Contract
Certain
portions of the below Distribution Agreement have been redacted based on a
request for confidential treatment and those portions have been filed separately
with the Securities and Exchange Commission.
THIS
AGREEMENT made as of the 21st day of February, 2005. ("Effective
Date")
BETWEEN:
|
SKINVISIBLE
PHARMACEUTICALS, INC.,
a
company incorporated under the laws of the State of Nevada having
its
principal place of business located at Xxxx #00 - 0000 Xxxxx Xxxxxxxx
Xxxx, Xxx Xxxxx, Xxxxxx, 00000 (“Skinvisible”);
|
AND:
DERMAL
DEFENSE, INC.,
a
company incorporated under the laws of the State of Michigan having its
principal place of business located at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxx, XX
00000 (the “Distributor”).
WHEREAS:
A. Skinvisible
is in the business of developing polymer-based delivery systems and related
technologies for combining hydrophilic and hydrophobic polymer emulsions and
licensing its technologies and/or selling its polymer delivery systems to
established brand manufacturers and providers of topical prescription and
over-the-counter cosmetic and skin-care Product.
B. The
Distributor is engaging in the business of marketing and distributing skin-care
Product.
C. Skinvisible
and the Distributor have agreed to enter into this Agreement, whereby the
Distributor will have the exclusive right to distribute, market, sell and
promote the Product throughout the Territory.
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
herein set forth and other good and valuable consideration, the parties agree
as
follows:
I. DEFINITIONS
In
this
Agreement, the following terms have the following meanings:
1.1 “Customers”
means,
at any time and from time to time, the customers of the Distributor in respect
of the Product.
1
1.2 “Confidential
Information” means
any
and all technical or business information, data, designs, concepts, ideas,
Product, processes, methods, techniques, specifications, formulas, compositions,
samples, know-how, trade secrets, and improvements of a confidential or
proprietary nature, whether in tangible form or not, which relate to the
Product, or the development, manufacture, end-use, or commercialization thereof,
and were disclosed by one party to the other party under this Agreement. As
used
herein, “Confidential Information” shall not include information a party can
demonstrate through its records:
(a)
is, at
the time of disclosure, available to the general public;
|
(b)
|
becomes
at a later date available to the general public through no fault
of the
receiving party, and then only after said later
date;
|
|
(c)
|
was
already in the possession of the receiving party without restriction
prior
to the date of disclosure;
|
|
(d)
|
is
disclosed to the party without secrecy obligations by a third party
who
had a lawful right to disclose it;
or
|
|
(e)
|
is
independently developed by personnel of the receiving party who had
no
direct or indirect access to the Confidential Information of the
disclosing party.
|
1.3 "Formula"
shall
mean the specific ingredients, composition, and process for preparing the
Product (as defined below).
1.4 "Patents"
shall
mean U.S. Patent No. 6,582,683 issued on June 24, 2003 for "Dermal Barrier
Composition"; U.S.S.N. 09/933,275 filed on August 20, 2001 and U.S.S.N.
10/154,723 filed on May 23, 2002, both for "Topical Composition, Topical
Composition Precursor, and Methods for Manufacturing and Using the Same";
Canadian Application No. 2,457,124 filed on August 16, 2002 for "Topical
Composition, Topical Composition Precursor, and Methods for Manufacturing and
Using the Same"; PCT Application No. US02/26301 filed on August 16, 2002 for
purposes of the countries designated therein that are within the Territory;
and
all divisions, continuations, continuation-in-parts, reissues, reexamination
applications, extensions, foreign equivalents within the Territory, and patents
issuing therefrom which are owned or controlled by Skinvisible pertaining to
the
Product, Confidential Information, and Improvement Inventions.
1.5 "Product"
means
Skinvisible's proprietary antimicrobial hand sanitizer product incorporating
1%
Triclosan as an active ingredient, and further identified in Appendix
A.
1.6 "Product
Specifications"
shall
mean the specifications for the Product that will likely be needed to meet
customer and regulatory requirements. These Product Specifications shall not
be
modified without the express, written agreement of the parties.
1.7
"Territory"
means
those countries identified in Schedule C.
2
II. APPOINTMENT,
TERRITORY AND PRODUCT
2.1 Subject
to the terms hereof, Skinvisible hereby appoints the Distributor and grants
to
the Distributor the exclusive right to distribute, sell, market and promote
the
Product within the Territory. For greater certainty, while this Agreement shall
remain in effect, except for sub-distributors appointed by the Distributor
and
consented to in writing by Skinvisible, no person, firm or corporation will
be
granted the right to distribute, sell, market or promote the Product within
the
Territory other than the Distributor.
2.2 The
Distributor shall not be entitled to appoint sub-distributors to distribute,
market, sell, or promote the Product within the Territory without the prior
express written consent of Skinvisible, pursuant to Article VIII, which shall
not be unreasonably withheld.
2.3 The
Distributor shall be restricted from integrating the Product into the
manufacture and production of finished Product to be distributed, sold, marketed
and promoted by or on behalf of the Distributor or its permitted agents,
associates, affiliates, or sub-distributors. However, the Product may be sold
under a "private" label by the Distributors or its permitted agents, associates,
affiliates, or sub-distributors, provided that all packaging costs are paid
in
advance to Skinvisible.
2.4 Distributor
recognizes that Skinvisible is in the business of developing, marketing,
selling, and distributing its polymer-based delivery systems and related
technologies (including Product), and developing end-use applications therefore,
on worldwide bases. For so long as Distributor retains its exclusive
distribution rights for the Product granted under Section 2.1 of this Agreement,
Skinvisible shall refrain from selling the Product to customers within the
Territory, or engaging any third party as a distributor of the Product within
the Territory.
III. DISTRIBUTOR
NOT MADE AGENT OR LEGAL REPRESENTATIVE
This
Agreement does not render Distributor an agent or legal representative of
Skinvisible for any purpose whatsoever. The Distributor is not granted any
right
or authority to assume or to create any obligation or responsibility, express
or
implied, on behalf of or in the name of Skinvisible or to bind Skinvisible
in
any manner or thing whatsoever.
IV. PRICING
AND PAYMENT
4.1 Product
shall be sold to the Distributor by Skinvisible at the pre-determined prices
set
forth in Schedule B hereto. Any change in the price of Product shall not affect
orders by the Distributor that were accepted by Skinvisible prior to such
change. As business conditions warrant, Skinvisible shall have the unrestricted
right to change the price of the Product, provided that the increase is directly
attributable to higher costs of raw materials, other manufacturing costs, or
an
increase in the Cost of Living Index, and that Skinvisible provides Distributor
sixty (60) days prior written notice of any such price increase before it
becomes effective.
3
4.2 The
Distributor shall pay for all orders for Product by electronic bank transfer,
certified check or bank draft in favor of Skinvisible
4.3 Except
as
provided in Section 5.5(b), the purchase price for each order of Product must
be
paid by the Distributor prior to shipment of the Product and the Distributor
shall incur all shipping and packaging costs.
4.4 The
Distributor shall pay Skinvisible an up-front license fee in the amount of
$1,000,000 USD for the exclusive right to distribute, sell, market and promote
the Product within the Territory. Skinvisible acknowledges receipt of a $250,000
nonrefundable deposit applicable toward this up-front license fee. The remaining
$750,000 USD is payable under the following schedule until Skinvisible has
received the $750,000:
|
Date
of Payment
|
Amount
of Payment
|
|
June
30, 2004
|
$75,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the prior quarter, whichever is
greater
|
|
September
30, 2004
|
$75,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the prior quarter, whichever is
greater
|
|
December
31, 2004
|
$75,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the prior quarter, whichever is
greater
|
|
March
31, 2005
|
$75,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the prior quarter, whichever is
greater
|
|
June
30, 2005
|
$75,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the prior quarter, whichever is
greater
|
|
September
30, 2005
|
$75,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the prior quarter, whichever is
greater
|
|
December
31, 2005
|
$75,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the prior quarter, whichever is
greater
|
|
March
31, 2006
|
$75,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the prior quarter, whichever is
greater
|
|
June
30, 2006
|
$75,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the prior quarter, whichever is
greater
|
|
September
30, 2006
|
$75,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the prior quarter, whichever is
greater
|
Under
no
circumstances shall the installments towards such up-front license fee exceed
in
the aggregate $750,000.
|
(a)
|
Payments
made under this Section 4.4 are separate and in addition to payments
to be
made under Section 4.1 for the Product and the running royalties
due under
Section 4.5.
|
|
(b)
|
In
the event that payments are not made as set forth in this Section
4.4 and
the parties are unable to agree to a revised schedule of payments
within
thirty (30)
|
4
|
|
days of the date for payment, then Skinvisible may in its sole discretion terminate the Agreement or any provision therein and retain, without any claim or demand from the Distributor, all monies previously paid. |
4.5 The
Distributor shall pay quarterly to Skinvisible a running royalty fee in order
to
maintain the exclusivity granted herein no later than thirty (30) days after
the
end of each quarter. The amount of the royalty shall be calculated as
follows:
|
Quarter
Ended
|
Amount
of Payment
|
|
June
30, 2004
|
$5,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the quarter, whichever is greater
|
|
September
30, 2004
|
$10,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the quarter, whichever is greater
|
|
December
31, 2004
|
$15,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the quarter, whichever is greater
|
|
March
31, 2005 and subsequent Year Quarters
|
$20,000
or 5% of gross revenues generated by Distributor from sales of the
Product
in the Territory in the quarter, whichever is
greater
|
|
(a)
|
In
the event that payments are not made as set forth in section 4.2,
then
Skinvisible shall give the Distributor a written notice of default.
If
payment is not received within thirty (30) days following receipt
of the
notice of default, then Skinvisible may in its sole discretion terminate
the Agreement or any provision therein and retain, without claim
or demand
from the Distributor, all monies previously
paid.
|
|
(b)
|
The
Distributor shall provide to Skinvisible documentation including,
but not
limited to, receipts, invoices, or other documentation that shall
reasonably allow Skinvisible to confirm the accuracy of the royalty
payment made.
|
|
(c)
|
Skinvisible
shall be entitled to audit the accuracy of the royalty payments made
by
the Distributor. Skinvisible shall incur the expense of the audit
only if
it is determined that Skinvisible received ninety percent (90%) or
more of
the audited amount and in all other circumstances the Distributor
shall
incur the expense of the audit. The existence of an audit for any
quarterly payment does not suspend or relieve the Distributor from
their
obligation to make a royalty payment within thirty (30) days after
the end
of each quarter.
|
4.6 All
payments by the Distributor to Skinvisible to be made hereunder shall be in
United States dollars.
V. TERMS
AND CONDITIONS OF PRODUCT ORDERS
5
5.1 The
Distributor shall submit a written purchase order to Skinvisible specifying
the
amount of Product required. Skinvisible agrees to provide an acceptance of
an
order within three (3) business
days after receiving a written purchase order from the Distributor.
5.2 All
of
the Product ordered by the Distributor shall be shipped within three (3) weeks
from the date the acceptance of an order has been delivered to the Distributor
and shall carry an expiration date of three (3) years from the date of shipment.
Delivery of all Product sold by Skinvisible to the Distributor shall be F.O.B.
the place of Product manufacture. The
method and route of shipment shall be at the sole discretion of the Distributor
subject to Skinvisible’s guidelines for the method and conditions of shipment
which would provide for arrival of the Product at the Distributor’s point of
delivery in substantially the same condition as such Product were at the point
of shipment. These guidelines include conditions regarding temperature (which
shall not exceed at a maximum of 450
Celsius
and at a minimum of 40
Celsius)
to preserve the quality and integrity of the Product during shipment. Failure
of
Distributor to abide by Skinvisible’s guidelines in the shipment of the Product
shall bar the Distributor from making any claim whatsoever against Skinvisible
arising from any defect in the Product which occurred or arose during shipment.
Nothing in this section shall mean or be implied to mean that there is any
shifting of the risk of loss of goods to Skinvisible once such goods are placed
in the control of Distributor’s carrier. All such risk of loss is borne by
Distributor once the Product to be shipped have been delivered to or placed
in
the control of the carrier.
5.3 Title
to
the Product shall pass from Skinvisible to the Distributor upon the delivery
to
a recognized commercial carrier of the Product for shipment to the Distributor.
5.4 Skinvisible
shall deliver the Product to the Distributor free and clear of all liens,
encumbrances and security interests and shall not, without the prior written
consent of the Distributor: (a) transfer, deliver or otherwise provide the
Product as listed in the written purchase order submitted by the Distributor
to
any other person or entity; or (b) assign any rights to the Product as listed
in
the written order submitted by the Distributor to any other person or
entity.
5.5 Prior
to
receiving an acceptance of the written order from Skinvisible, the Distributor
may cancel any order at any time, with or without cause, and the Distributor’s
liability for such cancellation shall be limited to Skinvisible’s out-of-pocket
costs and expenses incurred for such cancelled order.
5.6 The
Distributor shall give notice to Skinvisible of any claims relating to the
non-conformity of Product. The Distributor shall make all claims with respect
to
the Product as follows:
|
(a)
|
Any
claim that a shipment contains a shortage of Product or other error
in
delivery must be made by the Distributor to Skinvisible in writing
within
seven (7) days from the date of receipt by the
Distributor of
such shipment of Product together with a reasonable description of
the
delivery error. The Distributor’s failure to make a claim in accordance
with the foregoing sentence shall constitute
|
6
|
|
agreement
by the Distributor that there was no error in delivery. Provided
that the
Distributor makes a claim in accordance with this Section 5.6(a)
and
proves that the shipment contained a shortage of Product or other
error in
delivery, Skinvisible, at the Distributor’s option, shall deliver to the
Customer to such location(s) designated by the Distributor, at
Skinvisible’s risk and cost and expense, the number of Product in shortage
in such shipment, or credit the Distributor the amount of such shortage.
|
|
(b)
|
In
the event that the Distributor claims that upon delivery any of the
Product are non-conforming because the product is not consistent
with the
Certificate of Analysis, the Distributor may reject the same, provided
that (i) within thirty (30) days after receipt by the
Distributor of such shipment of Product, the Distributor notifies
Skinvisible in writing of the nonconformity, (ii) the Distributor
sends
the product out for further review and inspection and it is determined
that the Product are not consistent with the Certificate of Analysis,
(iii) the Distributor returns to Skinvisible, at Skinvisible’s expense,
the rejected Product or shipment, subject to the terms and conditions
hereinafter provided, within seven (7) days after the Distributor
receives
notice that the further review and inspection of the Product found
the
Product to be inconsistent with the Certificate of Analysis, and
(iv) none
of the Product has been changed from its original condition. The
Distributor’s failure to make a claim in accordance with the foregoing
sentence shall constitute unqualified acceptance of all shipments
and
Product. Following receipt of the rejected Product under this Section
5.6(b), Skinvisible shall deliver Product consistent with the Certificate
of Analysis within fourteen (14) days. Provided that the rejected
Product
have been rejected by the Distributor in accordance with the terms
of this
Section 5.6(b) and are proved to have been non-conforming, then
Skinvisible shall credit the Distributor for the cost of the Product
and
all costs and expenses incurred by the Distributor in shipping the
rejected Product back to Skinvisible, if such Product return requested
is
made by Skinvisible to the distributor. The Distributor shall pay
the
costs of the conforming Product within thirty (30) days after receipt
by
the Distributor. The Distributor shall not be responsible for any
royalty
payments on the sale of any Product that do not conform to the Certificate
of Analysis.
|
|
(c)
|
In
the event that the Distributor claims that upon delivery any of the
Product are non-conforming for any reasons other than as set forth
in
Section 5.6(a) or (b), then Distributor may reject the same, provided
that
(i) within thirty (30) days after receipt by the
Distributor of such shipment of Product, the Distributor notifies
Skinvisible of such rejection, in writing, together with a reasonable
description of why the Product have been rejected (the “Rejection
Notice”), (ii) the Distributor, at Skinvisible’s option, may return to
Skinvisible the rejected Product or shipment, subject to the terms
and
conditions hereinafter provided, within thirty (30) days after the
Distributor sends the Rejection Notice, and (iii) none of the Product
has
been changed from its original condition. The Distributor’s failure to
make a claim in accordance with the foregoing sentence shall constitute
unqualified acceptance of all shipments and Product. Provided that
the
rejected
|
7
| Product have been rejected by the Distributor in accordance with the terms of this Section 5.5(c) and are proved to have been non-conforming, Skinvisible shall credit the Distributor for the cost of the Product and all costs and expenses incurred by the Distributor in shipping the rejected Product back to Skinvisible, if such Product return requested is made by Skinvisible to the distributor. |
5.7 The
warranty for defective Product of Skinvisible as from time to time in effect
shall be applicable to all sales of the Product by Skinvisible to the
Distributor. Notwithstanding the provisions of Article XIII hereof, Skinvisible
shall have no obligation or liability to the Distributor for any loss, damage
or
expense of any kind caused directly or indirectly by the Product or the use,
maintenance, repairs or adjustments of or to the Product except as may be
provided in such warranty.
VI. OBLIGATIONS
OF THE SKINVISIBLE
6.1 Skinvisible
shall at
all times during the Term of the Agreement:
|
(a)
|
publish
and make available to the Distributor from time to time a list of
the
Product and a list of the prices charged by Skinvisible
therefore;
|
|
(b)
|
with
respect to each Product sold to the Distributor, provide the Distributor
with a standard Certificate of
Analysis;
|
|
(c)
|
reimburse the Distributor under any warranty obligation of Skinvisible; |
|
(d)
|
provide
Distributor with copies of the research and efficacy studies for
the
Product in Skinvisible's possession as of the Effective Date of this
Agreement.
|
|
(e)
|
permit
the Distributor to use Skinvisible's INVISICARE trademark (collectively
"Trademark") for the sole purpose of advertising, marketing and
distributing the Product within the Territory, and strictly in accordance
with the terms and conditions of the Trademark License Agreement
of
Appendix D.
|
6.2 Skinvisible
hereby grants Distributor a royalty-free, non-exclusive, non-transferable
license to use Skinvisible's Confidential Information, Improvement Inventions,
and Patents that are directly relevant to the advertising, marketing,
distribution, and sale of the Product within the Territory under this Agreement,
and the manufacture by Distributor of the Product, where applicable under
Article VII. This license is limited in scope, and shall not authorize
Distributor to use Skinvisible's Confidential Information, Improvement
Inventions, or Patents outside of this Agreement without Skinvisible's prior,
written consent.
VII. RIGHT
TO MANUFACTURE
7.1 Distributor
shall have the right to manufacture the Product covered by this Agreement,
instead of sourcing it from Skinvisible, provided that: (a) Distributor makes
the Product strictly in accordance with the Formula, and that it achieves the
Product Specifications; (b) Distributor sources the "M1 Polymer" ingredient
for
the Product from Skinvisible; (c) Distributor applies
8
Skinvisible's
INVISICARE Trademark in a prominent fashion to all packaging, labels, tags,
advertising, and promotional materials associated with the Products; and (d)
Distributor pays Skinvisible the license fees and royalties due pursuant to
Sections 4.4 and 4.5. Distributor shall notify Skinvisible ninety (90) days
prior to its commencement of the manufacture of Product under this Section
7.1.
7.2 Should
Distributor decide to manufacture Product under this Agreement, Skinvisible
shall disclose to Distributor as soon reasonably practicable the Formula,
Product Specification, and manufacturing know-how in sufficient detail (using
reasonable commercial efforts) to enable Distributor to make the Products.
This
information shall be treated as Skinvisible's Confidential Information pursuant
to Article X. Notwithstanding the foregoing, Skinvisible shall not be required
to disclose any specific information to Distributor in the event that any
agreement with a third party would preclude Skinvisible from doing
so.
7.3 Distributor
shall bear all costs associated with the: (a) disclosure of the Formula, Product
Specifications, manufacturing know-how; (b) adapting such information or
technology for its use by Distributor; (c) any necessary training; and (d)
any
documentation done for Distributor's internal purposes.
7.4 Distributor
and Skinvisible shall negotiate in good faith a separate agreement for supplying
the M1 Polymer to Distributor for incorporation into the Product to be
manufactured by Distributor, including the purchase price for such M1
Polymer.
7.5 Distributor
shall permit duly authorized representatives of Skinvisible, at reasonable
times, upon reasonable nature, and in the company of Distributor's employees
to
enter any facility where the Product is being manufactured for the purpose
of:
(a) inspecting those portions of the facility used in the manufacture, handling,
or storage of the Product; (b) inspecting the manufacture, handling, and storage
of the Product; and (c) ensuring that the provisions of this Agreement are
being
complied with by Distributor. Such representatives shall comply with all of
Distributor's plant safety and other rules and regulations while at the
facility.
VIII. SUB-DISTRIBUTORS
8.1 In
the
event that Distributor determines that commercial exploitation of the Product
within the Territory requires the appointment of sub-distributors through which
the Product may be sold, then Distributor shall identify such sub-distributors
to Skinvisible, and seek Skinvisible's prior written approval of them, which
shall not be unreasonably withheld, before appointing any such sub-distributors
under this Agreement.
8.2 Any
sub-distributor approved in writing by Skinvisible shall have the right during
the continuance of this Agreement to use Skinvisible’s Trademark, Patents, and
other intellectual property rights licensed under this Agreement for the sole
purpose of promoting the sales of the Product throughout the Territory under
the
same terms and conditions imposed upon Distributor under this
Agreement.
IX. IMPROVEMENT
INVENTIONS
9
9.1 Distributor
shall have no right to make any modifications or improvements to the Product
without Skinvisible's prior, written permission. In the event that Distributor
does conceive, develop, or reduce to practice any invention or other information
arising from or based upon the use of Skinvisible's Confidential Information
or
Product (hereinafter "Improvement Invention"), then Skinvisible shall be the
sole owner of such Improvement Invention, which shall be subject to the
exclusive distributorship grant of Article II. Should Distributor desire
modification or improvement to be made to the Product, then it shall contract
with Skinvisible under a separate agreement to develop such modifications or
improvements.
9.2 Only
Skinvisible shall have the right, in its sole discretion, to patent the Product
and Improvement Inventions.
X. CONFIDENTIALITY
10.1 Each
party recognizes the importance to the other party that of that other party’s
Confidential Information, and such information is critical to the business
of
the disclosing party. Each party recognizes that neither party would enter
into
this Agreement without assurance that its Confidential Information and the
value
thereof will be protected as provided in this Section 10 and elsewhere in this
Agreement.
10.2 All
Confidential Information shall remain the property of the disclosing party.
The
receiving party shall hold in strict confidence the disclosing party’s
Confidential Information and with no less than the same degree of care that
it
holds its own confidential and proprietary information, and it will take all
reasonable precautions to protect such Confidential Information. The receiving
party shall make the Confidential Information received under this Agreement
available only to those of its employees who have a need to know the same in
connection with their work assignments to further the objections contemplated
under this Agreement. No disclosures to third parties shall be made by the
receiving party of such Confidential Information without the prior written
approval of the disclosing party. The receiving party will use the disclosing
party’s Confidential Information only for the purposes and under the
circumstances provided in this Agreement.
10.3 Upon
any
termination of this Agreement, or earlier at a party's request, each party
will
return the other party’s Confidential Information and all documents or media
containing any such Confidential Information to the other party, except that
the
receiving party has the right to keep one copy of such information for legal
purposes (which shall remain subject to the confidentiality provisions set
forth
herein), including, but not limited to, copies of all documentation required
by
the FDA.
10.4 Each
party acknowledges and agrees that the other party shall be entitled to
appropriate equitable relief in addition to whatever remedies it may have at
law
in the event of a breach by the other party of its covenants contained in this
Section 10. The foregoing provision is in addition to, and not in limitation
of,
any and all remedies at law, in equity or otherwise, that the non-breaching
party may have upon the other party’s breach of this Agreement.
10.5 Except
as
otherwise provided in this Agreement, either party shall immediately notify
the
other party of any private or governmental request for Confidential Information
or any other
10
information
or documents relating to the Product or this Agreement. Each party shall have
the right to participate in the other party’s response to any such request. If a
party receives any legal instrument requiring the production of data, work
papers, reports, or other materials relating to this Agreement, that party
shall: (a) give the other party, if possible, the opportunity to participate
in
quashing, modifying or otherwise responding to any compulsory process in an
appropriate and timely manner; and (b) cooperate fully with the other party’s
efforts to narrow the scope of any such compulsory process, to obtain a
protective order limiting the use or disclosure of the information sought,
or in
any other lawful way to obtain continued protection of the Confidential
Information.
10.6 If
either
party becomes aware of the loss, theft or misappropriation of Confidential
Information which is in its possession or control, it shall notify the other
party in writing within seven (7) days of its discovery of such loss, theft
or
misappropriation.
10.7 The
rights and duties of this Article 10 shall survive the termination of this
Agreement, whether upon expiration or termination by either party.
XI. TERM
AND TERMINATION
11.1 This
Agreement shall continue in full force and effect for twenty (20) years from
the
Effective Date or the last to expire of the Patents, whichever occurs first,
unless otherwise terminated as provided in Section 11.2 below, or by mutual
written consent of the parties hereto.
11.2 Either
party may terminate this Agreement at any time as follows:
|
(a)
|
By
either party, effective immediately, in the event that the other
party
should fail to materially perform any of its material obligations
under
this Agreement and should fail to remedy such failure within thirty
(30)
calendar days after receiving written demand to remedy such failure,
or in
the event such other party, despite remedying a particular failure
within
thirty (30) days as aforesaid, is guilty of chronic or persistent
breaches
of such material obligation in question, in the end result having
a
material adverse effect upon the other party;
or
|
|
(b)
|
By
either party, upon thirty (30) days’ written notice if a force majeure
event described in Section 16.1 shall have occurred and continue
for sixty
(60) days.
|
11.3 Skinvisible
may terminate this agreement at any time if the Distributor should become the
subject of any voluntary or involuntary bankruptcy, receivership or other
insolvency proceedings or make an assignment or other arrangement for the
benefit of its creditors, or if such other party should be nationalized or
have
any of its material assets expropriated.
11.4
This
Agreement may also be terminated by mutual agreement of the
parties.
11.5 The
Distributor may not manufacture, market, distribute, or sell any Competing
Product while this Agreement is in full force and effect.
11
XII. EFFECT
OF TERMINATION
12.1 The
rights, duties and obligations of the parties upon and following the expiration
or termination of this Agreement however occurring shall be governed by the
following provisions:
|
(a)
|
The
termination of this Agreement shall not release or affect, and this
Agreement shall remain fully operative as to, any obligations or
liabilities incurred by either party prior to the effective date
of such
termination;
|
|
(b)
|
Skinvisible,
subject to its production capabilities, shall fill all orders submitted
by
the Distributor during the term of this Agreement regardless of whether
any of the Product in such orders are to be delivered after the expiration
or termination of this Agreement. During such period of time that
Skinvisible is filling such orders, all terms of this Agreement shall
apply between the parties with respect to such production;
and
|
|
(c)
|
Notwithstanding
the provisions of section 10 hereof, Skinvisible shall, by reason
only of
the expiration or termination of this Agreement in accordance with
the
terms of this Agreement, be liable in any manner whatsoever to the
Distributor for any damage of any kind whether direct, indirect or
conse-quential, or for any profits on anticipated sales, or for any
expenditures or investments;
|
|
(d)
|
Upon
the effective date of termination of this Agreement, the parties
hereto
acknowledge that the exclusivity provisions set forth in Paragraph
2
herein will no longer be in effect and that any limitations on the
parties
pertaining to sales and marketing and potential customers are dissolved
and the parties are free to contract with any third party for future
business; and
|
|
(e)
|
Termination
or expiration of this Agreement for any reason shall not relieve
the
parties of their obligations under Articles IX, X, XI, XII, XIII,
XIV, and
XV of this Agreement.
|
XIII. WARRANTY
AND REPRESENTATIONS
13.1 As
an
essential term of this Agreement, each party hereby warrants and represents
to
the other party that it is entitled to disclose to and license the other party
to xxx its Confidential Information, Improvement Inventions, and Patents under
the terms of this Agreement without violating the trade secret or contractual
rights of any third party.
13.2 EXCEPT
AS
SET FORTH IN SECTION 13.1, OR AS OTHERWISE SPECIFICALLY STATED HEREIN, THE
PARTIES EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS OR A PARTICULAR PURPOSE,
PATENT VALIDITY, OR NON-INFRINGEMENT OF A THIRD-PARTY PATENT OF OTHER
INTELLECTUAL PROPERTY RIGHTS REGARDING THE USE OR COMMERCIALIZATION OF PRODUCT,
CONFIDENTIAL INFORMATION, IMPROVEMENT INVENTIONS, OR PATENTS.
12
XIV. INDEMNIFICATION
14.1 Each
party shall indemnify, defend and hold harmless the other party from any and
all
claims, costs, liabilities, or damages (including reasonable attorney's fees)
arising from its:
(a) uncured
material breach of this Agreement;
(b) breach
of
any Warranty or Representation provided pursuant to Article XII;
(c)
negligent,
grossly negligent, reckless, or willful acts or omissions. Each party shall
be
responsible for any and all damages that it is subjected to by means of its
own
negligent, grossly negligent, reckless or willful acts or
omissions.
14.2 In
the
event a third-party lawsuit is filed against a party (the "Indemnitee") due
to
the negligent, grossly negligent, reckless or wilful actions or omissions of
the
other party (the "Indemnitor"), then the Indemnitee shall promptly provide
notice of such suit to the Indemnitor, and permit the Indemnitor to control
its
defense, including the terms under which any such suit is settled. The
Indemnitee shall provide all reasonable cooperation to the Indemnitor at the
Indemnitor's expense in the defense of that suit.
XV. PATENT
MARKING
Distributor
shall cause each unit of Product that it manufactures, markets, sells, or
otherwise introduces into commerce under this Agreement to have affixed thereto
a label bearing the following legend: "U.S. Patent No. 6,582,683 under license
from Skinvisible Pharmaceuticals, Inc." Skinvisible shall update this legend
for
Distributor as additional Patents are issued.
XVI.
MISCELLANEOUS
PROVISIONS
16.1 Neither
party shall be in default hereunder by reason of any failure or delay in the
performance of any obligation under this Agreement where such failure or delay
arises out of any cause beyond the reasonable control and without the fault
or
negligence of such party. Such causes shall include, without limitation, storms,
floods, other acts of nature, fires, explosions, riots, war or civil
disturbance, strikes or other labor unrests, embargoes and other governmental
actions or regulations which would prohibit either party from ordering or
furnishing the Product or from performing any other aspects of the obligations
hereunder, delays in transportation, and liability to obtain necessary labor,
supplies or manufacturing facilities.
16.2
Each
and
every right and remedy hereunder is cumulative with each and every other right
and remedy herein or in any other agreement between the parties or under
applicable law.
16.3 Each
party hereby acknowledges receipt of a signed copy of this
Agreement.
16.4 Nothing
contained in this Agreement shall create or shall be construed as creating
a
partnership, a joint venture, agency or employment relationship between the
parties. The parties
13
agree
to
perform their obligations in accordance with this Agreement at arms’ length and
only as independent contractors. Neither party has the right or authority to
assume nor create any obligations or responsibilities, express or implied,
on
behalf of the other party, and neither party may bind the other party in any
manner or thing whatsoever. Neither party shall be liable, except as expressly
provided otherwise in this Agreement, for any expenses, liabilities or other
obligations incurred by the other.
16.5 Skinvisible
and the Distributor each represent and warrant to the other that it is duly
organized, validly existing and in good standing under the laws of the State
or
Commonwealth (as applicable) in which incorporated, and that it has full
corporate power and authority to carry on the business presently being conducted
by it and to enter into and to perform its obligations under this Agreement.
16.6 Skinvisible
and the Distributor each represent and warrant to the other that it has taken
all action necessary to authorize the execution and delivery of this Agreement
and the performance of each party’s respective obligations hereunder. Each
party’s officer executing this Agreement on its behalf has the legal power,
right and authority to bind the party to the terms and conditions of this
Agreement, and when he or she executes and delivers this Agreement and any
instruments contemplated herein, he or she will have the power, right and
authority to bind the party thereto.
16.7 All
notices, requests, demands and other communications hereunder shall be given
in
writing and shall be: (a) personally delivered; (b) sent by telecopy, facsimile
transmission or other electronic means of transmitting written documents with
confirmation of receipt; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified mail, return receipt
requested and postage prepaid, or by private overnight mail courier services
with confirmation of receipt. The respective addresses to be used for all such
notices, demands or requests shall be as set forth on page 1 hereof or to such
other person or address as either party shall furnish to the other in writing
from time to time. If personally delivered, such communication shall be deemed
delivered upon actual receipt by the “attention” addressee or a person
authorized to accept for such addressee; if electronically transmitted pursuant
to this paragraph, such communication shall be deemed delivered the next
business day after transmission (and sender shall bear the burden of proof
of
delivery); if sent by overnight courier pursuant to this paragraph, such
communication shall be deemed delivered upon receipt by the “attention”
addressee or a person authorized to accept for such address; and if sent by
mail
pursuant to this paragraph, such communication shall be deemed delivered as
of
the date of delivery indicated on the receipt issued by the relevant postal
service, or, if the addressee fails or refuses to accept delivery, as of the
date of such failure or refusal. Any party to this Agreement may change its
address for the purposes of this Agreement by giving notice thereof in
accordance with this section 16.7.
16.8 This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
16.9 This
Agreement is not intended, nor shall it be construed, to confer upon any person
except the parties hereto and its successors and permitted assigns any rights
or
remedies under or by reason of this Agreement, except as contemplated
herein.
14
16.10 This
Agreement and all matters arising under or growing out of or in connection
with
or in respect of this Agreement shall be governed by and construed in accordance
with the laws of the State of Nevada.
16.11 The
headings in this Agreement are inserted for convenience only and shall not
constitute a part hereof.
16.12 Each
provision contained in this Agreement is declared to constitute a separate
and
distinct covenant and provision and to be severable from all other separate,
distinct covenants and provisions. In any provision of this Agreement is or
becomes invalid, illegal, or unenforceable in any jurisdiction, such provision
shall be deemed amended to conform to applicable laws as to be valid and
enforceable or, if it cannot be so amended without materially altering the
intention of the parties, it shall be stricken and the remainder of this
Agreement shall remain in full force and effect.
16.13 No
waiver
of a breach of any provision of this Agreement shall be deemed to be, or shall
constitute, a waiver of a breach of any other provision of this Agreement,
whether or not similar, nor shall such waiver constitute a continuing waiver
of
such breach unless otherwise expressly provided in such waiver.
16.14 This
Agreement may not be assigned by the Distributor without the prior written
consent of Skinvisible. Skinvisible may assign, transfer, or convey its
manufacturing obligations to third parties who shall be bound by the same
standards as Skinvisible.
16.15 All
prices quoted in this Agreement are exclusive of all applicable sales, use
or
other excise taxes (including sales tax and goods and services tax). The
Distributor is responsible for all taxes and similar charges customary for
a
buyer of Product and services as herein contemplated.
16.16 All
disputes, claims or controversies arising out of or relating to this Agreement,
or the breach, termination or invalidity hereof, shall
be
finally settled in United States under the Rules of Arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with the said Rules. The arbitration shall take place in Las Vegas,
Nevada.
16.17 The
parties agree to execute such documents, make such filings and take such actions
as may be reasonably necessary at the request of the other party to give full
force and effect to the provisions hereof.
16.18 This
Agreement may be executed in one or more counterparts, each of which when taken
together shall constitute one and the same instrument. This Agreement may be
delivered by personal delivery of facsimile transmission.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first written above.
15
SKINVISIBLE
PHARMACEUTICALS, INC.
By:
Name:
Title:
DERMAL
DEFENSE, INC.
By:
Name:
Title:
16
SCHEDULE
A
Product
List
Skinvisible's
Antimicrobial Hand Sanitizer:
Triclosan 1%, Purified Water, PVM/MA Copolymer - VP/Hexadecene Copolymer -
VP/Eicosene Copolymer, Glycerin, Aloe - 10% Solution, Triethanolamine,
Nonoxynol-9, Vegetable Oil, Carbomer, Propylene Glycol, Diazolidinyl Urea,
Iodopropynyl, Butylcarbarnate.
17
SCHEDULE
B
Price
List
| Product |
Packaged
Wholesale
Pricing
|
|||||
|
2
oz.
|
4
oz.
|
8
oz.
|
16
oz.
|
1
gal.
|
1
liter
|
|
| Sanitizer Lotion |
*
|
*
|
*
|
*
|
*
|
*
|
* The
confidential portion has been omitted and filed separately with the Commission.
18
SCHEDULE
C
Territory
United
States
Canada
Mexico
