DISTRIBUTION AGREEMENT
This Distribution Agreement (the "Agreement") dated for reference
the 28th day of July, 1999
BETWEEN:
SKINVISIBLE PHARMACEUTICALS, INC.,
a Nevada Corporation having its head office
at 0000 X. Xxxxxxx Xxxx, Xxxxx 0
Xxx Xxxxx, Xxxxxx, XXX 00000
Fax # (000) 000-0000
(the "Company")
OF THE FIRST PART
AND:
EYI INTERNATIONAL LIMITED
a Cayman Island Company having its head office at
XX Xxx 0000 XX Xxxxxx Xxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Fax # (000) 00000000
(the "Distributor")
OF THE SECOND PART
WHEREAS:
A. The Company has developed a line of hand lotion products which
are marketed under the name "Skinvisible".
B. The Distributor wishes to acquire certain rights to market and
distribute the Company's Skinvisible hand lotion products outside
of North America on the terms and conditions contained herein.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
mutual covenants and agreements contained herein, the parties
hereto agree as follows:
1. DEFINITIONS
In this Agreement, the following words and phrases shall have the
following meanings:
(A) "Confidential Information of the Company" means all
business plans, trade secrets, design concepts,
knowledge, information, production technology, processes,
know how, business projections, customer lists and
intellectual property concerning or relating to the
business of the Company and the Products, including the
Manufacturing Information, which may be communicated to,
acquired by, or learned
-2-
of by the Distributor from the Company, whether or not such
information is subject to proprietary protection at law;
(B) "Confidential Information of the Distributor" means all
customer lists, independent sales agent lists, direct
sales marketing contacts and information, business plans,
trade secrets, knowledge, information, know how,
business projections, computer software programs and
intellectual property concerning or relating to the
business of the Distributor which may be communicated to,
acquired by, or learned of by the Company from the
Distributor, whether or not such information is subject
to proprietary protection at law;
(3 "Direct Selling Market" means that portion of the Retail
Market characterized by person-to-person, multi-level or
network marketing;
(4 "Future Products" means any future products developed by
the Company marketed under the name "Skinvisible" and
using the same polymer base as the Products;
(5 "Industrial Market" means the commercial, institutional
and industrial market for the Products;
(6 "Manufacturing Information" means all information,
technology, data and trade secrets relating to the
manufacture of the Products;
(7 "North America Distribution Agreement" means the
distribution agreement dated July 27, 1999 between the
Company and Essentially Yours Industries Limited for the
distribution of the Products in North America;
(8 "Patents" means any patents underlying the Products which
are owned or may be owned by the Company or licensed or
which may be licensed to the Company;
(9 "Products" means the following hand lotion products
marketed by the Company under the trade name
"Skinvisible":
(11 Skinvisible Medical Formula;
(12 Skinvisible Food Service Formula;
(13 Skinvisible Personal Formula;
(14 Skinvisible Industrial Formula;
(15 Skinvisible Salon Formula.
(10 "Retail Market" means the retail market for the Products
whereby the Products are sold to the public or to re-
sellers for sale to the public and is deemed to exclude
the Industrial Market;
-3-
(11 "Schedule A Countries" means those countries listed in
Schedule A to this Agreement and those countries which
are deemed to be Schedule A Countries in accordance with
Section 3.1 of this Agreement;
(12 "Schedule B Countries" means those countries listed in
Schedule B to this Agreement and those countries which
are deemed to be Schedule B Countries in accordance with
Section 3.1 of this Agreement;
(13 "Term" has the meaning described in Section 14.1 of this
Agreement.
(14 "Territory" means the territory comprised of the Schedule
A Countries and the Schedule B Countries;
(15 "Trade Name" means the tradename "Skinvisible" and the
trademark "Skinvisible" in the event that the Company is
granted trademark protection by the United States Patent
and Trademark Office.
2. Grant of Distribution Rights
2.1 In consideration of the sum of One ($1.00) USD and other good
and valuable consideration, the receipt and sufficiency of which is
acknowledged by the Company and subject to the terms and conditions
of this Agreement, the Company hereby grants to the Distributor the
exclusive rights to market, distribute and sell the Products to the
Retail Market within the Territory for the Term of this Agreement
(the "Distribution Rights"). The Distribution Rights will include
the following rights:
(1 the right to market, distribute and sell the Products;
(2 the right and license to use the Trade Name in connection
with the marketing, distribution and sale of the
Products.
2.2 The Distributor will have the right to market, distribute and
sell the Products to the Retail Market using whatever methods/sales
programs it deems appropriate in the various countries in the
Territory, subject to the terms and conditions of this Agreement.
2.3 The Distribution Rights will extend to the right and license
to use the trademark "Skinvisible" in the event that the Company's
application to the United States Patent and Trademark Office for
the registration of "Skinvisible" as a trademark is approved. The
Distributor acknowledges that there is no assurance that trademark
protection will be granted by the United States Patent and
Trademark Office.
3. Option to Expand Territory
-4-
3.1 The Company grants to the Distributor the option to expand the
Territory to include additional countries on the following
basis (the "Option"):
(20 the Option will be exercisable during the initial term of
this Agreement;
(21 the Option may be exercisable from time to time in
respect of any country not included within the Territory,
excluding Canada, the United States and Mexico;
(22 the Option will be exercisable with respect to a country
by the Distributor placing an order with the Company for
a minimum of 25,000 oz of Product for the country (to be
paid once approval is obtained) and by the Distributor
paying for the cost of obtaining applicable approvals and
registrations for sales in the country in accordance with
Section 5.1 of this Agreement;
(23 any order to be placed by the Distributor pursuant to
Section 3.1(c) would be subject to the Company obtaining
all applicable approvals and registrations for sales of
the Products in the country;
(24 the country will become a part of the Territory upon the
Company achieving all applicable permits for sales of the
Products in the country and the Distributor having
completed payment for the cost of obtaining the
applicable approvals and registrations;
(25 the country in respect of which the Option is exercised
will be deemed to be a Schedule A Country unless the laws
of the country prohibit direct sales marketing, in which
event the country will be deemed to be a Schedule B
Country.
3.2 The Distributor will have a right of first refusal to acquire
the Distribution Rights for those countries not within the
Territory, other than the countries of Canada, United States and
Mexico, on the following basis:
(1 Upon the receipt by the Company from a third party of a
written offer to enter into an agreement for the
marketing, distribution and sale of the Products for a
country or countries not within the Territory, other than
the countries of Canada, United States and Mexico, (the
"Third Party Proposal") and the determination of the
Company to accept the Third Party Proposal, subject to
compliance with the terms and conditions of this
Agreement, then the Company will deliver to the
Distributor notice of the Distributor's right to enter
into an agreement with the Company for the marketing,
distribution and sale of the Products within such country
on the terms and subject to the conditions of the Third
Party Proposal (a "Right of First Refusal Notice");
(2 Upon delivery of a Right of First Refusal Notice, the
Distributor will have a period of thirty days in which to
accept or reject the offer to enter into an agreement
with the
-5-
Company for the marketing, distribution and sale
of the Products on the terms and subject to the
conditions of the Third Party Proposal;
(3 In the event of acceptance by the Distributor of the
Right of First Refusal Notice, then the Distributor and
the Company will enter into an agreement with the Company
for the marketing, distribution and sale of the Products
on the terms and subject to the conditions of the Third
Party Proposal;
(4 In the event that the Distributor does not accept the
Company's offer, then the Company will have the right to
enter into an agreement with the third party for the
marketing, distribution and sale of Products within the
applicable country or countries on the terms and subject
to the conditions of the Third Party Proposal.
(5 In the event the Company does not enter into the
agreement with the third party on the terms of the Third
Party Proposal, then the terms and conditions of this
Section 3.2 will apply to any new proposal or counter-
proposal from the third party or a new third party.
4. Product Prices
4.1 The prices to be paid by the Distributor to the Company for
the Products are as follows, subject to adjustment as provided in
Section 4.2 (the "Product Prices"):
Product Size Price
------------ -----
2-oz bottle $1.94 US
4-oz bottle $2.78 US
8-oz bottle $4.46 US
16-oz bottle $7.85 US
4.2 The Product Prices will be fixed for the 1999 calendar year.
Such prices shall be exclusive of all city, state and federal
taxes, including, without limitation, manufacture, value added,
sales, use, receipts, gross income, excise, occupation or similar
taxes, which obligations attributable to the manufacture and sale
to the Distributor are the obligations of the Distributor.
Following the initial 1999 period, unless agreed otherwise by the
parties in writing, the Company shall have the right to adjust
prices not more than once per year and then only to the extent
necessary to cover increased costs and expenses. In the event of
such a price increase, the Company will supply the Distributor
written notice of the price increases. Price increases shall take
effect on the date designated by the Company, but in no event
earlier than one hundred twenty (120) days following receipt of
notice of such increase by the Distributor. Any purchase order
placed by the Distributor prior to the expiration of said one
hundred twenty (120) day period shall by filled by the Company at
the pre-increase price.
-6-
4.3 The Distributor will pay to the Company 25% of the aggregate
price for all Products at the Product Price ordered (the "Order
Price") upon submission of an order for Products to the Company.
4.4 The Company will invoice the Distributor for all Products sold
to the Distributor at the Product Prices. The Distributor will pay
the balance of the Order Price to the Company for all orders of
Products within thirty (30) days of the date of delivery FOB Las
Vegas, Nevada.
4.5 The Distributor shall have the right to establish its own
selling prices for Products to the Retail Market within the
Territory.
4.6 The determination of sales, marketing strategies, and selling
prices for the Products to the Retail Market within the Territory
will be the sole responsibility of the Distributor.
4.7 All references to money or currency herein contained shall
mean lawful money of the United States of America.
4.8 Each order placed by the Distributor for the purchase of any
Products shall be subject to the terms and conditions of this
Agreement.
4.9 All purchases of Products will be in units of 2 ounce, 4
ounce, 8 ounce or 16 ounce bottles, unless the Parties agree
otherwise.
4.10 The Company will deliver all Products to the Distributor FOB
Las Vegas, Nevada within 42 days of the date of receipt of an order
for Products by the Distributor.
5. Approvals
5.1 In regard to obtaining registration of the Products and
approval for sale of the Products in each country within the
Territory the following terms shall govern:
a) the Distributor shall provide written notice to the Company
of its intention to commence sales/marketing activities in
a country;
b) the Company shall forthwith undertake to use its reasonable
best efforts to obtain the necessary approvals and
registrations for its Products in the countries indicated;
c) the out of pocket costs of the application for registration
and approval, excluding the Company's own internal costs
and expenses, shall be paid by the Distributor;
d) in the event that the Company chooses at a later date to
enter into the Industrial Market in that certain country
for which approvals and registrations have been received
and relies upon the approvals paid for by the Distributor
then:
-7-
i) if the Distributor is still actively marketing in such
country the Company shall reimburse the Distributor 50%
of the costs and expenses paid by the Distributor in
regard to such approvals and registrations;
ii) if the Distributor has ceased actively marketing in
such country then the Company shall reimburse the
Distributor 100% of the costs and expenses paid by the
Distributor in regard to such approvals and registrations
if the Company continues to sell Products in the country.
6. Limitations on the Distribution Rights
6.1 The Distributor will use its reasonable best efforts to ensure
that the Distributor does not distribute or sell any Products for
re-sale to any person or Company in the Industrial Market within
the Territory or in any market outside the Territory.
6.2 The Distributor will not, directly or indirectly, sell, assign
or grant to any other person, firm or corporation, the right to
sell, or distribute the Products to the Industrial Market within
the Territory.
6.3 The Distribution Rights do not extend to any products
manufactured by the Company and marketed under the "Skinvisible"
name other than the Products.
6.4 The Distributor will not market, distribute or sell any
products similar to or competitive with the Products during the
Term of this Agreement, save and except those products already part
of Distributor's existing product line.
6.5 Nothing in this Agreement shall be deemed in any way to
constitute any transfer or assignment by the Company of any Patents
or Confidential Information to the Distributor or to give the
Distributor any right, title or interest in or to any Patents or
Confidential Information. The Distributor acknowledges that all
patents pertaining to the Products or Confidential Information are
and shall remain the exclusive property of the Company.
6.6 The Distributor will not purchase Products from any person
other than the Company.
6.7 Nothing in this Agreement shall limit the right of the Company
to market, distribute and sell products with the same or similar
formulations under different product names and labels, not to be
confusing with the name "Skinvisible", with the express exclusion
of the Direct Selling Market for Schedule A Countries and the
Retail Market for Schedule B Countries.
7. Sub-Distributors
-8-
7.1 The Distributor will have the right to appoint sub-
distributors within the Territory, provided that each sub-
distributor is appointed on the following terms and conditions:
a) each sub-distributor will enter into a sub-
distributorship agreement with the Distributor on terms
and conditions acceptable to the Company and which will
bind the sub-distributor to the terms and conditions set
forth in this Agreement;
b) the Distributor shall provide the Company a copy of each
executed sub-distributorship agreement within 30 days of
execution in order that the Company can verify compliance
of the sub-distributorship agreement with the terms and
conditions of this Agreement.
c) each sub-distributor must be an affiliate of the
Distributor. The term "affiliate" is defined as a person
with whom the Distributor has entered into a
distributorship relationship for products other than the
Products in a country or state within the Territory or a
person to whom the Company has consented to in writing as a
sub-distributor acceptable to the Company. In determining
whether a person is an acceptable sub-distributor, the
Company will not unreasonably withhold its consent and will
evaluate the potential sub-distributor based on the
business experience and financial resources of the
potential sub-distributor. Any request by the Distributor
for approval for a potential sub-distributor will be in
writing and will include such written information as is
reasonably necessary for the Company to determine whether
or not to withhold its consent. The Company will advise
the Distributor of its determination in writing within 14
days of the receipt of the written request of the
Distributor and the required information.
7.2 The Distributor will not have any right to assign, sub-license
or otherwise transfer any of the rights granted to the Distributor
in this Agreement except as set forth in this Article 7.
8. Additional Covenants of the Distributor
8.1 The Distributor will throughout the term of this Agreement:
(A) refer to the Company all queries, orders and requests
relating to the purchase of Products intended for the
Industrial Market within the Territory;
(B) purchase and maintain a sufficient liability insurance
policy with reputable insurance companies in those
jurisdictions in which the Distributor markets, distributes
and sells the Products;
(C) ensure that any advertising or promotional efforts
undertaken by the Distributor will be conducted in
compliance with advertising and marketing guidelines
established by the Company in order to ensure a consistent
marketing and brand recognition of the Products;
-9-
(D) not make any claims with regards to the Products other than
those made by the Company;
(E) comply with all applicable laws and regulations regarding
the distribution, marketing and sale of the Products within
the Territory.
9. Additional Covenants of the Company
9.1 The Company will during the term of this Agreement:
(A) refer to the Distributor all queries, orders and requests
relating to the purchase of Products intended for the
Retail Market within the Territory;
(B) provide the Distributor with such information as the
Company considers appropriate in order to assist the
Distributor in the preparation of sales promotion material
and shall provide the Distributor with its sales
promotional material relating to the Products in order to
facilitate advertising of the Products within the
Territory;
(C) ensure all the Products meet the Company's specifications
for the applicable Products;
(D) In addition to any warranty requirements pursuant to the
terms of this Agreement, all Products supplied by the
Company and its manufacturers shall be of merchantable
quality and shall meet any and all U.S. governmental
standards applicable to such Products. The Distributor
shall have the right, through its duly appointed
representative, to examine, inspect and/or test any and all
of the Products supplied by the Company, and the production
lines, production facilities and storage facilities.
Without limiting the forgoing, the Company shall not alter
or substitute any ingredients used in production of the
Products without the prior written consent of Distributor
and without compliance with U.S. governmental standards
applicable to such products. The Company warrants that the
goods delivered in accordance with this Agreement shall
measure up to the same standard and analysis as the sample
Products previously submitted to Distributor. The
Distributor may, but is not required to do so, from time to
time, conduct laboratory tests on the Products to verify
that the content (if applicable) of the Products conform to
a Certificate of Analysis (the "Certificate") which must be
provided to Distributor within 14 days following each
shipment of Products(s). Such testing shall be conducted
to assure quality control, and any material deviation from
the Certificate shall be deemed a breach of this Agreement,
or, at the election of the Distributor, the Company shall
be required to immediately comply with supplying the
Products in accordance with the criteria in the
Certificate;
(F) permit the Distributor and its affiliates to hold
themselves out as authorized distributors of the Products
for the Retail Market within the Territory;
-10-
(G) Company agrees to furnish to the Distributor in a timely
manner Product Information (other than the composition of
the Company's proprietary polymers) regarding the Products,
which Product Information shall accurately describe the
nature, character and prescribed use of the Products. Such
information shall be appropriate for distribution to
Consumers and Associates of Distributor in the discretion
of the Distributor. The Product Information shall not
misrepresent or in any way intentionally mislead
Distributor, its Associates or consumers with respect to
the products. Distributor may incorporate such Product
Information in its sales and advertising and promotional
literature and materials (the "Sales Materials") Said
Product Information utilised shall not be deemed as
Confidential Information as set forth in this Agreement;
(H) Company has the right to supply and distribute the
Products and all components thereof, and the Products shall
not and do not, constitute any known infringement of any
license, trademark, copyright, patent or similar
proprietary interest of any third party;
(I) Company represents it has the capability to supply the
Products necessary to meet the anticipated sales of the
Distributor for the duration of this Agreement;
(J) Execution and delivery of this Agreement by the Company
has been duly authorized. The person executing this
Agreement on behalf of the Company has full and proper
authorization to execute same, and this Agreement is the
valid and binding agreement of the Company and is
enforceable against the Company in accordance with its
terms;
(K) The Company warrants that it will provide delivery within
forty two (42) days, or less, of receipt of Distributor
orders except in the case of disruption of transportation
systems by "force majeure" or other factors in or other
factors beyond the control of the Company.
-11-
10. Indemnification
10.1 Each of the parties agrees to indemnify and hold harmless the
other party from any liability arising out of the act or omission
of the indemnifying party, its servants, agents and
representatives.
11. Right of First Refusal for Future Products
11.1 The Distributor will have a right of first refusal to acquire
the marketing, distribution and sales rights for Future Products
for the Retail Market within the Territory on the following basis:
(A) Upon the Company intending to market any Future Product
or upon the receipt by the Company from a third party of
a written offer to enter into an agreement for the
marketing, distribution and sale of any Future Product
(the "New Product Third Party Proposal") and the
determination of the Company to accept the New Product
Third Party Proposal, subject to compliance with the
terms and conditions of this Agreement, then the Company
will deliver to the Distributor notice of the
Distributor's right to enter into an agreement with the
Company for the marketing, distribution and sale of the
Future Product on the terms and subject to the conditions
of the Company's proposal or the New Product Third Party
Proposal as the case may be (a "New Product Right of
First Refusal Notice");
(B) Upon delivery of a New Product Right of First Refusal
Notice, the Distributor will have a period of thirty (30)
days in which to accept or reject the offer to enter into
an agreement with the Company for the marketing,
distribution and sale of the Future Product on the terms
and subject to the conditions of the Company proposal or
New Product Third Party Proposal; as the case may be;
(3 In the event of acceptance by the Distributor of the New
Product Right of First Refusal Notice, then the Distributor
and the Company will enter into an agreement with the
Company for the marketing, distribution and sale of the
Future Product on the terms and subject to the conditions
of the Company Proposal or New Product Third Party Proposal
as the case maybe;
(4 In the event that the Distributor does not accept the
Company's offer, then the Company will have the right to
commence marketing or to enter into an agreement with the
third party for the marketing, distribution and sale of the
Future Product on the terms and subject to the conditions
of the New Product Third Party Proposal, as the case may
be. In the event the Company does not commence marketing
within six (6) months on the terms of its proposal or the
Company not enter into the agreement with the Third Party
on the terms of the New Product Third Party Proposal, then
the terms and conditions of this
-12-
Section 11.1 will apply to any new proposal by the Company
or any new proposal or counter-proposal from the third party
or a new Third Party.
-13-
12. Confidential Information
12.1 The Company acknowledges that the Confidential Information of
the Distributor is the property of the Distributor and the success,
profitability and competitive position of the Distributor requires
that the Confidential Information of the Distributor be maintained
in confidence by the Company. Accordingly, the Company covenants
and agrees with the Distributor, subject to Sections 12.2 and 12.3
of this Agreement, that:
(A) the Company will at all times keep all Confidential
Information in the strictest confidence;
(B) the Company will not use the Confidential Information for
any purpose other than for performing its obligations
pursuant to this Agreement;
(C) the Company will not at any time publish or in any way
participate or assist in the publishing of any Confidential
Information;
(D) the Company will not disclose or assist in the disclosure
of any Confidential Information to any person, firm,
corporation or other entity;
(E) the Company will not contact the Distributor's independent
sales associates directly without the consent of the
Distributor.
12.2 The Company may disclose the Confidential Information of the
Distributor in confidence to its lawyers, accountants and other
professional advisors in connection with the performance of the
business arrangements between the Company and the Distributor, each
of whom shall be advised of the confidential nature of such
confidential information.
12.3 The Company may disclose the Confidential Information of the
Distributor only to the extent necessary in order that the Company
may comply with all applicable laws and regulations, including
compliance with the Company's obligations as a reporting issuer
under the United States Securities Exchange Act of 1934.
12.4 The Distributor acknowledges that the Confidential Information
of the Company is the property of the Company and the success,
profitability and competitive position of the Company requires that
the Confidential Information of the Company be maintained in
confidence by the Distributor. Accordingly, the Distributor
covenants and agrees with the Company, subject to Sections 12.5 and
12.6 of this Agreement, that:
(A) the Distributor will at all times keep all Confidential
Information in the strictest confidence;
(B) the Distributor will not use the Confidential Information
for any purpose other than for performing its obligations
pursuant to this Agreement;
-14-
(C) the Distributor will not at any time publish or in any way
participate or assist in the publishing of any Confidential
Information;
(D) the Distributor will not disclose or assist in the
disclosure of any Confidential Information to any person,
firm, corporation or other entity.
12.5 The Distributor may disclose the Confidential Information of
the Company in confidence to its lawyers, accountants and other
professional advisors in connection with the performance of the
business arrangements between the Company and the Distributor.
12.6 The Distributor may disclose the Confidential Information of
the Company only to the extent necessary in order that the
Distributor may comply with all applicable laws and regulations,
provided that this disclosure will not relate to the composition of
the Company's proprietary polymers.
12.7 No waiver by either party of its rights pursuant to the
confidentiality agreements or any consent to any release of
confidential information shall be effective unless expressed in
writing, and no such waiver or consent shall apply beyond the
specific facts in respect of which the waiver of consent was given.
12.8 This confidentiality agreements of each party do not apply to
information which is or becomes publicly available or is lawfully
received by the other party other than by breach of this
Confidentiality Agreement.
13. Modifications
13.1 The Distributor will not make any modifications to any
Products or in any way vary or change the specifications or content
of the Products purchased from the Company. The Distributor will
use its reasonable efforts to ensure that its sub-distributors,
independent business associates, dealers, agents, or customers do
not make any modifications to, or in any way vary, the
specifications or content of any Products.
14. Term and Termination
14.1 The term of this Agreement (the "Term") will commence on the
Effective Date of this Agreement and will continue until the
earlier of December 31, 2002 or until the date on which this
Agreement is terminated in accordance with the provisions of this
Agreement. The Term of this Agreement will automatically renew from
year to year after the initial Term until December 31, 2099
provided the Distributor has commenced activities and continues
activities in at least three (3) countries within the Territory on
the basis that registrations and approvals for sale of the Products
has been obtained by the Company.
-15-
14.2 Each of the Distributor or the Company, as the case may be,
shall have the right to terminate this Agreement upon the
occurrence of any of the following events, such termination to be
effective immediately upon the receipt or deemed receipt by the
other party of notice to that effect and the expiry of any
applicable period for remedy of the default:
(A) if a party is in default of any of the material terms or
conditions of this Agreement, and shall fail to remedy such
default within 60 days of written notice thereof from the
other party, provided that if the default is the non-
payment of any monetary amount, the defaulting party will
have a period of 30 days from receipt of notice in which
to remedy the default;
(B) if (i) the North America Distribution Agreement is
terminated due to a default by the Distributor under the
North American Distribution Agreement or the failure of the
Distributor under the North American Distribution Agreement
to meet the minimum purchase requirements under the North
America Distribution Agreement; and (ii) the Distributor
has failed to purchase in aggregate the volumes of Products
under this Agreement and the North America Distribution
Agreement which would meet or exceed the minimum volume
requirements set forth in the North America Distribution
Agreement;
(C) if the other party becomes bankrupt or insolvent, makes an
assignment for the benefit of its creditors or attempts to
avail itself of any applicable statute relating to
insolvent debtors;
(D) if the other party winds-up, dissolves, liquidates or takes
steps to do so or otherwise ceases to function as a going
concern or is prevented from reasonably performing its
duties hereunder; or
(E) if a receiver or other custodian (interim or permanent of
any of the assets of the other party is appointed by
private instrument or by court order or if any execution or
other similar process of any court becomes enforceable
against the other party or its assets or if distress is
made against the other party's assets or any part thereof.
14.3 Subject to Section 14.4, upon termination of this Agreement
for any reason whatsoever, the following shall apply:
(A) those rights and obligations of each of the Company and the
Distributor which are expressly stated to survive
termination of this Agreement will survive termination and
will continue in full force and effect;
(B) all rights and privileges granted by the Company to the
Distributor pursuant to this Agreement, including the
rights to market, distribute and sell Products, will
immediately terminate and be relinquished by the
Distributor, and thereafter the Distributor shall take no
action that would make it appear to the public that the
Distributor is still supplying Products;
-16-
(C) the Distributor shall return to the Company all
advertising, informational or technical material given to
the Distributor by the Company;
(D) the Distributor shall cease using the Trade Names and
thereafter refrain from holding itself out as an authorized
distributor of the Products;
(E) the Distributor will retain in confidence all information
regarding the business and property of the Company and the
Products;
(F) all sub-distributorship agreements entered into by the
Distributor will terminate.
The provisions of this Section 14.3 will survive the termination of
this Agreement.
14.4 In the event of termination of this Agreement by the Company,
then the Distribution Rights will continue on a non-exclusive basis
for a period of six months with respect to this Agreement or with
respect to the deleted country, as the case may be, on the terms
and conditions of this Agreement.
15. Assignment
15.1 Except as provided by Section 7 of this Agreement, the rights
granted by this Agreement may not be sold, assigned, sub-licensed
or otherwise transferred by the Distributor without the prior
written consent of the Company, which consent may be unreasonably
withheld by the Company at its sole discretion.
15.2 The Company will have the right to assign this Agreement
without the consent of the Distributor.
16. Miscellaneous Provisions
16.1 Entire Agreement
This Agreement constitutes the entire agreement between the parties
with respect to all matters herein contained, and its execution has
not been induced by, nor do any of the parties hereto rely upon or
regard as material, any representations or writings whatsoever not
incorporated herein and made a part hereof. This Agreement shall
not be amended, altered or qualified except by an instrument in
writing, signed by all parties hereto and any amendments,
alterations or qualifications hereof shall not be binding upon or
affect the rights of any party who has not given its consent in
writing.
16.2 Interpretation
-17-
The division of this Agreement into articles and sections is for
convenience of reference only and shall not affect the
interpretation or construction of this Agreement.
16.3 Severability
In the event that any of the covenants herein contained shall be
held unenforceable or declared invalid for any reason whatsoever,
such unenforceability or invalidity shall not affect the
enforceability or validity of the remaining provisions of this
Agreement and such unenforceable or invalid portion shall be
severable from the remainder of this Agreement.
16.4 Force Majeure
In the event of an inability or failure by the Company to
manufacture, supply or ship any of the Products herein by reason of
any fire, explosion, war, riot, strike, walk-out, labour
controversy, flood, shortage of water, power, labour transportation
facilities or necessary materials or supplies, default or power
failure of carriers, breakdown in or the loss of production or
anticipated production from plant or equipment, act of God or
public enemy, any law, act or order of any court, board, government
or other authority of competent jurisdiction, or any other direct
cause (whether or not of the same character as the foregoing)
beyond the reasonable control of the Company, then the Company
shall not be liable to the Distributor and will not be deemed to be
in default during the period and to the extent of such inability or
failure. Deliveries omitted in whole or in part while such
inability remains in effect shall be cancelled.
16.5 Notices
Any notice required or permitted to be given hereunder shall be in
writing and shall be effectively given if:
(a) Delivered personally;
(b) Sent by prepaid courier service or mail;or
(c) Sent prepaid by telecopiers, fax, telex or other similar
means of electronic communication
Addressed to the relevant Party at the address/fax number shown for
that Party at the beginning of this Agreement or in the Definition
section,
Any notice so given shall be deemed conclusively to have been given
and received when so personally delivered or, if sent by telex,
fax, telecopier or other electronic communication, on the first
business day thereafter, or if sent by mail on the third business
day thereafter. Any party may change any particulars of its
address/fax number for notice by notice to the others in the manner
above described.
16.6 Time of the Essence
-18-
Time shall be of the essence.
16.7 Further Assurances
The parties agree to sign such other instruments, cause such
meetings to be held, resolutions passed and by-laws enacted,
exercise their vote and influence, do and perform and cause to be
done and performed such further and other acts and things as may be
necessary or desirable in order to give full effect to this
Agreement.
16.8 Successors and Assigns
This Agreement shall endure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted
assigns.
16.9 Non-Waiver
No waiver by any party of any breach by any other party of any of
its covenants, obligations and agreements hereunder shall be a
waiver of any subsequent breach of any other covenant, obligation
or agreement, nor shall any forbearance to seek a remedy for any
breach be a waiver of any rights and remedies with respect to such
or any subsequent breach.
16.10 Arbitration
All disputes in relation to this Agreement, other than a dispute
regarding the non-payment of any monetary amount required by this
Agreement, be referred to and finally resolved by Arbitration,
under the rules of American Arbitration Association (the "Rules"),
which Rules are deemed to be incorporated by reference into this
Article. The tribunal shall consist of One (1) Arbitrator. The
Parties will endeavour within twenty-one (21) days of the matter
being referred to Arbitration to agree upon an Arbitrator, failing
which the Arbitrator shall be appointed in accordance with the
Rules. The place of Arbitration shall be in Las Vegas, Nevada.
The language of the Arbitration shall be English. The parties
agree that the Arbitrator shall be requested to make his award
within sixty (60) days following the later of the conclusion of the
Arbitration hearings or any exchange of final written submissions
by the Parties and further agree that the word of the Arbitrator
shall be final and binding and without appeal.
16.11 Relationship
The relationship between the Company and the Distributor is, and
during the term of this Agreement shall be that of independent
contractors. No party shall be deemed a legal representative or
agent of the other party for any purpose and shall have no right or
authority to assume or create in writing or otherwise, any
obligation of any kind, express or implied, with respect to any
commitments, in the name of the other party or on behalf of the
other party, unless given with the express written
-19-
authority of such party. Furthermore, the relationship among
the Company and the Distributor hereunder shall not constitute a
joint venture, general partnership or similar arrangement.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
-20-
16.12 Governing Law
This Agreement shall be governed by and construed in accordance
with the laws of England
IN WITNESS WHEREOF the parties hereto have executed this Agreement
as of the date and year first above written.
SKINVISIBLE PHARMACEUTICALS,
INC.
by its authorized signatory
\s\ Xxxxx X. Xxxxxxx
Signature of Authorized Signatory
Xxxxx X. Xxxxxxx
Name of Authorized Signatory
President
Position of Authorized Signatory
EYI INTERNATIONAL LIMITED
by its authorized signatory
\s\ Xxxxxx Xxxxxxx
Signature of Authorized Signatory
Xxxxxx Xxxxxxx
Name of Authorized Signatory
Attorney & Agent
Position of Authorized Signatory
