Document:

Exhibit 10.15

 

DISTRIBUTORSHIP AGREEMENT

 

THIS DISTRIBUTORSHIP AGREEMENT
is made and entered into by and between WORLDWIDE PRODUCTS
DISTRIBUTION, INC. (hereinafter referred to as the “Company”),
a corporation organized and existing under the laws of the State of California,
and CNO Chinese Obagi Corporation, a corporation organized and existing under
the laws of California and having its principal place of business of at 4930
Fiesta Ave., Temple City, CA 91780 hereinafter referred to as the “Distributor”.

 

W I T N E S S E T H:

 

WHEREAS, the Company desires to promote the distribution, sale and use
of the Products (defined in Section 1.2 hereof) in the Territory (defined
in Section 1.3 hereof) and is willing to appoint the Distributor as its
exclusive distributor of the Products in the Territory, on the terms and
conditions set forth hereinafter;

 

WHEREAS, the Distributor desires to be appointed as such exclusive
distributor, on the terms and conditions set forth hereinafter; and

 

WHEREAS, the Company and the Distributor have engaged in extensive
negotiations over the terms and conditions set forth hereinafter and each of
them, after careful consideration in conjunction with legal counsel, is willing
and able to enter into an exclusive distributorship arrangement, on such terms
and conditions;

 

NOW, THEREFORE, in consideration of the premises set forth above and
the mutual promises hereinafter contained, the parties hereto agree as follows:

 

ARTICLE 1. APPOINTMENT

 

Section 1.1                               Appointment
and Acceptance of Appointment. The Company appoints the Distributor,
and the Distributor accepts appointment, as the Company’s exclusive distributor
to promote, distribute and sell the Products (defined in Section 1.2
hereof) in the Territory (defined in Section 1.3 hereof); provided,
however, that if, at any time during the term hereof, Section 1.6 hereof
should be deemed to be invalid or unenforceable in the Territory, then the
Distributor shall thereafter cease to be an exclusive distributor of the
Products, shall become a non-

 

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exclusive
distributor, and the Company shall be entitled to make sales itself or to
appoint other distributors of the Products in the Territory.

 

Section 1.2                                Products.
The Distributor is authorized to promote, distribute and sell in the Territory
only those products specified in Schedule A attached hereto and
incorporated herein, as such Schedule A may be amended in writing by
the parties hereto from time to time during the term hereof (all of such products
hereinafter collectively referred to as the “Products”). The Company reserves
the right, with respect to any of the Company’s products other than the
Products, to make direct sales in the Territory or to appoint other
distributors in the Territory.

 

Section 1.3                                Territory.
The territory in which the Distributor is authorized to solicit customers of
the Products is limited to the geographic area(s) specified in Schedule B
attached hereto and incorporated herein, as such Schedule B may be
amended in writing by the parties hereto from time to time during the term
hereof (hereinafter referred to as the “Territory”), and does not include any
other place in the world. The Distributor shall not actively solicit sales of
the Products outside the Territory and shall not establish any branch or
maintain any distribution depot or warehouse outside the Territory for the
Products, except with the prior written consent of the Company, which may be
granted or denied in the Company’s sole discretion.

 

Section 1.4                                Restrictions
on Authority. For all purposes under this Agreement, the
Distributor is an independent contractor and shall not be deemed to be an
employee, agent, partner or legal representative of the Company. This Agreement
does not grant, and the Distributor shall not have, any authority, express or
implied, to create or assume any obligation, enter into any agreement, make any
representation or warranty, file any document with any governmental body or
serve or accept legal process on behalf of the Company, to settle any claim by
or against the Company, or to bind or otherwise render the Company liable in
any way in the Territory or anywhere else in the world, without the prior
express written consent of the Company. The Distributor shall purchase the
Products for its own account from the Company and shall re-sell the Products
for its own account in the Territory.

 

Section 1.5                                Employees
of Distributor. The Distributor shall be responsible for the
selection, training and supervision of, and the payment of remuneration and
benefits to, its employees who assist it in the performance of its obligations 

 

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hereunder and in no event shall the Company have any obligation to, or
authority over, such employees of the Distributor.

 

Section 1.6                                Non-competition.

 

1.6.1                                   The Distributor
shall use its best efforts to attain and sustain maximum sales of the Products
in the Territory and shall refrain from diminishing or otherwise weakening the
Company’s rights by engaging in any activities whatsoever in the Territory that
might reasonably be deemed as injurious to the sales potential of the Products
in the Territory.

 

1.6.2                                   The Distributor
represents and warrants to the Company that, as of the Effective Date of this
Agreement (as defined in Article 17 hereof), the Distributor is not,
directly or indirectly, acting as an agent, representative or distributor in
the Territory for, and is not, directly or indirectly, selling or distributing
in the Territory, any products that are similar to or competitive with the
Products. Furthermore, during the term of this Agreement, the Distributor shall
not, directly or indirectly, act as an agent, representative or distributor in
the Territory for, and shall not, directly or indirectly, design, develop,
manufacture, license, promote, sell or distribute in the Territory, any
products that are similar to or competitive with the Products.

 

1.6.3                                   The Distributor
agrees that any breach by it of its obligations under this Section 1.6
shall be just cause for termination under Section 18.3 hereof.

 

ARTICLE 2. TERMS OF SALE

 

Section 2.1                                Purchase
Orders. In making its purchases of the Products from the
Company, the Distributor shall submit written purchase orders to the Company at
the address set forth in Article 15 below, which the Company may, in its
sole discretion, accept or reject, in whole or in part, for any one of the
following reasons: the Company is unable to fill a purchase order due to
commercial reasons; the Company has experienced an event of force majeure as
defined in Article 14; the Company has decided to cease manufacturing the
Products or to cease selling the Products in the Territory; the order(s)
contain terms or conditions inconsistent with the terms of this Agreement or
the course of dealing between the parties hereto or violative of applicable
law; or if the Company determines that fulfilling the order would cause the
Company to be in breach of any other contract, order, judgment, decree or other
authority to which it is a party or by which it is bound. The Company reserves
the right to distribute unusually large orders over an extended 

 

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period of time. The Company may, in its sole discretion, determine
whether an order is unusually large and what extended shipment period is
appropriate. The Company may, in its sole discretion, accept and act on
telecopy or telephone purchase orders issued by the Distributor; provided,
however, that, upon the request of the Company, the Distributor shall promptly
confirm telephone purchase orders in writing or by telecopy. No purchase orders
accepted by the Company may be cancelled by either the Distributor or the
Company, unless the parties hereto agree otherwise in writing.

 

Section 2.2                                Prices to
Distributor. The purchase prices for the Products shall be the
prices specified in Schedule A, as such Schedule A may be
amended from time to time during the term hereof by the Company on each January 1,
in its sole discretion, on sixty (60) days calendar days’ prior written Notice
to the Distributor; provided, however, that, within the ten (10) calendar
days following the date of such Notice by the Company, the Distributor may order,
at the previously prevailing prices, such quantities of the Products as are
reasonably needed by the Distributor during the thirty (30) calendar day period
immediately following the date of such Notice to fill contracts and outstanding
quotations existing on the date of the Company’s Notice of such price changes.

 

Section 2.3                                Payment
Terms.

 

2.3.1                                   Each purchase order
hereunder shall specify the amount, manner and timing of payment thereunder;
provided, however, that, in all cases, the Company shall be paid in the same
currency reflected on the Company’s invoices to the Distributor, and payment
shall be made, at the option of the Company, by one of the following three
methods: a bank draft, a wire transfer of immediately available funds or by an
irrevocable letter of credit drawn in favor of the Company, confirmed by a U.S.
banking institution acceptable to the Company and on terms and conditions
acceptable to the Company. In all cases, the payment terms shall be Net 30
days, less 20% on those prices specified in Schedule A attached hereto.
Provided, however, that in the event the Company changes its payment terms
applicable generally to substantially all of its distributors who conduct a
comparable volume of business in the Products, then the Company may, in its
sole discretion, upon Notice to the Distributor, alter the payment terms at any
time during the term hereof and any such alteration shall be effective with
respect to any and all purchase orders not theretofore accepted by the Company.

 

2.3.2                                   Acceptance and
endorsement by the Company of any instrument for less than the full amount that
the Company 

 

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claims to be due and payable to it under a purchase order or hereunder
shall not be deemed to be an admission of payment in full, and any conditions
to the contrary that are noted on such instrument shall not be binding on the
Company.

 

Section 2.4                                Delivery.

 

2.4.1                                   Delivery schedules
stated by the Company are estimates only and are not guaranteed by the Company,
but the Company shall, subject to Article 14 hereof, attempt to make
delivery within a reasonable time, taking into account the Distributor’s need
to obtain the Products, the availability of transportation, the needs of other
customers of the Company, the existence of special orders and other commercial
matters. The Company shall not be obligated to deliver any Products without
timely receipt of shipping instructions from the Distributor, and the Company
shall not be obligated to ship Products that have been discontinued or that are
temporarily out of stock.

 

2.4.2                                   Unless the parties
hereto otherwise agree in writing or by telecopy with respect to a given
purchase order, the Distributor shall be solely responsible for all shipping,
duty and customs charges applicable to the Products.

 

Section 2.5                                Return of
Products. Distributor agrees to abide by the terms of the
Company’s returned goods policy, and no Product may be returned after
shipment to the Distributor, except as permitted in the Company returned goods
policy as such may be amended from time to time by the Company.

 

Section 2.6                                Taxes.
Any and all customs, tariffs and duties or excise, sales, use, value-added
or other taxes or levies imposed by any governmental body in the Territory on
the Distributor or the Company in connection with the sale of the Products to
or by the Distributor shall be paid by the Distributor. The Distributor shall
fully reimburse and indemnify the Company for any amount actually paid by the
Company or withheld by the Distributor for any such taxes or levies within
thirty (30) calendar days after the date on which the Company gives notice
thereof to the Distributor or after the date of withholding by the Distributor,
as the case may be.

 

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ARTICLE 3. INTELLECTUAL PROPERTY AND TRADEMARKS

 

Section 3.1                                Certain
Definitions.

 

3.1.1                                   “Company’s Property”
shall mean any and all inventions, trade secrets, manufacturing processes,
know-how, product designs, formulas, formulations, machine designs, technical
information, technical designs, engineering and product data, specifications,
blueprints, drawings, manuals, customer lists, vendor and supplier lists and
agreements, distributor and sales representative lists and agreements,
marketing and other business strategies, forms, sales aids, and other
confidential information and materials, whether or not in documentary form and
whether or not patented by the Company or its parent, subsidiaries or other
affiliates in the Territory or elsewhere, that are heretofore and hereafter
owned or controlled by the Company or its parents, subsidiaries or other
affiliates and that relate to the design, manufacturing, production,
operations, marketing, sale, distribution and use of the Products or that
otherwise relate to the business, products and services of the Company or its
parents, subsidiaries or other affiliates.

 

3.1.2                                   “Company’s
Trademarks” shall mean any and all of the trademarks, service marks or trade
names, whether or not registered by the Company or its parents, subsidiaries or
other affiliates in the Territory or elsewhere, and all good will related
thereto, that are heretofore and hereafter owned or controlled by the Company
or its parents, subsidiaries or other affiliates and that are associated with
the Products.

 

Section 3.2                                Ownership
and Limited License to Reproduce Company’s Trademarks. Any and
all of Company’s Property and Company’s Trademarks are and shall remain the
exclusive property of the Company or its parents, subsidiaries or other
affiliates. This Agreement affords the Distributor no rights therein; the
Distributor shall have no rights therein; and the Distributor shall never
assert any rights therein; provided, however, that the Company grants the
Distributor a limited, non-exclusive, fully paid-up license to reproduce
Company’s Trademarks in advertisements and other promotional materials during
the term of this Agreement. Such license is granted for the sole purpose of
assisting the Distributor in promoting the sale and use of the Products in the
Territory under this Agreement. Subject to Section 18.7 hereof, such license
shall expire immediately upon the expiration of this Agreement or the
termination of this Agreement, with or without cause.

 

Section 3.3                                Certain
Additional Restrictions.

 

3.3.1                                   The Products to be
sold to the Distributor hereunder shall bear Company’s Trademarks. The
Distributor shall not remove, conceal or alter any of Company’s Trademarks on
the 

 

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Products. The Distributor shall promote and sell all Products in their
original packages and under the original labels provided by the Company;
provided, however, that the Distributor shall fully and timely advise the
Company of all laws and regulations of the Territory governing the packaging
and labeling of the Products and provided further that, upon receipt of such
information, the Company shall use its best efforts to ensure that the
packaging and labeling of the Products are in substantial compliance with all
such laws and regulations. The Distributor shall make no modifications,
alterations, changes, enhancements or additions in or to the Products or the
Company’s Trademarks, except for the addition of the name and address of the
Distributor to the Products, displaying the name and address of the Distributor
and the Company in the same-size print on the Products.

 

3.3.2                                   The Distributor
shall include an appropriate trademark or trade name notice on its
advertisements, sales literature, press releases and all other marketing
materials that use Company’s Trademarks.

 

3.3.3                                   The Distributor
shall not use Company’s Trademarks on its letterhead or in its Company name;
provided, however, that the Distributor may include a short plain language
statement on its letterhead and promotional literature to the effect that it is
an authorized distributor of the Company’s Products.

 

3.3.4                                   The Distributor
represents and warrants that it has not sought or obtained, and agrees that it
shall not seek or obtain, in the Territory or elsewhere, any trademark or
tradename registration embodying Company’s Trademarks or any patent or other
intellectual property protection for any of the Company’s Property, unless
authorized to do so in advance in writing by the Company.

 

Section 3.5                                Confidentiality.

 

3.5.1                                   During the term of
this Agreement at all times after the expiration of this Agreement or the
termination of this Agreement, with or without cause, the Distributor shall
treat all Company’s Property disclosed or supplied to it by the Company as
confidential and shall cause, instruct and oblige its directors, officers,
employees and agents and any other person acting in concert with it or on its
behalf and having access to such Company’s Property to keep the same in
confidence. The Distributor shall not, at any time, in any way, directly or 

 

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indirectly, publicly or privately (i) communicate, disclose,
disseminate, lecture upon or publish articles concerning Company’s Property nor
(ii) aid anyone else in such communication, disclosure, dissemination,
lecturing or publishing, nor (iii) use, nor aid anyone else in using,
Company’s Property, without the prior express written consent of the Company.
provided, however, that the Distributor’s obligation of secrecy and non-use
under this Agreement shall not apply to (a) information that the Distributor
is using strictly in accordance with the terms of this Agreement for the
limited purpose of promoting the sale and use of the Products in the Territory;
(b) information that at the time of the disclosure by the Company to the
Distributor is in the public domain; (c) information that, after
disclosure by the Company to the Distributor, becomes part of the public
domain by publication or otherwise, through an authorized source other than the
Distributor and without the fault of the Distributor; and (d) information
that the Distributor can show by written records was in the Distributor’s
possession prior to the disclosure by the Company to the Distributor and was
not acquired, directly or indirectly, from the Company. Provided further,
however, in order for the above proviso in this Section 3.5.1 to be
applicable, Distributor must make a claim to the Company in writing and with
specificity that it contends this proviso applies to some or all of the Company’s
Property disclosed to it by Company within ten (10) days of the date of
Company’s disclosure. Such writing must identify the portion of the Company’s
Property that Distributor contends is the subject of this proviso and the
factual basis upon which its claim is grounded. If Company disputes such claims
by Distributor then the parties shall submit the issues to JAMS - ENDISPUTE for
binding arbitration in Orange County, California. The Distributor shall have
the burden of proving that the exceptions set forth in the proviso apply by
clear and convincing evidence and, until there is a final resolution of the
dispute in Distributor’s favor. Distributor shall be bound by the provisions in
the first part of Section 3.5.1. If Distributor fails to deliver
timely notice under this Section, then all such information shall be
conclusively deemed to be Company Property belonging to Company and subject to
all of the other provisions of this Agreement.

 

3.5.2                                   During the term of
this Agreement, the Distributor shall not, under any circumstances, copy,
replicate, imitate, or reverse engineer any products of the Company, including,
but not limited to, the Products.

 

3.5.3                                   Upon the expiration
of this Agreement or the termination of this Agreement, with or without cause,
the 

 

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Distributor shall, subject to Section 18.7 hereof, immediately
return to the Company any and all Company’s Property, including, but not
limited to, any documentary embodiment thereof.

 

Section 3.6                                Infringement.
The Distributor shall give immediate Notice to the Company of any and all
infringements of Company’s Property Trademarks that come to the Distributor’s
attention during the term of this Agreement and shall assist the Company in
taking such action against such infringement as the Company may, in its sole
discretion, decide to take; provided, however, that all costs and expenses,
including reasonable attorneys’ fees incurred by counsel approved by the
Company, incurred in connection with any such infringement action shall be
borne by the Company. The Company shall hold the Distributor harmless from, and
shall indemnify the Distributor against, any and all claims, losses,
liabilities, damages and costs and expenses (including, but not limited to,
costs of investigation, court costs, arbitrators’ fees and attorneys’ fees)
that the Distributor may incur by reason of any infringement by the
Company of any trademark or patent or other proprietary right of any third
party.

 

Section 3.7                                Injunctive
Relief. The parties hereto understand and agree that remedies at
law may be inadequate to protect against any breach of any of the
provisions of this Article 3 by the Distributor or any of its employees,
agents, officers or directors or any other person acting in concert with it or
on its behalf. Accordingly, the Company shall be entitled to the granting of
injunctive relief by a court of competent jurisdiction against any action that
constitutes any such breach of this Article 3. It is understood that such
injunctive relief is intended solely as provisional relief pending arbitration
in accordance with Article 10 hereof.

 

Section 3.8                                Indemnification.
Each party shall hold the other harmless from, and shall indemnify the other
against, any and all claims, losses, liabilities, damages and costs and
expenses (including, but not limited to, costs of investigation, court costs,
arbitrators’ fees and attorneys’ fees) that the indemnified party may incur
by reason of any breach of any of the provisions of this Article 3 by the
indemnifying party or any of its employees, agents, officers, or directors or
any other person acting in concert with it or on its behalf.

 

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ARTICLE 4. PROMOTIONAL ACTIVITIES

 

Section 4.1                                Promotional
Activities of the Distributor. During the term hereof, the
Distributor, at its sole cost and expense, covenants and agrees to:

 

4.1.1                                   Assign at least one (1) full-time
product manager, whose sole responsibility shall be to promote vigorously and
consistently the sale of the Products and provide technical support regarding
the Products for the Distributor’s customers;

 

4.1.2                                   Monitor closely the
activities of sub-distributors, if any, all of which must be approved by
Company in writing in advance;

 

4.1.3                                   Participate actively
and engage in sufficient advertising and publicity campaigns, scientific
meetings and exhibitions, trade fairs and shows, and other marketing
activities, to promote vigorously and consistently the sale of the Products
throughout the Territory.

 

Section 4.2                                Promotional
Activities of the Company. During the term hereof, the Company, at its
sole Cost and expense, covenants and agrees to:

 

4.2.1                                   Provide at least one
(1) technical support specialist to (a) conduct appropriate training
sessions and workshops for all employees of the Distributor engaged in
promoting the Products, and (b) conduct in-service support for key
purchasers and users of the Products;

 

4.2.2                                   Make such
contributions to the Distributor’s marketing budget as the Company may determine
in its discretion;

 

4.2.3                                   Make such contributions
to the Distributor’s new product launch budget as the Company may determine
in its discretion, including product literature, samples and other
informational materials;

 

4.2.4                                   Conduct an annual
training workshop.

 

ARTICLE 5. MINIMUM SALES

 

Section 5.1                                Minimum
Sales. In addition to all of its other obligations under this
Agreement, the Distributor shall achieve the annual minimum sales of the
Products specified on Schedule A attached
hereto, as such Schedule A may be amended in writing by the parties
hereto from time to time during the term hereof. The Distributor understands
and acknowledges that its strict fulfillment of such minimum sales is an
essential 

 

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condition to this Agreement and that its failure to make any of such
sales shall be just cause for termination of this Agreement pursuant to Section 18.3
hereof.

 

Section 5.2                                Reporting
Obligations.

 

5.2.1                                   During the term
hereof, the Distributor shall provide: (a) quarterly in arrears, a sales
report, on a customer by customer basis, including detail as to type of
customer, and (b) a current inventory report within ten (10) days of
the Company’s request therefor.

 

5.2.2                                   To underscore that
the arrangement contemplated by this Agreement is an exclusive distributorship
and not a sales agency, the parties hereto agree that under no circumstances
shall the Distributor be required to provide the Company at any time after its
expiration or termination, the names and addresses of any of the Distributor’s
customers of the Products in the Territory.

 

ARTICLE 6. WARRANTY COVERAGE

 

Section 6.1                                Warranty
Limitation. The sole warranties that the Company makes with
respect to the Products are set forth on the Products or their packaging.
EXCEPT AS STATED IN THE FOREGOING SENTENCE, THE COMPANY DISCLAIMS ANY AND ALL
WARRANTIES ON THE PRODUCTS, WHETHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTIES OF THEIR MERCHANTABILITY OR THEIR FITNESS FOR A
PARTICULAR PURPOSE OR ANY WARRANTY ARISING FROM COURSE OF DEALING OR USAGE OF
TRADE. TO THE EXTENT THAT ANY IMPLIED WARRANTIES MAY NOT BE DISCLAIMED,
SUCH WARRANTIES ARE EXPRESSLY LIMITED TO THE DURATION OF THE EXPRESS WARRANTY
STATED BY THE COMPANY ON THE PRODUCTS OR THEIR PACKAGING.

 

Section 6.2                                Warranty Claims.

 

6.2.1                                   All of the Products
shall be received by the Distributor subject to the Distributor’s visual
inspection and may be rejected on the grounds that the warranties that the
Company states on the Products or their packages have been breached. The
Distributor shall assert all such warranty claims in writing to the Company as
soon as possible but in any event during the warranty period stated in the
warranty on the Products or their packaging. At the Company’s request, the
Distributor shall promptly supply such evidence of warranty breach as the
Company may reasonably request.

 

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6.2.2                                   THE DISTRIBUTOR’S
EXCLUSIVE REMEDY AND THE COMPANY’S LIMIT OF LIABILITY FOR ANY AND ALL WARRANTY
CLAIMS HEREUNDER, SHALL BE FOR THE REPLACEMENT OF THE PARTICULAR PRODUCTS WITH
RESPECT TO WHICH SUCH CLAIMS ARE ASSERTED. THE COMPANY SHALL NOT BE LIABLE FOR
INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES RESULTING
FROM THE USE OF THE PRODUCTS OR ARISING OUT OF ANY BREACH OF ANY OF THE
WARRANTIES THAT THE COMPANY STATES ON THE PRODUCTS OR THEIR PACKAGING OR ANY
BREACH BY THE COMPANY OF ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR
APPLICABLE LAW.

 

Section 6.3                                Indemnification
for Unauthorized Warranties. The Company shall not be
responsible for any warranty that the Distributor or any of its
sub-distributors makes concerning the Products other than those warranties made
by the Company as set forth in Section 6.1 hereof. The Distributor shall
hold the Company harmless from and indemnify it against any and all claims,
losses, liabilities, damages, and costs and expenses (including, but not
limited to, costs of investigation, court costs, arbitrators’ fees and
attorneys’ fees) that the Company may incur arising out of or relating to (i) any
such additional warranty made by the Distributor or any of its agents,
employees or sub-distributors, (ii) the act or omission of the Distributor
or any of its agents, employees or sub-distributors in connection with the
transporting, receiving, handling, storing, advertising, promoting, selling and
distributing any of the Products, and (iii) any breach by the Distributor
of any of its obligations under this Agreement or any purchase order issued by
the Distributor and accepted by the Company hereunder or under applicable law.

 

Section 6.4                                Product
Liability Insurance. The Distributor shall at all times maintain
adequate product liability insurance with respect to its sale of the Products
with underwriters, limits and terms reasonably acceptable to the Company.

 

ARTICLE 7. REPRESENTATIONS AND WARRANTIES BY THE
DISTRIBUTOR

 

Section 7.1                                The
Distributor represents and warrants to the Company as follows:

 

7.1.1                                   It is a marketing
and sales company duly organized and validly existing and in good standing
under the laws of the state or country of its organization and all applicable
foreign jurisdictions, and is duly qualified to conduct its business as
presently conducted in all those jurisdictions in which it presently conducts
business.

 

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7.1.2                                   It has full power
and authority to execute and deliver this Agreement and to perform the
terms and conditions hereof.

 

7.1.3                                   It has taken all
necessary legal action to authorize the execution and delivery of this
Agreement. The representative who has executed and delivered this Agreement on
behalf of the Distributor has been duly and validly authorized and will bind
the Distributor by his action.

 

7.1.4                                   This Agreement
constitutes the legal, valid and binding obligation of the Distributor
enforceable against the Distributor in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors’ rights generally and except as the availability
of equitable remedies may be limited under applicable law.

 

7.1.5                                   The execution,
delivery and performance of this Agreement will not violate any provision of
the Articles of Incorporation or Bylaws of the Distributor, or any law, rule,
regulation, order or decree of any court or arbitrator that is or may be
binding upon the Distributor or any of its assets. The execution, delivery and
performance of this Agreement will not result in the breach of any provision of
or any default under any agreement to which the Distributor is a party or which
is or may be binding upon the Distributor or any of its assets.

 

7.1.6                                   There are not
pending or, to the knowledge of the Distributor, threatened legal actions,
arbitrations or other proceedings against the Distributor or any of its assets
that, if adversely determined, might have a material adverse effect on the
validity or enforceability of this Agreement or on the financial condition of
Distributor or the capability of the Distributor to perform its
obligations hereunder.

 

7.1.7                                   None of the
following is a shareholder, director, officer, employee, agent or
representative of the Distributor: The Government of any Municipality, State or
Country within the Territory or any political subdivision thereof or any
agency, department or instrumentality of any such Government or the Territory
or any political subdivision thereof; no official or representative of any such
Government or the Territory or any agency, department or instrumentality of any
such Government or the Territory or political subdivision thereof, or any
official of a political party or candidate for public office.

 

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7.1.8                                   The Distributor has
never been and is not now the subject of any bankruptcy or insolvency proceeding
or other proceeding, voluntary or involuntary, for the benefit of creditors.

 

7.1.9                                   Neither this
Agreement nor the appointment of the Distributor hereunder must be notified to,
approved by, or registered with, any governmental body, agency or instrumentality
in the Territory, except as set forth in Schedule E.

 

7.1.10                             The
Distributor has the capacity under the law to agree to the choice of law and
the choice of forum set forth in Articles 9 and 10, respectively, and such
choices are enforceable against the Distributor.

 

7.1.11                             Nothing
in this Agreement violates the fundamental public policy of the Territory.

 

7.2                                            Each
of the representations and warranties set forth in this Article 7 and in Section 1.6.2  hereof shall be deemed to be confirmed by the
Distributor on each date on which it submits a purchase order to the Company
hereunder.

 

7.3                                            The
Distributor shall immediately give Notice to the Company if any of the
representations and warranties made by it in this Article 7 or in Section 1.6.2
hereof should prove to have been incorrect, incomplete or misleading on the
date of this Agreement or should become incorrect, incomplete or misleading
during the term of this Agreement.

 

ARTICLE 8.   REPRESENTATIONS AND WARRANTIES
BY THE COMPANY

 

Section 8.1                                The
Company represents and warrants to the Distributor as follows:

 

8.1.1                                   It is a corporation
duly organized and validly existing and in good standing under the laws of the
State of California and is duly qualified to conduct its business as presently
conducted in all those jurisdictions in which it presently conducts business.

 

8.1.2                                   It has full power
and authority to execute and deliver this Agreement and to perform the
terms and conditions hereof.

 

8.1.3                                   It has taken all
necessary legal action to authorize the execution and delivery of this
Agreement. The representative who has executed and delivered this Agreement on 

 

14

 

behalf of the Company has been duly and validly authorized and will
bind the Company by his action.

 

8.1.4                                   This Agreement
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency or other similar laws affecting
creditors’ rights generally and except as the availability of equitable
remedies may be limited under applicable law.

 

8.1.5                                   The execution,
delivery and performance of this Agreement will not violate any provision of
this Articles of Incorporation or Bylaws of the Company or any order or decree
of any court or arbitrator that is or may be binding upon the Company or
any of its assets. The execution and delivery of this Agreement will not result
in the breach of any provision of or any default under any agreement to which
the Company is a party or which is or may be binding upon the Company or
any of its assets.

 

ARTICLE 9.   GOVERNING LAW

 

This Agreement and each purchase order issued by the Distributor and
accepted by the Company hereunder shall be exclusively governed by and
construed in accordance with the laws of the State of California, United States
of America, without giving effect to the choice-of-law principles thereof;
provided, however, that the United Nations Convention on contracts for the
International Sale of Goods shall in no way apply to the interpretation of this
Agreement or any such purchase order.

 

ARTICLE 10. DISPUTE SETTLEMENT

 

Section 10.1                         Arbitration.

 

10.1.1                             Any dispute, controversy
or claim arising out of or relating to this Agreement or any purchase order
issued by the Distributor and accepted by the Company hereunder or a breach
hereof or thereof shall be finally resolved by arbitration in accordance with
the Rules and Procedures of JAMS - ENDISPUTE in Orange County, California.

 

10.1.2                             The arbitration
proceedings, all documents submitted therein and the award shall be in the
English language, and the arbitrator shall be fluent in the English language.
The arbitration proceedings shall be held in Orange County, California. The
arbitrator shall apply such rules of procedure as it thinks appropriate in
the circumstances; provided, however, 

 

15

 

that both parties hereto shall be entitled to representation by
counsel, to appear and present written and oral evidence and argument and to
cross-examine witnesses presented by the other party. The award shall be in
writing and the arbitrator shall provide written reasons for its award. The
award of the arbitrator shall be final and binding upon the parties hereto.

 

10.1.3                             The provisions of this Article 10
shall survive and bind the parties hereto, notwithstanding any expiration or
termination of this Agreement or any purchase order, whether by way of the
exercise of rights of termination hereunder or thereunder, passage of time or
otherwise. The provisions of this Article 10 shall be severable and
binding on the parties hereto, notwithstanding that any other provisions of
this Agreement or any purchase order may be held or declared to be invalid,
illegal or unenforceable.

 

Section 10.2                         Service
of Process.

 

10.2.1                             The Distributor
irrevocably and unconditionally consents to service of process upon it in any
proceeding brought pursuant to Section 3.6 or 10.1 hereof by mailing
copies of any Notice or pleading thereof by U.S. registered mail, postage
prepaid, return receipt requested. The foregoing shall not limit the right of
the Company to serve process in any other manner permitted by applicable law
and shall not limited the ability of the Company to bring any such proceeding
or to obtain execution for any judgment rendered in any such proceeding any
other jurisdiction in which the Distributor or any of its property or assets may be
found.

 

10.2.2                             The Distributor
specifically hereby waives any claim or right it may have by statute,
treaty or law to contest the jurisdiction or venue of JAMS - ENDISPUTE in
Orange County, California or any United States state or federal court in any
action or proceeding instituted pursuant to this Agreement, including, but not
limited to, any claim that the Distributor might assert under the Foreign
Sovereign Immunities Act of the United States, the Hague Convention on the
Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial
Matters and the Hague Convention on the Taking of Evidence Abroad in Civil or
Commercial Matters.

 

10.2.3                             The Distributor
specifically waives any claim of forum non conviens and specifically consents
to venue as provided herein.

 

16

 

Section 10.3                         Enforcement
of Judgment.

 

The Distributor agrees that final judgment on an arbitral award
rendered against it in any action or proceeding relating in any way to this
Agreement or any purchase order issued by the Distributor and accepted the
Company hereunder shall be conclusive and may be enforced, to the extent
permitted by applicable law, in any other jurisdiction within or outside the
United States of America by suit on the judgment, a certified copy of which
judgment shall be conclusive evidence thereof, or by such other means provided
by applicable law.

 

ARTICLE 11.                               SEVERABILITY
AND SURVIVAL

 

Section 11.1                         Severability.
In the event that any provision or part of any provision of this Agreement
or any purchase order issued by the Distributor and accepted by the Company
hereunder is held to be invalid or unenforceable in any respect, then, unless
such provision or part of a provision is material to the performance of
this Agreement or such purchase order, as the case may be, as determined
by the Company or the Distributor or both of them, this Agreement or such
purchase order, as the case may be, shall continue in effect and such
provision or part of the provision shall be excised herefrom or therefrom.
In the event that either party hereto, in its sole discretion, determines that
such provision or part of a provision to the operation or performance of
this Agreement or such purchase order, as the case may be, then either
such party may, in its sole discretion, elect to terminate this Agreement or
such purchase order, as the case may be, or both, upon thirty (30)
calendar days’ prior to notice to the other party.

 

Section 11.2                         Survival.
Sections 1.4, 1.5, 1.6 and 2.5 and the Articles 3, 6, 7, 8, 9, 10, 16 and 19
hereof shall survive the expiration of this Agreement or the termination of
this Agreement, with or without cause.

 

ARTICLE 12.                               ASSIGNMENT

 

Neither party hereto may assign its rights or obligations under
this Agreement or any purchase order issued by the Distributor and accepted by the
Company hereunder except upon the prior written approval of the other party
hereto; provided, however, that the Company may assign its rights and
obligations hereunder or thereunder to its parent or any of its subsidiaries or
other affiliates or the surviving entity in any corporate merger or
reorganization, but shall give prompt Notice thereof to the Distributor. This
Agreement shall be binding upon and inure 

 

17

 

to the benefit of
the parties hereto and their respective successors and permitted assigns.

 

ARTICLE 13.                               WAIVER

 

The failure or delay of either party hereto to require performance by
the other party or to enforce its rights under any provision of this Agreement
or any purchase order issued by the Distributor and accepted by the Company
hereunder shall not affect the rights of such party to require performance and
to enforce its rights with respect to such provision unless and until such
performance has been waived in writing by such party. No waiver of any failure
or delay in performance hereunder or thereunder shall constitute waiver of a
continuance or reoccurrence of such failure or delay or of any other failure or
delay, except as provided in such waiver. The rights granted to each party hereunder
and under any purchase order issued by the Distributor and accepted by the
Company hereunder and any rights available to it at law or in equity shall be
cumulative and may be exercised in whole or in part from time to
time.

 

ARTICLE 14.                               FORCE
MAJEURE

 

Neither party hereto shall be liable or responsible to the other party
hereto for delay or failure to perform any of its obligations, other than
an obligation to pay money arising under this Agreement or any purchase order
issued by the Distributor and accepted by the Company hereunder, due to events
of force majeure, including, but not limited to, acts of God or of the public
enemy, fire, flood, storm, explosion, earthquake, riots, wars, hostilities,
civil commotion, strikes and labor disputes, interruption of supply, inability
to obtain fuel, power, raw materials or freight or transportation services, any
law or regulation, any decision by any judicial or arbitral tribunal or any
other acts of any government or any agency or instrumentality thereof or persons
purporting to act with governmental authority, or any other cause beyond the
reasonable control of such party or which such party is not able to overcome by
the use of reasonable measures or which such party is able to overcome only at
substantial expense. This Article 14 shall not be interpreted to relieve
the Distributor from its obligation to pay as and when due in the applicable
currency all payments required to be made by the Distributor under this
Agreement or any purchase order issued by the Distributor and accepted by the
Company hereunder. If any such event of force majeure should occur, the
affected party shall promptly give Notice thereof to the other party hereto. If
any such even of force majeure continues, in whole or in substantial part, whether
continuously or intermittently, for a period of sixty (60) calendar days or
more, the other party may 

 

18

 

terminate this
Agreement or any relevant purchase order or both on thirty (30) calendar days’
prior Notice to the affected party.

 

ARTICLE 15.                               NOTICES
AND OTHER COMMUNICATIONS

 

All notices (“Notices”), purchase orders, acceptances of purchase
orders, and other communications between the parties hereunder shall be in the
English language and in writing (by mail, telecopy or telegraph), postage or
transmission costs prepaid, and shall be addressed to the parties hereto at
their respective principal places of business, which shall initially be:

 

	
  If
  to the Company:

  	
   

  	
  If
  to the Distributor:

  
	
   

  	
   

  	
   

  
	
  WORLDWIDE
  PRODUCTS, INC.

  	
   

  	
  CNO
  Chinese Obagi Corp.

  
	
  2030
  East Alosta Avenue

  	
   

  	
  4930
  Fiesta Ave.

  
	
  Suite 103

  	
   

  	
  Temple
  City, CA 91780

  
	
  Glendora,
  California 91740

  	
   

  	
  United
  States of America

  
	
  United
  States of America

  	
   

  	
  Attention:
  Dr. Thomas Lee &

  
	
  Attention:
  President

  	
   

  	
  Evelyn
  Lee

  
	
  Telecopy:
  (818) 857-7652

  	
   

  	
  Telecopy:
  (818) 956-7173

  

 

All such Notices
and communications shall be deemed effective on (i) the date of
transmission, if sent during normal business hours by telecopy, or (ii) the
date that is five (5) calendar days after the date on which transmitted,
deposited or sent, if sent by mail or telegraph. Each party hereto may change
its address for purposes hereof by Notice given to the other party in the
manner prescribed herein.

 

ARTICLE 16.                               COMPLIANCE
WITH LAW

 

Section 16.1                         Compliance
with U.S. Law. The parties hereto understand and acknowledge
that the export of the Products to the Distributor is subject to the law of the
United States of America and may require, amount other things, prior
approval of one or more agencies of the U.S. Government. The Distributor shall
use its best efforts to assist the Company in obtaining, retaining and
complying with any export license that may be granted to the Company with
respect to the export of the Products to or by the Distributor hereunder. In
addition, the Distributor shall at all 

 

19

 

times comply fully and timely with all laws of the United States of
America that may be applicable to it in performing its obligations under
this Agreement, and the Distributor shall refrain from taking any action that
might cause it or the Company to be deemed to be in violation of any law of the
Territory or any law of the State of California or of the United States of
America, including, but not limited to, the U.S. Foreign Corrupt Practices Act,
the U.S. export control laws, and the U.S. anti-boycott laws.

 

Section 16.2                         Compliance
with Local Law

 

16.2.1                             The Distributor shall at
all times comply fully and timely with all laws and regulations applicable in
the Territory, including, but not limited to, all laws and regulations relating
to the review or approval of this Agreement, the performance of Distributor’s
duties hereunder, and the registration, approval, promotion, distribution and
sale of the Products in the Territory.

 

16.2.2                             The Distributor shall use
its best efforts to obtain and maintain all licenses, consents, qualifications
and approvals of governmental bodies in the Territory necessary or advisable to
perform this Agreement and render this Agreement valid, binding and
enforceable in the Territory; provided, however, no disclosures, filings and
other submissions cornering this Agreement or the Products may be made to
any such governmental body without the prior approval of the Company. If for
any reason, including, but not limited to, an event of force majeure, the
Distributor does not obtain all such necessary and advisable government
registrations and/or approvals of the Products within six (6) months after
the Effective Date (as defined in Section 17 hereof) or such other time as
may be permitted under applicable law, then this Agreement shall, without
any notice or other act by the Company, terminate, unless the parties hereto
agree in writing to extend the deadline by which the Distributor must obtain
all such government registrations and/or approvals. Throughout the term of this
Agreement, the Distributor shall immediately give the Company Notice of any
revocation of, or any other notice, investigation, inquiry, action or decision
with respect to, Distributor, the Products of this Agreement or any
registration and/or approval of Distributor or the Products by governmental
bodies in the Territory.

 

Section 16.3                         Information
on Local Law. The Distributor shall keep informed and shall use
its best efforts to promptly and regularly give Notice to the Company of any
and all of the following of which the Distributor has knowledge: laws,

 

20

 

ordinances, rules, regulations or judicial or arbitral decisions in the
Territory that might affect the sale or distribution of the Products in the
Territory, the use of the Company’s Trademarks in the Territory, or the
protection of the Company’s Property and the Company’s Trademarks in the
Territory, including, but not limited to, laws, regulations, or judicial or
arbitral decisions relating to customs duties, import procedures, foreign
exchange transactions, tax laws, product certifications, protection of
proprietary information, or the rights and duties of distributors and foreign
manufacturers.

 

ARTICLE 17.                               EFFECTIVE
DATE; TERM

 

This Agreement shall become effective on the date this Agreement is
signed by the Company, as shown on the signature page hereto, (the “Effective
Date”) and shall expire on the day prior to the first anniversary of the
Effective Date, unless terminated earlier in accordance with the terms and
conditions hereof. Immediately following the initial one year time period, and
on an annual basis thereafter, and subject to Distributor’s compliance with the
terms contained herein, this agreement will be automatically renewed. Subject
to Section 18.7 hereof, neither party hereto shall continue with its
performance hereunder after the expiration or termination hereof, unless the
parties agree otherwise in writing.

 

ARTICLE 18.                               TERMINATION

 

Section 18.1                         Termination
Due to Bankruptcy and Other Events.

 

This Agreement shall terminate immediately, without Notice or other act
by the Company in the event that:

 

18.1.1                             a voluntary or involuntary
case, action, petition or other proceeding is initiated seeking liquidation,
reorganization or other relief of Distributor under any bankruptcy, insolvency
or similar law now or hereafter in effect, or seeking appointment of a trustee,
receiver, liquidator or other similar official of Distributor or any of its
property, or Distributor shall consent to have any such relief, or shall make a
general appointment for the benefit of its creditors, or Distributor shall fail
generally to pay its debts as they become due, or Distributor shall take any
corporate action in furtherance of any of the foregoing;

 

18.1.2                             the Distributor shall be
dissolved or its assets liquidated;

 

21

 

18.1.3                             a substantial change
influencing Distributor’s ability to service this Agreement shall occur in the
ownership, control, organization, personnel or operations of the Distributor,
including, but not limited to, a sale or transfer of all or substantially all
of its assets or a merger between the Distributor and another entity; then in
any such event, without Notice or other act by the Company, this Agreement
shall terminate immediately.

 

Section 18.2                         Termination
for Breach of Confidentiality. If the Distributor breaches any
of its obligations under Article 3 hereof or if any of its directors,
officers, employees, agents or others acting in concert with it or on its
behalf breach any of their obligations under the separate confidentiality
agreements referred to in Section 3.5(e) hereof, then this Agreement
shall terminate immediately, without any Notice or other act by the Company and
without prejudice to any other remedy available to the Company.

 

Section 18.3                         Termination
by the Company for Certain Other Causes. The Company may, at its
option and without prejudice to any other remedy available to it, and without
being deemed to have made an election of remedies, terminate this Agreement
upon the occurrence of any of the following events:

 

18.3.1                             The Distributor fails to
pay any amount that is obligated to pay under this Agreement or under any
purchase order or under any other written agreement between the Company and the
Distributor within thirty (30) calendar days of the date on which such amount
became due and payable;

 

18.3.2                             The Distributor fails to
make any of the minimum sales specified in Schedule A attached hereto;

 

18.3.3                             The Distributor breaches
any of its other obligations hereunder (other than its obligations under Article 3
hereof, breach of which is cause for immediate termination pursuant to Section 18.2
hereof), or under any purchase order issued by the Distributor and accepted by
the Company hereunder or any other written agreement between the Company and
the Distributor, and fails to remedy such breach within thirty (30) calendar
days after its receipt of Notice thereof from the Company;

 

22

 

18.3.4                             Any representation or
warranty made by the Distributor in this Agreement or in any other written
agreement between the Company and the Distributor shall prove to have been
incorrect, incomplete or misleading in any material respect at the time it was
made or deemed made; or

 

18.3.5                             It becomes unlawful under
the law of the Territory for the Distributor to perform its obligations
hereunder or under any purchase order issued by the Distributor and accepted by
the Company hereunder; or an enactment, modification or change in the
interpretation of the law of the Territory subsequent to the date first above
written interferes with or prohibits the full and faithful performance by the
Distributor of its obligations hereunder or under any such purchase order or
interferes with or prohibits the full and complete enforcement of the Company’s
rights under this Agreement or any such purchase order.

 

Section 18.4                         Termination
by the Distributor for Certain Other Causes. The Distributor
may, at its option, terminate this Agreement upon the occurrence of any of the
following events:

 

18.4.1                             The Company materially
breaches any of its obligations hereunder and fails to remedy or commence to
cure such breach within thirty (30) calendar days after its receipt of written
notice thereof from the Distributor; or

 

18.4.2                             Any express representation
or warranty made by the Company in this Agreement shall prove to have been
materially incorrect, incomplete or misleading in any material respect at the
time it was made.

 

Section 18.5                         Termination
for Other Causes by Either Party. Either party hereto may terminate
this Agreement in accordance with other express provisions hereof. This Agreement
shall terminate automatically in accordance with Section 16.2.2           hereof.

 

Section 18.6                         No
Compensation. Upon expiration of this Agreement and upon
termination of this Agreement by either party hereto, with or without cause,
the Company shall not be liable or obligated to the Distributor with respect to
future profits, exemplary, special or consequential damages, indemnification or
other compensation regarding such expiration or termination, irrespective of
whether such obligations or liabilities may be provided for in the law of
the Territory or elsewhere, and the Distributor waives and relinquishes any
rights, pursuant to law or otherwise, to any such indemnification or
compensation.

 

23

 

Section 18.7                         Duties of
the Distributor Upon Termination. Upon the expiration of this
Agreement or upon the termination of this Agreement by either party hereto,
with or without cause, the Distributor shall (i) cease immediately all of
its efforts to promote the sale of the Products; (ii) cease immediately
use of Company’s Trademarks; (iii) immediately discontinue making any
statements or taking any actions that might cause third parties to infer that
any business relationship continues to exist between the parties hereto and,
where necessary or advisable, inform third parties that the Distributor no
longer has a business relationship with the Company and is no longer authorized
to sell the Products in the Territory; and (iv) within ten (10) calendar
days after the date of expiration of this Agreement or the termination of this
Agreement, with or without cause, return to the Company, at the Company’s
expense, any and all Company’s Property, including, but not limited to,
promotional material, that has been furnished to the Distributor by the
Company; provided, however, that if the Distributor has an inventory of the
Products on hand on the date of expiration or termination, the Distributor may,
subject to Section 18.9, sell such Products, and may use Company’s
Trademarks and Company’s Property in connection therewith, for a period of
ninety (90) calendar days thereafter. In no event, however, shall the
Distributor sell the Products in a commercially unreasonable manner or in a
manner that could harm the future sales potential of the Products or the good
will of the Company or Company’s Trademarks in the Territory.

 

Section 18.8                         Unfilled
Purchase Orders. Unless otherwise agreed to in writing by the
parties hereto, Notice of termination of this Agreement by either party automatically
cancels all unfilled purchase orders. The Company’s acceptance of a purchase
order from the Distributor after the Company has given Notice of termination
hereunder shall not be deemed a waiver or a rescission of such Notice.

 

Section 18.9                         Repurchase
of Products by the Company. During the ninety (90) calendar-day
period after the date of expiration or termination of this Agreement, the
Company may, at its option, repurchase from the Distributor, at the net price
paid by the Distributor to the Company any and all of the Products on hand in
the Distributor’s place of business or elsewhere. Upon demand and tender by the
Company of such repurchase price, the Distributor shall deliver such Products
and all rights, title and interest therein, free and clear of all liens and
encumbrances, to the Company and the Company shall pay all reasonable freight
costs associated with shipping such Products back to the Company. The Company,
however, reserves the 

 

24

 

right to reject any such repurchased Products not in first class or
acceptable condition, as reasonably determined by the Company.

 

Section 18.10                  Right to Sell. Upon
the expiration of this Agreement or the termination of this Agreement by either
party hereto, with or without cause, the Company shall have the right to sell
the Products in the Territory itself and to appoint one or more other
distributors of the Products in the Territory. The Distributor waives and
relinquishes any rights that it may have, under the law of the Territory
or elsewhere, to seek to enjoin the Company from making such sales or
appointing such other distributors and the Distributor shall not attempt to
exercise any such rights.

 

ARTICLE 19.                               ENTIRE
AGREEMENT AND AMENDMENT

 

Section 19.1        Entire
Agreement; Revocation of All Prior Agreements. This
Agreement constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof and all parties hereto expressly intend and agree
that this Agreement shall supersede any prior agreement or expression of intent
or understanding, oral or written, with respect to the subject matter hereof.
In addition, Distributor expressly acknowledges and agrees there have been no
representations, warranties, inducements or promises made by Company which are
not set forth in this Agreement.

 

Section 19.2                         Amendment.
Neither this Agreement nor any purchase order issued by the Distributor and
accepted by the Company hereunder nor any Schedule hereto may be
amended except by a writing executed by duly authorized representatives of the
parties hereto, or except pursuant to other provisions hereof.

 

ARTICLE 20.                               HEADINGS

 

Headings are inserted in this Agreement for reference and convenience
only and shall not form part of this Agreement for the purpose of
interpretation.

 

ARTICLE 21.                               COUNTERPARTS

 

This Agreement may be executed in two (2) or more
counterparts, each of which is in the English language and each of which is an
original, true and correct version hereof.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective duly authorized representatives on
the date first above written.

 

25

 

	
  WORLDWIDE PRODUCTS

  DISTRIBUTION, INC.

  	
  Chinese
  Obagi Corporation

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
  /s/
  Evelyn Lee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  James
  Headley

  	
  Name:

  	
  Evelyn
  Lee

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   President

  	
  Title:

  	
   Director

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
     9/27/97

  	
   

  
							

 

26

 

SCHEDULE A

 

TO: Evelyn Lee and
Dr. Thomas Lee

 

DISTRIBUTORSHIP
AGREEMENT BETWEEN WORLDWIDE PRODUCTS, INC. AND CNO Chinese Obagi Corp.
DATED 9/23/97

 

	
  /s/ Evelyn Lee

  	
   

  	
   

  

 

PRODUCTS, PRICES
AND MINIMUM SALES REQUIREMENTS

 

	
  Product

  	
   

  	
  Price

  	
   

  	
  Minimum Sales

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SKIN HEALTH PRODUCTS

  	
   

  	
   

  	
   

  	
  Not Applicable

  
	
  NU-DERM PRODUCTS

  	
   

  	
   

  	
   

  	
   

  
	
  BLUE PEEL PRODUCTS

  	
   

  	
   

  	
   

  	
   

  

 

Price list is
Attached

 

27

 

SCHEDULE B

 

TO: Evelyn Lee and
Dr. Thomas Lee

 

DISTRIBUTORSHIP
AGREEMENT BETWEEN WORLDWIDE PRODUCTS, INC. AND CNO Chinese Obagi Corp.
DATED 9/23/97

 

	
  /s/ Evelyn Lee

  	
   

  	
   

  

 

TERRITORY

 

CNO will have the
rights to sell the products to physicians in the Chinese community located in
the San Gabriel Valley, California. The territory is contained in the following
postal zip code (917XX), (918XX), (916XX).

 

CNO will be
allowed to distribute the products to medical professional Chinese people for
use by Chinese patients in predominantly Chinese communities. CNO can advertise
the Obagi products in Chinese specific literature. All advertisements are to be
approved by WWPI management.

•                             Additionally, both CNO and
WWPI agree that ALL the products will only be sold to a medical professional
(MD) or a facility associated with a medical professional (MD Clinic) for
re-sale to that professionals patients. Non-professional settings are to be
avoided. CNO will provide WWPI with a list of the customers that purchase the
product from CNO.

 

28

 

AMENDMENTS

 

SECTION 1.3,
TERRITORY: The geographic territory is defined in Schedule B of the
initial contract and takes precedence. Consideration will be given to include
other specific accounts outside of the defined geographic territory or to
include additional geographic territories. The inclusion of either accounts or
territories will be done on a one-by-one basis. Both the DISTRIBUTOR and the
COMPANY must approve all changes (additions and deletions) in writing and be
signed by either the president or vice president of both companies.

 

The DISTRIBUTOR
must insure that the products sold to accounts under their control are used by
those accounts. Product is to be used by the account, at the accounts location,
and for the accounts patients. Product is not to be diverted to other accounts,
territories, or geographic locations with the intent of re-sale. The
DISTRIBUTOR is responsible for maintaining the distribution and use of the
products in the assigned territories.

 

SECTION 2.2,
DISCOUNT: Product pricing is specified in SECTION 2.2 and takes
precedence. A 30% discount will be extended to the DISTRIBUTOR for the
COMPANIES products. The 30% discount will apply to all accounts in the initial
territory as defined in Schedule B of the initial contract. If accounts or
territories are assigned to the DISTRIBUTOR that are being serviced by a
COMPANY sales representative, the sales commission for these sales will be
deducted from the DISTRIBUTOR’S discount. Typically, the COMPANY sales
representative commission is 8%, therefore, the DISTRIBUTOR discount will be
reduced to 22%. If accounts or territories are assigned to the Distributor that
are being serviced by both a COMPANY sales representative and a DISTRIBUTOR
sales representative, the DISTRIBUTOR discount will be reduced to 20% with 5%
commission being payable to both the COMPANY and DISTRIBUTOR sales
representative.

 

Pricing: The
DISTRIBUTOR agrees to maintain, to the best of their ability, pricing policies
that are compatible to that of the COMPANY. The COMPANY extends a 10% discount
on orders placed at regional and national exhibitions. The COMPANY extends a
15% discount on any single order greater than $5,000.

 

29

 

SECTION 4.1,
MARKETING: Promotional activities of the DISTRIBUTOR are specified in section 4.1
and take precedence. The Company will provide financial support to the
DISTRIBUTOR for approved marketing and advertising expenses incurred by the
DISTRIBUTOR for the purpose of promoting the COMPANIES products in their
assigned territories. These marketing and advertising expenses by the DISTRIBUTOR
must be pre-approved by the COMPANY vice president to qualify for the financial
support.

 

30

 

ORDER
FORM

 

	
  

  
	
   

  
	
  WorldWide Products, Inc.

  	
   

  
	
  2060 East Alosta Avenue, Suite 103

  	
   

  
	
  Glendora, California 91740

  	
   

  
	
  Phone: (818) 857-7650

  	
   

  
	
  Fax: (818) 857-7652

  	
   

  
	
  Customer Service: (800)
  636-SKIN

  	
   

  
	
   

  	
   

  
	
  Order Information

  	
   

  
	
   

  	
   

  
	
  DATE

  	
   

  
	
   

  	
   

  	
   

  
	
  ORDER TAKEN BY

  	
   

  
	
   

  	
   

  	
   

  
	
  ORDER PLACED BY

  	
   

  
	
   

  	
   

  	
   

  
	
  NAME

  	
   

  
	
   

  	
   

  	
   

  
	
  ADDRESS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CITY

  	
   

  
	
   

  	
   

  	
   

  
	
  STATE

  	
  ZIP

  	
   

  
	
   

  	
   

  	
   

  
	
  PHONE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Shipping Instructions

  	
   

  
	
   

  	
   

  
	
  o Ground

  	
  o Overnight

  	
   

  
	
   

  	
   

  	
   

  
	
  o 2 Day

  	
  o 3 Day

  	
   

  
	
   

  	
   

  
	
  o Other

  	
   

  	
   

  
	
   

  	
   

  
	
  Method of Payment

  	
   

  
	
   

  	
   

  
	
  o Visa

  	
  o MasterCard

  	
   

  
	
   

  	
   

  	
   

  
	
  CREDIT CARD NUMBER

  	
   

  
	
   

  	
   

  	
   

  
	
  EXPIRATION DATE

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  o Direct Bill (Terms: Net 30 days)

  	
   

  
	
   

  	
   

  
	
  o Check (Please make checks
  payable

  to Worldwide Products, Inc.)

  	
   

  
	
   

  	
   

  
	
  Thank you for your order!

  	
   

  
						

 

Products Ordered

 

	
   

  	
   

  	
  ITEM #

  	
   

  	
  DESCRIPTION

  	
   

  	
  OM*

  	
   

  	
  PRICE

  	
   

  	
  QTY

  	
   

  	
  TOTAL PRICE

  	
   

  
	
  BLUE PEEL

  	
   

  	
  0200S

  	
   

  	
  Blue Peel Kit (6 trays per kit)

  	
   

  	
   

  	
   

  	
  $

  	
  375

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0209S

  	
   

  	
  New Blue Peel Cleanser

  	
   

  	
   

  	
   

  	
  $

  	
  12

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SKIN HEALTH

  	
   

  	
  0300B

  	
   

  	
  HQ Skin Health Kit (Item #’s 0301B-0305B

  	
   

  	
   

  	
   

  	
  $

  	
  85

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0301B

  	
   

  	
  HQ Gentle Cleanser

  	
   

  	
  3

  	
   

  	
  $

  	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0302B

  	
   

  	
  HQ Balancing Toner

  	
   

  	
  3

  	
   

  	
  $

  	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0303B

  	
   

  	
  HQ Multiple Action Corrector

  	
   

  	
  3

  	
   

  	
  $

  	
  22

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0304B

  	
   

  	
  HQ Multiple Action Stimulator

  	
   

  	
  3

  	
   

  	
  $

  	
  24

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0305B

  	
   

  	
  HQ Skin Lightener w/SPF 20

  	
   

  	
  3

  	
   

  	
  $

  	
  17

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0306B

  	
   

  	
  Mild Skin Health Kit (Item #’s 0307B-0311B)

  	
   

  	
   

  	
   

  	
  $

  	
  80

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0307B

  	
   

  	
  Mild Gentle Cleanser

  	
   

  	
  3

  	
   

  	
  $

  	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0308B

  	
   

  	
  Mild Balancing Toner

  	
   

  	
  3

  	
   

  	
  $

  	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0309B

  	
   

  	
  Mild Multiple Action Corrector

  	
   

  	
  3

  	
   

  	
  $

  	
  20

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0310B

  	
   

  	
  Mild Multiple Action Stimulator

  	
   

  	
  3

  	
   

  	
  $

  	
  22

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0311B

  	
   

  	
  Mild Sun Protection w/SPF 20

  	
   

  	
  3

  	
   

  	
  $

  	
  15

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0312B

  	
   

  	
  Eye Cream

  	
   

  	
  3

  	
   

  	
  $

  	
  25

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0313B

  	
   

  	
  HQ Spot Fader

  	
   

  	
  3

  	
   

  	
  $

  	
  15

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0314B

  	
   

  	
  Day Moisturizer

  	
   

  	
  3

  	
   

  	
  $

  	
  15

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0315B

  	
   

  	
  Night Moisturizer

  	
   

  	
  3

  	
   

  	
  $

  	
  20

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NU-DERM

  	
   

  	
  0010A

  	
   

  	
  Cleanser I

  	
   

  	
  12

  	
   

  	
  $

  	
  12

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0013A

  	
   

  	
  Toner I

  	
   

  	
  12

  	
   

  	
  $

  	
  12

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0016A

  	
   

  	
  Cleanser II

  	
   

  	
  12

  	
   

  	
  $

  	
  12

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0012A

  	
   

  	
  Toner II

  	
   

  	
  12

  	
   

  	
  $

  	
  12

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0018A

  	
   

  	
  Basic II

  	
   

  	
  12

  	
   

  	
  $

  	
  21

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0019A

  	
   

  	
  Clear II

  	
   

  	
  12

  	
   

  	
  $

  	
  23

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0007A

  	
   

  	
  Sunfader I

  	
   

  	
  12

  	
   

  	
  $

  	
  17.50

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0005A

  	
   

  	
  Sunfader II

  	
   

  	
  12

  	
   

  	
  $

  	
  17.50

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0002A

  	
   

  	
  Tolereen

  	
   

  	
  12

  	
   

  	
  $

  	
  18

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0006A

  	
   

  	
  Exfoderm

  	
   

  	
  12

  	
   

  	
  $

  	
  20

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0008A

  	
   

  	
  Action

  	
   

  	
  12

  	
   

  	
  $

  	
  15

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0014A

  	
   

  	
  Eye Cream

  	
   

  	
   

  	
   

  	
  $

  	
  25

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0011A

  	
   

  	
  Oil Free Moisturizer

  	
   

  	
   

  	
   

  	
  $

  	
  18

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0015A

  	
   

  	
  Normal Moisturizer

  	
   

  	
   

  	
   

  	
  $

  	
  13

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0017A

  	
   

  	
  Enriched Moisturizer

  	
   

  	
   

  	
   

  	
  $

  	
  13

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0038A

  	
   

  	
  Action Plus

  	
   

  	
   

  	
   

  	
  $

  	
  20

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0009A

  	
   

  	
  Complex V

  	
   

  	
   

  	
   

  	
  $

  	
  150

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0070A

  	
   

  	
  Bacitracin

  	
   

  	
   

  	
   

  	
  $

  	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0071A

  	
   

  	
  Dermasol

  	
   

  	
   

  	
   

  	
  $

  	
  7.50

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0097A

  	
   

  	
  Prepak Program I

  	
   

  	
   

  	
   

  	
  $

  	
  254

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0089A

  	
   

  	
  Prepak Program II

  	
   

  	
   

  	
   

  	
  $

  	
  259

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0029A

  	
   

  	
  Pre-Op Laser Kit

  	
   

  	
   

  	
   

  	
  $

  	
  39

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0030A

  	
   

  	
  Post-Op Laser Kit

  	
   

  	
   

  	
   

  	
  $

  	
  39

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0031A

  	
   

  	
  Travel Kit

  	
   

  	
   

  	
   

  	
  $

  	
  39

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TOTAL

  	
   

  	
   

  	
   

  
																						

 

*OM=ORDER
MULTIPLES

 

 

ORDER
FORM

 

	
  

  
	
   

  
	
  WorldWide Products, Inc.

  	
   

  
	
  2060 East Alosta Avenue, Suite 103

  	
   

  
	
  Glendora, California 91740

  	
   

  
	
  Phone: (818) 857-7650

  	
   

  
	
  Fax: (818) 857-7652

  	
   

  
	
  Customer Service: (800) 636-SKIN

  	
   

  
	
   

  	
   

  
	
  Order Information

  	
   

  
	
   

  	
   

  
	
  DATE

  	
   

  
	
   

  	
   

  	
   

  
	
  ORDER TAKEN BY

  	
   

  
	
   

  	
   

  	
   

  
	
  ORDER PLACED BY

  	
   

  
	
   

  	
   

  	
   

  
	
  NAME

  	
   

  
	
   

  	
   

  	
   

  
	
  ADDRESS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CITY

  	
   

  
	
   

  	
   

  	
   

  
	
  STATE

  	
  ZIP

  	
   

  
	
   

  	
   

  	
   

  
	
  PHONE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Shipping Instructions

  	
   

  
	
   

  	
   

  
	
  o Ground

  	
  o Overnight

  	
   

  
	
   

  	
   

  	
   

  
	
  o 2 Day

  	
  o 3 Day

  	
   

  
	
   

  	
   

  
	
  o Other

  	
   

  	
   

  
	
   

  	
   

  
	
  Method of Payment

  	
   

  
	
   

  	
   

  
	
  o Visa

  	
  o MasterCard

  	
   

  
	
   

  	
   

  	
   

  
	
  CREDIT CARD NUMBER

  	
   

  
	
   

  	
   

  	
   

  
	
  EXPIRATION DATE

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  o Direct Bill (Terms: Net 30 days)

  	
   

  
	
   

  	
   

  
	
  o Check (Please make checks
  payable

  to Worldwide Products, Inc.)

  	
   

  
	
   

  	
   

  
	
  Thank you for your order!

  	
   

  
						

 

Merchandise Ordered

 

	
   

  	
   

  	
  ITEM #

  	
   

  	
  DESCRIPTION

  	
   

  	
  PRICE

  	
   

  	
  QTY

  	
   

  	
  TOTAL PRICE

  	
   

  
	
  BLUE-PEEL

  	
   

  	
  0201S

  	
   

  	
  Blue Peel Video

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0202S

  	
   

  	
  Blue Peel Prescription Pad

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0203S

  	
   

  	
  Blue Peel Technical Card

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0204S

  	
   

  	
  Blue Peel Take One Brochure

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0205S

  	
   

  	
  Blue Peel Consent Form

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0206S

  	
   

  	
  Blue Peel Mixing Cup

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0207S

  	
   

  	
  Blue Peel Training Manual

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0208S

  	
   

  	
  Blue Peel Physician Brochure

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0210S

  	
   

  	
  Blue Peel Post Card

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
  SKIN HEALTH

  	
   

  	
  0319B

  	
   

  	
  HQ Program I System Card

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0320B

  	
   

  	
  HQ Program II System Card

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0321B

  	
   

  	
  Mild System Card

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0322B

  	
   

  	
  Skin Health Display Unit

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0323B

  	
   

  	
  Skin Health Post Card

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0324B

  	
   

  	
  Skin Health Take One Brochure

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0325B

  	
   

  	
  Skin Health Physician Brochure

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
  NU-DERM

  	
   

  	
  0101A

  	
   

  	
  Nu-Derm Patient Information Brochure

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0100A

  	
   

  	
  Nu-Derm Patient System Card

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0074A

  	
   

  	
  Nu-Derm Patient Instruction Booklet

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0075A

  	
   

  	
  Nu-Derm Take One Brochure

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0081A

  	
   

  	
  Nu-Derm Take One Brochure Holder

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0102A

  	
   

  	
  Nu-Derm Physician Information Brochure

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0073A

  	
   

  	
  Nu-Derm Training Manual

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0077A

  	
   

  	
  Nu-Derm Post Card

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0092A

  	
   

  	
  Nu-Derm Line Display

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0076A

  	
   

  	
  Nu-Derm Slides: Before & After

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0083A

  	
   

  	
  Nu-Derm Photos: Before & After

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0080A

  	
   

  	
  Nu-Derm Staff Training Video

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0078A

  	
   

  	
  Nu-Derm Waiting Room Video

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0079A

  	
   

  	
  Nu-Derm Patient Take Home Video

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
  OTHER

  	
   

  	
  0087A

  	
   

  	
  Obagi Folder

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  
	
   

  	
   

  	
  0088A

  	
   

  	
  Obagi Printed Bag

  	
   

  	
  N/C

  	
   

  	
   

  	
   

  	
  N/C

  	
   

  

 

 

Chinese Physicians
Ordering with CNO inside CNO territory

 

	
  Dr. Philip Hone

  1850 S. Azusa Ave., #60

  Hacienda
  Hts., CA 91745

  626-810-0706

  	
  Dr. Nick
  Lee

  328
  N. Garfield Ave., #C

  Monterey
  Park, CA 91754

  626-280-5000

  
	
   

  	
   

  
	
  Dr. Shyh-Mine
  Lii

  3859
  N. Rosemead Blvd.

  Rosemead,
  CA 91770

  	
  Dr. Tony
  Shum

  600
  N. Garfield Ave., #307

  Monterey
  Park, CA 91754

  
	
   

  	
   

  
	
  Dr. Hung
  Chuen Yeung

  15940
  Halliburton Road

  Hacienda
  Hts., CA 91745

  626-968-2442

  	
   

  

 

Chinese Physicians
outside CNO territory that have ordered with CNO.

 

	
  Dr. Choa
  Chan

  1422
  Hillcrest Avenue

  Glendale,
  CA 91202

  	
  Dr. Li
  Ching Chen

  17801
  Arvida Drive

  Granada
  Hills, CA 91344

  818-368-1808

  
	
   

  	
   

  
	
  Dr. Chin
  Cha Cheng

  17822
  Beach Blvd., #230

  Huntington
  Bch, CA 92647

  714-848-3565

  	
  Dr. Steven
  Cheng

  1000
  Dove St., #250

  Newport
  Bch, CA

  949-622-6969

  
	
   

  	
   

  
	
  Dr. Tzong
  Y. Hwang

  12146
  South St., Unit B

  Artesia,
  CA 90701

  562-809-0288

  	
  Dr. Long
  Way Tsai

  12225
  South St., #101

  Artesia,
  CA 90701

  562-865-4141

  
	
   

  	
   

  
	
  Dr. Gideon
  Lowe

  625
  Fair Oaks Ave., #344

  S.
  Pasadena, CA 91030

  818-441-2554

  	
  Dr. George Sun

  624 W. Duarte Rd., #101

  Arcadia,
  CA 91007

  626-447-8828

  
	
   

  	
   

  
	
  Dr. Jeffrey
  Roberts

  1535
  W. Merced #300

  W.
  Covina, CA 91790

  	
   

  

 

Chinese Physicians
inside CNO territory that is ordering with OMP

 

	
  Dr. Grace
  Liu

  2219
  S. Hacienda Blvd., #208

  Hacienda
  Hts, CA 91745

  626-333-6380

  	
  Dr. Max
  Chiou

  210
  N. Garfield Ave., #300

  Monterey
  Park, CA 91754

  626-573-9875

  
	
   

  	
   

  
	
  Dr. Francis
  Sheng

  500
  N. Garfield Ave., #206

  Monterey
  Park, CA 91754

  626-288-8000

  	
  Dr. Jinng
  Wang

  11511
  E. Garvey Avenue

  El
  Monte, CA 91732

  626-443-8891

  
	
   

  	
   

  
	
  Dr. Robert
  Wang

  210
  N. Garfield Ave., Ste 302

  Monterey
  Park, CA 91754

  626-280-5311Exhibit 10.16

 

DISTRIBUTORSHIP AGREEMENT

 

THIS DISTRIBUTORSHIP AGREEMENT is
made and entered into by and between WORLDWIDE PRODUCTS
DISTRIBUTION, INC. (hereinafter referred to as the “Company”),
a corporation organized and existing under the laws of the State of California,
and VNO Vietnam Obagi Corporation, a corporation organized and existing under
the laws of California and having its principal place of business of at 10161
Bolsa Ave., Suite B210, Westminster, CA 92683, hereinafter referred to as
the “Distributor”.

 

W I T N E S S E T H:

 

WHEREAS, the Company desires to promote the distribution, sale and use
of the Products (defined in Section 1.2 hereof) in the Territory (defined
in Section 1.3 hereof) and is willing to appoint the Distributor as its
exclusive distributor of the Products in the Territory, on the terms and
conditions set forth hereinafter;

 

WHEREAS, the Distributor desires to be appointed as such exclusive
distributor, on the terms and conditions set forth hereinafter; and

 

WHEREAS, the Company and the Distributor have engaged in extensive
negotiations over the terms and conditions set forth hereinafter and each of
them, after careful consideration in conjunction with legal counsel, is willing
and able to enter into an exclusive distributorship arrangement, on such terms
and conditions;

 

NOW, THEREFORE, in consideration of the premises set forth above and
the mutual promises hereinafter contained, the parties hereto agree as follows:

 

ARTICLE 1.                             APPOINTMENT

 

Section 1.1                                   Appointment
and Acceptance of Appointment. The Company appoints the Distributor,
and the Distributor accepts appointment, as the Company’s exclusive distributor
to promote, distribute and sell the Products (defined in Section 1.2
hereof) in the Territory (defined in Section 1.3 hereof); provided,
however, that if, at any time during the term hereof, Section 1.6 hereof
should be deemed to be invalid or unenforceable in the Territory, then the
Distributor shall thereafter cease to be an exclusive distributor of the
Products, shall become a non-exclusive

 

1

 

distributor, and
the Company shall be entitled to make sales itself or to appoint other
distributors of the Products in the Territory.

 

Section 1.2                                   Products.
The Distributor is authorized to promote, distribute and sell in the
Territory only those products specified in Schedule A attached hereto and
incorporated herein, as such schedule A may be amended in writing by
the parties hereto from time to time during the term hereof (all of such
products hereinafter collectively referred to as the “Products”). The Company
reserves the right, with respect to any of the Company’s products other than
the Products, to make direct sales in the Territory or to appoint other
distributors in the Territory.

 

Section 1.3                                   Territory.
The territory in which the Distributor is authorized to solicit customers
of the Products is limited to the geographic area(s) specified in Schedule B
attached hereto and incorporated herein, as such Schedule B may be
amended in writing by the parties hereto from time to time during the term
hereof (hereinafter referred to as the “Territory”), and does not include any
other place in the world. The Distributor shall not actively solicit sales of
the Products outside the Territory and shall not establish any branch or
maintain any distribution depot or warehouse outside the Territory for the
Products, except with the prior written consent of the Company, which may be
granted or denied in the Company’s sole discretion.

 

Section 1.4                                   Restrictions
on Authority. For all purposes under this Agreement, the Distributor is
an independent contractor and shall not be deemed to be an employee, agent,
partner or legal representative of the Company. This Agreement does not grant,
and the Distributor shall not have, any authority, express or implied, to
create or assume any obligation, enter into any agreement, make any
representation or warranty, file any document with any governmental body or
serve or accept legal process on behalf of the Company, to settle any claim by
or against the Company, or to bind or otherwise render the Company liable in
any way in the Territory or anywhere else in the world, without the prior
express written consent of the Company. The Distributor shall purchase the Products
for its own account from the Company and shall re-sell the Products for its own
account in the Territory.

 

Section 1.5                                   Employees
of Distributor. The Distributor shall be responsible for the selection,
training and supervision of, and the payment of remuneration and benefits to,
its employees who assist it in the performance of its obligations

 

2

 

hereunder and in
no event shall the Company have any obligation to, or authority over, such
employees of the Distributor.

 

Section 1.6                                   Non-competition.

 

1.6.1                                                   The
Distributor shall use its best efforts to attain and sustain maximum sales of
the Products in the Territory and shall refrain from diminishing or otherwise
weakening the Company’s rights by engaging in any activities whatsoever in the
Territory that might reasonably be deemed as injurious to the sales potential
of the Products in the Territory.

 

1.6.2                                                   The
Distributor represents and warrants to the Company that, as of the Effective
Date of this Agreement (as defined in Article 17 hereof), the Distributor
is not, directly or indirectly, acting as an agent, representative or
distributor in the Territory for, and is not, directly or indirectly, selling
or distributing in the Territory, any products that are similar to or
competitive with the Products. Furthermore, during the term of this Agreement,
the Distributor shall not, directly or indirectly, act as an agent,
representative or distributor in the Territory for, and shall not, directly or
indirectly, design, develop, manufacture, license, promote, sell or distribute
in the Territory, any products that are similar to or competitive with the
Products.

 

1.6.3                                                   The
Distributor agrees that any breach by it of its obligations under this Section 1.6
shall be just cause for termination under Section 18.3 hereof.

 

ARTICLE 2.                             TERMS
OF SALE

 

Section 2.1                                   Purchase
Orders. In making its purchases of the Products from the Company, the
Distributor shall submit written purchase orders to the Company at the address
set forth in Article 15 below, which the Company may, in its sole
discretion, accept or reject, in whole or in part, for any one of the following
reasons:  the Company is unable to fill a
purchase order due to commercial reasons; the Company has experienced an event
of force majeure as defined in Article 14; the Company has decided to
cease manufacturing the Products or to cease selling the Products in the
Territory; the order(s) contain terms or conditions inconsistent with the terms
of this Agreement or the course of dealing between the parties hereto or
violative of applicable law; or if the Company determines that fulfilling the
order would cause the Company to be in breach of any other contract, order,
judgment, decree or other authority to which it is a party or by which it is
bound. The Company reserves the right to distribute unusually large orders over
an extended

 

3

 

period of time.
The Company may, in its sole discretion, determine whether an order is unusually
large and what extended shipment period is appropriate. The Company may, in its
sole discretion, accept and act on telecopy or telephone purchase orders issued
by the Distributor; provided, however, that, upon the request of the Company,
the Distributor shall promptly confirm telephone purchase orders in writing or
by telecopy. No purchase orders accepted by the Company may be cancelled
by either the Distributor or the Company, unless the parties hereto agree
otherwise in writing.

 

Section 2.2                                   Prices
to Distributor. The purchase prices for the Products shall be the
prices specified in Schedule A, as such Schedule A may be
amended from time to time during the term hereof by the Company on each January 1,
in its sole discretion, on sixty (60) days calendar days’ prior written Notice
to the Distributor; provided, however, that, within the ten (10) calendar
days following the date of such Notice by the Company, the Distributor may order,
at the previously prevailing prices, such quantities of the Products as are
reasonably needed by the Distributor during the thirty (30) calendar day period
immediately following the date of such Notice to fill contracts and outstanding
quotations existing on the date of the Company’s Notice of such price changes.

 

Section 2.3                                   Payment
Terms.

 

2.3.1                                                   Each
purchase order hereunder shall specify the amount, manner and timing of payment
thereunder; provided, however, that, in all cases, the Company shall be paid in
the same currency reflected on the Company’s invoices to the Distributor, and
payment shall be made, at the option of the Company, by one of the following
three methods:  a bank draft, a wire
transfer of immediately available funds or by an irrevocable letter of credit
drawn in favor of the Company, confirmed by a U.S. banking institution
acceptable to the Company and on terms and conditions acceptable to the
Company. In all cases, the payment terms shall be Net 30 days, less 20% on
those prices specified in Schedule A attached hereto. Provided, however,
that in the event the Company changes its payment terms applicable generally to
substantially all of its distributors who conduct a comparable volume of
business in the Products, then the Company may, in its sole discretion, upon
Notice to the Distributor, alter the payment terms at any time during the term
hereof and any such alteration shall be effective with respect to any and all
purchase orders not theretofore accepted by the Company.

 

2.3.2                                                   Acceptance
and endorsement by the Company of any instrument for less than the full amount
that the Company

 

4

 

claims to be due
and payable to it under a purchase order or hereunder shall not be deemed to be
an admission of payment in full, and any conditions to the contrary that are noted
on such instrument shall not be binding on the Company.

 

Section 2.4                                   Delivery.

 

2.4.1                                                   Delivery
schedules stated by the Company are estimates only and are not guaranteed by
the Company, but the Company shall, subject to Article 14 hereof, attempt
to make delivery within a reasonable time, taking into account the Distributor’s
need to obtain the Products, the availability of transportation, the needs of
other customers of the Company, the existence of special orders and other
commercial matters. The Company shall not be obligated to deliver any Products
without timely receipt of shipping instructions from the Distributor, and the
Company shall not be obligated to ship Products that have been discontinued or
that are temporarily out of stock.

 

2.4.2                                                   Unless
the parties hereto otherwise agree in writing or by telecopy with respect to a
given purchase order, the Distributor shall be solely responsible for all
shipping, duty and customs charges applicable to the Products.

 

Section 2.5                                   Return
of Products. Distributor agrees to abide by the terms of the Company’s
returned goods policy, and no Product may be returned after shipment to
the Distributor, except as permitted in the Company returned goods policy as
such may be amended from time to time by the Company.

 

Section 2.6                                   Taxes.
Any and all customs, tariffs and duties or excise, sales, use, value-added or
other taxes or levies imposed by any governmental body in the Territory on the
Distributor or the Company in connection with the sale of the Products to or by
the Distributor shall be paid by the Distributor. The Distributor shall fully
reimburse and indemnify the Company for any amount actually paid by the Company
or withheld by the Distributor for any such taxes or levies within thirty (30)
calendar days after the date on which the Company gives notice thereof to the
Distributor or after the date of withholding by the Distributor, as the case may be.

 

5

 

ARTICLE 3.                             INTELLECTUAL
PROPERTY AND TRADEMARKS

 

Section 3.1                                   Certain
Definitions.

 

3.1.1                                                   “Company’s
Property” shall mean any and all inventions, trade secrets, manufacturing
processes, know-how, product designs, formulas, formulations, machine designs,
technical information, technical designs, engineering and product data,
specifications, blueprints, drawings, manuals, customer lists, vendor and
supplier lists and agreements, distributor and sales representative lists and
agreements, marketing and other business strategies, forms, sales aids, and
other confidential information and materials, whether or not in documentary form and
whether or not patented by the Company or its parent, subsidiaries or other
affiliates in the Territory or elsewhere, that are heretofore and hereafter
owned or controlled by the Company or its parents, subsidiaries or other
affiliates and that relate to the design, manufacturing, production,
operations, marketing, sale, distribution and use of the Products or that
otherwise relate to the business, products and services of the Company or its
parents, subsidiaries or other affiliates.

 

3.1.2                                                   “Company’s
Trademarks” shall mean any and all of the trademarks, service marks or trade
names, whether or not registered by the Company or its parents, subsidiaries or
other affiliates in the Territory or elsewhere, and all good will related
thereto, that are heretofore and hereafter owned or controlled by the Company
or its parents, subsidiaries or other affiliates and that are associated with
the Products.

 

Section 3.2                                   Ownership
and Limited License to Reproduce Company’s Trademarks. Any and all of
Company’s Property and Company’s Trademarks are and shall remain the exclusive
property of the Company or its parents, subsidiaries or other affiliates. This
Agreement affords the Distributor no rights therein; the Distributor shall have
no rights therein; and the Distributor shall never assert any rights therein;
provided, however, that the Company grants the Distributor a limited,
non-exclusive, fully paid-up license to reproduce Company’s Trademarks in advertisements
and other promotional materials during the term of this Agreement. Such license
is granted for the sole purpose of assisting the Distributor in promoting the
sale and use of the Products in the Territory under this Agreement. Subject to Section 18.7
hereof, such license shall expire immediately upon the expiration of this
Agreement or the termination of this Agreement, with or without cause.

 

Section 3.3                                   Certain
Additional Restrictions.

 

3.3.1                                                   The
Products to be sold to the Distributor hereunder shall bear Company’s
Trademarks. The Distributor shall not remove, conceal or alter any of Company’s
Trademarks on the

 

6

 

Products. The
Distributor shall promote and sell all Products in their original packages and
under the original labels provided by the Company; provided, however, that the
Distributor shall fully and timely advise the Company of all laws and
regulations of the Territory governing the packaging and labeling of the
Products and provided further that, upon receipt of such information, the
Company shall use its best efforts to ensure that the packaging and labeling of
the Products are in substantial compliance with all such laws and regulations.
The Distributor shall make no modifications, alterations, changes, enhancements
or additions in or to the Products or the Company’s Trademarks, except for the
addition of the name and address of the Distributor to the Products, displaying
the name and address of the Distributor and the Company in the same-size print
on the Products.

 

3.3.2                                                   The
Distributor shall include an appropriate trademark or trade name notice on its
advertisements, sales literature, press releases and all other marketing
materials that use Company’s Trademarks.

 

3.3.3                                                   The
Distributor shall not use Company’s Trademarks on its letterhead or in its
Company name; provided, however, that the Distributor may include a short
plain language statement on its letterhead and promotional literature to the
effect that it is an authorized distributor of the Company’s Products.

 

3.3.4                                                   The
Distributor represents and warrants that it has not sought or obtained, and
agrees that it shall not seek or obtain, in the Territory or elsewhere, any
trademark or tradename registration embodying Company’s Trademarks or any
patent or other intellectual property protection for any of the Company’s
Property, unless authorized to do so in advance in writing by the Company.

 

Section 3.5                                   Confidentiality.

 

3.5.1                                                   During
the term of this Agreement at all times after the expiration of this Agreement
or the termination of this Agreement, with or without cause, the Distributor
shall treat all Company’s Property disclosed or supplied to it by the Company
as confidential and shall cause, instruct and oblige its directors, officers,
employees and agents and any other person acting in concert with it or on its
behalf and having access to such Company’s Property to keep the same in
confidence. The Distributor shall not, at any time, in any way, directly or

 

7

 

indirectly,
publicly or privately (i) communicate, disclose, disseminate, lecture upon
or publish articles concerning Company’s Property nor (ii) aid anyone else
in such communication, disclosure, dissemination, lecturing or publishing, nor (iii) use,
nor aid anyone else in using, Company’s Property, without the prior express
written consent of the Company. Provided, however, that the Distributor’s
obligation of secrecy and non-use under this Agreement shall not apply to (a) information
that the Distributor is using strictly in accordance with the terms of this
Agreement for the limited purpose of promoting the sale and use of the Products
in the Territory; (b) information that at the time of the disclosure by
the Company to the Distributor is in the public domain; (c) information
that, after disclosure by the Company to the Distributor, becomes part of
the public domain by publication or otherwise, through an authorized source
other than the Distributor and without the fault of the Distributor; and (d) information
that the Distributor can show by written records was in the Distributor’s
possession prior to the disclosure by the Company to the Distributor and was
not acquired, directly or indirectly, from the Company. Provided further,
however, in order for the above proviso in this Section 3.5.1 to be
applicable, Distributor must make a claim to the Company in writing and with
specificity that it contends this proviso applies to some or all of the Company’s
Property disclosed to it by Company within ten (10) days of the date of
Company’s disclosure. Such writing must identify the portion of the Company’s
Property that Distributor contends is the subject of this proviso and the
factual basis upon which its claim is grounded. If Company disputes such claims
by Distributor then the parties shall submit the issues to JAMS - ENDISPUTE for
binding arbitration in Orange County, California. The Distributor shall have
the burden of proving that the exceptions set forth in the proviso apply by
clear and convincing evidence and, until there is a final resolution of the
dispute in Distributor’s favor. Distributor shall be bound by the provisions in
the first part of Section 3.5.1. If Distributor fails to deliver
timely notice under this Section, then all such information shall be
conclusively deemed to be Company Property belonging to Company and subject to
all of the other provisions of this Agreement.

 

3.5.2                                                   During
the term of this Agreement, the Distributor shall not, under any circumstances,
copy, replicate, imitate, or reverse engineer any products of the Company,
including, but not limited to, the Products.

 

3.5.3                                                   Upon
the expiration of this Agreement or the termination of this Agreement, with or
without cause, the

 

8

 

Distributor shall,
subject to Section 18.7 hereof, immediately return to the Company any and
all Company’s Property, including, but not limited to, any documentary
embodiment thereof.

 

Section 3.6                                   Infringement.
The Distributor shall give immediate Notice to the Company of any and all
infringements of Company’s Property Trademarks that come to the Distributor’s
attention during the term of this Agreement and shall assist the Company in
taking such action against such infringement as the Company may, in its sole
discretion, decide to take; provided, however, that all costs and expenses,
including reasonable attorneys’ fees incurred by counsel approved by the
Company, incurred in connection with any such infringement action shall be borne
by the Company. The Company shall hold the Distributor harmless from, and shall
indemnify the Distributor against, any and all claims, losses, liabilities,
damages and costs and expenses (including, but not limited to, costs of
investigation, court costs, arbitrators’ fees and attorneys’ fees) that the
Distributor may incur by reason of any infringement by the Company of any
trademark or patent or other proprietary right of any third party.

 

Section 3.7                                   Injunctive
Relief. The parties hereto understand and agree that remedies at law may be
inadequate to protect against any breach of any of the provisions of this Article 3
by the Distributor or any of its employees, agents, officers or directors or
any other person acting in concert with it or on its behalf. Accordingly, the
Company shall be entitled to the granting of injunctive relief by a court of
competent jurisdiction against any action that constitutes any such breach of
this Article 3. It is understood that such injunctive relief is intended
solely as provisional relief pending arbitration in accordance with Article 10
hereof.

 

Section 3.8                                   Indemnification.
Each party shall hold the other harmless from, and shall indemnify the other
against, any and all claims, losses, liabilities, damages and costs and
expenses (including, but not limited to, costs of investigation, court costs,
arbitrators’ fees and attorneys’ fees) that the indemnified party may incur
by reason of any breach of any of the provisions of this Article 3 by the
indemnifying party or any of its employees, agents, officers, or directors or
any other person acting in concert with it or on its behalf.

 

9

 

ARTICLE 4.                             PROMOTIONAL
ACTIVITIES

 

Section 4.1                                   Promotional
Activities of the Distributor. During the term hereof, the Distributor,
at its sole cost and expense, covenants and agrees to:

 

4.1.1                                                   Assign
at least one (1) full-time product manager, whose sole responsibility
shall be to promote vigorously and consistently the sale of the Products and
provide technical support regarding the Products for the Distributor’s
customers;

 

4.1.2                                                   Monitor
closely the activities of sub-distributors, if any, all of which must be
approved by Company in writing in advance;

 

4.1.3                                                   Participate
actively and engage in sufficient advertising and publicity campaigns,
scientific meetings and exhibitions, trade fairs and shows, and other marketing
activities, to promote vigorously and consistently the sale of the Products
throughout the Territory.

 

Section 4.2                                   Promotional
Activities of the Company. During the term hereof, the Company, at its sole cost and expense, covenants and agrees to:

 

4.2.1                                                   Provide
at least one (1) technical support specialist to (a) conduct
appropriate training sessions and workshops for all employees of the
Distributor engaged in promoting the Products, and (b) conduct in-service
support for key purchasers and users of the Products;

 

4.2.2                                                   Make
such contributions to the Distributor’s marketing budget as the Company may determine
in its discretion;

 

4.2.3                                                   Make
such contributions to the Distributor’s new product launch budget as the
Company may determine in its discretion, including product literature,
samples and other informational materials;

 

4.2.4                                                   Conduct
an annual training workshop.

 

ARTICLE 5.                             MINIMUM
SALES

 

Section 5.1                                                Minimum
Sales. In addition to all of its other obligations under this
Agreement, the Distributor shall achieve the annual minimum sales of the
Products specified on Schedule A attached hereto, as such Schedule A may be
amended in writing by the parties hereto from time to time during the term
hereof. The Distributor understands and acknowledges that its strict
fulfillment of such minimum sales is an essential

 

10

 

condition to this
Agreement and that its failure to make any of such sales shall be just cause
for termination of this Agreement pursuant to Section 18.3 hereof.

 

Section 5.2                                                Reporting
Obligations.

 

5.2.1                                                   During
the term hereof, the Distributor shall provide: (a) quarterly in arrears,
a sales report, on a customer by customer basis, including detail as to type of
customer, and (b) a current inventory report within ten (10) days of
the Company’s request therefor.

 

5.2.2                                                   To
underscore that the arrangement contemplated by this Agreement is an exclusive
distributorship and not a sales agency, the parties hereto agree that under no
circumstances shall the Distributor be required to provide the Company at any
time after its expiration or termination, the names and addresses of any of the
Distributor’s customers of the Products in the Territory.

 

ARTICLE 6.                             WARRANTY
COVERAGE

 

Section 6.1                                   Warranty
Limitation. The sole warranties that the Company makes with respect to
the Products are set forth on the Products or their packaging. EXCEPT AS STATED
IN THE FOREGOING SENTENCE, THE COMPANY DISCLAIMS ANY AND ALL WARRANTIES ON THE
PRODUCTS, WHETHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTIES OF THEIR MERCHANTABILITY OR THEIR FITNESS FOR A PARTICULAR PURPOSE
OR ANY WARRANTY ARISING FROM COURSE OF DEALING OR USAGE OF TRADE. TO THE EXTENT
THAT ANY IMPLIED WARRANTIES MAY NOT BE DISCLAIMED, SUCH WARRANTIES ARE
EXPRESSLY LIMITED TO THE DURATION OF THE EXPRESS WARRANTY STATED BY THE COMPANY
ON THE PRODUCTS OR THEIR PACKAGING.

 

Section 6.2                                   Warranty
Claims.

 

6.2.1                                                   All
of the Products shall be received by the Distributor subject to the Distributor’s
visual inspection and may be rejected on the grounds that the warranties
that the Company states on the Products or their packages have been breached.
The Distributor shall assert all such warranty claims in writing to the Company
as soon as possible but in any event during the warranty period stated in the
warranty on the Products or their packaging. At the Company’s request, the Distributor
shall promptly supply such evidence of warranty breach as the Company may reasonably
request.

 

11

 

6.2.2                                                   THE
DISTRIBUTOR’S EXCLUSIVE REMEDY AND THE COMPANY’S LIMIT OF LIABILITY FOR ANY AND
ALL WARRANTY CLAIMS HEREUNDER, SHALL BE FOR THE REPLACEMENT OF THE PARTICULAR
PRODUCTS WITH RESPECT TO WHICH SUCH CLAIMS ARE ASSERTED. THE COMPANY SHALL NOT
BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES
RESULTING FROM THE USE OF THE PRODUCTS OR ARISING OUT OF ANY BREACH OF ANY OF
THE WARRANTIES THAT THE COMPANY STATES ON THE PRODUCTS OR THEIR PACKAGING OR
ANY BREACH BY THE COMPANY OF ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR
APPLICABLE LAW.

 

Section 6.3                                                Indemnification
for Unauthorized Warranties. The Company shall not be responsible for
any warranty that the Distributor or any of its sub-distributors makes
concerning the Products other than those warranties made by the Company as set
forth in Section 6.1 hereof. The Distributor shall hold the Company
harmless from and indemnify it against any and all claims, losses, liabilities,
damages, and costs and expenses (including, but not limited to, costs of
investigation, court costs, arbitrators’ fees and attorneys’ fees) that the Company
may incur arising out of or relating to (i) any such additional
warranty made by the Distributor or any of its agents, employees or
sub-distributors, (ii) the act or omission of the Distributor or any of
its agents, employees or sub-distributors in connection with the transporting,
receiving, handling, storing, advertising, promoting, selling and distributing
any of the Products, and (iii) any breach by the Distributor of any of its
obligations under this Agreement or any purchase order issued by the
Distributor and accepted by the Company hereunder or under applicable law.

 

Section 6.4                                                Product
Liability Insurance. The Distributor shall at all times maintain
adequate product liability insurance with respect to its sale of the Products
with underwriters, limits and terms reasonably acceptable to the Company.

 

ARTICLE 7.                             REPRESENTATIONS
AND WARRANTIES BY THE DISTRIBUTOR

 

Section 7.1                                                The
Distributor represents and warrants to the Company as follows:

 

7.1.1                                                   It
is a marketing and sales company duly organized and validly existing and in
good standing under the laws of the state or country of its organization and
all applicable foreign jurisdictions, and is duly qualified to conduct its
business as presently conducted in all those jurisdictions in which it presently
conducts business.

 

12

 

7.1.2                                                   It
has full power and authority to execute and deliver this Agreement and to perform the
terms and conditions hereof.

 

7.1.3                                                   It
has taken all necessary legal action to authorize the execution and delivery of
this Agreement. The representative who has executed and delivered this
Agreement on behalf of the Distributor has been duly and validly authorized and
will bind the Distributor by his action.

 

7.1.4                                                   This
Agreement constitutes the legal, valid and binding obligation of the
Distributor enforceable against the Distributor in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors’ rights generally and except as the
availability of equitable remedies may be limited under applicable law.

 

7.1.5                                                   The
execution, delivery and performance of this Agreement will not violate any
provision of the Articles of Incorporation or Bylaws of the Distributor, or any
law, rule, regulation, order or decree of any court or arbitrator that is or may be
binding upon the Distributor or any of its assets. The execution, delivery and
performance of this Agreement will not result in the breach of any provision of
or any default under any agreement to which the Distributor is a party or which
is or may be binding upon the Distributor or any of its assets.

 

7.1.6                                                   There
are not pending or, to the knowledge of the Distributor, threatened legal
actions, arbitrations or other proceedings against the Distributor or any of
its assets that, if adversely determined, might have a material adverse effect
on the validity or enforceability of this Agreement or on the financial
condition of Distributor or the capability of the Distributor to perform its
obligations hereunder.

 

7.1.7                                                   None
of the following is a shareholder, director, officer, employee, agent or
representative of the Distributor:  The
Government of any Municipality, State or Country within the Territory or any
political subdivision thereof or any agency, department or instrumentality of
any such Government or the Territory or any political subdivision thereof; no
official or representative of any such Government or the Territory or any
agency, department or instrumentality of any such Government or the Territory
or political subdivision thereof, or any official of a political party or
candidate for public office.

 

13

 

7.1.8                                                   The
Distributor has never been and is not now the subject of any bankruptcy or
insolvency proceeding or other proceeding, voluntary or involuntary, for the
benefit of creditors.

 

7.1.9                                                   Neither
this Agreement nor the appointment of the Distributor hereunder must be
notified to, approved by, or registered with, any governmental body, agency or
instrumentality in the Territory, except as set forth in Schedule E.

 

7.1.10                                             The
Distributor has the capacity under the law to agree to the choice of law and
the choice of forum set forth in Articles 9 and 10, respectively, and such
choices are enforceable against the Distributor.

 

7.1.11                                             Nothing
in this Agreement violates the fundamental public policy of the Territory.

 

7.2            Each of
the representations and warranties set forth in this Article 7 and in Section 1.6.2
hereof shall be deemed to be confirmed by the Distributor on each date on which
it submits a purchase order to the Company hereunder.

 

7.3            The
Distributor shall immediately give Notice to the Company if any of the
representations and warranties made by it in this Article 7 or in Section 1.6.2
hereof should prove to have been incorrect, incomplete or misleading on the
date of this Agreement or should become incorrect, incomplete or misleading
during the term of this Agreement.

 

ARTICLE 8.                             REPRESENTATIONS
AND WARRANTIES BY THE COMPANY

 

Section 8.1                                   The
Company represents and warrants to the Distributor as follows:

 

8.1.1                                                   It
is a corporation duly organized and validly existing and in good standing under
the laws of the State of California and is duly qualified to conduct its
business as presently conducted in all those jurisdictions in which it
presently conducts business.

 

8.1.2                                                   It
has full power and authority to execute and deliver this Agreement and to perform the
terms and conditions hereof.

 

8.1.3                                                   It
has taken all necessary legal action to authorize the execution and delivery of
this Agreement. The representative who has executed and delivered this
Agreement on

 

14

 

behalf of the
Company has been duly and validly authorized and will bind the Company by his
action.

 

8.1.4                                                   This
Agreement constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other similar
laws affecting creditors’ rights generally and except as the availability of
equitable remedies may be limited under applicable law.

 

8.1.5                                                   The
execution, delivery and performance of this Agreement will not violate any
provision of this Articles of Incorporation or Bylaws of the Company or any
order or decree of any court or arbitrator that is or may be binding upon
the Company or any of its assets. The execution and delivery of this Agreement
will not result in the breach of any provision of or any default under any
agreement to which the Company is a party or which is or may be binding
upon the Company or any of its assets.

 

ARTICLE 9.                             GOVERNING
LAW

 

This Agreement and each purchase order issued by the Distributor and
accepted by the Company hereunder shall be exclusively governed by and
construed in accordance with the laws of the State of California, United States
of America, without giving effect to the choice-of-law principles thereof;
provided, however, that the United Nations Convention on contracts for the
International Sale of Goods shall in no way apply to the interpretation of this
Agreement or any such purchase order.

 

ARTICLE 10.                      DISPUTE
SETTLEMENT

 

Section 10.1                                         Arbitration.

 

10.1.1                                             Any
dispute, controversy or claim arising out of or relating to this Agreement or
any purchase order issued by the Distributor and accepted by the Company
hereunder or a breach hereof or thereof shall be finally resolved by
arbitration in accordance with the Rules and Procedures of JAMS -
ENDISPUTE in Orange County, California.

 

10.1.2                                             The
arbitration proceedings, all documents submitted therein and the award shall be
in the English language, and the arbitrator shall be fluent in the English
language. The arbitration proceedings shall be held in Orange County,
California. The arbitrator shall apply such rules of procedure as it
thinks appropriate in the circumstances; provided, however,

 

15

 

that both parties
hereto shall be entitled to representation by counsel, to appear and present
written and oral evidence and argument and to cross-examine witnesses presented
by the other party. The award shall be in writing and the arbitrator shall
provide written reasons for its award. The award of the arbitrator shall be
final and binding upon the parties hereto.

 

10.1.3                                             The
provisions of this Article 10 shall survive and bind the parties hereto,
notwithstanding any expiration or termination of this Agreement or any purchase
order, whether by way of the exercise of rights of termination hereunder or
thereunder, passage of time or otherwise. The provisions of this Article 10
shall be severable and binding on the parties hereto, notwithstanding that any
other provisions of this Agreement or any purchase order may be held or
declared to be invalid, illegal or unenforceable.

 

Section 10.2                                         Service
of Process.

 

10.2.1                                             The
Distributor irrevocably and unconditionally consents to service of process upon
it in any proceeding brought pursuant to Section 3.6 or 10.1 hereof by
mailing copies of any Notice or pleading thereof by U.S. registered mail,
postage prepaid, return receipt requested. The foregoing shall not limit the
right of the Company to serve process in any other manner permitted by
applicable law and shall not limited the ability of the Company to bring any
such proceeding or to obtain execution for any judgment rendered in any such
proceeding any other jurisdiction in which the Distributor or any of its
property or assets may be found.

 

10.2.2                                             The
Distributor specifically hereby waives any claim or right it may have by
statute, treaty or law to contest the jurisdiction or venue of JAMS - ENDISPUTE
in Orange County, California or any United States state or federal court in any
action or proceeding instituted pursuant to this Agreement, including, but not
limited to, any claim that the Distributor might assert under the Foreign
Sovereign Immunities Act of the United States, the Hague Convention on the
Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial
Matters and the Hague Convention on the Taking of Evidence Abroad in Civil or
Commercial Matters.

 

10.2.3                                             The
Distributor specifically waives any claim of forum non conviens and
specifically consents to venue as provided herein.

 

16

 

Section 10.3                                         Enforcement
of Judgment.

 

The Distributor agrees that final judgment on an arbitral award
rendered against it in any action or proceeding relating in any way to this
Agreement or any purchase order issued by the Distributor and accepted the
Company hereunder shall be conclusive and may be enforced, to the extent
permitted by applicable law, in any other jurisdiction within or outside the
United States of America by suit on the judgment, a certified copy of which
judgment shall be conclusive evidence thereof, or by such other means provided
by applicable law.

 

ARTICLE 11.                      SEVERABILITY
AND SURVIVAL

 

Section 11.1                                         Severability.
In the event that any provision or part of any provision of this Agreement
or any purchase order issued by the Distributor and accepted by the Company
hereunder is held to be invalid or unenforceable in any respect, then, unless
such provision or part of a provision is material to the performance of
this Agreement or such purchase order, as the case may be, as determined
by the Company or the Distributor or both of them, this Agreement or such
purchase order, as the case may be, shall continue in effect and such
provision or part of the provision shall be excised herefrom or therefrom.
In the event that either party hereto, in its sole discretion, determines that
such provision or part of a provision to the operation or performance of
this Agreement or such purchase order, as the case may be, then either
such party may, in its sole discretion, elect to terminate this Agreement or
such purchase order, as the case may be, or both, upon thirty (30)
calendar days’ prior to notice to the other party.

 

Section 11.2                                         Survival.
Sections 1.4, 1.5, 1.6 and 2.5 and the Articles 3, 6, 7, 8, 9, 10, 16 and 19
hereof shall survive the expiration of this Agreement or the termination of
this Agreement, with or without cause.

 

ARTICLE 12.                      ASSIGNMENT

 

Neither party hereto may assign its rights or obligations under
this Agreement or any purchase order issued by the Distributor and accepted by
the Company hereunder except upon the prior written approval of the other party
hereto; provided, however, that the Company may assign its rights and
obligations hereunder or thereunder to its parent or any of its subsidiaries or
other affiliates or the surviving entity in any corporate merger or
reorganization, but shall give prompt Notice thereof to the Distributor. This
Agreement shall be binding upon and inure

 

17

 

to the benefit of
the parties hereto and their respective successors and permitted assigns.

 

ARTICLE 13.                      WAIVER

 

The failure or delay of either party hereto to require performance by
the other party or to enforce its rights under any provision of this Agreement
or any purchase order issued by the Distributor and accepted by the Company
hereunder shall not affect the rights of such party to require performance and
to enforce its rights with respect to such provision unless and until such
performance has been waived in writing by such party. No waiver of any failure
or delay in performance hereunder or thereunder shall constitute waiver of a
continuance or reoccurrence of such failure or delay or of any other failure or
delay, except as provided in such waiver. The rights granted to each party
hereunder and under any purchase order issued by the Distributor and accepted
by the Company hereunder and any rights available to it at law or in equity
shall be cumulative and may be exercised in whole or in part from
time to time.

 

ARTICLE 14.                      FORCE
MAJEURE

 

Neither party hereto shall be liable or responsible to the other party
hereto for delay or failure to perform any of its obligations, other than
an obligation to pay money arising under this Agreement or any purchase order
issued by the Distributor and accepted by the Company hereunder, due to events
of force majeure, including, but not limited to, acts of God or of the public
enemy, fire, flood, storm, explosion, earthquake, riots, wars, hostilities,
civil commotion, strikes and labor disputes, interruption of supply, inability
to obtain fuel, power, raw materials or freight or transportation services, any
law or regulation, any decision by any judicial or arbitral tribunal or any
other acts of any government or any agency or instrumentality thereof or
persons purporting to act with governmental authority, or any other cause
beyond the reasonable control of such party or which such party is not able to
overcome by the use of reasonable measures or which such party is able to
overcome only at substantial expense. This Article 14 shall not be
interpreted to relieve the Distributor from it’s obligation to pay as and when
due in the applicable currency all payments required to be made by the
Distributor under this Agreement or any purchase order issued by the
Distributor and accepted by the Company hereunder. If any such event of force
majeure should occur, the affected party shall promptly give Notice thereof to
the other party hereto. If any such even of force majeure continues, in whole
or in substantial part, whether continuously or intermittently, for a period of
sixty (60) calendar days or more, the other party may

 

18

 

terminate this
Agreement or any relevant purchase order or both on thirty (30) calendar days’
prior Notice to the affected party.

 

ARTICLE 15.                      NOTICES AND
OTHER COMMUNICATIONS

 

All notices (“Notices”), purchase orders, acceptances of purchase
orders, and other communications between the parties hereunder shall be in the
English language and in writing (by mail, telecopy or telegraph), postage of
transmission costs prepaid, and shall be addressed to the parties hereto at
their respective principal places of business, which shall initially be:

 

	
  If
  to the Company:

  	
   

  	
  If
  to the Distributor:

  
	
   

  	
   

  	
   

  
	
  WORLDWIDE
  PRODUCTS, INC.

  	
   

  	
  VNO
  Vietnam Obagi Corp.

  
	
  2030
  East Alosta Avenue

  	
   

  	
  10161
  Bolsa Ave,

  
	
  Suite 103

  	
   

  	
  Suite B210

  
	
  Glendora,
  California 91740

  	
   

  	
  Westminster,
  CA 92683

  
	
  United
  States of America

  	
   

  	
  United
  States of America

  
	
  Attention:
  President

  	
   

  	
  Attention:               &
  Elizabeth Lam Nguyen

  
	
  Telecopy:
  (818) 857-7652

  	
   

  	
   

  

 

All such Notices
and communications shall be deemed effective on (i) the date of
transmission, if sent during normal business hours by telecopy, or (ii) the
date that is five (5) calendar days after the date on which transmitted,
deposited or sent, if sent by mail or telegraph. Each party hereto may change
its address for purposes hereof by Notice given to the other party in the
manner prescribed herein.

 

ARTICLE 16.                      COMPLIANCE
WITH LAW

 

Section 16.1                            Compliance
with U.S. Law. The parties hereto understand and acknowledge that the
export of the Products to the Distributor is subject to the law of the United
States of America and may require, amount other things, prior approval of
one or more agencies of the U.S. Government. The Distributor shall use its best
efforts to assist the Company in obtaining, retaining and complying with any
export license that may be granted to the Company with respect to the
export of the Products to or by the Distributor hereunder. In addition, the
Distributor shall at all

 

19

 

times comply fully
and timely with all laws of the United States of America that may be
applicable to it in performing its obligations under this Agreement, and the
Distributor shall refrain from taking any action that might cause it or the
Company to be deemed to be in violation of any law of the Territory or any law
of the State of California or of the United States of America, including, but
not limited to, the U.S. Foreign Corrupt Practices Act, the U.S. export control
laws, and the U.S. anti-boycott laws.

 

Section 16.2                            Compliance
with Local Law

 

16.2.1                                             The
Distributor shall at all times comply fully and timely with all laws and
regulations applicable in the Territory, including, but not limited to, all
laws and regulations relating to the review or approval of this Agreement, the
performance of Distributor’s duties hereunder, and the registration, approval,
promotion, distribution and sale of the Products in the Territory.

 

16.2.2                                             The
Distributor shall use its best efforts to obtain and maintain all licenses,
consents, qualifications and approvals of governmental bodies in the Territory
necessary or advisable to perform this Agreement and render this Agreement
valid, binding and enforceable in the Territory; provided, however, no
disclosures, filings and other submissions cornering this Agreement or the
Products may be made to any such governmental body without the prior
approval of the Company. If for any reason, including, but not limited to, an
event of force majeure, the Distributor does not obtain all such necessary and
advisable government registrations and/or approvals of the Products within six (6) months
after the Effective Date (as defined in Section 17 hereof) or such other
time as may be permitted under applicable law, then this Agreement shall,
without any notice or other act by the Company, terminate, unless the parties
hereto agree in writing to extend the deadline by which the Distributor must
obtain all such government registrations and/or approvals. Throughout the term
of this Agreement, the Distributor shall immediately give the Company Notice of
any revocation of, or any other notice, investigation, inquiry, action or
decision with respect to, Distributor, the Products of this Agreement or any
registration and/or approval of Distributor or the Products by governmental
bodies in the Territory.

 

Section 16.3                            Information
on Local Law. The Distributor shall keep informed and shall use its
best efforts to promptly and regularly give Notice to the Company of any and
all of the following of which the Distributor has knowledge: laws,

 

20

 

ordinances, rules,
regulations or judicial or arbitral decisions in the Territory that might
affect the sale or distribution of the Products in the Territory, the use of
the Company’s Trademarks in the Territory, or the protection of the Company’s
Property and the Company’s Trademarks in the Territory, including, but not
limited to, laws, regulations, or judicial or arbitral decisions relating to
customs duties, import procedures, foreign exchange transactions, tax laws,
product certifications, protection of proprietary information, or the rights
and duties of distributors and foreign manufacturers.

 

ARTICLE 17.                      EFFECTIVE
DATE; TERM

 

This Agreement shall become effective on the date this Agreement is
signed by the Company, as shown on the signature page hereto, (the “Effective
Date”) and shall expire on the day prior to the first anniversary of the
Effective Date, unless terminated earlier in accordance with the terms and
conditions hereof. The parties hereto expressly understand and agree that this
Agreement is a fixed term agreement and shall, unless terminated earlier in
accordance herewith, expire at the end of its term without Notice or any other
act by either party hereto. Subject to Section 18.7 hereof, neither party
hereto shall continue with its performance hereunder after the expiration or
termination hereof, unless the parties agree otherwise in writing.

 

ARTICLE 18.                      TERMINATION

 

Section 18.1                            Termination
Due to Bankruptcy and Other Events.

 

This Agreement shall terminate immediately, without Notice or other act
by the Company in the event that:

 

18.1.1                                             a
voluntary or involuntary case, action, petition or other proceeding is
initiated seeking liquidation, reorganization or other relief of Distributor
under any bankruptcy, insolvency or similar law now or hereafter in effect, or
seeking appointment of a trustee, receiver, liquidator or other similar
official of Distributor or any of its property, or Distributor shall consent to
have any such relief, or shall make a general appointment for the benefit of
its creditors, or Distributor shall fail generally to pay its debts as they
become due, or Distributor shall take any corporate action in furtherance of
any of the foregoing;

 

18.1.2                                             the
Distributor shall be dissolved or its assets liquidated;

 

21

 

18.1.3                                             a
substantial change influencing Distributor’s ability to service this Agreement
shall occur in the ownership, control, organization, personnel or operations of
the Distributor, including, but not limited to, a sale or transfer of all or
substantially all of its assets or a merger between the Distributor and another
entity; then in any such event, without Notice or other act by the Company,
this Agreement shall terminate immediately.

 

Section 18.2                                         Termination
for Breach of Confidentiality. If the Distributor breaches any of its
obligations under Article 3 hereof or if any of its directors, officers,
employees, agents or others acting in concert with it or on its behalf breach
any of their obligations under the separate confidentiality agreements referred
to in Section 3.5(e) hereof, then this Agreement shall terminate
immediately, without any Notice or other act by the Company and without
prejudice to any other remedy available to the Company.

 

Section 18.3                                         Termination
by the Company for Certain Other Causes. The Company may, at its option
and without prejudice to any other remedy available to it, and without being
deemed to have made an election of remedies, terminate this Agreement upon the
occurrence of any of the following events:

 

18.3.1                                             The
Distributor fails to pay any amount that is obligated to pay under this
Agreement or under any purchase order or under any other written agreement
between the Company and the Distributor within thirty (30) calendar days of the
date on which such amount became due and payable;

 

18.3.2                                             The
Distributor fails to make any of the minimum sales specified in Schedule A
attached hereto;

 

18.3.3                                             The
Distributor breaches any of its other obligations hereunder (other than its
obligations under Article 3 hereof, breach of which is cause for immediate
termination pursuant to Section 18.2 hereof), or under any purchase order
issued by the Distributor and accepted by the Company hereunder or any other
written agreement between the Company and the Distributor, and fails to remedy
such breach within thirty (30) calendar days after its receipt of Notice
thereof from the Company;

 

22

 

18.3.4                                             Any
representation or warranty made by the Distributor in this Agreement or in any
other written agreement between the Company and the Distributor shall prove to
have been incorrect, incomplete or misleading in any material respect at the
time it was made or deemed made; or

 

18.3.5                                             It
becomes unlawful under the law of the Territory for the Distributor to perform its
obligations hereunder or under any purchase order issued by the Distributor and
accepted by the Company hereunder; or an enactment, modification or change in
the interpretation of the law of the Territory subsequent to the date first
above written interferes with or prohibits the full and faithful performance by
the Distributor of its obligations hereunder or under any such purchase order
or interferes with or prohibits the full and complete enforcement of the
Company’s rights under this Agreement or any such purchase order.

 

Section 18.4                            Termination
by the Distributor for Certain Other Causes. The Distributor may, at
its option, terminate this Agreement upon the occurrence of any of the
following events:

 

18.4.1                                             The
Company materially breaches any of its obligations hereunder and fails to
remedy or commence to cure such breach within thirty (30) calendar days after
its receipt of written notice thereof from the Distributor; or

 

18.4.2                                             Any
express representation or warranty made by the Company in this Agreement shall
prove to have been materially incorrect, incomplete or misleading in any
material respect at the time it was made.

 

Section 18.5                            Termination
for Other Causes by Either Party. Either party hereto may terminate
this Agreement in accordance with other express provisions hereof. This
Agreement shall terminate automatically in accordance with Section 16.2.2
hereof.

 

Section 18.6                            No
Compensation. Upon expiration of this Agreement and upon termination of
this Agreement by either party hereto, with or without cause, the Company shall
not be liable or obligated to the Distributor with respect to future profits,
exemplary, special or consequential damages, indemnification or other
compensation regarding such expiration or termination, irrespective of whether
such obligations or liabilities may be provided for in the law of the
Territory or elsewhere, and the Distributor waives and relinquishes any rights,
pursuant to law or otherwise, to any such indemnification or compensation.

 

23

 

Section 18.7                                         Duties
of the Distributor Upon Termination. Upon the expiration of this
Agreement or upon the termination of this Agreement by either party hereto,
with or without cause, the Distributor shall (i) cease immediately all of
its efforts to promote the sale of the Products; (ii) cease immediately
use of Company’s Trademarks; (iii) immediately discontinue making any
statements or taking any actions that might cause third parties to infer that
any business relationship continues to exist between the parties hereto and,
where necessary or advisable, inform third parties that the Distributor no
longer has a business relationship with the Company and is no longer authorized
to sell the Products in the Territory; and (iv) within ten (10) calendar
days after the date of expiration of this Agreement or the termination of this
Agreement, with or without cause, return to the Company, at the Company’s
expense, any and all Company’s Property, including, but not limited to,
promotional material, that has been furnished to the Distributor by the
Company; provided, however, that if the Distributor has an inventory of the
Products on hand on the date of expiration or termination, the Distributor may,
subject to Section 18.9, sell such Products, and may use Company’s
Trademarks and Company’s Property in connection therewith, for a period of
ninety (90) calendar days thereafter. In no event, however, shall the
Distributor sell the Products in a commercially unreasonable manner or in a
manner that could harm the future sales potential of the Products or the good
will of the Company or Company’s Trademarks in the Territory.

 

Section 18.8                            Unfilled
Purchase Orders. Unless otherwise agreed to in writing by the parties
hereto, Notice of termination of this Agreement by either party automatically
cancels all unfilled purchase orders. The Company’s acceptance of a purchase
order from the Distributor after the Company has given Notice of termination
hereunder shall not be deemed a waiver or a rescission of such Notice.

 

Section 18.9                            Repurchase
of Products by the Company. During the ninety (90) calendar-day period
after the date of expiration or termination of this Agreement, the Company may,
at its option, repurchase from the Distributor, at the net price paid by the
Distributor to the Company any and all of the Products on hand in the
Distributor’s place of business or elsewhere. Upon demand and tender by the
Company of such repurchase price, the Distributor shall deliver such Products
and all rights, title and interest therein, free and clear of all liens and
encumbrances, to the Company and the Company shall pay all reasonable freight
costs associated with shipping such Products back to the Company. The Company,
however, reserves the

 

24

 

right to reject
any such repurchased Products not in first class or acceptable condition,
as reasonably determined by the Company.

 

Section 18.10                     Right to
Sell. Upon the expiration of this Agreement or the termination of this
Agreement by either party hereto, with or without cause, the Company shall have
the right to sell the Products in the Territory itself and to appoint one or
more other distributors of the Products in the Territory. The Distributor
waives and relinquishes any rights that it may have, under the law of the
Territory or elsewhere, to seek to enjoin the Company from making such sales or
appointing such other distributors and the Distributor shall not attempt to
exercise any such rights.

 

ARTICLE 19.                      ENTIRE
AGREEMENT AND AMENDMENT

 

Section 19.1                            Entire
Agreement; Revocation of All Prior Agreements. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and all parties hereto expressly intend and agree that
this Agreement shall supersede any prior agreement or expression of intent or
understanding, oral or written, with respect to the subject matter hereof. In
addition, Distributor expressly acknowledges and agrees there have been no
representations, warranties, inducements or promises made by Company which are
not set forth in this Agreement.

 

Section 19.2                            Amendment.
Neither this Agreement nor any purchase order issued by the Distributor and
accepted by the Company hereunder nor any Schedule hereto may be
amended except by a writing executed by duly authorized representatives of the
parties hereto, or except pursuant to other provisions hereof.

 

ARTICLE 20.                      HEADINGS

 

Headings are inserted in this Agreement for reference and convenience
only and shall not form part of this Agreement for the purpose of
interpretation.

 

ARTICLE 21.                      COUNTERPARTS

 

This Agreement may be executed in two (2) or more
counterparts, each of which is in the English language and each of which is an
original, true and correct version hereof.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective duly authorized representatives on
the date first above written.

 

25

 

	
  WORLDWIDE PRODUCTS

  DISTRIBUTION, INC.

  	
  

  V. N. Obagi Corporation

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
  /s/ Elizabeth Lam Nguyen

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  James
  Headley

  	
  Name:

  	
  Elizabeth
  Lam Nguyen

  
	
   

  	
   

  
	
  Title:

  	
  President

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
  8/18/97

  	
   

  

 

26

 

SCHEDULE A

 

TO: Nelson Nam
Nguyen and Elizabeth Lam Nguyen

 

DISTRIBUTORSHIP
AGREEMENT BETWEEN WORLDWIDE PRODUCTS, INC.

 

AND VNO Vietnam
Obagi Corp. DATED 8/18/97

 

PRODUCTS, PRICES
AND MINIMUM SALES REQUIREMENTS

 

	
  Product

  	
   

  	
  Price

  	
   

  	
  Minimum Sales

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SKIN
  HEALTH PRODUCTS

  	
   

  	
   

  	
   

  	
  $

  	
  100,000.00

  	
   

  
	
  NU-DERM
  PRODUCTS

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BLUE
  PEEL PRODUCTS

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Price
  list is Attached

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

27

 

SCHEDULE B

 

TO:
              and
Elizabeth Lam Nguyen

 

DISTRIBUTORSHIP
AGREEMENT BETWEEN WORLDWIDE PRODUCTS, INC.

 

AND VNO Vietnam
Obagi Corp. DATED 8/18/97

 

 

TERRITORY

 

VNO will have the
rights to sell the products to physicians in the Vietnamese community located
in Westminster, California. The territory is contained in the following postal
zip code (926XX).

 

VNO will be
allowed to distribute the products to medical professional Vietnamese people
for use by Vietnamese patients in predominantly Vietnamese communities. These
geographic areas will be approved by WWPI management. VNO can advertise the
Obagi products in Vietnamese specific literature. All advertisements are to be
approved by WWPI management.

 

•                  Additionally, both VNO and WWPI agree
that ALL the products will only be sold to a medical professional (MD) or a
facility associated with a medical professional (MD Clinic) for re-sale to that
professionals patients. Non-professional settings are to be avoided. VNO will
provide WWPI with a list of the customers that purchase the product from VNO.

 

28

 

AMENDMENTS

 

SECTION 1.3,
TERRITORY: The geographic territory is defined in Schedule B of the
initial contract and takes precedence. Consideration will be given to include
other specific accounts outside of the defined geographic territory or to
include additional geographic territories. The inclusion of either accounts or
territories will be done on a one-by-one basis. Both the DISTRIBUTOR and the
COMPANY must approve all changes (additions and deletions) in writing and be
signed by either the president or vice president of both companies.

 

The DISTRIBUTOR
must insure that the products sold to accounts under their control are used by
those accounts. Product is to be used by the account, at the accounts location,
and for the accounts patients. Product is not to be diverted to other accounts,
territories, or geographic locations with the intent of re-sale. The
DISTRIBUTOR is responsible for maintaining the distribution and use of the
products in the assigned territories.

 

SECTION 2.2,
DISCOUNT: Product pricing is specified in SECTION 2.2 and takes
precedence. A 30% discount will be extended to the DISTRIBUTOR for the
COMPANIES products. The 30% discount will apply to all accounts in the initial
territory as defined in Schedule B of the initial contract. If accounts or
territories are assigned to the DISTRIBUTOR that is being serviced by a COMPANY
sales representative, the sales commission for these sales will be deducted
from the DISTRIBUTOR’S discount. Typically, the COMPANY sales representative
commission is 8%, therefore, the DISTRIBUTOR discount will be reduced to 22%.

 

Pricing: The
DISTRIBUTOR agrees to maintain, to the best of their ability, pricing policies
that are compatible to that of the COMPANY. The COMPANY extends a 10% discount
on orders placed at regional and national exhibitions. The COMPANY extends a
15% discount on any single order greater than $5,000.

 

SECTION 4.1,
MARKETING: Promotional activities of the DISTRIBUTOR are specified in section 4.1
and take precedence. The Company will provide financial support to the
DISTRIBUTOR for approved marketing and advertising expenses incurred by the
DISTRIBUTOR for the purpose of promoting the COMPANIES products in their
assigned territories. These marketing and advertising expenses by the
DISTRIBUTOR must be pre-approved by the COMPANY vice president to qualify for
the financial support.

 

29

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