Common use of Distribution Payment Clause in Contracts

Distribution Payment. In consideration of the exclusive rights granted to Distributor herein, Distributor shall make the following one-time payments to Empyrean: 5.3.1 the sum of US$600,000 upon the signing of this Agreement; and 5.3.2 the additional sum of US$600,000 within 120 days following the receipt by Distributor of written notification from Empyrean that the Food and Drug Administration of the United States of America (the "FDA") has approved the claims made for the Products listed in Exhibit A in relation to the prevention of the transmission of the Human Immunodeficiency Virus ("HIV") (the "FDA Approval"). In addition, the parties hereto agree that out of the sub-distribution fee to be paid by each distributor to Distributor under each Sub-Distribution Agreement (the "Sub-Distribution Fee"): (i) 33 per cent of the Sub-Distribution Fee shall be paid to Empyrean; (ii) 33 per cent of the Sub-Distribution Fee shall be utilized by Distributor to promote and market the Products in the Territory; and (iii) the balance of the Sub-Distribution Fee shall be retained by Distributor for its account. B. Empyrean factory or designated warehouse facility) during Year One of this Agreement, and which US$100,000 shall be credited towards the Year One Minimum Annual Purchase requirement.