INTERNATIONAL DISTRIBUTOR AGREEMENT This International Distributor Agreement (“Agreement”) is effective this day of Company signature, by and between the following parties: Clothing Co. . (“Company”) 11060 E Artesia Bl., Ste G Los Angeles, California 90703 U.S.A. Telephone: Facsimile: and: Siesta Distribution and its partners, associates, subsidiaries, employees, officers and agents (“Distributor”) _________________________ _________________________ _________________________ _________________________ Telephone: ____________________ Facsimile:_____________________ RECITALS WHEREAS; The Company owns, develops, manufactures, and markets certain trademarks and clothing products, more specifically set forth as Exhibit A hereto and made a part hereof, individually and collectively referred to herein as “Product”; WHEREAS; The Company desires to establish distribution for Product in selected markets which are more specifically set forth as Exhibit B attached hereto and made a part hereof, individually and collectively referred to as “Territory”; WHEREAS; The Distributor operates a chain of retail stores and possesses certain proprietary contacts, relationships, and marketing and sales abilities within the Territory, and so desires to market, sell and service Product within the Territory; THEREFORE; in consideration of the mutual promises and covenants set forth herein, and other good and valuable considerations, the parties agree as follows: 1. APPOINTMENT OF TERRITORY a. The Company hereby appoints Distributor, and Distributor hereby accepts appointment, as its exclusive distributor for the purpose of selling, marketing, and servicing the Product anywhere within the geographic area of the Territory. This license shall include the right to manufacture and sell approved cut-n-sew lines, as well as to sell Company approved T-shirts and hooded shirts. Distributor shall not, either directly or indirectly, sell or offer for sale product outside of the Territory. Company shall have the right to terminate this agreement upon thirty (30) days written notice if Distributor offers to sell or sells Product outside the Territory. b. Distributor shall have the right to appoint sub-distributors provided that such appointment (i) is subject to written notification to the Company within two (2) weeks following such appointment and (ii) any such appointment shall terminate automatically upon the termination of this agreement. The Distributor shall be responsible at all times for the supervision of such sub-distributors and to enforce full compliance by the sub-distributors with the terms, covenants and conditions of this agreement and any sub-distributor agreement. The responsibility for appointment and termination of sub-distributors lies solely at the discretion of the Distributor. 2. RANGE OF PRODUCT a. Products manufactured and marketed by the Company other than Product included as part of Exhibit A herein are expressly excluded from this agreement and are not available to the Distributor. b. Distributor shall have the first right of refusal for distribution in the Territory of new Product which is also available and is developed by the Company subsequent to the signing of this agreement, provided that this Agreement remains in effect at such time. c. Company shall have the right to veto the use or sale of any design, product or marketing materials not supplied by Company. 3. TERM AND RENEWAL a. The initial term of this Agreement shall begin on the effective date of this Agreement and shall end at midnight three (3) years thereafter unless sooner terminated in accordance with other provisions of this Agreement. Each twelve (12) month period of said term shall be considered as a Contract Year. b. If, in the final Contract Year of the initial term, Distributor has maintained its exclusive rights under this Agreement, the parties agree to an optional renewal of this Agreement for an additional three (3) years. 4. INITIAL PURCHASE a. Upon execution of this Agreement, Distributor shall execute a firm purchase order for Product in such quantities as are set forth in Exhibit C attached hereto and made a part hereof (“Initial Purchase”). 5. MINIMUM DOLLAR PURCHASE a. Distributor shall purchase Product from Company or shall pay royalties to Company for sales of its product in such quantities as agreed between the parties and set forth in Exhibit D. This amount shall be referred to as the minimum dollar purchase. b. In the event Distributor fails to meet the Minimum Dollar Purchase for any Contract Year, the exclusive right and license granted hereunder may be revoked at the option of the Company by providing written notice to the Distributor, within sixty (60) days after the end of the Contract Year in which Distributor failed to meet the Minimum Dollar Purchase, that the Company has elected to revoke Distributor’s exclusive right and license, and this Agreement shall terminate. If the Company fails to give such written notice to Distributor, Company shall be deemed to have waived the Minimum Dollar Purchase for that previous Contract Year, and Distributor’s exclusive rights, including the provisions for Minimum Dollar Purchase, shall continue in full force and effect. 6. ROYALTIES a.Distributor shall be responsible to provide monthly sales reports of all Clothing Co. Product sold by Distributor. Within 15 days of the end of each calendar month, Distributor shall provide such reports and pay all royalties due on the sales for that month. 8. PRICES a. For all items purchased from company, Distributor shall purchase the Products at the respective list prices shown on Exhibit E, attached hereto and made a part hereof. b. Company shall have the right, in its sole discretion, to change prices at any time. In the event of any such price change, the Company shall provide the Distributor with a revised copy of Exhibit E as promptly as practicable and, in any event, not less than thirty (30) days prior to the effective date of such price change. c. Distributor shall purchase the Product from the Company F.O.B. at the Company’s manufacturing facility in California, U.S.A., in U.S. Dollars. Transportation shall be arranged and paid for by Distributor. d. Distributor’s resale prices to its sub-distributors and customers shall be established solely by Distributor in its sole discretion. Distributor acknowledges that no representation has been made by Company as to the profitability of a sale of the Product. 9. RISK OF LOSS Good and unencumbered title and risk of loss shall pass to Distributor when the Product is delivered to carrier for shipment to Distributor. 10. COMPLIANCE WITH REGULATIONS a. Distributor agrees to comply with applicable trade rules and regulations including but not limited to U.S. and foreign customs rules. b. Distributor will inform Company of the laws and regulations in the Territory which, in Distributor’s reasonable judgment, affect the Product, Company, or other distribution obligations hereunder, including without limitation conformance with the Essential Requirements or other regulatory requirements of the Territory. c. Any registrations or approvals shall be obtained by the Distributor and shall include approval in the name of the Company, wherever reasonably possible. d. Company agrees to provide whatever information and assistance is reasonably required to assist, expedite, and allow the Distributor to obtain the required approvals. The Company will provide on site consulting as reasonably required based on a per diem charge of not less than USD $2,000.00 per day per individual plus all travel expenses. e. Company shall be responsible for maintaining compliance with US laws. 11. ADVERTISING a. Distributor will actively market, advertise, and promote the Product within the Territory at its own discretion and at its own expense. b. Distributor agrees to attend the relevant major trade shows in the Territory to promote the Product at its own expense. c. Company shall provide to Distributor, at the Company’s cost, reasonable quantities of marketing and technical information in the English language. d. Distributor shall pay all shipping and distribution costs associated with such materials and any translation costs. 12. NON-COMPETE a. Distributor agrees that, during the term of this Agreement and for a period of three (3) years after termination of this Agreement for any reason whatsoever, it will not directly or indirectly sell products which compete with the Product or use the same trademarks, without the express written consent of the Company. 13. TRADEMARKS, PROPRIETARY RIGHTS AND CONFIDENTIALITY a. The Distributor recognizes that the Company is the exclusive owner of all trademarks, trade names, designs and logos used with the Products and that the Distributor has no right or interest in such trademarks, trade names, designs or logos other than those explicitly granted to it in this Agreement. However, Distributor shall be responsible for registration and maintenance of all trademarks necessary for sale of the Products within the Territory, and to take all steps reasonably necessary to protect the trademarks. b. The Distributor acknowledges that the Products have been obtained by the Company at great expense, contain information and processes proprietary to and trade secrets of the Company and, in general, constitute proprietary products of the Company. The Distributor agrees not to disclose nor divulge any information about the Products to any third party except on a need to know basis, and not to reveal any information conveyed as “confidential” without the express written consent of the Company, except where failure to do so would be in violation of law. The Distributor agrees not to make any modifications to or copies of the Products for any purposes whatsoever except as expressly set forth in this Agreement, and not to contest or in any manner challenge or impair such patents, proprietary rights and trade secrets. The Distributor further agrees to use the Company’s trademarks only as prescribed by the Company. c. The Distributor agrees to immediately notify the Company of any infringement or apparent infringement on the rights of the Products or Company, or any claim that the Products infringe another’s proprietary rights. d. All written information relating to the Products or designated as confidential and exchanged between the Company and the Distributor while this Agreement is in effect, including but not limited to , sales and financial data, customer information, manufacturing processes for the Products, and the Company’s Product specifications shall be treated as confidential information, and neither party shall use (other than in the performance of its obligations hereunder) or disclose such information to any third party without the prior written approval of the other party. e. In the course of performing this Agreement, the parties may disclose to each other information concerning their respective businesses, confidential know how and trade secrets as may be necessary to further the purposes of this Agreement. All such information, confidential know how and trade secrets disclosed hereunder shall remain the sole property of the party disclosing them, and the receiving party shall have no interest in or rights with respect thereto except as expressly set forth in this Agreement. f. The parties agree to maintain all such confidential information in confidence and to take all reasonable precautions to prevent any unauthorized disclosure of such information. g. The foregoing restrictions on appropriation and disclosure shall survive for three (3) years after the termination of this Agreement. h. In the event of a breach of the foregoing provisions, the non-defaulting party shall be entitled to equitable and injunctive relief in addition to any other available remedies. 14. PERFORMANCE AND FORCE MAJEURE a. Company shall supply Product according to specifications and shall use best efforts to supply Product to Distributor in such quantities as needed by Distributor to satisfy its requirement for sales in the Territory. If Company is unable to supply Product as ordered by Distributor and, as a result, Distributor is unable to meet the Minimum Dollar Purchase under Paragraph 5 of this Agreement, Distributor’s inability to comply with such Minimum for that Contract Year shall not render this Agreement non-exclusive nor give rise to a termination of this Agreement. b. Each of the parties hereto shall be excused from the performance of its obligations hereunder in the event such performance is prevented by a cause beyond the control of Distributor or Company including, without limitation, regulations, laws, or acts of any government, destruction of production facilities or material by fire, strikes, or failure of public utilities or common carriers (“Force Majeure”); and such excuse shall continue for as long as the condition constituting such Force Majeure continues, plus thirty (30) days after the termination of such condition. 16. INQUIRIES a. Company agrees to promptly notify Distributor of all inquiries or orders regarding Product received directly or indirectly from potential users of the Product in the Territory and Distributor agrees to follow-up said inquiries or leads in a prompt manner. b. Should Distributor elect, in its sole discretion, not to pursue such leads or inquiries, Company retains the right to pursue such leads as direct sales with the written permission of the Distributor, which permission will not be unreasonably withheld. 17. INDEMNIFICATION Each party (“Indemnifying Party”) shall protect, indemnify, and hold harmless the other party, its directors, officers, employees, subsidiaries and assigns against any and all loss, damage, claim, demand, suit, proceeding, action and expense (including attorney’s fees) whatsoever arising out of any breach or default under this Agreement by the Indemnifying Party. 18. INSURANCE During the Initial Term of this Agreement and any renewal thereof, each party shall maintain in full force and effect comprehensive general liability insurance with, in the case of Company, adequate product liability coverage, and with, in the case of Distributor, adequate coverage to meet its indemnification obligations set forth in Paragraph 17 above and to cover its liability under Paragraph 9 above for loss, damage, delay and theft in transit. 19. TERMINATION This Agreement may be terminated prior to the expiration of its term: (i) by either party upon thirty (30) days written notice to the other party, if such party shall commit a material breach of this Agreement, provided that, the party in default shall have received notice of such breach and shall have failed to cure the same during such thirty (30) day period; or (ii) by either party upon written notice to the other party if such party ceases doing business, or shall be insolvent, or shall file any voluntary petition in bankruptcy or any involuntary petition in bankruptcy is filed against such party, and such petition is not dismissed or withdrawn within sixty (60) days from the date of the filing thereof. All rights and obligations regarding Proprietary Rights and Information and Indemnification in this Agreement shall survive the termination of this Agreement for any reason whatsoever and shall bind the parties and their legal representatives, successors, and assigns. 20. NOTICE All notices, demands and communications provided for in the Agreement shall be in writing and shall be deemed effective by a party upon hand delivery or, when mailed, postage prepaid, by registered or certified mail, or when sent by confirmed telecopy to the other party at its address listed above, unless and until such address is changed by giving notice thereof in like manner. 21. ASSIGNMENT This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties hereto, provided however that Distributor will not assign any of its rights nor delegate any of its obligations without the prior written consent of the Company. Such consent shall not be unreasonably withheld. A change in ownership or control of the Distributor shall be considered an assignment under this paragraph. Company may assign this Agreement and any of its rights hereunder, or delegate any of its obligations or responsibilities hereunder, to any third party at Company’s sole discretion without prior written notification. 22. INDEPENDENT PARTIES Distributor is an independent contractor. This Agreement does not constitute either party as the agent or legal representative of the other party for any purpose whatsoever except as specifically set forth herein. Neither party is granted any right or authority to assume or create any obligation or responsibility, express or implied, on behalf of or in the name of the other party or to bind the other party in any way whatsoever. 23. ENTIRE AGREEMENT The failure of either party to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of such provision(s) nor of the right of such party thereafter to enforce any such provision. This Agreement constitutes the entire agreement between the parties and supersedes all prior and contemporaneous agreements between the parties with respect to the subject matter contained herein. No amendment or modification changing its scope or terms shall have any force or effect unless it is in writing and signed by the duly authorized officers of the Company and the Distributor. 24. DISAGREEMENT Any disagreement emanating from this Agreement will be satisfied by binding arbitration consisting of a panel of one (1) person selected by the Company, one (1) person selected by Distributor, and a third person picked by the two (2) arbitrators already selected by the parties. The decision of the arbitrators shall be based on the facts presented, notwithstanding the parties’ national status, and shall be governed by common business sense. Each party shall pay one-half (1/2) of the three arbitrator’s expenses and fees. 25. APPLICABLE LAW The parties agree that in the interpretation, performance or resolution of any dispute or claim arising under this Agreement, the laws of the United States of America (including the Uniform Commercial Code) and the laws of the State of California shall govern notwithstanding any state or nation’s choice of law rules to the contrary. No law of any other country or international trade agreement shall preclude or supersede any specific or intended provision of this Agreement. Any litigation under this Agreement shall be conducted within such Federal or California court’s jurisdiction at the arbitration panel’s sole and irrevocable discretion, and Distributor and Company hereby consents to such jurisdiction. The parties may submit any dispute arising under this Agreement to arbitration. 26. SEVERABILITY AND NON-WAIVER Each and every paragraph, term, and/or provision of this Agreement shall be considered severable. The invalidity, the legality or unenforceability of any paragraph, term or provision of this Agreement shall in no way affect the validity, legality and enforceability, operation or effect of the remaining paragraphs, terms or provisions hereof; and this Agreement shall be construed in all respects as if the invalid, illegal or unenforceable paragraph, term or provision were omitted. The failure of either party to enforce at any time the provisions of this Agreement shall not be construed to be a waiver of such provision nor of the right of such party thereafter to enforce any such provision. 27. HEADINGS The headings hereunder have been inserted for the purposes of convenience and ready referral only. They do not purport to, and shall not be deemed to, define, limit, or extend the scope or intent of the paragraphs to which they appertain. 28. COUNTERPARTS This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same Agreement, and shall become a binding agreement when the first two counterparts of this Agreement have been signed by each of the parties hereto and delivered to the other party. 29. AUTHORITY TO EXECUTE The person signing this Agreement on behalf of each party warrants that such party has authority to enter in to this Agreement and that such person is authorized to bind said party to the terms. IN WITNESS WHEREOF, the parties have executed this Agreement effective the day and year first above written. “COMPANY” “DISTRIBUTOR” By: ____________________________ By: _____________________________ Title: __________________________ Title: ___________________________ Date Signed: ___________________ Date Signed: _____________________ ATTACHED: Exhibit A: Description of the Product T-shirts, hooded shirts, cut n sew. No headwear or accessories Exhibit B: Exclusive Territory Exhibit C: Initial Purchase Requirements Exhibit D: Minimum Purchase Requirements Exhibit E: Price List & Royalty Schedule $3T-shirts, $5 hoods ? cut n sew Each exhibit has the signature chunk at the bottom of it. EXHIBIT “B” EXCLUSIVE TERRITORY Includes: (list countries), countrywide, hospitals, medical clinics, universities and any other health care provider for human use. Excludes: n Commercial companies for research use n Any individual, institution, organization or company with the right to re-sell for export (for any reason whatsoever) out of the territory. n United States Military Bases, United Nations Groups including World Health Organizations. EXHIBIT “D” PAYMENT TERMS Banking Instructions: TERMS: Irrevocable, 21 day, confirmed, Letter of Credit