INTERNATIONAL DISTRIBUTION AGREEMENT
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THIS INTERNATIONAL DISTRIBUTION AGREEMENT ("Agreement") made in the
State of Florida, United States of America, as of this 21st day of November,
1997 between REXALL SUNDOWN, INC., a Florida corporation with principal
offices at 000 Xxxxxx Xxxxx Xxxxxxx, X.X., Xxxx Xxxxx, Xxxxxxx 00000
("Rexall"), and BESO PHARMACEUTICS, INC., a Nevada corporation, with
principal offices at 00000 Xxxxxx Xxxxxxxxx, Xxxxx X, Xxxxxxxxx, Xxxxxxxxxx
("Distributor").
1. APPOINTMENT OF DISTRIBUTOR. Rexall hereby appoints Distributor as its
exclusive authorized distributor for the retail store channel in the People's
Republic of China (the "Territory") of Rexall's REXALL brand of vitamins,
nutritional products and food supplements as set forth on SCHEDULE A hereto
and made a part hereof (collectively, the "Products"), subject to the terms
and conditions hereinafter set forth. The Products shall be marketed under
the Beso REXALL name. Distributor hereby accepts such appointment and agrees
to use its best efforts to promote, market, sell and distribute the Products
under Rexall's trademarks and under the Beso REXALL tradename within the
Territory by dealers, agents, traveling representatives, advertising and such
other promotion and merchandising methods as will insure the widest possible
distribution and maximum sales of the Products within the Territory in the
retail store channel, except that none of the Products shall be marketed or
sold through the direct sales, network marketing or multi-level marketing
channel of distribution. Notwithstanding anything contained herein to the
contrary, Rexall's wholly-owned subsidiary, Rexall Showcase International,
Inc. ("RSI"), reserves the right to sell its products, which products shall
be labeled and packaged as RSI products, under the REXALL trademarks in the
Territory through its independent distributors in the direct sales, network
marketing or multi-level marketing channel of distribution and the exclusive
distribution rights granted to Distributor herein shall in no way prevent or
restrict any such sales of RSI's products in the Territory through RSI's
independent distributors.
2. USE OF REXALL TRADENAME. TRADEMARKS AND LOGO. Distributor shall use
the authorized Rexall tradename, trademarks and logo (the "Intellectual
Property") in all written documents, oral presentations, and in general, all
communications to third parties relating to the sale, promotion and
advertising of the Products. The form and content of all such labels,
communications, promotions and advertisements shall be submitted for Rexall's
prior written approval. It is understood however, that Rexall shall remain
tge sole owner of all such tradenames, trademarks and logos and that neither
the performance of this Agreement nor the use by Distributor thereof shall
confer on Distributor any rights thereto which cannot be terminated by Rexall
as set forth herein.
3. TERM. The term of this Agreement shall be for a period of ten (10)
years (the "Term") commencing on November 30, 1997 (the "Effective Date") and
shall terminate on the tenth anniversary of the Effective Date, unless sooner
terminated as herein provided.
4. TERRITORY. Distributor shall be responsible for the marketing, sale
and distribution of the Products in the Territory. Distributor shall market,
sell and distribute the Products only in the Territory and Distributor shall
not directly or indirectly seek customers, establish branches or other sales
entities or maintain any warehouse facilities outside the Territory for the
sale of Products.
5. NON-ASSIGNABILITY BY DISTRIBUTOR. This Agreement may not be assigned
by Distributor without the prior written consent of Rexall except that
Distributor may, at any time, assign this Agreement to any of its affiliated
companies in which it owns the same interest, provided it executes the
appropriate amendments to this Agreement. Rexall may also at any time, assign
this Agreement to any of its affiliated companies.
6. RELATIONSHIP OF PARTIES.
(a) The appointment of Distributor hereunder shall not be deemed to
constitute Distributor as the agent or legal representative of Rexall or any
affiliated entity of Rexall for any purpose whatsoever. Distributor shall not
represent itself nor permit itself to be represented as an agent of Rexall or
any affiliated entity of Rexall in any telephone directory, building
directory, advertisement or in any publication
or notice to the public or otherwise, provided, however, that Distributor may
use the words "DISTRIBUTOR FOR REXALL VITAMINS."
(b) 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 Rexall or to bind Rexall in any way except as specifically
authorized in this Agreement. In addition, Distributor shall not obligate or
purport to obligate Rexall by issuing or making any warranties or guarantees
with respect to the Products other than as specifically authorized by Rexall
in writing. It is expressly agreed that Distributor shall be solely
responsible for any and all obligations or liabilities incurred or assumed by
Distributor in the performance hereof and Rexall shall not be held liable in
any manner therefor.
7. MINIMUM ANNUAL PURCHASE REQUIREMENT. Distributor expressly agrees to
make the following minimum annual purchases of Products from Rexall:
(a) During the first year of the Term, Distributor shall purchase a minimum
of $500,000 U.S. of Products from Rexall.
(b) During the second year of the Term, Distributor shall purchase a
minimum of $1,100,000 U.S. of Products from Rexall.
(c) During the third year of the Term, Distributor shall purchase a minimum
of $2,500,000 U.S. of Products from Rexall.
(d) During the fourth year of the Term, Distributor shall purchase a
minimum of the greater of (i) $3,500,000 U.S. of Products or (ii) 110% of
the dollar amount of Products purchased by Distributor during the third
year of the Term.
(e) During the fifth year of the Term, Distributor shall purchase a minimum
of the greater of (i) $5,100,000 U.S. of Products or (ii) 110% of the
dollar amount of Products purchased by Distributor during the fourth year
of the Term.
(f) During the sixth year of the Term, Distributor shall purchase a minimum
of the greater of (i) $6,500,000 U.S. of Products or (ii) 110% of the
dollar amount of Products purchased by Distributor during the fifth year of
the Term.
(g) During the seventh year of the Term Distributor shall purchase a
minimum of the greater of (i) $7,800,000 U.S. of Products or (ii) 110% of
the dollar amount of Products purchased by Distributor during the sixth
year of the Term.
(h) During the eighth year of the Term, Distributor shall purchase a
minimum of the greater of (i) $9,200,000 U.S. of Products or (ii) 110% of
the dollar amount of Products purchased by Distributor during the seventh
year of the Term.
(i) During the ninth year of the Term, if any, Distributor shall purchase a
minimum of the greater of (i) $11,000,000 U.S. of Products or (ii) 110% of
the dollar amount of Products purchased by Distributor during the eighth
year of the Term.
(j) During the tenth year of the Term, Distributor shall purchase a minimum
of the greater of (i) $13,000,000 U.S. of Products or (ii) 110% of the
dollar amount of Products purchased by Distributor during the ninth year of
the Term.
In order to maintain the exclusive distribution rights within the
Territory with respect to the Products granted hereby, Distributor shall
purchase not less than such minimum annual purchases of Products from Rexall
in each of the above described periods.
8. PRICES AND PAYMENT: CONDITIONS OF SALE OF PRODUCTS. Rexall will, from
time to time, furnish
Distributor with descriptions of Products, with prices to Distributor. From
time to time, economic considerations may require Rexall to change its
prices. Rexall shall provide Distributor with sixty (60) days prior written
notice of such price changes. All Products shall be shipped Freight Collect,
F.O.B. Boca Raton, Florida. The conditions of payment shall be prepayment for
all Products with bank draft, cashieVs check, money order, wire transfer or
letter of credit in U.S. dollars; provided, however, payment may also be made
by irrevocable letter of credit in U.S. dollars, confirmed by a bank in the
United States of America reasonably acceptable to Rexall, payable no later
than ninety (60) days from the invoice date.
9. TAXES. Distributor shall be solely liable for the payment of any
sales, use, occupational or other charges or taxes assessed, levied, imposed
or collected by the Territory or any political subdivision thereof arising
from the sale, use, possession, ownership or storage of Products purchased by
Distributor, or arising in respect to any payment to be made by Distributor
to Rexall.
10. GOVERNMENTAL REGISTRATION. It shall be the sole responsibility of
Distributor at its cost to obtain and maintain all licenses, permits,
authorizations or registrations required by the government or by local
authorities of the Territory to sell the Products in the Territory. All such
Product registrations shall be in the name of Distributor during the Term
hereof and upon the termination of this Agreement for any reason, Distributor
shall immediately assign all such registrations to Rexall. Rexall shall
provide Distributor with all reasonable and necessary documentation to obtain
the required registrations. If Distributor receives any notice from any such
governmental authority raising any issues concerning the safety, efficacy or
quality of any of the Products, or any of the promotional practices that are
being used by Distributor to sell the Products, Distributor shall immediately
notify Rexall in writing. Upon receipt of such notification, Distributor and
Rexall will consult with each other and Rexall shall have the right, in its
sole discretion, to intervene with such governmental authority with or
without Distributor's assistance.
11. RETURNS. SHORTAGES. DAMAGE. No Products purchased from Rexall shall
be returned to Rexall without Rexall's prior written authorization.
Distributor shall notify Rexall of all claims for packing shortages within
sixty (60) days after receipt of such Products. Distributor shall maintain
adequate insurance covering Products in transit and shall supply a copy of
the covering policy to Rexall as well as copies of any extensions or
amendments thereto, within thirty (30) days after the date of this Agreement,
and shall thereafter promptly supply copies of any subsequent amendments,
extensions or substitutions thereto. Claims for damage to Products in transit
shall be made by Distributor to the transportation or insurance carrier. The
responsibility of Rexall with respect to Products shall cease and terminate
after delivery of the same in good order to the transportation carrier at
Rexall's factory. Distributor shall warehouse, store and otherwise maintain
the Products at all times under appropriate conditions that will prevent any
deterioration or damage to the Products.
12. CONTINGENCIES. Rexall shall not be liable for any loss, damage or
demurrage due to any delay or failure in performance either (a) because of
compliance with any order, request or control of any governmental authority
or person purporting to act therefor, or (b) when the supply of Products or
any facility of production, manufacture, storage, transportation,
distribution or delivery contemplated by Rexall is interrupted, unavailable
or inadequate because of wars, hostilities, public disorders, acts of
enemies, sabotage, strikes, labor or employment difficulties, fires, acts of
God, accidents or breakdowns, weather conditions or any cause beyond Rexall's
control whether or not similar to the foregoing.
13. DISTRIBUTOR'S REPRESENTATIONS AND WARRANTIES. Distributor represents
and warrants to Rexall as follows:
(a) Neither the execution and delivery of this Agreement nor compliance
with the obligations of Distributor hereunder will violate any law or
regulation, or any order or decree of any court or government
instrumentality, or will conflict with, or result in the breach of, or
constitute a default under, any contract, agreement, instrument or judgment
to which Distributor or any officer, director, employee or controlling person
of Distributor is a party, or which is or purports to be binding upon any of
the foregoing persons.
(b) No action, approval or consent, including but not limited to, any
action, approval or
consent by any federal, state, municipal or other governmental agency,
commission, board, bureau or instrumentality is necessary in order to
constitute this Agreement as a valid, binding and enforceable obligation of
Distributor in accordance with its terms.
14. FINANCIAL CONDITION OF DISTRIBUTOR. In the event of (a) the
insolvency of Distributor; (b) the complete or partial liquidation or
suspension of the business of Distributor; (c) the filing by or against
Distributor of a voluntary or involuntary petition in bankruptcy; (d) the
making by Distributor of any assignment for the benefit of creditors or the
application for the appointment or the appointment of any receiver of the
property of Distributor; (e) the dissolution of Distributor; or (f) the
financial responsibility of Distributor becoming impaired or otherwise
unsatisfactory to Rexall; then, and in any such event, at Rexall's option,
this Agreement may be terminated by Rexall upon five (5) days written notice
to Distributor, and Rexall shall thereupon be released from all obligations
hereunder.
15. CONFIDENTIALITY. In connection with Distributor's responsibilities
hereunder, Rexall may disclose or make known to Distributor, and Distributor
may be given access to or become acquainted with, certain confidential
information not disclosed to the general public, including trade secrets,
relating to the business of Rexall, its distributors, customers, products,
service or other proprietary items, formulas or ideas, which Rexall considers
proprietary and desires to maintain confidential (collectively, "Confidential
Information"). Distributor hereby agrees that during the Term and at all
times thereafter, Distributor shall not in any manner, either directly or
indirectly, divulge, disclose or communicate to any person or firm, except to
or for Rexall's benefit as directed by Rexall, any of the Confidential
Information which Distributor may have acquired as an incident to his acting
as a distributor of Rexall's Products, the parties agreeing that such
information affects the successful and effective conduct of the business and
goodwill of Rexall, and that any breach of the terms of this Section is a
material breach of this Agreement. Distributor shall take all reasonable
measures to prevent its employees, agents and representatives from disclosing
the Confidential Information. Confidential Information shall not include any
documentation, data or information that is either (a) already in the
possession of the receiving party at the Effective Date of this Agreement,
(b) independently learned by the receiving party, (c) righffully received by
the receiving party from a third party having the right to make such
disclosure, or (d) publicly known or that becomes publicly known through no
wrongful act of the receiving party.
16. NON-PERFORMANCE.
(a) If Distributor shall breach or default in the performance of any
term, condition or covenant contained in this Agreement or if any
representation or warranty of Distributor hereunder shall be untrue or
incorrect in any respect, Rexall, in addition to such other rights and
remedies as it may have at law or otherwise under this Agreement, may elect
immediately to terminate this Agreement by giving written notice to
Distributor of its election to do so, and such election shall be effective
immediately upon the giving of such notice.
(b) (i) If Distributor fails to meet its minimum annual purchase
requirement for the first year of this Agreement as set forth in Section 7
hereof, Distributor shall be responsible for paying Rexall 25% of the minimum
annual purchase requirement for such year in which Distributor has failed to
meet its minimum annual purchase requirement and 25% of the second and third
year annual minimum purchase requirements;
(ii) If Distributor fails to meet its minimum annual purchase
requirement for the second year of this Agreement as set forth in Section 7
hereof, Distributor shall be responsible for paying Rexall 25% of the minimum
annual purchase requirement for such year in which Distributor has failed to
meet its minimum annual purchase requirement, 25% of the third year annual
minimum purchase requirement and 20% of the fourth year annual minimum
purchase requirement;
(iii) If Distributor fails to meet its minimum annual purchase
requirement for the third year of this Agreement as set forth in Section 7
hereof, Distributor shall be responsible for paying Rexall 25% of the minimum
annual purchase requirement for such year in which Distributor has failed to
meet its minimum annual purchase requirement, 20% of the fourth year annual
minimum purchase, and 15% of the
minimum annual purchase requirement for the fifth year of this Agreement;
(iv) If Distributor fails to meet its minimum annual purchase
requirement for the fourth year of this Agreement as set forth in Section 7
hereof, Distributor shall be responsible for paying Rexall 20% of the minimum
annual purchase requirement for such year in which Distributor has failed to
meet its minimum annual purchase requirement and 15% of the annual minimum
purchase requirement for the fifth year of this Agreement;
(v) If Distributor fails to meet its minimum annual purchase
requirement for the fifth year of this Agreement as set forth in Section 7
hereof, Distributor shall be responsible for paying Rexall 15% of the minimum
annual purchase requirement for such year in which Distributor has failed to
meet its minimum annual purchase requirement and 10% of the annual minimum
purchase requirement for the sixth year of this Agreement.
(vi) If Distributor fails to meet its minimum annual purchase
requirement for the sixth through the tenth year of this Agreement as set
forth in Section 7 hereof, Distributor shall be responsible for paying Rexall
10% of the minimum annual purchase requirement for such year in which
Distributor has failed to meet its minimum annual purchase requirement and
10% of the annual minimum purchase requirement for the following year of this
Agreement.
17. EFFECT OF TERMINATION.
(a) Any termination of this Agreement shall not release Distributor from
payment of any sum which may then be owing to Rexall, including but not
limited to, any sums due under Section 16 hereof.
(b) Upon termination of this Agreement, all rights and privileges herein
granted to Distributor shall immediately cease and terminate, and Distributor
agrees that upon its disposition of inventory bearing such trade names, logos
and trademarks of Rexall, which shall not exceed a period of six months from
the date of termination, thereupon to discontinue forever the use of
trademarks, logo and tradenames of Rexall in its business operations.
18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof. This
Agreement may not be changed, altered, renewed, or otherwise modified except
by written instrument signed by or on behalf of the party to be charged
therewith.
19. WAIVER. No waiver of the provisions hereof shall be effective unless
in writing and signed by the party to be charged with such waiver. No waiver
shall be deemed a continuing waiver or waiver in respect of any subsequent
breach or default, either of similar or different nature unless expressly so
stated in writing.
20. HEADINGS. The headings or captions under paragraphs of this
Agreement are for convenience and reference only and do not form a part
hereof, and do not in any way modify, interpret or construe the intent of the
parties or affect any of the provisions of this Agreement.
21. NOTICES. Any notice, demand or payment required,' permitted or
desired to be given pursuant to any of the provisions of this Agreement shall
be deemed to have been sufficiently given or served for all purposes if sent
by registered or certified mail, return receipt requested, and postage
prepaid addressed to Rexall or Distributor at their respective addresses
hereinabove set forth.
22. EXECUTION; GOVERNING LAW: JURISDICTION: ARBITRATION.
(a) This Agreement shall not be binding upon Rexall until it has been
executed on behalf of Rexall at Boca Raton, Florida, by a duly authorized
officer of Rexall.
(b) This Agreement and all purchases made hereunder shall be governed by
the law of the State of
Florida, as that law applies to contracts made and performed wholly within
the State of Florida. The invalidity or unenforceability of any portion of
this Agreement, should that be the case, shall not be deemed to affect the
remaining portion(s) of this Agreement.
(c) Distributor irrevocably consents to the jurisdiction of the courts
of the State of Florida and of any federal courts in the State of Florida in
connection with any suit, action or proceeding arising out of, or relating to
this Agreement. In any such suit, action or proceeding, Distributor waives
personal service of any summons, complaint, or other process and agrees that
service thereof may be made in accordance with Paragraph 21 hereof or in such
other manner as may be permissible under applicable court rules.
(d) All disputes arising out of or under this Agreement shall be
submitted to the American Arbitration Association (AAA) to be heard in Palm
Beach County, Florida, under the rules then in force, such determination of
the AAA shall be enforceable through collateral proceedings to enforce
arbitration awards in the state courts of Florida which shall have the
authority to enjoin any violation of this Agreement. The parties acknowledge
that any controversy or claim arising out of, or relating to this Agreement,
or its breach, shall be determined in accordance with the then governing
rules of the AAA. Judgment upon the award rendered may be entered and
enforced in any court of competent jurisdiction. In the event that either
party seeks to enforce its rights under this Agreement, the prevailing party
shall be entitled to recover reasonable fees (including attorneys' fees),
costs and other expenses incurred in connection therewith.
23. PENALTIES. No provision of this Agreement is to be interpreted as a
penalty upon any party to this Agreement. In particular, without limitation,
the parties hereby agree that the provisions of Sections 7, 14 and 16 with
respect to the rights of each party in the event the other party takes or
fails to take certain actions pursuant to this Agreement, are reasonable, and
that the parties desire such certainty with regard to such matters.
24. COMPLIANCE WITH FOREIGN CORRUPT PRACTICES ACT. Distributor
represents and agrees that it has not offered, given, promised to give or
authorized giving, and will not offer, give, promise to give or authorize
giving, directly or indirectly, any money or anything else of value to any
governmental official, political party, political official or candidate for
political office in connection with its activities hereunder.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above set forth.
REXALL SUNDOWN, INC.
By:
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Name:
Title:
BESO PHARMCEUTICS, INC.
By:
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Name:
Title:
