DISTRIBUTION AGREEMENT
This
Agreement is made and entered into as of the latest date set forth on the
signature lines below (the “Effective Date”) by and between Oculus Innovative
Sciences, Inc., a California corporation having a place of business located at
0000 Xx. XxXxxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000 and a manufacturing site located
at Industria Vidriera 81Fraccionamiento Industrial, Xxxxxxx Xxxxx Xxxxxxx,
Xxxxxxx Xxxxxx 00000 ("Company"), and Tianjin Ascent Import and Export
Company, Ltd, a Chinese limited liability company having a place of
business at Unit H, Third Floor, Bldg A, Xx 00, Xxxxxxxx Xxxx, Xxx Xxx Xxxxxxxx,
Xxxxxxx, Xxxxx. (“Distributor”).
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WHEREAS
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Company
has developed proprietary technology and know-how known as the “Microcyn
Technology” which Company distributes and sells in the form of liquid
solutions, as further identified in Exhibit A to
this Agreement,
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WHEREAS
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Distributor
and its Subdistributors import and sell hospital supplies and medical
devices and has considerable experience in the marketing, sale and
servicing of such supplies and devices for such applications;
and
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WHEREAS
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Supplier
desires Distributor to distribute Supplier’s Products, and Distributor
desires to distribute Supplier’s Products, all as provided for in, in
accordance with and subject to the terms, conditions and provisions set
forth in this Agreement.
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NOW
THEREFORE in consideration of the mutual promises and undertakings of the
parties hereto the parties agree as follows:
1.
Definitions.
1.1 “Confidential
Information” means information of a party, which information is conspicuously
marked with "Confidential", or "Proprietary" or other similar
legend. If Confidential Information is orally disclosed or if it is
observed, it shall be identified as such at the time of disclosure or
observation and a brief written description and confirmation of the confidential
nature of the information shall be sent to the recipient within thirty (30) days
after the disclosure. The Solution Specifications, quantities, schedules and
pricing, projections and business plans shall be considered Confidential
Information hereunder whether disclosed orally or in writing, or whether or not
marked "Confidential" or "Proprietary".
1.2 “Intellectual
Property Rights” means all intellectual property rights worldwide arising under
statutory or common law or by contract and whether or not perfected, now
existing or hereafter filed, issued, or acquired, including all (a) patent
rights; (b) rights associated with works of authorship including copyrights and
mask work rights; (c) trademarks, service marks, trade dress and trade names;
(d) rights relating to the protection of trade secrets and confidential
information; and (e) any right analogous to those set forth herein and any other
proprietary rights relating to intangible property.
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1.3 “Markets”
means the advanced human wound care for humans in hospital, pharmacy and clinic
markets solely for use in the treatment of Professional Hospital Care within the
Territory.
1.4 “Purchase
Order” shall mean an offer from Distributor received by Company, whether in
written or other form, or in electronic form, to purchase or schedule delivery
of a specified amount of Products that complies with the requirements set forth
in this Agreement.
1.5 “Regulatory
Approvals” means any and all approvals, applications, registrations, licenses,
certifications and other requirements imposed by any governmental agency or
other entity exercising any regulatory or other governmental or
quasi-governmental authority, including but not limited to the US Food and Drug
Administration, the Chinese Food and Drug Administration and the US or Chinese
Environmental Protection Agency.
1.6 “Company’s
Technology” means Company’s proprietary technology and know-how known as the
Microcyn Technology, used for (among other things) wound care
applications.
1.7 “Products”
means the liquid solutions based on Company’s Microcyn Technology which is to be
provided by Company under this Agreement as further described in Exhibit
A.
1.8 “Product
Specifications” means the specifications for the Products as set forth in Exhibit
B.
1.9 “Territory”
shall mean the People’s Republic of China.
2.
Purchases and
Products.
2.1 General. This
Agreement establishes the terms and conditions on which Company will sell to
Distributor the Products. The purchase and sale of Products between
Company and Distributor shall be governed solely and exclusively by this
Agreement, which shall supersede the terms and conditions contained in any
purchase order, acknowledgment or other document related to the purchase and
sale of Products. Company’s failure to object to any additional or
different term or condition contained in any communication from Distributor
shall not be deemed a waiver of the terms of this Agreement and any additional
or different term or condition is expressly rejected unless agreed to by the
Company in writing. This Agreement shall not be modified,
supplemented or interpreted by any trade usage or prior course of dealing not
made a part of this Agreement by its express terms.
2.2 Appointment. Subject
to all the terms and conditions of this Agreement, Company hereby appoints
Distributor for the Term of this Agreement as an exclusive distributor of the
Products only within the Market and only within the Territory. Distributor may
distribute Products only to persons and entities located and taking delivery
within the Territory and only as packaged by Company. Furthermore,
Solution distributed by Distributor for further distribution may be distributed
only through subdistributors who are bound in writing for Company's benefit to
all the restrictions on Distributor contained in this Agreement.
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2.3 Development
Fee. After execution of this Agreement, Distributor will
pay the Company a one time, non-refundable up-front fee by Feb. 23, 2011, equal
to Three Hundred and Fifty Thousand ($350,000 USD) for the exclusive
right to market and sell products referenced in Exhibit A for the first
contractual year.
2.4 Purchase Orders and
Forecasts. Solution is delivered based on F.O.B. term, that
Company must deliver the products to the loading port. Company cannot adjust the
price of the product at any time during the first 3 years of the agreement.
Company shall have the right, in its sole discretion, to change such prices with
one hundred eighty (180) days' written notice before the execution of the
updated prices for the 4th and
5th
year of the agreement. New prices will apply to all shipments made after such
notice period. If there are unavoidable circumstances that the price
must be adjusted, then both parties can negotiate and decide on the price issue.
In addition, Distributor will pay all charges, including without limitation
transportation charges and insurance premiums and shall be responsible for all
taxes, duties and other governmental assessments (this includes, without
limitation, sales taxes, unless Distributor provides appropriate resale
certificates).
2.5 Purchase Order and
Forecast. On or before the 15th day of
each month, Distributor will submit to Company a Purchase Order covering the
next calendar month and a non-binding, rolling forecast of purchases of Products
for the next three (3) months after the period covered by the Purchase
Order.
2.6 Purchase Orders. The
following requirements shall apply to all purchase orders:
(a) Purchase
Orders shall be issued by Distributor to Oculus or its designee
(b) All
Purchase Orders shall contain such pricing, requested shipment schedule,
delivery address, requested carrier and quantity terms as set forth in Exhibit
A.
(c) Purchase
Orders may NOT request shipment of the Products earlier than seven (7) days
after the date the Purchase Order is received by Company.
(d) All
Purchase Orders shall reference this Agreement.
When
acknowledgement of receipt and acceptance of the Purchase Order is made by
Company (either by written notice or by shipment of the Products covered by the
Purchase Order), the Purchase Order shall be deemed a commitment to purchase and
sell the Products pursuant to the terms of this Agreement. Shipment
and delivery schedules will be at all times subject to Company’s approval, and
Company may at any time decline to make any shipments or deliveries except upon
receipt of payment or upon terms and conditions or security satisfactory to
Company.
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2.7 Pricing. The Solution
prices are set forth in Exhibit A, provided
however that Company may adjust the prices from time to time on one hundred and
eighty (180) days written notice to Distributor to reflect market
conditions. （Regarding pricing,
please refer to 2.4 for reference）
2.8 Taxes. Prices
are exclusive of ocean transportation and insurance. All taxes, duties and other
related charges that occur from Mexico or U.S. delivery port to final
destination in China are the responsibility of the
distributor. Unless prior to shipment of the Products the Distributor
provides Company with a tax exemption certificate acceptable to the appropriate
taxing authorities, Distributor shall pay any present or future excise, sales,
use or similar tax, duties or other governmental charges, and Distributor agrees
to indemnify Company against liability for payment of such
taxes. Such taxes, when applicable, will appear as separate items on
the invoice.
2.9 Payment Terms.
Payment shall be made in full prior to a shipment of product by wire to an
Oculus account that will be furnished.
2.10
Minimum Orders; Minimum
Purchase. Minimum ordering quantities are set forth in Exhibit A. No
orders shall be accepted, unless such orders are at least equal to or greater
than the minimum quantities set forth in Exhibit
A. Distributor agrees to purchase sufficient
Products to meet the minimum purchase obligation set forth in Exhibit A for each
calendar year during the term of this Agreement. If, at the end of
each calendar year during the term of this Agreement, Distributor has failed to
purchase the quantity of Products specified in the minimum purchase obligation
set forth in Exhibit
A, then Company may, in its sole discretion, adjust the price charged for
all Products sold to Distributor during the term and recover from Distributor
the difference between: (i) the greater of the price Company would have charged
for the Solution absent the volume discount or, a [ ]* increase in
the purchase price set forth on Exhibit A attached
hereto; and (ii) the price Company charged Distributor during the
term.
3.
Delivery and
Acceptance.
3.1 Delivery of
Solution. Delivery of Solution shall be F.O.B. point of Mexico
or U.S. delivery port. Shipment dates are approximate and are subject
to change.
3.2 Packaging. Company
shall package the Products for shipment to Distributor in the manner customarily
used by Company, unless Distributor requires different packaging specifications,
in which case any such different packaging shall be at Distributor’s
expense. Distributor will provide such reasonable specifications to
Company in writing within thirty (30) days of the Effective Date.
*
Confidential material redacted and separately filed with the
Commission.
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3.3
Risk of Loss or
Damage. Title and risk of loss will be transferred to
Distributor upon delivery of Products by Company to the point of Mexico or U.S.
delivery port. Unless Company receives specific shipping instructions
from Distributor within thirty (30) days prior to the scheduled shipment date,
Company may exercise its own discretion in selecting the method of
shipment. In no event will the carrier be considered an agent or
representative of Company. Distributor will also bear the risk of
loss with respect to any Products rejected by Distributor until received by
Company.
3.4
Delivery
Performance. Company may make partial deliveries of the Products under
this Agreement. Partial deliveries will be separately invoiced by
Company and paid for by Distributor without regard to subsequent
deliveries.
3.5 Cancellation;
Rescheduling. Distributor may not cancel or reschedule any
shipment under a Purchase Order once the Purchase Order is accepted by
Company.
3.6 Product Acceptance.
Company is fully responsible for the quality of the
products. Products shipped by Company must materially conform to the
Solution Specifications as further defined in Exhibit B at the time
of shipment by Company. Use of the Products by Distributor or its
customers, or the failure by Distributor to return the defective Products after
five (5) days following the arrival date of the Distributor’s warehouse of such
Products shall constitute acceptance by the Distributor. Any Products
properly rejected will be returned to Company in accordance with the return
procedures set forth in Article VI with respect to warranty claims.
3.7 Security
Interest. Company hereby reserves and Distributor hereby
grants to Company a purchase money security interest in the Products sold under
this Agreement and the proceeds thereof and accounts receivable, until payment
in full of the purchase price. Distributor agrees to execute any
financing statements, continuation statements or other documents as Company
requests to protect its security interest.
3.8 Force
Majeure. In no event will Company be liable for any
reprocurement costs for delay in delivery or non-delivery due to causes beyond
Company’s reasonable control, including but not limited to supplier delays,
shortages of labor, energy, components, raw materials or supplies, acts of God,
labor unrest, fire, explosion or earthquake. If such delay occurs,
the date of delivery shall automatically be extended for a period equal to the
time lost by reason of the delay. In any event, Company shall not be
in default for failure to deliver unless Company does not commence to cure such
failure within ten (10) days after receipt of written notice from Distributor of
such failure to deliver. Distributor’s sole remedy for such default
shall be cancellation of the applicable Purchase Order.
4.
Certain
Obligations.
4.1 Distribution
Efforts. Distributor shall consult and cooperate with Supplier
in connection with the marketing, sale and distribution of Supplier’s Products
under this Agreement. Without limiting the generality of the
foregoing, Distributor shall prepare and submit to Supplier, at least ninety
(90) days prior to the commencement of each Contract Year, a written plan for
the marketing, sale and distribution of Supplier’s Products under this Agreement
in the Territory during such Contract Year. Distributor’s plan shall
include, without limitation: (a) a description of the promotional,
advertising and other marketing activities planned by Distributor for each
division within the Territory during the applicable Contract Year; (b) a budget
and schedule for such activities; (c) Distributor’s best estimate of
anticipated sales of Supplier’s Products in each division within the
Territory during the applicable Contract Year; and (d) a description of any
training or other support to be provided by Distributor during the applicable
Contract Year, which shall be subject to Supplier’s approval not to be
unreasonably withheld or delayed. Distributor shall use commercially
reasonable effort to comply with the plan for each Contract
Year. Distributor shall supply all sales and marketing material in
the Field (included, but not limited to translation of promotional literature
marketing materials manuals and other documentation for the liquid and gel.
Supplier shall supply Distributor, as reasonably, requested from time to time,
information required in order to prepare sales and marketing
materials.
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4.2 Laboratory
testing. Company shall cooperate with Distributor for the
rebottling aging test. The Distributor will be responsible for
sending samples using Fedex express to Company for testing. Company
shall provide test reports back to Distributor based on correct lot
numbering.
4.3 Documents and
Licensing. The Company must provide the necessary documentations and
licensing to Distributor in order to allow rebottling the products in China
within 30 days after the agreement is executed.
4.4 Products Registration and
Extension. Company’s registration for the products in China will
[ ]*. Distributor will be responsible for updating the
registrations before expiration date in order to continue the legal sale of
Products in China. Company shall provide necessary documents and information to
Distributor for the registration.
4.5 Compliance with
Laws. Distributor shall conduct its business in accordance
with all laws and regulations of any country in which Licensee is marketing and
distributing the Products. Without limiting the foregoing, Licensee
shall not market sell any Solution except in compliance with the Regulatory
Approvals and all applicable laws and regulations.
4.6 Use of
Products. Distributor’s purchase of Solution is solely for use
by Distributor in the Markets. Distributor shall not market,
distribute, sell the Solution on a stand-alone basis or in any market other than
the Markets.
4.7 Support. Subject
to Company’s scheduling and personnel constraints, Company will provide to
Distributor reasonable engineering, research, development
and marketing support, including training in the proper use and
clinical benefits of the Products, and access to its personnel as needed for
sales of the Products in the Markets. The two parties shall have scheduled
academic exchanges. Chinese experts or professionals will come to the
U.S. for observation and study, and/or Company will send their experts or
professionals to China. Each party shall bear their own expenses for the visit
trip.
*
Confidential material redacted and separately filed with the
Commission.
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4.8 Branding of
Solution. Distributor may market, sell and distribute
the Products using Company’s trademarks, logos, and other proprietary
designations, packaging and marketing materials. Distributor shall
have no right whatsoever to use Company’s marks without Company’s prior written
consent.
4.9 Shared
Knowledge. Company agrees that Distributor can use the
website link between the two parties.
4.10 Management
Review. The senior project managers of both parties will meet
at least bi-annually during the term of this Agreement to discuss the status of
the parties’ business relationship, each party’s upcoming plans relating to the
Products, the competitive situation in the Markets for the Products, and similar
matters.
5.
Ownership.
5.1 Company’s
IP. Company is and shall be the sole and exclusive owner of
all Intellectual Property Rights in and to the Products and Company’s
Technology, including without limitation its Microcyn Technology, and any and
all inventions, technology, know-how and other intellectual property made,
conceived, created, reduced to practice or otherwise developed as part of
Company’s services pursuant to Article IV of this Agreement, and all
improvements, enhancements, modifications and derivatives of any of the
foregoing (collectively, “Company’s IP”).
5.2 No Reverse
Engineering. Distributor acknowledges that the Products
contain the valuable trade secret information of Company and other proprietary
information of Company. Accordingly, Distributor agrees that it will
not, at any time during the term of this Agreement or thereafter, reverse
engineer or otherwise attempt to discern the trade secret information of the
Products, nor will Distributor permit any third party to do any of the
foregoing. Company acknowledges that the Distributor’s Process
contains the valuable trade secret information of Distributor and other
proprietary information of Distributor. Accordingly, Company agrees
that it will not, at any time during the term of this Agreement or thereafter,
reverse engineer or otherwise attempt to discern the trade secret information of
the Distributor’s Process, nor will Company permit any third party to do any of
the foregoing.
6.
Limitation On Liability And
Remedies.
6.1 Company Limited Warranty;
Limitation of Remedies.
(a) Company
warrants that each Solution delivered will, under normal use and conditions,
substantially conform to the applicable Solution Specifications for a period of
thirty (30) days after the specific Solution has been shipped to
Distributor. This limited warranty does not cover the results of
accident, abuse, misapplication, vandalism, acts of God, use contrary to
specifications or instructions, or modification by anyone other than
Company.
(b) Company’s
entire liability and Distributor’s exclusive remedy shall be replacement of the
materially non-conforming Products. Distributor may reject and return
such non-conforming Products for modification or replacement by Company provided
that Distributor must first obtain a Return Material Authorization from Company.
Company shall issue a Return Material Authorization ("RMA") within two (2)
business days after Distributor's request. Any additional terms of the RMA
procedure shall be mutually agreed to between the parties. Distributor shall
include the RMA number with all returns. Distributor shall return all
such non-conforming Products to Company within fifteen (15) days of
Distributor’s receipt of such Products.
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(c) Distributor
is liable for all transit costs associated with return and Company is liable for
all transit costs associated with replacement of non-conforming
Solution.
(d) If
modification or replacement is not reasonably possible, then Company may elect
to refund to Distributor an amount equal to the purchase price for the
non-conforming Products, and such refund shall be Distributor’s entire
remedy. Any replacement Solution will be warranted for the remainder
of the original warranty period. Company shall not be responsible for
any labor costs or other costs Distributor incurs incident to the replacement of
any non-conforming Solution.
(e) If
Company determines that any returned Solution conformed to the warranty, Company
will return the Solution to Distributor at Distributor’s expense, freight
collect, along with a written statement setting forth Company’s conclusion that
the returned Solution was not defective, and Distributor agrees to pay Company’s
reasonable cost of handling and testing the returned Solution.
(f) EXCEPT AS
EXPRESSLY SET FORTH IN THIS ARTICLE VI, THE PRODUCTS ARE PROVIDED “AS-IS”
WITHOUT WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
AND AGAINST INFRINGEMENT. EXCEPT AS EXPRESSLY SET FORTH IN THIS
ARTICLE VI, COMPANY DOES NOT WARRANT THAT THE PRODUCTS WILL MEET SPECIFIC
REQUIREMENTS.
6.2 Consequential Damages
Waiver. IN NO EVENT WILL COMPANY BE LIABLE TO DISTRIBUTOR OR
ITS CUSTOMERS FOR ANY INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE OR INDIRECT
DAMAGES, INCLUDING BUT NOT LIMITED TO ANY LOST PROFITS OR LOST SAVINGS ARISING
OUT OF THE USE OR INABILITY TO USE THE PRODUCTS OR OTHERWISE ARISING OUT OF OR
RELATED TO THIS AGREEMENT, EVEN IF COMPANY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
6.3 Limitation of
Liability. COMPANY’S AGGREGATE LIABILITY UNDER OR ARISING OUT
OF THIS AGREEMENT FOR ANY CLAIM, WHETHER BASED ON CONTRACT, TORT OR OTHERWISE,
SHALL BE LIMITED TO AN AMOUNT EQUAL TO THE AMOUNT PAID BY DISTRIBUTOR TO COMPANY
UNDER THIS AGREEMENT FOR THE PRODUCTS THAT ARE THE SUBJECT OF THE LIABILITY IN
THE SIX-MONTH PERIOD IMMEDIATELY PRECEDING THE DATE ON WHICH THE CLAIM
AROSE.
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7.
Indemnification.
7.1 Indemnity. Distributor
agrees that it will, at its own expense, defend all suits or proceedings
instituted against Company arising out of any marketing, sale or use of the
Solution that is not expressly permitted by the terms of this Agreement or any
breach of Distributor’s obligations hereunder.
8. Confidential
Information
8.1 Ownership of Confidential
Information. Company is and shall remain the owner of its
Confidential Information. Nothing contained in this Agreement shall
be construed as granting any rights by license or otherwise to such Confidential
Information.
8.2 Agreement to Maintain
Confidentiality. Distributor shall take all reasonable steps
to ensure that it and its agents maintain the confidentiality of the
Confidential Information.
8.3 Agreement Not to Use or
Disclose. Except as provided in this Agreement, Distributor
shall not disclose to any other person or entity the Company’s Confidential
Information of the disclosing party or use such Confidential Information for any
purpose other than the purposes expressly authorized under this
Agreement. Such Confidential Information may be disclosed to an
independent contractor of the receiving party solely in the performance of the
obligations of the receiving party under this Agreement; provided, however,
that the receiving party shall ensure that any such independent contractor has
first signed an appropriate confidentiality agreement, at least as
restrictive as the provisions contained in this Article VIII and the
receiving party shall remain fully responsible for the independent contractor’s
performance of its obligations under such agreement.
8.4 Specific
Performance. The parties recognize and agree that any breach
by the receiving party of its obligations contained in this Article VIII
would cause irreparable harm to the disclosing party such that the disclosing
party could not be compensated for the harm by money damages
alone. Therefore, the parties agree that the provisions of this
Article VIII shall be enforceable by specific performance, including
injunctive relief.
9.
Term and
Termination.
9.1 Term. This
Agreement shall be effective and in full force for five (5) years from the
Effective Date (“Term”), and thereafter shall renew by mutual written consent
for additional, successive periods of three (3) years each, unless terminated
earlier pursuant to this Article 9.
9.2 Termination for Failure to
Meet Minimum Purchase Requirement. Company will have the right
to terminate this Agreement if Distributor fails to meet the Minimum Purchase
Requirements as listed in Exhibit A. Company will provide one hundred
and eighty (180) days written notice upon failure to meet the Minimum Purchase
Requirements during which time the Company will maintain effective pricing to
Distributor and may elect to sell products to other parties.
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9.3 Termination for
Cause. Either party will have the right to terminate this
Agreement for cause upon forty five (45) days’ prior written notice to the other
party of a material breach of this Agreement by the other party that remains
uncured during such forty five (45) day period.
9.4 Effect of
Termination.
(a) Upon the
termination of this Agreement for any reason, each party shall retain ownership
of its respective Confidential Information and shall return to the other party
all of the Confidential Information received from the other party up to the time
of termination.
(b) Upon
termination of this Agreement, Distributor will pay to Company any amounts due
under this Agreement.
(c) If
Distributor terminates this Agreement without cause or if Company terminates
this Agreement for cause, then, Company may elect to (i) continue to supply
Products to Distributor under Purchase Orders that Company accepted prior to the
effective date of termination and Distributor agrees to pay Company the purchase
price for such Products or (ii) cancel all such Purchase Orders and Company will
have no liability for such cancellation.
(d) If
Company terminates this Agreement without cause or if Distributor terminates
this Agreement for cause, then Distributor may elect either (i) to have Company
supply the Products under Purchase Orders that Company accepted prior to the
effective date of termination and Distributor agrees to pay Company the purchase
price for such Products or (ii) to cancel such Purchase Orders in accordance
with the terms of this Agreement.
(e) Neither
Company nor Distributor shall be liable to the other for compensation,
reimbursement or damages for the loss of prospective profits, anticipated sales
or goodwill as a result of the termination of this Agreement in accordance with
the terms of Section 9.2 or Section 9.3.
9.5 Survival. Upon
the expiration, or the termination for any reason, of this Agreement, the rights
and obligations of the parties under Sections 2.6, 2.7, 3.7, 3.8, 4.1, 9.4, 9.5
and Articles I, V, VI, VII, VIII, IX and X shall survive and remain in
effect.
10.
Miscellaneous.
10.1 Notices. All
notices shall be deemed given (i) five days after being deposited in the U.S.
mail, postage prepaid, certified or registered, return receipt requested;
or (ii) one day after being sent by overnight courier, charges prepaid, with a
confirming fax; and addressed as set forth at the signature line below or
to such other address as the party to receive the notice or request so
designates by written notice to the other.
10.2 Export Controls.
Distributor shall comply with all applicable laws and regulations, including
without limitation, applicable export and import laws and regulations.
Distributor will not export, reexport, divert, transfer or disclose, directly or
indirectly, the Products and any related technical information or materials
without complying with the export control laws and all legal requirements in the
relevant jurisdiction. Obtaining any necessary export or import
approval for the Products and/or any portion thereof is the responsibility of
Distributor.
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10.3 Storage and
Distribution. Supply of Solution by Company to Distributor will be in
accordance with the shipping instructions provided by Company. The
storage conditions will be established and defined in the Solution
specifications. Expiration dating of the Solution will be provided by
the Company.
10.4 Customer Complaints.
All customer feedback received by Company or Distributor which could be related
to the quality of Company will be communicated in writing to the Quality
Assurance Department of Company as soon as possible. Complaints will
be documented and managed in accordance with Company
procedures. Complaints relating to Company manufacturing or Quality
Control issues will be fully investigated by Distributor’s Quality Unit and a
report prepared and issued to Company’s QA Representative within a reasonable
time-frame mutually agreed to between Company and Distributor from receipt of
the complaint unless otherwise specified (medical urgency).
10.5 Recalls. In the event
either party has reason to believe that one or more batches of any of the
Solution which are the subject of this Agreement should be recalled or withdrawn
from distribution, such party shall immediately inform the other in
writing. Recalls will be managed by Company in accordance with
Company procedures.
10.6 Audits. Upon
reasonable advanced notice, Distributor will permit Company, or persons
designated by Company, to audit manufacturing and storage facilities, processes
and related procedures used by Distributor to process, inspect, package, label
or store Solution and may also be performed by Company representatives to
qualify facilities and equipment and to ensure regulatory compliance of
Distributor quality systems. Distributor will provide a written
response to any audit findings communicated to Distributor in an Audit
Report. The final determination for fitness of Distributor as a
contract manufacturer for Company Product rests with Company.
10.7 Assignment and
Subcontracting. This Agreement and all rights and
obligations hereunder are personal to the parties hereto and shall not be
assigned by either party to any third party without the prior written consent
thereto by the other party except that Company may assign this Agreement to an
affiliate or to a successor to all or substantially all of the Company’s assets
or to a majority of Company’s voting stock. This Agreement shall benefit and be
binding upon the parties to this Agreement and their respective permitted
successors and assigns.
10.8 Waiver. No
term or condition of this Agreement shall be deemed waived unless such
waiver is in a writing executed by the party against whom the waiver is sought
to be enforced. Failure or delay in the exercise of any right, power
or privilege hereunder shall not operate as a waiver thereof or of any
subsequent failure or delay.
10.9 Governing Law, Jurisdiction,
Venue. The formation, validity, construction and the
performance of this Agreement are governed by the laws of the United States
exclusive of its choice of law principles. In the event of any
differences or disputes arising out of the performance of this Agreement, the
parties agree that the same shall be settled through discussions between
them. If the differences or disputes remain unresolved thereafter,
the same would be settled through an arbitration proceeding, to be held in Hong
Kong, under the substantive laws of the United States. The English
language shall be the controlling language.
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10.10 Severability. If
any of the provisions of this Agreement in any way violate or contravene any
laws applicable to this Agreement, such provision shall be deemed not to be a
part of this Agreement and the remainder of this Agreement shall remain in full
force and effect. In such event, the parties agree to negotiate in
good faith to substitute legal and enforceable provisions that most nearly
effect the original intent of the severed provision.
10.11 Subject
Headings. The captions and headings used herein are intended
for convenience only, and shall not affect the construction or interpretation of
any section or provision of this Agreement.
10.12 Entire Agreement;
Amendments. This Agreement, including Exhibits A and B hereto,
constitutes the entire understanding and agreement of the parties related to the
subject matter hereof, and supersedes any and all prior or contemporaneous
offers, negotiations, agreements and/or understandings, written or oral, as to
such subject matter. Except as provided herein, no amendment,
revision or modification of this Agreement shall be effective or binding unless
made in writing and signed by the party against whom enforcement is
sought.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date transcribed below.
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COMPANY:
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DISTRIBUTOR:
Tianjin
Ascent Import and Export Company, Ltd.
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BY: /s/ Xxxxx Xxxxxxxx
TITLE: Executive Vice President
DATE: January 25, 2011
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BY: /s/ Xxxxxx Xxx
TITLE: Vice General Manager
DATE: January 28, 2011
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ADDRESS: 0000
Xx. XxXxxxxx Xxxxxxxxx
Xxxxxxxx,
XX 00000
PHONE:
(___) __________________
FAX:
(___) ____________________
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ADDRESS:
PHONE:
(___) ____________________
FAX:
(___) ______________________
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MANDARIN
TRANSLATION OF DEFINITIVE ENGLISH TEXT FOR INFORMATION ONLY
-12-
EXHIBIT A
PRODUCTION VOLUME QUANTITY
AND PRICING SCHEDULE
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I.
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Solution
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The
solution shall be defined as “super-oxidized, pH-neutral water that is
manufactured by Oculus using Oculus’ patented electrolysis process and
currently sold under the name Dermacyn in the United States in the
advanced wound care human health
market.”
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From
time to time, the Company may introduce new products into the marketplace
for use in the Market. The parties agree to work in good faith
regarding distribution rights to those new products in the
Territory.
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II. Minimum
Order
Minimum
ordering quantity per purchase order to be placed with Company under this
Agreement shall not be less than [ ]* per shipment and may be
comprised of any combination of the product sizes noted
below. Pricing and Annual Minimum Quantity
The
annual minimum purchase order volume to maintain distribution rights within the
Territory is as listed below. The first order at the amount of
$180,000 must be placed by January 25, 2010 and will be delivered to the
destination port of Mexico or U.S. prior to March 31, 2010.
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($US
Dollars)
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Year
1
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Year
2
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Year
3
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Year
4
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Year
5
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Minimum
Sales
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$[ ]*
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$[ ]*
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$[ ]*
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$[ ]*
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$[ ]*
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Price
per 1000 liter tote
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$[ ]*
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$[ ]*
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$[ ]*
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$[ ]*
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$[ ]*
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Price
per 5 liter unit
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$[ ]*
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$[ ]*
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$[ ]*
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$[ ]*
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$[ ]*
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The
above prices do not include shipping costs from destination port in Mexico or
U.S.
The Distributor
assumes shipping and insurance costs from destination port in Mexico or U.S. to
final destination in China.
[ ]*
shall equal [ ]* of the minimum purchase order volume in
Years 1 and 2 for each year, and shall ship with the purchased products
together. In Year 3, Year 4, and Year 5, [ ]* shall equal to
[ ]* of the minimum purchase order volume for each year. If in Year 1
Distributor purchase [ ]* worth of products, then Company shall
provide [ ]* to Distributor. In Year 2 Distributor purchase
[ ]* worth of products, Company shall provide [ ]*. In
Year 3 Distributor purchase [ ]* worth of products, Company shall
provide [ ]* worth of free samples. In year 4 Distributor purchase
[ ]* worth of products, Company shall provide [ ]*. And in
year 5 Distributor purchase [ ]* worth of products, Company shall
provide [ ]*. In addition, Company shall provide [ ]* to
Distributor as the support to the development of Chinese market in December,
2011. [ ]* assumes shipping and insurance costs
[ ]* from destination port in Mexico or U.S. to final destination in
China.
*
Confidential material redacted and separately filed with the
Commission.
A-1
EXHIBIT
B
PRODUCT
SPECIFICATIONS
Product
Specifications shall mean the product claims and specifications contained in the
Company’s current Dermacyn FDA cleared 510(K) label claim sold in the United
States of America as an advanced wound care product with no less than a twenty
four (24) month self life from date of shipment. The production date of the
products cannot exceed more than 30 days since the shipment date of the
products.
For each
lot of Products shipped, the Company will provide copies to Distributor of a
Certificate of Conformation, attached as Exhibit C, reflecting the Solution
meets the manufacturer’s specifications for the following tests:
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1.
pH:
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[ ]*
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2.
Oxidation
Reduction Potential: (ORP)
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[ ]*
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3.
Free
Available Chlorine:
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[ ]*
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4.
Microbial
Kill:
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[ ]*
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*
Confidential material redacted and separately filed with the
Commission.
EXHIBIT
C
CERTIFICATE OF
CONFORMATION
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Lot#:
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H
-
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No
of units:
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Manufacturing
date:
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Expiration
date:
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Chemical
analysis
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pH-value
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ORP-value
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mV
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Free
available Chlorine
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ppm
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Microbiological
Spore Reduction
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Tested
by:
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Date:
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2
