EXHIBIT 10.14
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT (this "AGREEMENT") is made and entered into as
of October 1, 1996 (the "EFFECTIVE DATE"), by and between EDUDATA CORPORATION, a
Delaware corporation ("EDUDATA"), and BOSTON MARKETING COMPANY, LTD., a Japanese
corporation ("BMC").
SECTION 1. DEFINITIONS.
1.1. Definitions. For the purposes of this Agreement, the following terms
shall have the following meanings:
"DENTAL MARKET" means persons engaged in (i) the business of selling
dental and/or orthodontic products and/or services, (ii) the practice of dental
or orthodontic medicine, and (iii) the administration of educational
institutions authorized to confer degrees for the study of dentistry and
orthodontics.
"SALE PERIOD" means the period commencing on the Effective Date and
ending on the first anniversary thereof, and every consecutive twelve-month
period thereafter throughout the term of this Agreement.
"SYSTEM DEVICE" means Model No. CS6110 S/B with frame grabber, CS
6110P S/B with frame grabber and CS6110 S/B without frame grabber, or any
successor devices thereto, which shall be identical to the CCDs and the CCUs
shipped to EDUDATA by BMC since December 1995.
"TELICAM XXXX" shall mean the trademark more particularly identified
on ANNEX A hereto.
"TERRITORY" means the entire world.
SECTION 2. APPOINTMENT AND ACCEPTANCE.
2.1. EXCLUSIVE APPOINTMENT. BMC hereby appoints EDUDATA, and EDUDATA
hereby accepts such appointment, as BMC's exclusive distributor of the System
Devices to the Dental Market throughout the Territory. EDUDATA, without the
consent of BMC, shall have the right to appoint subdistributors and sales
representatives to sell the System Devices under the
1
provisions of this Agreement. BMC shall not sell or otherwise distribute, or
appoint any person to sell or otherwise distribute, the System Devices to the
Dental Market in the Territory without the prior written consent of EDUDATA,
which consent may be withheld in EDUDATA's sole and absolute discretion.
EDUDATA shall also have a right-of-first-refusal to be appointed the
exclusive distributor within the Territory of any additional products,
accessories or equipment reasonably associated with the System Devices,
having applications to the Dental Market (collectively, "ADDITIONAL
DEVICES"), developed, marketed or sold by BMC following the Effective Date of
this Agreement, and BMC agrees to notify EDUDATA of the development,
marketing and/or sale of any such Additional Devices as soon as practicable
after the commencement of such development, marketing and/or sales efforts by
BMC. The terms and conditions of EDUDATA's appointment with respect to any
Additional Devices shall be agreed to pursuant to good faith negotiations
between the parties.
2.2. TERM AND TERMINATION OF AGREEMENT. The term of this Agreement shall
commence on the Effective Date and shall continue for a period of five (5) years
thereafter, unless sooner terminated as provided in this section (the "INITIAL
TERM"). If at the end of the period ending 180 days prior to the expiry of the
Initial Term, this Agreement has not been terminated, the parties, by mutual
written agreement, may renew this Agreement on the same terms and conditions as
set forth herein for one (1) additional five (5) year term (the "ADDITIONAL
TERM"). During the Initial Term and the Additional Term, if any, BMC shall only
have the right to terminate this Agreement if (a) EDUDATA fails to purchase an
aggregate of 2,500 System Devices during any Sale Period, (b) EDUDATA purchases
CCDs or CCUs for use in its intraoral camera systems from third parties
(PROVIDED, HOWEVER, that BMC shall have no right to terminate this Agreement if
EDUDATA orders System Devices from BMC and BMC fails to fill such orders on a
timely basis) or (c) EDUDATA fails to pay in full for any System Device within
30 days of such System Device's delivery to EDUDATA.
SECTION 3. PURCHASE PRICE AND PAYMENT TERMS.
3.1. PRICE. During the first two Sale Periods under this Agreement, the
price for each System Device shall be $750 (f.o.b. Japan); PROVIDED, HOWEVER,
that BMC shall have the right at any time following six months written notice
to EDUDATA to increase such price. In the event such price increase is not
acceptable to EDUDATA, EDUDATA shall have the right to terminate this
Agreement. The purchase price for each System Device shall be paid by wire
transfer to BMC's Japan office. All prices will be determined and paid in
U.S. Dollars. EDUDATA shall have the right, in its sole and absolute
discretion, to establish the prices, charges and terms governing its sale of
the System Devices to third parties.
3.2. TAXES AND OTHER CHARGES. The purchase price for the System Devices
does not include taxes and other charges. All shipping, handling, insurance,
brokerage and other charges
2
and all import duties, sales, use or privilege taxes, value-added taxes,
excise or similar taxes, duties or assessments, and other related charges
levied by any jurisdiction pertaining to the System Devices, other than taxes
computed on the basis of the income of BMC, shall be paid by EDUDATA.
SECTION 4. WARRANTY; LIMITATION OF LIABILITY
4.1. PRODUCT WARRANTY. BMC warrants to EDUDATA that the System Devices
purchased by EDUDATA pursuant to this Agreement shall be free from defects in
design, materials and workmanship, and that it shall function in accordance with
the specifications provided to EDUDATA by BMC (the "PRODUCT WARRANTY"). With
respect to each System Device, the Product Warranty shall remain in effect until
the earlier to occur of (a) 12 months following the delivery of such device to
EDUDATA and (b) the incorporation of such System Device into an EDUDATA
intraoral camera system. BMC agrees to repair or replace any defect in design,
materials and\or workmanship on any System Device during the term of the Product
Warranty. Any warranty service hereunder shall include only parts, but shall
not include the cost of repairing or replacing those parts and equipment damaged
or rendered inoperable by the customer's neglect or abuse. The foregoing
warranty shall not apply to any System Devices or parts thereof which have been
(a) improperly repaired or altered, (b) subjected to misuse, misapplication,
negligence or accident or (c) used in a manner contrary to BMC's directions.
This warranty does not apply to defects in materials or designs provided or
stipulated by EDUDATA which are not standard parts provided by BMC in the
manufacture of the System Devices.
SECTION 5. TRADEMARKS, TRADE NAMES AND COPYRIGHTS.
5.1. USE OF TELICAM XXXX. During the term of this Agreement, BMC hereby
grants an unconditional and irrevocable license to EDUDATA to use the TELICAM
Xxxx in connection with marketing the System Device in the Territory.
5.2 IDENTIFICATION AS AUTHORIZED DISTRIBUTOR. EDUDATA shall have the
right to represent itself as the exclusive authorized distributor of the System
Devices.
5.3 EDUDATA'S MARKS. BMC shall permit EDUDATA to place EDUDATA's, or any
of its subsidiaries' or affiliates' name, trademark, or logo on each System
Device to be distributed by EDUDATA.
5.4 USE OF INTELLECTUAL PROPERTY. Nothing contained herein shall be
construed to allow BMC to use, in any fashion, any patent, copyright, trade name
or other item of intellectual
3
property owned or otherwise held by EDUDATA. Except as expressly provided
herein, nothing contained herein shall be construed to allow EDUDATA to use,
in any fashion, any patent, copyright, trade name or other item of
intellectual property owned or otherwise held by BMC.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. REPRESENTATIONS AND WARRANTIES OF BMC. BMC represents, warrants and
covenants to EDUDATA that:
6.1.1.DISTRIBUTION RIGHTS. BMC has (a) BMC has the exclusive right to
sell and distribute the System Devices throughout the world, including without
limitation, the right to sublicense the right to sell and distribute the System
Devices in the Territory; (b) BMC has not granted any rights to any third party
operating within the Territory relating to the System Devices; (c) BMC has not
entered into any agreements providing for the sale and/or distribution of the
System Devices to any third party within the Territory; and that (d) this
Agreement is a valid, binding and enforceable obligation of BMC, has been
authorized by all necessary corporate action, and will not violate any other
agreement or relationship to which BMC is a party.
6.1.2. OWNERSHIP OF INTELLECTUAL PROPERTY. BMC has the
unrestricted right to use the TELICAM Xxxx within the territory, including
without limitation the right to grant the license to use the TELICAM Xxxx to
EDUDATA set forth in Section 5 of this Agreement; and BMC has not entered into
any agreements with any third party operating within the Territory granting a
right to use of the TELICAM Xxxx.
6.1.3. KNOWLEDGE OF VIOLATIONS. To the best of BMC's knowledge,
neither the manufacture, distribution and sale in the Territory of the System
Devices nor the use by EDUDATA of the TELICAM Xxxx will violate or infringe
upon any patent, trademark, service xxxx, trade name, copyright, trade secret,
proprietary right, process or other intellectual property right of any other
person; and further, the transactions contemplated by this Agreement will not
result in any such violation; and
6.1.4. LICENSES AND PERMITS. BMC possesses from the appropriate
regulatory agencies, commissions, boards and governmental authorities, whether
national, regional or local state, all licenses, permits, the authorizations,
approvals, franchises and rights which are necessary for BMC to distribute and
sell the System Devices; and all such certificates, licenses, permits,
authorizations and rights have been lawfully and validly issued, are in full
force and effect and to the best of BMC's knowledge will not be revoked,
canceled, withdrawn, terminated or suspended.
4
6.2. REPRESENTATIONS AND WARRANTIES OF EDUDATA. EDUDATA represents,
warrants and covenants to BMC that:
6.2.1. NO CONFLICT. This Agreement is a valid, binding and
enforceable obligation of EDUDATA, has been authorized by all necessary
corporate action, and will not violate any other agreement or relationship to
which EDUDATA is a party; and
6.2.2. LICENSES AND PERMITS. EDUDATA possesses from the
appropriate regulatory agencies, commissions, boards and governmental bodies and
authorities, whether national, regional or local, all licenses, permits,
authorizations, approvals, franchises and rights which are necessary for EDUDATA
to distribute and sell the System Devices (other than licenses, permits,
authorizations, approvals, franchises and rights which are necessary for the
design, manufacture, distribution and/or sale of medical and/or dental devices
as to which EDUDATA makes no representation, warranty or covenant); and all such
certificates, licenses, permits, authorizations and rights have been lawfully
and validly issued, are in full force and effect and to the best of EDUDATA's
knowledge will not be revoked, canceled, withdrawn, terminated or suspended.
SECTION 7. TERM AND TERMINATION
7.1. REASONS. Notwithstanding anything to the contrary contained in
Section 2 hereof, and subject to EDUDATA's rights contained in Section 3.1
hereof, this Agreement, including without limitation the license granted
pursuant to Section 5 hereof, shall terminate prior to its scheduled expiration
as follows:
(a) At any time by mutual written consent;
(b) Immediately upon notice by the adversely affected party, if (i) a
party materially breaches any of the terms and conditions of or representations
contained in this Agreement or (ii) fails to cure any such breach within thirty
(30) days of receipt by the breaching party of notice of such breach except for
breaches relating to the non-payment of undisputed outstanding invoices which
shall be cured within three (3) business days; and
(c) Immediately upon notice of the nonaffected party, if a court
having jurisdiction shall (i) enter a decree or order for relief in respect of a
party hereto in an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, (ii) appoint a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
a party hereto or of any substantial part of the property of a party hereto
(including, without limitation, such party's subsidiaries, if any, and their
property), or (iii) order the winding up or liquidation of such party's affairs,
where any such decree or order for relief or
5
any such other decree or order remains unstayed and in effect for a period of
sixty (60) consecutive days.
7.2. CONSEQUENCES OF EXPIRATION OR TERMINATION. Upon expiration or prior
termination of this Agreement:
(a) UNFILLED ORDERS. Any orders received by BMC that are unfilled on
the effective date of expiration or termination of this Agreement shall not be
affected by such termination or expiration, and shall be timely filled by BMC
except where termination is due to EDUDATA's breach; PROVIDED, HOWEVER, that
EDUDATA's termination of this Agreement pursuant to Section 3.1 shall not be
deemed to constitute a breach;
(b) SETTLING OF ACCOUNTS; ETC. EDUDATA shall (i) pay to BMC all
amounts owing to BMC under any binding order for System Devices as such payments
become due; (ii) cease to engage in advertising or promotional activities
concerning the System Device and the use of the TELICAM Xxxx or any other
trademark authorized by BMC pursuant to this Agreement; (iii) cease to
represent, in any manner, that EDUDATA has been designated by BMC to sell the
System Device; and (iv) deliver to BMC, at EDUDATA's expense, all documents
concerning the System Devices which are then in EDUDATA's possession and which
contain confidential information of BMC (PROVIDED, HOWEVER that EDUDATA shall
not be required to return order or shipping documents containing information).
BMC shall within thirty (30) days from the date of expiration or termination of
this Agreement (i) refrain from using EDUDATA's trade names, trademarks, and
logos in connection with any of BMC's activities; (ii) cease to represent, in
any manner, that EDUDATA is responsible for the distribution of the System
Devices, and (iii) deliver to EDUDATA, at BMC's expense, all of the EDUDATA
confidential information then in the possession of BMC, its Subsidiaries or its
Affiliates;
(c) CONTINUED RIGHT TO USE "TELI" NAME. For a period of six (6)
months following the termination of this Agreement, EDUDATA shall have the right
to use the name "Telicam" in connection with its distribution and sale of
intraoral cameras;
(d) CONTINUED RIGHT TO SELL SYSTEM DEVICES. For a period ending on
the earlier to occur of (i) six (6) months following the termination of this
Agreement and (ii) the sale of the last System Device held by EDUDATA, EDUDATA
and its subdistributors and sales representatives, shall continue to have the
right to sell the System Device;
(e) CLAIMS FOR INDEMNITY. NEITHER PARTY SHALL, IN CONNECTION WITH
THE EXPIRATION OR TERMINATION OF THIS AGREEMENT, HAVE THE RIGHT TO CLAIM ANY
INDEMNITY, REIMBURSEMENT OR COMPENSATION FOR ALLEGED LOSS OF CLIENTELE,
GOODWILL, OR THE LIKE OR HAVE ANY OTHER RIGHT TO COMPENSATION FOR LOSSES OR
DAMAGES RESULTING FROM THE
6
EXPIRATION OR TERMINATION, EACH PARTY ACKNOWLEDGING THAT IT HAS DECIDED AND
WILL DECIDE ON ALL INVESTMENTS, EXPENDITURES AND COMMITMENTS IN FULL
AWARENESS OF THE POSSIBILITY OF ITS LOSSES OR DAMAGES RESULTING FROM SUCH
EXPIRATION OR TERMINATION AND IS WILLING TO BEAR THE RISK THEREOF;
(f) LOSS OF PROFITS ON ANTICIPATED SALES. Notwithstanding anything
herein to the contrary, any claim of BMC under this Agreement for loss of
profits on anticipated sales as a consequence of a breach by EDUDATA shall be
limited to (i) $750 multiplied by 12,500 LESS (ii) $750 multiplied by the number
of System Devices purchased by EDUDATA pursuant to this Agreement. The parties
agree that in the event of EDUDATA's breach of this Agreement, BMC shall be
obligated to use its best efforts to mitigate its damages; and that the
foregoing measure of damages shall not be deemed to be a provision for
liquidated damages; and
(g) SURVIVAL. Notwithstanding anything to the contrary herein
contained, the provisions of Sections 7.2, 8.1, 8.5 and 8.6 and EDUDATA's
obligation to pay for all operable System Devices which are delivered to EDUDATA
shall survive the expiration or other termination, for any reason whatsoever of
this Agreement.
7
SECTION 8. MISCELLANEOUS.
8.1. INDEMNIFICATION. Each party agrees, if promptly notified by the
other, to indemnify and hold harmless the other from and against all claims or
liabilities resulting directly or indirectly from any breach by the indemnifying
party of any obligation under this Agreement, from any violation by the
indemnifying party of applicable law or regulation, from any misrepresentation
of the indemnifying party, or from any claim arising out of any breach of any
representation or warranty contained herein. In addition, BMC shall indemnify
and hold harmless EDUDATA from and against all claims or liabilities which
EDUDATA may suffer as a direct or indirect result of the "Teli" name or the
System Device infringing upon any patent, trade secret, trademark or copyright
or any other proprietary right held by a third party when the "Teli" name and/or
the System Device are used by EDUDATA in the manner agreed upon by BMC and
EDUDATA. Such indemnification shall include the payment of reasonable
attorneys' fees and other costs incurred by the indemnified party in defending
against such claims except that the indemnifying party must have the right to
control the defense and must approve any settlements.
8.2. FORCE MAJEURE. No party shall be liable for failure to perform or
delay in performing any obligation under this Agreement or any individual
contract of sale hereunder if such failure or delay is due to fire, flood,
earthquake, strike, labor trouble or other industrial disturbance, war (declared
or undeclared), embargo, blockade, shortage of labor, materials or equipment,
legal prohibition, governmental action, riot, insurrection, damage, destruction
or any other cause beyond the control of such defaulting party preventing or
delaying the performance.
8.3. SCOPE OF AUTHORITY. The relationship of the parties under this
Agreement shall be and at all times shall remain one of independent contractor.
For the purposes of this Agreement, neither EDUDATA nor BMC is a partner, agent,
employee or legal representative of the other party.
8.4. ASSIGNMENT. No party may transfer the rights or delegate the duties
provided for under the terms of this Agreement without the prior written consent
of the other party. Notwithstanding the foregoing sentence, no consent shall be
necessary for an assignment made by EDUDATA to any Subsidiary of EDUDATA, to a
purchaser of all or substantially all of the assets of EDUDATA, or to any
corporation into which EDUDATA may merge, providing that EDUDATA is the
surviving corporation subsequent to any such merger.
8.5. GOVERNING LAW. This Agreement and any contract of sale concluded in
accordance with this Agreement shall be interpreted and their effects shall be
determined in accordance with the laws of the State of California, applicable to
contracts made within and to be performed solely within the State of California.
8
8.6. ATTORNEYS' FEES. If any action, suit, arbitration or other proceeding
is instituted concerning or arising out of this Agreement, the prevailing party
shall recover all of such party's costs and attorneys' fees incurred in each and
every such action, suit or other proceeding, including any and all appeals or
petitions therefrom. As used herein, "attorneys' fees" shall mean the full and
actual costs of any legal services actually rendered in connection with the
matters involved, calculated on the basis of the usual fee charged by the
attorneys performing such services, and shall not be limited to "reasonable
attorneys' fees" as defined by any statute or rule of court.
8.7. SEVERABILITY. If any provision of this Agreement is held to be
invalid, illegal or unenforceable for any reason or in any respect whatsoever,
such invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
8.8. WAIVER AND AMENDMENTS. No failure or delay on the part of either
party hereto in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single waiver or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available. No amendment or waiver of any provision of this Agreement
nor consent to any departure therefrom, shall in any event be effective unless
the same shall be in writing and signed by both of the parties hereto, and with
respect to such waivers or consents shall be effective only in the specific
instance and for the specific purpose for which given.
8.9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
8.10. ENTIRE AGREEMENT. This Agreement and the annexes hereto, when
signed by the authorized representatives of all parties hereto, shall constitute
the only agreement among them with respect to the distribution of the System
Devices and shall supersede all prior agreements.
8.11. Consent to Service of Process; Jurisdiction.
8.11.1 Except as provided in Section 8.1.2 below, the parties
hereto agree that any dispute arising out of this Agreement, whether arising in
contract, tort, equity, or otherwise, may be resolved by state or federal courts
located in California. Each of the parties
9
hereto waives in any such dispute any objection that it may have to such
California courts considering the dispute including, without limitation, any
objection to the laying of venue or based on the ground of forum non
conveniens.
8.11.2 Each of the parties hereto agrees that the other party to
this Agreement shall have the right, to the extent permitted by applicable law,
to proceed against it or its property in a court in any location reasonably
selected in good faith to enable such other party to realize on such property,
or to enforce a judgment or other court order entered in favor of any such other
party. Both of the parties hereto waive any objection that either may have to
the location of the court in which the other party to this Agreement has
commenced a proceeding described in this paragraph including, without
limitation, any objection to the laying of venue or based on the ground of forum
non conveniens.
8.11.3 The parties hereto waive any right to have a jury
participate in resolving any dispute, whether sounding in contract, tort, or
otherwise arising out of this Agreement. Instead, any disputes resolved in
court will be resolved in a bench trial without a jury.
8.11.4 Both parties hereby irrevocably designate CT Corporation
System as its designee, appointee and agent to receive, for and on behalf of it,
service of process in any legal action or proceeding with respect to this
Agreement. It is understood that a copy of such process serviced on such agent
will be promptly forwarded by mail to it at its address set forth below the
signatures of the parties below, but the failure to receive such copy shall not
affect in any way the service of such process. Each of the parties hereto
further irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the address
given in this Agreement, such service to become effective four days after such
mailing.
10
8.11.5 Nothing herein shall affect the right of any party to this
Agreement to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against any other party in any other
jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
BOSTON MARKETING COMPANY, LTD.,
a Japanese corporation,
By: ______________________________
Its:______________________________
Notice Address:
Boston Marketing Company, Ltd.
00-0, 0-Xxxxx Xxxxxxx-Xxxxxx
Xxxxxxx-XX, Xxxxx, Xxxxx
Attn:_____________________________
Telephone: (000) 0000 0000
Fax: (000) 0000 0000
EDUDATA CORPORATION,
a Delaware corporation,
By: ______________________________
Its:______________________________
Notice Address:
EDUDATA CORPORATION
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
11
ANNEX A
DESCRIPTION OF TELICAM XXXX
12
