EXCLUSIVE DISTRIBUTION AGREEMENT BY AND BETWEEN DIVINE SKIN, INC. AND DISTRIBUTOR
EXHIBIT 10.14
EXCLUSIVE DISTRIBUTION AGREEMENT
BY AND BETWEEN
DIVINE SKIN, INC.
AND “DISTRIBUTOR”
DISTRIBUTOR: Cellway International, Inc MANUFACTURER: Divine Skin, Inc
EXCLUSIVE DISTRIBUTION AGREEMENT
This Agreement, made and entered into this 25th day of November, 2008 (the "EFFECTIVE DATE"), by and between DIVINE SKIN, INC., whose principal office is located at 1680 Meridian Ave Suite 301, Miami Beach, FL 33139 (the "MANUFACTURER"), and Cellway International Inc, whose principal office is located at 363 Van Ness Way Suite 402, Torrance, CA. 90501 (the "DISTRIBUTOR"). The Manufacturer and the Distributor are sometimes collectively referred to as the "Parties" and sometimes individually referred to as a "Party."
RECITALS
A. Manufacturer manufactures of high performance dermatological and skin care products.(the "PRODUCTS").
B. Distributor desires to acquire the exclusive right to distribute and sell the Products.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties agree as follows:
1. RECITALS
The foregoing Recitals are true, accurate, and incorporated into this Agreement.
2. APPOINTMENT
2.1 Subject to the terms of this Agreement, Manufacturer grants Distributor the Exclusive Distribution Rights for the Products (including any improvements to said Products now or hereafter developed by Manufacturer), and Distributor hereby accepts such appointment (the "APPOINTMENT").
2.2 The Appointment shall commence upon Distributor's completion of the preconditions set forth on the schedule attached hereto ("PRECONDITIONS"). In the event Distributor fails to satisfy the Preconditions within the times and dates specified, this Agreement shall automatically and immediately terminate, whereupon the parties shall be relieved of all further obligation or liability hereunder.
2.3 Exclusive Distribution Rights are assigned in the following territories for all products manufactured by Divine Skin, Inc and it’s subsidiary companies and brands. At the inception of this agreement the subsidiary companies and DBAs are as follows:
1. DS Laboratories
2. Sigma Skin
3. Polaris Labs
The territory agreed for sole exclusive distribution rights is:
1.
Japan and its entire geographic territory.
2.
Japan and its entire intellectual territory. This includes catalogs and websites run by or marketed to customers within this territory.
3. TERM; OPTION TO RENEW; MINIMUM SALES QUOTA
3.1 Unless sooner terminated in accordance herewith, this Agreement shall commence on the Effective Date and continue for a Term of ten (10) years (the "TERM"); provided, however, at any time Manufacturer shall agree to make such changes or modifications to the Agreement as (i) may be deemed necessary or desirable by Distributor’s bankers or insurance company, or (ii)facilitate either party's compliance with any law or regulation; provided, further, Manufacturer shall not change the location or size of the Territory, charge a fee to renew the Agreement, or require Distributor to execute an agreement that is materially different than the most current form of distribution agreement utilized by Distributor in Japan.
3.2 MINIMUM SALES QUOTA. Distributor shall execute an Initial Order, the minimum number of product units Distributor shall purchase from Manufacturer (the "MINIMUM SALES QUOTA") shall be as follows:
(a) 83,333 product units at the inception of the agreement. Delivery of merchandise shall be executed upon the “Distributor’s” choice of date and location.
(b) 25,000 product units every year thereafter, effective from 01/01/20011 through 01/01/2019.
3.3 Distributor may terminate this Agreement at any time by providing Manufacturer with not less than thirty (30) days advance written notice of same.
4. ORDERS AND PRICES
4.1 The prices for the Product purchased by Distributor shall be based on current price lists published by Manufacturer, plus all applicable taxes, fees, duty or other charges imposed by any government or governmental authority, including without limitation sales tax. All prices published by Manufacturer shall not change during the Term of this Agreement.
4.2 All orders for Products shall be in writing, addressed to Manufacturer, utilizing Manufacturer's approved form for same (each a "PURCHASE ORDER").
4.3 All prices quoted herein are in United States Dollars. All payments from Distributor to Manufacturer hereunder shall be in United States Dollars.
4.4 Merchandise cost:
DS Laboratories:
Spectral DNC: $12.00
Spectral DNC-L: $12.00
Spectral RS: $12.00
Revita Shampoo: $12.00
Dandrene Shampoo: $12.00
Trioxil: $12.00
Hidroviton: $12.00
Nirena: $12.00
Viterol Eyes: $12.00
Viterol Face: $12.00
Oligo DX: $15.00
Keramene: $31.00
Sigma Skin: (Case quantities of 1000 product units)
Hair Regrowth System: Step-1 Hair Growth Stimulating Shampoo
Cost: $16.10
Hair Regrowth System: Step-2 Minoxidil Topical Spray
Cost: $15.40
Hair Regrowth System: Step-3 Conditioning Treatment
Cost: $13.65
Hair Regrowth System: Set (Step-1 Shampoo, Step-2 Minoxidil Spray, Step-3 Conditioning Treatment)
Cost: $37.10
Hair Growth Suppressing Aftershave
Cost: $17.46
Facial Moisturizer with SPF29
Cost: $15.40
Anti Aging Daily Facial Cleanser
Cost: $13.86
Abdominal Toning Cream
Cost: $19.60
5. PAYMENT
5.1 After the Initial Order, each subsequent Purchase Order shall be accompanied by (i) payment of a deposit (the "DEPOSIT") equal to twenty percent (20%) of the gross amount of the Purchase Order (the "PURCHASE PRICE").
5.2 Every payment by Distributor to Manufacturer hereunder shall be in U.S. dollars via (A) irrevocable bank letter of credit issued by a bank acceptable to the Manufacturer and Manufacturer's bank, (B) bank wire transfer to Manufacturer's account, or (C) such other financial instrument as may be acceptable to the Manufacturer.
5.3 Initial order. The initial order has been set to meet the total dollar amount of $1,000,000.00 (One Million US Dollars). Divine Skin Holdings will finance the above amount to “Distributor” under the following payment schedule:
a.
10% down payment at inception of the agreement
b.
Equal 24 monthly payments in the amount of $37,500 (thirty seven thousand five hundred dollars)
5.3 Final Balloon payment. The (“Distributor”) retains the option for a final payment within the calendar year of 2009 to pay off the entire balance at a discount of 10%.
6. DELIVERY; INVENTORY
6.1 Delivery of all Products shall be given to any place as the Distributor shall designate by written notice to Manufacturer. DS Laboratories, Inc. also agrees to take diligent care to pack the products in the most secure fashion possible to insure best protection of the products.
7. TRAINING, DEMONSTRATION AND USE OF PRODUCTS
7.1 Distributor will maintain a properly trained sales force of adequate size to represent and promote sales of the Product throughout the Territory. Distributor shall be responsible for developing its own marketing plan and system for selling the Product.
8. MARKETING MATERIALS; OFFICIAL LANGUAGE
8.1 Manufacturer will not copy, duplicate, reprint, fax or otherwise disseminate any Marketing Materials created by the Distributor.
8.2 The official language of the Distributor and this Agreement is English, and the official version of the Agreement is the English version.
8.3 All communication by and between Distributor and Manufacturer shall be in English. All documents prepared in any language other than English and submitted by Distributor to Manufacturer shall first be translated into English so that Manufacturer receives both a copy of the English version of such document and the version that is not in English.
9. SPECIAL PROJECTS
9.1 From time to time Distributor may request Manufacturer to assist with various projects that are not addressed in the Agreement. Distributor acknowledges that Manufacturer has no obligation to assist with or otherwise participate in such projects and that any such assistance or participation is strictly voluntary and shall not create any obligation or liability.
9.2 The distributor may at any time request changes to the product or packaging in order to meet the requirements from the health agencies within the territory of distribution, such alterations may also be executed to adapt to the marketing strategy in place. The (“Manufacturer”) shall execute the custom production of any product provided that the following requirements are met:
a.
The product is safe for personal use.
b.
The “Distributor” agrees to place an order for five thousand (5,000) units or greater of the custom product.
10. TRADEMARKS AND PATENTS
10.1 Use of Trademarks. Distributor shall display each of the Trademarks (logos and marks) only on behalf of and for the sole benefit of Manufacturer, and in such manner and on such terms as Manufacturer may require or allow in writing.
11. CONFIDENTIALITY
The Distributor and the Manufacturer acknowledge a duty of care and confidentiality to each other.
11.1 Business information. All business information provided by either party to the other, including but not limited to present or prospective customers, management information reports, contracts, operational methods, plans or strategies, and other business affairs of either party, are and shall be treated as confidential both during and after the Term of this Agreement.
11.2 By Distributor. Distributor shall indemnify and save Manufacturer, its officers and shareholders harmless from and against any loss, claim or damage, including reasonable attorney's fees, resulting from any breach of the warranty provided herein by Distributor.
13. COMPLIANCE WITH LAWS AND REGULATIONS
13.1 Distributor acknowledges that it is responsible for complying with all governmental laws, ordinances, rules and regulations of the Territory ("LAWS"), including without limitation all Laws which may govern (I) the importation, transportation, storage, marketing, distribution, sale, use and disposal of Products in the Territory, and
governmental permits or approvals, compliance with customs requirements or testing of any Products. Manufacturer shall cooperate fully with Distributor in complying with any governmental agency order or rule.
14. PRODUCT WARRANTY
14.1 Manufacturer warrants to Distributor that the Products were manufactured in accordance with their written specifications when shipped to Distributor, and that for the first three hundred sixty (360) days after delivery to Distributor the Products shall be free from such material defect as would render the Products unsuitable for use in the normal course.
15. AMENDMENTS
15.1 The provisions of this Agreement may not be amended, supplemented, waived or changed orally, but only by a writing signed by the party as to whom enforcement is sought and making specific reference to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
"MANUFACTURER"
Divine Skin, INC.
By: /S/ LEONID SMIRNOV
Leo Smirnov
By: /S/MICHAEL STRONG
Michael Strong, VP Sales
By: /S/DANIEL KHESIN
Daniel Khesin, VP Marketing
"DISTRIBUTOR"
By: /S/KATSUYUKI FUJIKI
Mr. Katsuyuki Fujiki
