Document:

ex_210547.htm

Exhibit 10.2

 

FOURTH AMENDMENT TO SECOND AMENDED 

AND RESTATED CREDIT AGREEMENT

 

This Fourth Amendment to Second Amended and Restated Credit Agreement (this “Amendment”), dated as of October 30, 2020, is by and between NewBevCo, Inc., a Delaware corporation (“Company”), and Comerica Bank, a Texas banking association (“Bank”).

 

WITNESSETH:

 

WHEREAS, Company and Bank entered into that certain Second Amended and Restated Credit Agreement dated as of June 30, 2008 (as amended, restated or otherwise modified from time to time, the “Agreement”); and

 

WHEREAS, Company and Bank wish to further amend the Agreement;

 

NOW, THEREFORE, Company and Bank agree as follows:

 

1.     The definition of “Termination Date” in Section 1.1 of the Agreement is amended by deleting the date April 30, 2021 where it appears therein and replacing it with the date April 30, 2023.

 

2.     The following definitions in Section 1.1 of the Agreement are amended and restated as follows:

 

“Eurocurrency-based Rate” means a per annum interest rate which is equal to the sum of (a) the Applicable Margin plus (b) the quotient of the following:

 

	 	
			(1)

				
			The LIBOR Rate:

			

 

divided by

 

	 	
			(2)

				
			1.00 minus the maximum rate (expressed as a decimal) during such Interest Period at which Bank is required to maintain reserves on “Euro-currency Liabilities” as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category.

			

 

 

 

 

"LIBOR Rate" means, with respect to any Advance or other indebtedness bearing interest on the basis of the Eurocurrency-based Rate, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to the relevant Interest Period for such Advance, commencing on the first day of such Interest Period, appearing on Page BBAM of the Bloomberg Financial Markets Information Service at or about 11:00 a.m. (London, England time) (or as soon thereafter as practical), two (2) Business Days prior to the first day of such Interest Period. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service), the "LIBOR Rate" shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be reasonably selected by Bank, or, in the absence of such other service, the "LIBOR Rate" shall, instead, be determined based upon the average of the rates at which Bank is offered dollar deposits at or about 11:00 a.m. (Detroit, Michigan time) (or as soon thereafter as practical), two (2) Business Days prior to the first day of such Interest Period in the interbank eurodollar market in an amount comparable to the principal amount of the respective Eurocurrency-based Advance which is to bear interest on the basis of such Eurocurrency-based Rate and for a period equal to the relevant Interest Period; provided, however, and notwithstanding anything to the contrary set forth in this Agreement, if at any time the LIBOR Rate determined as provided above would be less than one quarter of one percent (.25%), then the LIBOR Rate shall be deemed to be one quarter of one percent (.25%) per annum for all purposes of this Agreement. Each calculation by Bank of the LIBOR Rate shall be conclusive and binding for all purposes, absent manifest error.

 

“Prime-based Rate” means for any day, that rate of interest which is equal to the sum of the Applicable Margin plus greatest of (i) the Prime Rate, (ii) one percent (1%) plus the Federal Funds Effective Rate and (iii) two and one-half percent (2.50%) per annum.

 

3.     The definition of “Specified Hedging Agreement” in Section 1.1 of the Agreement is deleted in its entirety.

 

4.     The first sentence of Section 2.1(a) of the Agreement (Revolving Credit Commitment) is amended by deleting the words “Twenty Five Million Dollars ($25,000,000) (the “Committed Amount”)” and replacing it with the words “Fifty Million Dollars ($50,000,000) (the “Committed Amount”)”.

 

5.     Section 6.1(a) of the Credit Agreement is amended and restated as follows:

 

“(a) As soon as practicable and in any event within forty-five (45) days after the end of each fiscal quarter of the Borrower, a consolidated balance sheet of the Borrower and the Restricted Subsidiaries as at the last day of such quarter and the related consolidated statement of income for such quarter and cumulative fiscal year-to-date for the Borrower and the Restricted Subsidiaries, setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year, all in reasonable detail and satisfactory in scope to the Bank and certified by the chief financial officer of the Borrower as to the fairness of such financial statements and that the same have been prepared in accordance with GAAP, subject to changes resulting from normal, recurring year-end adjustments; provided, however, that if, so long as the Borrower is a Subsidiary of the Parent, the Parent duly files with the SEC any Form 12b-25 under the Exchange Act (or any successor form thereunder) with respect to its inability to timely file its quarterly report on Form l0-Q for a fiscal quarter and obtains a valid extension of such time to file, the financial information required to be delivered by this paragraph may be delivered later than forty-five (45) days after the end of such fiscal quarter but in no event later than the extended deadline for filing such quarterly report imposed by said Rule 12b-25;”

 

 

 

 

6.      Section 6.1(b) of the Credit Agreement is amended and restated as follows:

 

“(b) [Reserved];”

 

7.     Schedule 10.7 of the Credit Agreement is amended, restated and replaced in its entirety with Schedule 10.7 attached hereto.

 

8.     Except as modified hereby, all of the terms and conditions of the Agreement shall remain in full force and effect. Capitalized terms used but not defined herein shall have the meanings given them in the Agreement.

 

9.     Company hereby represents and warrants that, after giving effect to the amendments contained herein, (a) execution, delivery and performance of this Amendment and any other documents and instruments required under this Amendment or the Agreement are within Company’s corporate powers, have been duly authorized, are not in contravention of law or the terms of Company’s Certificate of Incorporation or Bylaws, and do not require the consent or approval of any governmental body, agency, or authority; and this Amendment and any other documents and instruments required under this Amendment or the Agreement, will be valid and binding in accordance with their terms; (b) the continuing representations and warranties of Company in Sections 4.1 through 4.17 of the Agreement, as updated by the quarterly financial statements of the Company and the Parent, are true and correct on and as of the date hereof with the same force and effect as if made on and as of the date hereof; and (c) no Default or Event of Default has occurred and is continuing as of the date hereof.

 

10.     This Amendment shall be effective as of the date set forth above.

 

 

 

(Remainder of page intentionally left blank)

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered, or have caused their respective duly authorized officers or representatives to execute and deliver this amendment as of the day and year first written above.

 

 

	BANK: 	COMPANY:
	 	 
	COMERICA BANK 	NEWBEVCO, INC.
	 	 
	 	 
	By: ______________________ 	By: ________________________
	Gerald R. Finney, Jr.	George R. Bracken
	 	 
	Its:    Vice President 	Its:   Vice President 

                             

 

Signature Page to Fourth Amendment

 

 

 

 

SCHEDULE 10.7

 

PRICING GRID

 

	
			BASIS FOR PRICING

				
			LEVEL I

				
			LEVEL II

				
			LEVEL III

				
			LEVEL IV

				
			LEVEL V

			
	
			 

			CONSOLIDATED FUNDED DEBT TO EBITDA RATIO

				
			 

			< 0.75 to 1.0

				
			 

			>0.75 to 1.0 and

			< 1.5 to 1.0

				
			 

			>1.5 to 1.0 and

			< 2.0 to 1.0

				
			 

			>2.0 to 1.0 < and

			< 2.5 to 1.0

				
			 

			> 2.5 to 1.0

			
	
			 

			APPLICABLE FACILITY FEE PERCENTAGE

			(expressed as basis points)

				
			 

			25.00

				
			 

			25.00

				
			 

			30.00

				
			 

			30.00

				
			 

			30.00

			
	
			 

			APPLICABLE LETTER OF CREDIT PERCENTAGE

			(expressed as basis points) 

				
			 

			100.00

				
			 

			110.00

				
			 

			135.00

				
			 

			160.00

				
			 

			180.00

			
	
			 

			APPLICABLE PRIME-BASED RATE MARGIN

			(expressed as basis points)

				
			 

			-20.00

				
			 

			0.00

				
			 

			0.00

				
			 

			0.00

				
			 

			50.00

			
	
			 

			APPLICABLE EUROCURRENCY –BASED RATE MARGIN

			(expressed as basis points)

				
			 

			100.00

				
			 

			110.00

				
			 

			135.00

				
			 

			160.00

				
			 

			180.00Exhibit 10.1

 

[Certain identified
information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if
publicly disclosed.]

 

EXCLUSIVE DISTRIBUTION
AND SUPPLY AGREEMENT

 

This Exclusive Distribution
and Supply Agreement is entered into as of December 4, 2020 (the “Effective Date”) by and between Sonoma Pharmaceuticals,
Inc., a Delaware corporation having a place of business at 645 Molly Lane, Suite 150, Woodstock, GA 30189 (“Supplier”)
and Crown Laboratories, Inc., a Delaware corporation, having a place of business at 207 Mockingbird Lane, Johnson City, TN 37604
(“Distributor”).

 

WHEREAS,
Supplier manufactures certain products based on the Proprietary Rights (as such term is defined below) and subject to the Label
Claims as approved by the Government Authorities, which it is willing to supply to Distributor on the terms and subject to the
conditions of this Agreement;

 

WHEREAS,
Distributor wishes to obtain from Supplier exclusive rights to distribute the private-label Products through the Channels in the
Territory in the Field (as such term is defined below);

 

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants
set forth below, the Parties mutually agree as follows:

 

		1.	Definitions.

 

“Affiliate”
means, with respect to any person or entity (a) any other person or corporation directly or indirectly controlling, controlled
by, or under common control with a Party to this Agreement, or (b) any partnership, joint venture or other entity directly or indirectly
controlled by, controlling, or under common control with, a Party to this Agreement but in each case only for so long as such ownership
or control shall continue. For purposes of this definition, the term “control” as applied to any person or entity means
the possession, directly or indirectly, of the power to direct or cause the direction of the management of that person or entity,
whether through ownership of voting securities or otherwise.

 

“Agreement”
means this Exclusive Distribution and Supply Agreement including its Exhibits attached hereto, as amended from time to time by
both parties.

 

“Business
Day” means a day (excluding Saturdays, Sundays and public holidays) on which banks are generally open for business in
the United States of America for the transaction of normal banking business.

 

“Channels”
has the meaning given to it in Exhibit A hereto.

 

“Distribution
Rights” shall have the meaning assigned to it under Section 2.1 of this Agreement.

 

“Effective
Date” has the meaning ascribed thereto in the preamble.

 

“Field” shall
mean the application set forth on Exhibit A attached hereto.

 

 

 

 

    	 	1	 

     

    

 

“Government
Authority” means any federal, state or public authority, exercising governmental powers and having jurisdiction in connection
with this Agreement; and all statutes, laws, ordinances, regulations, orders, decrees, permits, licenses, approvals, writs, process
and rules issued thereby that may operate in connection with this Agreement in the Territory.

 

“Initial Term”
shall have the meaning set forth in Exhibit B.

 

“Instructions
for Use” means the instructions for use approved by the U.S. Food and Drug Administration or any other Government Authority.

 

“Label
Claims” means the label claims obtained for a Product as approved by a Government Authority.

 

“Marketing
Authorization” means the permit, authorization and/or license for the Products issued by the relevant health authorities
in the Territory, the underlying applications thereto, and any supplements and amendments to such permit, authorization and/or
license, that authorize the holder of such license to market and sell the Products in the Territory.

 

“Party” shall
mean each of Supplier and Distributor.

 

“Permitted Use”
means use in accordance with applicable Label Claims.

 

“Patents” means
the patent(s) owned by Supplier.

 

“Patent Applications”
means the patent application(s) filed by Supplier.

 

“Proprietary
Rights” means the Trade Names, Trademark(s), Trademark Application(s), Patent(s), Patent Application(s), copyrights,
trade secret rights and all other intellectual and industrial property rights of any sort related to the Product and Supplier’s
business.

 

“Product”
means the hypochlorous-acid based products, in the volumes, and packaging specified on Exhibit A of this Agreement. The
Parties agree that they may, from time to time and by mutual written agreement, include new Products in such Exhibit A;
provided, however, that pricing must be agreed to by the Parties before adding any new Product to such Exhibit A.

 

“Recall” shall
have the meaning assigned to it under Section 7.3 of this Agreement.

 

“Subdistributor”
means any third party appointed to act for Distributor in promoting, marketing, selling and distributing the Products in the Territory
for the Permitted Use in the Field as permitted under Section 2.2 hereof; provided, however, that Subdistributors shall not include
any service providers (including sales brokers, agents or the like) acting on behalf of Distributor.

 

“Term”
means the Initial Term and any extension thereof pursuant to Exhibit B hereof.

 

“Territory”
shall mean the geographic area(s) set forth on Exhibit A attached hereto.

 

 

 

 

    	 	2	 

     

    

 

“Trademark(s)”
means the trademark application(s) filed by Supplier, any derivatives thereof, any other symbols related to the Products and all
goodwill associated therewith.

 

“Trade
Names” means any name under which Supplier markets a product or service or that Supplier uses in connection with its
business.

 

		2.	Distribution Rights.

 

2.1             
Appointment of Distributor. On the terms and subject to the conditions of this Agreement, including the Minimum Purchase
Requirements, Supplier hereby appoints Distributor, and Distributor hereby accepts appointment, as Supplier’s exclusive distributor
of Products through the Channels in the Territory for the Permitted Use in the Field in accordance with the terms of this Agreement
(the “Distribution Rights”).

 

2.2             
Reservation of Rights. Distributor shall not have any right to, and shall not, promote, market, import, offer for
sale, sell and/or distribute or use any Products outside of the Channels or outside of the Territory or for any use outside of
the Field. Distributor shall have no right to distribute or sell Products through the internet or any website unless specifically
permitted on Exhibit A. Except as expressly provided by this Agreement, all right, title and interest in and to Supplier’s
Proprietary Rights related to the Products and Supplier’s business remains with Supplier.

 

2.3             
Subdistributors. The Distribution Rights are limited to, and may be exercised by Distributor and/or permitted Subdistributors
solely for the purpose of promoting marketing, import, offering for sale, selling and/or distributing the Products for the Permitted
Use in the Field, in the Territory. Distributor may appoint Subdistributors, but only pursuant to written agreements with third
parties consistent with Distributor’s obligations under this Agreement. Such agreements shall contain obligations of the
third party Subdistributor materially similar to the obligations of Distributor hereunder, and no less favorable to Supplier’s
rights than the provisions contained in this Agreement. Any Subdistributor shall be subject to Supplier’s prior written approval,
which approval shall not be unreasonably withheld, conditioned or delayed, and which approval may be withdrawn in the event Subdistributor
breaches any term of this Agreement. Distributor shall be liable to Supplier for acts or omissions of any Subdistributor not in
conformity with the terms of this Agreement or any agreement between Distributor and any Subdistributor.

 

		3.	Purchase Orders and Delivery.

 

3.1             
Forecast. Within five (5) days after the Effective Date, and on the first day of each quarter, Distributor shall
provide Supplier with a written non-binding rolling annual forecast, by month and by Product, of the quantities of Products Distributor
expects Supplier to ship to Distributor for each quarter covered by the forecast (each, a “Forecast”). If at
any time Supplier anticipates that it will be unable to meet the quantities of Product and delivery dates in the applicable Forecast,
Supplier shall promptly notify the Distributor of the anticipated shortfall and the reason(s) therefor, and implement a plan to
promptly address such shortfall and supply the full quantity of Product.

 

3.2             
Terms and Conditions.

 

3.2.1       
Supplier shall make available and sell Products to Distributor at the Purchase Prices and on the terms and conditions set
forth in this Agreement.

 

3.2.2       
Purchase Orders by Distributor shall be subject to acceptance by Supplier at Woodstock, Georgia, or such other place(s)
as may be designated by Supplier. Except as modified by this Agreement, all Purchase Orders shall be accepted subject to (a) minimum
purchase quantities specified in Exhibit A, and (b) to the terms and conditions of Supplier’s Terms and Conditions
of Sale (“General Terms and Conditions”), a copy of which is attached hereto as Exhibit C and incorporated
herein by reference. In the event of any inconsistency between the General Terms and Conditions and any provision of this Agreement,
this Agreement shall be controlling.

 

 

 

 

    	 	3	 

     

    

 

3.2.3       
If Supplier does not supply at least [___] percent ([___]%) of Distributor’s Purchase Orders for Products by the scheduled
and agreed upon delivery date, then, assuming Distributor has complied with the General Terms and Conditions and the terms of this
Agreement including payment terms with respect to the applicable Purchase Orders, Supplier shall provide Distributor with a commercially
reasonable explanation for the shortfall and a written plan for correcting the shortfall. For purposes of clarity, Supplier will
endeavor to meet Distributor’s request for an Emergency Shipment (as defined in the General Terms and Conditions), however
Supplier may need 30 calendar days or more depending on product ordered and other factors. Please refer to the General Terms and
Conditions attached as Exhibit C.

 

3.3             
Packaging and Labeling. Distributor shall use the Supplier Mark specified in Exhibit A on all Products. Distributor
shall supply or cooperate with Supplier to provide the Product labeling for use by Distributor that is compliant with all Marketing
Authorizations. Any changes to Product labeling shall be noticed to Supplier at least 120 days prior to any change and be subject
to Supplier’s prior written approval. Supplier shall have the right to modify the Product packaging and labeling at any time,
including, without limitation, to address modifications required or suggested by the relevant Government Authority issuing the
Marketing Authorization.

 

3.4             
Working Group. Senior representatives of Supplier and Distributor shall meet from time to time as the Parties reasonably
agree (but in any event not less than once per calendar quarter during the Term) to discuss Product pricing, supply or quality
concerns or issues, manufacturing contingency planning, and such other matters pertaining to the transactions contemplated by this
Agreement as the Parties may agree.

 

		4.	Pricing.

 

The current Purchase Price
schedule for Products is set forth on Exhibit A attached hereto (the “Purchase Prices”). The Purchase
Prices may be changed by Supplier from time to time (but in any event [___]) to reflect any changes to Product manufacturing costs
and related expenses incurred by Supplier, by providing Distributor with a proposed amended Exhibit A at least [___] days
in advance in advance of the effectiveness of any change, together with written explanation for such change and such supporting
information as Distributor may request. During such [___] day period, the Parties shall discuss in good faith the proposed change
to the Purchase Prices and use commercially reasonably efforts to minimize the amount of any increase to the Purchase Prices.

 

		5.	Marketing and Sales.

 

5.1             
Business Plan. Pursuant to its appointment as a distributor for the Products, Distributor agrees to use all commercially
reasonable efforts to develop the market for, and promote the sale of Products in the Territory for the Permitted Use in the Field
and diligently engage in the marketing, distribution and sale thereof. Distributor represents and warrants to Supplier that it
is not engaged in the promotion, marketing, distribution, and/or sale of any hypochlorous acid or sodium hypochlorite products
that are competitive with the Products, and that it shall not, during the Term of this Agreement, engage in any such activity in
the Territory without Supplier’s prior written consent.

 

5.2             
Compliance with Laws. Distributor agrees to ascertain and materially comply with all applicable laws and regulations
and standards of industry or professional conduct in connection with the use, marketing, offer for sale, sale, distribution and
promotion of the Products, including, without limitation, those applicable to exportation, importation, product claims, labeling,
approvals, registrations and notifications.

 

5.3             
Compliance with Label Claims, Etc. Distributor agrees to market the Products consistent with all applicable Label
Claims. Distributor shall not, and shall cause its Affiliates not, to make any representations or warranties relating to the Products
except for those representations contained in this Agreement. Distributor agrees not to make, and agrees to cause its Subdistributors
not to make, any representation or warranty, whether oral or in writing, regarding the Products that is not consistent with the
Label Claims authorized for the Product in the Field in the Territory.

 

 

 

 

    	 	4	 

     

    

 

5.4             
Marketing Authorization. Supplier shall be solely responsible for, and shall use diligent efforts in connection with
filing, communicating with, and seeking Marketing Authorization(s), approvals, registrations, notifications and the like from,
Government Authorities. All costs incurred in connection with the preparation and filing of the Marketing Authorization(s) shall
be the sole responsibility of Supplier.

 

5.5             
Marketing Materials. Distributor shall supply all sales and marketing material in the Territory at its sole expense
and, upon Supplier’s request, shall obtain Supplier’s approval before using any such material; provided, however that
Supplier’s approval right shall be limited to confirming that such material does not violate any applicable regulatory requirements.
Supplier shall not unreasonably withhold or delay this approval. Any sales and marketing materials not objected to in writing by
Suppler within fourteen (14) days, or such longer period as Supplier may reasonably request, after receipt by Supplier for review
shall be deemed approved by Supplier. Upon notice from Supplier of objections regarding marketing literature or promotional materials,
Distributor shall discontinue the use of such literature or material until the Parties mutually agree that they are acceptable
in form and substance. Supplier shall supply Distributor, as reasonably requested from time to time, with information required
in order to prepare sales and marketing materials.

 

5.6             
Government Contracts. Distributor shall not resell Products to any Governmental Authority or its respective agencies
without express written approval from Supplier. Unless otherwise separately agreed to in writing between Supplier and Distributor,
no provisions required in any US government contract or subcontract related thereto shall be a part of this Agreement, imposed
on or binding on Supplier, and this Agreement is not deemed an acceptance of any government provisions that may be included or
referenced in Distributor's request for quotation, Purchase Order, or any other document.

 

		6.	Intellectual Property.

 

6.1             
No rights to Intellectual Property. Unless otherwise expressly set forth in this Section, this Agreement shall not
be interpreted or construed to transfer, assign, license or grant to a Party or any third party any right to or under any patent,
trade secret, trademark, trade name or other intellectual property right of the other Party.

 

6.2             
Identification of Supplier Rights. Distributor shall properly identify and accurately describe all Products as products
of Supplier. Distributor shall not alter, remove, deface or obscure any notice of any Proprietary Right on any Product and shall
not add to any Product any other trade name, trademark or notice of any other person or entity without the prior written consent
of Supplier. Distributor shall not rebottle or repackage any Product.

 

6.3             
No Use of Supplier Trade Names and Trademarks. Neither Distributor nor any Distributor Affiliate or Subdistributor
shall, either during the Term nor after expiration, termination or dissolution of this Agreement, use a company name (whether in
its charter documents or otherwise) that includes the element “Oculus”, “Sonoma” and / or Microcyn®
(technology) or any other Trademark or Trade Name (collectively, “Supplier Marks”) that is similar to or could
be confused with any Supplier Mark. Neither Distributor nor any Subdistributor is authorized to license or permit any third party
to use a name or trademark which includes a Supplier Mark or any word or words that is similar to, could be confused with, or is
disparaging of any Supplier Mark.

 

6.4             
Protection of Proprietary Rights. Distributor shall comply with all directives issued by Supplier respecting the
use or protection of Supplier’s Proprietary Rights and shall not use or suffer the use of any of the same in any manner which
contravenes Supplier’s directives or which otherwise may, in Supplier’s opinion, tend to lessen the value thereof,
or impair the goodwill or reputation of Supplier, of any Supplier Affiliate, and/or of its respective products and/or services

 

6.5             
Assistance with Intellectual Property Matters. If requested by Supplier, Distributor shall assist Supplier in registering
or otherwise protecting Supplier’s Proprietary Rights within the Territory, all strictly in Supplier’s name and for
Supplier’s benefit.

 

 

 

 

    	 	5	 

     

    

 

6.6             
Notice of Infringement. Distributor shall immediately notify Supplier of any infringement, misuse, misappropriation,
tort, unfair competition, passing off or violation relating to any Supplier Proprietary Right that comes to Distributor’s
attention. In the event of any such infringement, misuse, misappropriation, tort, unfair competition, passing off or violation
relating to the activities of Distributor, any Subdistributor or any third party acquiring any Product directly or indirectly from
Distributor or any Subdistributor, Distributor shall take steps reasonably requested by Supplier to terminate any such infringement,
misuse, misappropriation, tort, unfair competition, passing off or violation.

 

6.7             
Proceedings. Supplier shall have exclusive control over the commencement, prosecution and settlement of any legal
proceeding with respect to any infringement, misuse, misappropriation, tort, unfair competition, passing off or violation relating
to any patent, trade secret, trademark, trade name or other Supplier Proprietary Rights. In connection with any such legal proceeding,
Distributor shall provide such assistance related to such proceeding as Supplier may reasonably request; provided that Supplier
shall reimburse the expenses reasonably incurred by Distributor in providing such assistance in accordance with Supplier’s
request for the same. Distributor shall not have any right to commence, prosecute or settle any legal proceeding with respect to
any infringement, misuse, misappropriation, act of tort, unfair competition, passing off or violation relating to any Supplier
Proprietary Rights.

 

		7.	Non-Conformities and Recall.

 

 7.1             
 Traceability and Complaints.

 

7.1.1       
During the Term, and for a period of 5 (five) years after the end of the Term Distributor shall keep and maintain records
of all sales and other distributions of Products made by Distributor or its Subdistributors sufficient to effectively, efficiently
and economically implement any Recall or investigation of any Product, but at a minimum containing information about:

 

		(i)	Product description;

		(ii)	Customer identification (name and location); and

		(iii)	Shipping date.

 

All complaints received by
Distributor shall be communicated to Supplier within two (2) Business Days. All traceability information accompanied by the complaint
shall be made available to Supplier.

 

7.1.2       
Upon Supplier’s request, Distributor shall make such records available to Supplier and otherwise cooperate as reasonably
required to effectively, efficiently and economically implement any Recall or investigation.

 

7.2             
Recalls. The Parties shall cooperate fully with one another in any of the following events involving a recall of
Product resulting in a market withdrawal covered by this Agreement, including any correction, post-sale warning or mailing of information
(the “Recall”):

 

7.2.1       
A Recall is requested or ordered by Government Authority issued due to the Products not meeting the Label Claims or manufacturing
related issues or Supplier requests a Recall for Product quality or manufacturing related issues;

 

7.2.2       
A Recall is requested or ordered by a Government Authority issued due to off-Label promotion, illegal marketing or misrepresentation
of Product quality; and

 

 7.2.3        Any Recall other than those specified in Sections 7.2.1 and 7.2.2 above.

 

 

 

 

    	 	6	 

     

    

 

Each Party shall inform the
other Party in writing on a reasonably timely basis in light of the events concerning any Product related issues that have the
potential to result in a Recall in the Territory or elsewhere if impacting this Agreement. Supplier and Distributor and its Subdistributors
shall further cooperate with one another using reasonable efforts and acting in good faith in conducting a Recall. The Parties
will provide reasonable assistance to each other to investigate the root cause(s) related to a Recall subject to this Agreement.
The out-of-pocket costs and expenses incurred in connection with a Recall under subsection 7.2.1 shall be borne by Supplier; the
out-of-pocket costs and expenses incurred in connection with a Recall under subsection 7.2.2 shall be borne by Distributor; the
out-of-pocket costs and expenses incurred in connection with a Recall under subsection 7.2.3 shall be borne by Supplier and Distributor
on a 50%-50% basis.

 

		8.	Confidentiality.

 

8.1             
Confidential Information. All information disclosed or exchanged by the Parties under this Agreement, including all
intellectual property related to the Products, shall constitute confidential information of the disclosing Party (the “Confidential
Information”). Each Party agrees:

 

		(i)	to hold the other Party’s Confidential Information in confidence
and to take all reasonable precautions to protect such Confidential Information (including, without limitation, all precautions
each Party employs with respect to its confidential materials, but in no case less than reasonable care);

 

		(ii)	not to disclose such Confidential Information other than to its employees and
agents who need to know such information and who are informed of the confidential nature of such information and bound by confidentiality
and non-use obligations regarding such information;

 

		(iii)	not to divulge any such Confidential Information or any information derived
therefrom to any third person; provided, however, that if disclosure is required by a competent Government Authority, prior to
such disclosure, the receiving Party shall give prompt written to the disclosing Party sufficient to allow the disclosing Party
the opportunity to pursue its legal and equitable remedies regarding such potential disclosure, and the receiving Party shall (A)
assert the confidential nature of the Confidential Information to the Government Authority; (B) seek an appropriate protective
order and/or narrow the scope of such order to only that portion of the Confidential Information which is required by law to be
disclosed; (C) use its reasonable best efforts to obtain confidential treatment for any Confidential Information that is so disclosed;
and (D) cooperate fully with the disclosing Party in protecting such disclosure; and

 

		(iv)	not to remove or export from the United States
and/or the Territory or re-export any such Confidential Information or any direct product thereof (e.g., Products by whomever made)
unless expressly consented to in writing by the other Party and except in compliance with all licenses and approvals required under
applicable local and foreign export laws and regulations.

 

8.2             
Exclusions. Without granting any right or license, the Parties agree that the foregoing sub-sections (i), (ii), (iii)
and (iv) shall not apply with respect to information the other Party can document (W) is in or (through no improper action or inaction
by the other Party, agent or employee enters) the public domain, or (X) was rightfully in its possession or known by it prior to
receipt from the disclosing Party, or (Y) was rightfully disclosed to it by another person without a duty of confidentiality owed
to the other Party, or (Z) was independently developed by it, by persons without access to such information and without use of
any information of the other Party. Each Party must promptly notify the other Party of any information it believes comes within
any circumstance listed in the immediately preceding sentence and will bear the burden of proving the existence of any such circumstance
by clear and convincing evidence including contemporaneous written records.

 

 

 

 

    	 	7	 

     

    

 

8.3             
Termination. Immediately upon termination of this Agreement, at the written request of Supplier, Distributor will
turn over, or shall cause to have turned over, to Supplier all Confidential Information received from the other Party and all documents
or media containing any such Confidential Information, and any and all copies or extracts thereof. The confidentiality obligations
contained in this Section 8 shall survive termination of this agreement for a period of five (5) years.

 

8.4             
Remedies; Equitable Relief. The Parties acknowledge and agree that due to the unique nature of their Confidential
Information, there can be no adequate remedy at law for any breach of its obligations hereunder, that any such breach may allow
the non-breaching Party or third parties to unfairly compete with the non-breaching Party resulting in irreparable harm to the
non-breaching Party, and therefore, that upon any such breach or any threat thereof, the non-breaching Party shall be entitled
to appropriate equitable relief in addition to whatever remedies it might have at law and to be indemnified by the breaching Party
from any damages and expenses (including reasonable and documented attorney’s fees), in connection with any breach or enforcement
of each Party’s obligations hereunder or the unauthorized use or release of any such Confidential Information. Each Party
will notify the other in writing immediately upon the occurrence of any such unauthorized release or other breach. Any breach of
this Section 8 will constitute a material breach of this Agreement.

 

		9.	Representations, Warranties, Indemnification and Insurance.

 

9.1             
 Supplier’s Representations.
Supplier hereby represents and warrants the following:

 

(a)               
It is a corporation duly organized, validly existing and in good standing under the laws of Delaware;

 

(b)              
It has the legal power and authority to enter into and be bound by the terms and conditions of this Agreement and to perform
its obligations under this Agreement;

 

(c)               
It has taken all necessary action to authorize the execution and delivery of this Agreement. This Agreement has been duly
executed and delivered on behalf of it and constitutes a legal, valid, binding obligation, enforceable against it in accordance
with its terms;

 

(d)               
It is not subject to any legal, contractual or other restrictions, limitations or conditions which conflict with its rights
and obligations under this Agreement or which might affect adversely its ability to perform under this Agreement;

 

(e)               
To the best of its knowledge, there are no investigations, adverse third party allegations, claims or actions against it,
including any proceedings or any pending or threatened action against it by or before any Government Authority, relating to the
Product;

 

(f)               
The execution and delivery of this Agreement will not (i) violate Supplier’s charter documents or other organizational
document, (ii) conflict with or result in a violation or breach of, or constitute a default under, any contract, agreement or instrument
to which it is a party or by which it is bound, or (iii) violate or conflict with any law, rule, regulation, judgment, order or
decree of any court applicable to it; and

 

(g)              
Supplier represents and warrants that all Product will be manufactured in accordance with good manufacturing practices and
when supplied will comply with the Label Claims.

 

 

 

 

    	 	8	 

     

    

 

9.2             
 Distributor’s Representations. Distributor hereby represents and warrants the following:

 

(a)               
It is a corporation duly organized, validly existing and in good standing under the laws of Delaware.

 

(b)               
Its legal representative is empowered with the necessary sufficient authority to bind the Distributor under the terms hereof.
Distributor has taken all necessary action on its part to authorize the execution and delivery of this Agreement. This Agreement
has been duly executed and delivered on behalf of Distributor and constitutes a legal, valid, binding obligation, enforceable against
Distributor in accordance with its terms;

 

(c)               
Distributor is not subject to any legal, contractual or other restrictions, limitations or conditions that conflict with
its rights and obligations under this Agreement or that might affect adversely its ability to perform under this Agreement;

 

(d)               
To the best of its knowledge, there are no investigations, adverse third party allegations, claims or actions against it,
including any proceedings or any pending or threatened action against it by any Governmental Authority that may limit or in any
manner affect the compliance by Distributor of the obligations undertaken hereunder;

 

(e)               
The execution and delivery of this Agreement will not (i) violate the charter documents or other organizational documents
of Distributor, (ii) conflict with or result in a violation or breach of, or constitute a default under, any contract, agreement
or instrument to which Distributor is a party or by which it is bound, or (iii) violate or conflict with any law, rule, regulation,
judgment, order or decree of any court applicable to Distributor;

 

(f)                
As of the Effective Date, there are no claims pending or, to Distributor’s knowledge, threatened against Distributor
or any of its Affiliates or Subdistributors by any third party, which might affect adversely its ability to perform under this
Agreement. Distributor represents that it has not been notified of, nor does have knowledge of, any circumstances or set of circumstances
that would put Distributor in any such situation;

 

(g)               
Distributor represents and warrants that the Product will be used, promoted, marketed, imported, offered for sale, sold
and/or distributed in accordance with good practices and in material compliance with applicable law and Marketing Authorizations.

 

 9.3 Mutual Representations.

 

9.3.1       
The Parties understand and agree to comply with the U.S. Foreign Corrupt Practices Act, as revised, which prohibits the
promise, payment or giving of anything of value, either directly or indirectly, to any government official for the purpose of
obtaining or retaining business or any improper advantage. For purposes of this Section, “government official” means:

 

(a)               any
official, officer, representative, or employee of any non-U.S. government department, agency or instrumentality (including any
government-owned or controlled commercial enterprise), or

 

(b)               
any official of a public international organization or political party or candidate for political office.

 

The Parties shall
furthermore ensure that their Affiliates that have rights or obligations under this Agreement understand and agree to comply
with the U.S. Foreign Corrupt Practices Act, as revised with regard to activities performed under this Agreement.

 

 

 

 

    	 	9	 

     

    

 

9.3.2       
The Parties, their Affiliates and their shareholders are not engaged in or in any manner whatsoever related to illegal or
illicit acts or activities and the financial resources used for the compliance of the obligations undertaken hereunder derive from
legal activities and sources. The Parties further represent that they are in full compliance with all applicable laws, rules and
regulations that are applicable to their activities.

 

9.4             
Supplier Indemnification. Supplier hereby agrees to defend, hold harmless and indemnify Distributor and its agents,
directors, officers and employees from and against any liability or loss or liability for any and all judgments, claims, causes
of action, suits, proceedings, losses, damages, demands, fees, expenses, fines, penalties or costs (including reasonable attorney’s
fees, costs and disbursements) resulting from suits, claims, actions and demands, in each case brought by a third party arising
out of: (a) a breach of any of Supplier’s representations and warranties under Section 9.1 or 9.3 or of any warranty contained
in the General Terms and Conditions, (b) any bodily harm or death caused by defects in materials or workmanship of Products, or
on-label use of the Product, or (c) infringement, misuse, misappropriation, tort, unfair competition, passing off or violation
by Supplier’s Products or Supplier Marks of any patent, trade secret, trademark, trade name or other intellectual property
right of any third party.

 

9.5             
Distributor Indemnification. Distributor hereby agrees to defend, hold harmless and indemnify Supplier, its Affiliates,
and their respective agents, directors, officers and employees from and against any liability or loss or liability for any and
all judgments, claims, causes of actions, suits proceedings, losses, damages, demands, fees, expenses, fines, penalties or costs
(including reasonable attorney’s fees, costs, and disbursements), resulting from suits, claims, actions and demands, in each
case brought by a third-party arising out of: (a) any breach of Distributor’s obligations under this Agreement, (b) a breach
of any of Distributor’s representations and warranties under Section 9.2 or 9.3, (c) Product claims, representations or warranties,
whether written or oral, made or alleged to be made by Distributor, Distributor’s Subdistributor or any of their respective
agents of in advertising, publicity, promotion or sale of any Product where such product claims, representations or warranties
were not provided by or approved by Supplier or are inconsistent with the Label Claims, (d) any infringement, misuse, misappropriation
or violation of any intellectual property right of any third party by any trademark or trade name of Distributor or any of its
Subdistributors or agents, (e) off-label promotion, marketing sale or distribution of the Products by Distributor or Subdistributors,
and any bodily harm or death caused by the off-label promotion, marketing, sale or distribution of the Product by Distributor,
or (f) negligent handling by Distributor or any its Subdistributors or their respective agents.

 

9.6             
Insurance. Each Party agrees to maintain general commercial and product liability insurance consistent with industry
standards for a product of this nature. Distributor shall provide Supplier with evidence of such coverage upon written request.

 

9.7             
Warranties Disclaimer; Non-Reliance. EXCEPT FOR THE LIMITED EXPRESS WARRANTIES DESCRIBED IN SECTION 9.1 AND SECTION
9.3, (A) NEITHER SUPPLIER NOR ANY PERSON ON SUPPLIER'S BEHALF HAS MADE OR MAKES ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY
WHATSOEVER, INCLUDING ANY WARRANTIES OF: (i) MERCHANTABILITY; OR (ii) FITNESS FOR A PARTICULAR PURPOSE; OR (iii) TITLE; OR (iv)
NON-INFRINGEMENT WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE, ALL OF WHICH ARE
EXPRESSLY DISCLAIMED, AND (B) DISTRIBUTOR ACKNOWLEDGES THAT IT HAS NOT RELIED ON ANY REPRESENTATION OR WARRANTY MADE BY SUPPLIER,
OR ANY OTHER PERSON ON SUPPLIER'S BEHALF, EXCEPT AS SPECIFICALLY DESCRIBED IN SECTION 9.1 AND SECTION 9.3 OF THIS AGREEMENT.

 

		10.	Termination.

 

10.1           
No Liability. Neither Party shall incur any liability whatsoever for any damage, loss or expense of any kind suffered
or incurred by the other (or for any compensation to the other) arising from or incident to any termination of this Agreement by
such Party that complies with the terms of the Agreement whether or not such Party is aware of any such damage, loss or expense.

 

10.2           
Survival. Except to the extent expressly provided to the contrary, the following provisions shall survive the termination
of this Agreement: Sections 1, 6.7, 7.2, 8, 9.4, 9.5, 10.4, 10.5, 11 and Attachment C.

 

 

 

 

    	 	10	 

     

    

 

		11.	Miscellaneous.

 

11.1         
Liability. Nothing in this Agreement shall be effective to limit or restrict any liability of any Party in respect
of (i) death, personal injury, loss or claim resulting from fraud, gross negligence or willful misconduct as otherwise prohibited
by law; or (ii) any fraudulent or negligent misrepresentation.

 

Subject to clauses (i) and
(ii) above, the Parties will not be liable to the other for any punitive, incidental, special, indirect or consequential damages,
including loss of profits, revenue or income, diminution in value or loss of business reputation or opportunity relating to the
breach or alleged breach of this Agreement.

 

The Parties acknowledge that
monetary damages may be inadequate for a breach of this Agreement by any Party. Accordingly, the Parties agree that any other Party
may seek the granting of injunctive relief as one of the remedies available to it in respect of any breach by any Party.

 

11.2         
Entire Agreement. This Agreement, together with its Attachments, which by this reference are incorporated herein,
contains the entire agreement of the Parties regarding the subject matter hereof and supersedes all prior agreements, understandings
and negotiations regarding the same. This Agreement may not be modified or supplemented except by a written instrument signed by
the Parties. Furthermore, it is the intention of the Parties that this Agreement shall be controlling over additional or different
terms of any Purchase Order or similar Distributor document, even if accepted in writing by the Parties, and waivers and amendments
shall be effective only if made by negotiated waiver agreements referencing this Agreement and clearly understood by the Parties
to be an amendment or waiver.

 

11.3         
Severability. If any provision of this Agreement shall be held illegal or unenforceable, that provision shall be
limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect.

 

11.4         
Further Assurances. Each Party hereto agrees to execute, acknowledge and deliver such further instruments, and to
do all such other acts as may be reasonably necessary or appropriate in order to carry out the purposes and intent of this Agreement.

 

11.5         
 Use of Party’s Name. Except as provided in this Agreement, or right, express or implied, is granted by this
Agreement to either Party to use in any manner the name or trademark of the other.

 

11.6         
Assignment. This Agreement may not be assigned by either Party without the prior written consent of the other Party
(and any attempt to do so will be void), which consent shall not be unreasonably withheld, conditioned or delayed; provided that
Distributor may assign this Agreement (i) to a third party that is in good standing and has good credit and is obligated to be
bound by all of the terms of this Agreement, including the Minimum Purchase Requirements, by giving at least fourteen (14) Business
Days’ notice to Supplier, (ii) to any affiliate of Distributor and (iii) to an entity that acquires all or substantially
all of the business or assets of Distributor, or any brand or business segment of Distributor, whether by merger, reorganization,
acquisition, stock or asset sale, or otherwise, in each case, without the prior written consent of Supplier. Any attempted or purported
assignment or transfer of rights outside of this provision infringe the provisions of this Section and shall be null and void.

 

11.7         
Notices. All notices, consents, or approvals required by this Agreement shall be in writing sent by certified or
registered mail, postage prepaid, or through a reputable expedited courier service, to the Parties at the addresses set forth in
the preamble of this Agreement or such other addresses as may be designated in writing by the respective Parties. Notice shall
be deemed effective on the date of confirmed receipt shown on the return receipt or on the third day following delivery to a reputable
courier.

 

 

 

    	 	11	 

     

    

 

11.8         
Relationship of the Parties. All Parties are independent contractors under this Agreement. Nothing contained in this
Agreement is intended nor is to be construed so as to constitute Supplier and Distributor as partners, agents or joint venturers
with respect to this Agreement. Neither Party hereto shall have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or undertaking
with any third party.

 

11.9         
Waiver. The waiver by either Party of a breach of any provisions contained herein shall be in writing and shall in
no way be construed as a waiver of any subsequent breach of such provisions or the waiver of the provision itself.

 

11.10        
Dispute Resolution and Applicable Law. Any dispute regarding this Agreement shall be governed by and construed in
accordance with the law of the State of Georgia, without regard to conflict of law principles. Each of the Parties hereby consents
to the exclusive jurisdiction of the federal and state courts in Cherokee County, Georgia, U.S.A over any and all disputes arising
hereunder. Further each of the Parties hereby expressly and irrevocably waives any claims or defense in any such action or proceeding
based on any alleged lack of personal jurisdiction, improper venue, forum non-conveniens or any similar basis.

 

11.11        
Captions. Section captions are for convenience only and in no way are to be construed to define, limit or affect
the construction or interpretation hereof.

 

11.12        
Force Majeure. A Party shall not be liable for nonperformance or delay in performance (other than obligations regarding
payment, confidentiality and Distribution Rights) caused by any event reasonably beyond the control of such Party including, but
not limited to, wars, hostilities, revolutions, riots, civil commotion, national emergency, strikes, lockouts, epidemics, pandemics,
fire, flood, earthquake, force of nature, explosion, embargo, or any other Act of God, or any law, proclamation, regulation, ordinance,
or other act or order of any court, government or governmental agency.

 

11.13        
Counterparts. This Agreement may be executed in two or more counterparts, in original all of which shall be considered
one and the same agreement, and all of which shall become effective when one or more such counterparts have been signed by each
of the Parties and delivered to the other Party.

 

[Signature Page follows.]

 

 

 

 

 

 

 

 

 

 

    	 	12	 

     

    

 

 

	DISTRIBUTOR	SUPPLIER
	CROWN LABORATORIES, INC.	SONOMA PHARMACEUTICALS, INC.
	 	 
	By: /s/ Jeff Bedard                      	By: /s/ Amy Trombly                      
	 	 
	Name: Jeff Bedard	Name: Amy Trombly
	 	 
	Title: CEO/President	Title: CEO
	 	 
	Date: 12/7/20	Date:

 

 

 

EXHIBITS

 

Exhibit A –
Channels, Field, Territory, Products, Minimum Purchase Requirements, Initial Fee and Pricing

Exhibit B – Term and Termination

Exhibit C - Supplier’s General Terms and
Conditions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	13	 

     

    

 

EXHIBIT A

TO EXCLUSIVE DISTRIBUTION
AGREEMENT

 

This agreement is for Over the Counter (OTC) dermatology
applications in both Channels and application.

 

Channels: Over the Counter dermatological
itch market. OTC sales through drug stores, pharmacies and retail stores, directly or indirectly. Sales to healthcare offices,
clinics, hospitals and spas are excluded. Any office or direct dispense is excluded.

 

Field: Topical dermatological application to
manage itch.

 

	Territory:	United States of America, including the District of Columbia. Distributor will have an exclusive
option and right of first refusal to distribute the Products in [____] under the following conditions. To secure such rights, Distributor
and Supplier [___].

 

Website sales: Permitted only when delivery
is within the Territory

 

Product(s):

 

Microcyn Technology OTC Dermal Spray 6oz, 8oz
bottles

Microcyn Technology OTC Gel 6oz, 8oz bottles

Microcyn Technology OTC Spray Gel 8oz bottles

 

Supplier Mark to be applied on all Packaging

 

 

Initial
Fee:

	 	Within ten (10) Business Days of the Effective Date,
Distributor shall pay to Supplier an amount of $[___] to cover initial costs to set up, among others, labeling, packaging and Marketing
Authorizations for the Product. If Distributor requests any changes to labeling or packaging of the Product or the Marketing Authorization,
Supplier may charge additional fees to cover any such costs and expenses.

 

Minimum
Purchase Requirements:

	 	Each purchase order shall
be for a minimum of [___] units, [___]. Minimum purchase order per SKU is [___] units. Orders totaling less than [___] units are
subject to incurring special order charges and pricing.
	 	 
	 	[___]
	 	 
	Pricing: 	[___]

 

 

 

 

 

 

 

    	 	14	 

     

    

 

EXHIBIT B

TO EXCLUSIVE DISTRIBUTION
AGREEMENT TERM AND TERMINATION

 

Initial
Term. 2 years from Effective Date (“Initial Term”)

 

Renewals:
5-year Renewal Terms, unless Distributor provides written notice to Supplier of its intent not to renew at least [___]
calendar days prior to the second anniversary of the Effective Date or the then current Renewal Term; provided, however, that
in the event that this Agreement is changed to a non-exclusive distribution as provided in Exhibit A, then either Party may
elect not to renew this Agreement by providing written notice to the other Party of its intent not to renew at least [___]
calendar days prior to the second anniversary of the Effective Date or the then current Renewal Term.

 

Termination by Either Party.
Either Party may terminate this Agreement:

 

[___]

 

Termination by Distributor.

 

[___]

 

Termination by Supplier.

 

[___]

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	15	 

     

    

 

EXHIBIT C

TO EXCLUSIVE DISTRIBUTION
AGREEMENT

 

SONOMA PHARMACEUTICALS, INC.

 

GENERAL TERMS AND CONDITIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00317-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00317-of-00352.parquet"}]]