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International Marketing and Distribution Agreement

This International Marketing and Distribution Agreement (the “Agreement”), dated as of [Insert Date] (the “Effective Date”), is entered into by and between “HIK” ltd (the “Company”) and ………… (the “Distributor”).

1. Definition. The following terms shall have the respective meanings specified below:

“Commercials” shall mean videotaped programs promoting the sale of the Product on television.

“Company Marketing Materials” shall mean materials and information related to the Product provided to Distributor or any Subdistributors by Company, including but not limited to the Commercials, transparencies, brochures, product packaging, photographs, artworks, labels, instructions, manuals and point of purchase materials.

“Distributor Marketing Materials” shall mean any materials and information related to the Product created or produced by Distributor or any Subdistributors from any sources for the purpose of marketing and distributing the Product, including but not limited to any translation, packaging, re-design, re-editing, photograph, modification or alteration of the content of the Company Marketing Materials.

“Product” shall mean the product or products set forth in Exhibit A attached hereto.

“Subdistributors” shall mean any affiliates of Distributor or third parties which Distributor has sublicensed the rights granted to Distributor by Company to sell, offer to sell and market Product in the Territory.

“Territory” shall mean the countries or territories set forth in Exhibit A attached hereto.

2. Grant of Rights. During the term of this Agreement, and subject to the limitations and restrictions hereunder.The exclusive rights of the products, which are showed in Exhibit A, to promote, market, sell and otherwise distribute the Product, through all channels of distribution only within the Territory, has been granted to the Company from Telestar Direct Marketing S.A. Such rights granted shall include the right to use the Commercials, Company Marketing Materials and Company Intellectual Property (as defined below) in the Territory. Distributor may distribute the Product to Subdistributors only with the express written consent of Company, which consent shall not be unreasonably withheld by Company. Distributor agrees that it shall only distribute the Product to Subdistributors at a standard reasonable markup to its own cost price.

3. Use of Company Materials. Distributor shall (i) use and shall ensure that any Subdistributors use (A) such trademarks, trade names, logos and other names or designs related to the Product and (B) the Company Marketing Materials and the names or likenesses (including photographs, and videotapes, endorsements and testimonials) of any endorsers of the Product only in such format and manner approved in writing by Company, and (ii) transmit and air and shall ensure that any Subdistributors transmit and air the Commercials only in such format and manner as approved in writing by Company.

4. Ownership of Intellectual Property. Distributor hereby acknowledges and agrees that Company is the sole and exclusive owner at all times of all right, title and interest in and to the Product, Commercials, Company Marketing Materials, Distributor Marketing Materials, and all trademarks, copyrights, patents and any other intellectual property worldwide pertaining thereto (collectively, the “Company Intellectual Property”). Furthermore, Distributor agrees not to apply for any jurisdiction's registration of rights in the Product, Commercials, Company Marketing Materials and/or Distributor Marketing Materials, including trademarks, patents, design rights, or copyrights, and not to oppose or object in any way to applications for registration of same by Company or others designated by Company with respect to the Distributor Marketing Materials.

5. Non-Competition. During the term of this Agreement, Distributor shall not and ensure that any Subdistributors shall not (except in connection with items obtained from or through Company) directly or indirectly, license, make, market, advertise, sell and/or offer to sell a confusingly similar product.

6. Purchase Terms.

   1. Purchase Orders and Price. Company shall sell to Distributor such quantities of the Product as Distributor may order at a purchase price per unit (in U.S. dollars) set forth in Exhibit A attached hereto. Title of goods shall pass from Company to Distributor upon payment for such goods by Distributor. All goods shall be shipped “EX WORKS” Company’s designated location, and distributor shall be responsible for all shipping, freight, taxes, customs fees and other charges relating to the Product purchased by Distributor or the Subdistributors.

   2. Payment for Goods. Distributor shall pay Company (in U.S. dollars) for each purchase order as follows: (i) thirty percent (30%) of the total purchase price of the goods by wire transfer at the time Distributor submits a purchase order, and (ii) the remaining seventy percent (70%) of the total purchase price of the goods by wire transfer five (5) days prior to the shipment of the goods. If Product is specially configured and manufactured, Distributor shall pay Company fifty percent (50%) of the total purchase price of the goods by wire transfer at the time Distributor submits a purchase order. Distributor agrees that unless pre-approved by Company in writing, all costs and expenses incurred by Distributor in connection with its performance under this Agreement shall be at Distributor’s own expense and without cost or charge to the Company.

   3. Defects and Returns. Distributor understands and agrees that without Company’s written authorization, which may be withheld in Company’s sole discretion, any Product purchased by Distributor from Company may not be returned to Company unless the Product is defectively manufactured.

7. Representations, Warranties and Covenants. Distributor represents, warrants and covenants that:

   1. It will use its best efforts to ensure that the Distributor Marketing Materials do not and will not infringe or conflict with any copyright or other intellectual property right of any third party.

   2. It is cognizant of applicable regulatory requirements relating to demonstration techniques employed in television commercials and infomercials in the Territory, and it shall, at all times, comply with all applicable laws, rules and regulations and to obtain any necessary import and other licenses, governmental or regulatory approvals and other consents required in connection with the promotion and sale of the Product in the Territory.

   3. If applicable, it will ensure that all Subdistributors under this Agreement sign the contract attached hereto as Exhibit B.

   4. It shall be responsible for all product liability claims resulting from its distribution and sales of the Product.

8. Confidentiality. Distributor recognize that it may become aware of proprietary, confidential information concerning Company, its products, processes, operations, technical information, designs, concepts, ideas, or other information that may be deemed a trade secret, or is sensitive in nature or is not otherwise known to the public, including the contents of this Agreement (collectively, “Confidential Information”). Distributor shall take commercially reasonably efforts to protect the Confidential Information of Company and agree that it shall not use or disclose Confidential Information of Company without the prior written consent of the other party.

9. Term and Termination. Unless agreed to otherwise by the parties (through minimum order commitment and such), the term of this Agreement shall be for one (1) year from the Effective Date.

   1. Termination by Company. Company may terminate this Agreement as follows: (i) after thirty (30) days if distributor has not placed an initial order; (ii) sixty (60) days after initial order if distributor has not placed a follow up order; (iii) at any time when there is a lapse of ninety (90) days without placing an order.

   2. Rights and Duties Upon Termination. Upon termination of this Agreement for any reason whatsoever, (i) the marketing and distribution rights of Distributor under this Agreement (as well as any marketing or distribution rights granted to Subdistributors) shall be deemed immediately revoked without need for any additional action by Company, (ii) Company and Distributor shall promptly settle any outstanding payments under this Agreement; and (iii) Distributor shall cease using, and ensure that all Subdistributors cease using, in any manner whatsoever, the Commercials, Company Marketing Materials, Distributor Marketing Materials and Company Intellectual Property and immediately return any and all property of Company in the possession of or under the control of Distributor or any Subdistributors..

10. General.

    1. Entire Agreement. This Agreement, including any schedule hereto, constitutes the entire Agreement of the parties.

    2. Assignment and Transfer. Company shall have the right to assign any of its rights or obligations in full or in part to an affiliate entity; provided that any assignee shall assume Company’s obligations hereunder in writing. Distributor shall not have the right to assign any of Distributor’s rights or obligations to any third party without the prior written consent of Company.

    3. Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of Bulgaria for contracts to be performed entirely therein and without regard to conflicts of law principles.

In Witness Whereof, the parties have caused duplicate originals of this International Marketing and Distribution Agreement to be executed on the date first written above.

Exhibit A

The rights provided hereunder shall be valid for the following product(s) only in the following countries, including the respective territories of each such country (collectively, the “Territory”). For the avoidance of doubt, Distributor expressly understands and agrees that it shall in no manner use, sell, offer to sell, advertise, export, directly or indirectly, or otherwise exploit the Product outside of the Territory.

Exhibit B: Contract With Subdistributors

This Subdistributor Agreement (the “Agreement”), dated as of _______________ (the “Effective Date”), is entered into by and between [……………]. (the “Distributor”) and [Insert Name of Subdistributor] (the “Subdistributor”) pursuant to that certain International Marketing and Distribution Agreement, dated as of ___________ (the “Distribution Agreement”), by and between Distributor and “HIK” ltd (the “Company”). All capitalized terms not defined herein shall have the same meaning as set forth in the Distribution Agreement.

1. Third-Party Beneficiary. It is agreed by Distributor and Subdistributor that Company is intended to be a third-party beneficiary of this Agreement.

2. Grant of Rights

   1. Marketing and Distribution Rights. Subject to the limitations and restrictions hereunder and under the Distribution Agreement, Distributor hereby grants to Subdistributor the non-exclusive right to advertise, promote, market, sell and otherwise distribute the Product through all channels of distribution only within the Territory. Such rights granted shall include the right to use the Commercials, Company Marketing Materials and Company Intellectual Property in the Territory. “Territory” shall mean the following countries: [Insert List of Countries].

   2. Use of Product Trademarks. Subdistributor shall (i) use (A) such trademarks, trade names, logos and other names or designs related to the Product and (B) the Company Marketing Materials and the names or likenesses (including photographs, and videotapes, endorsements and testimonials) of any endorsers of the Product only in such format and manner approved in writing by Company, and (ii) transmit and air the Commercials only in such format and manner as approved in writing by Company.

   3. Ownership of Intellectual Property. Subdistributor hereby acknowledges and agrees that Company is the sole and exclusive owner at all times of all right, title and interest in and to the Company Intellectual Property. Furthermore, Subdistributor agrees not to apply for any state, federal, or other jurisdiction's registration of rights in the Product, Commercials, Company Marketing Materials and/or Distributor Marketing Materials, including trademarks, patents, design rights, or copyrights, and not to oppose or object in any way to applications for registration of same by Company or others designated by Company with respect to the Distributor Marketing Materials.

   4. Non-Competition. During the term of this Agreement, Subdistributor shall not, except in connection with items obtained from or through Company, directly or indirectly, license, make, market, advertise, sell and/or offer to sell a confusingly similar product. For purposes of this Agreement, a confusingly similar product is one that (i) infringes the Company Intellectual Property, or (ii) is substantially similar in design or function to the Product.

3. Representations, Warranties and Covenants. Subdistributor represents, warrants and covenants that:

   1. It will use its best efforts to ensure that the Distributor Marketing Materials do not and will not infringe or conflict with any copyright or other intellectual property right of any third party.

   2. It is cognizant of applicable regulatory requirements relating to demonstration techniques employed in television commercials and infomercials in the Territory, and it shall, at all times, comply with all applicable laws, rules and regulations and to obtain any necessary import and other licenses, governmental or regulatory approvals and other consents required in connection with the promotion and sale of the Product in the Territory.

4. Confidentiality. Subdistributor may have access to the Confidential Information. Sudistributor agrees to maintain the Confidential Information, including the terms and details of this Agreement, in strict confidence. Distributor agrees not to use, disclose or permit any other person or entity access to the Confidential Information without the prior written consent of Company, and Distributor shall be liable for any such use, disclosure or access.

In Witness Whereof, the parties have caused duplicate originals of this Agreement to be executed on the date first written above.