DOBI Medical International, Inc EXHIBIT 10.3
MARKETING, SALES, AND SERVICES AGREEMENT
This Marketing, Sales and Services Agreement ("Agreement") is entered into
this ___ day of _______ (the "Effective Date") by and between DOBI Medical
International, Inc., a Delaware corporation, with its principal place of
business located at 0000 XxxXxxxxx Xxxx., Xxxxxx, XX 00000, XXX (hereinafter
referred to as "DOBI Medical") and _________________("Distributor").
WHEREAS, DOBI Medical is in the business of developing, manufacturing and
distributing various medical products; accessories and supplies; and
WHEREAS, Distributor is in the business of marketing, selling, and
servicing various medical services, accessories and supplies within the
Territory as specifically set forth in Schedule A; and
WHEREAS, Distributor and DOBI Medical have agreed to enter into an
arrangement whereby DOBI Medical will appoint Distributor as its authorized
Distributor within the Territory for the purpose of marketing, selling and
servicing the single use products owned by DOBI Medical to be sold to
Distributor for resale to its customer end users, subject to the terms and
conditions set forth herein; and
NOW THEREFORE, in consideration of the mutual promises and representations made
between the parties in this Agreement, Distributor and DOBI Medical hereby agree
as follows:
1. Definitions
a) "Marks" include all words, symbols, insignia, devices, designs, trade
names, trademarks, service marks, or combinations thereof, owned or licensed by
DOBI Medical as identifying its products, software, documentation, manuals,
systems, devices, parts, and services.
b) "Patents" include one or more patents issued or applications pending in
the United States Patent and Trademark Office or in any foreign jurisdiction
which are owned or licensed by DOBI Medical or an affiliate of DOBI Medical.
c) "Products" include the single use medical imaging system and related
Software, training manuals and other documentation, accessories and options,
supplies, spare and replacement parts, and related DOBI Medical's copyrights,
Marks and Patents, as offered for sale or license by DOBI Medical as a
complement to mammography, and as set forth in Schedule B attached hereto, and
as may be amended from time to time by mutual written agreement. As to any
subsequent updates, upgrades, improvements, other enhancements, or new models
incorporating or based upon such technologies, features, and/or operating system
for which DOBI Medical may, but is not obligated to develop. DOBI Medical
reserves the right to require additional licenses, charge different fees and/or
offer different discounts off suggested retail prices.
d) "Purchase" shall have the meaning given to it at Section 3.c).
e) "Services" include installation, hardware maintenance and repair,
support services, consulting, training, and all materials and other
documentation with respect to the Products sold by Distributor under the terms
of this Agreement.
f) "Software" includes one or more programs that may be included by DOBI
Medical and fixed, unaltered and bundled within the system configuration of the
Product as sold by DOBI
Medical and not removable in normal operation, and any subsequent releases or
upgrades associated with the Product as may be made available from time to time
by DOBI Medical.
g) "Territory" means only the geographically bounded area(s) as
specifically set forth in attached Schedule A.
h) "Unit" shall have the meaning given it at Section 3.a).
2. Grant of Distributorship License
a) Appointment and Scope. Provided Distributor is in compliance with this
Agreement, including without limitation, Distributor meeting the minimum
purchase requirement obligations per year as mutually agreed to and set forth in
Schedule D attached, DOBI Medical, subject to Section 3 a) below, hereby grants
a limited, non-transferable (subject to Section 2 d) non-exclusive license to
Distributor as DOBI Medical's authorized Distributor within the Territory with
respect to the promotion, marketing, sales and servicing of those single use
Product(s) that are specifically set forth in Schedule B, (and for no other
products or services), for resale to its subdistributors, if any, and customer
end users within the Territory.
b) Acceptance. Distributor understands that DOBI Medical has expended and
will continue to expend substantial efforts and funds to secure and retain
public goodwill toward DOBI Medical, the Products, Services, copyrights and
Marks, and Distributor recognizes the vital interest to DOBI Medical for it to
be well represented within the Territory in accordance with the terms and
conditions of this Agreement, including without limitation, the importance for
Distributor's customers to be trained in the proper functioning, use and
operation of the Products. Distributor hereby accepts its obligations under this
Agreement, and undertakes, at its expense, to use its best efforts to promote
the sales and servicing of the Products for resale to its customers end user
within the Territory in accordance with the terms and conditions of this
Agreement.
c) Sublicense to Customers. For so long as Distributor is in compliance
with this Agreement, DOBI Medical hereby grants a limited, non-exclusive,
non-transferable license to sublicense to its customer end users the perpetual
right to the use of the Products in connection with the Software as fixed,
unaltered and bundled within the Products in the system configuration for the
single use for which the Products are sold.
d) Sublicense to Subdistributors. For so long as Distributor is in
compliance with this Agreement, Distributor may also, after exercising due
diligence, grant sublicenses under this Agreement by appointing qualified
subdistributors within the Territory who in the judgment of Distributor are well
recognized and of good reputation, and who are experienced in selling medical
devices, provided that: i) any such sublicense shall be pursuant to and
consistent with all the terms and conditions of this Agreement, ii) DOBI Medical
has approved in writing the form of any sublicense agreement that Distributor
intends to utilize, which form must conform to this Agreement in all material
respects, and to which Distributor may not waive, alter, or change any provision
of the approved sublicense agreement without the prior written approval of DOBI
Medical, iii) Distributor shall at all times remain primarily liable to DOBI
Medical for all obligations it delegates hereunder to any such subdistributor,
including without limitation, any payment of fees, reporting, marketing, sales,
service, training, intellectual property rights and proper usage thereof,
minimum sales quotas, and certification obligations contained herein, iv) the
term of any sublicense agreement conforms in all respects to the remaining term
of this Agreement, and vi) Distributor sends a copy of any such sublicense
agreement, and any subsequent amendments or modifications, together with a
complete and accurate English translated copy, to DOBI Medical and a copy of any
notice of default to any sublicense. Distributor acknowledges and agrees that it
will, at its sole cost and expense, promptly and strictly enforce the terms and
conditions of any sublicense agreement against any such subdistributor, and
further, that any default not cured within the cure period of any its
sublicensees will be deemed a default of Distributor under this
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Agreement, and subject to termination rights of DOBI Medical under Section 15 of
this Agreement in the same manner as if Distributor had defaulted. Nothing shall
preclude DOBI Medical's right to enforce any rights it may have in law or in
equity directly against any sublicensee of Distributor, however, nothing shall
require DOBI Medical to exhaust any legal or equitable remedies it may have
against the sublicensee before seeking legal recourse against Distributor.
3. Distributor's Obligations
a) Within thirty (30) days after the Effective Date of this Agreement,
Distributor will identify a clinical site within the territory, which must be
approved by DOBI Medical, whereby Distributor will promptly commence a market
study to meet Distributor's requirements to begin commercial sales within the
Territory. This market study is to be completed within sixty (60) days after
delivery of the promotional ComfortScan system (a "Unit") to Distributor
pursuant to Section 4.c) below.
b) Within sixty (60) days after the Effective Date of this Agreement,
Distributor shall submit to DOBI Medical a marketing plan for the Territory.
Distributor agrees to use its best commercial efforts to actively promote the
sale of the Products within the Territory, including developing and executing a
comprehensive marketing plan, the use of direct marketing and media campaigns,
and attending and promoting the Products at trade shows and other conferences.
Distributor shall only use the Marks and promotional materials as approved by
DOBI Medical in advance (which approval shall not be unreasonably withheld or
delayed) of use and in accordance with DOBI Medical's policies. In carrying out
its obligations herein, Distributor agrees to exercise its best efforts to avoid
deceptive, misleading, or unethical practices that may be detrimental to the
goodwill, name, and reputation of DOBI Medical, its Products and Services, its
Patents, its Marks, and its other products and services. Distributor will not
make any representations, warranties, or guarantees to any customers or
prospective customers concerning the Products or anything else relating to DOBI
Medical that are inconsistent with or are in addition to those expressly set out
in writing by DOBI Medical.
c) Minimum Purchase Requirements. Distributor shall purchase from DOBI
Medical and DOBI Medical shall have received payment in full in US currency for
at least the minimum number of Products on an annual base with quarterly
reviews, as mutually agreed to by the parties and set forth in Schedule D
attached. Time is of the essence, and but for Distributor's promise and
representation to timely meet all the obligations set forth in this Section and
Schedule D, DOBI Medical would not have entered into this Agreement. "Purchase"
shall mean ordering the Products on or before the last day of such period with
payment made in full to DOBI Medical as mutually agreed to by the parties.
Purchases of Products made in excess of the minimum purchase requirement will be
credited towards the minimum purchase requirements for subsequent periods.
Failure to meet the minimum purchase requirement shall give rise to DOBI
Medical's right to terminate this Agreement pursuant to Section 15.a) (v) below.
d) Account Administration and Reports. Upon execution of this Agreement,
Distributor agrees to designate an Account Manager responsible for the oversight
of this Agreement and for all administrative and non-technical matters,
including keeping DOBI Medical informed about Distributor's marketing plan and
execution, current market trends and conditions within the Territory, customers'
comments about the Products and Services, and major negotiations and prospective
sales possibilities. Distributor through its Account Manager shall provide by
electronic media monthly, by the third (3) business day of each month, or more
often if requested by DOBI Medical. Product, Service, and installation reports
shall include the customer installed base by customer name, address, phone, fax
and email numbers, contact person, Product identity (e.g., description and model
number), site where installed, date installed, serial number, and such other
information as DOBI Medical may reasonably request, or as may be made necessary
by reason of any federal, state, local or foreign governmental entity or
industry requirement.
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e) Training. Distributor, at its own expense, shall designate a number of
its employees as reasonably determined by DOBI Medical and Distributor to attend
(i) DOBI Medical's applications training program, and, (ii) field service
technician program at a location(s) to be determined by DOBI Medical, taking
into consideration the region where Distributor is located. All classes and all
materials will be in English. All such designated trainees shall be reasonably
experienced in the sales and servicing of other medical imaging devices and must
attend and successfully complete the applicable training program to DOBI
Medical's reasonable satisfaction, including written, oral and skills testing,
in order to become certified. Distributor shall employ at least two certified
applications trainers and two certified field service technicians at all times,
and Distributor shall promptly replace any such employee whom DOBI Medical
determines in its sole discretion is no longer qualified with another certified
employee. Distributor is responsible for all compensation, insurance, travel and
living expenses of its employee trainees, plus, after the initial training
session for which there is no fee, the payment to DOBI Medical of $500 per
employee for the first day of training or portion thereof, and $300 per employee
for each additional day or portion thereof for all subsequent training sessions
after the initial training session. Distributor may train these persons using
DOBI's approved training program upon DOBI certifying Distributor's train the
trainer program, and Distributor may certify such persons so long as they
satisfactorily pass DOBI's standardized test.
(i) Distributor, at its own expense, shall arrange for its certified
trainers to attend additional DOBI Medical's training sessions in order to
obtain certification for new products and/or retain the competence levels
necessary to provide applications training to certify customer end users of the
Products in accordance with DOBI Medical's instructions, documents, and
policies. Distributor must document all applications training that it provides
to its customer end users and maintain a current list of certified customer
technicians. Distributor shall not permit any person or entity to use the
Product without assurances from the customer that its technicians will be and
remain certified in the use of the Product.
(ii) Distributor shall cause each trainee to execute and maintain in
effect DOBI Medical's confidentiality, non-disclosure and non-compete
agreement as a condition for certification, and provide an original to DOBI
Medical prior to such trainee commencing training. Distributor agrees to
promptly notify DOBI Medical of any threatened or actual material breach that it
becomes aware of, and to assist DOBI Medical, at DOBI Medical's expense, in
enforcing such agreement(s).
(iii) Prior to Distributor's installation of the Product at the site and
the training of its customers' technicians and physicians, Distributor shall
cause each of its customer end users to execute an end user agreement that
includes the terms and conditions contained in Schedule E, and will provide a
copy to DOBI Medical. Distributor agrees to promptly notify DOBI Medical of any
threatened or actual material breach that it becomes aware of, and at its
expense to fully enforce such agreement(s).
f) Facilities. Distributor shall maintain adequate facilities,
communications services and at least one complete and operational demonstration
Product along with a reasonable inventory of common replacement parts, so as to
allow for the prompt delivery and servicing of its customers, as well as
sufficient personnel and promotional and training materials to at all times
efficiently operate the business of marketing, selling and servicing the
Products and otherwise fulfilling the obligations under this Agreement.
Distributor shall keep its personnel who have a need to know current and fully
informed on the DOBI Medical Products, their installation and training,
operation, specifications, maintenance and repair, and applications. All
Services provided on DOBI Medical Products must be in accordance with DOBI
Medical's instructions, documents, and policies. DOBI Medical shall have the
right upon prior notice and at reasonable times to audit Distributor's
facilities, employees, books and records relating to compliance with this
Agreement.
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g) Quality Control. Distributor agrees to provide the Services to each of
its customers with respect to the Products in a good and workmanlike manner and
in compliance with all DOBI Medical specifications, service manuals and other
publications. Only a certified field service technician with satisfactory basic
technical skills and training and customer complaint handling in DOBI Medical's
Products, policies and procedures, and duly certified by DOBI Medical, is
permitted and authorized to install and service the Products. Distributor shall
use only authorized, original DOBI Medical replacement parts, and shall cause
each field service technician to possess all the tools and then current
technical manuals and updates in order to service and maintain the Products in
accordance with DOBI Medical's specification, policies, and procedures.
Distributor shall keep detailed, accurate, and complete documentation and
records of all field installation and service calls, and upon request, forward
copies thereof to DOBI Medical. All service visits shall be recorded in
accordance with all applicable legal and regulatory requirements and DOBI
Medical's instructions, documents and policies. At a minimum, all records shall
include the name of the customer, location and model number of the Product being
serviced, date of Service, name of the field service technician servicing the
Product, services performed, and test and inspection data. All service reports
shall regularly be reviewed by Distributor for quality assurance, potential
reportable events, and systemic and safety concerns, and Distributor shall
promptly send a report of each such incident to DOBI Medical. Distributor shall
promptly implement any programs, modifications or changes required by any
technical bulletins, field change notices, and safety notices it receives from
DOBI Medical.
h) Product Approval/Registration. As of the Effective Date, DOBI Medical is
ISO 9001:2000 and ISO 13485 certified, has received CE Marking for the Product,
and is in the process of seeking approval for the Product by the United States
Food and Drug Administration ("FDA") for sale in the United States. However,
Distributor understands that as of the Effective Date, no DOBI Medical Product
is currently approved by the FDA, and DOBI Medical does not guarantee that the
Product ever will be approved, and shall not be legally bound to receive
approval, by the FDA or any other federal or state agency in the United States
or by any governmental authority of any other jurisdiction, foreign or domestic,
or by any industry practice or certification entity. Therefore, Distributor
agrees not to sell any Product in or for use in any jurisdiction if such
jurisdiction requires the licensing or other approval of the Product for sale or
use in such jurisdiction, unless and until such Product has been duly approved
and/or registered for sale and use in such jurisdiction.
i) Distributor agrees, on behalf of and in the name of DOBI Medical, to do
all things necessary and reasonable to obtain approval and/or registration of
DOBI Medical's Product from the appropriate governmental entities within the
Territory as soon as possible. Distributor shall pay all other costs and
expenses, including the costs for any translations and other fees. Certified
copies of all governmental approvals and registrations shall be promptly sent to
DOBI Medical. Further, if requested in writing by DOBI Medical, Distributor
agrees to fully cooperate and exercise best efforts to cause its subdistributors
and its customer end users to cooperate with DOBI Medical, at DOBI Medical's
direction and expense, to assist DOBI Medical in obtaining and maintaining any
such approvals, including providing DOBI Medical with proper documentation of
Distributor's handling of the Product, to assure that DOBI Medical's Products in
Distributor's possession comply with all orders, rules and regulations,
including without limitation, those issued by the FDA.
j) Distributor further agrees to complete and submit to DOBI Medical on or
before the 10th day of each month a Product and Service installation report for
each DOBI Medical Product installed during the previous month as required by the
U.S. Medical Device Directive. Such form will be supplied by DOBI Medical, and
Distributor hereby agrees to timely complete and submit such form(s) and any
other additional information or additional forms as may hereafter be required by
the U.S. Medical Device Directive, and any amendment thereto or successor
regulations, or as may be required by the FDA, or any other domestic or foreign
governmental entity.
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4. DOBI Medical's Obligations
a) Marketing Plan. Within sixty (60) days after the Effective Date of this
Agreement, DOBI Medical and Distributor will agree to a marketing plan for
selling the Products within the Territory, which plan shall include DOBI Medical
making available a marketing and sales training program to Distributor's sales
team as soon as possible as mutually agreed to by the parties at no additional
cost to Distributor other than as set forth in Section 3.d).
b) Promotional Unit. As set forth in 3.a) above, upon identification of the
approved clinical site for the marketing study, DOBI at its expense will ship Ex
Works ("EXW") Mahwah, NJ, USA to Distributor a promotional Unit to be used for
the marketing study. At the end of the sixty (60) day marketing study,
Distributor will air ship at its expense the promotional Unit in reasonable good
condition back to DOBI Medical in the same shipping container with sufficient
packaging and adequate insurance coverage. Upon completion of the marketing
study or 60 days after deliver to Distributor of the promotional Unit, whichever
is sooner, DOBI Medical will commence delivery of the Units as set forth in 4.c)
below. Legal and equitable title to this promotional Unit shall be and remain at
all times with DOBI Medical.
c) DOBI agrees to deliver the systems at the earliest time possible in
accordance with manufacturing schedules and backlogs. DOBI Medical shall provide
an initial support schedule and contacts for all sales, technical, Product and
Service matters, and, upon consultation with Distributor, will determine the
level of continued marketing, sales, training and technical support as deemed
necessary and reasonable by DOBI Medical. DOBI Medical will maintain sufficient
quantities of spare parts within the Territory to ensure reasonable response to
Distributor's service requirements. Inventory levels will be based on local
install base, component reliability, and expected lead times for restocking.
DOBI Medical will regularly review parts inventories and usage history on a
global basis and make adjustments accordingly.
d) Training. DOBI Medical shall make available to Distributor in English,
at such time and place as designated by DOBI Medical, its training programs for
certifying Distributor's field service technicians and applications trainers in
order to assist Distributor in organizing and developing its applications
training program for its customer end users to certify its technicians in the
use and operation of the Product. Subsequent support for training will be made
available as deemed necessary and reasonable by DOBI Medical in accordance with
Section 3. e) above and 4. e) below. DOBI Medical shall provide Distributor with
current technical bulletins, Field change notices, and safety notices affecting
Distributor's installations of Products and replacement parts.
e) Promotional Materials. DOBI Medical shall provide Distributor with
reasonable quantities of promotional materials in English to assist in
Distributor's marketing efforts. Additional materials can be purchased by the
Distributor at DOBI Medical's then current costs plus shipping and any taxes.
All promotional materials and other documentation and manuals relating to the
Products and Services are in English. Any translations are at the sole cost of
Distributor and must conform in all material respects with the English versions,
including proper and conspicuous use of DOBI Medical's Marks and Patent and
copyright notices, and be duly certified by a certified translator.
f) Second Line Support. DOBI Medical shall provide at no additional cost
ongoing second line support as reasonably requested by Distributor via
electronic media between the hours of 9:00 AM and 5:00 PM, Eastern Time, USA,
Monday through Friday (except US holidays). DOBI Medical will use commercially
reasonable efforts to respond to Distributor's requests in a manner and time
frame which are reasonably responsive considering the nature and severity of the
concerns which gave rise to such request.
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g) DOBI Medical will designate maintenance and support personnel to assist
Distributor's first line support personnel in providing maintenance and support
services. DOBI Medical shall provide reasonable access to and assistance of its
technical, sales, and service personnel as reasonably appropriate under the
circumstances at no additional charge.
h) Subsequent Support. Any subsequent support services, including without
limitation, technical support, software or hardware customization or training
services requested by Distributor which are beyond, in DOBI Medical's sole
opinion, the reasonable scope of this Agreement or are not specifically required
to be performed by DOBI Medical under this Agreement, are subject to the
availability of DOBI Medical's clinical and technical staff, and shall be billed
at DOBI Medical's then current time and material rates plus out-of-pocket
expenses, and subject to such other terms and conditions which may be agreed
upon in writing by the parties before such services are performed.
5. Terms and Conditions of Sales to Distributor
a) So long as Distributor is in compliance with this Agreement, DOBI
Medical agrees to sell to Distributor the Products and related replacement parts
described in Schedule B of this Agreement at the then published, suggested,
retail net prices, delivery EXW, Mahwah, New Jersey, USA, or such other place of
manufacture, in effect on the date of acceptance by DOBI Medical of
Distributor's order, less the applicable discounts as set forth in Schedule D.
Payments must be in full and in available U.S. currency. Prices are valid for
all purchase orders issued by Distributor only if accepted in writing by DOBI
Medical within ten (10) business days of its receipt of an order. Failure to
issue a timely written acceptance or rejection shall be deemed an acceptance of
the order in issue. DOBI Medical shall inform Distributor giving at least 90
days notice prior to effecting any price changes to the Products, and at least
30 days notice as to replacement parts. All purchase orders accepted by DOBI
Medical are final. DOBI Medical will NOT allow the return of Products, except
for warranty claims approved by DOBI Medical in accordance with this Agreement.
b) All fees are due in full and in available U.S. currency within thirty
(30) days of the date of DOBI Medical's invoice to Distributor. Upon DOBI
Medical's acceptance of each Distributor purchase order, Distributor shall
thereupon provide DOBI with an irrevocable, documentary letter of credit in a
form to DOBI Medical's reasonable satisfaction from a first class, global bank
having an affiliate in New York, NY, for the value of the purchase order.
Payment terms as between Distributor and its customers are the sole
responsibility of Distributor and failure of a customer to pay Distributor shall
in no manner relieve Distributor from payment and receipt by DOBI Medical of the
full purchase price when due pursuant to the terms of this Agreement. DOBI
Medical has the right to set off and apply any amounts paid by Distributor to
past due accounts. Title to Products, including any related documentation, shall
not pass to Distributor until the purchase price is received in full by DOBI
Medical. However, Distributor bears the entire risk of loss upon DOBI Medical's
delivery of the Products to the shipper EXW, Mahwah, NJ, USA, or such other
place of manufacturer.
c) All past due amounts are subject to a late charge equal to one and
one-half percent (1 1/2%) per month or the maximum amount allowed by law,
whichever is less. Distributor shall be liable for all costs, including but not
limited to, reasonable attorney's fees, incurred by DOBI Medical in collecting
any past due amounts. Unless exempted, evidence of which must be provided to
DOBI Medical, Distributor shall be obligated to determine and timely pay any
applicable foreign and domestic federal, state, local and other taxes or other
charges, penalties, interest thereon (other than taxes on income payable by DOBI
Medical) applicable to the Products, Services and the transactions resulting
from this Agreement, as well as any shipping and handling fees. (If no taxes are
assessed, Distributor is solely responsible to self-assess and pay any taxes
that may be due as a result of its purchase of the Products, Services, Marks,
Patents and transactions resulting from this Agreement). Except as otherwise
provided herein, each party shall be responsible for all taxes, tariffs, duties
and other governmental charges, however designated, levied or based, on its
sale, purchase and use of
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the other party's Products and Services or the charges for such Products
and Services, including without limitation, sales and use charges that may now
or hereafter be imposed.
d) Payment terms as between Distributor and its customers are the sole
responsibility of Distributor and failure of a customer to pay Distributor shall
in no manner relieve Distributor from payment and receipt by DOBI Medical of the
full purchase price when due pursuant to the terms of this Agreement.
e) Except as may by specifically authorized by DOBI Medical pursuant to
this Agreement, all payments made by Distributor hereunder are non-refundable,
and no partial payment or acceptance by DOBI Medical of any partial payment
shall be treated as anything other than as a partial payment on account without
prejudice to DOBI Medical. Distributor agrees to pay DOBI Medical on demand any
and all costs and expenses in collecting any money owed by Distributor. These
costs and expenses may include, but are not limited to, costs and commissions
due a collection agency, reasonable attorneys' fees (including any attorneys'
fees incurred in bankruptcy or like proceedings), court costs, expert witness
fees, any witnesses' reasonable travel and living costs, discovery costs and any
reasonable attorneys' fees and costs for appeals, together with the maximum
legally allowable interest charges computed from the date the obligation was
first past due.
f) DOBI Medical and Distributor, as the case maybe, shall cause all Product
shipments to be made in customized containers capable of withstanding damage to
the Product contained therein. All such containers shall be properly labeled and
made to accommodate any U.S. Customs or other government inspections, including
but not limited to, the use of heavy screws and bolts (not nails) to permit the
reasonable re-closing after a Customs inspection. DOBI Medical and Distributor,
as the case may be, shall assure any vehicle transport of Distributor's Product
orders is equipped with air-ride suspension or other similar equipment to avoid
Product damage. Shipee may request that a specific freight carrier be used, and
shipper will give such request due consideration, but it is under no obligation
to use such freight carrier.
6. Limited Warranty
a) Without prejudice to any local law, DOBI Medical represents and warrants
to the Distributor and to its original customer end users that the Products or
parts shall be free from defects in material or manufacturing, except for minor
errors that do not materially affect functionality or performance, and shall
conform substantially to applicable specifications in effect as of the date of
shipment EXW Mahwah, NJ, USA of the order by DOBI Medical of the Product or part
when properly installed by a Distributor's field technician certified by DOBI
Medical, and when subjected to normal, proper and intended usage and operation
by a technician of customer end user who has been certified by Distributor.
Products and parts manufactured by parties other than DOBI Medical, where DOBI
Medical acts solely as Distributor or reseller, will carry their respective
manufacturers' warranties.
b) DOBI Medical Products shall be warranted for a period of 12 months from
the time of original installation, the date of which will be determined by a
completed, returned warranty card, which must be received by DOBI Medical at its
corporate office, attention: Service Department, within 30 days of Product
installation. If the warranty card is not so timely received by DOBI Medical,
then the warranty shall take effect 12 months from the date of shipment EXW
Mahwah, NJ, USA by DOBI Medical. In no event shall the warranty exceed 15 months
from the date of shipment EXW Mahwah, NJ, USA from DOBI Medical. Repair and
replacement parts will be warranted for 90 days from installation or 12 months
from shipment, whichever is sooner. Any component furnished without charge
during the warranty period to correct a warranty failure shall be warranted only
to the extent of the unexpired term of the warranty of the original Product or
replacement part. Warranty consideration will be given only for defective DOBI
Medical products properly returned to the factory in accordance with DOBI
Medical's warranty return procedure.
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DOBI Medical will act as the sole judge in determining whether new products or
parts may be defective by reason of manufacture.
c) In the event that a documented and reproducible flaw n the Product(s)
inconsistent with this warranty is discovered, DOBI Medical shall use
commercially reasonable efforts to correct such flaw in a timely manner. At DOBI
Medical's option and at no cost to or expense to Distributor or customer end
user, DOBI Medical shall correct any such failure by (i) repairing, adjusting,
or replacing any defective or non-conforming Products, or parts, (ii) by making
available any necessary repaired or replacement parts or assemblies, or (iii) by
furnishing either new or exchanged replacement parts or assemblies. All such
returned Products and parts shall become the property of DOBI Medical if
determined by DOBI Medical to be defective by reason of material or manufacture.
DOBI Medical will bear the cost of shipping such defective Product back to DOBI
Medical.
THIS LIMITED WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR
STATUTORY, INCLUDING BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR USE FOR A PARTICULAR PURPOSE. DOBI MEDICAL'S WARRANTY IS EXCLUSIVE
OF, WITHOUT LIMITATION, THE FOLLOWING:
o Failure of Distributor or customer end user to prepare the site or
provide power requirements or operating environmental conditions in
compliance with any applicable instructions or recommendations of DOBI
Medical.
o Failure of Distributor or customer end user to provide the proper
incoming power required to support the Products in accordance with the
recommendation of DOBI Medical.
o Any modification of Product performed by a party other than DOBI
Medical or an authorized Distributor or a technician certified by DOBI
Medical.
o Combining products or furnishing services which have not been
authorized in publications by DOBI Medical and are deemed by DOBI
Medical to be incompatible with the Products.
o Improper or extraordinary use of the Product, improper maintenance of
the Product, or failure to comply with any applicable instructions or
recommendations of DOBI Medical.
o Misuse, tampering, or negligent storage/handling of the Product by
Distributor or customer end users, its employees, agents, or
contractors.
o Acts of God, acts of civil or military authority, fires, floods, power
failures or electrical power surges, strikes or other labor
disturbances, war, acts of terrorism, riots or other causes beyond the
reasonable control of DOBI Medical.
o Installation, troubleshooting, or repair services are not included in
this warranty, and are provided solely by the Distributor and a
certified technician.
o Any installation, maintenance, repair, service, relocation or
alteration to or of, or any other tampering with the Product,
performed by any person or entity other than DOBI Medical,
Distributor, or a DOBI Medical certified technician without the prior
written approval of DOBI Medical shall immediately void and cancel all
warranties with respect to the Product.
o Products and any portions thereof containing any third party software
or hardware manufactured other than by DOBI Medical, whether sold or
given to Distributor or customer end user hereunder, are provided "AS
IS", and DOBI Medical makes no representations or warranties in
connection thereto. Any warranties that may be associated with any
such third
Page 9 of 27
party items are the sole obligations of such third parties and shall
pass directly through to the customer end user, and are not the
obligation of DOBI Medical.
o Software maintenance after the applicable warranty period to the end
user has expired, unless there is a separate software maintenance
written agreement in effect between the end user and DOBI Medical.
o Any Products or parts damaged in transit. It is the sole
responsibility of Distributor to adequately insure such freight and
examine all cartons and crates carefully at time of delivery. If
damage is apparent, Distributor should make a notation on the delivery
receipt, request an inspection by the freight carrier, and if
applicable, file appropriate claim(s).
7. Limitations of Liability
a) IN NO EVENT SHALL either party BE LIABLE to the other FOR LOSS OF
PROFIT, OR FOR SPECIAL OR CONSEQUENTIAL DAMAGES, OR FOR ANY OTHER INDIRECT
DAMAGES SUCH AS, BUT NOT LIMITED TO, EXEMPLARY OR PUNITIVE DAMAGES, EVEN IF IT
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. Neither party shall not be
liable to the other for any corruption, any down time of the PRODUCTS OR
SERVICES or suspension of the Services OR USE OF THE PRODUCTS, OR FOR any loss
or mistransmission of patient data, or for the security of patient data, or for
any medical or professional malpractice claims. In no event will either party be
liable to the other for loss or damages resulting directly or indirectly, in
whole or in part, from intentional or NEGLIGENCE acts, WILLFUL misconduct,
errors, omissions, insolvency or other fault or circumstances attributable to
any third party.
b) Distributor's AND ANY customer END-USER'S sole and exclusive remedy for
any breach of warranty or representation by DOBI Medical concerning ANY PRODUCTS
AND SERVICES shall be only UPON WRITTEN REQUEST OF Distributor OR customer
END-USER and only if received by DOBI Medical within twelve (12) months of such
ALLEGED breach. In any event, DOBI MEDICAL'S CUMULATIVE LIABILITY TO Distributor
AND ITS customer END-USERs FOR ANY AND ALL CLAIMS RELATING TO THE USE OF OR THE
INABILITY TO USE THE PRODUCTS AND SERVICES SHALL NOT EXCEED THE TOTAL AMOUNT OF
THE FEES paid or owed BY Distributor AND ITS customer END-USER FOR THE PRODUCTS
AND SERVICES, whether based on contract, tort or otherwise.
c) The foregoing limitations of liability represents the allocation of risk
of failure between the parties as reflected in the pricing hereunder and is an
essential element of the basis of the bargain between the parties.
8. Non-Compete and Non-Solicitation
a) Nothing in this Agreement shall prohibit DOBI Medical from itself or
licensing others to market, sell and service the Products and any other products
and services, or use the copyrights and Marks outside the Territory after this
Agreement terminates or expires. DOBI Medical reserves to itself all rights to
market, sell, use and license the Products and Services, Patents, the Marks, and
any other products and services, other than those expressly granted to
Distributor under this Agreement.
b) Except for the manufacturers, Distributor and developers specifically
identified in Schedule C attached hereto, during the term of this Agreement and
for a 180 days after the effective date of its termination or expiration,
Distributor shall not itself offer for sale or represent any manufacturers,
Distributor's or developers of products or other systems or devices with
non-ionizing radiation hardware and software configurations of optical imaging
devices which compete
Page 10 of 27
with the Products and Services, including but not limited to, promoting,
marketing, distributing, selling, leasing, renting or servicing any such
competing products and services. DOBI may, in its sole discretion, unilaterally
amend Schedule C from time to time to 1) include manufacturers, developers and
Distributors of diagnostic, screening or treatment non-ionizing radiation
medical imaging systems which DOBI Medical deems, in its reasonable judgment, to
be competitive with the Products and Services covered by this Agreement or other
competing systems, devices, products and services which DOBI Medical offers for
sale; and 2) take into account mergers and acquisitions among competitors or
which create new competitors.
c) It is understood and agreed that DOBI Medical has expended
substantial time and money in developing and marketing the Products, and that
DOBI Medical has the right to protect and exploit the proprietary information
that is being conveyed to Distributor. Therefore, for a period of 180 days after
the effective date of its termination or expiration, Distributor will not
solicit, directly or indirectly, or encourage anyone to solicit, directly or
indirectly, any customer end-user, whether within the Territory or outside the
Territory, to terminate or replace the Products or Services, or otherwise affect
any end-user's use of the Products or Services in any manner including, without
limitation, promoting any competing product or service. Further, each party
agrees that it shall not directly or indirectly through others, solicit for
employment or hire any employee of the other party during the term of this
Agreement. Former employees shall not be solicited or hired by the other party
for a period of six (6) months after such employee's termination.
d) If any part of this restriction is found to be unreasonable in time
or distance by a court of competent jurisdiction, each unit shall be deemed
separate and may be reduced by appropriate court order as the court deems
reasonable. If a party files suit to enforce this Section, the time periods
shall begin to run upon entry of a final, non-appealable judgment. The parties
agree that breach of this Section would cause irreparable injury to the other
party that it would be without an adequate remedy at law. Accordingly, the party
seeking the injunction shall be entitled to obtain injunctive relief (without
posting any bond or security), in addition to any other legal right or equitable
remedies it may have.
9. Confidential Information
a) Distributor acknowledges that it may acquire certain non-public
knowledge, information, materials, and other trade secrets of DOBI Medical, in
whole or in part, concerning DOBI Medical's business, Products and Services, and
other of its products and services, all of which are proprietary and entirely
owned by DOBI Medical. "Confidential Information" means nonpublic information of
DOBI Medical that should reasonably be understood by the Distributor, because of
legends or other markings, the circumstances of disclosure, or the nature of the
information itself, to be proprietary and confidential to DOBI Medical, an
affiliate of the DOBI Medical or a third party, and includes, without
limitation, information relating to DOBI Medical's, its affiliate's or a third
party's business (including, without limitation, proposals, business plans,
financial information, pricing and discounts, customer, prospect and supplier
lists and information, personnel information and contract information),
properties, methods of operation, Software (including, without limitation,
source code, specifications, data, works in process, alpha and beta versions,
design processes and documentation, and other software of DOBI Medical),
manufacturing and design processes and documentation, trade secrets, inventions,
discoveries, know-how and other intellectual property. Confidential Information
also includes such non-public information that was disclosed by the DOBI Medical
to Distributor prior to the date hereof in connection with the business purpose
hereof, as well as information currently provided and to be provided during the
term of this Agreement. Confidential Information may be disclosed in written or
other tangible form (including on magnetic or optical media) or by electronic,
oral, visual or other means.
b) Confidential Information shall not include information that (i) at any
time becomes a matter of public knowledge without any fault of the Distributor;
(ii) is at any time lawfully received by the Distributor from a third party
under circumstances permitting its disclosure to others; (iii) is
Page 11 of 27
independently developed by the Distributor as evidenced by the
Distributor's own records; (iv) was in Distributor's possession free of any
obligation of confidence at the time of DOBI Medical's communication thereof to
Distributor; and (v) is later published or generally disclosed or furnished to
the public by DOBI Medical. Distributor shall bear the burden of showing that
any of the foregoing exclusions applies to any information or materials.
c) Distributor understands and acknowledges that such Confidential
Information disclosed to it has been developed or obtained by DOBI Medical by
the investment of significant time, effort, and expense, and that such
Confidential Information provides DOBI Medical with a significant competitive
advantage in its business. Therefore, Distributor hereby covenants not to
misappropriate or use the Confidential Information for any reason other than as
specified in this Agreement, including without limitation, for personal or
commercial gain, for a period of six (6) years from the date of disclosure. The
foregoing notwithstanding, any Confidential Information that is designated as a
"trade secret" shall be kept confidential by the Distributor for as long as it
remains a trade secret under New York law.
d) Except as set forth in this Agreement, without the clear and express
prior written consent of a duly authorized representative of the DOBI Medical,
Distributor agrees to hold in strict confidence and not to disclose or reveal
Confidential Information received hereunder to any person except for
Distributor's employees, directors, counsel, sub Distributors, and other
authorized agents and advisors (collectively "Representatives") who are required
to have such Confidential Information in order to perform their functions in
connection with the limited purpose of this Agreement. Each permitted
Representative to whom Confidential Information is disclosed shall adhere to all
aspects of this Agreement. Distributor further agrees not to use any of the
Confidential Information received hereunder except for the purposes set forth in
this Agreement. Further, the parties understand that each other's Confidential
Information may be considered material, non-public information under U.S.
federal and state securities laws and either party could be found in violation
thereof if it takes advantage of such information by (i) trading in the other
party's or any other party's stock, or (ii) furnishing information to others in
connection with the trading of such stock.
e) In the event Distributor or anyone to whom Distributor supplies the
Confidential Information receives a request under the terms of a subpoena or
order issued by, or in conjunction with litigation pending with a court of
competent jurisdiction or a governmental body to disclose all or any part of the
Confidential Information, Distributor agrees, to the extent lawful, to (i)
immediately notify DOBI Medical of the existence, terms and circumstances
surrounding such a request; (ii) consult with DOBI Medical on the advisability
of taking legally available steps to resist or narrow such request; (iii) if
disclosure of such Confidential Information is required, furnish only that
portion of the Confidential Information which, in the opinion of counsel,
Distributor is required to disclose; and (iv) use its best efforts to permit
DOBI Medical at its expense to obtain an order or other reliable assurance that
confidential treatment will be accorded to such portion of the disclosed
Confidential Information which DOBI Medical so designates.
f) All Confidential Information of DOBI Medical and any Derivatives
(defined below) thereof whether created by such DOBI Medical or Distributor or
its Representatives, shall remain the property of DOBI Medical, and no license
or other rights to such DOBI Medical's Confidential Information or Derivatives
is granted or implied hereby. For purposes of this Agreement, "Derivatives"
shall mean: (i) for copyrightable or copyrighted material, any translation,
abridgment, revision or other form in which an existing work may be recast,
transformed or adapted; (ii for patentable or patented material, any improvement
thereon; and (iii)for material which is protected by trade secret, any new
material derived from such existing trade secret material, including new
material which may be protected under copyright, patent and/or trade secret
laws. To the fullest extent permitted by law, Distributor agrees, and will cause
its Representatives to agree, to convey to DOBI Medical or its nominee the
entire right, title, and interest, domestic and/or foreign, which any such party
may have, or a lesser interest therein.
Page 12 of 27
Distributor agrees, and will cause its Representatives to agree, to
promptly, upon DOBI Medical's request, execute all applications for patents,
copyrights, assignments and other appropriate documents, and to perform all acts
and to do all things necessary and appropriate to carry out the intent of this
Section, whether or not such person continues in his capacity as Distributor or
Representative. All materials (including, without limitation, documents,
drawings, models, apparatus, sketches, designs, lists and all other tangible
media of expression) furnished by DOBI Medical to Distributor and which are
designated in writing to be the property of such DOBI Medical, shall remain the
property of such DOBI Medical. At DOBI Medical's request and no later than five
(5) days after such request, Distributor shall promptly destroy or deliver to
such DOBI Medical, at such DOBI Medical's option, (a) all materials furnished to
Distributor by such DOBI Medical, (b) all tangible media of expression in such
Distributor's possession or control to the extent that such tangible media
incorporate any of such DOBI Medical's Confidential Information, and (c)written
certification of Distributor's compliance with such Distributor's obligations
under this sentence.
10. Alterations
a) Distributor agrees itself or through any Representative or other agent
or consultant not to copy, alter, modify or otherwise change the Product(s) sold
or licensed hereunder in any way, and agrees not to reverse engineer,
disassemble, reverse assemble, decompile, or otherwise attempt to derive source
code from the Software or otherwise attempt to design around the Product and
Software, or contest the validity of any Patent or Xxxx owned or applied for by
DOBI Medical or its authorized affiliates.
b) Distributor agrees not to remove or cover any DOBI Medical Marks, trade
name, or logos, or Patent or copyright notices, and not repaint or make other
changes to such Products without the prior express written permission of DOBI
Medical, which may be withheld by DOBI Medical in its sole discretion.
11. Insurance
a) Both parties shall procure and maintain in full force and effect during
the Term of this Agreement, at its own expense, comprehensive commercial general
and product liability insurance covering occurrences within the Territory. Said
insurance policies shall be written on an occurrence basis and shall be with a
top rated insurance carrier(s) reasonably acceptable to the other party, and
shall provide coverage of at least $500,000 US Dollars ($500,000), or equivalent
local currency, per occurrence. Each policy shall name the other party
(including its officers, directors, employees, affiliates, subdistributors, and
agents) as an additional named insured, with all such coverage being primary for
such party. Upon request, each party shall provide the other with certificates
of insurance from its insurance carrier(s) evidencing that such insurance is in
effect. The certificates must state that the insurance cannot be cancelled or
changed without at least thirty (30) days written notice to the other.
12. Mutual Indemnification
a) The following indemnification obligations shall apply with respect to
this Agreement, subject to the limitations set forth herein:
(i) DOBI Medical hereby agrees to defend, indemnify, save and hold
Distributor harmless from and against any loss, claim, demand, action or
expense (including attorneys' fees) arising out of any third party claims
asserted against Distributor to the extent that such a claim is based upon
a breach of any of DOBI Medical's obligations under this Agreement, or
pertaining to the infringement of copyrights, trademarks, or Patents
arising from Distributor's use, as authorized by DOBI Medical, of Products
and Services, Patents and Marks, owned or licensed and supplied by DOBI
Medical under this Agreement, except to the extent that the claim is
causally connected to the acts, omissions or misrepresentations of
Page 13 of 27
the Distributor, its employees, representatives, officers, directors and
agents, or those of its customer end users
(ii) Distributor hereby agrees to indemnify, save and hold DOBI Medical
harmless from and against any loss, claim, demand, action or expense
(including attorneys' fees) arising from or related to the negligent acts
or omissions and the intentional misconduct of the Distributor, or arising
out of any third party claims asserted against DOBI Medical. DOBI Medical
reserves the right to undertake and assume the entire defense of any such
action alleged against it, subject to the other terms and conditions of
this Section.
b) The indemnification obligations contained in this Section shall be
conditioned upon the indemnifying party's receiving:
(i) prompt written notice of any loss, claim, demand, action or expense
for which indemnification is sought, and
(ii) full control of the defense or settlement, and
(iii) reasonable cooperation in the defense of such claim, demand, or
action by the party seeking indemnification. The party seeking
indemnification shall have the right to participate in the defense at its
option and expense.
c) In the event that DOBI Medical's Products, Services, Patents or Marks
become, or in DOBI Medical's sole opinion, likely to become the subject of a
claim of infringement, DOBI Medical shall have the right, at its option and
expense, either to (i) procure for Distributor and its customer end users the
right to continue using the Products, Services, Patents or Marks, or (ii)
replace or modify the same so that they become non-infringing and functionally
equivalent, or (iii) upon failure of (i) and (ii) above, terminate, without any
obligations, Distributor's and its customer end users use of the Products and
Services, and return the purchase price of same.
13. DOBI Medical Copyrights/Marks/Patents
a) Distributor acknowledges that all rights in any of the copyrights,
Patents and Marks associated with the business of DOBI Medical (i.e.,
trademarks, service marks, slogans, logos, designs and other similar means of
distinction), including all goodwill pertaining thereto, shall be the sole
property of DOBI Medical. Distributor may use and display such Marks and Patent
and copyright notices only in the manner and for the purpose authorized by DOBI
Medical, and only during the term of this Agreement. DOBI Medical reserves the
right to add to, change or discontinue the use of any of the copyrights, Marks
or Patents, on a selective or general basis, at any time, and to order
Distributor to change all or some items bearing the Marks to the new Marks
within a reasonable period of time without any liability to DOBI Medical.
Distributor shall not use any trademark or trade name of DOBI Medical in any
corporate, partnership, or business name without DOBI Medical's prior written
consent. In connection with fulfilling its obligations under this Agreement,
Distributor must disclose to its potential customers and the general public that
it is an authorized Distributor and licensee of DOBI Medical Systems, Inc. In
the event that Distributor wishes to affix its label on any Product, Distributor
must obtain DOBI Medical's prior approval as to its design, size, location, and
overall appearance.
b) Distributor agrees that nothing in this Agreement gives it any right,
title or interest in the copyrights, Patents or the Marks (except the right to
use the Marks in accordance with this Agreement), that the copyrights, Patents
and the Marks are the sole property of DOBI Medical and its affiliates, that
Distributor shall not directly or indirectly contest the validity of the
copyrights, Patents and the Marks, or ownership of the copyrights, Patents and
the Marks, or DOBI Medical's right to license the copyrights, Patents and the
Marks, and that any and all uses by Distributor of the copyrights, Patents and
the Marks, and the goodwill arising there from, shall inure solely and
exclusively to the benefit of DOBI Medical. Further, upon the termination of
this Agreement,
Page 14 of 27
Distributor shall cease all further use in its business of trademarks or
trade names identical or similar or confusingly similar to "DOBI Medical" or any
others of its Marks.
c) DOBI Medical will provide all Products sold to Distributor with
instruction manuals and critical caution, warning and packaging labels, written
in English language. With regards to changing equipment silk screens and panels
with translated copy, DOBI Medical and Distributor will discuss and mutually
agree to these in writing on a case-by-case basis. In the event that the
original labeling is not lawful for use in the Territory or does not comply with
all legal requirements for labeling material of the classification(s) into which
the Product fit, Distributor will advise DOBI Medical so they may re-label all
such Products so as to meet all applicable legal requirements. Distributor will
bear the cost of such relabeling. Distributor will not remove any labels from
the Products nor add anything thereto without the written consent in each
instance of DOBI Medical.
d) DOBI Medical represents and warrants that it owns or has the
unencumbered right to utilize and license to Distributor all Marks, Software,
Products, copyrights and Patents and other intellectual property as under this
Agreement. DOBI Medical further represents and warrants that the Products, and
its Marks and Patents, Software are not currently the subject of any litigation
and do not to the best of its knowledge infringe the rights of any third
parties.
e) Unless specifically authorized to do so under this Agreement, and to the
extent necessary by either party to carry out its obligations hereunder, neither
party shall use the other party's name, logos, marks, or other intellectual
property for any reason whatsoever, including without limitation advertising and
references, without the prior written consent of that party, except that each
party may refer to the other privately in discussions with its potential
investors and potential Distributors and customers, or as may be required to
meet governmental disclosure and securities laws. The parties acknowledge that
the other owns valuable property rights in all its marks, names, designs, logos,
patents, and trade secrets. None of these rights are being granted to the other
unless specified otherwise in this Agreement. Neither shall represent that it
owns any rights in the other's intellectual property. All use of such
intellectual property shall inure to the benefit of the owner thereof.
14. Agreement Term
a) The term of this Agreement shall commence on the Effective Date, and
shall continue for ____________ months, unless sooner terminated in accordance
with the provisions hereof. Termination of this Agreement shall not terminate
either party's obligation to pay for all Products and Services or warranties
performed under the Agreement prior to discontinuation of performance due to
termination. Those provisions of this Agreement which by their nature extend
beyond termination or expiration will survive and remain in effect until all
obligations there under are satisfied, including without limitation, the
provisions dealing with warranty, confidentiality, legal and equitable ownership
to intellectual property, no compete and non-solicitation, Confidential
Information, termination, indemnification, limitation of liability, arbitration,
choice of law and payment of fees.
15. Termination
a) It shall constitute a material default under the Agreement, with the
corresponding right of termination as stated below, if any of the following
shall occur:
(i) In the event Distributor fails to pay any amounts due hereunder and
such failure continues for a period of ten (10) days or more from the
original due date, then the Agreement may be immediately terminated by DOBI
Medical. If Distributor disputes any invoice, it must notify DOBI Medical
in writing within ten (10) days of receipt of the
Page 15 of 27
invoice and must pay the undisputed portion of the invoice in accordance
with the terms of this Agreement.
(ii) In the event of a violation by a party of any provision of this
Agreement (other than the non-payment of monies) which violation continues
uncured for a period of thirty (30) days after written notice to the other
party specifying such violation, then the Agreement may be immediately
terminated by the non-breaching party.
(iii) In the event a party makes an assignment for the benefit of
creditors, files a voluntary petition in bankruptcy, is adjudicated
insolvent or bankrupt, a proceeding is filed against said party to declare
said party bankrupt and said proceeding is not dismissed within thirty (30)
days, or said party commences any proceeding under any reorganization,
arrangement, readjustment of debt or similar law or statute of any
jurisdiction, then this Agreement may be terminated by the other party
effective upon written notice.
(iv) If Distributor markets sells, or services the Products or Services
outside of the Territory (except upon the prior written consent of DOBI
Medical), then DOBI Medical may immediately terminate this Agreement.
(v) If Distributor fails to meet the minimum purchase requirements on a
per year period as agreed to and set forth on Schedule B, then DOBI Medical
may immediately terminate this Agreement effective upon written notice with
no rights to cure such default. Time is of the essence
(vi) If Distributor consistently fails after three written warnings from
DOBI Medical to meet minimum service standards as published by DOBI
Medical, or receives three customer service complaints within any trailing
three month period which have not been satisfactorily responded to and
attended to, or if Distributor fails to meet and maintain the minimum
number of certified applications trainers and certified field trainers,
then DOBI Medical may immediately terminate this Agreement. During such
period that Distributor has received such a notice of default, DOBI Medical
may itself or cause another to provide such Services to the customer end
user without any liability to Distributor.
(vii) Distributor's failure to strictly enforce the terms and conditions
of any sublicense agreement against any of its subdistributors. Any default
of subdistributors not cured within the cure period, will also be deemed a
default of Distributor under this Agreement.
b) All remedies are cumulative and may be pursued concurrently or
separately. Pursuit of one remedy is not an election of remedies or a waiver of
another remedy. Delay or failure to pursue a remedy will neither waive the
remedy nor modify the terms of this Agreement. Upon termination of the
Agreement, at the election of DOBI Medical, it may continue to provide
Distributor with service and technical and safety bulletins in order for
Distributor to provide warranty and post-warranty service to customer end users
or it may itself or license others to provide same. Within three (3) business
days after termination of this Agreement, Distributor shall submit to DOBI
Medical i) a complete list of all prospective or pending customers in which
Distributor was involved prior to the termination of this Agreement and that
have not been consummated or otherwise finalized at the time of such
termination; and ii) a complete list of the identities of any customer end-users
by name and address, phone number and contact person. Distributor further agrees
at its expense to deliver to DOBI Medical within three (3) business days after
the termination of this Agreement, all marketing literature, price lists,
specification sheets, training and technical manuals, and all other documents
and things in its possession or control relating to this Agreement, and to
return to DOBI Medical, for credit for returned goods consistence with past
practice under the
Page 16 of 27
Agreement, its demonstration Product and any other Products or replacement parts
it has in inventory. DOBI Medical will pay Distributor any fees that may be due
Distributor if any such leads are sold within 180 days after the termination
date, provided that Distributor complies with the termination requirements
herein, and is current in any obligations it owes DOBI Medical.
16. Compliance with Laws
a) Each party will comply with any applicable federal, state, local, or
other governmental laws and regulations or industry practices in connection with
their respective rights and obligations under this Agreement. The parties agree
to comply fully with all applicable regulations of the United States Department
of Commerce and with the United States Export Administration Act, as amended
from time to time, and with all applicable laws and regulations of other
jurisdictions with respect to the importation and use of the Products and
Services to assure that such are not exported, imported or used in violation of
law.
b) In the event of any governmental law, regulation or action forbidding
performance of any obligations of DOBI Medical or Distributor hereunder, or in
the event of inability, after exercising due diligence, reasonable best efforts
and good faith, of either to obtain any governmental action required for the
performance of its obligations hereunder, DOBI Medical or Distributor shall be
excused from the performance of such obligations except for the obligations
which survive termination. In such cases, the non-defaulting party shall be
entitled, without liability to the other party, to terminate this agreement.
c) Each party represents and warrants that it is a duly formed and validly
existing corporation in good standing pursuant to the laws of its domicile, that
it has the full power, authority and legal right to execute, deliver and perform
its obligations under this Agreement, and that it has not directly or indirectly
offered, promised, or authorized to pay, or paid any compensation, or given
anything of value to any official, agent, or employee of any government or
governmental agency, or any candidate for or holder of political office, in
exchange for any approval of this Agreement and the transactions that may arise
from it.
17. Amendments
a) This Agreement cannot be amended or modified in any manner except by a
formal amendment to this Agreement in writing duly executed and signed by a duly
authorized officer of DOBI Medical and of the Distributor.
18. Assignment or Transfer
a) Except as otherwise specifically provided herein, this Agreement shall
not be assigned by either party, in whole or in part, without the prior written
consent of the other party, which consent shall not be unreasonably withheld or
delayed; except that DOBI Medical may assign this Agreement in whole or in part
without such consent to a parent, affiliate, subsidiary, successor-in-interest
or in connection with an acquisition, merger, sale of substantially all its
assets and/or stock, or a change of ownership resulting in over 50% voting
control, as long as the assuming party remains liable for all then existing
obligations, fees and warranties due and owing through the assignment date. Any
attempted assignment not permitted hereunder shall be void and shall be deemed a
material breach of this Agreement. In the event of a change of ownership
resulting in over 50% voting control with respect to DOBI Medical, either party
may terminate this Agreement by giving the other 180 days written notice.
19. Notices
a) Except as otherwise specifically provided herein, any notice required or
permitted to be sent by this Agreement will be in writing and will be (i)
delivered by hand; (ii) sent by electronic medium (if the receiving machine
confirms receipt and the sending machine prints a paper copy of the
Page 17 of 27
answerback message); or (iii) mailed by registered, certified or other
prepaid, receipted or express delivery service, to the address. Complying
notices will be effective (a) when delivered by hand; (b) when sent by
electronic media, receipt confirmed; (c) three (3) business days after deposited
in the mail in the manner required above, with proper postage prepaid; or (d)
three (3) business days after deposited with an express delivery service.
Notices will be addressed as follows, or as from time to time directed in
writing by either party, by notice given hereunder:
To Distributor:
To DOBI Medical: DOBI Medical International, Inc.
0000 XxxXxxxxx Xxxx.
Xxxxxx, XX, XXX. 00000
Attention: General Counsel, Xxxxx X. Xxxxxxx
Phone No. (201) 760-6464 ext. 225
Fax No. (000) 000-0000
20. Independent Contractor
a) The relationship of DOBI Medical and Distributor established by this
Agreement is and at all times will remain one of independent contractors, and
except for the rights of Distributor hereunder, neither party will at any time
or in any way represent itself as being an agent or other representative of the
other party or as having authority to assume or create obligations or otherwise
act in any manner on behalf of the other party. Nothing in this Agreement shall
be construed as creating a franchise, partnership, or joint venture. Nothing
here shall be construed as implying that employees of either party are employees
of the other party for any purposes whatsoever.
21. Waiver/Severability
a) Any waiver or delay in the exercise by a party of its right to terminate
or enforce any provision of this Agreement for any breach by the other party
will not prejudice such party's right of termination or enforcement for such
breach or any further, continuing, or other breach by the other party.
b) If any provision of this Agreement is, for any reason, held
unenforceable or invalid in any respect under the laws of any jurisdiction where
enforcement is sought, the invalidity or unenforceability will not affect (i)
any other provision of this Agreement and this Agreement will be construed as if
such unenforceable or invalid provision was not contained herein; and (ii)
enforcement or validity of such provision in any other jurisdiction.
22. Arbitration.
a) Except for disputes relating to Sections 8, 9, 10, and 13 of this
Agreement, any and all other disputes or controversies that shall arise under or
in connection with this Agreement or in any other way relate to this Agreement,
including its termination, shall be submitted to a panel of three arbitrators
(one arbitrator if the amount in dispute in less than $50,000) under the
International Arbitration Rules of the International Center for Dispute
Resolution, a division of the American Arbitration Association then in effect.
The parties hereby acknowledge that the United States Arbitration Act (9 USC
ss.ss.1-16) takes precedence over any state arbitration statutes, rules and
regulations, domestic or foreign. Each of the arbitrators shall be qualified and
experienced in the business and laws of contracts and licensing, with at least
one arbitrator also being a licensed
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attorney. The arbitrator(s) must base their determination solely on the
terms and conditions of this Agreement and the laws in the State of New York.
The arbitrator(s) shall have the authority to award any remedies that a court
may order or grant, except that they will have no authority to award punitive
damages or any other damages not measured by the prevailing party's actual
damages, and may not in any event make any ruling, finding or award that does
not conform to the terms and conditions of this Agreement. Arbitration shall be
held in New York, New York. The parties hereby agree to accept service of
process at its principal office address and agree to the exclusive, personal
jurisdiction, forum and venue as set out herein, and waive all arguments of
forum non-conveniens. Both parties expressly covenant and agree to be bound by
the decision of the arbitrator(s) as the final determination of the matter in
dispute. Judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof. Each party will be responsible for its
own attorneys' fees and expenses except as otherwise provided under this
Agreement.
23. Force Majeure
a) Neither party shall be liable to the other for failure or delay in the
performance of a required obligation if such failure or delay is caused by an
act of any federal, state or local governmental authority, act of God, loss of
communication, delay of the other party or third parties, strike, war, acts of
terrorism, riot, fire, flood, lightning, electrical power failure, natural
disaster or other similar cause beyond its control. Written notice within thirty
(30) days of any such condition shall be provided. Either party may terminate
this Agreement if such force majeure continues for a period of ninety (90) days.
24. Integration
a) This Agreement constitutes the entire agreement of the parties and
supersedes any other agreement or understanding, written or oral that may have
been made or entered into with regard to the subject matter hereof.
25. Press Releases
DOBI Medical and Distributor agree to issue a joint press release at a time
to be mutually agreed upon by the parties.
26. Governing Law/Interpretation
a) This Agreement will be construed and enforced in accordance with the
laws of New York as applied to contracts entered into in and performed in New
York, New York, USA, as between New York residents without giving effect to its
conflicts of law provisions. The parties agree that any dispute hereunder not
arbitrated shall be submitted to the courts of the State of New York or the
United States Southern District Court for New York, New York if federal
jurisdiction exists with respect to such dispute. The parties hereby agree that
service of process may be made pursuant to the notices provision of this
Agreement. The parties agree to the exclusive personal jurisdiction, forum and
venue as set out herein, and waive all arguments of forum non-conveniens. The
section headings of this Agreement are for convenience only and will neither be
considered a part of, nor affect the construction or interpretation of any
provision of this Agreement. The parties hereto acknowledge and agree that they
have each had the benefit of counsel and participated in the drafting of this
Agreement. Therefore, the rule of law which provides that if an ambiguity is
found to exist in the Agreement, the ambiguity is construed against the party
who drafted the agreement, shall not apply to the interpretation of this
Agreement.
b) No government procurement regulations or contract clauses are binding on
either party unless required by law or mutually agreed to.
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27. Integration/Counterparts
a) This Agreement may be executed in any number of counterparts, each of
which shall be deemed original, but such counterparts together shall constitute
but one and the same instrument. This Agreement constitutes the entire agreement
of the parties and supersedes any other agreement or understanding, written or
oral that may have been made or entered into with regard to the subject matter
hereof. The parties intend and agree that a photocopy or facsimile of this
Agreement with their signatures thereon shall be treated as an original and
shall be deemed to be as binding, valid, genuine, and authentic as an
original-signature document for all purposes including all matters of evidence
and the "Best Evidence" rules.
28. Authority
The undersigned represent and warrant that they are the persons legally
authorized by the indicated entities to execute this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
DOBI MEDICAL INTERNATIONAL, INC.
By: ______________________________ By: ______________________________
Authorized Officer Xxxxx X. X'Xxxxxx
Name: Senior Vice President, Sales and
Title: Marketing
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SCHEDULE A
NON-EXCLUSIVE TERRITORY
Page 21 of 27
SCHEDULE B
PRODUCT(S)
The DOBI Medical Product subject to this Agreement is the standard ComfortScan
system configuration.
Suggested Retail List Price as of the Effective
Date of this Agreement............................... $140,000.00/Unit
While this is the suggested retail price that DOBI Medical recommends that
Distributor resell this Product, Distributor is free to sell the Product for
whatever price it wishes.
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SCHEDULE C
LIST OF DISTRIBUTOR CONTRACTS WITH OTHER COMPETING MANUFACTURERS,
DEVELOPERS AND DISTRIBUTORS PURSUANT TO SECTION
8.B) OF THE AGREEMENT
Page 23 of 27
SCHEDULE D
PRICING DISCOUNTS AND MINIMUM PURCHASE REQUIREMENTS
During the initial term of this Agreement, Distributor's discount off the
then current suggested retail price for the DOBI Medical Standard ComfortScan
system configuration, (the "Product" or "Unit"), is based on the following:
Unit Price Discount from List __%
Distributor's discount for replacement parts for the Product is __% off of
the then current suggested retail price as listed in DOBI Medical's equipment
parts pricing book.
MINIMUM PURCHASE REQUIREMENTS--SECTION 3.C) OF THE AGREEMENT.
Distributor must purchase the following minimum Units per year.
MINIMUM UNITS PER YEAR*
First 12 months ___ _ComfortScan systems
*Within 5 calendar days after the each quarterly period, or more often if
requested by DOBI Medical, Distributor shall submit to DOBI Medical a written
quarterly sales reports projected out over the following 12 month period,
including its list of prospective customers.
NOTES:
1) Standard options and/or accessories to configured systems can be sold by
Distributor at same discount schedule.
2) Prices do not include any applicable taxes, duties, or tariffs, or any
shipping, insurance and handling costs.
3) Minimum units per year are cumulative and subject to Sections 3.c) and
15.a.(v) of the Agreement concerning DOBI Medical's right to terminate
this Agreement if such minimum purchase requirements are not meet. Time
is of the essence for Distributor to meet these minimums.
4) All purchase orders shall contain at a minimum the following
information:
Purchase order number
Xxxx to and ship to name and address
Product description and model number
Requested delivery date
Shipping method
Correct price
5) Purchase orders shall be addressed to
DOBI Medical International, Inc
0000 XxxXxxxxx Xxxx.
Xxxxxx, XX 00000, XXX
Attention: Sales Dept
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SCHEDULE E
CUSTOMER END USER AGREEMENT TERMS
All Distributors' Customer End User Agreements covering the sublicense of
DOBI Medical International, Inc.'s Software affixed to the Products, and the
Patents related to the Products shall include substantially the following
provisions:
1. Only a non-exclusive, non-transferable and perpetual right to use the
Software affixed to the Products and the patents related to the Products only in
the configuration in which the Product and Software is sold or subsequently
upgraded by DOBI Medical, and within the scope of the Agreement is granted by
this sublicense. The End-User agrees that End-User will not assign, sublicense,
transfer, pledge, lease, rent or share End-User's rights under this Agreement.
2. Distributor's licensor, DOBI Medical International, Inc. ("DOBI
Medical"), retains the entire right, title and interest to the Software,
copyrights, Patents and Marks, and all copies and portions thereof, and no title
to the Software or the Patents or the Marks related to the Products are
transferred to the Distributor or Customer End-User. The Software and Products
contain proprietary and confidential Information of Distributor's licensor, DOBI
Medical Systems, Inc., and are considered by such licensor to constitute
valuable intellectual property. The Customer End-User will protect the
Product(s) and Software and Confidential Information with at least the same
degree of care with which the Customer End-User protects its own similar
confidential information.
3. Customer End-User agrees itself or through any agent or consultant not
to copy, alter, modify or otherwise change the Product(s) sold or licensed
hereunder in any way, and agrees not to reverse engineer, disassemble, reverse
assemble, decompile, or otherwise attempt to derive source code from the
Software or otherwise attempt to design around the Product and Software, or
contest the validity of any Patent or Xxxx owned or applied for by DOBI Medical
or its authorized affiliates. Distributor and DOBI Medical reserve the right to
audit the Customer End-User's deployment and use of the Products and Services
for compliance with the terms of this agreement, with Distributor's Agreement
with DOBI Medical, and with all applicable laws, at any time during the customer
end user's normal business hours upon reasonable notice.
4. Representations and Warranties
a) Without prejudice to any local law, DOBI Medical represents and warrants
to the original Customer End User that the Products shall be free from defects
in material or manufacturing, except minor errors that do not materially affect
functionality or performance, and shall conform substantially to applicable
specifications in effect as of the date of delivery of the Product, when
properly installed by Distributor's certified technician and when subjected to
normal, proper and intended usage and operation by a technician of customer end
user certified by Distributor.
b) DOBI Medical Products shall be warranted for a period of 12 months from
the time of original installation, the date of which will be determined by a
completed, returned warranty card, which must be received by DOBI Medical within
30 days of Product installation. If the warranty card is not timely received by
DOBI Medical, then the warranty shall take effect 12 months from the date of
shipment by DOBI Medical. In no event shall the warranty exceed 15 months from
the date of shipment from DOBI Medical. Repair and replacement parts will be
warranted for 90 days from installation or 12 months from shipment, whichever is
sooner. Any component furnished without charge during the warranty period to
correct a warranty failure shall be warranted only to the extent of the
unexpired term of the warranty of the original Product or replacement part.
c) Subject to Section 4.b) above, in the event that a documented and
reproducible flaw n the Product(s) inconsistent with this warranty is
discovered, DOBI Medical shall use commercially
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reasonable efforts to correct such flaw in a timely manner. At DOBI
Medical's option and at no cost to or expense to customer end user, DOBI Medical
shall correct any such failure by 1) repairing, adjusting, or replacing any
defective or non-conforming Products or parts, or 2) by making available any
necessary repaired or replacement parts or assemblies, 3) by furnishing either
new or exchanged replacement parts or assemblies. All returned Products and
parts shall become the property of DOBI Medical if determined by DOBI Medical to
be defective by reason of material or manufacture. DOBI Medical will bear the
cost of shipping such defective Product back to DOBI Medical.
d) All Confidential Information of DOBI Medical and any Derivatives
(defined below) thereof whether created by such DOBI Medical or Distributor or
its Representatives or by Customer End User or its agents or consultants, shall
remain the property of DOBI Medical, and no license or other rights to such DOBI
Medical's Confidential Information or Derivatives is granted or implied hereby.
For purposes of this Agreement, "Derivatives" shall mean: (a)for copyrightable
or copyrighted material, any translation, abridgment, revision or other form in
which an existing work may be recast, transformed or adapted; (b) for patentable
or patented material, any improvement thereon; and (c)for material which is
protected by trade secret, any new material derived from such existing trade
secret material, including new material which may be protected under copyright,
patent and/or trade secret laws. To the fullest extent permitted by law,
Customer End User agrees, and will cause its agents and consultants to agree, to
convey to DOBI Medical or its nominee the entire right, title, and interest,
domestic and/or foreign, which any such party my have, or a lesser interest
therein. Customer End User agrees, and will cause its agents and consultants to
agree, to promptly, upon DOBI Medical's request, execute all applications for
patents, copyrights, assignments and other appropriate documents, and to perform
all acts and to do all things necessary and appropriate to carry out the intent
of this Section, whether or not such person continues in his capacity as a
customer, agent or consultant
THIS LIMITED WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR
STATUTORY INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR USE FOR A PARTICULAR PURPOSE. DOBI Medical's WARRANTY IS EXCLUSIVE
OF, WITHOUT LIMITATION, THE FOLLOWING:
o Failure of customer end user to prepare the site or provide power
requirements or operating environmental conditions in compliance with
any applicable instructions or recommendations of DOBI Medical.
o Failure of customer end user to provide the proper incoming power
required to support the Products in accordance with the recommendation
of DOBI Medical.
o Any modification of Product performed by a party other than DOBI Medical
or an authorized Distributor and DOBI Medical certified technician.
o Combining products or furnishing services which have not been authorized
in publications by DOBI Medical and are deemed by DOBI Medical to be
incompatible with the Products
o Improper or extraordinary use of the Product, improper maintenance of
the Product, or failure to comply with any applicable instructions or
recommendations of DOBI Medical.
o Misuse, tampering or, negligent storage/handling of the Product by
Distributor or customer end uses, its employees, agents or contractors.
o Fuses, glassware, high voltage cables and other items deemed by DOBI
Medical to be expendable.
o Acts of God, acts of civil or military authority, fires, floods, power
failures or electrical power surges, strikes or other labor
disturbances, war, acts of terrorism, riots or other causes beyond the
reasonable control of DOBI Medical.
o Installation, troubleshooting, or repair services provided by the
Distributor.
o Any installation, maintenance, repair, service, relocation or alteration
to or of, or any other tampering with the Product, performed by any
person or entity other than DOBI Medical or
Page 26 of 27
Distributor or a DOBI Medical certified technician without the prior
written approval of DOBI Medical, shall immediately void and cancel all
warranties with respect to the Product.
o Products and any portions thereof containing any third party software or
hardware manufactured other than by DOBI Medical, whether sold or given
to customer end user hereunder, are provided "AS IS", and DOBI Medical
makes no representations or warranties in connection thereto. Any
warranties that may be associated with any such third party items are
the sole obligations of such third parties directly to the customer end
user, and not DOBI Medical.
o Any Products or parts damaged in transit.
5. Training.
End user shall at all times have a fully trained and certified clinical
technician operating the ComfortScan(TM) system for acquiring patient scans.
Likewise, end user shall have on staff a licensed radiologist physician
certified in the use and reading of the ComfortScan system patient scans.
6. Limitations of Liability
a) customer END-USER'S sole and exclusive remedy for any breach of warranty
or representation by DOBI Medical concerning ANY PRODUCTS AND SERVICES shall be
only UPON WRITTEN REQUEST OF customer END-USER if received by DOBI Medical
within twelve (12) months of such ALLEGED breach. In any event, DOBI MEDICAL'S
CUMULATIVE LIABILITY ITS customer END-USER FOR ANY AND ALL CLAIMS RELATING TO
THE USE OF OR THE INABILITY TO USE THE PRODUCTS AND SERVICES SHALL NOT EXCEED
THE TOTAL AMOUNT OF THE FEES PAID ITS customer END-USERs FOR THE PRODUCTS AND
SERVICES, whether based on contract, tort or otherwise. A IN NO EVENT SHALL DOBI
MEDICAL BE LIABLE FOR LOSS OF PROFIT, OR FOR SPECIAL OR CONSEQUENTIAL DAMAGES,
OR FOR ANY OTHER INDIRECT DAMAGES SUCH AS, BUT NOT LIMITED TO, EXEMPLARY OR
PUNITIVE DAMAGES, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. DOBI Medical shall not be liable for any corruption, any down time of
the PRODUCTS OR SERVICES or suspension of the Services OR USE OF THE PRODUCTS,
OR FOR any loss or mistransmission of patient data, or for the security of
patient data, or for any medical or professional malpractice claims. In no event
will DOBI Medical be liable for loss or damages resulting directly or
indirectly, in whole or in part, from errors, omissions, insolvency or other
fault or circumstances attributable to any third party. The foregoing
limitations of liability represent the allocation of risk of failure between the
parties as reflected in the pricing and is an essential element of the basis of
the bargain between the parties.
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