| DISTRIBUTOR
LEGAL AGREEMENT
THIS AGREEMENT is made this ______ day of ______,
2005, by and between Professional Beauty Corporation
[ProBeautyCorp], with its principal place of business
located at 6937 Orangewood Avenue, Cypress, CA 90630-5742 (ProBeautyCorp)
and ____________ [Name of Distributor], ____________ [Address] _________________
(the "Distributor").
NOW, THEREFORE, in consideration of the promises
hereinafter made by the parties hereto, it is agreed as follows:
ARTICLE I
APPOINTMENT OF DISTRIBUTORSHIP
1. Distribution Right. ProBeautyCorp
hereby appoints and grants Distributor the exclusive and non-assignable
right to sell the Product of ProBeautyCorp ("Product")
listed in the then current "Price List" (Exhibit "A"
attached hereto) [omitted]. The distribution right shall be limited
to customers who have places of business in, and will initially
use ProBeautyCorp's products in the geographic area set forth in Exhibit
"B" attached hereto.
2. Prices. All prices stated are
FOB ProBeautyCorp's offices in Cypress, California. Prices do not
include transportation costs which shall be borne by Distributor.
Prices do not include federal, state or local taxes applicable to
the products sold under this Agreement. An amount equal to the appropriate
taxes will be added to the invoice by ProBeautyCorp where ProBeautyCorp
has the legal obligation to collect such taxes. Distributor shall
pay such amount to ProBeautyCorp unless Distributor provides Company
with a valid tax exemption certificate authorized by the appropriate
taxing authority.
3. Terms. Terms are net cash upon
delivery, except where satisfactory credit is established in which
case terms are net thirty (30) days from date of delivery. ProBeautyCorp
reserves the right to revoke any credit extended at ProBeautyCorp's
sole discretion. Distributor agrees to pay such invoices when due
regardless of other scheduled deliveries. Invoices not paid within
thirty (30) days of the invoice date will have one and onehalf percent
(1-1/2%) per month finance charge assessed against the unpaid balance
from the date of invoice until the date of payment.
4. Title to Product. ProBeautyCorp
hereby reserves a purchase money security interest in each unit
of Product sold or to be sold under this Agreement and in the
proceeds thereof, if Distributor shall have sold or leased a unit(s)
to another party prior to Distributor paying Company the purchase
price for such Unit as set forth herein, in the amount of such unit's
purchase price. These interests will be satisfied by payment in
full. A copy of this Agreement may be filed with the appropriate
authorities at any time after the signature by ProBeautyCorp as
a financing statement in order to perfect ProBeautyCorp's security
interest. On the request of ProBeautyCorp, Distributor shall execute
financing statement(s) and other instruments ProBeautyCorp shall
desire to perfect a security interest in the Product for its purchase
price. Title to the Product shall pass to Distributor upon receipt
by ProBeautyCorp of payment in full for all amounts due for such
units of Product.
5. Competitive Product. Distributor
agrees not to represent or sell other products which are deemed
to be competitive with ProBeautyCorp's Product unless agreed to
by ProBeautyCorp by written notice.
ARTICLE II
MARKETING AND SUPPORT
1. Sales. Distributor shall use
its best efforts to promote the sale and distribution of the Product
and to provide adequate support, which efforts shall include the
following:
(a) Establishing and maintaining appropriate, attractive
and accessible premises and facilities for the display and demonstration
of Product;
(b) Provide an adequate, trained sales and technical
staff to promote the sale and support of the Product;
(c) Undertake promotional campaigns and canvas
prospective users to stimulate the sales of Product;
(d) Provide Company with forecasts every month
of its probability requirements for the next six months for Product
and accessories, such forecasts to be in such manner and on forms
to be specified by Company and agreed to by Distributor.
2. Advertising. Company shall,
upon request, assist the Distributor on all advertising, sales promotion,
and public relations campaigns to be conducted, including providing
Distributor with documentation of previous promotional campaigns
conducted in connection with the Product, and shall provide necessary
technical information and assistance.
3. Training. Company shall furnish
training of Distributor's sales and technical representatives at
various times and locations as shall be designated for this purpose
by Company. Enrollment in training courses shall be limited to a
reasonable number of persons who shall be sufficiently qualified
to take the courses. Distributor shall pay the salaries and all
travel and lodging expenses and subsistence of its representatives.
ARTICLE III
DELIVERY
1. Purchase Orders. Distributor
shall order Product by written notice to Company. Each order shall
specify the number of units to be shipped, the type of units to
be shipped (as identified by Company model number designations indicated
in the Price List) including all optional features, the desired
method of shipment and the installation site. Company shall indicate
its acceptance of such release by returning a signed copy to Distributor.
Company agrees to ship units to Distributor as close as possible
to the delivery schedule set forth in each order as accepted by
Company, unless Company otherwise indicates in writing. Company
shall not be required to honor any release which: (a) specifies
a shipping date earlier than Company's thencurrent delivery schedule
for the date such release is received by Company and/or (b) specifies
a quantity to be delivered in any one month within the current delivery
schedule which is greater than one hundred percent (100%) of the
total quantity shipped in the preceding sixty (60) day period.
2. Product Acceptance. The criterion
for acceptance of Company Product by Distributor shall be the
successful operation of the Product using Company's standard test
procedures and diagnostic test programs applicable to the Product
involved.
3. Shipment. All shipments of
Product shall be made FOB Company's plant and liability for loss
or damage in transit, or thereafter, shall pass to Distributor upon
Company's delivery of Product to a common carrier for shipment.
Shipping dates are approximate and are based, to a great extent,
on prompt receipt by Company of all necessary ordering information
from Distributor. Distributor shall bear all costs of transportation
and insurance and will promptly reimburse Company if Company prepays
or otherwise pays for such expenses. Company shall not be in default
by reason of any failure in its performance under this Agreement
if such failure results from, whether directly or indirectly, fire,
explosion, strike, freight embargo, Act of God or of the public
enemy, war, civil disturbance, act of any government, de jure or
de facto, or agency or official thereof, material or labor shortage,
transportation contingencies, unusually severe weather, default
of any other manufacturer or a supplier or subcontractor, quarantine,
restriction, epidemic, or catastrophe, lack of timely instructions
or essential information from Distributor, or otherwise arisen out
of causes beyond the control of ProBeautyCorp. Nor shall ProBeautyCorp
at any time be liable for any incidental, special or consequential
damages.
4. Delay. Distributor may delay
for a period of thirty (30) days upon giving ProBeautyCorp written
notice at least fifteen (15) days prior to the scheduled delivery
date. In the event distributor delays delivery for more than thirty
(30) days with notification as set forth above, or for a period
of more than five (5) days written notice, Distributor shall pay
to Company, as a service charge, an amount equal to 1/360th of twentyfive
percent (25%) of the Purchase Price for each day of such delay to
be computed from the first day of such delay through the termination
of such delay.
5. Cancellation. Distributor may,
at any time prior to the scheduled date of shipment, cancel any
or all Product on order upon giving timely written notice and
upon payment of the following cancellation charges for each unit
cancelled. The cancellation charges, intended as liquidated damages
and not penalties, are as follows:
Number of Days Prior to Scheduled Date of Shipment that Notice of
Cancellation is Received by Company:
Cancellation Charges Expressed as a Percentage of Purchase Price:
0-5 days 10%
5-15 days 15 %
16-30 days 15 %
31 days or more 20 %
ARTICLE IV
PROPRIETARY RIGHTS
1. Use of Company Name. Company
expressly prohibits any direct or indirect use, reference to, or
other employment of its name, trademarks, or trade name exclusively
licensed to Company, except as specified in this Agreement or as
expressly authorized by Company in writing. All advertising and
other promotional material will be submitted to Company at least
two weeks in advance and will only be used if Company consents thereto,
which consent shall not be unreasonably withheld. Company hereby
authorizes and requires Distributor's use of ProBeautyCorp's insignia
or lettering which will be on the products at the time of the delivery.
Company hereby authorizes the Distributor's use of the legend set
forth below. ProBeautyCorp shall submit to the Distributor in writing
full particulars prior to any use of the authorized legends, on
stationery, invoices, promotion material or otherwise, and shall
not proceed with such use unless and until ProBeautyCorp's written
approval shall have been received.
Authorized legend shall be the following:
[Name of Company]
If the authorized legend is used on any stationery,
invoices, promotion material or otherwise by Distributor, Distributor
will, on termination of this Agreement, or upon request of Company,
discontinue the use of such legend on any stationery, invoices,
promotion material or otherwise and thereafter will not use, either
directly or indirectly in connection with its business, such legend
or any other names, titles of expressions so nearly resembling the
same as would likely lead to confusion or uncertainty, or to deceive
the public.
2. Patent Indemnity. Company agrees, at its own
expense, to indemnify, defend and hold harmless each Distributor
and its customers from and against every expense, damage, cost and
loss (including attorneys' fees incurred) and to satisfy all judgments
and decrees resulting from a claim, suit or proceeding insofar as
it is based upon an allegation that the Product or any part thereof
furnished by Company or any process which is practiced in the customary
use of the Product is or has been infringing upon any patent,
copyright or proprietary right, if Company is notified promptly
of such claim in writing and given authority, and full and proper
information and assistance (at Company's expense) for the defense
of same. In case the Product, or any part thereof, in such suit
is held to constitute an infringement and the use of said Product
or part is enjoined, Company shall, in its sole discretion and at
its own expense, either procure for the indemnitee the right to
continue using said Product or part or replace or modify the same
with nonperformance or capacity or affect its compatibility with
the hardware or firmware comprising the Product or the software
utilized thereon.
3. Drawings and Data. ProBeautyCorp normally supplies
all necessary data for the proper installation, test, operation
and maintenance of its Product. Portions of this data are proprietary
in nature and will be so marked. The Distributor agrees to abide
by the terms of such markings and to be liable for all loss or damage
incurred by ProBeautyCorp as a result of the improper or unauthorized
use of such data. ProBeautyCorp retains for itself all proprietary
rights in and to all designs, engineering details, and other data
pertaining to any Product specified in the contract and to all
discoveries inventions, patent rights, etc., arising out of work
done in connection with the contract and to any and all Product
developed as a result thereof, including the sole right to manufacture
any and all such products. The Distributor shall not contact ProBeautyCorp's suppliers, or any other person, for the purpose of manufacture.
4. Title to Products and Documentation Package.
Distributor acknowledges that the Product and documentation listed
in Schedule 1 are the property of Company, and that the products
are being made available to Distributor in confidence and solely
on the basis of its confidential relationship to Company, Distributor
agrees not to print, copy, provide or otherwise make available,
in whole or in part, any portion of an original or modified Product
Documentation Package or related materials.
ARTICLE V
WARRANTY
1. Product Warranty. Company warrants that Distributor
shall acquire Product purchased hereunder free and clear of all
liens and encumbrances except for Company's purchase money security
interest defined in Articles I, 4, above. Company further warrants
all Product to be free from defects in material or workmanship
under normal use and service for a period of [e.g., ninety (90)
days] from the date of delivery. All repair covered by this warranty
must be done at Company's factory, or other such warranty repair
facilities of Company as designated by Company unless Company specifically
directs that this service be performed at another location. Any
defect corrected within ninety (90) days and found to be within
this scope of the warranty will be repaired by Company and all charges
for labor and material, will be borne by Company. If it is determined
that either no fault exists in Company, or the damage to be repaired
was caused by negligence of Distributor, its agents, employees or
customers, Distributor agrees to pay all charges associated with
each such repair. THIS CONSTITUTES THE SOLE WARRANTY MADE BY COMPANY
EITHER EXPRESSED OR IMPLIED. THERE ARE NO OTHER WARRANTIES EXPRESSED
OR IMPLIED WHICH EXTEND BEYOND THE FACE HEREOF, HEREIN, INCLUDING
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. IN NO EVENT SHALL COMPANY BE LIABLE FOR ANY INCIDENTAL
OR CONSEQUENTIAL DAMAGES AND DISTRIBUTOR'S REMEDIES SHALL BE LIMITED
TO REPAIR OR REPLACEMENT OF NONCONFORMING UNITS OR PARTS.
2. Misuse of Product. Any tampering, misuse or
negligence in handling or use of Product renders the warranty
void. Further, the warranty is void if, at any time, Distributor
attempts to make any internal changes to any of the components of
the Product; if at any time the power supplied to any part of
the Product exceeds the rated tolerance; if any external device
attached by Distributor creates conditions exceeding the tolerance
of the Product; or if any time the serial number plate is removed
or defaced. OPERATION OF THE Product THAT RENDERS THIS WARRANTY
VOID WILL BE DEFINED TO INCLUDE ALL OF THE POSSIBILITIES DESCRIBED
IN THIS PARAGRAPH, TOGETHER WITH ANY PRACTICE WHICH RESULTS IN CONDITIONS
EXCEEDING THE DESIGN TOLERANCE OF THE Product.
ARTICLE VI
SPARES
1. Availability. Spares, as used herein, shall
be defined as Company's standard subassemblies and parts used to
fabricate and/or repair the Product manufactured by ProBeautyCorp.
Company shall make spares for purchase by Distributor for a period
of not less than five (5) years after shipment of the last unit
to Distributor hereunder. Such spares will be available to Distributor
at prices, terms and conditions in effect at the time such spares
are purchased. No provision in this Paragraph, or in any other part
of this Agreement, shall relieve Distributor of Distributor's responsibility
to stock spares. Distributor is expected to maintain an adequate
inventory of spares to support the Product purchased hereunder.
ARTICLE VII
DURATION OF AGREEMENT
1. Term. The term of this Agreement shall be for [e.g., five years]
from the date hereof, unless sooner terminated. Termination shall
not relieve either party of obligations incurred prior thereto.
2. Termination. This Agreement may be terminated
only:
(a) By either party for substantial breach of any
material provision of this Agreement by the other, provided due
notice has been given to the other of the alleged breach and such
other party has not cured the breach within [e.g., thirty (30) days]
thereof; or
(b) By ProBeautyCorp if: there is an unacceptable
change in the control or management of the Distributor; if the Distributor
ceases to function as a going concern or makes an assignment for
the benefit of creditors; if a petition in bankruptcy is filed by
or against the Distributor, resulting in an adjudication of bankruptcy;
or, if the Distributor fails to pay its debts as they become due
and provided due notice has been given by ProBeautyCorp to the Distributor
and the Distributor has not cured such breach within thirty (30)
days thereof;
(c) By Company at the end of the third year of
this Agreement, upon ProBeautyCorp paying to Distributor the sum of
$______ and having given to Distributor ninety (90) days advanced
written notice of its intention to so terminate;
(d) Upon termination of this Agreement all further
rights and obligations of the parties shall cease, except that Distributor
shall not be relieved of (i) its obligation to pay any monies due,
or to become due, as of or after the date of termination, and (ii)
any other obligation set forth in this Agreement which is to take
effect after the date of termination. Distributor shall have the
right to continue to purchase spare parts in accordance with Article
VI.
ARTICLE VIII
NOTICES
1. Notice or Communication. Any notice or communication
required or permitted hereunder (other than Administrative Notice)
shall be in writing and shall be sent by registered mail, return
receipt requested, postage prepaid and addressed to the addresses
set forth below or to such changed address as any party entitled
to notice shall have communicated in writing to the other party.
Notices and communications to Company shall be sent to:
[Name and Address of Company]
Notices and communications to Distributor shall
be sent to address shown on first page of this Agreement. Any notices
or communications to either party hereunder shall be deemed to have
been given when deposited in the mail, addressed to the then current
address of such party.
2. Date of Effectiveness. Any such notice or communication
so mailed shall be deemed delivered and effective seventytwo (72)
hours after mailing thereof in the United States.
ARTICLE IX
GENERAL PROVISIONS
1. Relationship of Parties. The relationship between
the parties established by this Agreement shall be solely that of
vendor and vendee and all rights and powers not expressly granted
to the Distributor are expressly reserved to ProBeautyCorp. The Distributor
shall have no right, power or authority in any way to bind ProBeautyCorp
to the fulfilment of any condition not herein contained, or to any
contract or obligation, expressed or implied.
2. Independence of Parties. Nothing contained in
this Agreement shall be construed to make the Distributor the agent
for ProBeautyCorp for any purpose, and neither party hereto shall
have any right whatsoever to incur any liabilities or obligations
on behalf or binding upon the other party. The Distributor specifically
agrees that it shall have no power or authority to represent ProBeautyCorp in any manner; that it will solicit orders for products
as an independent contractor in accordance with the terms of this
Agreement; and that it will not at any time represent ProBeautyCorp
in any manner; that it will solicit orders for products as an independent
contractor in accordance with the terms of this Agreement; and that
it will not at any time represent orally or in writing to any person
or corporation or other business entity that it has any right, power
or authority not expressly granted by this Agreement.
3. Indemnity. The Distributor agrees to hold ProBeautyCorp free and harmless from any and all claims, damages, and
expenses of every kind or nature whatsoever (a) arising from acts
of the Distributor; (b) as a direct or indirect consequence of termination
of this Agreement in accordance with its terms; or (c) arising from
acts of third parties in relation to products sold to the Distributor
under this Agreement, including, but not limited to execution of
liens and security interests by third parties with respect to any
such products.
4. Assignment. This Agreement constitutes a personal
contract and Distributor shall not transfer or assign same or any
part thereof without the advance written consent of Company.
5. Entire Agreement. The entire Agreement between
ProBeautyCorp and the Distributor covering the Product is set forth
herein and any amendment or modification shall be in writing and
shall be executed by duly authorized representatives in the same
manner as this Agreement. The provisions of this Agreement are severable,
and if any one or more such provisions are determined to be illegal
or otherwise unenforceable, in whole or in part, under the laws
of any jurisdiction, the remaining provisions or portions hereof
shall, nevertheless, be binding on and enforceable by and between
the parties hereto. Any provisions, terms or conditions of Distributor's
Purchase Orders which are, in any way contradicting of this Agreement,
except those additional provisions specifying quantity and shipping
instructions, shall not be binding upon Company and shall have no
applicability to the sale of goods by Company to Distributor.
6. Applicable Law. This Agreement shall be governed
by the laws of the State of California and is accepted by Professional
Beauty Corporation at its Corporate Office in Cypress,
California. All payments hereunder shall be made at Professional
Beauty Corporation offices at 6937 Orangewood Avenue, Cypress,
California 90630. Company's rights granted hereby are cumulative
and in addition to any rights it may have at law or equity.
7. Separate Provisions. If any provision of this
Agreement shall be held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions
shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed by their duly authorized officers as of
the date and year indicated above.
Professional Beauty Corporation
By:_________________________________
(Authorized Officer)
DISTRIBUTOR
By:_________________________________
(Authorized Officer)
EXHIBIT A
PRICE LIST AS OF ______, 2005
1. Order No. 1 . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . [Price Per Unit]
2.. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
3.. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Future Orders . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
Future orders are to be priced such that the Distributor
will receive a distributors 35% discount from the then current manufacturers
list price for Product, together with the necessary components
will be priced on an order by order basis with the Distributor,
receiving a 10% distributors discount on the price of each unit
ordered.
EXHIBIT B
DESCRIPTION OF THE TERRITORY
Subject to the provisions of sections ______ and
______ of this Agreement, the following country or countries shall
constitute the Territory:
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