EXHIBIT 10.49
MARKETING AND DISTRIBUTION
AGREEMENT
BACKSTROKE BODY MASSAGER
This Agreement ("Agreement") is by and between NATIONAL BOSTON MEDICAL,
INC., a Nevada corporation ("National Boston"), and TRISTAR PRODUCTS, INC., a
Pennsylvania corporation ("Tristar"), both of which are sometimes referred to
herein as a "party" or the "parties".
WHEREAS, National Boston owns and/or controls all rights of manufacturing,
distribution and sale with respect to a body massager product as defined in
Exhibit A currently known as the "Backstroke", and all improvements, line
extensions and modifications thereof (the "Product", and when more than one -
"Products"); and
WHEREAS, National Boston is in the business, among other things, of
manufacturing, advertising, marketing and distributing products in various
media; and
WHEREAS, Tristar is also in the business, among other things, of
manufacturing, advertising, marketing and distributing products in various
media, including television, print, and retail; and
WHEREAS, the parties wish to set forth in this Agreement their
understanding of the terms, and conditions upon which National Boston will grant
to Tristar rights to use, distribute, sell, advertise, promote and otherwise
exploit the Products.
NOW THEREFORE, in consideration of the premises and the mutual promises and
undertakings set forth herein, and intending to be legally bound hereby, the
parties agree as follows:
1. Marketing and Distribution Rights.
1.1 Grant of Rights. National Boston hereby grants to Tristar the following
rights which Tristar may, but is not obligated to, exercise alone or through any
one or more of its affiliates:
(a) Generally. The exclusive right, license and privilege during the Term
(as hereafter defined) throughout the United States and Canada and subject to
Section 1.7 below, the exclusive right, license and privilege during the Term
throughout the World (the "Territory") to use, distribute, sell, advertise,
promote and otherwise exploit the Products by any and all means and media, in
any and all markets, including but not limited to broadcast, cable, satellite
and all other forms of television transmission now existing or hereafter
developed, including without limitation, infomercials, commercial spots, promos,
television shopping programs such as QVC and HSN, radio, electronic and computer
retailing media (such as the Internet), all print media, direct mail
solicitation, package inserts, inbound and outbound telemarketing, credit card
syndication, CD-ROM, catalog sales, retail sales, and all other channels or
means of distribution now existing or hereafter developed;
(b) Use of Trademarks. The right to use any and all trademarks that
National Boston may own or control with respect to the Products including
without limitation the trademark "Backstroke" U.S. Registration No. 1,841,759;
75-431833 and 75-431983 (the "Trademarks"), and the right to advertise, promote,
market, sell and distribute the Products under or in connection with such other
trademarks or identifying names or marks as Tristar may determine;
(c) Use of National Boston's Artwork. The right to copy and use any and all
artwork and promotional materials that National Boston may own or control with
respect to the Products ("National Boston's Artwork"), copies of all of which
National Boston shall provide to Tristar for this purpose;
(d) Names, Likenesses and Endorsements. The right to use the names,
likenesses (including, without limitation, photographs, illustrations, films and
videotapes), endorsements and testimonials of all endorsers and other persons
that National Boston may own or control with respect to the Products;
(e) Packages. The right to develop such groupings, ensembles,
configurations and packaging of the Products and other ancillary goods for sale
as Tristar may determine;
(f) Subdistributors. The right to appoint such subdistributors as Tristar,
in its sole judgment, may deem appropriate in order to market and distribute the
Products; and
(g) Existing Infomercial. The right to use an existing long form television
infomercial (the "Existing Infomercial") owned by National Boston in the conduct
of a television direct response marketing campaign, and to edit and modify the
infomercial as Tristar deems necessary and appropriate.
1.2 Non-Compete. During the term of this Agreement and for one year
thereafter, neither National Boston nor Tristar shall directly or indirectly,
either alone or in participation with any other person or entity, engage in or
be involved with manufacturing, marketing or distributing any other back
massaging products similar in design, composition, content or function to the
Product. Further, Tristar agrees to purchase the Products only from National
Boston. This Section shall not be construed to impeed National Boston's
commitments to deliver Product to Xxxxxxxxxxx TV per Section 1.7. This section
shall not apply in the event of the insolvency, committing any act of
bankruptcy, including, but not limited to the appointment of a trustee or
receiver for any part of the property, or the commencement of any proceedings by
or against either of the parties hereto under any law having to do with the
relief of debtors or in the event that National Boston shall no longer have
rights to the license to the Product.
1.3 Minimum Sales Requirements. Tristar shall not have any minimum
purchace/sales requirement under this Agreement. However, Tristar's rights of
exclusivity and right to use the Existing Infomercial or any newly created
Infomercial/Commercial whether created by Tristar or National Boston within the
Territory, are subject to Tristar's maintaining certain minimum order
quantities, as described in Section 8 hereof.
1.4 Resale Prices. Tristar, in its sole judgment, shall have the right to
sell and distribute the Products at such prices, and on such terms and
conditions (including shipping and handling charges), as Tristar may establish.
1.5 Quality Control. Tristar shall adhere to any reasonable requests and
directions of National Boston relating to warranties and the Trademark applied
to such Products, pursuant to the terms of this Agreement. Tristar will make no
representation whether written or oral as to the Products except as specifically
set forth in materials provided by National Boston in respect of the Products;
or assume liability and responsibility for representations not so approved by
the Company in advance.
1.6 Advertising Costs. Tristar will be responsible for all costs associated
with the marketing and distribution of the Products. Except as by National
Boston Section 1.7
1.7 Rights Reserved to National Boston. Notwithstanding anything to the
contrary contained in Section 1.1 hereof, Tristar shall have no marketing and
distribution rights for the Products in countries which have already been
assigned or licensed to Xxxxxxxxxxx Television, Inc. until such rights
terminate. A copy of National Boston's agreement with Xxxxxxxxxxx Television
will be provided to Tristar.
2. Sale of Product and Quantity The Company agrees to sell to TRISTAR, and
TRISTAR in order to maintain its' exclusivity within the specified
territory/channel, agrees to purchase and pay for such minimum units of the
Product on an annual basis as is specified in Section 8 attached hereto,
PROVIDED THAT orders for Products shall not be effective until accepted by the
Company and the Company may in its sole discretion reject any order which does
not comply with Exhibits B and/or C of this Agreement or their subsequent
modifications.
All sales of Products to TRISTAR shall be subject to National Boston's
conditions of sale except where excluded by law, INCLUDING THOSE LIMITING
WARRANTIES OF MERCHANTABILITY AND FITNESS from time to time in effect. National
Boston's current conditions of sale are attached hereto as Exhibit B and made a
part hereof. TRISTAR will inspect all Product shipments from National Boston
according to TRISTAR's usual procedures. TRISTAR may reject any goods, which are
shipped contrary to the terms of this Agreement, or are not in compliance with
purchase orders accepted from TRISTAR. TRISTAR's sole remedy for receipt of
defective Products including customer warranty returns or for Products not
delivered shall be as stated in said conditions of sale. National Boston shall
in no event be responsible for special or consequential damages.
2.1. Prices, Delivery, Title and Risk of Loss TRISTAR shall pay for the
Products purchased hereunder at the prices as set forth in Exhibit C attached
hereto and made a part hereof. Prices will not change without the agreement of
both parties. All orders accepted by National Boston prior to the effective date
of any price changes shall remain at the price in effect at the time of order
acceptance, regardless of actual ship dates for such orders. Delivery of all
Products shall be F.O.B. Longbeach, CA. If delivery is required at a location
other than as stated in this Section 2.1 or in the event of changes in shipping
and duty costs subsequent to the date of this agreement, then National Boston
May pass on to Tristar any cost difference for such delivery. Risk of loss of
the Products shall pass to Tristar upon such delivery. Tristar acknowledges that
National Boston requires additional advance notice to specially package and
deliver the Products. Lead time required for orders shall be not less than 45
days from the time of order placement to the required time of delivery at
Tristar's warehouse. To the extent that National Boston is unable to deliver
products within the specified time frame then such units not delivered on a
timely basis shall be deemed to have been included in Tristars monthly minimum
requirements to maintain exclusivity as though they had been delivered on time.
2.2. Payment. Payment shall be made in United States dollars on the
following terms: an irrevocable letter of credit, or other arrangement as agreed
by both parties. At National Boston's discretion, credit terms may be changed.
If TRISTAR shall fail to fulfill the terms of payment, the Company, may, at its
option and without prejudice to any other lawful remedy, defer further shipments
hereunder until such default is made good, treat such default as a breach of
this entire Agreement, and/or terminate this Agreement.
The initial order for the purpose of this agreement shall be not less than
22,500 units (July and August exclusivity minimums) at $16.50 per unit. The
payment terms for this order shall be $92,812.50 (25%) wired to National
Boston's account upon execution of this agreement. The remaining value of the
order in the amount of $278,437.50 shall be covered by an irrevocable letter of
credit for the benefit of National Boston. The entire letter of credit shall be
drawn down by National Boston immediately upon shipment by National Boston of
the initial 15,000 units.
2.3 Reporting and Remittances; Review of Tristar's Books Tristar will
provide National Boston with quarterly reports of its sales activities,
quantities sold and such other information as the National Boston shall
reasonably require. National Boston shall have the right to review at Tristar's
premises the books and records of Tristar that pertain to the sale and other
commercial exploitation of the Products on reasonable advance notice and at
reasonable intervals not to exceed twice in each calendar year. Such reports
shall be Media Spending, Inventory and Sales reports by Customer.
3. Television Direct Response Advertising
3.1 Existing Infomercial.
(a) Revisions/Editing. Tristar may edit and revise the Existing Infomercial
at its own cost and expense as it determines in its sole discretion.
(b) Substantiation. The Existing Infomercial shall be based upon such
attributes of and claims made about the Product as shall have been documented
and substantiated by National Boston to Tristar's satisfaction in compliance
with all applicable laws and regulations relating to the advertising and sale of
the Product. National Boston shall provide to Tristar all such documentation and
substantiation as Tristar shall determine may be necessary to ensure or
facilitate compliance with all such laws and regulations, to the extent such
information is in National Boston's possession, custody or control.
3.2 Broadcast of Commercial. Tristar shall have exclusive control over and
shall be responsible for the broadcast, performance and transmission of the
Existing Infomercial as well as any other commercials or infomercials (all of
which are collectively referred to herein as "Commercials") via broadcast, cable
and satellite television, at such times, with such frequency, in such markets,
and on such networks and stations as Tristar, in its sole judgment, may
determine.
3.3 Media and Product Fulfillment Costs. Beginning with the effective date
of the Agreement, Tristar shall bear all Media Costs incurred in connection with
the advertising, marketing and distribution of the Products ordered by Tristar
and all costs of order processing, payment processing, order fulfillment and
customer service. Tristar shall not be responsible for any such costs incurred
by National Boston prior to the effective date of this agreement. At the request
of National Boston, Tristar at its option, may but is not required to take
customer service responsibility for National Boston's existing customer base for
a fee to be mutually agreed to by both parties. Tristar will assume the cost to
re-shoot the instructional video and any revisions requested by Tristar to the
retail display box or instructional booklet.
4. Proprietary Rights.
4.1 National Boston's Intellectual Property.
(a) Generally. Subject to the rights granted to Tristar under this
Agreement, all right, title and interest in and to the design of the Products
and/or its derivatives, the Patents, Trademarks, and National Boston's Artwork
(collectively, "National Boston's Intellectual Property"), is and shall remain
the sole property of National Boston, and neither Tristar nor any third party
shall acquire any right, title or interest in National Boston's Intellectual
Property by virtue of this Agreement or otherwise, except as expressly provided
herein. Any trademarks developed by Tristar to be used in conjunction with sales
of the Product shall be owned by Tristar. Any unauthorized use of National
Boston's Intellectual Property by Tristar shall be deemed an infringement of the
rights of National Boston therein. Tristar shall not in any way or at any time
dispute or attack the validity or contest the rights of National Boston in or to
any of National Boston's Intellectual Property. The provisions of this Section
4.1(a) are subject in all respects to the accuracy of the representations and
warranties of National Boston given pursuant to Section 5.2.
b) Enforcement of Rights. National Boston may at its expense enforce
National Boston's rights in National Boston's Intellectual Property against
infringement thereof. If Tristar requests National Boston to enforce such rights
and National Boston declines to do so, Tristar shall have the right (but shall
not be required) to enforce such rights, and may do so in National Boston's name
with National Boston's written agreement which shall not be unreasonably
withheld. The party enforcing the rights shall be responsible for its own legal
fees and expenses incurred in such enforcement efforts, but shall first be
reimbursed for such expenditures from any recovery obtained. All monies
recovered in excess of such expenditures shall be paid to the party suffering
actual loss to the extent of such loss, and any amount remaining shall be shared
equally by Tristar and by National Boston. Tristar shall fully inform National
Boston of the status of any such enforcement efforts undertaken by Tristar.
4.2 Tristar's Intellectual Property. All right, title and interest in and
to the entire editorial, visual, audio, and graphic content of all
advertisements and promotional materials developed by Tristar in connection with
its activities under this Agreement, any new trademarks developed by Tristar to
be used in conjunction with sales of the Product, any Commercials other than the
Existing Infomercial that Tristar produces, and all related materials and the
contents thereof (collectively, "Tristar's Intellectual Property") shall be and
remain the sole property of Tristar, and neither National Boston nor any third
party shall acquire any right, title or interest in Tristar's Intellectual
Property by virtue of this Agreement or otherwise. Any unauthorized use of any
of Tristar's Intellectual Property by National Boston shall be deemed an
infringement of the rights of Tristar therein. National Boston shall not in any
way or at any time dispute or attack the validity or contest the rights of
Tristar in or to any of Tristar's Intellectual Property.
4.3 Customer List. Tristar may compile a list of the names and addresses of
persons and entities who order the Products through it or its affiliates or are
otherwise targeted by or on behalf of it or its affiliates as potential
customers of the Products (the "Customer List"). The Customer List shall be the
joint property of Tristar and National Boston. Proceeds from the sale or other
use of this list shall be shared equally by the parties.
4.4 Future Patent Applications. Tristar shall have the right, but not the
obligation, to prosecute any patent application, United States and foreign, for
the Product, in National Boston's name and on behalf of National Boston with
National Boston's prior written approval, and National Boston shall cooperate
fully with Tristar with respect thereto, but all of such activity shall be at
the sole cost and expense of Tristar. Tristar shall have no liability under any
circumstances to National Boston for any decision or failure by Tristar to apply
for such patents or for any action, activity, neglect or failure by Tristar, its
representatives and agents, in connection therewith.
5. National Boston's Representations, Warranties and Covenants.
5.1 The Products. National Boston represents, warrants and covenants to
Tristar that:
(a) Information. All information provided to Tristar by National Boston
relating to the Products is and will be, to the best of National Boston's
knowledge and belief, true and correct, including without limitation all
information regarding the effectiveness, quality, characteristics or fitness of
the Products;
(b) Substantiation. National Boston will provide to Tristar all information
in National Boston's possession or control which substantiates all claims made
by the National Boston to Tristar about the Product; and
(c) Patent. The Product sample shown to Tristar conforms to the description
contained, and is consistent with the claims made, in the Patents.
5.2 Proprietary Rights. National Boston represents, warrants and covenants
to Tristar that:
(a) National Boston's Intellectual Property. National Boston owns or
otherwise controls or shall own or otherwise control all right, title and
interest in and to National Boston's Intellectual Property, which constitutes
and shall constitute all of the intellectual property and other proprietary
rights necessary or appropriate for the manufacture, marketing, distribution and
sale of the Products;
(b) Power and Authority. National Boston has and shall have all necessary
power and authority to grant to Tristar all of the rights and privileges granted
pursuant to this Agreement;
(c) No Infringement. Neither the granting of the rights and privileges
granted hereunder nor the exercise thereof by Tristar in accordance with the
terms of this Agreement will infringe or otherwise violate the intellectual
property or other proprietary rights of any person or entity;
(d) No Adverse Claims. National Boston has not been and is not, as of the
date of this Agreement, a party to any litigation enforcing or defending
National Boston's rights in, to or with respect to the Products or any of
National Boston's Intellectual Property, and is not aware of any claims or
demands made or threatened by any person or entity involving the validity of
National Boston's rights in, to or with respect to the Products or any of
National Boston's Intellectual Property; and
(e) Applicable Patents, Copyrights, Trademarks and Licenses. National
Boston will at the time of execution of this Agreement, and thereafter, provide
Tristar with copies of all patents, abstracts of all copyright registrations,
copyright applications, trademark registrations, trademark applications,
licenses and other agreements and instruments relating to the Products and
National Boston's Intellectual Property (and all amendments, supplements, and
modifications thereof) which are now in existence or which National Boston shall
obtain, file or enter into during the term of this Agreement.
5.3 Other Warranties. The warranties and representations of National Boston
set forth in this Section 5 and elsewhere in this Agreement are in addition to
and without prejudice to all other warranties expressed or implied by law.
5.4 No Warranty By Tristar. National Boston acknowledges that Tristar, by
executing this Agreement and exercising its rights hereunder, makes no
representation, warranty, endorsement or certification regarding the
effectiveness, quality, character or fitness of the Products.
6. Additional Representations and Warranties. Each party represents and warrants
to the other as follows:
6.1 Power and Authority. It has all requisite power and authority to enter
into this Agreement, and has duly authorized by all necessary action the
execution and delivery hereof by the officer or individual whose name is signed
on its behalf below.
6.2 No Conflict. The execution and delivery of this Agreement by it, and
the performance of its obligations hereunder, do not and will not conflict with
or result in a breach of or a default under its organizational instruments or
any other agreement, instrument, order, law or regulation applicable to it or by
which it may be bound.
6.3 Binding Effect. This Agreement has duly and validly executed and
delivered by it and constitutes its valid and legally binding obligation,
enforceable in accordance with it terms.
7. Indemnification.
7.1 By Tristar.
(a) Generally. Subject to Section 7.1 (b), Tristar shall defend, indemnify
and hold harmless National Boston and its affiliated companies and their
respective officers, directors, shareholders, employees, licensees, agents,
successors and assigns from and against any and all without limitation, claims,
damages, judgments, awards, settlements, investigations, costs, and reasonable
attorneys fees and disbursements (collectively "Claims") which any of them may
incur or become obligated to pay arising out of or resulting from (i) the breach
by Tristar of any of its representations, warranties, covenants, obligations,
agreements or duties under this Agreement, and (ii) any advertising claims made
by Tristar based on information not provided to it by National Boston.
(b) Exceptions. Tristar shall have no duty under Section 7.1(a) or
otherwise to defend, indemnify or hold harmless with respect to any Claims which
(i) arise out of or result from the breach by National Boston of any of its
representations, warranties, covenants, obligations, agreements or duties under
this Agreement; or (ii) are subject to National Boston's duty to defend,
indemnify and hold harmless pursuant to Section 7.2(a).
7.2 By National Boston.
(a) Generally. Subject to Section 7.2(b), National Boston shall defend,
indemnify and hold harmless Tristar, its affiliated companies and their
respective officers, directors, shareholders, employees, licensees, agents,
successors and assigns from and against any and all without limitation, claims
which any of them may incur or become obligated to pay arising out of or
resulting from (i) the breach by National Boston of any of its representations,
warranties, covenants, obligations, agreements or duties under this Agreement,
(ii) any documentation or studies and any substantiation for advertising claims
provided by National Boston to Tristar (iii) the infringement of the proprietary
rights or any third party with respect to any of the Products or National
Boston's intellectual property in the course of the exercise by Tristar or the
rights granted to it under this Agreement, and (iv ) National Boston shall
provide product liability coverage in the amount of not less than five million
dollars and name Tristar as an additional insured.
(b) Exceptions. National Boston shall have no duty under Section 7.2(a) or
otherwise to defend, indemnify or hold harmless with respect to any Claims which
(i) arise out of or result from the breach by Tristar of any of its
representations, warranties, covenants, obligations, agreements or duties under
this Agreement; or (ii) are subject to Tristar's duty to defend, indemnify and
hold harmless pursuant to Section 7.1(a).
7.3 Procedure. Promptly after learning of the occurrence of any event which
may give rise to it rights under the provisions of this Section 7, any party
seeking to enforce such right (a "Claiming Person") shall give written notice of
such matter to the party against whom enforcement of such rights is sought (the
"Indemnifying Party"). The Claiming Person shall cooperate with the Indemnifying
Party in the negotiation, compromise and defense of any such matter. The
Indemnifying Party shall be in charge of and control such negotiations,
compromise and defense and shall have the right to select counsel with respect
thereto, provided that the Indemnifying Party shall promptly notify the Claiming
Person of all material developments in the matter. In no event shall the
Indemnifying Party compromise or settle any such matter without the prior
consent of the Claiming Person, which shall not be bound by any such compromise
or settlement absent its prior consent.
8. Term. This Agreement shall commence July 26, 1999 and shall continue so long
as Tristar makes reasonable commercial efforts to sell the Product. However,
Tristar's rights of exclusivity shall terminate, and Tristar's rights shall
continue at the discretion of National Boston on a non-exclusive basis except
that Tristar, at the discretion of National Boston shall have no further right
to use the Existing Infomercial after a 180 day DRTV sell-off opportunity, if
Tristar does not maintain Product orders to National Boston in at least the
following monthly minimum unit quantities:
July, 1999 - 7,500 units
August, 1999 - 15,000 units
September, 1999 - 15,000 units
October, 1999
and each month thereafter 20,000 units
All Product Orders shall be considered cumulative, so that if Tristar has taken
delivery on in excess of the minimum Order rate in one period, the minimum order
rate in subsequent periods will be correspondingly reduced to the extent of such
excess. Further, Tristar may prepay orders in order to meet any minimums and
receive a credit therefor against future orders. Tristar, in consideration of
the rights granted herein, within the Territory, and regardless of other
performance, shall guarantee the order schedule defined in this Section 8 shall
be placed with and paid to National Boston for the initial six (6) month period.
Thereafter, orders will continue consistent with Section 2 and as necessary to
maintain exclusivity.
9. Termination.
9.1 Termination Events.
(a) Election by Tristar. Tristar may terminate this Agreement at any time
upon 30 days prior written notice by so notifying National Boston and this
Agreement, subject to the provisions of Section 9.2, shall terminate 30 days
following National Boston's receipt of such notice.
(b) Election By National Boston. National Boston may terminate this
Agreement upon 30 days prior written notice to Tristar, subject to Section 9.1
(c) and Section 9.2 if Tristar fails after 12 months to maintain the
requirements for exclusivity. Such termination will be effective 30 days
following Tristar's receipt of such notice if the situation remains uncured.
(c) Termination Upon Breach. Either party may terminate this Agreement upon
30 days written notice to the other party upon the breach by the other party of
any of its material representations, warranties, covenants or agreements
contained in this Agreement. Upon the expiration of such notice period, this
Agreement shall terminate without the need for further action by either party;
provided, however, that if the breach upon which such notice of termination is
based shall (i) have been fully cured to the reasonable satisfaction of the non-
breaching party within such 30 day period, or (ii) not be capable of cure within
such 30 days, but can be cured within a reasonable time thereafter, and the
breaching party is taking reasonable steps to effect such a cure, then such
notice of termination shall be deemed rescinded, and this Agreement shall be
deemed reinstated and in full force and effect. Such right of termination shall
be in addition to such other rights and remedies as the terminating party may
have under applicable law.
9.2 Obligations Deemed Fulfilled in the Event of Early Termination. Any
early termination pursuant to Section 9.1(a) of this Agreement shall not be
viewed to be a breach of this Agreement. Unless either of the parties has
separately breached a commitment made elsewhere in this Agreement, such parties
shall be deemed to have fulfilled all of their obligations hereunder, except
those which by their nature survive the termination of the Term (e.g. warranties
and representations, payment obligations, confidentiality and indemnifications,
etc.). Early termination by Tristar shall not relieve its obligations to
National Boston under Section 8.
9.3 Limited Sales Rights After Termination. For a period of six months
following the termination of this Agreement, Tristar shall retain non-exclusive
rights to advertise, market, and sell the Products in the same manner as
provided for in this Agreement, until Tristar has sold all of its existing
inventory of the Product. To assist Tristar in liquidation of inventory in the
event of termination, National Boston agrees that any subsequent licensee will
be directed at Tristar's option, to first acquire existing stocks of unsold new
inventory, held by Tristar at the time of the termination, until such inventory
is liquidated provided such inventory is in saleable condition as reasonably
determined by National Boston. Such sales to the new licensee by Tristar will be
at a price not to exceed that paid by Tristar to National Boston for such
inventory. Tristar agrees that such sales will be transacted and delivered in a
timely manner.
9.4. Effect of Termination. Upon termination or expiration of this
Agreement for any reason whatsoever:
(a) National Boston shall be entitled, but not obligated to, buy all or
part of any remaining Products which TRISTAR may have in stock (subject to
applicable law); all costs of shipment of repurchased product will be at the
expense of National Boston. Should National Boston elect not to repurchase
TRISTAR's existing stocks of the Products, then TRISTAR may sell the remaining
stock without further compensation to National Boston excluding any then
existing liabilities on the part of TRISTAR to National Boston.
(b) TRISTAR shall, at its own expense, return any remaining technical,
marketing or promotional materials obtained from National Boston and
(c) Each party shall immediately pay to the other all amounts due,
regardless of whether such amounts are then or thereafter payable.
(d) Tristar acknowledges and agrees that National Boston shall not by
reason of the termination or non-renewal of this Agreement be liable to Tristar
pursuant to any law, rule or regulation, domestic or foreign, for reimbursement,
compensation, or damages in the nature of loss of profit, or opportunity, or
otherwise, and Tristar hereby irrevocably waives any and all such rights and
releases and discharges National Boston from any and all such liabilities.
(f) Each party shall retain any and all rights and remedies available to it
at law or equity.
10. Confidentiality.
10.1 Generally. All customer lists, price lists, written and unwritten
marketing plans, techniques, methods and data, sales and transaction data, all
technology and know-how relating to the manufacture of the Products, and other
information provided by either party shall constitute confidential information
of such party ("Confidential Information"). Either party receiving Confidential
Information (a "Receiving Party") from the other party (a "Conveying Party")
shall hold all Confidential Information in the strictest confidence and shall
protect all Confidential Information of the Conveying Party with at least the
same degree of care that the Receiving Party exercises with respect to its own
propriety information. Without the prior written consent of the Conveying Party,
the Receiving Party shall not use, disclose, divulge or otherwise disseminate
any Confidential Information of the Conveying Party to any person or entity,
except for the Receiving Party's attorneys, accountants and such other
professionals as the Receiving Party may retain in order for it to perform and
enforce the provisions of this Agreement.
10.2 Exceptions. Notwithstanding Section 10.1, the Receiving Party shall
have no obligation with respect to any Confidential Information of the Conveying
Party which (i) is or becomes within the public domain through no act of the
Receiving Party in breach of this Agreement, (ii) was lawfully in the possession
of the Receiving Party without any restriction on use or disclosure prior to its
disclosure in connection with this Agreement and the negotiations leading to
this Agreement, (iii) is lawfully received from another source subsequent to the
date of this Agreement without any restriction on use or disclosure, or (iv) is
required to be disclosed by order of any court of competent jurisdiction or
other governmental authority (provided in such latter case, however, that the
Receiving Party shall timely inform the Conveying Party of all such legal or
governmental proceedings so that the Conveying Party may attempt by appropriate
legal means to limit such disclosure, and the Receiving Party shall further use
its best efforts to limit the disclosure and maintain confidentiality to the
maximum extent possible).
10.3 Communication Either party shall be entitled to communicate the
existence of this agreement.
11. Injunction. Each party acknowledges that a breach of the obligations not to
compete under Section 1.2, and/or of confidentiality under Section 10 will
result in irreparable and continuing damage to the non-breaching party for which
there will be no adequate remedy at law. Accordingly, in the event of any such
breach, the non-breaching party shall be entitled to temporary and/or permanent
injunctive relief and/or an order for specific performance, without bond, with
respect to such breach. Neither party shall oppose such relief on the grounds
that there is an adequate remedy at law, and such right shall be cumulative and
in addition to any other remedies at law or in equity (including monetary
damages) which the non-breaching party may have upon the breach of either of the
other party's obligation of exclusivity or confidentiality hereunder.
12. Independent Contractor. No party or any of its officers, employees, agents
or representatives is a partner, employee or agent of any other party for any
purpose whatsoever. Rather, each party is and shall at all times remain an
independent contractor. No party has, nor shall it hold itself out at as having,
any right, power or authority to create any contract or obligation, either
express or implied, on behalf of, in the name of, or binding upon the other
party, unless such other party shall consent thereto in writing. Each party
shall have the right to appoint and shall be solely responsible for its own
employees, agents and representatives, who shall be at such party's own risk,
expense and supervision and shall not have any claim against any other party for
compensation or reimbursement.
13. Force Majeure. In the event of war, fire, flood, labor troubles, strike,
riot, act of governmental authority, acts of God, or other similar contingencies
beyond the reasonable control of either of the parties interfering with the
performance of the obligations of such party, the obligations so affected shall
be deferred to the extent necessitated by such event or contingency without
liability, but this Agreement shall otherwise remain unaffected. Notice with
full details of any circumstances referenced herein shall be given by the
affected party to the other party, promptly after its occurrence. The affected
party shall use due diligence, where practicable, to minimize the effects of or
end any such event.
14. Further Actions. The parties agree to execute such additional documents and
to perform all such other and further acts as may be necessary or desirable to
carry out the purposes and intentions of this Agreement.
15. Supply of Product to Tristar. National Boston will be the exclusive supplier
of the Product to Tristar. To insure most favorable manufacturing rates,
National Boston will utilize the contract manufacturer of choice as indicated by
Tristar so long as the manufacturer is able to meet acceptable cost, quality
and delivery standards as mutually established by National Boston and Tristar.
16. Royalties Owing to Third Parties. National Boston shall be responsible to
pay all third parties that are entitled to royalties from sale of the Product
and or airing of the infomercial by reason of agreements entered into prior to
the date of execution of this Agreement. Such third parties include the producer
of the Existing Infomercial, Banyon Productions in Philadelphia.
17. Third Party Media Reports. Tristar shall instruct its third party media
purchasers to furnish National Boston on a timely basis with weekly media
reports on television direct response sales. The failure of the third party to
provide the reports shall not constitute a material breach of this Agreement.
18. Stock in National Boston. National Boston shall issue to Tristar its common
stock, a total of 500,000 shares uponn execution. The shares will be subject to
piggyback registration rights and any restrictions that may be imposed by
current SEC rules and regulations.
19. Miscellaneous.
19.1 Notices. All notices, requests, instructions, consents and other
communications to be given pursuant to this Agreement shall be in writing and
shall be deemed received (i) on the same day if delivered in person, by same-day
courier or by telegraph, telex or facsimile transmission, (ii) on the next day
if delivered by overnight mail or courier, or (iii) on the date indicated on the
return receipt, or if there is no such receipt, on the third calendar day
(excluding Sundays) after being sent by certified or registered mail, postage
prepaid, to the party for whom intended to the following addresses:
If to National Boston:
National Boston Medical, Inc.
00 Xxxxxxx Xxxxx, Xxxxx 0
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxx, President
Tel. (000) 000-0000
If to Tristar:
Tristar Inventions, Inc.
0 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxxxxxxxxx, President
Fax No.: (000) 000-0000
Each party may by written notice given to the other in accordance with this
Agreement change the address to which notices to such party are to be delivered.
19.2 Entire Agreement. This Agreement contains the entire understanding of' the
parties and supersedes all prior agreements and understandings, whether written
or oral, between them with respect to the subject matter hereof. Each party has
executed this Agreement without reliance upon any promise, representation or
warranty other than those expressly set forth herein.
19.3 Amendment. No amendment of this Agreement shall be effective unless
embodied in a written instrument executed by both of the parties.
19.4 Waiver of Breach. The failure of any party hereto at any time to
enforce any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provisions, or in any way to affect the validity of
this Agreement or any provisions hereof or the right of any party to thereafter
enforce each and every provision of this Agreement. No waiver of any breach of
any of the provisions of this Agreement shall be effective unless set forth in a
written instrument executed by the party against which enforcement of such
waiver is sought; and no waiver of any such breach shall be construed or deemed
to be a waiver of any other or subsequent breach.
19.5 Assignability. This Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective heirs, representatives,
successors and assigns. Neither of the parties hereto can assign their
respective rights under this Agreement without the prior written consent of the
other party, but any such assignment shall not relieve such parties from their
obligations contained herein.
19.6 Governing Law; Venue; Waiver of Jury Trial. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New Jersey without regard to conflict of law principles. All disputes relating
to or arising out of this Agreement shall be resolved in the state courts of New
Jersey located in the Xxxxxx County. The parties hereto waive any right to a
jury trial with respect to any matter arising out of or related to this
Agreement.
19.7 No Representation as to Extent of Sales. Notwithstanding the minimums
required to maintain the exclusivity of the license, Tristar has not made and
does not hereby make any representation or warranty with respect to the extent
or volume it may achieve in the sale or other exploitation of the Product
hereunder. Tristar shall make such effort to exploit successfully the Product
and the related rights herein granted as it may determine in accordance with its
business judgment; however, National Boston recognizes and acknowledges that
such matters are speculative and agrees that the judgment of Tristar and its
related companies or licensees in regard to any such matters shall be binding
and conclusive upon National Boston. National Boston agrees that it will not
make any claim nor shall any liability be imposed upon Tristar based upon any
claim that more or better business could have been done than was actually
obtained or done by Tristar or any of its related companies or licensees, or
that better prices or terms could have been obtained.
19.8 Severability. All of the provisions of this Agreement are intended to
be distinct and several. If any provision of this Agreement is or is declared to
be invalid or unenforceable in any jurisdiction, it shall be ineffective in such
jurisdiction only to the extent of such invalidity or unenforceability. Such
invalidity or unenforceability shall not affect either the balance of such
provision, to the extent it is not invalid or unenforceable or the remaining
provisions hereof, or render invalid or unenforceable such provision in any
other jurisdiction.
19.9 Headings. The headings of sections and subsections have been included
for convenience only and shall not be considered in interpreting this Agreement.
19.10 Counterparts; Facsimiles. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same Agreement. This Agreement may
be executed and delivered by electronic facsimile transmission with the same
force and effect as if it were executed and delivered by the parties
simultaneously in the presence of one another, and signatures on a facsimile
copy hereof shall be deemed authorized original signatures.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the date last written below.
TRISTAR PRODUCTS, INC.
By: /s/Xxxxx Xxxxxxxxxxx
-------------------------------
Xxxxx Xxxxxxxxxxx Date
President
NATIONAL BOSTON MEDICAL, INC.
By: /s/Xxxxxx X Xxxxx
-------------------------------
Xxxxxx Xxxxx Date
President
EXHIBIT A
PRODUCTS
As defined in this Agreement, "Products" shall mean the following:
Complete Backstroke Back Massager(TM) with seven massaging elements.
Neck roller assembly.
Instructional booklet and Video
Packaging for the above shall be a craft box for "Infomercial Sales" and a
display box for "Retail Sales".
Improvements, modifications and line extensions of the above are included
(pricing of modified "Product" may be effected as mutually agreed by both
parties)
EXHIBIT B
TERMS AND CONDITIONS OF SALE
National Boston warrants that its' products will be shipped in salable
condition, free from defects and conforming to its' manufacturing standards then
in effect for product specification and quality. The sole remedy of Tristar for
any product shipped by National Boston which does not meet the conditions stated
above at the time of shipment by National Boston, including customer warranty
issues, shall be return of defective goods to National Boston for refund of
amounts paid by Tristar for the defective product including freight and customs
clearance charges.
THE EXPRESS WARRANTY SET FORTH ABOVE IS THE ONLY WARRANTY MADE BY NATIONAL
BOSTON WITH RESPECT TO ITS' PRODUCTS. NATIONAL BOSTON MAKES NO OTHER WARRANTIES,
EXPRESS OR IMPLIED OR ARISING BY CUSTOM OR TRADE USAGE, AND SPECIFICALLY, MAKES
NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. NATIONAL
BOSTON'S EXPRESS WARRANTY SHALL NOT BE ENLARGED, DIMINISHED OR AFFECTED BY, AND
NO OBLIGATION OR LIABILITY SHALL ARISE OUT OF NATIONAL BOSTON'S RENDERING OF
TECHNICAL OR OTHER ADVICE OR SERVICES IN CONNECTION WITH THE PRODUCTS OR
OTHERWISE HEREUNDER.
The liability of either party, whether in contract, tort (including
negligence, fraud and willful misconduct), or otherwise, arising out of or in
connection with the products or this Agreement shall not exceed the amounts paid
to such party by the other hereunder. IN NO EVENT SHALL NATIONAL BOSTON BE
LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR TORT DAMAGES, INCLUDING,
WITHOUT LIMITATION, ANY DAMAGES RESULTING FROM LOSS OF USE, LOSS OF PROFIT OR
LOSS OF BUSINESS ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE OR LACK OF
PERFORMANCE OF THE PRODUCTS OR NATIONAL BOSTON'S PERFORMANCE OF SERVICES OR OF
ANY OTHER OBLIGATIONS RELATING TO THIS AGREEMENT OR THE PRODUCTS,
WHETHER OR NOT NATIONAL BOSTON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
Tristar understands and agrees that it shall not recover special or
consequential damages from National Boston. However, National Boston understands
and agrees that it shall stand behind its Product(s) vis-a-vis the ultimate
consumer to whom each Product is sold. Therefore, notwithstanding anything to
the contrary set forth within this Agreement (including, without limitation
Paragraph 2 and/or Exhibit B), National Boston shall indemnify and hold Tristar
harmless (consistent with the scope of indemnity set forth in Paragraph 7) from
any and all claims of ultimate consumers of the Product(s) except where such
claims result from unauthorized changes by Tristar to Product claims.
EXHIBIT C
PRICES
Backstroke Back Massager(TM) Pricing
June 30, 1999
(a) The pricing for the Backstroke Back Massager(TM) as defined in Exhibit "A"
is $20.00 per unit of Product sold by any means and media other than television
or print direct response.
(b) The pricing for the Backstroke Back Massager(TM) as defined in Exhibit "A"
for sales and exploitation of the Product made in direct response to the airing
of a television direct response commercial or infomercial, including the
Existing Infomercial, or any new Infomercial/Commercial whether produced by
National Boston or Tristar, or direct response print media is $16.50 per unit.
Sales on home shopping networks such as QVC and HSN are considered sales made in
direct response to a television commercial or infomercial for purposes of this
Agreement.
All prices are quoted F.O.B. Longbeach, CA and are to be paid in US Dollars.
If NATIONAL BOSTON MEDICAL INC. on its own or through Tristar, improves its
production process so as to, and/or if quantity production is such so as to,
materially lower NATIONAL BOSTON MEDICAL Inc's. cost of production, 50% of the
cost savings on a per unit basis will be passed on to Tristar.
Pricing for foreign countries will be determined as necessary (excluding Canada
which assumes US pricing).
EXHIBIT D
Product Changes
In the event that National Boston or Tristar plans to change the current
version of the Product as described in Exhibit A, including packaging, notice of
such change must be given in writing, in advance, detailing such change to the
other party. Upon receipt of such notice, the notified party will respond to the
other party within 30 days of such receipt, regarding the perceived assessment
of the planned change for the Territory, and make a recommendation to the
proposing party regarding such change. The foregoing not withstanding, no
changes to the Product will be undertaken without the agreement of both parties.
Tristar Inventions shall have the ability to select and at its option source
upsells.
Exhibit E
Product Sample
This Agreement is subject to Tristar's approval of the Taiwan sample, which
needs to be provided by National Boston.
Sample is required to be of equal quality, design, function and looks as USA
sample provided by National Boston.
