distribution & product supply
TERMS AND CONDITIONS

 

This Distribution and Product Supply Agreement is active & in effect the day the SunnaTan Professional Client (The “Authorized Distributor”) orders product and enters into business with
SunnaTan, owned and operated by Organic Tan Inc. (The “Company”) a corporation existing under the provincial laws of Alberta, Canada.

WHEREAS, The Company is in the business of providing unique branded solutions for spray tanning application and products and services for spray tanning;
WHEREAS, The Authorized Distributor wishes to obtain products and services from the Company in order to carry out spray tanning activities within a region in accordance with the terms of this Agreement; and
WHEREAS, The Company desires to provide products and services to the Authorized Distributor to carry out activities within a region.
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Authorized Distributor agree as follows:

 

1             INTERPRETATION

1.1           Definitions. Capitalized terms have the meanings set forth or referred to in this Section:

Agreement” has the meaning set forth in the preamble to this Agreement.
Approved Retail Location(s)” means a retail location(s) approved by the Company for the sale of its Products in accordance with this Agreement.  The initial SunnaTan Professional request form indicating the location of the business is determined to be the Approved Retail Location. Please refer to Schedule 2 for a listing of the Canadian locations that are unavailable for SunnaTan Professional distribution. It is not an exhaustive list. Please contact the company before moving locations in Canada.
Claim” has the meaning set forth in Section 9.1.
Competitive Product” means any tanning solutions or tanning extendersthat are not manufactured and sold by the Company. 
Intellectual Property” means the Trademarks, trade names (including, but not limited to Organic Tan and SunnaTan), logos or other symbols, copyrights (including, but not limited to copyright in the Manual and Videos), and inventions of the Company.
Manual” means the materials prepared by the Company and loaned to the Authorized Distributor setting out standards, methods, procedures, and techniques related to spray tanning and use of the Products. 
Notice” has the meaning set forth in Section 11.6.
Party” means a party to this Agreement (collectively the “Parties”).
Product” means the Company items
Trademarks” means the trademarks, both registered and unregistered, and logos, and any other marks or symbols listed in Schedule 1 - Trademarks.
Video” means the instructional video provided by the Company to the Authorized Distributor.

1.2           Currency. All amounts shall be in paid in the currency set out in the applicable price quotation. 

1.3           Sections and Headings. The division of this Agreement into sections and insertion of headings are for convenience of reference only and shall not affect the interpretation of this Agreement.

 

2               APPOINTMENT AND PRODUCT SUPPLY

2.1           Appointment and License. Subject to Section 4.5, the Company hereby appoints the Authorized Distributor as a distributor in the Approved Location(s).  Notwithstanding the foregoing, the appointment of the Authorized Distributor as a distributor of the Products in the Approved Location specifically excludes the right to distribute, directly or indirectly, any Products for use in association with sun tanning beds or in a retail location which offers sun tanning bed services. The Company also hereby grants to the Authorized Distributor the exclusive right and license to utilize the Intellectual Property in the Territory, subject to the terms and conditions of this Agreement. The Company reserves the right to utilize the Intellectual Property for its own benefit worldwide, including within the Territory. Nothing in this Agreement limits the Company’s right to enter agreements outside the Territory.  The grant of this appointment shall not in any way restrict the right of the Company to distribute the Products within the Territory. 

2.2           Authorized Distributor Restrictions. The Authorized Distributor agrees that, except with the prior written consent of the Company, it will:

(a)            only sell, or otherwise provide, spray tanning services and Products in the Approved Location;

(b)            not supply any of the Products in any retail location other than at the Approved Location(s);

(c)             not offer for sale (or otherwise) any Competitive Tanning Products; 

(d)            sell the Products to retail customers only and in accordance with Section 2.1 of this Agreement and shall not, without the prior written consent of the Company, sell any of the Products to other vendors for resale; and

(e)            not make any modifications to, or in any way vary the specifications, formulations, or packaging of the Products supplied to it. 

2.3           Manual and Video. The Company shall provide a copy of the Manual and Video to the Authorized Distributor during the Term and any Renewal Period, as the case may be, of this Agreement. The Authorized Distributor must supply or otherwise have access to a laptop computer (or similar device) in order to engage in video conferences with the Company, if requested by the Authorized Distributor. 

 

3               FEES AND TAXES

3.1           Taxes. All payments and fees shall be subject to all applicable regional taxes including GST/HST or other applicable taxes as the case may be.

 

4               PRODUCT PRICING AND SUPPLY

4.1           Pricing. During the Term and any Renewal Period of this Agreement, the purchase price for each Product purchased by the Authorized Distributor from the Company shall not be lower than the price that is offered on the Company website located at www.sunnatan.com or such other website designated by the Company from time to time.    

4.2           Ordering and Payment. All orders for Products may be made by the Authorized Distributor to the Company is through the Company online portal in accordance with the process set out in the Manual. All orders are subject to acceptance by the Company. The Company shall confirm receipt and acceptance of an order within five (5) business days. Payment for the order, once accepted, must be made prior to delivery for each purchase order. 

4.3           Shipping. The Company shall use commercially reasonable efforts to ship Products promptly. Product title and risk of loss transfer to the Authorized Distributor upon delivery.

4.4           Supply of Products. The Company will use reasonable efforts to have available sufficient Products to meet the Authorized Distributor’s orders, but the Company reserves the right to allot Products as it deems best. The Company reserves the right to modify the Product offerings and discontinue products as they see fit.

4.5           Pricing Changes. The Company has the right to change its Product prices at any time.

 

5               AUTHORIZED DISTRIBUTOR OBLIGATIONS

5.1           Use of Trademarks. The Authorized Distributor agrees and acknowledges that the rights granted herein to the Authorized Distributor to use the Trademarks applies only to their use in connection with spray tanning and the sale of the Products within the Territory and not elsewhere, and the Authorized Distributor further agrees:

(a)            to use the Trademarks only in connection with advertisement and operation of spray tanning and sale of the Products;

(b)            that the Company is the exclusive owner of the Trademarks and all goodwill associated therewith, and any unauthorized use of the Trademarks is and shall be deemed an infringement of the rights of the Company;

(c)             that the Authorized Distributor acquires no right, title or interest in the Trademarks, and any and all goodwill associated with the Trademarks ensures exclusively to the benefit of the Company and is the property of the Company and that upon expiration or termination of this Agreement, no monetary amount shall be assigned as attributable to any goodwill associated with any of the Authorized Distributor’s activities in the operation of spray tanning or sale of the Products;

(d)            during the Term and any Renewal Period and after termination or expiration of this Agreement for any reason whatsoever, not to dispute or contest for any reason whatsoever, directly or indirectly, the validity, ownership or enforceability of any of the Trademarks, nor directly or indirectly attempt to dilute the value of the goodwill attached to the Trademarks, nor counsel, procure or assist anyone else to do any of the foregoing;

(e)            to notify the Company promptly of any attempt, by any person other than the Company or another authorized distributor of the Company, to use the Trademarks, or any variation or imitation of this the Trademarks, and to notify the Company immediately of any claim, demand or cause of action involving the Trademarks that is threatened or instituted by any person against the Authorized Distributor and to allow the Company to undertake the defence of any such action.  In the event that the Company undertakes to take or defend any action with respect to the Trademarks, the Authorized Distributor shall co-operate fully with the Company and execute such documents and do such acts and things as, in the opinion of the Company, may be necessary to carry out such defence.  The Company makes no warranty, express or implied, as to the use, validity or enforceability of the Trademarks.  If the Company decides against undertaking the defence or prosecution of any litigation relating to the Trademarks, the Authorized Distributor shall not be entitled to do so without the prior written approval of the Company;

(f)              without the Company’s prior written consent, not to use any of the Trademarks as part of the Authorized Distributor’s corporate, partnership, trade or other legal name, or as part of the corporate, partnership, trade or other legal name of any corporation, partnership or other entity in which the Authorized Distributor has a direct or indirect interest;

(g)            to operate and advertise spray tanning and sale of the Products only under the Trademarks and under no other name or mark and use the Trademarks only with accompanying words or symbols approved in writing by the Company;

(h)            to use or display the Trademarks on all signs, forms, stationery, invoices and other materials only in the manner and form prescribed by the Company and as provided for in this Agreement and the Manual, including displaying logos in high resolution.

(i)              to observe such reasonable requirements with respect to copyright and Trademark notices, trade name registrations and other forms of marking as the Company may direct from time to time; and

(j)              its license to use the Trademarks and the copyrighted material is exclusive within the Territory and the Company, in its sole discretion, has the right itself to operate businesses under the Trademarks, and to grant other licenses in, to and under the Trademarks, on any terms and conditions the Company deems fit.

5.2           New Trademarks. In the event that it becomes advisable at any time in the sole discretion of the Company for the Authorized Distributor to modify or discontinue use of any of the Trademarks or use one or more additional or substitute names or marks, the Authorized Distributor agrees to do so within such reasonable time as the Company may require, and all costs incurred by the Authorized Distributor in complying with this section shall be borne by the Authorized Distributor.

5.3           Use of Manual and Video. The content of the Manual and Video is confidential and may only be disclosed to an individual employed by the Authorized Distributor for the sole purpose of providing spray tanning services in accordance with Section 5.4. The Authorized Distributor shall not make any copies of the Manual or Video.

5.4           Confidentiality. The Authorized Distributor acknowledges that certain information relating to the operation of spray tanning and formulation and specifications of the Products including, without limitation, the standards, methods, procedures and specifications provided in the Manual and Video, and the formulation of the Products, is owned by the Company and that all such information is of a proprietary and confidential nature and is a trade secret of the Company and shall be deemed confidential for the purposes of this Agreement.  The Authorized Distributor shall at all times, during and after the term of this Agreement, keep all such trade secrets and confidential information as secret and confidential and disclose such information to its employees only to the extent necessary for the operation of spray tanning and sale of the Products in accordance with this Agreement. Authorized Distributor shall be responsible for ensuring all employees sign confidentiality agreements to protect the Company’s confidential information and trade secrets.

5.5           Authorized Distributor Staff. All of the Authorized Distributor’s staff must be over age of majority and adequately trained to ensure proficiency in spray tanning procedures and techniques and Product knowledge.

5.6           Disposables. The Authorized Distributor must provide and ensure that all spray tanning operations and the sale of Products are in accordance with all applicable law including but not limited to applicable health laws and regulations and maintain the highest health standards.  In addition to the foregoing, the Authorized Distributor must provide and ensure that all clients use the following mandatory disposables for each service, namely gloves, foot stickies and lip wands and any other mandatory disposables as may be communicated by the Company to the Authorized Distributor from time to time. 

5.7           Insurance. The Authorized Distributor shall obtain, and maintain, for the Term of this Agreement and any Renewal Period hereunder, general liability insurance in accordance with industry standards. The Authorized Distributor shall have the Company added to the policy as an additional insured. From time to time upon request by the Company, the Authorized Distributor will provide certificates of insurance evidencing compliance with this Section 5.7. 

5.8           Quality Assurance Program. The Authorized Distributor agrees and acknowledges that the Company may audit the sale and distribution of the Products by the Authorized Distributor at Approved Locations which may include, but are not limited to, spot audit quality assessments and secret shopper audits at any time during the Term or any Renewal Period as the case may be. 

5.9           Quality Standards and Publicity Considerations.  The Authorized Distributor agrees that the foundation of this Agreement is that the Authorized Distributor will benefit from the association with the name and good reputation of the Company.  As a result, it is necessary that the Authorized Distributor: (i) conduct its respective business and other affairs in a manner that reflects well generally and on the association with the Company; (ii) does not do anything that brings disrepute upon the Company, or lessens or destroys the goodwill value of the Company and its Products; and (iii) operate its business and operations consistent with the best practices in its industry and that the Authorized Distributor will not do anything or omit to do anything which in the reasonable opinion of the Company is prejudicial to the image of the Company or its Products including but not limited to its quality standards. 

 

6               AUTHORIZED DISTRIBUTOR REPRESENTATION AND WARRANTIES

6.1           Compliance. The Authorized Distributor represents and warrants to the Company that its business is conducted, developed, and operated in accordance with good industry and business practices, and in accordance with all judgements, decrees, orders, laws, statutes, rules, regulations, government approvals and permits applicable to the Authorized Distributor.

 

7               MARKETING

7.1           Electronic  Marketing Material. The Authorized Distributor has unlimited access to the Company online portal for promotional materials that the Company may develop from time to time.  Customizable electronic material may be purchased from  the Company, at an additional cost as indicated on the online portal and the cost will depend on the material being customized.

 

8               LIMITED WARRANTY

8.1           Limited Warranty.  The Company represents and warrants that the Products will be free from defects in material and manufacture.  If the Products are defective, in the sole and exclusive opinion of the Company, the Authorized Distributor’s exclusive remedy shall be, at Company’s option, replace of the Products or refund of the purchase price.  The Company shall have no obligation under this Section 8.1 if the defect is the result of (i) improper storage, handling or use of the Product, (ii) use of the Product in conjunction with another product which is incompatible or of an inferior quality; or (ii) any damage to the Product by fire, explosion or any act of God or other cause beyond the Company’s control. 

NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, THE PROVISIONS OF THIS SECTION 8.1 CONSTITUTE THE AUTHORIZED DISTRIBUTOR'S AND ANY RELEVANT THIRD PARTY'S SOLE REMEDY UNDER THIS AGREEMENT WITH RESPECT TO ANY DEFECTIVE PRODUCTS OR BREACH OF WARRANTY.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 8.1 THE COMPANY MAKES NO REPRESENTATION, WARRANTY, OR CONDITION OF ANY KIND BY STATUTE, USAGE, CUSTOM OF THE TRADE OR OTHERWISE WITH RESPECT TO ANY PRODUCTS, AND THE COMPANY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS RELATING THERETO, INCLUDING, BUT NOT LIMITED TO, ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR ANY INTENDED OR PARTICULAR PURPOSE.

 

9               LIABILITY AND INDEMNIFICATION

9.1           Indemnification. The Authorized Distributor hereby agrees to indemnify and undertakes to defend the Company and its affiliates, and its and their respective shareholders, directors, officers, employees and agents and hold them harmless from all suits, proceedings, assessments, losses, claims, demands or actions of any nature or kind whatsoever (a “Claim”), directly or indirectly arising out of, or in any manner whatsoever associated or connected with:

(a)            the failure of the Authorized Distributor to pay when due any levies, taxes, or assessments that the Authorized Distributor may be required by applicable law to pay;

(b)            the Authorized Distributor’s spray tanning operations, and sale and use of Products;

(c)             the Authorized Distributor’s breach of any of its duties, obligations, covenants, representations or warranties under this Agreement; and

against any and all damages, costs, expenses and fees (including, without limitation, reasonable legal expenses and fees), losses, fines, or penalties incurred by or on behalf of any of them in the investigation or defence of any and all Claims.

9.2           Limitation of Liability.  NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, REGARDLESS OF THE FORM OR CAUSE OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, OR THE NUMBER OF CLAIMS, AND WHETHER IN RESPECT OF A BREACH OR DEFAULTIN THE NATURE OF A BREACH OF WARRANTY, CONDITION OR FUNDAMENTAL TERM OR A FUNDAMENTAL BREACH, OR OTHERWISE: (A) THE COMPANY SHALL NOT HAVE ANY LIABILITY TO THE AUTHORIZED DISTRIBUTOR FOR ANY ECONOMIC, CONSEQUENTIAL, INDIRECT, INCIDENTAL, AGGRAVATED, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, ANY LOST REVENUES OR PROFITS) ARISING OUT OF THIS AGREEMENT, AND (B) THE COMPANY’S LIABILITY FOR ANY CLAIM ARISING OUT OF THIS AGREEMENT OR IN ANY WAY RELATED TO THE PRODUCTS SHALL NOT EXCEED ACTUAL, DIRECT, PROBABLE DAMAGES, NOT TO EXCEED THE PURCHASE PRICE OF THE PRODUCTS THAT ARE THE SUBJECT OF SUCH CLAIM, WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE AND WHETHER OR NOT COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

10           TERMINATION

10.1        Termination.  This Agreement may be terminated:

(a)            Default – upon the failure or neglect of either Party to comply with any of the terms and provisions of this Agreement, and the same is not corrected by the defaulting party within thirty (30) days of such Party’s receipt of written demand from the other Party that the same be corrected. 

(b)            Insolvency - in the event that either Party be adjudged insolvent or bankrupt, or upon the institution of any proceedings by or against it seeking relief, reorganization or arrangement under any laws relating to bankruptcy or insolvency which proceedings are not dismissed within sixty (60) days, or upon any assignment for the benefit of creditors, or upon the appointment of a receiver, liquidator or trustee of any of its property or assets, or upon the liquidation, dissolution or winding up of its business, then and in any such events this Agreement may forthwith be terminated or cancelled by the other Party upon giving written notice thereof, and upon the giving of such notice this Agreement shall terminate forthwith.

(c)             Acquisition of Authorized Distributor - in the event of the direct or indirect taking over or assumption of control of the Authorized Distributor or substantially all of its assets by any third party, the Company shall have the right to terminate this Agreement at any time thereafter upon giving written notice thereof to the Authorized Distributor and upon the giving of such notice this Agreement shall terminate.

10.2        Termination by the Company. In addition to the terminating events provided for in Section 10.1, each of the following events shall, at the option of the Company and without prejudicing any other rights it may have, constitute a terminating event:

(a)            if the Authorized Distributor makes any of the Products available for sale outside of the Approved Location;

(b)            if any information furnished by or on behalf of the Authorized Distributor pursuant to or in connection with this Agreement proves to have been false in any material respect;

(c)             if any change occurs in the constitution, management, control or the financial or other circumstances of the Authorized Distributor which, in the opinion of the Company is materially detrimental to the interest of the Company and, in particular, but without limiting the generality of the foregoing, if any interest in the Authorized Distributor is acquired by any entity engaged in any business which, in the opinion of the Company, is deemed to compete with the business of the Company. 

10.3        Effects of Expiration or Termination. Upon expiration or termination of this Agreement, the Authorized Distributor shall within thirty (30) days from the termination:

(a)            return the Manual and Video and any other confidential information in the possession or control of the Authorized Distributor to the Company;

(b)            provide any unused Product to the Company atthe Authorized Distributor’ s cost; and

(c)             cease the use of all Trademarks and provide any Trademark bearing materials to the Company.

 

11           MISCELLANEOUS

11.1        Independent Contractor. Nothing in this Agreement shall be construed to constitute the Authorized Distributor or any person employed or engaged by the Authorized Distributor as an employee, partner or agent of Company nor shall either Party have any authority to bind the other in any respect, it being intended that each shall remain an independent contractor responsible only for its own affairs and actions.

11.2        Assignment. The Authorized Distributor shall not have the right to assign this Agreement in whole or in part without Company's prior written consent, not to be unreasonably withheld.  The Company may assign its rights, duties and obligations under this Agreement upon prior written Notice to the Authorized Distributor.

11.3        Amendment. This Agreement and the Schedules attached hereto may not be amended or modified in any way without the written consent of both Parties. Notwithstanding the foregoing, the Company may amend the Schedules without the consent of the Authorized Distributor, in accordance with the terms of this Agreement.

11.4        Further Assurances. Each Party to this Agreement shall do all such further acts and shall execute all such further documents and assurances as any other Party reasonably requests in order to carry out the terms of this Agreement.

11.5        Survival. All obligations of the Company and the Authorized Distributor which expressly or by their nature survive termination or expiration or transfer of this Agreement shall continue in full force and effect subsequent to and notwithstanding such termination or expiration or transfer and until they are satisfied or by their nature expire.

11.6        Notices. All notices, consents and approvals (a "Notice") permitted or required to be given under this Agreement shall be in writing and shall be deemed to be sufficiently and duly given if set forth in writing and delivered personally or, by electronic mail.  Any Notice so given or made shall be deemed to have been given or made and received on the day of delivery.

Notice to Company:     

Organic Tan Inc.

2920 23rd Avenue S.W.

Calgary, AB T3E 0J1

Email: info@organictan.ca                   

11.7        Counterparts. This Agreement may be executed in counterparts and each counterpart when so executed and delivered shall be deemed an original.

11.8        Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta, Canada, and the federal laws Canada applicable herein. The Parties irrevocably consent to the exclusive jurisdiction of the courts in the Province of Alberta in the judicial centre of Calgary. 

11.9        Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written of any of the Parties in respect of the subject matter hereof.

 

SSCHEDULE 1 –  TRADEMARKS

REGISTERED TRADEMARK:

 

Registration Number TMA887075

 

 SCHEDULE 2 – LOCATION RESTRICTIONS

These locations are not available for SunnaTan Professional distributors to advertise their services & operate their primary business in.

This list is not exhaustive as each location has a unique territory line surrounding them. For more detailed restrictions, please contact the company directly.
These locations are subject to change.