Exhibit 10
LICENSE AND DISTRIBUTION AGREEMENT
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THIS LICENSE AND DISTRIBUTION AGREEMENT ("Agreement") is made and
effective as of this 26th day of August, 2003 ("Effective Date"), by and between
Baywood International, Inc. a Nevada Corporation (the "Company"), having an
address at 00000 Xxxxx 00xx Xxxxx, Xxxxx 0, Xxxxxxxxxx Xxxxxxx 00000, inclusive
of its affiliated companies, and Healthy International Ltd., a Hong Kong Company
("Distributor"), having an address at Xxxx X-X, 00/X Xxxxxxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 2, 57 Sha Tsui Road, Tsuen Wan N.T., Hong Kong, inclusive of its
affiliated companies, both collectively referred to as the "Parties".
Recitals:
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A. WHEREAS, the Parties wish to define their rights and therefore
enter into this Agreement that reflects all of the rights of both Parties
referred to as the Company and Distributor.
B. WHEREAS, The Company is in the business of developing,
marketing and distributing its own brands of proprietary nutraceuticals (the
"Brands") in addition to the private label of such brands (the "Formulas"), both
collectively referred to as the "Products" as more fully defined in Exhibit "A",
and desires to distribute those Products internationally.
C. WHEREAS, Distributor is in the business of distributing
nutraceutical products.
D. WHEREAS, the Company desires to grant and Distributor desires
to obtain the exclusive right to distribute and sell the Products for the
Company in certain Asian countries as more fully described in Exhibit "A" (the
"Territory"), upon and subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the covenants, agreements,
warranties and representations contained in this Agreement, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties to this Agreement hereby agree as follows:
Agreement
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1. Grant of License. The Company hereby grants to Distributor a
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revocable, exclusive, non-transferable, royalty-free license to use the
Company's trademarks as set forth in Exhibit "A" in the Territory (the
"Trademark(s)"), in Distributor's advertising, marketing and promotional
materials for the Brands, provided that Distributor displays or announces notice
of trademark status and properly attributes ownership of the Trademark(s) as set
forth in Exhibit "A" in each piece of advertising, marketing or promotional
material. Distributor acknowledges the Company's exclusive ownership of the
Trademark(s) and agrees to act consistently with such ownership and agrees that
all uses of the Trademark(s) by Distributor shall inure to the Company's sole
benefit. If Distributor becomes aware of any unauthorized use of the
Trademark(s), Distributor agrees to immediately notify the Company. The Company
shall have the sole right and responsibility for enforcing its rights with
respect to the Trademark(s). In addition, the Company recognizes that
Distributor may choose not to market the Company's Brands and, therefore, market
the Formulas under its own label.
2. Designation as Distributor. The Company hereby designates
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Distributor as the Company's exclusive authorized distributor of the Products in
the Territory. This distributorship is exclusive with respect to marketing and
sales of the Products within the Territory, but the Company, in its sole
discretion, reserves the right to designate additional distributors of the
Products elsewhere in the world and to license the Products to others throughout
the world.
3. Orders. Purchase orders may be submitted to the Company by
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facsimile, first class mail, postage prepaid or other electronic means. All
purchase orders for the Products are subject to written acceptance by the
Company and shall include a 3% allowance for damages to the Products resulting
from shipment and/or manufacturing. Any such allowance shall be shown by
Distributor as a deduction from the gross amount on the purchase order. Upon
acceptance, the Company agrees to provide written acknowledgement of such
purchase orders within three (3) days. Distributor agrees to accept the risk of
erroneous, incomplete or failed transmissions of any purchase orders submitted
by Distributor to the Company. The normal lead time required by the Company to
fulfill a purchase order for the Products in stock at the Company's location is
three (3) to four (4) weeks from the date of the Company's written acceptance of
each purchase order. Distributor acknowledges that lead times vary for Products
not in stock at the Company's location at the time of the Company's receipt of
each purchase order. Purchase orders accepted by the Company cannot be
cancelled or modified without the Company's prior written consent. The Company
may, in its sole discretion, withhold such consent.
4. Obligations and Covenants of Distributor. Subject to all other
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terms, provisions and conditions of this Agreement, Distributor shall:
(a) Use Distributor's best efforts to advertise, sell and
distribute the Products;
(b) Order the Products solely from the Company;
(c) The Company understands that Distributor may be presented
with or seek out new products from time-to-time due to the competitive nature of
its business. In the case of any products that the Company does not currently
carry, Distributor agrees to offer the Company, whenever possible, any new
nutraceutical products for the Company to develop and supply with acceptable
quality and prices. Distributor will review its market and any such new
products from time-to-time and decide which new or existing products it would
not choose to distribute under this Agreement and to be freed back to the
Company;
(d) Not reverse engineer the Products or otherwise
manufacture or develop products of same ingredients as the Products without
notifying the Company;
(e) Use its best efforts to research and develop a market for
all of the Products inclusive of any additional products that the Company may
develop from time-to-time;
(f) Agree that, due to the close similarities in each of the
Parties' businesses for the Products, that there may be interest from
time-to-time for the Parties to concurrently market and sell Products that have
similar formulations in areas outside of the Territory, including the areas
where the Company is currently selling or may contemplate selling the Products.
When any such interest does exist, the Parties agree to consult with each other
on any same or similar formulation so as to reach a mutual understanding that
using such same or similar formulation will not present conflicts to the market
of either Party;
(g) At all times refrain from engaging in any illegal, unfair
or deceptive trade practices or unethical business practices, including
disparagement of the Company or the Products or other conduct that is or may be
detrimental to the Company, the Products or the public;
(h) Not make any false or misleading statement or
representations concerning or related to the Company or the Products;
(i) Refrain from making any representations, warranties or
guarantees to customers or other third parties with respect to the Products that
are inconsistent with the written information distributed by the Company in
connection with or related to the Products;
(j) Otherwise perform its covenants under this Agreement.
5. Obligations and Covenants of the Company. Subject to all other
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terms, provisions and conditions of this Agreement, the Company shall:
(a) Use its best efforts to fill and ship all purchase orders
submitted by Distributor for the Products within a reasonable time from the date
of the Company's acceptance of Distributor's purchase order as set forth in
Section 3;
(b) Refer any inquiries from any potential customers within
the Territory to Distributor with the understanding that Distributor will honor
the negotiated pricing that the Company has established with the potential
customer to develop the sale;
(c) Be allowed to solicit the Products to the Territory with
the understanding that Healthy would be responsible for marketing and selling
the Products if such solicitation develops into a customer;
(d) Not market or sell the Products to the Territory unless
prior approval has been received by Distributor;
(e) Agree that the Parties will concurrently market and sell
the Products that have similar formulations in areas outside of the Territory,
including the areas where the Company is currently selling or may contemplate
selling the Products;
(f) At all times refrain from engaging in any illegal, unfair
or deceptive trade practices or unethical business practices, including
disparagement of Distributor or other conduct that is or may be detrimental to
Distributor, the Products or the public;
(g) Not make any false or misleading statement or
representations concerning or related to the Distributor;
(h) Not advertise or otherwise disclose to any unrelated
third party, unless permitted by Distributor, that the Company is the supplier
of the Products to Distributor;
(i) Otherwise perform its covenants under this Agreement.
6. Parallel Imports. The Parties understand that both the
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Company's and Distributor's control is limited with regard to the marketing and
sale of the Products from third party customers to consumers. However, both
Distributor and the Company will use their best efforts to protect the
exclusivity of this Agreement by stopping, where legally permissible, the sale
by any third party customer to consumers in the Territory not sold directly by
the Company or Distributor.
7. Risk of Loss. Title to the Products purchased by Distributor
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shall remain with the Company until delivery of the Products to the carrier.
From and after delivery of the Products to the carrier, title shall vest in the
Distributor and Distributor shall be responsible for the entire risk of loss,
theft, damages, damage to or destruction of the Products.
8. Invoice and Payment Terms. All Products sold by the Company to
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Distributor under this Agreement shall be sold in accordance with the pricing
schedule set forth in Exhibit "A." The Company reserves the right, from
time-to-time and in its sole discretion, to increase or decrease the prices set
forth in Exhibit "A", and shall provide Distributor ninety (90) days prior
written notice of any pricing changes. The Company shall invoice Distributor
for each purchase order submitted to the Company for the Products at the prices
set forth in Exhibit "A." Payment for each invoice shall be due to the Company
in the amount of fifty
percent (50%) of the total invoice upon receipt of order by the Company and the
remaining fifty percent (50%) shall be due to the Company upon shipment of the
Product (each a "Due Date"). If Distributor fails to pay any amount due to the
Company on or before a Due Date, interest shall accrue at the rate of one-half
percent (0.5%) per month on all past due amounts until paid in full.
9. Product Support and Returns. The Company shall from time to
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time provide written Product information and data to Distributor. The Company
will not provide sales training to Distributor, its employees or agents. The
Company shall not accept any Product returns from Distributor unless authorized
in writing prior to Distributor's return of any Product. If the Company accepts
any Product return, Distributor shall return only unopened, unexpired Product,
stored according to Product specifications.
10. Term; Breach; Termination.
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(a) The license and distributorship granted hereunder by this
Agreement shall be for an initial term of two (2) years from the Effective Date
and shall automatically renew for subsequent one (1) year periods (each a
"Renewal Term"), unless earlier terminated in accordance with this section. In
the event either party should fail to perform or comply with its obligations,
representations, warranties or covenants hereunder, the non-defaulting party
shall have the right, without waiving, limiting, removing or restricting any
other legal or equitable rights or remedies it may have, to cease performance
under this Agreement, and, if such breach is not remedied within thirty (30)
calendar days after written notice to the defaulting party, to terminate this
Agreement.
(b) Upon termination of this Agreement, (i) Distributor's
right to act as licensee and distributor of the Products shall cease, (ii)
Distributor shall immediately cease exercising any rights granted under this
Agreement, (iii) Distributor shall return to the Company all Confidential
Information (as defined in Section 11) and any copies or derivatives thereof,
and (iv) Distributor may sell in the Territory any remaining Product inventory
purchased during the term of this Agreement for a period of twelve (12) months
from the termination date. Following the twelve (12) month period, Distributor
shall return to the Company or destroy any remaining Product inventory.
Termination of this Agreement shall not discharge or terminate any obligations
either party has to the other that have accrued as of the date the Agreement is
terminated. The Company, or its agents, shall upon request be afforded
sufficient access to Distributor's premises to verify adherence to the covenants
contained in this Section 10.
(c) Any provision of this Agreement to the contrary
notwithstanding, the Company shall have the right to terminate this Agreement,
if (i) Distributor fails to make timely payments, or (ii) a filing of a petition
of bankruptcy by or against Distributor.
(d) Any provision of this Agreement to the contrary
notwithstanding, Distributor shall have the right to terminate this Agreement in
the case of a filing of a petition of bankruptcy by or against the Company.
11. Confidentiality. The Parties acknowledge that the Product
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(including underlying technology, techniques, procedures, specifications and/or
know-how) and business of Distributor (including customers, sales and marketing
techniques, procedures and/or know-how) (collectively, the "Confidential
Information") have been acquired by the Company and/or Distributor at great
expense and constitute trade secrets, and that the Company and Distributor each
have respective proprietary and other rights in the Confidential Information.
The Parties shall keep confidential the Confidential Information, and shall not
disclose such information to any person and shall advise all persons with access
to the Confidential Information (excluding consumers purchasing the Product for
their own use) of the confidential and proprietary nature of the Product and the
Confidential Information. Each of the Parties shall cause its agents and
employees and other persons to protect the confidentiality of the Product and
the Confidential Information. Distributor acknowledges that the Product is not
patented and that no representation or warranty whatsoever is made by the
Company except that the Company has the right to distribute the Product as set
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forth in this Agreement. Except as expressly permitted in this Agreement,
Distributor shall not use,
sublicense, sell, assign, transfer, disclose, publish, duplicate, modify or
otherwise deal with the Product in any way which may infringe upon the Company's
or its licensor's rights therein. Distributor acknowledges and agrees that no
title or ownership of the Product or the Confidential Information is transferred
to Distributor by this Agreement, and such rights are and shall remain the
exclusive property of the Company or its licensors. The covenants contained in
this Section 11 shall survive the termination of this Agreement.
12. Compliance with Applicable Law. Distributor shall at all
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times during the term of this Agreement strictly comply with any applicable
laws, statutes, rules, regulations or ordinances whether, local, state,
national, or international relative to the marketing and sale of the Product in
the Territory, including, without limitation, the export laws of Hong Kong.
Distributor shall obtain any and all permits, licenses, authorizations and/or
certificates that may be required in any jurisdiction or by any regulatory or
administrative agency in connection with the use, sale, marketing and/or
distribution of the Product.
13. No Conflict. Distributor represents and warrants that it has
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full power and authority to undertake the obligations set forth in this
Agreement and Distributor represents and warrants that it has not entered into
any other agreements, nor will Distributor enter any other agreements, in
conflict with Distributor's obligations under this Agreement or that would
render Distributor incapable of satisfactorily performing its obligations under
this Agreement.
14. Disclaimer; Limitations.
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a. The Company does not make any, and expressly disclaims
all, warranties other than as expressly made in this Section 14, whether oral or
written, express or implied, or arising by usage of trade or course of dealing,
including, without limitation, the warranties of merchantability and fitness for
a particular purpose. The remedies set forth in this Section 14 shall be the
sole and exclusive remedies of Distributor.
b. The Parties understand that the Company has undertaken to
purchase a foreign products liability insurance policy in the amount of
$1,000,000 (the "Policy") on behalf of Distributor. However, Distributor
understands that the Policy neither covers nor is the Company liable for
economic, incidental, consequential, indirect, special, punitive or exemplary
damages, whether claimed under contract, tort or any other legal theory,
including, but not limited to, damages for loss of revenue or anticipated profit
or cost of capital. The Company shall have no obligation to defend, indemnify
or reimburse Distributor or any purchaser of the Product for any amount that
they may be required to pay as a result of any claim, lawsuit, action, judgment
or liability related to or arising out of the Product or its use over and above
the coverage that the Policy provides.
15. Payment of Taxes. Distributor shall be responsible for
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paying, when due, any sales, use, excise, import and export taxes, duties,
tariffs, or similar charges applicable to products sold to it by the Company in
the Territory. Distributor agrees to indemnify and hold the Company harmless
from and against any and all such taxes, duties, tariffs or assessments in the
Territory.
16. Governing Law. This Agreement is entered into in Arizona and
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shall be governed by and construed under the substantive laws of the State of
Arizona, exclusive of laws relating to conflict of laws principles. Distributor
specifically consents to the application of Arizona law to this Agreement and
consents to the jurisdiction of the Superior Court of the State of Arizona, and
the United States Federal District Court for Arizona, and consents to venue in
Phoenix, Arizona.
17. Integration. This Agreement and the Exhibits hereto
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constitute the entire agreement between the Parties with respect to the subject
matter hereof, and supersede all prior proposals, negotiations, representations,
commitments, writings, agreements or other communications, whether written or
oral, between the Parties with respect to the subject matter hereof.
18. Headings. The headings and captions used in this Agreement
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are for convenience only and shall have no force or effect in the interpretation
of this Agreement.
19. Amendment. This Agreement may not be amended, modified,
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released or discharged except by an instrument executed in writing by the
Parties hereto.
20. Severability. If any term, clause or provision of this
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Agreement shall be judged invalid for any reason whatsoever a court of competent
jurisdiction, such invalidity shall not effect the validity or operation of any
other term, clause or provision and such invalid term, clause or provision shall
be deemed to have been modified, to the extent necessary to make it valid and
enforceable or, if such term, clause or provision cannot be so modified, it
shall be deemed deleted from this Agreement.
21. Successor and Assigns. This Agreement shall be binding upon
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each of the Parties and its successors and assigns, including the acquisition of
Distributor by another company, provided that Distributor shall not assign its
rights and obligations under this Agreement without the prior written consent of
the Company, which consent shall not be unreasonably withheld, and further
provided that Distributor shall remain liable for the performance of its
obligations under this Agreement.
22. No Waiver. The failure of either party to enforce at any time
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any of the provisions of this Agreement or to require timely performance by the
other party of any of the provisions of this Agreement shall not be construed as
either present or future waiver of such provisions nor in any way affect the
right of either party to enforce each and every provision of this Agreement as
written.
23. Cumulative Remedies. Any rights and remedies conferred under
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this Agreement shall be cumulative and may be exercised singularly or
concurrently. Termination of this Agreement shall not act as a waiver of any
claim that has accrued as of this date of termination with regard to either
party hereto.
24. Notices. All notices hereunder shall be in writing and shall
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be delivered in person, mailed or sent via facsimile machine or telecopier. A
notice shall be deemed to be personally delivered to a person if delivered to
the address of such person by a courier or other delivery service. If mailed,
they shall be sent by certified mail, postage prepaid. Notices sent by mail
shall be deemed effective on the earlier of (i) the date when received, or (ii)
the date which is three days after mailing. Notices sent via facsimile shall be
deemed effective on the earlier of (i) the date when received, or (ii) the date
which is one (1) business day after transmission, provided in either case
confirmation of transmission is received by the sender.
If to Distributor, at:
Healthy International Ltd.
Attn: Xxxxxxx Xxxx
Flat E-L, 23/F Superluck Industrial Centre
Phase 0, 00 Xxx Xxxx Xxxx
Xxxxx Xxx X.X., Xxxx Xxxx
Telephone: (000) 00000000
Facsimile: (000) 00000000
If to the Company, at:
Baywood International, Inc.
Attn: Xxxx Xxxxxxxxxx
00000 Xxxxx 00xx Xxxxx, Xxxxx 0
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
25. Distributor Status. Nothing in this Agreement shall be
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construed so as to constitute Distributor an agent or legal representative of
the Company for any purpose whatsoever. This Agreement does not create the
relationship of a partnership or joint venture or any similar relationship
between the Company and Distributor. The Company shall not be liable for any
damages, losses, costs or expenses whatsoever, including incidental or
consequential damages, resulting from any sale or service performed by
Distributor.
26. Time of the Essence. Time shall be of the essence with
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respect to the obligations of the Parties under this Agreement.
This Agreement is executed on this 26th day of August 2003.
THE "COMPANY" "DISTRIBUTOR"
BAYWOOD INTERNATIONAL, INC. HEALTHY INTERNATIONAL, LTD.
By: /s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxxxx Xxxx
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Its: President & C.E.O. Its: Director
EXHIBIT "A"
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PRODUCTS
The Products covered by this Agreement shall include, but are not limited
to, current products, future products and/or any form thereof that the Company
may develop now or in the future.
TERRITORY
The Territory covered by this Agreement shall include Hong Kong, Macau,
China, Singapore, Taiwan, Malaysia, Japan, Indonesia and Korea with exception to
certain customers as follows to which the Company is currently selling certain
Products:
INDONESIA
PT Xxxxxxxxx Media Perkasa
KOREA
Baycom (name subject to change)
SINGAPORE
MedPlus Health
TRADEMARKS
The Trademarks covered by this Agreement shall include Baywood
Solutions(R), Baywood Purechoice(R), Complete La Femme(R), Baywood "Making LIFE
Better"(R) and any future trademarks that the Company may develop now or in the
future.
