ironclad_10q-ex1001.htm


    Exhibit
10.1

     

    EXCLUSIVE
LICENSE AND DISTRIBUTORSHIP AGREEMENT

     

    THIS EXCLUSIVE LICENSE AND
DISTRIBUTORSHIP AGREEMENT (the “Distributorship
Agreement”) is
made and entered into as of this 6th day of
January, 2009, by and between:  [i] IRONCLAD PERFORMANCE WEAR
CORPORATION, a corporation organized and existing under the laws of
Nevada, having an address of 2201 Park Place, Suite 101, El Segundo, CA 90245
(the “Licensor”); and [ii] ORR SAFETY CORPORATION, a
corporation organized and existing under the laws of the Commonwealth of
Kentucky, having an address of 11601 Interchange Drive, Louisville, Kentucky
40229 (the “Distributor”).

     

    RECITALS

     

    A.  The
Licensor is in the business of manufacturing, marketing and selling specialty
technical work gloves and other workwear.

     

    B.  The
Distributor is in the business of selling and distributing industrial safety
equipment and supplies, and providing certain services related to the delivery
and use of such equipment and supplies.

    


    C.  The
Licensor desires to grant to the Distributor, and the Distributor desires to
accept from the Licensor, the exclusive
right within the Territory to distribute and sell the Products as set forth
herein.

    


    NOW THEREFORE, in
consideration of the mutual promises hereinafter set forth, and intending to be
legally bound, the parties hereto hereby agree as follows:

     

    ARTICLE
1

    CERTAIN
DEFINITIONS

     

    Unless
the context otherwise requires, the following initially capitalized terms shall,
for purposes of this Distributorship Agreement, have the meanings
specified:

     

    1.1  “Confidential
Information”
means and includes (but is not limited to) all prices, costs, sales volumes,
trademark information, product formulation, know-how, technical knowledge,
technical bulletins, service manuals, software (including source and object
codes), drawings, specifications, data sheets, sales and marketing techniques
and information, photographs, artwork, designs, instructions, and all other
information whether or not reduced to writing, relating to the manufacture,
sale, marketing, distribution, and servicing of the Products or customers of the
Products, and any other information and trade secrets that might adversely
affect either party’s ability to compete in any market, as well as any other
information relating to the business of either party to this Distributorship
Agreement that may be disclosed or communicated to either party to this
Distributorship Agreement at any time during the Term of this Distributorship
Agreement which is not generally known in the trade or is not information which
is in the public domain through no fault or breach of this Distributorship
Agreement by the receiving party.

     

    *
Redacted

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2  “Products” means, collectively, those
products listed and described on Schedule
A attached hereto and incorporated herein by reference.

     

    1.3  “Territory” means each country and
jurisdiction in the world where the Products may lawfully be marketed and
sold.

     

    ARTICLE
2

    APPOINTMENT; RELATIONSHIP;
CONDITION OF EXCLUSIVITY

     

    2.1  Exclusive
Appointment.  For and during the Term and subject to the
conditions of this Distributorship Agreement, the Licensor hereby appoints the
Distributor as the exclusive distributor for the Products in the Territory, and
the Distributor hereby accepts such appointment on the terms and conditions
contained herein.  In addition, during the Term, Distributor shall not
represent, sell or distribute, directly or for or on behalf of any third party,
any products specifically designed and/or marketed for the petrochemical and
offshore exploration markets that are substantially similar to, or competitive
with, the Products.  During the Term, the Licensor shall not appoint
any individual, corporation (except for the Distributor), trust, partnership,
joint venture, limited liability company or other entity as a distributor for
the Products or sale thereof within the Territory and the Licensor shall refer
to Distributor any orders or inquiries which it receives for the shipment of the
Products to any place within the Territory.  The Distributor may
appoint subdistributors or agents for the resale and/or distribution of the
Products, it being understood that the Distributor shall be solely responsible
for the payment of any compensation to, and any and all liability relating to
the appointment of, such subdistributors or agents.  It is
acknowledged and agreed that Distributor may distribute and sell the Products
through Licensor’s managers in certain foreign markets as the parties may
mutually agree.

     

    2.2  Nature of
Relationship. During the Term of this Distributorship Agreement, the
relationship between the Licensor and the Distributor is solely that of vendor
and vendee. The Distributor is an independent contractor and nothing herein
shall be construed so as to constitute the Distributor as a partner, joint
venturer, agent, or representative of the Licensor for any purpose whatsoever,
nor shall the Distributor engage in any conduct which might create such an
impression or inference.  The Distributor shall be solely responsible
for the discharge of its obligations and liabilities to third parties and shall
have no right to indemnity or contribution from the Licensor in respect therefor
except as set forth in Article 9 below.

     

    2.3  Condition
of Exclusivity. Distributor agrees that it expects to purchase the
Minimum Purchase Level of the Products as described in Schedule
B.  In the event that Distributor does not purchase the Minimum
Purchase Level of such Products, then Licensor shall have the right in its sole
discretion to terminate the exclusive rights of Distributor under this Agreement
as to the Products, and the rights of Distributor to distribute Products in the
Territory shall thereafter become non-exclusive, in which event, prices to
Distributor for Products shall thereafter become Licensor’s standard
non-exclusive distributor prices and Licensor shall be free to sell Products in
the Territory through any available channels (including, without limitation,
through direct distribution or another distributor).

     

    
      
        
        

      

      
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    ARTICLE
3

    PRICE; TERMS OF SALE AND
SHIPMENT

     

    3.1  Price.  The
initial prices (paid by Distributor to Licensor) for the Products are set forth
on Schedule
B attached hereto and incorporated herein by reference, as the same may
be amended from time-to-time (the “Price
List”).  The price
listed assumes goods will be purchased and shipped with freight terms of
Delivered Duty Paid (“DDP”) Distributor’s continental United States
warehouse.  Any change in freight terms or destination may result in
associated price change.  Such prices may not be changed during the
first year of the Initial Term as described in Section 4.1, except upon the
mutual agreement of the parties.  For years two through five of the
Initial Term, Licensor may adjust pricing at its sole discretion by no more than
10% in the aggregate (i.e. the total aggregate
price adjustment for all such years taken together shall not exceed 10% of the
prices in the first year of the Initial Term).  At the beginning
of each Renewal Term, the price may be adjusted by Licensor, including annual
price adjustments, at its sole discretion, but in no event to exceed the amount
of any price adjustments made by the manufacturer of the Products, the raw
material suppliers or Carriers.  Licensor shall deliver written notice of any
proposed price adjustment to Distributor not less than sixty (60) calendar days
prior to the date on which such adjustment would become
effective.

     

    3.2  Orders.  Orders
by the Distributor for the Products shall be in writing (delivery by facsimile
or electronic mail shall be permitted) and must include all information
reasonably required, from time to time, by the Licensor.  Orders shall
be subject to the provisions of Section 3.4.  Orders shall not be
binding upon the Licensor until received on the form of Purchase Agreement
attached hereto as Schedule
C (the “Purchase
Agreement”) and
accepted by the Licensor.  The Licensor shall use commercially
reasonable efforts to fill and ship all orders promptly after receipt and
acceptance, but shall not be liable for any delay in delivery caused solely by
the Carrier (defined below).

     

    3.3  Payment.  The
payment terms for each shipment of Products shall be as set forth on the
Purchase Agreement for such shipment.  The Distributor shall pay all
invoices for the Products in United States Dollars by wire transfer to such
banking institutions as designated by the Licensor  in
writing.

     

    3.4  Title
Transfer; Packaging; Delivery.  Sale and delivery of the
Products shall be Delivered Duty Paid (“DDP”) to Distributor’s continental United.
States warehouse, or such other location as
may be requested from time-to-time.  Title to and risk of loss of the
Products shall pass to the Distributor upon delivery of the Products, together
with proof of delivery or other documentary evidence of delivery, to Distributor
at the Distributor’s designated facility.  The selection of and
coordination with the air, ground, ocean or other carrier (the “Carrier”) shall be the sole
responsibility of the Licensor.  All Products shall be packaged by or
for the Licensor in a manner which is customary in the industry and reasonably
expected to afford protection against damage during normal
shipment.  It is the sole responsibility of the Licensor to file any
appropriate claims with the Carrier for reimbursement for loss or damage and the
Distributor shall reasonably cooperate with the Licensor in making such
claims.  In the event any Products are delivered to Distributor more
than thirty (30) business days following the delivery date specified in the
Purchase Agreement covering such shipment of Products (other than any delay in
delivery caused solely by the Carrier), the Distributor shall be entitled to a
rebate in the amount of three percent (3%) of that portion of the total amount
of such order which is more than thirty
(30) business days following the delivery date specified in the Purchase
Agreement covering such shipment of Products (i.e. the rebate applies only to
that portion of the order which is late, not to the entire order).  A
delay in delivery shall be deemed to be caused solely by the Carrier where the
Licensor establishes by competent written evidence that an order of Products was
dutifully and reasonably conveyed by Licensor to the Carrier at the designated
location on the scheduled shipment date and time agreed upon by the Licensor and
Distributor.  Upon transfer of the title to the Products to
Distributor under this Distributorship Agreement, the Products will be free and
clear of any liens or encumbrances.

     

     

    
      
        
        

      

      
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    3.5  Sales to
Distributor; Resales.  All deliveries of Products covered by
this Distributorship Agreement will constitute sales made directly to the
Distributor.  Nothing herein contained shall be deemed in any way to
limit the right of the Distributor to determine the prices or terms at which
Products purchased by the Distributor may be re-sold by the Distributor to their
customers, except as described in Section 3.5 (A)
below.  The  Distributor may sell any such Products at any
prices determined by the Distributor, except that Distributor may not sell
Product below the cost of the Product sold by Licensor to
Distributor.  All exchange, conversion, taxes, withholdings, fees or
other charges at any time levied or assessed by any governmental, administrative
or banking authority on the distribution or sale of the Products by Distributor
(collectively, “Import/Export
Charges”), if
any, will be paid by the Distributor.  In the event the purchase,
shipment, import or other event associated with the Distributor’s distribution
or sale of the Products becomes subject to Import/Export Charges, the payment
and administration of same shall be the sole responsibility of the Distributor
who shall indemnify and hold harmless the Licensor from such Import/Export
Charges.

     

    (A)  Distributor
agrees that it will sell products to other distributors at or below the Reseller
prices described in Schedule
D attached hereto; provided, however, that such reseller prices may be
proportionally increased by Distributor effective immediately upon any
adjustment in the Price List of the Products made at any time during the Term of
this Distributorship Agreement.  

     

    3.6  Warranty
of the Licensor.  The Licensor warrants that the Products sold
and delivered to the Distributor will be merchantable, will have been produced
in accordance with the Licensor’s normal quality standards, will be free from
defects in design, manufacture or packaging for sale in the Territory and will
conform to any specifications mutually agreed upon in writing by the parties
hereto, as well as any applicable legal and regulatory requirements in the
Territory related to the Products’ importation, labeling and
packaging.  The Distributor shall promptly notify the Licensor in the
event the Distributor receives any non-conforming Products and shall promptly
return any such Products to the Licensor at its national headquarters, currently
located in El Segundo, California.  The Licensor shall take
appropriate action to promptly replace the Products in kind with conforming
Products.  The Distributor shall be entitled to a refund of the entire
purchase price of any non-conforming Products not replaced in kind within sixty
(60) calendar days and, in addition, the Licensor shall be responsible for all
reasonable costs associated with the replacement of any non-conforming Products,
including, without limitation, the costs incurred by the Distributor to return
or destroy such Products.

     

     

    
      
        
        

      

      
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    ARTICLE
4

    TERM AND
RENEWAL

     

    4.1  Term and
Renewal.  The initial term of this Distributorship Agreement
shall commence on the date first written above and shall continue for a period
of five (5) years (the “Initial
Term”).  The Initial
Term of this Distributorship Agreement shall automatically be extended for three (3) additional
successive terms of five (5) years each (each a “Renewal
Term”).  The Initial
Term and all applicable Renewal Terms are collectively referred to herein as the
“Term”.  The Renewal
Terms shall automatically commence immediately upon the expiration of the
Initial Term or previous Renewal Term, provided that neither party is in
material default in the performance of this Distributorship Agreement at the
time such Renewal Term commences.  Unless extended in writing by both
parties, this Distributorship Agreement terminates  immediately at the
end of the last Renewal Term and does not require written notice from either
party to so terminate.  In addition, the parties may elect to
terminate this Distributorship Agreement at any time by written mutual
consent.

     

    ARTICLE
5

    DUTIES OF THE
DISTRIBUTOR

     

    In
addition to the other obligations of the Distributor as set forth in this
Distributorship Agreement, the Distributor agrees as follows:

     

    5.1  Distributor’s
Business and Commercial Efforts.  The Distributor, at its
expense, shall devote such time and resources as required to actively promote,
market and sell the Products in the Territory to the petrochemical, offshore
exploration markets and other industrial markets, with such time and resources
of the Distributor to include, without limitation, [i] maintaining an adequate
sales force and support staff, suitable place of business and sufficient
inventory of Products to enable it to make prompt delivery to all customers;
[ii] using appropriate means, in Distributor’s commercially reasonable
discretion, to promote the sale of the Products throughout the Territory,
including, without limitation, advertising campaigns and trade show activities;
and [iii] using its commercially reasonable efforts to preserve the
goodwill of customers at all times.

     

    5.2  Compliance
with Local Laws.  The Distributor shall comply with all
applicable laws and regulations pertaining to the distribution of Products, and
obtain and maintain all licenses, registrations, permits and governmental
approvals which may be necessary to permit, the sale and distribution of the
Products by Distributor hereunder.

     

    ARTICLE
6

    DUTIES OF THE
LICENSOR

     

    In
addition to the other obligations of the Licensor as set forth in this
Distributorship Agreement, the Licensor agrees as follows:

     

    6.1  Licensor’s
Business and Commercial Efforts.  The Licensor, at its expense,
shall develop and devote such resources as required to produce a sufficient
quantity of Products to meet the anticipated demand therefor as agreed upon from
time-to-time by the parties, with such resources of the Licensor to include,
without limitation, [i] maintaining or causing to be maintained an adequate
manufacturing force and support staff, suitable manufacturing facilities, and
shipping and freight arrangements to enable it to make prompt delivery of
Products to Distributor; [ii] making available to the Distributor, upon its
reasonable request and as otherwise available, at the reasonable expense of the
Licensor, the services of sales and technical personnel of the Licensor to
assist Distributor with Product information, technical knowledge, sales training
and applications; and [iii] using its commercially reasonable efforts to preserve the
goodwill of customers at all times.

     

     

    
      
        
        

      

      
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    6.2  Information
Required on Products.  The Licensor shall cause to be placed on
the inside label of the Products sold in the Territory during the Term (i) the
name of the Distributor, (ii) the ORR SAFETY trademark, and (iii) such other
information as shall enable a user of a Product to order the same Product from
the Distributor, including, but not limited to, the telephone number and/or Web
address of the Distributor and the model number of the Product.

     

    6.3  Applications
for Patents.  The Licensor, at its expense, shall apply for
patent protection for the Products in the United States, and may, at its sole
discretion, apply for patent protection for the Products elsewhere where such
protection is necessary or appropriate, and shall provide a copy of all such
applications to the Distributor upon request.

     

    6.4  Applications
for Trademark Registrations.  The Licensor, at its expense,
shall apply to register the “KONG” trademark, and any other mark containing the
term “KONG”, that is to be used in connection with the Products in the United
States, and may, at its sole discretion, apply for trademark protection for the
Products elsewhere where such protection is necessary or appropriate, and shall
provide a copy of all such applications to the Distributor upon
request.

     

    ARTICLE
7

    INTELLECTUAL PROPERTY
RIGHTS

     

    7.1  Licensor's
License to Use Distributor's Trademarks or Trade
Name.   Distributor hereby grants to Licensor a
non-exclusive, royalty-free, license to use the ORR SAFETY trademark
(hereinafter the "Distributor's
Mark") in connection with the manufacture of the Products, the sale of
the Products to Distributor, or materials relating to Licensor’s description of
its business, products and business opportunities, including the use in press
releases or other public disclosures.  Licensor acknowledges that
Distributor's Mark shall remain the sole property of Distributor, and the
Licensor's use of Distributor's Mark shall be subject to review and approval by
the Distributor.  Licensor covenants that it will not contest the
validity of Distributor's Mark or Distributor's ownership thereof in any
proceeding or at any time.  Nothing in this Distributorship Agreement
shall be deemed to confer upon the Licensor any right, title, interest, or
license (express or implied) in the Distributor's Mark, or in the goodwill now
or hereafter associated therewith.  Upon termination or expiration of
this Distributorship Agreement, the Licensor shall make no further use of
Distributor's Mark, for any purpose whatever or wherever, nor employ or use any
other trademark or trade names which gives the impression, tends to suggest, or
is likely to cause confusion with Distributor's Mark or any part
thereof.

     

     

    
      
        
        

      

      
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    7.2  Distributor's
License to Use Licensor's Trademarks or Trade Names.  Licensor
hereby grants to Distributor an exclusive (within the Territory) royalty-free,
license to use the trade names, trademarks, advertising symbols, copyrighted
materials and any other tangible or intangible property rights relating to the
Products and owned by the Licensor during the existence of this Distributorship
Agreement solely in connection with the marketing, distribution and sale of the
Products.  During the Term of this Distributorship Agreement,
Distributor may refer to itself as the exclusive “master distributor” of the
Products within the Territory.  Distributor acknowledges that, with
the exception of Distributor's Mark, all trademarks used to designate any of the
Product(s) are and shall remain the sole property of
Licensor.  Distributor covenants that it will not contest the validity
of such trademarks or Licensor's ownership of them in any proceeding or at any
time.  With the exception of the provisions of this Section 7.2,
nothing in this Distributorship Agreement shall be deemed to confer upon the
Distributor any right, title, interest, or license (express or implied) in any
of Licensor's trademarks, or in the goodwill now or hereafter associated
therewith.  During the Term of this Distributorship Agreement each
trademark shall be used by the Distributor solely to designate the Product(s) to
which it refers and shall not be used in such manner as to impair or dilute the
same, nor otherwise than in accordance with instructions given from time to time
by Licensor.  During the Term of this Distributorship Agreement, the
right of Distributor to use the “KONG” trademark, or any other trademark
containing the term “KONG” (hereinafter collectively the "KONG Marks"), in connection
with the Products shall be exclusive within the Territory, and Licensor shall
not, and shall not provide any other entity with the right to, use the KONG
Marks in connection with any other goods or services without Distributor’s prior written consent (which
consent shall not be unreasonably withheld).  Upon termination
of this Distributorship Agreement, the Distributor shall make no further use of
said trademarks or any trade name of Licensor, for any purpose whatever or
wherever, nor employ or use any other trademark or trade names which gives the
impression, tends to suggest, or is likely to cause confusion: (a) with
Licensor's trademarks or trade names or any part thereof, or (b) that the
Distributor continues to sell Licensor's Product(s).

     

    (A)  Notwithstanding
the foregoing Section 7.2, in the event [i]
that Licensor determines to terminate this Distributorship Agreement for any
reason, other than as a result of a material breach of any of the terms and
conditions of this Distributorship Agreement by Distributor or other failure by
Distributor to observe or perform any of the terms of this Distributorship
Agreement, or [ii] of a bankruptcy of Licensor, Licensor shall assign to
Distributor all of its rights to the KONG Marks and the goodwill associated
therewith, including any and all trademark registrations and trademark
applications throughout the world, and Licensor shall cease-and-desist all use
of the KONG Marks and any confusingly similar marks.

     

    7.3   Patent
Rights in the Products.  Licensor has applied for patent
protection of the Products in the United States, Application Serial No.
12/284256, and may in the future file additional new or continuing patent
applications in the United States or elsewhere for the Products ("Patent
Rights").  Licensor hereby grants to Distributor an exclusive
(within the Territory), royalty-free, license to use the Patent Rights during
the existence of this Distributorship Agreement solely in connection with the
marketing, distribution and sale of the Products.  In the event [i]
that Licensor determines to terminate this Distributorship Agreement for any
reason, other than as a result of a material breach of any of the terms and
conditions of this Distributorship Agreement by Distributor or other failure by
Distributor to observe or perform any of the terms of this Distributorship
Agreement, or [ii] of a bankruptcy of Licensor, Licensor shall grant to
Distributor a license for the remainder of the Term to any patents in the United
States or elsewhere that have issued for the Products during this
Distributorship Agreement, together with any inventions or improvements now or
hereafter embodied in the Products (whether or not patented or patentable in any
jurisdiction) during the term of this Distribution
Agreement.  Distributor shall pay a reasonable royalty fee to Licensor
for such license of the Patent Rights in an amount to be agreed upon by the
parties.  Further, upon either of the
events described in [i] or [ii] above, Licensor shall provide to
Distributor all technical information and know-how necessary for Distributor to
manufacture the Products or to source the Products from a third party and shall
provide Distributor with full and immediate access to the manufacturer of the
Products and facilitate the introduction of Distributor to such manufacturer and
provide Distributor with copies, at Licensor’s expense, of all information and
materials pertaining to the manufacture of the Products.

     

     

    
      
        
        

      

      
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    7.4  Protection
of Intellectual Property Rights.  The Distributor acknowledges
and agrees that the Products, brand names, trademarks, label and container
designs, patents, copyrighted material and like property and rights in
connection therewith (collectively, the “Intellectual
Property”) are
and shall remain the absolute property of the Licensor subject to the exceptions
for the “KONG” Marks in Section 7.2(A) and the Patent Rights in Section 7.3 of
this Distributorship Agreement.  Distributor shall immediately inform
the Licensor of any infringements on the Licensor’s rights to its Intellectual
Property that come to the Distributor’s attention, and if requested, the
Distributor will assist the Licensor, at the Licensor’s expense, in taking all
reasonable steps as required to defend the Licensor’s rights to its Intellectual
Property.

     

    7.5  Non-Infringement
or Conflict.  Licensor
represents and warrants that the Products do not infringe on the patent,
trademark, copyright, or other intellectual property rights of any third party,
and further that Licensor is the sole and exclusive owner of the Intellectual
Property.  Licensor further represents and warrants that the
execution, delivery and performance by Licensor of this Distributorship
Agreement will not constitute a breach of, or conflict with, any agreement or
instrument to which the Licensor is a party or by which any of its assets are
bound.

     

    7.6  Confidential
Information.

     

    (A)  During
the Term of this Distributorship Agreement and for a period of five (5) years
after its termination, each party (the “Receiving
Party”) shall not disclose to any third party, or use for any purpose
other than as required in the performance of this Distributorship Agreement, any
Confidential Information of the other party (the “Disclosing
Party”).

     

    (B)  The
Receiving Party may disclose, but shall limit disclosure of, the Confidential
Information within its organization, to those directors, officers, employees,
agents and advisors of the Receiving Party or affiliated or related companies
(the “Permitted
Recipients”) who are required to use such information in connection with
the Receiving Party’s performance under this Agreement and who are advised by
the Receiving Party of this Agreement and agree to be bound by and comply with
all the provisions of this Agreement.  Further, the Receiving Party
shall require that any of its Permitted Recipients who may receive the
Confidential Information maintain the same in strict confidence and not use or
disclose the Confidential Information except as permitted under this
Agreement.

     

     

    
      
        
        

      

      
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    (C)  Confidential
Information shall not, however, include information that would constitute
Confidential Information, but that (i) is or hereafter becomes publicly
available through no act or omission on the Receiving Party’s part; (ii) was
already known to the Receiving Party as of the date of disclosure without
restriction as to its use or disclosure, as evidenced by competent written
evidence in the Receiving Party’s possession; (iii) is independently developed
by the Receiving Party without reference to the Confidential Information, as
evidenced by competent written evidence in the Receiving Party’s possession;
(iv) is rightfully and lawfully received by the Receiving Party without
restriction as to its use or disclosure from a third party that rightfully and
lawfully obtained such information and rightfully and lawfully disclosed such
information to the Receiving Party, as evidenced by competent written evidence
in the Receiving Party’s possession; or (v) is disclosed with the prior written
consent of the Disclosing Party.  Disclosure of Confidential
Information by the Receiving Party shall not be precluded if such disclosure is
required to be made in response to a valid order of a court or other
governmental body of competent jurisdiction or other process of law; provided,
however, that the Receiving Party shall first have given written notice to the
Disclosing Party and given the Disclosing Party a reasonable opportunity to
quash such order or to obtain a protective order; and provided further that if
disclosure is required, the Confidential Information disclosed in response to
such process of law shall be limited to that Confidential Information that is
legally required to be disclosed in response to such process of
law.

     

    ARTICLE
8

    EVENTS OF DEFAULT;
TERMINATION

     

    8.1  Events of
Default.  In addition to the other rights of termination set
forth in Article 4 above, this Distributorship Agreement may be terminated by
the aggrieved party on the occurrence of any of the following events (“Events of
Default”):

     

    (A)  Either
party ceases to operate its business or ceases to engage in the business
contemplated by this Distributorship Agreement for any reason; or

     

    (B)  Either
party shall liquidate, become the debtor in any bankruptcy or equivalent
proceeding, whether voluntary or involuntary, enter into any arrangement with
its creditors for the payment of its debts by composition or otherwise, make any
assignment for the benefit of creditors or if a receiver shall be appointed for
either party’s business and property; or

     

    (C)  Either
party fails to procure or to hold in good standing any governmental license,
permit or other authority necessary and required to manufacture, export, import,
purchase and sell the Products as contemplated by this Distributorship
Agreement, or the government of the country in which either party is located
enacts any laws or promulgates any codes or regulations whereby the manufacture,
export, import, purchase or sale of the Products, wholesale or retail, shall be
prohibited or shall be reserved to such government or agency or instrumentality
thereof; or

     

     

    
      
        
        

      

      
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    (D)  Either
party is in material breach of any other of the terms and conditions of this
Distributorship Agreement or otherwise fails to observe or becomes unable to
perform any of the terms of this Distributorship Agreement.

     

    8.2  Notice of
Default.  If as a result of an Event of Default (or the
happening of any Event of Default forthwith) the aggrieved party shall desire to
terminate this Distributorship Agreement, it shall give written notice of its
intent to terminate to the other party, and if that party fails to cure or
correct such Event of Default within thirty (30) calendar days after the giving
of such notice, then this Distributorship Agreement shall automatically
terminate.

     

    8.3  Effect of
Termination.  Termination of this Distributorship Agreement,
for any reason as provided herein, shall not affect or limit the right of either
party to receive or recover any amounts which may then be owing to such party
under the terms of this Distributorship Agreement or any invoice or other
instrument, or any loss of profits, business or goodwill, or other claim for
damages.  Without limitation of any other rights, in the event of the
termination of this Distributorship Agreement by Distributor pursuant to Section
8.1, Licensor shall submit to Distributor within thirty (30) days after the date
of such termination an inventory list of all the Products held by Licensor as of
the date of termination and Distributor may, at its option, purchase any or all
of such Products from Licensor upon written notice of its intention to do so not
later than thirty (30) days after receipt of such list, at the price paid by
Licensor.

     

    ARTICLE
9

    INDEMNIFICATION AND
INSURANCE

     

    9.1  Indemnification
by the Distributor.  The Distributor shall indemnify and hold
the Licensor and each of its affiliates and/or their respective directors,
officers, employees, representatives and agents (the “Licensor
Indemnified Parties”) harmless from and against all claims, fines,
penalties, losses, damages, liabilities and expenses (including reasonable
attorney’s fees and costs) (collectively, “Losses”)
arising from (i) the Distributor’s breach or violation of any of the
representations, warranties, covenants or obligations of the Distributor
contained in this Distributorship Agreement; or (ii) the Distributor’s negligent
acts or omissions, willful misconduct or other wrongdoing, including, without
limitation, any third party claims or suits brought against any of the Licensor
Indemnified Parties that arise out of the Distributor’s importing, storing,
marketing, distributing or sale of the Products.  Notwithstanding the
foregoing, the Distributor shall not be obligated to indemnify the Licensor
Indemnified Parties for any Losses for which the Licensor is obligated to
indemnify the Distributor Indemnified Parties under the terms of this
Distributorship Agreement.

     

    9.2  Indemnification
by the Licensor.  The Licensor shall indemnify and hold the
Distributor and each of its affiliates and/or their respective directors,
officers, employees, representatives and agents (the “Distributor
Indemnified Parties”) harmless from and against all Losses arising from
(i) the Licensor’s breach or violation of any of the representations,
warranties, covenants or obligations of the Licensor contained in this
Distributorship Agreement; (ii) the Licensor’s negligent acts or omissions,
willful misconduct, or other wrongdoing, including, without limitation, any
third party claims or suits brought against any of the Distributor Indemnified
Parties arising from the Licensor’s manufacturing, production, labeling,
shipping, storing or handling of the Product, including any actual or alleged
defect in the design, manufacture or packing of the Products, existing at the
time of delivery; or (iii) any actual or alleged infringement of third parties’
rights resulting from the Distributor’s authorized use of the trade names,
trademarks, advertising symbols, copyrighted materials and any other tangible or
intangible right property rights relating to the Products and licensed to the
Distributor by the Licensor under this Distributorship
Agreement.  Notwithstanding the foregoing, the Licensor shall not be
obligated to indemnify the Distributor Indemnified Parties for any Losses for
which the Distributor is obligated to indemnify the Licensor Indemnified Parties
under the terms of this Distributorship Agreement.

     

     

    
      
        
        

      

      
        Page 10 of 19

        
          

        

      

      
        
        

      

    

     

    9.3  Losses
Caused by Others.  Losses that are subject to the foregoing
indemnification shall be deemed to include Losses caused by the acts or
omissions of any affiliates, employees, agents, contractors, sub-contractors, or
representatives of either party or any other person or entity used by either
party to fulfill its obligations under this Distributorship
Agreement.

     

    9.4  Notice,
Defense of Claims and Settlement.  The obligations and
liabilities of each indemnifying party hereunder (the “Indemnitor”)
with respect to Losses that give rise to a right of indemnification by any
indemnified party (the “Indemnitee”)
shall be subject to the following terms and conditions:

     

    (A)  The
Indemnitee shall endeavor to give prompt written notice to the Indemnitor of any
claim that might give rise to a right of indemnification hereunder (a “Notice of
Claim”), but in any event not more than thirty (30) calendar days after
the Indemnitee receives or otherwise becomes aware of such claim, stating the
nature and basis of such claim and the amount or the estimated amount thereof,
to the extent then known or feasible (which estimate shall not be conclusive of
the final amount of such claim); provided, however, that failure to give timely
Notice of Claim shall not constitute a defense in whole or in part to any claim
by the Indemnitee hereunder, except and only to the extent that such failure
shall result in any material prejudice to the Indemnitor.

     

    (B)  With
respect to any claim, demand, suit or action that is the subject of a Notice of
Claim, the Indemnitor shall, in good faith and at its own expense, defend,
contest or otherwise protect against any such claim, demand, suit or action with
legal counsel of its own selection and shall further have the sole power to
direct and control such defense.  The Indemnitee shall have the right,
but not the obligation, to participate, at its own expense, in the defense
thereof through counsel of its own choice.  So long as the Indemnitor
is defending in good faith any such claim, demand, suit or action, the
Indemnitee shall at all times cooperate in all reasonable ways with, make its
relevant files and records available for inspection and copying by, and make its
employees available or otherwise render reasonable assistance to, the
Indemnitor.

     

    (C)  Except
as otherwise expressly provided herein, the Indemnitee shall not make any
settlement or offer to settle or compromise any indemnifiable claims being
defended by Indemnitor hereunder without the written consent of the Indemnitor,
and the Indemnitor shall not make any settlement or offer to settle or
compromise any claims naming an Indemnitee as a party without the written
consent of such Indemnitee, which consents shall not be unreasonably withheld or
delayed.  If the Indemnitor elects not to defend Indemnitee against
any indemnifiable claims hereunder, or otherwise fails to settle or finally
resolve such claims, then the Indemnitee may defend such claim using counsel of
its own choice and the Indemnitor shall reimburse the Indemnitee for any
resulting Losses and the related costs of defending such claim.

     

     

    
      
        
        

      

      
        Page 11 of 19

        
          

        

      

      
        
        

      

    

     

    9.5  Insurance.  The
Licensor and the Distributor shall each at all times during the Term of this
Distributorship Agreement maintain comprehensive general liability insurance
coverage, at its sole cost and expense, with limits of not less than U.S.
$2,000,000 (two million dollars), each for the protection of the other party as
additional named insured and shall upon request furnish the other party a
certificate of insurance.  In addition, the Licensor shall at all
times during the Term of this Agreement maintain, at its sole cost and expense,
product liability insurance coverage in relation to the Products in the amount
of not less than $2,000,000 (two million dollars) in aggregate, listing
Distributor as additional named insured, and shall upon request furnish the
Distributor a certificate of insurance.

     

    ARTICLE
10

    MISCELLANEOUS

     

    10.1  Notices.  Any
notice required or permitted to be given hereunder by either of the parties
hereto shall be in writing and shall be deemed given if (i) delivered personally
(in which case, it will be effective upon delivery), (ii) by electronic mail (in
which case, it will be effective when sent), (iii) facsimile (in which case, it
will be effective upon receipt of confirmation of good transmission), or (iv)
sent by overnight courier (providing proof of delivery) (in which case, it will
be effective on the business day after being deposited with such courier
service) to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice or electronic mail address provided
to the other parties):

     

    
    

     

    
      	 	(A)	
              if
      to the Licensor, to:

               

              Ironclad
      Performance Wear Corporation

              Attention:
      Chief Executive Officer

              2201
      Park Place, Suite 101

              El
      Segundo, CA 90245

              Facsimile:
      (310) 643-0300

            
	 	 	 
	 	(B)	
              if
      to the Distributor, to

               

              Orr
      Safety Corporation

              Attention:
      Clark Orr, Jr., Vice President Strategic Planning

              11601
      Interchange Drive

              Louisville,
      Kentucky  40229

              Facsimile:
      (502) 774-6467

            


    

    
 

    10.2  Force
Majeure:  If either party becomes unable to perform any of its
obligations under this Distributorship Agreement, other than the obligation to
pay money when due, because of any event which is beyond the reasonable control
of the non-performing party ("Event of
Force Majeure"), including but not limited to, a judicial or governmental
decree, regulation or other direction not the fault of the party who has been so
affected, labor stoppage, civil unrest, war, fire, power failure, earthquake,
flood or other natural disaster or act of God or other circumstances of similar
nature, the party that becomes aware of such event shall send the other party
written notice thereof.  The non-performing party shall take all steps
required to resume performance as soon as possible, shall keep the other party
informed on a regular basis as to the status of the Event of Force Majeure, and
shall not be considered as in breach of any obligation hereunder because of
failure to perform during the period that it is prevented from performing by
such Event of Force Majeure.  Notwithstanding that an Event of Force
Majeure shall not result in a breach of this Distributorship Agreement, such
event shall not excuse either party from its failure to perform brought about by
its lack of commercially reasonable effort to correct such Event of Force
Majeure and to carry out the terms of this Distributorship Agreement within a
reasonable time.

     

     

    
      
        
        

      

      
        Page 12 of 19

        
          

        

      

      
        
        

      

    

     

    10.3  Binding
Effect of Agreement and Assignability.  This Distributorship
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns; provided, however, that neither
party may assign or subcontract its rights and obligations hereunder to any
third-party without the prior written consent of the other party, subject to
Section 2.1, and in the event of such assignment or subcontract with such
written consent, the assigning party’s liability for its obligations to the
non-assigning party under the terms of this Distributorship Agreement shall not be
diminished, except as otherwise agreed to by the parties in writing in their
sole discretion.

     

    10.4  Entire
Agreement; Order of Precedence.  This Distributorship
Agreement, including the attached schedules, sets forth the entire agreement of
the parties with respect to the subject matter of this Distributorship
Agreement, supersedes all existing agreements between them concerning that
subject matter, and may be modified, supplemented or amended only by a written
instrument signed by each party.  In the event of any conflict or
inconsistency between the terms and conditions of this Distributorship Agreement
and those set forth on any Purchase Agreement, the terms and conditions of this
Distributorship Agreement shall control and govern except as the parties may
otherwise expressly agree in writing on the face of such Purchase
Agreement.

     

    10.5  Non-waiver.  No delay
or failure by either party to exercise any right under this Distributorship
Agreement, and no partial or single exercise of that right, shall constitute a
waiver of that or any other right the party may have, and a waiver of any single
incident shall not be deemed to be a waiver of any other subsequent
incident.

     

    10.6  Governing
Law..  This Distributorship Agreement and the rights and
obligations of the parties hereunder shall not be governed by
the provisions of the United Nations Convention on Contracts for the
International Sale of Goods or the United Nations Convention on the Limitations
Period in the International Sales of Goods, as amended.  This
Distributorship Agreement and the rights and obligations of the parties shall be
governed by and construed in accordance with the laws of the State of New York,
United States, without giving effect to its conflict of laws rules and including
its provisions of the Uniform Commercial Code.

     

    10.7  Jurisdiction;
Service of Process. Each of the parties agrees not to assert, by way of
motion, as a defense, or otherwise, in any action, suit or proceeding seeking to
enforce any provision of, or based on any right arising out of, this
Distributorship Agreement, that it is not subject personally to the jurisdiction
of the courts referred to in Section 10.6, that the action, suit or proceeding
is brought in an inconvenient forum, that the venue of the action, suit or
proceeding is improper, or that this Distributorship Agreement may not be
enforced in or by the courts referred to in Section 10.6.

     

     

    
      
        
        

      

      
        Page 13 of 19

        
          

        

      

      
        
        

      

    

     

    10.8  English
Language. This Distributorship Agreement and all
documents entered into in connection herewith shall be in the English language,
and the English language shall be the governing language as to any disputes or
questions of interpretation concerning this Distributorship Agreement.  The
English version of this Distributorship Agreement, regardless of whether a
translation in any other language is or will be made, shall be the only
authentic one.

     

    10.9  Headings.  Headings
to sections in this Distributorship Agreement are for convenience of reference,
and shall not affect the meaning or construction of this Distributorship
Agreement.

     

    10.10  Counterparts.  This
Distributorship Agreement may be executed in counterparts, each of which when
executed and delivered shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.

     

    10.11  Severability.  If
any provision of this Distributorship Agreement or part thereof is found by a
court or other authority of competent jurisdiction to be illegal, unenforceable,
ineffective or void, then such provision, or part thereof, shall be severed and
be of no further effect.  If it is possible to accomplish the intent
and business purposes of the parties pursuant to this Distributorship Agreement
without giving effect to any void provisions thereof, the remainder of this
Distributorship Agreement shall be and remain in full force and effect, and
shall be construed to the fullest extent lawful to fulfill the intentions of the
parties hereto as expressed herein including such severed
portions.


     

     [SIGNATURE
PAGE FOLLOWS]

     

    
      
        
        

      

      
        Page 14 of 19

        
          

        

      

      
        
        

      

    

     

    IN TESTIMONY WHEREOF, witness
the signatures of the parties to this Exclusive License and Distributorship
Agreement effective as of the day and year first hereinabove
written.

     

    
      	 
      	
              “LICENSOR”

               

              IRONCLAD PERFORMANCE WEAR

               

            	 
	 	 	 	 	 
	 	By:	/s/
      Eduard Jaeger	 
	 	 	  Name:	Eduard
      Jaeger	 
	 	 	
                Title:

            	
              President and C.E.O.

            	 
	 	 	 	 	 
	 
      	
               

              “DISTRIBUTOR”

               

              ORR
      SAFETY CORPORATION, a Kentuck corporation 

               

            	 
	 
      	By:	
              /s/ Clark Orr, Jr.

            	 
	 	 	  Name:	Clark
      Orr, Jr.	 
	 	 	
                Title:

            	
              VP Strategic Planning

            	 


    

    


     

    SCHEDULES:

     

    Schedule
A                                --           List
of Products

    Schedule
B                                --           Price
List and Minimum Purchase Levels

    Schedule
C                                --           Form
of Purchase Agreement

    Schedule
D                                --           Reseller
Pricing

    


    


    
      
        
        

      

      
        Page 15 of 19

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
A

     

    List
of Products


     

    “KONG”
safety gloves (all sizes), together with any
inventions or improvements now or hereafter embodied therein (whether or not
patented or patentable in any jurisdiction) during the Term of this Distribution
Agreement

     

    


    
      
        
        

      

      
        Page 16 of 19

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
B

     

    Price
List and Minimum Purchase Levels

     

    


    KONG Original Style (SKU:
SDX02 through SDX07)

    


    
      
        	
                  Total
      Number of Pairs of Products

                Covered by a single
      Purchase Order

              	 
      	 	
                
                  Price1 Per
      Pair
(all
      sizes)

              
	 
      	 
      	 	 
      
	
                60,000+

              	
                .....................................................................................................................................................

              	 	
                *2

              
	 
      	 
      	 	
                 
      

              
	
                20,000
      to 59,999

              	
                .....................................................................................................................................................

              	 	
                *3

              
	 
      	 	 	
                 
      

              
	
                Less
      than 20,000

              	
                .....................................................................................................................................................

              	 	
                *

              


      

      
 

      
        Minimum
Purchase Levels Across All KONG Styles

        (to
maintain Exclusivity)

         

        
          	
                  Year

                  Initial
      Term

                	
                  Annual Payment4

                
	
                  2009

                	
                  US$*
      million

                
	
                  2010

                	
                  US$*
      million

                
	
                  2011

                	
                  US$*
      million

                
	
                  2012

                	
                  US$*
      million

                
	
                  2013

                	      
                  US$*
      million

                


        

         

        Prior to
the completion of the Initial Term, the parties will agree upon a revised
Minimum Purchase Levels schedule for the First Renewal Term, but in no event
will it be less than *.

        


        Prior to
the completion of the First Renewal Term, the parties will agree upon a revised
Minimum Purchase Levels schedule for the Second Renewal Term, but in no event
will it be less than the Minimum Purchase Level established for the final year
of the First Renewal Term.

        


        Prior to
the completion of the Second Renewal Term, the parties will agree upon a revised
Minimum Purchase Levels schedule for the Third Renewal Term, but in no event
will it be less than the Minimum Purchase Level established for the final year
of the Second Renewal Term.

         

      

    

    

      
        

      

    

    
      1 Price paid by Distributor to
Licensor

    

      
      2 Requires a *% cash deposit to Licensor
at the time of order, and a payment of the shipment balance on
delivery

    

      
      3 Requires a *% cash deposit to Licensor
at the time of order, and a payment of the shipment balance on
delivery

    

      
      4 Paid by Distributor to
Licensor

       

       

      *
Redacted

       

      
        
          
          

        

        
          Page 17 of 19

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULE
C


    Form
of Purchase Agreement

     

    


     

    
      
        
        

      

      
        Page 18 of 19

        
          

        

      

      
        
        

      

    

     

     

    SCHEDULE
D

    


    Reseller
Pricing

    (from
Distributor to other distributors)


     

    KONG Original Style (SKU:
SDX02 through SDX07)

     

     

    
      	
              Number
      of Units (pairs) per Purchase Order

            	 	
              Reseller
      Price**

            
	 
      	 
      	 	 
      
	
              Less
      than 12,000 

            	
              .....................................................................................................................................................

            	 	
              *

            
	 
      	 
      	 	
               
      

            
	
              Greater
      than or equal to 12,000

            	
              .....................................................................................................................................................

            	 	
              *

            
	 
      	 	 	
               
      

            


    

    


    **These
reseller prices are effective for the first year of the Initial Term
only.  The reseller prices may be proportionally increased by
Distributor effective immediately upon any adjustment in the Price List of the
Products made at any time during the Term of this Distributorship
Agreement.

     

     

     

     

     

    * Redacted

     

     

    Page 19 of 19