Exhibit 4.6
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (this "Agreement") is entered into effective
as of November 27, 2003 (the "Effective Date") by and between ART ADVANCED
RESEARCH TECHNOLOGIES INC., a company incorporated under the laws of Canada,
with its principal place of business at 0000 Xxxxxx-Xxxxx Xxxxxxxxx,
Xxxxx-Xxxxxxx, Xxxxxx X0X 0X0 Xxxxxx (the "Company") and GENERAL ELECTRIC
COMPANY, acting through and on behalf of its GE MEDICAL SYSTEMS division and
other affiliates, a company incorporated under the laws of the State of New
York, with its principal place of business at 0000 Xxxxx Xxxxxxxxx Xxxxxxxxx,
Xxxxxxxx, Xxxxxxxxx 00000 (the "Distributor") (each of the Company and the
Distributor, a "Party" and together, the "Parties").
RECITALS
WHEREAS, the Company has developed a stand-alone small animal molecular
optical imaging spectroscopy device, SAMI(TM) or such other trade-xxxx as may be
designated by the Company, which uses fluorescence and time domain based
technology designed to characterize, visualize and measure cellular and
molecular processes and pathways for single animal imaging (each device, and
similar small animal molecular optical imaging devices developed by the Company,
hereinafter referred to as a "Unit"); and
WHEREAS, the Company wishes to appoint the Distributor to exclusively
distribute the Units in the Territory (as defined below), and the Distributor is
willing to accept such appointment, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises and covenants set forth below, the Parties hereto agree as follows:
1. DEFINITIONS. All capitalized terms will have the meanings ascribed to
such terms in this Section 1 or as otherwise defined herein.
"Arbitration" will have the meaning set forth in Section 18.1(b)
below.
"Bankruptcy Code" will mean the Bankruptcy Reform Act of 1978, as
amended.
"Base Unit" will mean a Unit containing the features as described in
Exhibit E entitled SAMI Base Unit Specification Document.
"Business Day" will mean any day of the year, other than a Saturday,
Sunday or any day on which the banks are required or authorized to close in
Canada or the United States of America.
"Company" will have the meaning set forth in the first paragraph
hereof.
"Company Inventions" will have the meaning set forth in Section
7.3(a) below.
"Company's IP" will have the meaning set forth in Section 7.1 below.
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"Company's Trademarks" will have the meaning set forth in Section 12
below.
"Confidential Information" will have the meaning set forth in
Section 11.1 below.
"Delivery Point" will have the meaning set forth in Section 4.2
below.
"Demonstration Unit" will have the meaning set forth in Section
3.1(f) below.
"Dispute" will have the meaning set forth in Section 18.1(a) below.
"Dispute Notice" will have the meaning set forth in Section 18.1(a)
below.
"Distribution Manager" will have the meaning set forth in Section
2.4 below.
"Distributor" will have the meaning set forth in the first paragraph
hereof.
"Distributor Inventions" will have the meaning set forth in Section
7.3(b) below.
"Distributor IP" will have the meaning set forth in Section 7.2
below.
"Distributor Marks" will mean the trademarks, service marks, trade
names and logos of the Distributor and its Affiliates that are identified in
writing to the Company by the Distributor for use in accordance with Section
2.3(b).
"Distributor Products" will mean the Distributor's products and
systems manufactured by the Distributor or any of its affiliates and all
versions and derivatives thereof.
"Documentation" will have the meaning set forth in Section 13.8
below.
"Effective Date" will have the meaning set forth in the first
paragraph hereof.
"End User" will mean any customer of the Distributor or
Subdistributors who is permitted to use the Units.
"Field" will mean development, manufacture and marketing of
diagnostic imaging and patient monitoring equipment. The Field does not include
development, manufacture and marketing of products for invasive procedures or
invasive disposables.
"Files for Bankruptcy" will mean, with respect to an entity, the
occurrence of any of the following events: such entity (a) voluntarily becomes
the subject of any proceedings relating to its winding-up, liquidation or
insolvency or for the appointment of a receiver or similar officer for it; (b)
involuntarily becomes the subject of any proceedings relating to its winding-up,
liquidation or insolvency or for the appointment of a receiver or similar
officer for it, which is not discharged in its favor with prejudice within
ninety (90) days thereafter; (c) makes an assignment for the benefit of all or
substantially all of its creditors, or enters into an agreement for the
recomposition, extension or readjustment of all or substantially all of its
obligations; (d) has filed against it a petition or other document seeking
relief under bankruptcy laws, which is not discharged with prejudice within
ninety (90) days thereafter; or (e) has a temporary or
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permanent receiver or liquidator appointed over it or all or substantially all
of its assets, which appointment is not cancelled within ninety (90) days
thereafter.
"Force Majeure" will mean circumstances beyond the reasonable
control of a Party, including, but not limited to, failures or delay caused by
the other Party, acts of God (including without limitation, flood or
earthquake), war, embargo, strike, labor disturbance, riot, public disorder,
terrorism, catastrophes of fire or explosion, disruption of power supply, local
or foreign laws or regulations not existing at the time of execution of this
Agreement, inability to secure materials and transportation facilities and the
intervention of any governmental authority.
"Hardware" will have the meaning set forth on Exhibit A.
"Indemnitee" will have the meaning set forth in Section 16.3 below.
"Indemnitor" will have the meaning set forth in Section 16.3 below.
"Insurance Policy" will have the meaning set forth in Section 16.5
below.
"Joint Inventions" will have the meaning set forth in Section 7.3(c)
below.
"Licensed Patent Rights" shall mean the patents and patent
applications set forth in Exhibit B, and any continuations,
continuations-in-part, divisionals, reissues, reexaminations, extensions,
foreign counterparts and national and regional designations thereof.
"Licensed Technology" shall mean the Licensed Patent Rights, and any
and all inventions, know-how, trade secrets, software, copyrights and any other
intellectual property rights related to, or required for the practice of, the
inventions disclosed in the Licensed Patent Rights.
"Losses" will have the meaning set forth in Section 16.1 below.
"Notes" will have the meaning set forth in Section 11.1 below.
"Notice" will have the meaning set forth in Section 18.16 below.
"Party" and "Parties" will have the meaning set forth in the first
paragraph hereof.
"Patent Rights" will mean the Patents; any continuations, divisions
or continuations-in-part of the Patents; any patent issuing from any of the
foregoing; and any reissues, re-examinations, foreign counterparts, national or
regional designations or extensions of the Patents.
"Patents" will mean the patents listed in Exhibit C and any patents
that are issued based on any patent applications listed in Exhibit C, such
exhibit to be automatically amended from time to time to include all patents
related to the Units.
"Representatives" will have the meaning set forth in Section 11.1
below.
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"Software" will have the meaning set forth on Exhibit D. All
references in this Agreement to the "sale" "selling," or "purchase" of Software
or Software Copies will mean the sale of a license to use such Software or
Software Copies.
"Software Copy" will mean an object code copy of any of the
Software, together with a copy of any user manual or other documentation
customarily supplied therewith to End Users by the Company with each Unit.
Software and Software Copies shall include Updates but shall not include
Upgrades for such Software and Software Copies.
"Subdistributor" will have the meaning set forth in Section 3.2(b)
below.
"Target Units" will have the meaning set forth in Section 3.1(d)
below.
"Taxes" will mean any sales and similar taxes or duties imposed by
any government agency that has jurisdiction over the import, export or purchase
of the Units (other than taxes on net income of the Company or the Distributor).
"Term" will have the meaning set forth in Section 15.1 below.
"Territory" will mean all the countries of the world.
"Unit" will have the meaning set forth in the recitals hereto. For
greater certainty, the term Unit shall include one device in its entirety and
one Software Copy.
"Update" will mean a revision of the Software and/or Hardware, which
is not an Upgrade, which improves the existing functions or features of the
Software and/or Hardware.
"Upgrade" will mean a major revision of the Software and/or
Hardware, which adds to the existing functions or features of the Base Unit,
including separate analysis/visualization workstations and standalone Software
packages related to the device
2. SCOPE OF THE AGREEMENT.
2.1 Appointment. The Company hereby appoints the Distributor, and
the Distributor hereby accepts the appointment, as the Company's exclusive
distributor of the Units (and any Updates or Upgrades) in the Territory. For the
avoidance of doubt, this Agreement will not in any way limit or prohibit those
activities of the Company that are not expressly included herein.
2.2 Exclusivity. Except as expressly set forth in Section 13.9,
during the Term, the Company will not sell, lease, loan, license, transfer or
otherwise provide, or grant any distribution or other rights to provide,
directly or indirectly, the Units or any Updates or Upgrades to any
manufacturer, distributor, customer or other third party in the Territory, other
than the Distributor.
2.3 Responsibilities of the Parties.
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(a) The Company shall maintain sole responsibility for the
manufacture and sourcing of the Units and all engineering matters relating to
the Units, including, without limitation, all design issues, quality fixes,
product enhancements, and title and right to sell such Units. [CONFIDENTIAL]
During the Term, except as otherwise expressly set forth herein, the Distributor
shall maintain sole responsibility for the sales and marketing activities and
installation, training and customer support services described in Section 13
hereof.
(b) The Company shall, upon the Distributor's reasonable
request, customize the Units according to the Distributor's requirements in
matters relating to color, aesthetic appearance, visual design, branding, user
interface and other requirements of a similar nature including the addition of
the Distributor Marks in accordance with the Distributor's standards. For
greater certainty, such customization shall not relate to shape, size or
functional aspects of the Units. The Distributor shall be responsible for
providing the Company with specifications for customization of the Units in
accordance with the Distributor's standards upon reasonable notice.
(c) The Company shall ensure that all Units adhere to the
parameters specified in the "SAMI Base Unit Specification Document" attached
hereto as Exhibit E.
2.4 Distribution Manager. Promptly following the Effective Date,
each Party shall appoint a manager (each, a "Distribution Manager"), who shall
be responsible for communication and interaction between the Parties with regard
to the routine distribution of the Units and for managing the performance of the
Parties under this Agreement. In addition, the Distribution Managers will have a
monthly teleconference review on progress and a quarterly operating review to be
conducted in person at a mutually agreed upon location.
3. PURCHASE AND DISTRIBUTION.
3.1 Purchase of Units From the Company for End Users.
(a) During the Term, the Distributor shall purchase such
number of Units from the Company, and the Company shall sell such number of
Units to the Distributor, as the Distributor shall desire for purposes of
distribution to End Users.
(b) [CONFIDENTIAL]
(c) [CONFIDENTIAL]
(d) [CONFIDENTIAL]
(e) The lead time, permitted time for rescheduling of orders
and maximum capacity per month (or other agreed interval) for each Unit will be
as mutually agreed in writing between the Parties.
(f) [CONFIDENTIAL]
3.2 Distribution of Units by the Distributor.
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(a) (i) The Distributor shall use commercially reasonable
efforts to distribute the Units to End Users in all major markets in the
Territory in accordance with the terms of this Agreement and all applicable laws
and codes of practice.
(ii) The Company acknowledges that, as of the Effective
Date, it has received correspondence from third parties with respect to alleged
infringement by the Company of certain intellectual property of such third
parties. The Company shall have full discretion to resolve the issues raised in
such correspondence, provided that the Company shall indemnify the Distributor
in accordance with the terms of Sections 9 and 16 hereof for any Losses suffered
by the Distributor in connection with such issues. For purposes of clarity, such
issues will be deemed "resolved" if the Company and the Distributor mutually
agree that (A) the Company has not infringed or no longer infringes upon the
intellectual property of any such third parties or (B) such issues otherwise
have been resolved. [CONFIDENTIAL]
(b) Distribution will be performed by the Distributor's GE
Medical Systems division; provided that the Distributor may appoint one or more
third parties within any portion of the Territory to distribute the Units to End
Users (each such third party, a "Subdistributor"); provided, further, that (i)
every such Subdistributor must confirm to the Company in writing its agreement
to be bound by all provisions of this Agreement, and that the Distributor shall
remain responsible hereunder for all actions thereof; (ii) the Company's sole
liability shall remain towards the Distributor; (iii) the Distributor shall
remain responsible for obtaining any consents for the Company that are required
to be obtained under this Agreement from Subdistributors; (iv) a breach of this
Agreement by a Subcontractor shall be deemed a breach by the Distributor and
vice versa, and (v) no Subdistributor shall be permitted to appoint further
subdistributors. Upon becoming aware that a Subdistributor is selling or
otherwise distributing Units, directly or indirectly, in a manner that is not in
accordance in any material respect with the provisions of this Agreement, the
Distributor promptly shall notify such Subdistributor of such failure. If such
Subdistributor has not taken any action to remedy such failure within thirty
(30) days after receipt of notice from the Distributor, then the Distributor
shall terminate such Subdistributor's right to distribute Units.
(c) [CONFIDENTIAL]
(d) [CONFIDENTIAL]
3.3 Reservation of Rights; No Rights Beyond Units. Except as
expressly provided in this Agreement, (a) no right, title, or interest is
granted, whether express or implied, by the Company to the Distributor, (b)
nothing in this Agreement will be deemed to grant to the Distributor rights in
any products or technology not owned by the Distributor, (c) no provision of
this Agreement will be deemed to restrict the Company's right to exploit
technology, know-how, patents or any other intellectual property rights relating
to the Units in products other than the Units, and (d) no provision of this
Agreement will be deemed to restrict the Distributor's right to exploit
technology, know-how, patents or any other intellectual property rights relating
to the Distributor Products, provided that such rights do not include the right
to exploit the Company's technology, know-how, patents or any other intellectual
property contained in the Distributor Products other than as expressly allowed
by this Agreement.
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3.4 Independent Contractors. The relationship of the Distributor and
the Company established by this Agreement is that of independent contractors,
and nothing herein will be construed to (a) give either Party the power to
direct or control the day-to-day activities of the other, (b) constitute the
Parties as partners, joint venturers, principal and agent, employer and
employee, co-owners, franchisor and franchisee, or otherwise as participants in
a joint undertaking or (c) allow either Party to create or assume any obligation
on behalf of the other Party for any purpose whatsoever. Except as otherwise set
forth herein, all financial and other obligations associated with each Party's
business are the sole responsibility of such Party.
3.5 Cease Production. Upon written notice to the Distributor at
least one hundred and eighty (180) days prior thereto, the Company may cease
production of the Units, and in such case the Parties shall prepare together a
phase-out plan consistent with the Distributor's phase review discipline
procedure (PRD) as it exists as of the Effective Date of this Agreement.
[CONFIDENTIAL] This Agreement shall terminate upon the consummation of such
delivery and all other stages of the phase-out plan.
4. PRICING, DELIVERY AND PAYMENT.
4.1 Pricing. All prices referred to herein shall be payable in
United States Dollars.
4.2 Delivery and Freight. Deliveries of Units from the Company to
the Distributor will be made to a designated delivery point of the Distributor's
GE Medical Systems division in or near Milwaukee, Wisconsin, United States of
America (the "Delivery Point"). The Company shall make all reasonable efforts to
meet the delivery times specified in duly accepted purchase orders, provided
that the Company will not be liable for delays in deliveries when such delays
are the result of Force Majeure. The Company agrees to use freight carriers for
shipment of Units that are designated as preferred freight carriers by the
Distributor unless commercially unreasonable. Each shipment of Units shall
include a packing list that contains the purchase order number, product
identification, quantity shipped, date of shipment and such other information as
the Distributor shall require. The Company shall pay all packing, shipping and
handling charges for the delivery of Units to the Delivery Point.
4.3 Taxes. The Distributor shall bear all Taxes imposed on it under
applicable law in connection with the purchase of Units from the Company,
including any VAT, transfer or sales tax, in each case of which the Company is
not entitled to a refund. The Distributor shall have the right to withhold or
deduct at source any applicable Taxes as required by law from the purchase
price, and the amount so withheld or deducted at source shall be treated as paid
for purposes of this Agreement.
4.4 Payment. [CONFIDENTIAL] The Company's invoices shall contain the
purchase order release number, item number on such release, invoice quantity,
unit of measure, unit price, total invoice amount, phone number, address to
which remittance should be sent and such other information as may be required by
the Distributor. For the purpose of clearing invoices for payment, Units shall
be considered accepted by the Distributor within seven (7) days after delivery,
unless within such period the Distributor submits to the Company a written
notice as to the unacceptable condition of the Units and such unacceptance is
found to be justified. The
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Distributor shall pay to the Company the amount charged in the invoice within
[CONFIDENTIAL] after both accepting a Unit and receiving an invoice prepared in
accordance with the terms of this Agreement.
5. REGULATORY MATTERS. The Company will use commercially reasonable
efforts, at its own expense, to apply for and obtain all regulatory approvals
from all governmental and regulatory authorities in the Territory (including, if
applicable, the U.S. Food and Drug Administration), to the extent required to
market, sell and distribute the Units or any Joint Inventions of the Parties in
the Territory, where applicable, and comply with the most current governmental
and other regulatory standards with respect to the Units or any Joint
Inventions, as applicable, as the same may be supplemented or revised from time
to time. To the extent permitted by applicable law, and without in any way
limiting the Company's rights hereunder, all regulatory approvals obtained by
the Company related to the Units will be made in the Company's name. All
regulatory approvals obtained for Joint Inventions shall be made in a name to be
selected by the Parties.
6. OTHER SUPPLY TERMS. To the extent not otherwise addressed herein, and
to the extent commercially reasonable without incurring substantial additional
costs by the Company, terms related to ordering, packaging, shipping and
returning the Units and other matters relating to supply of the Units will be
equivalent to such terms as apply to the Distributor's other similarly situated
suppliers. Such terms are appended as Exhibit F to this Agreement. Where there
is any inconsistency between such terms and the terms and conditions of this
Agreement, this Agreement shall prevail.
7. OWNERSHIP OF INTELLECTUAL PROPERTY.
7.1 Ownership of Company Intellectual Property. Subject to the
license rights set forth in this Agreement and the rights of the Distributor to
the ownership of each Unit after the Distributor has purchased such Unit from
the Company, sole and exclusive right, title and interest to all Patent Rights,
Software and the Units and any technology, know-how and intellectual property
owned by, licensed to (except if the licensor is the Distributor) or developed
by the Company underlying the Units and the Software (collectively, the
"Company's IP") will remain with the Company.
7.2 Ownership of Distributor Intellectual Property. Sole and
exclusive right, title and interest to all Distributor Products and any
technology, know-how and intellectual property owned by, licensed to (except if
the licensor is the Company) or developed by the Distributor underlying the
Distributor Products or embodied or contained therein and related thereto
(collectively, "Distributor IP"), will remain with the Distributor.
7.3 Ownership of Inventions and Improvements.
(a) Company Inventions. The Company will have and retain sole
and exclusive right, title and interest to all inventions, improvements,
discoveries and know-how which are made during the Term by the Company, its
employees or agents acting under authority from the Company relating to, made
using, comprising or underlying or embodied in the Units that do not constitute,
and are not derivative works of, Distributor Products, other products and
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systems manufactured by the Distributor or any of its affiliates and all
versions and derivatives thereof, Distributor Inventions or Distributor IP and
for which the Distributor does not fully fund the payment of development costs
(collectively, "Company Inventions").
(b) Distributor Inventions. The Distributor will have and
retain sole and exclusive right, title and interest to all inventions,
improvements, discoveries and know-how which are made during the Term by the
Distributor, its employees or agents acting under authority from the Distributor
relating to, made using, comprising or underlying or embodied in the Distributor
Products that do not constitute, and are not derivative works of, the Units,
other products and systems manufactured by the Company or any of its affiliates
and all versions and derivatives thereof, Company Inventions or the Company's IP
(collectively, "Distributor Inventions").
(c) Joint Inventions. [CONFIDENTIAL] (d) Assignments. Each
Party agrees to take such action as may reasonably be necessary to effectuate
the ownership provisions of this Section 7.3, including without limitation, the
execution and delivery of instruments of assignment, recordation or
registration, and the giving of truthful testimony.
8. LICENSE.
8.1 During the Term, the Company grants to the Distributor, its
Subdistributors, and their End User customers, an irrevocable, world-wide,
royalty-free, exclusive right and license to use, offer to sell, sell, import
and export the Units purchased by the Distributor, its Subdistributors or such
customers. Such exclusive right and license includes the right to use the
Licensed Technology solely in association with the use, offer to sell, sale,
importing and exporting of such Units and for no other purpose.
8.2 If (a) the Company refuses to, cannot or does not, without
appointing a successor reasonably acceptable to the Distributor, supply or sell
to the Distributor (other than due to temporary shortages in the ordinary course
of business and events of Force Majeure), the Distributor's requirements of the
Units in accordance with this Agreement (including without limitation, the
Distributor's requirements with respect to Unit quality and prices), or (b) the
Company Files for Bankruptcy, the Distributor will have the right [CONFIDENTIAL]
by the Company on or in the Units.
8.3 Together with each Unit to be supplied to an End User, the
Distributor will attach an End User license agreement, in a form mutually
acceptable to the Distributor and the Company, which the End User will be
required to execute prior to the use of the Unit and the installation of the
Software.
8.4 The Company agrees that the license described in this Section 8
is a license for intellectual property as that term is defined in Section 101 of
the Bankruptcy Code. The Company further agrees that any enhancement to or
improvements of the intellectual property licensed hereunder, whenever made, are
also intellectual property as defined in Section 101 of the Bankruptcy Code and
that Distributor is entitled to retain the benefits of such
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enhancements or improvements pursuant to Section 365(n) of the Bankruptcy Code.
The Company shall maintain up-to-date physical embodiments of all intellectual
property licensed hereunder.
8.5 The Parties agree that the Distributor would suffer irreparable
damage in the event that any of the provisions of this Section 8 were not
performed by the Company in accordance with their specific terms or were
otherwise breached by the Company. It is accordingly agreed that the Distributor
shall be entitled to an injunction or injunctions to prevent breaches of this
Section 8 by the Company and to enforce specifically the terms and provisions
hereof in any court having jurisdiction, this being in addition to any other
remedy to which the Distributor is entitled at law or in equity.
9. INTELLECTUAL PROPERTY WARRANTY
9.1 The Company hereby represents, warrants and covenants as
follows:
(a) The Company will not include in any of the Units or End
User documentation, nor will the Company knowingly enter into a situation where
the sale or distribution by the Distributor of any of the Units or End User
documentation as approved by the Company, or the use of such Units or
documentation by End Users, infringes any third party's patent, trademark, trade
secret, copyright or other intellectual property right. The Company owns or has
license rights to (as indicated) the Patents. As of the Effective Date, the
Company has received no notice of infringement from any source relating to the
Units. The Company is not aware of any facts which would, upon a reasonable
interpretation thereof, render the Patents invalid or unenforceable. The Patents
and the intellectual property rights underlying the Hardware and Software
represent all intellectual property rights owned or held by the Company which
are necessary for the Distributor to perform its obligations and enjoy its
rights under this Agreement. The Company is not aware of any other intellectual
property rights underlying the Hardware and the Software which are necessary for
the Distributor to perform its obligations and enjoy its rights under this
Agreement. The Company will use commercially reasonable efforts to develop,
within a reasonable time, any additional technical information required with
respect to the Units.
(b) Subject to the limitations set forth in Section 9.2 below,
the Company will (i) indemnify, defend and hold the Distributor and its
directors, officers, employees, representatives, agents and End Users harmless
from and against any and all Losses arising out of or attributable to, and (ii)
have the right to defend, or at its option to settle, at its own expense, any
claim, suit or proceeding brought against the Distributor or its End Users on
the issue of infringement of any third party patent, copyright, trademark or
other intellectual property right or the misappropriation of a trade secret by
the Units distributed hereunder or the use thereof, whether based on current or
future patent, copyright, trademark or other intellectual property rights or
trade secrets of the third party. The Company will have sole control of any such
action or settlement negotiations, and the Company agrees to pay any settlement
amounts or final judgment entered against the Distributor or its End Users in
any such suit, claim or proceeding (including reasonable attorney fees, other
professional fees, and other costs of litigation or settlement). The Distributor
agrees to notify the Company promptly in writing of such claim, suit or
proceeding; provided that the failure to promptly notify the Company will not
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relieve the Company of any obligation under this Agreement except to the extent
such failure to provide prompt notice adversely impairs the Company's ability to
defend against such claim, suit or proceeding; provided further, that (x) the
Company may not consent to imposition of any obligation or restriction on the
Distributor in any settlement unless mutually agreed by the Company and the
Distributor, (y) the Company will keep the Distributor fully informed and permit
the Distributor to participate (at its own expense) as the Distributor may
reasonably request and (z) the Distributor may, without affecting its right to
indemnity hereunder, defend and settle any such claim, suit or proceeding if the
Company declines to defend against such claim, suit or proceeding or Files for
Bankruptcy. The Distributor agrees to authorize the Company to proceed as
contemplated herein, and, at the Company's expense, to give the Company
information and assistance to settle and/or defend any such claim, suit or
proceeding as the Company may reasonably request.
(c) If (i) in the mutual reasonable opinion of the Parties,
the Units or any part thereof are or may become the subject of any non-frivolous
claim, suit or proceeding for infringement of any patent, copyright, trademark
or other intellectual property right or misappropriation of a trade secret, (ii)
it is adjudicatively determined that the Units, or any part thereof, infringe
any patent, copyright, trademark or other intellectual property right or involve
the misappropriation of a trade secret, or (iii) the distribution or use of the
Units, or any part thereof, is enjoined, then the Company shall, at its expense
(but subject to the limitations contained in Section 9.2 below): (x) procure for
the Distributor and its End Users the right under such patent, copyright,
trademark, other intellectual property right or trade secret to distribute or
use, as appropriate, the Units or any part thereof; (y) replace the Units, or
any part thereof, with functionally equivalent products or parts that do not so
infringe or misappropriate; or (z) suitably modify the Units or any part
thereof.
(d) Except for the express limited warranties provided herein,
the Company disclaims all other warranties, whether express or implied,
pertaining to the underlying intellectual property used in the Units.
9.2 No Liability. Notwithstanding any of the provisions of Section
9.1, the Company assumes no liability for any claim, suit or proceeding brought
against it or the Distributor, any Subdistributor or any End User on the issue
of infringement of any third party patent, copyright, trademark, or other
intellectual property right or the misappropriation of a trade secret (a)
involving any marking or branding not applied by the Company or involving any
marking or branding applied at the request of the Distributor; (b) that arise
from use of the Distributor Inventions, Distributor IP or special requirements
or designs of the Distributor or End Users included in the Units or End User
documentation; or (c) involving modifications of the Units made by the
Distributor, its Subdistributors or End Users without the knowledge or consent
of the Company provided such modifications cause the otherwise non-infringing
product to become infringing. If a court of competent jurisdiction issues a
final, non-appealable judgment or ruling holding the Company liable in
connection with a claim based solely upon the matters set forth in clauses (a),
(b) or (c) above, then the Distributor shall indemnify and hold the Company
harmless from and against any Losses incurred by the Company in connection with
such claim.
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9.3 No Lockout. The Company covenants that no "lockout" or disabling
code or devices will be incorporated or present within any Unit at the time any
Unit is sold by the Company to the Distributor which would result in the Unit
being disabled or inoperable. In no event will the Company remove, alter, change
or interfere with any Unit for purposes of preventing the Distributor or its End
Users from using the Unit as the result of any dispute under this Agreement. The
Company will not modify any Unit to restrict its use by the Distributor or its
End Users to required passwords, periods of time or other restrictions, without
the prior written consent of the Distributor.
10. PATENT PROSECUTION AND LITIGATION.
10.1 Maintenance of Patents. The Company will, at its expense, have
responsibility for continuation and maintenance of all Patents; provided that,
if the Company provides notice to the Distributor that it intends to discontinue
the maintenance or continuation of any Patents in the Territory, then the
Company shall offer the Distributor the opportunity to acquire such Patents and
the Distributor may choose to continue and maintain such Patents at its own
expense and ownership of such Patents shall be transferred to the Distributor.
10.2 Prosecution of New Patents.
(a) Filings for the Company Inventions. The Company will, at
its expense, have responsibility for filing, prosecution and maintenance of all
patents for the Company Inventions in the Territory which the Company determines
to file, prosecute and maintain. The Distributor will have the right to review
pending patent applications and make recommendations to the Company concerning
the Company Inventions related to the Distributor Products. The Company will
consider in good faith all reasonable suggestions of the Distributor with
respect to such pending applications related to Distributor Products. The
Company agrees to keep the Distributor informed of the course of patent
prosecution or other proceedings with respect to the patents related to the
Distributor Products within the Territory. In the event that the Company elects
to discontinue the prosecution of any such patents in the Territory, then the
Company shall notify the Distributor of such election to discontinue and the
Distributor may, at its expense, choose to continue the prosecution of such
patents with the cooperation of the Company in the name of the Distributor and
the ownership of such patent applications shall be transferred to the
Distributor, provided that the Distributor pays to the Company the legal fees
and disbursements that the Company has incurred (excluding maintenance fees paid
by the Company pursuant to Section 10.1) relating to such patent applications up
to and including the date of the transfer of such applications.
(b) Filings for Joint Inventions. The Distributor and the
Company will jointly, at their joint expense, have responsibility for filing,
prosecution and maintenance of all patents for Joint Inventions. The Parties
shall discuss those countries in the Territory in which they will file patent
applications for such Joint Inventions. All information disclosed to either
Party under this Section 10.2(b) will be deemed Confidential Information of the
disclosing Party. In the event that either Party elects not to file or
discontinues the prosecution or maintenance of any patents relating to Joint
Inventions in any country in the Territory, then the other Party may, at its
expense, choose to file or continue (and thereby own) such Patents with the
cooperation of the Party choosing not to proceed. In case one Party becomes the
sole owner of such patents,
12
such Party will grant to the other Party a non-exclusive, royalty-free,
perpetual license (with right to sublicense) to use, execute, reproduce,
display, perform, distribute, modify, create derivative works of, make, have
made, market, offer for sale, sell, import and sub-license products
incorporating such patents or to otherwise fully exploit such patents; provided
however that such license shall not extend to inventions or intellectual
property of the other Party. [CONFIDENTIAL]
10.3 Third Party Infringement. The Company shall enforce its
intellectual property rights related to the Units unless it has a reasonable
basis not to do so. In the event the Company does not undertake such
enforcement, the Distributor will have the right to so enforce such rights and
the Company will give such authority or approvals as may be required for the
Distributor to do so, including joining as a party in a suit if necessary. In
the event that the Company or the Distributor becomes aware of actual or
threatened infringement of a Patent or of any other infringement or
misappropriation by any third party of any patent, copyright, trademark or other
intellectual property right or trade secret relating to the Licensed Technology
or the Units anywhere in the Territory, such Party will promptly notify the
other Party in writing. If the Company does not commence, at its own expense, an
infringement or misappropriation suit within one hundred and eighty (180) days
after receipt of a request by the Distributor to do so and the issue of
infringement or misappropriation has not otherwise been resolved, then the
Distributor, after notifying the Company in writing, will be entitled to bring
such action for infringement or misappropriation at the Company's expense and to
include the Company as a nominal party plaintiff. The Company will keep the
Distributor reasonably informed of its efforts to resolve such infringement or
misappropriation and to prepare for the possibility of commencing an action
during such one hundred and eighty (180) day period. The Party conducting such
action will have full control over the conduct of such action, including
settlement thereof subject to the provisions of this Agreement. In any event,
the Company and the Distributor will assist one another and cooperate in any
such litigation at the other's reasonable request without expense to the
requesting Party.
10.4 Recovery. The Company and the Distributor will recover their
respective actual out-of-pocket expenses, or equitable proportions thereof,
associated with any litigation against persons undertaken pursuant to Section
10.3 above or settlement thereof from any resulting recovery made by any Party.
Any excess amount of such a recovery will be retained by the Party conducting
such action unless the other Party has agreed in advance to bear half the
expenses of such action, in which case such excess will be shared by both
Parties.
10.5 Status of Activities. The Parties will keep one another
informed of the status of their respective activities regarding any actual or
threatened infringement of a Patent or of any other infringement or
misappropriation by any third party of any patent, copyright, trademark or other
intellectual property right or trade secret relating to the Licensed Technology
or the Units and any litigation or settlement thereof concerning Units within
the Territory. No settlement or consent judgment or other voluntary final
disposition of any suit defended or action brought by a Party pursuant to this
Section 10 may be entered into without the consent of the other Party if such
settlement would require the other Party to be subject to an injunction or to
make a monetary payment or would otherwise adversely affect the other Party's
rights or the validity, ownership or extent of the intellectual property of the
other Party.
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11. CONFIDENTIALITY.
11.1 Definition. For purposes of this Agreement, "Confidential
Information" will mean information, including without limitation, customer lists
and product information and financial, technological and commercial information
of a Party or any third party, exchanged between the Company and the Distributor
pursuant to this Agreement and the performance of the Parties' obligations
hereunder, orally (if reduced to writing and delivered to the other Party within
thirty (30) days of disclosure) or in writing, if marked to indicate its
confidential nature or if of a type that a reasonable person would expect to be
proprietary and confidential. Confidential Information also will include,
without limitation, the terms and conditions (but not the existence) of this
Agreement. Each Party may disclose Confidential Information of the other Party
to its employees, affiliates, agents, professional advisors, consultants or
authorized representatives (collectively, "Representatives"); provided that such
Party's Representatives will be informed of the confidential nature of such
Confidential Information and the obligations of such Party under this Section
11. Each Party agrees to be responsible for any breach of this Agreement by its
Representatives to the same extent as though such person were a Party hereto.
Each Party agrees to take at least the same measures to preserve the
confidentiality of the Confidential Information of the other as it does for its
own Confidential Information and in no event measures which would be less than
those taken by a reasonable person under similar circumstances to preserve the
confidentiality of such information. Without the prior written consent of the
other Party, neither Party will use or allow the use for any purpose of any
Confidential Information of the other Party, including any notes, summaries,
reports, modifications, abridgments, compilations, analyses or other material
derived in whole or in part from such Confidential Information by the receiving
Party, its affiliates or its Representatives, in whatever form maintained
(collectively, "Notes"), in each case except for the purposes contemplated or
allowed by this Agreement or by the licenses granted hereunder. In addition,
each Party will hold all Confidential Information of the other Party in
confidence and will not publish, disclose, or allow disclosure of, any
Confidential Information of the other Party to any other person or entity except
to its Representatives, in each case only to the extent necessary to permit such
Representatives to assist such Party in performing its obligations or exercising
its rights under this Agreement, or except as specified in this Section 11. The
term "person" as used in this Section 11 will be broadly interpreted to include,
without limitation, the media and any individual, corporation, company,
partnership, or other entity or group. The obligations in this Section 11 will
not apply to disclosure by National Broadcasting Company or any of its
affiliates in the ordinary course of their business as a broadcaster, provided
that such disclosure does not result from a breach by the Distributor or its
Representatives of its obligations under this Agreement and that such disclosure
was not initiated by the Distributor.
11.2 No Confidentiality. The confidentiality and non-use obligations
set forth in this Section 11 will not apply to Confidential Information which
(a) is in the public domain or subsequently enters the public domain other than
as a result of an unauthorized disclosure by the receiving Party or its
Representatives; (b) became available to the receiving Party on a
non-confidential basis prior to its disclosure to such Party by the other Party
or its Representatives; (c) becomes available to the receiving Party on a
non-confidential basis from a source other than the other Party or its
Representatives, provided that the receiving Party had no actual knowledge that
such source was under a legal obligation to refrain from such disclosure; or (d)
was
14
independently developed by the receiving Party without reference to such
Confidential Information and can be so shown by documentary evidence.
11.3 Ownership. Except as specifically provided herein, all
Confidential Information will remain the sole and exclusive property of the
disclosing Party that owns such information, and this Agreement will not limit
in any way the right of the disclosing Party to enter into agreements with third
parties granting rights of any kind to its Confidential Information unless such
agreements shall conflict or interfere with the rights of the other Party under
this Agreement.
11.4 Compelled Disclosure. Neither Party will issue any press
release or otherwise make any public statements with respect to this Agreement
or the transactions contemplated hereby without the prior written consent of the
other Party, except as may be required by applicable law. If a Party is required
(pursuant to legal process, securities rules and regulations or otherwise) to
disclose any Confidential Information of the other Party, such Party agrees to
provide the other Party with prompt notice of each such required disclosure, to
the extent practical, so that the other Party may seek an appropriate protective
order or confidential treatment. If, absent the entry of a protective order or
confidential treatment, a Party or its Representatives are legally compelled or
required to disclose Confidential Information of the other Party, such Party may
disclose such information to the persons and to the extent required without
liability under this Agreement.
11.5 Confidential Documentation. Upon expiration or termination of
this Agreement and at the request of the disclosing Party, all Confidential
Information of the disclosing Party in the possession of the other Party,
including without limitation any Notes and copies, will be returned immediately
or, upon request by the disclosing Party, destroyed, except that one copy of
such Confidential Information and all Notes included therein may be retained in
the legal files of the receiving Party solely for compliance purposes or for the
purpose of defending or maintaining any litigation (including any administrative
proceeding) relating to this Agreement or such Confidential Information. No such
termination or return or destruction of such Confidential Information by a Party
will affect such Party's obligations under this Agreement (including its
obligations to ensure compliance with the provisions of this Agreement by its
Representatives), all of which obligations will continue in effect.
11.6 Survival. Upon expiration or termination of this Agreement,
each Party will be prohibited from using the other Party's Confidential
Information (including, in cases in which the Company is the receiving Party,
information with respect to the Distributor's End Users) gained through
performance of the transactions contemplated by this Agreement for any purpose
including to directly or indirectly compete with the other Party, without the
prior written consent of the other Party. The obligations under Section 11 with
respect to any item of Confidential Information shall survive the expiration or
termination of this Agreement.
11.7 Escrow. [CONFIDENTIAL]
12. TRADEMARKS AND TRADE-NAMES. During the Term, the Distributor shall
have the right, but not the obligation, to indicate to the public that it is the
exclusive worldwide distributor of the Units and to advertise such items under
the trademarks, service marks and trade
15
names that the Company may adopt from time to time (the "Company's Trademarks")
in a manner to be agreed upon with the Company. Nothing herein will grant to the
Distributor any right, title or interest in the Company's Trademarks. During the
Term, the Company shall have the right to indicate to the public that the
Distributor is the exclusive worldwide distributor of the Units, provided that
marketing materials, announcements or other public disclosure that mentions or
references the Distributor shall be subject to the Distributor's prior written
approval, such approval not to be unreasonably withheld. The Parties acknowledge
and agree that the Units sold to End Users shall include Distributor Marks as
the primary labeling and the Company's Trademarks as the subordinate labeling.
13. SALES, SERVICE , SUPPORT AND TESTING.
13.1 Sales and Marketing. The Distributor shall use commercially
reasonable efforts to sell and market the Units to End Users in all major
markets in the Territory in accordance with the terms of this Agreement and all
applicable laws and codes of practice. The Distributor shall be solely
responsible for all sales and marketing activities in connection with the Units
at its sole expense, including advertising in trade magazines and other media
and distribution of marketing materials. The Company will supply to the
Distributor reproducible master copies in English of applicable original content
for marketing materials. Subject to the consent of the Distributor, at the
Company's request, Company personnel shall be allowed to join the Distributor's
and its Subdistributors' personnel during marketing, installation, training or
any other visits at End Users' premises as well as on sales calls to potential
purchasers of Units. The Parties agree that they shall meet and confer from time
to time, including in the meetings of Distribution Managers provided for in
Section 2.4 hereof, to exchange information and views on matters such as
marketing and promotional material used by the Distributor and its
Subdistributors, market conditions, sales leads and sales forecasts, conferences
and trade shows, number of Base Units sold for more than [CONFIDENTIAL] and the
actual sales price of such Units to End Users. During these meetings, the
Distributor recognizes that the Company may from time to time provide the
Distributor with the Company's perspective and related information on global
product positioning for the Units and other marketing and promotional matters.
The Distributor agrees that it shall give reasonable consideration to the views
of the Company during its marketing and promotional planning processes. The
Distributor may, at its discretion, invite the Company's personnel to attend
conferences and trade shows to participate with the Distributor and its
Subdistributors in the marketing and demonstration of the Units. Such
participation may include attending the Distributor's product booths to meet
potential clients for the Units.
13.2 Marketing by the Company. Nothing in this Agreement shall
preclude the Company from marketing the Units at trade shows and conferences
where the Company will be marketing and selling its full line of products.
However, the Company agrees that all such marketing activities will be
consistent with the Distributor's positioning and general marketing strategies
for the Units. The Company will not distribute any marketing materials other
than marketing materials provided by the Distributor. The Company will advise
any potential End User customer that the Distributor and its Subdistributors are
the exclusive source for the purchase of such Units and shall promptly refer any
sales leads for the Units to the Distributor.
16
13.3 Installation and Training. The Distributor shall be solely
responsible for the installation of all Units at End Users' premises and for
training End Users' personnel to use the Units.
13.4 Updates and Upgrades.
(a) The Company shall provide all Units ordered by the
Distributor including all Updates, enhancements or options to the Units released
prior to the date of order. The Company shall provide the Distributor with
future Updates for Units purchased by the Distributor at no charge during the
Term.
(b) The Company shall provide the Distributor with Upgrades at
a price and on other terms and conditions as to be agreed upon by the Parties.
13.5 Training of the Distributor Personnel. The Company will provide
personnel and equipment adequate for basic training of the Distributor's
personnel with respect to (a) the technical installation, operation and
maintenance of the Units and (b) initial Unit orientation and sales training for
the Distributor's sales specialists. Such training will be provided at the
Company's expense (other than travel and lodging of the Distributor's employees)
until six (6) months after the Distributor has purchased six (6) Units from the
Company. Any additional training required by the Distributor, including all man
hours and equipment required in connection therewith and expenses related
thereto, shall be paid for by the Distributor based upon the Company's then
current price list. The Company will supply sufficient demonstration Software
and training documentation in configurations suitable for the Distributor to
perform additional internal training for new Distributor personnel in quantities
reasonably requested by the Distributor. In addition, the Company will supply to
the Distributor's sales specialists appropriate demonstration data bases and
Software for installation in computers operated by the Distributor's sales
personnel at the Company's expense where commercially reasonable to do so. The
Distributor will bear all expenses with regard to any additional demonstration
data bases and Software requested by the Distributor.
13.6 Service and Support.
(a) Distributor Obligations. The Distributor will be
responsible for service and support of the Units towards End Users with the
reasonable cooperation of the Company. The Distributor will provide End Users
with Level 1 and Level 2 service support. For purposes of this Agreement, "Level
1" services will include, without limitation, (i) answering End User questions
regarding the use and operation of the Units, interpretation of accompanying
documentation and all documented services and events, (ii) responding to
application questions, (iii) basic trouble shooting to determine proper
documentation procedures and problem isolation and (iv) installing and providing
End User assistance to process system operation changes or additions. "Level 2"
services will include, without limitation, (x) assistance in non-documented
services or events or non-resolvable highly technical situations and (y)
assisting End Users with implementation of Upgrades and non-Software updates and
technical support to resolve issues and problems escalating from Level 1 service
issues, including the provision of on-site support where necessary. At the
Distributor's request, the Company's personnel shall join the Distributor's
personnel during on-site support at End Users' premises to perform Level 2
services,
17
and in such a case the Distributor shall reimburse the Company for the costs of
such labor at the Company's then current rates (including, without limitation,
travel and living expenses).
(b) Changes in the Units. Except as may be authorized in
writing by the Company or as expressly set forth in this Agreement, neither the
Distributor nor any of its Representatives or End Users is authorized to make
any changes, modifications or alterations in the Units or Documentation.
(c) Company Obligations. The Company will provide Level 3
service support to the Distributor and the End Users. For purposes of this
Agreement, "Level 3" service will include, without limitation, (i) addressing
design defects that impair the functionality of the Units and (ii) verifying and
fixing "bugs" reported to the Company by the Distributor or the End Users,
notifying the Distributor of the nature of the bug, and providing to the
Distributor periodic status reports regarding repair of the bugs until all bugs
are resolved and fixed at the End User site accompanied by appropriate
documentation. To the extent commercially reasonable, all reported bugs will be
repaired by the Company prior to release of the succeeding Upgrade to the
relevant Units. The Company will not be responsible for providing Xxxxx 0
service support arising from any inappropriate use of the Unit by the End User.
(d) Other Obligations. Any service support that is not covered
by Xxxxx 0, Xxxxx 0 or Level 3 services shall be provided as mutually agreed by
the Parties.
(e) Company Inability to Support. If the Company is unable to
satisfy its service support obligations specified hereunder, the Company shall
notify the Distributor as soon as practicable, and the Distributor shall
provide, at the Company's expense, the services that the Company is unable to
perform, including without limitation service of the installed base.
13.7 Special and Additional End User Software Customization
Requests. In the event that an End User requests special Software modifications
or enhancements, the Distributor will promptly forward such requests to the
Company. The Company will assist and cooperate with the Distributor's sales and
service specialists and the End User to interpret the End User's requests and
needs. The Company and the Distributor shall mutually agree upon the cost of
requested modifications or enhancements. Such customization requests shall be
undertaken by the Company upon commercially reasonable terms as agreed upon
between the Company, the Distributor and the End User. The Company will maintain
a schedule of requested features. The Company may incorporate such enhancements
and additions into future editions of the Software in its sole discretion.
13.8 Documentation. The Company will supply to the Distributor user
documentation in English (and in the appropriate formats), as necessary to use
the applicable Unit effectively, without additional charge to the Distributor.
User documentation will include without any limitation the following
(collectively, the "Documentation", and the Parties agree that this term shall
not include any source code or source materials):
(a) such documents and manuals that collectively contain a
complete description and definition of all Unit operations, all user guides
necessary for the operation and
18
management of the Units and instruction manuals, including all original
worksheets to instruct and verify installation of the Software;
(b) service manuals including all internally-developed
documentation for Software and Hardware troubleshooting and all vendor
documentation relating to Software and Hardware;
(c) service part replacement lists with current prices;
(d) set-up worksheets including copies of original worksheets
used for installation;
(e) End User configuration worksheets specifying, among other
things, selected options and templates; and
(f) all materials, documentation, specifications, technical
manuals, flow diagrams, file descriptions and other written information from
time to time either received by the Distributor or published by the Company that
describes the function and use of the Units.
The Company grants to the Distributor and its End Users permission
to duplicate all printed Documentation for their internal use. The Distributor
may also incorporate such Documentation into its own documentation for
distribution and use by the Distributor and its End Users. If a change in any
Unit requires a change in the Documentation, the Company will promptly notify
the Distributor of the change and will provide the revised text as an addendum
or as a complete revised master copy.
13.9 Company Product Development. The Company shall have the
right to loan Units to third parties solely for product and application
development purposes. Prior to making such loan, the Company shall consult with
the Distributor in order to ensure that the loan is not inconsistent with the
Distributor's ongoing sales and marketing strategies. [CONFIDENTIAL]
13.10 [CONFIDENTIAL] This Agreement shall not be considered to
be breached in any manner as a result of such operation and use.
14. ADDITIONAL AGREEMENTS AND COVENANTS OF THE PARTIES.
14.1 Unit Warranties.
(a) The Company shall provide the Distributor with a full
warranty for each Unit for twelve (12) months from the time the End User has
fully installed such Unit at such End User's facility. The full warranty shall
include, without limitation, the Company's supply of replacement parts for
defective parts of such Units and related labor; provided that, if the Parties
agree that such labor shall be performed by the Distributor, then the Company
shall reimburse the Distributor for the costs of such labor at the Distributor's
then current rates (including, without limitation, travel and living expenses).
19
(b) As long as the full warranty for any Unit remains in
effect, the Company shall maintain a readily available inventory of replacement
parts that can be delivered to the Distributor, Subdistributor or applicable End
User within a commercially reasonable period of time.
(c) After the expiration of the full warranty for a Unit, the
Company shall maintain an inventory of replacement parts for Units. The Company
shall deliver such replacement parts to the Distributor within forty-eight (48)
hours after the Distributor's request therefor, at a price equal to the
Company's cost plus twenty percent (20%) and any and all applicable delivery or
shipping charges.
14.2 Device Incident Reporting. If the Company or the Distributor is
required to report to any governmental or regulatory agency information that
reasonably suggests that a Unit may have caused or contributed to a death or
serious injury to a human being or has malfunctioned and that the device would
be likely to cause or contribute to a death or serious injury to a human being
if the malfunction were to recur, then each of the Company and the Distributor
agree to supply to the other any such information promptly after becoming aware
of it so that each of the Company and the Distributor can comply with such
governmental or regulatory reporting requirements. Each Party will use its best
efforts to comply with all applicable governmental or regulatory reporting
requirements within the Territory. It is understood and agreed that each Party
will deliver all applicable reports to the other Party as promptly as
practicable to enable such other Party to comply with all applicable
governmental or regulatory reporting requirements. In the event that the Company
is required by any regulatory agency to recall a Unit, or if the Company or a
regulatory authority initiates a Unit recall, the Distributor will cooperate
with and assist the Company in locating, and retrieving if necessary, the
recalled Units from the Distributor's End Users. All recalls of the Units
arising from manufacturing defects will be at the Company's cost and expense.
The Distributor will maintain records of sales of Units by lot number and by End
Users to whom such Units were sold or otherwise transferred. Upon the Company's
request, the Distributor will provide the Company with access to or information
from such records in the event of a Unit recall or other quality related issue.
The Distributor will be responsible for obtaining all records of its sales to
End Users in the event of a Unit recall or other quality related issue. During
the time that the Units are commercially marketed, distributed, or sold by the
Distributor, (a) the Distributor will promptly forward all Unit complaints which
it receives from End Users to the Company and (b) the Company will investigate
the root causes of and the corrective actions necessary to resolve each such
complaint and will convey its conclusions to the Distributor within ten (10)
Business Days after receipt of each such complaint.
15. TERM AND TERMINATION.
15.1 Term. This Agreement will continue in full force and effect
beginning on the Effective Date and continuing until [CONFIDENTIAL], unless
earlier terminated in accordance with the provisions of this Agreement (as such
period may be renewed and extended, the "Term"). The Parties may renew or extend
the Term by mutually agreeing in writing to such renewal or extension period and
the duration of such period at least one hundred and eighty (180) days prior to
the end of the initial term or any renewal or extension period.
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15.2 Termination for Cause. [CONFIDENTIAL]
15.3 Other Termination Events. [CONFIDENTIAL]
15.4 Fulfillment of Orders upon Termination. Upon termination of
this Agreement by the Company, the Company will have the right, at its sole
option, to require the Distributor to satisfy the Distributor's obligations
under all outstanding purchase orders that have been accepted by the Company
prior to the effective date of termination. Upon termination of this Agreement
by the Distributor, the Distributor will have the right, at its sole option, to
require the Company to satisfy the Company's obligations under all outstanding
purchase orders that have been accepted by the Company prior to the effective
date of termination.
After the termination of this Agreement, to the extent that the
Distributor has possession of Units that it has not distributed or sold to third
parties, the Distributor will have the right to market, distribute and sell such
Units in the Territory pursuant to the terms hereof on a non-exclusive basis for
a period of one hundred twenty (120) days after termination of this Agreement.
Notwithstanding anything herein to the contrary, in the event that
the Distributor is under obligation by statute to distribute or sell Units in
the Territory to any End User or in any country after expiration or termination
of this Agreement, then the Parties shall agree upon the terms applicable to
such distribution or sale, and if not agreed upon promptly, the delivery,
payment, support and other applicable terms and conditions of this Agreement
will remain in effect as to such End Users or countries, as the case may be,
until such obligation ceases.
Upon termination of this Agreement, the Parties will cooperate in
good faith to transfer outstanding support undertakings towards End Users as
described in Section 13 from the Distributor to the Company or its distributors;
provided that the Parties shall not be required to effect such transfer if
termination of this Agreement is (a) due to a material breach or material
default by the Distributor or (b) because the Company Files for Bankruptcy.
15.5 Effects of Termination. Termination or expiration of this
Agreement will not relieve either Party of obligations incurred prior to such
termination or expiration. Subject to the terms hereof, termination of this
Agreement for any reason will result in termination of any subdistributorship
for the Units granted by the Distributor.
15.6 Survival of Certain Terms. The provisions of Sections 3.3, 3.4,
7, 9, 10, 11, 14.1, 15.4, 15.5, 16 and 18.1 will survive the termination or
expiration of this Agreement for any reason. All other rights and obligations of
the Parties will cease upon termination or expiration of this Agreement, except
as expressly provided herein.
15.7 Remedies. Unless otherwise provided in this Agreement, upon any
termination of this Agreement pursuant to this Section 15, except as specified
in Section 9, each Party will have all rights and remedies available to it
hereunder or at law or in equity, it being understood that the exercise of any
one remedy is not meant to be exclusive of any other remedy and that all
remedies hereunder are intended to be cumulative.
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16. INDEMNIFICATION.
16.1 Indemnification by the Distributor. Subject to any limitation
contained elsewhere in this Agreement, the Distributor agrees to indemnify,
defend and hold the Company and its directors, officers, employees,
representatives and agents harmless from and against any and all claims, losses,
damages, obligations, liabilities and costs (including reasonable attorneys' and
other professional fees and other costs of litigation) (collectively, "Losses")
arising out of or attributable to: (a) the gross negligence or willful
misconduct of the Distributor in connection with this Agreement; (b) any
material breach of this Agreement by the Distributor; or (c) any claim asserted
against the Company for the Distributor's or its Subdistributors' failure to
comply with any agreements with End Users.
16.2 Indemnification by the Company. Subject to any limitation
contained elsewhere in this Agreement, the Company agrees to indemnify, defend
and hold the Distributor and its directors, officers, employees,
representatives, agents and End Users harmless from and against any and all
Losses arising out of or attributable to: (a) the manufacture of the Units or
any design defect, malfunction or other failure of the Units to perform for the
purpose for which it was supplied; (b) the gross negligence or willful
misconduct of the Company in connection with this Agreement; or (c) any material
breach of this Agreement by the Company.
16.3 Indemnification Procedures. In the event that any person
intends to claim indemnification pursuant to Section 16.1 or 16.2 (an
"Indemnitee"), it will promptly notify the indemnifying Party (the "Indemnitor")
in writing of such alleged liability, provided that the failure to promptly
notify the Indemnitor will not relieve the Indemnitor of any obligation under
this Agreement except to the extent such failure to provide prompt notice
adversely impairs the Indemnitor's ability to defend against the claim, suit or
proceeding. The Indemnitor will have the sole right to control the defense and
settlement of such claim, suit or proceeding, provided, that (a) the Indemnitor
may not consent to imposition of any obligation or restriction on the Indemnitee
in any settlement unless mutually agreed by the Indemnitor and the Indemnitee,
(b) Indemnitor will keep Indemnitee fully informed and permit the Indemnitee to
participate (at Indemnitee's expense) as the Indemnitee may reasonably request
and (c) Indemnitee may, without affecting its right to indemnity hereunder,
defend and settle any such claim, suit or proceeding if Indemnitor declines to
defend against such claim, suit or proceeding or Files for Bankruptcy. The
Indemnitee will cooperate with the Indemnitor and its legal representatives in
the investigation of any action, claim or liability covered by Section 16.1 or
Section 16.2. Except as expressly set forth above, the Indemnitee will not,
except at its own cost, voluntarily make any payment or incur any expense with
respect to any claim, suit or proceeding without the prior written consent of
Indemnitor.
16.4 Further Limitation. Notwithstanding any other provision of this
Agreement, each Party hereby waives any and all claims against the other Party
for indirect, incidental or consequential damages, and for any sums on account
of loss of goodwill, income or profit or other special damages, even if the
other Party has been advised of the possibility of such damages and losses.
16.5 Insurance for the Company. The Company covenants that, as of
the Effective Date, the Company will have Units/Completed Operations Liability
Insurance in the
22
amount of [CONFIDENTIAL] combined single limit per occurrence and [CONFIDENTIAL]
in the aggregate (the "Insurance Policy"). During the Term, the Company agrees
to maintain the Insurance Policy, to increase coverage under the Insurance
Policy as may be appropriate and to take such steps necessary to provide for the
Distributor to be named as an additional insured party under the Insurance
Policy. At the reasonable request of the Distributor, the Company will deliver
to the Distributor a certificate of insurance, a certified copy of the Insurance
Policy and evidence of all premium payments.
17. COMPLIANCE WITH LAWS.
17.1 Government. Each Party will at all times during the Term have
in effect all licenses, permits, and authorizations from all governmental
agencies necessary for the performance of its obligations hereunder, and will
comply with all applicable laws, rules and regulations affecting its activities
hereunder, including, without limitation, the United States Foreign Corrupt
Practices Act, as applicable.
17.2 Currency Control. In the event that any currency control laws
come into effect in any jurisdiction which prevent the payment to the Company of
any sums due under this Agreement from being made in United States Dollars, the
Distributor will notify the Company as promptly as practicable, and will
cooperate with the Company in any procedure reasonably requested by the Company
to give effect to the Parties' intent under this Agreement without incurring
unreasonable costs.
18. GENERAL PROVISIONS.
18.1 Dispute Resolution.
(a) Any dispute, controversy or claim arising out of or
relating to any purchase order, this Agreement or any related agreement or the
validity, interpretation, breach or termination thereof (a "Dispute"), including
claims seeking redress or asserting rights under applicable law, shall be
brought to the other Party's attention by the disputing Party by a written
notice setting forth with specificity the matters covered by the Dispute (the
"Dispute Notice"). Beginning upon receipt by the receiving Party of the Dispute
Notice, the Distribution Managers shall commence a fifteen (15) day period of
good faith negotiation regarding such Dispute. If the Parties are unable to
resolve the Dispute within such fifteen (15) day period, then the Parties agree
to escalate the Dispute to at least one level of management higher than the
Distribution Managers in their respective organizations for a second resolution
period of no more than forty-five (45) days. During each such resolution period,
each Party will honor the other Party's reasonable requests for non-privileged
and relevant information relating to the Dispute. All negotiations pursuant to
this Section 18.1(a) shall be confidential and shall be treated as compromise
and settlement negotiations for purposes of any applicable rules of evidence.
Nothing in this Section 18.1(a) shall be deemed to prevent either Party from
seeking injunctive relief for any matter with or without recourse to the
procedures set forth in this Section 18.
(b) If the Parties are unable to resolve the Dispute through
good faith negotiation within sixty (60) days after the receiving Party's
receipt of the Dispute Notice as described in Section 18.1(a) above, the Dispute
shall be submitted to binding arbitration (the
23
"Arbitration"). The Arbitration shall be conducted in the City of Xxxxxxx,
Xxxxxxx, Xxxxxx, before a single arbitrator. The arbitrator shall be appointed,
and the Arbitration shall be conducted, under the rules of the American
Arbitration Association in effect at the time of such Arbitration, provided that
the arbitrator shall have no power to award punitive, exemplary or consequential
damages to any party to the Arbitration. The arbitrator's decision shall be
final, conclusive and binding on the parties to the Arbitration, and shall be
the exclusive forum for any claims arising out of this Agreement or the subject
matter hereof. Each Party shall bear its own costs of the Arbitration.
18.2 Force Majeure. Neither Party will be liable to the other Party
for its failure to perform or delay in performing any of its obligations
hereunder during any period in which such performance is delayed by Force
Majeure.
18.3 Assignment. Except as provided in Section 3.2(b), neither Party
may assign or delegate this Agreement or any of its licenses, rights or duties
under this Agreement without the prior written consent of the other Party;
provided that the Distributor shall be entitled to assign this Agreement to any
of its affiliates upon notice to the Company.
18.4 Non-Solicitation of Employees. During the Term, neither Party
may solicit, interfere with, or endeavor to cause any employee of the other
Party to leave his or her employment or induce or attempt to induce any such
employee to terminate or breach his or her employment agreement, if any.
18.5 Operation of Business. Each Party shall operate its business
for lawful purposes only and in conformance with all applicable laws. In
furtherance thereof, but without limiting the foregoing, each Party shall be
prohibited from providing any remuneration to any customer to induce such
customer to purchase any products or services from the Distributor or any of its
affiliates.
18.6 Prohibition Against Tying. The Parties shall be prohibited from
tying the terms of a sale of any products or services from the Company, the
Distributor or any of their respective affiliates to a customer's purchase of
any other product or service.
18.7 Right to Refuse Transaction. The Distributor and the Company
shall have the right to refuse to enter into or fulfill any transaction. The
Distributor shall have the right to terminate or rescind a transaction if it
determines that the buyer of a Unit is not properly licensed or qualified to
purchase or use such Unit.
18.8 No Reimbursement Advice. No representative of the Company shall
provide advice regarding reimbursement or billing related to the purchase of any
product or service from the Distributor or any of its affiliates, beyond
accurately conveying publicly available information.
18.9 Good Standing; Authority; Enforceability; No Conflict. Each
Party represents that (a) it is a validly existing corporation under the laws of
its respective jurisdiction of incorporation, (b) it has full power and
authority to enter into this Agreement, (c) all corporate action necessary for
the authorization, execution and delivery of this Agreement by such Party
24
and the performance of its obligations hereunder has been taken, (d) this
Agreement is a valid and binding obligation of such Party, enforceable against
such Party in accordance with its terms, and (e) the performance by such Party
of this Agreement and its obligations hereunder does not violate any provision
of any other agreement or violate or conflict with any other restriction of any
kind or character to which such Party is a party or by which it is bound.
18.10 Partial Invalidity. If any section, paragraph, provision or
clause in this Agreement is found or held to be invalid or unenforceable in any
jurisdiction in which this Agreement is being performed, the remainder of this
Agreement will be valid and enforceable and the Parties will negotiate, in good
faith, at arms' length, a substitute, valid and enforceable provision which most
nearly effects the Parties' intent in entering into this Agreement.
18.11 Counterparts. This Agreement may be executed in counterparts,
which, taken together, will be regarded as one and the same instrument.
18.12 Modification. No alteration, amendment, waiver, cancellation
or any other change in any term or condition of this Agreement will be valid or
binding on either Party unless the same will have been mutually assented to in
writing by both Parties.
18.13 Waiver. The failure of either Party to enforce at any time the
provisions of this Agreement, or the failure to require at any time performance
by the other Party of any of the provisions of this Agreement, will in no way be
construed to be a present or future waiver of such provisions, nor in any way
affect the right of either Party to enforce each and every such provision
thereafter. The express waiver by either Party of any provision, condition or
requirement of this Agreement will not constitute a waiver of any future
obligation to comply with such provision, condition or requirement.
18.14 Entire Agreement. The terms and conditions contained herein
(including the exhibits hereto) constitute the entire agreement between the
Parties and supersede and terminate all previous agreements and understandings,
whether oral or written, between the Parties hereto with respect to the subject
matter hereof, including, without limitation, the Memorandum of Understanding
entered into by the Parties as of August 14, 2003. In the event of any
inconsistency between the Agreement and the exhibits hereto, the terms of this
Agreement shall govern.
18.15 Section Headings. The section headings contained in this
Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement.
18.16 Notices. Any notice or other writing required or permitted to
be given under this Agreement or for the purposes of this Agreement (each, a
"Notice") shall be in writing sufficiently given if: (a) delivered personally,
(b) transmitted by fax or other form of recorded communication tested prior to
transmission, (c) sent by registered or certified mail return receipt requested,
postage prepaid, or (d) sent by commercial overnight courier with written
verification of receipt to the sending Party. All Notices shall be sent to the
addresses set forth below or to such other address as may be designated by a
Party by giving Notice to the other Party pursuant to this Section 18.16:
25
If to the Distributor:
GE Medical Systems
0000 Xxxxx Xxxxxxxxx Xxxx X-000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
with a copy to: [CONFIDENTIAL]
If to the Company:
ART Advanced Research Technologies Inc.
0000 Xxxxxx- Xxxxx Xxxxxxxxx,
Xxxxx-Xxxxxxx, Xxxxxx
Xxxxxx, X0X 0X0
Attention: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
[CONFIDENTIAL]
Any Notice personally delivered to the Party to whom it is addressed
as provided in this Section 18.16 shall be deemed to have been given and
received on the day it is so delivered at such address, provided that if such
day is not a Business Day then the Notice shall be deemed to have been given and
received on the Business Day next following such day. Any Notice transmitted by
fax or other form of recorded communication shall be deemed given and received
on the first Business Day after its transmission. Any Notice given by mail shall
be deemed to be given and received three (3) calendar days after having been
sent. Any Notice given by overnight courier shall be deemed to be given one (1)
Business Day after deposit with such courier.
18.17 Compliance with Policies. During the Term, the Parties will
discuss and agree upon policies relating to a variety of matters such as
material quality requirements. For illustrative purposes only, a sample
Distributor Purchased Material Quality Requirement document is attached hereto
as Exhibit G. This document is not intended to be binding.
18.18 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (without regard
to principles of conflicts of law), and all questions relating to the validity
and performance hereof and remedies hereunder shall be determined in accordance
with such law.
18.19 Expenses. Each Party shall be solely responsible for and shall
bear all of its own respective costs and expenses, including without limitation
the fees and expenses of
26
accountants, attorneys and other advisors, incurred at any time in connection
with this Agreement and the transactions contemplated hereby.
[The remainder of this page is intentionally left blank]
27
IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of
the day and year first above written.
ART ADVANCED RESEARCH TECHNOLOGIES INC. GENERAL ELECTRIC COMPANY,
acting through and on behalf of its
GE MEDICAL SYSTEMS division and
other affiliates
By: By:
----------------------------------------- ---------------------------------------
Name: Xxxxxxxxx Xxxxxxxx Name: [CONFIDENTIAL]
Title: President and Chief Executive Officer Title: [CONFIDENTIAL]
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EXHIBIT A
HARDWARE
[CONFIDENTIAL]
29
EXHIBIT B
LICENSED PATENT RIGHTS
LIST OF PATENTS AND PATENT APPLICATIONS
[CONFIDENTIAL]
30
EXHIBIT C
LISTS OF PATENTS RELATED TO THE UNITS
[CONFIDENTIAL]
31
EXHIBIT D
SOFTWARE
[CONFIDENTIAL]
32
EXHIBIT E
SAMI BASE UNIT SPECIFICATION DOCUMENT
[CONFIDENTIAL]
33
EXHIBIT F
DISTRIBUTOR'S TERMS RELATED TO ORDERING, PACKAGING, SHIPPING
AND RETURNING THE UNITS
[CONFIDENTIAL]
34
EXHIBIT G
DISTRIBUTOR PURCHASED MATERIAL QUALITY REQUIREMENT
[CONFIDENTIAL]
35
