XDOGS COM INC, 10KSB40, EX-10.43, 2000-07-13

XDOGS COM INC
10KSB40, EX-10.43, 2000-07-13
SPORTING & ATHLETIC GOODS, NEC

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<PAGE> 1

OXBOW, S.A.
and
XDOGS.COM, INC.
DISTRIBUTION AGREEMENT

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
1. Definitions and Interpretation ..........................................................................1
3. Commencement ...........................................................................................4
4. Grant ..................................................................................................4
5. Term ...................................................................................................4
6. Royalties ..............................................................................................4
7. Targets ................................................................................................5
8. Purchase and Sale of Products ..........................................................................6
9. Marketing of Products ..................................................................................7
10. Indemnity and Insurance ...............................................................................10
11. Books and Records .....................................................................................11
12. Report and Remittance Forms ...........................................................................11
13. Packaging and Advertising of Products .................................................................12
14. Quality Control .......................................................................................13
15. Confidential Information ..............................................................................14
18. Sufficient Use of Trade Marks .........................................................................14
17. Benefit of Use of Trade Marks .........................................................................15
18. Rights not to be Challenged ...........................................................................15
19. Infringements .........................................................................................16
20. Sales Outside the Territory ...........................................................................17
21. Sales by the Company in the Territory .................................................................17
22. Sale of Competitive Products ..........................................................................17
23. Termination ...........................................................................................18
24. Rights and Obligations on Termination .................................................................20
25. Representations and Warranties ........................................................................21
28. Agency Relationship ...................................................................................22
27. Notices ...............................................................................................23
28. Assignment ............................................................................................23
29. Legal and Ethical Requirements ........................................................................24
30. Local Law Compliance ..................................................................................24
31. Governing Law .........................................................................................25
34. Force Majeure .........................................................................................27
35. Whole Agreement .......................................................................................28
36. Agreement Severable ...................................................................................28
37. Agreement to Co-operate ...............................................................................28
38. Waiver and Variation ..................................................................................28
39. Execution in Counterpart ..............................................................................28
Schedule 1 ......................................................................................................
Schedule 2 ......................................................................................................
Schedule 3 ......................................................................................................
</TABLE>

<PAGE> 3

DISTRIBUTION AGREEMENT

This Agreement is made and entered into as of the 24th day of January,
2000 by and between Oxbow, a societe anonyme (French joint-stock company), with
principal offices at 55, route Jean Briaud, 33700 Merignac, France (the
"Company), and XDOGS.COM, Inc., a Nevada corporation, with principal offices at
80 South Eighth Street, Suite 3660, Minneapolis, Minnesota 55402 (the
"Distributor).

WHEREAS, the Company is producing and selling clothing and equipment
under the OXBOW trademark;

WHEREAS, for the purposes of its marketing activities, the Company
distinguishes its products in different Brands or Lines

o OXBOW

o OXBOW - Girls

o OXBOW - Snow Boards

o OXBOW - NIX

WHEREAS, the Company and the Distributor are entering into an exclusive
license agreement of even date herewith (the "License Agreement");

WHEREAS, the Company also wishes to enter into a commercial
relationship with the Distributor for the importation and commercialization of
its products in the North America

NOW, THEREFORE, in consideration of the representations, warranties,
covenants and mutual promises set forth in this Agreement, the parties agree as
follows:

1. DEFINITIONS

A. "ADVERTISING PERCENTAGE" means ten percent (10%).

B. "ANNIVERSARY DATE" means January 1, 2001 and each January 1
thereafter during the term of this Agreement.

C. "CONFIDENTIAL INFORMATION" means and includes all advice,
information and knowhow including (without limitation) any
designs, processes, developments, improvements, inventions,
concepts, graphics and styling relating to the Products and trade
secrets relating to the Products or the business of the Company
or any associated company, whether tangible or intangible,
provided by the Company to the Distributor.

<PAGE> 4

D "CONTRACT YEAR" means the period commencing with the Effective
Date and ending on December 31, 2000 for the first Contract Year,
and each successive twelve (12) month period commencing on an
Anniversary Date.

E. "EFFECTIVE DATE" means January 1, 2000.

F. "FISCAL YEAR" means the twelve month period commencing with April
1 and ending on the following March 31.

G. "OXBOWS SELLING PRICE" means the purchase price of Products
Ex-Works invoiced to the Distributor by the Company at its full
cost price plus 5% (five percent).

H. "INTELLECTUAL PROPERTY RIGHTS" means the Trade Marks and any
patents, copyright, registered or unregistered designs or any
applications or rights to apply for any of the foregoing which
are owned or used by the Company.

I. "Net Sales" means gross sales of Products invoiced by the
Distributor plus the fair market value in the case of
transactions otherwise than at arm length, after deduction of

(1) any value added or other similar tax charged upon and
included in the invoice price to the purchaser;

(2) quantity discounts to the extent customarily granted by the
Distributor;

(3) customer returns actually credited during the applicable
period; and

(4) bad debts.

J. "Percentage Royalty" means the following percentage, dependent on
the period in which such purchases are made.

Period Percentage

January 1, 2000 to December 31, 2000 10
January 1, 2001 to December 31, 2001 12
January 1, 2002 to December 31, 2002 14
January 1, 2003 to December 31, 2003 16

K. "Products" means (a) all Company apparel including without
limitation the group of Products designated in Exhibit I hereto,
and presented in the two main Company's catalogs in 1999 (b) all
changes, modifications or enhancement of the Products.

<PAGE> 5

The list of Products which are included, without limitation, in the
definition of Products on the Effective Date is found in Exhibit 1.
This fist may be changed at any time by the Company, to provide for
changes, modifications and enhancement of the Products. The
Distributor shall be informed within a reasonable time of any changes
made to this list.

The Distributor undertakes to implement said changes to the Product
list. If the Distributor fails to include such additional Products in
its Products list the Company may terminate this Agreement following
formal notice which the Distributor does not take step to cure within
four (4) weeks after sending of such notice.

"Products" excludes:

o All existing and future Licensed products such as : the Kids
'~OXBOW` 4 to 12 years" line, the OXBOW Eyewear" line, the
"OXBOW Timepieces" line, and the "OXBOW Footwear line.

o Products other than (a) all Company apparel including
without limitation the group of Products designated in
Exhibit I hereto, and detailed in all of the Company's
1999-catalogues, and (b) all changes, modifications or
enhancement of the Products mentioned in clauses (a), (b)
and (c) of the present paragraph. The Wetsuits line, MX
(Moto Cross) line, and Snowboards line.

L. "QUARTET" means each of the three (3) month periods ending on
March 31, June 30, September 30 and December 31 in each Contract
Year.

M. "Target" means the obligations of the Distributor under Section
7.

N. "TERRITORY" means the country or countries listed in Exhibit 2.

O. "TRADEMARKS" means the Company commercial marks, business names,
emblems, drawings and logos listed in Exhibit 3 which appear on
the Products.

2. INTERPRETATION. In this Agreement, unless the context otherwise
requires:

A. headings and underlinings are for convenience only and do not
affect the interpretation of this Agreement;

B. words importing the singular include the plural and vice versa;

C. an expression importing a natural person includes any company,
partnership, joint venture, association, corporation or other
body corporate and any governmental agency or authority;

<PAGE> 6

D. a reference to any thing includes a part of that thing; and

E. references to clauses, parties and schedules are references to
clauses, parties and schedules to this Agreement.

3. COMMENCEMENT. This Agreement shall commence and be deemed effective as
of the Effective Date notwithstanding that it may be executed after
that date.

4. GRANT.

A. Subject to the terms of this Agreement, the Company grants to the
Distributor the exclusive right to:

(1) import the Products into the Territory; and

(2) use the Trade Marks in relation to the Products in the
Territory.

B. The rights granted under paragraph A shall not include sales over
the internet outside the Territory.

5. TERM. This Agreement shall commence on the Effective Date and continue
until December 31, 2003 , unless The Company is majority sold or
floated, in which case it will terminate 12 months after either the
date of the signature of the sale or the date at which the Company's
shares are quoted on a public securities market. It being understood
that during this 12 month period the parties will negotiate in good
faith to continue the Agreement.

6. ROYALTIES.

A. The Distributor shall pay the Company a royalty equal to the
product of the Percentage Royalty and the amount of Net Sales.

B. The Distributor shall make payment of the royalties referred to
in paragraph A in US Dollars by wire transfer to the Company at
such place as may be nominated from time to time by the Company.
The Distributor will remit no less than sixty percent (60%) of
the projected royalty, such projection based on Distributor's
estimated sales figures which are attached hereto as Exhibit 4,
within forty five (45) days after the end of each Quarter. The
Distributor may deduct from such payment such

<PAGE> 7

amount as it is required to deduct on account of any taxation
liability of the Company in the Territory. The Distributor shall
obtain an official receipt for any amount so paid and forward
this immediately to the Company together with a written
explanation as to why such deduction is necessary.

The Distributor will also provide such assistance and sign such
documentation as may be available in order to enable such royalty to
be paid without any deduction.

C. The Distributor will provide each Quarter a statement as to the
calculation of the royalty certified as correct by a senior executive
of the Distributor approved by the Company.

D. The Distributor will also provide to the Company by March 31 in each
Contract Year a calculation of the royalty paid for the previous
Contract Year confirmed as correct by its auditors and the Distributor
will also provide to the Company each Quarter such other reports,
statements, accounts and records as are referred to in Section 12.

7. TARGETS.

A. The Distributor undertakes that the Net Sales of Products by the
Distributor for the four (4) years of the Term shall not be less than
the Net Sales of Products shown on Exhibit 4 attached hereto.

B. The Distributor undertakes that the Product Purchases by the
Distributor in the following periods shall be not less than:

<TABLE>
<CAPTION>
PERIOD (FISCAL YEAR) PRODUCT PURCHASES EX WORKS (US DOLLARS 0001S)
-------------------- ---------------------------------------------

C. The Distributor undertakes that the Products will be carried in the
following periods by not less than the following number of retail
stores in the Territory, having a significant presence of Oxbow
Products, each with an annual purchase order of at least USD 20,000:

<TABLE>
<CAPTION>
PERIOD (CONTRACT YEAR) NUMBER OF RETAIL STORES
---------------------- -----------------------

<PAGE> 8

To these retail stores will be added the 50 existing Oxbow accounts having taken
orders for Spring Summer 2000 products.

D. The Company will be entitled to terminate immediately and without any
requirement to remedy by notice sent by mail to the Distributor in the
event that the Distributor fails to achieve:

(1) the aggregate Net Sales Target for any calendar year; or

(2) the Product Purchase Target for any calendar year.

8. PURCHASE AND SALE OF PRODUCTS.

A. The Distributor will purchase the Products ready packaged only from:

(1) the Company; or

(2) from such supplier as may be authorised from time to time in
writing by the Company and the Distributor will not repackage any
Products nor alter, amend or modify any packaging in which any
Products are supplied nor remove, deface, obscure, alter or
modify any Trade Marks, brand names, logos, graphics or wording
applied to any of the Products on their packaging without the
prior written consent of the Company.

B. The Company's selling prices for the Products are quoted in French
Francs or in Euros. The selling prices to the Distributor shall be
equal to the full costs of the Products plus 5% of such costs. The
full selling prices will in addition include the cost of packing,
transport, insurance and customs duties, the charge of such costs,
taxes, rights or other expenses being borne by the Distributor. Prices
may only be increased to reflect actual increase of the full
manufacturing costs.

In the case of delivery made directly by a manufacturing factory, the
prices are established identically, but ex-manufacturing factory. The
Distributor will continue to bear all the costs, taxes and other expenses
related to transport.

The price list in effect on the Effective Date is attached as Exhibit 5
hereto. Any change made to this list by the Company shall be transmitted to
the Distributor within a reasonable period before the entry into force of
the new tariffs.

C. All prices for the Products quoted by the Company or its suppliers
shall (unless otherwise agreed in writing) be for payment by
irrevocable Letter of Credit sixty

<PAGE> 9

(60) days from the date of loading in French Francs or in Euros.

D. Products shall be sold subject to the conditions of sale of the
Company or other authorised supplier as shall be notified to the
Distributor from time to time. Conditions of sale will be established
by the Company.

E. Neither the Distributor's standard conditions of purchase nor any
terms or conditions in any order forms or other documents prepared by
the Distributor shall apply to the sale of the Products by the Company
or other authorised supplier to the Distributor.

F. Title to the Products will pass to the Distributor at the point
specified in the purchase order (Ex Works, INCOTERMS 1990) and the
confirmation thereof or at the point specified in the conditions of
sale of the Company or other authorised supplier.

G. The responsibility for all operations, costs and expenses from the
point specified in the said conditions of sale or purchase order and
the confirmation thereof (including transportation, insurance, custom
duties) will be paid by the Distributor.

9. MARKETING OF THE PRODUCTS.

A. The Distributor shall use its best endeavours to create, meet and
expand demand in the Territory for the Products.

B. At the commencement of this Agreement, and for each Contract Year
thereafter the Distributor will provide to the Company a marketing
plan for the distribution of the Products within the Territory which
marketing plan is to be approved in writing by the Company. The
nwketing plan for each Contract Year of this Agreement other than the
first Contract Year is to be, agreed upon three (3) months prior to
each Anniversary Date, and will be reviewed Quarterly. The marketing
plan will specify objectives and strategies with respect to the
following and any related matters which are consistent with the
Distributor's obligations under paragraph A.

(1) product fines and new product plans;

(2) pricing and margin structure;

(3) distribution chamels;

(4) sales and distribution targets on a product by product basis;

<PAGE> 10

(5) accumulation of market data including assessment of total market
size and segmentation in units and value (which will be updated
on a half yearly basis);

(6) overview of trading for the current year and objectives and
strategies for the following year;

(7) assessment of competition;

(8) advertising and promotional expenses; and

(9) overall advertising and promotional strategy including in
particular the use and cost of promotions, public relations,
sponsorship, exhibitions, point of sale and other in-store
merchandising.

The Company will not unreasonably withhold its approval of or agreement to any
marketing plan presented by the Distributor.

C. In addition to its obligations under paragraph B the Distributor at
the commencement of this Agreement and prior to each Contract Year
thereafter shall supply a Business Plan fbr the remaining term of the
Agreement which is to be agreed by the Company not less than three (3)
months prior to the beginning of each Contract Year. The Business Plan
shall be in a format reasonably specified by the Company, and will
include key success factors and indicators to follow the progress in
Distribution, Marketing, Brand Awareness, Customer, Service, Consumer
Satisfaction and Operations. The Company and the Distributor will
review progress against such plan on a Quarterly basis.

D. The Distributor shall:

(1) develop and agree with the Company as set out in paragraph B a
legally supportable distribution policy for the Products;

(2) promote and enhance the reputation and the recognition and
awareness of the Trade Marks in the Territory;

(3) develop a sales, marketing and merchandising facility for the
Products in the Territory;

(4) engage such key staff as the Company shall specify, such
appointments to be approved by the Company before implementation;

(5) offer a complete stock and refill service to all retailers;

<PAGE> 11

(6) achieve distribution throughout all agreed trading channels;

(7) establish the Company's signage where possible within agreed
retail stores in the Territory, and install significant shop in
shop Oxbow furniture in at least 20% (twenty percent) of retail
stores every year, as of year 2001.

E. The Distributor will use its best endeavours to ensure that the
Products are distributed only through such specialist outdoor outlets,
genuine outdoor departments in department or sports stores and
footwear or sports stores as are approved in writing by the Company.
In all cases, such stores should have a clientele of medium to high
quality. The Distributor shall not distribute the Products in any
circumstances through market stalls or stores of low quality and
image. The Distributor shall ensure that wherever possible, retailers
who stock the Products shall use the fittings, display units,
advertisements and point of sale material provided by the Company. The
Distributor shall be permitted to distribute the Products through mail
order or over the internet but may not sell Products through either
such channels to purchasers outside the Territory.

F. In each Contract Year the Distributor shall spend a minimum of the
Advertising Percentage of Net Sales (or in the first Contract Year,
the Target) of Products for that year on consumer advertising and
promotion in the Territory (the "Advertising Budget"). Within 60 days
following the end of each Contract Year the Distributor shall submit a
statement to the Company, certified as true and correct by a senior
executive of the Distributor approved by the Company detailing the
amounts spent and how the money was spent. The Advertising Budget
shall cover traditional media and Internet advertising, grass roots
promotion intended to raise awareness of the Products and their
exclusive availability from the Distributor, as well as promotions and
sponsorships of events and athletes including, but not limited to,
monetary and apparel sponsorships, cost of promotions or point-of-sale
items distributed to approved retailers or consumers, and co-op
advertising such as "e bate" email promotions. Point-of-sale items
shall be supplied by the Company at full cost plus five percent (50/6)
handling. Any other forms of advertising shall be approved in writing
by the Company, such approval not to be unreasonably withheld.

Traditional Media expenses shall never be less than 35% (thirty five
percent) of total Advertising.

G. The Distributor will at its own expense participate twice a year in
the Company's international meetings and four times a year in product
development meetings.

H. The Company grants to the Distributor the non-exclusive right to enter
into preliminary negotiations for sponsorship or promotional
agreements relating to the

<PAGE> 12

Trade Marks directly with athletes, clubs, federations, committees or
similar organisations; within the Territory approved in writing by the
Company. The Distributor shall have no power to conclude any such
agreement or enter into any such agreement on the Company's behalf Any
proposed agreement shall be presented to the Company for approval and,
(unless the Company and the Distributor otherwise agree), shall be
entered into directly between the Company and the relevant athlete,
club, federation, committee or organisation. Fees or payments to be
made under such agreements shall be borne as between the Company and
the Distributor in such proportion as they may from time to time
agree.

L. The Distributor shall have access to any and all Company artwork and
promotion items for the purpose of advertising and marketing Products.

10. INDEMNITY AND INSURANCE.

A. The Distributor shall, at its expense, carry comprehensive general
liability insurance and product liability insurance covering the
Products marketed or sold in connection with the Trade Marks under
this Agreement issued by a responsible insurer approved in advance by
the Company providing coverage approved in advance by the Company and
otherwise in terms approved in advance by the Company. Unless
otherwise agreed such insurance shall:

(1) include insurance coverage for the Distributor's obligation to
indemnify the Company in accordance with clause paragraph C.

(2) be for the benefit of the Distributor but shall name the Company
as co-insured and payee.

(3) remain in effect for the initial and any subsequent term of this
Agreement so long thereafter as the Distributor may continue to
use any of the Trade Marks.

(4) provide that 30 days written notice be furnished to the Company
prior to cancellation, or prior to any material modification or
change.

A. Upon the execution of this Agreement, the Distributor shall promptly
furnish the Company with a certificate evidencing that insurance has
been effected in accordance with the provisions of this clause.

B. Subject to the provisions of Section 19, the Distributor agrees to
defend, indemnify and hold harmless the Company and the Proprietor,
including all subsidiaries, affiliates and assignees of the Company
and the Proprietor against all

<PAGE> 13

claims, judgements, actions, debts or rights of action, of whatever
kind, and all costs, including reasonable legal fees, arising out of
the promotion, marketing, distribution or sale of the Products by the
Distributor under this Agreement.

11. BOOKS AND RECORDS.

(A) The Distributor shall keep full and correct records and accounts
showing details of the Products imported, distributed, bartered and
sold by it pursuant to this Agreement and otherwise containing such
information as may be necessary to enable the Company to monitor
compliance, with this Agreement.

(B) The Distributor shall throughout the continuance of this Agreement
give access to its records and accounts at an reasonable times (and in
any event within 48 hours of request) to the Company or any agent or
accountant authorised by the Company. Such person may take extracts
from or copies of any such records or accounts.

C. In the event that this Agreement is terminated for any reason the
Distributor shall provide the same access to its records and accounts
for a period of one year thereafter.

D. Throughout the term of this Agreement the Distributor agrees to
provide to the Company not later than one (1) calendar month after its
preparation a copy of the party's most recent quarter-end financial
statements (including balance sheet and profit AND LOSS accounts)
certified by an independent chartered accountant.

E. Throughout the term of this Agreement the Company agrees, after
receiving a written request to do so, to provide the Distributor on a
bi-annual basis and no less than ninety (90) days after its receipt, a
summary of its most recent financial statements certified by its
statutory auditors.

12. REPORT AND REMITTANCE FORMS.

(A) Within forty-five (45) days of the end of each Quarter the Distributor
shall provide to the Company a report showing:

(1) details of all sales of each of the Products made during that
Quarter to include the quantities of each type of the Products
sold and a breakdown of such sales by country and distribution
channel together with details of the

<PAGE> 14

computation from gross sales to net sales;

(2) estimates of anticipated sales of each of the Products for such
period as the Company may request; and

(3) details of the quantity and value of all returns of Products
received during that Quarter.

B. Within ninety (90) days of the end of each Contract Year the
Distributor shall provide to the Company a report showing a summary of
the data set out in paragraph A for the relevant Contract Year.

C. Within ninety (90) days of the end of each Contract Year the
Distributor shall provide to the Company a report showing all
e-commerce sales for the relevant Contract Year.

D. The rendering of any report or the payment of any royalty shall not
prejudice any right of the Company to recover any additional amount
that may be found to be due in respect of royalties or otherwise and
no such right shall be deemed to have been waived by the lapse of time
or any act or omission on the part of the Company.

13. PACKAGING AND ADVERTISING OF PRODUCTS.

A. The Distributor shall ensure that all the Products are marked with
such of the Trade Marks as may be appropriate and as prescribed in
writing by the Company from time to time.

B. The Distributor will imprint irremovably, legibly and prominently on
the Products and on any packaging, labelling and advertising or
promotional materials used in connection therewith, or otherwise, any
notice of trade marks and/or copyright together also with such
designation of ownership, registration and/or licence as shall
reasonably be requested by the Company including without limitation
the following:

(1) the symbol S in the upper right-hand comer next to the Trade
Marks which are registered with the appropriate patent and/or
trade mark body in the Territory; and

(2) the symbol (TM) in the upper right-hand comer next to the Trade
Marks which are not registered with the appropriate patent and
trademark body in the Territory.

<PAGE> 15

C. No other marks or wording shall appear on any of the Products,
packaging, labeling, advertising or promotional materials unless
the Distributor first obtains the written consent of the Company
provided that the Distributor may continue to use the
Distributor's name and mark on hang tags, packaging materials and
in advertising and on promotional materials in accordance with
the directions of the Company.

D. The Distributor shall, at its expense, furnish to the Company;

(1) at the earliest opportunity, mock ups of all matter which is
proposed to be used by the Distributor containing or
displaying any of the Trade Marks including, without
limiting the generality of the foregoing, any label,
brochure, packaging, business card, stationery, letterhead,
advertisement, point-of-sale and other publicity materials,
telephone or other directory entry, sign, decal and
illumination ("Display Material); and

(2) prior to release, final copies of all Display Material.

E. In the event that the Company does not raise any questions
relating to the nature, quality or workmanship of such samples
within twenty-eight (28) days of receipt by the Company of such
samples, the samples shall be deemed satisfactory for the use
pursuant to this Agreement. The Distributor's obligations
hereunder shall extend to all matters made or used by its agents
or sub-contractors appointed in accordance with this Agreement.
Wherever possible Display Material will be based on or
incorporate Display Material provided by the Company in order to
ensure that the brand image projected by the Products is in
conformity with the Company's world wide brand profile and image.

F. The Distributor shall not use any of the Trade Marks as part of
its corporate, business or trading name.

G. The Distributor shall use the Trade Marks only in accordance with
the policies and guidelines and/or instructions laid down by the
Company or its agent from time to time.

14. QUALITY CONTROL.

A. The Company shall deliver the Distributor with finished goods of
high quality which shall comply with the OXBOW Quality Chart.

B. The Distributor shall ensure that all uses of the Trade Marks are
consistent with the high quality, character and image of the
Trade Marks and shall comply with any direction reasonably made
by the Company relating to the quality of the

<PAGE> 16

Products and/or their packaging and/or any related promotional or
advertising material.

C. The Distributor shall store and transport the Products in
conditions that will preserve the Products and their packaging in
good condition and shall comply with any reasonable requests from
the Company in such regard.

D. If requested, the Distributor shall give all reasonable
assistance in locating and recovering any defective Products and,
in particular, shall comply (and procure so far as it is able
that its customers comply) with any product recall procedure
adopted by the Company.

15. CONFIDENTIAL INFORMATION.

A. All Confidential Information shall be used only for the
performance of this Agreement and shall be kept confidential by
the Distributor and shall be revealed to directors, officers,
employees and agents of the Distributor only to the extent
necessary to enable the Distributor to fulfil its obligations and
responsibilities pursuant to this Agreement. The Distributor
shall impose upon all such directors, officers, employees and
agents to whom any Confidential Information is revealed
obligations of confidentiality and restrictions on use in respect
thereof identical to these herein contained and shall be
responsible for any breach of any of such obligations by any of
such directors, officers, employees or agents. This provision
shall not apply to any Confidential information which is in the
public domain or to the extent to which it may be required to be
disclosed by law or which is obtained by the Distributor in good
faith from a third party with the right to disclose it. In the
event that the Distributor is required to make any Confidential
Information public as a result of the requirements of any law or
regulatory authority (including any stock exchange) the
Distributor will inform the Company beforehand and use its best
endeavors to ensure that any such disclosure is carried out in a
manner which the Company believes causes as little harm as
possible to the Company's reasonable commercial interests.

B. The Company makes no warranty as to the accuracy, sufficiency and
suitability for use by the Distributor of advice, information,
technical assistance or know-how provided by the Company for use
by the Distributor in the marketing of any Products and assumes
no responsibility or liability, including liability for direct,
indirect or consequential damages of any nature which arise out
of or in connection with the Distributors's use thereof.

18. SUFFICIENT USE OF TRADE MARKS. In order to preserve the Company's
ownership of the Trade Marks in the Territory, the Distributor will
take all steps reasonably required to ensure that sufficient use of
the Trade Marks is made to avoid abandonment by reason of non-use.

<PAGE> 17

17. BENEFIT OF USE OF TRADE MARKS. The Distributor acknowledges that

A. all use of the Trade Marks in any form and for any class of goods
or services shall accrue without cost to the Company to the
benefit of the Company; and

B. except as otherwise provided in this Agreement, the Distributor
has no right in any Intellectual Property Rights or any
associated goodwill nor any right to use any Intellectual
Property Rights.

18. RIGHTS NOT TO BE CHALLENGED.

A. The Distributor acknowledges the validity of the Intellectual
Property Rights and shall not at any time during the continuance
of this Agreement or thereafter directly or indirectly, by itself
or through its directors, officers, employers, agents or any
person in which the Distributor holds any issued share capital or
controls, whether directly or indirectly, the composition of its
board of directors or any of its voting power, contest or assist
any other person in contesting the validity of the Intellectual
Property Rights or the right, title and interest of the Company
to the Intellectual Property Rights.

B. Except as provided in this Agreement, the Distributor shall not
use or register whether during the continuance of this Agreement
or thereafter, any business or trade name, licensor name, trade
mark or labeling or packaging design which incorporates or which
is substantially identical with or deceptively or confusingly
similar to any of the Trade Marks or other Intellectual Property
Rights.

C. The Distributor shall, not supplement or interfere with or
obliterate the Trade Marks applied to the Products.

D. The Distributor shall take due care not to do or cause to be done
any action or thing which affects the validity of the
Intellectual Property Rights or the Company's ownership thereof
or which jeopardizes; the maintenance thereof, either during the
continuance of this Agreement or thereafter. In the event that
the validity or the maintenance of the registration of any of the
Trade Marks or other Intellectual Property Rights is in jeopardy,
then the Distributor, if reasonably requested by the Company,
will cease distribution of such of the Products as are affected
by such potential invalidity.

E. Nothing contained in this Agreement, whether express or implied,
shall give to the Distributor any claim, right, title or interest
in the Confidential Information, and the Distributor acknowledges
and agrees that all rights in such Confidential

<PAGE> 18

Information belong to and are the exclusive property of the
Company and that, during and after any termination of this
Agreement, the Distributor will not claim any rights in or to such
Confidential Information nor dispute or assist others to dispute
the Company's ownership thereof.

19. INFRINGEMENTS.

A. If any suspected or actual infringement or illegal use of the
Intellectual Property Rights or any wrongful use of the
Confidential Information by any person in the Territory or
elsewhere shall. come to the attention of the Distributor, the
Distributor shall immediately give notice thereof in writing to
the Company. The Company shall, at its absolute discretion, take
whatever action it deems appropriate at its own expense and
shall. have the sole conduct of any such action. If requested,
the Distributor will provide such assistance as may be reasonably
required in any suit or action subject to the payment by the
Company of the Distributor's direct expenses in the provision of
such assistance. If the Company initiates any action respect of
any such conduct, all compensation recovered whether at trial or
by way of settlement shall belong entirely to the Company.

B. If the Distributor receives any notice, claim or proceedings
alleging trade mark infringement, passing off, copyright
infringement, patent Infringement, or related causes of action
arising out of the Distributor's use of the Intellectual Property
Rights or the Confidential Information the Distributor shall,
notify the Company forthwith and shall not make any admissions or
take any substantive steps in connection therewith without the
prior written consent of the Company.

C. If such legal action referred to in paragraph A above relates to
use by the Distributor in accordance with the terms of this
Agreement then the Company shall defend or assist in the defense
of such litigation, and shall bear all costs and expenses of such
defense. If any damages or awards are assessed against the
Distributor in such litigation and provided that the Distributor
has in fact complied with the relevant term of this Agreement
they shall be satisfied and paid by the Company.

D. If such legal action referred to in paragraph A above relates to
use otherwise than in accordance with the terms of this
Agreement, the Company, in its sole discretion shall choose
whether to defend or assist in the defense of such action. If the
Company chooses not to defend or assist in the defense of such an
action, the Distributor shall bear all of its own costs and
expenses and shall be responsible for any awards against it or
the cost of any settlement or compromise. If the Company chooses
to defend or assist in the defense the Distributor shall
reimburse the Company for all direct expenses incurred by the
Company and for all costs and damages awarded against the
Company.

<PAGE> 19

20. SALES OUTSIDE THE TERRITORY.

A. The Distributor will not sell or cause or permit to be sold
directly or indirectly any Products outside the Territory, nor
will the Distributor, directly or indirectly, sell or cause or
permit to be sold Products in the Territory where, to its
knowledge, such Products are intended for re-sale or distribution
outside the Territory; notably in the Caribbean and/or European
Territory(ies). In particular the Distributor Shall not engage
in advertising by reference to the Trade Marks aimed at any place
outside the Territory or use any branch or distribution depot
outside the Territory for the sale or marketing of the Products,
and in the case of proposed sales over the intemet will
specifically state that Products are only available in the
Territory. In addition, the Distributor's website shall have the
capability to "mask" Product prices for anyone accessing the
Distributor's website from outside the Territory. The Distributor
will use its best endeavours lawfully to prevent any person from
distributing or selling the Products from the Territory.

B. During this Agreement the Company shall refer all inquiries
received by it relating to sales of the Products in the Territory
to the Distributor. During this Agreement the Distributor shall
refer to the Company all inquiries it receives for the Products
for sales outside or export from the Territory.

21. SALES BY THE COMPANY IN THE TERRITORY.

A. The Company will not sell or cause or authorise to be sold in the
Territory any products similar to the Products and bearing the
Trade Marks.

B. Nothing contained in this Agreement shall preclude the Company
from manufacturing or authorizing the manufacture of Products or
other goods in the Territory for sale to the Distributor or for
export.

22. SALE OF COMPETITIVE PRODUCTS. Unless specifically authorized in
writing so to do by the Company, the Distributor will not, directly or
indirectly, by itself or through its directors, officers employees,
agents or any person in which the Distributor holds any issued share
capital or controls whether directly or indirectly the composition of
its board of directors or any of its voting power, sell or distribute
any products in the Territory or procure the sale or distribution of
any products for sale in the Territory which are in direct competition
with the Products.

The Distributor commits, in these same conditions, not to sell any additional
apparel Brand within the 12 (twelve) months of signature of this Agreement.

<PAGE> 20

23. TERMINATION.

A. The Company may, without prejudice to any other rights of termination
available to it terminate immediately this Agreement, and the License
Agreement if the Distributor does not respect the terms and conditions
set forth in Section 7 of this Agreement and forthwith by giving
notice of termination to the Distributor in the circumstances set out
in Section 7 or upon any of the following events:

(1) if the Distributor commits any other breach of any of its
obligations hereunder and fails to remedy the same (if capable of
remedy) within 30 (thirty) days of the date of service by the
Company of a notice specifying the breach in question and
requiring it to be remedied;

(2) if any sum payable to the Company or to any authorised supplier
of any Products hereunder is not paid by the due date for
payment;

(3) if the Distributor is unable to pay its debts as they fall due or
suspends payment of any of its debts or enters into any
arrangement with creditors for the payment of any of its debts;

(4) if an administrator, receiver, manager or liquidator is appointed
in respect of the Distributor or any of its assets;

(5) if a winding up resolution is passed or a winding up or
bankruptcy order is made in respect of the Distributor or the
Distributor goes into liquidation;

(6) if any event or act occurs or is done by or in relation to the
Distributor which is equivalent or analogous to any of those
described in any of subparagraphs (3), (4) and (5);

(7) if the Distributor shall at any time directly or indirectly
contest or assist any other licensee or person in contesting the
validity of the Intellectual Property Rights or the right title
and interest of the Company;

(8) if any marketing plan referred to in Section I O.B is not agreed
at the time

B. Where the Company is entitled to terffiinate this under paragraph A
then the Company shall as an alternative to termination have the right
to amend the Agreement in all or any of the following ways:

(1) by converting some or all of the rights granted under Section 4
from exclusive rights to non-exclusive rights; and/or

<PAGE> 21

(2) by removing any trade marks, trade names, service marks, style
names, trade

(3) dress, logos and/or other trade symbols from the definition of
"Trade Marks"; and/or

(4) by removing any products from the definition of "Products";
and/or

(5) by removing any country or countries or any part or parts of any
country or countries from the definition of "Territory"

Any such amendment shall be made by means of a notice served on the
Distributor and shall take effect from the date on which such notice
is served or such later date as may be specified in the notice.

The Distributor may (without prejudice to any other rights of
termination available to it) terminate this Agreement forthwith by
giving notice of termination to the Company upon any of the following
events:

(1) if the Company commits any breach of any of its obligations
hereunder and fails to remedy the same (if capable of remedy)
within thirty (30 days of the date of service by the Distributor
of a notice specifying the breach in question and requiring it to
be remedied;

(2) if the Company is unable to pay its debts as they fall due or
suspends payment of any of its debts or enters into any
arrangement with creditors for the payment of any of its debts;

(3) if an administrator, receiver, manager or liquidator is appointed
in respect of the Company or any of its assets;

(4) if a winding up resolution is passed or a winding up or
bankruptcy order is made in respect of the Company or the Company
goes into liquidation;

(5) if any event or act occurs or is done by or in relation to the
Company which is equivalent or analogous to any of those
described in any of subparagraphs (2), (3) or (4).

D. Any exercise by either party of any of its rights under this Section
23 shall. be without prejudice to any accrued rights of either party
under this Agreement.

<PAGE> 22

24. RIGHTS AND OBLIGATIONS ON TERMINATION.

A. Upon the termination of this Agreement, the Distributor shall promptly
return all Confidential Information together with any copies and shall
not thereafter make any use of such Confidential Information except
insofar as the Distributor may have been specifically released by the
Company from its obligations of confidentiality hereunder -

B. The Company or its nominee may, by giving the Distributor written
notice within thirty (30) days following termination of this
Agreement, purchase from the Distributor any part or all of the
Products not previously sold by the Distributor. The price payable for
such Products (or materials) shall be the Distributor's purchase cost
(including duties, taxes and delivery charges) or the net realizable
market value of such Products in the Territory whichever is the lower.

C. Should the Company fail to purchase the Products pursuant to paragraph
B, then notwithstanding such termination:

(1) the Distributor shall have the right for a reasonable period up
to but not exceeding six (6) calendar months after termination to
sell the Products manufactured or imported by it prior to
termination in the Territory under the Trade Marks in accordance
with the terms of this Agreement provided that the price charged
for the Products shall be at least sixty-five per cent (65%) of
the price prevailing immediately prior to termination;

(2) after termination of the above sell-off period the Distributor
shall immediately destroy in the presence of the Company or its
representative any of the Products which are not then sold;

(3) all other provisions, terms and conditions of this Agreement
shall continue to apply during the period referred to in
subparagraph (1) except that the Company shall be at liberty to
appoint another person as the distributor of the Products or the
licensee of the Trade Marks or both; and

(4) the six month period referred to in subparagraph (1) will not be
extended by an event of force majeure.

D. After termination of this Agreement (but subject to paragraph C) the
Distributor:

(1) shall cease using the Trade Marks and other Intellectual Property
Rights in the Territory and shall not thereafter use or register
any words or marks that incorporate or are substantially
identical with or deceptively similar to or so closely resemble
any one or more of the Trade Marks so as to be likely to cause
confusion;

<PAGE> 23

(2) shall execute any and all necessary documents with respect to the
cancellation of the Distributor as registered user of the Trade
Marks; and

(3) shall not knowingly do any act or thing that would have the
effect of causing another person in the Territory to believe that
the Distributor is still associated or connected with the
Company.

E. Notwithstanding the termination of this Agreement:

(1) the provisions of Section 15 shall not terminate but shall
continue to remain in full force and effect;

(2) the Distributor shall continue to pay any royalties or other
applicable payments due hereunder and shall continue to provide
access to its records and accounts and furnish information and
reports in accordance with provisions of Sections 6, 11 and 12;

(3) the Company and the Distributor shall continue to have rights and
remedies with respect to damages and any other relief for breach
of this Agreement on the part of the other occurring prior
thereto; and

(4) any provisions of this Agreement necessary to enable the parties
to enforce their respective rights and obligations hereunder
shall remain in full force and effect.

F. Upon the expiry or termination of this Agreement for any cause
whatsoever except in accordance with Section 23.A(6) the Distributor
shall, if requested, supply to the Company a list of the Distributor's
customers for the Products.

The Distributor acknowledges that no rights whatsoever are extended to
it beyond the expiration or termination of this Agreement other than
as provided in this Section 24 and further acknowledges that it shall
not be entitled to any compensatory payment on the expiration or
termination of this Agreement.

25. REPRESENTATIONS AND WARRANTIES.

A. The Company represents and warrants that:

(1) it is a corporation duly incorporated and validly existing under
the laws of France;

(2) it has full corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby;

<PAGE> 24

(3) it is the owner of the Trade Marks.

B. The Company at its sole discretion may, upon written notice to the
Distributor, add or remove any trade marks to or from Exhibit 3.

C. The Company does not warrant that the Trade Marks may safely be used
as a trade mark or business name in the Territory.

D. The Distributor represents and warrants that:

(1) it is a corporation duly incorporated and validly existing under
the laws of the State of Nevada,

(2) it has full corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby;

(3) its board of directors has taken all action required by the law
of its jurisdiction of incorporation, its articles of
incorporation, by-laws or similar constituent documents or
otherwise to authorize execution of this Agreement and the
consummation of the transactions contemplated hereby;

(4) this Agreement is a valid and binding agreement by it and
enforceable against it in accordance with its terms;

(5) neither the execution of this Agreement nor the consummation of
the transactions contemplated hereby will violate any statute or
law or any judgement, decree, order, regulation or rule of any
court or governmental agency or authority in the Territory; and

(6) except for any required approvals of governmental agencies or
authorities which it will use its best efforts to obtain, no
consent of any person is necessary to the consummation of
transactions contemplated hereby. In the event that any required
consents are not obtained or are given on terms not acceptable to
the Company, the Company shall be entitled upon receipt of
knowledge thereof forthwith to terminate this Agreement.

28. AGENCY RELATIONSHIP. Except as otherwise provided herein, nothing in this
Agreement shall render one party the agent of the other in relation to any
rights or obligations granted under this Agreement or any transaction
carried on pursuant to it, and under no circumstances shall either party
pledge or attempt to pledge the credit of the other or incur any credit on
behalf of the other.

<PAGE> 25

27. Notices.

A. Any notice served by one party upon the other shall be in writing in
the English or French language and shall be delivered personally
(including by courier) or be sent by facsimile. Such notice or
document shall. be deemed to have been received in the case of
personal delivery when delivered or, if sent by facsimile, on the day
following that on which the facsimile was sent, provided that the
party serving such notice shall send a copy by registered air mail
within two (2) days after sending the notice.

B. Such notice shall be addressed as follows (or at such other place
designated in writing by the relevant party);

(a) If to the Company:
OXBOW, S.A.
55 route Jean Briaud
33700 Merignac, France
Attention: Philippe A. de Vilmorin
Telephone: (0)5 55 13 1145
Facsimile: (0)5 56 13 00 61

(b) if to the Distributor:
XDOGS.COM, INC.
80 South Eighth Street
Suite 3660
Minneapolis, Minnesota 55402

Attention: Kent Rodriguez
Telephone: (612) 359-4027
Facsimile: (612) 359-9017

28. ASSIGNMENT.

A. The Company may assign any of its rights or delegate any of its duties
arising out of or under this Agreement.

B. The Distributor may not assign any of its rights or delegate any of
its duties arising out of or under this Agreement without the prior
written consent of the Company which consent may be withheld by the
Company in its absolute discretion.

<PAGE> 26

C. In the event of a Change of Control the Distributor shall immediately
notify the Company in writing giving full particulars of such Change
of Control. The Company shall have the right to immediately terminate
the Agreement.

D. Should ownership of the Trade Marks be assigned by the Company then,
upon such assignment, the Company shall assign all of its rights and
delegate all of its duties under this Agreement to the assignee of the
Trade Marks and the Distributor shall, with effect from the date of
such assignment, release and discharge the Company from all claim and
demands whatsoever in respect of this Agreement relating to the period
after the date of the assigmnent and shall, from the date of such
assignment, accept the assignee as the owner of the Trade Marks.

E. On the request of the Company, the Distributor will execute,
acknowledge and deliver all such documents, deeds, agreements or other
instruments as may be requested by the Company to give effect to
paragraph D.

29. LEGAL AND ETHICAL REQUIREMENTS.

A. The Distributor shall at its own expense ensure that all local and
national laws, rules, regulations and other requirements and codes of
practice applicable in the Territory and all policies and ethical and
other standards from time to time specified by the Company in respect
of the treatment of any persons involved in the sale of any Products
hereunder or otherwise in respect of any human rights or other issues
are complied with in relation to all activities of the Distributor
and/or its authorised subcontractors under this Agreement.

B. The Distributor shall ensure that adequate records are maintained to
demonstrate compliance with the obligations contained in paragraph A
and shall as and when requested by the Company:

(1) furnish or cause to be furnished to the Company such proof of
compliance with the obligations contained in paragraph A as the
Company nay require;

(2) permit the Company or procure the Company to be permitted to
undertake such inspection of any activities of the Distributor as
the Company nay require;

(3) permit the Company or procure the Company to be permitted to
inspect any records required to be maintained under this
paragraph B and to take copies thereof

30. LOCAL LAW COMPLIANCE.

<PAGE> 27

A. The Distributor shall at its own expense comply with all relevant
legislation and other requirements of the Territory in connection with
its activities under this Agreement The Distributor shall furnish
proof of such compliance to the Company when and if the Company
requires.

B. As soon as possible after the execution of this Agreement the Company
and the Distributor shall if requested by the Company, at the expense
of the Distributor, execute such further documents as may be necessary
to make and make joint application to record for the registration of
the Distributor as a registered or permitted user of the Trade Marks
in respect of such of the Trade Marks as are registered or as become
registered to the extent provided by the law of the Territory.

C. The Distributor shall obtain any consents, licences and approvals and
comply with any formalities required for the performance of this
Agreement and payment of royalties. In the event that the Distributor
is unable to obtain any such consent, licence or approval within three
(3) months of the date of signature of this Agreement the Company
shall have the fight to terminate this Agreement by giving thirty (30)
days notice in writing to the Distributor.

31. GOVERNING LAW.

The formation, construction, validity and performance of this Agreement
shall be governed in accordance with the laws of France.

32. JURISDICTION

The parties shall endeavour to reach an amicable settlement for any dispute
relating to the validity, construction of performance of the present Agreement.

Consequently, each party agrees to notify, prior to initiating any legal
proceedings, by registered letter with recorded delivery the other party of its
wish to reach an amicable settlement.

The Parties undertake to involve its top management in order to reach an
amicable settlement for their dispute.

Failing to reach an amicable settlement themselves for a dispute, such a
dispute shall be submitted to a unique Conciliator at the initiative of the
diligent party.

The party who takes the initiative of a conciliation, will do it by
registered mail with recorded delivery to the other party. The date of reception
of this letter is the date of the introduction of the conciliation procedure.

<PAGE> 28

This letter will mention the name of the proposed Conciliator, and is
accompanied by a short presentation of the dispute and the arguments on which
its position is based, accompanied by all relevant documents.

The parties designate the Conciliator in a common agreement.

The failure of designating the Conciliator in a common agreement, one of
the parties may seize, in a delay of 15 (fifteen) days, the President of the
Tribunal de Commerce de Paris in order to designate the Conciliator.

The Conciliator will receive all the documents, memorandums and exchanged
notes between the parties. He will lead freely the proceedings, including
hearing the parties, together or separately. He will render his proposal
independently and in the respect of the terms and equilibrium of the present
Final Agreement.

33. ARBITRATION.

A. Failing agreement within a period of thirty (30) days from the date on
which either party with reference to this Section 32 requests an
amicable settlement, the matter shall be settled by arbitration
adjudicated under French Law, conducted in English or in French and
held in PARIS (France) in accordance with Rules of Conciliation and
Arbitration of the International Chamber of Commerce.

B. The Arbitration Board shall consist of three members. Each of the
parties shall appoint one arbitrator and two so nominated shall in
turn choose a third. If the chosen arbitrators cannot agree on the
choice of a third arbitrator, such arbitrator shall be appointed by
the Court of Arbitration of the International Chamber of Commerce.

C. The arbitration shall be conducted in accordance with the Rules of the
International Chamber of Commerce and it is agreed that the decision
shall be definite and there shall be no appeal to the Courts from the
decision of the arbitrators.

D. Either party shall be entitled to have any arbitration award made an
order of Court.

E. The obligation herein to arbitrate shall not be binding upon either
party with respect to requests for temporary restraining orders,
preliminary injunctions or other procedures (or their functional
equivalent) in a court of competent jurisdiction to obtain interim
relief when deemed necessary by such court to (a) preserve the status
quo or prevent irreparable injury pending resolution by arbitration of
the actual dispute between the Parties or (b) to order specific
performance.

<PAGE> 29

34. FORCE MAJEURE

A: Definition

Under this Agreement, v Force Majeure)) shall mean any situation, event,
circumstance which is unpredictable, irresistible and independent of the
will of either party including but not limited to:

"War (declared or not) invasion or armed conflict"

Revolution, riot, insurrection or other civil disturbance, acts of
terrorism or sabotage,

Major nuclear or chemical accidents,

Earthquake, tidal wave, flood, landslide.

Neither party shall be liable for delay or failure in the performance of this
Agreement arising from any one or more of the following causes which shall
forthwith be notified to the other upon such delay or failure:

(1) acts of persons engaged in subversive activities or sabotage;

(2) fires, floods, explosions or other catastrophes;

(3) epidemics or quarantine restrictions;

(4) strikes, similar labour disruptions or public demonstrations and
unrest;

(5) freight embargoes;

(6) unusually severe weather;

(7) delays of a supplier of either party due to any of the above causes or
events;

(8) any other causes, similar or dissimilar, beyond the reasonable control
of the party); or

(9) (in the case of the Distributor) a failure by the Company to meet
agreed delivery dates for products;

PROVIDED THAT in any case due diligence is exercised to cure such causes
and resume

<PAGE> 30

performance and the time for performance by such party shall be extended by
a period of any such delay.

B. If one or more causes of force majeure are asserted by either party as
a basis for nonperformance of this Agreement and such non performance
continues for a consecutive period of ninety (90) days the other party
shall have the right to terminate this Agreement forthwith by giving
written notice to that effect.

35. Whole Agreement. This Agreement contains the entire agreement and
understanding between the parties hereto with regard to its subject matter
and supersedes an prior agreements whether written or oral. Notably all
Agreements previously signed with J.ESSAKOW and The Family Trust ESSAKOW.

36. AGREEMENT SEVERABLE. This Agreement is severable and if any provision shall
be held inv" illegal or unenforceable, in whole or in part in any
jurisdiction (including both by reason of the provisions of any legislation
and also by reason of any decision of any court or authority having
jurisdiction over the parties in the Territory), then that provision shall
be severed in the jurisdiction in question and such invalidity, illegality
or unenforceability shall not in any way whatsoever prejudice or affect the
validity or enforceability of the remainder. To the extent legally
permissible, an arrangement which reflects the original intent of the
parties shall be substituted for such invalid or unenforceable provision
provided always that if the reasonable opinion of either party any such
severance materially affects the commercial basis of this Agreement and no
agreement can be reached by the parties as to the means by which such
matters can be resolved, such party shall have the right to terminate this
Agreement with immediate effect upon giving 90 days written notice to the
other containing the reason(s) why the commercial basis has been materially
affected.

37. AGREEMENT TO COOPERATE. Each party hereto, upon the reasonable request of
the other, will execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, all such further documents, deeds, assigmnents,
licenses, transfers or conveyances as may be required both to satisfy the
requisites of the law of the Territory and to give fiffl effect to the
terms and conditions of this Agreement.

38. WAIVER AND VARIATION. A provision of or a right created under this
Agreement may not be waived or varied except in writing signed by a duly
authorised representative of the party or parties to be bound. No delay or
fidlure of either party in exercising or enforcing any of its rights or
remedies shall operate as a waiver thereof nor shall any partial exercise
of such right or remedy preclude any other or further exercise of such
right.

39. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of
counterparts each of which shall be deemed an original and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.

<PAGE> 31

IN WITNESS WHEREOF, the parties, by the actions of their authorized
representatives, have executed this Agreement, including the attached Schedules,
as of the date first mentioned above.

THE DISTRIBUTOR, INC. OXBOW, S.A.

/s/ KENT A. RODRIGUEZ /s/ PHILIPPE A. DE VILMORIN
Kent A. Rodriguez Philippe A. de Vilmorin
Its President its Chairman

<PAGE> 32

EXHIBIT 1

PRODUCTS

DIVISION IN GROUPS AND SUB-GROUPS

<TABLE>
<CAPTION>
GROUP1 JACKETS
<S> <C>
IVES
SUB-GROUPS.-Blousons BLO
Wind coats
COU
Vests
GIL
Raincoat
RAI
Jackets
VES
Technical Jackets
VET

GROUP2 SWEATERS
CHA
SUB-GROUPS. Sweaters
CHA
Technical sweaters
CHT

GROUP3 SHIRTS
CHE
SUB-GROUPS. Technical shirts
CMT
Long sleeves shirts
CUL
Short sleeves shirts
CMC
Over-shirts
SCH

GROUP4 SWEATS SMRTS AND POLOS
SWE
SUB-GROUPS. Polos
PLO
Sweat shirts
SWE
</TABLE>

<PAGE> 33

<TABLE>
<S> <C>
Technical sweat shirts
SWT

GROUP5 T-SHIRTS
TSH
SUB-GROUPS.Event T. Shirts TSE
Short sleeves T. Shirts
TSC
Long sleeves T. Shirts
TSL
Sleeveless T. Shirts
TSM
Technical T. Shirts
TST

GROUP6 TROUSERS/OVERALLS/DRESSES
PAN
SUB-GROUPS.Overalls CSA
Skirts
JUP
5-pocket-trousers
PAN
Technical trousers and overalls
PCT
Sportswear trousers
PSP
Dresses
ROB
Sweat pants
TRA

GROUP7 SHORTS
SHO
SUB-GROUPS.Bermudas BER
Short shorts
SHC
Long shorts
SHL
Technical shorts
STN
GROUP8 SWIMWEAR
BAI

SUB-GROUPS.2-piece-swimsuits BAI
1-piece swimsuits
</TABLE>

<PAGE> 34

<TABLE>
<S> <C>
NIUP
Parcos
PAR

GROUP9 OTHER EQUIPMENT
EQU

SUB-GROUPS Luggage (waist bags, travel wallets,
BAG
various)
Business bags and pouches
BUS
Caps, hats and head bands
CAP
Belts
CEI
Socks
SOC
Beach towels
DDB
Scarves
ECH
Clothes
GAN
Key-holders
PCL
Wallet and business card holders
PTF
Bags and back packs
SAC
Underwear
SOU
Stickers
STI
</TABLE>

<PAGE> 35

EXHIBIT 2

Territory

United States of America, its territories and possessions
(not including the Caribbean basin)
Mexico
Canada

<PAGE> 36

EXHIBIT 3

Trademarks

<TABLE>
<CAPTION>
BRANDS CLASSES REGISTRATION VALIDITY
NUMBER
------------- ------------- ------------ ----------
<S> <C> <C> <C>
OXBOW 25 1535373 18.04.2009
OXBOW (name) 28 1733271 17.11.2002
OXBOW (name) 9-14-18 1816692 18.01.2004
Four Flowers 9-14-18-25-28 1810529 14.12.2003

LABEL
PLACEMENT ON Under registration
LEFT SHOULDER
OF GARMENT

</TABLE>

* Affidavit. asked on December 10, 1999 for classes where the Brand is used
that is: 14-18-25-28.