Exhibit 10.9
SAFARI ASSOCIATES, INC.
00 Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000
Voice 000-000-0000 Fax 000-000-0000
January 9, 2003
U.S. Manufacturing And Assembling Company, Inc.
0 X. Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx Altro, President
Dear Mr. Altro:
This letter is intended to set forth our agreement regarding the
manufacture of the Flame Tame.
Subject to the conditions and terms set forth in this letter, Safari
Associates, Inc., grants you the exclusive right to manufacture the
Flame Tame for us. The term of this agreement to manufacture is for
a period of five years commencing on February 1, 2003. As a
condition to this agreement you are to commence production on or
before March 1, 2003. Provided we are satisfied with your
performance of this agreement and provided further you are not in
default under any of the terms hereof, if we agree to the cost of
the units to us, the term of this agreement shall be extended year
to year after the conclusion of the original term.
You agree that commencing on or before March 1, 2003, you will have
established a manufacturing facility that will have the capacity to
manufacture at least 10,000 units a month. You further agree that
should sales of the Flame Tame require that your manufacturing
capacity be increased so that deliveries can be made within thirty
(30) days of receiving an order, you will increase your
manufacturing capacity within thirty days of receipt of a notice
from us that such increase in manufacturing capacity is necessary in
order to meet orders. You further agree to keep a reasonable
inventory of Flame Tame units in stock so as to meet orders within
the aforesaid thirty-day period. You shall provide us with a monthly
statement showing the inventory that you have on hand at the end of
the prior month.
You are fabricating the production prototype. This agreement shall
not become operative until and unless we approve the production
prototype prior to March 1, 2003. Such approval must be in writing
and signed by an officer of this Company.
The price per unit is to be mutually agreed upon in writing between
our respective companies. Said cost shall not exceed a unit price
that we can purchase said units from another manufacturer upon a
competitive bid.
It is agreed that this contract cannot be assigned by you or
subcontracted to another company.
Manufacturing quality control established by you to prevent
manufacturing defects must be approved by us.
You agree to manufacture an initial inventory of at least 1,000
units prior to the end of March, 2003. Furthermore, we will not seek
delivery of units until sold and it is agreed that you will ship
units as requested by us. Risk of loss shall remain with you until
units are actually delivered to our customers. We will do all
invoicing for units shipped. You will supply us with documentation
on a daily basis of all shipments made by you to our customers. We
will have thirty (30) days after shipments are received by our
customers to pay for any units shipped by you pursuant to our
instructions.
Both of our respective companies will carry product liability
insurance in the minimum amount of one million dollars per claim
based upon death or injury allegedly caused by a defect in the
product. Should any claim for damages be made or any action
commenced for damages that falls within product liability against
either of our companies, neither company will settle such a claim or
action without the written approval of the other company. Each
company shall be responsible for its own insurance premiums. A copy
of insurance coverage must be supplied by each company to the other.
No action instituted against your company based upon an allegation
that the Flame Tame infringes upon some third party patent can be
settled by you without our prior approval given to you in writing.
It is further understood and agreed that you have no interest in our
patent Xx. 0, 000, 000. Xxxxxxxxxxx, should you or any of your
employees or consultants improve upon the Flame Tame, any right to
an improvement patent shall be assigned to us.
This agreement is not intended to create any agency between our
companies and your relationship to us is limited to that of
independent contractor.
Should your company become insolvent or file a Petition in
Bankruptcy or an assignment for the benefit of creditors, then, in
that event, at our option, this agreement shall terminate.
In the event any dispute arises between us regarding this agreement
or performance hereunder, the dispute shall be submitted for binding
arbitration to the American Arbitration Association in the City of
New York. Each of us will pay our own share of the arbitration fees
of the American Arbitration Association. Any arbitration award shall
be binding and may be filed in any court of general jurisdiction in
the State of New York and a judgment may be entered upon said award
and enforced in said court.
This agreement shall be interpreted in accordance with the law of
the State of New York. It sets forth the entire understanding of the
parties and supersedes any prior agreement whether oral or in
writing. Any modification of this agreement must be in writing and
duly signed by an officer of the company intended to be bound.
The parties agree to execute any further documents necessary to
effectuate the intent of the parties as determined from this
agreement.
All notices to be given under this agreement shall be in writing and
mailed by certified mail, return receipt requested, to the address
of each party as indicated in this agreement. Our address is set
forth on our letterhead. Any change of address shall be in writing
and mailed to the other party as a Notice as set forth in this
agreement.
If this letter correctly sets forth our agreement, execute the
duplicate original and return same to our office.
Sincerely,
Xxxxxx Xxxxxx
President
Agreed and consented to the day and year
First above written.
U.S. Manufacturing And Assembling Company, Inc.
By: Xxxxxxx Altro, President
