IMAGING DIAGNOSTIC SYSTEMS, INC.
DISTRIBUTION AGREEMENT
This Distribution Agreement ("Agreement") is made and entered into as
of Dec 3, 1998, by and between Consultronix, SA, a corporation organized and
existing under the laws of above (the "Distributor"), and Imaging Diagnostic
Systems, Inc., a corporation organized and existing under the laws of the State
of Florida ("IDSI").
WITNESSETH:
RECITALS
WHEREAS, IDSI is the owner, and manufacturer of a state of the art
laser imaging system for detection and analysis of masses in the breast, and
ancillary equipment as more fully described on Exhibit A hereto and incorporated
herein (the "Equipment").
WHEREAS, IDSI is the licensee of a certain Patent and owner of certain
Patent pending and Patent applications, trade secrets and other proprietary
information in connection with the Equipment and represents that it has the
legal right to manufacture, sell and distribute the Equipment, either
individually or through others;
WHEREAS, IDSI wishes to grant to Distributor and Distributor wishes to
obtain the exclusive right to be supplied with, sell, distribute and market the
Equipment, individually or through others, in the Territory.
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement the following terms shall have
the definition set forth below.
(a) EQUIPMENT. The term "Equipment" shall mean and include only those
products listed on Exhibit A, as amended from time to time. IDSI may add to,
upgrade or change the Equipment from time to time by providing written notice
not less than thirty (30) days prior to any such change.
(b) TERRITORY. The term "Territory" shall mean the territories set
forth on Exhibit B hereto and incorporated herein.
2. TERM. This Agreement shall be for a term of thirty-six (36) months from the
date of its execution by Distributor. This Agreement will automatically renew
for an additional one year term provided that Distributor meets the Performance
Standards set forth in Section 5. and provided that Distributor satisfactorily
fulfills all other terms and conditions of this Agreement.
3. RIGHT TO SELL, DISTRIBUTE AND MARKET. During the term of this Agreement and
any renewal hereof, IDSI hereby grants to Distributor, as its exclusive agent,
the right to sell, distribute, individually or through outside distributors, and
market the Equipment in the Territory. Distributor shall also have the right to
use the trade names, and trademarks associated with the Equipment in connection
with the promotion, sale, marketing and distribution of the Equipment.
Distributor hereby acknowledges and agrees that all trade names and trademarks
associated with the Equipment are the property of and proprietary to IDSI.
4. DISTRIBUTOR'S DUTIES, REPRESENTATIONS AND WARRANTIES. Distributor agrees to
use its best efforts to sell, market and/or distribute the Equipment in the
Territory. Distributor agrees that it will perform at its expense the following
duties to IDSI's reasonable satisfaction
(a) PROMOTION AND MARKETING.
(i) Distributor will maintain a qualified sales and
distribution organization which will provide sales personnel, advertisement,
marketing and distribution support for the solicitation of customers and
potential customers in the Territory for the sale of the Equipment.
(ii) Any sales promotion, promotional activities, marketing or
advertising strategies, pamphlets, advertisements, brochures or other
promotional materials, other than those provided by IDSI, must have the prior
written approval of IDSI. At least one copy of all Distributor's advertising and
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sales promotion materials in which the Equipment is mentioned, must be provided
for IDSI's review and approval prior to the time of first use. Distributor shall
not use any such advertising and sales promotion materials or translations of
manuals or other materials until IDSI has approved such use in writing. All
advertisements, pamphlets, brochures or other promotional materials, other than
those provided by IDSI shall be at the sole cost of the Distributor. The
Distributor shall have the continuing right to use any promotional materials
produced by IDSI while this Agreement is in effect. (iii) DISTRIBUTOR, AT ITS
SOLE COST, WILL ATTEND THE ENTIRE RSNA CONFERENCE EACH YEAR DURING THE TERM OF
THIS AGREEMENT AND WILL BE PRESENT IN THE IDSI BOOTH FOR AT LEAST 4 HOURS PER
DAY DURING THE RSNA CONFERENCE.
(iv) Distributor will exhibit the CTLM(TM) in at least one
major trade show or exhibit, per year during the Term of this Agreement, in the
Territory or in the countries surrounding the Territory.
(b) QUARTERLY REPORTS. Distributor shall promptly prepare and deliver
to IDSI, within 15 days of the end of each quarter, reports identifying each
purchaser of Equipment by name, address and designation of type of business and
the date of sale, model and serial number for each unit of Equipment sold during
the preceding three months and a forecast of requirements for Equipment for the
following six months, as well as a description of all training, support, and
advertising and sales promotional activities undertaken during such period. In
addition, such Report shall contain a statement of the Distributor' then current
inventory of spare parts and technical literature available for customer
service, maintenance and support of the Equipment. The Report shall be certified
by an officer of the Distributor.
(c) GENERAL CONDUCT. Distributor shall at all times conduct its
business in a manner that reflects favorably on IDSI and its Equipment and will
not engage in any deceptive, misleading, illegal or unethical business
practices.
(d) SERVICE AND SUPPORT. DISTRIBUTOR WILL BE REQUIRED TO PROVIDE, NO
LATER THAN TWO MONTHS PRIOR TO THE FIRST INSTALLATION OF A CTLM(TM) UNIT, AT
LEAST ONE FIELD SERVICE ENGINEER AND AT LEAST ONE CLINICAL APPLICATION
SPECIALISTS FOR TRAINING AT IDSI HEADQUARTER FACILITIES. THESE PERSONS WILL BE
TRAINED IN OPERATION, SUPPORT AND SERVICE TECHNIQUES FOR ALL OF THE EQUIPMENT
AND SERVICES. IDSI WILL NOT CHARGE FOR SUCH TRAINING, HOWEVER DISTRIBUTOR SHALL
BE RESPONSIBLE FOR ALL TRAVEL, ACCOMMODATION AND OTHER EXPENSES.
DISTRIBUTOR WILL PROVIDE ADEQUATE TECHNICAL TRAINING, INSTALLATION,
CUSTOMER SERVICE, AND MAINTENANCE AND SUPPORT FOR THE EQUIPMENT IN THE
TERRITORY. DISTRIBUTOR WILL ESTABLISH AND MAINTAIN A STAFF OF TRAINED CLINICAL
AND SERVICE TECHNICIANS AND PURCHASE AND MAINTAIN STOCK OF SPARE PARTS AND
TECHNICAL LITERATURE NECESSARY IN ORDER TO PROVIDE ADEQUATE TRAINING,
INSTALLATION, CUSTOMER SERVICE, MAINTENANCE AND SUPPORT OF THE EQUIPMENT IN THE
TERRITORY. DISTRIBUTOR HEREBY AGREES TO PROVIDE SUCH SERVICE AND SUPPORT IN A
PROMPT AND WORKMANLIKE MANNER TO ANY USER OF THE EQUIPMENT IN THE TERRITORY,
WHETHER OR NOT SUCH EQUIPMENT WAS PURCHASED FROM DISTRIBUTOR, PROVIDED, HOWEVER,
THAT ANY SUCH USER MAY BE REQUIRED TO PAY A REASONABLE RATE OR FEE TO
DISTRIBUTOR FOR SUCH SERVICE AND SUPPORT.
(e) COMPETITIVE PRODUCTS. Distributor will do everything within its
power to feature, promote, and advertise, as part of its merchandising and sales
policy, the Equipment and use its best efforts to stimulate and increase
interest in IDSI's Equipment. IDSI understands that some existing and some new
customers may request competitors' products. Distributor will use its best
efforts to sell, market and distribute the IDSI Equipment to such customers.
Distributor will give IDSI the opportunity to assist with these accounts.
(f) CUSTOMER REQUIREMENTS. With a view to maximizing the potential
market for the Equipment within the Territory, Distributor will report to IDSI
on a quarterly basis, and assist IDSI in the assessment of the needs and
requirements of the potential customer base in the Territory with respect to the
Equipment, including, but not limited to: (i) a rolling twelve-month quantity
forecast, (ii) quality of the Equipment, (iii) design, functional capability and
additional features of the Equipment and related modifications, improvements and
enhancements, and (iv) general market conditions of the Territory.
(g) CO-MARKETING PROTECTION. Distributor will maintain confidentiality
of IDSI supplied prospective customers and not conduct any direct efforts to
persuade such clients toward competitive equipment or services.
(h) PURCHASE ORDERS. Distributor shall forward all orders promptly to
IDSI. The orders shall state clearly the name of the purchaser, the quantity
purchased, and the time and place of delivery.
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(i) DELIVERY. Distributor shall give IDSI at least 180 days prior
written notice before each shipment is required.
(j) EXPENSES AND TAXES. Distributor is an independent contractor, and
as such shall pay all expenses, including compensation of salesmen, rentals,
travel, and all taxes, including assessments, which may be made against the
salary or wages of those directly employed by Distributor.
(k) RELATIONSHIP OF PARTIES. Except as set forth herein, Distributor
shall have no right or authority to create any obligation on the part of IDSI or
bind IDSI to any agreement.
(1) OFFICES. Distributor shall maintain a suitable office in Krakow
with a telephone and facsimile line suitable for use for the sale of the
Equipment. The office shall contain a suitable display area where the Equipment
shall be prominently displayed at all times. This display area or another area
shall be suitable for and used for the demonstration of and training in the use
of, the Equipment. The office shall be staffed from 9:00 a.m. to 5:00 p.m.,
Monday through Friday, subject to recognized national holidays.
5. PERFORMANCE STANDARDS. Prior to the PMA, Distributor will purchase one
clinical CTLM(TM), at IDSI's cost, for sale to a major medical facility to be
used for clinical study comparisons. The sale to the medical facility shall be
approved by IDSI and shall be conditioned upon and provide Distributor with the
unlimited right, subject to scheduling, to use the Equipment for sale
demonstrations. Demonstrations of the equipment must be complete and must show
all features and functions of the Equipment.
If the following performance standards (the "Minimum Performance Standards") are
not met, IDSI will notify Distributor, in writing, that it is in default of this
Agreement. If Distributor does not cure the deficiency within 30 days from
receipt of the notice, IDSI, at its sole option, may: (i) continue this
Agreement on a nonexclusive basis; (ii) continue this Agreement on a
nonexclusive basis and limit the Territory; or (iii) terminate this Agreement.
Any such action taken by IDSI shall be without prejudice to the rights of the
parties with respect to Equipment already ordered, sold or delivered. For the
purpose of this Agreement, Year 1 shall begin upon PMA acceptance.
YEAR. NUMBER OF CTLM(TM) UNITS
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1 1
6. PURCHASE OF EQUIPMENT.
(a) ORDERS. Orders from Distributor for equipment shall be made by
delivery of a purchase order to IDSI. As soon as practicable after receipt of
such purchase order, IDSI will: (i) if such order is accepted, return to
Distributor IDSI's standard form of Sales Acknowledgment (the "Acknowledgment")
setting forth dates on which delivery will be made, or (ii) notify Distributor
in writing that such order is rejected. IDSI will use its best efforts to make
prompt delivery of the Equipment accepted by IDSI on the delivery dates
specified in the Acknowledgment, F.O.B. Fort Lauderdale, at the time and to the
entities and destinations listed in the purchase orders. IDSI shall not be
liable for any failure to deliver, if such failure has been occasioned by fire,
embargo, strike, failure to secure materials from a usual source of supply, or
any circumstance beyond IDSI's control, which shall prevent IDSI from making
deliveries in the normal course of its business. IDSI shall not, however, be
relieved from making delivery when the causes interfering with deliveries shall
have been removed. In particular, the Parties acknowledge that IDSI is reliant
on outside suppliers, which supply the components for its Equipment. Should
these suppliers fail to produce the required components in a timely manner, than
IDSI shall be excused from the delivery obligations under this Agreement until
such time as the components can be manufactured, delivered and installed in the
Equipment. In no event shall IDSI be responsible for any loss or liability
suffered by Distributor as a result of delay in delivery of any order.
(b) CANCELLATION OF ORDERS. Distributor may cancel any order (or any
part thereof) for Equipment by giving IDSI written notice of such cancellation
at least 15 days prior to the shipping date. If Distributor cancels an order for
Equipment (or any part thereof), Distributor will be subject to a charge based
upon the purchase price relating to the Equipment so affected, as set forth on
Exhibit C attached hereto. In the event of such cancellation, Distributor will
have no rights in partially completed goods.
(c) RESCHEDULING ORDERS. Distributor may at any time, upon not less
than thirty (30) days written notice to IDSI, reschedule and/or postpone the
delivery date relating to an order (or any part thereof) for up to thirty (30)
days. The postponement of delivery to a date more than thirty (30) days from the
delivery date specified in the initial order shall be deemed a cancellation of
such order. DISTRIBUTOR MAY NOT POSTPONE THE DELIVERY DATE MORE THAN ONCE WITH
RESPECT TO ANY ORDER. If Distributor cancels a previously rescheduled delivery
of Equipment, the applicable cancellation charges shall be based on the delivery
date specified in the initial order submitted by Distributor for such delivery.
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7. PRICE.
(a) PURCHASE PRICE. The purchase price for the Equipment to be sold
hereunder shall initially be as set forth on IDSI's Price List attached hereto
as Exhibit C and incorporated herein, which may be discounted based on the
cumulative quantities of such Equipment purchased by Distributor during the term
hereof or any Additional Term. Discounts shall not apply retroactively to prior
purchases of Equipment. IDSI shall have the sole right to set the price and
other terms of the sales of the Equipment. IDSI, at its sole discretion,
reserves the right to change prices, materials used, Equipment line and the
components of the Equipment. IDSI will provide reasonable notice of any price or
other changes to Distributor as to not disrupt the sales and distribution of the
Equipment. IDSI reserves the right to amend Exhibit C with respect to any
Additional Term.
(b) PRICE CHANGES. IDSI may change the prices to be charged for
Equipment sold hereunder by amending its published Price List and giving
Distributor thirty (30) days prior notice. All orders received and accepted by
IDSI prior to the effective date of the price increase for shipment within
thirty (30) days of such effective date will be billed at the prices in effect
at the time of acceptance of the order; provided, however, that if Distributor
notifies IDSI in writing prior to the effective date of such price increase that
it quoted the original price in an outstanding bid submitted prior to receipt of
IDSI's amended Price Lists, any order relating to such bid accepted by IDSI
prior to the effective date of such price increase for shipment within ninety
(90) days of such effective date will be billed at the prices in effect at the
time of acceptance. All other shipments after thirty (30) days (or ninety days,
if applicable) of such effective date shall be billed at the prices set forth in
the amended Price List.
(c) PAYMENT. All payments hereunder shall be in United States dollars
and shall be effected by means of confirmed, irrevocable letters of credit on a
Florida bank established, upon execution of this Agreement, to IDSI's
satisfaction. All exchange, interest, banking, collection and other charges
shall be the sole expense of the Distributor. Distributor shall have the option
to wire transfer funds in advance of shipment to IDSI as follows:
First Union National Bank of Florida, Jacksonville, Florida
Account of Imaging Diagnostic Systems, Inc.
Account Number 0000000
ABA Number 000000000
Shipment will be made upon either receipt of the letter of credit approved by
IDSI or confirmation that a wire transfer has been received.
8. TERMS AND CONDITIONS OF SALE. This Agreement and all sales of Equipment
hereunder by IDSI to Distributor shall be subject to IDSI's standard terms and
conditions of sale as set forth on the applicable Acknowledgment. A copy of
IDSI's current Standard Terms and Conditions of Sale is attached hereto as
Exhibit D and incorporated herein. To the extent that IDSI's standard terms and
conditions are inconsistent with express provisions of this Agreement, the
provisions of this Agreement shall prevail. Distributor agrees that although it
may use its standard forms for others or other notices hereunder, said standard
forms will be governed by the terms and conditions of this Agreement and any
applicable Acknowledgment shall have no force and effect. Distributor agrees to
place the following legend on its standard forms submitted to IDSI hereunder:
"NOTWITHSTANDING ANY OTHER TERMS AND CONDITIONS APPEARING HEREON, THIS PURCHASE
SHALL BE GOVERNED BY THE TERMS AND CONDITIONS OF SALE SET FORTH IN THE IDSI
DISTRIBUTION AGREEMENT DATED APRIL_____, 1998 BETWEEN DISTRIBUTOR AND IDSI."
9. PRODUCT WARRANTY.
(a) DISTRIBUTOR WARRANTY. The sole warranties provided by IDSI to
Distributor with respect to the Equipment are those contained in IDSI's Standard
Terms and Conditions. Notwithstanding the foregoing, with respect to Equipment
for which IDSI is not the original manufacturer, the sole warranties provided by
IDSI to Distributor shall be equivalent to the sole warranties provided by the
original manufacturer to IDSI (current original manufacturer warranties and the
Equipment to which they pertain.
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IDSI DISCLAIMS ALL OTHER WARRANTIES, WARRANTS OF TITLE, MERCHANTABILITY, AND
FITNESS FOR A PARTICULAR PURPOSE AND AGAINST INFRINGEMENT UPON THE RIGHTFUL
CLAIM OF ANY THIRD PERSON. IDSI DISCLAIMS LIABILITY FOR ALL CONSEQUENTIAL
DAMAGES IN ANY FORM, EVEN THOUGH IDSI MAY HAVE BEEN ADVISED OR MAY OTHERWISE
KNOW OF THE POSSIBILITY OF SUCH DAMAGES.
Nothing contained in this warranty shall make IDSI liable beyond the express
limitations of this warranty for loss or damage to the business of Distributor,
including any claims as to breach of contract, lost receipts or profits,
business interruptions or other tangible business loss.
(b) END-USER WARRANTY. Distributor is hereby authorized, subject to the
succeeding sentence, to offer the warranties set forth in Section 9 (a) to
customers to whom it sells the Equipment, and IDSI agrees to honor such
warranties. Distributor acknowledges and agrees that the warranty period set
forth in the Acknowledgment commences, with respect to both Distributor and its
customers, on the date of delivery to Distributor and not the date of any
subsequent delivery by Distributor to its customers. In no event however shall
the warranty period exceed fifteen months. In the event that the Distributor
extends or otherwise represents to a customer that the warranties are more
extensive or encompassing than those set forth herein, the Distributor shall
indemnify IDSI for any warranty claims made by a customer based on Distributor's
representations.
10. SUBLICENSES.
(a) PROGRAMS SUBLICENSE. Distributor is authorized to grant
restrictive, nonexclusive, nontransferable sublicenses to customers to use the
Programs (as defined in the Acknowledgment) or any portion thereof, provided
that each such Customer (sublicensee) enters into an agreement with Distributor
pursuant to which the sublicensee expressly accepts and agrees to the terms and
conditions of the license set forth in the Acknowledgment. In addition to any
other remedy IDSI may have, IDSI reserves the right to terminate any
sublicensee's sublicense if said sublicensee fails to comply with any term or
condition of any such sublicense. Any sublicense granted by Distributor to a
sublicense hereunder shall also terminate and such sublicense shall cease to use
and return the Programs.
(b) PROPRIETARY TECHNICAL MATERIALS SUBLICENSE. Distributor is
authorized to grant restrictive, nonexclusive, nontransferable sublicenses to
customers to use the Proprietary Technical Materials or any portion thereof,
provided that each such customer (sublicensee) enters into an agreement with
Distributor pursuant to which the sublicensee expressly accepts and agrees to
the terms and conditions of the license set forth in the Acknowledgment. In
addition to any other remedy IDSI may have, IDSI reserves the right to terminate
any sublicensee's sublicense if said sublicensee fails to comply with any term
or condition of any such sublicense. Any sublicense granted by Distributor to a
sublicense hereunder shall also terminate and such sublicense shall cease to use
and return the Proprietary Technical Materials.
11. MAINTENANCE.
(a) DISTRIBUTOR'S OBLIGATION TO PROVIDE SERVICE. Distributor agrees
that IDSI shall have no obligation to maintain the Equipment except for the
warranty obligations specified in Section 9. Distributor acknowledges and agrees
that it will perform, at no expense to IDSI, maintenance and repair of Equipment
sold or leased to the Distributors customers
(b) CONSIGNMENT OF SPARES PARTS. IDSI may, at its sole discretion,
consign to Distributor, from time to time, as it may deem necessary, spare parts
to support warranty repair service in Distributor's Territory. The title to such
parts shall at all times remain with IDSI and Distributor shall have no right,
title or interest therein until such time as payment is made to IDSI as set
forth below. In the event that such parts used for non-warranty repair service,
Distributor will purchase the part used or to be used for non-warranty repair
services at prices listed in Exhibit C, as may be amended from time to time.
Distributor will provide IDSI with a monthly report, not later than 15 days
after the first day of each month, which will indicate the Customers name,
address and phone number, the work performed, the parts used and whether the
repair was under warranty. The report shall also include a total dollar amount
for parts used for non-warranty repair and be accompanied by a check for full
payment therefor.
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12. TERMINATION.
(a) Either party may, by written notice to the other party, terminate
this Agreement upon the occurrence of any one or more of the following events:
(i) Upon the failure of the other party to pay any monies when
due hereunder, if such default continues for five (5) business days or more
after written notice to the defaulting party;
(ii) Upon material failure of a party to observe, keep or
perform any of the covenants, terms or conditions herein, if such default
continues for twenty (20) business days or more after written notice to the
defaulting party;
(iii) In the event that (A) a party makes a general assignment
for the benefit of creditors or transfers all or a substantial portion of its
assets; (B) a receiver is appointed and not discharged within 30 days of
appointment, or (C) the other party has become insolvent.
(b) IDSI may, by written notice to Distributor, terminate this
Agreement upon occurrence of any one more of the following events:
(i) In the event that Distributor solicits orders for
Equipment outside its Territory;
(ii) In the event of any dispute, disagreement or controversy
between or among the owners, partners, managers, officers or stockholders of
Distributor which in the opinion of IDSI adversely affects the ownership,
operation, management, business or interests of Distributor, or in the event of
a change in control or majority ownership of Distributor;
(iii) If Distributor ceases to function as a going concern or
to conduct its operations in the normal course of business, or
(iv) If Distributor fails to meet the Minimum Performance
Standards set forth in Section 5, IDSI shall have the right, upon 30 days
written notice to the Distributor, to terminate this Agreement. Distributor
shall have the right to cure the deficiency within such 30-day period. If
Distributor does not cure the Deficiency within such 30-day period, IDSI may
terminate this Agreement on the 30th day.
(c) Upon termination or expiration of this Agreement, for any reason
Distributor shall discontinue the use of IDSI's name, trademarks, trade names,
labels, copyrights, and other advertising media and shall remove all signs and
displays relating thereto: and will no longer identify itself as a distributor
of IDSI or indicate, in any way, that it is associated with IDSI. Distributor
shall promptly return to IDSI all marketing and selling materials, all manuals,
all technical data, all other documents and copies thereof previously supplied
by IDSI and all spare parts consigned to Distributor by IDSI.
(d) Upon termination or expiration of this Agreement, for any reason,
IDSI shall have the option to repurchase its Equipment and spare parts then in
possession of the Distributor, at prices originally billed to the Distributor if
the Equipment and spare parts are new and at an adjusted price if the Equipment
is used, and with deductions for money due or to become due to IDSI under this
Agreement. As to any of the IDSI's Equipment or spare parts not repurchased by
IDSI, Distributor shall have the right to dispose of them in the regular course
of its business and for this purpose only, the restrictions of preceding sub
paragraph shall be deferred until three months after the termination of this
Agreement.
(e) It is expressly understood and agreed that the rights of
termination as provided in this Agreement are absolute and that both parties
hereto have considered the costs and expenditures associated with the
preparation and performance of this Agreement and the possible losses and
damages which may be incurred by both parties in the event of its termination.
The parties hereto acknowledge and agree, by execution hereof that they have
entered into this Agreement with full knowledge of such possibilities, and
except as provided herein neither party hereto shall be responsible to the other
for compensation, damages, losses, or otherwise, for termination of this
Agreement as set forth above.
13. TRADEMARKS: MARKINGS.
(a) TRADEMARKS AND NAMES. Distributor is hereby granted permission to
use during the term of this Agreement, and any renewal hereof, the trademarks
and trade names used by IDSI in connection with the Equipment. Such permission
is expressly limited to uses by Distributor necessary to performance of
Distributor's obligations under this Agreement, and Distributor hereby admits
and recognizes IDSI's exclusive ownership of such marks and names and the renown
of IDSI's marks and names, both worldwide and specifically in the Territory.
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Distributor agrees not to take any action, inconsistent with such ownership and
further agrees to take any action, including without limitation the conduct of
legal proceedings, which IDSI deems necessary to establish and preserve IDSI's
exclusive rights in and to its trademarks and trade names. Reproductions of
IDSI'S trademarks, logos, symbols, etc. shall be true reproductions and shall be
done photographically, in a manner, which enhances the reputation and status of
IDSI.
(b) MARKINGS. Distributor will not remove or make or permit any
alterations in any labels or other identifying markings placed by IDSI on any of
the Equipment without written consent by IDSI.
(c) NO ADDITIONAL RIGHTS. No rights to manufacture, alter, or use the
Equipment for purposes other than those contained herein are granted by this
Agreement. Moreover, no licenses are granted or implied by this Agreement under
any patents owned or controlled by IDSI or under which IDSI has a right, except
the right to sell, market and distribute IDSI's Equipment, as contemplated
herein, during the term of this Agreement.
14. INDEMNIFICATION. Distributor shall indemnify and hold harmless IDSI, its
officers, directors, employees, or agents (collectively referred to in this
Section 14 as "IDSI") for damages or expenses resulting from any claim, suit or
proceeding brought against IDSI, with regard to any untrue statement or alleged
untrue statement, misrepresentation or alleged misrepresentations, promise or
agreements made or allegedly made by Distributor or its sub-distributors or
arising from the marketing, sale or distribution of the Product by Distributor
or its sub-distributors. This provision shall not apply to Distributor or any
person controlling Distributor in respect of any losses, claims, damages,
liabilities or actions arising out of or based upon any untrue statement or
alleged untrue statement, misrepresentation or alleged misrepresentations,
promise or agreement made or allegedly made by Distributor or arising from the
marketing, sale or distribution of the Product by Distributor, if such untrue
statement or alleged untrue statement, misrepresentation or alleged
misrepresentations, promise or agreement was made in reliance upon information
furnished in writing to Distributor by IDSI specifically for use in connection
with the sale, marketing or distribution of the Equipment. IDSI agrees that
Distributor has the right to defend, or at its option to settle, and Distributor
agrees, at its own expense, to defend or at its option to settle, any claim,
suit or proceeding brought against IDSI. Distributor agrees to pay any costs of
litigation, investigation or defense incurred by IDSI, including reasonable
attorney fees, and final judgement, entered against IDSI on such issue in any
such suit or proceeding. Distributor shall be relieved of the foregoing
obligations unless IDSI notifies Distributor in writing, within fifteen days of
receipt of notification of such suit, claim or proceeding, and gives Distributor
authority to proceed as contemplated herein.
15. RISK OF LOSS. Title to the Equipment shipped shall pass upon shipping,
subject to full payment. Distributor assumes the risk of loss and damage of the
Equipment in transit from IDSI's shipping point to the point of destination.
16. COMPLIANCE WITH LAWS. Distributor shall comply with all material applicable
present and future federal, state, county, local and foreign laws, ordinances
and regulations relating to the importation and sale of the Equipment.
Distributor will take all steps necessary to obtain the proper import licenses,
if applicable and Distributor shall be solely responsible for any excise tax,
duties or other costs for the importation of the Equipment. 17.
NON-CIRCUMVENTION AGREEMENT. The respective Parties involved in this Agreement,
agree not to circumvent each other. The Parties agree that they will not make
any contact, directly or indirectly, written, oral, electronic or by any medium
of contact whatsoever, with any Sources without the express written consent of
the other introducing Party. Each of the listed Parties hereto, accepts and
understands that any overt or covert action of circumvention, or unauthorized
disclosure shall constitute a breach of trust and shall be considered a breach
of the terms and conditions of this agreement. Such action shall be subject to
judicial action, and recompense.
If either Party shall bring an action to recover payment or other compensation
pursuant to the terms of this Agreement, the prevailing Party shall be entitled
to reasonable attorney's fees and expenses as may be awarded, including legal
fees and costs, and recovery for liquidated damages and punitive damages as may
be awarded by and through any legal process or jurisdiction.
For the purposes of this Section 17, the term "Party" or "Parties" shall be
considered to include and be binding upon the parties to this Agreement, any
individual, entity or entities, including but not limited to, associates,
partners, assigns, spouses, employees, agents, principals, clients,
corporations, companies, subsidiaries, divisions, affiliated, associations,
collateral providers or the like, which the Parties hereto may now or in the
future be associated with during the term of this Agreement and any renewal
thereof.
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For the purposes of this Section 17, the term "Sources" shall be considered to
include any business opportunity, principal, individual, entity or entities,
including but not limited to, customers and distributors, their associates,
partners, assigns, spouses, employees, agents, principals, clients,
corporations, companies, subsidiaries, divisions, affiliated partnerships,
associations or the like, introduced to or brought to the attention of a Party
to the other Party during the term of this Agreement or any renewal thereof.
Distributor acknowledges and agrees that no separate or additional payment will
be required to be made to it in consideration of its undertakings in this
Section 17.
18. NO COPYING. Without the prior written consent of IDSI, Distributor shall
refrain from copying, reverse engineering, disassembling, translating or
modifying the Equipment for its benefit, or granting any other person or entity
the right to do so.
19. NOTICES. Any notice required or permitted by this Agreement shall be in
writing and shall be delivered by U.S. Certified Mail, return receipt requested,
or by special messenger service with receipt (such as Federal Express), by
facsimile delivery or by hand, to the parties at the following addresses or such
substitute person or address of which notice is given in like manner:
IDSI Imaging Diagnostics Systems, Inc.
0000 XX 00 Xxxxx Xxxxxxxxxx, Xxxxxxx 00000
Phone (000) 000-0000 Fax (000) 000-0000
Distributor Consultronix
________________________
________________________
Phone: _________________
Fax: ___________________
or to such other address as either of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
20. GOVERNING LAW. VENUE AND ARBITRATION. This Agreement shall be deemed to be
executed in the State of Florida and governed by the laws of the State of
Florida. Any controversy or claim arising out of or relating to this Agreement
or to the interpretation, breach or enforcement thereof, except a claim for
injunctive relief, shall be submitted to an arbitrator and settled by
arbitration in Broward County, Florida, in accordance with the rules then
obtaining of the American Arbitration Association. Any award made by the
arbitrator shall be final, binding and conclusive on all parties hereto for all
purposes, and judgement may be entered thereon in any court having jurisdiction
thereof. Nothing contained herein shall serve to prohibit the parties from
seeking injunctive relief in a court of competent jurisdiction.
21. GENERAL.
(a) INDEPENDENT CONTRACTOR. Distributor will act as an independent
contractor under the terms of this Agreement and not an agent or legal
representative of IDSI for any purpose, whatsoever, and, except for the
extension of the warranty set forth in Section 9, Distributor has no right or
authority to assume or create any obligation of any kind, express or implied, on
behalf of IDSI to Distributor's customers or to any other person.
(b) LIMITATION. Nothing in this Agreement shall be construed to
preclude IDSI from selling or leasing or otherwise marketing any Equipment
directly to any other customer, or through other distribution channels outside
the Territory.
8
(c) PRODUCT CHANGES. IDSI reserves the right to make design and other
modifications in the Equipment at any time but shall not be obligated to
implement such modifications in Equipment that has previously been delivered.
(d) CONFIDENTIAL INFORMATION. Distributor agrees not to disclose to any
person outside of its employ, and not to use for any purpose other than to
fulfill its obligations under this Agreement, any information which is disclosed
to Distributor by IDSI and which is not otherwise publicly available.
Distributor agrees to take all preventative measures and precautions to guard
against and prevent any use or disclosure of such confidential information by
its partners, employees, agents, or other persons consistent with the intent of
this paragraph. Distributor further agrees not to disclose to IDSI any
information, which Distributor deems to be confidential, and it is understood
that any information received by IDSI will not be of a confidential nature.
(e) WAIVER AND AMENDMENT. Any party shall not construe the waiver by
any party to this Agreement of a breach of any provision hereof by any other
party as a waiver of any subsequent breach. The failure by either party at any
time to enforce the provisions of this Agreement, or to exercise any election or
option provided herein, shall in no way be construed as a waiver of such
provisions or options, nor in any way to affect the validity of this Agreement
or any part thereof, or the right of either party thereafter to enforce each and
every such provision. No provision of this Agreement may be terminated, amended,
supplemented, waived or modified other than by an instrument in writing signed
by the party against whom the enforcement of the termination, amendment,
supplement, waiver or modification is sought.
(f) NO OTHER WARRANTY OR REPRESENTATION. Distributor hereby
acknowledges that it has not entered into this Agreement in reliance upon any
warranty or representation by any person or entity except for the warranties or
representations specifically set forth herein.
(g) LANGUAGE. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions hereof in any
other language shall be for accommodation only and shall not be binding upon the
parties hereto. All communications and materials made or given pursuant to this
Agreement, including without limitation any operations and maintenance manuals,
shall be in the English language. IDSI shall have no obligations or liabilities
to Distributor or any other person for loss of profits, loss of use or
incidental, special or consequential damages, even if IDSI has been advised of
the possibility thereof, arising out of or in connection with the translation
from English into any other language of any materials made or given pursuant to
this Agreement, including without limitation any operations and maintenance
manuals.
(h) LICENSES AND PERMITS. IDSI will use its best efforts to secure all
export licenses and permits required by the United States government, and
Distributor will secure all import licenses and permits required in connection
with the importation, marketing, sale and distribution of the Equipment. Each
party will furnish any information and assistance reasonably required by the
other party in connection with securing any such licenses and permits.
(i) IMPORT/EXPORT CONTROLS. IDSI's obligations hereunder shall be at
all times subject to the export administration and control laws and regulations
of the United States Government, and any amendments thereof and the import
administration and control laws and regulations of the Territory, and any
amendments thereof. Distributor shall provide IDSI with any written assurances
it may reasonably request with respect to Distributor's compliance with such
laws or regulations. Distributor agrees that, with respect to the import, resale
or any other disposition of Equipment and any printed commercial and technical
data and information supplied by IDSI, Distributor will comply fully with the
import/export administration and control laws and regulations of the United
States of America and the Territory, and any amendments of such laws and
regulations.
(j) COMPLIANCE WITH LAWS. IDSI represents that, with respect to the
production of Equipment to be furnished hereunder, IDSI will fully comply with
all applicable laws of the United States and the State of Florida. Distributor
represents that, with respect to the purchase, marketing, sale and distribution
of the Equipment furnished hereunder, Distributor will comply with all
applicable laws of the Territory.
(k) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties concerning the subject matter hereof and
supersedes all prior agreements, negotiations and understandings of the parties
with respect thereto. No representation, promise, modification or amendments
shall be binding upon either party as a warranty or otherwise, unless in writing
and signed on behalf of each party by a duly authorized representative. Although
Distributor may use its standard purchase order form to give any order or other
notice provided for hereunder, said order or notice will be governed by the
terms and conditions of this Agreement any applicable Acknowledgment, and any
term or condition set forth in any such standard form which is inconsistent with
or in addition to the terms and conditions of this Agreement and any applicable
Acknowledgment shall have no force or effort.
(l) ATTORNEY'S FEES. In the event any action is commenced with regard
to this Agreement, or the terms and conditions herein, the prevailing party
shall be entitled to reasonable attorney's fees, costs and expenses.
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(m) SEVERABILITY CLAUSE. In the event any parts of this Agreement are
found to be void, the remaining provisions of this Agreement shall nevertheless
be binding with the same effect as though the void parts were deleted.
(n) SUCCESSORS. Subject to the provisions of this Agreement, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
(o) SECTION AND PARAGRAPH HEADINGS. The section and paragraph headings
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
(p) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature, provided however that
original signatures must be provided within ten days from the date of signing.
(q) FURTHER ASSURANCES. The Parties hereto agree to execute and deliver
from time to time at the other Party's request, without further consideration,
such additional documents and to take such other action necessary to consummate
the transactions contemplated herein.
(r) ASSIGNMENT. This Agreement may be assigned by IDSI. Distributor
will not be permitted to assign this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year set forth below.
Dated: 12/3/1998
In the presence of: Imaging Diagnostic Systems, Inc.
______________________________ BY:/s/Xxxxx Xxxxxx, President
Dated: 12/3/1998
In the presence of: Consultronix, SA
______________________________ BY: /s/Xxxxxx Xxxxxxx,
Special Project Manager
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EXHIBIT A
TERRITORY
Poland
EXHIBIT B
EQUIPMENT
CTLM(TM)
EXHIBIT C
PRICE
EXHIBIT D
STANDARD TERMS AND CONDITIONS
1. PAYMENT
Payments hereunder shall be made through a confirmed, irrevocable
letters of credit in U.S. dollars, opened by DISTRIBUTOR and advised through
First Union National Bank of Florida, in the full amount of the Purchase Price
for all Equipment, including an amount estimated for freight and insurance.
DISTRIBUTOR shall open the letter of credit upon issuance of any purchase order.
COMPANY shall receive disbursement under the letter of credit upon presentment
to the issuing/confirming bank of (i) an airway xxxx, xxxx of lading or similar
certificate issued by the transportation company, and (ii) a copy of COMPANY's
invoice for goods shipped (including freight and insurance). No other documents
shall be required. All interest, banking, collection, or other charges shall be
at the sole expense of DISTRIBUTOR. Payment shall be made without regard to
whether DISTRIBUTOR has made or may make any inspection or use of the Equipment.
Each shipment shall be treated as a separate transaction, but in the
event of any default of DISTRIBUTOR, COMPANY may decline to make further
shipments without in any way affecting its rights hereunder. If, despite any
default by DISTRIBUTOR, COMPANY elects to continue to make shipments, COMPANY's
action shall not constitute a waiver of any default by DISTRIBUTOR or in any way
effect COMPANY's legal remedies for any such default.
2. TAXES
The purchase price is exclusive of any sales, use or privilege tax,
customs or import duty, excise tax based on gross revenue or any similar tax or
charge which might be levied as a result of the production, sale or shipment of
any Equipment or the use of any Equipment by DISTRIBUTOR. DISTRIBUTOR agrees to
pay and otherwise be fully responsible for any such taxes (except for taxes
based on the net income of COMPANY). Any personal property taxes assessable on
the Equipment after delivery shall be borne by DISTRIBUTOR. COMPANY shall have
the right, but shall not be obligated, to pay any such taxes directly, in which
event DISTRIBUTOR shall promptly reimburse COMPANY in the amount thereof upon
presentation by COMPANY of evidence of payment.
3. DELIVERY
The Equipment shall be delivered to DISTRIBUTOR F.O.B. COMPANY's plant
in Sunrise, Florida. Delivery of the Equipment to a common carrier shall be
deemed a satisfactory delivery by COMPANY to DISTRIBUTOR. DISTRIBUTOR agrees to
pay all freight, insurance, packing and other transportation charges related to
said delivery. COMPANY shall have the right, but shall not be obligated, to
prepay such charges, in which event DISTRIBUTOR shall promptly reimburse COMPANY
in the amount thereof upon presentation by COMPANY of evidence of payment. In
connection with the delivery of the Equipment, DISTRIBUTOR may designate in
writing, not less than ten (10) business days prior to the shipment date, the
carrier for shipment and the amount of insurance and nature of coverage. If
DISTRIBUTOR fails to so designate any or all such items, COMPANY, at its
discretion, may specify any item not so designated. COMPANY shall select, at its
discretion, the types, amount of crating, and the carrier of any insurance. The
purchase price does not include any maintenance, installation, or training.
4. RISK OF LOSS; SECURITY INTEREST
Title and risk of loss or damage to the Equipment shall pass to
DISTRIBUTOR upon delivery by COMPANY to a common carrier for shipment.
COMPANY retains a security interest in the Equipment, any replacements
of the Equipment, and all proceeds of the Equipment or its replacements,
including, but not limited to, insurance proceeds, to secure performance of all
Distributor's payment obligations under this Agreement. If DISTRIBUTOR shall
fail to pay any portion of the purchase price or any related charges when due,
COMPANY shall have the right, without liability, to repossess the Equipment and
to avail itself of any legal remedy. DISTRIBUTOR agrees to execute and deliver
such financing statements and other documentation as COMPANY may reasonably
request to perfect and protect COMPANY's interests in the Equipment.
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5. PROGRAMS
As used herein, the word "Programs" shall include COMPANY's Firmware
and Software, each of which is defined as follows:
(a) "Firmware" shall mean all fixed electrical circuits (including
printed circuit boards and chips embodying such circuits) placed in the
Equipment by COMPANY that performs predetermined programs and routines in the
Equipment in response to specific inputs.
(b) "Software" shall mean all alterable programs and routines for the
internal operation of the Equipment placed in the Equipment by COMPANY, or
furnished with or for the Equipment by COMPANY.
6. PROGRAMS LICENSE
COMPANY hereby grants to DISTRIBUTOR a nonexclusive license to use and
sublicense to customers the Programs solely in connection with the sale and use
of the Equipment as contemplated under this Agreement. Any grant of a sublicense
of Programs to a Customer shall be by written sublicense agreement which
provides for all terms, conditions, restrictions and requirements as to the
ownership, use and confidentiality of such Programs as set forth in, and imposed
upon DISTRIBUTOR by, this Agreement. DISTRIBUTOR shall obtain COMPANY'S prior
approval of the form of sublicense agreement with Customers. COMPANY shall not
assign, transfer, or sublicense any Programs to any third party other than as
contemplated in this Agreement, without the express written consent of COMPANY.
Notwithstanding any contrary provision in this or in any other agreement between
COMPANY and DISTRIBUTOR, COMPANY shall retain all right, title and interest in
and to any Programs provided licensed to DISTRIBUTOR or sublicensed to customers
in connection with the sale and use of the Equipment being acquired by
DISTRIBUTOR or customers hereunder. DISTRIBUTOR agrees to maintain the
confidentiality of the Programs and to instruct and obligate its employees and
agents to do the same.
Without limiting the generality of the foregoing, DISTRIBUTOR shall not
reproduce or modify all or any portion of the Programs, nor shall DISTRIBUTOR
disclose, sell, sublicense or otherwise transfer or make available all or any
portion of the Programs to any third party, without the prior express written
consent of COMPANY.
In addition to any other remedy COMPANY may have, COMPANY reserves the
right to terminate Distributor's license or customers sublicense, if DISTRIBUTOR
or customer fails to comply with any term or condition hereof. Distributor's
license or customer's sublicense, as the case may be, granted pursuant to this
paragraph 6 shall also terminate at such time as DISTRIBUTOR shall permanently
cease to use the Equipment. DISTRIBUTOR agrees, upon notice from COMPANY of any
termination of the license granted pursuant to this paragraph 6 and, in
accordance with any more specific directions from COMPANY, to deliver
immediately to COMPANY all Software and copies thereof, and all Firmware chips
and printed circuit boards and other tangible items and materials in the
possession or custody of DISTRIBUTOR embodying the Programs.
7. PROPRIETARY TECHNICAL MATERIALS
Documentation, maintenance manuals and drawings relating to the
Equipment or the Programs (collectively, "Proprietary Technical Material") that
COMPANY may furnish shall be in DISTRIBUTOR's or customer's possession pursuant
only to a restrictive, nonexclusive license under which DISTRIBUTOR or customer
may use such Proprietary Technical Materials solely for the purpose of
operating, servicing and repairing the Equipment and the Programs and for no
other purpose. One installation, maintenance and operation manual will be
provided with each system purchased hereunder. DISTRIBUTOR agrees to maintain
the confidentially of all Proprietary Technical Materials and to instruct and
obligate its employees and agents to do the same. Without limiting the
generality of the foregoing, DISTRIBUTOR may not reproduce or copy any
Proprietary Technical Material or transfer, assign, sublicense, loan, disclose
or otherwise make available all or any portion of such Proprietary Technical
Materials to any other person or entity, without prior express written consent
of COMPANY. Title to and ownership of the Proprietary Technical Materials shall
at all time remain in COMPANY. In addition to any other remedy COMPANY may have,
COMPANY reserves the right to terminate DISTRIBUTOR's license granted pursuant
to this paragraph 7 if DISTRIBUTOR fails to comply with any term or condition
hereof. DISTRIBUTOR's license granted pursuant to this paragraph 7 shall also
terminate at such time as DISTRIBUTOR shall permanently cease to use the
Equipment. DISTRIBUTOR agrees, upon notice from COMPANY of any termination of
the license granted pursuant to this paragraph 7 and, in accordance with any
2
more specific directions from COMPANY, to deliver immediately to COMPANY all
Proprietary Technical Material and all copies thereof.
8. LIMITED WARRANTY
With respect to Equipment for which COMPANY is the original Company,
COMPANY warrants to DISTRIBUTOR that, for a period of twelve (12) months from
installation each item of Equipment will conform in all materials and
workmanship. COMPANY's obligation under this warranty is limited to, at
COMPANY's option, repairing or replacing, at COMPANY's facility or at the
location of the Equipment, any Equipment or parts thereof that do not conform to
this warranty. DISTRIBUTOR shall promptly notify COMPANY in writing of any
alleged defects in the Equipment and specifically describe the problem. COMPANY
shall have no obligations under this warranty with respect to any defect unless
it receives notice and a description of such defect no later than ten (10)
working days following the expiration of the warranty period. Upon receipt of
such notice, COMPANY shall either advise DISTRIBUTOR that warranty service shall
be provided at the location of the Equipment or shall instruct DISTRIBUTOR as to
the part or parts of the Equipment that DISTRIBUTOR shall ship back to COMPANY
for repair or replacement. COMPANY will pay the costs of transporting Equipment
to COMPANY which to have been defective; otherwise, DISTRIBUTOR shall pay all
costs of transportation in both directions.
With respect to Equipment for which COMPANY is the original Company,
COMPANY warrants to DISTRIBUTOR that the Programs provided to DISTRIBUTOR in
connection with such Equipment will conform to and perform in accordance with
the then existing Equipment documentation for a period of one (1) year from
shipment of the last item of Equipment in conjunction with which the Programs
are to be used if properly used on the Equipment. COMPANY's obligation under
this warranty is limited to, at COMPANY's option, correcting, repairing or
replacing, at COMPANY's option, at COMPANY's facility or the location of the
Programs, any Program or parts thereof that do not conform to this warranty.
With respect to Equipment for which COMPANY is not the original Company
and the Programs provided to DISTRIBUTOR in connection with such Equipment, the
sole warranties provided by COMPANY to DISTRIBUTOR shall be equivalent to the
sole warranties provided by the original Company to COMPANY (current original
Company warranties and the identification of Equipment to which they pertain
shall be provided to DISTRIBUTOR upon request).
The foregoing warranties shall not apply to any Equipment or Programs
which have been (i) used or operated in a manner inconsistent with the license
granted by COMPANY, (ii) modified or repaired by anyone other than COMPANY
personnel or COMPANY's authorized service representatives in a manner which
adversely affects their operations or reliability, or (iii) damaged because of
accident, neglect or misuse by anyone other than COMPANY personnel, failure or
surge of electrical power, air conditioning or humidity control, transportation,
or other than ordinary use.
THE FOREGOING WARRANTIES APPLY ONLY TO THE ORIGINAL PURCHASER AND ARE IN LIEU OF
ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT
LIMITATION IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY UPON THE RIGHTFUL CLAIM
OF ANY THIRD PERSON.
9. LIMITATION OF LIABILITY
COMPANY shall in no event have obligations or liabilities to
DISTRIBUTOR or any other person for loss of profits, loss of use or incidental,
special or consequential damages, whether based on contract, tort (including
negligence), strict liability, or any other theory or form of action, even if
COMPANY has been advised of the possibility thereof, arising out of, or in
connection with, the sale, delivery, use, repair or performance of the Equipment
or the Programs, or any failure or delay in connection with any of the
foregoing. Without limiting the generality of the preceding sentence, COMPANY
shall not be liable for personal injury or property damage. In no event shall
the liability of COMPANY arising in connection with any Equipment sold hereunder
exceed the actual amount paid by DISTRIBUTOR to COMPANY for Equipment delivered
hereunder.
3
10. PATENT AND TRADEMARK INDEMNITY
COMPANY will defend, at its own expense, any suit or proceeding against
DISTRIBUTOR in a court of the United States for the direct infringement of
United States patents and trademarks by Equipment from which COMPANY is the
original Company purchased from COMPANY hereunder. COMPANY shall pay all damages
and costs finally awarded against DISTRIBUTOR because of direct infringement;
provided, however, that COMPANY shall not be obligated to defend or be liable
for costs or damages awarded in any suit or proceeding for infringement of
patents by any other products, or any completed equipment, system, assembly,
combination, method or process, in which, or in the manufacture or testing of
which, any Equipment purchased from COMPANY may be used; and provided further
that COMPANY's obligations to pay such damages and costs shall not apply to any
alleged infringement occurring after DISTRIBUTOR has received notice of such
alleged infringement unless COMPANY thereafter gives to DISTRIBUTOR written
consent for such continuing alleged infringement. COMPANY's liability hereunder
shall not exceed the purchase price paid by DISTRIBUTOR for the infringing
Equipment, and COMPANY shall not be liable for any collateral, incidental, or
consequential damages awarded against DISTRIBUTOR.
COMPANY's duties under this paragraph 10 are conditioned upon
DISTRIBUTOR giving COMPANY prompt written notice of commencement of any suit or
proceeding or any claim of infringement and furnishing to COMPANY a copy of each
communication relating to the alleged infringement and giving to COMPANY all
authority (including the right to exclusive control of the defense of any such
suit or proceeding), information and assistance (at COMPANY's expense) necessary
to defend or settle such suit or proceeding. COMPANY shall not be bound by any
settlement made without COMPANY's prior written consent.
If in any such suit or proceeding, DISTRIBUTOR's continued use of any
item Equipment is enjoined or, if by reason of any claim of infringement,
COMPANY deems it advisable to do so, COMPANY may, at its option and expense, (i)
procure for DISTRIBUTOR the right to continue using such Equipment, (ii) modify
or replace such Equipment with non-infringing Equipment, provided that such
modification does not materially affect performance, or (iii) remove such
Equipment, grant DISTRIBUTOR a credit thereon as depreciated on a
straight-line-3-year basis and accept its return. If an infringement is alleged
prior to completion of deliveries of the Equipment, COMPANY may decline to make
further shipments without being in breach hereunder.
COMPANY shall not be obligated to defend any suit or proceeding, or be
liable for any costs or damages, if the infringement arises out of compliance
with DISTRIBUTOR's specifications or any marking or branding applied at the
request of DISTRIBUTOR. DISTRIBUTOR agrees, at its own expense, to defend and to
pay costs and damages finally awarded in any suit or proceeding against COMPANY
based on any such infringement, provided that DISTRIBUTOR is promptly notified
by COMPANY in writing of the commencement or threat of such suit or proceeding
or claim of infringement and is given all authority (including the right to
exclusive control of the defense of any such suit or proceeding), information
and assistance (at DISTRIBUTOR's expense) necessary to defend or settle such
suit proceeding.
11. FORCE MAJEURE
If the performance hereof or any obligation hereunder, except the
making of payments hereunder, is prevented, restricted or interfered with by
reason by fire, flood, earthquake, explosion or other casualty or accident;
strikes or labor disputes; inability to procure parts, supplies or power; war or
other violence; any law, order, proclamation, regulation, ordinance, demand or
requirement of any government agency; or any other or condition whatsoever
beyond the reasonable control of the affected party, the party so affected, upon
giving prompt notice to the other party, shall be excused from such performance
to the extent of such prevention, restriction or interference; provided,
however, that the party so affected shall take all reasonable steps to avoid or
remove such causes of nonperformance and shall resume performance hereunder with
dispatch whenever such causes are removed.
12. ASSIGNMENT
The rights of DISTRIBUTOR hereunder may not be assigned in whole or in
part, by operation of law or otherwise, without the express written consent of
COMPANY.
4
13. APPLICABLE LAW
The validity, construction and effect of this Agreement and the
respective rights and obligations of the parties hereunder, shall be governed by
and determined in accordance with the laws of the state of Florida in the United
States of America as such laws are applied to contracts between Florida
residents entered into and to be performed entirely within the state of Florida,
without reference to principles of conflicts of law. The parties hereby agree to
opt out of coverage of the United Nations Convention on Contracts for the
International Sale of Good. The parties hereby agree that this Agreement shall
be governed by the Uniform Commercial Code ("UCC") as adopted by the state of
Florida.
14. FORUM AND SERVICE OF PROCESS
All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined in a state or federal court sitting in
the County of Dade, State of Florida. Service of process shall be considered
effective if done pursuant to any of the methods set forth in Rule 4(i), Federal
Rule of Civil Procedure or pursuant to Florida law.
15. ATTORNEY'S FEES AND COSTS OF LITIGATION
If any action or proceeding arising out of or relating to this
Agreement is commenced the prevailing party shall be entitled to its reasonable
attorney's fees, costs, and expenses including the costs, expenses, and fees
associated with the enforcement or collection of any judgment.
5
