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EXHIBIT 99.1
EXCLUSIVE MANUFACTURING & SUPPLY AGREEMENT
This Exclusive Manufacturing and Supply Agreement ("Agreement") is made
and entered into as of December 28, 2005 by and between Arrowhead Industries,
Inc., a Florida corporation ("Arrowhead"), with principal offices located at
00000 Xxxxxx Xxxx Xxx, Xxxxxxxxxx, XX 00000 and CirTran Corporation, a Nevada
corporation, with principal offices at 0000 Xxxxx 0000 Xxxx, Xxxx Xxxxxx Xxxx,
XX 00000 ("Manufacturer").
RECITALS
Arrowhead is engaged in the business of marketing and distributing a
door hinge removal tool known as the "Hinge Helper", U.S. Patent No. 6,308,390
B1 (the "Product");
Manufacturer is engaged in the business of manufacturing various
products on an exclusive basis for marketing and distribution.
Arrowhead desires to have Manufacturer manufacture, on an exclusive
basis, and package the Product, upon the terms and conditions set forth herein.
In consideration of the mutual promises contained herein, and for other
good and valuable consideration, the receipt of which are hereby acknowledged,
the parties hereto agree as follows:
DEFINITIONS
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For purposes of this Agreement:
1. Definitions. For purposes of this Agreement the following terms shall
have the following meanings:
(a) "Applicable Laws" means all applicable
determinations of any governmental authority
and all applicable federal, state or local
laws, statutes, ordinances, rules,
regulations and orders.
(b) "Product" means the product known as the
"Hinge Helper", which is generally depicted
in Schedule A to Exhibit A hereto.
(c) "Specifications" means the specifications
for the Product, packaging and labeling (if
any) as set forth on the attached Exhibit A
and the specifications for the as set forth
on the attached Exhibit B. In the event that
complete specifications are not attached to
this Agreement at the time it is executed,
the parties shall thereafter mutually agree
in writing upon the completion of the
Specifications.
2. Sale of Products; Packaging.
2.1 Requirements. Subject to the terms and conditions hereafter
set forth, during the "Term" of this Agreement (as defined in Section 6 below),
Arrowhead agrees to buy from Manufacturer, on an exclusive basis, all of its
requirements for the Product identified in Exhibit "A". During the first three
(3) years of the Term (as defined below), Arrowhead agrees to purchase a minimum
of ten million (10,000,000) units of the Product (the "Minimum Quantity"),
subject to the terms and conditions of this Agreement, including, without
limitation, Manufacturer's compliance with its obligations hereunder. Arrowhead
and the Manufacturer have agreed on the Minimum Quantity in good faith, and the
parties acknowledge that in certain circumstances described below this agreement
may be terminated prior to the sale of the entire Minimum Quantity. Arrowhead
shall submit purchase orders for the Product from time to time in accordance
with Section 2.3 below.
2.2 Packaging. Subject to Arrowhead's rights with respect to the
protection of its trademark and the determination of text, color and packaging
sizes as addressed in sections 5.1 and 5.3 hereof, Manufacturer shall be
responsible for the selection, sourcing and purchasing of all materials and
packaging for the Product as described on Exhibit "A" (collectively, the
"Packaging"). Any additional packaging shall be responsibility of Arrowhead
unless the parties otherwise agree in writing.
2.3 Purchase Orders. Each purchase order ("Purchase Order") for
the Product shall be in writing and shall specify the quantity of the Product to
be manufactured and the date upon which Arrowhead desires to have the Product
ready for delivery (the "Requested Delivery Date"). Product must be ordered in
whole shipping container lots. Manufacturer estimates that a standard 20 foot
container will require not more than 6,000 packaged units and a 40 foot High-Q
container will require not more than 14,000 packaged units. When final packaging
has been determined, and whenever changes to packaging or Arrowhead's
palletizing instructions affect the number of units in a container, Manufacturer
will notify Arrowhead of the number of units in a whole container lot. The
initial Purchase Order for the Product is attached hereto as Exhibit "C".
Minimum lead time for shipment and other terms are set forth in Exhibit "A"
attached hereto. Subject to Section 2.4, Manufacturer shall deliver the Product
on or before the Requested Delivery Date. Upon Arrowhead's delivering a written
purchase order or a Three Month Forecast (as defined below) to Manufacturer,
Manufacturer shall confirm in writing within three business days its acceptance
or rejection of such Purchase Order or Three Month Forecast. If no such notice
is received from Manufacturer within such three business day period,
Manufacturer will be deemed to have accepted such Purchase Order or Three Month
Forecast, and shall be obligated under this Agreement to timely deliver the
Product as set forth in such Purchase Order or Three Month Forecast, subject to
adjustment as set forth in Section 2.6 hereof.
2.4 Shipment. Prior to being transported from Manufacturer's
factory, all Product shall be boxed, shrink wrapped and palletized according to
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Arrowhead's specifications. All Product will be shipped FOB Port of Los Angeles;
provided that Arrowhead may specify in its purchase another deep water port in
the continental United States. Transportation to the final Arrowhead
destination, which destination shall be specified by Arrowhead in the applicable
purchase order, is the responsibility of Arrowhead. Product will be inspected
prior to shipment by PRO QC, or another professionally certified inspector that
is mutually agreeable to the parties, to confirm that the Product conforms to
the criteria to be designated by the parties in the Inspection Checklist (herein
"Clearance"). No units of any Product shall be shipped to Arrowhead until such
units have satisfied the Clearance criteria, and other than the 20% deposit
Arrowhead shall have no payment or other obligation under this Agreement or
otherwise with respect to any such units until they have satisfied such
Clearance criteria. Satisfaction of the Clearance criteria shall constitute
acceptance of the Product by Arrowhead. After satisfaction of the Clearance
criteria, all risk of damage and loss to the Product which is the subject of a
shipment transfers to Arrowhead at the FOB point, excepting only damage or loss
in shipment to the FOB point.
2.5 Artwork. Arrowhead shall produce and deliver to Manufacturer
all artwork for Product logos and marks ("Materials"), when applicable and
necessary, and Manufacturer shall use such materials without modification,
addition or revision of any type other than necessary resizing.
2.6 Inventory Forecast. For purposes of production and inventory
planning, on or about the first day of each calendar month, Arrowhead will
provide to Manufacturer a binding forecast of Purchase Orders to be submitted
during each of the next three (3) months (the "Three Month Forecasts") and a
non-binding forecast of Purchase Orders to be submitted by it during each of the
next six (6) months (the "180 Day Forecasts" and, together with the Three Month
Forecasts, the "Forecasts"). For the purposes of this section 2.6, the term
"binding" shall mean binding on Arrowhead as well as on Manufacturer. The
Forecasts will detail the number of units of the Product and estimated to be
purchased through Purchase Orders the period covered by the Forecast and
anticipated delivery dates. Notwithstanding the above, to enable Arrowhead to
more accurately gauge initial demand for the Product, Arrowhead is not required
to submit 180 Day Forecasts during the first 60 days after the date hereof.
Subject to the following sentence, the Three Month forecast is a binding
commitment to place Purchase Orders for the number of units set forth in such
forecast, but the actual delivery dates set forth in the Three Month forecast
may be varied by Arrowhead on not less than thirty days notice to Manufacturer
(i.e. Arrowhead may not delay or advance shipments scheduled for delivery within
thirty days of its notice). Subject to this thirty day notice requirement,
Arrowhead may reduce by up to twenty percent the number of units set forth in
the Three Month Forecast without any liability under this Agreement.
Alternatively, Arrowhead may increase such number of forecasted Units for
delivery more than thirty days thereafter; provided that any such increase shall
be treated as a new forecast subject to acceptance or rejection as set forth in
Section 2.3. The parties acknowledge that Forecasts shall be based on
Arrowhead's good faith efforts to accurately reflect the timing and amount of
Product orders on all relevant information available to Arrowhead at the time of
the Forecast. Notwithstanding the foregoing, Arrowhead will promptly notify
Manufacturer of any material change in the applicable Forecast, which Arrowhead
anticipates as a result of market developments or other relevant factors. The
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parties acknowledge and agree that any failure or inability of Arrowhead to meet
any 180 Day Forecast shall not be deemed a breach of this Agreement.
3. Manufacturing Procedures, Acceptance and Warranty.
3.1 Procedures. Manufacturer and Arrowhead shall mutually agree in
writing upon appropriate procedures to determine whether each Product conforms
to the Sample (as defined below) (the "Procedures"). Similarly, the packaging
designs, containers, dimensions, and materials shall be approved in writing by
Arrowhead and Manufacturer and the procedures for determining compliance
therewith attached to this Agreement as a schedule ("Mutual Procedures").
3.2 Quality Control. Manufacturer shall itself maintain, and shall
require that its subcontractors and any and all raw material suppliers maintain,
a quality control program designed to assure compliance with the Specifications,
Procedures and Mutual Procedures. Unless otherwise agreed upon by the parties,
Manufacturer will provide the manufacturing process, any required manufacturing
technology, manufacturing capacity, labor, transportation logistics, systems and
facilities necessary for the manufacture, assembly, testing, packaging, and
delivery of the Products in a manner that complies with the Specifications, and
will use its best efforts to identify the lowest cost/highest quality materials
and equipment to manufacture the Product.
3.3 Sample, Specifications. Prior to commencement of full
production, Manufacturer will supply Arrowhead with a sample or prototype of the
Product as manufactured by Manufacturer (the "Sample"). Arrowhead will have ten
(10) days after receipt of the Sample to determine whether the Sample conforms
to the Specifications. Unless Arrowhead notifies Manufacturer within such ten
(10) day period that the Sample does not conform, giving the particulars of
non-conformance, then all Product thereafter manufactured by Manufacturer which
is substantially identical to the Sample (subject to normal manufacturing
tolerances) shall be conclusively and irrebuttably presumed to conform to the
Specifications. In the event that during the Term the Specifications change or
Manufacturer proposes to change materials or manufacturing practices, it may
submit an updated Sample for approval in accordance with this paragraph.
3.4 Product Inspection. Arrowhead, or its designated Acceptance
Agent, may evaluate each delivered Product as applicable, to determine if it
conforms to the Clearance criteria. Manufacturer may, at its request, have
representatives observe such evaluation. Arrowhead shall give Manufacturer
written notice of any defective Products within two (2) business days following
Arrowhead's receipt of such Product (the "Acceptance Period"). If a Product is
determined by Arrowhead to fail to conform to the Specifications (a "Defect"),
Arrowhead shall provide Manufacturer with a detailed written description of the
basis for the asserted Defect. If Manufacturer objects to the existence of the
Defect, and the Parties are unable to resolve such difference within twenty (20)
days after Manufacturer's notification, such dispute shall be submitted to
arbitration in accordance with the provisions of Section 14.6. If Manufacturer
does not object to Arrowhead's assertion of a Defect, Manufacturer will correct
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the Defect and repair or redeliver the corrected Product as soon as commercially
practicable, and such correction shall constitute Arrowhead's sole and exclusive
remedy with respect to any such defective Product. If Arrowhead continues to
assert the existence of a Defect after redelivery by the Manufacturer, the
preceding process shall be repeated until such time as Arrowhead has accepted
the Product or until Arrowhead has terminated this Agreement pursuant to Section
6.2 hereof. If Arrowhead fails to provide notice and a statement of Defect
within the Acceptance Period, Arrowhead's rights under this Section 3.4 will
have expired for such delivery or redelivery. Notwithstanding any of the
foregoing, nothing in this Section 3.4 shall affect Arrowhead's rights with
respect to any warranties for the Products as set forth in greater detail in
Section 3.7 of this Agreement.
3.5 Subcontractors. The Product will be manufactured by
Manufacturer or by subcontractors selected by the Manufacturer. Manufacturer
shall terminate the services of any subcontractor upon Arrowhead's prior written
notice that such subcontractor is not performing as required under this
Agreement (i.e., the subcontractor is not providing quality products or
services, etc.) unless the subcontractor cures, to Arrowhead's satisfaction, any
material deficiency noted by Arrowhead within thirty (30) days of Arrowhead's
written notice to Manufacturer. All delays or damages caused by any
subcontractor's failure to perform its obligations in the manner required of
Manufacturer as set forth in this Agreement ("Subcontractor's Breach") shall be
the obligation of Manufacturer , and Arrowhead shall have such rights and
remedies against Manufacturer as if the Subcontractor's Breach initially had
been Manufacturer's breach.
3.6 Warranty & RMAs.
3.6.1 Manufacturer Warranty. Manufacturer warrants for a
period of six (6) months from the Acceptance Date of the
Products that: (a) the Product will conform to the
Specifications, Procedures and Mutual Procedures applicable to
such Product at the time of its manufacture; and (b) such
Product will be of good material and workmanship and free from
defects in the manufacture, assembly and packaging of the
Product. Manufacturer shall, to the extent possible, pass
through to Arrowhead any warranties for components of the
Products purchased for Arrowhead.
3.6.2 Product Misuse and Warranty Exclusion. Manufacturer
does not warrant any Products that Manufacturer demonstrates
to have been subjected to mishandling, accident, misuse,
neglect, improper testing, improper or unauthorized repair,
alteration, damage, assembly, processing or any other
inappropriate or unauthorized action or inaction that alters
physical or other properties in the Products.
3.7 RMA. Manufacturer will repair or replace defective Products
caused by a breach of Manufacturer's warranties in accordance with
Manufacturer's standard return material authorization process and procedure
("RMA"). If Arrowhead desires to return a manufactured Product based on a claim
of defective workmanship, Arrowhead will request an RMA number from
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Manufacturer. Arrowhead will then send to Manufacturer the defective product
with a return purchase order identifying the RMA number. Manufacturer will
analyze all RMA Products and, if a failure to comply with the warranty set forth
in Section 3.7 is found (a "Warranty Defect"), and the RMA Products are received
by Manufacturer within thirty (30) days following the end of the warranty period
for the RMA Product, Manufacturer will repair or replace, at Manufacturer's
option, the Product within twenty (20) business days. Repaired or replacement
Products shall be warranted as the original Products for the remaining term of
the original warranty. If a Warranty Defect is found, Manufacturer will pay for
all transportation charges for all Products returned to Manufacturer under
warranty and all transportation charges involved in the return of repaired
warranted Products to Arrowhead.
3.8 Limitation of Liability. EXCEPT WITH RESPECT TO SECTIONS 3.11
3.12,9.1. 10. and 11. UNDER NO CIRCUMSTANCES SHALL MANUFACTURER BE LIABLE TO
ARROWHEAD OR TO ANY OTHER PERSON OR ENTITY FOR SPECIAL, INCIDENTAL,
CONSEQUENTIAL, OR INDIRECT DAMAGES, LOSS OF GOODWILL OR BUSINESS PROFITS, WORK
STOPPAGE, DATA LOSS, COMPUTER FAILURE OR MALFUNCTION, OR FOR ANY AND ALL OTHER
DAMAGES, LOSS, OR EXEMPLARY OR PUNITIVE DAMAGES, ARISING FROM THE SERVICES OR
PRODUCTS PROVIDED PURSUANT TO THIS AGREEMENT. EXCEPT AS SET FORTH IN THE
PRECEDING SENTENCE OR AS OTHERWISE SPECIFICALLY STATED IN THIS AGREEMENT OR AN
AMENDMENT THERETO, AND EXCEPT FOR A BREACH UNDER THE PARTIES' RESPECTIVE
CONFIDENTIALITY OBLIGATIONS AND FOR LIABILITY CAUSED BY GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF A PARTY, UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE
LIABLE TO THE OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE, OR OTHER
LEGAL OR EQUITABLE THEORY, FOR ANY PUNITIVE, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR FOR LOST PROFITS, LOST REVENUE OR ANTICIPATED SAVINGS
IN CONNECTION WITH THIS AGREEMENT.
3.9 Inspection. Arrowhead or its designee may from time to time
inspect Manufacturer's facilities (both domestic and international) upon five
(5) days prior notice and make recommendations concerning the manufacture,
material, workmanship, testing, and quality control for the Product.
Manufacturer shall give Arrowhead or its designee reasonable access to
Manufacturer's facilities for these purposes. Such inspection shall be based on
a statistically significant sample of the Product with a reasonable rate of
rejection. Arrowhead shall pay for the inspection.
3.10 Records. Manufacturer shall maintain an up-to-date file of
specifications for the Product supplied to Arrowhead, including, but not limited
to, performance standards, dimensional information, and material/physical
specifications.
3.11 Delays. Acceptance of a Purchase Order or Three Month Forecast
by Manufacturer indicates that Manufacturer will have the capacity and factory
space to produce the necessary quantity of Product on a timely basis consistent
with current production timing. Upon the request of Arrowhead, Manufacturer will
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from time to time inform Arrowhead of the amount of factory space allocated for
production of the Product. Manufacturer will inform Arrowhead immediately of any
occurrence which will or is expected to result in any delay in ship date or
quantity as specified on the Purchase Order. Manufacturer shall also notify
Arrowhead of all corrective action being taken to minimize the effect of such
occurrence.
3.12 Recalls or Seizures.
If any of the Product is the subject of a recall or seizure by any
governmental authority or in the event any governmental authority requests or
suggests that any of the Products or be recalled or withdrawn, and Arrowhead and
Manufacturer agree, or in the event Arrowhead and Manufacturer shall deem that
such a recall is necessary or advisable because the applicable Product does not
comply with the governmental law or regulations at issue, Arrowhead will be
solely responsible for executing such recall or taking all legal measures to
release the Product from seizure or impoundment, and the expense of such actions
shall be allocated between the parties as set forth below.
If the recall or seizure is attributable a failure of the
Specifications to comply with applicable law, Arrowhead shall bear the entire
cost and expense of remedial measures to comply with such applicable law. If the
recall or seizure is attributable to a failure of Manufacturer to comply with
applicable law regarding export or other customs regulations, or with respect to
the conditions of manufacture or the employment of persons engaged therein, or
with other applicable law including, without limitation, the payment of taxes
(collectively "Legal Failure"), Manufacturer shall indemnify Arrowhead for all
direct costs and expense of the recall or seizure including, without limitation:
(a) All costs and expenses of notifying the
trade and/or consumers of said recall or
withdrawal to the level acceptable to the
regulatory agency;
(b) All freight charges actually incurred by
Arrowhead, or paid by Arrowhead to its
distributors, related to the retrieval of
the Products; and
(c) The salaries of any additional employees,
contractors and agents that Arrowhead is
required to retain solely to effect the
recall or seizure.
If the parties disagree about the cause of a recall or seizure,
Arrowhead shall submit representative samples to an independent third party
approved by both parties, which shall make its own determination as to the cause
of the recall or seizure. which determination shall be final and binding upon
the parties. Arrowhead will not delay a required recall or seizure to wait for
the decision of the third party.
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4. Prices; Payment
4.1 Price. Arrowhead shall pay Manufacturer for the Product
purchased at the prices listed below (the "Price") depending on the cumulative
number of units of Product which have been purchased by Arrowhead:
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Cumulative Units Purchased Price per Unit in Tier
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Tier 1: 1,500,000 units or less $2.95
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Tier 2: 1,500,001 to 3,000,000 units $2.35
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Tier 3: 3,000,001 to 5,000,000 units $2.10
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Tier 4: 5,000,001 to 10,000,000 units $1.90
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Tier 5: More than 10,000,000 units To be determined
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By way of clarification, the Price for each Tier applies only to units purchased
within the Tier. For example, if Arrowhead orders 100,000 units which would
constitute the 1,450,001st through 1,550,000th units sold, the total Price for
the order would be $265,000 (50,000x$2.95 + 50,000x$2.35). If the Price is
adjusted by Manufacturer pursuant to paragraph 4.2, the Price will be adjusted
by an equal amount for each remaining Tier. If Tier 5 is reached, the parties
will negotiate the Tier 5 Price in good faith, but if agreement cannot be
reached Tier 5 will be priced the same as Tier 4. The attached Exhibit "A"
lists, for informational purposes only, a breakdown of the Price between the
Hinge Helper itself and the associated case and packaging.
4.2 Adjustment in Price. Manufacturer shall have the right to
increase the Price if its actual, third party U.S. dollar denominated costs
increase that results in increased costs; provided, however, that in no event
shall the Product prices increase by more than the sum of (a) any increase in
Manufacturer's actual out-of-pocket cost of production materials, including
materials purchased from third party subcontractors, (b) any increase in
Manufacturer's actual out-of-pocket cost for shipping, customs, taxes or similar
charges, and (c) any increase in Manufacturer's labor costs. Subject to the
terms herein, any increase in Price shall be effective upon thirty (30) days
written notice to Arrowhead of such change. Such change shall apply to any new
orders made after the effective date of the change. Any orders which were placed
for immediate delivery for quantities consistent with the 3 Month Forecast but
remain unfilled in whole or in part at the effective time of such change shall
be delivered at the old price. If Manufacturer makes a price change to the
Product which renders it uneconomical for Arrowhead to continue to market the
Product, then Arrowhead shall have the option, exercisable within sixty (60)
days after notice of the price change, to (i) terminate this Agreement on sixty
(60) days written notice in which event Arrowhead shall not thereafter purchase
the Product or any substantially similar product from a third party except as
provided in the following paragraph, or (ii) to submit to Manufacturer a bona
fide quote from a reputable third party ("RTP") to manufacture the Product at a
price (the "RTP Price") lower than Manufacturer's changed Price for the
then-current Tier (net of an assumed Rebate) and on payment terms no more
favorable to the RTP, then Manufacturer shall have the option to (x) accept the
RTP Price as the Price, in which case this Agreement will continue in full force
and effect except that the Price shall be the RTP Price for not less than six
months from the date that such RTP price becomes effective and there will no
longer be any Tier discounts or Rebates, or (y) reject the RTP Price, in which
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case this Agreement shall terminate and Arrowhead may purchase the Product from
the third party at a price at or below the RTP Price. If Manufacturer does not
notify Arrowhead which option it has exercised within thirty (30) days after
exercise of Arrowhead's option, it will be deemed to have rejected the RTP
Price.
In the event that Arrowhead terminates this Agreement pursuant to subparagraph
(i) above, and thereafter identifies a third party manufacturer ("Third Party")
to produce the Product, then Manufacturer shall have the first right of refusal
to manufacture such Products at the price offered by such Third Party (with
appropriate adjustments for freight) regardless of the Tier and without a
Rebate, but otherwise on the terms and conditions contained herein. Manufacturer
shall have sixty (60) days to exercise its first right after Arrowhead notifies
it in writing that it intends to accept a bona fide offer from the Third Party,
which notice will include a copy of the Third Party offer. If Manufacturer
exercises its first right, the parties shall enter into a new agreement on the
terms contained herein, other than inclusion of the Third Party Price and such
discounts, rebates and incentives as may be included within such Third Party
Price . If Manufacturer declines or fails to exercise its first right, then
notwithstanding subparagraph (i) above, Arrowhead may have the Product
manufactured by the Third Party; provided that the price payable to the Third
Party shall not exceed the price stated in Arrowhead's notice referred to in
this paragraph for at least eight (8) months following the date of such notice.
4.3 Payment Terms. Payment for each order of Product or placed by
Arrowhead shall be made as follows: 20% of the total payment for the number of
units ordered shall be paid by wire transfer of immediately available funds,
upon the placement of the order, with the balance due before shipment arrives at
the U.S. port of destination. Manufacturer will notify Arrowhead of the shipment
date and anticipated arrival date. Manufacturer will release the Xxxx of Lading
to Arrowhead or its designee within three (3) business days after receiving
payment as set forth herein regardless of whether the shipper has arrived in
port. Any amounts not paid when due shall bear interest at the rate of 1.5% per
month or the highest rate allowed by law. Any storage or demurrage charges
incurred at the port pending receipt of Arrowhead's payment shall be paid by
Arrowhead. Manufacturer will consider in good faith proposals from Arrowhead for
alternative financing which provide Manufacturer with equal or greater security
for payment, but Manufacturer shall have sole discretion to accept or reject any
such proposal.
4.4 Rebates. If Arrowhead purchases enough Product to move to a
new Tier of pricing, Arrowhead will be entitled to a rebate (the "Rebate") equal
to 10% of the purchase Price paid for Product in the previous Tier. For example,
if the Price is not adjusted, once Arrowhead enters Tier 3 it would be entitled
to a Rebate of $352,500 (10% of 1,500,000x$2.35) for Product purchased in Tier
2. Rebates will be payable only in the form of a credit memo against future
purchases. Rebate credit memos will not be paid in cash and may not be applied
against outstanding balances. Manufacturer will calculate eligibility for the
Rebate as soon as practicable following the end of the month in which a new Tier
is entered.
5. Development, Licensing and Ownership.
5.1 Product and Product Marks. As between Manufacturer and
Arrowhead, Arrowhead shall own all right, title and interest in and to the
Product. Arrowhead shall sell the Product under its own trademarks, service
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marks, symbols or trade names, if any ("Arrowhead Marks"). Solely in connection
with the performance of this Agreement, Arrowhead grants Manufacturer the right
to reproduce and print on the Product the Arrowhead Marks as are designated by
Arrowhead. Manufacturer agrees that it will not use the Arrowhead Marks in
advertising or promotional materials or place the Arrowhead Marks on goods or
otherwise without prior written consent of Arrowhead. Manufacturer agrees that
it shall not sell or distribute, or assist any party other than Arrowhead to
sell or distribute, in any manner whatsoever any goods marked or designated with
the Arrowhead Marks, or any derivation thereof, except to Arrowhead, without
obtaining Arrowhead's prior written consent.
5.2 Repurchase Responsibility. Arrowhead may change the
Specifications for the Packaging (if any) with at least thirty (30) days prior
notice to Manufacturer. Arrowhead may change the Specifications for the Product
with at least thirty (30) days prior notice to Manufacturer; provided that if
such change in Specifications will increase Manufacturer's costs (including
costs of raw materials, manufacturing or quality control) the change will not be
effective until the parties mutually agree to appropriate adjustments to the
purchase price of the Product. Manufacturer shall promptly implement the
requested change(s) to the Specifications and Arrowhead shall (i) reimburse
Manufacturer, within thirty (30) days of the date of invoice, for the cost of
any packaging materials or finished Product in inventory that is rendered
obsolete because of the change(s); and (ii) pay any agreed upon increase in the
cost of production of the Product due to the change(s). In no event shall
Arrowhead be responsible for purchasing any raw material, components or other
supplies which Manufacturer can use in the ordinary course of its business or
other products sold to other companies.
5.3 Packaging Materials and Artwork. If Manufacturer is
responsible for the development of any Packaging, Manufacturer shall maintain
sufficient inventory of Packaging, as applicable, to ensure continuity of
service in accordance with Arrowhead's Product forecasts. Arrowhead shall have
all rights and title to art, plates, negatives or designs prepared for Arrowhead
by Manufacturer or its printer, lithographer, or bag, box, or carton
Manufacturer/vendor, and all artwork shall become the possession of Arrowhead
upon notice of termination of this Agreement by either party. Arrowhead shall
pay the Manufacturer for the cost of preparing these materials, subject to
Arrowhead's prior written approval of such costs. The designs, including texts,
color and sizes of Packaging shall be determined by Arrowhead. The fee payable
by Arrowhead for Manufacturer supplied artwork, if any, shall be negotiated by
the parties.
6. Term and Termination.
6.1 Term. The Term of this Agreement shall commence upon its
execution and shall continue for a period of three years thereafter unless
terminated as set forth herein.
6.2 Termination for Material Breach. Either party may terminate
this Agreement on thirty (30) days prior written notice to the other party based
on a material breach of this Agreement by the non-terminating party, unless such
breach is cured within such thirty (30) day period or, in the event of a
non-monetary breach which cannot reasonably be cured within thirty (30) days,
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that the breaching party commences within such thirty day period steps
calculated to cure the breach as soon as practicable and the cure is completed
within forty-five (45) days. In the event of a termination by Manufacturer due
to Arrowhead's breach, Arrowhead grants the Manufacturer a non-exclusive license
for a period of one hundred eighty (180) days following termination to utilize
Arrowhead's intellectual property (including its patents, designs and
trademarks) solely for the purpose of liquidating Manufacturer's inventory of
Products (including Product assembled from Manufacturer's inventory of raw
materials and work in progress). In the event of termination of this Agreement
due to Manufacturer's breach, (a) Arrowhead shall have the right, but not the
obligation, to purchase, at the price determined below, all or any part of the
supply of work in progress ("WIP"), packed, labeled or on hand Product if such
right is exercised within ten days after termination, and (b) Manufacturer shall
use good faith efforts to assist Arrowhead, as reasonably necessary, to
transition the manufacture of the Product by a third party as selected by
Arrowhead. In no event shall Arrowhead be responsible for purchasing any raw
material, components or other supplies that Manufacturer can use in the ordinary
course of its business or other products sold to other companies. The price for
any items sold will be (i) for finished Products, the price provided herein,
(ii) for all other items, Manufacturer's actual third party cost, plus a xxxx-up
of ten percent (10%); provided that such sale is "as is, where is" and Arrowhead
shall be responsible to promptly removed the purchased items from Manufacturer's
facility.
6.3 Early Termination. If Arrowhead does not have any other valid
means of terminating this Agreement pursuant to the terms hereof, and Arrowhead
still desires to terminate this agreement, this Agreement may still be
terminated by Arrowhead prior to the sale of the minimum of 10,000,000 units of
Product by prior written notice if all of the following conditions apply:
(a) All invoices and payment for Product subject
to non-cancelable orders have been paid in full
(whether or not then due) and Arrowhead is not in
default under this Agreement.
(b) Arrowhead, through a senior executive
officer, certifies to Manufacturer in writing that
(1) Arrowhead is no longer advertising or promoting
the Product and has no plans to advertise or promote
the Product or any substantially similar product, (2)
Continued sale of the Product is no longer profitable
to Arrowhead, (3) other than sales of existing
inventory of the Product purchased from Manufacturer,
Arrowhead has no plans or intentions to manufacture,
distribute or sell the Product or any substantially
similar product, and (4) Arrowhead is aware of agrees
to abide by its exclusivity provisions as set forth
above.
(c) Arrowhead submits to Manufacturer at the
time of Arrowhead's notice of termination, a Purchase
Order for the shipment as soon as manufacturing
schedules permit of a number of units of Product
equal to three times the average monthly number of
11
units of Product purchased during the term preceding
Arrowhead's notice of termination, excluding any
months in which no Product was purchased (the "Final
Release") In lieu of the Final Release, if requested
by Arrowhead in its notice of termination, Arrowhead
may (i) purchase from Manufacturer, Manufacturer's
then existing inventory of Product, and (ii) pay to
Manufacturer a release payment (the "Release
Payment") equal to the product of (x) Manufacturer's
per unit gross profit on the Product, multiplied by
(y) the number of units which would have been
required to be purchased in the Final Release, less
the number of units in the inventory purchased
pursuant to clause (i). If Arrowhead elects the
Release Payment in lieu of the Final Release,
Manufacturer will notify Arrowhead of its gross
profit per unit and existing Product inventory as
soon as practicable after receipt of Arrowhead's
notice of termination, and the Release Payment shall
be due and payable within ten (10) days after
Arrowhead's receipt of Manufacturer's notice.
6.4 Rights Upon Expiration or Termination.
6.4.1 Purchase Orders. In the event of expiration of this Agreement,
Manufacturer will comply with all outstanding Purchase Orders for delivery
within 60 days after expiration. In the event of termination of this Agreement
by Arrowhead, Arrowhead will have the right to cancel any outstanding Purchase
Orders or to require Manufacturer to finish such Purchase Orders.
6.4.2 Inventory. In the event of expiration or termination of this
Agreement, Arrowhead will have the right, but not the obligation, to purchase
any Products in inventory that Manufacturer has in its possession. Arrowhead
shall have the right, but not the obligation, to purchase Manufacturer's
inventory of the Products by giving notice to Manufacturer within twenty (20)
days after the effective date of the expiration or termination. The purchase
price for the finished manufactured Product shall be the price as provided
herein plus actual freight, handling charges, customs duties and taxes if paid
by Manufacturer on the shipment to Arrowhead's possession and in sound
condition.
6.4.3 Duty to Mitigate Costs. Both Parties shall, in good faith,
undertake reasonable measures to mitigate the costs of termination. Manufacturer
shall make reasonable efforts to cancel all applicable component purchase orders
and reduce component inventory through return for credit programs or allocate
such components for other customer orders.
6.4.3 No Further Rights. In the event of expiration or termination
of this Agreement, Manufacturer shall have no further rights to use,
manufacture, distribute or sell the Product or any of the intellectual property
relating to the same except as provided herein.
6.4.4 Survival. The following terms will survive the expiration or
termination of this Agreement: Sections 5.1, 6.2, 6.3, 6.4, 8, 9, 10 and 14.6.
Upon expiration or termination of this Agreement for any reason whatsoever, (i)
all amounts then properly owed by Arrowhead to Manufacturer shall become
12
immediately due and payable and (ii) except as specifically provided in this
Section 6, all rights and obligations of the parties shall terminate.
7. Compliance with Regulations.
7.1 Facility Inspections. If a designated representative of the
United States, its territories, the District of Columbia, or other regulatory
agency chooses to inspect any manufacturing facility used by Manufacturer in the
performance of its obligations under this Agreement, Manufacturer shall provide
Arrowhead with written notice of the requested inspection.
7.2 Regulatory Reports. Each party shall promptly furnish the
other with copies of reports or other information relating to the Product
prepared by it, or on its behalf, to be filed with any governmental authorities
or received from any governmental authorities. Any and all issues concerning the
distribution or advertising/promotion of the Product shall be addressed and
resolved by Arrowhead. Any and all issues raised with respect to the
manufacturing of the Product shall be resolved by Manufacturer.
7.3 Export Control. Manufacturer agrees that it will not export,
re-export, resell or transfer, or otherwise ship or deliver any Product,
assembly, component or any technical data which violate any export controls or
limitations imposed by the United States or any other governmental authority, or
to any country for which an export license or other governmental approval is
required at the time of export without first obtaining all necessary licenses or
other approvals. Arrowhead acknowledges that Manufacturer will transfer the
specifications and other technical data regarding the Product to its
manufacturing facility in China, and to the best of Arrowhead's knowledge such
transfer will not violate such export controls or limitations. Arrowhead will
provide Manufacturer with all licenses, certifications, approvals and
authorizations in order to permit Manufacturer to comply with all export laws,
rules and regulations for the shipment and delivery of the Products. Arrowhead
shall also be responsible for complying with any legislation or regulations
governing the importation of the Products into the country of destination and
for payment of any duties thereon.
8. Representations and Warranties.
8.1 Both Parties. Each Party warrants to the other that: (i) it is
an entity duly organized, valid, existing and in good standing under the laws of
the state, province or country of its incorporation or establishment and has the
corporate or equivalent power to own its assets and properties and to carry on
its business as now being conducted; (ii) its obligations hereunder shall be
performed in full compliance with the Applicable Laws; (iii) it will cooperate
with the other, as necessary, to remain in full compliance with the Applicable
Laws; (iv) the execution, delivery and performance of this Agreement have been
duly authorized, do not violate its certificate of incorporation, by-laws or
similar governing instruments or Applicable Law and do not, and with the passage
of time will not, materially conflict with or constitute a breach under any
other agreement, judgment or instrument to which it is a party or by which it is
bound; (v) its employment and labor practices comply in all respects to
13
Applicable Law in the jurisdiction in which such labor is performed; and (vi)
this Agreement is the legal, valid and binding obligation of such party,
enforceable in accordance with its terms.
8.2 Manufacturer. Manufacturer warrants and represents: (i) it
will not and has not knowingly infringed any copyright, patent, trade secret or
other property right of any party in the performance of the services required by
this Agreement; (ii) it will obtain from Manufacturer's employees and
subcontractors, if any, any necessary assignment, license, and release of all,
if any, interests in the Product; and (iii) Manufacturer's actions in
manufacturing the Product will not cause the Product to be in violation of
consumer product safety laws or the requirements of other Applicable Laws;.
8.3 Arrowhead. Arrowhead warrants and represents: (i) it will not
and has not knowingly infringed any copyright, patent, trade secret or other
property right of any party in the provision of the design and specifications or
the sale of the Product; (ii) there is no suit, action, arbitration, or legal,
administrative or other proceeding or governmental or quasi-governmental
investigation pending or, to the best knowledge of Manufacturer, threatened
against or affecting the Product; (iii) it has obtained from the inventor
thereof, an assignment or exclusive license to U.S. Patent No. 6,308,390 B1, and
(iv) the design and specifications of the Product, to the extent provided by
Arrowhead, will conform to all consumer product safety laws and meet the
requirements of all other Applicable Laws.
9. Indemnification and Insurance.
9.1 Manufacturer Indemnity. Manufacturer will defend, indemnify
and hold harmless Arrowhead and its employees, directors, officers and agents
against any third party allegations, demands, suits, investigations, causes of
action, proceedings or other claims ("Third Party Claims") and from all damages,
liabilities, judgments, costs and expenses (including attorneys' fees and costs)
and other such losses ("Losses") which are based on, and send arise in
connection with such Third Party Claims to the extent based on, any of the
following: (i) any claim that the Product, including the Product Packaging, is
defective, including without limitation, illness, personal injury or death
caused by the Product or any other product liability claim related to the
Product, except to the extent caused by the Specifications and design not
provided by Manufacturer, (ii) any grossly negligent act or omission by
Manufacturer or a subcontractor, including, without limitation, those relating
to or affecting the condition, quality or character of the Product; (iii) any
failure of Product to conform with the applicable Specifications; (iv) any
failure of Manufacturer or a subcontractor to comply with any Applicable Law; or
(v) any other breach of Manufacturer's obligations under this Agreement,
including, without limitation, any representations or warranties of
Manufacturer.
9.2 Arrowhead Indemnity. Arrowhead will defend, indemnify and hold
harmless Manufacturer, its subcontractors and their respective employees,
directors, officers and agents any Third Party Claims (as defined above) and any
Losses (as defined above) which are based on and arise in connection with such
Third Party Claims and to the extent based on, any of the following: (i) any
negligent act or omission by Arrowhead relating to Arrowhead's design and
specifications for the Product or marketing and promotion of the Product; (ii)
14
any failure of Arrowhead to comply with any Applicable Law; (iii) any other
breach of Arrowhead's obligations under this Agreement, including any
representations or warranties of Arrowhead; (iv) the Product infringing upon any
intellectual property rights of a third party, including, without limitation,
patent, copyright, trade secret, trademark, etc.; or (v) allegation of illness,
personal injury or death caused by the Product or any other product liability
claim related to the Product which results from the design or Specifications
provided by Arrowhead.
9.3 Indemnification Procedures. The Party entitled to
indemnification under this Section 9 (the "Indemnified Party") will provide the
Party obligated to provide indemnification under this Section 9 (the
"Indemnifying Party") with prompt notice of any Third Party Claim for which its
seeks indemnification, provided that the failure to do so will not excuse the
Indemnifying Party of its obligations under this Section 9 except to the extent
prejudiced by such failure or delay. The Indemnifying Party will defend any such
Third Party Claim and have the sole right to control the defense and settlement
of the Third Party Claim, provided that the Indemnified Party may not, without
the Indemnified Party's consent, enter into any settlement, which admits guilt,
liability or culpability on the part of the Indemnified Party. The Indemnified
Party will provide reasonable cooperation to the Indemnifying Party in defending
any Third Party Claim.
9.4 Insurance. During the Term of this Agreement and for a period
of three (3) years thereafter, Manufacturer agrees to maintain a product
liability insurance policy with an insurance carrier with respect to any Product
sold by it hereunder with at least two million dollars ($2,000,000) per
occurrence and at least three million dollars ($3,000,000) in the aggregate.
Such policy shall name Arrowhead as an additional insured (not just as a
"Vendor") Manufacturer shall pay all premiums relating to such policy.
Manufacturer shall provide Arrowhead with a certificate of insurance, which
provides that Arrowhead, as the additional insured, shall be notified, in
writing, by the insurance carrier of change in the policy (including any
termination), not less than thirty (30) days prior to the effective date of such
change (including termination)
9.5 Confidentiality. Each Party agrees that it shall not, directly
or indirectly, at any time divulge or communicate to any person, or use to the
detriment of a party to this Agreement, or for the benefit of itself or any
other person, any proprietary information or technology of the other party.
Except as otherwise required by law, any proprietary information or technology
received by a party, or its or their representatives which is clearly denoted as
confidential shall be kept confidential and shall not be used or disclosed for
any purpose other than in furtherance of the purposes of this Agreement. This
obligation of confidentiality shall not extend to information which (a) is or
becomes generally available to the public other than as a result of a disclosure
by a party in violation of this Agreement or any other confidentiality
agreement, (b) was in the possession of a party prior to its receipt from the
other party, or (c) becomes available to a party or its Affiliate on a
nonconfidential basis from a source other than a party to this Agreement,
provided such source is not in violation of a confidentiality agreement with the
party whose information is being disclosed.
15
9.6 Employees, Agents and Representatives. Each Party represents
and warrants to the other that it has adopted policies and procedures with
respect to the receipt and disclosure of confidential or proprietary
information, with its employees, agents and representatives. Each party
represents and warrants to the other that it will exert all reasonable
commercial efforts to cause its employees, agents, subcontractors and
representatives to maintain and protect the confidentiality of the other party's
proprietary information and technology The confidentiality obligation set forth
in this Agreement shall be observed for the term of the Agreement and for a
period of three (3) years following the termination of the Agreement. Each Party
acknowledges that a breach of this provision may cause the non-breaching party
irreparable damage, for which the award of damages would not be adequate
compensation. Consequently, the non-breaching party may institute an action to
enjoin the breaching party from any and all acts in violation of those
provisions, which remedy shall be cumulative and not exclusive, and shall be in
addition to any other relief to which the non-breaching Party may be entitled at
law or in equity and such remedy shall not be subject to the arbitration
provisions of Section 14.6.
10. Non-Solicitation. As used in Section 10, a "Qualified Termination"
means a termination of this Agreement (i) by Arrowhead due to Manufacturer's
material breach, (ii) as a result of Manufacturer not agreeing to the RTP Price
pursuant to clause (ii) of paragraph 4.2. Manufacturer further agrees that
during the term of this Agreement and for a period of three (3) years from the
date of a Qualified Termination, Manufacturer will not, on behalf of itself or
any competitor of Arrowhead, (i) compete for, or engage in the solicitation of,
or attempt to divert or take away from Arrowhead, any customer of Arrowhead who
has done business with Arrowhead during the twelve (12) months immediately
preceding the termination of the Agreement for the purpose of providing to such
a customer products and services that are competitive with the Product; (ii)
compete for, solicit or attempt to divert or take away from Arrowhead any
prospective customer that has expressed an interest in doing business with
Arrowhead, and about which Manufacturer learned while the Agreement was in
effect, for the purpose of providing products and services that are competitive
with the Product; or (iii) hire or engage or attempt to hire or engage any
individual, or attempt to induce an individual to terminate their employment,
who was an employee of Arrowhead at any time during the twelve (12) months
immediately prior to the termination of the Agreement
10.1 Non-Competition. During the term of this Agreement, and for a
period of three (3) years from the date of a Qualified Termination of this
Agreement, Manufacturer agrees that it shall not:
(a) engage directly or indirectly, whether for
itself or as employee or agent of or consultant or
advisor to any person or any company, firm or other
business entity, in furnishing goods products or
services which are competitive with the Product; nor
(b) have any interest as a proprietor, partner,
director or stockholder in any company firm, or other
business entity which manufactures or sells products
or services which are competitive with the Product
except that nothing herein shall limit Manufacturer
16
from owning up to 5% of the aggregate voting stock of
any such company, firm or entity which has any class
of stock registered under the provisions of Section
12 of the United States Securities Exchange Act of
1934.
As used in this section 10, the phrase "products and services competitive with
the Product", means products and services, whether now known or subsequently
developed, that are intended for the same or substantially similar commercial
purpose as the Product (i.e. which are intended to be principally used as a door
hinge removal tool) or which facilitate the manufacture or design or sale of
products that have the same or substantially similar commercial purpose as the
Product.
11. Intellectual Property. Arrowhead hereby grants to Manufacturer a
non-exclusive, royalty-free license to its Intellectual Property solely to the
extent necessary for Manufacturer to perform its obligations hereunder. Such
rights may be sublicensed to subcontractors solely for to the extent necessary
and for the purpose of performing Manufacturer's obligations under this
Agreement. Arrowhead shall retain all right, title and interest in Arrowhead's
Intellectual Property, including, without limitation, any and all Product
Specifications. Except as set forth in this section and in Section 5.3, each
Party hereby acknowledges and agrees that it does not have and shall not
acquire, any interest in any other party's Intellectual Property trademarks,
trade names and/or trade dress unless otherwise expressly agreed to in a writing
executed by both Parties. For purposes of this Agreement, "Intellectual
Property" means all intellectual property rights recognized under any
jurisdiction, including, without limitation, patents, copyrights, trademarks and
trade secrets.
12. No Conflict. Manufacturer and Arrowhead acknowledge that they have not
previously entered into any contractual arrangement, which would conflict with
the rights granted, or the services to be provided by Manufacturer or Arrowhead
hereunder.
13. Force Majeure. Each shall be excused for any failure or delay in
performance hereunder, in whole or in part, to the extent caused by events
beyond its reasonable control, such as fire, embargo, strikes (other than
strikes of a party or its contractors), wars, acts of God, and acts of
terrorism, provided, however, that a Party will not be excused from any failure
or delay to the extent it could have been avoided by the use or reasonable
precautions or to the extent such party can perform by using commercially
reasonable efforts.
14. Miscellaneous.
14.1 Amendment. This Agreement may be amended, modified or
supplemented only by a writing signed by the party or parties sought to be bound
thereby.
14.2 Entirety. This Agreement and the Exhibits hereto constitute
the entire agreement of Manufacturer and Arrowhead with respect to the subject
matter hereof, and supersede all prior or contemporaneous agreements or
understandings of Manufacturer and Arrowhead with respect to such subject
matter.
17
14.3 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provisions shall be fully severable and this Agreement
shall be construed and enforced as if such legal, invalid or unenforceable
provision never comprised a part hereof, and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.
14.4 Captions. The captions of this Agreement are for convenience
of reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
14.5 Notices. Any notice or communication required or permitted to
be delivered hereunder shall be in writing addressed to the party to be
notified, and shall be delivered by depositing it with a nationally recognized
overnight delivery service or in the United States mail, postage prepaid, and
either registered or certified with return receipt requested, or by confirmed
facsimile to the fax numbers indicated below, and shall be deemed to be
effective upon receipt for overnighted or faxed notice and or three (3) days
after being sent for mailed notice. For this purpose, the addresses of the
parties shall be:
Arrowhead: Arrowhead Industries
00000 Xxxxxx Xxxx Xxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Fax: (000) 000-0000
Copy to : Xxxxxxx X. Xxxxxxx, Esq.
Xxxxx Xxxxx & Xxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Manufacturer: CirTran Corporation
0000 Xxxxx 0000 Xxxx
Xxxx Xxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Fax: 000-000-0000
14.6 Applicable Law. This Agreement and rights and obligations of
the parties hereto shall be governed, construed and enforced in accordance with
the laws of the State of Utah. Any controversy between Manufacturer and
Arrowhead arising out of or relating to this Agreement or the breach thereof,
shall be settled by binding arbitration, in accordance with the rules then
obtaining of the American Arbitration Association or other mutually agreeable
ADR services, and any such arbitration shall be held in Chicago, Illinois or
another location that is mutually agreeable to the parties. Both parties consent
and agree to the jurisdiction and venue for such arbitration, and, solely for
then purposes of the venue of the arbitration, waive any and all challenges on
the basis of jurisdiction, venue and/or forum non conveniens.
18
14.7 Facsimile; Counterparts. The parties agree that signature by
facsimile shall hereby be deemed an original signature, and fully binding upon
the parties hereto. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
14.8 Business Day. If any time period set forth in this Agreement
expires on any day other than a business day; i.e. upon a Saturday, Sunday or
legal or bank holiday, such period shall be extended to and through the next
succeeding business day.
IN WITNESS WHEREOF, Arrowhead and Manufacturer have executed this
Agreement as of the date first set forth above.
ARROWHEAD INDUSTRIES, INC.,
a Florida corporation
By: /s/
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
CIRTRAN CORPORATION
a Nevada corporation
By: /s/
-----------------------------------
Name: Xxxxx Xxxxxxxx
Its: President
19
Exhibit A
---------
Product Description, Pricing, Minimum Lead Time
Total HH Tool Casing
Volume Package Only Only PKG Only
(Millions) Pricing Pricing Pricing Pricing
0.0-1.5 $2.95 $1.65 $0.90 $ 0.40
1.5-3.0 $2.35 $1.35 $0.75 $ 0.25
3.0-5.0 $2.10 $1.25 $0.65 $ 0.20
5.0-10.0 $1.90 $1.15 $0.55 $ 0.20
TBD= To Be Determined after 10M unit commitment is met by
Arrowhead
Minimum Lead Time: 6-8 Weeks from Date of Order
20
[Picture #1 of Product OMITTED]
[Picture #2 of Product OMITTED]
Product The Hinge Helper Tool
------- ---------------------
The Hinge Helper Tool
Nylon Housing (Case)
Clam Shell Packaging
21
Exhibit B
---------
Description
22
Exhibit C
---------
Initial Purchase Order
23
Arrowhead Industries, Inc. Purchase Order
00000 Xxxxxx Xxxx Xxx Date X.X. Xx.
Xxxxxxxxxx, XX 00000 3/9/2006
Vendor Ship To
CirTran Corporation
0000 Xxxxx 0000
Xxxx Xxxx Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
--------------------------------------------------------------------------------
Item Description Qty Rate Amount
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ship via air freight directly to ________ by ____________. Total $
24
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--------------------------------------------------------------------------------
Phone # Fax # E-mail
--------------------------------------------------------------------------------
(000) 000-0000 (000) 000-0000 xxxxxxxxxxxxxxxxxxx@xxxxxxxxx.xxx
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