EXHIBIT 10.60
MANUFACTURING, MARKETING AND DISTRIBUTION
AGREEMENT
CACTUS XXXX PRODUCTS
This Agreement ("Agreement") is by and between CACTUS JACK'S MARKETING
CORP., an Iowa corporation ("Cactus Xxxx"), and NATIONAL BOSTON MEDICAL, INC., a
Nevada corporation ("National Boston"), both of which are sometimes referred to
herein as a "party" or the "parties".
WHEREAS, Cactus Xxxx owns and/or controls all rights of manufacturing,
distribution and sale with respect to products as described in Exhibit A and all
improvements, line extensions and modifications thereof (the "Product", and when
more than one - "Products"); and
WHEREAS, Cactus Xxxx is in the business, among other things, of
manufacturing, advertising, marketing and distributing products in various
media; and
WHEREAS, National Boston 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 Cactus Xxxx will xxxxx to
National Boston rights to manufacture, use, distribute, sell, advertise, promote
and otherwise exploit the Products as well as additional products to be added to
Exhibit A from time to time hereafter by mutual agreement of the parties.
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. Manufacturing, Marketing and Distribution Rights.
1.1 Grant of Rights. Cactus Xxxx hereby grants to National
Boston the following rights which National Boston 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 World (the
"Territory") to manufacture, 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 (subject to provisions of Exhibits E) 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 Patents. The right to use any U.S. and
foreign patents
that exist or that may issue on the Product and on like or related matter
developed, owned or controlled by Cactus Xxxx (collectively referred to as the
"Patents"), copies of which have been or will be provided to National Boston.
Cactus Xxxx represents and warrants that any patent applications and any patents
it may own with respect to the Product are described on Exhibit B hereto;
(c) Use of Trademarks. The right to use any and
all trademarks that Cactus Xxxx may own or control with respect to the Products
including without limitation the trademarks described in Exhibit C hereto (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 National Boston may determine;
(d) Products in Development. The right to use any
and all technology, know-how, mechanical drawings, initial prototypes,
manufacturing specifications, molds, tooling, and other materials owned or in
the control of Cactus Xxxx which would be necessary or useful in the
manufacturing and marketing of the Products ("Cactus Jack's Technology"), all of
which Cactus Xxxx shall provide to National Boston for this purpose;
(e) Use of Cactus Jack's Artwork.The right to copy
and use any and all artwork and promotional materials that Cactus Xxxx may own
or control with respect to the Products ("Cactus Jack's Artwork"), copies of all
of which Cactus Xxxx shall provide to National Boston for this purpose;
(f) 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 Cactus Xxxx may own or control with respect to
the Products;
(g) Packages. The right to develop such groupings,
ensembles, configurations and packaging of the Products and other ancillary
goods for sale as National Boston may determine; and
(h) Subdistributors. The right to appoint such
subdistributors as National Boston, in its sole judgment, may deem appropriate
in order to market and distribute the Products.
(i) Reserved Rights. Not withstanding, Cactus Xxxx
shall retain the right to market and distribute the existing Products
exclusively on live shop at home programming on QVC and non-exclusively at trade
shows, fairs, on the internet (QVC only), to existing local distributors to whom
licensor distributes products through, provided that such sale is not to
in-store retail distributors with three or more stores, locations, franchises or
similar multi store operations. National Boston acknowledges that there may be
existing web sites used by these existing distributors for the sale of Products
covered by this Agreement. The existence of such shall not constitute a
violation of this Agreement by Cactus Xxxx. However, National Boston
reserves the right to prohibit further distribution of the Products on sites
established subsequent to the execution of this Agreement.
1.2 Additional Products. The parties contemplate that from
time to time they will mutually agree upon additional products to be licensed by
Cactus Xxxx to National Boston. Such products will be added to the Exhibits
attached hereto, and unless otherwise agreed at such time all of the terms and
conditions of this Agreement shall be applicable to such additional products.
1.3 Non-Compete. During the term of this Agreement, Cactus
Xxxx shall not, 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 products similar in design, composition,
content or function to the Products.
1.4 Prices. National Boston, 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 National Boston may
establish.
1.5 Minimum Royalty Requirements. National Boston shall not
have any minimum sales requirement under this Agreement. However, extensions of
the Term of this Agreement are subject to National Boston's meeting certain
minimum royalty conditions, as described in Section 9 hereof.
1.6 Quality Control. National Boston shall adhere to any
reasonable requests and directions of Cactus Xxxx relating to the maintenance of
the quality of the Products manufactured, and the Trademark applied to such
Products, pursuant to the terms of this Agreement.
2. Exploitation of the Products by National Boston.
National Boston shall be responsible for the commercial exploitation of
the Products. It shall pay all costs for the development, manufacturing,
marketing, and selling of the Products. Cactus Xxxx shall have no responsibility
to pay for any of these expenses.
3. Royalty.
National Boston shall pay Cactus Xxxx, monthly, a royalty equal to
fifty percent (50%) of National Boston's net profits from sales and exploitation
of the Products.
Net profits shall mean all gross receipts including shipping and
handling revenues received by National Boston from such sales, less all direct,
third party costs (without markup by National Boston, save for National Boston's
administrative overhead fee described below), incurred by National Boston
related thereto including, but not limited to, the costs listed below:
(a) cost of Products (including all costs of development and
manufacturing);
(b) returns, discounts, commissions and/or allowances for Products;
(c) advertising and media costs;
(d) packaging and fulfillment-related activities;
(e) production/editing costs of commercials and infomercials and any
printed materials;
(f) sales and use taxes, VAT;
(g) shipping, handling and transportation costs;
(h) outside professional fees, including legal fees related to
compliance issues;
(i) samples of the Product retained by the parties for their own
internal use, and for promotional activities;
(j) third party royalties;
(k) telemarketing expenses;
(l) credit card fees and chargebacks;
(m) inventory and media financing fees and expenses;
(n) sales commissions;
(o) reasonable reserves to include reserves for return and
non-salable or less than first quality inventory; and
(p) an administrative overhead fee to National Boston of twelve
percent (12%) of all of National Boston's gross receipts from
sales or exploitation of the Products.
National Boston may, but is under no obligation to, amortize or
capitalize any costs it incurs in connection with the activities described
herein. Decisions related to the spending levels associated with any sales
activity of the Products covered by this Agreement shall be at the sole
discretion and judgment of National Boston.
National Boston's administrative overhead fee shall be in lieu of any
charges by National Boston for the time of its personnel, and customary overhead
expenses, to include internal copying expenses, telephone, travel, Federal
Express services, etc.
Cactus Xxxx shall not be responsible for any losses incurred by
National Boston in respect of National Boston's activities permitted by this
Agreement, but the expenses associated with any such losses will be carried
forward and included in calculating whether there have been net profits in
future accounting periods. To the extent that there may have
been losses in one area of activity, such as direct response sales, the expenses
associated with such losses may be carried over and applied to the calculation
of profits in any other area of activity, such as retail sales, in determining
the moneys to be paid to Cactus Xxxx, at the sole discretion of National Boston.
All of the Cactus Xxxx products (all products for which there is an Exhibit A
attachment), will be aggregated for the purpose of determining whether or not
there is net profit.
When the Product is distributed in combination with another product
which has not been licensed to National Boston by Cactus Xxxx, net profits will
not include revenues and costs reasonably allocable to the other product, and
allocations will be made to reflect the portion of such sales that relate to the
Product. However, in the event the above described product is branded as "Cactus
Xxxx" or "One Shot" then revenues and costs reasonably allocable to such
products will be included in net profit calculations due to Cactus Xxxx.
4. Reports; Record Keeping; and Inspection Rights.
4.1 Separate Division to be Established. National Boston
intends to establish a division of its operations which will be responsible for
the activities of manufacturing, marketing and distributing products licensed to
it by Cactus Xxxx. The books and records of National Boston shall be prepared in
a manner that will recognize this division and facilitate the calculation of net
profits earned from the Cactus Xxxx products and the royalties to be paid to
Cactus Xxxx.
4.2 Reports to Cactus Xxxx. National Boston shall provide
monthly reports to Cactus Xxxx showing the calculation of any royalty that has
accrued in respect of sales of the Products in form and content as National
Boston customarily provides to other licensers. The monthly reports shall
accompany the royalty payment, and shall be provided by the last business day of
each month following the month for which the royalties are calculated.
4.3 National Boston's Records; Inspection. National Boston
shall maintain complete and accurate records of all sales by National Boston of
the Products, and shall retain such records for a period of two years. During
such period, all such records that are relevant to the determination of the net
profits to be paid by National Boston to Cactus Xxxx shall be made available for
inspection by Cactus Xxxx (or Cactus Jack's designee at Cactus Jack's sole
expense) twice per year during normal business hours upon reasonable prior
notice to National Boston.
5. Proprietary Rights.
5.1 Cactus Jack's Intellectual Property.
(a) Generally. Subject to the rights granted to
National Boston under this Agreement, all right, title and interest in and to
the design of the Products and/or its derivatives, the Patents, Trademarks,
Cactus Jack's Technology, and Cactus Jack's Artwork (collectively, "Cactus
Jack's Intellectual Property"), is and shall remain the sole property of Cactus
Xxxx, and neither National Boston nor any third party shall acquire any right,
title or interest in Cactus Jack's Intellectual Property by virtue of this
Agreement or otherwise, except as expressly provided herein. Any trademarks
developed by National Boston to be used in
conjunction with sales of the Product shall be owned by National Boston. Any
unauthorized use of Cactus Jack's Intellectual Property by National Boston shall
be deemed an infringement of the rights of Cactus Xxxx therein. National Boston
shall not in any way or at any time dispute or attack the validity or contest
the rights of Cactus Xxxx in or to any of Cactus Jack's Intellectual Property.
The provisions of this Section 5.1(a) are subject in all respects to the
accuracy of the representations and warranties of Cactus Xxxx given pursuant to
Section 6.2.
b) Enforcement of Rights. Cactus Xxxx may at its
own expense enforce its rights in Cactus Jack's Intellectual Property against
infringement thereof. If National Boston requests Cactus Xxxx to enforce such
rights and Cactus Xxxx declines to do so, National Boston shall have the right
(but shall not be required) to enforce such rights, and may do so in Cactus
Jack's name with Cactus Jack's written agreement which shall not be unreasonably
withheld. Any expenses incurred and any recoveries obtained by National Boston
will be used in the calculation of net profits for the purposes of determining
royalties that may be due to Cactus Xxxx.
5.2 National Boston'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
National Boston in connection with its activities under this Agreement, any new
trademarks developed by National Boston to be used in conjunction with sales of
the Product, any commercials and infomercials that National Boston produces, and
all related materials and the contents thereof (collectively, "National Boston's
Intellectual Property") shall be and remain the sole property of National
Boston, and neither Cactus Xxxx nor any third party shall acquire any right,
title or interest in National Boston's Intellectual Property by virtue of this
Agreement or otherwise. Any unauthorized use of any of National Boston's
Intellectual Property by Cactus Xxxx shall be deemed an infringement of the
rights of National Boston therein. Cactus Xxxx 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.
5.3 Customer List. National Boston 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 sole property of National Boston, but proceeds from the sale of
this list shall be included in the calculation of gross receipts for purposes of
determining the royalty due to Cactus Xxxx.
5.4 Expense Re-imbursement. Cactus Xxxx shall be entitled to
reimbursement for all reasonable expenses, including travel and entertainment
incurred by the Cactus Xxxx at the request of National Boston. Cactus Xxxx will
maintain records and written receipts as required by National Boston policy to
substantiate such expenses.
5.5 Future Patent Applications; Improvements; Modifications.
National Boston shall have the right, but not the obligation, to prosecute any
patent application, United States and foreign, for the Product, and to file for
any patents modifications or improvements, in Cactus Jack's name and on behalf
of Cactus Xxxx and Cactus Xxxx shall cooperate fully with National Boston with
respect thereto, but all costs of such activity shall be included in the
calculation of net profits for the purpose of determining royalties that may be
due to Cactus Xxxx. National Boston shall have no liability under any
circumstances
to Cactus Xxxx for any decision or failure by National Boston to apply for such
patents, to continue to prosecute or to discontinue any such prosecution of any
such application, or for any action, activity, neglect or failure by National
Boston, its representatives and agents, in connection therewith.
6. Cactus Jack's Representations, Warranties and Covenants.
6.1 The Products. Cactus Xxxx represents, warrants and
covenants to National Boston that:
(a) Information. All information provided to
National Boston by Cactus Xxxx relating to the Products is and will be, to the
best of Cactus Jack's knowledge and belief, true and correct, including without
limitation all information regarding the effectiveness, quality, characteristics
or fitness of the Products;
(b) Substantiation. Cactus Xxxx will provide to
National Boston all information in Cactus Jack's possession or control which
substantiates all claims made by Cactus Xxxx to National Boston about the
Product; and
(c) Patent. The Product sample shown to National
Boston conforms to the description contained, and is consistent with the claims
made, in the Patents (if there are Patents associated with such Product).
6.2 Proprietary Rights. Cactus Xxxx represents, warrants
and covenants to National Boston that:
(a) Cactus Jack's Intellectual Property. Cactus
Xxxx owns or otherwise controls, or shall own or otherwise control, all right,
title and interest in and to Cactus Jack'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. Cactus Xxxx has and shall
have all necessary power and authority to grant to National Boston 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 National
Boston 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. Cactus Xxxx has not been
and is not, as of the date of this Agreement, a party to any litigation
enforcing or defending Cactus Jack's rights in, to or with respect to the
Products or any of Cactus Jack's Intellectual Property, and is not aware of any
claims or demands made or threatened by any person or entity involving the
validity of Cactus Jack's rights in, to or with respect to the Products or any
of Cactus Jack's Intellectual Property; and
(e) Applicable Patents, Copyrights, Trademarks and
Licenses. Cactus Xxxx will at the time of execution of this Agreement, and
thereafter, provide National Boston 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 Cactus Jack's Intellectual Property (and all amendments,
supplements, and modifications thereof) which are now in existence or which
Cactus Xxxx shall obtain, file or enter into during the term of this Agreement.
6.3 Other Warranties. The warranties and representations of
Cactus Xxxx set forth in this Section 6 and elsewhere in this Agreement are in
addition to and without prejudice to all other warranties expressed or implied
by law.
6.4 No Warranty By National Boston. Cactus Xxxx acknowledges
that National Boston, 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.
7. Additional Representations and Warranties. Each party represents and
warrants to the other as follows:
7.1 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.
7.2 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.
7.3 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.
8. Indemnification.
8.1 By National Boston.
(a) Generally. Subject to Section 8.1 (b), National
Boston shall defend, indemnify and hold harmless Cactus Xxxx 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 National Boston of any of its representations,
warranties, covenants, obligations, agreements or duties under this Agreement,
and (ii) any advertising claims made by National Boston based on information not
provided to it by Cactus Xxxx.
(b) Exceptions. National Boston shall have no duty
under Section 8.1(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 Cactus
Xxxx of any of its representations, warranties, covenants, obligations,
agreements or duties under this Agreement; or (ii) are subject to Cactus Jack's
duty to defend, indemnify and hold harmless pursuant to Section 8.2(a).
8.2 By Cactus Xxxx.
(a) Generally. Subject to Section 8.2(b), Cactus
Xxxx shall defend, indemnify and hold harmless National Boston, 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 Cactus Xxxx of any of its
representations, warranties, covenants, obligations, agreements or duties under
this Agreement, and (ii) any advertising claims made by National Boston based
upon documentation, studies, substantiation, and representations made or
provided by Cactus Xxxx to National Boston.
(b) Exceptions. Cactus Xxxx shall have no duty
under Section 8.2(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
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 8.1(a).
8.3 Procedure. Promptly after learning of the occurrence of
any event which may give rise to it rights under the provisions of this Section
8, 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.
9. Term.
This Agreement shall commence on the date of its execution by all of
the parties and shall continue so long as National Boston makes reasonable
commercial efforts to sell the Products. However, National Boston's rights to
manufacture and market each individual Product described on an Exhibit A shall
terminate with respect to such Product (but not any other Product for which
there is a separate Exhibit A), and National Boston shall have no further rights
with respect thereto (except for the sell-off rights contained in Section 10.3)
if National Boston does not pay royalties to Cactus Xxxx in at least the amount
stated in Exhibit D for such Product and such condition is not cured by National
Boston within 30 days of written notification by Cactus Xxxx of National
Boston's failure to meet such requirements.
10. Termination.
10.1 Termination Events.
(a) Election by National Boston. National Boston
may terminate this Agreement, or its rights to manufacture and sell any
individual Product, at any time upon 30 days prior written notice by so
notifying Cactus Xxxx and this Agreement, or the rights relating to the
individual Product, subject to the provisions of Section 10.3, shall terminate
30 days following Cactus Jack's receipt of such notice.
(b) Election By Cactus Xxxx. Cactus Xxxx may
terminate, subject to Section 10.3, National Boston's rights to manufacture and
sell any individual Product upon 30 days prior written notice to National Boston
under the condition, if any, described in Exhibit E.
(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 cured 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.
10.2 Obligations Deemed Fulfilled in the Event of Early
Termination. Any early termination pursuant to Section 10.1(a) or (b) 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.).
10.3 Limited Sales Rights After Termination. For a period of
six months following the termination of this Agreement, National Boston shall
retain non-exclusive rights to manufacture, use, distribute, sell, advertise,
promote and otherwise exploit the Products in the same manner as provided for in
this Agreement in order for it to (i) complete the manufacturing of all Products
for which it has parts either in its possession or on order, or is otherwise
obligated to manufacture, and (ii) sell all of its inventory of, and fulfill any
existing or expected orders for, the Product.
10.4. Effect of Termination. Upon termination or expiration of
this Agreement for any reason whatsoever:
a) National Boston shall, at its own expense, return any
of Cactus Jack's Technology and any of Cactus Jack's
Artwork in its possession or control.
(b) National Boston shall continue to pay such royalties as
may be due to Cactus Xxxx for sales made both before
termination and during the sell-off period.
(c) Each party shall retain any and all rights and remedies
available to it at law or equity.
11. Confidentiality.
11.1 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.
11.2 Exceptions. Notwithstanding Section 11.1, 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).
11.3 Material Provisions of this Agreement are Confidential.
The material content of this Agreement dealing with amount of royalties to be
paid, minimum royalties to maintain rights, issuance's of stock, and the like,
are deemed by the parties to be Confidential Information.
12. Injunction.
Each party acknowledges that a breach of the obligations not to compete
under Section 1.3, and/or of confidentiality under Section 11 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.
13. 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.
14. 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.
15. 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.
16. Right of First Refusal.
During the Term of this Agreement, Cactus Xxxx shall provide to
National Boston the exclusive opportunity to first look at any other products
owned and/or controlled by Cactus Xxxx which have been sufficiently developed
for potential marketing, distribution and/or exploitation. In the event that
National Boston is interested in distributing, selling, advertising, publicizing
and/or otherwise exploiting any such products presented by Cactus Xxxx, then
National Boston and Cactus Xxxx shall negotiate in good faith the terms and
conditions of a mutually agreeable marketing arrangement with respect to each
such product. It is envisioned that the terms of this Agreement will be the
foundation for any such marketing arrangement, and that the specific terms for
each of the products will be described
in new Exhibits A-E to be attached to this Agreement. If National Boston
notifies Cactus Xxxx that it is not interested in pursuing any such product or
fails to notify Cactus Xxxx of its interest or lack of interest with respect to
such product within 30 business days following presentation of such product to
National Boston, or the parties cannot agree on the terms and conditions of
marketing arrangement within 30 days after such presentation, then in each such
case, Cactus Xxxx shall be free to market, distribute, and/or exploit any such
product in any manner it shall choose thereafter without accounting to National
Boston for any compensation.
17. Royalties Owing to Third Parties.
Unless otherwise expressly stated in this Agreement, Cactus Xxxx shall
be responsible to pay all third parties that are entitled to royalties, if any,
from the exploitation of the Product by reason of agreements entered into by it
or others prior to the date of execution of this Agreement. National Boston
shall be responsible to pay all third party royalties for which it may after the
date of this Agreement incur an obligation.
18. Reverse Royalties and QVC Exemptions
Cactus Xxxx shall retain the exclusive right to sell and retain 100% of the net
profits associated with sales of Cactus Jack's One Shot Cleaning System and
Cactus Jack's Laundry Vitamins on QVC worldwide. Cactus Xxxx shall purchase its
product requirements for QVC sales only from the contract manufacturer supplying
the product to National Boston. If Cactus Xxxx is able to place additional
Cactus Xxxx products on QVC, then Cactus Xxxx will pay to National Boston a
reverse royalty of $1.00 for each unit of any such additional product that
Cactus Xxxx xxxxx on QVC for which National Boston has produced an infomercial.
This royalty will be paid monthly, by the last business day of the month
following the month of payment by QVC to Cactus Xxxx, and National Boston shall
have the right to inspect the books and records of Cactus Xxxx relating to such
sales. Cactus Xxxx will be the sole liaison to QVC on these products, unless
otherwise approved by Cactus Xxxx in writing. Cactus Xxxx shall maintain
complete and accurate records of all such sales by Cactus Xxxx of the additional
products, and shall retain such records for a period of two years. During such
period, all such records that are relevant to the determination of the Reverse
Royalty to be paid by Cactus Xxxx to National Boston shall be made available for
inspection by National Boston (or National Boston's designee at National
Boston's sole expense) twice per year during normal business hours and upon
reasonable prior notice to Cactus Xxxx.
19. Stock in National Boston.
National Boston shall issue to Cactus Xxxx 1,000,000 shares of its
restricted common stock within 30 days following the execution of this Agreement
by all of the parties. These shares shall be considered earned by Cactus Xxxx
upon execution of this Agreement. In addition, on each subsequent anniversary
date of this Agreement until this Agreement is terminated, National Boston will
issue an additional 250,000 restricted shares to Cactus Xxxx. If this Agreement
is terminated before any such anniversary date, National Boston will issue
shares pro rata to Cactus Xxxx for the portion of the year this Agreement was in
effect.
The restricted shares issued to Cactus Xxxx will be subject to
piggyback registration rights as described below and any restrictions that may
be imposed by current or future SEC rules and regulations.
The shares referred to in this Section 18 are being issued pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the "Act"), and Rule 506
of Regulation D promulgated thereunder ("Rule 506") or other applicable
provisions. The shares shall be Rule 144 restricted shares. After issuance of
the shares, at any time that National Boston proposes to file a National Boston
registration statement (except Form 10, Form 10-SB or Form S-8) under the Act
(the "Registration Statement") either for its own account or for the account of
a stockholder, National Boston shall give Cactus Xxxx written notice of its
intention to do so and of the intended method of sale (the "Registration
Notice") within a reasonable time prior to the anticipated filing date of
National Boston's Registration Statement. Cactus Xxxx may request inclusion of
any restricted shares in such Registration Statement by delivering to National
Boston, within ten business days after receipt of the Registration Notice, a
written notice (the "Piggyback Notice") stating the number of restricted shares
proposed to be included and that such shares are to be included in any
underwriting only on the same terms and conditions as the shares of common stock
otherwise being sold through underwriters under such Registration Statement.
National Boston shall use its best efforts to cause all restricted shares
specified in the Piggyback Notice to be included in the Registration Statement
and any related offering, all to the extent requisite to permit the sale by
Cactus Xxxx of its restricted shares in accordance with the method of sale
applicable to the other shares of common stock included in such Registration
Statement. Cactus Xxxx shall pay its pro rata portion of the costs of such
registration based on the number of shares to be sold. Cactus Xxxx shall have
only one right to participate in a Registration Statement, and if it does not
include all of its restricted shares in such registration, National Boston shall
have no further obligation to Cactus Xxxx to facilitate the registration of the
remaining shares.
20. Miscellaneous.
20.1 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
Fax No: (000) 000-0000
If to Cactus Xxxx:
Cactus Jack's Marketing Corp.
0000 Xxxxxxxxx Xxxxxx
Xxxx, Xxxx 00000
Attn: Xxxx Xxxxxxxxx, 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.
20.2 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.
20.3 Amendment. No amendment of this Agreement shall be
effective unless embodied in a written instrument executed by both of the
parties.
20.4 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.
20.5 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.
20.6 Governing Law; Venue; Waiver of Jury Trial. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State in which the action is brought without regard to conflict of
law principles. All disputes relating to or arising out of this Agreement shall
be resolved (i) in the state courts of Massachusetts located closest to the
offices of National Boston if such action is brought by Cactus Xxxx and (ii) in
the state courts of Iowa located closest to the offices of Cactus Xxxx if such
action is brought by National Boston. The parties hereto waive any right to a
jury trial with respect to any matter arising out of or related to this
Agreement.
20.7 No Representation as to Extent of Sales. Notwithstanding
the minimums required to maintain the license, National Boston 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 Products
hereunder. National Boston shall
make such effort to exploit successfully the Products and the related rights
herein granted as it may determine in accordance with its business judgment;
however, Cactus Xxxx recognizes and acknowledges that such matters are
speculative and agrees that the judgment of National Boston and its related
companies or licensees in regard to any such matters shall be binding and
conclusive upon Cactus Xxxx. Cactus Xxxx agrees that it will not make any claim
nor shall any liability be imposed upon National Boston based upon any claim
that more or better business could have been done than was actually obtained or
done by National Boston or any of its related companies or licensees, or that
better prices or terms could have been obtained or that profitability could have
been enhanced. Cactus Xxxx agrees that decisions related to the spending levels
associated with any sales or manufacturing activity covered by this Agreement
shall be at the sole discretion and judgment of National Boston.
20.8 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.
20.9 Headings. The headings of sections and subsections have
been included for convenience only and shall not be considered in interpreting
this Agreement.
20.10 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.
CACTUS JACK'S MARKETING CORP.
By: /s/ Xxxx Xxxxxxxxx 9/4/99
--------------------------- ----------
Xxxx Xxxxxxxxx Date
Chief Executive Officer
NATIONAL BOSTON MEDICAL, INC.
By: /s/ Xxxxxx X. Xxxxx 9/4/99
---------------------------- -----------
Xxxxxx Xxxxx Date
President
Agreement by Xxxx Xxxxxxxxx, Individual,
Not to Compete and to Honor Right of First Refusal
I, Xxxx Xxxxxxxxx, as an individual, agree as an inducement to National
Boston's execution of this Agreement, that I will (i) not individually, 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
products similar in design, composition, content or function to the Products,
and (ii) offer any new products owned and/or controlled by me (if they are not
otherwise products of Cactus Xxxx) which have been sufficiently developed for
potential marketing, distribution and/or exploitation to National Boston on the
same terms and conditions as stated in Section 16 of the above Agreement.
/s/ Xxxx Xxxxxxxxx 9/4/99
------------------------ ----------
Xxxx Xxxxxxxxx, Individual Date
EXHIBIT A-1
As defined in this Agreement, "Products" shall mean the following:
Cactus Jack's One Shot Catch-a-lot Fishing Lure
EXHIBIT B-1
As defined in this Agreement, "Patents " shall mean the following:
Patent pending
EXHIBIT C-1
As defined in this Agreement, "Trademarks" shall mean the following:
"Cactus Xxxx"
"One shot Catch A lot"
"Catch A lot"
"The Bait that Bleeds"
"The Lure that Thinks it's a Tackle Box"
EXHIBIT D-1
Minimum Royalty Payments to Maintain License:
$60,000 for each calendar quarter commencing with the earlier of (i) the first
full calendar quarter following the month in which the Product is rolled out on
a national basis in television direct response marketing or (ii) second quarter
of the year 2000. Royalty payments shall be cumulative in effect and payments
made in any period in excess of the quarterly minimum for that period shall be
applied toward future period minimum payment requirements in order to maintain
the license. National Boston may make payments in lieu of earned royalties in
order to meet the minimums stated herein, and such payments shall be deemed to
be advances to be credited against future royalties actually earned by Cactus
Xxxx. It is agreed that since the royalties are actually paid monthly on the
last business day of each month following the month for which the royalties are
calculated, the calculation to determine whether the quarterly minimums have
been met will be made based on royalties actually paid by the last business day
of the month following the third month of the quarter.
EXHIBIT E-1
Additional Termination Rights Afforded to Cactus Xxxx:
1. If National Boston does not commence filming of a new infomercial or
modification of an existing infomercial for the Product either before or within
60 days following execution of this Agreement.
OTHER AGREEMENTS OF THE PARTIES:
1. [If there is an existing infomercial for the fishing lure, the
rights of the parties with respect to such infomercial should be described here.
If there is a production agreement with a producer, or talent or host
agreements, requiring the payment of royalties, then copies of such agreements
should be provided to National Boston].
None
EXHIBIT A-2
As defined in this Agreement, "Products" shall mean the following:
Cactus Jack's One Shot Cleaning System
EXHIBIT B-2
As defined in this Agreement, "Patents" shall mean the following:
One Shot (design patent)
EXHIBIT C-2
As defined in this Agreement, "Trademarks" shall mean the following:
"Cactus Xxxx"
"One Shot"
EXHIBIT D-2
Minimum Royalty Payments to Maintain License:
$30,000 for each calendar quarter commencing with the earlier of (i) the first
full calendar quarter following the month in which the Product is rolled out on
a national basis in television direct response marketing or (ii) the first
quarter of the year 2000. Royalty payments shall be cumulative in effect and
payments made in any period in excess of the quarterly minimum for that period
shall be applied toward future period minimum payment requirements in order to
maintain the license. National Boston may make payments in lieu of earned
royalties in order to meet the minimums stated herein, and such payments shall
be deemed to be advances to be credited against future royalties actually earned
by Cactus Xxxx. It is agreed that since the royalties are actually paid monthly
on the last business day of each month following the month for which the
royalties are calculated, the calculation to determine whether the quarterly
minimums have been met will be made based on royalties actually paid by the last
business day of the month following the third month of the quarter.
EXHIBIT E-2
Additional Termination Rights Afforded to Cactus Xxxx:
1. If National Boston does not commence filming of a new infomercial or
modification of an existing infomercial for the Product within 30 days of
execution of this Agreement.
OTHER AGREEMENTS OF THE PARTIES:
1. [If there is an existing infomercial for the cleaning system, the rights of
the parties with respect to such infomercial should be described here. If there
is a production agreement with a producer, or talent or host agreements,
requiring the payment of royalties, then copies of such agreements should be
provided to National Boston].
Royalties to Third Parties include: HSND (Home Shopping Network Direct)
@$1.00 /unit; Xxxxx Xxxxxxxxxx @ 1/2% of gross revenue; 2-D Productions
@ 1/2% of gross revenue
EXHIBIT A-3
As defined in this Agreement, "Products" shall mean the following:
Cactus Jack's Laundry Vitamins
EXHIBIT B-3
As defined in this Agreement, "Patents " shall mean the following:
"One Shot"(design patent)
EXHIBIT C-3
As defined in this Agreement, "Trademarks" shall mean the following:
"Cactus Xxxx"
"Laundry Vitamins"
EXHIBIT D-3
Minimum Royalty Payments to Maintain License:
None
EXHIBIT E-3
Additional Termination Rights Afforded to Cactus Xxxx:
None
OTHER AGREEMENTS OF THE PARTIES:
None
EXHIBIT A-4
As defined in this Agreement, "Products" shall mean the following:
Cactus Jack's Growalot Plant Food
EXHIBIT B-4
As defined in this Agreement, "Patents " shall mean the following:
"One Shot" (design patent)
EXHIBIT C-4
As defined in this Agreement, "Trademarks" shall mean the following:
"Cactus Xxxx"
EXHIBIT D-4
Minimum Royalty Payments to Maintain License:
None
EXHIBIT E-4
Additional Termination Rights Afforded to Cactus Xxxx:
None
OTHER AGREEMENTS OF THE PARTIES:
None
EXHIBIT A-5
As defined in this Agreement, "Products" shall mean the following:
Cactus Jack's Air Fresh Bullets
EXHIBIT B-5
As defined in this Agreement, "Patents " shall mean the following:
"One Shot" (design patents)
EXHIBIT C-5
As defined in this Agreement, "Trademarks" shall mean the following:
"Cactus Xxxx"
EXHIBIT D-5
Minimum Royalty Payments to Maintain License:
None
EXHIBIT E-5
Additional Termination Rights Afforded to Cactus Xxxx:
None
OTHER AGREEMENTS OF THE PARTIES:
None
EXHIBIT A-6
As defined in this Agreement, "Products" shall mean the following:
Cactus Jack's Car Wash and Wax Bullets
EXHIBIT B-6
As defined in this Agreement, "Patents " shall mean the following:
"One Shot" (design Patent)
EXHIBIT C-6
As defined in this Agreement, "Trademarks" shall mean the following:
"Cactus Xxxx"
EXHIBIT D-6
Minimum Royalty Payments to Maintain License:
None
EXHIBIT E-6
Additional Termination Rights Afforded to Cactus Xxxx:
None
OTHER AGREEMENTS OF THE PARTIES:
None
EXHIBIT A-7
As defined in this Agreement, "Products" shall mean the following:
Cactus Jack's Soy Candles
EXHIBIT B-7
As defined in this Agreement, "Patents " shall mean the following:
None
EXHIBIT C-7
As defined in this Agreement, "Trademarks" shall mean the following:
"Cactus Xxxx"
EXHIBIT D-7
Minimum Royalty Payments to Maintain License:
None
EXHIBIT E-7
Additional Termination Rights Afforded to Cactus Xxxx:
None
OTHER AGREEMENTS OF THE PARTIES:
None