Username:
  
  Password:
  
  

Exclusive Marketing & Distribution Agreement

 

This Exclusive Marketing & Distribution Agreement (“ Agreement ”) is entered into as of this 25th day of September 2009 (the “ Effective Date ”), by and between hZo, Inc., a Delaware Corporation (“ Company ”) and ZAGG, Inc., a Delaware corporation, (“ ZAGG ”).

 

Recitals

 

A.           ZAGG is in the business of, among other things, providing marketing, promotional and distribution services in connection with the application of protective coatings to consumer electronic and hand-held devices (the “ Marketing Services ”).

 

B.           ZAGG identified the opportunity to market certain technology pertaining to the development and application of a protective coating to certain goods and products ( as the same may be modified or updated from time to time, the “ Technology ”) and provided certain funding to facilitate the formation of Company and enable Company to become the licensee or owner, as applicable, of all right, title, and interest in and to the Technology (the “ ZAGG Investment ,” as defined in more detail in Section 2 below).

 

C.           In consideration of the ZAGG Investment, Company desires to engage ZAGG to provide the Marketing Services to Company for branding, promotion, sales and distribution and to develop business channels for the Technology in the specific market segments set forth in Exhibit A (the “ Market Segment ”), as such may be amended by ZAGG and Company from time to time, upon the terms and subject to the conditions contained in this Agreement.

 

D.           ZAGG desires to provide the Marketing Services to Company with respect to the Market Segment , subject to the terms and conditions of this Agreement.

 

Agreement:

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.   Appointment .  Subject to the terms and conditions set forth in this Agreement and closing of the ZAGG Investment (as defined below), as of the Effective Date, Company hereby appoints ZAGG, on an exclusive   basis to: ( a ) market and promote the Technology to potential customers within the Market Segment (each a “ Customer ”); and ( b ) refer such Customers to Company (collectively, the “ Appointment ”).

 

2.   Condition Precedent .  The continued Appointment of ZAGG is conditioned upon the ZAGG Investment, which shall consist of the purchase by ZAGG of at least $3,150,000.00 in shares of Series A Preferred Stock of the Company .  In the event that the ZAGG Investment is not received by Company by February 25, 2010, either party may terminate this Agreement in all respects by delivering written notice of termination to the other party .

 

3.   First Right of Refusal of Appointment .  In the event that either Company or ZAGG identifies any applications or opportunities to market or promote the Technology outside the Market Segment (each a “ Proposed New Market Segment ”), then the party identifying the Proposed New Market Segment shall inform the other party of the existence of such Proposed New Market Segment and ZAGG shall have thirty (30) days to provide to Company either: (a) a written proposal including terms, conditions and pricing on which ZAGG would be willing to pursue marketing and promotions in the Proposed New Market Segment (“ ZAGG Proposal ”), or (b) a written waiver by ZAGG of any right to pursue marketing and promotions within the Proposed New Market Segment.  If Company accepts the ZAGG Proposal, the Proposed New Market Segment shall be added to Exhibit A and shall be part of the “Market Segment” for the purposes of this Agreement.  In the event that Company rejects the ZAGG Proposal, which Company may only do if the ZAGG Proposal is materially less favorable to Company than the terms, conditions or pricing in place for the Market Segment, or if ZAGG fails to provide a written waiver, then Company may market and promote the Technology for any application in the Proposed New Market Segment through its own direct sales organization or through third parties.  Notwithstanding the foregoing, other than the Market Segment licensed to ZAGG as defined in Exhibit A, the Company may respond to and fulfill unsolicited requests for the Technology for applications or from potential customers within the Market Segment provided that the Company first immediately notifies ZAGG of any such request and obtains ZAGG’s express prior written consent to accept and fulfilling such request.  ZAGG acknowledges that Company has made no representations about the any revenue that ZAGG may receive or any profit or income that ZAGG may realize , if any, as an independent representative of Company and ZAGG assumes all financial risks under this Agreement.

 

 

 

 

1


 

 

 

4.   Marketing Budget .  The parties agree that in certain circumstances Company may desire to engage ZAGG to perform additional services, either beyond the Marketing Services or outside the Market Segment (“ Additional Services ”). In the event that Company engages ZAGG to perform such Additional Services, then Company and ZAGG shall mutually agree upon a marketing budget on a per project or marketing campaign basis (“ Supplemental Budget ”) to be distributed to ZAGG in accordance with the terms of such Supplemental Budget, including, if applicable, payments by Company to ZAGG of royalties or other fees as may be mutually agreed upon between the parties from time to time for the use by Company of any ZAGG Mark (as defined below) in connection with products or services not directly distributed by ZAGG.  For the avoidance of doubt, the Supplemental Budget shall not apply in the ordinary course of the provision by ZAGG of the Marketing Services in the Market Segment except as agreed upon between the parties on a project by project basis.

 

5.   Personnel .  Personnel employed by ZAGG to perform the Marketing Services are not employees of Company and ZAGG assumes full responsibility for their acts, daily interaction, and management control.  Without limiting the generality of the foregoing, ZAGG shall not be treated as an employee of Company for state or federal income tax purposes, nor will ZAGG be an employee of Company for purposes of the Federal Unemployment Tax Act, Federal Insurance Contributions Act, the Social Security Act or any other federal, state or local unemployment or employment security act.   ZAGG shall inform its personnel that they are not entitled to the provisions of any Company employee benefits.  Company will not be responsible for worker’s compensation, health or disability benefits, retirement or pension benefits, unemployment insurance or withholding income taxes and Social Security for said personnel.   ZAGG shall identify itself as an authorized referral representative of Company only with respect to the Marketing Services covered by this Agreement and shall otherwise identify itself as an independent business.

 

6.   Conflict of Interest .  ZAGG warrants to Company that ZAGG does not currently distribute, sell, or promote any products, services or technologies that directly compete with the Technology (“Competing Technology ”) within the Market Segment.  ZAGG warrants that prior to distributing, selling, or promoting any Competing Technology to the Technology within the Market Segment , ZAGG will provide Company with written notice thereof.

 

7.   Changes in the Technology .  ZAGG shall have the right to market, distribute, sell or offer for sale and promote updated changes or modifications to the Technology, update or discontinue any of the Technology from time to time and Company shall notify ZAGG in writing of any such modifications, updates or discontinuations of the Technology that may affect the marketing efforts of ZAGG .

 

8.   Obligations of ZAGG .

 

8.1.   General .  ZAGG will use its best efforts to refer, market and promote the Technology to Customers for applications within the Market Segment and to refer such Customers to Company in accordance with the terms and conditions of this Agreement (the “ Promotion Obligations ”).  Without limiting the generality of the foregoing, the Promotion Obligations shall, at a minimum, require ZAGG to execute and complete the following promotional activities and to develop all advertising, promotional, sales and collateral literature related thereto and necessary therefore:

 

 

 

2


 

 

 

8.1.1.   E-Mail . Subject to Section 4 , ZAGG shall, at its sole expense, develop, design, print and fulfill an email campaign, the purpose of which shall be to introduce the Technology to the Market Segment.

 

8.1.2.   Collateral Materials . Subject to Section 4 , ZAGG,  at its sole expense, unless otherwise agreed upon in writing between the parties, shall develop, design, print and fulfill marketing collateral materials relating to the Technology, and provide sufficient quantities to each of its independent sales representatives or contractors.

 

8.1.3.   Tradeshow Marketing . ZAGG, at its sole cost and expense unless otherwise agreed upon in writing between the parties,  shall prominently display and diligently promote the Technology at any   applicable tradeshows that ZAGG attends during the Term (as defined below) .

 

8.1.4.   Customer Relations .  ZAGG shall be governed in all dealings with members of the public by the highest standards of honesty, integrity and fair dealing, and shall do nothing which would tend to discredit, dishonor, reflect adversely upon or in any manner injure the reputation of Company or any of its officers, partners, directors, managers, stockholders, members, affiliates or representatives (the “Related Parties”) or the Technology.  Without limiting the generality of the foregoing, ZAGG will: (a) refrain from and avoid any deceptive, misleading, disparaging or unethical practices that are or might be detrimental to Company or its Related Parties, the Technology, or the public; (b) make no false or misleading representations with regard to Company or the Technology; (c) not publish or employ, or cooperate in the publication or employment of, any misleading or deceptive advertising material with regard to Company or the Technology; and (d) make no representations, warranties or guarantees to Customers or to the trade with respect to the specifications, features or capabilities of the Technology that are inconsistent with any literature or specifications distributed by Company .  ZAGG will maintain records of its marketing activities hereunder and will permit Company to review such records upon reasonable prior written notice to determine ZAGG’s compliance with the terms and conditions of this Agreement.

 

8.1.5.   Compliance with Laws, Procedures and Good Busi


This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more