Document:

ex101

    Certain
      portions of the below Distribution Agreement have been redacted based on a
      request for confidential treatment and those portions have been filed separately
      with the Securities and Exchange Commission.

     

    

    DISTRIBUTION
      AGREEMENT 

    

    THIS
      AGREEMENT made as of the 21st day of February, 2005. ("Effective
      Date")

    

    BETWEEN:

    

    
      	 	
              SKINVISIBLE
                PHARMACEUTICALS, INC.,
                a
                company incorporated under the laws of the State of Nevada having
                its
                principal place of business located at Unit #10 - 6320 South Sandhill
                Road, Las Vegas, Nevada, 89120 (“Skinvisible”);

            

    

    

    AND:

    

    DERMAL
      DEFENSE, INC.,
      a
      company incorporated under the laws of the State of Michigan having its
      principal place of business located at 2447 Cumberland Drive, Whitelake, MI
      48383 (the “Distributor”).

    

    WHEREAS:

    

    A.  Skinvisible
      is in the business of developing polymer-based delivery systems and related
      technologies for combining hydrophilic and hydrophobic polymer emulsions and
      licensing its technologies and/or selling its polymer delivery systems to
      established brand manufacturers and providers of topical prescription and
      over-the-counter cosmetic and skin-care Product.

    

    B.  The
      Distributor is engaging in the business of marketing and distributing skin-care
      Product.

    

    C.  Skinvisible
      and the Distributor have agreed to enter into this Agreement, whereby the
      Distributor will have the exclusive right to distribute, market, sell and
      promote the Product throughout the Territory.

    

    NOW,
      THEREFORE, in consideration of the foregoing premises and the mutual covenants
      herein set forth and other good and valuable consideration, the parties agree
      as
      follows:

    

    I. DEFINITIONS

    

    In
      this
      Agreement, the following terms have the following meanings:

    

    1.1 “Customers”
means,
      at any time and from time to time, the customers of the Distributor in respect
      of the Product.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    1.2 “Confidential
      Information” means
      any
      and all technical or business information, data, designs, concepts, ideas,
      Product, processes, methods, techniques, specifications, formulas, compositions,
      samples, know-how, trade secrets, and improvements of a confidential or
      proprietary nature, whether in tangible form or not, which relate to the
      Product, or the development, manufacture, end-use, or commercialization thereof,
      and were disclosed by one party to the other party under this Agreement. As
      used
      herein, “Confidential Information” shall not include information a party can
      demonstrate through its records:

    

    (a)
       
      is, at
      the time of disclosure, available to the general public;

    

    
      	 	
              (b)

            	
              becomes
                at a later date available to the general public through no fault
                of the
                receiving party, and then only after said later
                date;

            

    

    

    
      	 	
              (c)
                

            	
              was
                already in the possession of the receiving party without restriction
                prior
                to the date of disclosure;

            

    

    

    
      	 	
              (d)

            	
              is
                disclosed to the party without secrecy obligations by a third party
                who
                had a lawful right to disclose it;
                or

            

    

    

    
      	 	
              (e)

            	
              is
                independently developed by personnel of the receiving party who had
                no
                direct or indirect access to the Confidential Information of the
                disclosing party.

            

    

    

    1.3 "Formula"
      shall
      mean the specific ingredients, composition, and process for preparing the
      Product (as defined below). 

    

    1.4 "Patents"
      shall
      mean U.S. Patent No. 6,582,683 issued on June 24, 2003 for "Dermal Barrier
      Composition"; U.S.S.N. 09/933,275 filed on August 20, 2001 and U.S.S.N.
      10/154,723 filed on May 23, 2002, both for "Topical Composition, Topical
      Composition Precursor, and Methods for Manufacturing and Using the Same";
      Canadian Application No. 2,457,124 filed on August 16, 2002 for "Topical
      Composition, Topical Composition Precursor, and Methods for Manufacturing and
      Using the Same"; PCT Application No. US02/26301 filed on August 16, 2002 for
      purposes of the countries designated therein that are within the Territory;
      and
      all divisions, continuations, continuation-in-parts, reissues, reexamination
      applications, extensions, foreign equivalents within the Territory, and patents
      issuing therefrom which are owned or controlled by Skinvisible pertaining to
      the
      Product, Confidential Information, and Improvement Inventions.

    

    1.5 "Product"
      means
      Skinvisible's proprietary antimicrobial hand sanitizer product incorporating
      1%
      Triclosan as an active ingredient, and further identified in Appendix
      A.

    

    1.6 "Product
      Specifications"
      shall
      mean the specifications for the Product that will likely be needed to meet
      customer and regulatory requirements. These Product Specifications shall not
      be
      modified without the express, written agreement of the parties. 

     

    1.7
"Territory"
      means
      those countries identified in Schedule C.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    II. APPOINTMENT,
      TERRITORY AND PRODUCT

    

    2.1 Subject
      to the terms hereof, Skinvisible hereby appoints the Distributor and grants
      to
      the Distributor the exclusive right to distribute, sell, market and promote
      the
      Product within the Territory. For greater certainty, while this Agreement shall
      remain in effect, except for sub-distributors appointed by the Distributor
      and
      consented to in writing by Skinvisible, no person, firm or corporation will
      be
      granted the right to distribute, sell, market or promote the Product within
      the
      Territory other than the Distributor.

    

    2.2 The
      Distributor shall not be entitled to appoint sub-distributors to distribute,
      market, sell, or promote the Product within the Territory without the prior
      express written consent of Skinvisible, pursuant to Article VIII, which shall
      not be unreasonably withheld.

    

     2.3 The
      Distributor shall be restricted from integrating the Product into the
      manufacture and production of finished Product to be distributed, sold, marketed
      and promoted by or on behalf of the Distributor or its permitted agents,
      associates, affiliates, or sub-distributors. However, the Product may be sold
      under a "private" label by the Distributors or its permitted agents, associates,
      affiliates, or sub-distributors, provided that all packaging costs are paid
      in
      advance to Skinvisible. 

    

    2.4 Distributor
      recognizes that Skinvisible is in the business of developing, marketing,
      selling, and distributing its polymer-based delivery systems and related
      technologies (including Product), and developing end-use applications therefore,
      on worldwide bases. For so long as Distributor retains its exclusive
      distribution rights for the Product granted under Section 2.1 of this Agreement,
      Skinvisible shall refrain from selling the Product to customers within the
      Territory, or engaging any third party as a distributor of the Product within
      the Territory.

     

    III. DISTRIBUTOR
      NOT MADE AGENT OR LEGAL REPRESENTATIVE

    

    This
      Agreement does not render Distributor an agent or legal representative of
      Skinvisible for any purpose whatsoever. The Distributor is not granted any
      right
      or authority to assume or to create any obligation or responsibility, express
      or
      implied, on behalf of or in the name of Skinvisible or to bind Skinvisible
      in
      any manner or thing whatsoever.

    

    IV. PRICING
      AND PAYMENT

    

    4.1 Product
      shall be sold to the Distributor by Skinvisible at the pre-determined prices
      set
      forth in Schedule B hereto. Any change in the price of Product shall not affect
      orders by the Distributor that were accepted by Skinvisible prior to such
      change. As business conditions warrant, Skinvisible shall have the unrestricted
      right to change the price of the Product, provided that the increase is directly
      attributable to higher costs of raw materials, other manufacturing costs, or
      an
      increase in the Cost of Living Index, and that Skinvisible provides Distributor
      sixty (60) days prior written notice of any such price increase before it
      becomes effective. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    4.2 The
      Distributor shall pay for all orders for Product by electronic bank transfer,
      certified check or bank draft in favor of Skinvisible

     

    4.3 Except
      as
      provided in Section 5.5(b), the purchase price for each order of Product must
      be
      paid by the Distributor prior to shipment of the Product and the Distributor
      shall incur all shipping and packaging costs.

    

    4.4 The
      Distributor shall pay Skinvisible an up-front license fee in the amount of
      $1,000,000 USD for the exclusive right to distribute, sell, market and promote
      the Product within the Territory. Skinvisible acknowledges receipt of a $250,000
      nonrefundable deposit applicable toward this up-front license fee. The remaining
      $750,000 USD is payable under the following schedule until Skinvisible has
      received the $750,000:

     

    
      	
              Date
                of Payment

            	
              Amount
                of Payment

            
	
              June
                30, 2004

            	
              $75,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the prior quarter, whichever is
                greater

            
	
              September
                30, 2004

            	
              $75,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the prior quarter, whichever is
                greater

            
	
              December
                31, 2004

            	
              $75,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the prior quarter, whichever is
                greater

            
	
              March
                31, 2005

            	
              $75,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the prior quarter, whichever is
                greater

            
	
              June
                30, 2005

            	
              $75,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the prior quarter, whichever is
                greater

            
	
              September
                30, 2005

            	
              $75,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the prior quarter, whichever is
                greater

            
	
              December
                31, 2005

            	
              $75,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the prior quarter, whichever is
                greater

            
	
              March
                31, 2006

            	
              $75,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the prior quarter, whichever is
                greater

            
	
              June
                30, 2006

            	
              $75,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the prior quarter, whichever is
                greater

            
	
              September
                30, 2006

            	
              $75,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the prior quarter, whichever is
                greater

            

    

    

    Under
      no
      circumstances shall the installments towards such up-front license fee exceed
      in
      the aggregate $750,000.

    

    
      	 	
              (a)

            	
              Payments
                made under this Section 4.4 are separate and in addition to payments
                to be
                made under Section 4.1 for the Product and the running royalties
                due under
                Section 4.5.

            

    

    

    
      	 	
              (b)

            	
              In
                the event that payments are not made as set forth in this Section
                4.4 and
                the parties are unable to agree to a revised schedule of payments
                within
                thirty (30) 

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	
               

            	days of the date for payment, then Skinvisible may
              in its
              sole discretion terminate the Agreement or any provision therein and
              retain, without any claim or demand from the Distributor, all monies
              previously paid.

    

     

    4.5 The
      Distributor shall pay quarterly to Skinvisible a running royalty fee in order
      to
      maintain the exclusivity granted herein no later than thirty (30) days after
      the
      end of each quarter. The amount of the royalty shall be calculated as
      follows:

     

    
      	
              Quarter
                Ended

               

            	
              Amount
                of Payment

            
	
              June
                30, 2004

            	
              $5,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the quarter, whichever is greater

            
	
              September
                30, 2004

            	
              $10,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the quarter, whichever is greater

            
	
              December
                31, 2004

            	
              $15,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the quarter, whichever is greater

            
	
              March
                31, 2005 and subsequent Year Quarters

            	
              $20,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the quarter, whichever is
                greater

            

    

     

    
      	 	
              (a)

            	
              In
                the event that payments are not made as set forth in section 4.2,
                then
                Skinvisible shall give the Distributor a written notice of default.
                If
                payment is not received within thirty (30) days following receipt
                of the
                notice of default, then Skinvisible may in its sole discretion terminate
                the Agreement or any provision therein and retain, without claim
                or demand
                from the Distributor, all monies previously
                paid.

            

    

    

    
      	 	
              (b)

            	
              The
                Distributor shall provide to Skinvisible documentation including,
                but not
                limited to, receipts, invoices, or other documentation that shall
                reasonably allow Skinvisible to confirm the accuracy of the royalty
                payment made. 

            

    

    

    
      	 	
              (c)

            	
              Skinvisible
                shall be entitled to audit the accuracy of the royalty payments made
                by
                the Distributor. Skinvisible shall incur the expense of the audit
                only if
                it is determined that Skinvisible received ninety percent (90%) or
                more of
                the audited amount and in all other circumstances the Distributor
                shall
                incur the expense of the audit. The existence of an audit for any
                quarterly payment does not suspend or relieve the Distributor from
                their
                obligation to make a royalty payment within thirty (30) days after
                the end
                of each quarter. 

            

    

     

    4.6 All
      payments by the Distributor to Skinvisible to be made hereunder shall be in
      United States dollars.

     

    V. TERMS
      AND CONDITIONS OF PRODUCT ORDERS 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    5.1 The
      Distributor shall submit a written purchase order to Skinvisible specifying
      the
      amount of Product required. Skinvisible agrees to provide an acceptance of
      an
      order within three (3) business
      days after receiving a written purchase order from the Distributor.

    

    5.2 All
      of
      the Product ordered by the Distributor shall be shipped within three (3) weeks
      from the date the acceptance of an order has been delivered to the Distributor
      and shall carry an expiration date of three (3) years from the date of shipment.
      Delivery of all Product sold by Skinvisible to the Distributor shall be F.O.B.
      the place of Product manufacture. The
      method and route of shipment shall be at the sole discretion of the Distributor
      subject to Skinvisible’s guidelines for the method and conditions of shipment
      which would provide for arrival of the Product at the Distributor’s point of
      delivery in substantially the same condition as such Product were at the point
      of shipment. These guidelines include conditions regarding temperature (which
      shall not exceed at a maximum of 450
      Celsius
      and at a minimum of 40
      Celsius)
      to preserve the quality and integrity of the Product during shipment. Failure
      of
      Distributor to abide by Skinvisible’s guidelines in the shipment of the Product
      shall bar the Distributor from making any claim whatsoever against Skinvisible
      arising from any defect in the Product which occurred or arose during shipment.
      Nothing in this section shall mean or be implied to mean that there is any
      shifting of the risk of loss of goods to Skinvisible once such goods are placed
      in the control of Distributor’s carrier. All such risk of loss is borne by
      Distributor once the Product to be shipped have been delivered to or placed
      in
      the control of the carrier.

    

    5.3 Title
      to
      the Product shall pass from Skinvisible to the Distributor upon the delivery
      to
      a recognized commercial carrier of the Product for shipment to the Distributor.
      

    

    5.4 Skinvisible
      shall deliver the Product to the Distributor free and clear of all liens,
      encumbrances and security interests and shall not, without the prior written
      consent of the Distributor: (a) transfer, deliver or otherwise provide the
      Product as listed in the written purchase order submitted by the Distributor
      to
      any other person or entity; or (b) assign any rights to the Product as listed
      in
      the written order submitted by the Distributor to any other person or
      entity.

    

    5.5 Prior
      to
      receiving an acceptance of the written order from Skinvisible, the Distributor
      may cancel any order at any time, with or without cause, and the Distributor’s
      liability for such cancellation shall be limited to Skinvisible’s out-of-pocket
      costs and expenses incurred for such cancelled order.

    

    5.6 The
      Distributor shall give notice to Skinvisible of any claims relating to the
      non-conformity of Product. The Distributor shall make all claims with respect
      to
      the Product as follows:

    

     

    
      	 	
              (a)
                

            	
              Any
                claim that a shipment contains a shortage of Product or other error
                in
                delivery must be made by the Distributor to Skinvisible in writing
                within
                seven (7) days from the date of receipt by the
                Distributor of
                such shipment of Product together with a reasonable description of
                the
                delivery error. The Distributor’s failure to make a claim in accordance
                with the foregoing sentence shall constitute

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	 	
               

            	
              agreement
                by the Distributor that there was no error in delivery. Provided
                that the
                Distributor makes a claim in accordance with this Section 5.6(a)
                and
                proves that the shipment contained a shortage of Product or other
                error in
                delivery, Skinvisible, at the Distributor’s option, shall deliver to the
                Customer to such location(s) designated by the Distributor, at
                Skinvisible’s risk and cost and expense, the number of Product in shortage
                in such shipment, or credit the Distributor the amount of such shortage.
                

            

    

     

    
      	 	
              (b)

            	
              In
                the event that the Distributor claims that upon delivery any of the
                Product are non-conforming because the product is not consistent
                with the
                Certificate of Analysis, the Distributor may reject the same, provided
                that (i) within thirty (30) days after receipt by the
                Distributor of such shipment of Product, the Distributor notifies
                Skinvisible in writing of the nonconformity, (ii) the Distributor
                sends
                the product out for further review and inspection and it is determined
                that the Product are not consistent with the Certificate of Analysis,
                (iii) the Distributor returns to Skinvisible, at Skinvisible’s expense,
                the rejected Product or shipment, subject to the terms and conditions
                hereinafter provided, within seven (7) days after the Distributor
                receives
                notice that the further review and inspection of the Product found
                the
                Product to be inconsistent with the Certificate of Analysis, and
                (iv) none
                of the Product has been changed from its original condition. The
                Distributor’s failure to make a claim in accordance with the foregoing
                sentence shall constitute unqualified acceptance of all shipments
                and
                Product. Following receipt of the rejected Product under this Section
                5.6(b), Skinvisible shall deliver Product consistent with the Certificate
                of Analysis within fourteen (14) days. Provided that the rejected
                Product
                have been rejected by the Distributor in accordance with the terms
                of this
                Section 5.6(b) and are proved to have been non-conforming, then
                Skinvisible shall credit the Distributor for the cost of the Product
                and
                all costs and expenses incurred by the Distributor in shipping the
                rejected Product back to Skinvisible, if such Product return requested
                is
                made by Skinvisible to the distributor. The Distributor shall pay
                the
                costs of the conforming Product within thirty (30) days after receipt
                by
                the Distributor. The Distributor shall not be responsible for any
                royalty
                payments on the sale of any Product that do not conform to the Certificate
                of Analysis.

            

    

    

    
      	 	
              (c)
                

            	
              In
                the event that the Distributor claims that upon delivery any of the
                Product are non-conforming for any reasons other than as set forth
                in
                Section 5.6(a) or (b), then Distributor may reject the same, provided
                that
                (i) within thirty (30) days after receipt by the
                Distributor of such shipment of Product, the Distributor notifies
                Skinvisible of such rejection, in writing, together with a reasonable
                description of why the Product have been rejected (the “Rejection
                Notice”), (ii) the Distributor, at Skinvisible’s option, may return to
                Skinvisible the rejected Product or shipment, subject to the terms
                and
                conditions hereinafter provided, within thirty (30) days after the
                Distributor sends the Rejection Notice, and (iii) none of the Product
                has
                been changed from its original condition. The Distributor’s failure to
                make a claim in accordance with the foregoing sentence shall constitute
                unqualified acceptance of all shipments and Product. Provided that
                the
                rejected 

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	
            	Product have been rejected by the Distributor in
              accordance with the terms of this Section 5.5(c) and are proved to
              have
              been non-conforming, Skinvisible shall credit the Distributor for the
              cost
              of the Product and all costs and expenses incurred by the Distributor
              in
              shipping the rejected Product back to Skinvisible, if such Product
              return
              requested is made by Skinvisible to the
              distributor.

    

     

    5.7 The
      warranty for defective Product of Skinvisible as from time to time in effect
      shall be applicable to all sales of the Product by Skinvisible to the
      Distributor. Notwithstanding the provisions of Article XIII hereof, Skinvisible
      shall have no obligation or liability to the Distributor for any loss, damage
      or
      expense of any kind caused directly or indirectly by the Product or the use,
      maintenance, repairs or adjustments of or to the Product except as may be
      provided in such warranty.

     

    VI. OBLIGATIONS
      OF THE SKINVISIBLE

    

    6.1 Skinvisible
      shall at
      all times during the Term of the Agreement:

    

    
      	 	
              (a)

            	
              publish
                and make available to the Distributor from time to time a list of
                the
                Product and a list of the prices charged by Skinvisible
                therefore;

            

    

    

    
      	 	
              (b)

            	
              with
                respect to each Product sold to the Distributor, provide the Distributor
                with a standard Certificate of
                Analysis;

            

    

     

    
      	 	
              (c)

            	reimburse
              the Distributor under any warranty obligation of
              Skinvisible;

    

     

    
      	 	
              (d)

            	
              provide
                Distributor with copies of the research and efficacy studies for
                the
                Product in Skinvisible's possession as of the Effective Date of this
                Agreement.

            

    

    

    
      	 	
              (e)

            	
              permit
                the Distributor to use Skinvisible's INVISICARE trademark (collectively
                "Trademark") for the sole purpose of advertising, marketing and
                distributing the Product within the Territory, and strictly in accordance
                with the terms and conditions of the Trademark License Agreement
                of
                Appendix D.

            

    

    

    6.2 Skinvisible
      hereby grants Distributor a royalty-free, non-exclusive, non-transferable
      license to use Skinvisible's Confidential Information, Improvement Inventions,
      and Patents that are directly relevant to the advertising, marketing,
      distribution, and sale of the Product within the Territory under this Agreement,
      and the manufacture by Distributor of the Product, where applicable under
      Article VII. This license is limited in scope, and shall not authorize
      Distributor to use Skinvisible's Confidential Information, Improvement
      Inventions, or Patents outside of this Agreement without Skinvisible's prior,
      written consent.

    

    VII. RIGHT
      TO MANUFACTURE

    

    7.1 Distributor
      shall have the right to manufacture the Product covered by this Agreement,
      instead of sourcing it from Skinvisible, provided that: (a) Distributor makes
      the Product strictly in accordance with the Formula, and that it achieves the
      Product Specifications; (b) Distributor sources the "M1 Polymer" ingredient
      for
      the Product from Skinvisible; (c) Distributor applies 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Skinvisible's
      INVISICARE Trademark in a prominent fashion to all packaging, labels, tags,
      advertising, and promotional materials associated with the Products; and (d)
      Distributor pays Skinvisible the license fees and royalties due pursuant to
      Sections 4.4 and 4.5. Distributor shall notify Skinvisible ninety (90) days
      prior to its commencement of the manufacture of Product under this Section
      7.1.

    

    7.2 Should
      Distributor decide to manufacture Product under this Agreement, Skinvisible
      shall disclose to Distributor as soon reasonably practicable the Formula,
      Product Specification, and manufacturing know-how in sufficient detail (using
      reasonable commercial efforts) to enable Distributor to make the Products.
      This
      information shall be treated as Skinvisible's Confidential Information pursuant
      to Article X. Notwithstanding the foregoing, Skinvisible shall not be required
      to disclose any specific information to Distributor in the event that any
      agreement with a third party would preclude Skinvisible from doing
      so.

    

    7.3 Distributor
      shall bear all costs associated with the: (a) disclosure of the Formula, Product
      Specifications, manufacturing know-how; (b) adapting such information or
      technology for its use by Distributor; (c) any necessary training; and (d)
      any
      documentation done for Distributor's internal purposes.

    

    7.4 Distributor
      and Skinvisible shall negotiate in good faith a separate agreement for supplying
      the M1 Polymer to Distributor for incorporation into the Product to be
      manufactured by Distributor, including the purchase price for such M1
      Polymer.

    

    7.5 Distributor
      shall permit duly authorized representatives of Skinvisible, at reasonable
      times, upon reasonable nature, and in the company of Distributor's employees
      to
      enter any facility where the Product is being manufactured for the purpose
      of:
      (a) inspecting those portions of the facility used in the manufacture, handling,
      or storage of the Product; (b) inspecting the manufacture, handling, and storage
      of the Product; and (c) ensuring that the provisions of this Agreement are
      being
      complied with by Distributor. Such representatives shall comply with all of
      Distributor's plant safety and other rules and regulations while at the
      facility. 

    

    VIII. SUB-DISTRIBUTORS

     

    8.1 In
      the
      event that Distributor determines that commercial exploitation of the Product
      within the Territory requires the appointment of sub-distributors through which
      the Product may be sold, then Distributor shall identify such sub-distributors
      to Skinvisible, and seek Skinvisible's prior written approval of them, which
      shall not be unreasonably withheld, before appointing any such sub-distributors
      under this Agreement.

    

    8.2 Any
      sub-distributor approved in writing by Skinvisible shall have the right during
      the continuance of this Agreement to use Skinvisible’s Trademark, Patents, and
      other intellectual property rights licensed under this Agreement for the sole
      purpose of promoting the sales of the Product throughout the Territory under
      the
      same terms and conditions imposed upon Distributor under this
      Agreement.

    

    IX. IMPROVEMENT
      INVENTIONS

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    9.1 Distributor
      shall have no right to make any modifications or improvements to the Product
      without Skinvisible's prior, written permission. In the event that Distributor
      does conceive, develop, or reduce to practice any invention or other information
      arising from or based upon the use of Skinvisible's Confidential Information
      or
      Product (hereinafter "Improvement Invention"), then Skinvisible shall be the
      sole owner of such Improvement Invention, which shall be subject to the
      exclusive distributorship grant of Article II. Should Distributor desire
      modification or improvement to be made to the Product, then it shall contract
      with Skinvisible under a separate agreement to develop such modifications or
      improvements.

    

    9.2 Only
      Skinvisible shall have the right, in its sole discretion, to patent the Product
      and Improvement Inventions.

    

    X. CONFIDENTIALITY

    

    10.1 Each
      party recognizes the importance to the other party that of that other party’s
      Confidential Information, and such information is critical to the business
      of
      the disclosing party. Each party recognizes that neither party would enter
      into
      this Agreement without assurance that its Confidential Information and the
      value
      thereof will be protected as provided in this Section 10 and elsewhere in this
      Agreement.

    

    10.2 All
      Confidential Information shall remain the property of the disclosing party.
      The
      receiving party shall hold in strict confidence the disclosing party’s
      Confidential Information and with no less than the same degree of care that
      it
      holds its own confidential and proprietary information, and it will take all
      reasonable precautions to protect such Confidential Information. The receiving
      party shall make the Confidential Information received under this Agreement
      available only to those of its employees who have a need to know the same in
      connection with their work assignments to further the objections contemplated
      under this Agreement. No disclosures to third parties shall be made by the
      receiving party of such Confidential Information without the prior written
      approval of the disclosing party. The receiving party will use the disclosing
      party’s Confidential Information only for the purposes and under the
      circumstances provided in this Agreement.

    

    10.3 Upon
      any
      termination of this Agreement, or earlier at a party's request, each party
      will
      return the other party’s Confidential Information and all documents or media
      containing any such Confidential Information to the other party, except that
      the
      receiving party has the right to keep one copy of such information for legal
      purposes (which shall remain subject to the confidentiality provisions set
      forth
      herein), including, but not limited to, copies of all documentation required
      by
      the FDA.

    

    10.4 Each
      party acknowledges and agrees that the other party shall be entitled to
      appropriate equitable relief in addition to whatever remedies it may have at
      law
      in the event of a breach by the other party of its covenants contained in this
      Section 10. The foregoing provision is in addition to, and not in limitation
      of,
      any and all remedies at law, in equity or otherwise, that the non-breaching
      party may have upon the other party’s breach of this Agreement.

    

    10.5 Except
      as
      otherwise provided in this Agreement, either party shall immediately notify
      the
      other party of any private or governmental request for Confidential Information
      or any other 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    information
      or documents relating to the Product or this Agreement. Each party shall have
      the right to participate in the other party’s response to any such request. If a
      party receives any legal instrument requiring the production of data, work
      papers, reports, or other materials relating to this Agreement, that party
      shall: (a) give the other party, if possible, the opportunity to participate
      in
      quashing, modifying or otherwise responding to any compulsory process in an
      appropriate and timely manner; and (b) cooperate fully with the other party’s
      efforts to narrow the scope of any such compulsory process, to obtain a
      protective order limiting the use or disclosure of the information sought,
      or in
      any other lawful way to obtain continued protection of the Confidential
      Information.

    

    10.6 If
      either
      party becomes aware of the loss, theft or misappropriation of Confidential
      Information which is in its possession or control, it shall notify the other
      party in writing within seven (7) days of its discovery of such loss, theft
      or
      misappropriation.

    

    10.7 The
      rights and duties of this Article 10 shall survive the termination of this
      Agreement, whether upon expiration or termination by either party.

    

    XI. TERM
      AND TERMINATION

    

    11.1 This
      Agreement shall continue in full force and effect for twenty (20) years from
      the
      Effective Date or the last to expire of the Patents, whichever occurs first,
      unless otherwise terminated as provided in Section 11.2 below, or by mutual
      written consent of the parties hereto.

    

    11.2 Either
      party may terminate this Agreement at any time as follows:

    

    
      	 	
              (a)
                

            	
              By
                either party, effective immediately, in the event that the other
                party
                should fail to materially perform any of its material obligations
                under
                this Agreement and should fail to remedy such failure within thirty
                (30)
                calendar days after receiving written demand to remedy such failure,
                or in
                the event such other party, despite remedying a particular failure
                within
                thirty (30) days as aforesaid, is guilty of chronic or persistent
                breaches
                of such material obligation in question, in the end result having
                a
                material adverse effect upon the other party;
                or

            

    

    

    
      	 	
              (b)

            	
              By
                either party, upon thirty (30) days’ written notice if a force majeure
                event described in Section 16.1 shall have occurred and continue
                for sixty
                (60) days.

            

    

    

    11.3 Skinvisible
      may terminate this agreement at any time if the Distributor should become the
      subject of any voluntary or involuntary bankruptcy, receivership or other
      insolvency proceedings or make an assignment or other arrangement for the
      benefit of its creditors, or if such other party should be nationalized or
      have
      any of its material assets expropriated.

     

    11.4
      This
      Agreement may also be terminated by mutual agreement of the
      parties.

     

    11.5 The
      Distributor may not manufacture, market, distribute, or sell any Competing
      Product while this Agreement is in full force and effect.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    XII. EFFECT
      OF TERMINATION

    

    12.1 The
      rights, duties and obligations of the parties upon and following the expiration
      or termination of this Agreement however occurring shall be governed by the
      following provisions:

    

    
      	 	
              (a)
                

            	
              The
                termination of this Agreement shall not release or affect, and this
                Agreement shall remain fully operative as to, any obligations or
                liabilities incurred by either party prior to the effective date
                of such
                termination;

            

    

    

    
      	 	
              (b)

            	
              Skinvisible,
                subject to its production capabilities, shall fill all orders submitted
                by
                the Distributor during the term of this Agreement regardless of whether
                any of the Product in such orders are to be delivered after the expiration
                or termination of this Agreement. During such period of time that
                Skinvisible is filling such orders, all terms of this Agreement shall
                apply between the parties with respect to such production;
                and

            

    

    

    
      	 	
              (c)

            	
              Notwithstanding
                the provisions of section 10 hereof, Skinvisible shall, by reason
                only of
                the expiration or termination of this Agreement in accordance with
                the
                terms of this Agreement, be liable in any manner whatsoever to the
                Distributor for any damage of any kind whether direct, indirect or
                conse-quential, or for any profits on anticipated sales, or for any
                expenditures or investments;

            

    

    

    
      	 	
              (d)

            	
              Upon
                the effective date of termination of this Agreement, the parties
                hereto
                acknowledge that the exclusivity provisions set forth in Paragraph
                2
                herein will no longer be in effect and that any limitations on the
                parties
                pertaining to sales and marketing and potential customers are dissolved
                and the parties are free to contract with any third party for future
                business; and

            

    

    

    
      	 	
              (e)

            	
              Termination
                or expiration of this Agreement for any reason shall not relieve
                the
                parties of their obligations under Articles IX, X, XI, XII, XIII,
                XIV, and
                XV of this Agreement.

            

    

    

    XIII. WARRANTY
      AND REPRESENTATIONS

    

    13.1 As
      an
      essential term of this Agreement, each party hereby warrants and represents
      to
      the other party that it is entitled to disclose to and license the other party
      to sue its Confidential Information, Improvement Inventions, and Patents under
      the terms of this Agreement without violating the trade secret or contractual
      rights of any third party.

    

    13.2 EXCEPT
      AS
      SET FORTH IN SECTION 13.1, OR AS OTHERWISE SPECIFICALLY STATED HEREIN, THE
      PARTIES EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
      LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS OR A PARTICULAR PURPOSE,
      PATENT VALIDITY, OR NON-INFRINGEMENT OF A THIRD-PARTY PATENT OF OTHER
      INTELLECTUAL PROPERTY RIGHTS REGARDING THE USE OR COMMERCIALIZATION OF PRODUCT,
      CONFIDENTIAL INFORMATION, IMPROVEMENT INVENTIONS, OR PATENTS.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    XIV. INDEMNIFICATION

    

    14.1 Each
      party shall indemnify, defend and hold harmless the other party from any and
      all
      claims, costs, liabilities, or damages (including reasonable attorney's fees)
      arising from its:

    

    (a) uncured
      material breach of this Agreement;

    

    (b) breach
      of
      any Warranty or Representation provided pursuant to Article XII;

    
       

      (c)
negligent,
        grossly negligent, reckless, or willful acts or omissions. Each party shall
        be
        responsible for any and all damages that it is subjected to by means of its
        own
        negligent, grossly negligent, reckless or willful acts or
        omissions.

    

     

    14.2 In
      the
      event a third-party lawsuit is filed against a party (the "Indemnitee") due
      to
      the negligent, grossly negligent, reckless or wilful actions or omissions of
      the
      other party (the "Indemnitor"), then the Indemnitee shall promptly provide
      notice of such suit to the Indemnitor, and permit the Indemnitor to control
      its
      defense, including the terms under which any such suit is settled. The
      Indemnitee shall provide all reasonable cooperation to the Indemnitor at the
      Indemnitor's expense in the defense of that suit.

    

    XV. PATENT
      MARKING

    

    Distributor
      shall cause each unit of Product that it manufactures, markets, sells, or
      otherwise introduces into commerce under this Agreement to have affixed thereto
      a label bearing the following legend: "U.S. Patent No. 6,582,683 under license
      from Skinvisible Pharmaceuticals, Inc." Skinvisible shall update this legend
      for
      Distributor as additional Patents are issued.

    

    XVI.
      MISCELLANEOUS
      PROVISIONS

    

    16.1 Neither
      party shall be in default hereunder by reason of any failure or delay in the
      performance of any obligation under this Agreement where such failure or delay
      arises out of any cause beyond the reasonable control and without the fault
      or
      negligence of such party. Such causes shall include, without limitation, storms,
      floods, other acts of nature, fires, explosions, riots, war or civil
      disturbance, strikes or other labor unrests, embargoes and other governmental
      actions or regulations which would prohibit either party from ordering or
      furnishing the Product or from performing any other aspects of the obligations
      hereunder, delays in transportation, and liability to obtain necessary labor,
      supplies or manufacturing facilities.

    

    16.2
       Each
      and
      every right and remedy hereunder is cumulative with each and every other right
      and remedy herein or in any other agreement between the parties or under
      applicable law.

    

    16.3 Each
      party hereby acknowledges receipt of a signed copy of this
      Agreement.

    

    16.4 Nothing
      contained in this Agreement shall create or shall be construed as creating
      a
      partnership, a joint venture, agency or employment relationship between the
      parties. The parties 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    agree
      to
      perform their obligations in accordance with this Agreement at arms’ length and
      only as independent contractors. Neither party has the right or authority to
      assume nor create any obligations or responsibilities, express or implied,
      on
      behalf of the other party, and neither party may bind the other party in any
      manner or thing whatsoever. Neither party shall be liable, except as expressly
      provided otherwise in this Agreement, for any expenses, liabilities or other
      obligations incurred by the other.

    

    16.5 Skinvisible
      and the Distributor each represent and warrant to the other that it is duly
      organized, validly existing and in good standing under the laws of the State
      or
      Commonwealth (as applicable) in which incorporated, and that it has full
      corporate power and authority to carry on the business presently being conducted
      by it and to enter into and to perform its obligations under this Agreement.
      

    

    16.6 Skinvisible
      and the Distributor each represent and warrant to the other that it has taken
      all action necessary to authorize the execution and delivery of this Agreement
      and the performance of each party’s respective obligations hereunder. Each
      party’s officer executing this Agreement on its behalf has the legal power,
      right and authority to bind the party to the terms and conditions of this
      Agreement, and when he or she executes and delivers this Agreement and any
      instruments contemplated herein, he or she will have the power, right and
      authority to bind the party thereto.

    

    16.7 All
      notices, requests, demands and other communications hereunder shall be given
      in
      writing and shall be: (a) personally delivered; (b) sent by telecopy, facsimile
      transmission or other electronic means of transmitting written documents with
      confirmation of receipt; or (c) sent to the parties at their respective
      addresses indicated herein by registered or certified mail, return receipt
      requested and postage prepaid, or by private overnight mail courier services
      with confirmation of receipt. The respective addresses to be used for all such
      notices, demands or requests shall be as set forth on page 1 hereof or to such
      other person or address as either party shall furnish to the other in writing
      from time to time. If personally delivered, such communication shall be deemed
      delivered upon actual receipt by the “attention” addressee or a person
      authorized to accept for such addressee; if electronically transmitted pursuant
      to this paragraph, such communication shall be deemed delivered the next
      business day after transmission (and sender shall bear the burden of proof
      of
      delivery); if sent by overnight courier pursuant to this paragraph, such
      communication shall be deemed delivered upon receipt by the “attention”
addressee or a person authorized to accept for such address; and if sent by
      mail
      pursuant to this paragraph, such communication shall be deemed delivered as
      of
      the date of delivery indicated on the receipt issued by the relevant postal
      service, or, if the addressee fails or refuses to accept delivery, as of the
      date of such failure or refusal. Any party to this Agreement may change its
      address for the purposes of this Agreement by giving notice thereof in
      accordance with this section 16.7.

    

    16.8 This
      Agreement may not be amended or modified otherwise than by a written agreement
      executed by the parties hereto or their respective successors and legal
      representatives. 

    

    16.9 This
      Agreement is not intended, nor shall it be construed, to confer upon any person
      except the parties hereto and its successors and permitted assigns any rights
      or
      remedies under or by reason of this Agreement, except as contemplated
      herein.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    16.10 This
      Agreement and all matters arising under or growing out of or in connection
      with
      or in respect of this Agreement shall be governed by and construed in accordance
      with the laws of the State of Nevada. 

    

    16.11 The
      headings in this Agreement are inserted for convenience only and shall not
      constitute a part hereof.

    

    16.12 Each
      provision contained in this Agreement is declared to constitute a separate
      and
      distinct covenant and provision and to be severable from all other separate,
      distinct covenants and provisions. In any provision of this Agreement is or
      becomes invalid, illegal, or unenforceable in any jurisdiction, such provision
      shall be deemed amended to conform to applicable laws as to be valid and
      enforceable or, if it cannot be so amended without materially altering the
      intention of the parties, it shall be stricken and the remainder of this
      Agreement shall remain in full force and effect.

    

    16.13 No
      waiver
      of a breach of any provision of this Agreement shall be deemed to be, or shall
      constitute, a waiver of a breach of any other provision of this Agreement,
      whether or not similar, nor shall such waiver constitute a continuing waiver
      of
      such breach unless otherwise expressly provided in such waiver.

    

    16.14 This
      Agreement may not be assigned by the Distributor without the prior written
      consent of Skinvisible. Skinvisible may assign, transfer, or convey its
      manufacturing obligations to third parties who shall be bound by the same
      standards as Skinvisible. 

    

    16.15 All
      prices quoted in this Agreement are exclusive of all applicable sales, use
      or
      other excise taxes (including sales tax and goods and services tax). The
      Distributor is responsible for all taxes and similar charges customary for
      a
      buyer of Product and services as herein contemplated.

    

    16.16 All
      disputes, claims or controversies arising out of or relating to this Agreement,
      or the breach, termination or invalidity hereof, shall
      be
      finally settled in United States under the Rules of Arbitration of the
      International Chamber of Commerce by one or more arbitrators appointed in
      accordance with the said Rules. The arbitration shall take place in Las Vegas,
      Nevada.

    

    16.17 The
      parties agree to execute such documents, make such filings and take such actions
      as may be reasonably necessary at the request of the other party to give full
      force and effect to the provisions hereof.

    

    16.18 This
      Agreement may be executed in one or more counterparts, each of which when taken
      together shall constitute one and the same instrument. This Agreement may be
      delivered by personal delivery of facsimile transmission.

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date and
      year first written above.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

    SKINVISIBLE
      PHARMACEUTICALS, INC.

    

    By:       

    Name:

    Title:

    

    

    

    DERMAL
      DEFENSE, INC.

    

    By:
             

    Name:

    Title:

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    

    Product
      List

    

     

     

    Skinvisible's
      Antimicrobial Hand Sanitizer:
      Triclosan 1%, Purified Water, PVM/MA Copolymer - VP/Hexadecene Copolymer -
      VP/Eicosene Copolymer, Glycerin, Aloe - 10% Solution, Triethanolamine,
      Nonoxynol-9, Vegetable Oil, Carbomer, Propylene Glycol, Diazolidinyl Urea,
      Iodopropynyl, Butylcarbarnate. 

     

    
      
         

        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    SCHEDULE
      B

    

    Price
      List

    

    

    
      	Product     	
                Packaged
                Wholesale
                Pricing

            
	 	
              2
                oz.

            	
              4
                oz.

            	
              8
                oz.

            	
              16
                oz.

            	
              1
                gal.

            	
              1
                liter

            
	Sanitizer Lotion	
              *

            	
              *

            	
              *

            	
              *

            	
              *

            	
              *

            

    

     

    * The
      confidential portion has been omitted and filed separately with the Commission.
      

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    SCHEDULE
      C

    

    Territory

    

    

    United
      States

    Canada

    Mexicoex101

    Certain
      portions of the below Distribution Agreement have been redacted based on a
      request for confidential treatment and those portions have been filed separately
      with the Securities and Exchange Commission.

     

    DISTRIBUTION
      AGREEMENT 

    

    THIS
      AGREEMENT made as of the 4th day of May, 2005. ("Effective Date")

    

    BETWEEN:

    

    
      	 	
              SKINVISIBLE
                PHARMACEUTICALS, INC.,
                a
                company incorporated under the laws of the State of Nevada having
                its
                principal place of business located at Unit #10 - 6320 South Sandhill
                Road, Las Vegas, Nevada, 89120 (“Skinvisible”);

            

    

    

    AND:

    

    SAFE4HOURS,
      INC.,
      a
      company incorporated under the laws of the State of Nevada having its principal
      place of business located at ---202 N. Carson Street, Carson City, Nevada 89701
      (the “Distributor”).

    

    WHEREAS:

    

    A.  Skinvisible
      is in the business of developing polymer-based delivery systems and related
      technologies for combining hydrophilic and hydrophobic polymer emulsions and
      licensing its technologies and/or selling its polymer delivery systems to
      established brand manufacturers and providers of topical prescription and
      over-the-counter cosmetic and skin-care Product.

    

    B.  The
      Distributor is engaging in the business of marketing and distributing skin-care
      Product.

    

    C.  Skinvisible
      and the Distributor have agreed to enter into this Agreement, whereby the
      Distributor will have the exclusive right to distribute, market, sell and
      promote the Product throughout the Territory.

    

    NOW,
      THEREFORE, in consideration of the foregoing premises and the mutual covenants
      herein set forth and other good and valuable consideration, the parties agree
      as
      follows:

    

    I. DEFINITIONS

    

    In
      this
      Agreement, the following terms have the following meanings:

    

    1.1 “Customers”
means,
      at any time and from time to time, the customers of the Distributor in respect
      of the Product.

    

    1.2 “Confidential
      Information” means
      any
      and all technical or business information, data, designs, concepts, ideas,
      Product, processes, methods, techniques, specifications, formulas, 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    compositions,
      samples, know-how, trade secrets, and improvements of a confidential or
      proprietary nature, whether in tangible form or not, which relate to the
      Product, or the development, manufacture, end-use, or commercialization thereof,
      and were disclosed by one party to the other party under this Agreement. As
      used
      herein, “Confidential Information” shall not include information a party can
      demonstrate through its records:

    

    (a)
       
      is, at
      the time of disclosure, available to the general public;

    

    
      	 	
              (b)

            	
              becomes
                at a later date available to the general public through no fault
                of the
                receiving party, and then only after said later
                date;

            

    

    

    
      	 	
              (c)
                

            	
              was
                already in the possession of the receiving party without restriction
                prior
                to the date of disclosure;

            

    

    

    
      	 	
              (d)

            	
              is
                disclosed to the party without secrecy obligations by a third party
                who
                had a lawful right to disclose it;
                or

            

    

    

    
      	 	
              (e)

            	
              is
                independently developed by personnel of the receiving party who had
                no
                direct or indirect access to the Confidential Information of the
                disclosing party.

            

    

    

    1.3 "Formula"
      shall
      mean the specific ingredients, composition, and process for preparing the
      Product (as defined below). 

    

    1.4 "Patents"
      shall
      mean U.S. Patent No. 6,582,683 issued on June 24, 2003 for "Dermal Barrier
      Composition"; U.S.S.N. 09/933,275 filed on August 20, 2001 and U.S.S.N.
      10/154,723 filed on May 23, 2002, both for "Topical Composition, Topical
      Composition Precursor, and Methods for Manufacturing and Using the Same"; PCT
      Application No. US02/26301 filed on August 16, 2002 for purposes of the
      countries designated therein that are within the Territory namely Asia,
      Australia, Europe, India, Japan and S. Korea; and all divisions, continuations,
      continuation-in-parts, reissues, reexamination applications, extensions, foreign
      equivalents within the Territory, and patents issuing there-from which are
      owned
      or controlled by Skinvisible pertaining to the Product, Confidential
      Information, and Improvement Inventions.

    

    1.5 "Product"
      means
      Skinvisible's proprietary antimicrobial hand sanitizer product incorporating
      1%
      Triclosan as an active ingredient, and further identified in Appendix
      A.

    

    1.6 "Product
      Specifications"
      shall
      mean the specifications for the Product that will likely be needed to meet
      customer and regulatory requirements. These Product Specifications shall not
      be
      modified without the express, written agreement of the parties. 

     

    1.7
"Territory"
      means
      all the countries of the world except Canada, USA and
      Mexico.

    II. APPOINTMENT,
      TERRITORY AND PRODUCT

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    2.1 Subject
      to the terms hereof, Skinvisible hereby appoints the Distributor and grants
      to
      the Distributor the exclusive right to distribute, sell, market and promote
      the
      Product within the Territory. For greater certainty, while this Agreement shall
      remain in effect, except for sub-distributors appointed by the Distributor
      and
      consented to in writing by Skinvisible, no person, firm or corporation will
      be
      granted the right to distribute, sell, market or promote the Product within
      the
      Territory other than the Distributor.

    

    2.2 The
      Distributor shall not be entitled to appoint sub-distributors to distribute,
      market, sell, or promote the Product within the Territory without the prior
      express written consent of Skinvisible, pursuant to Article VIII, which shall
      not be unreasonably withheld.

    

     2.3 The
      Distributor shall be restricted from integrating the Product into the
      manufacture and production of finished Product to be distributed, sold, marketed
      and promoted by or on behalf of the Distributor or its permitted agents,
      associates, affiliates, or sub-distributors. However, the Product may be sold
      under a "private" label by the Distributors or its permitted agents, associates,
      affiliates, or sub-distributors, provided that all packaging costs are paid
      in
      advance to Skinvisible. 

    

    2.4 Distributor
      recognizes that Skinvisible is in the business of developing, marketing,
      selling, and distributing its polymer-based delivery systems and related
      technologies (including Product), and developing end-use applications therefore,
      on worldwide bases. For so long as Distributor retains its exclusive
      distribution rights for the Product granted under Section 2.1 of this Agreement,
      Skinvisible shall refrain from selling the Product to customers within the
      Territory, or engaging any third party as a distributor of the Product within
      the Territory.

     

    III. DISTRIBUTOR
      NOT MADE AGENT OR LEGAL REPRESENTATIVE

    

    This
      Agreement does not render Distributor an agent or legal representative of
      Skinvisible for any purpose whatsoever. The Distributor is not granted any
      right
      or authority to assume or to create any obligation or responsibility, express
      or
      implied, on behalf of or in the name of Skinvisible or to bind Skinvisible
      in
      any manner or thing whatsoever.

    

    IV. PRICING
      AND PAYMENT

    

    4.1 Product
      shall be sold to the Distributor by Skinvisible at the pre-determined prices
      set
      forth in Schedule B hereto. Any change in the price of Product shall not affect
      orders by the Distributor that were accepted by Skinvisible prior to such
      change. As business conditions warrant, Skinvisible shall have the unrestricted
      right to change the price of the Product, provided that the increase is directly
      attributable to higher costs of raw materials, other manufacturing costs, or
      an
      increase in the Cost of Living Index, and that Skinvisible provides Distributor
      sixty (60) days prior written notice of any such price increase before it
      becomes effective. 

    

    4.2 The
      Distributor shall pay for all orders for Product by electronic bank transfer,
      certified check or bank draft in favor of Skinvisible

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    4.3 Except
      as
      provided in Section 5.5(b), the purchase price for each order of Product must
      be
      paid by the Distributor prior to shipment of the Product and the Distributor
      shall incur all shipping and packaging costs.

    

    4.4 The
      Distributor shall pay Skinvisible an up-front license fee in the amount of
      $1,000,000 USD for the exclusive right to distribute, sell, market and promote
      the Product within the Territory. Skinvisible acknowledges receipt of a $25,000
      nonrefundable deposit applicable toward this up-front license fee. The remaining
      $975,000 USD is payable under the following schedule until Skinvisible has
      received the $975,000: *

    

    
      	(a)  	
              Under
                no circumstances shall the remaining installments towards such up-front
                license fee required under this Section 4.4 exceed an aggregate of
                $975,000.

            

    

    

    
      	(b)  	
              In
                the event that the Distributor appoints a sub-distributor under Article
                VIII of this Agreement, the Distributor will then be required to
                make a
                one-time payment in addition to those in the payment schedule set
                forth
                above in this Section 4.4 equal to 50% of all up-front proceeds that
                the
                Distributor receives, directly or indirectly, upon the execution
                of any
                agreement in which a sub-distributor is appointed.
                

            

    

    

    
      	(c)  	
              Payments
                made under this Section 4.4 are separate and in addition to payments
                to be
                made under Section 4.1 for the Product and the running royalties
                due under
                Section 4.5.

            

    

    

    
      	(d)  	
              In
                the event that payments are not made as set forth in this Section
                4.4 and
                the parties are unable to agree to a revised schedule of payments
                within
                thirty (30) days of the date for payment, then Skinvisible may in
                its sole
                discretion terminate the Agreement or any provision therein and retain,
                without any claim or demand from the Distributor, all monies previously
                paid.

            

    

    

    * The
      confidential portion has been omitted and filed separately with the Commission.
      

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    4.5 The
      Distributor shall pay quarterly to Skinvisible a running royalty fee in order
      to
      maintain the exclusivity granted herein no later than thirty (30) days after
      the
      end of each quarter. The amount of the royalty shall be calculated as
      follows:

     

    
      	
              Quarter
                Ended

            	
              Amount
                of Payment

               

            
	
              September
                30, 2005 and subsequent first Year Quarters

            	
              $5,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the quarter, whichever is greater

            
	
              September
                30, 2006 and subsequent second Year Quarters 

            	
              $10,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the quarter, whichever is greater

            
	
              September
                30, 2007 and subsequent Quarters Thereafter

            	
              $20,000
                or 5% of gross revenues generated by Distributor from sales of the
                Product
                in the Territory in the quarter, whichever is
                greater

            

    

     

    
      	 	
              (a)

            	
              In
                the event that payments are not made as set forth in section 4.4,
                then
                Skinvisible shall give the Distributor a written notice of default.
                If
                payment is not received within thirty (30) days following receipt
                of the
                notice of default, then Skinvisible may in its sole discretion terminate
                the Agreement or any provision therein and retain, without claim
                or demand
                from the Distributor, all monies previously
                paid.

            

    

    

    
      	 	
              (b)

            	
              The
                Distributor shall provide to Skinvisible documentation including,
                but not
                limited to, receipts, invoices, or other documentation that shall
                reasonably allow Skinvisible to confirm the accuracy of the royalty
                payment made. 

            

    

    

    
      	 	
              (c)

            	
              Skinvisible
                shall be entitled to audit the accuracy of the royalty payments made
                by
                the Distributor. Skinvisible shall incur the expense of the audit
                only if
                it is determined that Skinvisible received ninety percent (90%) or
                more of
                the audited amount and in all other circumstances the Distributor
                shall
                incur the expense of the audit. The existence of an audit for any
                quarterly payment does not suspend or relieve the Distributor from
                their
                obligation to make a royalty payment within thirty (30) days after
                the end
                of each quarter. 

            

    

    

    4.6 All
      payments by the Distributor to Skinvisible to be made hereunder shall be in
      United States dollars.

    

    V. TERMS
      AND CONDITIONS OF PRODUCT ORDERS 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    5.1 The
      Distributor shall submit a written purchase order to Skinvisible specifying
      the
      amount of Product required. Skinvisible agrees to provide an acceptance of
      an
      order within three (3) business
      days after receiving a written purchase order from the Distributor.

    

    5.2 All
      of
      the Product ordered by the Distributor shall be shipped within three (3) weeks
      from the date the acceptance of an order has been delivered to the Distributor
      and shall carry an expiration date of three (3) years from the date of shipment.
      Delivery of all Product sold by Skinvisible to the Distributor shall be F.O.B.
      the place of Product manufacture. The
      method and route of shipment shall be at the sole discretion of the Distributor
      subject to Skinvisible’s guidelines for the method and conditions of shipment
      which would provide for arrival of the Product at the Distributor’s point of
      delivery in substantially the same condition as such Product were at the point
      of shipment. These guidelines include conditions regarding temperature (which
      shall not exceed at a maximum of 450
      Celsius
      and at a minimum of 40
      Celsius)
      to preserve the quality and integrity of the Product during shipment. Failure
      of
      Distributor to abide by Skinvisible’s guidelines in the shipment of the Product
      shall bar the Distributor from making any claim whatsoever against Skinvisible
      arising from any defect in the Product, which occurred or arose during shipment.
      Nothing in this section shall mean or be implied to mean that there is any
      shifting of the risk of loss of goods to Skinvisible once such goods are placed
      in the control of Distributor’s carrier. All such risk of loss is borne by
      Distributor once the Product to be shipped have been delivered to or placed
      in
      the control of the carrier.

    

    5.3 Title
      to
      the Product shall pass from Skinvisible to the Distributor upon the delivery
      to
      a recognized commercial carrier of the Product for shipment to the Distributor.
      

    

    5.4 Skinvisible
      shall deliver the Product to the Distributor free and clear of all liens,
      encumbrances and security interests and shall not, without the prior written
      consent of the Distributor: (a) transfer, deliver or otherwise provide the
      Product as listed in the written purchase order submitted by the Distributor
      to
      any other person or entity; or (b) assign any rights to the Product as listed
      in
      the written order submitted by the Distributor to any other person or
      entity.

    

    5.5 Prior
      to
      receiving an acceptance of the written order from Skinvisible, the Distributor
      may cancel any order at any time, with or without cause, and the Distributor’s
      liability for such cancellation shall be limited to Skinvisible’s out-of-pocket
      costs and expenses incurred for such cancelled order.

    

    5.6 The
      Distributor shall give notice to Skinvisible of any claims relating to the
      non-conformity of Product. The Distributor shall make all claims with respect
      to
      the Product as follows:

     

    
      	 	
              (a)
                

            	
              Any
                claim that a shipment contains a shortage of Product or other error
                in
                delivery must be made by the Distributor to Skinvisible in writing
                within
                seven (7) days from the date of receipt by the
                Distributor of
                such shipment of Product together with a reasonable description of
                the
                delivery error. The Distributor’s failure to make a claim in accordance
                with the foregoing sentence shall constitute agreement by the Distributor
                that there was no error in delivery. Provided that the
                

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	 	
            	Distributor makes a claim in accordance with this
              Section
              5.6(a) and proves that the shipment contained a shortage of Product
              or
              other error in delivery, Skinvisible, at the Distributor’s option, shall
              deliver to the Customer to such location(s) designated by the Distributor,
              at Skinvisible’s risk and cost and expense, the number of Product in
              shortage in such shipment, or credit the Distributor the amount of
              such
              shortage. 

    

     

    
      	 	
              (b)

            	
              In
                the event that the Distributor claims that upon delivery any of the
                Product are non-conforming because the product is not consistent
                with the
                Certificate of Analysis, the Distributor may reject the same, provided
                that (i) within thirty (30) days after receipt by the
                Distributor of such shipment of Product, the Distributor notifies
                Skinvisible in writing of the nonconformity, (ii) the Distributor
                sends
                the product out for further review and inspection and it is determined
                that the Product are not consistent with the Certificate of Analysis,
                (iii) the Distributor returns to Skinvisible, at Skinvisible’s expense,
                the rejected Product or shipment, subject to the terms and conditions
                hereinafter provided, within seven (7) days after the Distributor
                receives
                notice that the further review and inspection of the Product found
                the
                Product to be inconsistent with the Certificate of Analysis, and
                (iv) none
                of the Product has been changed from its original condition. The
                Distributor’s failure to make a claim in accordance with the foregoing
                sentence shall constitute unqualified acceptance of all shipments
                and
                Product. Following receipt of the rejected Product under this Section
                5.6(b), Skinvisible shall deliver Product consistent with the Certificate
                of Analysis within fourteen (14) days. Provided that the rejected
                Product
                have been rejected by the Distributor in accordance with the terms
                of this
                Section 5.6(b) and are proved to have been non-conforming, then
                Skinvisible shall credit the Distributor for the cost of the Product
                and
                all costs and expenses incurred by the Distributor in shipping the
                rejected Product back to Skinvisible, if such Product return requested
                is
                made by Skinvisible to the distributor. The Distributor shall pay
                the
                costs of the conforming Product within thirty (30) days after receipt
                by
                the Distributor. The Distributor shall not be responsible for any
                royalty
                payments on the sale of any Product that do not conform to the Certificate
                of Analysis.

            

    

    

    
      	 	
              (c)
                

            	
              In
                the event that the Distributor claims that upon delivery any of the
                Product are non-conforming for any reasons other than as set forth
                in
                Section 5.6(a) or (b), then Distributor may reject the same, provided
                that
                (i) within thirty (30) days after receipt by the
                Distributor of such shipment of Product, the Distributor notifies
                Skinvisible of such rejection, in writing, together with a reasonable
                description of why the Product have been rejected (the “Rejection
                Notice”), (ii) the Distributor, at Skinvisible’s option, may return to
                Skinvisible the rejected Product or shipment, subject to the terms
                and
                conditions hereinafter provided, within thirty (30) days after the
                Distributor sends the Rejection Notice, and (iii) none of the Product
                has
                been changed from its original condition. The Distributor’s failure to
                make a claim in accordance with the foregoing sentence shall constitute
                unqualified acceptance of all shipments and Product. Provided that
                the
                rejected Product have been rejected by the Distributor in accordance
                with
                the terms of this 

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	
            	Section 5.5(c) and are proved to have been
              non-conforming, Skinvisible shall credit the Distributor for the cost
              of
              the Product and all costs and expenses incurred by the Distributor
              in
              shipping the rejected Product back to Skinvisible, if such Product
              return
              requested is made by Skinvisible to the
              distributor.

    

     

    5.7 The
      warranty for defective Product of Skinvisible as from time to time in effect
      shall be applicable to all sales of the Product by Skinvisible to the
      Distributor. Notwithstanding the provisions of Article XIII hereof, Skinvisible
      shall have no obligation or liability to the Distributor for any loss, damage
      or
      expense of any kind caused directly or indirectly by the Product or the use,
      maintenance, repairs or adjustments of or to the Product except as may be
      provided in such warranty.

     

    VI. OBLIGATIONS
      OF SKINVISIBLE

    

    6.1 Skinvisible
      shall at
      all times during the Term of the Agreement:

    

    
      	 	
              (a)

            	
              publish
                and make available to the Distributor from time to time a list of
                the
                Product and a list of the prices charged by Skinvisible
                therefore;

            

    

    

    
      	 	
              (b)

            	
              with
                respect to each Product sold to the Distributor, provide the Distributor
                with a standard Certificate of
                Analysis;

            

    

     

    (c) reimburse
      the Distributor under any warranty obligation of Skinvisible;

    

    
      	 	
              (d)

            	
              provide
                Distributor with copies of the research and efficacy studies for
                the
                Product in Skinvisible's possession as of the Effective Date of this
                Agreement.

            

    

    

    
      	 	
              (e)

            	
              permit
                the Distributor to use Skinvisible's INVISICARE trademark (collectively
                "Trademark") for the sole purpose of advertising, marketing and
                distributing the Product within the Territory, and strictly in accordance
                with the terms and conditions of the Trademark License Agreement
                of
                Appendix D.

            

    

    

    6.2 Skinvisible
      hereby grants Distributor a royalty-free, non-exclusive, non-transferable
      license to use Skinvisible's Confidential Information, Improvement Inventions,
      and Patents that are directly relevant to the advertising, marketing,
      distribution, and sale of the Product within the Territory under this Agreement,
      and the manufacture by Distributor of the Product, where applicable under
      Article VII. This license is limited in scope, and shall not authorize
      Distributor to use Skinvisible's Confidential Information, Improvement
      Inventions, or Patents outside of this Agreement without Skinvisible's prior,
      written consent.

    

    VII. RIGHT
      TO MANUFACTURE

    

    7.1 Distributor
      shall have the right to manufacture the Product covered by this Agreement,
      instead of sourcing it from Skinvisible, provided that: (a) Distributor makes
      the Product strictly in accordance with the Formula, and that it achieves the
      Product Specifications; (b) Distributor sources the "M1 Polymer" ingredient
      for
      the Product from Skinvisible; (c) Distributor applies Skinvisible's INVISICARE
      Trademark in a prominent fashion to all packaging, labels, tags, 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    advertising,
      and promotional materials associated with the Products; and (d) Distributor
      pays
      Skinvisible the license fees and royalties due pursuant to Sections 4.4 and
      4.5.
      Distributor shall notify Skinvisible ninety (90) days prior to its commencement
      of the manufacture of Product under this Section 7.1.

    

    7.2 Should
      Distributor decide to manufacture Product under this Agreement, Skinvisible
      shall disclose to Distributor as soon reasonably practicable the Formula,
      Product Specification, and manufacturing know-how in sufficient detail (using
      reasonable commercial efforts) to enable Distributor to make the Products.
      This
      information shall be treated as Skinvisible's Confidential Information pursuant
      to Article X. Notwithstanding the foregoing, Skinvisible shall not be required
      to disclose any specific information to Distributor in the event that any
      agreement with a third party would preclude Skinvisible from doing
      so.

    

    7.3 Distributor
      shall bear all costs associated with the: (a) disclosure of the Formula, Product
      Specifications, manufacturing know-how; (b) adapting such information or
      technology for its use by Distributor; (c) any necessary training; and (d)
      any
      documentation done for Distributor's internal purposes.

    

    7.4 Distributor
      and Skinvisible shall negotiate in good faith a separate agreement for supplying
      the M1 Polymer to Distributor for incorporation into the Product to be
      manufactured by Distributor, including the purchase price for such M1
      Polymer.

    

    7.5 Distributor
      shall permit duly authorized representatives of Skinvisible, at reasonable
      times, upon reasonable nature, and in the company of Distributor's employees
      to
      enter any facility where the Product is being manufactured for the purpose
      of:
      (a) inspecting those portions of the facility used in the manufacture, handling,
      or storage of the Product; (b) inspecting the manufacture, handling, and storage
      of the Product; and (c) ensuring that the provisions of this Agreement are
      being
      complied with by Distributor. Such representatives shall comply with all of
      Distributor's plant safety and other rules and regulations while at the
      facility. 

    

    VIII. SUB-DISTRIBUTORS

     

    8.1 In
      the
      event that Distributor determines that commercial exploitation of the Product
      within the Territory requires the appointment of sub-distributors through which
      the Product may be sold, then Distributor shall identify such sub-distributors
      to Skinvisible, and seek Skinvisible’s prior written approval of them, which
      shall not be unreasonably withheld, before appointing any such sub-distributors
      under this Agreement.

     

    8.2 Any
      sub-distributor approved in writing by Skinvisible shall have the right during
      the continuance
      of this Agreement to use Skinvisible’s Trademark, Patents, and other
      intellectual property rights licensed under this Agreement for the sole purpose
      of promoting the sales of the Product throughout the Territory under the same
      terms and conditions imposed upon Distributor under this Agreement.

    

    IX. IMPROVEMENT
      INVENTIONS

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    9.1 Distributor
      shall have no right to make any modifications or improvements to the Product
      without Skinvisible's prior, written permission. In the event that Distributor
      does conceive, develop, or reduce to practice any invention or other information
      arising from or based upon the use of Skinvisible's Confidential Information
      or
      Product (hereinafter "Improvement Invention"), then Skinvisible shall be the
      sole owner of such Improvement Invention, which shall be subject to the
      exclusive distributorship grant of Article II. Should Distributor desire
      modification or improvement to be made to the Product, and then it shall
      contract with Skinvisible under a separate agreement to develop such
      modifications or improvements.

    

    9.2 Only
      Skinvisible shall have the right, in its sole discretion, to patent the Product
      and Improvement Inventions.

    

    X. CONFIDENTIALITY

    

    10.1 Each
      party recognizes the importance to the other party that of that other party’s
      Confidential Information, and such information is critical to the business
      of
      the disclosing party. Each party recognizes that neither party would enter
      into
      this Agreement without assurance that its Confidential Information and the
      value
      thereof will be protected as provided in this Section 10 and elsewhere in this
      Agreement.

    

    10.2 All
      Confidential Information shall remain the property of the disclosing party.
      The
      receiving party shall hold in strict confidence the disclosing party’s
      Confidential Information and with no less than the same degree of care that
      it
      holds its own confidential and proprietary information, and it will take all
      reasonable precautions to protect such Confidential Information. The receiving
      party shall make the Confidential Information received under this Agreement
      available only to those of its employees who have a need to know the same in
      connection with their work assignments to further the objections contemplated
      under this Agreement. No disclosures to third parties shall be made by the
      receiving party of such Confidential Information without the prior written
      approval of the disclosing party. The receiving party will use the disclosing
      party’s Confidential Information only for the purposes and under the
      circumstances provided in this Agreement.

    

    10.3 Upon
      any
      termination of this Agreement, or earlier at a party's request, each party
      will
      return the other party’s Confidential Information and all documents or media
      containing any such Confidential Information to the other party, except that
      the
      receiving party has the right to keep one copy of such information for legal
      purposes (which shall remain subject to the confidentiality provisions set
      forth
      herein), including, but not limited to, copies of all documentation required
      by
      the FDA.

    

    10.4 Each
      party acknowledges and agrees that the other party shall be entitled to
      appropriate equitable relief in addition to whatever remedies it may have at
      law
      in the event of a breach by the other party of its covenants contained in this
      Section 10. The foregoing provision is in addition to, and not in limitation
      of,
      any and all remedies at law, in equity or otherwise, that the non-breaching
      party may have upon the other party’s breach of this Agreement.

    

    10.5 Except
      as
      otherwise provided in this Agreement, either party shall immediately notify
      the
      other party of any private or governmental request for Confidential Information
      or any other 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    information
      or documents relating to the Product or this Agreement. Each party shall have
      the right to participate in the other party’s response to any such request. If a
      party receives any legal instrument requiring the production of data, work
      papers, reports, or other materials relating to this Agreement, that party
      shall: (a) give the other party, if possible, the opportunity to participate
      in
      quashing, modifying or otherwise responding to any compulsory process in an
      appropriate and timely manner; and (b) cooperate fully with the other party’s
      efforts to narrow the scope of any such compulsory process, to obtain a
      protective order limiting the use or disclosure of the information sought,
      or in
      any other lawful way to obtain continued protection of the Confidential
      Information.

    

    10.6 If
      either
      party becomes aware of the loss, theft or misappropriation of Confidential
      Information, which is in its possession or control, it shall notify the other
      party in writing within seven (7) days of its discovery of such loss, theft
      or
      misappropriation.

    

    10.7 The
      rights and duties of this Article 10 shall survive the termination of this
      Agreement, whether upon expiration or termination by either party.

    

    XI. TERM
      AND TERMINATION

    

    11.1 This
      Agreement shall continue in full force and effect for twenty (20) years from
      the
      Effective Date or the last to expire of the Patents, whichever occurs first,
      unless otherwise terminated as provided in Section 11.2 below, or by mutual
      written consent of the parties hereto.

    

    11.2 Either
      party may terminate this Agreement at any time as follows:

    

    
      	 	
              (a)
                

            	
              By
                either party, effective immediately, in the event that the other
                party
                should fail to materially perform any of its material obligations
                under
                this Agreement and should fail to remedy such failure within thirty
                (30)
                calendar days after receiving written demand to remedy such failure,
                or in
                the event such other party, despite remedying a particular failure
                within
                thirty (30) days as aforesaid, is guilty of chronic or persistent
                breaches
                of such material obligation in question, in the end result having
                a
                material adverse effect upon the other party;
                or

            

    

    

    
      	 	
              (b)

            	
              By
                either party, upon thirty (30) days’ written notice if a force majeure
                event described in Section 16.1 shall have occurred and continue
                for sixty
                (60) days.

            

    

    

    11.3 Skinvisible
      may terminate this agreement at any time if the Distributor should become the
      subject of any voluntary or involuntary bankruptcy, receivership or other
      insolvency proceedings or make an assignment or other arrangement for the
      benefit of its creditors, or if such other party should be nationalized or
      have
      any of its material assets expropriated.

     

    11.4
      This
      Agreement may also be terminated by mutual agreement of the
      parties.

     

    11.5 The
      Distributor may not manufacture, market, distribute, or sell any Competing
      Product while this Agreement is in full force and effect.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    XII. EFFECT
      OF TERMINATION

    

    12.1 The
      rights, duties and obligations of the parties upon and following the expiration
      or termination of this Agreement however occurring shall be governed by the
      following provisions:

    

    
      	 	
              (a)
                

            	
              The
                termination of this Agreement shall not release or affect, and this
                Agreement shall remain fully operative as to, any obligations or
                liabilities incurred by either party prior to the effective date
                of such
                termination;

            

    

    

    
      	 	
              (b)

            	
              Skinvisible,
                subject to its production capabilities, shall fill all orders submitted
                by
                the Distributor during the term of this Agreement regardless of whether
                any of the Product in such orders are to be delivered after the expiration
                or termination of this Agreement. During such period of time that
                Skinvisible is filling such orders, all terms of this Agreement shall
                apply between the parties with respect to such production;
                and

            

    

    

    
      	 	
              (c)

            	
              Notwithstanding
                the provisions of section 10 hereof, Skinvisible shall, by reason
                only of
                the expiration or termination of this Agreement in accordance with
                the
                terms of this Agreement, be liable in any manner whatsoever to the
                Distributor for any damage of any kind whether direct, indirect or
                conse-quential, or for any profits on anticipated sales, or for any
                expenditures or investments;

            

    

    

    
      	 	
              (d)

            	
              Upon
                the effective date of termination of this Agreement, the parties
                hereto
                acknowledge that the exclusivity provisions set forth in Paragraph
                2
                herein will no longer be in effect and that any limitations on the
                parties
                pertaining to sales and marketing and potential customers are dissolved
                and the parties are free to contract with any third party for future
                business; and

            

    

    

    
      	 	
              (e)

            	
              Termination
                or expiration of this Agreement for any reason shall not relieve
                the
                parties of their obligations under Articles IX, X, XI, XII, XIII,
                XIV, and
                XV of this Agreement.

            

    

    

    XIII. WARRANTY
      AND REPRESENTATIONS

    

    13.1 As
      an
      essential term of this Agreement, each party hereby warrants and represents
      to
      the other party that it is entitled to disclose to and license the other party
      to sue its Confidential Information, Improvement Inventions, and Patents under
      the terms of this Agreement without violating the trade secret or contractual
      rights of any third party.

    

    13.2 EXCEPT
      AS
      SET FORTH IN SECTION 13.1, OR AS OTHERWISE SPECIFICALLY STATED HEREIN, THE
      PARTIES EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
      LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS OR A PARTICULAR PURPOSE,
      PATENT VALIDITY, OR NON-INFRINGEMENT OF A THIRD-PARTY PATENT OF OTHER
      INTELLECTUAL PROPERTY RIGHTS REGARDING THE USE OR COMMERCIALIZATION OF PRODUCT,
      CONFIDENTIAL INFORMATION, IMPROVEMENT INVENTIONS, OR PATENTS.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    XIV. INDEMNIFICATION

    

    14.1 Each
      party shall indemnify, defend and hold harmless the other party from any and
      all
      claims, costs, liabilities, or damages (including reasonable attorney's fees)
      arising from its:

    

    (a) uncured
      material breach of this Agreement;

    

    (b) breach
      of
      any Warranty or Representation provided pursuant to Article XII;

    

    
      	 	
              (c)

            	
              negligent,
                grossly negligent, reckless, or wilful acts or omissions. Each party
                shall
                be responsible for any and all damages that it is subjected to by
                means of
                its own negligent, grossly negligent, reckless or wilful acts or
                omissions.

            

    

    

    14.2 In
      the
      event a third-party lawsuit is filed against a party (the "Indemnitee") due
      to
      the negligent, grossly negligent, reckless or wilful actions or omissions of
      the
      other party (the "Indemnitor"), then the Indemnitee shall promptly provide
      notice of such suit to the Indemnitor, and permit the Indemnitor to control
      its
      defence, including the terms under which any such suit is settled. The
      Indemnitee shall provide all reasonable cooperation to the Indemnitor at the
      Indemnitor's expense in the defence of that suit.

    

    XV. PATENT
      MARKING

    

    Distributor
      shall cause each unit of Product that it manufactures, markets, sells, or
      otherwise introduces into commerce under this Agreement to have affixed thereto
      a label bearing the following legend: "U.S. Patent No. 6,582,683 under license
      from Skinvisible Pharmaceuticals, Inc." Skinvisible shall update this legend
      for
      Distributor as additional Patents are issued.

    

    XVI.
      MISCELLANEOUS
      PROVISIONS

    

    16.1 Neither
      party shall be in default hereunder by reason of any failure or delay in the
      performance of any obligation under this Agreement where such failure or delay
      arises out of any cause beyond the reasonable control and without the fault
      or
      negligence of such party. Such causes shall include, without limitation, storms,
      floods, other acts of nature, fires, explosions, riots, war or civil
      disturbance, strikes or other labor unrests, embargoes and other governmental
      actions or regulations which would prohibit either party from ordering or
      furnishing the Product or from performing any other aspects of the obligations
      hereunder, delays in transportation, and liability to obtain necessary labor,
      supplies or manufacturing facilities.

    

    16.2
       Each
      and
      every right and remedy hereunder is cumulative with each and every other right
      and remedy herein or in any other agreement between the parties or under
      applicable law.

    

    16.3 Each
      party hereby acknowledges receipt of a signed copy of this
      Agreement.

    

    16.4 Nothing
      contained in this Agreement shall create or shall be construed as creating
      a
      partnership, a joint venture, agency or employment relationship between the
      parties. The parties 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    agree
      to
      perform their obligations in accordance with this Agreement at arms’ length and
      only as independent contractors. Neither party has the right or authority to
      assume nor create any obligations or responsibilities, express or implied,
      on
      behalf of the other party, and neither party may bind the other party in any
      manner or thing whatsoever. Neither party shall be liable, except as expressly
      provided otherwise in this Agreement, for any expenses, liabilities or other
      obligations incurred by the other.

    

    16.5 Skinvisible
      and the Distributor each represent and warrant to the other that it is duly
      organized, validly existing and in good standing under the laws of the State
      or
      Commonwealth (as applicable) in which incorporated, and that it has full
      corporate power and authority to carry on the business presently being conducted
      by it and to enter into and to perform its obligations under this Agreement.
      

    

    16.6 Skinvisible
      and the Distributor each represent and warrant to the other that it has taken
      all action necessary to authorize the execution and delivery of this Agreement
      and the performance of each party’s respective obligations hereunder. Each
      party’s officer executing this Agreement on its behalf has the legal power,
      right and authority to bind the party to the terms and conditions of this
      Agreement, and when he or she executes and delivers this Agreement and any
      instruments contemplated herein, he or she will have the power, right and
      authority to bind the party thereto.

    

    16.7 All
      notices, requests, demands and other communications hereunder shall be given
      in
      writing and shall be: (a) personally delivered; (b) sent by telecopy, facsimile
      transmission or other electronic means of transmitting written documents with
      confirmation of receipt; or (c) sent to the parties at their respective
      addresses indicated herein by registered or certified mail, return receipt
      requested and postage prepaid, or by private overnight mail courier services
      with confirmation of receipt. The respective addresses to be used for all such
      notices, demands or requests shall be as set forth on page 1 hereof or to such
      other person or address as either party shall furnish to the other in writing
      from time to time. If personally delivered, such communication shall be deemed
      delivered upon actual receipt by the “attention” addressee or a person
      authorized to accept for such addressee; if electronically transmitted pursuant
      to this paragraph, such communication shall be deemed delivered the next
      business day after transmission (and sender shall bear the burden of proof
      of
      delivery); if sent by overnight courier pursuant to this paragraph, such
      communication shall be deemed delivered upon receipt by the “attention”
addressee or a person authorized to accept for such address; and if sent by
      mail
      pursuant to this paragraph, such communication shall be deemed delivered as
      of
      the date of delivery indicated on the receipt issued by the relevant postal
      service, or, if the addressee fails or refuses to accept delivery, as of the
      date of such failure or refusal. Any party to this Agreement may change its
      address for the purposes of this Agreement by giving notice thereof in
      accordance with this section 16.7.

    

    16.8 This
      Agreement may not be amended or modified otherwise than by a written agreement
      executed by the parties hereto or their respective successors and legal
      representatives. 

    

    16.9 This
      Agreement is not intended, nor shall it be construed, to confer upon any person
      except the parties hereto and its successors and permitted assigns any rights
      or
      remedies under or by reason of this Agreement, except as contemplated
      herein.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    16.10 This
      Agreement and all matters arising under or growing out of or in connection
      with
      or in respect of this Agreement shall be governed by and construed in accordance
      with the laws of the State of Nevada. 

    

    16.11 The
      headings in this Agreement are inserted for convenience only and shall not
      constitute a part hereof.

    

    16.12 Each
      provision contained in this Agreement is declared to constitute a separate
      and
      distinct covenant and provision and to be severable from all other separate,
      distinct covenants and provisions. In any provision of this Agreement is or
      becomes invalid, illegal, or unenforceable in any jurisdiction, such provision
      shall be deemed amended to conform to applicable laws as to be valid and
      enforceable or, if it cannot be so amended without materially altering the
      intention of the parties, it shall be stricken and the remainder of this
      Agreement shall remain in full force and effect.

    

    16.13 No
      waiver
      of a breach of any provision of this Agreement shall be deemed to be, or shall
      constitute, a waiver of a breach of any other provision of this Agreement,
      whether or not similar, nor shall such waiver constitute a continuing waiver
      of
      such breach unless otherwise expressly provided in such waiver.

    

    16.14 This
      Agreement may not be assigned by the Distributor without the prior written
      consent of Skinvisible. Skinvisible may assign, transfer, or convey its
      manufacturing obligations to third parties who shall be bound by the same
      standards as Skinvisible. 

    

    16.15 All
      prices quoted in this Agreement are exclusive of all applicable sales, use
      or
      other excise taxes (including sales tax and goods and services tax). The
      Distributor is responsible for all taxes and similar charges customary for
      a
      buyer of Product and services as herein contemplated.

    

    16.16 All
      disputes, claims or controversies arising out of or relating to this Agreement,
      or the breach, termination or invalidity hereof, shall
      be
      finally settled in United States under the Rules of Arbitration of the
      International Chamber of Commerce by one or more arbitrators appointed in
      accordance with the said Rules. The arbitration shall take place in Las Vegas,
      Nevada.

    

    16.17 The
      parties agree to execute such documents, make such filings and take such actions
      as may be reasonably necessary at the request of the other party to give full
      force and effect to the provisions hereof.

    

    16.18 This
      Agreement may be executed in one or more counterparts, each of which when taken
      together shall constitute one and the same instrument. This Agreement may be
      delivered by personal delivery of facsimile transmission.

     

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date and
      year first written above.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

    

    SKINVISIBLE
      PHARMACEUTICALS, INC.

    

    By:       

    Name:

    Title:

    

    

    

    SAFE4HOURS,
      INC.

    

    By:
             

    Name:

    Title:

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    

    Product
      List

    

     

     

    Skinvisible's
      Antimicrobial Hand Sanitizer:
      Triclosan 1%, Purified Water, PVM/MA Copolymer - VP/Hexadecene Copolymer -
      VP/Eicosene Copolymer, Glycerin, Aloe - 10% Solution, Triethanolamine,
      Nonoxynol-9, Vegetable Oil, Carbomer, Propylene Glycol, Diazolidinyl Urea,
      Iodopropynyl, Butylcarbarnate. 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    SCHEDULE
      B

    

    Price
      List

    

    

    
      	Product	
               Packaged
                Wholesale Pricing

            
	 	
              2
                oz.

            	
              4
                oz.

            	
              8
                oz.

            	
              16
                oz.

            	
              1
                gal.

            	
              1
                liter

            
	Sanitizer Lotion	
              *

            	
              *

            	
              *

            	
              *

            	
              *

            	
              *

            

    

     

    * The
      confidential portion has been omitted and filed separately with the
      Commission.

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