EXHIBIT 10.7
ORIGINAL
DISTRIBUTION AGREEMENT
This Distribution Agreement (the "Distribution Agreement"), is made by
and between Energy Transfer Corporation, a company incorporated in the State of
Nevada, USA, ("ETC") and FemOne, Inc. ("Distributor"), herein sometimes referred
to collectively as the "parties".
RECITALS
WHEREAS, ETC owns the rights to the Biotron Energy Harmonizing Chip
(the `Biotron Chip) technology for the entire world;
WHEREAS, ETC desires to appoint Distributor as an authorized
distributor to promote, market, sell and distribute ETC's Biotron Chip in the
Territory and to set forth the respective duties, obligations, and
responsibilities of ETC and Distributor; and
WHEREAS, it is the expectation of each of the parties that by entering
into this Distribution Agreement, and by the full and faithful observance and
performance of their duties, obligations, and responsibilities, a mutually
satisfactory relationship between them will be established and maintained.
NOW, THEREFORE, in consideration of the mutual promises and
undertakings hereinafter set forth, as well as other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties, it is agreed as follows:
1. DEFINITIONS,
(a) "Biotron Chip" shall mean the Biotron Energy Harmonizing
Chip manufactured by ETC for sale to Distributors under the "Biotron"
trade name for use in harmonizing electro-magnetic field ("EMF")
emissions in cellular phones, home telephones and automobiles employing
the Biotron Chip technology.
2. APPOINTMENT, ACCEPTANCE, AND TERRITORY. ETC hereby appoints
Distributor to act as an ETC distributor in the countries of the United
States, Canada and Mexico on a non-exclusive basis except as set forth below,
(the "Territory") with respect to the three products utilizing the Biotron Chip,
the Cell Phone Product by Biotron, the Home Telephone Product by Biotron, and
the Automobile Phone Product by Biotron, collectively the Products. Distributor
accepts the appointment and agrees to promote, sell, distribute and service the
Biotron Chip to the maximum extent possible in the Territory. This appointment
does not provide any rights, interests, or implications thereof to distribute
any product other than the Products referenced above.
3. TERM. Unless sooner terminated hereunder, this Distribution
Agreement shall remain in effect for a period of twelve (12) months as further
defined in this Distribution Agreement.
4. DISTRIBUTORSHIP CONDITIONS.
(a) Distributor shall be a distributor for ETC in the
United States, Canada and Mexico for the promotion,
marketing, sale, and distribution of the Products.
(b) Distributor shall have the exclusive right, for a
period of twelve months to promote, market, sell, AND
distribute the Biotron Chip through its multi-level
marketing channel (the "MLM Channel") as herein
defined. At the end of the twelve month period, the
parties will re-evaluate the extension of the
exclusive period; however, in the event the parties
do not extend the term of twelve months by a written
addendum to this agreement, then in that event, the
exclusive period shall terminate without any
additionally notification in writing by either party.
The 12 month period shall he deemed to commence on
February 1, 2004 and expire on midnight Pacific
Standard Time, January 31, 2005. ETC is under no
obligation to determine if other Distributors are
either multi-level marketing firms or are purchasing
product with a view toward distribution to such
firms. ETC agrees that if it determines that a
prospective distributor is a multi-level marketing
firm, ETC agrees that they will not provide any
distribution rights to such prospective distributor.
(c) Distributor agrees not to promote, market, sell or
distribute the Biotron Chip outside of the Territory
without the prior, express, and written consent of
ETC.
(d) Distributor shall not have the right to grant
subdistributorships to third parties without the
prior written approval of ETC, which approval may be
unreasonably withheld solely at the option of ETC.
(e) Distributor agrees not to engage in claims relating
to the Biotron Chip, its efficacy, the ownership of
the technology, or any claim unrelated to the
proposed use of an individual packaged product, the
"Products", without the written approval of ETC.
(f) The MLM Channel, the Multi-Level-Marketing channel as
defined as set forth in Attachment C.
5. TERMS OF SALE. All sales of the Biotron Chip to Distributor shall he
made under and subject to the terms of this Distribution Agreement at such
prices and on such terms as ETC shall establish from time to time, beginning
with the prices, terms and conditions set forth in ATTACHMENT A and as changed
from time to time by ETC upon thirty days written notice to Distributor.
6. DISTRIBUTOR RELATIONSHIP AND CONDUCT OF BUSINESS.
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(a) Distributor shall maintain one or more sales offices,
and shall maintain a selling organization capable of
promoting the sale of the Biotron Chip to its
multi-level channels.
(b) Distributor shall use its best efforts and devote the
time and resources necessary to promote, market;
sell, distribute and service the Biotron Chip within
the Territory.
(c) Distributor is expected to stock sufficient
quantities of the Biotron Chip to provide adequate
sales and service to all of its customers.
(d) Nothing contained in this Distribution Agreement
shall be construed to constitute Distributor as a
partner, joint venture, or agent or employee of ETC,
nor shall either party have any authority to bind the
other in any respect, it being intended that each
shall remain an independent contractor responsible
only for its own actions.
(e) Distributor shall abide by ETC's policies, as
announced from time to time, and communicate such
policies to its customers for the Biotron Chip.
(f) Distributor shall not make any changes or alterations
to the Biotron Chip, or the packaging material
pertaining to the Biotron Chip without the express
permission of ETC. In addition, Distributor shall not
apply the technology of the Biotron Chip to any other
application than the Products referenced herein.
7. ADVERTISING POLICIES. Distributor shall hear the sole responsibility
for the advertising and sales promotion of the Biotron Chip, which advertising
shall be submitted to and approved by ETC in writing prior to its use.
8. MINIMUM PURCHASE REQUIREMENTS. Distributor shall immediately
commence the promotion, marketing, sale and distribution of the Biotron Chip,
and shall from and after the latest date of execution of this Distribution
Agreement (the "Twelve Month Anniversary Date") have satisfied the minimum
monthly purchase requirements fir the Biotron Chip, set forth in ATTACHMENT A.
In the event that Distributor is unable to satisfy the minimum monthly purchase
requirements for the Biotron Chip for such date set forth in ATTACHMENT A, then
this Distribution Agreement shall become null and void automatically, without
written notification of such termination.
9. PRODUCT WARRANTY POLICIES. ETC makes no warranty or representation
with respect to the Biotron Chip, except those, if any, made under ETC's
standard warranty. A copy of such warranty is annexed hereto as ATTACHMENT B.
ETC reserves the right to amend such warranty from time to time, and Distributor
shall not in any manner make representations intended to alter or amend such
warranty. The rights and obligations of each of the parties with respect to such
warranty are as follows:
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(a) Pursuant to written instructions from ETC,
Distributor shall deliver a copy of the applicable
warranty to every purchaser of the Biotron Chip from
Distributor.
(b) Distributor shall replace any Biotron Chip that is
proven to be defective in material or workmanship. If
any customer makes a claim under a warranty other
than the latest applicable warranty with respect to
which ETC has notified Distributor, Distributor shall
promptly refer such claim to ETC before taking any
other action with regard thereto.
(c) Upon Distributor's satisfaction of any warranty
claim, it shall immediately render a report thereof
to ETC.
(d) At the end of each month, Distributor shall ship to
the location designated by ETC, for ETC's inspection,
each Biotron Chip that Distributor replaces during
such month pursuant to a claim made under the ETC
warranty. If inspection by ETC verifies the claimed
defect in material or workmanship, ETC shall replace
the Biotron Chip and ship the same to Distributor
without expense to Distributor.
10. TRADE SECRETS AND COMPETITION.
(a) In consideration of the execution of this
Distribution Agreement by ETC, Distributor covenants
and agrees that it will not during or following the
term of this Distribution Agreement disseminate,
disclose, lecture upon or publish in any manner
information relating to the design or manufacturing
techniques employed by ETC in the development or
manufacture/assembly of the Biotron Chip or
information relating to the research and development,
marketing, or sales of the Biotron Chip by ETC.
(b) Distributor agrees not to reverse engineer, or in any
way attempt to disassemble the Biotron Chip.
11. FINANCIAL POLICIES. For as long as this Distribution Agreement is
in effect, Distributor
(a) Maintain and employ in connection with Distributor's
business and operations under this Distribution
Agreement such working capital and net worth as may
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be required to enable Distributor properly to fully
carry out and perform all of Distributor's duties,
obligations and responsibilities under this
Distribution Agreement.
(b) Pay promptly all amounts due EEC in accordance with
the terms of sale extended by ETC from time to time.
(c) Furnish ETC with financial statements in such form as
EEC may reasonably require from time to time, in the
EVENT Distributor is not current in its SEC filings.
Shipments may he suspended at EEC's discretion in the event that
Distributor fails to promptly and faithfully discharge each and EVERY provision
of this section,
12. DELAY IN DELIVERY.
(a) ETC shall not be liable for any delay or failure to
deliver any Biotron Chip during the term of this
Distribution Agreement where such delay or failure to
deliver results from circumstances beyond the control
of, and without the fault or negligence of, ETC.
(b) In no event shall ETC be liable for any incidental,
consequential, or special damages for any delay or
failure to deliver any Biotron Chip.
13. USE OF ETC'S NAME. Distributor shall not, without express written
authorization from ETC, use, authorize or permit the use of ETC's name or any
trademark owned by ETC as part of its firm, corporate or business name or in any
way, except to designate products purchased from ETC under the terms of this
Distribution Agreement. Distributor shall not contest the right of ETC to the
exclusive use of any trademark or trade name used or claimed by ETC, and shall
not use similar names that may imply or infer a conflict of name or ownership.
14. TERMINATION. ETC may cancel and terminate this Distribution
Agreement immediately if any of the following occurs:
(a) If a receiver is appointed for Distributor, or an
assignment having been. made for the benefit of
creditors, or if a petition under the bankruptcy or
reorganization laws shall be filed by or against
Distributor in the Territory.
(b) If Distributor assigns this Distribution Agreement,
or any rights under this Distribution Agreement in
violation of section 18; or if there is a change of
control or management of Distributor which is
unacceptable to ETC; or if Distributor ceases to
function as a going concern, or to conduct its
operations in the normal course of business.
(c) If Distributor is under investigation by the SEC,
whether formal or informal, or by the NASD (National
Association of Securities Dealers).
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(d) The minimum purchase as set forth in Paragraph 8
above are NOT MET by the specific dates as set forth
in Attachment A.
15. RIGHTS ON TERMINATION OF DISTRIBUTION AGREEMENT. On termination of
this Distribution Agreement, all rights and obligations of the parties under
this Distribution Agreement shall be extinguished except rights and obligations
that shall have accrued prior to the effective date of termination and those
surviving termination as otherwise provided in this Distribution Agreement.
16. NO LIABILITY ON TERMINATION. The right of termination of this
Distribution Agreement pursuant to section 15 is absolute. Neither ETC nor
Distributor shall incur any liability by reason of such termination, each of the
parties mutually releasing the other from any claim or any nature (including,
but not limited to, damages sustained on account of loss of prospective profits,
or on investments, contracts, leases, or other commitments) resulting from or
arising out of termination. However, nothing in this section 16 shall be
construed as a release of any obligation that shall have accrued prior to the
effective date of termination and that is preserved pursuant to this section.
17. AMENDMENT. Neither this Distribution Agreement nor any of the terms
or provisions hereof, may be amended, modified, supplemented or waived except by
a written instrument signed by the parties (or in the case of a waiver, by the
party granting such waiver). No waiver of any of the terms or provisions of this
Distribution Agreement shall he deemed to be or shall constitute a waiver of any
other term or provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver. No failure of a party hereto to insist upon
strict compliance by the other party hereto with any obligation, covenant.
agreement, or condition contained in this Distribution Agreement shall operate
as a waiver or estoppel with respect to, any subsequent or other failure.
Whenever this Distribution Agreement requires or permits consent by or on behalf
of a party hereto, such consent shall he given in a mariner consistent with the
requirements for a waiver of compliance as set forth in this section 17.
18. ASSIGNMENTS. Distributor may not directly or indirectly sell,
assign, or otherwise transfer this Distribution Agreement in whole or in part,
or any right or obligation arising therefrom to any third party without the
prior written consent of ETC. Any purported assignment or derivation of this
provision shall be null and void.
19. GOVERNING Law. This Distribution Agreement has been signed by
Distributor and sent to ETC for final approval and execution, and has been
signed and delivered on behalf of ETC. The parties hereto intend this
Distribution Agreement to be executed as a Distribution Agreement and to be
construed in accordance with the laws of the Nevada.
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20. ARBITRATION.
(a) Any controversy or claim relating to this Agreement
(other than a request for injunctive relief),
including any controversy or claim as to the
arbitrability of any controversy or claim and any
claim for rescission, shall be settled by arbitration
in the city of Las Vegas, State of Nevada, in
accordance with the then rules of the American
Arbitration Association, and judos-lent upon an award
rendered in such arbitration may be entered in any
court having jurisdiction of the matter.
Arbitration shall be by a single arbitrator
to he chosen jointly by the parties, provided that,
should the parties be unable to agree upon their
choice of arbitrator within thirty (30) days after
the demand for arbitration.. the arbitrator shall be
chosen in accordance with the Rules. The decision of
the arbitrator shall be final and binding upon the
parties and judgment on any award made by the
arbitrator may be entered in any court having
jurisdiction thereof. The arbitrator's discretion and
power shall include an appropriate award for costs,
including an apportionment thereof, in the absence of
which the costs of arbitration shall he borne equally
by the parties.
(b) Although the procedures specified in this section 20
are the sole and exclusive procedures for the
resolution of disputes arising out of or relating to
this Distribution Agreement, either party may seek a
preliminary injunction or other provisional equitable
relief if, in its reasonable judgment, such action is
necessary to avoid irreparable harm to itself or to
preserve its rights under this Distribution
Agreement.
22. SUCCESSORS BOUND. This Distribution Agreement shall bind the
respective parties, their administrators, successors and assigns.
23. ATTORNEY'S Fees. In the event that any party institutes any action
or suit to enforce this Distribution Agreement or to secure relief from any
default hereunder or breach hereof, the breaching party shall reimburse the
nonbreaching party for all costs, including reasonable attorney's fees,
including appeals incurred in connection therewith and in enforcing or
collecting any judgment rendered therein.
24. ENTIRE DISTRIBUTION Agreement. This Distribution Agreement;
including all Attachments prepared in connection herewith, constitutes the
entire Distribution Agreement and understanding between the parties with respect
to the subject matter hereof and supersedes and cancels any prior negotiations,
distribution agreements, understandings or arrangements between the parties with
respect to the subject matter hereof.
25. SEVERABILITY. If any provision of this Distribution Agreement or
portion thereof, or the application thereof to any person or circumstance, shall
be held to any extent invalid or unenforceable by a court of competent
jurisdiction, the remainder of this Distribution Agreement (or of such
provision) and the application thereof in such circumstances shall remain in
full force and effect.
26. REFERENCES. The reference to a number or lettered section, or
attachment refers to the section or attachment bearing that number or letter in
or attached to this Distribution Agreement, unless otherwise stated.
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27. RECITALS, The recitals set forth herein are true and correct and
are incorporated herein.
28. SURVIVAL. The representations, warranties and covenants contained
in section 10 shall survive the termination of this Distribution Agreement.
29. COUNTERPARTS. This Distribution Agreement may be executed in any
number of counterparts in English each of which shall be deemed an original but
all of which together shall constitute one and the same instrument; provided,
however, that in any case wherein a conflict arises as to the meaning or
interpretation of this Distribution Agreement the English version shall govern.
This Distribution Agreement shall become effective only upon its
execution by the authorized representative of each party.
IN WITNESS WHEREOF, the parties have executed this Distribution
Agreement on the date(s) indicated below.
ENERGY TRANSFER CORPORATION
By: /s/Xxxxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxxxx X. Xxxxx, Chairman of the Board
Dated: February 1, 2004
DISTRIBUTOR
By: /s/Xxx Xxxxx, Xx.
-------------------------------
Xxx Xxxxx, Xx. Chairman and CEO
Dated: February 1, 2004
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ATTACHMENT A
TO
ETC DISTRIBUTION AGREEMENT
1. PRICES, TERMS AND Conditions OF SALE
a. Prices
(i) The purchase price for each Biotron Chip shall be US$, $6.00
for the Cellphone Biotron Chip, $8.00 for the Home Telephone
Biotron Chip and $9.00 for the Automobile Biotron Chip, which
price shall be guaranteed for the initial period of the
contract; and
(ii) ETC shall ship all Biotron Chips to Distributor FCA
(International Chamber of Commerce Incoterms 1990) from ETC's
facilities, by air freight, exclusive of insurance, freight.
and delivery charges, customs duties, VAT taxes and other
similar assessments, all of which shall be the sole
responsibility of Distributor.
b. Terms and Conditions
Upon the execution of the Distribution Agreement, Distributor shall he
required to purchase the Products based upon the following minimum purchases
irrespective of type of Product (Cell Phone, Home Phone or Automobile):
10,000 Units prior to 5:00 pm, Pacific Time, on May 15, 2004
10,000 Units prior to 5:00 pm, Pacific time, on June 15, 2004
20,000 Units prior to 5:00 pm, Pacific time, on July 15, 2004
20,000 Units prior to 5:00 pm, Pacific time, on August 15,
2004
30,000 Units prior to 5:00 pin, Pacific time. on September 15,
2004
30,000 Units prior to 5:00 pm, Pacific time, on October 15,
2004
Payments made by bank wire transfer are to be made in US Dollars using
the following wire in information:
Beneficiary Name: Energy Transfer Corporation
Bank Name: Xxxxx Fargo Bank Nevada
000 Xxxx Xxxx Xxxxxxx Xxxx, Xxx.000
Xxx Xxxxx, XX 00000
Bank Telephone: (702) 000- 0000
Account #: 3803635550
Routing #: 000000000
Swift Code #: XXXXXX0X
Products purchased above shall he shipped within fifteen (15) days of
receipt of funds
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ATTACHMENT B
ENERGY TRANSFER CORPORATION
LIMITED WARRANTY AND LIMITATION OF LIABILITY
Except to the extent otherwise provided herein, Energy Transfer
Corporation (ETC) warrants each Biotron Chip sold by ETC only against defects in
workmanship and/or materials under normal service and use for a period of one
year from receipt by Distributor. Biotron Chips which have been changed or
altered in any manner from their original design, or which are improperly or
defectively installed, serviced or used are not covered by this warranty.
The obligations of ETC with respect to this warranty are limited to the
replacement of defective products after inspection by ETC and verification of
such defects, and. do not include the cost of installation. All products to be
considered for replacement are to he returned to the location designated by ETC
after receiving authorization from ETC. The buyer assumes all risk and liability
whatsoever resulting FROM the use of such products. In no event shall ETC be
liable to purchaser for any indirect, special or consequential damages or lost
profits, even if ETC has been advised of the possibility thereof, and regardless
of whether such products are used singularly or as components in other products.
The provisions of this warranty and limitation of liability may not he
modified in any respect except in writing signed by a duly authorized officer of
ETC.
When printed on or attached to any document issued by ETC or its
Distributor this warranty contains the complete and exclusive statement of the
obligations of ETC with respect to each Biotron.
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ATTACHMENT C
DEFINITION OF MULTI-LEVEL MARKETING
A forth of marketing and sales that uses independent distributors to
recruit more distributors. These distributors are placed in a level just below
their sponsors, thus forming a "multi-level" tree or network structure of
distributors. Compensation for distributors is based on the business activity of
a number of levels of downline distributors (or on downline business centers for
binary compensation plans).
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