EXHIBIT 10.1
EXCLUSIVE LICENSE AND MARKETING AGREEMENT
Between: Select Home Products ("SHP")
00000-00xx Xxxxxx
Xxxxxxxx, Xxxxxxx
X0X 000 Xxxxxx
And
International Commercial Television Inc. ("ICTV")
203B Kimman Center
0000 Xxxxx Xxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx
00000-0000 XXX
Recitals:
WHEREAS SHP has been granted by way of agreement (the "Master Agreement") from
Victoria Cosmetics, Taiwan (the "Manufacturer") the exclusive rights to market a
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pen-style nail decorating device with both brush and patented nib (the
"Product"), in the United States of America (the "Territory").
WHEREAS SHP and ICTV wish to enter into an exclusive licensing agreement (the
"License") and for good valuable consideration agree to be mutually bound by the
terms and conditions set forth in this Agreement.
1. The Master Agreement: SHP agrees to provide a fully executed copy of
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the Master Agreement as quickly as possible and prior to ICTV
commencing production of the proposed 60 second and 120 second direct
response television commercial (the "Commercial") featuring the
Product.
2. Supply: SHP agrees to allow ICTV to order the Product directly from
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the Manufacturer and ICTV agrees to provide SHP all copies of such
orders. Further SHP agrees to allow ICTV to negotiate its own terms of
trade with the Manufacturer.
3. Price: SHP agrees that the price ICTV will pay for the Product is the
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manufacturer's cost less all discounts, commissions and rebates that
the Manufacturer may wish to grant to SHP. SHP further agrees at the
request of ICTV to negotiate the best possible price for the Product.
4. Royalty: ICTV agrees to pay SHP a Royalty of $0.50 USD on a fully
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packed kit of ten units of single color of the Product or the pro-rata
equivalent, being a royalty of $0.50 USD per individual unit of color
of the Product. Such royalty will be paid on the sales of all Product
by ICTV, excluding those sales of the Product made on television home
channels. The Royalty will be paid every thirty
(30) days on direct response television sales and thirty (30) days
after ICTV has been paid, for all sales, other than direct response
sales. ICTV agrees that full accounting regarding sales will be
provided with Royalty payments.
5. Term: The term shall initially be for five years with automatic rights
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of renewal for each successive period of five years, provided that SHP
has been paid royalties as per Section 4 of this Agreement and the
Master Agreement remains in force.
6. Territory and Markets: SHP agrees that under the terms of this
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Agreement the License granted by SHP to ICTV, to sell the Product,
shall be exclusive in the Continental United States, Hawaii, Puerto
Rico and shall be for all forms of distribution (excluding television
home shopping, flea markets, consumer shows and exhibitions, and the
Internet) including, but not limited to, direct response television,
mail order/catalogues, print/syndication, traditional
retail/wholesale.
6.1 Television Home Shopping: ICTV agrees that all profits derived
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from sales of the Product on television home shopping channels
(such as but not limited to The Home Shopping Network and QVC)
will be shared equally with SHP. SHP agrees that it will be
responsible for supplying, at landed cost, all inventory required
for television home shopping and for the delivery of such Product
to the television home shopping channel. Profits and cost of
inventory will be forwarded to SHP as soon as ICTV receives
payment from the television home shopping channel. Profits will
be those monies that remain after the deduction of direct selling
expenses.
6.2 Flea Market and Consumer Shows: ICTV and SHP agree that both
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parties can supply resellers in flea markets and consumer shows
("Markets") but agree to do so on a mutually beneficial basis
which will be determined in a good faith manner once the
Commercial has been rolled out. Further SHP agrees that it will
immediately cease distribution of the Product to any resellers in
the Market if ICTV discovers that such resellers are supplying
the Product into those forms of distribution, within the
Territory that have been deemed exclusive to ICTV.
6.3 Internet: SHP grants to ICTV the exclusive right to display and
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market the Product on the Internet. Notwithstanding, ICTV agrees
that the current SHP website may also be displayed with the
Territory.
7. Patent: SHP agrees that it will immediately notify ICTV if it detects
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similar products and products that breach the Product patent. Further
SHP agrees to use its best efforts to have the Manufacturer take all
possible action to stop the sale, in the Territory, or any products
that infringe the Product's patent.
8. Promotion: ICTV agrees to shoot and media test the Commercial
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featuring the Product, at no cost to SHP. ICTV agrees that time is of
the essence in the
production of the Commercial and agrees to produce and media test the
Commercial as soon as possible, but no later than June 30, 2002,
subject to SHP's compliance to Section 1 of this Agreement.
9. Minimum Purchases: ICTV agrees that to retain exclusivity in the
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Territory it must purchase the following units of the Product. A unit
of the Product shall be defined as one single colour packed in the
manufacturer's single unit container with brush and patented nib and
every two units must be accompanied with a xxxxxx ring.
a) ICTV to purchase $100,000.00 USD of the Product by July 31,
2002
b) ICTV to purchase on an annual basis beginning July 31, 2002,
for five consecutive years, the following amounts of single
units of colour of the Product
Year one 750,000 units of color
Year two 2,000,000 units of color
Year three 2,400,000 units of color
Year four 2,880,000 units of color
Year five 3,456,000 units of color
Notwithstanding, the above figures any purchase of a single
unit of color made in a single year, that exceeds the years
required purchases, will count toward the following years
minimum purchase requirements.
If ICTV does not meet any of the minimum purchase
requirements as listed in this section, then this license
shall revert from exclusive to non-exclusive basis.
10. Governing Law: Both parties agree that this Agreement will be governed
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by the laws of the Country of Canada and the judicial district of the
province of Alberta.
11. Breach: If either party breaches this Agreement the party who claims
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breach must notify the other party in writing of such breach and the
breaching party has thirty days to remedy such breach. If the
breaching party does not remedy the breach within thirty days, then
the party who claimed the breach may at its own direction deem the
Agreement null and void.
12. Authority: Both parties agree that they have the authority to enter
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into this Agreement.
13. Good Faith: Both parties agree to act in good faith in connection with
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all of the terms and conditions relating to this Agreement.
Acknowledged and Agreed:
/s/ Xxxxxx Xxxxxx April 16, 2002
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Xxxxxx Xxxxxx - CEO Date Signed
International Commercial Television Inc.
/s/ Xxxxx Xxxxxx April 16/2002
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Xxxxx Xxxxxx - President Date Signed
Select Home Products
