OWNER has determined that to enhance the development of the market and increase the sales of its Product in the Territory, it would be advantageous to co-ordinate its distribution activities with a distributor in the Territory who possesses a readily available and extensive sales network in the Territory; and
DISTRIBUTOR wishes to enter into this Agreement with OWNER whereby DISTRIBUTOR will undertake the distribution and sale of Product in the Territory on the terms and subject to the conditions contained herein.
MAP is the Minimum Advertised Price that is defined by the OWNER whereby DISTRIBUTOR agrees to abide by the minimum advertised price without reducing it for any purpose unless agreed by the OWNER.
DEAL is the price advertised other than MAP that is defined by the owner whereby DISTRIBUTOR agrees to abide by obtaining pre-approval before promoting at DEAL price.
NOW, THEREFORE, THIS AGREEMENT WITNESSES that in consideration of the mutual promises and covenants herein contained and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged) the parties hereby agree as follows:
Article I – DEFINITIONS
I.1
Whenever used in this Agreement, the following terms shall have the following meanings respectively, unless otherwise specified:
(a)
“Agreement” means this distribution agreement, the recitals set forth in the preamble herein, and all schedules attached hereto, as well as all amendments, additions, restatements or modifications made hereto and thereto and all other documents incorporated herein or therein by reference, all of which are hereby made an integral part of and will be read as if included within the text of this distribution agreement.
(b)
“Business Day” means each of Monday, Tuesday, Wednesday, Thursday and Friday, except when any such day occurs on a statutory holiday observed in the Territory.
(c)
“Confidential Information” means any and all information, documentation or knowledge in any form, relating to the business and assets of OWNER, not generally known to the public, disclosed to, or which may be obtained directly or indirectly by, the DISTRIBUTOR, or which may be derived in any way by it as a consequence of the performance of its obligations hereunder, including, without limitation, information relating to OWNER’s present and contemplated products and services; product designs; inventions, improvements; standards, specifications, systems, methods and operating procedures; techniques and modes of manufacturing, compounding or preparing products, formulations and recipes; merchandising, marketing plans and strategies; tests and reports; profits, costs, pricing, product sourcing and sales policies and strategies; buying habits and preferences of present customers of OWNER, as well as prospective and potential customers, their names and addresses; trade secrets, know-how, data, research and development; patent, trade-mark, copyright, industrial design and all other intellectual property and proprietary rights and shall also include terms of this Agreement;
(d)
“Effective Date” means effective since January 2021.
(e)
“Person” means any person, individual, firm, association, syndicate, partnership, joint venture, trustee, trust, corporation, division of a corporation, unincorporated organization or other entity or a government agency or political subdivision thereof.
(f)
“Product” means the finished goods products manufactured and sold by OWNER as set forth more specifically in Schedule “A” attached hereto as the same may be supplemented by OWNER, in its sole discretion, from time to time.
(g)
“Term” means the term of this Agreement as set forth in Article III comprising the Initial Term and any Renewal Term.
(h)
“Trademarks” means all the trademarks and trade names, whether registered, which are owned and used by or under license from OWNER and which appear on the Product including without limitation, the trademarks “7E” “7E Myolift Mini”, “7E Myolift 600”, “7E Myolift MD”, “7E Myolift QT” and “7E Myocalme”.
I.2
The following schedules are incorporated into this Agreement by reference and form an integral part hereof:
(a)
Schedule “A”
List of Product, Distributor Price, Product Prices
Article II – DISTRIBUTION GRANT
II.1
OWNER hereby grants to DISTRIBUTOR and DISTRIBUTOR hereby accepts from OWNER the right to distribute the Product in the Territory, upon and subject to all terms and conditions set forth in this Agreement. DISTRIBUTOR covenants and agrees to purchase the Product for its own account from OWNER and to market, distribute and sell such Product only in the Territory. DISTRIBUTOR acknowledges and agrees that the rights granted pursuant to this Agreement are limited to the Territory and confer no rights upon DISTRIBUTOR with respect to the distribution of any Product outside the Territory, and nothing in this Agreement shall restrict OWNER from selling Product to any other Person within or outside the Territory. Without limiting the generality of the foregoing, DISTRIBUTOR shall not, directly, or indirectly, including through any agents, distribute or sell any Product outside the Territory and shall not solicit orders for Product, advertise the Product or keep any stock of the Product outside the Territory. DISTRIBUTOR further covenants and agrees not to distribute, market, or sell such Product to any Person within the Territory if DISTRIBUTOR knows or has any reason to believe that such Product will be resold by such Person, directly or indirectly, outside the Territory. If DISTRIBUTOR becomes aware that any Person to whom DISTRIBUTOR supplies any Product is marketing or selling, or is planning to market or sell, the Product outside the Territory, DISTRIBUTOR shall immediately notify OWNER and shall cease forthwith to supply such Person with Product.
II.2
DISTRIBUTOR shall inform OWNER in writing of, and OWNER shall have the right to approve or disapprove, any sub-distributor(s) proposed to be appointed by DISTRIBUTOR in respect to the sale and distribution of Product in the Territory, provided, however, that the appointment of any such sub-distributor(s) by DISTRIBUTOR, following approval by OWNER, shall not relieve DISTRIBUTOR of any of its obligations hereunder.
II.3
DISTRIBUTOR covenants and agrees that all inquiries with respect to and any orders for Product received, directly or indirectly, by DISTRIBUTOR from outside the Territory shall be referred to OWNER.
II.4
DISTRIBUTOR agrees to provide to OWNER from time to time and promptly upon request by OWNER, a list of all other manufacturers and products represented by DISTRIBUTOR.
II.5
DISTRIBUTOR agrees to provide to OWNER from time to time, and promptly upon request by OWNER, a list of the different distribution channels in which Product is being distributed or intended to be distributed by DISTRIBUTOR, the names of all sub-distributors engaged by DISTRIBUTOR, and the margins up to the end price to the consumers.
Article III – TERM
III.1
The initial term of this Agreement shall come into effect on the Effective Date and, unless terminated earlier in accordance with the terms of this Agreement, shall continue in full force and effect for a period of 12 months (the “Initial Term”).
Article IV – PURCHASE ORDERS AND SUPPLY OF THE PRODUCT
IV.1
At the outset of the Agreement, OWNER shall supply DISTRIBUTOR with pre-packaged and labelled Product at prices applicable thereto for the Territory as set forth in the price list, the current form of which is attached as Schedule “A” hereto.
IV.2
DISTRIBUTOR shall place a firm written order with OWNER on DISTRIBUTOR’s purchase order forms for the quantity of Product to be purchased. Only such orders placed by DISTRIBUTOR and accepted by OWNER shall be binding on the parties hereto. Where there is a conflict between the terms and conditions stated in such purchase order form and the provisions of this Agreement, the provisions of this Agreement shall prevail despite any statement to the contrary in such purchase order form or otherwise. For the purposes of clarity, notwithstanding anything herein to the contrary, the terms and conditions of this Agreement will govern all Product sold by OWNER to DISTRIBUTOR.
IV.3
The risk of loss and damage to Product shall pass to DISTRIBUTOR immediately upon Product being picked up by or on behalf of DISTRIBUTOR, its agent or transport carrier, at OWNER’s warehouse in USA, and thereafter OWNER shall not be responsible for any loss or damage to the Product. DISTRIBUTOR will be the importer of record into the Territory for all Product purchased by it and will be responsible for the accuracy of the information presented and the payment of all duties and taxes and will be liable for any fines or penalties resulting from any missing or inaccurate information.
(a)
DISTRIBUTOR will be responsible for all replacement and repair of the units and informing OWNER, within 14 days of receiving the units, if there are any issues with the unit or any manufacturing defect.
Article V – PRODUCT PRICING AND PAYMENT
V.1
Subject to and in accordance with the terms and conditions hereof, OWNER agrees to sell to DISTRIBUTOR, and DISTRIBUTOR agrees to buy from OWNER, the Product at the prices set forth in Schedule “A” hereto. Prices of the Product are in U.S. dollars, F.O.B. OWNER’s warehouse in USA. All charges that may be incurred in connection with the delivery of the Product to DISTRIBUTOR, including, without limitation, in respect to freight, export duties, import duties, all applicable taxes, appropriate insurance and storage costs or any other payments required to process the products from OWNER’s warehouse in USA are the sole and exclusive responsibility of DISTRIBUTOR.
V.2
Payment in full for all Product shipments shall be made by DISTRIBUTOR to OWNER in the following manner:
a) a deposit of 100% payment via check, credit card or PayPal to OWNER’s bank account in USA.
V.3 OWNER shall have the right, in its sole discretion, to increase its prices listed in Schedule “A” hereto unilaterally, it being understood that any such increases shall only be effective upon ninety (90) days’ written notice to DISTRIBUTOR, whereupon at the end of such ninety (90) day notice period, any such revised price shall be effective immediately without further notice and shall be deemed to form part of the price list set forth in Schedule “A” attached hereto as if the same had initially been set forth therein.
Article VI – DROP-SHIPMENT
VI.1 DISTRIBUTOR may request to arrange drop-shipment for their order and OWNER agrees to provide DROP-SHIPMENT service within 5 to 7 business days.
VI.2 DISTRIBUTOR agrees to pay all expenses and services fees related to taxes, shipping, exporting, importing products to distributor’s customer, collectively referred as DROP-SHIPMENT fees.
VI.3 DISTRIBUTOR agrees to use OWNERS online system to submit the DROP-SHIPMENT orders.
Article VII – SALES AND MARKETING OF THE PRODUCT
VII.1 DISTRIBUTOR agrees to abide by the Minimum Advertised Price (MAP) defined in the Schedule A, without reducing it further for any purpose unless agreed by the OWNER.
VII.2 DISTRIBUTOR shall forward to OWNER copies or samples of all advertisements, and special DEAL promotions for its approval and DISTRIBUTOR agrees to withdraw any advertisements or DEAL promotions which are considered unsuitable by OWNER.
VII.3 DISTRIBUTOR will resell all Product purchased hereunder in compliance with all applicable laws only in the packaging supplied or approved by OWNER.
VII.4 DISTRIBUTOR is responsible for marketing and promotional activities only in the TERRITORY defined.
VII.5 DISTRIBUTOR shall use its best efforts, at its own expense, to market, promote and sell the Product in the TERRITORY.
VII.6 All advertising by DISTRIBUTOR in any TERRITORY shall be conducted in a dignified manner that will reflect favourably upon the goodwill and reputation of OWNER and shall conform to the highest standards and shall display the Trademarks only in a manner approved by OWNER.
VII.7 DISTRIBUTOR further acknowledges that all advertising and promotional materials relating to the Product or bearing the Trademarks shall remain the property of OWNER who shall retain the sole and exclusive ownership of all copyright therein.
VII.8 The determination of sales and marketing strategies and DISTRIBUTOR’s selling prices for the Product within the TERRITORY shall be the responsibility of DISTRIBUTOR, after consultation with OWNER who may provide DISTRIBUTOR with a suggested resale price list as well as a confirmation on DEAL promotion.
VII.9 In performing its duties hereunder, DISTRIBUTOR agrees not to make any representation or give any warranty with respect to any of the Product other than those contained in any current brochures, leaflets or other printed matter relating to such Product, which may be issued from time to time by OWNER. If DISTRIBUTOR does make any representation or warranty in violation of the foregoing, then DISTRIBUTOR agrees to indemnify and save OWNER harmless from any claims, demands, suits, proceedings, damages, liabilities, costs or losses of any nature or kind whatsoever (including any legal costs) suffered or incurred, or which may be suffered or incurred, by OWNER arising out of or in any way connected with any such representation or warranty.
VII.10 DISTRIBUTOR agrees to make reasonable efforts to register every product that are distributed by their sales and marketing efforts, using the registration system provided by the OWNER. This will ensure warranty and support for every customer that owns the product.
Article VIII – TRADEMARKS
VIII.1 In connection with the foregoing, DISTRIBUTOR covenants and agrees as follows:
(a) to market, distribute and support the Product only under the Trademarks, and not under any other trademark or logo of any other Person.
(b) to obtain from OWNER written approval for all promotional material, alternative product packaging including, without limitation, blister packaging and cartons, and to comply with all instructions issued by OWNER relating to the form and manner in which OWNER’s Trademarks shall be used and to discontinue forthwith, upon notice from OWNER, any practice relating to the use of OWNER’s Trademarks which in OWNER’s opinion would or might adversely affect the rights or interests of OWNER in such Trademarks;
(c) to conduct business in a manner that always reflects favourably on the Product and reputation of OWNER in order to develop, promote and maintain same with customers and to protect and preserve the goodwill and image of OWNER and the Product.
(d) not to use or permit any entity controlled by it or affiliated with it to use the Trademarks or any other trademarks or trade names or trade dress of OWNER or any trademarks, trade dress, words, names, symbols, or designs which could reasonably be expected to be considered confusingly similar thereto, as part of its corporate or trading name or style, or on any of its products.
(e) not to infringe OWNER’s rights in and to any of the Trademarks and not to dispute, contest, attack or impair the validity or ownership of the Trademarks or do any act which tends to impair the validity of the Trademarks or the title of OWNER to any Trademarks, trade names, copyrights and registrations used in connection with the Product, nor to effect any applications or registrations thereof without the express written consent of OWNER, and not to take any action to the detriment of OWNER’s interest therein or which would or could dilute the value of the goodwill attaching to the Trademarks;
Article IX – CONFIDENTIAL INFORMATION AND NON-COMPETITION
IX.1 When and if required, OWNER will furnish DISTRIBUTOR the necessary information so that DISTRIBUTOR can fulfill its obligations hereunder regarding the registration of the Product to be distributed in the Territory. This information shall constitute part of the Confidential Information defined in Section 1.1(d).
IX.2 From time to time, OWNER may periodically provide DISTRIBUTOR with new or up-graded data that has become available, documentation, tests, reports, or other pertinent information relating to the Product or otherwise, which information will also form part of the Confidential Information and which will assist in keeping DISTRIBUTOR knowledgeable regarding the Product and maintaining a competitive edge in the marketing and sales of the Product.
IX.3 DISTRIBUTOR acknowledges that in its relationship with OWNER and/or by virtue of the performance of this Agreement, it and/or its employees, shareholders, officers, directors, principals, agents, and contractors (collectively, “Representatives”) will be and shall hereafter continue to be entrusted with Confidential Information, the disclosure of any of which to competitors of OWNER or to the public would be highly detrimental to the best interests of OWNER. DISTRIBUTOR further acknowledges that the right to maintain confidential such Confidential Information constitutes a proprietary right of OWNER, which OWNER is entitled to protect. Accordingly, and notwithstanding anything to the contrary herein expressed, DISTRIBUTOR covenants and agrees with OWNER:
(a) that it shall not use or copy or permit the use or copy of any of the Confidential Information, directly or indirectly, for any purpose other than the discharge of its duties and obligations arising from its appointment as a DISTRIBUTOR hereunder and only in the best interests of OWNER.
(b) that it will maintain the absolute confidentiality of the Confidential Information and that it will not (without the prior written consent of OWNER) either individually, or in partnership or jointly, or in conjunction with any other Person, as principal, agent, shareholder, or in any manner whatsoever, disclose, reveal, release, utilize, sell, assign, supply, or transfer to any person at any time, any of the Confidential Information, except to the extent necessary to discharge its duties and obligations relating to its appointment hereunder and only in the best interests of OWNER.
(c) that it will take all necessary action and will do all that is reasonably within its power to prevent the disclosure, release, or supply of any of the Confidential Information to any Person, including by any of its Representatives, except to the extent necessary to discharge its duties and obligations hereunder and only in the best interests of OWNER.
(d) in furtherance of the above, DISTRIBUTOR will advise its Representatives, and any other Persons who are given access to the Confidential Information, of the confidential and proprietary nature of the Confidential Information and of the restrictions imposed by this Agreement and, if appropriate, shall require each of them to signify in writing their agreement to abide by the terms of this Agreement and maintain the confidentiality of the Confidential Information. Notwithstanding any such agreement, by any of such Representatives, DISTRIBUTOR acknowledges that it shall be fully responsible and liable to OWNER for any and all damages and costs (including legal fees) suffered or incurred by it as a consequence of any breach by any of DISTRIBUTOR’s Representatives, and/or any other Persons given access to the Confidential Information, of the restrictive covenants contained herein.
