DISTRIBUTION AGREEMENT
Entered into this _____ day of April, 1999
BETWEEN
Empyrean Bioscience, Inc., a company organized under the laws of the State of
Wyoming, United States of America ("U.S.A.") and having its offices at 0000 Xxxx
Xxxx Xxxxxx Xx., Xxxxx 000, Xxxxxxx, XX 00000 U.S.A. ("Empyrean");
AND
Durstrand International Limited, a company organized under the laws of the
British Virgin Islands and having its registered office at P.O. Box 957,
Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (the
"Distributor").
WITNESSETH
WHEREAS Empyrean is engaged in the business of developing, manufacturing and
marketing medical diagnostic products and "Over-The-Counter" gels and lotions;
and
WHEREAS Distributor desires to be appointed by Empyrean as its exclusive
distributor for the "Over-The-Counter" products identified in Exhibit A hereto
(collectively, the "Products").
NOW THEREFORE, in consideration of the promises and of the mutual covenants and
obligations hereinafter set forth, the parties hereto agree as follows:
1. DISTRIBUTOR
1.1 EXCLUSIVE RIGHT. Empyrean hereby appoints Distributor as its exclusive
distributor to market, sell and promote by itself and/or through its
distributors, the Products described in Exhibit A, attached hereto and
made a part hereof during the term of this Agreement, in the
territories described under "Territory One" in Exhibit B
(collectively, the "Territory"), and subject to the terms and
conditions of this Agreement. Distributor's appointment as Empyrean's
exclusive distributor for the Products shall be automatically expanded
to include the countries listed as "Territory Two" countries in
Exhibit B (and which countries shall therefore form part of the
"Territory") in the event that Distributor is able to appoint
distributors of the Products in at least three of the eight countries
listed as "Territory One" countries in Exhibit B within four months
after the date of this Agreement.
Distributor and its distributors shall be entitled to describe
themselves as Empyrean's "Authorised Distributors" for the Products.
No rights whatsoever are granted to market, sell and promote Products
outside the Territory, whether directly or indirectly through
purchasers in the Territory for resale or other distribution outside
the Territory. Distributor hereby agrees to market, sell and promote
the sale of the Products in conformity with and subject to the terms
and conditions of this Agreement and further agrees not to sell or
otherwise distribute Products to purchasers in the Territory which it
knows are for resale or other distribution outside the Territory.
1.2 RIGHT TO APPOINT DISTRIBUTORS. Distributor may appoint any other
person, firm or company as its distributors to market, promote and
sell the Products in the Territory, on the terms and subject to the
conditions of a sub-distribution agreement to be entered into between
Distributor and each distributor (the "Sub-Distribution Agreement").
Each Sub-Distribution Agreement shall contain terms and conditions
which are consistent with the provisions contained herein.
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1.3 ADDITIONAL TERRITORIES. Empyrean further grants Distributor the first
right of negotiation to be appointed as Empyrean's exclusive
distributor to market, promote and sell the Products in each and every
country (save and except for the United States of America, Japan,
China, Taiwan, Hong Kong, South Africa, Canada, Turkey, Russia, Former
USSR and India) in addition to the countries comprising the Territory.
1.4 PRODUCTS OF OTHERS. Distributor shall have the right to distribute,
sell or sublicense the products of any manufacturers provided that
such other products are not similar to or competitive with the
Products.
1.5 EMPYREAN'S OBLIGATIONS. Empyrean shall not during the term of this
Agreement appoint any other person, firm or company as its distributor
or sales agent for the Products in the Territory; or supply to any
other person, firm or company in the Territory the Products; or supply
to any other person, firm or company outside the Territory the
Products which it knows are for resale in the Territory.
1.6 NO LIMIT ON PRICE. Distributor has the unrestricted right to
unilaterally determine the prices at which it sells the Products which
it purchases hereunder. No Empyrean representative has the authority
to require or suggest that Distributor charge a particular resale
price for the Products which it purchases hereunder.
2. RESPONSIBILITIES OF DISTRIBUTOR
2.1 DISTRIBUTOR'S RESPONSIBILITIES. In addition to all other rights and
obligations created by this Agreement, Distributor shall:
2.1.1 Use its best efforts in the Territory to market, sell,
distribute, promote and support the Products including, when
the necessary licenses (if any) are obtained, the
requirement to advertise the Products and participate and
exhibit the Products at no less than four major local
exhibitions per year (but if there are less than four such
major local exhibitions per year, then such lesser number of
exhibitions) in the Territory;
2.1.2 Maintain qualified staff to accomplish the market objectives
as may be agreed from time to time between the parties
hereto for the Products;
2.1.3 Provide reasonably adequate and competent technical
assistance in support of any prospective or actual Product
sales in the Territory including training salesmen and end
users;
2.1.4 Provide reasonably adequate customer and technical support
for the Products and reasonably assist Empyrean in the
discharge of obligations to customers;
2.1.5 Provide to end users written instructions which have been
determined by Empyrean as to the usage of each of the
Products;
2.1.6 Work with Empyrean quarterly to determine Distributor's
estimated Product needs for the next quarter, marketing
potential, trends and forecasts, competition, marketing
techniques, current developments in the Territory, changes
of regulations governing the sale of Products in the
Territory and amounts of Products sold;
2.1.7 Comply with all present and future regulations and/or
licensing requirements promulgated by authorized
governmental authorities effective during the term of this
Agreement and required in order to carry out the terms of
this Agreement;
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2.1.8 Maintain all relevant written documentation and provide the
same to Empyrean on Distributor's customer pricing,
distribution expenses and other financial data normally
needed to audit a distributorship. This will be provided to
Empyrean quarterly;
2.1.9 Distributor will inform Empyrean of any legal,
administrative or regulatory requirements in each country in
the Territory with which Distributor or Empyrean must or
should comply in connection with this Agreement or the
marketing, promotion or sale of Products in such country
(the "Approvals"). Distributor shall be responsible for
obtaining, at its cost, all Approvals for itself and
Empyrean and for complying in all respects with such
Approvals in performing its rights and obligations under
this Agreement. Distributor will maintain at its costs, the
Approvals throughout the term of this Agreement. Approvals
relating to Empyrean or the Products shall be obtained and
maintained in Empyrean's name. Empyrean will provide
reasonable assistance to Distributor in obtaining the
Approvals, including providing such data, samples and other
information and materials as are in Empyrean's possession
and may be required. Distributor will periodically upon
request, and not less other than quarterly, provide Empyrean
information regarding the status of Approvals;
2.1.10 Distributor will submit for and obtain Empyrean's written
approval (which shall not be unreasonably withheld) prior to
use, copies (with translations) of all new or modified
advertising and other promotional materials, including
catalog descriptions, prepared by or for Distributor or any
distributor in connection with the Products, and will only
use the materials so approved;
2.1.11 Distributor agrees not to, and not to permit a distributor
to, directly or indirectly, offer, pay, promise to pay or
authorize the payment of money or anything of value to any
governmental official or representative for the purpose of
influencing such persons' decisions or actions regarding the
Products; and
2.1.12 Unless otherwise agreed by Empyrean in writing, Distributor
will not (a) sell Products other than in original,
unmodified and unused condition, (b) remove, obscure or
modify any label or Product usage or other information,
other indication of patent, any trademark or other
intellectual property rights, (c) add any label or xxxx to
any Product, or (d) market, sell or promote any Product
under any name or xxxx other than those provided by
Empyrean.
2.2 SCOPE AND LIMITATIONS OF AUTHORITY. This Agreement does not create an
employer-employee relationship between Empyrean and Distributor, nor any joint
venture, agency or partnership. Neither party hereto shall have the authority to
act for or bind the other in any way, to execute agreements on behalf of the
other or to represent that either party is in any way responsible for the acts
or omissions of the other. Distributor shall be an independent contractor only
and may not, save as provided under Section 1.2 herein, engage any other entity
to carry out any or all of its undertakings under this Agreement unless such
engagement is agreed to by Empyrean in writing.
2.3 PROTECTION OF EMPYREAN'S LICENSES. Distributor acknowledges and agrees
that all proprietary rights in Products delivered to Territory by Empyrean are
and shall remain at all times the exclusive property of Empyrean or its
licensors, and may not be duplicated by Distributor or used except pursuant to
this Agreement and that Distributor, by taking delivery of, making payment for,
distributing, and selling or otherwise using or transferring any of the
Products, shall not become entitled to any proprietary rights in any such
Products. Distributor shall take all measures to ensure that all proprietary
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rights of Empyrean in the Products remain with Empyrean, except that Distributor
will not be obligated to institute legal actions against its customers or take
responsibility for their actions.
2.4 TRADEMARK PROTECTION. Distributor may use Empyrean's current and future
trademarks and logos and the name "Preventx" solely for the purposes of
fulfilling its obligation under the terms of this Agreement. Distributor may
(but shall not be obliged to) apply for registration of any trademarks or trade
names of Empyrean for and on behalf of Empyrean and in Empyrean's name and
Empyrean shall provide such assistance as Distributor may reasonably require in
relation to such trade xxxx or trade name applications. Empyrean shall indemnify
and save harmless Distributor from and against any and all losses, damages,
charges, costs and expenses of whatever nature which Distributor may at any time
and from time to time sustain, incur or suffer by reason of any claim or action
by any third party that the use of Empyrean's trademarks in accordance with this
Agreement infringes the intellectual property rights or other rights of such
third party.
2.5 EMPYREAN'S MARKS. Distributor's, and any distributor's, use of
Empyrean's trademarks or trade names shall at all times be in accordance with
applicable trademarks and other laws and Empyrean's policies regarding
advertising and trademark usage as in effect from time to time. Distributor
shall include all applicable Empyrean trademarks or trade names in any
literature, promotional materials or advertising which it produces or
distributes concerning the Products. Distributor agrees that all trademarks and
trade names of Empyrean are and will remain the sole property of Empyrean, and
Distributor agrees not to do anything inconsistent with that ownership or to
contest ownership of such trademarks or trade names. All use of such trademarks
and trade names shall inure to the benefit of, and be on behalf of, Empyrean.
Should Distributor or any other distributor, in spite of this provision, acquire
any title or interest in any trade names or trademarks, by operation of law or
otherwise, Distributor shall immediately notify Empyrean of that fact and will
assign or cease the assignment of, without consideration, the same to Empyrean.
Upon termination of this Agreement, Distributor shall immediately return to
Empyrean all advertising, sales or promotional material containing Empyrean's
name or marks then in its possession and a complete list of active accounts,
outstanding quotations and product inquiries received in the six months
preceding termination.
2.6 CONFIDENTIALITY OF INFORMATION. From time to time, Empyrean may make
available to Distributor information of a confidential nature including, but not
limited to, medical and technical data, test and analysis data, marketing,
application, financial, bookkeeping, business, market and customer information
in a written form or orally. All oral disclosures will be reduced to writing
within 30 days and all confidential material, not inherently or obviously
confidential, will be clearly labeled "CONFIDENTIAL". Distributor shall not
disclose such information to others or use such information without the prior
written consent of Empyrean, except to the extent required by law. All other
data or proprietary information transmitted by Empyrean to Distributor shall be
treated by Distributor with the same care as it would exercise in the handling
of its own confidential or proprietary information (which shall in every case be
reasonable care) and in no event shall such information be disclosed to any
person unless approved in writing in advance by Empyrean and such individual is
bound by the terms of this paragraph. Confidential or proprietary information
may however be disclosed to Distributor's employees and/or distributors to such
extent only as is necessary for the purposes contemplated by this Agreement and
subject to such employees and distributors being bound by the terms of this
paragraph. Upon termination or cancellation of this Agreement for any reason,
all such data, proprietary information and confidential information of Empyrean,
and all compilations and notes or summaries of same, shall be immediately
returned by Distributor to an officer of Empyrean and the limitations and
undertakings specified in this paragraph shall remain in effect for a period of
five years from the date of termination or expiration of this Agreement.
Confidential information as referred to in this Section 2.6 shall not include
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information (i) which is or becomes public knowledge through no fault of
Distributor; (ii) which is properly known to Distributor at the time of
disclosure by Empyrean, as evidenced by Distributor's written records; or (iii)
which is disclosed to Distributor on a non-confidential basis by a third party
having no obligation of secrecy to Empyrean.
3. RESPONSIBILITY OF EMPYREAN
3.1 SUPPORT RESPONSIBILITIES. In addition to other rights and obligations
created by this Agreement, Empyrean shall:
3.1.1 Use its commercially reasonable best efforts to deliver Products set
forth in Distributor's orders pursuant to the terms of this Agreement. Shipments
shall be made to Distributor or directly to customers established by Distributor
no later than 45 days from the date on which the order is received by Empyrean.
Empyrean reserves the right to immediately cease all shipments of the Product
upon the discovery of a non-conformity to specification in the Product or for
regulatory reasons. Empyrean shall use its best efforts to promptly correct such
non-conformity or such regulatory issue(s) and shall renew shipment upon such
correction;
3.1.2 Upon Distributor's request, provide a reasonable amount
of sales and Product training to key employees of
Distributor at Empyrean's facilities and at
Distributor's cost, for the purpose of training
qualified Distributor personnel to ensure proper
support of the Products. Empyrean may require
Distributor to pay reasonable charges for these
services;
3.1.3 Provide a reasonable quantity of current promotional
material literature relating to the Products at a
reasonable charge and such other samples, brochures and
up-to-date information concerning the Products as
Empyrean may consider appropriate or as Distributor may
reasonably require in order to assist Distributor to
sell the Products in the Territory; and
3.1.4 Assist Distributor at Distributor's expense, upon
request and subject to Empyrean's approval, which shall
not be unreasonably withheld, in making presentations
to Distributor's customers or prospects.
3.2 PROVISION OF INFORMATION. Empyrean accepts the responsibility to
provide Distributor with complete information regarding limitations to
use of the Products which are required to be disclosed under the
regulations of each country in the Territory.
4. PURCHASE OF PRODUCTS
4.1 PRODUCTS. Customers in the Territory shall purchase all units of the
Products from Distributor. Distributor shall follow up on delivery of
such units of the Products to customers and shall be responsible for
arranging for advanced payment of Products directly to Empyrean.
Distributor is responsible for entry of Products into the Territory
and for the successful delivery of Products to customers. If any
customer of Distributor does not provide advanced payment directly to
Empyrean, then Distributor must provide advanced payment to Empyrean.
An irrevocable letter of credit must be in place to cover all Product
purchases.
4.2 MINIMUM ANNUAL PURCHASE. Distributor agrees to market, promote and
sell the amount of Products set forth in Exhibit D hereto (the
"Minimum Annual Purchase") and to purchase at least this Minimum
Annual Purchase from Empyrean. In the event that Empyrean does not
obtain the FDA Approval (as defined in Section 5.3.2 below) within 15
months from the date of this Agreement, the parties hereto shall
immediately after the expiry of the 15-month period negotiate in good
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faith for a reduction in the Minimum Annual Purchase amounts. The
reduced Minimum Annual Purchase amounts shall thereafter apply until
the FDA Approval has been obtained, in which event, the Minimum Annual
Purchase amounts specified in Exhibit D shall be reinstated for the
year commencing after the FDA Approval has been obtained and for each
year thereafter.
4.3 FAILURE TO MEET MINIMUM ANNUAL PURCHASE REQUIREMENTS. Distributor
acknowledges and agrees that the exclusive right granted to it to
market, promote, distribute and sell the Products under this Agreement
is conditioned on fulfillment of such Minimum Annual Purchase
requirement for the Products or updated versions of the Products by
its distributors or its customers. In the event that less than the
total Minimum Annual Purchase requirement is met by Distributor for
any reason other than (i) due to a force majeure event as specified in
Section 8.3 herein, or (ii) directly attributable to Empyrean's breach
of this Agreement, Empyrean may give 60 days written notice to
Distributor and demand that such shortfall be remedied. If Distributor
fails to remedy the shortfall within the 60-day notice period,
Empyrean may upon written notice to Distributor declare the
distribution rights under this Agreement to be non-exclusive. If
Distributor notifies Empyrean in writing that the Minimum Annual
Purchase requirement for any year will not be met, then Distributor
and Empyrean shall meet to determine the appropriate Minimum Annual
Purchase level for that year.
4.4 NEW PRODUCTS. Distributor acknowledges that Empyrean manufactures
products for "Over-The-Counter". The Products which Empyrean agrees to
provide on an exclusive basis to Distributor are described in Exhibit
A. Additional future products derived from the Preventx product line
will be presented to Distributor on a first right of negotiation basis
for distribution in the Territory. Provided that if Distributor elects
not to accept such additional future products for distribution to its
customers on the terms offered by Empyrean for any reason which it
shall determine within 90 days of presentation, Empyrean shall be
entitled to present such additional future products to any third party
on terms and conditions no more favourable (when taken as a whole) to
such third party than those offered to Distributor.
4.5 PURCHASE PRICES. The prices payable by Distributor to Empyrean for the
Products are set out in Exhibit E (the "Product Price"). Distributor
will be responsible for arranging advanced payment or lines of credit
from the customer or from Distributor before Empyrean will ship the
Products to Distributor or its customers in the Territory.
4.6 DELIVERY AND PAYMENT. The Product Price to be paid by Distributor with
respect to each Product is based upon shipment F.O.B. Empyrean
factory, currently Canada or other warehouse facility in the United
States of America or elsewhere used by Empyrean. "Delivery" shall take
place when shipments are shipped from Empyrean's warehouse facility,
in accordance with instructions from Distributor. In the absence of
specific routing instructions, Empyrean reserves the right to select
the carrier and method of conveyance.
4.7 RISK OF LOSS. Risk of loss shall pass to Distributor on shipment at
Empyrean's warehouse facility. If a shipment of Products is not
accepted by a customer or Distributor due to failure to meet
specifications, Distributor will immediately notify Empyrean, return a
sample of the Product at Empyrean's request and provide its best
efforts to help Empyrean determine the source and nature of the
problem. Empyrean may request the return of the entire shipment and
shall pay all freight, customs fees and other charges associated with
the return of such shipment if such Products in the shipment are
defective. Distributor will use its best efforts to assist Empyrean in
pursuing a claim with the shipper at Empyrean's request provided that
Empyrean shall bear all and any costs and expenses incurred by
Distributor in providing such assistance.
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5. PAYMENT
5.1 TERMS. Payment will be an advanced payment prior to shipment using an
irrevocable letter of credit. Empyrean, at its option, shall have the
right to receive special payment procedures arranged by Distributor
for a customer. Any invoiced amount which is not paid when due will
bear interest at the rate of one and one-half (1.5%) per cent per
month. No Product Price or sums owed to Empyrean by a customer or
Distributor shall be subject to set off for claims of Distributor.
Empyrean shall have the right not to make further shipments to
specific customers or Distributor for invoices which are more than 60
days in arrears.
5.2 TAXES AND DUTIES. Distributor shall pay any and all applicable sales,
use or excise, state, local, federal or other taxes, customs duties,
or amounts legally levied with respect to the transportation, sale,
transfer, license, sublicense or use of the Product by or to a
customer or by Distributor, or upon the provision of any services by
Distributor with respect to a Product, as such taxes or amounts that
may now or hereafter be imposed under the authority of any nation,
group of nations, state, or local taxing jurisdiction.
5.3 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.
As further consideration for the payment by Distributor of the
sum of US$600,000 referred to in Section 5.3.1 herein, Empyrean
agrees to supply, at no cost to Distributor, Products valued at
not less than US$100,000 (based on the Product Price, F.O.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.
6. WARRANTIES
6.1 PRODUCTS. Empyrean undertakes and warrants to Distributor that
the Products shall perform and conform with the product
specifications in Exhibit F or otherwise provided for
Distributor from time to time. In the event that any claim
relating to the medicinal or other value of the Products is
approved by the FDA or any other regulatory authority in the
United States of America or elsewhere in the world, such
approved claims shall be deemed to form part of the product
specifications in Exhibit F for the sale of the Products in
each country comprising the Territory provided that such
approved claim shall also have been approved by the relevant
regulatory authority in that country. Empyrean agrees to
replace any Product not performing or conforming with the said
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product specifications if the non-conforming Product is
returned to Empyrean within the period of the shelf life
specified by Empyrean for each of the Products and provided
that such non-conformity was not caused by misuse or
negligence of the customer in the Territory and otherwise is
returned in accordance with Empyrean's product return
authorization procedures in effect from time to time. All
third party expenses, including any applicable transportation,
handling, customs and related costs associated with the return
and/or replacement of such Products, if determined to be
non-conforming, shall be paid by Empyrean. Empyrean further
agrees to indemnify and save harmless Distributor from and
against any and all damages that may be suffered or incurred
by Distributor by reason of any claim of any customer or other
third party against Distributor arising or attributable to any
failure of the Products to perform or conform with such
product specifications unless such Product or the labels
relating thereto have been altered by Distributor. SAVE AS
PROVIDED IN THE FOREGOING, EMPYREAN MAKES NO EXPRESS WARRANTY,
AND EXCLUDES AND DISCLAIMS, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL IMPLIED WARRANTIES INCLUDING,
WITHOUT LIMITATION, IMPLIED WARRANTIES IN CONNECTION WITH THE
DESIGN, SALE AND MERCHANTABILITY OR FITNESS OF THE PRODUCTS
FOR ANY PARTICULAR PURPOSE OR USE EXCEPT THAT THE PRODUCTS ARE
FREE FROM MANUFACTURING DEFECTS AND CONFORM TO EMPYREAN'S
PUBLISHED SPECIFICATIONS. EMPYREAN SHALL HAVE NO LIABILITY
WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT OR
OTHERWISE FOR CONSEQUENTIAL, EXEMPLARY, INCIDENTAL OR PUNITIVE
DAMAGES, EVEN IF IT HAS BEEN ADVISED THAT THE POSSIBILITY OF
SUCH DAMAGE EXISTS. While Distributor may provide a warranty
for its end user, any warranty provided by Distributor is its
own and shall be the sole responsibility of Distributor.
Distributor shall inform all customers of Empyrean's warranty
disclaimers. Empyrean will make a reasonable effort to provide
an initial response to all customer complaints within 14
working days after receipt of said information.
6.2 AUTHORITY. Each party hereby represents and warrants to and undertakes with
the other as follows:
6.2.1 it has full power and authority to execute and deliver
and perform all of its obligations under this Agreement
and the execution, delivery and performance of this
Agreement by it will not conflict with any law, order,
judgment, decree, rule or regulation of any court,
arbitral tribunal or government agency, or any
agreement, instrument or indenture to which it or any
of its affiliates is a party or by which it is bound;
and
6.2.2 the exercise of the rights granted or to be granted by
Empyrean to Distributor under this Agreement will not
result in the infringement of any copyright, designs,
patents, and other intellectual property of, or any
other claims or rights of whatsoever nature of, any
third parties.
7. TERM AND TERMINATION
7.1 TERM. The initial term of the Agreement shall commence on the date of
execution of this Agreement by both parties hereto and will remain in
effect for the initial term of three years, unless terminated earlier
under the provisions of Section 7.2 herein. At the conclusion of the
initial term, and provided that it has not been subject to earlier
termination under Section 7.2 herein, this Agreement shall be
automatically renewed for additional two ten-year terms unless and
until this Agreement is terminated by mutual written consent of the
parties hereto.
7.2 TERMINATION FOR CAUSE. Empyrean may terminate this Agreement by 60
days notice to Distributor upon the occurrence of any of the following
events should they not be remedied within such 60-day notice period:
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7.2.1 Distributor fails to pay an invoice when due;
7.2.2 Distributor fails to fulfil one or more of its
obligations hereunder or otherwise breaches this
Agreement;
7.2.3 Distributor becomes bankrupt, insolvent or becomes
unable to pay its obligation when they become due; or
7.2.4 Distributor fails to substantially perform the specific
support and promotional activities outlined in Exhibit
C without prior written agreement by Empyrean.
Distributor may terminate this Agreement by 60 days notice to
Empyrean upon the occurrence of any of the following events
should they not be remedied within such 60-day notice period:
7.2.5 Empyrean fails to fulfil one or more of its obligations
hereunder or otherwise breaches this Agreement; or
7.2.6 Empyrean becomes bankrupt, insolvent or becomes unable
to pay its obligation when they become due.
7.3 EFFECT OF EXPIRATION OR TERMINATION. The effect of expiration or
termination of the Agreement is to be as follows:
7.3.1 Upon expiration of this Agreement or upon termination
by either party as provided herein, Empyrean shall
continue to ship Products under any Product orders
previously submitted by Distributor. Distributor will
have the right to sell all Products it has in inventory
to its customer or, if requested by Empyrean, the newly
appointed distributor or to Empyrean at cost plus any
handling. All warranties in effect will survive the
termination of this Agreement.
7.3.2 Upon expiration of this Agreement or upon termination,
the terms of Section 2.6 will remain in effect for an
additional five years therefrom.
7.3.3 Termination of this Agreement for any reason shall be
without prejudice to any rights of either party hereto
against the other arising out of events occurring prior
to that termination.
7.3.4 All rights granted hereunder to use trademarks or trade
names of Empyrean shall immediately terminate.
8. MISCELLANEOUS PROVISIONS
8.1 ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or the performance or breach thereof, shall be settled
by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association in the City of Washington, D.C.,
U.S.A. and judgment upon the award rendered by the Arbitrator(s) may
be entered in any Court having jurisdiction thereof and each party
hereto consents to jurisdiction is such forum, except that any party
can apply to any court in the continental U.S. for emergency or
interim injunctive relief.
8.2 ASSIGNMENT. Neither party hereto may assign or transfer all or any of
its rights or obligations under this Agreement without the prior
consent in writing of the other party, except that Empyrean may assign
this Agreement without Distributor's consent in conjunction with the
sale of all or substantially all its business or assets.
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8.3 FORCE MAJEURE. Either party hereto shall be excused from any delay or
failure in performance hereunder caused by any labor dispute,
governmental requirement (other than obligations to obtain Approvals),
act of God, earthquake, inability to secure materials and
transportation facilities, and other causes beyond its control. If
such delaying cause shall continue for more than 60 days, and 135 days
in the case of Empyrean's inability to deliver Products, the party
injured by the inability of the other to perform shall have the right,
upon written notice to the other party, to terminate this Agreement.
Alternatively, Empyrean and Distributor may elect to continue the
Agreement, but determine new Minimum Annual Purchases through mutual
agreement.
8.4 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding between the parties hereto relative to the subject
matter contained herein and supersedes all other agreements, oral and
written, heretofore made between the parties hereto, except that it
shall not relieve either party from making payments which may be owing
under an agreement prior to the date thereof. Any amendment to this
Agreement must be in writing and signed by an authorized
representative of Empyrean and Distributor. Should any portion of this
Agreement be held invalid or unlawful, the remainder of the Agreement
shall continue to be binding on both parties hereto to the fullest
extent practicable.
8.5 CAPTIONS. Section titles or captions contained herein are for
reference only and shall not be considered in construing this
Agreement.
8.6 NOTICES. All notices and requests required or authorized hereunder
shall, except where specifically provided otherwise, be given either
in writing by personal delivery to the party to whom notice is to be
given, or sent by registered mail, addressed to the party intended at
the address set forth below. The date of delivery in the case of
personal delivery or the date upon which it is deposited in the mail
in the case of notice by mail, shall be deemed to be the date of such
notice.
Empyrean: Empyrean Bioscience, Inc.
0000 Xxxx Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: President or Chief Operations Officer
Distributor: Durstrand International Limited
x/x 000, Xxxxxx Xxxxxx
Xxxx Xxxxxxxx Xxxx
Xxxx Xxxx, Xxxx
Xxxxxxxxxxx 6000
Attn: Mr Xxxxx Xxxxxx de Montaigne
8.7 WAIVERS. The waiver by either party hereto of any breach or alleged
breach of any provision hereunder shall not be construed to be a
waiver of any concurrent, prior or succeeding breach of said provision
or any other provision herein. Any waiver must be in writing.
8.8 RECORDS. Distributor shall keep accurate and detailed records of all
sales of the Products, and Distributor shall permit examination and
inspection of such records by authorized representatives of Empyrean,
upon reasonable notice, during usual business hours. Distributor may
limit inspection of such information to an agreed independent auditor,
only to the extent such inspection may divulge confidential
information of Distributor. In the event that Distributor exercises
its right to limit inspection to an auditor, written informal records
of sales not containing such confidential information shall be
supplied by Distributor per the terms of Section 2.1.8.
11
8.9 GOVERNING LAW. This Agreement, and all of the rights and duties in
connection therewith, shall be governed by and construed under the law
of the State of Arizona, U.S.A. other than conflict of laws,
principles of such state, applicable to agreements made and to be
performed in that State.
In consideration of the mutual covenants and conditions herein set forth, the
parties hereto have executed this Agreement as of the day and year above
written.
Durstrand International Limited Empyrean Bioscience, Inc.
Signature:___________________________ Signature:_____________________________
By: ____________________________ By ______________________________
Title: ____________________________ Title: ______________________________
Date: ____________________________ Date: ______________________________
12
EXHIBIT A
PRODUCTS
Preventx Contraceptive Gel and Antiseptic provided in 60, 80, 120 ml tube size
or 5.5ml disposable applicators.
Preventx Contraceptive Gel and Antiseptic provided in 55 gallon drum size or
other "bulk" packaging.
Preventx Hand Sanitizer and Antiseptic Lotion provided as finished product in 2,
8, 16 and 32 ounce bottles.
Preventx Hand Sanitizer and Antiseptic Lotion provided in bulk packaging.
13
EXHIBIT B
TERRITORY ONE
I. The Philippines
II. Singapore
III. Thailand
IV. Indonesia
V. Malaysia
VI. Cambodia
VII. Myanmar
VIII. Vietnam
TERRITORY TWO
I. Bangladesh
II. Brunei
III. North Korea
IV. South Korea
V. Guam
VI. New Guinea
14
EXHIBIT C
SPECIFIC SUPPORT AND PROMOTIONAL ACTIVITIES
Distributor recognizes that significant market development activities will be
required to build sales volume for Empyrean's products. Distributor agrees to
promote the Products to government agencies and end users. Distributor agrees to
execute Empyrean-generated marketing campaigns in the Territory; these campaigns
may involve translation and printing of promotional materials into brochures,
advertisements and mailers. Distributor will also undertake Empyrean-initiated
product promotional campaigns. Distributor agrees to conduct these campaigns
with reasonable levels of expenditure, to maintain appropriate organizational
staffing to execute said campaigns and to conduct educational seminars
independently and with Empyrean representatives. These activities must first be
discussed and approved by Empyrean USA (which approval shall not be unreasonably
withheld) and shall only be carried out to the extent that such activities do
not contravene the applicable laws and regulations in the Territory of the
United States.
Distributor further agrees to purchase demonstration product as appropriate and
to maintain a product specialist to support the products in-house and in the
field and to provide appropriate incentives to its general support organization.
These activities must first be discussed and approved by Empyrean USA (which
approval shall not be unreasonably withheld).
The quarterly end user sales in the Territory will be maintained by both
Distributor and Empyrean, since customer or Distributor will be required to
remit payment in advance, directly to Empyrean. Distributor may submit to
Empyrean, if agreed to in advance, reasonable and customary sales expenses
relating to the presentation, promotion and sales of Empyrean's products.
Expenses will be reimbursed on a quarterly basis. Expenses must be submitted one
week after the close of each quarter.
Distributor will be responsible for establishing the customer and setting up the
advanced payment schedule with customer and Empyrean. If not, Distributor will
be responsible for advanced payment. Products will be delivered to the
Territory. Distributor will be responsible to follow up on deliveries.
Empyrean and Distributor will maintain a close working relationship. In the
event that Distributor has the ability to open up new customers through a
broader product offering, Empyrean will discuss this with an open mind to
increasing the products offered by Distributor in the Territory, but the
decision to add such products to this Agreement shall be at the sole and
absolute discretion of Empyrean.
Since Distributor is responsible for providing promotion, Product presentation
and selling of the Products only, Empyrean would not expect Distributor to
establish a distribution network, warehousing, or banking facilities on behalf
of Empyrean. Therefore, if Distributor elects to provide that for its customers,
it is at Distributor's expense.
14
EXHIBIT D
MINIMUM ANNUAL PURCHASE
PRODUCTS:
Preventx Contraceptive Gel and Antiseptic
Preventx Hand Sanitizer and Antiseptic Lotion
MINIMUM PURCHASES CAN BE IN EITHER PRODUCT:
Year One - US$400,000
Year Two - US$1,000,000
Year Three - US$3,000,000
Year Four onwards - Minimum Annual Purchase for each year shall be equivalent to
115 per cent of the Minimum Annual Purchase for the immediately preceding year.
16
EXHIBIT E
PRODUCT PRICES
PREVENTX CONTRACEPTIVE AND ANTI-MICROBIAL GEL
Preventx Gel 55 gallon containers sold in "bulk", no labels, tubes, or
boxes.
Preventx Gel If purchased in 5.5, 60, 80 or 120 ml size tubes pricing will
be negotiated based on quantity ordered and costs associated
with preparing tubes that are exclusive to the
Territory.
PREVENTX HAND SANITIZER
Hand Sanitizer May be purchased in bulk or in bottles.
PRICING WILL BE PUBLISHED WHOLESALE, MINUS 17.5 PER CENT, F.O.B. EMPYREAN
FACTORY OR DESIGNATED WAREHOUSE.
17
EXHIBIT F
PER ATTACHED PACKAGED INSERT
Product specifications are as outlined in the specific product package insert
which is delivered with individual product lots to Distributor in the Territory.
