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
