable or fails to
comply with any shipment date(s) requested by the Distributor under any order,
the Distributor may cancel, reduce or reschedule such order in accordance with
Section 4.2(c) hereof. In no event shall OneUp Innovations be liable to the
Distributor for damages (however described or arising) for any failure to
fulfill or meet shipment date(s) requested by the Distributor. OneUp Innovations
shall use commercially reasonable efforts to notify the Distributor if OneUp
Innovations is unable or will fail to comply with such requested shipment
date(s).

 

4.5 OneUp Innovations’ Warranties and Representations. OneUp Innovations
represents and warrants to the Distributor as follows:

 

(a) "Limited Warranty." In the event the Distributor is purchasing a Product for
its own use, OneUp Innovations will warrant such Product to the Distributor in
accordance with the OneUp Innovations Limited Warranty in effect from time to
time, set forth in the literature provided by OneUp Innovations to the
Distributor applicable to the particular Products (the "Limited Warranty"). The
Distributor shall have no authority to act for or on behalf of OneUp Innovations
in extending to the Distributor Customers any warranty or condition, either
express or implied, with regard to the Products; and any such other warranty or
condition, whether express or implied, made by the Distributor to its customers
with respect to the Products shall be and remain the sole responsibility of the
Distributor and shall not put OneUp Innovations under any obligation in any way.

 

(b) TO THE EXTENT PRODUCTS ARE PURCHASED FOR DISTRIBUTOR'S OWN USE, THE LIMITED
WARRANTY ARE MADE EXPRESSLY IN LIEU OF ANY AND ALL OTHER EXPRESS OR IMPLIED
WARRANTIES TO THE DISTRIBUTOR, INCLUDING, WITHOUT LIMITATION, ANY AND ALL
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND
ALL SUCH OTHER WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.

 

4.6 The Distributor's Remedies.

(a) In the event that any unit of the Products purchased by the Distributor for
its own use shall not comply with the Limited Warranty applicable to such
Products, the Distributor's sole and exclusive remedy with respect to such
non-conformity shall be the remedy set forth in the Limited Warranty
accompanying such units.

 

(b) ANY LIABILITY OF ONEUP INNOVATIONS TO THE DISTRIBUTOR SHALL BE LIMITED TO A
SUM EQUAL TO THE PRICE PAID BY THE DISTRIBUTOR TO ONEUP INNOVATIONS FOR THE
PRODUCTS OR PART THEREOF IN RESPECT OF WHICH THE DISTRIBUTOR MADE A CLAIM
AGAINST ONEUP INNOVATIONS. ONEUP INNOVATIONS SHALL NOT BE LIABLE FOR ANY CLAIM
AGAINST DISTRIBUTOR BY ANY CUSTOMER, CONSUMER OF THE PRODUCT OR OTHER THIRD
PARTY. NOTWITHSTANDING THE FOREGOING, ONEUP INNOVATIONS SHALL NEVER BE
RESPONSIBLE OR HELD LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR
CONSEQUENTIAL LOSS OR DAMAGE INCLUDING, BUT NOT LIMITED TO LOSS OF PROFITS,
BUSINESS, REVENUE, GOODWILL OR ANTICIPATED SAVINGS OR, TO THE EXTENT SUCH
LIMITATION IS PERMITTED BY APPLICABLE LAW, PUNITIVE DAMAGES OR DAMAGES RESULTING
FROM PHYSICAL INJURY TO TANGIBLE PROPERTY OR DEATH OR INJURY OF ANY CUSTOMER,
EMPLOYEE, AGENT OR INDEPENDENT CONTRACTOR OF THE DISTRIBUTOR, OR ANYONE ELSE,
WHETHER ARISING FROM ONEUP INNOVATIONS'S NEGLIGENCE, BREACH OF CONTRACT OR
OTHERWISE.

 

 

V. MISCELLANEOUS PROVISIONS

5.1 Entire Agreement; Amendments. This Agreement and the documents and
attachments referenced to herein constitute the entire agreement of the parties
hereto with respect to the subject matter hereof, and supersede all prior oral
or written agreements, term sheets, letter of intent or understanding or like
communications. Except as expressly provided herein, this Agreement may not be
amended or modified, except by a further written agreement signed by the parties
hereto.

 

5.2 Waiver. No failure or delay on the part of OneUp Innovations in exercising
any right or remedy hereunder will operate as a waiver thereof; nor will any
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or of any other right or remedy. No provision of this
Agreement may be waived except in a writing signed by the party granting such
waiver.

 

5.3 Assignment. The performance or exercise by the Distributor of the duties
imposed upon and rights granted to the Distributor hereunder are of the essence
to OneUp Innovations’ agreement hereunder; accordingly, the Distributor shall
not sell, transfer, lease, assign, pledge, mortgage, hypothecate or otherwise
dispose of any of the rights, privileges, duties and obligations granted or
imposed upon it under this Agreement. Notwithstanding, Distributor reserves the
right to sell all of its business to a suitable candidate in the future;
provided, however, that OneUp Innovations shall have a right of first refusal to
meet or beat any good faith offer on terms that are substantially similar to
those offered to Distributor for its business. In the instance of such an offer
being made to Distributor, the terms of such offer shall be presented to OneUp
Innovations prior to their acceptance, which entity shall then have fifteen (15)
business days to meet or beat such offer.

 

5.4 Notice. Except as otherwise specified herein, all notices, communications
and reports required or permitted pursuant to this Agreement shall be in writing
and shall be e-mailed, mailed, faxed, telexed or otherwise delivered to the
other party at the address first set forth above (or at such other address as
may be specified hereafter in writing by any party hereto to the other party
hereto in accordance with this Section 5.4) and shall be effective and deemed
received when delivered, or (i) if mailed, three (3) days after placement in the
United States Mail, postage prepaid, (ii) if faxed, when received, or (iii) if
telexed, when dispatched and confirmation of message received or (iv) when sent
via e-mail and an e-mail confirmation of receipt is received by OneUp.

 

5.5 Severability. In the event that any one or more of the provisions, or parts
of any provisions, contained in this Agreement shall for any reason be held to
be invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, the same shall not invalidate or otherwise affect any other
provision hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or part of any provision had never been
contained herein.

 

5.6 Governing Law. Distributor acknowledges that OneUp Innovations is based in
the State of Georgia, United States, and requires uniformity and consistency in
the laws under which it deals with all of its domestic and international
resellers. Accordingly, this Agreement, and the legal relations between the
parties hereto, shall be governed by and interpreted in accordance with the laws
of the State of Georgia, United States, without reference to conflict of laws
principles and without regard to the United Nations 1980 Convention on Contracts
for the International Sale of Goods and any amendments thereto. Venue for any
claims to be brought hereunder shall be exclusive to the state courts located in
Fulton County, Georgia or the federal courts for the Northern District of
Georgia.

 

5.7 Force Majeure. Neither party hereto shall be liable for the failure to
perform any of its obligations under this Agreement if such failure is caused by
the occurrence of any force majeure beyond the reasonable control of such party,
including without limitation fire, flood, wind, tsunami, earthquake, strikes and
other industrial disturbances, failure of supply or suppliers, failure of
transport or shippers, accidents, wars, terrorism, riots, insurrections, acts of
God or orders of governmental agencies. In the event that a contingency occurs
that affects OneUp Innovations’ performance, OneUp Innovations may allocate
production and delivery among its customers as it sees fit and without liability
to the Distributor.

 

5.8 Headings. Section headings herein are for convenience only and shall in no
case be considered in construing this Agreement.

 

5.9 Binding Agreement. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement is subject to acceptance of OneUp Innovations evidenced
by the execution of this Agreement and shall not become binding upon OneUp
Innovations until so executed.

 

5.10 Confidentiality. Each party expressly undertakes to retain in confidence
all information and know-how transmitted to the other that the disclosing party
has identified as being proprietary and/or confidential (“Confidential
Information”), and expressly undertakes to make no use of Confidential
Information except as required to perform its obligations under this Agreement
during its term. All Confidential Information shall be treated by the receiving
party with the same degree of care as is used with respect to the receiving
party’s own information of like importance that is to be kept confidential to
prevent disclosure to any third party (but in no event less than reasonable
care). However, neither party shall have an obligation to maintain the
confidentiality of information that:

(i) is already in the public domain or subsequently becomes available to the
public through no breach of this Agreement by the receiving party; (ii) was
lawfully in the receiving party’s possession prior to receipt from the
disclosing party; (iii) is received independently from a third party free to
lawfully disclose such information to the receiving party; (iv) is subsequently
independently developed by the receiving party; or (v) is generally made
available to third parties by the disclosing party without restrictions on
disclosure. Unless otherwise mutually agreed in writing, the receiving party’s
obligations hereunder with respect to each item of Confidential Information
shall survive for three (3) years after the termination or expiration of this
Agreement. Notwithstanding the foregoing, Distributor agrees to maintain in
strict confidence any pricing, functional and design specifications and release
plans concerning OneUp Innovations Products revealed to Distributor that have
not been generally released to the public.