Distribution

Distribution

OPERATIVE PROVISIONS

Interpretation

The following definitions and rules of interpretation apply in this agreement:

 

Definitions:

Business Day: a day, other than a Saturday, Sunday or public holiday in England, when banks in London are open for business.

control: the beneficial ownership of more than 50% of the issued share capital of a company or the legal power to direct or cause the direction of the general management of the company, and controls, controlled and the expression change of control shall be construed accordingly.

Mandatory Policies: the Supplier’s mandatory policies and procedures covering matters including brand usage, anti-bribery and anti-corruption, as amended by notification to the Distributor from time to time.

Trade Marks: the trade mark registrations and applications of the Supplier including UK3360604 and any further trade marks that the Supplier may, by express notice in writing, permit or procure permission for, the Distributor to use in the Territory in respect of the Products.

VAT: value added tax chargeable in the UK.

Vita Points: the virtual points the Supplier may record in respect of the Distributor which may be earned from ordering product, introducing customers to the Supplier direct and participating in marketing and promotional activities;

Year: the period of 12 months from the Start Date and each consecutive period of 12 months thereafter during the Term.

A person includes a natural person, corporate or unincorporated body (whether or not having separate legal personality).

A reference to a company shall include any company, corporation or other body corporate, wherever and however incorporated or established.

Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall include the singular and a reference to one gender shall include a reference to the other genders.

This agreement shall be binding on, and ensure to the benefit of, the parties to this agreement and their respective personal representatives, successors and permitted assigns, and references to any party shall include that party’s personal representatives, successors and permitted assigns.

A reference to a statute or statutory provision is a reference to it as amended, extended or re-enacted from time to time.

A reference to writing or written includes fax and email.

Any obligation on a party not to do something includes an obligation not to allow that thing to be done.

Any reference to an English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than England, be deemed to include a reference to that which most nearly approximates to the English legal term in that jurisdiction.

Any words following the terms including, include, in particular, for example or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms.

 

Commencement and duration

This agreement shall commence on the Start Date and shall continue, unless terminated in accordance with clause 14, for the Term.

The parties may agree to extend the Term.

 

Appointment

The Supplier appoints the Distributor as its non-exclusive distributor to market and distribute the Products in the Territory on the terms of this agreement, and the Distributor accepts the appointment on those terms.

The Supplier shall be free to:

appoint any other distributor, reseller or agent for the Products the Territory; and

supply any Products directly in the Territory whether for use or resale.

The Distributor shall buy the Products for its own account for resale under this agreement.

The Distributor must purchase the Products only from the Supplier or any other distributor of the Supplier, and shall not for the Term distribute or manufacture any goods which compete with the Products.

The Distributor shall not:

  1. represent itself as an agent of the Supplier for any purpose;
  2. pledge the Supplier’s credit;
  3. give any condition or warranty on the Supplier’s behalf;
  4. make any representation on the Supplier’s behalf;
  5. commit the Supplier to any contracts; or
  6. otherwise incur any liability for or on behalf of the Supplier.

The Distributor shall not, without the Supplier’s prior written consent, make any promises or guarantees about the Products beyond those contained in the promotional material supplied by the Supplier.

 

Distributor’s undertakings

The Distributor undertakes and agrees with the Supplier that at all times during the Term it will:

  1. use reasonable endeavours to promote and sell the Products in the Territory and to expand the sale of the Products by all reasonable and proper means and not to do anything which may hinder or interfere with such sales;
  2. keep the username and login codes and information for the Supplier’s website confidential and only use these for the purposes of this agreement;
  3. co-operate (as reasonably requested by the Supplier) with the Supplier and/or other distributors in marketing and promotional activities in return for Vita Points as agreed;
  4. employ a sufficient number of suitably experienced and qualified personnel to ensure the proper fulfilment of the Distributor’s obligations under this agreement;
  5. maintain, on its own account, an inventory of the Products so that it can supply all orders for Products received by it without delay;
  6. keep full and accurate books of account and records clearly showing all enquiries, quotations, transactions and proceedings relating to the Products and allow the Supplier, on reasonable notice during normal business hours, access to such accounts and records for inspection;
  7. keep all stocks of the Products that it holds in conditions appropriate for their storage, and provide appropriate security for the Products, all at its own cost;
  8. provide to customers an after-sale service in respect of the Products in accordance with the Mandatory Policies during the Term;
  9. inform the Supplier immediately of any changes in ownership or control of the Distributor, and of any change in its organisation that might be expected to affect the performance of the Distributor’s duties in this agreement;
  10. bear the cost of all returns from customers relating to the Products (other than defective Product); and
  11. pay or ensure payment on the due date to the Supplier of all sums due to the Supplier for sales of the Products.

 

Supply of products

The Supplier shall use its reasonable endeavours to accept and then meet all orders for the Products forwarded to it by the Distributor as soon as practicable, but the Supplier may, at its discretion, refuse any order that it reasonably considers it would be impracticable to attempt to meet. The Distributor acknowledges that the Supplier may supply other distributors or customers in priority to the Distributor.

Where the Supplier accepts and order, it will select a delivery method and place the ordered Products with such method within a reasonable time. Time of delivery is not of the essence

The Supplier may deliver an order in instalments and invoice for each instalment separately.

If a delivery is short or contains damaged Products, the Distributor must notify the Supplier within 5 Business Days of receipt. In the absence of such notification, the delivery shall be deemed to be correct and undamaged. The Supplier will make up any short delivery and replace damaged Products within a reasonable time and will usually do this on the next delivery to the Distributor.

The Supplier will allocate Vita Points to the Supplier for each order placed once paid for in full.

The Supplier may vary the Products as it thinks fit to exclude one or more of the Products or to make additions to the Products.

The Supplier may make changes to the specifications of the Products, provided the changes do not adversely affect the quality of the Products. The Supplier shall give notice of any changes to Product specifications to the Distributor as soon as reasonably practicable.

 

Supplier’s undertakings

The Supplier agrees that at all times during the Term it shall:

Devote to and operate a section of its website for the Supplier and allocate Vita Points (at the agreed rate) to the Supplier for each and every order received from customers using the Distributor’s section of the website.

Provide the Distributor with such information and support as the Supplier, in its sole discretion, considers appropriate to enable the Distributor to enable it to discharge its duties under this agreement properly and efficiently. This will include a login username and password for the Supplier’s website.

Supply any replacement Product as requested by the Distributor that is required to replace any defective Product supplied to customers. The Supplier may require that any Product claimed by a customer to be defective is returned to it for analysis to ensure that it is defective and, if so, the reason for such defect, prior to replacement.

 

Prices and payment

The prices to be paid by the Distributor to the Supplier for the Products are to be the prices as notified to the Distributor by the Supplier from time to time.

The Supplier shall give the Distributor 14 days’ notice in writing of any change in the prices for the Products.

Any and all expenses, costs and charges incurred by the Distributor in the performance of its obligations under this agreement shall be paid by the Distributor, unless the Supplier has expressly agreed in advance in writing to pay such expenses, costs and charges.

The Distributor shall pay the full amount invoiced to it by the Supplier within 30 days of the date of invoice.

As between the Supplier and the Distributor, the Distributor is solely responsible for the collection, remittance and payments of any or all taxes, charges, levies, assessments and other fees of any kind imposed by governmental or other authority in respect of the purchase, sale, importation, lease or other distribution of the Products.

At the end of each Year the Supplier will convert the Vita Points of the Distributor into a monetary equivalent and pay this amount (the amount being inclusive of VAT) to the Distributor.

 

VAT and taxes

All sums payable under this agreement, or otherwise payable by any party to any other party under this agreement are, unless stated, exclusive of any VAT chargeable on the supplies for which such sums (or any part of them) are the whole or part of the consideration for VAT purposes.

Where, under this agreement, any party makes a supply to any other party (Recipient) for VAT purposes and VAT is or becomes chargeable on that supply for which the supplying party is required to account to the [relevant] tax authority, the Recipient shall, subject to the receipt of a valid VAT invoice, pay the supplying party (in addition to, and at the same time as, any other consideration for that supply) the amount of such VAT.

Where any party is required by this agreement to reimburse or indemnify any other party for any cost or expense, that first party shall reimburse or indemnify the other party for the full amount of the cost or expense, including any VAT on that amount, except to the extent that the other party is entitled to credit or repayment for that VAT from any [relevant] tax authority.

 

Advertising and promotion

The Distributor shall:

  1. Advertise and promote the Products in accordance with the Mandatory Policies;
  2. display advertising materials and other signs provided by the Supplier;
  3. observe all directions and instructions given to it by the Supplier for promotion and advertisement of the Products; and not make any written statement as to the properties, benefits or quality of the Products without the prior written approval of the Supplier.

The Supplier shall:

  1. approve or reject, in its sole discretion, any promotional information or material or any advertising and promotional programme submitted by the Distributor within 14 days of receipt; and provide the Distributor with information on the advertising and promotion used by the Supplier and at the cost of the Distributor supply such quantities of promotional and advertising material as the Distributor shall reasonably request from time to time.
  2. The Distributor accepts that if it sells any Products online and not through the Supplier’s website, that it will not receive Vita Points for such sales.

 

Trade Marks

The Supplier grants to the Distributor the non-exclusive right, in the Territory, to use the Trade Marks in the promotion, advertisement and sale of the Products subject to this agreement. The Distributor acknowledges and agrees that all rights in the Trade Marks shall remain in the Supplier, and that the Distributor has and will acquire no right in them by virtue of the discharge of its obligations under this agreement, except for the right to use the Trade Marks as expressly provided in this agreement.

The Distributor shall market and sell the Products only under the Trade Marks, and not in association with any other trade mark, brand or trade name.

The Distributor shall comply with all rules for the use of the Trade Marks set out in the Mandatory Policies and shall not, without the prior written consent of the Supplier:

  1. alter or make any addition to the labelling or packaging of the Products displaying the Trade Marks;
  2. make any addition or modifications to the Products or to any advertising and promotional materials supplied by the Supplier; or
  3. alter, deface or remove any reference to the Trade Marks, any reference to the Supplier or any other name attached or affixed to the Products or their packaging or labelling.

The Distributor shall not sub-license, assign, transfer, charge, or otherwise encumber the right to use, reference, or designate the Trade Marks to any other party, except as otherwise expressly permitted under this agreement.

The Distributor shall not do, or omit to do, anything in its use of the Trade Marks that could adversely affect their validity or reputation.

The Distributor shall not, at any time during or within one year after termination of this agreement, in connection with any business similar to that of the Supplier, adopt, use, obtain, register or try to register without the prior written consent of the Supplier the words “Vita Sports” and/or a word or symbol or a combination of the two similar to the Trade Marks.

The Distributor shall promptly give notice to the Supplier in writing if it becomes aware of:

  1. any infringement or suspected infringement of the Trade Marks or any other intellectual property rights relating to the Products; or
  2. any claim that any Product or the manufacture, use, sale or other disposal of any Product, whether or not under the Trade Marks, infringes the rights of any third party.

The Supplier shall in its absolute discretion, decide what action to take in respect of any matter (if any) falling within clause 10.7 and the Supplier shall conduct and have sole control over any consequent action that it deems necessary and the Distributor shall on being so requested by the Supplier and at the Supplier’s cost assist in taking all steps to defend the rights of the Supplier including the institution at the Supplier’s cost of any actions which it may deem necessary to commence for the protection of any of its rights. The Supplier shall pay all costs in relation to that action and shall be entitled to all damages and other sums that may be paid or awarded as a result of that action

The Distributor shall not use the Trade Marks as part of the name under which the Distributor conducts its business, or any connected business, or under which it sells or services any products (except the Products), or in any other way, except as expressly permitted under this agreement.

Upon termination of this agreement for any reason, the Distributor shall immediately stop using all or any part of the Trade Marks.

 

Compliance with laws and policies

The Distributor shall at its own expense comply with all laws and regulations relating to its activities under this agreement, as they may change from time to time, and with any conditions binding on it in any applicable licences, registrations, permits and approvals.

The Distributor shall comply with the Mandatory Polices as the Supplier may update them from time to time.

 

Product liability insurance and product recalls

During the Term, the Supplier shall maintain product liability insurance with a reputable insurer of no less than £1,000,000 for any one occurrence and no less than £5,000,000 in total in any one year for any and all liability (however arising) for a claim that the Products are faulty or defective.

The Distributor undertakes to maintain appropriate, up-to-date and accurate records to enable the immediate recall of any Products or batches of Products from the retail or wholesale markets. These records shall include records of deliveries to customers (including batch numbers, delivery date, name and address of customer).

The Distributor shall, at the Supplier’s cost, give any assistance that the Supplier shall reasonably require to recall, as a matter of urgency, Products from the retail or wholesale market.

 

Limitation of liability

The Supplier has obtained insurance cover in respect of its own legal liability for individual claims not exceeding £1,000,000 per claim. The limits and exclusions in this clause reflect the insurance cover the Supplier has been able to arrange and the Distributor is responsible for making its own arrangements for the insurance of any excess loss.

Nothing in the agreement limits any liability which cannot legally be limited, including liability for:

  1. death or personal injury caused by negligence;
  2. fraud or fraudulent misrepresentation; and breach of the terms implied by section 12 of the Sale of Goods Act 1979 or section 2 of the Supply of Goods and Services Act 1982 (title and quiet possession).

Subject to clause 13.2:

  1. the Supplier’s total liability for damage to property caused by the negligence of its employees in connection with this agreement shall be limited to £1,000,000 for any one event or series of connected events;
  2. the Supplier’s total liability to the Distributor for all other loss or damage arising under or in connection with this agreement shall not exceed £100,000 in each Year of the Term. The Supplier’s total liability includes liability in contract, tort (including negligence), breach of statutory duty, or otherwise, arising under or in connection with the agreement.
    1. This clause 13.4 sets specific heads of excluded loss:
    2. subject to clause 13.2, the types of loss listed in clause 13.4 are wholly excluded by the parties;
    3. the following types of loss are wholly excluded:
    4. loss of profits;
    5. loss of sales or business;
    6. loss of agreements or contracts;
    7. loss of anticipated savings;
    8. loss of use or corruption of software, data or information;
    9. loss of or damage to goodwill; and
    10. indirect or consequential loss.

Terms implied by sections 13 to 15 of the Sale of Goods Act 1979 and sections 3 and 5 of the Supply of Goods and Services Act 1982 are, to the fullest extent permitted by law, excluded from this agreement.

 

Termination

Without affecting any other right or remedy available to it, either party may terminate this agreement with immediate effect by giving written notice to the other party if:

  1. the other party fails to pay any amount due under this agreement on the due date for payment and remains in default not less than 14 days after being notified in writing to make such payment;
  2. the other party commits a material breach of this agreement (other than failure to pay any amounts due under this agreement) which breach is irremediable or (if that breach is remediable) fails to remedy that breach within a period of 14 days after being notified in writing to do so;
  3. the other party repeatedly breaches any of the terms of this agreement in such a manner as to reasonably justify the opinion that its conduct is inconsistent with it having the intention or ability to give effect to the terms of this agreement;
  4. the other party suspends, or threatens to suspend, payment of its debts or is unable to pay its debts as they fall due or admits inability to pay its debts;
  5. the other party suspends or ceases, or threatens to suspend or cease, carrying on all or a substantial part of its business;
  6. the other party (being an individual) dies or, by reason of illness or incapacity (whether mental or physical), is incapable of managing their own affairs or becomes a patient under any mental health legislation;
  7. there is a change of control of the other party.

The Supplier may terminate this agreement on giving the Distributor 6 months’ notice in writing.

 

Consequences of termination

On termination or expiry of this agreement, clauses 1, 10, 15, 16, 18, 21, 22, 23, 24, 26, 27, 28, and 29 shall continue in force.

Termination or expiry of this agreement shall not affect any rights, remedies, obligations or liabilities of the parties that have accrued up to the date of termination or expiry, including the right to claim damages in respect of any breach of the agreement which existed at or before the date of termination or expiry.

On termination or expiry of this agreement:

  1. the Distributor shall immediately pay to the Supplier all of the Supplier’s outstanding unpaid invoices
  2. the Supplier shall have the option to buy from the Distributor any stocks of the Products at such price as the Supplier reasonably considers to be their current market value. To exercise the option, the Supplier must give notice to the Distributor within 14 days of termination or expiry of the agreement, stating the quantities of Products it wishes to buy. The Distributor shall deliver such Products to the Supplier within 14 days of receiving the Supplier’s notice, and the Supplier shall pay for the Products in full within 30 days of their delivery. The Distributor shall be responsible for the costs of packaging, insurance and carriage of the Products;
  3. if the Supplier chooses not to exercise its option to buy back the Products under clause 15.3(b), or purchases only part of the Distributor’s stocks of Products, the Distributor may for a period of 3 months following termination or expiry of this agreement, sell and distribute any stocks of the Products that it may have in store or under its control at the time. At the end of this period the Distributor shall promptly return all remaining stocks of the Products to the Supplier at the expense of the Distributor, or dispose of the stocks as the Supplier directs;
  4. if the Supplier chooses to buy back the Products under clause 15.3(b), or when the Distributor has disposed of its remaining stocks of Products under clause 15.3(c), the Distributor shall at the Supplier’s option promptly destroy or return all samples, technical pamphlets, catalogues, advertising materials, specifications and other materials, documents or papers that relate to the Supplier’s business that the Distributor may have in its possession or under its control (other than correspondence between the parties).

The termination or expiry of this agreement shall not of itself make the Supplier liable to pay any compensation to the Distributor, including compensation for loss of profits or goodwill.

Subject to clause 15.3, all other rights and licences of the Distributor under this agreement shall terminate on the date of termination or expiry of this agreement.

The Supplier may cancel any orders for Products placed by the Distributor before termination or expiry of this agreement if delivery would fall due after termination or expiry, whether or not they have been accepted by the Supplier. The Supplier shall have no liability to the Distributor in respect of such cancelled orders.

 

Confidentiality

Each party undertakes that it shall not at any time disclose to any person any confidential information concerning the business, affairs, customers, clients or suppliers of the other party, except as permitted by clause 16.2.

Each party may disclose the other party’s confidential information:

  1. to its employees, officers, representatives or advisers who need to know such information for the purposes of exercising the party’s rights or carrying out its obligations under or in connection with this agreement. Each party shall ensure that its employees, officers, representatives or advisers to whom it discloses the other party’s confidential information comply with this clause 16; and
  2. as may be required by law, a court of competent jurisdiction or any governmental or regulatory authority.

No party shall use any other party’s confidential information for any purpose other than to exercise its rights and perform its obligations under or in connection with this agreement.

 

Force majeure

Neither party shall be in breach of this agreement nor liable for delay in performing, or failure to perform, any of its obligations under this agreement if such delay or failure result from events, circumstances or causes beyond its reasonable control. In such circumstances the affected party shall be entitled to a reasonable extension of the time for performing such obligations. If the period of delay or non-performance continues for 3 months, the party not affected may terminate this agreement by giving 30 days’ written notice to the affected party.

 

Entire agreement

This agreement constitutes the entire agreement between the parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.

Each party agrees that it shall have no remedies in respect of any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this agreement. Each party agrees that it shall have no claim for innocent or negligent misrepresentation based on any statement in this agreement.

 

Variation

No variation of this agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives).

 

Assignment and other dealings

The Distributor shall not assign, transfer, mortgage, charge, subcontract, delegate, declare a trust over or deal in any other manner with any of its rights and obligations under this agreement.

 

Waiver

A waiver of any right or remedy under this agreement or by law is only effective if given in writing and shall not be deemed a waiver of any subsequent right or remedy.

A failure or delay by a party to exercise any right or remedy provided under this agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict any further exercise of that or any other right or remedy. No single or partial exercise of any right or remedy provided under this agreement or by law shall prevent or restrict the further exercise of that or any other right or remedy.

 

Severance

If any provision or part-provision of this agreement is or becomes invalid, illegal or unenforceable, it shall be deemed deleted, but that shall not affect the validity and enforceability of the rest of this agreement.

If any provision or part-provision of this agreement is deemed deleted under clause 22.1 the parties shall negotiate in good faith to agree a replacement provision that, to the greatest extent possible, achieves the intended commercial result of the original provision.

 

Notices

Any notice given to a party under or in connection with this agreement shall be in writing and shall be:

  1. delivered by hand or by pre-paid first-class post or other next working day delivery service at its registered office (if a company) or its principal place of business (in any other case); or
  2. sent by email to the address specified above.

Any notice shall be deemed to have been received:

  1. if delivered by hand at the time the notice is left at the proper address;
  2. if sent by pre-paid first-class post or other next working day delivery service, at 9.00 am on the second Business Day after posting; and
  3. if sent by email, at the time of transmission, or, if this time falls outside business hours in the place of receipt, when business hours resume. In this clause 23.2(c), business hours means 9.00 am to 5.00 pm Monday to Friday on a Business Day.

This clause does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other method of dispute resolution.

 

Third party rights

This agreement does not give rise to any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this agreement.

 

No partnership or agency

Nothing in this agreement is intended to, or shall be deemed to, establish any partnership or joint venture between the parties or constitute either party the agent of the other party.

Each party confirms it is acting on its own behalf and not for the benefit of any other person.

 

Set-off

All amounts due under this agreement shall be paid in full without any set-off, counterclaim, deduction or withholding (other than any deduction or withholding of tax as required by law).

 

Interest

If a party fails to make a payment due to the other party under this agreement by the due date, then the defaulting party shall pay interest on the overdue sum from the due date until payment of the overdue sum, whether before or after judgment.

Interest under this clause will accrue each day at 4% a year above the Bank of England’s base rate from time to time, but at 4% a year for any period when that base rate is below 0%.

 

Governing law

This agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.

 

Jurisdiction

Each party irrevocably agrees that the courts of England and Wales shall have non-exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this agreement or its subject matter or formation.

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