Milbon USA, Inc. (hereinafter “Milbon”) distributes hair and cosmetic products named PLARMIA and Milbon Hair Care Collection as well as professional hair colorants and lighteners (“Products”). Milbon has contracted with Premier Beauty Supply (“Distributor”) to distribute its Products to (a) Licensed Professional Stylists; and (b) a professional beauty and barber salon staffed by Licensed Professional Stylists who perform services there (together “Salon”). Milbon, Distributor and Salon make this contract with each other (“Contract”) to enable StyList By Premier Customers to act as a Salon customer of Milbon, effective on the date Salon signs this Contract.
1. Salon promises that Products it purchases will be purchased from Distributor or Milbon and will be used only for Salon Use which is defined as: (a) cosmetological services performed at Salon’s premises, or (b) resale only to the Salon’s customers only at the store front in the limited amounts needed for personal use.
2. All deliveries of Products to salon are in reliance on Salon’s promise to use Products for Salon Use only. Any other use is “DIVERSION.” Diversion includes, but not limited to, selling to retailers, selling to any third party who purchases the Products beyond the amounts reasonably assumed to be consumed for personal use, or selling over the Internet or via direct mail or catalog. Salon acknowledges that Diversion damages Milbon’s relations with its distributors and other salons. By placing each order, Salon reaffirms that the Products are intended only for Salon Use.
3. If Milbon, Distributor, or any other manufacturer or distributor, have any evidence, whether or not admissible in Court, that indicates Salon has defrauded anyone or has Diverted any Products, Salon may be terminated immediately for Diversion and is subject to legal action.
4. Salon agrees that Distributor gives Milbon access to entirety of Salon’s purchase/transaction records of Products for the purpose of maintaining Milbon’s salon finder on the Milbon’s website and that Milbon owns the right to publish the information on the salon finder.
5. Salon will not remove, obliterate, cover or otherwise tamper with any code or serial number applied to any Product, or to a box, or pallet of Products.
6. Salon warrants that all those working for it, know and understand the requirements of this Contract.
7. Salon agrees that it can be sued in New York, New York for any breach of this Contract and that the Courts in New York have the exclusive jurisdiction over such suits. The amount of damages that Milbon suffers as a result of Diversion is extremely difficult to ascertain. Thus, Salon agrees that equitable remedies, such as an injunction, should be granted for breach. Salon and Milbon further agree that “actual damages” for Diversion will be replaced by liquidated damages, equal to two times the suggested retail price of the Products that were Diverted. Salon further agrees that for the purpose of calculating the number of Products Diverted, that if any part of an order was Diverted, it shall be conclusively presumed that all of the Products in that order and in all subsequent order(s), were Diverted. In any proceeding arising from or related to this Contract, the prevailing party shall recover its reasonable attorneys’ fees, whether its claims were based in contract or tort law.
8. Salon, Distributor or Milbon may terminate this Contract immediately by giving written notice to the others. Upon termination: (1) Salon shall immediately stop transferring by sale or otherwise any Products; and (2) Distributor and/or Milbon shall each have the right to repurchase any remaining Products sold to Salon and the purchase price shall be the lowest price Salon paid to Distributor for those Products. Distributor and Salon waive any claim for lost profits arising from the termination of this Contract.
9. This Contract cannot be transferred or assigned in whole or in part by Salon. The Contract is specifically intended to benefit Milbon and Distributor and either Milbon or Distributor may initiate suit to enforce the terms of this Contract against Salon.