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EXHIBIT 10.1
EXCLUSIVE DISTRIBUTION AGREEMENT
AGREEMENT made between by and between The Rose Group Corporation of
Nevada, a corporation having its principal place of business at 1535 Northgate
Boulevard, Sarasota, Florida, United States, (hereinafter "RGC") and Brio AB
(publ.), a corporation having its principal place of business at S-283 83 Osby,
Sweden (hereinafter "Brio" (collectively referred to as the "Parties");
WHEREAS, Brio desires to sell its Products (defined below) in the
United States of America and RGC desires to be in the business of exclusively
marketing such products in such area;
WHEREAS, the Parties have reached an agreement through which Brio
will supply RGC with the Products (defined below), on an exclusive basis, to be
sold in the United States of America and RGC will purchase Products and sell
them in such area;
NOW, THEREFORE, the Parties hereby agree:
1. DEFINITIONS.
1.1 FORCE MAJEURE: means any strike, riot, storm, fire, explosion, act of
God, war, governmental action or other cause, such as embargoes,
failure of carriers, plant break-down, inability to obtain material or
transportation facilities or compliance with any law or regulation,
that is beyond the Parties' reasonable control.
1.2 PRODUCTS: means all prams, strollers, high-chairs and other baby
carriage type products and accessories to such products, all of which
Brio markets and sells from time to time.
1.3 TERRITORY: means the United States of America.
1.4 TRADEMARKS: means the trade names and the logos which Brio uses from
time to time in relation to the marketing of Products.
2. EXCLUSIVE DISTRIBUTION RIGHTS ETC.
2.1 RGC shall be the exclusive distributor of all Products in the
Territory. However, notwithstanding the foregoing, if RGC does not
during the first twelve (12) months immediately following the date of
this Agreement, or during any calendar year within the Term of this
Agreement purchase from Brio Products with an aggregate Brio net
invoice value of one million U.S. Dollars ($1,000,000)or more, then
Brio shall be entitled to terminate this Agreement within sixty (60)
days from the end of each such calendar year.
2.2 RGC shall purchase and sell the Products in its own name and for its
own account. RGC shall act as an independent trader as regards Brio
and RGC's customers. RGC
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is not authorized to act in the name of Brio or in any way bind or
commit Brio.
2.3 RGC may not promote sales of the Products to customers outside the
Territory. Any orders or inquiries received by RGC from any customer
outside the Territory shall be promptly offered to Brio. Any such
orders or inquiries that result in deliveries of Brio shall entitle
RGC to a commission amounting to ten (10) % of Brio's net invoice
value on such orders or inquiries.
2.4 Other than RGC's subsidiary Rosebaby.com, a Utah corporation, RGC
shall not appoint dealers, agents and/or sub-distributors without the
prior written consent of Brio; such consent shall not be unreasonable
withheld or delayed.
2.5 RGC shall not, through its subsidiary The Rose Group Corporation, a
Delaware corporation, during the term of this Agreement and for a
period of two (2) years thereafter directly or indirectly manufacture,
sell, represent or otherwise promote the sale of any product competing
with or any product likely to compete with the Products. This
subsection shall not apply to Rosebaby.com.
3. PRODUCTS ORDERS.
3.1 All orders placed by RGC with Brio for Products shall be in writing,
and shall specify the requested number and type of model of Product to
be shipped and shall be transmitted to Brio pursuant to the terms of
section 26 of this Agreement and such orders shall be subject to
Brio's written confirmation. Brio will supply the Products to RGC and
will, subject to its commitments to other parties and the right to
allocate on a non-discriminatory basis available supplies and
production, supply the Products to RGC in quantities required by RGC
for its sales of the products in the Territory.
3.2 RGC shall at all times exert all its best efforts to extend a market
for and to promote and maintain a demand for and to obtain maximum
sales of the Products throughout all areas of the Territory.
3.3 Unless otherwise agreed in writing, RGC shall carry all costs for its
sales promotion pertaining to the Products.
3.4 RGC shall inform Brio in writing on a monthly basis of all matters of
interest in the Territory, and, in particular, of progress in
marketing, customer contacts and competitors' activities and the
market situation.
4. PAYMENT FOR PRODUCTS ORDERED.
4.1 RGC shall pay Brio for Products ordered within sixty (60) days from
the date of shipment of such products, against bank guarantee. Payment
shall be made in U.S. Dollar ($) amounts. After the first shipments it
is the parties intention to achieve better terms, mainly regarding the
requirement of bank guarantee.
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4.2 Late payment by RGC shall be subject to penal interest at a rate which
shall not exceed the prime rate applied from time to time by the U.S.
Federal Reserve Bank increased by two (2) %.
5. PRICING OF PRODUCTS.
5.1 RGC shall pay Brio for the Products in accordance with the prices
negotiated between RGC and Brio and specified in Schedule A of this
Agreement. Such prices shall not include custom's duties, sales taxes,
excise taxes, or similar assessments or charges.
5.2 The prices specified in Schedule A of this Agreement remain in effect
until the beginning of the subsequent calendar year after signing of
this Agreement. The prices shall thereafter be adjusted for one (1)
year periods (including the calendar year subsequent to signing of
this Agreement) through negotiations between the parties. Such
negotiations shall commence not later than one (1) month before
expiration of any period. If the parties cannot agree upon adjustment
at the latest three (3) months after the negotiations' commencement,
either party may terminate this Agreement by giving the other party
written notice three (3) months in advance.
5.3 All payments to Brio by RGC shall be without deduction for taxes,
value added taxes, assessments, or other charges of any kind which may
be imposed by any national, local or other authority, except the
Swedish authorities, with respect to any amounts payable pursuant to
this Agreement, and such taxes, value added taxes, assessments or
other charges shall be assumed and paid by RGC provided, however, that
any such income taxes or taxes of a similar nature imposed upon Brio
by such non-Swedish authorities and paid by RGC shall be deductible by
RGC provided that RGC promptly furnished to Brio in original or
duplicate original tax receipt evidencing the payment of such income
taxes or other taxes to the appropriate tax authorities. The right to
deduct such taxes is limited to taxes that are allowed under the
applicable rules and regulations of Sweden as a credit against the
Swedish income taxes of Brio and to such allowed credits which can be
actually used by Brio due to its actual tax situations.
5.4 If RGC is required to deduct a tax from any payment to Brio and fails
to provide a receipt to Brio as prescribed in Section 5.3 above, then
RGC shall indemnify and hold Brio harmless for any damage, loss or
claims arising out of such failure.
6. SHIPPING PRODUCTS & RISK OF LOSS.
6.1 The Products shall be delivered Ex Works, Incoterms 2000 (with
amendments) or pursuant to other shipment terms that the Parties may
have agreed upon in writing prior to shipment of the Products for an
individual order.
6.2 In the event Brio anticipates a delay in delivery of any Products,
Brio shall promptly
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inform RGC and indicate the new delivery date anticipated by Brio. In
case of late delivery by Brio of any Products resulting in any loss or
damage to RGC, Brio shall, as RGC's sole remedy, pay to RGC liquidated
damages which for each full completed week of the delay shall be 0.50
percent of the agreed net price for the Products, but shall in no
event exceed a maximum of 4 percent of such price. Should RGC to
entitled to maximum liquidated damages, RGC shall, in addition, be
entitled to cancel the order of the Products delayed. Any delayed,
damaged or lost shipments made pursuant to this Agreement that result
in RGC's loss of sales or a customer shall count towards RGC's
aggregate sales for purposes of the one million dollar ($1,000,000)
requirement under paragraph 2.1 of this Agreement.
7. CERTIFICATION COSTS.
Brio shall compensate RGC for all fees RGC may incur in obtaining all
necessary certification of the Products in the Territory and shall
provide without charge RGC with Products samples required for use in
obtaining said necessary certification. Brio shall also provide any
necessary and available documentation and such materials required for
RGC to obtain said certification.
8. BROCHURES, SELLING AIDS AND SAMPLES.
Brio shall supply to RGC and bear the cost of:
8.1 Advertising materials, including, but not limited to, brochures
(printed in English language), images, photographs, videos, displays,
signs, banners, show materials or other advertising or selling tools
to a reasonable extent and of which Brio from time to time makes
available to its other distributors, however always limited to, on an
annual basis, a value corresponding to six (6) % of Brio's Ex Works
price to RGC ; and
8.2 Samples that may be required by RGC, including, but not limited to,
buyers' samples, sales and marketing samples, testing samples, testing
for certification samples and other samples as needed for each and
every Product to a reasonable extent and of which Brio from time to
time makes available to its other distributors. The parties agree to
discuss additional supply of samples in connection with campaigns.
9. AFTER-SALES SERVICE.
Brio shall to a reasonable extent provide RGC with the following:
9.1 Training by RGC personnel in the areas of customer service and repair
of Products and/or arrangement for a separate repair facility to be
maintained for the entire Term of this Agreement in the United States;
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9.2 Training materials, technical materials and, at a sufficient time
prior to the start of shipments of Products, relevant technical
documentation and drawings then available for the after sales service
of Products;
9.3 Spare parts on Products Brio has shipped to RGC, including a
sufficient supply, provided in advance, of spare parts most likely to
be needed by RGC to repair any of the Products;
9.4 Training materials, technical materials, any other relevant
documentation and parts for customer self-repair of Products sold by
RGC.
10. INTELLECTUAL PROPERTY RIGHTS
If a person or business entity not a party to this Agreement brings a
claim alleging patent or trademark infringement, Brio will hold
harmless, defend and indemnify RGC from any liability resulting from
such claim. RGC will cooperate with Brio in handling, defending or
otherwise resolving such claim by making available to Brio all
relevant personnel and files and by responding promptly to all
reasonable requests from Brio.
11. QUALITY REQUIREMENTS
11.1 RGC shall, pursuant to paragraph 7 of this Agreement, submit all
Products for certification and shall not sell such products that do
not comply with all applicable laws and regulations in the Territory
with respect to safety, health and the use of the Products and will
keep Brio fully advised of such laws and regulations so as to ensure
that Brio will be able to modify or alter the Products and manuals and
other Product documentation to the extent required for such
compliance.
11.2 RGC shall properly inform and instruct its customers of the contents
of any manuals and instructions for the use of the Products as may be
issued by Brio and furnished to RGC from time to time after Brio has
properly informed and instructed RGC regarding the same.
12. WARRANTIES AND DISCLAIMER OF LIABILITY
12.1 Brio warrants and represents as of the date hereof that:
(i) it has no arrangements or understandings with third parties
which in any way impair the ability of Brio to grant to RGC the
rights pursuant to this Agreement;
(ii) to the best of its knowledge the Products does not infringe
patents or other property rights of any third party;
(iii) to the best of its knowledge the Trademark do not constitute
infringement of patents or other property rights of any third
party; and
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(iv) the Products supplied by Brio to RGC at the date of delivery
and twenty-four (24) months thereafter will be free from
defects in designs, workmanship and material provided the
Products are used for their intended use and that the storing,
handling and use of the Products comply with manuals and other
instructions provided by Brio from time to time.
12.2 Brio's obligations for any Products under the warranty of Section
12.1(iv) will expire twenty four (24) months after the date of
delivery to RGC and is subject to Brio being notified in writing by
RGC within thirty (30) days after a non-conformity with the warranty
is discovered or should have been discovered upon a careful
inspection.
12.3 In the event of a defective Product, Brio shall in its option and as
RGC's sole remedy, either (i) replace such Product or defective parts
of such Product if such partial replacement will remedy the defect, or
(ii) within a reasonable period of time repair such defect.
12.4 Except as the parties may otherwise expressly agree in writing with
specific reference to the provisions of this Section 12, the
provisions hereof shall apply notwithstanding any other provision of
this or any other agreement between the parties, and shall in any
event survive the expiration and any termination of this Agreement.
13. TRADEMARK.
13.1 Brio hereby grants RGC, subject to the conditions of this Agreement
the exclusive right to use the Trademark in the Territory upon or in
relation to the Products. RGC may not use the Trademark for any other
purpose than the promotion and sale of the Products.
13.2 RGC hereby acknowledges that Brio is the owner of the Trademark and
that Brio shall remain the owner of the Trademark during the term of
this Agreement and thereafter.
13.3 On termination or expiration of this Agreement, RGC shall not, have
any right to use the Trademark or to represent itself as being
connected with Brio.
13.4 If, during the term of this Agreement, RGC shall become aware of any
infringement of any intellectual property right of Brio relating to
the Products or of any acts of unfair competition involving the
Trademark within the Territory, RGC shall promptly inform Brio
thereof. Brio shall have the right in its sole discretion to take such
legal action as it deems necessary to enjoin said infringement or act
of unfair competition, in which case Brio shall bear all costs and
expenses of the action and enjoy all benefits thereof. If Brio so
requests, RGC shall at
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Brio's cost assist Brio to the best of its ability.
14. PRODUCTS LIABILITY INSURANCE.
Brio shall maintain in effect a product liability insurance policy
with limits up to at least three million dollars ($3,000,000) and
shall include RGC as an additional insured under said policy.
15. FAVORED TERMS.
If, during the Term of this Agreement or any Renewal period
thereafter, Brio shall sell any Products to its distributors in Canada
and Mexico on terms that are more advantageous to RGC than the terms
contained herein, such more advantageous terms, or terms at least as
advantageous to RGC, shall thereafter apply, by express incorporation
or impliedly, as if expressly incorporated herein, so long as those
terms remain effective for the distributors mentioned.
16. REPRESENTAIONS AND WARRANTIES.
16.1 EXCLUSIVITY. Brio represents and warrants that as of the date of this
Agreement there are no other distributors authorized to sell Products
in the Territory.
16.2 PATENT OR TRADEMARK INFRINGEMENT. Brio represents and warrants that
that, to its knowledge, the sale of Products by RGC or any other
authorized dealer does not infringe upon the patent, trademark or
other intellectual property rights of any person or business not a
party to this Agreement.
17. TERM OF AGREEMENT.
Subject to Section 2.1, 5.2 and 19, this Agreement is effective from
the date hereof and continues for three (3) calendar years commencing
from 12:00 a.m. of the date immediately succeeding the date of first
shipment of Products is received by RGC ("Term").
18. RENEWAL OF AGREEMENT.
Subject to Section 2.1, 5.2 and 19, RGC has the right to and may, at
its option, renews this Agreement for another Term of one (1) calendar
year. In the event that RGC intends to renews this Agreement, RGC must
provide written notice of its intention, transmitted pursuant to
section 26 of this Agreement, at least two (2) months before the
expiration of the Term of this Agreement.
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19. TERMINATION
19.1 Either of the Parties may terminate this Agreement by written notice
to the other party, pursuant to section 26 of this Agreement,
effective immediately in the event that:
19.1.1 A judicial body of competent jurisdiction in the United States (in the
case of RGC) or Sweden (in case of Brio) determines that one of
Parties is insolvent or bankrupt;
19.1.2 The other Party files a petition in bankruptcy or has such a petition
filed against it and such petition is not dismissed or withdrawn
within sixty (60) days thereafter;
19.1.3 A receiver, trustee or other custodian is appointed for all or
substantially all of the assets of the other Party;
19.1.4 An assignment is made by or on behalf of the other for the benefit of
creditors;
19.1.5 A government expropriates or condemns all or substantially all of the
assets or the capital stock of the other or of any lesser portion of
such assets or capital stock, if the result would materially or
adversely affect the ability of the other to fulfill its obligations
hereunder; or
19.1.6 The other Party dissolves or liquidates, other than pursuant to a
merger, amalgamation or other corporate reorganization to which it is
a party;
19.2 If either of the Parties should be subject to any of the events
described in section 19.1 of this Agreement, such Party shall
immediately notify the other Party, pursuant to section 26 of this
Agreement, of the occurrence of such event.
19.3 This Agreement may be terminated upon thirty (30) days written notice,
transmitted pursuant to section 26 of this Agreement, by RGC or Brio
in the event that the other Party breaches any of the terms of or any
of its obligations under this Agreement and does not remedy,
confirming such remedy in writing pursuant to either section 26 of
this Agreement or by facsimile to the non-breaching party, its breach
within those 30 days.
19.4 Termination of this Agreement by either of the Parties, shall not
waive or otherwise prejudice the legal rights, duties or remedies of
either Party, including but not limited to the right to sue for and
recover any goods for which payment was made prior to delivery,
payments for goods delivered.
20. RIGHTS AND OBLIGATIONS UPON TERMINATION.
Upon Termination of This Agreement by Either of the Parties:
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20.1 RGC shall have the right to continue selling Products in the Territory
until its inventory of Products is depleted, however in no case for
more than ninety (90) days from the date of termination.
20.2 RGC shall have the right to continue using the Trademark in the
Territory in order to deplete its inventory, however in no case for
more than ninety (90) days from the date of termination;
20.3 Termination by either of the Parties shall not create liability to the
other party for any damage, expenditures, or losses of profits or
prospective profits of any kind or nature sustained or arising out of
alleged to have arisen out of alleged to have arisen out of such
Termination. The Termination of the Agreement shall not, however,
relieve or release either of the Parties from delivering accepted
orders or to making payments for delivered Products pursuant to this
Agreement.
21. FORCE MAJEURE.
Neither of the Parties shall be liable for any loss, injury, delay
damage or other casualty suffered by the other Party ("Injured Party")
as a result of Force Majeure and any failure or delay in performance
of any of the Injured Party's obligations under this Agreement because
of Force Majeure causes shall not be considered a breach of this
Agreement. If the performance of any of the obligations of this
Agreement shall be suspended due to Force Majeure causes for a period
of two (2) months and such suspension shall have a material adverse
effect on the Injured Party, either of the Parties may give notice,
pursuant to section 26 of this Agreement, requesting consultation
regarding such suspension. If the Parties fail to resolve such
concerns as they may have in a written agreement within thirty (30)
days from the aforesaid notice, either of the Parties shall have the
right to Terminate this Agreement. It is expressly agreed that in the
event of termination under this section the Party electing to
terminate will incur no liability to the other Party for any default
in performance of any obligations under this Agreement arising from
the exercise of the termination rights provided in this section.
22. EFFORTS.
Each of the Parties shall employ its best reasonable efforts and
facilities to secure the maximum sales distribution in the Territory.
23. ASSIGNMENT.
The rights and obligations of the Parties to this Agreement are not
assignable without express consent from the non-assigning Party.
24. BINDING EFFECT.
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This Agreement shall bind and inure to the benefit of the Parties,
their successors and assigns.
25. TIMES AND DATES.
All times and dates computed to for purposes of this Agreement shall
be based on United States Eastern Standard Time.
26. NOTICE.
All notices provided in relation to this Agreement shall be written
and transmitted between the parties by telefax with confirming air
mail. All such notices shall be addressed as follows:
If to RGC: Mr. Sheldon R. Rose
Chairman, C.E.O.
The Rose Group Corporation of Nevada
1534 Northgate Boulevard
Sarasota, Florida 34234-4760
Excluding purchase orders and written acceptance
documents, all notices to RGC shall provide a copy to:
David A. Einhorn, Esq.
Anderson Kill & Olick, P.C.
1251 Avenue of the Americas
New York, New York 10023-1082
U.S.A.
If to Brio: Mr. Johan Holmgren
Managing Director
Brio AB
S-283 83 Osby
Sweden
27. NON WAIVER.
If either of the Parties waives or fails to exercise any of its rights
or options under this Agreement at any time during or after the Term
of this Agreement, such waiver or failure to act shall not constitute
a continuing waiver or be deemed to waive any of that Party's future
rights or options under this Agreement.
28. SEVERABILITY.
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If any provision(s) of this Agreement is held invalid by a court of
competent jurisdiction, such invalidity shall not affect the remaining
provisions of this Agreement, and they shall be given effect by the
Parties hereto, without the invalid provision(s), unless to do so
would substantially frustrate the purposes of this Agreement and the
expectations of the Parties. This Agreement shall not be amended,
except by written agreement signed by authorized representatives of
both Parties.
29. CHOICE OF LAW.
This contract shall be interpreted in an autonomous way, making
reference first to the objectives and the spirit of the contract, and
second to the general principles which stem from the corpus of the
national legal systems of both Parties to the contract.
30. HEADINGS.
Headings or other titles or paragraphs of this Agreement are solely
for the convenience of the Parties and shall be given no effect
whatsoever when interpreting the provisions herein.
IN WITNESS WHEREOF, the Parties have executed this Agreement
effective as of the date of last signature hereto.
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Mr. Sheldon R. Rose Date: 3/30/00
Chairman, C.E.O. ----------------------------------
The Rose Group Corporation of Nevada /s/ Sheldon R. Rose
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Mr. Johan Holmgren/Mr Bengt Ivarsson Date: 4/4/00
Managing Director ----------------------------------
Brio AB (publ.) /s/ Bengt Ivarsson
/s/ Johan Holmgren
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