Exclusive Distribution Rights Agreement
Exhibit
10.N
Exclusive
Distribution Rights Agreement
AGREEMENT
(the
"Agreement") dated as of January 1 2006, by and between CONFIDENT
INC. and Its Nominee (DISTRIBUTOR),
having its principal offices at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and SEYCHELLE
ENVIRONMENTAL PRODUCTS JNC.
("SEYCHELLE"), having its principal offices at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS,
DISTRIBUTOR now desires to be designated by SEYCHELLE as the exclusive
distributor within the Peoples Republic of China, Hong Kong, Singapore and
Taiwan (Hereinafter referred to as "The Territory") of the water fil1ration
products manufactured and sold by SEYCHELLE which products are described on
Exhibit
"A"
hereto
(and are each herein referred to individually as a "Product" and, collectively,
as the "Products"), and thereby to have and hold the exclusive right to
distribute and sell each of the Products within The Territory during the time
periods provided herein; and
WHEREAS,
SEYCHELLE is willing to designate and empower DISTRIBUTOR as the exclusive
distributor of the Products in The Territory on the terms and conditions, and
for the time periods set forth herein.
NOW
THEREFORE,
in
consideration of the mutual covenants herein contained, and for other and good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree
as
follows:
1.
Grant of Exclusive Distribution Rights.
A.
SEYCHELLE hereby grants to DISTRIBUTOR the exclusive right to distribute and
sell each of the Products within the The Territory for and during an initial
period of five (5) years commencing on April 1, 2006, and ending on March 31,
2011. Details are provided in Section (vi) below. .
B.
The
parties hereto understand and agree that the scope of the rights so granted
(the
'"Exclusive Distribution Rights") shall mean, include and encompass the
following:
(i) DISTRIBUTOR
shall be the only persons or entities who may sell or distribute for resale
any of the Products within The Territory, and from whom SEYCHELLE
shall accept
any purchase order for any of the Products for shipment to The Territory
for sale
or
resale. Exclusive of sales to the Chinese Military and/or its
respective Divisions
(no retail), and the Medical and Pharmaceutical industries. In the event
that any
of
the above becomes SEYCHELLE customers, DISTRIBUTOR shall act as
a commissioned
representative for SEYCHELLE, and handle all sales
activities. Commissions
are to be mutually agreed upon by both parties.
(ii) In
the
event that no Medical or Phannaceutica1 business is developed by March
31, 2006,
and
no sales are ordered by the Chinese Military by June 30,
2006;
DISTRJBUTOR shall be granted exclusive rights to SEYCHELLE products
for these channels of distribution. However, DISTRIBUTOR shall have
the right
of
first refusal for the Medical and Phannaceutica1 channels of distribution
up to
March
31, 2006, if they are able to secure sizable customer orders acceptable
to SEYCHELLE.
(iii) To
this
effect, SEYCHELLE expressly covenants that (i) SEYCHELLE will
not knowingly
sell any Product to any other person or entity for which a shipping
address within
The Territory is indicated on the purchase order, nor complete any sale of
any Product
if advised by DISTRIBUTOR, upon reasonable proof: that the Product
is intended
by the purchaser for shipment to and/or sale within The Territory, and
(ii) SEYCHELLE
will not deliver any Product to any other person or entity for
shipment where
SEYCHELLE after due inquiry is or becomes aware that the Product
is ultimately
to be shipped to or sold within The Territory.
(iv) SEYCHELLE
will take all reasonable action, on DISTRIBUTOR request, to prevent or
prohibit any third party purchaser of any Product from circumventing the
exclusivity of the rights hereby
granted to DISTRIBUTOR.
(v) SEYCHELLE
shall promptly refer to DISTRIBUTOR all inquiries or purchase orders
for the purchase of any Product .received by SEYCHELLE from any prospective
purchaser whose
shipping address is within The Territory or whom SEYCHELLE knows or believes
to
intend to
distribute and sell such Product within The Territory.
(vi) DISTRIBUTOR
shall have the right to represent itself as the exclusive distributor for
each
of
the Products within The Territory in printed communications, public marketing
and promotional
materials and in any discussions with any private parties or agencies within
The
Territory.
(vii) DISTRIBUTOR
shall also have the first right of refusal for the exclusive distribution
rights
in
other Asian countries subject to the availability.
(viii) The
exclusive rights are granted under the following
conditions:
1. Upon
signing the Agreement, DISTRIBUTOR shall provide SEYCHELLE with
a
check for $50.000 USD as initial payment for Products to be purchased.
in the first quarter of this Agreement. DISTRIBUTOR. will have to
purchase an additional $200.000 in Products within the time period
of April,
2006 to June 30, 2006 (the first quarter of this Agreement) to
maintain exclusivity.
2. For
the
first year, exclusive rights are granted on a quarterly basis based
upon a
minimum
purchase of $250,000 in Products per quarter.
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3. For
the
first year, in the event that DISTRIBUTOR fails to purchase
the $250,000
minimum order of Products in any given single quarter, DISTRIBUTOR
shall be allowed to either carry over the excess amounts from
the
previous quarters or add the shortfall to the next quarter.
However, for
any
further default, SEYCHELLE have the right to: (a) waive the minimum
for that quarter, (b) add the shortfall to the next quarter
purchase requirement,
or (c) terminate the exclusivity of the Agreement.
4. For
the
consecutive years covered by this Agreement; each year a 50% increase
of the minimum order is required to maintain the
exclusivity. Therefore,
in year 2, DISTRIBUTOR will have to purchase a minimum of $1.50
million of product; year 3 -
$2.25 million;
year 4 - $3.38 million: and year
5 -
$5.00 million.
5. For
the
consecutive years, in the event that DISTRIBUTOR fails to
purchase the
minimum order of Products in any given single year,
DISTRIBUTOR shall
be
allowed to either carry over the excess amounts from the
previous years
or
add the shortfall to the next year provided period purchases are
at least
50%
of the annual requirement. If not, SEYCHELLE shall have the right
to
(a) waive the minimum order for that year, (b) add the shortfall to
the next
year
purchase requirement, or (c) terminate the exclusivity of the Agreement.
2. Obligations
of as Exclusive Distributor.
A. In
consideration of the grant of the Exclusive Distribution Rights made to
DISTRIBUTOR in Section 1. above, DISTRIBUTOR hereby agrees that it will
undertake, at its own reasonable expense and using reasonable best efforts,
to
obtain all necessary governmental licenses, permits and approvals required
to
allow the import into and sale of each of the Products within The Territory
prior in each case to its commencement of distribution and sales activities
of
that Product in The Territory.
B.
DISTRIBUTOR shall be exclusively responsible for all sales, promotion and
marketing expenses relating to its distribution and sale of Products in The
Territory.
C.
DISTRIBUTOR covenants and agrees that it will not distribute or resell any
Products purchased from SEYCHELLE other than in The Territory without first
advising SEYCHELLE of its intention and receiving SEYCHELLE's prior written
approval to do so.
3.
Products to be Sold
A.
Price and Terms of Products to:
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(i)
SEYCHELLE hereby agrees to sell to DISTRIBUTOR, per attached Exhibit
"B."
(ii)
DISTRIBUTOR shall be responsible for all costs of shipping the purchased
Products from point
of
manufacture.
B. Commitment
to Supply Products:
SEYCHELLE represents and agrees that it will use all commercially
reasonable efforts to manufacture and deliver any Products ordered
by DISTRIBUTOR
ou a priority basis, but in all events in a timely fashion.
4.
Rights Beyond Initial Period.
It
is the
intention of the parties that either by meeting the minimum purchase quantities
in the first 5 years or through its marketing and distribution efforts and
its
purchases of Products during the first 5 years that DISTRIBUTOR shall
demonstrate to SEYCHELLE its capabilities as an effective facilitator for the
distribution and sale of Products in The Territory, DISTRIBUTOR shall become
entitled to a mutually agreed upon extension of five (5) years, the period(
s)
during which DISTRIBUTOR may continue to hold and exploit the Exclusive
Distribution Rights. The minimum purchase requirements for any extension will
be
on a $5 million per year basis.
5.
Indemnification.
A.
SEYCHELLE warrants and represents to DISTRIBUTOR that (i) SEYCHELLE has
full
power and authority to grant the Exclusive Distribution Rights, (ii) no approval
or consent of any third party is required to enable SEYCHELLE to make such
grant
or for DISTRIBUTOR thereupon to be entitled to exercise the full rights and
benefits intended thereby, and (ill) the grant thereof will not breach any
license, patent 'or other right or agreement to which SEYCHELLE is a party
with
respect to SEYCHELLE's rights and authority to manufacture and sell each of
the
Products.
B.
SEYCHELLE shall defend and indemnify DISTRIBUTOR and hold its members, managers,
officers,' employees and agents harmless against all claims and losses
(including reasonable attorney's fees and costs incurred in investigating or
defending against any such claims) suffered by DISTRIBUTOR in connection with
or
as a result of a breach of the representation and warranty made by SEYCHELLE
in
subsection A above.
C.
Conversely, DISTRIBUTOR agrees that it shall defend and indemnify SEYCHELLE
and
hold its, managers, officers, employees and agents harmless against all claims
and losses (including reasonable attorney's fees and costs incurred in
investigating or defending against any such claims) suffered by SEYCHELLE in
connection with or as a result of the gross negligence, misrepresentation or
willful misconduct of DISTRIBUTOR or its personnel in the performance
of
its
duties hereunder.
6.
Miscellaneous Provisions.
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A.
Modification:
No
modification, waiver or amendment of any term or condition of this Agreement
sbaI1 be effective unless arid until it sbaI1 be reduced to writing and signed
by both of the parties hereto or their legal representatives.
B.
Waiver:
Failure
by either party at any time to require performance by the other party or to
claim a breach of any term of this Agreement will not be construed as
a:
waiver
of any right under this Agreement, will not affect any subsequent breach, will
not affect the effectiveness of this Agreement or any part thereof, and will
not
prejudice either party as
regards
any subsequent action.
C.
Severability:
If any
term or provision of this Agreement should be declared invalid by a court of
competent jurisdiction, the rem:lining
terms
and
provisions of this Agreement shall be unimpaired.
D.
Complete
Agreement:
This
Agreement constitutes the entire Agreement between the parties with respect
to
the subject matter hereof and supersedes in all respects all prior proposals,
negotiations, conversations, discussions and agreements between the parties
concerning the subject matter hereof
E.
Assignment:
This
Agreement may not be assigned, in whole or :in part, by either party hereto
without prior written consent shall not be unreasonably withheld.
F.
Governing
Law:
This
Agreement shall be construed according to the laws of the State of California
and shall not be subject to any choice of law provisions of such laws. This
Agreement shall be binding upon DISTRIBUTOR and SEYCHELLE, and their respective
successors and assigns.
G.
Compliance
with Laws:
The
parties hereto represent and agree each for itself that they and their
respective employees, agents and subcontractors will comply with all applicable
federal, state, county and local laws, ordinances, regulations and codes in
the
performance of their respective services, duties and obligations under this
Agreement.
H.
Force
Majeure:
Either
party is excused from performance and shall not be liable for any delay in
performance or delivery or for non-performance or non-delivery, in whole or
in
part, caused by the occurrence of any contingency beyond the control of the
parties including, but not limited to, work stoppages, fires, civil
disobedience, riots, rebellions, accident, explosion, flood, storm, acts of
God
and similar occurrences, Either party may terminate or suspend its obligations
under this Agreement if such obligations are prevented by any of the above
events to the extent such events are beyond the reasonable control of the party
whose reasonable performance is prevented.
I.
Counterparts:
This
Agreement may be executed in counterparts each of which shall be deemed an
original, but all of which together shall constitute one and the
same.
J.
Notices:
All
notices to be given and payments to be made to DISTRIBUTOR hereunder shall
be
sent to ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇.
All
notices to SEYCHELLE, to be made hereunder shall be given or made to SEYCHELLE
5
at
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Executive VP. All notices shall be sent by registered or certified mail or
by a
nationally recognized overnight delivery service and shall be deemed to have
been given at the time such notice is received.
7.
Survival Provisions.
The
terms
and provisions of the Agreement that by their sense and context to survive
the
performance hereof by either party or by other parties hereto shall so survive
the completion of performance and termination of this Agreement, including
without limitation the making of any and all payments due hereunder unless
otherwise noted.
8.
Confidentiality.
A.
The
information furnished or disclosed by either party to the other in connection
with this Agreement and the performance of the respective party's services,
duties and obligations hereunder, may contain or reflect confidential
information with respect to the business operations and practices of the
parties, any selling properties and/or buying sponsors ("Confidential
Information"). Confidential Information furnished by either party to the other
shall be used exclusively and only in connection with this
Agreement.
B.
The
parties hereto acknowledge and agree that the unauthorized disclosure of use
of
any Confidential Information may cause immediate and irreparable injury to
the
party which has disclosed that Confidential Information to the -other party,
injury which can not be adequately compensated by monetary damages. Accordingly,
each party hereto .authorizes the other party to seek any temporary or permanent
injunctive relief necessary to prevent such disclosure or use, or threat
thereof. Further, each party hereto consent to the jurisdiction of any federal
or state court sitting in the State of California for purposes of any suit
seeking such injunctive relief: and consents to the service of process therein
by certified or registered mail, return receipt requested. .
ACCEPTED
AND AGREED BY:
CONFIDENT
INC. and Its Nominee
By:
/s/
▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇
▇▇, President Date:
1/4/06
/s/
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇, Exec. VP Date:
1/4/06
SEYCHELLE
ENVIRONMENTAL PRODUCTS INC.
By: ▇.
▇.
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Executive VP Date:
1-4-06
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SEYCHELLE
Products* and Pricing:
- 24oz
Flip
Top Bottles $8.80
- 30oz
Bottoms Up Bottles
8.80
- 30oz
Canteens
8.80
- 24oz
Emergency Preparedness Bottles
6.60
- Filter
Replacements for all bottles
4.75
- Pitchers 20.35
- Filter
Pack Replacement 11.00
- Straws-Regular
6.60
- Straws-Advanced
7.75
- Shower
heads - Royal Wall Mount (White) 25.24
- Shower
Replacement Filter 14.24
- Pure
Water Pumps 11.93
- Pure
Water Bags 13.75
- Filter
Replacements -Pump/Bag
4.75
| · |
Additional
products may be added by separate Exhibit
|
| · |
Prices
subject to change with 60 days written
notice.
|
Exhibit
"B"
1. Pricing
-
see Exhibit "A". Prices subject to change with thirty (30) days written
notice.
2. For
the
first one million dollars purchase -
Terms
are
40% cash (USD) down with order (Wire transfer)
& 60% via an Irrevocable Letter of Credit upon shipment.
3. For
any
further purchases - Terms are 30% cash (USD) down with order (Wire transfer)
& 70% via an
Irrevocable Letter of Credit upon shipment.
4. It
is
agreed that SEYCHELLE, at its option, may reduce its cash down payment
requirements in the event
that it is able to negotiate more favorable payment terms with its
suppliers.
5. Shipment:
FOB our plant in San Juan Capistrano, CA (USA).
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