International Distribution

EXHIBIT 10.22


INTERNATIONAL
DISTRIBUTION AGREEMENT


between


NEW IMAGE INDUSTRIES, INC.


and


TAKARA BELMONT CO. LTD.


DISTRIBUTION AGREEMENT


TABLE OF CONTENTS


SECTION Page - ------- ----


1 Products 2


2 Appointment and Territory 3


3 Term and Termination 4


4 Pricing 6


5A Obligations of NEW IMAGE 6


5B Obligations of TAKARA BELMONT 7


6 Minimum Purchase Requirements 8


7 Sales Policy 9


8 Patents, Trade Names, Trademarks 9


9 Assignment 11


10 Independent Contractor 11


11 Entire Agreement 11


12 Headings 11


13 Confidentiality 12


14 Severability 12


15 Governing Law 12


16 Notices 13


17 Compliance with Law 13


18 Survival 13


19 Waiver 13


20 Force Majeure 13


21 Arbitration 14


Signature 14


Schedule A Current Products


Schedule B New Products


Schedule C Minimum Purchase Requirements


Schedule D Trade Names and Trademarks


NEW IMAGE INDUSTRIES, INC.
INTERNATIONAL DISTRIBUTION AGREEMENT
THIS AGREEMENT made and entered into the first day of January, 1996.


BETWEEN:


NEW IMAGE INDUSTRIES INC., a California Corporation, having its principal place of business at 2283 Cosmos Court, Carlsbad, California 92009, United States of America


hereinafter called "NEW IMAGE"


OF THE FIRST PART,


- and -


TAKARA BELMONT CO. LTD. P.O. BOX OSAKA MINANU 27 1-1,2-CHOME, HIGASAI-SHINSAIBASHI CHUO-KU, OSAKA, JAPAN


hereinafter called "TAKARA BELMONT"


OF THE SECOND PART.


WHEREAS:


(1) NEW IMAGE manufactures, sells and distributes the NEW IMAGE, intraoral camera system and related accessories and has established a reputation for quality and goodwill incident to its trade name, trademarks and Products (as defined


herein);


(2) TAKARA BELMONT desires to market and distribute such Products on an exclusive basis in the Territory (as defined herein); and


(3) The parties intend that their relationship be that of independent contractors;


NOW THEREFORE THIS AGREEMENT WITNESSETH and in consideration of the mutual covenants and agreements herein contained, the parties hereto do covenant and agree as follows:


1. PRODUCTS


(i) DEFINITION. As used herein the word "PRODUCTS" shall mean those set out in Schedule A hereto and such accessories thereto as are from time to time during the term of this Agreement offered for sale in the Territory by NEW IMAGE, "NEW PRODUCT (plural, "New Products") shall mean a product which may hereafter be manufactured, developed, or distributed by NEW IMAGE that is related to those defined, but not included, in Schedule A. If TAKARA BELMONT elects to market and distribute a New Product in accordance with Section I(ii), items included in the term "Products" shall thereafter include such New Product.


(ii) NEW PRODUCTS. Upon the international introduction of a New Product NEW IMAGE shall give TAKARA BELMONT written notice thereof including full technical specifications and export pricing. Within sixty (60) days after TAKARA BELMONT receives written notice of a New Product, it shall give written notice to NEW IMAGE specifying whether TAKARA BELMONT elects to market and distribute such New Product in the Territory. If TAKARA BELMONT elects to market and distribute such New Product in the Territory, TAKARA BELMONT'S written notice to NEW IMAGE shall be in the form of Schedule B. If TAKARA BELMONT notifies NEW IMAGE that it elects not to market and distribute such New Product, or fails to make an election to do so in the form of Exhibit B within such sixty (60) day period, NEW IMAGE may appoint a third party to market and distribute such New Product in the Territory. The procedure set out in this paragraph shall be applicable to each New Product during the "TERM" and any "RENEWAL Term," both as defined in Section 3.


(iii) PRODUCT SPECIFICATIONS. TAKARA BELMONT shall provide NEW IMAGE written notification of requirements and specifications for products to be imported into and transported within the Territory. NEW IMAGE will incur the cost of modifying or changing Products in order to comply with all product requirements and specifications provided that all Product changes will be done at NEW IMAGE'S


discretion.


(iv) IMPORT APPROVALS. TAKARA BELMONT shall incur, directly or through its affiliate Belmont Corporation, all costs of obtaining import, or other regulatory licenses required for the Products to be imported into, transported within, and sold and used within the Territory.


2. APPOINTMENT AND TERRITORY


(i) GRANT OF RIGHTS. NEW IMAGE grants to TAKARA BELMONT the limited right to use the "TRADEMARKS," as defined in Section 8 on the terms set forth in that Section and exclusive authority (subject to laws in the Territory) to market and distribute the Products to customers in JAPAN (the "TERRITORY") NEW IMAGE will notify TAKARA BELMONT of all inquires originating within the Territory that relate to Products (i) or to New Products which TAKARA BELMONT does not represent.


(ii) TERRITORIAL RESTRICTIONS. The grant of exclusive authority under Section 2(i) above is limited to sales and marketing of Products in the Territory for use in the Territory. TAKARA BELMONT accepts this grant of exclusive authority and agrees not to market, distribute, or use the Products directly or indirectly in any capacity outside the Territory. TAKARA BELMONT agrees not to distribute the Products to any person other than customers for use in the Territory. Subject to the laws in the Territory, TAKARA BELMONT shall not permit any other person to market or distribute the Products in any place other than the Territory or to persons other than customers. Except as provided herein, during the Term of this Agreement and any Renewal Term, NEW IMAGE shall not make sales of, or grant to others the right to sell the Products, within the Territory. NEW IMAGE further agrees not to sell any Products to any person, firm or company which NEW IMAGE knows or has reason to believe intends to resell or export, is reselling or exporting and or has resold or exported, the Products into the Territory. If due to oversight, inadvertence or lack of knowledge, any purchaser or licensee manufactures or exports Products for sale into the Territory, then NEW IMAGE will use its best efforts to take whatever steps are necessary to have such parties cease such offending activities.


(iii) EXCLUSIVITY OF DISTRIBUTION. During the term of this Agreement, TAKARA BELMONT shall not, directly or indirectly, in any capacity acquire, market, promote, use, sell, or otherwise deal with or distribute any products that compete with the Products without prior written consent of NEW Image TAKARA BELMONT learns that any person or entity is infringing on TAKARA BELMONT'S exclusive right to market and distribute the Products in the Territory, TAKARA BELMONT agrees to notify NEW IMAGE immediately and cooperate fully with NEW IMAGE in halting such infringement. New Image acknowledges that Takara Belmont agreed, prior to the effective date of this Agreement, to purchase from Moritex 50 units of a product competing with the Products. New Image consents to such purchase and to the resale of such items.


3. TERM AND TERMINATION


(i) TERM. This Agreement shall remain in effect until December 31, 1998 (the "TERM"), subject to the renewal provisions of Section 3(ii) and the earlier termination provisions of Section 3(iii) through 3(iv).


(ii) AUTOMATIC ANNUAL RENEWAL. If this Agreement is still in full force and effect at the end of the Term, it shall be automatically renewed at that time and each year thereafter for an additional one year period (the "RENEWAL TERM"), unless terminated by either TAKARA BELMONT or NEW IMAGE upon written notice submitted at least ninety (90) days prior to the end of the Term or Renewal Term, or unless otherwise terminated pursuant to Section 3(iii) through 3(v). Except as otherwise specifically provided, the Renewal Term shall be on the same terms and conditions as the Term. When this Agreement has been renewed, thereafter "Term" shall include the period of the "Renewal Term."


(iii) IMMEDIATE TERMINATION. In addition to all other rights or remedies, either NEW IMAGE or TAKARA BELMONT may terminate this Agreement upon 10 days prior written notice if:


(a) the other party (1) makes an assignment for the benefit of creditors; (2) files a voluntary petition in bankruptcy or is adjudicated as bankrupt or insolvent; or (3) files any petition or answer seeking reorganization, liquidation or similar relief or files an answer admitting the material allegations of a petition against it for any such relief,


(b) within 90 days after the commencement of any proceeding against the other party seeking reorganization, liquidation or similar relief, the proceeding has not been dismissed;


(c) any court, tribunal, or government agency modifies any term of this Agreement to the substantial detriment of the party seeking termination;


(d) the other party dissolves or ceases to do business; or


(e) the other party appoints a receiver or trustee for all or a part of its assets, business, or property.


(iv) ADDITIONAL RIGHTS TO TERMINATE. In addition to all of its other rights or remedies, NEW IMAGE may terminate this Agreement if:


(a) TAKARA BELMONT transfers or attempts to transfer without NEW IMAGE'S prior written consent the rights granted under this Agreement;


(b) TAKARA BELMONT fails to purchase the Minimum Purchase Requirements ...