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EXHIBIT 10.6
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT ("Agreement") is made and entered into
this 28th day of the month of June, 1999 by and between Advanced Plant
Pharmaceuticals, Inc. ("APPI") a Delaware corporation, having a principal
office at, 00 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, and Ambar Pharmacies
and Health, Inc., an Israeli corporation, having its principal offices at
00 Xxx Xxxxx Xxxxxx, Xxxxx-Xxx, Xxxxxx, 00000 ("Ambar").
WITNESSETH
WHEREAS, APPI manufactures and produces certain pharmaceutical "Products"
(as listed in Exhibit A attached hereto and as may be amended from time to time)
and would like Ambar to distribute such Products in Israel (hereinafter referred
to as the "Territory") and Ambar is willing to become a distributor of such
Products, all on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. TERM. This Agreement will remain in effect from the date hereof
until December 31, 2000, unless terminated sooner as hereinafter provided.
2. APPOINTMENT. APPI hereby appoints Ambar during the Term of this
Agreement, and Ambar hereby accepts such appointment, as APPI's exclusive
distributor of the Products in the Territory.
3. SALE AND PURCHASE OF PRODUCTS.
a. From the date hereof through December 31, 1999 ( the
"Initial Purchase Period"), APPI will sell to Ambar, and Ambar will purchase
from APPI the following:
not less than 2,000 units of Xx-Xxxx 00/0000 ("Xx-Xxxx 60") at a purchase
price of $5.23 per unit and 1,000 units of ACA 70/1000 ("ACA") at a purchase
price of $17.83 for an aggregate purchase price of $28,290 (the "Initial Period
Minimum Purchase Price").
b. The Initial Period Minimum Purchase Price is to be paid,
in U.S dollars, as follows: ten percent (10%) of the Initial Period Minimum
Purchase Price, $2,829 is to be wired to APPI's designated bank account or shall
be paid by Ambar using its business credit card within twenty (20) business days
of the signing of this Agreement. The remaining ninety percent (90%) of the
Initial Period Minimum Purchase Price is to be wired to APPI's designated bank
account at the time Ambar places an order for the Products or Ambar may, at the
time Ambar places an order for the Products, provide evidence of approval of
payment using its business credit card or a letter of credit acceptable to APPI
such that payment will be made to APPI no later than sixty (60) days from when
APPI makes the Products available to Ambar for pick-up. (For example, after
Ambar pays 10% of the Initial Period Minimum
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Purchase Price, $2,829, then a subsequent order by Ambar for $5,000 worth of
Products would only require Ambar to pay the remaining 90% percent of the
purchase price, $4,500.)
c. From January 1, 2000 through December 31, 2000 (the
"Second Purchase Period"), APPI will sell to Ambar, and Ambar will purchase from
APPI, Lo-Chol 60 at a purchase price of $5.23 per unit and/or ACA at a purchase
price of $17.83 per unit, which the total cost of such Products shall not be
less than an aggregate purchase price of $60,000 (the "Second Period Minimum
Purchase Price").
d. The Second Period Minimum Purchase Price is to be paid,
in US dollars, as follows: ten percent (10%) of the Second Period Minimum
Purchase Price, $6,000, is to be wired to APPI's designated bank account or
shall be paid by Ambar using a letter of credit acceptable to APPI or its
business credit card on January 15, 2000. The remaining ninety percent (90%) of
the Second Period Minimum Purchase Price is to be wired to APPI's designated
bank account at the time Ambar places an order for the Products or Ambar may, at
the time Ambar places an order for the Products, provide evidence of approval of
payment using its business credit card or a letter of credit acceptable to APPI
such that payment will be made to APPI no later than sixty (60) days from when
APPI makes the Products available to Ambar for pick-up.
e. Payments for Products ordered by Ambar, other than the
minimum purchases as outlined in subsections (b) and (d) of this Section, is to
be wired to APPI's designated bank account at the time Ambar places an order for
the Products or Ambar may, at the time Ambar places an order for the Products,
provide evidence of approval of payment using its business credit card or a
letter of credit acceptable to APPI such that payment will be made to APPI no
later than sixty (60) days from when APPI makes the Products available to Ambar
for pick-up.
f. APPI, at its expense, will make available the Products
ordered by Ambar, within thirty (30) days after Ambar requests such Products.
APPI will make the Products available by giving notice to Ambar, in accordance
with Section 15 of this Agreement, that such ordered units are available for
pick up by Ambar at APPI's principal office located at 00 Xxxxxx Xxxx, Xxx Xxxx,
XX 00000. After such notice is given to Ambar and such ordered Products are made
available at APPI's principal office, title to and all risk of loss of and
damage to the Products will pass to Ambar.
4. EXCLUSIVITY; SALES BY DISTRIBUTOR.
a. While this Agreement is in effect, APPI hereby grants to Ambar
the exclusive rights to sell the Products in the agreed Territory . While this
Agreement remains in effect, APPI will not, directly or indirectly, sell the
Products within the Territory and will not permit anyone else, either directly
or indirectly, to sell or otherwise exploit the Products within the Territory.
b. Ambar may sell the Products in such manner and on such terms as
approved by APPI. Ambar will comply with all applicable laws, rules and
regulations in selling and in otherwise dealing with the Products.
c. Should APPI, in its sole discretion, decide to market and sell
the Products in any or all of
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the "Extended Territories" (defined below), APPI acknowledges that it shall
provide Ambar with a right of first refusal to act as an exclusive distributor
for the Products in those areas subject to agreed upon terms by both parties.
The Extended Territories shall include any one or all of the following areas:
Turkey, Jordan, Holland and Denmark. APPI agrees that upon a decision by its
Board of Directors to market and sell the Products in the Extended Territories,
APPI will provide Notice to Ambar (as provided in Section 15 of this Agreement)
of such decision, upon which Ambar shall have fifteen business days to exercise
its right of first refusal by notifying the Company.
d. Neither Ambar, nor its officers, employees or agents will be
deemed to be the agents, employees, partners, co-venturers or representatives,
legal or otherwise, of APPI for any purpose whatsoever.
5. ADVERTISING. On the last day of the Initial Purchase Period, December
31, 1999, APPI will provide a rebate to Ambar in the amount of five percent of
the gross purchase price of the products ordered by Ambar during such period, so
long as such rebate is understood by Ambar to be used solely for marketing and
advertising of the Products in the agreed upon Territory. Evidence that such
rebate was used by Ambar solely for marketing and advertising of the Products in
the agreed upon Territory shall be provided to APPI and if such evidence is not
provided, Ambar agrees to return said rebate to APPI.
APPI acknowledges that during the Term of this Agreement Ambar may
suggest and recommend to APPI marketing and promotional strategies to help Ambar
sell the Products in the stated Territory. APPI, after review and approval of
such marketing and promotional strategies and at APPI's sole discretion, will
match, dollar for dollar in U.S. currency, those funds which Ambar is willing to
contribute towards such marketing and promotional strategies with the
understanding and acknowledgment by Ambar that APPI will not contribute in
excess of ten thousand dollars ($10,000) throughout the Term of this Agreement.
Should APPI review and approve such marketing expenses, APPI will notify Ambar
of such approval, Ambar will notify APPI regarding the dollar amount that Ambar
expects to contribute, APPI within fifteen business days will then match such
stated amount by sending a check or wire transfer to Ambar, and Ambar will then
provide to APPI evidence that such funds were expended on the agreed upon
marketing and promotional items.
6. CONFIDENTIALITY. Ambar hereby acknowledges and agrees that as per the
Confidentiality Agreement signed between Ambar and APPI, dated April 8, 1999 (a
copy of which is annexed hereto), all Confidential Information is and shall
remain the exclusive property of APPI.
7. RIGHT TO RENEW. The Term of this Agreement may be renewed by written
agreement of APPI and Ambar. Nothing contained herein shall be deemed to create
any express or implied obligation on the part of either party to renew or extend
this Agreement; however, the undersigned parties agree, in six months from the
date hereof, to evaluate the success of this Agreement and may negotiate, in
good faith, a potential five year extension of this Agreement with terms to be
agreed upon. Each party in its sole discretion shall have the right to
determine, for any reason whatsoever, not to renew, continue or extend this
Agreement.
8. PATENTS AND TRADEMARKS. Ambar acknowledges and agrees that APPI is the
sole and exclusive owner of all right, title and interest in and to the products
Lo-Chol and ACA and that Ambar will not claim or assert any rights or interests
in the trademarks or patents of such names and/or Products. Nothing contained in
this Agreement shall operate as or be construed as an assignment, grant or other
transfer of
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any kind of any of APPI's right, title, or interest in or to any of the
trademarks or patent rights of Lo-Chol and ACA.
9. INDEMNITY. Ambar agrees to indemnify and hold harmless APPI and its
Affiliates and any director, officer, stockholder, employee or agent of any of
them from and against any and all claims, losses, liabilities, damages, costs,
and expenses (including, but not limited to, attorneys', expert witness and
accounting fees and expenses) which may be sustained and arise out of Ambar's
activities, or those of its employees or agents, including without limitation,
any misrepresentations or misleading statements in respect of the Products or
any violation by Ambar of any of the provisions of this Agreement.
10. EXPENSES. All expenses and costs incurred by Ambar in the performance
of its obligations under this Agreement shall be the sole responsibility of
Ambar and shall not be advanced or reimbursed by APPI other than those outlined
in Section 5 of this Agreement.
11. ASSIGNABILITY. Ambar may not assign, transfer or delegate this
Agreement or any of its rights or obligations under this Agreement without the
prior written consent of APPI, and any attempted assignment, transfer or
delegation without such consent shall be deemed null and void and of no effect.
12. TERMINATION. This agreement may be terminated by either party in case
of a breach of any of the material terms of this agreement by giving ninety (90)
days prior written notice to the other party. If this Agreement is terminated by
Ambar, Ambar acknowledges to fulfill payment to APPI for both of the minimum
purchase requirements as outlined in Section 3 above. If Ambar fails to meet the
stated minimum purchase requirements or fails to make timely payments in
accordance with this Agreement then APPI shall treat such action as a material
default and may terminate this Agreement and/ or seek liquidated damages from
Ambar.
13. GOVERNING LAW. The validity, interpretation and performance of this
Agreement and any dispute connected herewith shall be governed and construed in
accordance with the laws of the Sate of New York without reference to its
conflict of law principles.
14. ENTIRE AGREEMENT. This Agreement, constitutes the entire agreement
between APPI and Ambar. This Agreement supersedes any prior or existing
contracts and arrangements by and between APPI and Ambar for the distribution of
the Products in the Territory.
15. NOTICE. Any notice required hereunder shall be made in writing by
hand-delivery, telefax, telex, courier, registered air mail, electronic mail, or
by any other means of delivery which enables the sending party to verily receipt
thereof Such notice shall be deemed given (a) at the actual time of receipt in
the case of hand-delivery or transmission by telefax, (b) Upon receipt of tile
addressee's answer back on the sender's machine in case of transmission by
telex, and (c) three (3) business days after sending in case of notice by
courier, cable or registered air mail. Any notices shall be sent to the
following addresses:
If to APPI: If to Ambar:
Advanced Pharmaceuticals, Inc. Ambar Pharmacies & Health, Inc.
Attention: Xxx Xxxxxxxxx Xxxxx Xxxxxxx
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00 Xxxxxx Xxxx 00 Xxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxxxx-Xxx, Xxxxxx 00000
Either party may change the address to which notices are to he sent to it by
giving notice of such change of address to the other party in the manner herein
provided for giving notice.
16. COUNTERPARTS. This Agreement may he executed in any number of
separate counterparts, each of which shall be deemed to be original but which
together shall constitute one in the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written by their respective authorized officials.
AMBAR PHARMACIES AND HEALTH, INC. ADVANCED PLANT
PHARMACEUTICALS, INC.
BY /s/ Xxxxx Xxxxxxx By /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxxxx
Title: Title: President
EXHIBIT A
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-Lo-Chol 60/1000
-ACA 70/1000
