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Distributor Agreement

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This Distributor Agreement (the "Agreement") is made between Hsin Ten Enterprise USA, Inc.(the "Company"), hereinafter known as HTEUSA, a N.Y. corporation and the distributor (the "distributor").
        WHEREAS, the Company is engaged in the manufacture and sale of Aerobic Exercisers and related accessories(*Products) under the registered trademark HTEUSA:
        WHEREAS, the Company desires to sell the Products to customers through nonexclusive independent agents who will maintain the company's high standards and the integrity of the Products, promote the good name of the Company's products, and abide by all applicable laws and regulations and the highest ethical standards in soliciting sales of Products; and
        WHEREAS, the Company desires to appoint the Distributor as a nonexclusive independent agent for the Company, and the Distributor desires to undertake the duties of a nonexclusive independent agent for the Company, upon the terms and conditions set forth herein.
        NOW, THEREFORE, the parties hereto mutually agree as follows:
SECTION 1. APPOINTMENT The Company hereby appoints the Distributor and the Distributor hereby accepts appointment as a nonexclusive independent agent authorized to sell the Products on the terms and conditions contained in the Agreement.
SECTION 2 RELATIONSHIP OF PARTIES The Distributor is an independent contractor and not an employee of the company and all obligations of the Distributor performed hereunder shall be fulfilled as an independent contractor. In addition, except as specifically provided herein, the Representative is not the representative or the agent of the Company for any purpose whatsoever and has no power or authority to incur any debt, obligation or liability on behalf of the Company.
2.1 Except as otherwise provided, the Company neither has nor reserves any right or power to exercise any direction, control or determination over the manner, means or methods of the Distributor's activities and objectives in his operations, other than to review the sales results of the Distributor. Unsatisfactory sales results may result in termination of this Agreement pursuant to Section 7.
2.2 As an independent contractor, the Distributor is responsible for filing all necessary federal, state and local tax returns and paying all applicable income taxes. The Distributor will not be treated as an employee with respect to any services or federal tax purposes and for state tax purposes and warrants that he understands his federal, state and local tax obligations.
2.3 The Distributor understands that he is not an employee of the company, that the Company is not obligated to provide any benefits to him, and that he is not entitled to any benefits except such benefits as the company chooses to provide to Distributors. The Distributor further understands that he is not entitled to any compensation in connections with the Agreement except for the commission payments provided in Section 5.
2.4 The Distributor shall not sell the Product, nor shall sales, services or repair work be subcontracted for or with, or sales commissions shared with, or paid to, non authorized people.
2.5 The Distributor shall not directly or indirectly promote, represent, distribute, sell or purchase for resale any products which compete with the Products.
2.6 All sales promotion expenses, selling expenses and any other incidental expenses incurred by the Distributor in selling the Products, including but not limited to transportation costs for any Products used by the Distributor for demonstration purposes, are the sole responsibility of the Distributor.
2.7 Important Notice: All income examples and illustrations found in the HTEUSA Marketing Plan are included for illustration and explanatory purposes only. They are intended to show how the HTEUSA program functions and how payments within the structure of the Marketing Plan are calculated. In no way do these explanations and illustrations represent actual, historical examples of specific Distributors or groups. They are not put forward as typical expectations for Distributors and group members. Nor are they intended to suggest that achievement of this type will be easy, or even possible in all circumstances. No Distributor and/or individual group can be expected to follow precisely any of the diagrams or configurations. This Distributor's group could be higher or lower than the hypothetical cass shown. Each individual's success depends solely on his or her individual efforts.
3.1 The Distributor is authorized to sell Products only at such prices and upon such terms and conditions as may be established by the Company from time to time.
3.2 Prior to completion of any sale, the Distributor shall disclose to a prospective purchaser of a Product the company's warranty applicable to the Product and request that the prospective purchaser read it. The Distributor shall not make any other representation, warranty or guarantee with respect to any Product unless expressly authorized in writing by the Company to do so. The distributor recognizes that the only warranty applicable to a Product is that written warranty specifically provided by the Company. The Company shall have the right to modify its standard warranty on any Product from time to time.
3.3 The distributor shall use only promotional and sales materials and forms supplied by the Company. The Distributor acknowledges that the Company's names, trademarks, patents, and trade names, slogans, symbols, and color schemes are the property of the Company and the Distributor shall not use or display names, trademarks, patents, trade names, slogans, symbols, or color schemes of the Company or permit the same to be displayed in connection with any other business carried on by the Distributor.
4.1 the proceeds of sales of Products sold by the Distributor shall be for the benefit and the account of the Company.
4.2 The Distributor shall account to the Company for each sale of Products in the manner and at the time specified by the Company from time to time.
SECTION 5 COMMISSIONS As full compensation for the distributor's performance under the agreement, the Company shall pay to the Distributor a commission in the amount, in the manner and at the time specified by the Company in the Marketing Plan.
6.1 Upon termination of the Agreement, the Distributor may,
        a. at Distributor's cost, return unencumbered, unopened inventory, which is reusable and resaleable, and which has been purchased within 1 year of the submission of said termination notice. The Company will refund 90% of the net cost of the Product to the Distributor. (Unless modified by any applicable state statute). The company will also repurchase the initial mandatory sales materials that are returned, postage prepaid, in a resaleable and reuseable condition; and
        b. cease to hold himself out to the public as a person entitled to sell or service the Products or represent the Company in any other manner.
6.2 The Company shall, within a reasonable time after the termination of the Agreement, render a detailed accounting to the Distributor of any amount to which the Distributor may be entitled from the company or any amount which the Distributor may owe to the Company. The amount so specified shall immediately become due and payable by the one party to the other.
SECTION 7 TERMINATION Either party shall have the right to terminate the Agreement at any time with or without cause and without written notice to either party. Termination of the Agreement shall not operate as cancellation of any indebtness owing to one party by the other at the time of such termination except as noted in the Leadership Benefits section of the Marketing Plan. On termination, the Distributor and the Company shall render an accounting to each other in accordance with Section 6.
SECTION 8 WAIVER Neither the waiver by wither party hereto of a breech of or a default under any of the provisions of the Agreement, nor the failure of either party, on one or more occasions, to enforce any of the provision of the Agreement or to exercise any right or priveledge hereunder shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provision, rights, or priveledges hereunder.
SECTION 9 COMPLETE AGREEMENT AND NONASSIGNABILITY The Agreement represents the complete agreement between the parties, and supersedes all previous agreements. The Agreement is personal to the Distributor and may not be assigned by the Distributor without the written consent of the company. The Company may assign the Agreement to any successor entity to the Distributor, or to any entity that acquires substantially all of the assets and assumes substantially all of the liabilities of the Distributor.
SECTION 10 APPLICABLE LAW AND SEVERABILITY The Agreement shall be governed and construed by the laws of the state of New York. If any provision of the Agreement is unforceable or invalid, the Agreement shall be ineffective only to the extent of such provision and the validity of the remaining provisions of the Agreement shall not be affected. The right to amend the content of this Agreement is reserved by the Company, and amendments may be published when deemed necessary.

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