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EXHIBIT 10.15
STRATEGIC DEVELOPMENT & MARKETING ALLIANCE AGREEMENT
BETWEEN
LITRONIC, INC.
AND
BIZ INTERACTIVE ZONE, INC.
"AGREEMENT"
THIS ALLIANCE AGREEMENT is made and entered into as of Sept. 05, 2000, by and
between BIZ Interactive Zone, Inc., having an office at 2030 Main Street, Suite
1250, Irvine, CA 92614 (hereinafter referred to as "BIZ") and LITRONIC, INC.,
having an office at 17861 Cartwright Road, Irvine, CA 92614 (hereinafter
referred to as "Litronic").
WHEREAS, BIZ and Litronic desire to form an alliance for the purpose of
cooperatively developing the hardware and software technology that will enable
BIZ to establish, deploy, and grow the worldwide industry standard for
processing real-time, secure, transactions over the Internet.
WHEREAS, BIZ has reviewed Litronic's products, and found the basic designs to be
desirable; BIZ wishes to have Litronic develop and manufacture private labeled
and derivative versions of the products for BIZ, using BIZ trademarks and with
certain designs specified by BIZ in the case of derivative versions (the
"Private Label Product" and "Derivative Products); and
WHEREAS, BIZ is interested in purchasing on a private label contract
manufacturing basis, certain models of Litronic's products, manufactured by
Litronic using the trademark or tradename "BIZ" or other BIZ designations (said
private label versions of Litronic's products to be hereinafter referred to as
the "Private Label Products") and Litronic is willing to manufacture and sell
the Private Label Products to BIZ under the terms and conditions as specified in
this Agreement; and
WHEREAS, BIZ is interested in purchasing on a private label contract
manufacturing basis, derivative versions of certain models of Litronic's
products, manufactured by Litronic using the trademark or tradename "BIZ" or
other BIZ designations (said private label versions of Litronic's Products to be
hereinafter referred to as the "Derivative Products") and Litronic is willing to
manufacture and sell the Derivative Products to BIZ under the terms and
conditions as specified in this Agreement; and
WHEREAS, BIZ and Litronic desire to set forth the terms and conditions which
shall apply to Purchase Orders issued by BIZ for the procurement of Litronic's
products and service; and
WHEREAS, Litronic is willing to provide quantities of such products to BIZ for
marketing by BIZ in conjunction with BIZ's product series; and
WHEREAS, BIZ is willing to accept and pay for certain quantities of such
products under the terms and conditions of this agreement; and
WHEREAS, BIZ intends to combine such product(s) with other products so as to
market such products to end-users, and system integrators;
NOW THEREFORE, the parties hereto agree as follows:
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1. Definitions
(a) "Private Label Products" means standard Litronic products labeled with
the BIZ trade name with the tradename design and location specified by
BIZ.
(b) "Derivative Products" means those products that are derivatives of
standard Litronic designs but with design modification and enhancement
variations that meet the specifications of BIZ.
2. Term of Agreement
This agreement shall be effective from the date first above written and
shall continue for a period of Five (5) years, and unless noted to the
contrary no later then sixty days before expiration, automatically
renews annually.
3. Exclusivity of Undertaking
The Derivative Products that Litronic designs, develops and
manufactures, based on the specification provided by BIZ in consultation
with Litronic and as specified in the Exhibit A attached hereto, shall
be considered as the work made for hire for BIZ.
4. Trademark Rights
Litronic shall use reasonable efforts to adhere to instructions received
from BIZ regarding the placement of the "BIZ" or other designated
tradename, service mark or trademark designated by BIZ, on the Private
Label Products and Derivative Products. The Parties hereby expressly
acknowledge the exclusive right, title, and interest of each Party in
and to the Party's own trademark, service mark, trade name or trade
dress, and of the goodwill and reputation appertaining thereto. Neither
Party shall acquire any right, title or interest to, nor shall have any
other right to use of the trade name, trademark, service mark, or trade
dress of the other Party, or the goodwill and reputation appertaining
thereto, except as pursuant to the order of the other Party (for example
as regards to placing the "BIZ" tradename or trademark to such Private
Label Products as are ordered by BIZ pursuant to this Agreement).
5. Industrial Property Rights
It is hereby expressly agreed as between the Parties hereto, that any
and all proprietary property rights in any feature or structure
incorporated in the Derivative Products are and shall be solely the
property of the Parties to this Agreement. Any BIZ industrial property,
proprietary rights, or technology to be integrated into the Derivative
Products must be specified by BIZ in writing prior to manufacture or
design integration into said Private Label Products.
6. Purchase Orders
A written Purchase Order shall be the basis for purchase of products
under this agreement.
All Purchase Orders shall be subject to the terms and conditions of this
Agreement. Any terms or conditions contained upon BIZ's Purchase Order
which add to or differ from the terms and conditions of this Agreement
must be approved in writing by Litronic. The incorporation of any
additional or different terms or liability in a BIZ's Purchase Order
shall be deemed objected to by Litronic unless expressly accepted in
writing by an authorized representative of Litronic at its office in
Irvine, California. Acknowledgment of the receipt of any Purchase Order,
including signing and returning to BIZ his acknowledgment copy, if any,
shall not constitute acceptance by Litronic of
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any additional or different terms or conditions, nor shall Litronic's
commencement of effort, in itself, be construed as acceptance of any
Order containing additional or different terms and conditions.
The provisions of this Agreement will prevail over any terms and
conditions contained in the BIZ's Purchase Order.
7. Prices
As a result of this AGREEMENT, the specifications and prices shown in
Exhibit A and B will prevail.
(a) Prices do not include excise, sales, use, gross receipts, value
added, property or other taxes, broker fees, customs duties and
other similar charges which may be assessed or charged in
connection with the sale, transportation or handling of the
product(s) sold hereunder, and BIZ shall pay all such charges,
and shall reimburse Litronic in full upon demand for all such
charges which Litronic may be required to pay.
(b) Prices do not include freight charges for transportation from
Litronic's factory in Irvine, California, which charges shall be
the responsibility of and paid by BIZ.
(c) Prices include standard commercial packaging for each product or
lot of products; special preservation and packing and/or export
boxing is extra.
(d) Prices do not include an installation/operating manual. One (1)
copy of the installation/operating manual will be provided with
each delivery of products to BIZ. A restricted license is hereby
granted to copy and distribute each manual with product sold by
BIZ.
(e) Litronic may revise the prices herein, unless pricing is
specifically guaranteed under purchase order for a period longer
than 30 days. This price revision will be provided with thirty
(30) days prior written notice.
8. Payment Terms.
Subject to approval of BIZ's credit, the full net amount of each invoice
is due and payable in cash or letter of credit from a chartered bank,
within thirty (30) days of shipment. Lot shipments will be invoiced on a
pro rata basis. Minor inadvertent administrative errors contained in an
invoice are subject to correction and shall not constitute reason for
untimely payment.
9. Price Warranty
Litronic warrants that the terms and prices offered hereby are in
compliance with all local, state and federal laws.
10. Freight, Insurance, Exporter's Charges, Duties
All transportation costs, exporter's charges and insurance are the
responsibility of the BIZ. Litronic will either (a) add these charges to
the prices specified herein, (b) add these charges to Litronic's
invoices as separate items, or (c) ship with charges to be collected by
the carrier or exporter. Documentation and duties are the responsibility
of the BIZ.
11. Shipment and Delivery.
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(a) Shipment and delivery shall be F.O.B. Litronic's factory in
Irvine, California, and title and risk of loss shall pass to BIZ
upon delivery to a carrier at such time and place of shipment.
Litronic shall not be liable for delay, damage, or breakage to
the product(s) sold hereunder after delivery has been made to the
carrier, and all claims for loss in respect thereof occasioned
after such delivery shall be made to the responsible carrier.
(b) In the absence of shipping instructions from BIZ, Litronic will
use its discretion in selecting shipping services and routings.
(c) Changes in shipping schedules requested by BIZ will require
written approval by Litronic and the assumption by BIZ of all
additional costs resulting therefrom.
(d) BIZ may delay shipment of any product(s) purchased hereunder;
provided however, that if such delay is in excess of sixty (60)
days from the quoted date of shipment, Litronic may invoice BIZ
for such product(s) and hold them at BIZ's risk and expense
pending instructions from BIZ. In the event such delay extends
beyond six (6) months from the quoted shipping date, BIZ agrees
to pay prices in effect at the time of shipment.
12. Taxes
Prices stated are net of any taxes applicable to the goods sold. BIZ
shall be responsible for payment of any and all taxes due.
13. Title
Title and risk of loss for products furnished by Litronic shall pass to
BIZ upon delivery to a common carrier, or other delivery as directed by
BIZ, at Litronic's plant.
14. Warranty and Limitation of Liability
Litronic warrants its product(s) to the original purchaser, to be free
from defects in material and workmanship and to be made in accordance
with BIZ's specifications which have been accepted in writing by
Litronic. In no event, however, shall Litronic be liable or have any
responsibility under such warranty if the product(s) has been improperly
stored, installed, used or maintained, if the product(s) is damaged or
fails to operate properly as a result of interconnection with the
equipment of BIZ, or if BIZ has permitted any unauthorized
modifications, adjustments and/or repairs to be made to such product(s).
Litronic's obligation hereunder is limited solely to repairing or
replacing (at its option), at its factory, any product(s) or parts
thereof, which prove to Litronic's satisfaction to be defective as a
result of defective materials or workmanship within ninety (90) days
from date (of shipment to the original BIZ); provided, however, that
written notice of any claimed defect shall have been given to Litronic
within thirty (30) days from the date any such defect is first
discovered. The product(s) or part(s) claimed to be defective must be
returned to Litronic, transportation pre-paid by BIZ, with written
specification of the claimed defect. Evidence acceptable to Litronic
must be furnished that the claimed defects were not caused by misuse,
abuse, or neglect by anyone other than Litronic.
Litronic's obligations hereunder do not include any responsibility for
any costs occasioned by removal, claims, or remedies with respect to
direct damage, loss of use, lost profits, or other secondary or
consequential damage of any kind, however occasioned. Litronic's total
obligation under this warrant is limited to the original purchase price
of the products or services found to be defective within the terms of
this warranty.
THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES (EXCEPT AS TO
TITLE), WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE,
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OTHER THAN AS EXPRESSLY SET FORTH AND TO THE EXTENT SPECIFIED HEREIN,
AND IS IN LIEU OF ALL OTHER OBLIGATIONS OR LIABILITIES ON THE PART OF
LITRONIC. LITRONIC'S MAXIMUM LIABILITY WITH RESPECT TO THIS QUOTATION
AND ANY RESULTING SALE, ARISING FROM ANY CAUSE WHATSOEVER, INCLUDING
WITHOUT LIMITATION, BREACH OF CONTRACT OR NEGLIGENCE, SHALL NOT EXCEED
THE PRICE SPECIFIED HEREIN OF THE PRODUCT(S) GIVING RISE TO THE CLAIM,
AND IN NO EVENT SHALL LITRONIC BE LIABLE UNDER THIS WARRANTY OR
OTHERWISE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING
WITH LIMITATION, DAMAGE OR LOSS RESULTING FROM INABILITY TO USE THE
PRODUCT(S), CONSEQUENTIAL DAMAGES, WHETHER SIMILAR OR DISSIMILAR, OF ANY
NATURE ARISING OR RESULTING FROM THE PURCHASE, INSTALLATION, REMOVAL,
REPAIR, OPERATION, USE OF OR BREAKDOWN OF THE PRODUCT(S), OR ANY OTHER
CAUSE WHATSOEVER, INCLUDING NEGLIGENCE.
The foregoing warranty shall also apply to products or parts which have
been repaired or replaced pursuant to such warranty for a period of
ninety (90) days from and after the date such repaired or replaced
products or parts are shipped by Litronic; provided, however, that such
warranty shall cover only the specific items repaired or replaced.
Litronic does not warrant (except as to title) any fabrics or plastic
materials.
No person, including any agent or representative of Litronic, is
authorized to make any representation or warranty on behalf of Litronic
concerning any product manufactured by Litronic, except to refer
purchasers to this warranty.
15. Excusable Delay
Litronic shall not be responsible for any failure to perform due to
causes beyond its control. These causes shall include but not be
restricted to fire, storm, flood, accident, earthquake, explosion, acts
of the public enemy, war sabotage, quarantine restrictions, failure of
vendors to make timely deliveries, labor shortages, transportation
embargoes, or failure or delays in transportation, inability to secure
raw materials or machinery for the manufacture of its devices, acts of
God, acts of the Federal Government or any agency thereof, acts of any
state or local government or agency thereof, and judicial action.
16. Control of Information
Data (including Designs, Drawings, Reports, or other Information)
furnished by either party in connection with such Purchase Order and
identified as proprietary, restricted, or limited rights data shall not
be disclosed by the receiving party outside of its own organization
without the prior written consent of the furnishing party except to the
extent that such data is otherwise available to the receiving party on a
restricted basis or is in the public domain. These restrictions also
include the terms, conditions and prices of this Agreement.
17. Business Relationship
Nothing in this Agreement shall be construed to constitute BIZ as the
partner, employee, or agent of the Company, nor shall either party have
any authority to bind the other in any respect. Each party shall remain
an independent contractor responsible for its own actions and business
expenses.
18. BIZ Orders
(a) Within 14 days after receiving a Purchase Order from the BIZ,
submitted in accordance
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with the terms hereof, Litronic shall accept such Purchase Order
unless Litronic determines that it cannot reasonably ship the
quantities called for in the Purchase Order. Acceptance by
Litronic of each of BIZ's Purchase Orders shall be deemed to have
occurred if Litronic fails to notify BIZ within 14 days after
receiving such Purchase Order. Litronic's acceptance shall
constitute a binding commitment to ship to the BIZ the quantities
and types of product stated in the Purchase Order, in accordance
with the terms and conditions hereof. If Litronic does not accept
said Purchase Order, Litronic shall provide BIZ with written
notice within 14 days of Litronic's receipt of such Purchase
Order as to what portion of such Purchase Order Litronic will
accept. BIZ may, in such an event, order from Litronic all or any
portion of such products that are available.
(b) BIZ agrees to receive, inspect, and accept shipments made
pursuant to Purchase Orders.
19. Governing Law
This Agreement shall be governed by the law of the State of California,
including the Uniform Commercial Code as enacted in that state.
20. Non-Waiver
Except as otherwise specifically provided for in this Agreement:
(a) No failure or delay on the part of BIZ or Litronic in exercising any
right or power under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power
preclude any other or further exercise thereof or the exercise of any
other right or power hereunder; and
No waiver of any provision of this Agreement shall be effective unless
the same shall be made in writing and signed by the Party against whom
such waiver is sought to be enforced.
21. Notices
Any notice made in connection with this Agreement, or in the performance
of the terms and conditions hereof, shall be sent to the addresses
first above written, or to such other addresses as the Parties may
subsequently notify each other, from time to time, by registered airmail
or telegram, or by telex and facsimile, followed immediately by
confirmation letter by registered airmail. When notice is dispatched as
proved above, said notice shall be deemed to have bee made upon receipt
at the address so specified, or in the event of any delay in actual
receipt, seven (7) business days following the date of dispatch thereof.
All notices to each Party shall be sent to the following:
Litronic, Inc. Biz Interactive Zone, Inc
Attention: CEO Attention: CEO
17861 Cartwright Road 2030 Main Street, 12th Floor
Irvine, California 92614 Irvine, CA 92614
Tel: 949-851-1085 Tel: 949-655-4500
Fax: 949-851-8679 Fax: 949-655-4501
22. Indemnity
By Litronic. Notwithstanding the provisions of Article 15 hereof,
Litronic shall indemnify and hold harmless BIZ/BCP and its affiliates,
partners, officers, employees, directors, agents,
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contractors, representatives, successors and assigns, as such, from and
against any losses, damages, liabilities, and expenses (including
reasonable attorneys' fees) which arise out of or result from any third
party claim that: (i) Litronic does not have sufficient right, title or
interest in Litronic's materials necessary to enter into this Agreement,
or that the Litronic's technology violates an existing United States
patent (in existence as of the date on which this Agreement is
executed), copyright, trademark, trade secret or other United States
intellectual property right of any third party; and (ii) Litronic has
breached a covenant, representation or warranty set forth in this
Agreement or otherwise. Litronic shall further indemnify and hold
harmless BIZ/BCP and its affiliates, partners, officers, employees,
directors, agents, contractors, representatives, successors and assigns,
as such, from and against any and all liabilities, claims, actions,
proceedings, suits, damages, losses, penalties, judgments, costs,
expenses, fines, disbursements and other obligations of any kind or
nature whatsoever (including, among other things, reasonable attorneys'
fees and other expenses of investigation, defense, litigation and
settlement, whether or not a lawsuit or a request for arbitration is
filed) regardless of when the same shall be made or incurred by BIZ/BCP,
whether prior to or after any termination or expiration of this
Agreement (a "Claim") which Claim is based upon, asserted in connection
with, arises out of, or in any way relates to, this Agreement, or to any
action taken or not taken by Litronic hereunder.
By BIZ. Notwithstanding the provisions of Article 15 hereof, BIZ shall
indemnify and hold harmless Litronic and its affiliates, partners,
officers, employees, directors, agents, contractors, representatives,
successors and assigns, as such, from and against any losses, damages,
liabilities, and expenses (including reasonable attorneys' fees) which
arise out of or result from any third-party claim that: (i) BIZ does not
have sufficient right, title or interest in any materials necessary to
enter into this Agreement, or that any such material violates an
existing United States copyright, trademark, trade secret or other
United States intellectual property right of any third party; and/or
(ii) BIZ has breached a covenant, representation or warranty set forth
in this Agreement or otherwise. BIZ shall further indemnify and hold
harmless Litronic and its affiliates, partners, officers, employees,
directors, agents, contractors, representatives, successors and assigns,
as such, from and against any and all Claims made or incurred by
Litronic, whether prior to or after any termination or expiration of
this Agreement which Claim is based upon, asserted in connection with,
arises out of, or in any way relates to this Agreement and results, in
whole or in part, from the negligence or willful misconduct of BIZ or
any of its employees or agents or the failure of BIZ to perform its
duties and obligations under this Agreement; provided, however, that
this indemnification shall not apply to any Claim whose associated
damages were primarily and proximately caused by the negligence or
willful misconduct of Litronic, any of its employees, agents,
representatives or associates or the failure of Litronic to perform its
duties and obligations. under this Agreement.
23. Assignment.
The Parties hereto shall not assign, pledge, subcontract or otherwise
dispose of its rights or duties under this Agreement without the prior
written consent of the other Party.
AS WITNESS THE HANDS OF THE PARTIES HERETO:
Signed /s/ ROBERT J. GORMAN Date: 09/05/00
Name: ROBERT J. GORMAN
Title: President & COO
For and on behalf of BIZ Interactive Zone, Inc.
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Signed /s/ KRIS SHAH Date: Sept 6, 00
Name: KRIS SHAH
Title: Chairman/CEO
For and on behalf of Litronic, Inc.
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