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EXHIBIT 10.2
EXCLUSIVE DISTRIBUTORSHIP AGREEMENT
This Agreement is made as of the 1st day of November, 2006, by and between RBC Life Sciences USA Inc., a Nevada corporation with offices at 2301 Crown Court, Irving, Texas 75038, USA, (“RBC”), and Merry Key, with offices at Seoul, Korea, (the “Distributor”).
WHEREAS, RBC manufactures the “RBC Life Sciences™” line of top quality health, nutrition, and personal care products (collectively, “Products”), which Products may also be marketed under the “Pure Life™”, “Light Force™” or “Royal Botanica™” trade names, for sale to independent Members;
WHEREAS, the Distributor is a corporation of Korea, with the power to carry on business as contemplated by this Agreement;
WHEREAS, the Distributor will promote and sell the Products exclusively as the authorized Distributor in Korea (“Territory”), subject to the terms and conditions of this Agreement; and
WHEREAS, the parties hereto desire to establish, among other things, the terms and conditions under which orders will be placed by the Distributor and accepted and filled by RBC.
NOW, THEREFORE, in consideration of the premises stated above and subject to the terms and conditions contained herein, the parties agree as follows:
I. PRICES
Prices for all Products available for purchase by the Distributor are set forth in Appendix A and shall be paid in U.S. Dollars, ex factory and export packed at RBC’s facility in Irving, Texas, USA. The Distributor shall be responsible for all land, sea, or airfreight charges, wharfage, and storage charges. The Distributor at its sole expense shall arrange any insurance desired by the Distributor to cover the Products while in shipment. The prices quoted in Appendix A shall remain fixed for a period of twelve (12) months from the date of commencement of this Agreement, and thereafter may be changed by RBC on not less than sixty (60) days prior written notice to the Distributor. RBC shall fill any orders pending at the time any such notice is given at the prices in effect immediately prior to the notification.
II. DELIVERY
RBC shall deliver the Products to the Distributor ex factory and export packed at RBC’s facility in Irving, Texas, USA. Upon delivery, title to the Products and all risk of loss or damage shall pass to the Distributor. The Products shall be ordered in production run quantities allowing eight (8) to twelve (12) weeks lead time prior to the shipment date requested by the Distributor. The lead time for Products ordered in less than production run quantities is subject to availability and ordering requirements for RBC’s own stock. RBC will consider requests from the Distributor for new products and modified formulations or packaging. RBC, at its sole discretion, shall determine whether and under what terms such requests shall be fulfilled. RBC’s obligation to meet the delivery dates quoted in response to the Distributor’s orders is subject to the prompt receipt by RBC of all information reasonably required to permit RBC to proceed with the fulfilment of the Distributor’s order or the production of the ordered Products, as the case may be, immediately and without interruption. RBC shall not be obligated to proceed with the fulfilment of any order for which payment has not been received pursuant to the provisions of Section IV below. The Distributor shall arrange for export and shall pay for all export related fees and expenses directly attributable to each of the Distributor’s orders including, but not limited to, those covering preparation of
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consular or other documents (but excluding fees and expenses related to any application by RBC for any export license that may be required by the U.S. Export Administration Act of 1979, as amended [“the EAA”]), freight, storage, and warehouse-to-warehouse (including war and terrorism risk) insurance. RBC shall at its sole expense apply for and obtain any required export licenses that may be required by the EAA in connection with the transactions contemplated by this Agreement.
III. DELAYS
RBC’s performance of its obligations under this Agreement shall be excused for the duration of any delay arising directly or indirectly from (A) acts of God, unforeseeable circumstances, acts (including delay or failure to act) of any governmental authority, war (declared or undeclared), riot, revolution, fires, strikes, labour disputes, sabotage, or epidemics, (B) inability, due to causes beyond RBC’s reasonable control, to timely obtain instructions or information from the Distributor, necessary and proper labor, materials, components, facilities, and transportation, or (C) any other cause beyond RBC’s reasonable control.
IV. PAYMENT
Payment for the Products shall be made in two instalments or as otherwise agreed by the parties in writing. First payment is due at the time the Distributor places its order with RBC. Payment will be sent via wire transfer to RBC, in the amount of fifty percent (50%) of the value of the order. The balance payment of fifty percent (50%) will be sent via wire transfer to RBC, upon notification by RBC that the order is ready for shipment. In the case of certain Products, full payment may be required at the time an order is placed with RBC. RBC will notify Distributor which Products require full payment with the order.
V. GOVERNMENTAL AUTHORIZATION
A. All sales hereunder shall be subject to the export control laws and regulations of the United States Government, including but not limited to the EAA.
B. The Distributor shall be responsible for the timely obtaining of any required authorizations such as import licenses, exchange permits, or any other specific governmental authorization within the Territory for the importation and/or sale of the Products. The Distributor shall use its commercially reasonable efforts and, if needed, engage an expert at its own reasonable expense to obtain governmental approval for the sale of RBC Products within the Territory. RBC shall in good faith use its best efforts as may reasonably be required to provide Certificate of Analysis, Certificate of Origin, Certificate of Free Sale, or other documentation that may be requested by the Territory’s government as proof that the Products comply with any applicable standards, requirements, tests, or procedures within the Territory (collectively, the “Standards”). The Distributor shall, if the Distributor has requested such information, reimburse RBC at cost for any fees directly related to obtaining these documents or authorizations. RBC shall not be liable if any such approval/authorization is delayed, denied, revoked, restricted, or not renewed, and the Distributor shall not be relieved thereby of its obligations to pay RBC for any Products already shipped to the Distributor at its request. Notwithstanding the preceding, nothing in this Agreement shall be construed to obligate RBC (i) to pay for the inspection of its facilities or the facilities of any supplier to satisfy governmental agencies or authorities in the Territory, or (ii) to otherwise incur any costs or expenses to qualify its facilities or the facilities of any supplier pursuant to the governmental regulations of the Territory. RBC shall manufacture the Products in accordance with the product specifications, in conformity with all applicable standards known to RBC at the time of manufacture. Products not in conformity with such standards, or which may be otherwise defective, may, at RBC’s option, be destroyed or returned by the Distributor to RBC at RBC’s expense upon written authorization from RBC. The Distributor agrees that it shall not make any disposition, by way of trans-shipment, re-export, diversion or otherwise, of the Products, other than in and to the Territory.
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VI. EXCLUSIVITY
A. RBC agrees that it will not sell or deliver the Products to any person or entity within the Territory without obtaining the prior written consent of the Distributor. RBC shall further use its best efforts to preclude any other person or entity from selling or delivering the Products within the Territory. Exporting or selling the Products by the Distributor outside the Territory is prohibited without the prior written consent of RBC.
B. In consideration of obtaining this Exclusivity, the Distributor agrees to meet the minimum performance requirements as described in Section XVI.
VII. SALES ACTIVITIES & DISTRIBUTOR RESPONSIBILITIES/OBLIGATIONS
A. Except as otherwise provided herein, the Distributor is not the agent of RBC for any purpose and is not granted any express or implied right to assume or create any obligation in the name of RBC or to bind RBC in any manner. The Distributor shall refer to RBC all inquiries or requests for Products received from areas outside the Territory. The Distributor shall use its best efforts to operate under the professional and ethical guidelines as set forth by the Direct Selling Association of the United States as published on the internet at www.dsa.org/ethics/.
B. The general responsibilities and obligations of the Distributor include, but are not limited to, the following:
1. The Distributor will develop at its own expense all training, promotional and business sales aids, including any translation and printing costs. RBC will make available examples of its US-based training, promotional, and business sales aid materials for the Distributor’s use. RBC reserves the right to review and approve such materials and procedures developed by the Distributor for use in the Territory. Such approvals shall not be unreasonably delayed or withheld.
2. The Distributor will develop labels for Products and such promotional materials as may be reasonably required for conduct of business by the Distributor. RBC reserves the right to review and approve such labels and materials prior to their use in the Territory. Such approval shall not be unreasonably withheld or delayed. All Products supplied to Distributor shall bear English-language RBC labels. Distributor shall have the right to develop its own labels at its own cost and expense. Such labels shall be affixed by RBC only if production run quantities or greater are ordered.
3. RBC and its affiliates shall remit to the Distributor commissions, overrides, and payments due to its upline Members located within the Territory. The Distributor shall disburse these payments to such upline Members.
4. The Distributor will promptly submit to RBC written reports concerning sales and marketing information including, but not limited to, customer lists, downline genealogies, sales demands, Member requests for products and services, Member complaints, inventories, backorders, and activities of Members, in such form and at such intervals as specified by RBC.
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5. The Distributor will provide pricing information to its downline Members and/or consumers. RBC reserves the right to review and recommend to the Distributor suggested wholesale/retail pricing in the Territory as well as commission values. The Distributor agrees to set the qualification value of each of its products equal to qualification value used by RBC for its independent distributors in the USA.
6. The Distributor will not engage in the sale, distribution, or promotion of products obtained from sources other than RBC, without written consent from RBC.
7. The Distributor will receive orders for Products, receive payments from its Members, promptly input the orders into the Distributor’s data processing equipment, and distribute all ordered Products in accordance with customary commercial standards.
8. The Distributor agrees to permit international sponsorship, including but not limited to recruiting, ordering, and payment of commissions and bonuses. The parties agree that all commissions and bonuses paid pursuant to International sponsorship will be calculated utilizing the compensation plan in effect in the country where the products are purchased.
VIII. COMPETING PRODUCTS AND CONFIDENTIALITY
A. During the period of this Agreement, and for a period of two (2) years after its termination or expiration, the Distributor will not, directly or indirectly, become associated with, or engage in, or render service to any other business directly competitive with the business of RBC as it was conducted on the date of the termination or expiration of this Agreement.
B. As used in this Section, “Confidential Information” means information disclosed to the Distributor by RBC or information disclosed to RBC by Distributor, or known by the Distributor and RBC as a consequence of, or through, the affiliation with each other, not generally known in the industry in which RBC and Distributor are active or may become engaged. Distributor shall not disclose any not publicly known information about RBC’s customer lists, products, processes, and services, including information relating to research, development, inventions, manufacture, purchasing, accounting, engineering, marketing, merchandising, selling, pricing, internal policies, and any lawsuits, legal work, or communications with RBC’s attorneys without the consent of RBC, which shall not be unreasonably withheld, or unless legally required. Likewise, RBC shall not disclose any information not publicly known about Distributor, including but not limited to business methods, software systems, bank accounts, names, phone numbers, suppliers, ownership, downline positions, budgets, results and other information received as a consequence of the affiliation with Distributor without the consent of Distributor, which shall not be unreasonably withheld, or unless legally required. The parties shall not, at any time, either during the term of this Agreement or thereafter, divulge to any person, firm, or corporation any of the Confidential Information received by it during the term of this Agreement, and all such information shall be kept confidential and shall not, in any manner, be revealed to anyone except as may be required by legal process or the order of any court of competent jurisdiction.
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IX. TAXES
A. All United States taxes, whether federal or state, are included in the prices, except sales, use, excise, and similar taxes, which have been excluded on the basis that the transaction is presumed to involve export and resale by the Distributor. The Distributor shall furnish evidence of export or other appropriate tax exemption evidence acceptable to the taxing authorities if requested by RBC.
B. Any taxes (including income, stamp, and turnover taxes), duties, fees, charges, or assessments of any nature levied by any governmental authority, other than that of the United States, or any jurisdiction in connection with this Agreement, whether levied against the Distributor, against RBC, or its employees, or against any of RBC’s subcontractors or their employees, or otherwise, shall be for the Distributor’s account and shall be paid directly by the Distributor to the applicable governmental authority or jurisdiction. If RBC is required by law or otherwise to pay any such levy and/or fines, penalties, or assessments as a result of the Distributor’s failure to comply with any applicable laws or regulations governing the payment of such levies by the Distributor, the amount of any such payments so made by RBC shall be reimbursed by the Distributor to RBC upon submission of RBC’s receipts or other evidence of payment of such levies, less any tax savings by RBC. The Distributor reserves the right to dispute in good faith any or all such taxes, duties, fees, charges, assessments, or penalties that may be levied against the Distributor or others in connection with this Agreement or its activities hereunder.
X. WARRANTIES
A. RBC hereby warrants that the Products shall be manufactured in accordance with the product specifications and in conformity with all applicable standards as described in Section V.B., above. The Distributor understands that RBC will develop and introduce from time to time product changes and/or modifications. The Distributor agrees that these product changes and/or modifications will be introduced into its line, if approved by governmental authority. The Distributor agrees to introduce into its line the new or modified product as soon as commercially reasonable.
B. Except as otherwise provided herein, RBC makes no warranty of merchantability or fitness for a particular purpose or any other warranty either expressed or implied, or any affirmation of fact or representation. RBC shall not be liable to the Distributor for any liability, claim, loss, damage, or expense of any kind or for any direct, consequential, collateral, or incidental damages relative to or arising from or caused directly or indirectly by the Products or the use thereof, unless expressly set forth in or contemplated by this Agreement. Except as otherwise provided herein, the Distributor’s exclusive remedy for any cause of action relating to breach of this warranty shall be limited to the prompt replacement by RBC of the defective Product, and RBC’s liability to the consumer for any and all losses or damages resulting from any breach of any Product warranty, including negligence, shall in no event exceed the purchase price of the Product in accordance with Section I hereto or, at the election of RBC, the replacement of the Product.
C. Product Liability Insurance. The Distributor will undertake to obtain its own product liability insurance to cover potential claims within the Territory. RBC hereby agrees to, at its expense, during the term of this Agreement, cause to be maintained product liability insurance covering claims brought within the United States with the named insured thereon being RBC. The insured amounts shall be no less than $1,000,000 per occurrence and $2,000,000 in the aggregate. This product liability insurance shall cover all Products sold by RBC to the Distributor.
XI. PATENTS
If the Distributor receives a claim that any Products or part thereof manufactured or distributed by RBC infringes any patent, the Distributor shall notify RBC promptly in writing and give RBC information, assistance, and exclusive






