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SAFE4HOURS, INC | SKINVISIBLE PHARMACEUTICALS, INC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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DISTRIBUTION AGREEMENT
THIS
AGREEMENT made as of the 4th day of May, 2005. ("Effective
Date")
BETWEEN:
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SKINVISIBLE PHARMACEUTICALS, INC. ,
a company incorporated under the laws of the State of Nevada having
its principal place of business located at Unit #10 - 6320 South
Sandhill Road, Las Vegas, Nevada, 89120
(“ Skinvisible
”);
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AND:
SAFE4HOURS, INC. ,
a company incorporated under the laws of the State of Nevada having
its principal place of business located at ---202 N. Carson Street,
Carson City, Nevada 89701 (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.
1.2
“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
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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;
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(b)
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becomes
at a later date available to the general public through no fault of
the receiving party, and then only after said later
date;
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(c)
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was
already in the possession of the receiving party without
restriction prior to the date of disclosure;
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(d)
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is
disclosed to the party without secrecy obligations by a third party
who had a lawful right to disclose it; or
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(e)
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is
independently developed by personnel of the receiving party who had
no direct or indirect access to the Confidential Information of the
disclosing party.
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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"; PCT Application No. US02/26301
filed on August 16, 2002 for purposes of the countries designated
therein that are within the Territory namely Asia, Australia,
Europe, India, Japan and S. Korea; and all divisions,
continuations, continuation-in-parts, reissues, reexamination
applications, extensions, foreign equivalents within the Territory,
and patents issuing there-from 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.
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1.7
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"Territory" means
all the countries of the world except Canada, USA and
Mexico.
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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,
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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
*
4.2
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4.3
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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
*
The confidential portion has been omitted and filed separately with
the Commission
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Territory.
Skinvisible acknowledges receipt of a $25,000 nonrefundable
deposit applicable toward this up-front license fee.
*
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4.5
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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:
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Quarter Ended
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Amount of Payment
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September
30, 2005 and subsequent first Year Quarters
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$5,000
or 5% of gross revenues generated by Distributor from sales of
the Product in the Territory in the quarter, whichever is
greater
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September
30, 2006 and subsequent second Year Quarters
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$10,000
or 5% of gross revenues generated by Distributor from sales of
the Product in the Territory in the quarter, whichever is
greater
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September
30, 2007 and subsequent Quarters Thereafter
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$20,000
or 5% of gross revenues generated by Distributor from sales of
the Product in the Territory in the quarter, whichever is
greater
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*
4.6
All
payments by the Distributor to Skinvisible to be made
hereunder shall be in United States dollars.
*
The confidential portion has been omitted and filed separately with
the Commission
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V.
TERMS AND CONDITIONS OF PRODUCT ORDERS
5.1
*
5.2
*
5.3
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5.4
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5.5
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5.6
*
*
The confidential portion has been omitted and filed separately with
the Commission
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(a)
*
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(b)
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*
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(c)
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*
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*
The confidential portion has been omitted and filed separately with
the Commission
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5.7
*
VI.
OBLIGATIONS OF SKINVISIBLE
6.1
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6.2
*
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
*
The confidential portion has been omitted and filed separately with
the Commission
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sources
the "M1 Polymer" ingredient for the Product from Skinvisible;
(c) Distributor applies 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.
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IX.
IMPROVEMENT INVENTIONS
9.1
Distributor
shall have no right to make any modifications or
