EXHIBIT 10.9
EXCLUSIVE DISTRIBUTORSHIP AGREEMENT
This AGREEMENT is made effective as of the 9th day of September, 1994,
between Omniglow Corporation, a corporation ("SELLER"), and THE TRYLON
CORPORATION, a corporation ("DISTRIBUTOR") with reference to the following
recitals which the parties agree are true:
A. SELLER is the owner of certain patents, trademarks, and know how with
regard to certain chemiluminescent light products, and desires to promote
goodwill associated with such patents and trademarks.
B. SELLER is the successor in interest to American Cyanamid Corporation, a
company with which distributor previously performed a joint development
agreement with regard to use of chemiluminescent light products in certain
health care applications.
C. DISTRIBUTOR has developed medical applications for Licensed Products and
desires to exploit these applications through sale of Licensed Products.
D. The Licensed Products to be sold by DISTRIBUTOR will be sold in
competition against existing products and procedures which currently dominate
the market into which Licensed Products will be sold by DISTRIBUTOR.
E. SELLER and DISTRIBUTOR have made significant investments to develop the
Licensed Products and applications for the Licensed Products respectively, and
obtaining patents which protect the Licensed Products and applications, and
desire to develop and enhance goodwill for both Licensed Products and the
applications therefor described in this Agreement.
F. SELLER and DISTRIBUTOR acknowledge and agree that to compete against
existing products and procedures, and to obtain and promote goodwill for patents
of SELLER and DISTRIBUTOR and Licensed Products and applications therefor, it
will be necessary for SELLER and DISTRIBUTOR to work closely together to assure
the best possible sales and marketing efforts for Licensed Products and
applications therefor.
THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties agree as follows:
1. EXCLUSIVE DISTRIBUTOR.
---------------------
a. Subject to all terms and conditions below, SELLER hereby
appoints DISTRIBUTOR as SELLER's exclusive distributor to market, sell,
distribute, and subject to the provisions of paragraph 11 below sub-distribute,
the product(s) listed on Exhibit A to this Agreement ("Licensed Products"), in
the field of use of endoscopic human and veterinary
examination applications ("Field of Use"), in all countries worldwide (the
"Territory"). DISTRIBUTOR's specification for LICENSED PRODUCTS, including color
coordinates, burn time, and intensity/time requirements over five, ten and/or
fifteen minute time intervals are set forth on Exhibit A. SELLER hereby grants
to DISTRIBUTOR a right of first refusal to the use of Licensed Products in human
and veterinarian medical applications other than the Field of Use which right
shall exist during the Initial Term and, if applicable, the Extended Term. In
the event SELLER determines to grant license rights with respect to such other
human or veterinarian medical applications, SELLER shall give DISTRIBUTOR
written notice of the intended license, the terms and conditions on which the
license will be granted, and all qualifications which must be met by the
proposed Licensee. DISTRIBUTOR shall have sixty (60) days after the date of such
notice to advise SELLER in writing if DISTRIBUTOR desires to be the Licensee
with respect to the pertinent application. If DISTRIBUTOR desires to be the
Licensee, DISTRIBUTOR shall indicate in its notice its agreement to be bound by
all terms and conditions of the applicable license, and shall demonstrate its
capability to be the Licensee. If DISTRIBUTOR elects to be the Licensee, and if
DISTRIBUTOR establishes to the satisfaction of SELLER, in SELLER's reasonable
discretion, that DISTRIBUTOR is qualified to be Licensee, then SELLER shall
grant the license to DISTRIBUTOR rather than to any other party. IF DISTRIBUTOR
does not affirmatively elect to be the Licensee, or if SELLER reasonably
determines that DISTRIBUTOR does not have the capability to be the Licensee,
then SELLER hall have the right to grant the license to a party or parties other
than DISTRIBUTOR.
b. DISTRIBUTOR hereby accepts such appointment as exclusive
distributor, and undertakes to promote and increase sales of Licensed Products
in the Field of Use to customers in the Territory, and to protect the interests
of SELLER therein as required by this Agreement.
c. The DISTRIBUTOR is an independent corporate entity having no
affiliation or relationship to or with the SELLER, except that SELLER may become
a shareholder of DISTRIBUTOR pursuant to the option agreement to be executed
pursuant to this Agreement described below. The relationship between the parties
is that of vendor and purchaser rather than principal and agent. Accordingly,
except with the prior written approval of SELLER, DISTRIBUTOR shall not be
empowered by its appointment hereunder or otherwise to act for or to bind
SELLER, or to make any express or implied representation or warranty on behalf
of SELLER.
d. So long as Distributor is not in violation of any of its payment
or exclusive purchase obligations under this Agreement, or its obligations under
Sections 5.a., 5.e., and 8 of this Agreement, Seller shall not appoint any other
distributor in the Field of Use in the Territory during the Initial Term
(defined below) or any Extended Term (defined below) of this Agreement.
e. Licensed Products shipped by SELLER to DISTRIBUTOR under this
Agreement shall meet the specifications for LICENSED PRODUCTS set forth on
Exhibit A at the time of shipment, and all such shipments shall be accompanied
by a certificate to the effect
2
that licensed products meet the applicable specifications. DISTRIBUTOR shall
have and bear all risk of loss with regard to LICENSED PRODUCTS upon delivery of
LICENSED PRODUCTS by SELLER to the appropriate carrier or shipper.
2. REQUIREMENTS. In consideration of the SELLER selling Licensed
------------
Products to DISTRIBUTOR, and granting DISTRIBUTOR the opportunity to be SELLER's
exclusive distributor under this Agreement, DISTRIBUTOR agrees that during the
Initial Term and any Extended Term of this Agreement, so long as SELLER makes
Licensed Products available to DISTRIBUTOR in accordance with the terms and
conditions of this Agreement, DISTRIBUTOR shall purchase from SELLER all of its
requirements for Licensed Products, all products having the same characteristics
or properties of Licensed Products, and all chemicals or components relating to
Licensed Products.
3. TERM. The initial term of this Agreement, subject to all
----
provisions of this Agreement, shall be ten (10) years ("Initial Term"). The
Initial Term shall automatically be extended for an extended term of ten (10)
years ("Extended Term") unless either party shall have given the other party
written notice of termination at least one hundred eighty (180) days prior to
the end of the Initial Term in accordance with paragraph 7(c) below, or unless
this Agreement shall otherwise have been terminated in accordance with the terms
of this Agreement.
4. ORDERS; PRICES; TERMS OF SALE. So long as Distributor is not in
-----------------------------
violation of any of its payment or exclusive purchase obligations under this
Agreement, or its obligations under Sections 5.a., 5.e., and 8 of this
Agreement, Seller will accept and timely fill Distributor's properly placed
orders. Initial prices and specific terms of sale applicable to all sales
hereunder, including time of payment and credit terms, shall be as set forth on
Exhibit B attached. General terms and conditions of sale applicable to all
sales hereunder shall be as set forth on Exhibit C attached. In the event of a
conflict between such terms and conditions and this Agreement, this Agreement
shall control and govern. SELLER shall have the right at all times to change
prices, terms of sale, or SELLER's general terms and conditions of sale, by
giving one hundred eighty (180) days' prior written notice of such change to
DISTRIBUTOR, which prior change shall not increase the price for any orders from
DISTRIBUTOR accepted by SELLER prior to the effective date of such price change.
5. PATENTS/TRADEMARKS.
------------------
a. DISTRIBUTOR recognizes the validity of and exclusive ownership
by SELLER of all of SELLER's patents, trademarks and trade dress relating to or
affecting Licensed Products including those set forth on Exhibit D attached
hereto. DISTRIBUTOR shall not, either while this Agreement is in effect or at
any time thereafter, register, use or attempt to obtain any right in or to any
such patent, trademark, or trade dress, or in and to any trademark or trade
dress confusingly similar to SELLER's trademarks or trade dress. DISTRIBUTOR
shall not, without the prior written consent of SELLER, use the words or symbols
of any trademark of Seller or of any of its subsidiaries in its advertising,
labels, signs, literature or commercial stationery; provided, however, that
-------- -------
while this Agreement remains in force, DISTRIBUTOR shall be entitled to describe
itself as SELLER's exclusive distributor for the Licensed Products in the
3
Field of Use in the Territory, and to identify SELLER as the source of Licensed
Products and/or to disclose the country of origin of the Licensed Products. All
uses of SELLER's trademarks permitted by SELLER shall be royalty free uses so
long as DISTRIBUTOR is not in default of its material obligations under this
Agreement. All permitted uses of SELLER's trademarks shall be terminable by
SELLER upon ninety (90) days prior written notice. DISTRIBUTOR shall have the
right to request SELLER to register new trademark(s) for the Licensed Products
developed and owned by SELLER. If SELLER does register such new trademark(s) as
requested by the DISTRIBUTOR, SELLER shall then give to DISTRIBUTOR a royalty-
free, exclusive license to use such trademark(s) in connection with the sale of
the Licensed Products in the Field of Use in the Territory, with the term of
such license being co-terminus with the term of this Agreement.
b. In the event DISTRIBUTOR is permitted to use any of SELLER'S
licensed trademarks in connection with the sale or distribution of Licensed
Products, DISTRIBUTOR shall submit to SELLER for SELLER's prior trademark use
approval all proposed packaging, merchandising, display material, advertising
and promotional material (including commercial stationery) to be used by
DISTRIBUTOR in connection with the Licensed Products.
c. SELLER acknowledges the validity of and exclusive ownership by
DISTRIBUTOR of DISTRIBUTOR's patents and trademarks listed on Exhibit D
attached. SELLER shall not, either while this Agreement is in effect or at any
time thereafter register, use or attempt to obtain any right in or to any such
patent or trademark, or in or to any trademark confusingly similar thereto.
d. SELLER and DISTRIBUTOR acknowledge and agree it is in the best
interest of both parties to assure that patents and trademarks of the parties
are utilized in a manner which will protect, enhance and promote the value of
those patents and trademarks, and goodwill associated therewith, through sale of
Licensed Products. Therefore, the parties shall cooperate in development of
packaging and sales and promotional materials for Licensed Products to protect,
enhance and promote the patents and trademarks, and goodwill associated
therewith, of both parties.
e. Neither party shall at any time challenge in any way the
validity or ownership of any of the patents or trademarks of the other party
listed on Exhibit D, or any other patent or trademark obtained or issued with
respect to Licensed Products after the effective date of this Agreement.
6. DISTRIBUTOR OBLIGATIONS.
-----------------------
a. Unless otherwise agreed to in writing by SELLER, any expense
incurred by DISTRIBUTOR in distributing the Licensed Products in the Field of
Use in the territory shall be borne by DISTRIBUTOR.
4
b. DISTRIBUTOR shall be solely responsible for complying with all
regulations and laws relating to the export, import, transportation, sale and
use of the Licensed Products by DISTRIBUTOR and its customers, representatives
and distributors and sub-distributors, including regulations and laws relating
to approval of registration of or filing of information in respect of Licensed
Products in the Field of Use; labeling, literature, and directions for use of
the Licensed Products in the Field of Use, and all customs regulations. In
addition, DISTRIBUTOR shall keep SELLER advised of the steps it proposes to
take, or has taken, in order to comply with all applicable regulations and laws
relating to the approval, registration, filing of information, labeling,
distribution, use and sale of the Licensed Products.
c. DISTRIBUTOR shall furnish to SELLER by December 1 and June 1 of
each calendar year during the Initial Term or any Extended Term of this
Agreement, a written forecast on a monthly basis of the quantity of Licensed
Products DISTRIBUTOR estimates it will require for distribution during the six
months extending January 1 through June 30, and July 1 through December 31,
respectively, in order to ensure adequate product supply and availability.
DISTRIBUTOR understands and agrees that because of the manner in which Licensed
Products are manufactured SELLER needs significant lead time with respect to
Licensed Products to be manufactured by SELLER for DISTRIBUTOR. Therefore,
provision by DISTRIBUTOR of accurate sales forecasts is critical to SELLER's
ability to have Licensed Products available for DISTRIBUTOR. DISTRIBUTOR'S
forecasts shall include product codes and units for each product and shall be
sent to SELLER's president at the address for notices set forth at the end of
this Agreement. DISTRIBUTOR shall notify SELLER in writing of any changes to its
business or in markets DISTRIBUTOR services which may or will result in material
changes to any forecast as soon as possible after DISTRIBUTOR learns of the
change. Seller shall notify DISTRIBUTOR as soon as Seller knows if SELLER will
not be able to deliver the forecasted quantities of Licensed Products at the
times requested by DISTRIBUTOR. SELLER will use its best efforts to maintain the
capacity to timely fulfill such orders as are placed by DISTRIBUTOR in
accordance with the forecasts.
d. DISTRIBUTOR shall report to SELLER monthly DISTRIBUTOR's actual
sales for the prior month to enable SELLER to track DISTRIBUTOR's actual sales
against projected customer sales, such monthly sales to be reported on a country
by country basis.
7. DEFAULT/TERMINATION.
-------------------
a. If either party shall at any time fail to discharge any of its
material obligations hereunder, the party entitled to the benefit of performance
shall be entitled to notify the other party of such default, and that it intends
to terminate this Agreement unless the default is corrected by the defaulting
party within ninety (90) days after its receipt of such notice. If the default
continues and is not cured within such ninety (90) day period, then the party
giving the default notice shall be entitled to terminate this Agreement.
b. In the event either party files a voluntary petition for
bankruptcy, as filed against it an involuntary petition for bankruptcy, or a
receiver or trustee is appointed for the property or estate of such party, and
such petition or appointment of a receiver is not
5
terminated within ninety (90) days after the filing or appointment date, or if
either party makes an assignment for the benefit of creditors, the other party
shall be entitled by written notice to such party to terminate this Agreement
forthwith.
c. Either party may terminate this Agreement, without cause
effective the end of the Initial Term or the Extended Term by giving at least
180 days' prior written notice of termination to the other party.
d. Expiration or termination of this Agreement for any reason shall
not relieve either party from any obligations to the other arising from acts
done on or before the effective date of termination or expiration, or from
performance of obligations under Paragraphs 5, 8, 9, 14, 15 and 16 of this
Agreement.
e. Upon termination of this Agreement, SELLER may, at its option,
purchase all or any part of the inventory of Licensed Products, including raw
materials, chemicals and components, of DISTRIBUTOR sold by SELLER to
DISTRIBUTOR for an amount equal to the cost of such inventory to DISTRIBUTOR at
the time of the shipment thereof, which shall include handling charges and
transportation. Promptly after the effective date of termination DISTRIBUTOR
shall furnish SELLER a statement, certified by an independent accountant,
showing in detail the inventories of Licensed Products owned by DISTRIBUTOR on
such effective date, and the cost thereof. If SELLER elects to purchase any of
said inventory, it shall so notify DISTRIBUTOR not later than thirty (30) days
after receipt of said certified statement, and shall purchase DISTRIBUTOR's
inventory within thirty (30) days thereafter. If SELLER does not elect to
repurchase DISTRIBUTOR's inventory of Licensed Products, then DISTRIBUTOR shall
have the right to sell off its remaining inventory at commercial prices for one
hundred eighty (180) days after the effective date of termination. At the end of
such one hundred eighty (180) day period DISTRIBUTOR shall not sell any Licensed
Products whatsoever.
8. CONFIDENTIAL INFORMATION. In connection with the performance of
------------------------
this Agreement, each party may disclose to the other confidential information
relating to Licensed Products or otherwise relating to the business of the
parties such as customer lists, vendor lists, costs of manufacture, assembly or
packaging of products, product development, ideas or plans, and marketing ideas
or plans ("Confidential Information"). All information marked or identified as
"Confidential Information" shall be treated as confidential information. all
information known by a party to be confidential information of the other party
shall be confidential information without regard to whether it is specifically
designated as such by the party owning the confidential information. Each party
agrees not to use for its own benefit, or disclose to any third party, or use
for the benefit of any third party, any such Confidential Information without
first obtaining the written consent from an officer of the party disclosing the
information. The obligations under this Section 8 shall survive the termination
or expiration of this Agreement for a period of five (5) years.
The foregoing obligations of non-disclosure and non-use shall not
apply to the extent that:
6
a. any or all of the Confidential Information disclosed by one
party to the other was known to the party receiving the information at the time
of its disclosure and such knowledge is evidenced by competent proof; or
b. such Confidential Information is or becomes generally available
to the public without breach of this Agreement; or
c. such Confidential Information is lawfully received by a party
from any third party without obligation of non-disclosure or non-use; provided,
--------
however, that no patent license or patent immunity is hereby implied under such
-------
exceptions (a), (b) or (c), and provided further that specific Confidential
Information disclosed by either party to the other pursuant to this Agreement
shall not be deemed to be within any of the above exceptions if it is embraced
by more general information within one of said exclusions.
d. the disclosure is made pursuant to subpoena issued by a court or
government agency having the power to issue subpoenas; or
e. the disclosure is made to a third party who has executed a
confidential disclosure agreement reasonably satisfactory to the party owning
the confidential information.
f. each party agrees to take at least the same actions to protect
the confidential information and trade secrets of the other party as it takes to
protect its own confidential information and trade secrets.
9. INSURANCE AND INDEMNITY.
-----------------------
a. DISTRIBUTOR shall procure and maintain, at its expense, during
the term of this Agreement, general liability insurance to the extent of at
least One Million Five Hundred Thousand Dollars ($1,500,000.00) for each
occurrence of bodily injury or property damage allegedly caused by or
contributed to by the Licensed Products purchased by the DISTRIBUTOR from the
SELLER. DISTRIBUTOR shall supply SELLER with a certificate evidencing such
insurance. All insurance for Product Liability shall contain the standard Broad
Form Vendors Coverage which shall name SELLER as an additional insured. The
certificate of insurance shall reference this Agreement and stipulate that the
policy shall not be canceled or materially altered without ten (10) days advance
written notice SELLER.
b. DISTRIBUTOR agrees to and shall indemnify, hold harmless and
defend SELLER from and against any and all claims, demands, costs, expenses and
causes of action for injury of any type to or death of any person, or
destruction of or damage to any property, including that of DISTRIBUTOR or
SELLER, that occurs or may occur as a result of any action or inaction or
conduct of DISTRIBUTOR, its agents, employees, distributors, sub-distributors,
subcontractors or representatives in any manner relating to endoscopic
gynecological human and veterinary applications of Licensed Products, and all
other uses or
7
applications of Licensed Products in the Field of Use. Without limiting the
generality of the foregoing, DISTRIBUTOR's duty to indemnify shall include
indemnification with regard to all claims arising: (a) out of representations
made by DISTRIBUTOR or its agents, employees, distributors, sub-distributors or
representatives regarding Licensed Products; (b) out of any use, whether proper
or improper, sale or other disposition of Licensed Products by any party in the
Field of Use; and (c) out of or incident to or resulting directly or indirectly
from any incorrect diagnosis or interpretation relating to use of Licensed
Products in the Field of Use. As used in this paragraph, SELLER includes its
subsidiaries and affiliates and their respective officers, directors,
shareholders, trustees, agents, partners, limited partners and employees.
c. DISTRIBUTOR acknowledges and agrees that but for the
indemnification provision set forth in this paragraph 9, SELLER would not sell
its products in the Field of Use for the reason that SELLER has no knowledge
with regard to legal or market requirements or needs in the Field of Use. In
entering into this Agreement SELLER has relied upon DISTRIBUTOR's knowledge and
expertise in the Field of Use, and has made it clear to DISTRIBUTOR that because
of its lack of knowledge and expertise with regard to the Field of Use SELLER
requires DISTRIBUTOR to provide the indemnification set forth in this Paragraph
9. DISTRIBUTOR has knowingly accepted the indemnification obligation set forth
in this Paragraph 9 with full knowledge of SELLER's unwillingness to have any
product liability risk in or with regard to the Field of Use.
d. Each party shall indemnify, hold harmless and defend the other
party against all claims arising directly or indirectly out of the performance
or non-performance by the party of any act or obligation under this Agreement.
e. Each party shall indemnify, hold harmless and defend the other
party from and against and all claims of liability, loss, cost, expense,
obligation or damage in any manner relating to or arising out of claims by a
third party that Licensed Products manufactured by SELLER, or endoscopic
examination applications for Licensed Products developed by DISTRIBUTOR, violate
the patents or trademarks of another party. It shall be the obligation of SELLER
under this paragraph to provide indemnification with regard to claims that
Licensed Products which has been manufactured by SELLER violates patents or
trademarks of another party. It shall be the obligation of DISTRIBUTOR under
this paragraph to provide indemnification with respect to claims that endoscopic
applications of Licensed Products developed by Distributor violate or infringe
patents or trademarks of another party. In the event a party believes it is
entitled to indemnification under the provisions of this paragraph it shall give
written notice of its claim to the other party. The party having an obligation
to provide indemnification shall at its expense provide full and complete
defense to the party entitled to be indemnified with respect to all claims of
the applicable third party, and shall bear full responsibility for all
reasonable costs and expenses of settlement, litigation, or other resolution of
the claims made by the third party. No settlement of any claims or litigation
shall be effected without the written consent of both the indemnified and
indemnifying party, which consent shall not be unreasonably delayed or withheld.
8
10. NOTICES. Any notice expressly provided for under this Agreement
-------
shall be in writing, shall be given either manually or by mail, telegram, telex,
facsimile transmission or cable, and shall be deemed sufficiently given if and
when received by the party to be notified at its address for notices set forth
at the end of this Agreement, or if and when mailed by registered mail, postage
prepaid, addressed to such party at such address. Either party may, by written
notice to the other, change its address for receiving such notices.
11. ASSIGNABILITY. DISTRIBUTOR shall have the right to appoint
-------------
representatives and distributors under this Agreement; provided, however, that
Distributor shall not grant any representative, distributor or sub-licensee any
rights greater or longer in duration than the rights of DISTRIBUTOR under this
Agreement, and no representative or distributor shall be granted any rights
which cannot be terminated consistent with the termination provisions of this
Agreement. No representative or distributor shall be granted rights to act as
agent of SELLER. SELLER shall have the right to assign its rights under this
Agreement; provided, however, that no assignment shall result in greater
obligations or burdens to DISTRIBUTOR than exist under this Agreement. Neither
SELLER nor DISTRIBUTOR shall be relieved of its obligations under this Agreement
by virtue of any assignment of rights.
12. AMENDMENTS. This Agreement, including the provisions included in
----------
Exhibits attached, constitutes the entire agreement between the parties with
reference to the subject matter hereof. This Agreement may not be changed or
modified orally, but only by an instrument in writing, signed by the parties,
which states that it is an amendment to this Agreement.
13. GOVERNING LAW. This Agreement shall be deemed to have been made
-------------
in the State of California, U.S.A., and shall be construed and enforced in
accordance with and governed by the laws of the State of California.
14. DISPUTE RESOLUTION. Except as set forth in paragraph 15 below,
------------------
in the event of a dispute in any manner relating to or arising out of this
Agreement, the parties shall meet, confer and negotiate in good faith in an
attempt to resolve the dispute. In the event the parties are unable to resolve
the dispute themselves, the dispute shall be resolved through binding
arbitration conducted by Judicial Arbitration and Mediation Services, Inc. in
San Francisco, California. In arbitrating any issue arising under this
Agreement, the power and authority of the arbitrator shall include the power and
authority to grant such equitable relief (including injunctive relief) as may be
appropriate under the circumstances, in accordance with applicable law. The
decision or award of the arbitrator shall be binding upon the parties and shall
be enforceable by judgment entered in a court having jurisdiction. In the event
the arbitrator determines there is a prevailing party in the arbitration, the
prevailing party shall recover from the losing party all costs of arbitration,
including all fees of the arbitrator and all attorneys' fees reasonably incurred
by the prevailing party. The arbitrator shall have authority to order such
limited discovery as the arbitrator shall deem relevant and appropriate.
15. EQUITABLE RELIEF. Notwithstanding the provisions of paragraph 15
----------------
above, if any conduct or an action by DISTRIBUTOR with regard to its obligations
under this
9
Agreement would entitle SELLER to obtain equitable relief with regard to that
action or inaction, SELLER shall have the right to commence an action in a court
having jurisdiction to obtain appropriate equitable relief from the appropriate
court, whether in the form of injunction, mandatory injunction, specific
performance, precision, or declaratory relief. Any such action shall be limited
to the equitable relief sought by SELLER. All other aspects of the matter
presented to the court shall be resolved through the arbitration provisions set
forth in paragraph 16.
16. Representations and Warranties. Each party represents to the
------------------------------
other as follows:
a. Each party is a corporation organized and existing in and in
good standing under the laws of its state of incorporation.
b. The execution of the performance of this Agreement by the party
executing the agreement will not cause or result in default of any material
agreement or obligation affecting the power or ability of the party to perform
its obligations under this Agreement.
c. There is no litigation pending or threatened, and no claims
have been asserted, with regard to validity or enforceability of any patent or
trademark which is a subject of this Agreement, and no party has asserted any
claim that the patents or trademarks of a party to this Agreement infringe upon
or violate the patents or trademarks of that party.
d. Execution of this Agreement by the respective presidents of the
parties and performance thereof has been duly authorized by the board of
directors of each party under resolution in the form attached as Exhibit F.
Except for the effect of bankruptcy or insolvency rules or proceedings, this
Agreement when executed constitutes the valid, binding, and enforceable
obligation of the party executing the agreement in accordance with the terms of
the agreement.
e. SELLER represents and warrants to BUYER that to the best of its
knowledge the chemicals and materials utilized by SELLER in Licensed Products,
separately and when mixed, are not considered by the United States Food and Drug
Administration to be toxic materials or substances.
17. OPTIONS.
-------
SELLER has expressed an interest in making an investment in the
common stock of DISTRIBUTOR, and DISTRIBUTOR has agreed to terms and conditions
upon which SELLER shall have certain rights to invest in DISTRIBUTOR'S common
stock. Contemporaneously with execution of this Agreement SELLER and DISTRIBUTOR
shall each execute and deliver to the other a stock option agreement in form
identical to Exhibit E attached the "Stock Option Agreement"). SELLER and
DISTRIBUTOR acknowledge and agree that the Contingent Options set forth in the
Stock Option Agreement have been structured to reflect cost
10
and price objectives of the parties. In the event SELLER reduces it prices to
levels set forth in the Option Agreement, DISTRIBUTOR shall price the Licensed
Products it offers for sale at a level which in its discretion and sole
determination allows DISTRIBUTOR to achieve market penetration of the Licensed
Products and to enhance revenues and reasonable profits of DISTRIBUTOR.
18. List OF EXHIBITS.
----------------
a. Exhibit A - "Licensed Products and Uses";
b. Exhibit B - "Price, Payment, and Terms";
c. Exhibit C - "General Terms and Conditions of Sale";
d. Exhibit D - "SELLER's and DISTRIBUTOR's Patents and
Trademarks";
e. Exhibit E - "Option Agreement."
f. Exhibit F - "Resolution of Board of Directors - Omniglow.
Resolution of Board of Directors - Trylon."
19. GOOD FAITH COMMUNICATION AND COOPERATION. SELLER and DISTRIBUTOR
----------------------------------------
acknowledge and agree that SELLER and DISTRIBUTOR must communicate regularly and
effectively to assure that SELLER at all times understands DISTRIBUTOR's needs
and capabilities, and DISTRIBUTOR understands SELLER's needs and capabilities.
SELLER and DISTRIBUTOR shall each designate a person primarily responsible for
the relationship between SELLER and DISTRIBUTOR, which persons shall have
primary responsibility for maintaining ongoing communications between SELLER and
DISTRIBUTOR. The appointed representatives shall discuss the respective
capabilities, needs, and requirements of the parties, the progress of the
DISTRIBUTOR's sales efforts, any and all problems experienced by DISTRIBUTOR
with regard to Licensed Products. or customers of DISTRIBUTOR with regard to
Licensed Products, and to assure the free-flow of all information necessary to
enable the parties to discuss and agree upon appropriate strategies for
protecting, promoting, enhancing, and growing sales of Licensed Products in the
Field of Use in the Territory. In addition, SELLER and DISTRIBUTOR shall each
cooperate in good faith to deliver to each other such information or documents
as may be required by a party to meet record keeping, file or reporting
requirements a party may have with respect to the Food and Drug Administration
or any other governmental agency having jurisdiction with respect to Licensed
Products.
20. BINDING EFFECT. This Agreement shall be binding upon the parties
--------------
and their respective successors, agents, employees, and representatives of all
types. This Agreement sets forth the final agreement of the parties with regard
to the subject matter of this Agreement.
11
This Agreement shall not be modified except by a writing signed by the parties
whose rights or obligations are modified.
12
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
SELLER:
OMNIGLOW CORPORATION
By: /s/
-------------------------
Name: Xxxx Xxxxxx
Title: President
Address for notices:
------
----------------------------
DISTRIBUTOR:
THE TRYLON CORPORATION
By: /s/
-------------------------
Name: X. Xxxxx
Title: President
Address for notices:
------
----------------------------
[CERTAIN PORTIONS OF THIS DOCUMENT, AS INDICATED WITHIN, HAVE
BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST]
13
EXHIBIT A
[OMITTED]
14
EXHIBIT B
PRICE/CREDIT TERMS
------------------
[OMITTED]
15
EXHIBIT C
STANDARD TERMS AND CONDITIONS OF SALE
-------------------------------------
[OMITTED]
16
