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(PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.)
EXHIBIT 10.67
INTERNATIONAL DISTRIBUTION AGREEMENT
This International Distribution Agreement ("Agreement") dated as of January 8,
2009 (the "Effective Date"), is by and between Cirtran Beverage Corp., a Utah
corporation located at 0000 Xxxxx 0000 Xxxx, Xxxx Xxxxxx Xxxx, XX 00000, XXX
(the "Company") and Tobacco Holding Group Sh.p.k, an Albanian Company with its
notice address at Rruga Kavajes, Ish Kombinati, Ushqimor, Tirane, Albania (the
"Distributor").
The Company is engaged in the business of advertising, marketing, distributing,
and selling the Playboy brand products listed in the attached Schedule 1, as it
may be amended from time to time (the "Products"). The Company's licensors, Play
Beverages, LLC, and Playboy Enterprises International, Inc. ("Xxxxxxx
Xxxxxxxxxxxxx") have entered into a Product License Agreement (the "License
Agreement") dated as of November 1, 2006, pursuant to which Xxxxxxx
Xxxxxxxxxxxxx has licensed the use of the Playboy name on the Products. A copy
of the License Agreement is attached as Exhibit "A". The License Agreement was
later amended on December 19, 2008 listing Albania as a licensed territory upon
receipt of confirmation of local counsel, the Company will request immediately
from Xxxxxxx Xxxxxxxxxxxxx the confirmation once this agreement is executed and
it is a condition precedent to the obligations of both parties hereunder that
such confirmation take place. The Company and Distributor desire that the
Distributor act as the exclusive seller and distributor of the Products in the
Territory as defined below.
The parties agree as follows:
1. APPOINTMENT.
1.1 Appointment. The Company hereby appoints the Distributor as its
exclusive distributor for the Products in the Territory, having the exclusive
right to sell and distribute the Products in the Territory. Distributor
acknowledges that Xxxxxxx Xxxxxxxxxxxxx has retained certain rights to
distribute Products to United States military bases and possessions in the
Territory.
1.2 Trademarks. The Company hereby grants to the Distributor the
nonexclusive, nonassignable, nontransferable right to use the Company's
trademarks, trade names and trade dress described in the attached Schedule 3
(the "Trademarks") solely in connection with the distribution, marketing, and
sale of the Products in the Territory. The Trademarks will remain the sole and
exclusive property of the Company or its licensors.
1.3 Initial Non-cancellable Purchase Order. As a condition precedent to
the effectiveness of this Agreement, upon execution of this Agreement
Distributor shall place with the Company a non-cancellable purchase order and
pay immediately for XXXXXX cases of Product. The Distributor must prepay for
this order in advance at the same time the order is issued via wire transfer.
The Distributor must accept, for the first 6 months from the date of this
agreement, the same product formula and packaging sold in the USA.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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1.4 Localization. Company will consider in good faith requests from
Distributor to change the formula, taste, color or form factor of the Products
to better match local tastes in the Territory. In Company's discretion, such
localized Products may be in addition to, or in replacement of, the initial
Products. Distributor will be responsible for translating Product labels to
local language(s). All translations will be subject to approval by the Company.
Distributor will provide the Company with any label information required by law
in the Territory. Distributor shall be responsible to obtain all governmental
licenses, approvals, permits and approvals for the importation and distribution
of the Products in the Territory.
2. EFFECTIVE AND TERMINATION DATES.
2.1 Term. This Agreement shall be effective as of the Effective Date
and shall remain in force for five years (the "Term"), unless terminated prior
thereto as provided herein. This Agreement will automatically renew for
successive renewal Terms of five years each if at the end of the then current
Term (i) Distributor is not in default hereunder, (ii) Distributor has satisfied
the Minimum Sales Requirement described in paragraph 2.4 for each year of the
then-current Term, (iii) the parties have agreed upon the Minimum Sales
Projections for the renewal term, and (iv) Distributor has not notified the
Company that it does not intend to renew the Term, which notice must be given at
least 90 days prior to the expiration of the then-current Term. The Company will
use its best efforts to extend the License Agreement for the full Term of this
Agreement.
2.2 Termination by Mutual Consent. This Agreement may be terminated at
any time by mutual consent of the parties in writing effective as provided
herein.
2.3 Termination upon Default. This Agreement may be terminated by the
Company upon a default under Paragraph 5.2 hereof.
2.4 Termination for Under-Performance.
(a) The Parties have agreed on the Minimum Sales Projections for
each of the five years in the initial Term, which is attached hereto as Schedule
7. The Parties may in their discretion, but are under no obligation to, revise
the Minimum Sales Projections during the Term to reflect market conditions. Any
such revision must be in a writing signed by both Parties.
(b) If actual sales for a twelve month period ending on an
anniversary of the Effective Date are less than 80% of the Minimum Sales
Projection for that year (the "Minimum Sales Requirement"), then the Company may
terminate this Agreement upon sixty (60) days prior written notice to
Distributor; provided that such notice is given within ninety (90) days after
the end of the relevant twelve month period.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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(c) It is a condition to any renewal of this Agreement that the
Parties agree in writing on new Minimum Sales Projections for each year of the
renewal Term. The Parties will consider, among other things, the saturation of
the Products in the Territory and the overall growth rate of the product
class(es) which includes the Products throughout the Territory. The Parties'
agreement to new Minimum Sales Projections shall be in writing signed by both
Parties and must be agreed upon no later than thirty (30) days prior to the
expiration of the then-current term unless the Parties mutually agree to extend
such deadline.
3. DISTRIBUTOR'S OBLIGATIONS.
The Distributor will develop and maintain a market for the Products in
the Territory and meet the sales and distribution goals on Schedule 4, which
shall be updated at least annually, and to do the following:
3.1 Territory Development. Within the first year after the Effective
Date, Distributor shall have commercially launched the Products fully in all its
channels in each country in the Territory. For purposes of this Agreement, if an
approved sub-distributor has been appointed for the country, a full commercial
launch means that the Products are being distributed to at least 70% of the
accounts of the sub-distributor. If Distributor has not appointed an approved
sub-distributor for the country, a full commercial launch means that the
Products are being distributed to at least as many outlets as would equal 70% of
the accounts serviced by the largest beverage distributor in that country;
provided that at the request of Distributor, made not more than four months
after the Effective Date, the Company will consider in good faith alternative
definitions for commercial launch in specified countries.
3.2 Compliance with License Agreement. Distributor shall conduct all of
its activities hereunder in full compliance with the License Agreement.
Distributor shall fully and promptly comply with any requests of the Company for
information or reports which the Company may need in order to comply with the
reporting requirements of the License Agreement.
3.3 Sub-Distributors. Distributor may appoint qualified
sub-distributors with exclusive or non-exclusive rights within specified
countries or areas within the Territory. The appointment of any sub-distributor
is subject to the prior written approval of the Company and Xxxxxxx
Xxxxxxxxxxxxx, which approval may be withheld in their sole discretion. All
sub-distributors must agree in writing to comply with this Agreement, the
License Agreement and such other restrictions as may be reasonably imposed by
the Company or Xxxxxxx Xxxxxxxxxxxxx. Distributor shall be fully responsible to
the Company and Xxxxxxx Xxxxxxxxxxxxx for any violation of this Agreement or the
License Agreement by its sub-distributors. Any refundable initial fees or
payments obtained by Distributor from a sub-distributor shall be subject to
return or surrender in the same manner as the return or surrender of the
Security Deposit pursuant to Paragraph ___ below. Distributor may obtain
non-refundable initial fees or payments only with the express written consent of
the Company, which consent may be withheld in the Company's discretion.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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3.4 Purchase from Company. Distributor must purchase all Product from
the Company or its designated subcontractor. Distributor will have no right to
manufacture, or to cause third parties to manufacture, the Products. Company
will control the manufacture of the Product either at Company's own facilities
or those of subcontractors, located inside or outside of the Territory, in
Company's discretion. All orders for Products will be placed with Company even
if a subcontractor is used for manufacture.
3.5 Distribution. Distributor will supply Products purchased from the
Company, or its designated subcontractor, to customers in the Territory.
Distributor will not distribute, cause to be distributed or assist in the
distribution of the Products outside the Territory or other than as specified by
the Company nor will Distributor distribute, cause to be distributed or assist
in the distribution of any product or item not specifically requested by the
Company that bears any or all of the Trademarks during or at any time after the
distribution of the Products pursuant to this Agreement. Distributor will not
engage in transshipping or otherwise violate the scope of the Territory defined
herein. Nothing contained herein shall be construed to grant Distributor any
right to manufacture Products or to purchase Products from any person other than
the Company or its designated subcontractors.
3.6 Review of Reports and Inspection. Distributor will keep and
maintain accurate and detailed books and records of its activities under this
Agreement. Upon reasonable notice, Distributor will allow the Company and
Xxxxxxx Xxxxxxxxxxxxx to review Distributor's books and records, including any
depletion or other reports applicable to the Products, and shall have the right
to make extracts therefrom or copies in order to ensure Distributor's compliance
with this Agreement. Within 10 days of a request from the Company or Playboy,
Distributor will supply a statement detailing Distributor's accounts for the
Products. Upon reasonable notice, Distributor will allow the inspection by the
Company and Xxxxxxx Xxxxxxxxxxxxx of the portions of the Distributor's
facilities used in connection with the storage and distribution of the Products.
3.7 Marketing. Distributor will develop and execute marketing programs
as initially set forth on Schedule 4 hereto, which shall be updated at least
semi-annually. Distributor has agreed that the initial marketing budget for the
initial launching stage should be set at $XXXXXX but never less than $XXXXXX.
Distributor will assist the Company in brand growth and support volume case
requirements with introductory and promotional case allowances as Distributor
and the Company may agree.
3.8 Handling Business. Distributor will maintain a business
organization and equipment necessary to function efficiently and effectively in
the sale and distribution of Products. Distributor will maintain all state,
federal and local licenses and permits necessary for it to perform under this
Agreement and will keep such licenses and permits current.
3.9 Quality Control. Distributor will ensure that only products of
merchantable quality are sold. Unmerchantable product is defined to be Product
that is spoiled, putrid or foul, does not conform to the Company's manufacturing
specifications for such Product, or has sustained damage to its primary or
secondary packaging and is no longer commercially marketable. The Company shall
replace, at its own expense, all unmerchantable Products, including
transportation costs of delivering replacement Product to Distributor, other
than Product which has been spoiled by mishandling by Distributor.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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3.10 Confidentiality. During and after the term of this Agreement,
Distributor will maintain the confidentiality of all documents, confidential
information, trade secrets, marketing and operating methods, and data of the
Company relating to the Products and the business of Company ("Trade Secrets")
and refrain from using and disclosing Trade Secrets for personal gain, or for
any other purpose not in furtherance of or incidental to the obligations of the
Distributor hereunder, except with the Company's written consent.
3.11 Report Law Suits or Claims. Distributor will notify the Company
promptly after becoming aware of any actual or potential claim or suit against
the Company, the Distributor, or any customer of Products that alleges that a
patent, trade name, copyright, or trademark of a third person will be infringed
by reason of the sale or use in the Territory of the Products or any promotional
materials of the Company or the Distributor with respect to the Products.
3.12 Infringement. Distributor will notify the Company promptly after
becoming aware of the any infringement of any of the Trademarks, and will assist
the Company (at the Company's expense) in any action or proceedings that the
Company or its licensors may institute as the result of such infringement.
Distributor will not make, cause others to make, or assist others in making, any
claim whatsoever to any or all of the Trademarks or any trademark, designation,
name, phrase, design or symbol similar thereto in connection with the
manufacture, advertising, promotion, sale or distribution of merchandise.
3.13 Storage and Handling Standards. Distributor will comply with
regulatory standards for storage, transportation and handling of Products and
will provide access to its warehouse for the Company to inspect inventory.
3.14 Use of Trade Name or Trademarks. Distributor will refrain from
removing the Trademarks from Products and from using the Trademarks on any other
product except the Products. Distributor will refrain from using the Trademarks
in the Distributor's corporate or business names without the Company's prior
approval, or in any case, in any manner inconsistent with the rights of the
Company and its licensors in the Trademarks.
3.15 Notice Requirements. Distributor will provide the Company with
written notice by certified mail of any event that the Distributor alleges
constitutes a default under Paragraph 5.2 of this Agreement, including without
limitation:
(a) A description of each act or omission relevant to the default;
(b) The dates of each act or omission relevant to the default; and
(c) (If the default is susceptible to cure) the steps the
Distributor believes are necessary to cure the default.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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3.16 Distribution in Territory. As described in the License Agreement,
if Distributor distributes Products in member states of the European Union
("EU"), right or obligations created or imposed by this Agreement may not be
exercised or enforced in a manner contrary to Community Law. Distributor will
not solicit orders from outside the Territory nor engage in any commercial or
promotional activities with respect to the Products outside the Territory, the
right of any purchaser of the Products within the Territory to export the
Products purchase to other member states of the EU staying unaffected.
Limitation of the exercise of rights or the enforcement of obligations due to
Community Law or the provisions of this Agreement shall not affect the validity
or enforceability of any other rights and obligations under this Agreement.
3.17 E-Commerce Web Site. Any advertisement, promotion, sale or
distribution of the Products via an "E-Commerce Web Site" shall be subject to
the terms and conditions of the E-Commerce Guidelines set forth on Schedule 5
hereto. In the event Distributor fails to adhere to any of the terms and
conditions of the E-Commerce Guidelines, such failure shall be deemed a default
under this Agreement.
3.18 Non-Circumvention. Except with the Company's prior written
consent, during the period ending two years after termination or expiration of
this Agreement, Distributor shall not manufacture, market or distribute any
non-alcoholic beverages identified by the Trademarks (or marks confusingly
similar to the Trademarks) other than the Products purchased from the Company.
By way of clarification, this restriction shall apply even if the Distributor or
the seller of such beverages is licensed to use the Trademarks by Xxxxxxx
Xxxxxxxxxxxxx or its licensees other than the Company. Distributor shall cause
any sub-distributors to agree to this restriction.
4. COMPANY'S OBLIGATIONS.
4.1 Sale of Products. The Company will sell the Products to the
Distributor under the terms of this Agreement, and the Company will take all
necessary steps to ensure that no other person sells or distributes Products in
the Territory in derogation of Distributor's exclusivity.
4.2 Shipping. The Company will make prompt shipments in accordance with
the Distributor's purchase orders for Products.
4.3 Notice Requirements. The Company will provide the Distributor with
written notice of any event Company alleges constitutes a default under
Paragraph 5.2 of this Agreement, including without limitation:
(a) A description of each act or omission relevant to the default;
(b) The dates of each act or omission relevant to the default; and
(c) (If the default is susceptible to cure) the steps the Company
believes are necessary to cure the default.
Such notice is a condition to termination of this Agreement for
Distributor's default, but failure to give such notice promptly after the event
will not be deemed a waiver of that or any subsequent default.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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4.4 Company Responses. The Company will respond promptly in writing to
the Distributor upon any notification pursuant to Paragraph 3.12 hereof of a
claim or suit against the Company, the Distributor, or any customer for
Products.
4.5 Quality and Production. The Company will assure that all Products
are of merchantable quality. The Company will be responsible for producing,
bottling, packaging and labeling the Products as required by the laws of the
country of origin and the laws of the Territory of which it is aware.
Distributor will notify the Company of any labeling requirements of which it is
aware specifically required in the Territory.
4.6 Promotional Materials. Company will provide camera ready copy and
images for advertising and promotional materials. It will be Distributor's
obligation to translate or otherwise localize the materials, to comply with
local laws and regulations and to reproduce and distribute the materials. All
promotional materials, whether localization of Company materials or created by
Distributor, must be approved by the Company prior to use.
4.7 Promotional Product. As a special introductory promotion to help
Distributor in the initial stages of introducing the Product in the Territory,
for every XXXXXX of Product purchased and paid for, the Company will provide
XXXXXX of Product to Distributor for no additional cost other than shipping and
customs. This introductory promotion will only apply to purchases during the
first 12 months from the Effective Date. The promotional product will not count
towards Distributor's Minimum Sales Requirement. Distributor agrees to pass on
this introductory promotion to its sub-distributors to help promote and market
the Products and upon the request of the Company Distributor will provide proof
that the sub-distributors received the benefit of the promotion.
5. DEFAULTS.
5.1 Deprivation of Products. To the extent that the Company may be
substantially deprived of Products for reasons beyond its control, the Company
will be excused from failure to perform according to the terms of this Agreement
for so long as such deprivation continues.
5.2 Default Defined. The following will be defaults:
(a) A breach by this Agreement by Distributor or any
sub-distributor (including but not limited to the failure to pay for Product
when due) upon written notice from the Company or Xxxxxxx Xxxxxxxxxxxxx.
(b) Distributor is insolvent or shall make or agree to make an
assignment for the benefit of creditors or an arrangement pursuant to any
bankruptcy law; Distributor has given an assignment for the benefit of
Distributor's creditors; involuntary or voluntary proceedings in bankruptcy are
instituted against or by Distributor that are not dismissed within 90 days, or
Distributor is adjudicated a bankrupt; a receiver or trustee is appointed for
Distributor, or any interest in its business, unless vacated within 90 days.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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(c) The abandonment by either party of its business by the
discontinuation of normal service to its customers for a period of 45
consecutive days.
(d) A determination by a court of competent jurisdiction that one
party made a material misrepresentation or false statement or materially misled
the other in order to procure a benefit or right from the other party.
5.3 Remedies.
(a) If the Distributor defaults, as described in Paragraph 5.2,
the Company may at its option exercise any one or more of the following
remedies:
(i) terminate this Agreement, effective immediately,
provided that the notice required by Paragraph 4.3 has been given;
(ii) declare all indebtedness of the Distributor to it
immediately due and payable, and repossess all the Products in the possession of
the Distributor for which the Distributor is indebted to it;
(iii) establish terms of cash in advance of delivery on
Products thereafter delivered to the Distributor; or
(iv) exercise any other legal remedies available to it.
(b) If the Company defaults, as described in Paragraph 5.2, the
Distributor may at its option
(i) terminate this Agreement, provided that the notice
required by Paragraph 3.15 has been given and the Company has failed to cure the
default within sixty days or such longer cure period as was provided n the
notice; or
(ii) exercise any other legal remedies available to it.
5.4 Effect of Termination. Termination of this Agreement, other than
termination resulting from Distributor's default or termination upon expiration
of the Term, will not affect the obligation of the Company to make delivery on
orders accepted by it prior to the effective date of the termination, subject to
the terms and conditions provided in this Agreement.
5.5 The Distributor's Obligations Upon Termination. Upon Termination of
this Agreement, the Distributor will immediately
(a) return to the Company (at the Company's expense) or upon the
Company's request destroy, all advertising, promotional and sales materials in
the Distributor's possession that were furnished by the Company without charge
(including without limitation brochures, catalogs, price books, photographs,
designs, drawings, and engineering and other data);
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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(b) provide to the Company and Xxxxxxx Xxxxxxxxxxxxx within 10
days of the date of Termination with a statement setting forth the number of
Products on hand and a listing of all of Distributor's accounts for the
Products.
(c) immediately cease all use of the Trademarks; and
(d) at its earliest opportunity remove the Trademarks from the
Distributor's vehicles and any of the Distributor's products, letterhead,
business cards, or other promotional materials of any kind.
6. TERMS OF SALE OF PRODUCTS.
The Company will sell the Products to the Distributor under the
following terms and conditions:
6.1 Price. The prices the Company will charge the Distributor as of the
Effective Date of this Agreement are set forth in the attached Schedule 6. The
Company reserves the right to change its prices for the Products at any time by
giving the Distributor at least 45 days prior written notice of any price
increase. Unless otherwise expressly and unambiguously stated on Schedule 6, all
pricing is FOB the warehouse or factory of the Company or its subcontractor.
6.2 Delivery. The Company will arrange and pay for transportation of
Products to the closest deep sea port in the Territory. Title to Products and
risk of loss pass to Distributor when the Products have been shipped from the
warehouse or factory of the Company or its subcontractor. Company will pay for
proper insurance premium to cover the risk of damage or loss until its arrival
to the port described herein.
6.3 Purchase Orders. The Distributor's orders for Products, and the
Company's acceptances thereof, whether oral, written, or otherwise, will be
subject to the terms and conditions of this Agreement. Any term or condition in
such purchase orders or acceptances in conflict with this Agreement will be null
and void.
6.4 Payment. All payments shall be in United States Dollars unless the
use of another currency is unambiguously set forth on Schedule 6. The
Distributor will pay for each shipment in cleared funds by electronic funds
transfer (or as otherwise agreed to by the Company in writing) received by the
Company as follows: one-half (1/2) with order and the balance (after application
of the per case credit, if any) upon shipment by the Company or its
subcontractor; provided that the xxxx of lading will not be released until
payment in full has been received. Alternatively, Distributor shall provide the
Company with an irrevocable unconditional letter of credit drawn on a bank
acceptable to the Company (which shall be a U.S. bank or the letter of credit
shall be payable at U.S. branches or correspondents of the issuing bank). The
letter of credit shall be for not less than the full amount of the purchase
order and may be drawn (i) as to one-half upon presentation of the purchase
order, and (ii) and the balance upon shipment by the Company or its
subcontractor; provided that the xxxx of lading will not be released until
payment in full has been received. If cleared funds are not timely received by
the Company for any invoice, Distributor shall pay a late charge of 1.5% (or the
maximum amount allowed by law, whichever is lower) of the price set forth on the
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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invoice for each 30-day period, or part thereof, that such invoice shall remain
unpaid. The Company may, from time to time, in its sole discretion, set forth
credit limits applicable to Distributor's purchases. Following review of
Distributor's financial information, the Company may in its sole discretion
specify other payment terms in writing. If, in the Company's judgment,
Distributor should not be granted or continue to receive credit, whether because
of an arrearage in its payment or otherwise, then the Company shall have the
unqualified right, without prior notice, to reduce or withdraw entirely
Distributor's credit limit (if any) or only to sell to Distributor on a cash on
order basis. The Company reserves the right at any time in its sole discretion
to demand immediate payment of any account whether due or not. There shall be no
right of set-off by Distributor.
6.5 Claims. Any claims for shortages, damaged Products, or
discrepancies in any shipment must be sent to the Company no later than 10 days
after the arrival of the shipment at the Distributor's facility. The Company
will issue the Distributor credit for such claims within 15 days of receipt of
claim.
7. INDEMNIFICATION AND INSURANCE.
7.1 Indemnification by the Company. The Company will indemnify, defend,
and hold harmless the Distributor from and against any and all third party
losses, expenses, damages, claims, suits, demands, and causes of action
(including without limitation the reasonable fees and expenses of attorneys,
court costs, and other litigation and dispute resolution costs) arising from or
relating to any injuries to or death of persons, or any damage to property,
occurring as a result of or in any way arising out of sales, production,
defects, or storage of the Products (including their bottling or packaging) by
the Company.
The Distributor will give the Company prompt written notice of any
matter for which it claims indemnification, and the Company may, if it elects,
defend or settle such claim or suit at its own expense using counsel of its
choosing (but any such settlement that does not provide for the giving of an
unconditional release to the Distributor will be subject to the approval of the
Distributor, in its sole discretion), and the Distributor will give Company
cooperation and any and all available information and assistance in connection
with the defense of such claim or suit, to the extent it is able without
incurring additional cost.
7.2 Company's Insurance. The Company will maintain primary and excess
products liability coverage totaling at least US$2,000,000 per occurrence, on an
occurrence (not claims-made) basis, and containing a Vendor's Liability
Endorsement applicable to the Distributor, its affiliated companies, and all
customers requesting such coverage through the Distributor.
7.3 Insurance. The Distributor and the Company will each maintain
Comprehensive General Liability insurance with bodily injury and property damage
limits of not less than US$2,000,000 per occurrence, and an endorsement
providing contractual liability coverage. Distributor's policy will name the
Company as an additional insured. Within 45 days of the effective date of this
Agreement, each party will provide an original certificate of insurance
containing such terms, and thereafter will provide each certificate of renewal
within 10 days of the effective date of renewal. Each such certificate will
contain an endorsement stating that the insurance company will give the other
party at least 10 days' prior written notice in the event of cancellation,
nonrenewal, or material change to the terms of such liability policy.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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8. INTELLECTUAL PROPERTY INFRINGEMENT.
8.1 The Company will indemnify, defend, and hold harmless the
Distributor from and against any and all losses, expenses, damages, claims,
suits, demands, and causes of action (including without limitation reasonable
fees and expenses of attorneys, court costs, and other litigation and dispute
resolution costs) arising from or relating to any actual or claimed infringement
of any patent, trademark, copyright, or other intellectual property or
proprietary rights by reason of the Products or any advertising or promotional
materials created or supplied by the Company.
8.2 Company Options. In the event of any infringement or claimed
infringement of any patent, trademark, copyright, or other intellectual property
or proprietary rights by reason of the Products or any advertising or
promotional materials created or supplied by the Company, the Company, at its
option and expense may
(a) secure for the Distributor the right to continue selling or
distributing the Products, either by obtaining a license for such continued sale
or distribution or by other appropriate means;
(b) replace the Products with noninfringing products or parts
thereof;
(c) modify the Products so as to render them noninfringing; or
(d) remove the Products from premises of Distributor, refund cost
paid by Distributor for such Products and, unless some of the Products are
noninfringing, terminate this Agreement.
9. MISCELLANEOUS.
9.1 Third Party Beneficiary. Xxxxxxx Xxxxxxxxxxxxx and Play Beverages,
LLC are each an intended third-party beneficiary of this Agreement.
9.2 Force Majeure. Fires, floods, wars, acts of war, strikes, lockouts,
labor disputes, accidents to machinery, delays or defaults of common carriers,
orders, decrees or judgments of any court, or any other contingency beyond the
control of the Company or the Distributor, whether related or unrelated, or
similar or dissimilar to any of the foregoing, will be sufficient excuse for any
resulting delay or failure in the performance by either party hereto of its
respective obligations under the Agreement, but such performance will be excused
only as long as the force majeure continues.
9.3 No Assignments. Neither party may assign any of its rights or
delegate any of its obligations under this Agreement without the prior written
consent of the other, in its sole discretion, and any attempt to do so will be
void and will be a material breach of this Agreement.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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9.4 Relationship of Parties. The relationship between the parties is
that of independent contracting parties, as buyer and seller of goods, and not
that of partners, joint ventures, or principal and agent. Neither party has or
will hold itself out as having the authority to bind or act in the name of or on
behalf of the other.
9.5 Notices. All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by document
[overnight] [expedited] delivery service or, to the extent receipt is confirmed,
faxed to the appropriate address or number set forth below.
If to Distributor: If to the Company:
Tobacco Holding Group Sh.p.k. Xxxxx Xxxxxxxx
Rruga Kavajes, Ish Kombinati c/o CirTran Beverage Corp.
Ushqimor, Tirane, Albania 0000 Xxxxx 0000 Xxxx
Xxxx: Xxxxx Xxxxxxxxx Xxxx Xxxxxx Xxxx, Xxxx 00000
Telephone: + 000 0 000000 Telephone: x(000) 000-0000
Fax: + 000 0 000000 Fax: x(000) 000-0000
If to Xxxxxxx Xxxxxxxxxxxxx: Copy to Cirtran's Attorney
Playboy Enterprises International, Inc. Xxxx X. Xxxxxxxx
000 Xxxxx Xxxxxx Xxxxxxxxx Xxxxxxx & XxXxxxxxxx
Xxx Xxxx, XX 00000 0000 X. 0000 Xxxx, Xxxxx 000
Attn: Xxxxx Xxxxx Xxxx Xxxx Xxxx, Xxxx 00000
Telephone: x(000) 000 0000 Telephone: x(000) 000-0000
Facsimile: x(000) 000 0000 Fax: x(000) 000-0000
9.6 Binding on Successors. This Agreement will bind and inure to the
benefit of the parties and their respective legal representatives, successors,
and permitted assigns, but nothing in this Agreement will confer any rights or
remedies on any person or entity other than the foregoing.
9.7 Reasonable Discretion. If any provision of the Agreement grants the
Company the right of approval or requires the Company's consent, such discretion
or consent will be subject to the standard of reasonableness.
9.8 Enforcement. Failure of either party to enforce at any time any
right or remedy it may have under this Agreement will be not be a waiver of such
provisions or rights, and will not preclude or prejudice such party from
thereafter exercising the same or any other right or remedy it may have under
this Agreement.
9.9 Governing Law. This Agreement will be governed by and interpreted
and construed in accordance with the internal laws of the State of Utah, U.S.A.
without reference to principles of conflicts or choice of law. All disputes and
matters arising under, out of, in connection with or relating to this Agreement
shall be brought only in a court of competent jurisdiction in the State of Utah
and the parties submit to the exclusive jurisdiction of such courts.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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9.10 Severability. If any provision of this Agreement is held invalid,
for any reason by a court, government agency, body or tribunal, the remaining
provisions will be unaffected and will remain in effect.
9.11 Amendment. No change, modification, or alteration to this
Agreement, or to the distribution relationship evidenced hereby will be
effective unless set forth in writing and approved by Xxxxxxx Xxxxxxxxxxxxx and
signed by the parties.
9.12 Entire Agreement. This Agreement supersedes all previous and
contemporaneous agreements and understandings between the parties and is
intended as the complete and exclusive statement of the terms of their
understanding and agreement with respect to the subject matter hereof. There are
no representations, oral or written, upon which the Company or the Distributor
has relied as an inducement to enter into this Agreement, other than those set
forth herein.
9.13 Confidentiality. Distributor may identify itself as a distributor
of the Product in the Territory. The Distributor agrees that this Agreement and
the other business terms hereof are confidential and proprietary information of
the Company. The Distributor shall not disclose the terms of this Agreement,
other than disclosure to its accountants, attorneys or other agents or
representatives with a need to know. Notwithstanding the above, a party may
disclose the terms of this Agreement and its terms to the extent required by
law.
9.14 Product Recall. If any Products are recalled by Company, the
Distributor will use its best efforts to obtain the return of any unsold
recalled Products and will follow the Company's direction to destroy, return to
the Company or otherwise dispose of the recalled Product within 15 days of
receipt of Company's recall notice. The Company will repurchase the recalled
Product from Distributor at the Distributor's cost.
9.15 Construction. The language used in this Agreement is the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against either party.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
COMPANY: DISTRIBUTOR:
CIRTRAN BEVERAGE CORP. Tobacco Holding Group Sh.p.k.
By: _____________________ By: _______________________
Name: Xxxxx X. Xxxxxxxx Name: Xxxxx Xxxxxxxxx
Title: Chairman Title: Managing Director
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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SCHEDULE 1 - PRODUCTS
---------------------
The following products, individually, have been authorized to Distributor by
this Agreement:
NAMES OF PRODUCTS
-----------------
Playboy(R) Energy Drink - 250ml aluminum cans
Playboy(R) Energy Drink Low Sugar - 250ml aluminum cans
The Distributor will be given 30 days to accept or reject all future products
and line extensions which the Company elects to distribute in the Territory. If
Distributor does not accept any future product or line extension, the Company
has the right to assign those products to an additional distributor in the
Territory. The Company may reformulate any of the Products or flavors or
discontinue them, so long as all flavors are not discontinued.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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SCHEDULE 2
----------
Territory: The Distributor has the exclusive right to sell and distribute the
Products in all cities and towns in the following countries, subject to any
government restrictions. Distributor's exclusivity does not extend to United
States military bases located within the Territory. Distributor shall have no
right to export Products from the Territory or to sell the Products for export.
Albania
Company grants the Distributor a 10 day first right of refusal to add Kosovo and
FYR Macedonia as additional Territories once Company receives offers for
Distribution from third party Distributors.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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SCHEDULE 3 - TRADEMARKS
-----------------------
The Distributor may use the following in accordance with Paragraph 1.2:
All trademarks, trade names, trade dress and images licensed to the Company from
Playboy Enterprises International, Inc., existing or future, applicable to the
Products, including "PLAYBOY".
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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SCHEDULE 4 -DISTRIBUTION GOALS AND PROMOTIONAL TERMS
----------------------------------------------------
DISTRIBUTION GOALS:
See Minimum Sales Requirements
PROMOTIONS, POINT OF SALE MATERIALS, SAMPLES AND SERVICES:
Distributor, at its own cost and expense, will advertise and promote the
Products in the Territory. All advertising and promotional materials, including
point of sale and give-away items, must be approved by the Company prior to use.
Distributor shall spend not less than XXXXXX% of sales by Distributor and its
sub-distributors on advertising each year.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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SCHEDULE 5 - E-COMMERCE GUIDELINES
----------------------------------
The following terms used in the Agreement shall have the meanings set forth
below:
"E-Commerce Web Site" is defined as promoting, offering, providing or selling
the Products using or via communications involving the TCP/IP Protocol or any
TCP/IP Successor.
"TCP/IP Protocol (Transmission Control Protocol/Internet Protocol)" is defined
as the two-layered program that is the basic communication language or protocol
of publicly accessible computer networks such as the Internet and private
computer networks such as intranets and extranets.
"TCP/IP Successors" is defined as programs, languages, protocols or other
technical means that are being developed or that have yet to be developed that
are intended to supplement, supersede or replace TCP/IP or its use for
communications on computer networks.
The following guidelines shall apply:
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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SCHEDULE 6 - DISTRIBUTOR PRICES
-------------------------------
Current distributor prices as of 01/07/2009:
Per case of 24 cans CIF (Cost, Insurance and Freight) of both
Playboy(R) Energy Drink Regular and Sugar Free- 250ml aluminum cans
US $XXXXXX - After discount of XXXXXX% for first 12 months from the
Effective Date US $XXXXXX - After 12 months from Effective Date
The Company will arrange and pay for transportation of Products to the
closest deep sea port in the Territory.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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Schedule 7. Minimum Sales Projections in Cases (24 cans)
--------------------------------------------------------
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Contract Year Territory
----------------------------------------------------------
First year XXXXXX
----------------------------------------------------------
Second Year XXXXXX
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Third Year XXXXXX
----------------------------------------------------------
Fourth Year XXXXXX
----------------------------------------------------------
Fifth Year XXXXXX
------------------------------------------------\---------
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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