Confidential Treatment Requested [ ]
EXHIBIT 10.13
OSMOTICS CORPORATION
DISTRIBUTORSHIP AGREEMENT
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(Xxxxx Xxxxx)
This Distributorship Agreement (this "Agreement") is made and entered
into as of 1.01.97., 1996, by and between Osmotics Corporation, a
Colorado corporation ("Osmotics"), and Xxxxx Xxxxx, a company organized under
the laws of France ("Distributor").
RECITALS
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A. Osmotics is engaged in the development, manufacture and sale of
cosmetics products, perfumes and toiletries and Distributor is engaged in the
business of marketing and distributing cosmetics in international markets.
B. Distributor desires to obtain the right to market and distribute
certain of such cosmetics products in the Territory (as defined in Section 1(e))
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under the Osmotics Trademarks (as defined in Section 1(c)), and Osmotics desires
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to grant such rights to the Distributor, upon the terms and conditions set forth
in this Agreement.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. Definitions.
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(A) "DISTRIBUTOR'S TRADEMARKS" shall mean the trademarks, logos
and other marks owned or licensed by Distributor, all as set forth on Exhibit A
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hereto, as the same may be amended from time to time by the parties.
(B) "INTELLECTUAL PROPERTY" shall mean the Osmotics Trademarks
and the patents, copyrights, trade secrets, know-how, proprietary information
and all other intellectual property rights owned or licensed by Osmotics
relating to the Products.
(C) "OSMOTICS TRADEMARKS" shall mean the trademarks, logos and
other marks owned or licensed by Osmotics relating to the Products, whether or
not registered, all as identified on Exhibit B hereto, as the same may be
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amended from time to time by the written agreement of the parties, including all
translations thereof.
(D) "PRODUCTS" shall mean the cosmetics products listed in
Exhibit C hereto, as the same may be amended from time to time by the written
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agreement of the parties.
(E) "TERRITORY" shall mean the country or countries more
particularly described in Exhibit D attached hereto, as the same may be amended
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from time to time by the written agreement of the parties.
2. Distributorship.
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(A) APPOINTMENT. Subject to the terms of this Agreement,
Osmotics hereby appoints Distributor as its exclusive authorized distributor to
market and sell the Products in the Territory and Distributor hereby accepts
such appointment. Osmotics shall not, during the term of this Agreement, appoint
another distributor or sales agent to sell the Products within the Territory,
except as set forth in Section 18(b).
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(B) SUB-DISTRIBUTORS; RISKS. Distributor shall have the right to
appoint sub-distributors for the purpose of marketing and distributing the
Products in the Territory; provided, that any such sub-distributor shall agree
in writing to be bound by the operative terms and conditions of this Agreement.
Except as expressly provided otherwise in this Agreement, Distributor shall bear
all risks attendant to its capacity as Distributor including risks of credit,
currency devaluation, blocked currency, confiscation, expropriation, rebellion,
revolution, war, and all other risks of transaction within the Territory.
3. Distributor's General Obligations.
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(A) BEST EFFORTS. Distributor agrees to use its continuing
diligence and best efforts to market, promote, and distribute the Products and
to secure purchasers for the Products within the Territory. The Distributor's
best efforts hereunder shall include, without limitation, attendance at trade
shows, distribution of marketing brochures and other sales information,
advertising in appropriate trade journals and other publications and media, the
dedication of a reasonable portion of the time, efforts and responsibilities of
a reasonable number of sales persons located within the Territory and the
maintenance of facilities and inventory adequate to meet the requirements of the
market for the Products in the Territory, all at Distributor's expense.
Notwithstanding the foregoing obligations, to the extent permitted under the
laws of the Territory, Distributor shall not sell the Products to any customer
disapproved by Osmotics in writing.
(B) ADVERTISING AND PROMOTION. Distributor shall expend for
advertising and promoting the Products during each year an amount reasonably
calculated under the then-extant commercial circumstances to enhance the market
for, and increase the sales of, the Products within the Territory. All use of
advertising, merchandising and promotional material by Distributor, including,
without limitation, Product labeling, package inserts, and other descriptive
copy and all advertising, promotion and merchandising activities
by Distributor shall be subject to Osmotics' prior written approval. Distributor
shall, upon Osmotics' request from time to time, promptly deliver to Osmotics
such statements as Osmotics requests showing the amount of expenditures made by
Distributor for promotion and advertising.
(C) SALES PERFORMANCE. Distributor shall achieve annual Net
Sales (as defined below) of the Products in the Territory equivalent in local
currency of the annual Sales Volume Targets set forth on Exhibit E. The term
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"Net Sales" shall mean the amount paid or payable to Distributor by its
customers for the Products, less the total of (I) refunds for returned
merchandise and (ii) freight and insurance charges and sales, excise and similar
taxes, if paid to Distributor by its customers. Osmotics may revise the Sales
Volume Targets at the time of any renewal of the term hereof by substituting an
amended Exhibit E setting forth the new Sales Volume Targets.
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(D) PRICING. To the extent permitted under the laws of the
Territory, Distributor will consult with Osmotics with reference to the
determination of retail prices, trade discounts, promotional discount, sales
incentives and special offers as Osmotics may determine and establish, and
Distributor shall to the best of its ability cause all of its customers to
maintain such retail prices, trade discounts, promotional discounts, sales
incentives and special offers and shall cease selling the Products to any of its
customers who fail to maintain the aforementioned retail prices, trade
discounts, promotional discounts, sales incentives and special offers.
(E) PRODUCT CONDITION AND PACKAGING. Distributor shall
distribute and sell the Products only in their original, unaltered condition and
packaging. Distributor shall not distribute or sell any Products the quality and
appearance of which do not conform to such quality standards as may be
prescribed by Osmotics and shall replace to the trade (at no cost to Osmotics)
any non-conforming Products sold. Distributor shall sell, handle, store,
transport, and use or apply the Products in a safe and reasonable manner and in
strict conformance with Osmotics' specifications therefor. Distributor shall
inform its customers regarding the proper usage and handling of the Products.
(F) RECORDS AND REPORTS. Distributor hereby acknowledges that
Osmotics requires accurate information regarding the present and future desires
or requirements of current and prospective customers for the Products, market
conditions, competitive products and prices, and other facts material to the
marketing of the Products in the Territory and that, due to the nature of the
cosmetics industry, Osmotics desires to maintain the ability to trace the
purchasers of the Products. Accordingly:
(i) Distributor shall keep true and accurate records of
inventory and sales of Products and of expenditures made pursuant to Section
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3(b). All of such records and the files upon which they are based shall be open
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to inspection by Osmotics' authorized representatives during Distributor's
regular business hours for the purpose of monitoring Distributor's compliance
with the terms and conditions of this Agreement; provided that such
representatives shall agree to maintain the confidentiality of such records.
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(ii) Distributor shall deliver to Osmotics from time to
time as Osmotics may reasonably request a report showing the monetary volume of
Products sold by Distributor to its customers (by individual account) and such
other matters pertaining to Buyer's sales and compliance with this Agreement as
Osmotics may reasonably deem necessary.
(iii) Distributor shall keep Osmotics informed of its price
lists and shall inform Osmotics immediately of any actual or anticipated changes
in Distributor's organization or method of doing business which might affect the
performance of Distributor's duties hereunder. Distributor shall maintain market
intelligence within the Territory and keep Osmotics informed as to market
developments which relate to the type of products generally manufactured by
Osmotics. Distributor shall keep Osmotics fully informed of any changes in local
or general conditions and the activities of Osmotics' competitors in the
Territory which may affect Product sales in the Territory.
(G) TRANSLATIONS. To the extent necessary to the promotion and
distribution of the Products and subject to the prior approval of Osmotics,
Distributor shall, at its sole expense, procure the translation of the Osmotics
Trademarks and other package marking to the local language of the Territory.
Osmotics agrees to cooperate with Distributor in such translations and to
provide the Products, to the extent necessary, in packaging marked with such
translated Osmotics Trademarks and other marking.
4. Compliance with Laws. Distributor acknowledges that it will at
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all times be acting as an importer of the Products for distribution in
accordance with the provisions of this Agreement. Accordingly, all sales of
Products hereunder shall at all times be subject to the export control laws and
regulations of the United States, as the same may be amended from time to time.
The Distributor agrees that it shall not make any disposition, by way of trans-
shipment, re-export, diversion or otherwise, except as such laws and regulations
may expressly permit, of U.S. origin Products other than in and to the ultimate
country of destination specified on Distributor's order, which shall be limited
to the Territory unless the parties otherwise agree in writing. Distributor
shall strictly comply with all laws and regulations pertaining to the
importation, promotion, sale and distribution of the Products at any time in
force in the Territory and the United States. Without limiting the generality of
the foregoing provision, Distributor expressly agrees as follows:
(A) IMPORTATION OF PRODUCTS. Distributor shall arrange for
clearance through customs of all Products and the transportation thereof to
Distributor's facility solely at Distributor's cost and expense. Distributor
shall pay all customs, import, excise, sales, and other similar duties and taxes
payable in respect of the Products shipped to Distributor.
(B) AUTHORIZATIONS. Distributor shall obtain any licenses,
authorizations, permissions, and other documents, and shall comply with all
formalities for import, export, distribution, sale and/or other disposal of the
Products in, to and from the
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Xxxxxxxxx solely at is cost and expense. Any right or privilege which may be
obtained by reason of any health or other registrations or authorizations with
respect to the Products will be exclusively for the benefit of Osmotics. Any
such health registrations or governmental authorizations in connection with the
sale and distribution of any of the Products shall at all times and for the
benefit of, and shall remain the property of, Osmotics. To the extent permitted
by the law of the Territory, Distributor will apply for any and all required or
permitted registrations and governmental authorizations with respect to the
Products in the name of Osmotics and shall forthwith take all necessary steps to
transfer any and all health and governmental authorizations with respect to the
Products to the name of Osmotics if otherwise registered.
5. Product Control; Diversion. Distributor shall not, directly or
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indirectly, distribute in the Territory, Osmotics' Products purchased from any
person other than Osmotics. Distributor shall note seek customers for the
Products outside the Territory nor establish or maintain any branch or
distribution center outside the Territory for the sale of the Products. The
Distributor shall promptly advise Osmotics of any inquiries which it or any of
its affiliates may receive from any prospective customers for the supply of
Products outside the Territory. To the extent permissible under the laws of the
Territory, Distributor will sell the Products only to customers resident in or
carrying on business for resale or consumption only in the Territory.
6. Competing Products. Representative shall have the right to
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market and distribute products and lines which compete directly with the
Products ("Competing Products"); provided, (a) that Distributor shall not,
directly or indirectly, be an owner, partner, officer, director, manager,
employee, or other representative (other than as an independent distributor) of
any person or entity which manufactures such Competing Products and (b) that no
such person or entity shall hold any interest, directly or indirectly, in
Distributor. Distributor shall from time to time, upon request, inform Osmotics
as to the particular types of Competing Products handled by it at such time, the
identity of the manufacturer of such Competing Products and Distributor's
relationship with such manufacturer.
7. General Obligations of Osmotics.
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(A) PRODUCT INFORMATION AND ASSISTANCE. Osmotics shall promptly
deliver to the Distributor information relating to the Products which Osmotics
reasonably believes to be necessary to enable the Distributor to market and sell
the Products. Upon Distributor's request, Osmotics shall provide additional
assistance and training to the Distributor at a site designated by the
Distributor at times as may be mutually agreed upon by the parties.
(B) OTHER ASSISTANCE. Osmotics shall assist Distributor to the
extent reasonably necessary to comply with any of its obligations under Section
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4. Notwithstanding the foregoing, Osmotics shall not be liable if any
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authorization is delayed, denied, revoked,
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restricted or not renewed.
8. Purchase and Delivery of Products.
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(A) PURCHASE ORDERS. The Distributor agrees to purchase all of
its requirements for the Products from Osmotics. All orders shall be made in
writing, telex and facsimile included. All orders placed by Distributor shall be
deemed offers to purchase which shall not be binding upon Osmotics unless and
until they have been accepted by Osmotics, such acceptance to be evidenced
solely by Osmotics' shipment of Products upon any such order. The terms of this
Agreement shall govern any purchases of Products by the Distributor,
notwithstanding any additional or contrary terms set forth in Distributor's
purchase order.
(B) PRODUCT PRICES. The current FOB prices of the Products are
set forth on Exhibit F, which shall be amended and superseded from time to time
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by Osmotics, immediately upon its redetermination of any of such prices, by its
delivery to Distributor of an amended Exhibit F setting forth the new FOB
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prices, which prices shall be effective upon the delivery to Distributor of such
amended Exhibit F.
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(C) PAYMENT; CURRENCY. Payment in full for any order shall be
due net 30 days following the date of shipment. Any and all sums due Osmotics
under the terms of this Agreement shall be paid in United States dollars (or
such other currency as Osmotics shall designate) at the rate of exchange
prevailing on the date payment is due, and at such place, in such manner and on
such credit terms, if any, as Osmotics shall determine. Osmotics shall have the
right to revise the place and the manner of payment and credit terms, if any, to
protect its interests.
9. Delivery; Risk of Loss; Security Interest.
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(A) SHIPMENT. Osmotics shall ship the Products ordered by
Distributor within the normal shipping schedule established by Osmotics from
time to time, but cannot guarantee a specific shipment date. Accordingly,
Osmotics' sole obligation to Distributor shall be to ship Products as promptly
as reasonably practicable following each order. All deliveries of Products shall
be made F.O.B. Osmotics' plant.
(B) RISK OF LOSS. Title and all risk of loss or damage to the
Products shall vest in the Distributor at the time of Osmotics' delivery of the
Products to the carrier notwithstanding any shipping and insurance arrangements
made by Osmotics on the Distributor's behalf. However, Osmotics reserves a
purchase money security interest in each Product delivered until full payment is
received. Osmotics may file this Agreement as a financing statement pursuant to
applicable law to evidence or perfect Osmotics' security interest. Distributor
agrees to execute any additional documents Osmotics deems necessary or desirable
to perfect or protect its security interest in the Products or to enable
Osmotics to exercise its rights and remedies hereunder.
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10. Insurance. Distributor represents that it currently maintains,
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and hereby agrees that it shall continue to maintain during the term of this
Agreement, comprehensive general liability insurance, property damage insurance,
and such other insurance in such amounts and with such coverages as are and
shall be customary in the Distributor's line of business and as required by law
including, but not limited to, workers' compensation and unemployment
compensation insurance. Distributor shall provide Osmotics with certificates
evidencing such insurance upon commencement of this Agreement and upon
commencement of each extension of this Agreement. Osmotics shall cause
Distributor to be added as a named insured on its product liability insurance
policy.
11. Warranty and Limitation of Liability.
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(A) WARRANTY; DISCLAIMER. Osmotics warrants to the Distributor
that, until the expiration date stated on the Products or, if none, one year
from the date of shipment, the Products shall conform to the description of such
Products as provided in Osmotics' written materials setting forth such
descriptions and such specification as may be required from time to time by the
United States government. THIS WARRANTY IS EXCLUSIVE AND OSMOTICS MAKES NO OTHER
REPRESENTATION OR WARRANTY TO DISTRIBUTOR OR ANY CUSTOMER OR OTHER THIRD PARTY,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE. Osmotics specifically
disclaims any warranty that the Products are free from infectious agents or
deleterious properties. This warranty shall not apply if Osmotics determines in
its sole discretion, that Distributor or any purchaser of the Product has
misused or mishandled the Products in any manner or has failed to use the
Products in accordance with instructions furnished by Osmotics. During the
warranty period, Osmotics will, at its option, refund the purchase price of or
replace any Product proved to Osmotics' satisfaction to be defective or
nonconforming; provided that Distributor returns the Product to the point of
shipment properly packed and shipment prepaid. Concurrently with any refund or
Product replacement, Osmotics shall reimburse Distributor for the cost of
shipping the defective Product to Osmotics .
(B) RETURNS. No returns of Products will be accepted unless
Distributor complies with Osmotics' return policy, as amended from time to time.
A copy of Osmotics' current return policy is attached hereto as Exhibit G.
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Replacement shall mean furnishing a new shipment (F.O.B. place of original
shipment) of the Product in an amount sufficient to replace any Product found to
be defective or nonconforming.
(C) LIMITATION OF LIABILITY. OSMOTICS' ENTIRE LIABILITY AND THE
DISTRIBUTOR'S (AND ITS CUSTOMERS') EXCLUSIVE REMEDY SHALL BE AS FOLLOWS:
IF THE DISTRIBUTOR RIGHTFULLY REJECTS THE PRODUCTS, OR JUSTIFIABLY REVOKES
ACCEPTANCE OF THE PRODUCTS, THE DISTRIBUTOR'S (AND ITS
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CUSTOMERS') SOLE REMEDY IS A REFUND OR CREDIT FOR ANY PAYMENTS MADE FOR THE
REJECTED OR REVOKED PRODUCTS UPON RETURN OF THE PRODUCTS TO OSMOTICS IN
ACCORDANCE WITH SECTION 11(a) ABOVE.
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AFTER ACCEPTANCE OF THE PRODUCTS, DISTRIBUTOR'S AND ITS CUSTOMERS' SOLE REMEDY
IS FOR REFUND OR REPLACEMENT, PURSUANT TO THE TERMS OF THE WARRANTY SET FORTH IN
SECTIONS 11(a) and (b) ABOVE.
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OTHER THAN OSMOTICS' OBLIGATION TO REFUND OR REPLACE AS SET FORTH ABOVE,
OSMOTICS SHALL NOT BE LIABLE FOR ANY LOST PROFITS OR INCIDENTAL, CONSEQUENTIAL,
INDIRECT, SPECIAL OR OTHER DAMAGES OF ANY KIND, FOR ANY REASON WHATSOEVER
INCLUDING, BUT NOT LIMITED TO, DAMAGES BASED UPON NEGLIGENCE, BREACH OF
WARRANTY, STRICT LIABILITY, OR ANY OTHER THEORY, EXCEPT AS SET FORTH IN SECTION
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12(b).
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INCIDENTAL AND CONSEQUENTIAL DAMAGES SHALL NOT BE RECOVERABLE EVEN IF THE
REPLACEMENT REMEDY FAILS ITS PURPOSE OR FOR ANY OTHER REASON.
12. Indemnification.
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(A) OSMOTICS' RIGHT OF INDEMNIFICATION. Distributor agrees that
it shall indemnify and hold Osmotics harmless from and against all claims,
damages, losses, and expenses, including reasonable attorneys' fees, arising out
of or resulting from (I) the sale, handling, storage, transport, use or
application of the Products by Distributor, or its employees, agents, customers,
or anyone for whose actions any of them may be liable or (ii) any breach by the
Distributor of the terms or conditions of this Agreement, including any
misrepresentation by Distributor of its authority hereunder or any
representation or warranty made by the Distributor to Osmotics or with respect
to Osmotics and/or the Products, which were untrue when made or were not
authorized in writing by Osmotics.
(B) DISTRIBUTOR'S RIGHT OF INDEMNIFICATION. Osmotics agrees
that it shall indemnify and hold Distributor harmless from and against all
claims, damages, losses, and expenses, including reasonable attorneys' fees,
arising out of or resulting from any claim of any individual for personal injury
arising out of such individual's use of Products sold in the Territory; provided
that the foregoing right of indemnification shall not apply in any instance
where such alleged personal injury arose from the use of Products which have
been altered in any way following shipment by Osmotics, or which were used by
such individual other than in accordance with instructions provided by Osmotics,
or which were used in conjunction with products other than the Products. As a
condition to the enforceability of such right of indemnification, Distributor
shall give Osmotics timely written notice of any action brought against
Distributor or Osmotics and Osmotics shall have the right and option to direct
and control the defense of such action.
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13. Intellectual Property.
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(a) Subject to the terms and conditions of this Agreement,
Osmotics grants to the Distributor a limited exclusive license to use the
Intellectual Property in the Territory during the term of this Agreement as
necessary for the sole purpose of marketing and selling the Products within the
Territory pursuant to the terms of this Agreement.
(b) The Distributor acknowledges that Osmotics is the owner of
the Intellectual Property, including the Osmotics Trademarks, and all rights and
good will associated with the Intellectual Property. Distributor shall not claim
adversely to possess any right, title or interest in and to such Intellectual
Property or to assist any third party in so claiming. The Distributor agrees to
refrain from using the Intellectual Property, including the Osmotics Trademarks,
outside the Territory or in connection with products not covered by this
Agreement.
(c) Osmotics may, during the Distributor's normal business hours,
inspect all packaging, labels, advertising and other materials on which the
Osmotics Trademarks appear. Distributor shall deliver to Osmotics copies of
Distributor's promotional and advertising material bearing the Osmotics
Trademarks for Osmotics' approval, prior to use of such materials. Distributor
agrees not to use any packaging, labels, promotional, advertising or other
materials on which the Osmotics Trademarks appear that Osmotics finds
unsuitable, in its sole discretion.
(d) The Distributor agrees that, with respect to any Products
sold and marketed by it under the Osmotics Trademarks, it will use and display
the Osmotics Trademarks properly and shall take no actions jeopardizing the
existence or enforceability of the same. This shall include, but not be limited
to, providing any trademark notices required by any applicable law. Distributor
hereby undertakes fully and without any reservation whatsoever, to distribute,
advertise and promote the Products only under the Osmotics Trademarks and not to
remove the Osmotics Trademarks from the Products without Osmotics' prior written
consent.
(e) Upon termination of this Agreement for any reason, the
Distributor agrees to discontinue its use of all Intellectual Property,
including the Osmotics Trademarks. The Distributor also agrees not to attempt to
register or to use or to aid any third party in attempting to register or to use
any marks or names which may be, in the opinion of Osmotics, confusingly similar
to any of the Osmotics Trademarks. It is understood that this covenant shall
survive the termination or expiration of this Agreement.
(f) Upon termination of this Agreement, the Distributor agrees to
execute such documents and take such actions as Osmotics may deem reasonably
necessary or desirable to evidence the fact that the Distributor has ceased
using the Intellectual Property, including the Osmotics Trademarks, and that it
has no further rights therein.
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(g) The Distributor shall have the right to use Distributor's
Trademarks in connection with, but not on labeling on, the Products for the sole
purpose of indicating that the Distributor is the distributor of the Products in
the Territory, and for any other purpose and in such manner upon which the
parties may mutually agree in writing.
(h) If legal protection for any of the Intellectual Property,
including registration of the Osmotics Trademarks, has not been obtained in the
Territory and the Distributor and Osmotics mutually agree that it is necessary
or advisable to obtain the same, Osmotics and the Distributor shall immediately,
in Osmotics' name, take all necessary steps to obtain legal protection for such
Intellectual Property in the Territory. All expenses incurred by either
Osmotics or the Distributor in order to obtain and maintain legal protection for
such Intellectual Property shall be the sole responsibility of Osmotics.
14. Osmotics' Infringement.
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(a) Osmotics warrants that it has no actual knowledge, as of the
date hereof, that any part of the Intellectual Property infringes any patent,
design, trademark, copyright, or similar intellectual property right belonging
to any third party in the Territory.
(b) The Distributor shall notify Osmotics immediately of the
institution of any legal action or other proceeding brought against the
Distributor which is based upon a claim that the Intellectual Property or any
part thereof, infringes any patent, design, trade name or trademark, copyright
or other intellectual property right belonging to any third party in the
Territory (an "Osmotics Infringement Action"). Osmotics and the Distributor
shall cooperate in the defense of such Osmotics Infringement Action; provided
that Osmotics shall ultimately have the right to control the litigation and any
settlement thereof. Osmotics shall indemnify and hold the Distributor harmless
from and against all claims, damages, losses and expenses, including reasonable
attorneys' fees, incurred by the Distributor arising out of or resulting from an
Osmotics Infringement Action.
(c) The Distributor covenants and agrees to inform Osmotics of
any third party infringement of Osmotics' Intellectual Property, including the
Osmotics Trademarks, promptly following the Distributor's discovery of any such
infringement.
15. Distributor's Infringement.
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(a) Distributor warrants that it has no actual knowledge, as of
the date hereof, that any part of the Distributor's Trademarks infringes any
patent, design, trademark, copyright, or similar intellectual property right
belonging to any third party.
(b) Osmotics shall notify the Distributor of the institution of
any legal action or other proceeding brought against Osmotics which is based
upon a claim that the Distributor's Trademarks or any part thereof, infringes
any patent, design, trade name or trademark, copyright or other intellectual
property right belonging to any third party (a
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"Distributor Infringement Action"). Osmotics and the Distributor shall cooperate
in the defense of such Distributor Infringement Action; provided that the
Distributor shall ultimately have the right to control the litigation and any
settlement thereof. The Distributor shall indemnify and hold Osmotics harmless
from and against all claims, damages, losses and expenses, including reasonable
attorneys' fees, incurred by Osmotics arising out of or resulting from a
Distributor Infringement Action.
(c) Osmotics covenants and agrees to inform the Distributor of
any third party infringement of the Distributor's Trademarks promptly following
Osmotics' discovery of any such infringement.
16. Proprietary Information.
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(A) CONFIDENTIAL INFORMATION. In performing this Agreement, each
party may receive information of a confidential and proprietary nature regarding
the other, including information about such party's intellectual property and
its operations, including, but not limited to, research, formulas, marketing
plans, strategies, forecasts, budgets, and customer and supplier lists
(hereinafter called "Confidential Information"). Confidential Information shall
be held in strict confidence by the recipient, shall not be used except as
permitted hereunder, and shall not be disclosed to any third party without the
prior written consent of the disclosing party. The employees, agents, and
sublicensees of the recipient shall be bound to the same obligations of
confidentiality and restrictions on use as the recipient. Confidential
Information shall not include:
(i) information which is known to the recipient prior to the
date of receipt and not obtained or derived in any manner related to this
Agreement;
(ii) information which is or becomes part of the public domain
through no fault of the recipient; or
(iii) information which is obtained from a third party who
lawfully possesses such Confidential Information and is under no obligation to
keep such Confidential Information confidential.
(B) DISCLOSURE TO TRIBUNAL. If disclosure of Confidential
Information is required by law, regulation or order, other than as contemplated
by subsection (C) below, such Confidential Information may be disclosed by the
recipient; provided that the disclosing party is notified before the recipient
makes any such disclosure and the recipient uses its best efforts to ensure that
the disclosures are treated, to the extent possible, as confidential by the
government agency or other person or entity receiving Confidential Information.
(C) REGISTRATIONS. If, in connection with the obtaining of
any health or other registration or authorization with respect to the Products,
Distributor
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shall be required to present to a government agency or authority formulas with
respect to any one or more of the products and such formulas shall be furnished
by Osmotics to Distributor for such purpose, then, in such event Distributor
shall treat the said formulas in all respects as strictly confidential and as
trade secrets and will not disclose the same to any party other than the
aforesaid government agency or authority. Distributor shall promptly notify
Osmotics of any request for such formulas made by said government agency or
authority. Further, said formulas shall be disclosed by Distributor only to such
persons within Distributor's organization who require the same for the purpose
of the filing of formula statements with the said government agency or
authority, and at Osmotics' request, Distributor shall cause the aforesaid
people in Distributor's organization to sign such nondisclosure or trade secrets
agreements as Osmotics may require with respect to said formulas. In all other
respects, the said formulas shall be kept confidential by Distributor and shall
not be used for any purpose other than that described herein.
(d) The provisions of this Section 16 shall survive the
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termination or expiration of this Agreement.
17. Remedies. The parties acknowledge that a breach by either party
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of the provisions of Sections 12, 13, 14, 15 and 16 of this Agreement will cause
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the other party irreparable injury for which it cannot be reasonably or
adequately compensated in money damages. The injured party shall, therefore, be
entitled, in addition to all other remedies available to it, to injunctive and
other equitable relief to prevent a breach of such provisions, or any part of
them, and to secure their enforcement. Nothing contained herein shall be
construed as prohibiting a party from pursuing any other remedies available to
it, including the recovery of damages, in the event of a breach of this
Agreement.
18. Term and Termination.
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(a) Unless sooner terminated as provided below, the term of this
Agreement shall commence as of the date set forth above and shall continue for
three years, where upon this Agreement shall automatically extend for
additional periods of three years each, unless either party gives written notice
to the other, that it does not intend so to extend this Agreement, at least 30
days prior to the expiration of the initial term or any renewal term hereof.
(b) If either party elects to terminate this Agreement pursuant
to Section 18(a), during the 30-day notice period provided therein, Osmotics or
-------------
any affiliate or both may appoint another distributor to serve in the Territory,
to place orders for, purchase, market and sell Products to any person and take
any other action it deems necessary to ensure the continuity of the marketing
and sale of the Products in the Territory. Distributor shall assist Osmotics or
such affiliate and any new distributor so appointed in making a smooth
transition to the new Product distribution
-12-
arrangements. Osmotics shall not be entitled to any compensation, commission or
other remuneration in respect of any action taken or Products sold by Osmotics
or its affiliates pursuant to this Section 18(b).
-------------
19. Termination.
-----------
(A) AUTOMATIC TERMINATION. This Agreement shall immediately and
automatically terminate without notice to the Distributor upon either of the
following events:
(i) the attempted or actual assignment by Distributor
of this Agreement or any of its rights or obligations hereunder without the
prior written consent of Osmotics; or
(ii) the voluntary bankruptcy, dissolution or
liquidation of Distributor or the appointment of a receiver for any substantial
portion of the assets of Distributor.
(B) MATERIAL DEFAULT. In the event of a material default by
either party in the performance of this Agreement, the other party may give
written notice to the defaulting party specifying the nature and extent of the
default and requiring cure; and the defaulting party shall have sixty (60) days
thereafter to cure such default. If such default is not cured within such sixty
(60) day period, then the aggrieved party may by written notice declare this
Agreement immediately terminated.
(c) This Agreement may be terminated immediately by Osmotics by
notice in writing to Distributor upon either of the following events:
(i) there are any changes in the financial or
business condition or other circumstances of Distributor which, in the judgment
of Osmotics, are materially detrimental to the interests of Osmotics, including,
without limitation, any acquisition of any interest in Distributor by an entity
engaged in any business which, in the judgment of Osmotics, manufactures
Competing Products (or the acquisition by Distributor of any interest in any
such entity); or
(ii) the commencement of an involuntary bankruptcy
proceeding against Distributor which proceeding is not dismissed within sixty
(60) days; or
(iii) Distributor's failure to meet the Sales Volume
Target in any year, pursuant to Section 3(c).
------------
20. Disposition of Products Upon Termination. Osmotics assumes no
----------------------------------------
responsibility or obligation for or with respect to Products in the possession
of the
-13-
Distributor at or after termination of this Agreement; provided, however, that
Osmotics shall have the right, at its option, within thirty (30) days after the
date of termination to purchase or cause to be purchased any or all of the
Products in the Distributor's inventory at a price equal to the "F.O.B." price
thereof to the Distributor. The Distributor shall pack and arrange for shipping
of such Products as are so purchased.
21. Force Majeure. Neither party to this Agreement shall be liable
-------------
to the other and neither shall be deemed in default hereunder for any failure or
delay in the performance of any of its covenants, agreements or obligations,
hereunder, other than the failure to pay money when due, caused by or arising
out of conditions of force majeure. In this clause, "conditions of force
majeure" shall mean any war, riot, social disturbance, act of God, strike,
lockout, trade dispute or labor disturbance, accident, breakdown of plant or
machinery, fire, flood, difficulty in obtaining workmen or materials or
transportation, any law, act or order of any court, board, government, or other
direct authority of competent jurisdiction, or any other cause beyond the
reasonable control of the party. The party affected by any condition of force
majeure as described in this provision shall promptly notify the other party in
writing and hereby agrees to use reasonable diligence to remove any such
conditions of force majeure as may occur from time to time; provided, however,
nothing contained herein shall require the settlement of strikes, lockouts, or
other labor difficulties by the party affected contrary to its wishes.
22. Notices. Any notices, payments or other communications required
-------
or permitted to be given or made hereunder shall be in writing in the English
language and shall be hand delivered or sent by registered airmail letter,
postage prepaid, express courier, and (except for payments) facsimile or telex
to the other party at its address set forth below or to such other address as
may from time to time be notified by one party to the other in accordance with
this Section.
If to Osmotics:
Osmotics Corporation
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000 XXX
Attn: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Distributor:
Xxxxx Xxxxx
00-00, Xxx Xxx Xxxxxx
00000 Xxxxxxxx
Xxxxx, Xxxxxx
-14-
Attn: Xxxxxx Xxxxxx
Telephone: 00 00 00 00 00
Facsimile: 01 47 91 03 79
All notices, payments and other communications shall be effective (I) if sent by
registered airmail letter, when received or seven (7) days after mailing,
whichever is earlier; (ii) if hand delivered or sent by express courier, when
delivered; or (iii) if by facsimile or telex, when received by the machine to
which it was transmitted (a machine-generated transaction report produced by
sender bearing recipient's facsimile number being prima facie proof of receipt.)
23. Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties relating to the subject matter hereof and
supersedes all prior written and oral understand ings and agreements between
the parties. No modification or waiver of any term or condition of this
Agreement shall be valid or binding unless the same is in writing signed by both
parties.
24. Arbitration. Any controversy or claim arising out of or relating
-----------
to this Agreement, or the breach thereof shall be settled by arbitration in
Denver, Colorado in accordance with the commercial rules, then obtaining, of the
American Arbitration Association, and judgment upon the award rendered may be
entered in any court having jurisdiction thereof pursuant to Section 25.
----------
25. Choice of Law; Jurisdiction. This Agreement shall be governed by
---------------------------
and construed in accordance with the laws of the State of Colorado, USA, without
regard to its conflict of laws principles. Distributor hereby waives French
jurisdiction and consents to the jurisdiction and venue of the state and federal
courts of Colorado over any disputes arising hereunder. The English language
text of this Agreement shall be the authorized text for all purposes.
26. Assignability; Binding Effect. This Agreement may not be
-----------------------------
assigned, sublicensed or transferred by Distributor, by operation of law or
otherwise, without the prior written consent of Osmotics. For purposes of this
Agreement, a change in control of or a merger or consolidation involving
Distributor, shall be deemed an assignment. Subject to this condition, this
Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the parties.
27. Authority. Each party to this Agreement warrants that it has the
---------
authority to execute and perform this Agreement and that this Agreement is the
valid and binding obligation of such party, enforceable against such party in
accordance with its terms.
28. Severability. If any provision of this Agreement shall be
------------
adjudged by a court to be void or unenforceable, the Agreement shall be deemed
-15-
modified to the minimum extent necessary to avoid the illegality, but the void
or unenforceable provision shall in no way affect any other provision of this
Agreement or the validity or enforceability of the remainder of this Agreement.
29. Independent Contractors. It is expressly understood that the
-----------------------
relations of the parties are those of a purchaser, on the part of Distributor,
and seller of the Products on the part of Osmotics, and that each party is an
independent contractor with the sole responsibility for its own business. It is
further agreed that Distributor is not and shall not represent itself to be an
agent of Osmotics for any purpose. Neither Party has the right or authority to
assume or create any obligation of any kind for or on behalf of the other or to
bind the other party in any respect.
30. Governmental Approvals. The parties agree that if any
----------------------
governmental approvals or filings are required, the parties will jointly
cooperate to make all such filings and obtain all such approvals. If any such
approval will require substantive modifications to this Agreement and the
parties cannot agree upon modifications which will permit governmental approval,
either party may terminate this Agreement by written notice to the other without
further liability to the other except for obligations accrued to the date of
termination and obligations which are otherwise specified herein as surviving
termination.
IN WITNESS WHEREOF, the parties hereto have caused this
Distributorship Agreement to be executed by their respective duly authorized
representatives on the day and year first above written.
OSMOTICS CORPORATION
By______________________________________
Xxxxxx Xxxxxx, President
XXXXX XXXXX
By______________________________________
Xxxxxxx Xxxxxx, Directeur General
-16-
EXHIBIT A
DISTRIBUTOR'S TRADEMARKS
------------------------
[trademarks graphics]
A-1
EXHIBIT B
OSMOTICS TRADEMARKS
-------------------
[trademarks graphics]
B-1
EXHIBIT C
PRODUCTS
--------
Product U.S. Retail Price Distributor's Price
----------------------------------------------------------------------------
All products carrying the Osmotics brand label.
C-1
EXHIBIT D
TERRITORY
---------
France
D-1
Confidential Treatment Requested [ ]
EXHIBIT E
SALES VOLUME TARGETS
--------------------
FIRST YEAR sales by Xxxxx are to be [ ]
At the eleventh month of the first year Osmotics and Xxxxx will determine sales
goals for years two and three based on first year's performance.
E-1
Confidential Treatment Requested [ ]
EXHIBIT F
RETAIL PRICES; DISTRIBUTOR'S PRICES
-----------------------------------
U.S. Distributor's
Product Retail Price Price
--------------------------------------------------------------------------------
Antioxidant Skin Care Derms [ ] [ ]
Trial Size Antioxidant Skin Care Derms [ ] [ ]
Hydrating Cleanser [ ] [ ]
Balancing Cleanser [ ] [ ]
Firming Tonic Facial Mist [ ] [ ]
Balancing Tonic Facial Mist [ ] [ ]
Hydrating Complex SPF 15 [ ] [ ]
Balancing Complex SPF 15 [ ] [ ]
Antioxidant Eye Therapy [ ] [ ]
Daily Eye Protection SPF 15 [ ] [ ]
Intensive Moisture Therapy [ ] [ ]
Facial Renewal [ ] [ ]
Travel Kit Normal/Dry [ ] [ ]
Travel Kit Normal/Oily [ ] [ ]
F-1
Confidential Treatment Requested [ ]
EXHIBIT G
RETURN POLICY
-------------
Except as described below, no returns of Products will be accepted by Osmotics
unless agreed to in writing by Osmotics. When a defective Product claim is
received, Osmotics will immediately recheck its quality control records to
ensure the Product performed according to Osmotics' Certificate of Analysis upon
shipment.
Osmotics will retest Product Distributor believes to be defective and compare
its performance to that of Osmotics' retention samples.
a) If Osmotics' retention samples perform according to Osmotics'
original release specifications but the returned product does not, Osmotics
will assume the Product was compromised either in shipping or handling
after it left the Osmotics facility. In this case, Osmotics will assist
Distributor in filing a claim with Distributor's carrier but Osmotics will
assume no liability for the claim.
b) If the Product's performance compares favorably with Osmotics'
retention samples but Distributor wants to exchange the Product for a
different lot, Osmotics will exchange the lot for Distributor, but
Distributor will be charged a [ ] restocking fee.
G-1
