Exclusive Distribution Agreement - Asia

DISTRIBUTION AGREEMENT


Entered into this 28th 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 2238 West Lone Cactus Dr., Suite 200, Phoenix, AZ 85027 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 mark to
any Product, or (d) market, sell or promote any Product
under any name or mark 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 mark 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. Confide ...