fsb2a9ex10a_royalsprng.htm


    
       

      CERTAIN
        PORTIONS OF THE EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL
        TREATMENT AND ALL NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE SECURITIES
        AND
        EXCHANGE COMMISSION

 

          DISTRIBUTORSHIP
      AGREEMENT

     

     

    THIS
      AGREEMENT IS MADE AS OF THE  24th DAY OF
      August,
      2007, by and between Royal Spring Water, Inc, (Supplier) a Nevada corporation
      and existing under the laws of Nevada, with its principal place of business
      at
      14553 Delano Street Suite 217 Van Nuys CA 91411, and Rhythm
      Structured Water Limited, (Distributor) a company organized and existing
      under the laws of the United Kingdom, with its principal place of business
      at
Waterside
      Court, Falmouth Road, Penryn, Cornwall, TR10 8AW, United
      Kingdom;

     

    ARTICLE
      I. DEFINITIONS

     

    When
      used
      in this Agreement, the following terms shall have the meanings indicated. The
      meanings shall be applied whether the singular or the plural form of the term
      is
      used.

     

     

    "Products"
      means the Products described in the attached Exhibit A, manufactured by supplier
      for the sale of the "Goods".  Supplier may change the specifications
      and design at its sole discretion at any time by mailing written notice of
      such
      changes to Distributor. Each change shall become effective within 30 days
      following the date notice thereof is mailed to Distributor.

     

     

    "Affiliate"
      means any company controlled by, controlling, or under common control with
      supplier.

     

     

    "Agreement"
      means this agreement, and the Exhibits, together with all amendments thereto.
      "Attachment" means any form or exhibit attached to this agreement.

     

     

    "Customer"
      means any person who purchases Products from Distributor.

     

     

    "Delivery
      Point" means Suppliers facilities located at Hereford Texas.

     

     

    "Goods"
      means those items described in exhibit A.

     

     

    "Products"
      means Goods, Products.

     

     

     "Territory"
      means the following geographic area or areas: United Kingdom

     

     

    "Trademark"
      means any trademark, logo, or service mark, whether or not registered, used
      to
      represent or describe the Products of Supplier, as set forth in Exhibit
      B.

     

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II. APPOINTMENT OF DISTRIBUTOR

     

     

    Appointment.
      Supplier hereby appoints Distributor as Supplier's exclusive distributor of
      Products in the Territory, and Distributor accepts that position.

     

     

    Referrals.
      If Supplier or any Affiliate is contacted by any party inquiring about the
      purchase of Products in the Territory, Supplier shall, or shall cause that
      Affiliate to, refer such party to Distributor.

     

     

    Term:  Two
      years from the time of signature of this agreement

     

     

    
      Cancellation
        of Agreement: Supplier may cancel this agreement at any time if Distributor
        has
        breached any of the terms and conditions of this agreement or in the event
        Distributor has not purchased at least a minimum of *||||||||||||||||||
        (40) foot containers * (||||||||||
        cases per
        container) during the two year term of this agreement, with a minimum of
        1
        container every two months. This is after the initial 6 months of pre-work
        to
        get the product and the brands in front of potential clients and Orders for
        the
        products. In the event Distributor has not breached any of the terms and
        conditions of this agreement the Distributor will have the right to extend
        his
        term by a further eight years, giving a potential total of ten years contract
        period.   In the event of such an Eight year extension,
        Distributor agrees to a minimum of *||||||||
        40 foot
        containers per month will be ordered for the remaining Eight years.

       

       

    

    Relationship
      of Parties. Distributor is an independent contractor and is not the legal
      representative or agent of Supplier for any purpose and shall have no right
      or
      authority (except as expressly provided in this Agreement) to incur, assume
      or
      create in writing or otherwise, any warranty on the part of Supplier. Supplier
      shall not exercise any control over any of Distributor's employees, all of
      who
      are entirely under the control of Distributor. Distributor shall be responsible
      for the acts and omissions of Distributor's employees. Distributor shall, at
      its
      own expense, during the term of this Agreement and any extension thereof,
      maintain full insurance under any Workmen's Compensation Laws effective in
      the
      state or other applicable jurisdiction covering all persons employed by and
      working for it in connection with the performance of this Agreement, and upon
      request shall furnish Supplier with satisfactory evidence of the maintenance
      of
      such insurance. Distributor accepts exclusive liability for all contributions
      and payroll taxes required under Federal Income Tax Law, Federal Social Security
      Laws and State Unemployment Compensation Laws or other payments under any laws
      of similar character in any applicable jurisdiction as to all persons employed
      by and working for it. Nothing contained in this Agreement shall be deemed
      to
      create any partnership or joint venture relationship between the
      parties.

     

    
       

      Sale
        of Products by Distributor. Distributor shall use its best efforts to
        distribute the Products and to fully develop the market for the Products
        within
        the Territory. The parties have consulted together and now agree that if
        Distributor's best efforts are used as provided in this Section, a minimum
        of
*||||||||||||||||||
        (40) foot containers of Products ("Annual Market Potential") will be purchased
        and distributed in the Territory during the two years of this Agreement.
        At the
        beginning of each subsequent year the parties will consult together in good
        faith and agree on the Annual Market Potential applicable to that year;
        provided, however, that if they cannot agree, the Annual Market Potential
        for
        the immediately Preceding year will apply to the current two years.

       

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Competing
      Products. Distributor agrees that it will not distribute or represent any
      Products in the Territory that compete with the Products during the term of
      this
      Agreement or any extensions thereof. This includes any future products or brands
      of products from the supplier. It is agreed that any such products or brands
      will first be offered to the Distributor for his territory.

     

     

    Advertising.
      Distributor shall be entitled, during the term of the distributorship created
      by
      this Agreement and any extension thereof, to advertise and hold itself out
      as an
      authorized Distributor of the Products. At all times during the term of the
      distributorship created by this Agreement and any extension thereof, Distributor
      shall use the Trademarks in all advertisements and other activities conducted
      by
      Distributor to promote the sale of the Products. Distributor shall submit
      samples of all proposed advertisements and other promotional materials for
      the
      Products to Supplier for approval including but not limited to web sites, Domain
      names, sales brochures, posters etc. Distributor shall not use any such
      advertisements or promotional materials without having received the prior
      written consent of Supplier to do so. Distributor shall not, pursuant to this
      Agreement or otherwise, have or acquire any right, title or interest in or
      to
      Supplier's Trademarks. Any such consent listed above shall not be unreasonably
      withheld and the Supplier agrees to make every effort to assist the Distributor
      in any and all ways to make the territory successful by not withholding any
      consent and should will actively encourage and assist in the creation of such
      material to be used for promotion.

     

     

    New
      Products. If Supplier or any Affiliate now or hereafter manufactures or
      distributes, or proposes to manufacture or distribute, any product other than
      the Products, Supplier shall immediately notify, or cause such Affiliate to
      notify, Distributor of that fact and of all details concerning that product.
      Distributor may request from Supplier distribution rights for that product
      in
      the Territory, or any portion thereof, and if so requested, Supplier shall
      negotiate, such distribution rights with Distributor in good
      faith.   If Distributor does not obtain those distribution rights
      or obtains them only for a portion of the Territory, and Supplier or an
      Affiliate later desires to offer those distribution rights for the Territory
      or
      any portion thereof to another party, Supplier shall first, or shall cause
      such
      Affiliate to first, make that offer in writing to Distributor on terms and
      conditions which shall be specified fully in that offer. That offer shall
      contain a full description of the subject product. Distributor may request,
      and
      Supplier shall promptly provide, or shall cause such Affiliate promptly to
      provide, further information concerning the product or the offer. If Distributor
      fails to accept such offer, Supplier or the Affiliate may then offer the product
      to another party for distribution in the Territory, but may not offer it on
      terms and conditions more favorable than those offered to Distributor. If
      Supplier or the Affiliate desires to make a better offer to another party,
      Supplier shall first, or shall cause the affiliate first to, make such better
      offer to Distributor in accordance with the procedure set forth above. The
      price
      of the offer for these further products shall not be made unreasonably high
      so
      as to cause the Distributor to reject such an offer. But shall be inline with
      all other Distributors pricing and the Suppliers general pricing.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
       

      Distributor
        Sales, Service and Storage Facilities. Distributor shall, at its expense,
        engage and maintain a sales service and handling organization in the Territory,
        staffed with such experienced personnel as are necessary to enable distributor
        to perform its obligations under this Agreement. Distributor shall, at its
        expense, maintain facilities and personnel in the Territory that will enable
        it
        promptly and satisfactorily to perform, at a reasonable price the sales,
        marketing and customer service of the Products sold by Distributor. To assist
        Distributor in this function, Supplier shall provide training, without charge,
        to any reasonable number of Distributor's personnel as Distributor shall
        designate. Distributor shall, at its expense, at all times store and maintain
        its inventory of Products in accordance with current, applicable instructions
        issued by Supplier from time to time. Distributor shall, at its expense,
        deliver
        one copy of a current sales brochure and literature, to each Customer either
        at
        the time of sale or as needed to present the product, at that time, Distributor
        shall, at its expense, fully explain and demonstrate to the customer the
        proper
        use of the Product. Distributor shall mail to Supplier, during the term of
        the
        distributorship created by this Agreement and any extension thereof, prompt
        written notice of the address of each location at which products are stored,
        and
        the address of each facility established by Distributor to sell and service
        the
        Products. Supplier may, through its designated agent, inspect all such locations
        and facilities and the operations conducted therein at any time during normal
        business hours.  Distributor shall supply a copy of the name and
        address of its customers after a sale has been made.  Distributor will
        get permission from its customer to use its name, company info and web address
        in press materials to be used by supplier. If this agreement were to be
        terminated by Supplier not due to breach of any of the terms and conditions
        of
        this agreement by Distributor then the Supplier shall agree a price with
        the
        Distributor for the customers gained by the Distributor over the agreement
        term.
        The price shall be mutually agreed, if this is not the case then a mutually
        agreed third party who is qualified in such matters shall be brought in to
        advise on the price and their decision would be deemed final by both
        parties.   In the event of termination by supplier due to breach
        of any of the terms and conditions of this agreement by Distributor, then
        Distributor will hand over to Supplier all the accounts they have secured
        and
        help with a smooth transition to a new distributor.  In the event
        Distributor terminates the agreement not due to  breach of any of the
        terms and conditions of this agreement by Supplier then Distributor will
        hand
        over to Supplier all the accounts they have secured and help with a smooth
        transition to a new distributor.

       

    

     

    Spare
      Parts and Products. Distributor shall keep in stock an adequate supply of
      the Products for the sales of Goods.

     

     

    Confidential
      Information. All information pertaining to the Products are recognized by
      Distributor to be secret and confidential and to be the property of Supplier.
      

     

     

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Those
      items shall at all times and for all purposes be held by Distributor in a
      confidential capacity and shall not, without the prior written consent of
      Supplier, (i) be disclosed by Distributor to any person, firm or corporation,
      excepting those salaried employees of Distributor who are required to utilize
      such items in connection with the sale, marketing and servicing of Products
      during the term of the distributorship created by this Agreement or any
      extension thereof, or (ii) be disclosed to any person, firm or corporation,
      or
      copied or used by Distributor, its employees or agents at any time following
      the
      expiration or termination of this Agreement or any extension thereof. Supplier
      may require as a condition to any disclosure by Distributor pursuant to this
      Section that any salaried employee to whom disclosure is to be made sign a
      confidentiality agreement, enforceable by Supplier, containing terms
      satisfactory to Supplier.

     

     

    ARTICLE
      III. TERMS OF PURCHASE AND SALE OF PRODUCTS 

     

    
      


       

      Purchase
        of Product. Distributor shall purchase its requirements for the Products
        from Supplier. Such requirements shall include purchasing and maintaining
        an
        inventory of Products that is sufficient to enable Distributor to perform
        its
        obligations hereunder,   Distributor shall buy sufficient
        Products to enable Distributor to meet the full demand for Products in the
        Territory. All purchases of Products by Distributor from Supplier shall be
        deemed to be accepted by Supplier at the time a bankable acceptable irrevocable
        letter of credit (“LC”) is opened in the name of supplier.  To the
        extent that LC is in compliance with the terms of this Agreement and drawn
        on an
        acceptable bank by suppliers bank, then Supplier shall perform in accordance
        all
        accepted orders. Supplier shall confirm its receipt and acceptance of each
        order
        within 5 days of receipt and approval of distributors LC by supplier’s bank. Or
        if the Distributor wishes to make payment in full for any order,   this is
        also acceptable by the Supplier.  Such payment must be made with in 7
        days of the order from Distributor providing the order to Supplier

       

    

     

    Purchases
      for Resale. All Products purchased by Distributor shall be purchased solely
      for commercial resale, excepting those Products reasonably required by
      Distributor for advertising and demonstration purposes. From time to time the
      Supplier will assist the Distributor in Marketing of products and Brands. This
      assistance shall be in the form of free product  when launching new
      products into the Distributor’s territory.

     

     

    
      Order
        Procedure. Each order for Products issued by Distributor to Supplier under
        this Agreement shall identify that it is an order and shall further set forth
        the delivery date or dates and the description and quantity of Products which
        are to be delivered on each of such dates. An order for Products provided
        by
        distributor shall not provide a delivery date of less than 30 days for the
        order
        to arrive at the port of Houston after the date that order is delivered to
        Supplier and the LC or receipt of funds is approved by suppliers bank such
        delivery date is to the port of Houston or any port of choice of distributor.
        The individual contracts for the sale of Products formed by Distributor's
        submission of orders to Supplier pursuant to the terms and conditions hereof
        shall automatically incorporate, to the extent applicable, the terms and
        conditions hereof, shall be subject only to those terms and conditions (together
        with all terms in orders which are contemplated by this Agreement) and shall
        not
        be subject to any conflicting or additional terms included in any documents
        exchanged in connection therewith. Notwithstanding anything in this Section,
        Supplier and Distributor may, by written agreement, modify the terms and
        conditions of this Agreement. Such changes must be approved in writing by
        both
        parties.

       

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

     

    Cancellation
      of Orders. All cancellation of orders by Distributor shall be in writing, or
      if not initially in writing, shall be confirmed in writing. If Distributor
      cancels an order, which has been accepted by Supplier, Distributor shall
      reimburse Supplier for any cost incident to such order incurred by Supplier.
      The
      Supplier shall set out the list of such costs in this agreement so as to show
      what potential ramifications a cancelled order could have on the
      Distributor.

     

     

    Purchase
      Price. The prices for Goods, and any discounts applicable thereto, are set
      forth in Exhibit A.   All prices are F.O.B. the Delivery
      Point.

     

     

    Price
      Changes. Supplier reserves the right, in its sole discretion, to change
      prices or discounts applicable to the Products. Supplier shall give written
      notice to Distributor of any price change at least 30 days prior to the
      effective date thereof. The price in effect as of the date of Distributor's
      receipt of notice of such price change shall remain applicable to all orders
      received by Supplier prior to that effective date. The Supplier shall not make
      any such price increases, to the Distributor solely for his territory and it
      shall be proved that the Supplier itself has applied these prices across the
      board to all Distributors and itself. These prices shall not be made detrimental
      so as to force the Distributor to cancel this agreement due to the product
      becoming uncompetitive in it’s markets.

     

     

    Packing.
      Supplier shall, at its expense, pack all Products in accordance with Supplier's
      standard packing procedure, which shall be suitable to permit shipment of the
      Products to the Territory; provided, however, that if Distributor requests
      a
      modification of those procedures, Supplier shall make the requested modification
      and Distributor shall bear any reasonable expenses incurred by Supplier in
      complying with such modified procedures which are in excess of the expenses
      which Supplier would have incurred in following its standard
      procedures.

     

     

    Delivery:
      Title and Risk of Loss. All deliveries of Products sold by Supplier to
      Distributor pursuant to this Agreement shall be made F.O.B. the Delivery Point,
      and title to and risk of loss of Products shall pass from Supplier to
      Distributor at the Delivery Point. Distributor shall be responsible for
      arranging all transportation of Products, but if requested by Distributor,
      Supplier shall, at Distributor 's expense if any, assist Distributor in making
      such arrangements. Distributor shall also procure insurance for the
      transportation of the Products, to the final destination in Distributor’s
      territory.

     

     

    Inspection
      and Acceptance. Promptly upon the receipt of a shipment of Products,
      Distributor shall examine the shipment to determine whether any item or items
      included in the shipment are in short supply. Within 5 days of receipt of the
      shipment, Distributor shall notify Supplier in writing of any shortages, which
      Distributor claims existed at the time of delivery. Within 5 days after the
      receipt of such notice, Supplier will inform insurance company of the claim
      of
      shortages, to determine, the loss at the time of delivery. All replacements
      of
      goods as a result of damage will be paid for from the supplier’s
      insurance.  All other claims are the responsibility of the Suppliers
      insurance Unless notice is given as provided in this Section, Distributor shall
      be deemed to have accepted such Products and to have waived all claims for
      shortages.

     

     

     

    
      
        
        

      

      
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    Payment.
      Upon shipping bill of lading presented to suppliers bank, Distributor’s LC will
      be paid to Supplier, unless it is already prepaid.

     

     

    U.S.
      Export Control. Supplier's obligations to sell and deliver Products shall be
      subject to such United States laws and regulations as shall, from time to time,
      govern the sale and delivery of goods for export from the United
      States.

     

    
      *-
        THIS INFORMATION HAS BEEN REDACTED FROM THIS AGREEMENT BASED UPON THE COMPANY’S
        REQUEST FOR CONFIDENTIAL TREATMENT OF SUCH INFORMATION. ALL NON-PUBLIC
        INFORMATION HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
        COMMISSION

    

    


     

     

    Royal
      Spring Water,
      Inc.                                               

    Supplier's
      Signature

     


       Its:
        /s/Harel
        Goldstein                                                 
DATE:  08/28/07
        
                 
            Harel Goldstein

           

        

      


     

    Bottled
      Water
      Company                                                 

    Distributor's
      Signature

     


      Its:
        /s/Peter
        Gifford                                                        
DATE:  08/28/07



            
        Peter Gifford


     

    


    
 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    


     

    


    EXHIBIT
      A

    


    PRICES  -RHYTHM
      STRUCTURED WATER

    


    


    Bottle
      size – 16.9 oz

     

    Water
      Bottler – Royal Spring Water Inc.

    Brand
–
      Rhythm Structured H20

    Cap
–
      Flat

    Bottles
      per case – 24 with shrink warp.

    
      Price
        per
        Case – *|||
        ||||| FOB
        Hereford

    

    


    


    


    


    PAYMENT
      TERMS

    


    Irrevocable
      Letter Of Credit payable of presentation of bill of lading for shipment with
      in
      five days from the issue of the order by Distributor

    


    


     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
      B

    


    Rhythm
      Structured H20

    
9