SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported): September 1, 1999
HYDRON TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Charter)
New York 0-6333 13-1574215
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(State or Other Jurisdiction of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
1001 Yamato Road, Boca Raton, Florida 33431
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (561) 994-2446
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. Other Events.
On August 31, 1999, the Company announced that it had entered into a
Marketing and Distribution Agreement (the "Agreement") with Home Shopping Club,
LP ("HSN"), effective September 1, 1999. Pursuant to the Agreement, the Company
will create, develop and manufacture skin care products for marketing,
distribution and sale in connection with the Company's "Hydron" trademark.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits.
Exhibit No. Description
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10.58 Marketing and Distribution
Agreement by and between Hydron
Technologies, Inc. and Home
Shopping Club, LP, effective
September 1, 1999.
99.1 Press Release, dated August 31,
1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HYDRON TECHNOLOGIES, INC.
By: /s/ Richard Banakus
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Richard Banakus
President
Date: September 14, 1999
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MARKETING AND DISTRIBUTION AGREEMENT
Agreement, effective September 1, 1999, between HYDRON TECHNOLOGIES, INC., a New
York corporation ("Hydron"), and HOME SHOPPING CLUB LP, a Delaware limited
partnership ("Home Shopping").
1. Products.
1.1 Product Development. Hydron will create, develop and manufacture
skin care products for marketing, distribution and sale in connection with the
"Hydron" trademark (the "Hydron Trademark") and in connection with the name,
autograph, voice, likeness and endorsement (collectively, the "Endorsement") of
Harvey Tauman ("Performer") (the foregoing skin care products being referred to
collectively as the "Products"). Hydron will consult with Home Shopping about
the formulation, design, packaging, positioning and other aspects of development
of Products.
1.2 Product Supply and Purchases. Hydron will supply to Home Shopping
Products approved by Home Shopping in such quantities as Home Shopping may
order, subject to the minimum purchase requirements of Section 1.5. Products
supplied by Hydron to Home Shopping will include a mix of previously best
selling Hydron items and items that are "new and improved" to differentiate them
from Products previously sold by Hydron. All Product packaging and
configurations of Products supplied by Hydron to Home Shopping will be exclusive
to Home Shopping for all channels of distribution, except that Hydron will have
the right to sell Products in the same packaging and configuration (a) in the
Hydron Products print catalog, and (b) in all channels of distribution in those
countries outside the United States where Home Shopping is not marketing or
planning to market the Products. Notwithstanding the foregoing, Hydron will not
be prohibited from using the Hydron Trademark in connection with the marketing
and sale of Products with different packaging and different configurations than
the Products supplied to Home Shopping, subject to the provisions of Section 5.
All Products supplied by Hydron to Home Shopping will meet Home Shopping's
legal, quality, packaging, labeling, shipping, cost, value, margin and other
reasonable business standards (collectively "Product Standards"). Home Shopping
will not purchase Products for marketing, distribution or sale in connection
with the Hydron Trademark or Performer's Endorsement from any source other than
Hydron without Hydron's prior written approval.
1.3 Products Prices. Prices paid by Home Shopping to Hydron for
Products will be negotiated in good faith by Hydron and Home Shopping and will
be as mutually agreed by Hydron and Home Shopping, provided that Hydron will
provide Products at a cost to Home Shopping that will allow Home Shopping to
achieve an average Initial Mark-Up on all Products of at least ___________1 (the
"Margin Standard") when Products are priced by Home Shopping to provide value to
its customers at historically successful price points for similar items.
"Initial Mark-Up" means ___________1 Home Shopping will consider excluding
certain Products with low Initial Mark-Ups from the calculation of the average
Initial Mark-Up on a case-by-case basis.
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1.4 Labeling. To the extent mutually agreed by Hydron and Home
Shopping, Hydron will label the Products supplied to Home Shopping with Home
Shopping's proprietary trademarks (the "Home Shopping Trademarks"). All such
uses of the Home Shopping Trademarks will be subject to Home Shopping's prior
written approval. All right, title and interest in the Home Shopping Trademarks
throughout the world in perpetuity shall be owned exclusively by Home Shopping.
Nothing contained in this Agreement shall be construed as an assignment or grant
to Hydron of any right, title or interest in or to the Home Shopping Trademarks,
except for the right to label the Products supplied to Home Shopping with the
Home Shopping Trademarks solely as provided in this Agreement.
1.5 Minimum Purchases. Provided that Hydron makes available sufficient
variety and quantities of Products that meet Home Shopping's Product Standards,
and provided that Hydron meets its other obligations to Home Shopping, (a) Home
Shopping will issue Net Purchase Orders for at least $2,500,000 of Products at
Hydron's wholesale prices as determined under Section 1.3 during the period
ending 12 months following the date of the first airing of the Products on Home
Shopping's TV Programs (the "First Airing"), and (b) provided that, in addition,
Home Shopping's Net Sales of Products during the period ending 12 months
following the date of the First Airing exceed ____________1, then Home Shopping
will also issue Net Purchase Orders for at least an additional $2,500,000 of
Products at Hydron's wholesale prices as determined under Section 1.3 during the
second 12 months following the date of the First Airing. "Net Purchase Orders"
means purchase orders reduced by any Products returned pursuant to the right to
return unsold inventory contained in Section 1.6 of this Agreement or Section 12
of the Master Terms and Conditions (but not reduced by any other Products
returned pursuant to any other return rights contained in the Master Terms and
Conditions, the Salvage Allowance, or any Products returned to Home Shopping by
its customers that are returned to Hydron). Home Shopping's "Net Sales" means
all amounts actually received and collected by Home Shopping from sales of the
Products on Home Shopping's TV Programs, excluding shipping and handling charges
and sales and use taxes, and reduced by bad checks, credit card chargebacks, and
refunds and credits on account of returns and otherwise granted in the ordinary
course of business. Home Shopping will have no additional minimum purchase
obligations after the second 12 months following the date of the First Airing,
even if the Term of this Agreement is extended beyond the Initial Term under
Section 6.1 or otherwise. Home Shopping acknowledges that Hydron's current
variety of Products is sufficient to support the launch of the Products on Home
Shopping's TV Programs; and both Hydron and Home Shopping understand that
continued support for the Product line requires the development of additional
Products, configurations and packaging to maintain customer interest.
1.6 Other Terms of Purchase. Terms of payment for Products purchased
pursuant to the purchase orders issued under Section 1.5(a) will be payment in
full upon issuance of the purchase orders. Terms of payment for all additional
Products will be net 30. All purchases of Products by Home Shopping from Hydron
will be pursuant to Home Shopping's standard Master Terms and Conditions for
Purchase Orders ("Master Terms and Conditions"), except that, in the event of
any conflict between any provisions of this Agreement and the Master Terms and
Conditions, the provisions of this Agreement shall govern and the Master Terms
and Conditions are amended to the extent of any such conflict. Home Shopping
will have the right to return
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unsold inventory of Products to Hydron for a full refund at any time. Hydron
will provide Home Shopping with a salvage allowance on all Product purchases to
cover Home Shopping's costs of Products returned by its customers ("Salvage
Allowance"). The Salvage Allowance will initially be 10%, and will be adjusted
commencing at the beginning of the first calendar quarter that starts at least
six months after the date of the First Airing, and further adjusted thereafter
at the beginning of each subsequent calendar quarter to Home Shopping's actual
customer return rates for Products during the preceding calendar quarter. Home
Shopping will have the right to hold back up to 10% of all payments to Hydron to
cover amounts due on account of the Salvage Allowance before it adjusts and
retains the portion of such payments equal to the actual Salvage Allowance.
2. Hydron Trademark. Home Shopping will sell the Products purchased from
Hydron under the Hydron Trademark. Subject to the rights granted to Home
Shopping in this Agreement, all right, title and interest in the Hydron
Trademark throughout the world in perpetuity shall be owned exclusively by
Hydron. Nothing contained in this Agreement shall be construed as an assignment
or grant to Home Shopping of any right, title or interest in or to the Hydron
Trademark, except for the rights expressly granted in and the uses of the Hydron
Trademark expressly contemplated by this Agreement.
3. On-Air Support By Hydron.
3.1 Support Materials and Substantiation. Hydron will supply Home
Shopping with b-roll footage, still stores and other on-air support materials
appropriate for promotion and marketing of the Products on Home Shopping's TV
Programs and in the other channels of distribution, if any, in which the
Products are promoted and marketed by Home Shopping. Hydron will supply Home
Shopping with substantiation meeting all requirements of the Federal Trade
Commission and other applicable legal standards for all advertising claims
proposed by Hydron for the promotion and marketing of the Products.
Substantiation provided by Hydron will meet the standards established by the
Federal Trade Commission.
3.2 Performer's Visits. Hydron will cause Performer to appear when
requested by Home Shopping during the live promotions of the Products on Home
Shopping's live television shopping programming ("Home Shopping's TV Programs"),
and to visit Home Shopping's studio facilities in St. Petersburg, Florida from
time to time for such purposes ("Visits"). The dates and the number of days for
each Visit will be determined by Home Shopping, provided that Home Shopping
gives reasonable notice to Hydron.
3.3 Performer's Appearances. The frequency, time and length of
Performer's appearances on Home Shopping's TV Programs ("Appearances") will be
determined and scheduled by Home Shopping during the Visits in the discretion of
Home Shopping. The content of Performer's Appearances will be subject to the
control of Home Shopping. Hydron will cause Performer to comply with all
regulatory and other reasonable business requirements of Home Shopping during
and in connection with the Appearances. Failure of Performer to comply with such
requirements may result in deductions from Hydron invoices if so stated on Home
Shopping purchase orders accepted or filled by Hydron.
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3.4 Promotions Involving Performer. Hydron will cause Performer to be
available during the Visits to render services in connection with the production
of taped video advertisements and print photography to be used by Home Shopping
in promoting and marketing the Products. The frequency, time and length of such
services will be determined and scheduled during Visits in the discretion of
Home Shopping.
3.5 Use of Promotional Segments. Home Shopping will have the right to
edit, dub, add to, subtract from, integrate and otherwise modify any of
Performer's Performances under Sections 3.2 and 3.3 ("Promotional Materials")
and to use and re-use the Hydron Trademark, Performer's Endorsements and any of
the Promotional Materials in promoting and marketing the Products as described
in this Agreement and in connection with the general promotion of Home Shopping
and Home Shopping's TV Programs.
3.6 Ownership. Home Shopping will own and Hydron grants, agrees to
grant and convey, and will cause Performer to grant and convey to Home Shopping
all right, title and interest in the economic results and proceeds of
Performer's services under this Section 3 throughout the world and in
perpetuity. Performer's services under this Section 3 shall be "works made for
hire" for the sole and exclusive benefit of Home Shopping.
3.7 Performer's Best Efforts. Hydron will cause Performer to use
Performer's best efforts in the Performance of services under this Section 3.
Hydron will cause Performer to attend and participate in pre-production
meetings, regulatory compliance training, make-up and other activities requested
by Home Shopping or otherwise appropriate for the complete, proper and effective
performance of such services.
3.8 Compensation and Expenses. No fees, compensation, expenses or other
amounts will be payable by Home Shopping in connection with the services of
Performer under this Section 3, except for the price paid by Home Shopping to
Hydron to purchase Products.
3.9 Letter. Hydron will cause Performer to execute and deliver to Home
Shopping a letter in the form attached to this Agreement prior to issuance by
Home Shopping of its first purchase order to Hydron.
3.10 Alternate. If Home Shopping determines that Harvey Tauman is not
performing adequately as an on-air guest to support sales of the Products, Home
Shopping will test the on-air performance of an alternate on-air spokesperson
provided by Hydron in accordance with the provisions of this Section 3, provided
that such alternate meets Home Shopping's reasonable standards generally applied
to its on-air guests, and any alternate spokesperson provided by Hydron under
this Section 3.10 will thereafter be deemed the Performer for all purposes of
this Agreement.
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4. Marketing By Home Shopping.
4.1 Product Airings. Provided that Hydron makes available to Home
Shopping a sufficient variety and quantities of Products that meet Home
Shopping's Products Standards, and provided that Hydron meets its other
obligations to Home Shopping, Home Shopping will commence airing the Products on
Home Shopping's TV Programs in September 1999. Home Shopping will devote
sufficient time on Home Shopping's TV Programs and schedule sufficient airings
to sell substantially all of the Products purchased from Hydron, excluding
customer returns, short lots, and Products that sell at rates below Home
Shopping's regular gross margin per minute and other reasonable performance
standards.
4.2 Brand Development and Promotion. In addition to airing the Products
on Home Shopping's TV Programs, Home Shopping will provide brand development and
marketing promotion and support for the Products as follows:
(a) a launch/conversion marketing program, with costs and expenses
shared equally by Home Shopping and Hydron based on Home Shopping's
standard rate card, consisting of
(i) promotion of the airings and the Products by taped
spots,
(ii) promotion in The Home Shopping Magazine (as long as it
is published by Home Shopping),
(iii) post card mailing to Hydron's mailing list and selected
Home Shopping customers,
(iv) package inserts in selected outbound packages shipped to
Home Shopping customers,
(v) outbound telemarketing campaign,
(vi) joint publicity campaign, and
(vii) sampling/try me inserts in selected outbound packages
shipped to Home Shopping customers;
(b) an on-going marketing program, consisting of
(i) the items listed under Section 4.2(a),
(ii) consultation between Home Shopping and Hydron regarding
product pricing, and (iii) consultation between Home
Shopping and Hydron regarding overall brand management
and development; and
(c) a back-end and continuity sales development program, consisting
of
(i) on-air offers of continuity products (i.e., products
automatically shipped to customers at established
intervals),
(ii) packaged inserts in selected outbound packages shipped
to Home Shopping customers,
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(iii) outbound telemarketing, and
(iv) direct mail.
5. Marketing Rights.
5.1 Exclusive Rights. Hydron grants to Home Shopping an exclusive
worldwide license to use the Hydron Trademark and Performer's Endorsement during
the Term (as defined in Section 6.1) and for six months thereafter in accordance
with Section 6.3 in connection with the marketing and sale by Electronic
Retailing of Products supplied by Hydron. "Electronic Retailing" means direct
response retailing by means of television, CD-ROM, the Internet and all other
electronic means and media now existing or hereafter developed.
5.2 Non-Exclusive Rights. In addition, Hydron grants to Home Shopping a
non-exclusive license to use the Hydron Trademark and Performer's Endorsement in
connection with the marketing and sale of Products supplied by Hydron by all
other means, media and channels of distribution in Japan, Germany, Italy, Spain,
Argentina, Chile and such other countries and geographic areas as may be
mutually agreed by Hydron and Home Shopping.
5.3 Non-Compete. During the Term and thereafter for a period of three
months, except as otherwise expressly permitted by Section 5.4, Hydron will not
and will cause Performer to not (a) directly or indirectly, either alone or in
participation with others, engage in or be involved with using the Hydron
Trademark or Performer's Endorsement in connection with the marketing or sale of
any goods or services anywhere in the world by Electronic Retailing; (b) license
or grant the right to others to use the Hydron Trademark or Performer's
Endorsement in connection with the marketing or sale of any goods or services
anywhere in the world by Electronic Retailing; or (c) sell any goods or services
to others without taking all reasonable steps to assure that they will not be
distributed or re-sold in connection with the Hydron Trademark or Performer's
Endorsement anywhere in the world by Electronic Retailing.
5.4 Exceptions to Non-Compete.
(a) Notwithstanding the provisions of Section 5.3, Hydron will be
permitted to sell the Products listed below to one company engaged in Electronic
Retailing ("Competitor"), provided that (i) such Products are currently in
Hydron's inventory as of the date of this Agreement, (ii) the prices charged to
the Competitor for the same or new and improved versions of such Products are no
less than the prices at which such Products historically have been sold to the
Competitor, (iii) the Competitor has agreed in writing that it will not actively
promote or actively market such Products by any means, media or channel of
distribution, and (iv) the Competitor has agreed in writing that resales of such
Products will be made solely to fill unsolicited reorders from its customers who
have previously purchased Hydron Products from the Competitor.
(b) Notwithstanding the provisions of Section 5.3, Hydron will be
permitted to sell Products on Hydron's web site devoted exclusively to
information about Hydron and the promotion and sale of Hydron branded Products.
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(c) Notwithstanding the provisions of Section 5.3, Hydron will be
permitted to sell Products by means of taped direct response television
retailing ("Infomercials"), provided that (i) Hydron obtains Home Shopping's
prior written consent, and (ii) Home Shopping and Hydron have agreed in writing
on the amount and all other material terms of a royalty to be paid by Hydron to
Home Shopping in connection with its Infomercial sales.
6. Term and Termination.
6.1 Term. The term of this Agreement ("Term") will be for an initial
period commencing on September 1, 1999 (the "Effective Date"), subject to the
conditions set forth in Section 9(i) and ending two years after the date of the
First Airing ("Initial Term"), and will be automatically extended after the
Initial Term for an indefinite number of successive additional periods of one
year each ("Additional Terms") unless terminated as provided in Section 6.2.
6.2 Termination.
(a) For Breach. Either Hydron or Home Shopping may terminate this
Agreement on at least 30 days prior notice to the other in the event of a
material breach by the other party, except that, if such breach is capable of
being cured, this Agreement will not be terminated by such notice if the breach
is cured within such 30 day period.
(b) Based on Purchase Amounts. Either Hydron or Home Shopping may
terminate this Agreement at the end of the Initial Term or any Additional Term
on at least 60 days prior notice given within 60 days after the end of such
Initial Term or Additional Term if Home Shopping does not issue Net Purchase
Orders for at least the Threshold Amount of Products at Hydron's wholesale
prices as determined under Section 1.3 during the last 12 months of the Initial
Term or during such Additional Term. The "Threshold Amount" for the first
Additional Term will be __________1 of Net Purchase Orders issued during the
preceding 12 months (the last 12 months of the Initial Term). For subsequent
Additional Terms, Home Shopping and Hydron will negotiate new Threshold Amounts
in good faith based on trends and other factors affecting the Hydron Products
business at Home Shopping. If Home Shopping and Hydron are unable to agree on
such Threshold Amounts, the Threshold Amount for the second Additional Term will
be ____________1 of Net Purchase Orders issued during the immediately preceding
12 months, the Threshold Amount for the third Additional Term will be
___________1 of Net Purchase Orders issued during the immediately preceding 12
months, and the Threshold Amount for subsequent Additional Terms will be 110% of
the Threshold Amount for the immediately preceding Additional Term.
(c) By Home Shopping. Home Shopping may terminate this Agreement on
notice to Hydron if (i) Performer commits any act or becomes involved in any
situation or occurrence that brings Home Shopping or Performer into public
disrepute, scandal or ridicule, or shocks or offends the community, or
significantly harms the public image of Home Shopping, the Products or
Performer, or (ii) if Performer makes any statement on Home Shopping's TV
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Programs that violates any governmental law, rule, regulation, guideline or
order, at any time after notice of any such violation or potential violation.
6.3 Sell-Off. For six months after termination of this Agreement, Home
Shopping's rights to market and sell the Products and to use the Hydron
Trademark and Performer's Endorsement will continue on a non-exclusive basis
with respect to Home Shopping's remaining inventory of Products (including
without limitation inventory on hand, Products Home Shopping has committed to
Purchase, and Products returned to Home Shopping by customers).
7. Representations and Warranties; Indemnification.
7.1 By Home Shopping.
(a) Representations and Warranties By Home Shopping. Home Shopping
represents and warrants to Hydron that, as of the Effective Date: (i) it is
under no legal impediment that would prevent its entering into or consummating
the transactions contemplated by this Agreement, and (ii) it has the full power
and authority to execute and perform this Agreement.
(b) Indemnification By Home Shopping. Home Shopping will indemnify,
defend and hold harmless Hydron and its subsidiaries and affiliates and their
respective officers, directors, shareholders, employees, licensees, agents,
successors and assignees from and against any and all claims, actions, suits,
investigations, liabilities, damages, judgments, costs and expenses (including
without limitation reasonable attorney's fees and expenses) of any kind
whatsoever arising out of, resulting from or relating to any of the following
(except as expressly included in the indemnity provided by Hydron pursuant to
Section 7.2), whether occurring before, on or after the Effective Date: (i) the
untruth of any of Home Shopping's representations or warranties contained in
this Agreement, (ii) Home Shopping's activities arising from this Agreement, or
(iii) any claim, allegation or assertion by a third party that (A) Home Shopping
is under any legal impediment that would prevent its entering into or
consummating the transactions contemplated by this Agreement, or (B) Home
Shopping lacks the full power and authority to execute and perform this
Agreement. Hydron will provide Home Shopping with prompt written notice of any
claim for indemnification under this Section 7.1(b). Home Shopping may not
settle any such claim without Hydron's approval, which will not be unreasonably
withheld. Hydron, at its own expense, will have the right to participate in the
defense of any such claim.
7.2 By Hydron.
(a) Representations and Warranties By Hydron. Hydron represents and
warrants to Home Shopping that, as of the Effective Date: (i) it is under no
legal impediment that would prevent its entering into or consummating the
transactions contemplated by this Agreement, (ii) it has the full power and
authority to execute and perform this Agreement, (iii) neither the execution and
delivery of this Agreement nor the grant or exercise of rights granted to Home
Shopping by Hydron in this Agreement will infringe or violate the trademark,
copyright,
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or other intellectual property, or any other proprietary, contractual or other
rights of any third party, and (iv) the performance by Hydron and Performer of
their services and obligations under this Agreement will not breach, violate or
be prohibited or restricted by any agreements or commitments with third parties.
(b) Indemnification By Hydron. Hydron will indemnify, defend and
hold harmless Home Shopping and its subsidiaries and affiliates and their
respective officers, directors, shareholders, employees, licensees, agents,
successors and assignees from and against any and all claims, actions, suits,
investigations, liabilities, damages, judgments, costs and expenses (including
without limitation reasonable attorney's fees and expenses) of any kind
whatsoever arising out of, resulting from or relating to any of the following
(except as expressly included in the indemnity provided by Home Shopping
pursuant to Section 7.1), whether occurring before, on or after the Effective
Date: (i) the untruth of any of Hydron's representations or warranties contained
in this Agreement, (ii) Hydron's activities arising from this Agreement, or
(iii) any claim, allegation or assertion by a third party that (A) the execution
or delivery of this Agreement by Hydron or the grant or exercise of rights
granted to Home Shopping by Hydron in this Agreement infringes or violates or
will infringe or violate the trademark, copyright, or other intellectual
property, or any other proprietary, contractual or other rights of any third
party, or (B) the performance by Hydron and Performer of their services and
obligations under this Agreement constitutes or will constitute a breach or
violation of or is or will be prohibited or restricted by any agreements or
commitments with third parties. Home Shopping will provide Hydron with prompt
written notice of any claim for indemnification under this Section 7.2(b).
Hydron may not settle any such claim without Home Shopping's approval, which
will not be unreasonably withheld. Home Shopping, at its own expense, will have
the right to participate in the defense of any such claim.
8. Confidentiality. Each of Hydron and Home Shopping will maintain (and
Hydron will cause Performer to maintain) the confidentiality of information
provided by or relating to the business of the other, including without
limitation the terms of this Agreement, business and marketing plans, practices
and strategies, sales plans and performance, and other business and financial
data. Neither Hydron nor Home Shopping will disclose (and Hydron will cause
Performer not to disclose) any such information of the disclosing party, except
for information that is in the public domain through no fault of the disclosing
party, information previously known to or independently developed by the
disclosing party, or information received from a third party without any
violation of an obligation of confidentiality. It will not be a violation of
this Agreement for either party to disclose information to the extent required
to be disclosed by a court order, other governmental authority or legal process;
and it will not be a violation of this Agreement for Home Shopping to disclose
information relating to Products or advertising claims for Products in order to
substantiate such claims or respond to any challenge by regulators, consumers,
media or other third parties. Hydron will not use (and will cause Performer not
to use) any information about Home Shopping's customers or contacts with Home
Shopping's customers to offer or promote the sale of any goods or services to
Home Shopping's customers, and will not disclose any information about Home
Shopping's customers to any third party. Neither Hydron nor Home Shopping will
issue or make (and Hydron will cause Performer not to issue or make) any press
release or public statement about the matters contained in this
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Agreement or the business dealings of the parties without the mutual Agreement
of Hydron and Home Shopping, except as required by law.
9. Miscellaneous.
(a) Notice. Notices under this Agreement shall be given at the
following addresses:
If to Home Shopping: with a copy to:
Home Shopping Network Home Shopping Network
1 HSN Drive 1 HSN Drive
St. Petersburg, FL 33729 St. Petersburg, FL 33729
Attn: DMM - Health & Beauty Attn: Legal Department
Fax: 727-573-9768 Fax: 727-573-0866
If to Hydron: with a copy to:
Hydron Technologies Denise M. Tormey
1001 Yamato Road, Suite 403 Rubin Baum Levin Constant &
Boca Raton, FL 33431 Friedman
Fax: 561-994-6598 30 Rockefeller Plaza
New York, NY 10112
Fax: 212-698-7825
Notices must be in writing and will be effective when received if sent by fax,
on the next day if delivered by overnight service, or on the date indicated on
the return receipt if sent by certified or registered mail.
(b) Binding Effect; Assignment. This Agreement is binding on the
parties and their respective successors and permitted assigns. This Agreement
and the respective duties and responsibilities of the parties hereunder may not
be assigned, in whole or in part, without the prior written consent of the other
party, except to an entity controlled by or under common control with the
assigning party, or in connection with the transfer of all or substantially all
of the business and assets of the assigning party.
(c) Force Majeure. Neither party shall be liable for failure of
performance under this Agreement if occasioned by war, fire, flood, sickness,
death, interruption of transportation, embargo, accident, explosion, inability
to procure or shortage of supply of materials, equipment or production
facilities, governmental orders, strikes, lockouts, or any other similar cause
beyond the control of such party.
(d) Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supercedes all prior agreements and understandings between them with respect to
the subject matter hereof.
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(e) Amendment. No amendment of this Agreement shall be effective
unless embodied in a written instrument executed by both of the parties.
(f) 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
right of any party hereto to thereafter enforce each and every provision of this
Agreement. No waiver of any breach of any 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.
(g) Severability. If any provision of this Agreement is declared
invalid or otherwise determined to be unenforceable for any reason, such
provision shall be deemed to be severable from the remaining provisions of this
Agreement, which shall otherwise remain in full force and effect.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Stated of Florida, without regard
to conflict of laws principles.
[The balance of this page is intentionally left blank.]
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<PAGE>
(i) Conditions. This Agreement will not become effective unless all
of the following conditions have been met on or before September 1, 1999: (i)
this Agreement has been signed and delivered by both Hydron and Home Shopping
prior to the Effective Date; (ii) Hydron has delivered to Home Shopping prior to
the Effective Date a letter signed by Performer in the form attached to this
Agreement; and (iii) during the period ending immediately prior to the Effective
Date, there shall not have been pending or threatened in writing by a third
party any claim or assertion that the negotiation, execution, delivery or
performance of this Agreement or the business or transactions contemplated by
this Agreement constitute a breach or violation of or are prohibited or
restricted by any agreement or commitment with such third party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed effective as of the date first above written.
HOME SHOPPING CLUB LP HYDRON TECHNOLOGIES, INC.
By: /s/ Morgan Hare By: /s/ Richard Banakus
--------------------------------- --------------------
Name: Morgan Hare Name: Richard Bankus
Title: Vice President, Merchandising Title: President
Date: August 31, 1999 Date: August 27, 1999
- --------
1 Certain provisions of this document have been omitted and a request for
confidential treatment relating thereto has been submitted to the Securities and
Exchange Commission
-12-
Exhibit 99.1
Hydron Technologies And Home Shopping Network
Enter Into Agreement To Market And Distribute Hydron Products
BOCA RATON, Fla., Aug. 31 /PRNewswire/ -- Hydron Technologies, Inc. (OTC
Bulletin Board: HTEC - news) announced today that it has signed a marketing and
distribution agreement with Home Shopping Network (HSN) that grants HSN an
exclusive worldwide license to market and distribute Hydron personal care
products through various forms of electronic retailing. Hydron moisturizers are
based on Hydron Technologies' patented and proprietary Hydron polymer
technology, which combines the distinct benefits of water-based and oil-based
moisturizers in a single formula. Hydron currently markets more than 40 skin
care, bath & body, and hair care products.
The agreement, which is to become effective September 1, 1999, also grants HSN a
non-exclusive license to market products through all other methods of
distribution in select countries outside the United States.
Under the terms of the agreement, HSN will make minimum product purchases from
the company during the period ending 12 months from the date on which Hydron
products first air on HSN's television programs. If HSN exceeds certain retail
sales of Hydron products during that period, the agreement will renew
automatically on the same terms for a second one-year period. Beginning in the
third year, HSN will no longer be required to make minimum product purchases,
except to maintain exclusivity. The agreement may be automatically extended for
an indefinite number of successive one-year periods, subject HSN's achieving
escalating minimum product purchase levels.
The company expects to launch its products on HSN's television programs
September 16, 1999, and will debut the line with a 30-day, seven-piece skin care
sampler expected to retail as a "Today's Special" for a one-time price of
$25.95. Hydron products will later be featured in "Hydron Skin Care Solutions"
hours, to air regularly on HSN's television programs.
In addition to selling Hydron products on-air, HSN will provide brand
development, and marketing promotion and support for the products, including
direct mail, sampling, outbound telemarketing, package inserts, advertising and
publicity programs, the costs to be shared equally by HSN and Hydron
Technologies.
The company also announced that it has entered into a separate agreement with
Harvey Tauman, Hydron Technologies' founder, to market the company's products in
connection with HSN and to serve as its on-air spokesperson. According to
Richard Banakus, Hydron Technologies' interim president, "We are anticipating
combining HSN's brand building expertise with Mr. Tauman's experience as an
electronic retail marketer, and feel this union marks an exciting new beginning
for our company."
"Hydron Technologies' focus is on e-commerce and related methods of
distribution. We are pleased to be working with such an experienced and
enthusiastic partner in this industry," added Mr. Tauman.
<PAGE>
Hydron Technologies develops a broad range of personal care products based on
its proprietary and patented Hydron polymer technology, which combines the
distinct benefits of oil-based and water-based moisturizers in a single formula.
Hydron moisturizing products are fast-absorbing and greaseless, and let skin
breathe while providing long-lasting hydration and protection against moisture
loss. The company markets its products primarily through electronic retailing
and by catalog.
Home Shopping Network, a USA company (Nasdaq: USAi - news), pioneered the
electronic retailing industry in 1977. Its 24-hour programming reaches 70
million households via cable, broadcast television and satellite dishes. HSN
continued its tradition of innovation in 1998 with the launch of Short Shopping,
a division that produces direct selling commercials for various broadcast and
cable network partners. The electronic retailer holds interests in shopping
channels in German and Japan and also operates Home Shopping en Espanol, a joint
venture with Univision. The network has been designated officialelectronic
retailer for Times Square 2000.
Except for historical information, all of the expectations and assumptions
contained in the foregoing are forward-looking statements involving risks and
uncertainties. For additional information regarding the risks associated with
the company's business, refer to Hydron Technologies' reports filed with the
SEC.
