Exhibit 10.1
INTERNATIONAL DISTRIBUTOR AGREEMENT
THIS INTERNATIONAL DISTRIBUTOR AGREEMENT (this "Agreement), effective
this 22nd day of August, 2001 (the "Effective Date"), by and between
SpectraSCIENCE, Inc., a Minnesota corporation with offices at 00000 00xx Xxx.
Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000 XXX ("SpectraSCIENCE"), and
Endoscopy U.K., Ltd., One Xxxx Xxxx, Lydney, Gloucestershire, GL 15 0XX, Xxxxxx
Xxxxxxx, a corporation organized under the laws of the United Kingdom, with
offices at ("DISTRIBUTOR").
RECITALS:
WHEREAS, SpectraSCIENCE designs, develops and manufactures proprietary
optical biopsy systems capable of determining whether tissue is normal,
pre-cancerous or cancerous without physically removing the tissue from the body;
WHEREAS, DISTRIBUTOR desires to act as SpectraSCIENCE's distributor in
a certain territory for certain of SpectraSCIENCE's products; and
WHEREAS, SpectraSCIENCE is willing to grant certain rights to
DISTRIBUTOR for the marketing and distribution of such products in such
territory, on the terms and conditions set forth herein.
Therefore, in consideration of entry into this Agreement and the mutual
covenants contained herein, and other good and valuable consideration, the
parties agree as follows:
SECTION 1. DEFINITIONS
1.1 Product(s). "Product(s)" means and includes the products set forth
in Schedule 1 attached hereto, including without limitation replacement parts
for such products and the printed materials that may accompany such products.
1.2 Territory. "Territory" shall mean the geographic area or areas set
forth in Schedule 1 attached hereto. Noncontiguous states, provinces, colonies,
territories, and other dependencies of a nation are not included in the
Territory unless specifically set forth in Schedule 1 hereof.
SECTION 2. GRANT OF RIGHTS
2.1 License. SpectraSCIENCE designates DISTRIBUTOR as its non-exclusive
distributor, and grants DISTRIBUTOR the right to market and distribute the
Products in the Territory, subject to the limitations set forth herein. This
grant of rights conveys no right, title, or interest in the Products, and no
direct or indirect license or right to use or have used, sell or have sold, or
make or have made the Products or any part thereof, except as specifically
provided herein. SpectraSCIENCE retains all other rights not expressly granted
herein with regard to the Products.
2.2 No Subdistributors. DISTRIBUTOR shall not market the Products
except through its own employees, agents, and representatives. If DISTRIBUTOR
wishes to grant subdistributorships, DISTRIBUTOR must obtain the prior written
approval of SpectraSCIENCE, which approval may be withheld for any reason. Any
subdistributor approved by SpectraSCIENCE must enter into a written
1
(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
agreement with DISTRIBUTOR substantially in the form of this Agreement, which
purports to give the subdistributor no greater rights than DISTRIBUTOR has under
this Agreement, and which provides that such agreement terminates automatically
upon the termination this Agreement, for any reason. DISTRIBUTOR shall at all
times remain liable for the performance of any approved subdistributor.
2.3 No Other Distributor. Except as otherwise specifically provided
below or in Schedule 1, and notwithstanding the reference to a "non-exclusive"
distributor in Section 2.1, SpectraSCIENCE shall not appoint any other
distributor for the Products in the Territory during the term of this Agreement,
provided DISTRIBUTOR meets or exceeds its performance quotas pursuant to Section
3.3 and (if applicable) Schedule 1.
SECTION 3. DISTRIBUTOR'S OBLIGATIONS
3.1 Best Efforts. DISTRIBUTOR shall use its best efforts to promote,
market, and distribute the Products in the Territory. DISTRIBUTOR shall conduct
its business in a professional manner that will reflect positively upon
SpectraSCIENCE and the Products.
3.2 Product Promotion. DISTRIBUTOR shall exhibit and demonstrate the
Products at such trade shows in the Territory as DISTRIBUTOR determines in good
faith are necessary or useful in marketing and promoting the Products.
DISTRIBUTOR shall give SpectraSCIENCE reasonable prior notice of all such trade
shows such that SpectraSCIENCE can attend if it so desires. DISTRIBUTOR shall
otherwise meet all reasonable business standards for displaying, demonstrating,
and explaining the operation and use of the Products to customers and potential
customers.
3.3 Performance Quotas.
3.3.1 DISTRIBUTOR acknowledges that low volume distribution of
the Products will adversely affect SpectraSCIENCE's goodwill in the Territory.
If SpectraSCIENCE terminates DISTRIBUTOR pursuant to Section 14 because
DISTRIBUTOR failed to meet any such quotas, DISTRIBUTOR specifically
acknowledges that pursuant to Section 14, it is not entitled to any
compensation, because, among other things, the damage to SpectraSCIENCE's
goodwill is likely to be at least as great as the losses DISTRIBUTOR might incur
as a result of any such termination.
3.3.2 DISTRIBUTOR agrees to purchase and take delivery of the
minimum purchase requirements of Products set forth in Schedule 1 hereof during
each quarter during the Term (as defined herein), commencing in the first
quarter of the second year of the Term. For purposes of determining compliance
with the minimum purchase requirements, DISTRIBUTOR's purchases hereunder shall
not be aggregated. Accordingly, DISTRIBUTOR may not apply purchases made during
any quarter to the minimum purchase requirement applicable to the following
quarter. If DISTRIBUTOR fails to meet such requirements, SpectraSCIENCE shall
have the right to appoint other distributors of the Product(s) in the Territory
or, at SpectraSCIENCE's option, to terminate this Agreement pursuant to Section
14.
3.4 Submission of Purchase Orders.
3.4.1 DISTRIBUTOR shall deliver purchase orders to
SpectraSCIENCE for the Products not less than fourteen (14) days prior to the
requested date of shipment. Such purchase orders shall state the quantities of
the Products ordered and the requested shipping date, and to which DISTRIBUTOR
office the Products should be shipped. The parties acknowledge that
DISTRIBUTOR's
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(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
use of purchase orders is for convenience of the parties, and agree that
additional or conflicting terms or conditions set forth in any purchase order
shall be of no force or effect.
3.4.2 Contemporaneously with the execution of this Agreement,
DISTRIBUTOR shall execute the initial purchase attached hereto as Exhibit A (the
"Initial Purchase Order"). The Products set forth in such purchase order shall
count against DISTRIBUTOR's minimum purchase requirements hereunder.
Notwithstanding anything to the contrary in this Agreement, the purchase price
for the Products set forth in the initial purchase order shall be due and
payable upon the Effective Date and SpectraSCIENCE shall be under no obligation
to delivery such Products until receipt of such payment.
3.4.3 DISTRIBUTOR shall order sufficient quantities of
replacement parts for the Products so as to be able to service customers in a
prompt and timely manner in accordance with its obligations hereunder.
3.4.4 DISTRIBUTOR shall not sell any Products beyond their
stated expiration date. DISTRIBUTOR may, at its expense, return expired Products
in exchange for like Products with a later expiration, but shall not be entitled
to a refund for any expired Product.
3.5 Customer Support.
3.5.1 DISTRIBUTOR shall provide its customers with a minimum
of three (3) months of free telephone technical support, upon a customer's
purchase of any of the Products.
3.5.2 DISTRIBUTOR shall respond to and handle all customer
inquiries and complaints relating to the Products. DISTRIBUTOR's
responsibilities shall include, but not be limited to, all support, training,
use, and maintenance issues relating to the Products. DISTRIBUTOR shall perform
such responsibilities at its own expense, provided, however, that SpectraSCIENCE
shall use its commercially reasonable efforts to repair or replace any defective
Product to the extent of its warranty obligations hereunder. DISTRIBUTOR shall
promptly report to SpectraSCIENCE all suspected Product defects, errors,
technical difficulties, or other problems relating to the use or operation of
the Products (collectively, "Problems") and shall keep SpectraSCIENCE reasonably
informed of customer complaints concerning same. Without limiting the foregoing,
upon becoming aware of any Problem, DISTRIBUTOR shall report the Problem to
SpectraSCIENCE in writing in accordance with the following: (i) if the Problem
involves patient injuries, within twenty-four (24) hours; and (ii) for any other
Problem, within forty-eight (48) hours.
3.6 Place of Business and Staffing. DISTRIBUTOR shall provide and
maintain, at its expense, an adequate number of personnel competent to provide
maintenance, support, and technical service to the end customers, and to service
the Products as described in this Agreement. DISTRIBUTOR shall permit
SpectraSCIENCE to inspect DISTRIBUTOR's premises upon reasonable notice and at
reasonable times, for purposes of determining compliance with this Agreement and
DISTRIBUTOR's ongoing ability to market and service the Products as contemplated
herein.
3.7 Customer List; Forecast. DISTRIBUTOR shall furnish to
SpectraSCIENCE quarterly a list of its customers for the Product, including the
name, address, and telephone number of each end customer, the dates and number
of Products sold to each customer and a sales forecast of the Products for the
next six months. SpectraSCIENCE shall have the right to contact these customers
at any time. Each
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(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
quarterly report shall also include such further information on marketing
contacts, training status of support personnel and identification thereof, and
any such other information, including certified financial statements, as
SpectraSCIENCE may reasonably require.
3.8 Advertising, Etc. DISTRIBUTOR shall provide SpectraSCIENCE with
copies of all advertising, brochures, and other materials relating to the
Products prior to the use of any thereof. DISTRIBUTOR shall not use any of such
materials to which SpectraSCIENCE objects. All advertising, brochures, and other
materials relating to the Products shall clearly identify the Products as being
manufactured in the USA by SpectraSCIENCE. DISTRIBUTOR shall make no claims
concerning the Products except as authorized by SpectraSCIENCE in writing or as
contained in SpectraSCIENCE's marketing materials provided to DISTRIBUTOR for
use in the Territory.
3.9 Restricting Activity to the Territory. DISTRIBUTOR shall not
advertise, promote, or solicit customers for the Products outside the Territory
or establish any office through which orders are solicited or any depot at which
inventories of the Products are stored outside the Territory. DISTRIBUTOR shall
not sell the Products to customers outside of the Territory, provided, however,
that nothing herein shall preclude DISTRIBUTOR from selling the Products to any
customer, wherever located, who purchase Products with the intent expressed in
writing to use the Products in the Territory.
3.10 No Modifications or Translations of Products. DISTRIBUTOR shall
not modify or alter the Products, or combine the Products with other products,
without SpectraSCIENCE's prior written consent. Without limiting the generality
of the foregoing, DISTRIBUTOR shall not translate all or any portion of the
manuals or the help files for the Products without SpectraSCIENCE's prior
written consent.
3.11 No Reverse Engineering. DISTRIBUTOR shall not attempt to decompile
or reverse engineer any of the Products or part thereof.
3.12 Pricing. The parties acknowledge that DISTRIBUTOR is free to
determine the prices at which it will market the Products. DISTRIBUTOR
recognizes and agrees with SpectraSCIENCE's objective of being a
price/performance leader, however, so DISTRIBUTOR shall use its best efforts to
sell Products at prices not substantially above SpectraSCIENCE's suggested
international retail prices.
3.13 Insurance. DISTRIBUTOR shall maintain in force, during the term of
this Agreement and for as long as a practical need exists, one or more policies
of liability insurance, including without limitation product liability
insurance, with an insurer reasonably acceptable to SpectraSCIENCE that shall
cover all liabilities of DISTRIBUTOR, whenever existing, attributable to the
Products and in an amount reasonably determined by SpectraSCIENCE.
SpectraSCIENCE shall be designated as an additional insured under such policy
and shall be provided with a certificate of insurance within thirty (30) days
after the issuance and each renewal thereof.
3.14 Product Recalls. If any governmental agency having jurisdiction in
the United States or the Territory shall request or order any corrective action
with respect to Products supplied hereunder, including without limitation any
Product recall, customer notice, restriction, change, correction active, or any
Product change, the parties shall cooperate fully to effectuate such corrective
action. The foregoing shall be without limitation to SpectraSCIENCE's right
terminate this Agreement pursuant to Section 14 if any Product does not receive
or loses any necessary or appropriate government approval.
4
(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
3.15 Indemnification. DISTRIBUTOR shall defend, indemnify, and hold
SpectraSCIENCE harmless from and against any and all costs, losses, claims,
liabilities, fines, penalties, damages and expenses, court costs, and reasonable
fees and disbursements of counsel, consultants, and expert witnesses
(collectively, "Damages") based upon, arising out of, or relating to (i)
DISTRIBUTOR's or any of its subdistributor's breach of this Agreement,
negligence, willful misconduct, or violation of any applicable law, rule,
regulation, or order, (ii) any act or omission by DISTRIBUTOR or any of its
subdistributors, or (iii) any unfair business practice of DISTRIBUTOR or any of
its subdistributors. SpectraSCIENCE will (i) promptly notify DISTRIBUTOR in
writing of any notice of claim or of any threatened or actual suit, and (ii) at
DISTRIBUTOR's expense, give DISTRIBUTOR all reasonable non-monetary assistance
for the defense of same.
SECTION 4. SpectraSCIENCE'S OBLIGATIONS
4.1 Products.
4.1.1 SpectraSCIENCE shall use its commercially reasonable
efforts to ship the quantity of Products in accordance by the requested date in
each purchase order submitted by DISTRIBUTOR. SpectraSCIENCE shall notify
DISTRIBUTOR of any delay or failure to ship the Products promptly upon learning
of any such delay or failure. The Products shall be shipped to DISTRIBUTOR by
SpectraSCIENCE or on SpectraSCIENCE's behalf, freight prepaid by DISTRIBUTOR in
accordance with Section 6, with risk of loss to pass to DISTRIBUTOR upon
delivery of the Products by SpectraSCIENCE to a common carrier.
4.1.2 In the event of any shortage, damage, or discrepancy in
or to a shipment of Products, DISTRIBUTOR shall within ten (10) days after
SpectraSCIENCE's shipment of the Products report the same to SpectraSCIENCE,
failing which the Products shall be deemed accepted by DISTRIBUTOR. DISTRIBUTOR
shall promptly furnish to such written evidence or other documentation of the
shortage, damage, or discrepancy, as SpectraSCIENCE may deem appropriate. If
such evidence and documentation demonstrates to SpectraSCIENCE's reasonable
satisfaction that SpectraSCIENCE is responsible for the shortage, damage, or
discrepancy, SpectraSCIENCE shall promptly deliver additional or substitute
Products to DISTRIBUTOR, but in no event shall SpectraSCIENCE be liable for any
additional costs, expenses, or Damages, suffered or incurred by DISTRIBUTOR as a
result of such shortage, damage, or discrepancy. DISTRIBUTOR shall return or
destroy any excess or damaged Products as directed by SpectraSCIENCE.
4.2 Samples. During the Term, upon the written request of DISTRIBUTOR,
SpectraSCIENCE may, in its sole discretion, provide, at no charge to
DISTRIBUTOR, certain Products as samples for use by DISTRIBUTOR in connection
with its marketing and promotion of the Products. Any of such samples that are
retained by third parties, or used by DISTRIBUTOR for other than marketing or
promotional purposes, shall be subject to the fees described in Section 6. All
such samples shall be subject to the same limitations as Products to be paid for
under this Agreement. All samples shall be returned to SpectraSCIENCE upon
termination of this Agreement.
4.3 Training and Assistance. SpectraSCIENCE shall provide initial sales
and annual service training to DISTRIBUTOR's personnel necessary for the
marketing and servicing of the Products, as further described in Schedule 1.
Such training and assistance shall be provided (i) at SpectraSCIENCE's offices,
or, if agreed by the parties, at DISTRIBUTOR's offices, and (ii) at no charge to
DISTRIBUTOR, except that if training is performed or assistance is provided at
DISTRIBUTOR's
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(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
offices, DISTRIBUTOR shall promptly reimburse SpectraSCIENCE for reasonable
expenses of travel, meals, and lodging. Training or support other than or in
excess of that provided for above shall be at SpectraSCIENCE's then current
rates, plus reimbursement for reasonable expenses of travel, meals, and lodging.
The foregoing notwithstanding, SpectraSCIENCE shall provide reasonable sales
assistance to DISTRIBUTOR at no charge, provided, however, that: (i) DISTRIBUTOR
shall reimburse SpectraSCIENCE for reasonable expenses of travel, meals, and
lodging incurred in providing such assistance (SpectraSCIENCE may waive such
reimbursement in its sole discretion); (ii) the parties acknowledge and agree
that such assistance shall generally be limited to sales of more than one
console to a customer.
4.4 Sales and Technical Literature. SpectraSCIENCE shall provide to
DISTRIBUTOR reasonable quantities of such sales and technical literature and
materials as SpectraSCIENCE may have prepared and shall make available copies of
promotional materials at may have prepared. DISTRIBUTOR shall use such materials
solely as provided under this Agreement. SpectraSCIENCE retains all rights,
title, and interests in and to such materials.
4.5 Product Changes. SpectraSCIENCE may, upon written notice and
without liability to DISTRIBUTOR, discontinue the sale of any Product, commence
the development and distribution of new products or of modifications or
improvements to the Products having features that may make the Products wholly
or partially obsolete, whether or not DISTRIBUTOR is granted any distribution
rights in respect of such new or modified products.
SECTION 5. EXPENSES
Except as otherwise expressly provided in this Agreement,
SpectraSCIENCE and DISTRIBUTOR shall each bear their respective costs and
expenses as incurred by each party in its performance hereunder, including
without limitation all rents, salaries, commissions, and advertising,
demonstration, promotional, travel, and accommodation expenses.
SECTION 6. PRICES AND PAYMENTS
6.1 Prices and Payments.
6.1.1 DISTRIBUTOR shall pay SpectraSCIENCE the amount(s) set
forth in SpectraSCIENCE's then current price list for each Product shipped to
DISTRIBUTOR (except those Products provided to DISTRIBUTOR pursuant to Section
4.2). The price list in effective as of the date of this Agreement is set forth
in Schedule 1. All prices are set forth in United States dollars. Except as
otherwise provided herein or in Schedule 1, DISTRIBUTOR shall pay SpectraSCIENCE
for all such copies of the Products on or before the fifteenth (15th) day of the
month following the month during which SpectraSCIENCE shipped the Products.
6.1.2 All payments to be made by DISTRIBUTOR to SpectraSCIENCE
pursuant to this Agreement represent net amounts SpectraSCIENCE is entitled to
receive and shall not be subject to any deductions for any reason whatsoever,
including without limitation, duties, assessments, taxes, or bank charges.
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(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
6.1.3 DISTRIBUTOR shall promptly provide SpectraSCIENCE with
copies of DISTRIBUTOR's current price lists for the Products and the update
service and shall advise SpectraSCIENCE of any proposed or actual changes in
these price lists.
6.2 Currency of Payment and Blocked Funds. DISTRIBUTOR shall make all
payments to SpectraSCIENCE in United States currency. Each payment shall be
deemed not to have been made until the payment is available to SpectraSCIENCE in
immediately available funds in the United States. If DISTRIBUTOR is prevented by
government regulation from transferring funds to the United States,
SpectraSCIENCE shall have the right to terminate this Agreement, pursuant to
Section 14. In addition, at SpectraSCIENCE's request, DISTRIBUTOR shall deposit
for the account of SpectraSCIENCE the blocked funds due SpectraSCIENCE in any
bank designated by SpectraSCIENCE to which such blocked funds may be legally
paid. DISTRIBUTOR shall, at DISTRIBUTOR's sole cost and expense, institute and
complete whatever proceedings may be necessary to obtain approval of such
payment in United States currency from all government authorities blocking such
payment, whether or not SpectraSCIENCE exercises its right to terminate this
Agreement.
6.3 Late Payments. If DISTRIBUTOR shall be overdue on any payment(s),
SpectraSCIENCE may delay shipment of the Products, cancel outstanding orders
until DISTRIBUTOR is current on all payments, or terminate this Agreement
pursuant to Section 14. SpectraSCIENCE shall charge DISTRIBUTOR a late payment
charge of one and one-half percent (1 1/2%) per month or such lower rate as may
be imposed by law on any balances outstanding after the date payment is due
pursuant to Section 6.1.1 hereof.
6.4 Taxes, Shipping, Etc. DISTRIBUTOR shall be responsible for all
shipping charges, insurance, United States and foreign governments' federal,
state, municipal, or other governmental sales or other taxes, fees, and charges,
duties, excise taxes, or tariffs now or hereafter imposed on the production,
storage, sale, licensing, transportation, import, export, or other use of the
Products.
6.5 Risk of Payment. DISTRIBUTOR assumes all credit risk of end
customers. DISTRIBUTOR shall pay SpectraSCIENCE for all Products ordered and
delivered and update service ordered, regardless whether DISTRIBUTOR licenses
such Products to end customers or receives payment for any such licenses or
services.
SECTION 7. LIMITATIONS OF WARRANTY AND DAMAGES
7.1 Limited Warranty. SpectraSCIENCE warrants, solely for the benefit
of DISTRIBUTOR, that for a period of ninety (90) days after shipment by
SpectraSCIENCE that each Product shall substantially conform to the
specifications set forth in the materials accompanying the Product and shall be
free from defects in materials and workmanship; provided, however, that the
foregoing warranties are expressly contingent (and shall otherwise be void) upon
use of the Product strictly in accordance with such specifications and without
misuse, damage, alteration, or modification thereto. As DISTRIBUTOR's exclusive
remedy for any defective Product, SpectraSCIENCE shall repair or replace the
Product, or, at SpectraSCIENCE's sole discretion, repay or credit the actual
price paid by DISTRIBUTOR therefore. SpectraSCIENCE must receive warranty claims
within thirty (30) days after the claim arises, but no later than the stated
expiration date of the applicable warranty period, and must be made in writing
in sufficient detail to allow SpectraSCIENCE to reproduce the defect.
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(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
7.2 Limitation of Warranty. EXCEPT AS PROVIDED IN SECTION 7.1,
SpectraSCIENCE MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE PERFORMANCE OF
THE PRODUCTS TO DISTRIBUTOR OR TO ANY OTHER PERSON. SpectraSCIENCE RESERVES THE
RIGHT TO CHANGE THE WARRANTY POLICY AT ANY TIME. ALL IMPLIED WARRANTIES,
INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, AND OBLIGATION OF RESULTS, ARE HEREBY EXCLUDED.
7.3 Limitation of Damages. The liability of SpectraSCIENCE, if any, for
all damages relating to any allegedly defective Product shall be limited to the
actual price paid by DISTRIBUTOR for such Product and shall in no event include
incidental, special, or consequential damages of any kind, whether the claim
therefor be based in contract, tort, strict liability, negligence, or otherwise.
SECTION 8. CONFIDENTIAL INFORMATION
8.1 Confidentiality. During the Term and for a period of three (3)
years following the effective date of termination or expiration of this
Agreement, each party agrees not to disclose to any third party or to use any
information regarding the terms of this Agreement or information obtained from
the other party concerning operations, technical information, or financial
information without advance written approval of the other party, except (i)
information generally available to the public without breach of this Agreement,
(ii) information provably developed independently by the receiving party, (iii)
information obtained from a third party not under any obligation of
nondisclosure, (iv) information required to be disclosed by law or governmental
regulation; and (v) customer information disclosed by DISTRIBUTOR in accordance
with this Agreement; provided, however, that before making any use or disclosure
in reliance on any of such exceptions (i) through (iv) the party that intends to
use or disclose such information shall give at least fifteen (15) business days'
prior written notice to the other party specifying the applicable exception(s)
and circumstances giving rise thereto.
8.2 Injunctive Relief. The parties agree that any breach of this
Section 8 would constitute irreparable harm, and that either party shall be
entitled to seek specific performance or injunctive relief to enforce this
Section 8 in addition to whatever remedies such party may otherwise be entitled
to at law or in equity.
SECTION 9. COMPLIANCE WITH LAWS
9.1 General. DISTRIBUTOR shall at all times promote the Products and
SpectraSCIENCE's goodwill and reputation, and shall conduct its business in a
highly ethical manner and in accordance with all federal, state, and local
statutes, laws, regulations, and customs of the United States and of any country
in which DISTRIBUTOR is marketing and distributing the Products, including
without limitation the requirements of the United States Export Administration
Regulations, the United States Foreign Corrupt Practices Act, and the United
States Anti-Boycott Regulations as amended during the Term and as they may apply
to DISTRIBUTOR's activities under this Agreement.
9.2 Contract Approval. DISTRIBUTOR represents that, except as described
on Schedule 2, neither DISTRIBUTOR nor SpectraSCIENCE is required to give notice
to or obtain the approval of any governmental, regulatory, or judicial authority
having jurisdiction in the Territory or over DISTRIBUTOR before the parties can
execute this Agreement.
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(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
9.3 Customs Matters. Each party shall provide the other with all such
information as is necessary to enable the relevant party to comply with
applicable customs laws in that party's country, including such laws as provide
relief from customs duties and taxes in respect of goods imported into such
country. Notwithstanding the foregoing, DISTRIBUTOR, at its expense, shall be
primarily responsible for identifying such laws and procedures and preparing any
necessary documentation to effect such relief and compliance.
9.4 United States Export Control. DISTRIBUTOR has provided and shall
provide SpectraSCIENCE with such assurances as SpectraSCIENCE has requested or
shall reasonably request that during the Term the Products shall not be exported
or reexported directly or indirectly to destinations prohibited by the United
States Department of Commerce in accordance with the Department's Export
Administration Regulations.
SECTION 10. INTELLECTUAL PROPERTY RIGHTS; INFRINGEMENT
10.1 Ownership. DISTRIBUTOR acknowledges that SpectraSCIENCE owns all
rights, title, and interests in and to (i) the Products (including but not
limited to all versions, enhancements, updates, or other modifications thereto),
and (ii) all its trade names and trademarks used on or in connection with the
Products, including but not limited to "SpectraSCIENCE," "Virtual Biopsy
System," and "SpectraSCIENCE Virtual Biopsy System" (collectively, the
"Trademarks").
10.2 Proprietary Notices. The Products and accompanying materials may
each contain patent, copyright, or other proprietary notices. DISTRIBUTOR shall
not remove, obscure, deface, or otherwise alter or modify such notices.
10.3 Trademarks.
10.3.1 DISTRIBUTOR may use the Trademarks only on or in
connection with the Products and in the form(s) approved by SpectraSCIENCE in
writing, or otherwise with the express prior written permission of
SpectraSCIENCE. Nothing contained herein shall give to DISTRIBUTOR any
proprietary or other property interest in any of the Trademarks. All goodwill
and any rights that may arise as a result of DISTRIBUTOR's use of any of the
Trademarks shall inure to the benefit of SpectraSCIENCE.
10.3.2 DISTRIBUTOR shall not use any trademarks, trade names,
or logos other than the Trademarks on or in connection with the Products without
SpectraSCIENCE's prior express written consent. If SpectraSCIENCE gives its
consent for DISTRIBUTOR to use certain of its separate trademarks, trade names,
or logos on or in connection with the Products, DISTRIBUTOR's identifying marks,
names, and logos shall be of equal or lesser prominence than SpectraSCIENCE's.
10.4 Registration. DISTRIBUTOR shall, at SpectraSCIENCE's request,
assist SpectraSCIENCE in taking all reasonably necessary action to assure that
SpectraSCIENCE's copyrights, Trademarks, and patents are adequately protected in
the Territory. DISTRIBUTOR shall execute whatever documents are reasonably
necessary for SpectraSCIENCE to perform under this Section 10.4.
10.5 Infringement. SpectraSCIENCE shall defend, indemnify, and hold
DISTRIBUTOR harmless from and against any and all Damages incurred or suffered
by SpectraSCIENCE as a consequence of third party claims that distribution of
the Products violates any United States patent,
9
(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
copyright, trademark right, trade secret right, or any other proprietary right,
provided that (i) SpectraSCIENCE is notified promptly in writing of any notice
of claim or of any threatened or actual suit, (ii) at SpectraSCIENCE's expense,
DISTRIBUTOR gives SpectraSCIENCE all reasonable non-monetary assistance for the
defense of same, and (iii) SpectraSCIENCE shall have no liability with respect
to any patent, copyright, trademark, trade secret or other proprietary rights
infringement to the extent it results from the distribution or use of products
other than the Products, or any modifications to the Products not created by
SpectraSCIENCE.
SECTION 11. COMPETING PRODUCTS
Except as set forth on Schedule 1, DISTRIBUTOR represents and warrants
that it does not currently market optical biopsy systems and that it shall not,
or permit any person or entity affiliated with it to, directly or indirectly
market or sell other products competitive with the Products. To the extent
permitted by law, during the Term DISTRIBUTOR shall not develop any products
competitive with the Products, acquire the right to market, distribute, or
license any such competitive products within the Territory, or take any action
that is adverse to SpectraSCIENCE's interests, Products, market, goodwill, or
reputation. DISTRIBUTOR represents and warrants that it has no other actual or
potential conflicts of interest with SpectraSCIENCE nor with its obligations
under this Agreement, and shall avoid any such conflict during the Term.
SECTION 12. INDEPENDENT CONTRACTOR
DISTRIBUTOR is an independent contractor and is not an agent, employee,
or legal representative of SpectraSCIENCE. DISTRIBUTOR expressly acknowledges
that it has no power or authority to accept any order for SpectraSCIENCE, or to
make guarantees or warranties concerning the Products or the delivery thereof,
or to make any commitment for SpectraSCIENCE or to obligate SpectraSCIENCE in
any respect whatsoever. DISTRIBUTOR agrees to indemnify SpectraSCIENCE and to
hold SpectraSCIENCE harmless from and against any and all Damages based upon,
arising out of, or relating to action in excess of DISTRIBUTOR's authority
hereunder and arising out of any claims by customers of DISTRIBUTOR, except as
provided in Section 10.5.
SECTION 13. TERM AND TERMINATION
13.1 Term. This Agreement shall have an initial term as set forth in
Schedule 1 hereof, subject to early termination as provided in Section 14. As
used herein, the "Term" shall include the initial term and any renewal hereof,
until expiration or termination pursuant to this Agreement.
13.2 Renewal. This Agreement may be renewed for successive one (1) year
periods upon the written agreement of the parties.
SECTION 14. TERMINATION
14.1 Termination for Just Cause. This Agreement may be terminated prior
to expiration as follows:
14.1.1 This Agreement shall terminate thirty (30) days after
notice of termination by one party to the other for the material breach of any
other provision, covenant, or obligation of this Agreement unless such breach is
corrected to the nonbreaching party's reasonable satisfaction within such thirty
(30) day notice period.
10
(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
14.1.2 To the extent permitted by law, this Agreement shall
terminate immediately if an assignment is made of either party's business for
the benefit of creditors; if a receiver, trustee in bankruptcy, or like official
is appointed to take all or part of either party's property; or if either party
ceases doing business in the ordinary course.
14.1.3 SpectraSCIENCE may terminate this Agreement upon ten
(10) days written notice to DISTRIBUTOR if:
(i) SpectraSCIENCE is acquired in whole or in part
by, or is merged with, a third party;
(ii) the individuals set forth in Schedule 1 (if any)
no longer control or are employed by, as the case may be, DISTRIBUTOR or there
is a material change in the management of operation of DISTRIBUTOR's business;
(iii) any Product does not receive any necessary or
appropriate approval of any governmental agency having jurisdiction in the
United States or the Territory, or if any such approval is withdrawn, revoked,
qualified, or otherwise changed, modified, or amended in any respect;
(iv) DISTRIBUTOR fails to meet the applicable minimum
purchase requirements hereunder during any calendar quarter during the Term;
(v) any act or omission of DISTRIBUTOR, any of its
subdistributors, or their respective agents, representatives, or employees is
likely, in the sole discretion of SpectraSCIENCE, to cause or has caused harm or
disrepute to the reputation of SpectraSCIENCE or any Product, or harm to the
public;
(vi) DISTRIBUTOR or any of its subdistributors
breaches any confidentiality obligation to SpectraSCIENCE or any obligation
relating to SpectraSCIENCE's intellectual property or alters any Product or its
accompanying written materials without the written authorization of
SpectraSCIENCE, or sells a Product beyond its expiration date; or
(vii) SpectraSCIENCE ceases to sell the Products.
14.2 Termination Without Cause. (***)
14.3 Waiver of Termination Claims. Neither party, by reason of the
expiration or termination of this Agreement in conformity with the terms hereof,
shall be liable to the other party for compensation, reimbursement, or damage
either because of the loss of goodwill, present or prospective profits on sales
or anticipated sales, expenditures, investments, commitments made in connection
therewith, or related to the performance hereunder or the business or goodwill
of the other party, and any and all claims of such liability and the right to
make such claims are hereby waived by the other party; provided, however, that
termination or expiration of this Agreement will not relieve either party of its
then accrued payment obligations under this Agreement or obligations relating to
confidentiality.
11
(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
14.4 Available Remedies. Except as provided in Section 14.3, the rights
and remedies provided to the parties in this Section 14 shall not be exclusive
or limiting and are in addition to any of the other rights provided by this
Agreement or by law.
14.5 Effect of Termination. Upon expiration or termination of this
Agreement, except as otherwise provided in this paragraph, DISTRIBUTOR shall
forthwith (i) return to SpectraSCIENCE all samples of the Products provided by
SpectraSCIENCE to DISTRIBUTOR pursuant to Section 4.2 or pursuant to any earlier
agreement of which this may be a renewal; (ii) pay SpectraSCIENCE all sums due
and owing pursuant to this Agreement; (iii) provide SpectraSCIENCE with a
current customer list including names, addresses, and telephone numbers; (iv)
cease any and all uses of SpectraSCIENCE's proprietary information and
materials, including but not limited to SpectraSCIENCE's copyrighted materials
and Trademarks; (v) return to SpectraSCIENCE, or destroy in the presence of an
independent inspector, all promotional and other literature relating to the
Products; and (vi) advise all customers, in a form acceptable to SpectraSCIENCE,
that DISTRIBUTOR no longer distributes the Products. Further, DISTRIBUTOR shall
certify to SpectraSCIENCE that all of the actions set forth in (i) through (vi)
above have been taken, and shall take no action that shall adversely affect
SpectraSCIENCE's reputation or goodwill. Except in the event of termination
pursuant to Section 14.1.1 or 14.1.3(iii), (v), or (vi) , DISTRIBUTOR may
continue to market and distribute the Products DISTRIBUTOR has remaining in its
inventory as of the effective date of such expiration or termination of this
Agreement for a period of six (6) months following expiration or termination. At
the end of such six (6) month period, DISTRIBUTOR shall, without reimbursement
from SpectraSCIENCE, forthwith return or destroy all remaining Products as
directed by SpectraSCIENCE and certify to SpectraSCIENCE that such action has
been taken.
SECTION 15. GENERAL
15.1 Waivers. No term or provision hereof shall be deemed waived and no
breach consented to or excused, unless such waiver, consent, or excuse shall be
in writing and signed by the party claimed to have waived or consented. Should
either party consent, waive, or excuse a breach by the other party, such shall
not constitute consent to, waiver of, or excuse of any other different or
subsequent breach whether or not of the same kind as the original breach.
15.2 Binding Effect; Assignment. This Agreement will mutually benefit
and be binding upon the parties and their permitted successors and assigns.
DISTRIBUTOR may not assign this Agreement in whole or in part, except to an
affiliated entity reasonably acceptable in writing to SpectraSCIENCE. Any
assignment or attempted assignment by DISTRIBUTOR without the written consent of
SpectraSCIENCE shall be void and constitute a breach of this agreement.
15.3 Notices. All notices required or permitted hereunder or by law
shall be given in writing and shall be effective whether served by personal
delivery, by mailing return receipt requested, postage prepaid, by private
express delivery, or by facsimile (with hard copy by mail or express delivery
immediately following), to the address listed above or such other address as one
party may notify the other pursuant to this Section 15.3.
15.4 Governing Law. This Agreement, including the validity hereof and
the rights and obligations of the parties hereof, shall be exclusively construed
in accordance with and governed by the laws of the State of Minnesota without
regard to its conflicts of laws principles, and, as applicable, United States
federal law. The parties expressly reject the applicability to this Agreement of
the United Nations Convention on Contracts for the International Sale of Goods.
12
(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
15.5 Jurisdiction. DISTRIBUTOR and SpectraSCIENCE, each, to the extent
that it may lawfully do so, hereby consents to the exclusive jurisdiction of the
courts of the State of Minnesota and the United States District Court of
Minnesota for any suit, action, or other proceeding arising out of any of its
obligations hereunder or with respect to the transactions contemplated hereby,
and expressly waives any and all objections such party may have to venue in any
such courts. Each party, to the extent that it may lawfully do so, further
agrees that a summons and complaint commencing an action or proceeding in any of
such courts shall be properly served and shall confer personal jurisdiction if
served personally or by certified mail to it at its address provided at the
beginning of this Agreement or as otherwise provided under the laws of the State
of Minnesota.
15.6 Arbitration. All disputes arising in connection with this
Agreement shall be finally settled in accordance with the rules then in effect
of the International Chamber of Commerce ("ICC") in proceedings to be held in
Minneapolis, Minnesota, USA. Arbitrators are to be selected by the parties, each
side choosing one. In case the two arbitrators cannot agree, they shall select a
third arbitrator (or failing agreement, such third arbitrator will be selected
by the ICC upon reference being made to such body), and the decision of any two
of the three arbitrators shall be binding upon the parties. Notwithstanding the
foregoing, any breach or violation of the provisions of Sections 6 (Payment), 8
(Confidentiality), 9 (Compliance with Laws), and 10 (Proprietary Rights) may be
submitted by the injured party, at its discretion, to a court of competent
jurisdiction (as limited by Section 15.5 hereof) in an action for injunctive or
other equitable relief in lieu of arbitration. In addition, judgment upon any
award rendered in arbitration may be entered in a court of competent
jurisdiction or application may be made to such court for judicial acceptance of
such award and an order of enforcement, as the case may be. Each party shall
bear its own cost of arbitration hereunder.
15.7 Entire Agreement. This Agreement, including the schedules,
constitutes the entire understanding of the parties relating to the subject
matter hereof, and merges all prior agreements, understandings, and
communications. No modification of this Agreement will be effective unless made
in writing signed by both parties by their duly authorized representatives.
15.8 General Assurances. The parties agree to execute, acknowledge and
deliver all such further instruments, and to do all such other acts, as may be
necessary or appropriate to carry out the intent and purpose of this Agreement.
15.9 Counterparts. All executed copies of this Agreement (including
without limitation counterparts executed and delivered by facsimile) shall be
deemed originals.
15.10 Severability. If any provision of this Agreement shall be held by
a court of competent jurisdiction to be contrary to law or public policy, the
remaining provisions shall remain in full force and effect.
15.11 Force Majeure. Except as to any payment or confidentiality
obligations under this Agreement, neither party shall be liable for damages for
any delay or failure arising out of causes beyond its reasonable control and
without its fault or negligence, including but not limited to the inability to
obtain an export license, acts of civil or military authority, fires, riots,
wars, or embargoes.
13
(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
15.12 Disputes Between Distributors. In the event of a dispute between
DISTRIBUTOR and any other distributor of SpectraSCIENCE, DISTRIBUTOR shall
submit such dispute to SpectraSCIENCE and agrees to abide by SpectraSCIENCE's
decision thereon.
15.13 Translations. The official language of this Agreement, and to the
extent permitted by law all future communications with respect to, and contracts
executed pursuant to this Agreement shall be in English.
15.14 References to SpectraSCIENCE and DISTRIBUTOR. All references to
SpectraSCIENCE and DISTRIBUTOR hereunder shall mean SpectraSCIENCE and
DISTRIBUTOR and/or any of their parents or subsidiaries. "Parent" shall means
any legal entity, present or future, that controls, directly or indirectly, more
than fifty percent (50%) of the voting stock or equity of either party, and
"subsidiary" shall mean any legal entity, present or future, of which more than
fifty percent (50%) of the voting stock or equity is owned or controlled,
directly or indirectly, by either of the parties.
15.15 Publicity. Either party may announce the existence of an
agreement for DISTRIBUTOR's distribution of the Products. The terms of this
Agreement are deemed confidential by the parties pursuant to Section 8 hereof.
IN WITNESS WHEREOF, the parties have each caused this Agreement to be
executed by its duly authorized representative as of the date first written
above.
SpectraSCIENCE, INC. Endoscopy U.K., Ltd.
By: /s/ XXXXX X. XXXXXXXX By: /s/ XXX XXXXXXX
Name: Xxxxx X. Xxxxxxxx Name: Xxx Xxxxxxx
Title: Vice President Title: Managing Director
Date: 22 Aug. 2001 Date: 22 August 2001
14
(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
SCHEDULE 1 TO THE INTERNATIONAL DISTRIBUTOR AGREEMENT
BETWEEN SPECTRASCIENCE, INC. AND ENDOSCOPY U.K., LTD.
Products: Virtual Biopsy System Laser Console with Polyp Software
("Console") (***)
Reusable Biopsy Forceps ("Forceps")* (***)
Replacement Parts, Tools, and Testing Equipment
(collectively, "Parts") (***)
*These products bear an expiration date.
Territory: United Kingdom
Minimum Quarterly Purchase Requirements:
Console (***)
Forceps (***)
Training: Initial Sales Training - one (1) session, for up to ten (10)
individuals, at a mutually agreeable time and location within three
(3) months following the Effective Date.
Annual Service Training - two (2) sessions, each for up to ten (10)
individuals, each year for as long as the Agreement remains in
effective, at mutually agreeable times and locations.
Exceptions to No Competing Products Obligation (if any): None
Term: One (1) year, commencing upon the Effective Date.
15
(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
EXHIBIT A TO THE INTERNATIONAL DISTRIBUTOR AGREEMENT
BETWEEN SPECTRASCIENCE, INC. AND ENDOSCOPY U.K., LTD.
INITIAL PURCHASE ORDER
Item Quantity Price
--------------------------------------------------------------------------------
Virtual Biopsy System Laser Console with Polyp Software (***) (***)
Reusable Biopsy Forceps (***) (***)
-----
Total (***)
Endoscopy U.K., Ltd.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Date:
--------------------------
16
(***) Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange
Act of 1934, as amended.
