DISTRIBUTOR AGREEMENT Pharmaceutica

DISTRIBUTOR AGREEMENT

Pharmaceutical Specialties
and
AL-MERRI International EST
DRAFT 26 MAY 2015

THIS AGREEMENT made and entered into as of this _29th_____Day of July, 2015 (the “Effective Date”), between PHARMACEUTICAL SPECIALTIES, INC., a Minnesota, U.S.A., corporation having its principal place of business at 1620 Industrial Drive NW, Rochester, Minnesota, U.S.A. 55901 (hereinafter called "PSI") and AL-MERRI International EST, a corporation organized and existing under the laws of Kuwait, having its principal place of business at P.O. Box 1211, post code 13013, Safat, Kuwait, with its physical address at: Shop #62 - First Floor, Almadeenah Building - Mubarak Alkabeer Street - Block 9 – Alqeblah – Capital Governorate - Kuwait (hereinafter called "AL-MERRI"), and represented in this Agreement by its Owner and authorized agent, AL-MERRI Bakheet Ali Bakheet, residing at #258 Street 13 – Block 3 - Alriqqah - Kuwait.

RECITALS:

A.​ PSI manufactures and markets various types of pharmaceutical products; and

B. ​AL-MERRI wishes to market and sell in the territory identified in the attached Schedule A (the “Territory”) certain products manufactured and supplied by PSI; and

C.​ PSI wishes to appoint AL-MERRI as an independent authorized distributor for the promotion, distribution, and sale of Products (as hereinafter defined) in the Territory;
NOW, THEREFORE, in consideration of the premises and covenants contained herein, PSI and AL-MERRI (each a “Party” and collectively the “Parties”) hereby agree as follows:

1.​APPOINTMENT

1.1 ​Appointment. PSI hereby appoints AL-MERRI as the exclusive distributor in the Territory for the products described in Schedule A attached hereto (the "Products"), upon the terms and conditions specified in this Agreement. Subject to the explanation of “exclusivity” in Section 1.2 below, PSI represents and warrants that it has not appointed any distributor for the Territory and during the term of this Agreement will not appoint a distributor for any portion of the Territory with respect to which AL-MERRI holds exclusive distribution rights under this Agreement.

1.2​Exclusivity. PSI shall not sell, market or distribute any products or formulations similar to any Products, nor grant any license or rights to nor authorize any third party to sell, market or distribute Products or formulations similar to any Products, whether directly or indirectly, to or in the Territory during the term of this Agreement or its renewal. PSI will exert reasonable efforts to discourage other distributors and agents from selling the Products into the Territory, but it is recognized that PSI may be unable to prevent all instances of such sales, and PSI shall have no responsibility or obligation to AL-MERRI for such sales. AL-MERRI shall not directly or indirectly sell, market or distribute any Products outside the Territory during the term of this Agreement, including any extension or renewal hereof. PSI shall be the sole and exclusive supplier of all of AL-MERRI's need for the Products.

1.3 ​Independent Relationship; No Agency. Each Party hereto shall act as independent contractor. This Agreement does not make either Party the employee, agent, or representative of the other for any purpose. AL-MERRI is granted no right or authority to assume, or to create any obligation or responsibility, express or implied, in the name of or on behalf of PSI, except as may be specifically authorized in writing signed by an authorized officer of PSI. AL-MERRI shall have the sole responsibility for the satisfaction of any and all claims made by third parties on account of AL-MERRI’s conduct or that of its employees or agents in the performance of this Agreement.

1.4​Compensation. The Parties agree that AL-MERRI’s entire compensation for its actions and obligations under this Agreement is the gross profit of AL-MERRI from buying the Products from PSI and re-selling the Products to AL-MERRI’s customers, less AL-MERRI’s related costs as required by this Agreement or by AL-MERRI’s business, and that in no case is PSI to provide AL-MERRI with a commission on sales or with direct or indirect damages, compensation, or indemnity of any sort for termination or non-renewal of this Agreement due to any reason other than PSI’s breach. Except where such damages or indemnity arise from PSI’s breach of this Agreement, AL-MERRI hereby waives any rights to such damages or indemnity that might otherwise apply. It is agreed and recognized that the prices of the Products reflect full compensation to AL-MERRI and are established with the foregoing waiver in mind.

2. ​TERM AND RENEWAL

2.1 ​Initial Term. Except as otherwise provided herein, the term of this Agreement shall be one (1) year, beginning on the Effective Date.

2.2 ​Renewals. Upon the expiration of the original term, this Agreement may be renewed for successive terms of one (1) year, or such longer term as the Parties agree, provided that renewal is effected by a written document signed by both Parties. Renewal, however, shall be subject to provisions of Section 5.6 below. This Agreement may also be terminated pursuant to provisions of Article 15 below. As mentioned in Section 1.4 above, it is mutually agreed between the Parties, and AL-MERRI so acknowledges, that PSI has the right to refuse to renew this Agreement at any stage, and in case of refusal by PSI to renew this Agreement, AL-MERRI shall not be entitled to claim any compensation or indemnification from PSI.

3. ​PRODUCT DELIVERY; PRICES AND PAYMENT; TAXES

3.1​Product Delivery. Delivery of Products shall be EXW (Incoterms 2010) at PSI's production facility, Rochester, Minnesota. When requested by AL-MERRI or in the absence of arrangements by AL-MERRI a reasonable period before the date scheduled for delivery EXW, PSI may, at PSI's discretion, arrange for shipment of Products to AL-MERRI's designated location in the Territory. If PSI agrees to ship Products, AL-MERRI shall pay all expenses associated with such shipment, either reimbursing them promptly or, at PSI’s option, paying them in advance. If PSI also procures insurance for the shipment, AL-MERRI shall reimburse PSI for the insurance costs also. In any and all cases, transportation and insurance shall be paid directly or reimbursed by AL-MERRI.

3.2 ​Prices and Price Increases. For each order, PSI shall sell the Products to AL-MERRI at PSI's prevailing international distribution price for each Product, as determined by PSI, as of the date PSI receives AL-MERRI's order for the Product. AL-MERRI and PSI hereby agree that PSI may at any time increase prices for the Products, effective sixty (60) days after notice thereof to AL-MERRI; provided, however, that PSI shall not implement a price increase more than once for any one Product within any twelve (12) month period. All prices shall be in United States Dollars unless otherwise explicitly stated by PSI in writing.

3.3 ​Payment Methods. Unless and until other credit and payment terms may be mutually agreed to, AL-MERRI shall prepay the total amount for each order placed by AL-MERRI, making payment by electronic funds transfer or using a bank check or certified check made payable to PSI at a bank in the United States at least ten (10) days before the shipment date. All payments shall be in U.S. dollars, unless otherwise explicitly agreed by the Parties in writing. In the event of AL-MERRI's failure to prepay, as provided above, for all Products ordered, or to pay the remainder of any order amount as required above, PSI shall have the right to refuse to ship any unshipped order, repossess any Products previously shipped and not yet paid for in full, and/or terminate this Agreement. If, as a convenience for AL-MERRI, PSI agrees to arrange for transportation and insurance of any shipment under provisions of Section 3.1, the costs for transportation and insurance shall be included in AL-MERRI’s payment for the shipment if known sufficiently in advance. If invoiced separately by PSI after shipment, the costs are to be reimbursed by AL-MERRI immediately upon AL-MERRI’s receipt of invoice and reasonable supporting