Exhibit 10.3
 
ABBOTT NUTRITION
 
DISTRIBUTION AGREEMENT
 
This Distribution Agreement (“Agreement”) is entered into to be effective as of
the 25th  day of June, 2010 (the “Effective Date”), between Abbott Nutrition,
Abbott Laboratories Inc., a Delaware corporation with a principal place of
business at 3300 Stelzer Road, Columbus, Ohio 43219, hereafter referred to as
“Abbott Nutrition”, and Blue Gem Enterprise hereinafter referred to as
“Distributor”.
 
In consideration of the mutual promises set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
 
1.  DEFINITIONS
 
1.1  “Affiliate” means, with respect to either party, a corporation or any other
entity that directly, or indirectly through one or more intermediaries,
controls, is controlled, or is under common control with, such party.  As used
herein, the term “control” means possession of direct or indirect power to order
or cause the direction of the management and policies of a corporation or other
entity whether (i) through the ownership of more than fifty percent (50%) of the
voting securities of the other entity, or (ii) by contract, statute, regulation
or otherwise.
 
1.2   “Contract Year” means the twelve months immediately following the
Effective Date, and each consecutive twelve-month period thereafter.
 
1.3  “Intellectual Property” means the Trademarks of Abbott Nutrition and its
Affiliates, whether or not registered, patents and patent applications,
copyrights, trade secrets and know how (“Know How”) or other intangible property
which Abbott Nutrition may have at any time created, adopted, used, registered,
owned or otherwise been issued in the United States and any other location in
connection with Abbott Nutrition’s business.
 
1.4  “Licensed Products” means the Abbott Nutrition products Distributor is
authorized to distribute pursuant to this Agreement; the initial Licensed
Products and their SKU's are listed on Schedule 1.
 
1.5  “SKU's” means stock keeping units that identify the Licensed Products by
flavor and package or container type, design and size.
 
1.6  “Territory” means the outlets in the geographic territory in which
Distributor is authorized to distribute Licensed Products described on Schedule
2.
 
1.7  “Trademarks” means the trademarks EAS® and Myoplex®, and such trademarks,
trade dress, trade names and Licensed Product names as Abbott Nutrition has
directed be used on or in respect of the Licensed Products sold within the
Territory.
 
1.8  “Outlets” means all retail stores within the assigned territory as defined
on Schedule 2
 
 
 

--------------------------------------------------------------------------------

 
2.  APPOINTMENT
 
2.1  Appointment.  Abbott Nutrition hereby grants Distributor the exclusive
right to distribute and sell Licensed Products only in the Territory for resale
in a Cold Box in any retailer or in both the Cold Box and dry merchandise
sections of Outlets, during the Term of this Agreement and does not grant
Distributor any other rights of any kind to distribute or sell other Abbott
Nutrition Licensed Products; provided, however, nothing in this Agreement shall
be construed to limit the right of Abbott Nutrition and its Affiliates to
directly or indirectly market, distribute, or sell the other Abbott Nutrition
Licensed Products in the Territory to Outlets.  Distributor shall not receive
any compensation for sales of the other Abbott Nutrition Licensed Products made
directly or indirectly by Abbott Nutrition, or any Affiliate of Abbott
Nutrition. Acceptance.  Distributor hereby accepts the foregoing appointment and
agrees to use its best efforts to:
 
(i)  promote, sell, deliver and assure customer satisfaction for the Licensed
Products within the Territory;
 
(ii) develop new business opportunities for Licensed Products to Outlets in the
Territory;
 
(iii) secure extensive in-store merchandising and optimal shelf positioning for
Licensed Products in the Territory, except for those National Accounts otherwise
serviced pursuant to Section 2.6
 
(iv) permit Abbott Nutrition representatives to work sales routes with
Distributor’s salesmen in the Territory, upon reasonable advance notice to
Distributor;
 
(v) provide the resources necessary for the sale, delivery, marketing, promotion
and servicing of the Licensed Products within the Territory, except for those
National Accounts otherwise serviced in accordance with Section 2.6;
 
(vi) at least once per year, or more frequently as agreed between the parties,
Distributor shall present to Abbott Nutrition its business plans in which are
established targets for volume, market share and marketing plans for the
Licensed Products, which targets shall not be binding on Distributor;
 
(vii) sell only appropriately dated Licensed Product and any out-of-date product
Distributor finds in their possession or in-store cannot be sold and must be
destroyed; and
 
(viii) comply with all of its other duties and covenants set forth herein.
 
2.2  Distribution Requirements.  Distributor shall achieve by the end of the
first Contract Year and thereafter maintain (i) distribution levels in the
independently owned Outlets as mutually agreed upon in the annual business plan,
and (ii) 90% distribution in the Authorized National Accounts (“Distribution
Requirements”).
 
-2-

--------------------------------------------------------------------------------

 
2.3  Additions to Licensed Products.  Distributor shall purchase Licensed
Products for distribution and sale in the Territory exclusively from Abbott
Nutrition.  If Abbott Nutrition internally develops any other beverage products
not currently included in the definition of Licensed Products that Abbott
Nutrition intends to sell in the refrigerated beverage container at retail
through direct store delivery by independent distributors within the Territory
(“Additional Beverages”), Abbott Nutrition grants Distributor the first right of
refusal to distribute such Additional Beverages on an exclusive basis within the
Territory, on terms and conditions substantially identical to the terms and
conditions set forth herein and applicable with respect to the Licensed
Products.  Abbott Nutrition will provide Distributor with written notice of any
Beverage Products available for distribution within the Territory (“New Product
Notice”).  Within thirty days after the New Product Notice, Distributor may
elect to include the products stated in the New Product Notice in the definition
of Licensed Products by executing the New Product Notice and thereby amending
Schedule 1 of this Agreement.  If Distributor does not execute the New Product
Notice Abbott Nutrition will have the unrestricted right to enter into a
distribution agreement for the product(s) included in the New Product Notice
through other distributors.
 

 
2.4  Compliance with Applicable Law.  Distributor expressly agrees to comply
with and abide by, all applicable federal, state and local laws, rules,
ordinances, codes and regulations (including returnable container or deposit
laws), as amended and all rules and regulations now existing or that may be
promulgated under and in accordance with any such law or laws, as may be
applicable to the Licensed Products and Distributor's activities in connection
with the distribution and sale of the Licensed Products. Further, Distributor
shall obtain and maintain at its own expenses all permits, licenses and other
approvals necessary to enable Distributor to perform fully under this Agreement,
and Distributor shall provide copies thereof to Abbott Nutrition promptly upon
request.
 
2.5  National Accounts.  “National Account” means a group of Affiliated,
centrally managed Outlets which are designated by Abbott Nutrition for national
account treatment. Except as otherwise provided by applicable law, Abbott
Nutrition retains the right to exclusively manage and unilaterally establish
policies for any such National Accounts. So long as Distributor complies with
any National Account policies and otherwise sells to and services the National
Account Outlets in the Territory on terms mutually agreeable to Abbott Nutrition
and the National Account, Distributor will retain the exclusive right to sell
Licensed Products to National Account Outlets in the Territory. However, in the
event Distributor's distribution network in the Territory does not meet the
National Account requirements, Abbott Nutrition may, in its sole discretion,
cease such sales through Distributor and arrange for alternate sources of supply
to that National Account's Outlets in the Territory. Abbott Nutrition retains
the right to manage and establish policies for such National Accounts; provided,
however that Abbott Nutrition shall not require, unless the parties mutually
agree, Distributor to sell Licensed Product to National Accounts at a price that
is less than $5.56 cents per case above the delivered price as set forth on
Schedule 3, as same may be modified from time to time pursuant to the terms of
Section 4.3 of this Agreement.
 
2.6  Territory Limitation.  Distributor agrees not to actively, either directly
or indirectly, advertise, solicit orders for, or otherwise actively promote,
market or sell Licensed Products outside the Territory, Cold Box, or Outlets,
without the prior written consent of Abbott Nutrition, and shall not establish,
locate or utilize an office, branch, or distribution depot or utilize the
Internet for the sale of the Licensed Products outside the Territory or Outlets
(each, a “Transfer”). Distributor hereby further agrees not to Transfer any
Licensed Products, either directly or indirectly, to any persons and/or entities
within the Territory for Transfer, or to persons or entities with regard to whom
Distributor has knowledge or reasonable belief will distribute and/or sell the
Licensed Products outside of the Territory or Outlets, except that, subject to
all of the terms and conditions of this Agreement, Distributor may Transfer
Licensed Products to the extent authorized in writing by Abbott
Nutrition.  Distributor shall promptly direct to Abbott Nutrition all inquiries
that are related to any Transfer.
 
-3-

--------------------------------------------------------------------------------

 
2.7  Distributor’s Representations and Warranties.  Distributor represents and
warrants to Abbott Nutrition that (i) it has the right and lawful authority to
enter into this Agreement, and (ii) the execution, delivery and performance of
this Agreement will not cause or require Distributor to breach any obligation
to, or agreement or confidence with, any other person or entity.
 
3.  MARKETING, DISTRIBUTION AND SALES
 
3.1  Highest Quality Positioning. An essential element of the consideration
Abbott Nutrition has bargained for in granting the exclusive distributorship
under this Agreement is Distributor's agreement to position, and market,
deliver, and set up the displays for all point of sale materials provided at no
charge by Abbott Nutrition, in its discretion, and to promote, merchandise and
distribute the Licensed Products as high quality premium products. Distributor
agrees to keep Abbott Nutrition aware of product sales and trends, product
performance, customer satisfaction, market shifts and trade conditions, market
potential, sales forecast and recommended product changes, and, in general, to
assist Abbott Nutrition in implementation of product and marketing improvements
for the mutual benefit of the parties.
 
3.2  Promotion and Trade Marketing of Licensed Products.  Distributor shall be
responsible for promotion and “trade” marketing of the Licensed Products to
Outlets within the Territory; provided, however, that Distributor may not
produce any written material promoting, describing or marketing the Licensed
Product without Abbott Nutrition’s prior written consent.  Distributor shall
aggressively distribute and encourage the utilization of merchandising aids and
promotional materials provided at no charge by Abbott Nutrition, in its
discretion, in all Outlets throughout the Territory.  Without in any way
detracting from the foregoing, Distributor shall reasonably participate in and
diligently implement all “trade” marketing and promotional programs that are
mutually agreed upon by Abbott Nutrition and Distributor from time to
time.  Distributor acknowledges that Abbott Nutrition makes no, and hereby
disclaims any, express or implied warranty, representation, or covenant relating
to or in connection with Abbott Nutrition’s discretionary marketing and
promotional activities, including without limitation, as to the value,
performance, extent, effectiveness, quantity, quality, success or results of any
such activities or the lack thereof.  Distributor shall have no claim against
Abbott Nutrition and its Affiliates and hereby releases Abbott Nutrition and its
Affiliates from all and any claims by, and/or liability to, Distributor of any
nature for Abbott Nutrition’s failure to successfully market and promote, or
adequately market and promote, the Licensed Products or arising from or relating
to or in connection with any marketing activities procured, provided or
performed by Abbott Nutrition or Abbott Nutrition’s decision, in its discretion,
not to procure, provide or perform such activities.
 
-4-

--------------------------------------------------------------------------------

 
3.3  Reports. Distributor will maintain accurate and complete books and records
concerning its performance in connection with this Agreement. Abbott Nutrition
may inspect such books and records during Distributor's regular business hours.
Within fifteen (15) days after the end of each calendar month, within thirty
(30) days after the end of Distributor's fiscal year, and within thirty (30)
days after termination of this Agreement, Distributor will furnish to Abbott
Nutrition a statement setting forth its purchases, and aggregate sales (on a
depletion basis) to Outlets of Licensed Products, expressed in actual case sales
(SKU's) for such period, including the name, address, zip code and quantity of
the Licensed Products (“Reports”).
 
4.  PURCHASE OF PRODUCT
 
4.1  Purchase and Sale of Licensed Products. Distributor will purchase Licensed
Products only from or as directed by Abbott Nutrition. Abbott Nutrition will
sell to Distributor such quantities of Licensed Products as Distributor shall
require to fulfill its obligations hereunder for the price and on the shipment
terms set forth in Section 4.4. Abbott Nutrition shall use reasonable efforts to
accommodate Distributor's request to ship the Licensed Products on the requested
shipment dates. Abbott Nutrition shall use reasonable efforts to notify
Distributor if it is unable or will fail to comply with such requested shipment
dates.
 
4.2  Payment. Payment is due in full to Abbott Nutrition within thirty (30) days
after delivery of the Licensed Products, with a two percent (2%) discount if
payment is received within ten (10) days after receipt of goods (two percent
(2%) ten (10) days, net thirty-five (35) days). Abbott Nutrition has the right
to change the credit terms applicable to Distributor's future purchases at any
time upon reasonable notice, provided that any such changes in credit terms are
consistent with credit policies that are generally applicable and consistently
applied by Abbott Nutrition.
 

 
4.3  Prices for Licensed Products. The initial delivered wholesale prices for
Licensed Products (including freight and shipping terms and charges) are set
forth on Schedule 3. Abbott Nutrition reserves the right to change prices on no
less than sixty (60) days' prior written notice to Distributor. Distributor's
orders will be honored at the price in effect at the time they are received by
Abbott Nutrition, provided Distributor takes delivery prior to the effective
date of the price changes.
 
4.4  Forecasts, Purchase Orders and Delivery.
 
(a)  Forecasts.  No later than the first day of the month following the
Effective Date, Distributor shall provide Abbott Nutrition with a quarterly
forecast of Distributor’s requirements for each SKU of the Licensed Products for
the subsequent 12 month period.
 
(ii)  Purchase Orders.  All purchase orders for Licensed Products shall be
transmitted in writing or electronically, shall specify a reasonable date and
time for delivery with a lead time of at least ten (10) days.  Each order shall
be for a minimum of one (1) pallet and each pallet shall contain only one (1)
SKU.  Each order shall be subject to written or electronic acceptance by Abbott
Nutrition at its discretion, and shall not be binding upon Abbott Nutrition
unless and until so accepted.  Any purchase order issued by Distributor is for
administrative convenience only.  In the event of any conflict between the
provisions of this Agreement (including the Schedules) and any purchase order,
the provisions of this Agreement (including the Schedules) shall prevail and
govern and any additional terms in the purchase order shall be inapplicable.
 
-5-

--------------------------------------------------------------------------------

 
4.5  Abbott Nutrition’s Warranty.  Abbott Nutrition’s Warranty.  Abbott
Nutrition warrants to Distributor that its Licensed Products will substantially
conform to Abbott Nutrition's published specifications for such Licensed
Products for a reasonable period of time from the date of shipment of Licensed
Product to Distributor by Abbott Nutrition, but not to exceed the Licensed
Product expiration date, and when delivered to Distributor, shall have a
remaining shelf life of not less than six (6) months. Abbott Nutrition warrants
that all Licensed Products, all food additives in the Licensed Products, or all
substances for use in, with, or for the Licensed Products, comprising each
shipment or other delivery hereby made by Abbott Nutrition to, or on the order
of, Distributor are hereby guaranteed as of the date of such shipment to be, on
such date, not adulterated or misbranded within the meaning of the Federal Food,
Drug and Cosmetic Act, as amended, including the Food Additives Amendment of
1958 (the “Act”) or within the meaning of any substantially identical and
applicable state food and drug law, if any, and are not articles which may not
under the provisions of Sections 404, 505, or 512 of the Act, be introduced into
interstate commerce. ABBOTT NUTRITION WILL REPLACE ANY LICENSED PRODUCT
CONFIRMED BY ABBOTT NUTRITION AS DEFECTIVE OR REFUND THE PURCHASE PRICE PAID BY
DISTRIBUTOR FOR SUCH DEFECTIVE LICENSED PRODUCT, AT ABBOTT NUTRITION'S SOLE
OPTION, DURING SAID PERIOD.  THIS WARRANTY IS CONTINGENT UPON PROPER
WAREHOUSING, SHIPMENT AND USE OF LICENSED PRODUCTS IN THE APPLICATION FOR WHICH
THEY WERE INTENDED AS INDICATED IN THE LICENSED PRODUCT LABEL CLAIMS, AND ABBOTT
NUTRITION MAKES NO WARRANTY (EXPRESS, IMPLIED, OR STATUTORY) FOR LICENSED
PRODUCTS THAT ARE MODIFIED, REPACKAGED, RELABELED OR SUBJECTED TO UNUSUAL
PHYSICAL OR ENVIRONMENTAL STRESS.  Except as required by law, Distributor shall
not pass on to its customers a warranty or limitation of liability which is more
protective of such customers than the warranty (including the limited remedy and
exclusions) set forth in this Section 4.5 and the limitations of warranty and
liability set forth in this Agreement, including without limitation Sections 4.6
and 15.  The foregoing is in lieu of all other warranties.
 
4.6  LIMITATION OF WARRANTY.  EXCEPT FOR THE LIMITED WARRANTY PROVIDED IN
SECTION 4.5 OF THIS AGREEMENT, ABBOTT NUTRITION GRANTS NO OTHER WARRANTIES OR
CONDITIONS, EXPRESS OR IMPLIED, BY STATUTE, IN ANY COMMUNICATION WITH
DISTRIBUTOR OR CUSTOMERS, OR OTHERWISE REGARDING THE LICENSED PRODUCTS, THEIR
FITNESS FOR ANY PURPOSE, THEIR QUALITY, OR THEIR MERCHANTABILITY.  ABBOTT
NUTRITION NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO MAKE OR ASSUME ANY
OTHER LIABILITIES ARISING OUT OF OR IN CONNECTION WITH THE SALE OR USE OF ANY
LICENSED PRODUCT. THE REMEDIES OF THE DISTRIBUTOR SET FORTH HEREIN SHALL BE THE
ONLY REMEDIES AVAILABLE. IN NO EVENT SHALL ABBOTT NUTRITION BE LIABLE FOR THE
COST OF PROCUREMENT OF SUBSTITUTE GOODS BY THE DISTRIBUTOR. ABBOTT NUTRITION
SHALL IN NO EVENT BE LIABLE FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, INCLUDING WITHOUT LIMITATION LOST REVENUES OR PROFITS, WHETHER A CLAIM
FOR SUCH DAMAGES IS BASED UPON WARRANTY, CONTRACT, TORT, COMMON LAW, STATUTE OR
OTHERWISE.
 
4.7  Distributor Warranty Indemnity.  Distributor shall indemnify, defend and
hold Abbott Nutrition harmless against all claims, liabilities, costs and
expenses (including the reasonable fees of attorneys and other professionals)
incurred by, or threatened against, Abbott Nutrition in connection with any
representation or warranty by Distributor or Distributor's personnel
inconsistent with the foregoing limited warranty and disclaimer and publications
of Abbott Nutrition concerning the Licensed Products.
 
 
-6-

--------------------------------------------------------------------------------

 
4.8  Product Returns. Except as expressly set forth in Section 4.9 of this
Agreement, Abbott Nutrition will not accept any returned Licensed Product, for
any reason, from Distributor.  All expired Licensed Products shall be the sole
responsibility of the Distributor.
 
4.9  Defective and Improper Delivery; Returns.  The following provisions shall
apply:
 
(i)  Distributor shall inspect all Licensed Products upon delivery in a
commercially reasonable manner.
 
(ii)  In the event that (a) any Licensed Product delivered to Distributor is
patently defective and thereby fails to meet the relevant specifications and
such defect is a result of Abbott Nutrition’s manufacture or packaging, or (b) a
delivery is short or is not made, Distributor shall notify Abbott Nutrition
within fifteen (15) days of receipt of such shipment or lack thereof.  Upon
receipt of such notice, and at Abbott Nutrition’s option, Abbott Nutrition’s
sole obligation shall be to: (1) replace any defective Licensed Product,
(2) make up the shortfall, or (3) refund any invoiced purchase price to
Distributor.
 
(iii)  Failure by Distributor to give notice of defective or damaged Licensed
Product within fifteen (15) days of receipt, or in the case of a latent defect,
within fifteen (15) days of discovery of such defect, shall be deemed a waiver
by Distributor of Abbott Nutrition’s obligations as stated herein.
 
5. HANDLING OF LICENSED PRODUCTS
 
5.1  Quality Control.  Distributor will be responsible for maintaining the
quality of all Licensed Products in its possession or under its control.
Distributor agrees to use the warehousing practices, inventory control, product
rotation (including at Outlets), handling and other quality control procedures
which Abbott Nutrition reasonably may specify or, if not so specified, which are
consistent with national brand industry standards in effect in the Territory.
Distributor will promptly notify Abbott Nutrition of any quality problems that
come to its attention, and of the steps being taken to correct each such
problem. Distributor agrees to keep complete and accurate records of the
disposition and location of all Licensed Products distributed by it in order to
facilitate tracing.
 
 
-7-

--------------------------------------------------------------------------------

 
5.2  Customer Complaints.  Distributor will give Abbott Nutrition prompt written
notice of any complaints involving Licensed Products it has distributed. In
recognition of the importance of protecting the Trademarks, Abbott Nutrition’s
business, and associated goodwill, Distributor agrees to consult with Abbott
Nutrition before taking any steps to resolve any complaint.
 
5.3  Inventory.  Distributor shall maintain, at its own expense, an adequate
inventory of reasonable quantities of Licensed Products, for the proper sale,
promotion and delivery of the Licensed Products and for assuring customer
satisfaction with and needs for the Licensed Products in the Territory.  Such
inventory shall be stored in accordance with the provisions of Schedule 4.
 
6.  INTELLECTUAL PROPERTY RIGHTS
 
6.1  Intellectual Property Rights.  Distributor shall have a non-exclusive
license to use the Trademarks for the sole purpose of promoting, selling and
distributing Licensed Products.   Distributor acknowledges that exclusive
ownership of and title to the licensed Trademarks and other Intellectual
Property shall at all times remain with Abbott Nutrition.
 
6.2  Distributor Covenants.  Distributor shall comply with the following
provisions:
 
(i)  Distributor shall not dispute or contest or assist others to dispute or
contest the validity of any of Abbott Nutrition's Intellectual Property.  In
addition, if Distributor so disputes or contests or assists others to dispute or
contest the validity of any of the foregoing rights of Abbott Nutrition, Abbott
Nutrition shall have the right to terminate this Agreement immediately upon
written notice to Distributor.  This covenant not to contest shall not, however,
apply to the validity of any U.S. letters patent owned by Abbott Nutrition or to
the extent this covenant is invalid under applicable law.
 
(ii) Distributor shall not omit or alter patent numbers, trade names or
trademarks, indications of copyright numbers or series or any other Abbott
Nutrition markings affixed on the Licensed Products obtained from Abbott
Nutrition, or alter Licensed Product labeling.  Distributor shall not tamper
with or alter the packaging of Licensed Products as provided by Abbott
Nutrition.  Distributor shall sell the Licensed Products in the Territory under
Abbott Nutrition's name.  Distributor shall not take any action which would, or
fail to take any action where such failure would, directly or indirectly, have
an adverse effect upon the Trademarks or goodwill of Abbott Nutrition.  Upon any
termination of this Agreement, Distributor shall cease all use of the Trademarks
of Abbott Nutrition and its Affiliates, shall not employ in any way any other
word, mark, sign, symbol or name associated with the Licensed Products, and
shall not use any trademarks, copyrights, trade names, or product names which
are confusingly similar to the Trademarks.  Distributor shall in no event use
any such Trademarks in connection with any products other than the Licensed
Products.
 
(iii)  Distributor shall acquire no rights or other interest in the Trademark
and Abbott Nutrition’s trade name, trade dress or any other trademark or other
Intellectual Property right owned or otherwise controlled by Abbott Nutrition
except as explicitly provided by this Agreement.  All uses by Distributor of the
Trademarks shall inure solely to the benefit of Abbott Nutrition.  Distributor
understands and agrees that it is not authorized to use the Abbott Nutrition
name in connection with its general business or to imply to third parties that
its relationship with Abbott Nutrition is other than as a sales distributor
under this Agreement.  Distributor may only use the Trademarks in strict
accordance with Abbott Nutrition’s policies and instructions, and Abbott
Nutrition reserves the right, from time to time and at any time, at its
discretion, to modify such policies and instructions then in
effect.  Distributor shall hold Abbott Nutrition harmless and indemnify it
against any liability, including attorney's fees and other costs of defense,
resulting from actions of third parties claiming injury or loss as a result of
the failure by Distributor to honor this Section.
 
 
-8-

--------------------------------------------------------------------------------

 
(iv)  All representations of Abbott Nutrition's Trademarks that Distributor
intends to use apart from as provided to Distributor from Abbott Nutrition shall
first be submitted to Abbott Nutrition for written approval, particularly, but
not limited to review of design, color, and other details.  If any of Abbott
Nutrition's Trademarks are to be used in conjunction with another trademark on
or in relation to Licensed Products, then Abbott Nutrition's mark shall be
presented equally legibly, equally prominently, and of greater size than the
other but nevertheless separated from the other so that each appears to be a
mark on its own right, distinct from the other mark.  In advertising,
promotions, or in any other manner so as to identify Licensed Products,
Distributor shall clearly indicate Abbott Nutrition’s ownership of the
Trademarks.
 
(v)  Distributor agrees to protect Abbott Nutrition's Licensed Products against
all suspected limitations and unfair competition by others, and will give Abbott
Nutrition written notice of any such conduct. Distributor agrees to cooperate
with Abbott Nutrition, at Abbott Nutrition's request and expense, and take
whatever action is required to cause the termination of such conduct including
but not limited to the execution and delivery in accordance with Abbott
Nutrition’s request of such documents and instruments as may be necessary or
appropriate in such proceedings.  Abbott Nutrition reserves the right to take
whatever action it deems appropriate to protect its Trademarks.
 
(vi)  Distributor shall not use the name of Abbott Nutrition in any manner,
including in its advertising or business name.  Distributor shall not use any of
Abbott Nutrition’s Trademarks in its business name.
 
7.  RECALLS
 
7.1  Recall or Advisory Actions.  In the event Abbott Nutrition elects, or any
governmental action requires, the recall, withdrawal, destruction, or
withholding from market of any Licensed Product sold hereunder (a “Recall”),
then in each instance Abbott Nutrition will promptly notify Distributor of same
in writing or by electronic means, and Distributor shall fully cooperate with
Abbott Nutrition and take all reasonable measures to Recall the Licensed
Products.  Abbott Nutrition will determine the manner, text and timing of a
Recall and any publicity to be given such matters in time to comply with any
applicable regulatory requirements.  Abbott Nutrition shall have the right to
control the arrangement of any Recall, and Distributor shall cooperate with
respect to the reshipment, storage or disposal of recalled Licensed Products,
the preparation and maintenance of relevant records and reports, and
notification to any recipients or end users.  Distributor shall promptly refer
to Abbott Nutrition, for exclusive response by Abbott Nutrition, all customer or
consumer complaints involving the health, safety, quality, composition or
packaging of the Licensed Products, or which in any way could be detrimental to
the image or reputation of Abbott Nutrition or the Licensed Products, and shall
notify Abbott Nutrition of any governmental, customer or consumer inquiries
regarding the Licensed Products about which Distributor becomes aware.  To the
extent the Recall results from any cause or event attributable to Distributor,
its Affiliates or agents, including without limitation, the overlabeling,
marketing, advertising, warehousing, packaging, or shipment thereof, Distributor
shall be responsible for the expense of the Recall.  To the extent a Recall
results from the manufacture, warehousing, or distribution of Licensed Product
by Abbott Nutrition or its Affiliates, or other cause or event attributable to
Abbott Nutrition or its Affiliates, Abbott Nutrition shall be responsible for
the expense of the Recall.
 
 
-9-

--------------------------------------------------------------------------------

 
8.  ASSIGNMENT
 
8.1  Assignment by Abbott Nutrition.  Abbott Nutrition may assign this Agreement
to any person or entity without the consent of Distributor.
 
8.2  No Assignment or Transfer by Distributor; Sub-Distributors.
 
(i)  No Assignment. This Agreement is being entered into by Abbott Nutrition on
the basis of careful investigation of Distributor's reputation and experience
and the know-how of its personnel.  This Agreement and Distributor's duties and
privileges may not be transferred or assigned, in whole or in part, directly or
indirectly, including, without limitation, by assignment, pledge or
hypothecation, merger, consolidation, reorganization or similar event, or
control of Distributor, sale or transfer of securities, or otherwise by
operation of law, or sale of all or a substantial portion of Distributor's
business or assets, or otherwise without the prior written approval of Abbott
Nutrition.  Abbott Nutrition will not unreasonably withhold assignment.
 
(ii)  Sub-distributors. No sub-distributor for any Licensed Products or portions
of the Territory may be appointed without Abbott Nutrition's prior written
approval.   Any request for approval of a sub-distributor must be made in
writing at least thirty (30) business days prior to the proposed appointment.
Distributor agrees to promptly furnish such information as Abbott Nutrition
reasonably may request to assess such request.  Abbott Nutrition acknowledges
that Distributor intends to appoint certain sub-distributors with respect to
certain specified portions of the Territory, all as identified on Exhibit B
hereto. Distributor’s appointment of sub-distributors, other than the
sub-distributors identified on Exhibit B as of the Effective Date, shall be to
supplement and augment but not to replace or substitute, wholly or partially,
any of Distributor’s obligations or any of Distributor’s resources, performance
capabilities and/or ability to fully perform all of Distributor’s obligations
under this Agreement.  Distributor's agreement with any sub-distributor must be
approved by Abbott Nutrition in writing, and must provide Distributor with the
ability to exercise all of the rights and powers with respect to such
sub-distributor as this Agreement provides Abbott Nutrition with respect to
Distributor, so that if Abbott Nutrition exercises a right hereunder,
Distributor will have the power to comply with respect to all Licensed Products
and all of the Territory by exercising corresponding rights with respect to each
sub-distributor. Distributor will be responsible for monitoring and regulating
the conduct of all sub-distributors and/or Distributor-appointed owner
operators.  Distributor will ensure that any approved sub-distributor meets the
quality, financial, legal, ethical and technical requirements to sub-distribute
the Licensed Products in accordance with applicable laws and with the standard
of care that is commercially reasonable and that could be reasonably expected in
the nutritional beverage industry. The approved appointment of sub-distributors
under this Section will not release the Distributor from any of its rights and
obligations under this Agreement and Abbott Nutrition will continue to hold the
Distributor responsible for, and the Distributor will hold Abbott Nutrition
harmless from, any acts of its sub-distributors in the performance of this
Agreement.
 
 
-10-

--------------------------------------------------------------------------------

 
9.  TERM
 
The period during which this Agreement remains in effect is referred to as the
“Term”. The initial Term will commence on the Effective Date and will continue
for three (3) years, unless terminated sooner pursuant to Sections 10 or 11.
Thereafter, provided neither party is in default, this Agreement will
automatically renew for separate, successive one (1) year renewal periods,
unless (i) earlier terminated pursuant to Sections 10 or 11 or, (ii) either
party is notified in writing of the other party's decision that the Agreement
shall be terminated at least ninety (90) days in advance of the end of the Term
or then-current renewed Term, or such longer notice period as may be required by
applicable law.
 
10.  TERMINATION FOR CAUSE
 
10.1  Termination for Cause.  Unless otherwise provided by applicable law, this
Agreement may be terminated by either party if the other party breaches or fails
to perform or observe any of its representations, covenants or obligations
hereunder, upon written notice stating the nature and character of such failure
and allowing the breaching party thirty (30) days to cure such failure;
provided, however, if such failure is of such a nature that it can not
reasonably be cured within thirty (30) days, then the breaching party shall have
an additional thirty (30) day period to cure such breach, providing it
immediately commences, and thereafter diligently prosecutes, in good faith, its
best efforts to cure such breach.  If such failure has not been corrected within
the applicable cure period, the party that delivered such notice may terminate
this Agreement immediately upon further written notice to the breaching party to
such effect.
 
10.2  Automatic Termination. This Agreement will immediately terminate, without
further act or notice, upon the happening of any of the following events, unless
otherwise provided by applicable law:
 
(i)  A party hereto becomes insolvent, or files a voluntary petition, or
acquiesces to an involuntary petition, pursuant to any bankruptcy act or law, or
an order is entered in any involuntary proceeding which remains unstayed for
more than thirty (30) days, or a petition is filed for, or a party consents to
the appointment of, or possession is taken by, a trustee, receiver or similar
official for a party or all or a substantial part of its business, or an order
is entered appointing any such official which remains unstayed for more than
thirty (30) days; or
 
 
-11-

--------------------------------------------------------------------------------

 
(ii)  A party ceases all or a material part of, or makes a material change in,
its business, or an order is entered by a court of competent jurisdiction
decreeing the dissolution of a party (otherwise than in the course of a bona
fide reorganization or restructuring previously approved in writing by the other
party) or the administration or the occurrence of any analogous event.
 
10.3  Abbott Termination Rights. Unless otherwise provided by applicable law,
this Agreement may be terminated by Abbott Nutrition immediately upon giving
notice to Distributor, if (i) Distributor transfers or attempts to transfer,
directly or indirectly, any of its rights or privileges hereunder in violation
of Section 8; (ii) Distributor negligently or fraudulently acts or fails to act
with respect to its reporting obligations hereunder, including Reports as
provided in Section 3.3; (iii) Distributor fails to perform any advertising,
promotional, merchandising, funding, rebate or similar program established by
Abbott Nutrition; (iv) Distributor fails to obtain by the end of the first
Contract Year or thereafter maintain the Distribution Requirements in Section
2.3; or (v) there is any material change in the control of Distributor or
Distributor sells all or substantially all of its assets, without the prior
written consent of Abbott Nutrition.
 
10.4  Other.  Certain other provisions of this Agreement address additional
termination rights of the parties.
 
11.  TERMINATION WITHOUT CAUSE
 
11.1  By Agreement or Upon Notice.  By mutual written agreement, the parties may
terminate this Agreement at any time.  In addition, the parties acknowledge that
either of them may wish to terminate this Agreement without reference to or the
need to document the occurrence of defaults, breaches or shortcomings of the
other. Accordingly, either party may terminate this Agreement without
compensation to the other, for any reason or no reason at all, upon ninety (90)
days' prior written notice in writing with mutually signed agreement that both
parties agree to terminate this agreement with no compensation to the other, or
such longer notice period as may be required by applicable law, effective as of
the expiration of such notice period or, if terminated by Distributor, such
earlier date (if any) as Abbott Nutrition may specify.
 
11.2  Liquidated Compensation to Distributor for Termination Without Cause.  (i)
If Abbott Nutrition terminates this Agreement without cause as provided in
Section 11.1, Distributor shall, provided it complies in all material respects
with its obligations below, be entitled to receive Liquidated Compensation. The
payments of such Liquidated Compensation conclusively shall be deemed to be in
full and complete satisfaction of all claims and causes of action Distributor
may have relating in any way to the termination hereof, and, to the extent
allowable by law, to supersede any applicable statute or rule regulating
termination of distribution agreements or similar matters, or otherwise.
Distributor agrees to confirm the foregoing in a written instrument reasonably
acceptable to Abbott Nutrition as a condition to payment of such Liquidated
Compensation.
 
(ii)       As used herein:  (a) “Liquidated Compensation” means 2 times the
Gross Profit actually earned by the Distributor from the sale of the Licensed
Products during the twelve (12) full calendar months immediately preceding the
effective date of termination; (b) "Gross Profits" means Distributor's Net
Selling Price of all Licensed Products less the Net Invoice paid by Distributor
to Abbott Nutrition; (c) "Net Invoice" means Abbott Nutrition’s total invoice
price for all Licensed Products sold to Distributor during such period, net of
all discounts, allowances and rebates; (d) "Net Selling Price" means
Distributor’s average selling price for all Licensed Products sold to
Distributor's customers during such period, net of all discounts, allowances and
rebates, plus all bill-backs and marketing or promotional support payments paid
or payable to Distributor from Abbott Nutrition during such period.
 
 
-12-

--------------------------------------------------------------------------------

 
(iii)  Distributor shall provide to Abbott Nutrition the following information
to support its calculation of Liquidated Compensation:  (a) a detailed schedule
enumerating each and every account served by the Distributor, and/or as
available by owner operator, with Abbott Nutrition products
directly  (b) detailed information relating to each account indicating
servicing, prices, delivery frequency, promotions and all other relevant
information necessary to continue servicing said account in an orderly fashion;
and (c) detailed financial statements/records supporting the claim for Gross
Profits to also include sales by volume and dollars, by account for the
immediately preceding six (6) month period, upon which Liquidated Compensation
is to be based.
 
(iv)  Abbott Nutrition shall have sixty (60) days after Abbott Nutrition
receives such information to review Distributor’s books and records in
accordance with Section 3.3.  Provided such review supports the Distributor’s
calculation of Liquidated Compensation, Abbott Nutrition shall have thirty (30)
days to make such payment to Distributor.
 

 
12.  EFFECT OF TERMINATION; POST-TERMINATION
 
12.1  Cessation of Privileges; Accounting; Right of Set-Off. Upon termination of
this Agreement:
 
(i)  all rights and privileges of Distributor hereunder will cease and
Distributor will immediately discontinue the sale of Licensed Products and the
use of the Marks, including, but not limited to use of the Marks in domain
names, URL's, websites, business names, directory listings, or any other printed
or digital media;
 
(ii)  Abbott Nutrition may cancel unfilled orders and stop any shipment to
Distributor; and
 
(iii)  the parties promptly will do an accounting of and settle all outstanding
amounts owed one another on account of promotions, discounts, charge-backs,
cooperative or other optional advertising programs.
 
12.2  Distributor Inventory. Upon notice of termination of this Agreement,
Distributor will furnish Abbott Nutrition with an itemized list of its inventory
of all Licensed Products by SKU's, and of all packaging, advertising,
promotional and other materials bearing any of the Marks, wherever located.
Abbott Nutrition may make an inspection of such inventory. Within forty-five
(45) days after the effective date of termination, Abbott Nutrition will
purchase (a) all of Distributor's saleable and unopened inventories of Licensed
Products with at least six months of shelf-life remaining, which are in good and
merchantable condition, in the reasonable opinion of Abbott Nutrition, at
Distributor's floor cost plus agreed handling costs, not to exceed One Dollar
($1.00) per case, and (b) all other inventories of visible materials related to
the Licensed Products that cannot otherwise be utilized by the Distributor, at
Abbott Nutrition’s net book value.
 
 
-13-

--------------------------------------------------------------------------------

 
12.3  Continued Supply of Licensed Products After Termination.  In the event
Abbott Nutrition continues to supply Licensed Products to Distributor for any
reason following the termination of this Agreement, Distributor acknowledges and
agrees that any such action shall not constitute a waiver of Abbott Nutrition’s
rights under this Agreement or a reinstatement, renewal or continuation of the
term of this Agreement.  Abbott Nutrition and Distributor agree that if Abbott
Nutrition, in its discretion, continues to supply Licensed Products to
Distributor following the termination of this Agreement on a mere purchase order
basis, (a) Distributor shall be prohibited from selling or otherwise
transferring Licensed Products except to Outlets within the Territory,
(b) Distributor shall promptly pay the prices of the Licensed Products in full
(without deduction or set-off for any reason) in accordance with the payment
terms set forth in Abbott Nutrition’s invoice, (c) such continued supply by
Abbott Nutrition shall not in any way constitute a renewal or reinstatement of
this Agreement, and (d) Abbott Nutrition shall have the right, in its sole
discretion, to discontinue supplying Licensed Products to Distributor at any
time, with a 15 day  notice to Distributor.
 
12.4  Survival. Sections 3.3, 4.7, 4.8, 6.2, 7, 12, 14, 15, 17, 18, 20 and 30
will survive termination of this Agreement.
 
12.5  Sole Remedy.  The express provisions of this Agreement providing for
certain rights and obligations of each party upon termination shall constitute
the sole and exclusive remedy for any termination of this Agreement, subject to
the limitations expressly set forth in this Agreement.
 
13.  FORCE MAJEURE
 
Any delay in the performance of any of the duties or obligations of any party
(except the payment of money due hereunder) caused by an event outside the
affected party’s reasonable control, shall not be considered a breach of this
Agreement, and unless provided to the contrary herein, the time required for
performance shall be extended for a period equal to the period of such
delay.  Such events shall include, without limitation, acts of God; acts of the
public enemy; terrorist acts; insurrections; riots; injunctions; embargoes;
labor disputes, including strikes, lockouts, job actions, or boycotts; fires;
explosions; floods; earthquakes; shortages of material or energy; delays in the
delivery of raw materials, or other unforeseeable causes beyond the reasonable
control and without the fault or negligence of the party so affected.  The party
so affected shall give prompt notice to the other party of such cause, and
shall take whatever reasonable steps are necessary to relieve the effect of such
cause as rapidly as reasonably possible.
 
 
-14-

--------------------------------------------------------------------------------

 
14.  INDEMNIFICATION
 
14.1  By Distributor.  Distributor agrees to defend, indemnify and hold Abbott
Nutrition harmless for any and all claims, demands, costs, liabilities, damages
and expenses (including reasonable attorneys’ fees and expenses), incurred by,
or threatened against, Abbott Nutrition, regardless of the claimant or the
claimant’s place of filing a claim, resulting from or any way associated with a
claim in connection with: (i) the breach of any representation or warranty by
Distributor or Distributor's officers, directors, employees, sub-distributors,
or agents acting on behalf of Distributor, (ii) any act or omission of
Distributor relating to Distributor’s distribution, storage, marketing, selling
or supply of Licensed Products, and/or (iii) Distributor’s other breach of this
Agreement.
 
14.2  No Joinder.  Distributor agrees not to join Abbott Nutrition or any Abbott
Nutrition employee as a party in any action at law or in equity or in any other
proceeding, arising out of the liabilities, duties and responsibilities that
Distributor assumes or performs pursuant to this Agreement.  Distributor shall
promptly notify Abbott Nutrition of any and all actions at law or equity or
claims or governmental administrative proceedings of which it becomes aware,
arising out of the operation or performance of this Agreement.
 
14.3  By Abbott Nutrition.  Abbott Nutrition shall defend and/or settle third
party claims brought against Distributor alleging personal injury liability that
is proximately and solely caused by defects in Licensed Products supplied to
Distributor by Abbott Nutrition and shall pay any damages finally awarded in
connection therewith, provided that (i) such defect existed at the time the
Licensed Product was shipped by Abbott Nutrition; (ii) the Licensed Product has
not been subject to misuse, negligence or accident; and (iii) Distributor
promptly notifies Abbott Nutrition of such claims, gives Abbott Nutrition sole
control over the defense and/or settlement of such claims, and provides Abbott
Nutrition with full information and reasonable assistance in the defense of such
claims.
 
14.4  Third Party Claim.  If any action or proceeding (a “Third Party Claim”) is
brought by a person or entity not a party to this Agreement against either party
hereto which, if proven and paid by such party, would give such party a right of
indemnity under Section 14.1 or 14.3 (the “Indemnified Party”), the Indemnified
Party shall promptly notify the party required to provide indemnification (the
“Indemnifying Party”) in writing to that effect.  If the Indemnified Party fails
to promptly notify the Indemnifying Party, the Indemnified Party shall be deemed
to have waived any right of indemnification with respect to such Third Party
Claim to the extent (but only to the extent) any delay in such notice prejudices
the Indemnifying Party’s ability to defend same.  The Indemnifying Party shall
have the right to defend the Third Party Claim at the Indemnifying Party’s sole
cost, by counsel satisfactory to Indemnifying Party.  If the Indemnifying Party
fails to promptly defend or otherwise settle or finally resolve the Third Party
Claim, Indemnified Party may defend the Third Party Claim using counsel selected
by Indemnified Party, and the Indemnifying Party shall reimburse Indemnified
Party for any resulting loss, damages, costs, charges, attorney’s fees, and
other expenses and the related costs of defending the Third Party Claim.
 
14.5  Survival.  The indemnification obligations of the Parties set forth in
this Section 14 shall apply during the Term and for a period of five (5) years
after the expiration or other termination of this Agreement, after which time
they shall terminate, except with respect to claims notified to the indemnifying
party prior to the expiration of said five year period.
 
 
-15-

--------------------------------------------------------------------------------

 
15.  LIMITATION OF LIABILITY
 
15.1  LIMITS AND EXCLUSIONS.  ABBOTT NUTRITION'S LIABILITY ARISING OUT OF THIS
AGREEMENT, THE TERMINATION THEREOF, AND/OR SALE OF THE LICENSED PRODUCTS SHALL
BE LIMITED TO THE AMOUNT PAID BY THE DISTRIBUTOR FOR THE PRODUCT.  ABBOTT
NUTRITION SHALL NOT BE LIABLE TO DISTRIBUTOR OR ANY OTHER PARTY FOR ANY DAMAGES
CAUSED BY FAILURE TO MAKE SHIPMENT ON ANY ORDER OR CONTRACT OR FOR DELAY IN
DELIVERY OF ANY PRODUCT.  IN NO EVENT SHALL ABBOTT NUTRITION BE LIABLE FOR COSTS
OF PROCUREMENT OF SUBSTITUTE GOODS, LOST PROFITS, LOSS OF GOODWILL, BUSINESS
INTERRUPTION, OR ANY OTHER SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL
DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY ARISING OUT OF THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND/OR THE USE OF OR
INABILITY TO USE OR SELL THE LICENSED PRODUCTS, AND/OR FROM ANY OTHER CAUSE
WHATSOEVER, AND WHETHER OR NOT ABBOTT NUTRITION HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE.  THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY
FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN OR IN THE
LIMITED WARRANTY APPLICABLE TO THE LICENSED PRODUCTS.
 
15.2  SEVERABLE PROVISIONS.  EACH AND EVERY PROVISION OF THIS AGREEMENT WHICH
PROVIDES FOR A LIMITATION OF LIABILITY OR WARRANTIES, DISCLAIMER, OR EXCLUSION
OF DAMAGES, IS EXPRESSLY INTENDED TO BE SEVERABLE AND INDEPENDENT FROM ANY OTHER
PROVISION, SINCE THOSE PROVISIONS REPRESENT SEPARATE ELEMENTS OF RISK ALLOCATION
BETWEEN THE PARTIES, AND SHALL BE SEPARATELY ENFORCED.
 
16.  RELATIONSHIP OF PARTIES
 
The parties are independent contractors and not agents, partners or joint
venturers of one another. Each party will maintain complete control over its
respective employees and agents and over its relationship with its respective
agents and contractors. Nothing herein creates any contractual relationship
(whether employment or otherwise) between a party and any agents or contractors
of the other party. Each party will perform its obligations hereunder in
accordance with its own methods, subject only to compliance with this
Agreement.  Neither party has any express or implied right under this Agreement
to assume or create any obligation on behalf of or in the name of the other
party, or to bind the other party to any contract, agreement or undertaking with
any third party, and no conduct of a party shall be deemed to infer such right.
Neither party will be liable for any debts, acts, obligations or torts of the
other or its agents, servants or employees. Distributor has not paid nor agreed
to pay any direct or indirect fee, royalty or other consideration for the rights
conferred on it hereby, and agrees that it is not a franchisee nor the purchaser
of a business opportunity within the meaning of, and hereby expressly waives, to
the fullest extent permitted by law, the benefits of and any claim under, any
statute or rule regulating franchises, business opportunities, dealerships,
distribution agreements or similar matters, or any so-called franchisee or
distributor protection, or business opportunity or dealership, laws. It is
specifically acknowledged that Distributor is not required to maintain an
office, warehouse, or place of storage or other facility within the Territory.
 
 
-16-

--------------------------------------------------------------------------------

 
17.  INSURANCE
 
17.1  Distributor Insurance.  On or prior to the Effective Date, Distributor
shall, at its own cost and expense, obtain and thereafter maintain in full force
and effect the following insurance during the Term and for a period of not less
than two (2) years following termination of this Agreement:
 
(i)  Worker’s Compensation and Occupational Disease Insurance with statutory
limits and Employer’s Liability coverage with a minimum limit of Five Hundred
Thousand Dollars (US$500,000) per occurrence or (if greater) per state
requirements;
 
(ii)  Automobile Liability Insurance with a single limit of liability per
occurrence of Two Million Dollars (US$2,000,000) covering all owned, non-owned
and hired vehicles; and
 
(iii)  General Liability Insurance including Professional Liability Insurance
naming Abbott Nutrition and its subsidiaries as additional insureds with a
minimum limit of Two Million Dollars (US$2,000,000) per occurrence and Ten
Million Dollars (US$10,000,000) in aggregate with a recognized insurer rated by
A.M. Best “A (IX)” or better.
 
17.2  Abbott Nutrition, its Affiliates and their respective directors, officers,
employees and agents shall be named as an “additional insured” under this
general liability coverage.  Within ten (10) days of the after execution of this
Agreement, Distributor shall provide Abbott Nutrition with a certificate of
insurance evidencing such insurance, in a form satisfactory to Abbott
Nutrition.  The evidence of insurance shall include a statement by the insurer
that the policy or policies will not be cancelled or materially altered without
giving at least thirty (30) days' prior written notice to Abbott
Nutrition.  Distributor shall obtain the prior written consent of Abbott
Nutrition before implementing any material change or cancellation of the
insurance coverage agreed upon herein.  Distributor shall not make any changes
to coverage thresholds that bring Distributor’s required coverage below the
minimum requirements stated in this Agreement.  Unapproved reductions in any
coverage threshold may result in termination of this Agreement.  Should
Distributor, for any reason, fail to procure or maintain the insurance required
by this Agreement a breach of this Agreement shall result.  Abbott Nutrition
shall then have the right and authority (but not the obligation) to procure such
insurance and to charge same to Distributor, which charges shall be payable by
Distributor immediately upon notice from Abbott Nutrition.
 
18.  CONFIDENTIALITY
 
18.1  Confidential Information. During the Term, the parties will from time to
time disclose to one another non-public information concerning their respective
businesses and operations (including plans and trade secrets and the terms of
this Agreement) which is confidential and proprietary (“Confidential
Information”). Without the prior written approval of the other party, each of
the parties agrees that Confidential Information disclosed by the other will not
be disclosed or used by it except in connection with this Agreement, other than
disclosure to those of its employees, agents and representatives on a reasonable
need-to-know basis and who agree to honor the provisions of this Section.
Distributor and Abbott Nutrition further agree to hold all information and
materials provided to each other, and the terms of this Agreement strictly
confidential and shall not disclose such information and materials to any third
party (except as to Distributor and Abbott Nutrition's business advisors, legal
counsel, tax advisors, and the like) without the prior written consent of the
other party. No press releases, publicity statements or other information
regarding this Agreement shall be released by the other party hereto without the
prior written approval of the other party. Each of the parties will be
responsible for any breach of this Section by, and jointly and severally liable
with, its employees, agents and representatives.
 
 
-17-

--------------------------------------------------------------------------------

 
18.2  Exclusions.  Notwithstanding the foregoing, with regards to obligations of
nondisclosure or limitations as to use, no party hereto shall have any liability
to the other party with respect to the disclosure and/or use of any information
or materials which one party can establish to have (i) become publicly known
without breach of this Agreement; (ii) been known to such party, without any
obligation of confidentiality, prior to disclosure of such information by the
other party; (iii) been received in good faith by such party from a third party
source having the right to so disclose; or (iv) been required by law to be
disclosed, or necessary to enforce a party’s rights hereunder.
 
18.3  Duration of Confidentiality Obligation. The confidentiality obligations
described herein shall commence on the date of disclosure of the Confidential
Information and shall continue (i) for Confidential Information which qualifies
as a trade secret under applicable law, at all times thereafter so long as such
Confidential Information so qualifies as a trade secret; and (ii) for all other
Confidential Information, for a period of five (5) years following expiration or
termination of the Agreement.
 
18.4  Return of Confidential Information. Upon termination of this Agreement,
neither party thereafter will use or disclose any Confidential Information
received from the other, and will promptly (i) return each and every copy
thereof, whether in written or electronic form, or (ii) upon request of the
other party, destroy the same together with all documents and materials which
contain or are based upon such Confidential Information provided, however, that
the receiving party may retain one archival copy thereof, to be stored in a
secure location in accordance with this Section 18, for the purposes of
determining and enforcing any continuing confidentiality obligations.
 
19.  NO OTHER COMPENSATION; NO INCOME OR PROFITS REPRESENTATION
 
(i)  Distributor and Abbott Nutrition hereby agree that the terms of this
Agreement fully define all consideration, compensation and benefits, monetary or
otherwise, to be paid, granted or delivered by Distributor to Abbott Nutrition
and by Abbott Nutrition to Distributor in connection with the transactions
contemplated herein. Neither Abbott Nutrition nor Distributor previously has
paid or entered into any other commitment to pay, whether orally or in writing,
any Abbott Nutrition or Distributor employee, directly or indirectly, any
consideration, compensation or benefits, monetary or otherwise, in connection
with the transaction contemplated herein.
 
 
-18-

--------------------------------------------------------------------------------

 
(ii)  Abbott Nutrition makes no representation, warranty or guarantee whatsoever
regarding sales, profits, income, or earnings that the Distributor may realize
from this distribution relationship.  Distributor acknowledges same and hereby
assumes all risk of business success or failure of the Distributor in the sales
of the Licensed Products under this Agreement.
 
20.  DEBARMENT AND EXCLUSION
 
20.1  Distributor represents and warrants that neither it, nor any of its
employees nor agents performing hereunder, have ever been, are currently, or are
the subject of a proceeding that could lead to it or such employees or agents
becoming, as applicable, a Debarred Entity or Debarred Individual, an Excluded
Entity or Excluded Individual or a Convicted Entity or Convicted
Individual.  Distributor further covenants, represents and warrants that if,
during the Term, it, or any of its employees or agents performing hereunder,
become or are the subject of a proceeding that could lead to a person becoming,
as applicable, a Debarred Entity or Debarred Individual, an Excluded Entity or
Excluded Individual or a Convicted Entity or Convicted Individual, Distributor
shall immediately notify Abbott Nutrition, and Abbott Nutrition shall have the
right to terminate this Agreement immediately. For purposes of this provision,
the following definitions shall apply:
 
(i)  A “Debarred Individual” is an individual who has been debarred by the FDA
pursuant to 21 U.S.C. §335a (a) or (b) from providing services in any capacity
to a person that has an approved or pending drug or biological product
application.
 
(ii)  A “Debarred Entity” is a corporation, partnership or association that has
been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from submitting
or assisting in the submission of any abbreviated drug application, or a
subsidiary or Affiliate of a Debarred Entity.
 
(iii)  An “Excluded Individual” or “Excluded Entity” is (a) an individual or
entity, as applicable, who has been excluded, debarred, suspended or is
otherwise ineligible to participate in federal health care programs such as
Medicare or Medicaid by the Office of the Inspector General (OIG/HHS) of the
U.S. Department of Health and Human Services, or (b) is an individual or entity,
as applicable, who has been excluded, debarred, suspended or is otherwise
ineligible to participate in federal procurement and non-procurement programs,
including those produced by the U.S. General Services Administration (GSA).
 
(iv)  A “Convicted Individual” or “Convicted Entity” is an individual or entity,
as applicable, who has been convicted of a criminal offense that falls within
the ambit of 21 U.S.C. §335a (a) or 42 U.S.C. §1320a - 7(a), but has not yet
been excluded, debarred, suspended or otherwise declared ineligible.
 
20.2  Distributor further covenants, represents and warrants that if, during the
Term, it, or any of its employees or agents providing services under this
Agreement, becomes or is the subject of a proceeding that could lead to that
person becoming, as applicable, a Debarred Individual or Debarred Entity,
Distributor shall immediately notify Abbott Nutrition, and Abbot Nutrition shall
have the right to immediately terminate this Agreement.
 
 
-19-

--------------------------------------------------------------------------------

 
21.  GOVERNING LAW
 
21.1  This Agreement or the performance, enforcement, breach or termination
hereof shall be construed, governed, and interpreted in accordance with the laws
of the State of Ohio, United States of America, without regard to conflict of
laws principles and the provisions of the United Nations Convention on the
International Sale of Goods, except that questions affecting the construction
and effect of any patent shall be determined by the law of the country in which
the patent shall have been granted.  The parties agree that the venue for any
claims or proceeding relating to the provisions of this Agreement or in any way
arising out of or relating to the relationship of the parties hereunder shall be
the federal and state courts located in Franklin County, State of Ohio. The
parties irrevocably waive trial by jury in any action, proceeding or
counterclaim, whether at law or in equity, brought by either party.
 
22.  NOTICE
 
Any notices required or permitted under this Agreement shall be in writing,
shall refer specifically to this Agreement, and shall be sent by recognized
national or international overnight courier, confirmed facsimile transmission,
confirmed electronic mail, or registered or certified mail, postage prepaid,
return receipt requested, or delivered by hand to the following addresses or
facsimile numbers of the recipient.
 
If to Distributor:
 
With a copy to:

If to Abbott Nutrition:

Abbott Laboratories Inc.
Abbott Nutrition
3300 Stelzer Road
Columbus, Ohio 43214
Attn: Jeffrey Fischer
Fax:  (614) 727-5722

with a copy to:

Abbott Laboratories
Nutrition Legal Operations
3300 Stelzer Road
Columbus, Ohio 43214
Attn: Senior Counsel
Fax:  (614) 624-3074

 
-20-

--------------------------------------------------------------------------------

 
Notices under this Agreement shall be deemed to be duly given: (a) when
delivered by hand; (b) one (1) business day after confirmed facsimile or
electronic mail transmission; or (c) two (2) business days after deposit with a
recognized national or international overnight courier; or (d) on the delivery
date indicated in the return receipt for registered or certified mail.  A party
may change its contact information immediately upon written notice to the other
party in the manner provided in this Section.
 
23.  ENTIRE AGREEMENT
 
This Agreement, and the Exhibits and Schedules hereto, contain the entire
agreement between the parties with respect to the subject matter hereof, and
supersede all previous agreements, negotiations, discussions, writings,
understandings, commitments and conversations with respect to such subject
matter.
 
24.  SEVERABILITY
 
If any provision of this Agreement or the application thereof to any person or
circumstance is determined by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions hereof or thereof, or the
application of such provision to persons or circumstances or in jurisdictions
other than those as to which it has been held invalid or unenforceable, shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby or thereby, as the case may be, is not affected
in any manner adverse to any party.  Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
provision to effect the original intent of the parties.
 
25.  AMENDMENTS
 
No provisions of this Agreement shall be deemed amended, supplemented or
modified unless such amendment, supplement or modification is in writing and
signed by an authorized representative of both parties.
 
26.  WAIVER
 
No waiver will be implied from conduct or failure to enforce rights.  No
provisions of this Agreement shall be deemed waived unless such waiver is in
writing and signed by the authorized representative of the party against whom it
is sought to be enforced.  Waiver by either party of any default by the other
party of any provision of this Agreement shall not be deemed a waiver by the
waiving party of any subsequent or other default.
 
27.  CONSTRUCTION OF AGREEMENT
 
Each party has cooperated in the drafting and preparation of this Agreement and,
in any construction to be made of this Agreement, it shall not be construed
against any party.
 
 
-21-

--------------------------------------------------------------------------------

 
28.  COUNTERPARTS
 
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, and all of which together shall constitute
one and the same agreement.  Each party acknowledges that an original signature
or a copy thereof transmitted by facsimile shall constitute an original
signature for purposes of this Agreement.
 
29.  PUBLIC ANNOUNCEMENTS
 
Neither party shall issue any public announcement, press release or other public
disclosure regarding this Agreement or its subject matter, nor use the name of
the other party in any publicity, advertising or announcement, without the other
party’s prior written consent, except for any such disclosure that is, in the
opinion of the disclosing party’s counsel, required by law or the rules of a
stock exchange on which the securities of the disclosing party are listed.  In
the event a party is, in the opinion of its counsel, required to make a public
disclosure by law or the rules of a stock exchange on which its securities are
listed, such party shall submit the proposed disclosure in writing to the other
party as far in advance as reasonably practicable so as to provide a reasonable
opportunity to comment thereon.
 
30.  DISPUTE RESOLUTION
 
If a dispute arises between the parties, the parties shall follow the
alternative dispute resolution provisions provided for in Exhibit A.
 
31.  THIRD-PARTY BENEFICIARIES
 
Nothing in this Agreement, express or implied, except as regards permitted
sub-distributors of Distributor which are approved by Abbott Nutrition, is
intended or shall be construed to give any person or entity, other than the
parties to this Agreement and their successors and permitted assigns, any legal
or equitable right, remedy or claim under or in respect of any agreement or any
provision contained in this Agreement.
 
32.  FURTHER ASSURANCES
 
Each party to this Agreement will execute all instruments and documents and take
all actions as may be reasonably required from time to time to effectuate this
Agreement.
 

 

 
 
-22-

--------------------------------------------------------------------------------

 

 
IN WITNESS WHEREOF, each of the parties hereto has caused this Distribution
Agreement to be executed by its duly authorized representative as of the
Effective Date.
 
 
 
ABBOTT LABORATORIES INC.
 
 
[ex10-3.jpg]

 
 
 
 
 
 
 
 
 
 
 
 
 
 
-23-

--------------------------------------------------------------------------------

 
SCHEDULE 1

LICENSED PRODUCTS

[ex10-3b.jpg]

 
 
 
 
 
 
 
 
 
 
 
 
 
 
-24-

--------------------------------------------------------------------------------

 
SCHEDULE 2

TERRITORY

Counties in the state of Florida consisting of:
Nassau, Duval, Baker, Union, Bradford. Clay, St. John's, Putnam, Flagler,
Volusia, Pasco, Pinellas, Hillsborough, Manatee, Hardee, Sarasota, Desoto,
Highlands, Glades, Charlotte, Lee, Hendry, Collier, Okeechobee, Indian River,
St. Lucie, Martin, Palm Beach, Broward, Dade and Monroe

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
-25-

--------------------------------------------------------------------------------

 

SCHEDULE 3

PRICES AND FREIGHT TERMS

$XXXX/case for all Licensed Product SKUs

SHIPMENT; TRANSFER OF TITLE AND RISK OF LOSS
Abbott Nutrition will be responsible for freight charges to the destination
specified by Customer in its order, reserves the right to select the mode and
the carrier, and reserves the right to determine the shipping point.
 
Title of the Products and risk of loss will transfer to Customer at the FOB
Point upon signature of undamaged product.  but Abbott Nutrition will make such
claims on behalf of Customer.  In the event of such a claim against the carrier,
payment by Customer to Abbott Nutrition for that portion of the order to which
the claim pertains is due five (5) days after resolution of the claim with the
carrier.
 
 
 
 
 
 
 
 
 
 
 
 
-26-

--------------------------------------------------------------------------------

 
SCHEDULE 4

STORAGE INSTRUCTIONS

§  
Cannot double stack pallets

§  
Store in food grade warehouse or better

§  
Avoid extreme temperatures (over 95 degrees Fahrenheit)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
-27-

--------------------------------------------------------------------------------

 
EXHIBIT A

ALTERNATIVE DISPUTE RESOLUTION

The parties recognize that from time to time a dispute may arise relating to
either party’s rights or obligations under this Agreement. The parties agree
that any such dispute shall be resolved by the Alternative Dispute Resolution
(“ADR”) provisions set forth in this Exhibit, the result of which shall be
binding upon the parties.
 
To begin the ADR process, a party first must send written notice of the dispute
to the other party for attempted resolution by good faith negotiations between
their respective presidents (or their designees) of the affected subsidiaries,
divisions, or business units within twenty-eight (28) days after such notice is
received (all references to “days” in this ADR provision are to calendar days).
If the matter has not been resolved within twenty-eight (28) days after the
notice of dispute, or if the parties fail to meet within such twenty-eight (28)
days, either party may initiate an ADR proceeding as provided herein. The
parties shall have the right to be represented by counsel in such a proceeding.
 
1.           To begin an ADR proceeding, a party shall provide written notice to
the other party of the issues to be resolved by ADR. Within fourteen (14) days
after its receipt of such notice, the other party may, by written notice to the
party initiating the ADR, add additional issues to be resolved within the same
ADR.
 
2.           Within twenty-one (21) days following the initiation of the ADR
proceeding, the parties shall select a mutually acceptable independent,
impartial and conflicts-free neutral to preside in the resolution of any
disputes in this ADR proceeding. If the parties are unable to agree on a
mutually acceptable neutral within such period, each party will select one
independent, impartial and conflicts-free neutral and those two neutrals will
select a third independent, impartial and conflicts-free neutral within ten (10)
days thereafter.  None of the neutrals selected may be current or former
employees, officers or directors of either party, its subsidiaries or
affiliates.
 
3.           No earlier than twenty-eight (28) days or later than fifty-six (56)
days after selection, the neutral(s) shall hold a hearing to resolve each of the
issues identified by the parties. The ADR proceeding shall take place at a
location agreed upon by the parties. If the parties cannot agree, the neutral(s)
shall designate a location other than the principal place of business of either
party or any of their subsidiaries or Affiliates.
 
4.           At least seven (7) days prior to the hearing, each party shall
submit the following to the other party and the neutral(s):
 
(a)           a copy of all exhibits on which such party intends to rely in any
oral or written presentation to the neutral;
 
(b)           a list of any witnesses such party intends to call at the hearing,
and a short summary of the anticipated testimony of each witness;
 
 
-28-

--------------------------------------------------------------------------------

 
(c)           a proposed ruling on each issue to be resolved, together with a
request for a specific damage award or other remedy for each issue. The proposed
rulings and remedies shall not contain any recitation of the facts or any legal
arguments and shall not exceed one (1) page per issue. The parties agree that
neither side shall seek as part of its remedy any punitive damages.
 
(d)           a brief in support of such party’s proposed rulings and remedies,
provided that the brief shall not exceed twenty (20) pages. This page limitation
shall apply regardless of the number of issues raised in the ADR proceeding.
 
Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery shall
be required or permitted by any means, including depositions, interrogatories,
requests for admissions, or production of documents.
 
5.           The hearing shall be conducted on two (2) consecutive days and
shall be governed by the following rules:
 
(a)           Each party shall be entitled to five (5) hours of hearing time to
present its case. The neutral shall determine whether each party has had the
five (5) hours to which it is entitled.
 
(b)           Each party shall be entitled, but not required, to make an opening
statement, to present regular and rebuttal testimony, documents or other
evidence, to cross-examine witnesses, and to make a closing argument.
Cross-examination of witnesses shall occur immediately after their direct
testimony, and cross-examination time shall be charged against the party
conducting the cross-examination.
 
(c)           The party initiating the ADR shall begin the hearing and, if it
chooses to make an opening statement, shall address not only issues it raised
but also any issues raised by the responding party. The responding party, if it
chooses to make an opening statement, also shall address all issues raised in
the ADR. Thereafter, the presentation of regular and rebuttal testimony and
documents, other evidence, and closing arguments shall proceed in the same
sequence.
 
(d)           Except when testifying, witnesses shall be excluded from the
hearing until closing arguments.
 
(e)           Settlement negotiations, including any statements made therein,
shall not be admissible under any circumstances. Affidavits prepared for
purposes of the ADR hearing also shall not be admissible. As to all other
matters, the neutral(s) shall have sole discretion regarding the admissibility
of any evidence.
 
6.           Within seven (7) days following completion of the hearing, each
party may submit to the other party and the neutral(s) a post-hearing brief in
support of its proposed rulings and remedies, provided that such brief shall not
contain or discuss any new evidence and shall not exceed ten (10) pages. This
page limitation shall apply regardless of the number of issues raised in the ADR
proceeding.
 
 
-29-

--------------------------------------------------------------------------------

 
7.           The neutral(s) shall rule on each disputed issue within fourteen
(14) days following completion of the hearing. Such ruling shall adopt in its
entirety the proposed ruling and remedy of one of the parties on each disputed
issue but may adopt one party’s proposed rulings and remedies on some issues and
the other party’s proposed rulings and remedies on other issues. The neutral(s)
shall not issue any written opinion or otherwise explain the basis of the
ruling.
 
8.           The neutral(s) shall be paid a reasonable fee plus expenses. These
fees and expenses, along with the reasonable legal fees and expenses of the
prevailing party (including all expert witness fees and expenses), the fees and
expenses of a court reporter, and any expenses for a hearing room, shall be paid
as follows:
 
(a)           If the neutral(s) rule(s) in favor of one party on all disputed
issues in the ADR, the losing party shall pay one hundred percent (100%) of such
fees and expenses.
 
(b)           If the neutral(s) rule(s) in favor of one party on some issues and
the other party on other issues, the neutral(s) shall issue with the rulings a
written determination as to how such fees and expenses shall be allocated
between the parties. The neutral(s) shall allocate fees and expenses in a way
that bears a reasonable relationship to the outcome of the ADR, with the party
prevailing on more issues, or on issues of greater value or gravity, recovering
a relatively larger share of its legal fees and expenses.
 
9.           The rulings of the neutral(s) and the allocation of fees and
expenses shall be binding, non-reviewable, and non-appealable, and may be
entered as a final judgment in any court having jurisdiction.
 
10.           Except as provided in paragraph 9 or as required by law, the
existence of the dispute, any settlement negotiations, the ADR hearing, any
submissions (including exhibits, testimony, proposed rulings, and briefs), and
the rulings shall be deemed Confidential Information. The neutral(s) shall have
the authority to impose sanctions for unauthorized disclosure of Confidential
Information.
 
11.           All ADR hearings shall be conducted in the English language.
 
 
 
 
 
 
-30-

--------------------------------------------------------------------------------