Exhibit 10.11
EXCLUSIVE HAND-HELD PRODUCTS
This Agreement with an effective date of June 15, 1999 is made and
entered by and between Dynamic International, Ltd. (hereinafter referred
to as "Dynamic" and/or "Spalding), ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
the licensee of the Spalding Product Line, and Power Point Fitness
International, Inc. (hereinafter referred to as "Power"), the
owner/producer of the Program entitled "Totalmente En Forma."
COVENANTS AND AGREEMENTS
In consideration for the compensation described below, Dynamic
shall receive the following:
1. For a period of one year form the signing of this agreement,
Dynamic/Spalding shall be the exclusive hand held product line sponsor
for "Totalmente En Forma" (hereinafter referred to as the "Program") a
Spanish health and fitness series, to be aired for a 52 week period on
ESPN International Latin America. Airing shall commence on/or about
October 15th, 1999. Power represents that it is the owner of the
Program and has full power and authority to execute this agreement to
provide the services referenced herein, and that this agreement will not
conflict with any other agreements to which it is a party.
2. Dynamic shall receive one thirty second commercial to be shown
during the Program on a daily basis throughout the territories of Latin
America, Central America, South America and the Caribbean on the Pan
Regional ESPN International Network, as further described in the ESPN
Agreement which is attached hereto and incorporated herein by reference.
The commercial will be produced during the summer of 1999. The
1
Commercial will be first-class in all respects and produced in accordance with
Dynamic's approval as to content and quality.
3. One five second billboard to be presented daily during the Program in the
territories Latin America, Central America, South America, and the Caribbean.
Billboard shall read "sponsored by....." with a graphic and voice over. The
billboard shall be placed within the 26 half hour Programs to be produced this
summer. The billboard is subject to Dynamic review and approval which will not
be unreasonably delayed or withheld.
4. Full product integration in all exercise segments where appropriate. Spalding
products shall be integrated into the Program format, on an exclusive basis, for
all handheld products used or shown in the program.
5. Options:
A. Dynamic shall have the exclusive option to participate as to
the exclusive hand held equipment sponsor of the Program for a second
term/season consisting of the next 52 week period for a fee of $200,000.
Sponsorship shall include:
1. Product integration in Program:
2. 30 Second Commercial to be placed during the airing of
the Program;
and
3. A billboard to be included in the Program.
Terms of Payments:
50% upon exercise of the option;
25% upon completion of taping; and
25% upon completion of post-production
2
Exercise: This option must be exercised, if at all, in writing on before April
30, 2000, and if the option is so exercised, all terms which are not
inconsistent with the terms of this Option shall remain in effect.
B. In the event that Power produces an English speaking health
and fitness Program to air in the United States. Dynamic shall have the
option to be the exclusive hand held equipment sponsor of the Program
for a fee of $175,000. Power shall notify Dynamic of the production in
writing and Dynamic shall have thirty days thereafter to exercise this
option. Otherwise, all of the terms set forth in section 5 (A), above,
shall apply to this option.
6. The existing English Rotaflex informecial (taped in English) shall
be modified with the re-taping of various segments (in English) of the
Program, with members of the cast of "Totalmente En Forma" on location
during the taping of the "Totalmente En Forma" Program. Power shall
consult with Dynamic as to the concept of this re-taping, and have a
mutual approval of concept, prior to actual taping. Such a re-taping is
to be approved as to content by Dynamic, which will not be unreasonably
delayed or withheld. The cost of any material changes requested by
Dynamic after the initial shooting shall be incurred by Dynamic. In
addition the parties shall include and integrate the Rotaflex product
within the series Program. The parties will additionally re-edit this
footage to include the new material to strengthen and deliver a more
exciting message to the consumer.
* To be delivered on or about Oct 15th, 1999.
7. Power shall be compensated by Dynamic for all of the above services
as set forth in this agreement, all of which shall be completed at
Power's sole expense, except as otherwise provided herein, as follows:
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1. Dynamic shall pay to Power the sum of $250,000 as follows:
a) Within 5 days after execution of this agreement, Dynamic shall
pay Power the sum of $125,000. This sum is to be received by
Power within 5 days;
b) Within 5 days of completion of taping, which the parties
reasonably contemplate to occur on or before August 30, 1999,
Dynamic shall pay Power the sum of $62,500.
c) Within 5 days after delivery of improved informercial to be
approved by Dynamic shall pay the balance of $62,500 to Power.
2. The parties agree to exercise good faith in negotiating the terms of
a separate agreement whereby Power shall receive an additional $125,000
in deferred bonus compensation from the sales of Dynamic's Spalding
product lines, once sales have passed an agreed upon threshold and price
point and with Dynamic showing a substantional profit.
4
GENERAL TERMS AND CONDITIONS
1. The parties hereto acknowledge and agree that the above terms
constitute the entire agreement between the parties. No additional oral
or written promises, representations or agreements exist between the
parties. Each party has reviewed this agreement and agree to be bound
thereby, and hereby acknowledge that no inducements have been
given other than the covenants and promised embodies herein.
2. This agreement may be modified only by a subsequent written
agreement signed by all parties.
3. This agreement shall be interpreted according to New York law, and
venue for any and all disputes hereunder shall be exclusively in the
Supreme Court of the State of New York, County of Kings.
4. If either party shall commence any action in law or equity to
enforce and/or interpret this agreement, the prevailing party shall be
entitled to recover its cost of suit and reasonable attorney's fees.
5. Late payments hereunder shall accrue interest at the rate of 12% per
annum as a contractual service charge only with respect to sums past
more than seven business days written notice of non-payment.
5
6. This agreement is subject to and on condition that the ESPN
agreement is executed and in full force and effect with copy supplied to
Dynamic.
EACH INDIVIDUAL SIGNING BELOW ACKNOWLEDGES AND REPRESENTS THAT HE HAS THE
EXPRESS AUTHORITY TO BIND THE PRINCIPAL.
DATE OF SIGNATURE: 7/1/99 /S/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
DYNAMIC INTERNATIONAL, LTD.
BY: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
TITLE: PRESIDENT
DATE OF SIGNATURE: 6/24/99 /S/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
POWER POINT FITNESS
INTERNATIONAL, INC.
BY: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, PRESIDENT
6
(Exhibit 10.12)
CONSULTING AGREEMENT
This Agreement, with an effective date of July 1, 1999, is made
and entered by and between Dynamic International, LTD. (hereinafter
referred to as "Dynamic"), ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, the
licensee of the Spalding Product Line, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, individually
and dba Fit Mundo Interactive Network (hereinafter referred to as
"Freirich"), the owner/producer of the Program entitled "Totalmente En
Forma."
COVENANTS AND AGREEMENTS
In consideration of the compensation described below, Freirich
agrees to provide marketing consultation services to Dynamic as follows:
1. The services to be provided by Freirich are specifically
outlined in the document entitled "Services" which is attached hereto as
Exhibit "A" and fully incorporated herein.
2. Term: The term of this agreement between the parties shall be
for a minimum period of six months. This agreement will be effective as
of July 1, 1999, and shall remain in effect for a period of (6) six
months. At the conclusion of the six month period, this agreement shall
automatically be renewed on a one month by one month basis unless a
party gives written notice of termination at least 30 days before the
end of the applicable month.
1
COMPENSATION/EXPENSES
In consideration of Freirich's ongoing services described above,
which shall be performed by Freirich in a professional, competent and
prompt manner on an "as needed" basis, in the discretion of Dynamic,
Dynamic shall compensate Freirich as follows:
1. Freirich shall receive the sum of $5,000 per month on the
following terms:
(a) $5000 within 5 days of execution of this agreement
(b) $5000 on or before August 1, 1999;
(c) $5000 on or before September 1, 1999;
(d) $5000 on or before October 1, 1999;
(e) $5000 on or before November 1, 1999;
(f) $5000 on or before December 15, 1999;
2. With regard to renewals of this agreement as described above,
Freirich shall be paid the sum of $5,000 per month payable on or
before the 1st day of each month during the renewal period(s).
3. Expense Reimbursement
(a) Travel. Dynamic (subject to its pre-approval and
discretion) shall provide Freirich with prepaid coach airline
tickets and hotel accommodations which are not exceed
$175/day if required by
2
Freirich, through any travel agency Dynamic elects or
Independently. It is anticipated by the parties that
Freirich shall travel from California to New York one time
per month for a period of one or two days during the term of
this agreement and any renewals thereof. However, the
obligation to provide and pay for travel and lodging shall not
be limited to one trip per month and shall apply to all trips
requested or approved by Dynamic in advance.
Dynamic shall also provide for Freirich's ground
transportation while in New York or elsewhere at Dynamic's
request. All of Freirich's ground transportation must be
pre-approved by Dynamic provided at no expense to Freirich.
(b) Per Diem. Freirich shall receive an additional per diem
allowance up to $100.00 per day subject to review and
submission of receipts to Dynamic for actual and reasonable
amounts expended per day while in New York or elsewhere as a
result of this agreement for Freirich's personal expenses and
meals. The daily per diem allowance shall be paid to
Freirich by Dynamic in advance of each trip.
(c) Other Expenses. Any and all reasonable expenses not
specifically mentioned herein which are reasonably related to
the services to be provided hereunder shall be submitted to
Dynamic by Freirich in advance for approval. Dynamic shall
3
not unreasonably withhold approval for such expenses. All
approved expenses may be paid directly by Dynamic or advances
to Fit Mundo, at Dynamics discretion.
GENERAL TERMS AND CONDITIONS
1. The parties hereto acknowledge and agree that the above
terms constitute the entire agreement between the parties. No
additional oral or written promises, representations or
agreements exist between the parties. Each party has
reviewed this agreement and inducements have been given other
than the covenants and promises embodied herein.
2. This agreement may be modified only by a subsequent written
agreement signed by all parties.
3. This agreement shall be interpreted according to New York
law, and venue for any and all disputes hereunder shall be
exclusively in the Supreme Court of the State of New York,
County of Kings.
4. If either party shall commence any action in law or
equity to enforce and/or interpret this agreement, the
prevailing party shall be entitled to recover its
4
costs of suit and reasonable attorney's fees.
5. Late payments hereunder shall accrue interest at the rate
of 12% per annum as a contractual service charge only with
respect to sums past due more that seven business days after
written notice of non-payment.
EACH INDIVIDUAL SIGNING BELOW ACKNOWLEDGES AND
REPRESENTS THAT HE HAS THE EXPRESS AUTHORITY TO BIND THE
PRINCIPAL.
DATE OF SIGNATURE: 7/1/99 /S/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
DYNAMIC INTERNATIONAL, LTD.
BY: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
TITLE: PRESIDENT
DATE OF SIGNATURE: 6/23/99 /S/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INDIVIDUALLY
AND DBA FIT MUNDO INTERACTIVE
NETWORK
5
SERVICES
(EXHIBIT "A")
Freirich will provide consulting services to dynamic by providing ongoing
strategic planning and market consultation for the Spalding brand and product
line in the following areas:
1. Research and Development:
Product Development
2. Creative:
Product Image
Creative Input Rotaflex
Commercial Spot Spalding
3. Marketing:
Product Integration with Sponsorship
Develop relationships with fitness celebrities/spokespersons Development of new
markets Product perception in market Focus groups
4. Sales:
Assist in sales strategy domestic and international
5. Public Relations:
Develop outside relationship with P.R. agencies.
6. Product line extension:
Assist in development of new products
6
Exhibit 10.13
▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇
P R O J E C T S
September 15, 1998
VIA AIRBORNE EXPRESS
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
DYNAMIC CLASSICS, LTD.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Ref. #111804*C DYNAMIC CLASSICS, LTD.
CHRYSLER CORPORATION - Jeep
Dear ▇▇. ▇▇▇▇▇▇▇▇:
Enclosed please find a fully-executed Letter Amendment
between DYNAMIC CLASSICS, LTD. and CHRYSLER CORPORATION.
Please do not hesitate to call ▇▇▇▇▇ ▇▇▇▇▇▇▇ should you have any
questions or concerns.
Sincerely yours,
/S/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Director, Contracts
ge
Enclosure
cc: ▇▇▇▇▇▇ ▇▇▇▇▇/Chrysler Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ PROJECTS, INC. IS A SUBSIDIARY OF SPELLING ENTERTAINMENT GROUP INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ PHONE/▇▇▇-▇▇▇-▇▇▇▇ FAX/▇▇▇-▇▇▇-▇▇▇▇
▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇
P R O J E C T S
July 9, 1998
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
DYNAMIC CLASSICS, LTD.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
LETTER AMENDMENT (REF. #111804*C) (AMENDMENT C) TO THE LICENSE
AGREEMENT DATED JANUARY 8, 1993 BETWEEN CHRYSLER CORPORATION
AND DYNAMIC CLASSICS, LTD. COVERING CHRYSLER CORPORATION
TRADEMARKS JEEP, WRANGLER AND RENEGADE ( REF. #111804)
(AMENDMENT)
Dear ▇▇. ▇▇▇▇▇▇▇▇:
The following, when signed by you and counter-executed by Chrysler
Corporation, shall constitute an Amendment to the above-referenced Agreement as
follows:
SUMMARY SHEET - PARAGRAPH 2 -- LICENSED ARTICLES.
The Licensed Article is hereby amended and restated to read in its
entirety as follows:
Trademark - identified backpacks, tote bags, fancy packs, and luggage
made of canvas, and nylon trimmed or decorated with all fabrications.
The rights to all canvas and nylon backpacks, tote bags, fanny packs,
and luggage shall be exclusive except as specifically modified
hereunder.
Specifically excluded from Licensee's exclusive right shall be the
right to fashion bags and the right to backpacks sold to retail fashion
buyers and departments.
Specifically excluded from the Licensed Articles are children's
products and all technical camping backpacks and camping gear.
▇▇▇▇▇▇▇▇ PROJECTS, INC. IS A SUBSIDIARY OF SPELLING ENTERTAINMENT GROUP INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ PHONE/▇▇▇-▇▇▇-▇▇▇▇ FAX/▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
DYNAMIC CLASSICS, LTD.
July 9, 1998 Page 2.
SUMMARY SHEET - PARAGRAPH 5 -- TERM.
The Third Renewal Term of the Agreement shall begin on January 01, 1999
and will expire on December 31, 2000.
THIRD RENEWAL REQUIREMENTS:
Sixty (60) days prior to the expiration of the Second Renewal Term of
the Agreement, Licensee shall have the option, by written notice to
Chrysler, to renew this Agreement for the Third Renewal Term,
commencing on January 1, 1999 and expiring on December 31, 2000;
provided this Agreement has not been terminated in accordance with the
provisions hereof and Licensee has achieved the required Four Million
Dollars ($4,000,000) in Minimum Net Sales for the period January 1,
1998 to December 31, 1998.
THIRD RENEWAL TERM: January 1, 1999 - December 31, 2000
Minimum Net Sales: $11.0 Million Dollars
$5,000,000 January 1, 1999 - December 31, 1999
$6,000,000 January 1, 2000 - December 31, 2000
Minimum Royalty Payments: $550,000 ($250,000 for 1999 and
$300,000 for 2000)
$62,500 Due on or Before January 1, 1999
$62,500 Due on or Before April 1, 1999
$62,500 Due on or before July 1, 1999
$62,500 Due on or before October 1, 1999
$75,000 Due on or before January 1, 2000
$75,000 Due on or before April 1, 2000
$75,000 Due on or before July 1, 2000
$75,000 Due on or before October 1, 2000
FOURTH RENEWAL REQUIREMENTS:
Sixty (60) days prior to the expiration of the Third Renewal Term of
the Agreement, Licensee shall have the option, by written notice to
Licensor, to renew this Agreement for a Fourth Renewal period
commencing on January 1, 2001 and expiring on December 31, 2002,
provided this Agreement has not been terminated in accordance with the
provisions hereof and Licensee has achieved the required $11.0 in
Minimum Sales for the Products Licensed herein.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
DYNAMIC CLASSICS, LTD.
July 9, 1998 Page 3.
SUMMARY SHEET - PARAGRAPH 5 - - TERM. (continued)
FOURTH RENEWAL TERM: January 1, 2001 - December 31, 2002
Minimum Net Sales: $15.5 Million Dollars
$7,500,000 January 1, 2001 - December 31, 2002
$8,000,000 January 1, 2002 - December 31, 2002
Minimum Royalty Payments: $750,000 ($350,000 for 2001 and
$400,000 for 2002)
$87,500 Due on or Before January 1, 2001
$87,500 Due on or Before April 1, 2001
$87,500 Due on or Before July 1, 2001
$87,500 Due on or Before October 1, 2001
$100,000 Due on or Before January 1, 2002
$100,000 Due on or Before April 1, 2002
$100,000 Due on or Before July 1, 2002
$100,000 Due on or Before October 1, 2002
SUMMARY SHEET - PARAGRAPH 6 - - ROYALTY RATE
Effective January 1, 1997, an additional 1% of total sales shall be
reported and paid quarterly to be used for the Licensing Institutional
Advertising campaigns and may not be cross- collateralized against
guarantees which have already been paid or become due under the
Agreement. Licensee shall pay any Licensing Institutional Advertising
royalties retroactive to January 1, 1997 upon signature of this
Agreement.
SUMMARY SHEET - PARAGRAPH 7 -- MINIMUM NET SALES.
Licensee agrees to achieve Minimum Net Sales for the Second Renewal
Term in amount of $4,000,000.00 between January 1, 1998 and December
31, 1998.
SUMMARY SHEET - PARAGRAPH 14 -- DISTRIBUTION REQUIREMENTS.
Added to the channels of distribution on a non-exclusive basis shall be
Retail Catalogs. Licensee will make best efforts to distribute to
department stores, specialty stores and better catalogs. Distribution
to Mass Merchants shall be specifically excluded.
DYNAMIC CLASSICS, LTD.
July 9, 1998
Page 4.
SUMMARY SHEET - PARAGRAPH 14 -- DISTRIBUTION REQUIREMENTS.
(continued)
Merchandise sales to retailers not specifically allowed hereunder shall
be subject to written approval by Chrysler which shall be conditioned
upon other "better" national luggage brands being sold at those outlets
and Jeep luggage being sold at a price and quality consistent with such
national brands, i.e. Samsonite.
SPECIAL RIDER -- TRADE SHOWS.
Licensee agrees to participate in trade shows including Supershow and
LLGMA show.
Except as specifically modified herein, all other terms and conditions
of the Agreement shall remain in full force and effect.
Assuming the preceding statements accurately reflect your
understanding, please sign the three original Amendments in the space provided,
and return them to ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, along with your advance check in the
amount of US Dollars .00, made payable to ▇▇▇▇▇▇▇▇ Projects, Inc. We will then
have the Amendment executed and a fully-executed copy will be returned to you
for your files. Of course, no binding modification exists until a fully-executed
copy of the Amendment has been returned to you.
If you have any questions, feel free to contact ▇▇▇▇▇ ▇▇▇▇▇▇▇.
AGREED TO AND ACCEPTED BY:
CHRYSLER CORPORATION DYNAMIC CLASSICS, LTD.
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Patent Counsel Title: President
EXHIBIT 10.14
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ TEL ▇▇▇-▇▇▇-▇▇▇▇
SANTA ▇▇▇▇▇▇ FAX ▇▇▇ ▇▇▇-▇▇▇▇
CALIFORNIA 90405
[LOGO]
▇▇▇▇▇-▇▇▇▇▇▇
DATE: January 13, 1999
TO: ▇▇▇▇ Pers
FROM: Ben Van ▇▇ ▇▇▇▇
SUBJECT: Distribution Agreement; Rotaflex
------------------------------------------------------------------------------
The purpose of this letter is to describe the agreement between Dynamics
International, Ltd., a ___________ corporation ("Licensor") and ▇▇▇▇▇-▇▇▇▇▇▇
Corporation, a Delaware corporation ("GRC").
BACKGROUND
a. Licensor has the exclusive marketing and distribution rights to that
certain product known as "Rotaflex" more specifically described on Exhibit "A"
attached hereto ("Product");
b. GRC has certain international marketing and distribution rights and
abilities;
c. Licensor and GRC desire to cause GRC to market and distribute the
Product through all channels of distribution throughout the "Territory"
("Territory" is described on Exhibit "A" attached hereto).
AGREEMENT
1. Grant of Rights. From the date of execution of this Agreement through
the "Term" defined below, Licensor hereby grants GRC the exclusive right to
market and distribute the Product in the Territory.
2. Term. GRC shall have the exclusive right to market and distribute the
Product in the Territory for ninety (90) days following GRC's initial airing of
the "Rotaflex" infomercial ("Infomercial") in the Territory ("Test Period"). It
is GRC's present intention to commence the Test Period by airing the
Infomercial, at its sole cost and expense, within sixty (60) days following
GRC's receipt of the Product (i.e., Product 240 units per Exhibit "A").
Thereafter, GRC may renew this Agreement for successive six (6) month terms on
the same terms and conditions, provided that (i) said renewal is in writing
signed by both parties and (ii) the parties mutually agree upon minimum
purchase order requirements ("Minimum Purchase Order"). Thereafter, if GRC
fails to meet any Minimum Purchase Order in respect of a country or group of
countries in the Territory, then such
1
failure to meet the Minimum Purchase Order shall not be a breach of this
Agreement, provided, however, that the grant of rights to GRC herein shall
revert to non-exclusive for the remainder of the Term as to the particular
country or group of countries to which the Minimum Purchase order applies or,
at Licensor's election and upon thirty (30) days' prior written notice,
Licensor may terminate this Agreement with respect to such country or group of
countries, subject to GRC's sell-off rights as provided herein.
3. Financial Terms. During the Test Period, as Licensor's total
compensation, GRC shall purchase the Product from Licensor at the costs set
forth in Exhibit "A" hereto. GRC shall receive payment from Licensor for
defective Product returned to GRC; Licensor must make such payment to GRC
within thirty (30) days of GRC's receipt of the defective Product (any delay
will result in GRC's right to full reimbursement by any lawful means, including
without limitation offset rights; however, if the nature of the defect is in
reasonable dispute, then there shall be no right of offset until mutually
resolved). GRC's payment for Product shall be due Licensor thirty (30) days
following GRC's receipt of Product. It is understood and agreed that the
pricing set forth in Exhibit "A" shall not be increased during the Test Period
or any renewals of the Term as exercised by GRC. A Product shall not be deemed
defective if the purported defect is due wholly to actions on the part of GRC
or its customers.
4. Other Rights. Licensor hereby grants GRC any and all rights that it may
have in and to the Product, any and all Infomercials and/or any related
materials to the Product and commercials to exclusively sell the Product in any
channel of distribution throughout the Territory.
5. Insurance. Licensor shall name GRC an additional insured on its
commercial general liability and product liability insurance policies and
provide GRC with a certificate of insurance evidencing that such insurance has
been obtained, is in effect and has policy limits of no less than one million
dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) in the
aggregate. Licensor shall provide GRC a certificate of insurance showing GRC
named as an additional insured.
6. Royalties. Any and all royalties due and payable to third-parties shall
be the sole responsibility of Licensor.
7. Claims. All claims and representations made in the Infomercial, Product
and associated Product literature are true and correct. Licensor shall defend
and indemnify GRC from any claims arising from its airing of the Infomercial or
sale of the Product.
8. Product Samples. Licensor will provide GRC a minimum of five (5) Product
samples (in an actual shipper box) upon request from GRC.
9. Infomercial and Product Video D2 Master. Licensor shall provide GRC with
a D2 or Beta master of the Infomercial and product instructional video (if
applicable) in the following format: split audio, NTSC, address track time
codes, superless, generic--containing no 800 numbers.
10. Upon execution of this Agreement, Licensor must complete the product
fact sheet attached hereto as Exhibit "B".
2
11. Sell-Off Rights. Upon termination of this Agreement, GRC shall have
the right to continue to accept and process orders to sell off all Product
inventory.
12. Representations of Licensor. Licensor represents and warrants it has
not received any inquiries from the consumer product safety commission or any
other regulatory body. Licensor also represents and warrants that it possesses
all rights necessary to market and distribute the Product and to the
Infomercial, including, but not limited to, all footage related to the
Infomercial, all necessary music rights, intellectual property rights and that
it has all necessary on-air footage releases for all participating individuals
or entities referenced in the Infomercial. Licensor shall provide Product to
Licensee in conformance with the terms and conditions of Licensee's standard
purchase order, a copy of which is attached.
13. Representations of GRC. GRC represents that it will (i) use its
commercially reasonable efforts to maximize sales of the Product in the
Territory, (ii) pay all costs associated with its marketing efforts, and (iii)
conduct such marketing efforts in accordance with all applicable laws, and will
hold Licensor harmless from any claims, costs or expenses made against Licensor
as a result of GRC's marketing of the Product in the Territory.
The parties are reflecting their agreement to these terms by signing below.
▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION,
a Delaware corporation, its Member
By: /s/ Ben Van de ▇▇▇▇
▇▇▇ Van ▇▇ ▇▇▇▇
Its: Corporate Secretary
AGREED AND ACCEPTED THIS
13 DAY OF January, 1999
DYNAMICS INTERNATIONAL, LTD.
By: /S/ ▇▇▇▇ Pers
_______________________
Its: Executive Vice President
3
EXHIBIT "A"
Product, Pricing and Territory Definition
A. Product. The Product shall mean that certain product known as "Rotaflex"
and shall include, but not be limited to, the following components:
Rotaflex - a compact portable total body exercise device
Cost: Test: 240 FOB Nevada @ $17.50
Roll-out: 240 FOB Nevada @ $17.50/3200 FOB Taiwan @ $15.00
(possible 240 FOB Taiwan @ $15.00 if in production))
B. Territory. The Territory shall include the following:
* Australia, New Zealand and Japan. GRC shall have a "first matching right"
on any other offers received by Licensor regarding Product distribution
during the Term for other territories.
4
EXHIBIT B
Page 1
Product Name: Spalding Rotaflex
The information on the following pages will assist us in promptly placing a
purchase order for this product and preparing the product for sale in our
international markets. Please complete the following pages and return them via
fax to GRC International Department at (▇▇▇) ▇▇▇-▇▇▇▇. Thank you for your
assistance and we look forward to a very successful relationship!
Product Information:
Product Components: (list all bonus items, written, audio, video materials)
Rotaflex
Rotapad
Instructional video (12-1/2 min.)
Exercise manual / wall chart
_____________________________________________________________________________
Upsell Components:
Rotaclip
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Item Code/Model Number: Extra resistance #290 (#292 w/rotaclip) regular
resistance #291
(#293 w/rotaclip)
Minimum Order Qty: Test 240
Roll-out 240
Lead Time: 2-4 weeks
FOB Point(s): Sparks, Nevada Taichung, Taiwan
Country of Origin: Taiwan
COG (product): FOB USA $17.50 FOB Taiwan $15.00
COG(upsells): Unit with Rotaclip FOB USA $20.00 Taiwan $17.00
Payment Terms: USA: NET 30 Taiwan L/C at sight
Qty Per 20 ft Container: Approx. 3200
Qty Per 40 ft Container: Approx. 6700
Shipper Box: Inner Carton Master Carton Pallet
Dimensions 18" x 17.5" x 2" 22.5" x 18 1/4" x 19" 48 x 40 x 63
Weight 3.5 Ibs. 42.5 Ibs. 623
Cubic Feet .36 4.5 70
Quantity ________________ ____________________ ________________
5
EXHIBIT "B"
Page 2
Order Administration (where PO is entered and managed)
Company Name: Dynamic International Ltd. Fed. Tax ID # ▇▇-▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇.
City: Brooklyn State: NY Zip: 11215
Primary Contact: ▇▇▇▇ Pers Title: Executive Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
Claims/Substantiation (documentation and releases on IN/Spot and product)
Company Name: Dynamic International Ltd. Fed. Tax ID # ▇▇-▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇.
City: Brooklyn State: NY Zip: 11215
Primary Contact: ▇▇▇▇ Pers Title: Executive Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
Manufacturing Data (where product is produced)
Company Name:
Address:
City: State: Zip:
Primary Contact: Title:
Phone: Fax:
Shipment Data (where product is picked up for shipment)
Company Name: Dynetic Manufacturing Ltd.
Address: ▇▇. ▇▇-▇, ▇▇▇▇ ▇▇▇, Section ▇, ▇▇ ▇▇▇▇ ▇▇., ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇: Taichung County: Taiwan Zip:
Primary Contact: ▇▇▇▇▇▇▇ ▇▇▇▇ Title: Sales Manager
Phone: ▇▇▇-▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇-▇▇▇-▇▇▇▇
6
EXHIBIT "B"
Page 3
Product Name: Spalding Rotaflex
Required Materials:
* Five complete samples of products as it will ship (if not already provided).
* Artwork (CD-ROM) preferred) for all in-product materials including
instruction manuals, in-product video sleeves, etc.
* "Hero shots" of Product (transparencies or CD-ROM preferred).
* "Action shots" of product, i.e., shots of the product in use, before and
after shots, etc. (transparencies or CD-ROM preferred).
* Samples of any print ads, catalog sheets, etc.
* Broadcast quality D2 or Beta Master of the infomercial offering the product
as noted above:
NTSC Format
Generic - (no 800 numbers)
Superless
Address Track Time Code
Split Audio:
Channel 1: Composite (music, sound effects, dialogue)
Channel 2: Composite (music, sound effects, dialogue)
Channel 3: ME (music and sound effects)
Channel 4: ME (music and sound effects)
If the master is not available as noted above, please advise us
immediately as to what is available. Thank you.
* D2 or Beta Master of In-Product Videos (if applicable).
Format same as above.
Please ship all MASTERS to: ▇▇. ▇▇ ▇▇▇▇▇▇
Pacific Media Technology
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Please ship ALL OTHER MATERIALS to: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇ Corporation
International Department
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
7
