Exhibit 10.2
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DISTRIBUTION AGREEMENT
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Bug Master LLC
000 Xxxxxx Xxxx
XX Xxx 000
Xxxxxxxxx, XX 00000-0000
(000) 000-0000
AGREEMENT made this 3rd day of June 2004, between Bug Master LLC, a New
York Corporation with offices at 000 Xxxxxx Xxxx, XX Xxx 000, Xxxxxxxxx, XX
00000-0000 (the "Company") and Europa Trade Agency Ltd. with offices at 0000
Xxxx 00xx Xxxxxx, Xxxxxxxxx, XX, Xxxxxx, X0X 0X0 (the "Distributor").
1. Appointment. The Company hereby grants to the Distributor the right to
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promote, sell, and deliver at retail and wholesale its Products (as defined
below) within the Area of Primary Responsibility (as defined below), upon the
terms and conditions set forth in this Agreement.
2. Products. The Products which are subject to this Agreement are designated
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as Dealer Products and Commission Products.
(The term "Products: as used in this Agreement shall refer to both Dealer
Products and Commission Products.)
A. Dealer Products shall be:
Scent Master Wrist Band and Scent Master Stick On Strips.
B. Commission Products shall be:
Scent Master Wrist Band and Scent Master Stick On Strips.
New or additional products of the same general nature as any one of the
Products may be added by the Company, from time to time, as either Dealer
Products or Commission Products and the Company may discontinue or change any
Product, at any time.
3. Area of Primary Responsibility. The area of responsibility in which the
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Distributor is hereby granted the right of distribution is as follows:
Canada (only as a Dealer Product established for distribution to Wal-Mart
Canada Corp.)
The Company during the term of this Agreement agrees that it will not appoint
another distributor or dealer to sell its Distributor Products within the Area
of Primary Responsibility.
4. Duties of Distributor. The Distributor shall have the following duties and
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obligations:
A. The Distributor agrees to use its best efforts to market, promote,
sell and service the Products within the Area of Primary Responsibility.
B. During the term of this Agreement, the Distributor will maintain a
minimum inventory of the Products to service and promote the sale of the
Products within the Area of Primary, Responsibility. The Distributor agrees
Final Agreement as of June 3, 2004
to maintain an inventory level as set forth on Schedule A which schedule
may be changed from time to time by the Company upon thirty (30) days prior
written notice to the Distributor
C. The Distributor will not make any sales or quote any prices for
shipment or use of Products to the persons or entities described in
Paragraph 8 below.
5. Orders. The Company has the right to accept or reject any orders for Dealer
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Products submitted to it by the Distributor. Acceptance of an order can only
occur at the office of the Company at Lancaster, New York by execution of a
final written statement by the Company, the terms and specifications in the
acceptance becoming final and binding upon the parties. Accepted orders cannot
be cancelled by the Distributor without the prior written permission of the
Company.
6. Price and Payment. Unless otherwise agreed in writing, the purchase price
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for Dealer Products purchased by the Distributor from the Company shall be the
list price shown on the Company's applicable published price list in effect at
the time a purchase order is received from the Distributor by the Company, less
a discount of $.10 US per unit of Product purchased. Unless otherwise agreed in
writing, payment will be due at the office of the Company prior to the shipment
of the Product. When the Company ships Dealer Products ordered by the
Distributor, the Distributor will accept delivery at point or points of
shipment; pay all transportation and handling charges thereon from the P.O.B.
point or points named by the Company, to destination. The Company may change its
prices, terms, and conditions upon sixty (60) days written notice to the
Distributor. Such changes will take effect only in relation to orders placed by
Distributor after the end of the sixty (60) day notice period. The Company will
offer the Distributor the lowest price per unit that it offers to anyone for
approximately the same total volume of product within 60 days of an order by
Distributor, and will refund to the Distributor any difference.
7. Commission Products. The Distributor shall refer to the Company all
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inquiries received from persons outside the Area of Primary Responsibility with
respect to Commission Products. In the event that the Company sells a Commission
Product during the terms of this Agreement to a customer who has been referred
to it by the Distributor, the Company will pay to the Distributor a commission
equal to $.10 US per unit of Product sold by the Company. The Commission shall
be paid within ten (10) days of the month end in which the Company has received
final and full payment from the customer for the Commission Products sold.
8. Reservation of Right to Make Direct Sales. The Company expressly reserves
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to itself the right to manufacture, sell or consign the Products in the Area of
Primary Responsibility without restriction or obligation to the Distributor:
A. To international accounts and foreign governments purchasing their
requirements in the United States for export.
B. To any agency of the United States government.
C. To Canada (other than that which has been established as an Area of
Primary responsibility or Commission Product area established within the
distribution network of Europa Trade Agency Ltd.)
D. To those persons or entities listed on Schedule C, attached hereto.
Except as provided in paragraph 7 with respect to sales of Commission
Products, no commission shall be allowed or paid to the Distributor on
direct sales made by the Company.
9. Changes in Design. The Company reserves the right to make changes in the
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manufacture or design of its Products, component parts, or packaging at any time
in such manner as it may consider necessary or advisable and any Products so
changed will be accepted by the Distributor as standard manufacture in
fulfillment of existing orders. The Company shall not be obligated to furnish
the Distributor with improvements or changes in Products and component parts
previously delivered. All changes in the details of any order requested by the
purchaser after final approval thereof are subject to additional changes and
possible change in delivery time. Charges will be added to cover changes and
cover "in-process" work already completed which is effected by the change. The
Company reserves the right to stop selling any items or Products at any time for
any reason, subject to its existing contractual obligations.
10. Distributor Not Company's Agent. The Distributor is to be considered and it
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is the intent of the parties, that it act as an independent contractor and not
as the Company's agent, partner, or co-venturer in any respect, and the
Distributor is not authorized to incur any debts, obligations or to make any
promises or representations on behalf of the Company. The Distributor and the
Company shall not pledge the credit of the other party or in any way indicate to
a third party that the other will be responsible for the other's debts.
Final Agreement as of June 3, 2004
11. Contingencies. The Company shall not be responsible for loss, damages or
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delay in transportation or for failure to deliver Products or to fill orders
where such occurrences are caused by fire, accident, shortage of material,
strikes, labor disputes, common carriers, priorities, delays of original
manufacturers, war, riot, by the decrees or order of any court of government, or
by any cause beyond the Company's reasonable control.
12. Routing and Risks of Shipment. Unless otherwise agreed in writing, all
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shipments shall be routed as the Company may direct, and after delivery to
carrier, the Company shall not be responsible for any loss, damage or delay
during transportation.
13. Claims Against The Company for Shortage, Defect or Damage. The Distributor
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shall examine all shipments on arrival and within ten (10) days after receipt
and shall notify the Company in writing of all claims that the Products were
shipped short, defective or damaged, unless such defect cannot be discovered by
reasonable inspection, in which event such limiting period shall commence after
a reasonable time for inspection. Without such notice being received at the
Company's office, the Company shall not be responsible for any such claims.
Defective or damaged Products, except those damaged in transit for which the
Company assumes no responsibility, shall be held by the Distributor for
inspection by a company representative or for instructions from the Company as
to their disposition. When timely notice has been given and received, the
Company shall have a reasonable time in which to make good any shortage, or to
replace defective or damaged Products where responsibility therefore attaches to
the Company. Sale of any defective or damaged Product after notice of the defect
or damage shall constitute acceptance in waiver of the alleged defect or
damages.
14. Disclaimer of Warranties. EXCEPT FOR THE EXPRESS WARRANTIES WHICH ARE
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FURNISHED TO THE DISTRIBUTOR IN WRITING BY THE COMPANY AND DESIGNATED AS A
WARRANTY, THE COMPANY DISCLAIMS AND MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED,
AS TO THE PRODUCTS, THE CONDITION OF THE PRODUCTS, THE PERFORMANCE OR NON
PERFORMANCE OF THE PRODUCTS, THE MERCHANTABILITY SUITABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE PRODUCTS, OR ANY RESULT OBTAINED FROM USE OF THE
PRODUCTS. The Distributor acknowledges that in reselling the Products, it shall
not give any additional or different warranties to any customer other than that
which is the Company's standard warranty at such time.
15. Terms of Agreement. This Agreement shall commence as of the date hereof and
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shall continue for three (3) years provided that the Distributor, as of August
15, 2005, has ordered over $20,000 US in Product. Furthermore, if, over the next
three (3) years from the date hereof, the Distributor orders over $50,000 US in
Product, this Agreement shall renew for an additional two (2) years after the
date that the Agreement would otherwise terminate. After the initial three (3)
year period either party may terminate this Agreement by giving ninety (90) days
prior written notice to the other.
If at any time a petition for relief under any bankruptcy statute is filed
by or against the Distributor or if any insolvency proceedings or procedure for
composition or adjustment for debts or a general assignment for benefit of
creditors or similar proceeding is filed by or against the Distributor, or if a
receiver is appointed for the Distributor, the Company may terminate this
Agreement upon five (5) days prior written notice to the Distributor.
16. Effect of Termination. Any termination shall be effective as of the date
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provided above or the date set forth in a notice of termination pursuant to
Paragraph 15 above. Such termination shall be without prejudice to the rights of
either party to receive or collect any amounts due or to become due to it under
this Agreement in the event that the Company elects to terminate this Agreement,
without cause, pursuant to paragraph 15A above, then the Company agreement to
purchase all new and unused inventory of Distributor Products from the
Distributor at prices equal to the lower of (i) the current list price for such
Distributor Product, less applicable discount, or (ii) the price paid by the
Distributor to the Company for such item. Such inventory shall be purchased
within ninety (90) days from the date the Agreement is terminated and the
Distributor shall pay the cost of delivering such inventory to the Company.
If the Agreement is terminated for any other reason, the Company shall have
the option to repurchase the Distributor Products then in the possession of and
owned by the Distributor upon the same terms and conditions.
Upon termination of this Agreement for any reason the Distributor shall
discontinue the use of the Company's tradenames, trademarks, labels, copyrights
and other advertising media and shall remove all signs and displays relating
thereto; in the event of failure to do so, the Company may itself remove such
items and articles at the Distributor's expense.
Final Agreement as of June 3, 2004
17. Security. The Company shall retain a first lien and purchase money security
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interest in and to all Products sold to the Distributor pursuant to this
Agreement as continuing security for any and all present or future debts which
the Distributor may owe to the Company. The Distributor also grants to the
Company a first lien and security interest in and to any and all proceeds
realized from the sale of the Products. The Distributor hereby authorized and
designates the Company as its attorney-in-fact for the purposes of enabling the
Company to execute and sign any and all documents, including but not limited to,
financing statements and certificates of products and proceeds. The Distributor
further agrees to execute and deliver any and all further documents which may be
reasonably required for the Company to perfect and record its security interest
in the products and proceeds. The Distributor further agrees to execute and
deliver any and all further documents which may be reasonably required by the
Company in order to document, perfect or record any security interest grantee to
the Company pursuant to this Agreement. The Company reserves any rights which it
may have available to it under the New York State Uniform Commercial Code.
18. Indemnification. The Distributor hereby agrees to indemnify and hold the
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Company harmless from any and all claims, losses, suits and demands which may be
asserted by other parties against the Company by reason of the Distributor's
negligence or the Distributor's breach of any term, condition, covenant,
warranty or representation as set forth in this Agreement, including any and all
amendments hereto. The Company hereby agrees to indemnify and hold the
Distributor harmless from any and all claims, losses, suits and demands which
may be asserted by other parties against the Distributor by reason of the
Company's negligence or the Company's breach of any term, condition, covenant,
warranty or representation as set forth in this Agreement including any and all
amendments hereto.
19. Jurisdiction and Venue. This Agreement shall be governed by the laws of the
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State of New York and the Distributor hereby agrees and submits to the
jurisdiction of the State of New York, with the venue lodged in State of New
York, County of Erie, with respect to any legal actions, lawsuits or disputes
arising out of or relating to this Agreement.
20. Construction. This Agreement constitutes the entire Agreement between the
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parties with respect to its subject matter and supersedes all prior and
contemporaries written or oral negotiations and agreements between the parties
hereto. If any provision of this Agreement is determined to be invalid or
unenforceable, the provision shall be deemed to be severable from the remainder
of this Agreement and shall not cause its invalidity or unenforceability of the
remainder of this Agreement.
21. Notice. Any notice, payment or demand required under this Agreement shall
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be deemed to have been given when mailed by United States mail postage pre-paid,
or personally delivered as follows:
To the Company:
Bug Master LLC
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxx, XX 00000-0000
To the Distributor:
Europa Trade Agency Ltd.
0000 Xxxx 00xxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Xxxxxx
22. Assignment. This Agreement may be assigned by the Company and the
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performance of its duties hereunder delegated. Without the written consent of
the Company the Agreement shall not be assigned by the Distributor (and the
performance of its duties hereunder shall not be delegated) to a company managed
by persons other than Xxxxxx Xxxx and Xxxxxxx Xxxxxx. The Distributor shall have
no right to grant sublicenses without the written permission of the Company.
Final Agreement as of June 3, 2004
23. Approval of Contract. The Agreement, or any amendments, modifications or
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waiver of its terms shall not be binding upon the Company until approved in
writing by its Owner.
IN WITNESS WHEREOF, Agreement has been executed as of the date first above
written.
COMPANY: Bug Master
By: /s/ Xxxxxxx X. D'Arcy
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Xxxxxxx X. D'Arcy, Owner
DISTRIBUTOR: Europa Trade Agency Ltd.
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, President
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx, Sales Manager
Final Agreement as of June 3, 2004
SCHEDULE A
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None
SCHEDULE B
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WARRANTY REIMBURSEMENT POLICY:
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A. Product will be credited as invoiced or dealer net at the time of
purchase.
1. Return shipping charges are the responsibility of the dealer or
customer.
B. Disposition of Warranty Claims shall be in the forma of credits to
dealers or customers account unless other wise provided.
All charges submitted for warranty reimbursement must be submitted in writing to
Bug Master LLC at 000 Xxxxxx Xxxx, XX Xxx 000, Xxxxxxxxx, XX 00000-0000
SCHEDULE C
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None.
Final Agreement as of June 3, 2004
