EXHIBIT 10.1
EXCLUSIVE LICENSEE AGREEMENT
This Exclusive Licensee Agreement is entered into this ____ day of
December, 2005, by and between PORTAGY CORP., a Delaware corporation
("Company"), and BAVLI GROUP INTERNATIONAL, INC., a Delaware corporation
("Bavli").
WITNESSETH:
WHEREAS, Company is in the business of selling portable energy
products;
WHEREAS, Bavli represents that it and/or its principals have
substantial experience in the sale of consumer products internationally and
throughout designated channels in the United States and have established certain
relationships which will enable it to sell the Company's portable energy
products; and
WHEREAS, Company desires to engage Bavli to sell its portable energy
products and Bavli desires to sell such products on behalf of Company to third
parties in certain geographic regions and in certain designated domestic
channels; and
WHEREAS, the parties desire to set forth their understanding in writing
regarding the sale of the portable energy products and certain other agreements
related thereto, all in accordance with the provisions set forth below.
NOW, THEREFORE, in consideration of the foregoing, and the mutual
agreements set forth herein, Company and Bavli hereby agree as follows:
1. SERVICES.
A. Exclusive Sales Rights. Subject to the terms and
conditions of this Agreement, Company grants to Bavli, and Bavli hereby accepts,
the exclusive right to sell those certain products set forth on Exhibit "A"
hereto (the "Products") in the territory set forth on Exhibit "B" hereto (the
"Territory"). No right, title or interest is granted, whether express or
implied, by Company to Bavli relating to the right to sell any of the other
products of Company or, except as set forth in Sections 1.D and 1.E, to sell the
Products anywhere other than in the Territory.
B. Exclusivity Requirements. Bavli must meet the
following minimum sales requirements during the Term of this Agreement in order
to maintain the exclusive rights to sell the Products in the Territory:
i. For Start Me Up Products, the minimum sales
requirements are as follows:
a. Bavli must procure sales of at least 62,500 Units
(as hereinafter defined) during the first twelve month period commencing with
the initial delivery by Company to Bavli of the first Start Me Up Product (the
"Start Me Up Product Launch");
b. Bavli must procure sales of at least 71,875 Units
during the second twelve month period commencing with the Start Me Up Product
Launch;
c. Bavli must procure sales of at least 81,250 Units
during the third twelve month period commencing with the Start Me Up Product
Launch;
d. Bavli must procure sales of at least 90,625 Units
during the fourth twelve month period commencing with the Start Me Up Product
Launch;
e. Bavli must procure sales of at least 100,000 Units
during the fifth twelve month period commencing with the Start Me Up Product
Launch; and
f. Bavli must procure sales of at least 109,375 Units
during the sixth twelve month period commencing with the Start Me Up Product
Launch.
Each twelve month period described above is calculated independently, and there
shall be no cumulative factor in the calculations from one twelve month period
to the next during the Term of this Agreement. For purposes of this Section
1.B.i., "Units" shall mean the actual number of Start Me Up Products sold by
Bavli in the Territory, less returns.
ii. For PowerPak Products, the minimum sales requirements
are as follows:
a. Bavli must procure Net Sales Revenue (as
hereinafter defined) of at least $1,200,000 during the first twelve month period
commencing with the initial delivery by Company to Bavli of the first
PowerPak(TM) Product (the "PowerPak Product Launch");
b. Bavli must procure Net Sales Revenue of at least
$1,380,000 during the second twelve month period commencing with the PowerPak
Product Launch;
c. Bavli must procure Net Sales Revenue of at least
$1,560,000 during the third twelve month period commencing with the PowerPak
Product Launch;
d. Bavli must procure Net Sales Revenue of at least
$1,740,000 during the fourth twelve month period commencing with the PowerPak
Product Launch;
e. Bavli must procure Net Sales Revenue of at least
$1,920,000 during the fifth twelve month period commencing with the PowerPak
Product Launch; and
f. Bavli must procure Net Sales Revenue of at least
$2,100,000 during the sixth twelve month period commencing with the PowerPak
Product Launch.
Each twelve month period described above is calculated independently, and there
is no cumulative factor in the calculations from one twelve month period to the
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next during the Term of this Agreement. For purposes of this Section 1.B.ii.,
"Net Sales Revenue" shall mean gross revenue generated from the sales in the
Territory of the PowerPak Products by Bavli, less any discounts, returns and
rebates and/or price adjustments.
C. Failure to Attain Sales Targets. In the event that
Bavli fails to attain any of the minimum sales requirements set forth herein,
Company may, in its sole and absolute discretion, at any time (i) revoke the
exclusive sales rights originally granted to Bavli with respect to the Product
for which the minimum sales requirements was not met upon written notice to
Bavli, or (ii) Company may terminate this Agreement upon thirty (30) days
written notice to Bavli.
D. Permitted Sales Rights in the U.S. During the Term,
Company hereby grants Bavli the nonexclusive right to market and sell the
Products to U.S. Permitted Customers in the United States only through its
account, Remco Hardware, subject to the terms hereof. "U.S. Permitted Customers"
include Home Depot, Cotter/Tru Value, Ace Hardware, Orchard Supply Hardware, and
any other hardware and home improvement stores approved by Company, in its sole
discretion. Remco will issue purchase orders to the Company, solely for the
Permitted Customers; provided, however, that Remco shall submit all purchase
orders through Bavli. During the Term, Company and Bavli shall be subject to the
payment terms set forth in Section 2 on all orders placed by U.S. Permitted
Customers. In the event Remco solicits business with any customer other than the
Permitted Customers, Company shall provide written notice to Bavli of the same.
In such event, Bavli shall immediately cause such unauthorized solicitation to
cease. If after two notices of unauthorized sales or solicitations from Company
to Bavli the unauthorized solicitation occurs, Bavli may, in the sole discretion
of Company, immediately lose its domestic sales rights pursuant to this Section.
E. Marketing Outside Territory. Bavli shall not actively
market, advertise or pursue or solicit sales orders for the Products outside the
Territory. However, if Bavli should obtain a lead ("Lead") for sales outside the
Territory, which was not actively procured, Bavli may request, in writing, that
the Company ship to that Lead outside of the Territory. Company, in its sole
discretion, shall have the right to determine whether or not to accept and ship
to a Lead. During the Term, in the event an order is fulfilled or Company later
sells to the Lead, Company and Bavli shall be subject to the payment terms set
forth in Section 2. Exhibit "D" sets forth Leads referred to Company by Bavli
prior to the date of this Agreement that are approved as Leads and which shall
be subject to this Agreement upon execution by the Parties.
F. First Right of Refusal. So long as Bavli is in
compliance with the minimum sales requirements set forth in Section 1.B.,Company
hereby grants Bavli a first right of refusal for the exclusive sales rights for
each new product line sold by Company in the Territory ("First Right of
Refusal"). Company shall provide Bavli with written notice of any such First
Right of Refusal prior to any solicitation or sale or distribution of any new
product in the Territory. If Bavli fails to provide written notice to Company of
its intent to exercise its First Right of Refusal within forty-five (45) days of
Bavli's receipt of Company's notice pursuant to the preceding sentence, Bavli
shall lose its First Right of Refusal with respect to such new product line
(whether sold or distributed in or outside the Territory). The additional
exclusive sales rights granted to Bavli pursuant to the exercise of First Right
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of Refusal shall be subject to and conditioned upon (i) Bavli only selling
through those sales agents which Bavli utilized for the sale of the Start Me Up
Products and PowerPak Products hereunder and (ii) Bavli meeting benchmarks for
minimum sales as established by Company from time to time.
2. COMPENSATION
A. Net Profit Split. During the Term, for services
provided hereunder, Company shall pay Bavli an amount equal to fifty percent
(50%) of the "Net Profits". "Net Profits" shall be calculated by subtracting
from the gross revenue generated from the sale of a Product by Bavli in the
Territory or to a Permitted Customer or approved Lead in accordance with
Sections 1.D. or 1.E., respectively, less: (i) the Cost of the Product as
determined pursuant to Exhibit "C", (ii) any discounts, returns and rebates
and/or price adjustments, (iii) shipping and insurance costs for U.S. sales
only, and (iv) account program costs including, but not limited to, advertising,
marketing and promotional expenses incurred by Company (e.g. an allowance or
monies allocated through to a designated account for any promotional purpose).
B. Payment. Company shall submit to Bavli any amount
payable to Bavli pursuant to this Section 2 within fifteen (15) days from the
end of each month (or the end of the Term if earlier) during which Company
receives payment for the Products, together with the reports described in
Section 7.A. Notwithstanding the preceding, during the first sixty (60) days of
the Product Launch, the Company shall pay Bavli its share of the Net Profits
within seven (7) business days from the Company's receipt of payment for the
Products.
C. License Fee Reimbursement. No later than January 5,
2006, Company shall reimburse Bavli in the amount of $10,000 for its payment
made to Automotive Energy Systems, LLC, provided that Company has entered into
an exclusive distributorship agreement with Automotive Energy Systems, LLC by
that date.
3. ORDERS AND CREDIT TERMS
A. Orders. Purchase orders, in the form approved by
Company, shall be submitted to Company for approval directly from Bavli. Company
shall have the option, in its sole discretion, of accepting or rejecting any
such orders. No considerationshall be payable to Bavli pursuant to section 2.A,
except on orders approved by Company and actually shipped by Company and
received, accepted and paid for by customer. Should any account of Bavli submit
a purchase order directly to Company, Company shall promptly notify Bavli of
receipt of such order(s), remit to Bavli a copy of such order, and notify the
account that future purchase orders shall be submitted to Bavli, which will then
forward it to Company.
B. Credit Terms. The Company reserves the exclusive
right to grant credit and establish credit terms. International orders shall be
only on a cash in advance or irrevocable letter of credit basis, with F.O.B.
Hong Kong or the Company's factory's Asian shipping port.
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C. Prices. The prices for which the Products shall be
sold shall be determined by Company, in its sole discretion. Notwithstanding the
preceding, the prices for which the Products shall be sold shall not be more
than the lowest price the Products are sold in territories outside of the United
States. Company shall notify Bavli within seven (7) days of any price
fluctuations.
4. TERM AND TERMINATION.
A. Term. The term of this Agreement shall be six (6)
years commencing on the date this Agreement is executed, plus the time elapsed
between such date and the date of the later of (i) the PowerPak Product Launch
and (ii) the Start Me Up Product Launch, unless earlier terminated pursuant to
the terms of this Agreement (the "Term").
B. Bankruptcy/ Insolvency. This Agreement may be
terminated by either party upon notice if the other party liquidates or
terminates its business, is adjudicated a bankrupt, makes an assignment for the
benefit of creditors, has a custodian, receiver, trustee or similar official
appointed to take possession, custody or control of the property of the other
party, invokes the provisions of any law for the relief of debtors (including,
without limitation, laws relating to reorganization, insolvency or moratorium)
or files or has filed against it any similar proceeding.
5. INDEPENDENT CONTRACTOR. Bavli will serve as an independent
contractor and be responsible to pay all applicable Social Security,
withholding, and other national and international taxes, licensing fees and
other governmental charges if any. Bavli will bear all expenses incurred in its
sales endeavors except for those, if any, for which the Company agrees in
writing to pay. If Bavli has any agents or employees, it shall be responsible
for all taxes and insurance or such agents or employees, including any workers'
compensation and/ or employer's liability insurance as may be usual and
customary and/or required under local law or practice.
6. CONFIDENTIALITY AND NONSOLICITATION
A. Mutual Confidentiality Agreement.
(i) Each party acknowledges that, by reason of their
relationship with each other under this Agreement, they will or may have access
to confidential and proprietary information of the other's, including, without
limitation, each other's present and future products, business plans, client and
customer lists or profiles, and other information relating to the sale of the
Products, all of which are not otherwise readily available from public or
published sources (collectively, the "Confidential Information"). Both parties
agree that they will maintain in confidence all such Confidential Information
and that they will not, for any reason, directly or indirectly, use for the
benefit of themselves, or for any person, firm, corporation, limited liability
company, partnership, joint venture or any other entity whatsoever, or disclose
to any person, firm, corporation, limited liability company, partnership, joint
venture or other entity whatsoever, any of the Confidential Information of the
other party, without the prior written authorization of the other party. Each
party shall limit the dissemination of Confidential Information to only those of
either party's employees who have a need to know to perform their duties related
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to the obligations of their entity pursuant to this Agreement and, prior to
showing the Confidential Information or discussing the same with them, each
party shall require that they enter into an agreement for the benefit of each
other which contains substantially the same terms as this Section 6A.
(ii) Upon termination of this Agreement, both parties
shall return all notices, memoranda, lists, reports and all other documents and
materials, and all copies thereof, which contain or relate to the Confidential
Information of the other party, including all copies and records thereof, to the
other upon receipt of request therefore.
B. Nonsolicitation Agreement.Both parties acknowledge
and agree that as a result of their relationship with each other they are, and
continue to be privy to the Confidential Information of the other party, and
that such Confidential Information is valuable and material to the businesses
and competitive position of the other party, and that the covenants herein
contained are a material consideration and inducement to both parties to enter
into this Agreement. Accordingly, both parties agree that during the term of
this Agreement and for a period of two (2) years thereafter, they will not,
without the prior written consent of the other, directly or indirectly, for
themselves or others, or as owners, consultants, joint venturers, independent
contractors, advisors, agents or otherwise: directly or indirectly, or for or
with any other person, firm, corporation, limited liability company,
partnership, joint venture or other entity whatsoever, knowingly solicit or
endeavor to entice away from the other any person employed by the other party,
or with whom the other party has a business relationship, in order to accept an
employment or establish an association withthem, or any other person, firm,
corporation, limited liability company, partnership, joint venture or entity
whatsoever, and approach any such person for any such purpose or authorize or
knowingly cooperate with the taking of any such action by any other person,
firm, corporation, limited liability company, partnership, joint venture or
entity whatsoever.
C. Competing Products. Until termination of this
Agreement and for a period of twelve (12) months following such termination,
Bavli, directly or indirectly or, in association with or as a stockholder,
partner, joint venturer, member or otherwise of or through any person, firm,
corporation, partnership, association or other entity, shall not sell or
distribute any other products similar to the Products anywhere in the world
where the Company, its affiliates or its agents are engaged in the offer and
sale of the Products, provided, however, the foregoing provisions shall not
prohibit Bavli from owning up to 5% of the securities of any publicly-traded
enterprise that markets any products that could be construed as competitive with
Company's.
D. Remedies for Breach of Section 6. Both parties agree
that upon breach of this Section 6, the other party to this Agreement shall be
entitled to all profits realized by that party as a result of any violation and,
in addition, as a matter of right, to injunctive relief in any court of
competent jurisdiction, all of which remedies either party shall be entitled to
pursue simultaneously and cumulatively.
E. Independence of Section 6. The agreements contained
in this Section 6 are to be construed as being independent of any other
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agreements in this Agreement and the existence of any cause of action in favor
of either party against the other, whether predicated on this Agreement or
otherwise, shall not constitute a defense to enforcement by either party of the
provisions of this Section 6.
F. Severability of Section 6. The activities,
territories, time, customers, persons and institutions to which the restrictions
herein above set forth are applicable, are separate and divisible covenants and
agreements. If any restriction is held by any court of competent jurisdiction to
be unenforceable as to any one activity, territory, time, customers, persons
and/or institutions above listed or a variation thereof, such restriction shall
nonetheless be operative as to all other activities, territories, time,
customers, persons or institutions. In the event that any court of competent
jurisdiction determines that a restriction as to any activity, territory, time,
customers, persons and/or institutions above listed, or a variation thereof, is
unenforceable, then such restriction as to a lessor activity, territory, time,
customers, persons and/or institutions as determined to be enforceable by the
court shall be enforced against Bavli or Company, as applicable.
G. Broad Interpretation of Section 6. The provisions of
this Section 6 shall be construed and interpreted so as to afford the full
measure of protection to be given by each party to the other. For purposes of
this Section 6, the term Bavli shall include any of its affiliates and the term
Company shall include any of its affiliates. An "affiliate" shall mean an entity
directly or indirectly controlling, controlled by, or under common control with
Bavli or Company, as applicable.
H. Survival of Section 6. This Section 6 shall survive
the termination of this Agreement and shall continue to bind Bavli and Company,
their affiliates, successors, heirs and permitted assigns.
7. REPORTS/INSPECTION
A. Reports. Within the time period specified in Section
2.B. for Company to make payment to Bavli, Company shall deliver to Bavli a true
and accurate written report showing the actual Product sales in the Territory
and the Product sales to U.S. Permitted Customers and Leads for such time
period, together with the Net Profits generated thereform.
B. Inspection. Bavli has the right to audit the records
of Company, solely limited to verifying the calculation of the net profit split
to be paid pursuant to Section 2, including B.O.M. costs, once every twelve
months, at Bavli's own cost upon 21 days prior written notice to Company.
Provided, however, if the audit reflects a greater than 5% deviation from the
B.O.M. costs represented by Company to Bavli, the audit charges will be paid by
Company.
8. SALES, MARKETING AND PROMOTION
A. Sales Expenditures. Bavli shall pay for all costs and
expenditures involved in selling the Products within the Territory to third
parties.
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B. Samples/Brochures. Company shall furnish Bavli with
demos and brochures and marketing materials for the Products, all of which Bavli
agrees to return to Company, and to be liable for any failure to return any
portion thereof, at the request of Company, including any video master that
Company produces that pertains to the Products.
C. Website. Company's international website shall list
Bavli as the sole distributor for the Territory, and all inquiries and leads for
the Territory will be directed to Bavli.
9. TRADEMARKS OF COMPANY
A. Licenses. Subject to the terms and conditions of this
Agreement, each party hereby grants to the other party a nonexclusive limited
license in the Territory to use the other party's name, logo and trademark, in
each instance solely for the purpose of promoting, distributing and selling the
Products in the Territory, or otherwise as permitted pursuant to Sections 1.D
and 1.E., in accordance with the terms and conditions of this Agreement. Bavli
shall submit to Company for approval proofs of any materials containing the
name, logo or other trademark of Company proposed to be used by Bavli or its
agents or contractors prior to use.
B. Use of Trade Names and Logos. Each party recognizes
that the name, logo and trademark of the other party represent a valuable asset
of such entity and that substantial recognition and goodwill are associated with
such intangibles. Each party hereby agrees that, without prior written
authorization of the other party, it shall not use the name, logo or trademark
of the other party for any purpose other than the promotion and sale of the
Products in the Territory solely to the extent required to fulfill its
obligations under this Agreement.
C. Injunctive Relief. Each Party acknowledges that a
violation of this Section 9 would cause irreparable harm to the other party for
which no adequate remedy at law exists, and each party therefore agrees that, in
addition to any other remedies available, and notwithstanding any other
provision in this Agreement, the aggrieved party shall be entitled to injunctive
relief to enforce the terms of this Section 9. If either party prevails in any
such action, it shall be entitled to recover all costs and expenses, including
reasonable attorney's fees and other professional fees and expenses incurred
because of any legal action arising in relation to this Section 9.
D. Notification of Infringement and Enforcement. Each
party shall notify the other party of any infringement or misuse of its name,
logo or trademarks of which such party becomes aware. Each party shall be solely
responsible to prosecute any such infringement of its trademark(s).
10. INDEMINIFICATION/ LIMITATION OF DAMAGES.
A. Each party shall indemnify, defend, and hold harmless
the other party from and against all loss, cost, liability and expense which may
be imposed upon or reasonably incurred by the other party, including reasonable
attorneys' fees and disbursements and reasonable settlement payments, in
connection with any claim, action, suit or proceeding or threat thereof, made or
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instituted in which the other party may be involved or be made a party by reason
of a breach of such party's representations or covenants.
B. Company shall indemnify, defend, and hold harmless
Bavli from and against all loss, cost, liability and expense which may be
imposed upon or reasonably incurred by Bavli, including reasonable attorneys'
fees and disbursements and reasonable settlement payments, in connection with
any claim, action, suit or proceeding or threat thereof, made or instituted by
any third parties in which Bavli may be involved or be made a party by reason of
which Bavli may suffer as a result of any loss to the persons or property of a
third party arising directly or indirectly from use of a Product; provided,
however, that Company shall have no such obligation to indemnify or hold Bavli
harmless from any matters covered by Bavli's indemnity set forth in C. below.
C. Bavli shall indemnify, defend, and hold harmless
Company from and against all loss, cost, liability and expense which may be
imposed upon or reasonably incurred by Company, including reasonable attorneys'
fees and disbursements and reasonable settlement payments, in connection with
any claim, action, suit or proceeding or threat thereof, made or instituted by
any third parties in which Company may be involved or be made a party by reason
of which Company may suffer as a result of any loss to the person or property of
a third person arising directly or indirectly from the wrongful or negligent
action or inaction of Bavli, or any other third party acting on its behalf or
under its direction with regard to the Products; provided, however, that Bavli
shall have no such obligation to indemnify or hold Company harmless from any
matters covered by Company's indemnity set forth in B above.
D. WITH REGARD TO CLAIMS BETWEEN THE PARTIES, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, SPECIAL, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES ARISING OUT OF ANY OBLIGATION, BREACH ACT OR
OMISSION IN CONNECTION WITH THE PERFORMANCE OF THE AGREEMENT, REGARDLESS OF
WHETHER THE CLAIM IS FOR BREACH OF CONTRACT, BREACH OF WARRANTY, TORT (INCLUDING
NEGLIGENCE) STRICT LIABILITY, OR OTHERWISE.
E. Promptly after receipt by a person or entity
indemnified under any express provision of this Agreement (the "Indemnified
Party") of notice of the commencement of any action against the Indemnified
Party, such Indemnified Party shall give notice to the person or persons or
entity or entities obligated to indemnify the Indemnified Party pursuant to the
express provisions of this Agreement (the "Indemnifying Party"). The
Indemnifying Party shall be entitled to participate in the defense of the action
and, to the extent that it may elect, in its discretion, by written notice to
the Indemnified Party, to assume the control and defense and/or settlement of
such action and the Indemnified Party shall execute such documents or otherwise
to permit the Indemnifying Party to do so; provided, however, that (i) both the
Indemnifying Party and the Indemnified Party must consent and agree to any
settlement of any such action, except that if the Indemnifying Party has reached
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a bona fide settlement agreement with the plaintiff(s) in any such action and
the Indemnified Party does not consent to such settlement agreement, then the
dollar amount specified in the settlement agreement shall act as an absolute
maximum limit on the indemnification obligation of the Indemnifying Party, and
(ii) if the defendants in any such action include both the Indemnifying Party
and the Indemnified Party and if the Indemnified Party shall have reasonably
concluded that there are legal defenses available to it which are in conflict
with those available to the Indemnifying Party, then the Indemnified Party shall
have the right to select separate counsel to assert such legal defenses and
otherwise to participate in the defense of such action on its own behalf, and
the fees and disbursements of such separate counsel shall be included in the
amount which the Indemnified Party is entitled to recover under the terms and
subject to the conditions of this Agreement.
11. REPRESENTATIONS AND WARRANTIES.
A. Each party hereby represents and warrants to the
other party that such party (i) is duly organized, validly existing and in good
standing under the laws of the state in which it is organized, (ii) has the
power and authority and the legal right to own and operate its property and
assets, and to carry on its business as it is now being conducted, and (iii) is
in compliance with all requirements of applicable law, except to the extent that
any noncompliance would not materially adversely affect such party's ability to
perform its obligations under this Agreement.
B. Each party hereby represents and warrants to the
other party that such party (i) has the power and authority and the legal right
to enter into this Agreement and perform its obligations hereunder and (ii) has
taken all necessary action on its part to authorize the execution and delivery
of the Agreement and the performance of its obligations hereunder. The Agreement
has been duly executed and delivered on behalf of such party, and constitutes a
legal, valid, binding obligation enforceable against such party in accordance
with its terms.
C. Each party hereby represents and warrants to the
other party that the execution and delivery of the Agreement and the performance
of such party's obligations hereunder and thereunder (i) do not conflict with or
violate any requirement of applicable laws or regulations or any material
contractual obligation of such party and (ii) do not materially conflict with,
or constitute a material default or require any consent thereunder, any material
contractual obligation of such party.
D. Each party agrees to prepare and file whatever
filings, requests, or applications are required to be filed with any
governmental authority in connection with this Agreement and to cooperate with
one another as reasonably necessary to accomplish the foregoing.
E. Each party covenants that it will comply with all
applicable federal, state, local and international laws and regulations related
to its development, manufacture, marketing, selling, and importing of the
Products, as applicable.
12. STOCK, WARRANTS AND BONUSES
A. As additional consideration for the services
provided hereunder, within 7 days of the execution of this Agreement by Bavli
and Company, Company shall issue or grant, as applicable, the following:
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i. 160,000 shares of common stock of Company to Bavli
or its designee, subject to a one year restriction on its sale or transfer (and
applicable securities restrictions);
ii. 40,000 shares of common stock of Company to Bavli
or its designee, subject to a restriction limiting its sale or transfer to
10,000 shares per month in each of the first four months following the date the
initial registration statement filed by Company becomes effective covering any
common stock of Company (and applicable securities restrictions);
iii. 200,000 warrants to purchase common stock of
Company at $0.75 per share to Bavli or its assignee; and
iv. 200,000 warrants to purchase common stock of
Company at $0.75 per share to Steve Oscherowitz;
B. Within 15 days of:
i. The satisfaction by Bavli of the minimum sales
requirements set forth in Section 1.B.ii., Company shall issue 200,000 shares of
common stock of Company to Bavli or its designee, subject to restrictions
limiting its sale or transfer upon the earlier of (x) one year from the date of
issuance or (y) the date a registration statement is filed by Company and
effective covering any common stock of Company (and applicable securities
restrictions).
ii. The sale by Company of at least 500,000 units of
START ME UP products during the first twelve month period in accordance with the
agreement between Company and START ME UP, Company shall issue 200,000 shares of
common stock of Company to Bavli or its assignee, subject to restrictions
limiting its sale or transfer upon the earlier of (x) one year from the date of
issuance or (y) the date a registration statement is filed by Company and
effective covering any common stock of Company (and applicable securities
restrictions).
In the event of a merger, reorganization or other capital event of Company, the
shares to be issued hereunder shall be adjusted or converted in the same manner
as the shares of other stockholders of the Company are adjusted or converted.
13. ADDITIONAL TERMS.
A. No trans-shipping is allowed by any Bavli customer,
including customers of Bavli's agents and contractors, that is licensed or
utilized by Bavli for business outside of the Territory. In the event that such
trans-shipping outside of the Territory occurs, Company shall notify Bavli,
which shall then immediately cause such action to cease. Should such-Bavli
customer trans-ship outside of the Territory a second time after Company
provides Bavli notice of such action, Bavli shall immediately terminate its
dealings with that customer and Company shall have the right to reject or refuse
to fulfill purchase orders issued by such customer.
B. Company will replace or issue credit for any
"initially defective" (out of the box) product to Bavli's accounts or licensees.
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C. Bavli will be added as an "additional insured" on
any of Company's product liability policies.
D. Bavli and Company hereby waive any and all claims
that such party may have against the other party arising from or caused by such
other party's actions or omissions prior to the date hereof.
14. MISCELLANEOUS.
A. All notices, offers, acceptance and any other acts
under this Agreement (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressees in person, by Federal Express
or similar overnight next business day delivery, or by facsimile delivery
followed by overnight next business day delivery, as follows:
If to Company, the notice should be sent to the attention of:
Portagy Corp.
9812 Falls Road
Suite 114-198
Potomac, MD 20854
Attention: Mark Levin
with a copy to: Todd Ruhalter
c/o Portagy Corp.
21800 Burbank Blvd.
Suite 150
Woodland Hills, CA 91367
with a copy to: Harris Cramer LLP
1555 Palm Beach Lakes Blvd.
Suite 310
West Palm Beach, FL 33401
Attn: Daryl B. Cramer, Esq.
Facsimile: 561-659-0701
If to Bavli, the notice should be sent to the attention of:
Charles Wiesel
Bavli Group International, Inc.
9412 Oakmore Road
Los Angeles, CA 90035
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or to such other address as any of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be evidence of successful facsimile delivery. Time shall
be counted from the date of transmission.
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
B. This Agreement (which term includes all Attachments
hereto) constitutes the entire agreement between the parties hereto pertaining
in any manner to the subject matter hereto, and supersedes any prior oral or
written agreement or understanding between the parties with respect to such
subject matter.
C. Neither this Agreement, nor any right, interest or
obligation hereunder of each party, shall be assigned or assignable by either
party without the written consent of the other. Notwithstanding the preceding,
this Agreement may be assigned by Company to an affiliated entity or transferred
by merger upon notice to Company.
D. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
E. In the event of litigation regarding the subject
matter of this Agreement, the prevailing party shall be entitled to reasonable
attorney's fees and costs (at the trial and all appellate levels).
F. In the case any one or more of the provisions
contained in this Agreement or any application thereof shall be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and any other application thereof
shall not in any way be affected or impaired thereby.
G. Except as otherwise provided to the contrary herein,
this Agreement shall be binding upon, and inure to the benefit of, each party
and their respective heirs, executors, administrators, successors and permitted
assigns.
H. Amendments to this Agreement shall be in writing and
signed by each party hereto.
I. This Agreement may be executed in several
counterparts and all so executed shall constitute one agreement binding on all
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the parties hereto, notwithstanding that all the parties are not signatory to
the original counterpart. Any facsimile signature of any party hereto shall
constitute a legal, valid and binding execution hereof by such party.
J. Wherever the context shall so require, all words
herein in a particular gender shall be deemed to include other genders where
applicable. In addition, singular words shall include the plural and plural
words shall include the singular where applicable.
K. Titles of Sections, paragraphs and subparagraphs are
for convenience only, and neither limit nor amplify the provisions of the
Agreement itself, and all references herein to Sections, paragraphs or
subparagraphs thereof shall refer to the corresponding Sections, paragraphs or
subparagraphs of this Agreement unless specific reference is made to such
Section, paragraph or subparagraph of another document or instrument.
L. All representations, warranties and provisions hereof
without limitation shall survive the termination of this Agreement, the
liquation or dissolution of each party, if any, and shall thereby continue in
full force and effect at all times thereafter.
M. The waiver or inaction by either party hereto of a
breach of any condition of this Agreement by the other party shall not be
construed as a waiver of any subsequent breach by such party, nor shall it
constitute a waiver of any subsequent breach by such party, nor shall it
constitute a waiver of that party's rights, actual or inherent. The failure of
any party hereto in any instance to insist upon a strict performance of the
terms of this Agreement or to exercise any option herein shall not be construed
as a waiver or relinquishment in the future of such term or option, but that the
same shall continue in full force and effect.
N. The fact that the first (or later) draft of this
Agreement was prepared by counsel for either party shall create no presumptions
and specifically shall not cause any ambiguities to be construed against the
drafting party.
O. Each of the parties submits to the jurisdiction of
any state or federal court sitting in Los Angeles, in any action or proceeding
arising out of or relating to this Agreement and agrees that all claims in
respect of the action or proceeding may be heard and determined in any such
court. Each of the parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety,
or other security that might be required of any other party with respect
thereto. Each party agrees that a final judgment in any action or proceeding so
brought shall be conclusive and may be enforced by suit on the judgment or in
any other manner provided by law or in equity.
P. No party shall be responsible or liable for any loss,
damage, detention or delay caused by fire, strike, civil or military authority,
insurrection or riot, railroad embargoes, lock-out, tempest, accident, breakdown
of machinery, delay in delivery by other parties or by any other cause which is
unavoidable or beyond its reasonable control, or in any event for the
consequential damages.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the ___ day of December, 2005.
COMPANY
PORTAGY CORP.
By:________________________________
By: _______________________________
Name: _____________________________
Title: ____________________________
BAVLI
BAVLI GROUP INTERNATIONAL, INC.
By: _______________________________
Name: _____________________________
Title: ____________________________
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EXHIBIT "A"
PRODUCTS
The Products shall include all current and future (i) Start Me Up products
produced by Automotive Energy Systems, LLC and (ii) PowerPak(TM) products
produced by Zibo Enterprises.
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EXHIBIT "B"
TERRITORY
The Territory shall be Germany (as per industry standard, including Austria and
Switzerland), South Africa, New Zealand, Australia, and the Middle East,
including Israel, Jordan, Cyprus, Lebanon, Kuwait, Saudi Arabia, Iraq, Iran, the
United Arab Emirates, Syria and Qatar.
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EXHIBIT "C"
COST
The Cost of the Products are as follows:
1. For Start Me Up products:
The Cost shall be the invoiced cost of the Product from
Automotive Energy Systems, LLC.
2. For PowerPak(TM) products:
The Cost shall be the invoiced cost of the Product from Zibo
Enterprises.
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EXHIBIT "D"
LEADS
The following are considered Leads provided to Company by Bavli prior to the
date hereof:
1. Fulcrum, in Toronto, Canada, and pertaining to retailers in Canada,
most prominently with, but not necessarily limited to convenience stores and gas
stations.
2. Shada, in Austria pertaining to Russia and eastern Europe.
3. Intcomex, in Florida, pertaining to Latin American countries.
4. Global Marketing, in New Jersey, pertaining to Latin American
countries.
5. Solly Sakal, in Israel, pertaining to his airline travel sales
company based in Singapore for business with selected airlines BGI plans to
solicit with Mr. Sakal's company.
6. Patrick Haddad, in Los Angeles, whose company services the global
retail travel trade through various chains such as Duty Free Shops
internationally.
7. Igor Krivitski, in Russia and pertaining to Russia.
8. Ata, pertaining to Turkey.
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