Selective Distribution Agreement
iS CLINICALSELECTIVE DISTRIBUTION AGREEMENT
THIS SELECTIVE DISTRIBUTION AGREEMENT is entered into as of the Commencement Date (defined below) by and between Stern Laser (Pty) Ltd located at 35 Ferguson Road, 4th Floor, Illovo, South Africa (“DISTRIBUTOR”) and [Reseller name and address] (“RETAILER”).
SCIENCE OF SKINCARE, LLC, 3333 North San Fernando Blvd., Burbank, CA 91504 (“SCIENCE OF SKINCARE”, “iS”, or “Innovative Skincare”) is engaged in the manufacture of luxury skincare products bearing the “iS CLINICAL® by INNOVATIVE SKINCARE®” brand name and trademarks, as set forth on SCHEDULE A to this agreement (the “iS CLINICAL® PRODUCTS”). SCIENCE OF SKINCARE has invested significant sums in ensuring that its products are of the highest quality and have a luxury image. This includes the positioning and presentation of iS CLINICAL® PRODUCTS as luxury products and the provision of first-class pre-sales and after-sales service. It is of the utmost importance for SCIENCE OF SKINCARE that the distributors and retailers of its products support this reputation for excellence and luxury.
(A) DISTRIBUTOR is the exclusive distributor of iS CLINICAL® PRODUCTS for [South Africa] (“SELECTIVE DISTRIBUTION TERRITORY”), offering national coverage to a wide group of customers. DISTRIBUTOR supplies the iS CLINICAL® PRODUCTS only to retailers who have signed and are bound by a Selective Distribution Agreement and who respect the standards of quality and service associated with the iS CLINICAL® PRODUCTS and to authorized businesses offering licensed professional esthetic skincare services (“AUTHORIZED RETAILERS”).
NOW, THEREFORE, in consideration of the mutual promises above and the agreements contained herein, the parties hereby agree as follows:
1. APPOINTMENT. DISTRIBUTOR hereby appoints RETAILER as an AUTHORIZED RETAILER of iS CLINICAL® PRODUCTS in the TERRITORY. Unless otherwise agreed to in writing, TERRITORY shall be the country in which the RETAILER’s authorized place of establishment is located (according to SCHEDULE C). RETAILER undertakes to comply with the selective distribution criteria set out in SCHEDULE B (the “iSCLINICAL® SELECTIVE DISTRIBUTION CRITERIA”). SCIENCE OF SKINCARE through designated Distributor may vary the iS CLINICAL® SELECTIVE DISTRIBUTION CRITERIA from time to time, which shall become binding on the parties hereto and form an integral part of this agreement and shall replace all previous versions. Use of SCIENCE OF SKINCARE’S and the DISTRIBUTOR’S intellectual property (i.e., trademarks, logos, images, photos, documents, and layouts) by RETAILER or those acting under its auspices is subject to prior written approval by the DISTRIBUTOR. SCIENCE OF SKINCARE shall own all intellectual property associated with iS CLINICAL® PRODUCTS, promoting websites and social media, including but not limited to domain names and social media handles. SCIENCE OF SKINCARE and DISTRIBUTOR may, in their sole discretion, allow alternative brand guidelines with written authorization only.
2. RETAILER’S OBLIGATIONS. RETAILER may only sell the iS CLINICAL® PRODUCTS to end users and other AUTHORIZED RETAILERS and AUTHORIZED BUSINESSES in accordance with SCHEDULES B and C. RETAILER shall not sell, distribute, or otherwise make available the iS CLINICAL® PRODUCTS to distributors, resellers, or end-users outside the TERRITORY. DISTRIBUTOR may review the RETAILER’s compliance with this agreement from time to time. RETAILER shall cooperate with DISTRIBUTOR, respond promptly to any request for information, and provide access to all premises for such purpose upon reasonable request. Notwithstanding anything to the contrary, resale of professional iS CLINICAL® PRODUCTS to end users and eCommerce channels is strictly prohibited.
3. DISTRIBUTOR’S OBLIGATIONS. DISTRIBUTOR shall only sell the iS CLINICAL® PRODUCTS to AUTHORIZED RETAILERS. DISTRIBUTOR reserves the right to sell the iS CLINICAL® PRODUCTS directly to end users in the TERRITORY. For any sales and offers of sale to end users DISTRIBUTOR will adhere to the obligations set out in iS CLINICAL® SELECTIVE DISTRIBUTION CRITERIA. Notwithstanding anything to the contrary, resale of professional iS CLINICAL® PRODUCTS to end users and eCommerce channels is strictly prohibited.
4. TERMS AND CONDITIONS, PRICES, PAYMENT. RETAILER may purchase the iS CLINICAL® PRODUCTS in accordance with the terms of this agreement. RETAILER shall then display, market, and sell these products in accordance with the iS CLINICAL® SELECTIVE DISTRIBUTION CRITERIA. The terms and conditions for the sale and purchase of the iS CLINICAL® PRODUCTS, prices, payment, and delivery shall be agreed to in separate purchase agreements.
5. DURATION AND TERMINATION
5.1. This agreement begins on the COMMENCEMENT DATE and, subject to clause 5.2, shall continue for an initial term of two years and renew automatically for additional 1-year periods thereafter, unless terminated by either party with 30 days' notice.
5.2. DISTRIBUTOR reserves the right to terminate this agreement upon RETAILER’s material breach, provided if such breach is curable, RETAILER shall have 14 days of being notified to cure. The parties agree that any and all terms of the iS CLINICAL® SELECTIVE DISTRIBUTION CRITERIA are material terms within the meaning of this clause.
5.3. Termination of this agreement for any reason shall not affect any rights or liabilities accrued at the date of termination.
5.4. Upon termination DISTRIBUTOR shall have the option to buy from RETAILER any remaining stocks of iS CLINICAL® PRODUCTS at the net price paid by RETAILER for these products. If DISTRIBUTOR chooses not to exercise this option, RETAILER shall have the right to sell off any remaining stock within 3 months from the date of termination in accordance with the iS CLINICAL® SELECTIVE DISTRIBUTION CRITERIA. Any stock remaining after the sell-off period shall promptly be destroyed or returned to DISTRIBUTOR along with all iS CLINICAL® PRODUCTS, samples, technical pamphlets, catalogues, advertising materials, specifications and other materials, documents or papers that relate to the iS CLINICAL® PRODUCTS. RETAILER shall not be entitled to any compensation for loss arising as a result of such termination, whether compensation for loss of profits or goodwill, or otherwise.
DISTRIBUTOR may cancel any orders for iS CLINICAL® PRODUCTS placed by RETAILER before termination if delivery would fall due after termination, whether or not they have been accepted by DISTRIBUTOR. DISTRIBUTOR shall have no liability to RETAILER in respect of such cancelled orders.
6. FINAL PROVISIONS
6.1. This agreement (and any Schedules referred to in it) constitutes the entire agreement between the parties and supersedes all previous agreements between the parties relating to its subject matter.
6.2. RETAILER shall not, without the prior written consent of DISTRIBUTOR, assign, transfer, mortgage, charge, or deal in any other manner with this agreement or any of its rights and obligations under or arising out of this agreement (or any document referred to in it), or purport to do any of the same. RETAILER shall not subcontract or delegate in any manner any or all of its obligations under this agreement to any third party or agent.
6.3. DISTRIBUTOR shall have the right, at its sole discretion, to transfer any and all rights and obligations under this agreement to SCIENCE OF SKINCARE or to any other distributor appointed by SCIENCE OF SKINCARE for the relevant territory. The parties hereby acknowledge and agree that SCIENCE OF SKINCARE is the intended third-party beneficiary of this agreement and shall have all rights to bring any action directly to enforce its rights hereunder.
6.4. The parties acknowledge that by reason of their relationship hereunder they will have access to certain information and materials concerning their business plans, affairs, customers, clients, suppliers, customer lists, technology and products that is confidential and of substantial value to them, which value would be impaired if such information were disclosed to third parties. The parties agree that they shall not use in any way for their own account or the account of any third party, nor disclose to any third party, any such confidential information revealed to them by the other party.
6.5. RETAILER will defend, indemnify, and hold harmless DISTRIBUTOR, SCIENCE OF SKINCARE, and their respective directors, employees, agents, successors, and assigns from all claims, liability, damages, and expenses (including reasonable attorneys’ fees and costs) (collectively “Claims”) arising from breach of this Agreement, sales of the iS CLINICAL® PRODUCTS, or violation of law.
6.6. If any provision or part of any provision of this agreement is found by any court or other authority of competent jurisdiction to be invalid, illegal, or unenforceable, that provision or part-provision shall, to the extent required, be deemed not to form part of this agreement, and the validity and enforceability of the other provisions of this agreement shall not be affected. If a provision or part of any provision of this agreement is found illegal, invalid or unenforceable, the provision or part-provision shall apply with the minimum modification necessary to make it legal, valid and enforceable.
6.7. This agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the laws of the State of California, USA, without regard to any conflicts of law principles.
6.8. The parties irrevocably agree that the courts of Burbank, California, USA shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).
iS CLINICAL® SELECTIVE DISTRIBUTION CRITERIA
The RETAILER shall at all times comply with the following:
1. GENERAL REQUIREMENTS.
A. use its best endeavors to promote the sale of the iS CLINICAL® PRODUCTS;
B. employ, at its sole cost and expense, skincare professionals composed of a sufficient number of suitably qualified personnel to ensure the proper fulfillment of the RETAILER’s obligations under this agreement and this SCHEDULE B;
C. employ at least one team member within each brick-and-mortar storefront who has a clinical or medical background;
D. ensure that its sales force be trained in and comply with all iS CLINICAL® policies and guidelines and that each skin care professional employed by RETAILER participate in trainings provided by DISTRIBUTOR at least twice per year;
E. ensure that its sales force not disparage, denigrate, “run down” or make any negative comments regarding any product hereunder; maintain a professional appearance at all times; and not perform any of their duties while intoxicated in any manner or under the influence of any alcohol or illegal drug;
F. not solicit iS CLINICAL® PRODUCTS, or enter into a type of arrangement, wherein the sale of iS CLINICAL® PRODUCTS is made conditional in any way on a user’s purchase of another company’s products or services;
G. maintain and only sell from premises that reflect the clinical, professional and luxury image of the iS CLINICAL® by INNOVATIVE SKINCARE® brand name and the iS CLINICAL® PRODUCTS to include respected, high end medical spas, doctor’s offices, clinics, medical institutions, luxury spa and destination spa locations offering professional clinical skincare services, high-end pharmacies and boutiques with highly trained skincare professional sales staff, highly respected web stores where the clinical and luxury position of iS CLINICAL PRODUCTS is maintained;
H. provide pre- and after-sale services of the highest quality in line with the quality and clinical, luxury image of the iS CLINICAL® by INNOVATIVE SKINCARE® brand name and the iS CLINICAL® PRODUCTS;
I. offer and stock an adequate and representative range of iS CLINICAL® PRODUCTS;
J. display iS CLINICAL PRODUCTS in a prominent position within the RETAILER’s location in keeping with the stature and luxury positioning of the iS CLINICAL brand. iS CLINICAL PRODUCTS should be located on shelving and/or in display cabinets that are easily visible, well lit, kept clean of dust and fingerprints with packaging and marketing materials arranged in a tidy, organized, and detailed fashion;
K. maintain adequate sales and temperature-controlled facilities which are capable of storing iS CLINICAL® PRODUCTS at room temperature or cooler to ensure stable shelf life and store any heat sensitive products in a cool area, away from direct sunlight, and away from direct shelf lightening; if storage rooms and offices are not air conditioned at night, during weekends and holidays, store heat sensitive products in a cool location during hot seasons;
L. ensure adherence to all regulations and laws applicable at its place of business;
M. maintain a general reputation for honesty, integrity and good credit standing and shall maintain the highest quality standards;
N. abide by such marketing and public relations policies and guidelines as provided from time to time by DISTRIBUTOR, including the BRAND GUIDELINES below, Celebrity Mentions Statement, Diversion Statement, and INTERNET SALES POLICY below;
O. exert its best efforts to maintain and further enhance the luxury brand image of the iS CLINICAL® PRODUCTS;
P. not make any promises, representations, warranties or guarantees about the iS CLINICAL® PRODUCTS beyond those contained in the promotional materials, if any, supplied by the DISTRIBUTOR; and
Q. not alter or make any changes to any iS CLINICAL® PRODUCTS, and in particular it shall not remove or alter the model or serial number on any product or its packaging.
2. INTERNET SALES POLICY
A. iS CLINICAL® Products may be sold online only by AUTHORIZED RETAILERS on their authorized websites. RETAILER shall not establish or maintain any new branch, sales outlet or distribution depot or any new website for the sale of the iS CLINICAL® PRODUCTS without the prior written consent of DISTRIBUTOR.
B. Any sales on third-party e-commerce platforms are prohibited. Exceptions may be evaluated on a case-by-case basis and must be pre-approved in writing by DISTRIBUTOR. RETAILER shall ensure that, to the extent permitted by applicable law, approved third-party e-commerce platforms comply with all of the policies and requirements outlined in this agreement.
C. No unauthorized third-party e-commerce sales (in particular, but not limited to, eBay, Amazon, Strawberrynet) are permitted. DISTRIBUTOR reserves the exclusive right to suspend and/or terminate this agreement if RETAILER or any entity or person related to or under the direct or indirect control of RETAILER is found to be selling iS CLINICAL® PRODUCTS through unauthorized third-party e-commerce platforms. Such right is in addition to any claims for damages which may exist under the applicable law.
D. Active sales of iS CLINICAL® PRODUCTS are only permitted to clients, patients, and customers within the SELECTIVE DISTRIBUTION TERRITORY.
E. Approved use of SCIENCE OF SKINCARE’S and DISTRIBUTOR’S intellectual property is limited to the Retailer’s physical location(s) preapproved Social Media Channels or, if applicable, the pre-approved website of RETAILER. No intellectual property may be used on any unauthorized third-party e-commerce platform (in particular, but not limited to Amazon, eBay, Strawberrynet).
F. RETAILER utilizing a pre-approved authorized third-party website or platform for the sale of iS CLINICAL® PRODUCTS is fully responsible for ensuring that the presentation and all artwork is in compliance with this agreement, the iS CLINICAL SELECTIVE DISTRIBUTION CRITERIA and the luxury brand image of iS CLINICAL® PRODUCTS and updated within the time-frame requested by DISTRIBUTOR at time of notification. RETAILER’s authorized website and any authorized third-party website must fully comply with BRAND GUIDELINES below, any other requirements specified by DISTRIBUTOR, and at all times display the following language: “iS CLINICAL® products are formulated to be sold in conjunction with professional skin care direction. INNOVATIVE SKINCARE® recommends professional assistance to help select products best suited for your individual skin care needs. To arrange for a professional consultation with one of our skin care professionals, please contact us at (insert Distributor or Account contact information here).”
3. BRAND GUIDELINES
A. Branding Introduction – It is important to uphold the integrity of the brand within the design schemes of all marketing assets. Significant investment has been made in developing the iS Clinical brand and design the corresponding artwork. It is imperative to use the correct and consistent branding, in order to do the following:
3.1.A.1. Maintain a clear, strong, and consistent message
3.1.A.2. Unify our communications
3.1.A.3. Ensure the quality and integrity of the brand
3.1.A.4. Help to consistently build good relationships
3.1.A.5. Reflect brand image
3.1.A.6. Support brand values
3.1.A.7. Create trust within the company and outside
3.1.A.8. Preserve the quality and integrity of the brand
A. Brand Identity – The foundation of the brand is our product formulation. iS Clinical products are meticulously formulated using the most advanced technologies available. We use the highest-grade ingredients, pharmaceutical grade, and botanically sourced ingredients to ensure our formulas are not only powerful and efficacious, but also gentle, non-irritating, and easy to use. All marketing materials must message this Brand Identity clearly and concisely, without addition or subtraction.
B. Intellectual Property – Innovative Skincare owns a comprehensive intellectual property portfolio, including trademark, copyright, design rights and patent registrations, ensuring that our brand is protected from brand abuse and intellectual property infringement, on a worldwide basis.
C. Logo: All iS Clinical logos and logo types are to be used as provided, without alteration, and should not be layered with other effects or placed over images, unless approved by iS in writing. iS Clinical logos should appear in a prominent position to other artwork and never be subjugated to minor positions at the edges, bottoms, and corners of artwork. To ensure the iS Clinical brand’s strongest impact, do not modify or distort the logo.
D. Image Use – All Innovative Skincare imagery is to be used as provided, without alteration. Rendering product imagery in 3D is not permitted. iS imagery is not to be combined with imagery from any other brand or company, unless approved by iS in writing. Group product images are to be created by the corporate headquarters of iS only. All lifestyle imagery and stock images that are used with Innovative Skincare branding or marketing must come from or be approved by Innovative Skincare. This includes all photos of people, backgrounds, props, seasonal images, tec. Any stock imagery used in Innovative Skincare marketing collateral is only licensed to be used in the design provided, without alteration.
E. Social Media – All mentions of the iS Clinical brand via social media channels must abide by the Brand Guide and Celebrity Mentions Statement below.
F. Sharing Content – Be sure to practice due diligence when sharing user generated content by giving photo credit to the original creator
G. Consumer Engagement – Social media engagement helps to develop the relationship between the brand and consumers. Timely responses and engagement is a key part of our social media strategy. Checking Direct Messages, comments, Instagram Stories and tagged photos daily is essential.
H. PR Materials and Mockups – Retailers may use iS Clinical produced PR materials and mockups as provided by Innovative Skincare. Do not recreate or modify iS Clinical produced PR material images or verbiage. Celebrity and Influencer endorsements may only be reproduced using iS Clinical produced materials and may not be altered in any way.
I. PR Guidelines on Sharing – Distributors and Retailers are welcome to share editorials that are approved and released by Innovative Skincare.
J. Asset Creation & Alterations – Retailers are not permitted to create custom marketing materials or visual assets on behalf of the iS Clinical brand. Approved marketing materials and visual assets will be created by Innovative Skincare and provided by the Distributor.
PLACE OF ESTABLISHMENT
RETAILER’s authorized places of establishment is South Africa (such country, the “TERRITORY”)
RETAILER’s authorized website is the website operated under the domain
RETAILER shall not establish or maintain any new branch, sales outlet or distribution depot or any new website for the sale of the Products without the prior written consent of DISTRIBUTOR.
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Document Name: Selective Distribution Agreement
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