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MARKETING AND DISTRIBUTION AGREEMENT
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This Agreement is made as of October 24, 2005, between CirTran
Corporation, a company incorporated in the State of Nevada (referred to as
"Licensor"), and Xxxxxxxxxx Business Development, a company incorporated in
Florida ("HBD").
1. Marketing and Distribution Rights.
Licensor grants to HBD the exclusive right to advertise, promote, market,
sell and otherwise distribute the products, including all identified
component parts, described in the Schedule attached hereto and
incorporated herein (the "Products" and the "Schedule" respectively in
Japan, North America and South America (the "Territory"), by means of
direct response television programming however distributed and by all
other means, media and channels of distribution; including, but not
limited to retail, radio, catalog, Internet, Live Home Shopping, credit
card stuffers, now existing or hereafter developed.
Licensor grants HBD the following rights:
1.1 Use of Materials. The right to use all trademarks and/or trade
names, artwork or promotional materials which Licensor may own,
control or have the right to use with respect to the Products,
including the trademarks and/or trade names listed in the
Schedule.
1.2 Production and Use of the Infomercial. The right to produce
television advertisements for the Products of approximately one
half hour in length and any shorter versions as HBD deems
necessary by any means or media ("the Infomercial") as described
in Section 2.
1.3 Names, Likenesses and Endorsements. In connection with the
exercise of the Marketing and Distribution Rights, the right to
use Licensor's trade name and the names, likenesses (including,
without limitation, photographs, illustrations, films and
videotapes), endorsements and testimonials of all endorsers and
other persons that Licensor may own, control or have the right to
use with respect to the Products. All fees or royalties associated
with any footage provided by Licensor for the Infomercial is the
responsibility of Licensor. Any fees or royalties for the
Infomercial are the responsibility of HBD.
1.4 Modifications. For the purpose of distribution in languages other
than English in the Territory, HBD has the right to duplicate and
modify the Infomercial and Licensor's Artwork, including the right
to make insertions and deletions, dub foreign languages or
voiceovers, or to use time compression or expansion techniques.
HBD shall have the right to translate, modify and otherwise revise
and edit product packaging and printed, video or audio materials
included with the Products and to include such modified versions
with the Products.
1.5 Product Packaging. The right to develop such groupings, ensembles,
configurations and packaging of the Products and other ancillary
goods as HBD may determine with Licensor's approval, not to be
unreasonably withheld.
1.6 Subdistributors. HBD shall have the right to utilize outside
parties with regard to distribution into other channels of
distribution within the Territory, including but not limited to,
retail, catalog, credit card syndication, print, and Internet.
2. The Infomercial.
2.1 Production of the Infomercial. HBD shall produce the initial
Infomercial of approximately one half hour in length. HBD will
provide scripting, set preparation, audio and video technicians,
studio equipment, audio and video editing, casting, services of a
director, light and grips, cameras, production and post-production
and any other services as may be necessary to create a broadcast
quality infomercial. HBD will have full editorial control over the
content, format and presentation of the Infomercial provided that
HBD shall not make any inaccurate or misleading statements
regarding the Products or their use. HBD will complete Infomercial
for broadcast within 90 days of the date hereof.
2.2 Licensor's Share of Production Costs. Licensor will pay one-half
of the costs of producing the initial Infomercial, up to a total
of $37,500. Promptly after full execution of this Agreement,
Licensor will deliver a check for $37,500 to HBD for such costs.
Not later than the release of the Infomercial for Test Marketing,
HBD will deliver to Licensor a detailed accounting of the full
production costs, and if such costs are less than $75,000 HBD will
refund to Licensor the difference between one-half of such costs
and $37,500.
2.3 Rights to Infomercial Footage. HBD grants Licensor the right to
use the raw footage, including audio and video, for the initial
Infomercial to produce infomercials or other advertisements for
the Products for use solely outside of the Territory. Such rights
shall include the rights to edit, modify, translate, duplicate and
broadcast the raw footage, including the right to make insertions
and deletions, dub foreign languages or voiceovers, or to use time
compression or expansion techniques. Licensor is entitled to
sub-license its rights to the raw footage to the person(s) who
have distribution rights to the Products outside of the Territory,
provided that the Licensor shall be liable to HBD for breaches of
this Agreement by the sub-licensor(s). Upon completion of the
Infomercial, HBD will deliver the raw footage to Licensor on
broadcast quality videotape, DVD or such other format as the
parties may mutually agree all at the Licensor's expense. The
rights granted by this Section 2.3 shall survive termination of
this Agreement. Except for the limited rights granted herein to
Licensor, all Infomercial footage, including but not limited to,
both audio and video shall at all times remain the property of
HBD.
2.4 Royalties. In further consideration for use of the Infomercial
footage, Licensor will pay to HBD a royalty of $2.00 per unit of
Product on all Products sold outside of the Territory by Licensor
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or sublicensees of the Infomercial footage, net of returns and
warranty replacements. For purposes of this Section 2, a unit of
Product consists of the basic Product itself including any
accessories included in the price of the basic Product. The
Royalty to HBD for any accessories or options which are advertised
in the Infomercial and which may be sold separately, shall be 10%
of the wholesale price for such items received by Licensor. For
purposes of this Section 2, sales will be calculated on a cash
basis, i.e. royalties are due within 14 days of the receipt of
payment by Licensor for the Product. At all times the payment of
the Royalties described in this Section shall remain the
responsibility of the Licensor and shall apply to all sales of
Product by Licensor or sub licensees of the Infomercial,
regardless of whether within or outside of the Territory. The
Royalties required by this Section shall survive termination of
this Agreement except as provided in Section 2.6.
2.5 Option to Acquire Infomercial Rights. In the event that this
Agreement is terminated by HBD pursuant to Section 14.2 or by
Licensor pursuant to Section 14.1, then Licensor shall have the
option to acquire all rights to the Infomercial, including the
right to use the Infomercial and the Infomercial footage within
the Territory for the total exercise price of $37,500. Upon
exercise of the option, Licensor shall assume HBD's obligation to
pay royalties thereafter accruing to certain persons associated
with the Infomercial (the "Talent Royalties") to be limited to (i)
a demonstrator royalty not to exceed one percent (1%), host
royalty not to exceed three quarters of one percent (0.75%) with a
cap and producer royalty not to exceed one percent (1%) of the
gross revenues from the sale of the Product. Licensor may exercise
such option by delivering notice of exercise to HBD within sixty
days after the effective date of termination. As soon as
practicable after notice of exercise, the parties will hold a
closing at which the Licensor will deliver payment and an
agreement assuming the Talent Royalties and HBD will deliver
documents of transfer (in form and substance reasonably
satisfactory to Licensor) and master copies of the Infomercial.
HBD will remain responsible for any third party fees or royalties
for use of the Infomercial other than the Talent Royalties.
2.6 Surrender of License, Termination of Royalties. At any time
following termination of this Agreement, Licensor may surrender
its rights to the Infomercial footage by delivering written notice
to HBD. Following such surrender, Licensor shall have no further
right to use the Infomercial or Infomercial footage (other than
any footage or artwork originally supplied by Licensor) and the
royalties described in Section 2.4 shall cease.
3. Non-Competition. Licensor shall not, either alone or in participation
with another person or entity, market, distribute or license the Products
or any products so similar in design, composition, content and function
to the Products as to compete directly with the Products for sale
("Competing Products") in the Territory, or use any of the trademarks,
the Infomercial or Licensor's artwork in the Territory, by any means or
medium, without HBD's prior written consent.
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4. Exclusivity. During the term of this Agreement, HBD agrees that it will
purchase from Licensor 100% of the requirements of HBD for the Product
and any other product substantially similar to the Product ("Similar
Product"). Accordingly, HBD will not purchase, manufacture, or cause any
third party to manufacture, any Product during the term of this Agreement
or at any time thereafter, except from Licensor. HBD will not purchase,
manufacture, or cause any third party to manufacture, any Similar Product
during the term of this agreement, except from Licensor.
5. Test Marketing. Upon obtaining all required regulatory approvals and the
receipt of all applicable items requested by HBD from Licensor, HBD shall
conduct test marketing of the Products in all or any portion of the
Territory for a period of up to 60 days by such means as HBD may
determine ("Test Marketing"). The Test Marketing will in any event be
concluded by the earlier of (i) one hundred and twenty (120) days after
the first airing of the Infomercial or (ii) two hundred ten (210) days
after the date of this Agreement. Licensor agrees to supply HBD with
reasonable quantities of Product for the test marketing on the terms set
forth herein. Within ten (10) days after conclusion of the Test
Marketing, HBD will determine in its sole judgment, and notify Licensor,
whether the Test Marketing was successful, in which event HBD shall
commence wide-scale airings ("Rollout"), defined as the first week that
HBD's media expenditure for the Infomercial exceeds $150,000, or if the
Test Marketing was unsuccessful. If HBD determines that the Test
Marketing was unsuccessful, then within 30 days following such
determination, HBD shall either (a) terminate this Agreement upon written
notice to Licensor, or (b) negotiate in good faith with Licensor
appropriate Corrective Action to be taken. "Corrective Action" shall mean
such action as the parties may mutually agree upon to alter the marketing
or pricing of the Products. If the parties are unable to agree upon
appropriate Corrective Action within such 60-day period, or if HBD, in
its sole judgement, determines that the results of any Corrective Action
taken do not warrant further marketing and sales efforts, then either
party may terminate the rights granted to HBD under this Agreement upon
written notice to the other.
6. Minimum Order Requirements. If the Test Marketing is successful, HBD
estimates that it will purchase at least $30,000,000 of Product over the
term of the Agreement. In the event that following completion of
successful Test Marketing and Rollout of the Infomercial, Licensor may,
upon 30 days' prior written notice to HBD, terminate this Agreement if
HBD fails to purchase from Licensor the following minimum quantities of
Product, including options ("Minimum Dollar Volume") during the
respective one-year periods commencing upon Rollout indicated below. The
Minimum Dollar Volume for the first one-year period is $1,500,000. The
Minimum Dollar Volume for the second one-year period is $5,000,000. The
Minimum Dollar Volume for the third and each subsequent one-year period
is $10,000,000. HBD makes no representations that it will order the
estimated total amount of Product or the Minimum Dollar Volume in any
year, and Licensor's sole recourse if HBD purchases lesser quantities is
termination of the Agreement in accordance with this Section 6.
7. Supply of Products. Unless otherwise agreed by parties, all order for the
Products purchased from Licensor will be subject to the following terms
and conditions:
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7.1 Purchase Orders. All orders will be placed pursuant to written
purchase orders issued by HBD. Licensor will sell, or its
designated vendor shall sell, to HBD such quantities of the
products as HBD shall order at prices not in excess of those
specified in the Schedule. Licensor shall hold the Schedule price
firm for firm confirmed purchase orders placed within 12 months
commencing from the Roll Out. Following the twelve month
moratorium on price increases, Licensor may from time to time
adjust the pricing by written notice to HBD based on changes in
the U.S. Dollar costs of Licensor's materials, labor and
contracted manufacturing. Any increase in pricing shall be
effective forty-five (45) days after the date of such written
notice.
7.2 Description of Goods. The goods shipped by Licensor will conform
in every manner to the samples, specifications and other
descriptions provided to HBD, will be new and not used, and will
be free from all defects in materials and workmanship. Product
will be inspected by "PRO QC" or other inspectors mutually
acceptable to the parties and upon approval by the inspector will
be deemed accepted by HBD. All risk of damage and loss to the
Product which is the subject of a shipment transfers to HBD upon
such acceptance, unless such damage is caused by Licensor's gross
negligence or willful misconduct in connection with Licensor's
manufacturing, packaging, shipping or warehousing of Product shall
be borne by HBD.
7.3 Defective Products. In the event that HBD determines that any
Product delivered to it hereunder does not conform to Licensor's
warranty, it shall request an RMA number from Licensor and upon
receipt of such number shall return to Licensor a reasonable
number of randomly selected samples thereof for review and
analysis by Licensor. If Licensor confirms that the Product is
defective, Licensor shall, subject to its rights described below,
reimburse HBD for its freight costs (ground shipping) to return
the Product and either issue HBD a credit memo for replacement
Product or, at Licensor's option, replace such defective Product
as promptly as possible. In either such event, HBD shall, at
Licensor's option, either destroy all such defective Product and
so certify in writing to Licensor or return all such defective
Product to Licensor at Licensor's expense. If after analyzing any
Products alleged by HBD to be nonconforming, Licensor disagrees
with HBD's determination with respect thereto, HBD shall submit
such samples to an independent Control Lab approved by both
Parties, which shall make its own determination as to whether or
not such Product conforms with the Specifications, which
determination shall be final and binding upon the parties. If the
Control Lab agrees with HBD's determination that the Product is
defective, then Licensor shall pay the cost of the Control Lab and
refund, credit or replace at HBD's option.
7.4 Shipment of Goods. For the initial test, Licensor will deliver or
cause to be delivered the goods described in each purchase order
to HBD or at HBD's direction to HBD's fulfillment centers or any
other location, at HBD's discretion, on or before the delivery
date set forth in the purchase order based on lead times given.
Licensor will contact or cause the shipper of goods to contact
HBD's traffic department prior to each shipment of goods. Licensor
will ship all goods in accordance with HBD's purchase order or, if
differently instructed by HBD's traffic department, in accordance
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with such instructions. Licensor will indicate HBD's purchase
order number on all invoices, packages and other communications
relating to purchase orders. Licensor will notify HBD immediately
if Licensor is unable to ship or cause shipment of all or any
portion of the goods covered by a purchase order by the specified
shipping date. If Licensor is unable to ship or cause shipment of
all or any portion of the goods covered by a purchase order,
Licensor shall provide HBD with a detailed packing list indicating
the exact times and quantities that are available for shipment.
7.5 Prices. The price for the Products (including component parts)
purchased by HBD from Licensor will be as set forth on Schedule 1
attached hereto. The Schedule indicates, for each component part,
the price that HBD shall pay for the Product. The first 2,500
units used for test marketing shall be priced based on a consumer
price of less than $100, regardless of the consumer price actually
charged by HBD. Section 7.7 shall govern payment covering the cost
of goods.
7.6 Freight Terms. All Products ordered by HBD will be shipped by
Licensor FOB Licensor's or its subcontractor's manufacturing plant
in Asia ("F.O.B. Factory"). All customs, tariffs, freight,
insurance and other shipping expenses from the F.O.B. point will
be paid by HBD.
7.7 Payment Terms. Ten percent (10%) of the cost of the Products
(exclusive of shipping) is due and payable by wire transfer of
immediately available U.S. funds to an account specified by
Licensor on the date HBD places the purchase order. To the extent
that the cost of Products as set forth on Schedule 1 is determined
by reference to their retail price, the cost shall be determined
in accordance with Section 7.8. Licensor will invoice HBD for the
remaining balance when the Products have been shipped from the
Asian factory. The invoice for the remaining balance will be due
and payable upon arrival of the shipment in the U.S. port (or loss
in transit if applicable) and prior to release of the original
xxxx of lading. Invoices not paid when due shall bear interest at
1.5% per month, or the maximum legal interest rate, whichever is
lower, until paid. Licensor will consider in good faith proposals
from HBD for alternative financing which provide Licensor with
equal or greater security for payment, but Licensor shall have
sole discretion to accept or reject any such proposal.
7.8 Monthly Reports. Upon successful completion of the Rollout, HBD
will notify Licensor of the consumer price it initially intends to
ask for the Product, and that consumer price will be used to
calculate the Price of the Product in accordance with Schedule 1.
If the consumer price is initially $100 or less, then HBD will
notify Licensor prior to raising the consumer price above $100.
The Price of all Product delivered after the date of such notice
will be calculated based on the higher consumer price. HBD shall
provide on or before the tenth of each calendar month a report
(the "Monthly Report") to Licensor summarizing the number of
Products sold and the sale price of the Products. Licensor and its
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representatives may, on reasonable notice, examine HBD's books
records used to produce the Monthly Report during normal business
hours at the offices of HBD on five business days' notice. Such
examination shall be at Licensor's expense unless the examination
reveals that the Product is being sold above the $100 breakpoint
without notice to Licensor, in which case HBD shall bear the
reasonable expense thereof.
7.9 Third Party Suppliers. If HBD receives a firm quote from a
reputable third party to manufacture the Product or a component
thereof, it shall so notify Licensor. Following receipt of the
notice, Licensor will investigate the reputation, manufacturing
facilities and prior performance of the third party, and HBD will
cause the third party to grant Licensor full access to its
facilities. If Licensor reasonably concludes that the third party
is reputable and capable of producing the Product or component
with the same or better quality than Licensor, Licensor hereby
agrees to use its best efforts to match or cause its suppliers to
match such reputable third party quote and to sell such Products
or components of Product to HBD within one hundred and twenty
percent (120%) of the Licensor's cost. HBD acknowledges that
Licensor's cost includes a royalty to Euro-GEM GmbH, the
documented amount of which will be disclosed to HBD in connection
with any price change pursuant to this paragraph. If the third
party manufacturer does not agree to terms of sale (including
timing of payments, extension of credit and return policy) at
least as favorable to Licensor as Licensor's current supplier,
Licensor may condition any change in the price of the Product
pursuant to this Section on a change in the payment terms
specified in Section 7.7 to require up to 100% of the cost of the
Product to be payable on placement of the purchase order.
8. Regulatory Approvals. Licensor shall cooperate with HBD in securing all
regulatory and other approvals.
9. Intellectual Property Rights
9.1 Licensor's Intellectual Property. Subject to the rights granted to
HBD under this Agreement, HBD shall not acquire any right, title
or interest in or to Licensor's design and packaging of the
Products, Licensor trademarks, or Licensor's artwork (the
"Licensed Intellectual Property").
9.2 Enforcement of Rights. Licensor shall have the right, but shall
not be required, at its expense to enforce its rights in the
Licensed Intellectual Property against infringement thereof. In
the event that Licensor declines to do so, HBD shall have the
right to enforce any such rights in the Territory in Licensor's
name at HBD's sole cost and expense. HBD shall fully inform
Licensor of the status of any such enforcement efforts.
9.3 HBD's Intellectual Property. Licensor acknowledges and agrees that
it shall acquire no right, title or interest in or to any
trademarks, trade names or other intellectual property owned by
HBD.
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10. Customer List. HBD's customer list shall be HBD's exclusive property
during the term of and following any termination of this Agreement
11. Licenser's Representations, Warranties and Covenants.
11.1 The Products. Licensor represents, warrants and covenants to HBD
that all information provided to HBD by Licensor relating to the
Products is and will be true and correct, including without
limitation all written information regarding the effectiveness,
quality, characteristics or fitness of the Products. The Product
will be safe and appropriate for the purpose for which goods of
that kind are normally used. In addition, Licensor shall provide
copies of all copyright registrations, copyright applications,
patents, trademark applications, licenses and other agreements and
instruments relating to the Products and Licensor's Intellectual
Property (and all amendments supplements and modifications
thereof) which are now in existence or which Licensor shall
obtain, file, or enter into during the term of the Agreement to
HBD within ten days after the execution of this Agreement or
subsequently within ten days after any of the listed documents
herein come into existence or into Licensor's possession.
11.2 The Infomercial. If Licensor has provided HBD with footage or
other material for insertion in the Infomercial ("Licensor
Supplied Footage"), Licensor represents, warrants and covenants to
HBD that the claims made about the product in the Licensor
Supplied Footage are truthful and accurate and comply with all
applicable laws and regulations within the United States relating
to the advertising and sale of the Products, and all claims made
about the Products in the Licensor Supplied Footage, Licensor's
artwork and any literature or packaging comprising part of the
Products have been documented and substantiated in compliance with
all applicable laws. Licensor shall provide to HBD, at Licensor's
expense, all such documentation and substantiations of claims made
about the Products as HBD reasonably requests. Further, Licensor
has paid or shall pay all fees, royalties and other compensation
payable to any person or entity in connection with (i) the
development, manufacture, sale or use of the Products or (ii) the
use of the trademarks and Licensor's artwork.
11.3 Proprietary Rights. Licensor represents, warrants and covenants
that to the best of its knowledge it has all necessary power and
authority to grant to HBD the rights in this Agreement, and
neither the granting of the rights nor the exercise of them by HBD
will infringe or violate the intellectual property or other
proprietary or intangible rights of any other person or entity.
Licensor has not been and is not, as of the date of this
Agreement, a party to any litigation enforcing or defending
Licensor's rights in, to or with respect to the Products, licensed
intellectual property or any other intangible property rights
relating to the Products ("Licensor's Intellectual Property"), and
Licensor is not aware of any such claims made or threatened
involving the validity of Licensor's rights in, to or with respect
to the Products or Licensor's Intellectual Property.
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12. Indemnification.
12.1 By Licensor. Licensor shall indemnify and hold harmless HBD and
its subsidiaries, affiliates, sub-distributors and sub-licensees
and their respective officers, directors, shareholders, employees,
licensees, agents, successors and assigns from and against any and
all liabilities and expenses whatsoever, including without
limitation, claims, damages, judgments, awards, settlements,
investigations, costs and reasonable legal fees ("Claims"), which
any of them may incur or become obligated to pay as a result of
(i) the use of any of Licensor's trademarks or Licensor's artwork,
or (ii) the breach by Licensor of its representations, warranties,
covenants or obligations under this Agreement.
12.2 By HBD. HBD shall defend, indemnify and hold harmless Licensor and
its officers, directors, shareholders, employees, licenses,
agents, successors and assigns from and against any and all Claims
which any of them may incur or become obligated to pay arising out
of or resulting from the breach by HBD of any of its
representations, warranties, covenants or obligations under this
Agreement.
12.3 Procedure. Promptly after learning of the occurrence of any event
which may give rise to its rights under the provisions of this
Section 12, 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
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.
13. Term. Unless sooner terminated in accordance with the provisions of
Section 6 or 14, this Agreement shall remain in full force and effect for
an "Initial Term," commencing as of the date hereof and expiring three
years after the commencement of the Rollout. The Agreement shall
thereafter remain in full force for as long as HBD meets the minimums set
forth in Section 6 of the Agreement unless terminated pursuant to Section
14.
14. Termination.
14.1 Upon Breach. Either party may terminate this Agreement upon 30
days notice to the other party upon the breach by the other party
of any of its material representations, warranties, covenants or
obligations under 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 have
been fully cured to the reasonable satisfaction of the
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non-breaching party within such 30-day notice period, then such
notice of termination shall be deemed rescinded. Such right of
termination shall be in addition to such other rights and remedies
as the terminating party may have under applicable law.
14.2 By HBD. HBD shall have the right to terminate this Agreement upon
written notice to Licensor if Test Marketing and any Corrective
Action are unsuccessful. HBD may have the right to terminate this
Agreement upon written notice to Licensor upon the occurrence of
any event or circumstance, which, in HBD's reasonable judgment,
materially adversely affects HBD's ability to market and
distribute the Products for sale. HBD may terminate this Agreement
concurrently upon written notice to Licensor upon the occurrence
or existence of any administrative or court order or other
regulatory action, pattern of litigation activity, or adverse
publicity relating to Licensor, the Products or the Infomercial,
adversely affecting HBD's ability to market and distribute the
Products.
14.3 By Licensor. Following the Initial Term, Licensor may have the
right to terminate this Agreement upon 90 days written notice to
HBD upon the occurrence of any event or circumstance, which, in
Licensor's reasonable judgment, materially adversely affects
Licensor's ability to economically manufacture Products.
15. Rights and Duties Upon Termination. For a period of one year following
the expiration or termination of this Agreement under Sections 13 or 14
(other than a termination by Licensor due to HBD's material breach), HBD
shall retain the rights to sell its inventory of Products on hand at
termination by doing the following: (i) accept and process orders for the
Products that were placed prior to the effective date of termination,
(ii) accept and process those orders from customers with whom HBD was
negotiating or whom HBD had solicited prior to the effective date of
termination, (iii) solicit and fill reorders from prior customers, (iv)
advertise and promote the Products by means of any media purchased or
committed to prior to the effective date of termination and accept and
process all orders for the Products which it receives pursuant to such
advertisement and promotion, and (v) use Licensor's Intellectual Property
in connection with the exercise of the foregoing rights. HBD shall notify
Licensor of any inventory of the Products remaining in HBD's hands after
the exercise of the foregoing rights, and if Licensor does not elect to
promptly repurchase such inventory from HBD at HBD's cost, then HBD shall
have the right to dispose of such inventory in such manner as HBD may
determine. Termination of this Agreement will not affect rights accrued
prior to termination, including obligations to pay any amounts owed to
the other party and responsibility for returns. The provisions of
Sections 2.3, 2.4, 12 and 16 shall survive termination.
16. Confidentiality. All customer lists, price lists, written and unwritten
marketing plans, techniques, methods and data, sales and transaction
data, and other information designated or deemed either by HBD or
Licensor as being confidential or a trade secret, shall constitute
confidential information of HBD or Licensor, respectively ("Confidential
Information"). HBD and Licensor shall hold all Confidential Information
in the strictest confidence and shall protect all Confidential
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Information with the same degree of care that HBD and Licensor exercises
with respect to its own proprietary information. Without the prior
written consent of the other, HBD or Licensor shall not use, disclose,
divulge or otherwise disseminate any Confidential Information of the
other party to any person or entity, except for each party's attorneys
and such other professionals as a party may retain in order for it to
enforce the provisions of this Agreement. Notwithstanding the foregoing
HBD and Licensor shall have no obligation with respect to any
Confidential Information which (i) is or becomes within the public domain
through no act of HBD or Licensor in breach of this Agreement, (ii) was
lawfully in the possession of HBD or Licensor without any restriction on
use or disclosure prior to its disclosure hereunder, (iii) is lawfully
received from another source subsequent to the date of this Agreement
without any restriction on use or disclosure, (iv) is required to be
disclosed pursuant to rule or regulations promulgated under federal or
state securities laws and applicable to the proposed discloser, or (v) is
required to be disclosed by order of any court of competent jurisdiction
or other government authority (provided in such latter case, however,
that each party shall timely inform the other of all such legal or
governmental proceedings so that the party may attempt by appropriate
legal means to limit such disclosure, and HBD and Licensor shall further
use their best efforts to limit the disclosure and maintain
confidentiality to the maximum extent possible).
17. Product Warranty. EXCEPT AS EXPRESSLY PROVIDED HEREIN, LICENSOR DISCLAIMS
ALL WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING THE WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND SATISFACTORY
QUALITY.
18. Product Liability. Licensor agrees that, if notified promptly in writing
and given sole control of the defense and all related settlement
negotiations, it will defend HBD from any claim or action and will hold
HBD harmless from any third party loss, damage, or injury, including
death, which arises from any alleged design or workmanship defect of any
Products. Licensor will list HBD as an additional insured on Licensor's
product liability and blanket insurance policies. HBD's indemnification
obligation contained herein shall remain in full force and effect until
the date one year after the shipment of each applicable product.
19. Product Liability Insurance. For the life of the Products sold by
Licensor to HBD, or any third party on Licensor's behalf, Licensor will
maintain and keep in force product liability insurance with an insurer
approved by HBD in the amounts not less than $2,000,000 per occurrence
and $3,000,000 in the aggregate covering all Products purchased by HBD
from Licensor. HBD (and upon HBD's request any of its subsidiaries,
affiliates or sub-licensees who are involved with the marketing and
distribution of the Products) shall be named as additional insureds on
all such insurance policies, each of which shall be endorsed so as to
provide at least 30 days notice to HBD of its cancellation, termination
or non-renewal. At HBD's request, Licensor shall deliver to HBD evidence
of such insurance.
20. Limitation on Liability. EXCEPT FOR THE EXPRESS WARRANTIES CREATED UNDER
THIS AGREEMENT AND EXCEPT AS SET FORTH OTHERWISE IN THIS AGREEMENT, IN NO
EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL,
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CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE ARISING
OUT OF THIS AGREEMENT OR THE SALE OF PRODUCTS, WHETHER SUCH LIABILITY IS
ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING THE POSSIBILITY OF
NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE PARTY HAS BEEN
WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE, AND EVEN IF ANY OF
THE LIMITED REMEDIES IN THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE.
21. Miscellaneous.
21.1 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 Licensor: If to HBD:
CirTran Corporation Xxxxxxxxxx Business Development
4125 South 6000 West 000 Xxxxxxxx Xxxxx Xxxxx Xxxxx
Xxxx Xxxxxx Xxxx, XX 00000 Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx Attn: Xxx Xxxxxxxxxx
Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (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.
21.2 Entire Agreement: Amendment. This Agreement (including the
Schedule) contains the entire understanding of the parties with
respect to the subject matter hereof and supersedes all prior
agreements and understandings between them. Each party has
executed this Agreement without reliance upon any promise,
representation or warranty other than those expressly set forth
herein. No amendment of this Agreement shall be effective unless
written and signed by both parties.
21.3 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 affect the validity of this Agreement or the right of any
party to thereafter enforce its provisions.
21.4 Assignability. Neither party may assign this Agreement or any
rights under it to any person or entity without the prior written
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consent of the other party, which consent shall not be
unreasonably withheld. Any attempted assignment without such
consent shall be void.
21.5 Right to Audit. Both parties and their representatives may, on
reasonable notice, examine each other's books and records during
normal business hours on five business days' notice. Such
examination shall be at the audit requesting party's expense
unless the examination reveals a discrepancy of more than 3% at
which time the audit will be paid for by the audited party.
21.6 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 or
eliminated 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 within ten days after its occurrence. The affected
party shall use due diligence, where practicable, to minimize the
effects of or end any such events.
21.7 Further Actions. The parties agree to execute such additional
documents and to perform such other and further acts as may be
necessary or desirable to carry out the purposes and intents of
this Agreement.
21.8 Severability. All of the provisions of this Agreement are intended
to be distinct and severable. 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, and the parties
shall with best efforts attempt to replace any such invalid or
unenforceable provisions with one that comes reasonably close to
the original intent and that is valid and enforceable. 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.
21.9 Counterparts. 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.
21.10 Independent Contractor. No party is an employee or agent of the
other party. Each party is and shall at all times remain an
independent contractor.
21.11 Conflict with Schedule. In the event of a conflict between this
Agreement and the Schedule, the terms and conditions of the
Schedule shall prevail.
21.12 Currency. All dollar amounts set forth in this Agreement and the
Schedule shall refer to U.S. Dollars.
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21.13 Governing Law, Dispute Resolution. This Agreement shall be
governed by and construed by the laws of the State of Utah,
disregarding the conflicts of laws provisions thereof. Any claim,
dispute or controversy arising out of, or relating to any section
of this Agreement or the making, performance, or interpretation of
the rights and obligations explicitly set forth in this Agreement
shall, upon the election by written notice of either party, be
settled on an expedited basis by binding arbitration before a
single arbitrator mutually agreeable to the parties, or if no
agreement is reached, before a single arbitrator from the American
Arbitration Association selected in accordance with its rules then
in effect, which arbitration shall be conducted in accordance with
such rules, and judgment on the arbitration award may be entered
in any court having jurisdiction over the subject matter of
controversy. The location of such arbitration shall be (i) in Salt
Lake City, Utah if commenced by HBD, or (ii) in Tampa, Florida if
commenced by Licensor.
IN WITNESS WHEREOF, the parties have caused this Agreement and Schedule to be
duly executed on the date first written above.
XXXXXXXXXX BUSINESS DEVELOPMENT CIRTRAN CORPORATION
By: /s/ Xxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxxxxx
-------------------- -------------------
Name: Xxx Xxxxxxxxxx Name: Xxxxx Xxxxxxxx
Title: President Title: President
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SCHEDULE
--------
1. Products: The Products consist of the following items (packaged in boxes
suitable for shipment to direct response customers, Instructions,
Customer Letter and a Reorder Form).
Description of each component: Price:
------------------------------ ------
Electric Indoor Grill with Deluxe Stand
including three Plates:
If package is sold for $100 or less $25.00
If package is sold for more than $100 $26.50
Additional Plates (Flat or Ripple Surface) $4.95/piece
Hot Dog Plate $6.95
HBD shall have first right to distribute any other infomercial
product developed or owned by Licensor in the specific category or
using the Patents used for Product. Such right shall expire if not
exercised on terms mutually acceptable to the parties within 5 days
after notice of availability from Licensor.
2. Trademarks:
3. Licensor shall relinquish to HBD any URL associated with the Product.
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