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Exhibit No. 26
XxxxxxXxxxxx.xxx, Inc.
Form 10-KSB/ 2000
File No. 0-26917
AGREEMENT
THIS AGREEMENT is made and entered into, and shall be
effective as of, this 25th day of April, 2000, by and between
BUYERS XXXXXX.XXX, a Delaware corporation ("Buyers") and D.R.
JR., INC., a Pennsylvania corporation ("D.R."), relative to the
services of XXXXX XXXXX ("Xxxxx") as a spokesperson for Buyers in
connection with its marketing, through direct response
television, print advertisements, retail and/or other marketing
means, of a consumer buying club.
NOW THEREFORE, in consideration of the mutual covenants and
conditions as set forth hereinbelow, the parties agree as
follows:
1. Production of Commercials and Testing:
1. Product Line: The Product Line shall be defined as a
consumer buying club providing an array of services in
communications and entertainment, as well as hard goods,
including (but not limited to) some or all of the following: (i)
telecommunications and Internet-related services, utilities,
insurance, financial services, groceries, fuel, and other
household-related services, and (ii) durable goods, including
electronics, appliances, home furnishings, lawn and garden,
automobile, travel, and books and tapes.
2. Production of Commercials: Xxxxx will be available for, and
appear in, one thirty (30) minute infomercial, a series of :30,
:60, and :120 second commercials (not to exceed six commercials),
and still photography, promoting the Product Line, the dates,
times and locations of which sessions shall be mutually agreed
upon in good faith by the parties and shall not exceed two days
in total for all of the foregoing services (with each day not to
exceed ten hours from call time to release). In connection with
the foregoing, Xxxxx shall have those rights of approval as are
set forth in Paragraph 17, below. The parties agree that Xxxxx'x
services are unique in character and, therefore, may not be
delegated for any purposes under this Agreement.
3. Compensation: Buyers shall pay D.R., in consideration for
the services of Xxxxx as set forth hereinabove, the sum of
$50,000.00 (the "Session Fee"), said sum to be credited against
all union minimum payments (calculated at twice the minimum
scale) due under this Agreement and to be paid upon commencement
of the infomercial/commercial shoot. The Session Fee shall be
non-refundable, but it shall be recoupable against the Royalty
due D.R. pursuant to Paragraph 2F(1), below. In addition, Buyers
shall make or cause to be made payment on behalf of D.R. of all
sums required to be paid to the applicable pension, health and
welfare funds arising out of Xxxxx'x services referenced
hereinabove and shall provide D.R. with written verification that
such payments have been made. D.R. agrees to pay any required
income, employment or other taxes relating to the compensation
paid to D.R. by Buyers hereunder. In the event that the
infomercial or commercials are shot outside of the greater Los
Angeles area, Buyers shall provide D.R. with first class, round
trip air fare, first class hotel accommodations and first class
ground transportation for two people, and a per diem of $150.00
per person (including travel days), all of the foregoing in
connection with Xxxxx'x travel to and from the shoot.
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4. Usage During Test Phase: The infomercial and/or commercials
will test, at the discretion of Buyers, on cable stations,
network affiliates, and independent stations for a period not to
exceed ninety (90) days (the "Test Phase"), such test to commence
by not later than August 31, 2000. Buyers agrees that the
infomercial and commercials shall not air during the Test Phase
on the ABC, NBC, or CBS television networks during prime time.
Buyers shall pay D.R. the Royalty, as defined in Paragraph 2F, on
Product Line membership activations generated during the Test
Phase in direct response to the infomercial and/or commercials
(but not on such activations generated thereafter unless Buyers
proceeds with a Roll-Out as referenced in Xxxxxxxxx 0X, xxxxx).
D.R. and Xxxxx consent to the use of Xxxxx'x name, image,
likeness, photograph, voice, signature and reputation
(collectively the "Endorsement") for such purpose, subject to
D.R.'s approval rights as set forth in Paragraph 17, below.
There shall be no print use of Xxxxx'x Endorsement during the
Test Phase, except in connection with collateral materials
provided to Product Line purchasers. D.R. and Xxxxx agree to
provide Xxxxx'x on-camera services, if requested by Buyers,
during the Test Phase (at dates and times to be mutually agreed
upon by the parties and not to exceed eight hours in total) to
reshoot footage for the infomercial and/or commercials for
purposes of enabling Buyers to test or retest the material. In
consideration for such services, Buyers will pay D.R. the minimum
session fee due in accordance with the applicable collective
bargaining agreement calculated at twice the minimum scale (such
fee to be in addition to the Session Fee referenced in Paragraph
1C, above).
2. Marketing:
1. Option: Buyers will have the option (the "Option"),
exercisable in writing within one hundred eighty (180) days
following completion of the Test Phase (but in any event by not
later than December 31, 2000), to elect to proceed with and to
commence a Roll-Out of the infomercial, commercials and/or the
still photography containing Xxxxx'x Endorsement in connection
with the marketing of the Product Line, with the Roll-Out (if
any) to commence by not later than January 1, 2001. The term
"Roll-Out" shall be defined as the exhibition of the commercials
and/or still photography following the Test Phase and shall be
deemed to have commenced (if at all) upon the first such
exhibition. It is specifically understood and agreed by the
parties hereto that Buyers shall have the right not to exercise
such Option, for any reason whatsoever or for no reason, and that
neither party shall have any liability whatsoever to the other
arising solely out of Buyers' election not to exercise the
Option.
2. Term:
(1) The term ("Term") of this Agreement shall commence upon
execution hereof and shall, thereafter, continue in full force
and effect for a period of one year (the "Initial One Year Term")
beginning on the date of a Roll-Out, if any, subject to renewal
thereafter for successive one year terms ("Renewal Terms")
pursuant to Paragraph 3, below. The Roll-Out, if any, shall
commence by not later than January 1, 2001.
(2) Notwithstanding the foregoing, this Agreement will terminate
("Early Termination") in the event, and at such time as, Buyers
elects not to proceed with a Roll-Out. In the event of such
Early Termination, there shall be no further use by Buyers of
Xxxxx'x Endorsement in any manner, except as permitted by
Paragraph 1E, above.
3. Area of Use: The area of use for the advertising materials
shall be the United States and its commonwealths, territories and
possessions (the "Territory"), and shall include all
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manner, media, and methods of distribution.
4. Consent: In the event of a Roll-Out, D.R. and Xxxxx consent
to the use of Xxxxx'x Endorsement in connection therewith for the
duration of the Initial One Year Term, all Renewal Terms, and the
Sell-Off Period. Such consent shall extend to all uses incident
to Buyers' marketing of the Product Line, inclusive of the
infomercial, commercials, print advertisements (e.g.:
advertisements in newspapers, magazines, catalogs, and other
periodicals; credit card inserts; and direct mail), product
packaging and inserts, sales literature and corporate promotional
materials, through any and all manner, media, and channels of
distribution throughout the Territory, including direct response,
electronic media, the Internet ( but only Buyers' Web site and
such other Web sites as the parties may mutually agree upon), and
retail distribution. In connection with the foregoing, D.R. and
Xxxxx shall have those rights of approval as are set forth in
Paragraph 17, below. Notwithstanding the foregoing, Buyers
agrees that there shall be no use of Xxxxx'x Endorsement on
billboards, and that Buyers will make a good faith effort to
avoid the purchase of any air time for the infomercial and
commercials in the same time slots as those occupied by the CBS
television network program, "Touched By An Angel," during the
first and second network runs of the program. In addition,
Buyers agrees that Xxxxx'x Endorsement shall not be directed to
specific endorsements of individual products comprising the
Product Line, but rather shall be directed to the Product Line as
a whole (although reference will be made within the advertising
materials to the variety of products being offered by Buyers).
Notwithstanding this, in the event that Buyers elects in the
future to offer one or more products not included in the Product
Line membership and desires to have Xxxxx endorse such individual
products, Buyers will negotiate with D.R. and Xxxxx regarding the
possible terms for Xxxxx'x endorsement of the products, and D.R.
and Xxxxx shall have the right to agree or not agree to such
additional endorsement.
5. Additional Services: In the event of a Roll-Out, and at the
option and upon the request of Buyers, D.R. will provide Xxxxx'x
services during the Initial One Year Term (following a Roll-Out)
and each Renewal Term thereafter, at specific dates, times, and
places to be mutually agreed upon by the parties, not to exceed
two days in total, not necessarily consecutive (nor ten hours
from call time to release on each day), during each one year
term, for the purpose of shooting additional footage to update
the infomercial, commercials, including still photography, or for
shooting footage for a new infomercial or new commercials,
including still photography. Buyers agrees that any unused shoot
days shall expire at the end of the then-current one year period
and may not be carried over into any successive one year period
during the Term. The updated or new infomercial, commercials and
still photography may be tested on air either prior to expiration
of the then current one year term or following renewal thereof,
and may then be aired on a Roll-Out basis as a replacement for
the originally-produced advertising materials. D.R. and Xxxxx
consent to the use of such materials to the full extent set forth
in subparagraph D, above, subject to the rights of approval as
are set forth in Paragraph 17, below. In consideration for the
foregoing services, Buyers will pay D.R. an additional session
fee of $50,000.00 during each one year term in which such
services are utilized, such session fee to be paid upon
commencement of the shoot and to be treated in the same manner as
the Session Fee referenced in Paragraph 1C with respect to
crediting, non-refundability and recoupability.
6. Compensation:
(1) Royalty Payable to D.R.: In the event of a Roll-Out, Buyers
shall pay to D.R., for the duration of the Term (including the
Renewal Terms), a royalty (the "Royalty") equal to the following:
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(1) $2.50 shall be earned for each Product Line membership
activated during the Term (including any Renewal Term and the
Sell-Off Period);
(2) $1.25 shall be earned upon commencement of the second
successive year of membership of each Product Line membership
originally activated during the Term, including any Renewal Term
(regardless of whether such second year commences during or after
expiration of the Term);
(3) $0.65 shall be earned upon commencement of the third
successive year of membership of each Product Line membership
originally activated during the Term, including any Renewal Term
(regardless of whether such third year commences during or after
expiration of the Term).
Notwithstanding the foregoing, no Royalty
shall be paid on membership activations
generated: (i) as a result of member
referrals, or (ii) through QVC marketing of
the Product Line (unless the parties
subsequently agree in writing that Xxxxx
shall appear as a spokesperson for the
Product Line on QVC and Xxxxx, in fact,
appears on QVC, in which event D.R. shall be
paid in accordance with the provisions of
such separate written agreement). In this
regard, Buyers agrees to maintain in effect
for the duration of the Term a system for
tracking the source of all member activations
in order to accurately determine which
activations are the result of member
referrals.
In addition, for purposes of clarification,
D.R. and Xxxxx acknowledge that Product Line
members may purchase over time a variety of
different products and services from Buyers,
but that no Royalty shall be paid in
connection with such purchases (the Royalty
being earned only in connection with original
membership activations occurring during the
Term and the second and third years of
sustained membership of each such
activation).
(2) Payment Schedule: The foregoing Royalty shall be due and
payable to D.R. on a quarterly basis within forty-five (45) days
following the close of each calendar year quarter. Each payment
shall be accompanied by a statement of accounting setting forth a
summary of Product Line activations occurring during such
calendar year quarter, and successive years of membership
commencing during such quarter (subject to audit by D.R. pursuant
to Paragraph 6, below). Buyers shall be entitled to recoup its
Guaranty payment due under subparagraph 2F(3), below, against all
Royalty payments otherwise due under this subparagraph 2F(2).
(3) Guaranty: In the event of a Roll-Out, Buyers guarantees to
D.R. that the total compensation paid to D.R. in connection with
the Initial One Year Term (including any Royalty payments made in
connection with the Test Phase) and each Renewal Term shall not
be less than $1,500,000, payable as follows:
(a) For the Initial One Year Term:
$375,000 payable upon exercise of the option
to Roll-Out and $375,000 payable ten (10)
days prior to commencement of the second,
third, and fourth calendar year quarters
following the Roll-Out; and
(b) For each Renewal Term: $375,000
payable ten (10) days prior to
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commencement
of the Renewal Term and $375,000 payable ten
(10) days prior to commencement of the
second, third, and fourth calendar year
quarters following commencement of the
Renewal Term.
Each Guaranty payment shall constitute a non-
refundable but recoupable advance against all
sums due D.R. under this Agreement. To the
extent that the amount paid to D.R. in
connection with any calendar year quarter
during the Initial One Year Term or any
Renewal Term exceeds the Guaranty installment
due for such quarter, the amount in excess of
the Guaranty installment shall be applied as
a credit against the Guaranty installment due
D.R. for the next succeeding calendar year
quarter. Further, at such time as the total
amount paid to D.R. in connection with the
Initial One Year Term (including the Session
Fee and Test Phase Royalty payments), or any
Renewal Term, equals $1,500,000, no further
Guaranty payments shall be due for the
remainder of such period.
Payment of the foregoing Guaranty shall be
secured by a standby letter of credit to be
obtained by Buyers for the benefit of D.R.
after completion of the Test Phase and prior
to commencement of the Initial One Year Term
(and only in the event of an affirmative
election to proceed with a Roll-Out). The
letter of credit shall be in a form
acceptable to Buyers and D.R. and, upon
issuance, a copy of same shall be attached to
this Agreement as Exhibit 1. The amount of
the letter of credit upon initial issuance
shall be $1,125,000, and D.R. shall be
entitled to draw against such letter of
credit only if, and to the extent that,
Buyers shall fail to make payment of the
second, third and/or fourth quarterly
Guaranty installments when due D.R. as set
forth above. During the Initial Term, the
initial amount of the letter of credit shall
be reduced by and to the extent of all
Guaranty payments made by Buyers to D.R., as
well as by and to the extent of any draws
against such letter of credit made by D.R.
Prior to commencement of each Renewal Term,
Buyers shall renew or extend the term of the
letter of credit for the duration of such
Renewal Term in the amount of $1,125,000, and
D.R. shall again be entitled to draw against
such letter of credit only if, and to the
extent that, Buyers shall fail to make
payment of the second, third and fourth
quarterly Guaranty installments when due D.R.
(with the amount of the letter of credit
being again reduced by and to the extent of
all Guaranty payments made by Buyers to D.R.,
as well as by and to the extent of any draws
against such letter of credit made by D.R.).
(4) Crediting of Payments: All compensation as referenced above
shall be credited against any and all union minimum payments due
under this Agreement calculated at twice the minimum scale
(excluding pension, health and welfare fund contributions). D.R.
agrees to pay any required income, employment or other taxes
relating to the compensation paid to D.R. by Buyers hereunder.
3. Renewal: Buyers shall have the sole right, but not the
obligation, to renew this Agreement for a maximum of two (2)
successive one year terms (each being designated a "Renewal
Term") upon the same terms and conditions, exercisable in writing
not less than ten (10) days prior to the expiration of the then
current one year term.
4. Representations and Warranties:
1. D.R. and Xxxxx warrant and represent that:
(1) they have the right to enter into this Agreement and to
grant the rights as set forth hereinabove;
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(2) there are no contractual obligations preventing the
fulfillment of this Agreement;
(3) neither this Agreement nor the transactions contemplated
hereby will cause a violation of any other agreement to which
D.R. or Xxxxx is a party; and
(4) D.R. and Xxxxx have not, and will not, either themselves or
by granting authority to any other person or entity, exercise any
right or take any action which derogates or impairs the rights
granted to Buyers hereunder, or derogates the names or
reputations of Buyers, the Product Line, or any of the officers,
directors, or shareholders of Buyers.
2. Buyers warrants and represents that:
(1) it has the right to enter into this Agreement and to grant
the rights as set forth hereinabove;
(2) there are no contractual obligations preventing the
fulfillment of this Agreement;
(3) neither this Agreement nor the transactions contemplated
hereby will cause a violation of any other agreement to which
Buyers or any of its affiliated companies is a party.
5. Indemnity:
1. D.R. and Xxxxx shall indemnify and hold Buyers, and its
officers, directors and shareholders (collectively "Indemnitees")
harmless from and against any and all losses, costs, damages,
charges, claims, reasonable legal fees, recoveries, judgments,
penalties and/or reasonable expenses (collectively "Losses")
which may be obtained against, imposed upon, or suffered by
Indemnitees by reason of any breach of any representation or
warranty made by D.R. and/or Xxxxx under this Agreement, or by
reason of any breach of any other provision hereof. The
foregoing obligation of D.R. and Xxxxx to indemnify and hold
Indemnitees harmless shall survive termination or expiration of
this Agreement.
2. Buyers shall indemnify and hold D.R. and Xxxxx, and each of
them, harmless from and against any and all Losses which may be
obtained against, imposed upon, or suffered by D.R. and/or Xxxxx
by reason of the exhibition of the advertising materials produced
hereunder or the promotion, sale or use of the Product Line
advertised therein or any product or service offered thereby, or
by reason of any breach of any representation or warranty made by
Buyers under this Agreement or of any other provision hereof.
The foregoing obligation of Buyers to indemnify and hold D.R. and
Xxxxx harmless shall survive termination or expiration of this
Agreement. For the duration of the Term of this Agreement
(including the Sell-Off Period), and thereafter for so long as
the Product Line is marketed by Buyers (or by any Buyers
affiliate, subsidiary, successor, or assign) and the insurance
coverage described herein is available, Buyers shall include D.R.
and Xxxxx as additional named insureds on Buyers's commercial
general liability insurance policy (including coverage for
product liability) and advertising liability policy with combined
limits of not less than $3,000,000, and shall provide D.R. and
Xxxxx with certificates of insurance evidencing such coverage
prior to any use of the material produced hereunder.
6. Right to Audit: Buyers shall maintain during the Term
(including all Renewal Terms) complete
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and accurate books of
account evidencing membership activations. At any time within
eighteen (18) months after a statement is rendered hereunder,
D.R. shall have the right to examine Buyers' books and records
evidencing its Product Line membership activations and membership
statuses for the subject period solely for the purpose of
determining the accuracy of such statement. The examination (i)
shall be conducted by a CPA firm selected by D.R. which is a
member in good standing of the AICPA, after reasonable advance
written notice from D.R. to Buyers, (ii) shall be commenced and
conducted during Buyers' normal business hours at the offices of
Buyers or its accounting representative, and (iii) shall be
conducted at D.R.'s sole cost and expense. There shall not be
more than one examination during each year of the Term.
Notwithstanding clause (iii), above, in the event it is mutually
determined by Buyers and D.R., or by arbitration pursuant to
Paragraph 10, below, that D.R. has been underpaid in an amount in
excess of three (3%) percent of the contract rate of
compensation, Buyers shall pay the reasonable costs of such
examination (excluding travel, living and other personal expenses
of the examiner). All statements rendered by Buyers under this
Agreement shall be final and binding on D.R., unless specific
objections thereto are made and delivered in writing within
twelve (12) months from the date any such statement is delivered
to D.R. Once the records for any accounting period have been
inspected by D.R., such records shall not be the subject of a
later inspection. Further, with respect to each inspection, D.R.
must notify Buyers within ninety (90) days following completion
of the inspection of any claim it asserts for money due and owing
it as a result of a prior underpayment, in the absence of which
Buyers' accounting statements for the examined period shall be
deemed accurate and any claim of D.R. for money due and owing in
connection therewith shall be deemed waived. Buyers shall have
the right to condition disclosure of information to D.R. and its
agents, in connection with any inspection under this paragraph,
upon Buyers's receipt of a non-disclosure agreement, acceptable
in form and content to Buyers and duly executed by D.R. and any
agent of D.R. receiving such information.
7. No Warranty Re Revenues: The parties understand and agree
that there is a substantial risk in any new venture; that neither
party is making any warranty or representation regarding the
total amount of revenues which will ultimately be generated
pursuant to this Agreement, other than the Guaranty set forth in
Paragraph 2F(3), above; that Buyers and/or its affiliated
companies currently do, and may in the future, manufacture,
market, distribute, and/or sell other, possibly competitive,
products under the same or other names, utilizing the same
distribution channels as will be utilized for the marketing of
the Product Line; and that no royalty or other form of
compensation shall be payable to D.R. or Xxxxx in connection
therewith.
8. Successors and Assigns: Subject to the restrictions on
delegation of duties contained elsewhere in this Agreement, this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective executors, administrators,
heirs, successors, and assigns, as the case may be.
9. Exclusivity: Commencing upon execution of this Agreement
and continuing thereafter through the Initial One Year Term and
each Renewal Term, neither D.R. nor Xxxxx shall in any way
develop, manufacture, endorse, or market, or appear in any form
of advertisement of any kind for the purpose of endorsing or
marketing, any other consumer buying service. In addition,
commencing upon execution of this Agreement and continuing
thereafter for the duration of the Initial One Year Term and each
Renewal Term, neither D.R. nor Xxxxx shall in any way participate
or appear in any other long form infomercial (i.e.: approximately
thirty minutes in length), regardless of the product or service
being advertised therein; and, in the event that D.R. or Xxxxx
elects during the Term to participate in a short form direct
response commercial for a non-competing product, they agree to
provide Buyers with advance written notice of such participation
(it being agreed, however, that an inadvertent failure by D.R. or
Xxxxx to so notify Buyers of such participation shall not
constitute a breach of this Agreement). This paragraph shall not
preclude Xxxxx from appearing in the entertainment, news or
information portion of any radio, television, live or other
entertainment program regardless of sponsorship, provided that
Xxxxx does not appear or otherwise participate in any "lead-ins"
or "lead-outs" for competitive products.
10. Attorney's Fees: In the event that any legal proceeding is
commenced to enforce any term of this Agreement or to seek
recovery for any breach thereof, the prevailing party in such
action shall be entitled to recovery of its reasonable attorney's
fees and actual costs incurred in such action. Any controversy
or claim arising out of or relating to this contract, or the
breach thereof, shall be settled by an expedited arbitration to
be conducted by the American Arbitration Association (utilizing
one arbitrator) in the City of Los Angeles, State of California,
and judgment on the award rendered by the arbitrator, which shall
be prompt and timely, may be entered in any
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Court having
jurisdiction thereof. In order to accomplish the foregoing, the
parties hereby consent to jurisdiction of this matter in the
County of Los Angeles, State of California. The parties shall
have the right to engage in reasonable discovery in connection
with any such arbitration. The arbitrator shall be entitled to
award expenses to the prevailing party, inclusive of reasonable
attorney's fees. The parties shall endeavor, to the extent
reasonably feasible, to keep any dispute arising hereunder
confidential, and the arbitrator shall have authority to enforce
and interpret this duty of reasonable confidentiality.
11. Controlling Law: This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
12. Entire Agreement: This Agreement contains the entire
agreement of the parties and supersedes any prior agreements,
understandings and memoranda relating thereto. This Agreement
may not be changed, altered or modified in any way except by a
writing signed by the parties hereto.
13. Severability: If any clause or provision of this Agreement
shall be adjudged to be invalid or unenforceable, such
adjudication shall not affect the validity of any other clause or
provision of this Agreement, which shall remain in full force and
effect.
14. Consent in the Event of Death: The parties agree that, in
the event of Xxxxx'x death during the Initial One Year Term or
any Renewal Term, Buyers shall have the option to continue
marketing the Product Line utilizing Xxxxx'x Endorsement in
connection therewith for the duration of the Initial One Year
Term and all Renewal Terms (if any) under the same terms and
conditions as set forth in this Agreement. In the event that
Buyers shall instead elect to terminate such marketing, Buyers
shall pay to D.R. the Royalty as provided in Paragraph 2F(1),
above, on each Product Line origination or renewal generated
through the date of termination (and on each Product Line
origination or renewal generated thereafter in response to any
direct response advertisements which utilized Xxxxx'x
Endorsement, but on no other Product Line sales), and the
Guaranty provided in Paragraph 2F(3) shall be prorated to date of
termination. Such proration shall be accomplished by multiplying
the Guaranty which otherwise would have been due for the then-
current one year period by a fraction, the numerator of which is
the number of days which have elapsed between the commencement
date of such one year term and date of termination, and the
denominator of which is 365.
15. Ownership of Product Line and Advertising Materials: The
Product Line and all advertising materials produced hereunder
will be and remain the absolute property of Buyers forever,
including, but not limited to, all intellectual property
interests therein. D.R. and Xxxxx acknowledge that they have no
right, title, or interest in or to same and hereby assign all
rights to the Product Line and advertising materials to Buyers.
To the extent required under the applicable copyright laws
regarding ownership of any advertising materials produced
hereunder or the content or use thereof, the product of the
services of D.R. and Xxxxx hereunder will be considered works
made for hire or, if not legally capable of being considered as
such, then and in such event D.R. and Xxxxx hereby assign to
Buyers any and all right, title or interest they may have in or
to such advertising materials. Notwithstanding the foregoing, it
is agreed that, except as otherwise permitted herein, Buyers may
not use Xxxxx'x Endorsement after the termination or expiration
of this Agreement; however, Buyers shall have a period of six
months (the "Sell-Off Period") following expiration of the Term
(either the Initial One Year Term or, in the event of renewal,
the final Renewal Term) to dispose of its then existing inventory
of the Product Line containing the Endorsement of Xxxxx, provided
that Buyers pays D.R. the Royalty due thereon in accordance with
Paragraph 2F(1), above, with no guaranty as to the total amount
thereof and, provided further, that Buyers does not air or
otherwise exploit the infomercial, commercials or any other
advertisements containing Xxxxx'x Endorsement during or after
such time period without the prior written consent of D.R.
16. Independent Contractor: It is understood and agreed that
the relationship of D.R. and Xxxxx to Buyers is that of an
independent contractor, and nothing contained in this Agreement
shall be construed to create any partnership, joint venture,
principal/ agent relationship, or any other fiduciary
relationship between the parties hereto. The parties expressly
disclaim the existence of any third party beneficiaries to this
Agreement.
17. Approvals: D.R. and Xxxxx shall have the right of approval
over all images, signatures,
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photographs and likenesses of Xxxxx
utilized in the infomercial, commercials, print advertisements or
otherwise; the infomercial and commercial scripts; and any press
releases relating to the Test Phase or a Roll-Out. Once an item
has been approved by D.R. and/or Xxxxx under this Paragraph, it
need not again be submitted by Buyers for approval for subsequent
consistent uses, so long as no material changes are made with
respect to such item or the use thereof. All rights of approval
shall be exercised in a fair and reasonable manner, with no such
approval being unreasonably withheld. In all instances where the
right of approval is provided, same shall be given within five
(5) business days following receipt by D.R. and/or Xxxxx (as the
case may be) of a written request for approval. In order to
facilitate the processing of approvals, D.R. and Xxxxx agree to
endeavor to reasonably advise Buyers of their travel plans during
time periods when requests for approval are likely to be
forthcoming.
18. Confidentiality: The parties acknowledge that the terms and
provisions of this Agreement, and any disputes arising hereunder,
are confidential in nature and, therefore, agree not to disclose
the content or substance thereof to any third parties other than
their attorneys (unless affiliated by common ownership,
employment, or other form of agency relationship), other than as
may be reasonably required in order to comply with any
obligations imposed by the Agreement, or to comply with any
statute, ordinance, rule, regulation, other law, court order or
civil proceeding.
19. Notices: All notices to be sent pursuant to this Agreement
shall be sent via Federal Express, Express Mail, or confirmed
facsimile transmission, to the persons identified below at the
designated addresses (or at such new addresses as the parties may
hereinafter notify each other in writing):
Buyers Xxxxxx.xxx Mr. Xxx Xxxxx
Buyers Xxxxxx.xxx
00 Xxxx Xxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
(000) 000-0000 - telephone
(000) 000-0000 - facsimile
D. Xxxx Xxxxxxxxxxx, Esq.
Hall Xxxxxxx Xxxx Xxxxxxxx & Xxxx
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
(000) 000-0000 - telephone
(000) 000-0000 - facsimile
D.R. Jr., Inc.
and Xxxxx Xxxxx: Ms. Xxxxx Xxxxx
D.R. Jr., Inc.
c/o Xx. Xxxxxxx X. Xxxxx
Xxxxxxx Xxxxxx Agency, Inc.
000 Xx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
000-000-0000 - telephone
000-000-0000 - facsimile
20. Force Majeure: If, for any reason, such as strikes,
boycotts, war, weather, other acts of God, riots, delays of
commercial carriers, restraints of public authority, or for any
other reason beyond the control of Buyers and outside the normal
scope of commercial restraints (collectively "Force Majeure"),
Buyers is unable to air the infomercial and/or commercials at all
during any part of the Initial One Year Term or any Renewal Term
hereof, then Buyers shall have the right to extend the affected
Term for an equivalent period (not to exceed ninety (90) days
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in
total) without payment of any additional compensation to D.R. or
Xxxxx (but with payment of the Royalty pursuant to Paragraph 2F).
In the event such Force Majeure causes the prevention, suspension
or postponement of any production session for the infomercial,
commercials or still photography to be produced under this
Agreement, the time for completion of such session(s) shall be
extended, at the election of Buyers and with no additional
compensation being payable to D.R. or Xxxxx in connection
therewith, by the number of days equal to the number of days for
which the production session was prevented, suspended, or
postponed (but not to exceed ninety (90) days in total and, in
any event, only to the extent not prohibited by the applicable
union contract having jurisdiction over the production).
21. Applicable Union Agreements: This Agreement is subject to
all of the terms and conditions of the representative contracts
of the union(s) having jurisdiction over the services covered by
this Agreement, except as same may be, and are hereby,
superseded, amended, or supplemented.
22. Agency Fees: Each party hereby represents to the other that
no agent, broker or finder is entitled to any fee or commission
in connection with this Agreement or the transaction contemplated
hereby.
23. Representation by Counsel: Each party represents and
warrants that it has been represented by legal counsel of its own
choosing in the negotiation and drafting of this Agreement; that
it has read this Agreement; that it understands all of its terms;
that the contents of this Agreement have been explained to it by
its counsel; and that this Agreement is executed voluntarily and
with full knowledge of its significance.
Buyers Xxxxxx.xxx D.R. Jr., Inc.
By: By:
Mr. Xxx Xxxxx
I hereby represent and warrant that D.R. Jr., Inc. is authorized
to grant and assign the rights, and furnish my services, as
hereinabove set forth in this Agreement, and I agree to be bound
by the terms and conditions of this Agreement.
Xxxxx Xxxxx
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