EXHIBIT 10.1
CONFIDENTIAL
SALES DISTRIBUTION RIGHTS AGREEMENT
AN AGREEMENT made on the 1st day of December 2000 between
MONTAGNE JEUNESSE incorporating the brands Montagne Jeunesse, Chantelle and
Bathtime is Playtime a trading division of Medical Express (UK) Ltd. (a company
incorporated under the Laws of England) having its registered office at:
The Old Grain Store
0 Xxxxx Xxxx
Xxxxxxx
Xxxx Xxxxxx XX00 0XX
(hereinafter called the Supplier Partner which expression shall where the
context so permits include the assigns of the company) of the one part and:
NEOTERIC COSMETICS, INC.
having their office at:
0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
(hereinafter called the Distributor Partner) of the other part
WHEREBY IT IS AGREED as follows:
1- DISTRIBUTION
The Supplier Partner hereby appoints the Distributor Partner as the sole and
exclusive Distributor Partner for the sale of those of its products (hereinafter
called the products) specified in the first schedule hereto in the territory
(hereinafter called the territory) specified in the second schedule hereto
subject to the terms and conditions hereinafter set out and to the power of the
Supplier Partner to vary those schedules in accordance with the provisions of
clause 5(a).
2- PERIOD
This appointment will commence from the date hereof. Should either party decide
to terminate this agreement other than in accordance with clause 8 hereof it
must give three months notice in writing of their desire to terminate. If notice
has been served both parties are obliged to continue to fulfill their
obligations as per this agreement to the fullest extent, to the expiration of
the three month period.
3- SUPPORT FROM THE SUPPLIER PARTNER
The Supplier Partner hereby agrees with the Distributor Partner that it will
during the continuance of this agreement
(a) whenever it considers it necessary, send at its own cost a representative
to visit the Distributor Partner for the purpose of promoting sales of the
products.
(b) use its best endeavours to safeguard the selling rights hereby granted to
the Distributor Partner including the taking of such steps of which it shall
solely determine and as may be available to it to prevent the infringement of
its patent, trade marks, emblems, designs and other similar industrial or
commercial rights within the territory.
4- MAXIMISE SALES OF THE PRODUCTS
The Distributor Partner hereby undertakes and agrees with the Supplier Partner
that it will at all times during the continuance in force of this agreement
observe and perform the terms and conditions set out in this agreement and in
particular it:
(a) will use at all times its commercially reasonable endeavours to promote and
extend sales of the product throughout the territory to all potential purchasers
thereof and work diligently to obtain orders therefrom.
(i) by means of personal visits to and by correspondence with such purchasers.
(ii) by the distribution of printed matter and other promotional techniques.
(iii) by exhibiting and by public relations techniques.
(b) NOT SELL DIRECTLY COMPETITIVE PRODUCTS
Will not without the previous consent in writing of the Supplier Partner be
concerned or interested either directly or indirectly in the manufacture,
production, importation, sale or advertisement of any goods in the territory
which comprise a range of skin care sachets (packettes) or any toiletry/cosmetic
packettes including but not limited to products which may be substituted for the
Supplier Partner's products from time to time which might otherwise directly
compete or interfere with the sale of the products. However, Distributor Partner
may manufacture and distribute product sample packettes not intended for sale or
re-sale.
At the cessation of this agreement regardless of reason the Distributor partner
agrees not to sell or otherwise engage in the business of toiletry/cosmetic
packettes in the United States marketplace for a period of not less than two
years from that cessation and specifically not to compete with the Supplier
Partner's ongoing business concerning toiletry/cosmetic packettes.
(c) ONLY SELL WITHIN THE TERRITORY
Will not take any orders for the sale to any person or persons corporate or
unincorporate of any of the products which the Distributor Partner knows or has
reason to believe are intended to be exported from or sold or used outside the
territory without the prior agreement of the Supplier Partner.
(d) PROJECT SALES REQUIREMENTS
Will submit to the Supplier Partner on a regular monthly basis projections of
product requirements on a rolling basis and any requirements for ancillary
materials in sufficiently full and accurate detail as to enable the Supplier
Partner with the least possible delay to respond effectively and to supply sales
data on a monthly basis lists of current and future distribution by name,
address and type of business.
(e) HOLD SUFFICIENT STOCKS
Will ensure that adequate stocks are held in the territory to enable prompt
delivery to the customers, such stocks to be large enough to accommodate
seasonal increases in sales and increases in sales due to new large customers
and to take full account of delivery times from the Supplier Partner to the
Distributor Partner, based upon the Supplier Partner's ability to ensure
fulfillment and timely delivery of orders placed by Distributor Partner.
(f) NOT MAKE FALSE REPRESENTATIONS
will accept orders as a Distributor Partner for Distributor Partner's sale of
the products and on behalf of itself the Distributor Partner will not accept
orders or make contracts on behalf of the Supplier Partner other than subject to
confirmation and acceptance by the Supplier Partner and in accordance with the
Supplier Partner's conditions of sale. The Distributor Partner will not make any
promises, representations, warranties or guarantees with reference to the
product except such as are consistent with those conditions of sale and/or any
statements confirmed in writing by the Supplier Partner. The Distributor Partner
will not incur any liability on behalf of the Supplier Partner or in any way
pledge or purport to pledge the Supplier Partner's credit or accept any order or
make any contract binding upon the Supplier Partner without the Supplier Partner
first approving its terms.
(g) NOTIFY INFRINGEMENTS OF INTELLECTUAL PROPERTY RIGHTS
will use its commercially reasonable endeavours to immediately bring any
improper or wrongful use in the territory of the Supplier Partner's patents,
trade marks, emblems, designs, models or other similar industrial or commercial
rights which come to its notice to the attention of the Supplier Partner and
will in and about the execution of its duties use every commercially reasonable
effort to safeguard the intellectual property rights and interests of the
Supplier Partner and will assist the Supplier Partner at the request and cost of
the Supplier Partner in taking all commercially reasonable steps to defend the
rights of the Supplier Partner other than by the institution of legal
proceedings.
(h) LIAISON
will liaise with the Supplier Partner in relation to the sale distribution and
exploitation of the products and act for the long-term benefit of the products.
(i) COMPLAINTS
to maintain file of complaints received from retail and trade customers of the
products and to forward copies of such complaints at the Supplier Partner's
request. In particular to bring to the Supplier Partner's attention in writing
any recurring or unresolved complaints, the parties agree to use their
commercially reasonable endeavours to achieve customer satisfaction, bearing in
mind the individual responsibilities of the parties.
(j) NON-ASSIGNMENT
will not assign transfer charge or in any manner make over or purport to assign
transfer charge or make over this agreement or its rights thereunder or any part
thereof except in so far as the Distributor Partner is permitted by clause 12
hereof to appoint sub-Distributor Partners.
(k) SUPPLIER PARTNERS INTELLECTUAL PROPERTY RIGHTS
will agree that the trade marks, patents, emblems, designs, models, copyright or
other similar intellectual rights remain the property of the Supplier Partner
and will not seek to prejudice their exclusive rights.
5- The Supplier Partner reserves unto itself the right notwithstanding
anything to the contrary herein contained:
(a) VARY PRODUCTS OFFERED AFTER APPROPRIATE CONSULTATION
to vary the first schedule hereto defining the products either by the withdrawal
therefrom of a class or classes of products named therein in the event of the
Supplier Partner ceasing to manufacture or stock that class or those classes of
products or by the addition thereto after consultation with the Distributor
Partner of a further class or of further classes of products. The Distributor
Partner may refuse the introduction of products with the express agreement of
the Supplier Partner if, for marketing reasons,
the Distributor Partner considers them to be inappropriate to the local market
or if in conflict with any obligations of the Distributor Partner. The
Distributor Partner shall order and/or the Supplier Partner shall supply to the
appropriate case or box size of the product. The Supplier Partner confirms that
the products are designed to meet the legal requirements of present UK law.
(b) ASSIST DISTRIBUTOR PARTNER'S SALES
to take such steps itself as may seem necessary or expedient to it to promote
the sale of the products in the territory but will first consult the Distributor
Partner.
(c) TRADE OUTSIDE TERRITORY
to trade direct outside the territory with any person, firm, body corporate or
unincorporate who insist on purchasing directly from the Supplier Partner for
shipment into the territory, subject to the Supplier Partner having consulted
the Distributor Partner and to the Supplier Partner paying to the Distributor
Partner a reasonable commission on any such sales, this commission not being
less than 5%.
6-
(a) DISTRIBUTOR PARTNER TO PROMOTE/PAYMENT TERMS
Save as hereinafter provided the Supplier Partner shall sell at the Supplier
Partner's sales prices in United States Dollars (USD) the products listed in
schedule 1 (subject to availability). The prices to be agreed between the
parties from time to time. The Supplier Partner's sales price at the
commencement of this agreement are set out in schedule 3. Prompt payment as per
clause 6(e) is of the essence and an important condition of this agreement.
The Supplier Partner may increase the prices of the products without restriction
with the prior agreement of the Distributor Partner. The Distributor Partner
shall not without informing the Supplier Partner increase the wholesale trade
prices for the products, prior to imposing such increase.
In case of any refunds made by the Supplier Partner to the Distributor Partner
for any products which fall below the standard of satisfactory quality, these
refunds shall be made at exactly the same price as was the original sale price
of the goods. Payment shall be made by the Supplier Partner to the Distributor
Partner after receipt of the goods on the same payment terms as exist between
the Distributor Partner and the Supplier Partner.
(b) CONTRIBUTIONS TOWARDS ADVERTISING COSTS
The Supplier Partner shall contribute outer pack originations and the outer
packs when produced at its source for special promotions or similar. The
Distributor Partner shall, provided its net sales of the products are as defined
in clause 8(v) exceeding a
minimum of eight million dollars in the first calendar year), expend a minimum
of 5% of annual net sales as defined in clause 8(v) on advertising (namely
consumer magazines and television) during the following year.
All further advertising expenditures including displays, co-op advertising with
customers, slotting, mailings, coupons, promotional materials and preparation of
the materials, and advertisements on the Internet shall be at the discretion and
at the expense of the Distributor Partner. Such advertising in its design,
positioning and format shall be prior agreed with the Supplier Partner.
(c) DISTRIBUTOR PARTNER RESPONSIBLE FOR BAD DEBTS
No allowance shall be made by the Supplier Partner to the Distributor Partner in
respect of bad debts or on replacement or refunds made free of cost by the
Distributor Partner of perfect quality products to its customers.
(d) COMMISSION NOT PAYABLE AFTER CESSATION OF AGREEMENT
No sum shall be payable to the Distributor Partner by the Supplier Partner in
respect of any order received by the Supplier Partner after the termination of
this agreement notwithstanding that the Distributor Partner may have been
responsible for or concerned in the obtaining of that order and notwithstanding
that quotations may have been submitted during the continuation in force of the
distribution agreement.
(e) DEDUCTIONS NOT ACCEPTED UNLESS AGREED
No claims for or deductions in respect of expenses incurred by the Distributor
Partner in the performance of their functions and duties under this agreement
shall be made or allowed except where expressly agreed to beforehand in writing
by the Supplier Partner.
(f) TERMS OF PAYMENT/DELIVERY TERMS
Payment shall be made by irrevocable letter of credit issued by the Distributor
Partner's bank in favour of the Supplier Partner, and/or as agreed upon from
time to time between the Distributor Partner and the Supplier Partner; delivery
terms shall be CIF Houston, Texas Port. Title of the products shall remain with
the Supplier Partner until the Supplier Partner has received full payment for
the products; however, the risk in the products is transferred to the
Distributor Partner upon despatch who is responsible for the insurance of said
products.
7- STAND DISPLAY MATERIALS
(a) Shelf talkers, stand header cards, showcards when supplied by the Supplier
Partner shall be invoiced at cost to the Distributor Partner. The cost of stands
supplied by the Supplier Partner shall be met by the Distributor Partner. Any
extra promotional material
produced from time to time by the Distributor Partner solely for the Distributor
Partner's use including leaflets on the products in the language of the
territory, shall be solely for the Distributor Partner's account.
(b) Outlets to which the Distributor Partner shall sell the products shall be
Grocery, Drug, Perfumeries, Pharmacies, Textile Fashion, department stores,
larger health food stores, Mass Merchandisers, Beauty Salons, Airport Retail
Shops, Television Home Shopping Networks. The Distributor Partner shall consult
with the Supplier Partner concerning the distribution policy. The Distributor
Partner shall only vary the distribution policy in a significant way with the
agreement of the Supplier Partner.
8- TERMINATION
(1) Either party shall have the right at any time by giving thirty days notice
in writing to the other to terminate the agreement forthwith in any of the
following events:
(i) If the other party shall enter into liquidation whether compulsorily or
voluntarily or compound with its creditors or take or suffer any similar action
in consequence of debt or has a receiver or administrator appointed over all or
any of its assets and/or becomes unable or unwilling to discharge its debts as
and when the fall due
(ii) If from any cause either party is prevented by reason of Force Majeure (as
the same is defined in clause 21 hereof) in performing its duties hereunder for
a period of two consecutive months
(iii) If either party purports to assign the benefit or burden of this agreement
without the written consent of the other party
(iv) If there be a change of majority ownership of either company and/or change
of senior management
(v) If, in any one year of the agreement, the Distributor Partner's net sales
(as determined in accordance with US generally accepted accounting principles)
fall below the minimum net sales per calendar year during the period of this
agreement. The minimum net sales for the first calendar year (2001) is 8 million
USD. The minimum net sales in
calendar year two (2002) to be 12 million USD; calendar year three (2003) to be
17 million USA; calendar year four (2004) to be 22 million USD; and calendar
year five (2005) to be 28 million USD.
The Distributor Partner guarantees to purchase a minimum quantity of any new
product introduced by the Supplier Partner, within six months of the product
being available. The volume will be determined by the monthly mean of the least
selling sachet over the last 12 months, allowing the new product opportunity to
be sold in the territory. If Distributor Partner feels any product within the
range will not sell in its territory for reasons of culture, religion and
climate, it will advise the manufacturer in writing of their reasoning for not
introducing the product.
(vi) If the other shall alone or jointly with third parties engage in acts of
cruelty to animals whether involving vivisection or not with regard Montagne
Jeunesse products
(vii) If the other shall engage in acts or support third parties engaging to
acts which result in severe and unnecessary damage to the environment and
ecosystems
(2) The Supplier Partner shall be entitled to terminate this agreement by
giving 30 days notice in writing to the distributor if the Distributor Partner
fails to comply with the terms of clause 6(b) hereof
(3) If either party shall commit a breach of this agreement, which it is
capable of correcting and having been sent a written statement of their breach
fail to correct the breach and/or continue to commit the breach for one further
month after having received the written statement then that party will be deemed
to have committed a material breach and the other party may at its sole
discretion terminate the agreement on 30 days notice in writing to the other.
9- CONFIDENTIALITY
The Distributor Partner hereby undertakes that, it will not divulge or use any
confidential information in relation to the Supplier Partner's affairs or
business or method of carrying on business without the prior consent in writing
of the Supplier Partner and the same confidentiality shall be offered by the
Supplier Partner to the Distributor Partner. The provisions of this clause 9
shall continue to apply notwithstanding termination or expiry of this Agreement
10- PRODUCT LEGISLATION AND WARRANTY
The Supplier Partner hereby warrants that the products as supplied to the
Distributor Partner conform to all current legislation applicable to such goods
manufactured or sold within the United Kingdom of Great Britain and Northern
Ireland. The Distributor Partner agrees to bring to the attention of the
Supplier Partner any known claim of non-compliance or problem that the
Distributor Partner becomes aware of.
The Supplier Partner hereby warrants that the products as supplied to the
Distributor Partner are of satisfactory quality and fit for the purpose for
which they are sold, and are not adulterated or misbranded. Supplier partner
shall indemnify, and hold Distributor Partner harmless from and against any and
all direct losses, claims, suits, proceedings, expenses (including reasonable
attorneys' fees), and damage arising out of or based on any claim of any third
party (including any governmental agency) relating to the manufacture,
formulation, or labeling of the products in breach of the aforementioned
warranty.
If any governmental agency shall request or order, any corrective action with
respect to the products, including any product recall, customer notice, or other
corrective action, and the cause or basis of such corrective action is
attributable to the manufacture, formulation, or labeling of the products by
Supplier Partner, then Supplier Partner will indemnify, and hold harmless
Distributor Partner for any and all direct losses, damages, or expenses
associated with such corrective action. Supplier Partner shall use all
reasonable efforts to comply with requirements of United States (federal and
state) laws and regulations of which Distributor Partner informs Supplier
Partner.
The Supplier Partner shall maintain an insurance policy covering product
liability with a reputable insurance company relating to its products. The
product liability cover held shall not be less than one million Pounds and shall
cover the goods provided they are promoted for use and used as they are
intended.
11- RETURN OF LITERATURE/STANDS
Upon the termination of this agreement from any cause or at any time previous to
such termination at the request of the Supplier Partner the Distributor Partner
shall promptly return to the Supplier Partner or otherwise dispose of as the
Supplier Partner may instruct all display stands, samples, patterns, instruction
books, technical pamphlets, catalogues, advertising material, specifications and
other materials documents and papers whatsoever sent to the Distributor Partner
and relating to the business of the Supplier Partner (other than correspondence
between the Supplier Partner and the Distributor Partner) which the Distributor
Partner may have in their possession or under their control and also deliver up
to the Supplier Partner upon the termination of this agreement a list of
customers within the territory for the products.
12- SUB-DISTRIBUTOR PARTNERS
Where in order to enable the Distributor Partner to maintain adequate sales
coverage the appointment by the Distributor Partner of sub-Distributor Partners
is desirable, the Distributor Partner shall be entitled with the previous
consent in writing of the Supplier Partner to make such appointments but only on
such terms as the Supplier Partner shall in writing approve and the Distributor
Partner shall be at all times responsible for the acts, deeds or omissions of
all persons, firms or companies so appointed.
13- MISCELLANEOUS
(a) The Supplier Partner shall not be responsible for acts or defaults of the
Distributor Partner or of the Distributor Partner's employees or
representatives.
(b) In each case where the term Supplier Partner or Distributor Partner is used
it shall include any body corporate or unincorporate which is controlled or
owned partly or fully or related to the Supplier Partner or Distributor Partner
or in the either case their key personnel.
14- DISPUTES
Any dispute difference or question which may arise at any time hereafter between
the Supplier Partner and the Distributor Partner touching the true construction
of this agreement or the rights and liabilities of the parties hereto shall be
referred to by the High Court in London.
15- GOOD FAITH
In relation to every Clause mentioned in this Agreement and particularly in
establishing and building the Montagne Jeunesse brand in the United States, both
parties agree to act with Good Faith and, without prejudice to the generality of
the foregoing, not to do or omit to do, or to permit or suffer anything to be
done or omitted which each of them (according to their respective obligations
under this Agreement) ought properly to do or not to omit to do, or could
reasonably prevent from being done or omitted to be done (as the case may
require).
16- NON PARTNERSHIP
In relation to every Clause mentioned in this Agreement the terms "Supplier
Partner" and "Distributor Partner" are not statements of joint-venture between
the two separate parties.
17- APPLICABLE LAW
This agreement is governed by and shall be construed in accordance with English
Law.
Each party irrevocably agrees for the benefit of the Supplier Partner that the
courts of England shall have jurisdiction to hear and determine any suit, action
or proceedings,
and to settle any disputes, which may arise out of or in connection with this
Agreement (respectively, "Proceedings" and "Disputes") and for such purposes
irrevocably submits to the jurisdiction of the courts of England.
Each party irrevocably waives any objection which it might at any time have to
the courts of England being nominated as the forum to hear and determine any
Proceedings and settle any Disputes and agrees not to claim that the courts of
England are not a convenient or appropriate forum.
The submission to the jurisdiction of the courts of England shall not (and shall
not be construed so as to) limit the right of the Supplier Partner to take
Proceedings against the Distributor Partner in any court of competent
jurisdiction, nor shall the taking of Proceedings by the Supplier Partner in any
one or more jurisdictions preclude the Supplier Partner taking Proceedings in
any other jurisdiction (whether concurrently or not) if and to the extent
permitted by applicable law.
18- WAIVER
The waiver by either party of any breach of any term of this agreement shall not
prevent the subsequent enforcement of that term and shall not be deemed a waiver
of any subsequent breach.
19- PREVIOUS AGREEMENTS
All previous agreements and arrangements if any made between the Supplier
Partner and the Distributor Partner are hereby cancelled but without prejudice
to any rights which have already occurred thereunder to either party.
20- STOCKS SOLD OR RETURNED
Upon the termination of the agreement the Supplier Partner will allow the
Distributor Partner to sell off the stock in its normal course of business and
in a manner which is not detrimental to the products' reputation. If the
Distributor Partner sells off its stocks of the products to other than the
Supplier Partner, then the Distributor Partner must use its commercially
reasonable endeavours to see all goods are sold within 4 months. The Distributor
Partner shall not price discount or price slash the price of the products
without the Supplier Partner's written agreement.
21- FORCE MAJEURE
Neither party shall be liable to the other party for any failure to perform its
obligations under this agreement by reason of circumstances outside its
reasonable control, including but not limited to industrial action, civil
unrest, Acts of God, the acts or
defaults of third parties where such acts or defaults result from force majeure
circumstances.
22- CONSENTS OR APPROVALS
Wherever in this agreement the consent or approval of one or other party shall
be required such content or approval shall not be unreasonably withheld and
shall be deemed granted if not refused within 21 days of the requesting party's
written request thereof.
23- PARAGRAPH HEADINGS
The paragraph headings do not form part of this agreement and shall not be taken
into account in its interpretation.
24- ENTIRE UNDERSTANDING
This agreement embodies the entire understanding of the parties and there are no
promises, terms, conditions or obligations oral or written expressed or implied
other than those contained herein.
25- SERVING OF NOTICE
Any notice required to be given hereunder shall be sufficiently given to the
Distributor Partner if forwarded by registered post (i.e. post where receipt is
signed for) to the last known postal address of the Distributor Partner in the
territory and shall be sufficiently given to the Supplier Partner if similarly
forwarded to its registered office and last known postal address in England.
Every notice shall be deemed to have been received and given at the time when in
the ordinary course of transmission it should have been delivered at the address
to which it was sent.
26- IN WRITING
The words "in writing" whenever contained in this agreement shall be deemed to
include any communication sent by letter.
Signed by /s/ Xxxx Xxxxxxx Signed by /s/ Xxxx Xxxxxxxxx
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As Witness /s/ Xxxxx Stevendale As Witness /s/ Xxxxxx Xxxxxxx
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/s/ Xxxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
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/s/ Xxxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxx
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/s/ Xxxxxx Xxxxx /s/ Xxxxxxx Xxxxxx
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for MONTAGNE JEUNESSE for NEOTERIC COSMETICS, INC.
Dated 19th April 2001 Dated April 6, 2001
FIRST SCHEDULE
THE PRODUCTS (see attached sheet)
SECOND SCHEDULE
THE TERRITORIES: United States of America, the Caribbean and Puerto Rico
THIRD SCHEDULE
THE PRICES (see attached sheet)
