EXHIBIT 10.1
DISTRIBUTION AGREEMENT
This Distribution Agreement between QuantRx Biomedical Corporation, a
Nevada corporation ("Supplier"), with offices at 000 Xxxxxxxxxx Xx., Xxxxx 000,
Xxxxxx, XX 00000 and SYNOVA HEALTHCARE, INC., a Delaware corporation,
("Distributor" or "DISTRIBUTOR"), with its offices at 0000 Xxxxx Xxxxxxxxxx
Xxxx, Xxxxx 0000, Xxxxx, Xxxxxxxxxxxx, 00000, (the "Parties") is effective as of
July 7, 2006 ("Effective Date").
BACKGROUND
Supplier manufactures and/or supplies products and seeks to establish
or enhance distribution in certain territories. Distributor distributes products
and seeks to distribute additional products to its customers. Supplier desires
to appoint Distributor as an exclusive distributor in certain territories of
certain products, accessories and related goods to be supplied by Supplier and
Distributor desires to accept such appointment.
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged hereby, and intending to be legally bound
hereby, Distributor agrees to purchase and Supplier agrees to sell products upon
the following terms and subject to the following conditions:
1. DEFINITIONS
The following terms have the meaning indicated here when used in this
Agreement:
1.1 "Affiliate": With respect to either Party, means any person, firm,
corporation, other legal entity which controls or is controlled by or under
common control with such Party.
1.2 "Products": Means all products, supplies, accessories, parts and
needed goods listed in Exhibit 1 as well as any and all updates, enhancement
sets, or follow-on products relating to the Products, and any other products
that the Parties mutually agree to add to Exhibit 1.
1.3 "Territory": Territory means the United States of America,
which territory may be expanded pursuant to Section 3 below.
2
2. APPOINTMENT
Supplier hereby appoints Distributor as the exclusive distributor of
the Products in the Territory. Distributor agrees to use commercially reasonable
efforts to promote, sell and support the Products to customers of the Products.
Subject to Section 4 below, Supplier may not, directly or indirectly, appoint,
license or otherwise grant to any third person the right to sell, promote,
license or distribute the Products in the Territory. Distributor may not
sublicense or appoint sub-distributors without the prior written approval of
Supplier, and Distributor shall purchase all Products from Supplier.
Notwithstanding anything to the contrary set forth in this Agreement,
Distributor may not, directly or indirectly, sell or distribute, or take any
actions to sell or distribute, the Products outside the Territory.
3. EXPANSION OF TERRITORY
The term Territory shall be amended to include Canada and Mexico if
Distributor meets the Minimum Sales Milestones for Year 1 as more fully
described in Section 4 below. For the purpose of preserving DISTRIBUTOR'S rights
in such an expanded Territory, Supplier shall not take any action that would
frustrate or limit those rights, including, without limitation, directly or
indirectly granting any distribution, licensing or similar rights to any third
party for the Products in Canada or Mexico prior to the conclusion of Year 1
(and any applicable cure period).
4. EXCLUSIVITY MILESTONES AND TERMINATION
The Distributor's exclusivity granted in Section 2 above is conditional
upon its achieving the annual Exclusivity Milestones set forth below. In the
event that the Distributor fails to achieve any one of the annual Exclusivity
Milestones, unless such failure shall be as a direct result of Supplier's
failure to deliver saleable Product in a timely manner or other action or
failure to act, Supplier shall be entitled to cancel (a) the Distributor's
exclusivity under this Agreement or (b) this Agreement, each upon thirty (30)
days prior written notice; provided, however, if within such thirty (30) day
period the Distributor cures or otherwise achieves the Exclusivity Target, the
Distributor's exclusivity, or this Agreement as applicable, shall continue to be
in effect; provided, further, however, if Supplier fails to prosecute or
otherwise abase any actual or potential infringement, interference, or
misappropriation of any right, title, or interest in or to the Products in the
Territory of which it has actual knowledge, Supplier shall not have the right to
cancel or terminate Distributor's exclusivity and/or this Agreement.
3
For purposes of the following, a "Unit" shall mean a box of 24 Product pads
individually folded and wrapped in plastic with one package insert containing
patient instructions. The pads shall be wrapped in plastic and folded
substantially similar to the packaging samples provided to Distributor. "Net
Unit Sales" shall mean Units sold to Distributor by Supplier.
EXCLUSIVITY MILESTONES
YEAR NET UNIT SALES
(QUARTERLY/ANNUALLY)
1 [*]
2 [*]
3 [*]
4 [*]
5 [*]
Year one shall begin on the first day of the month immediately
following the first shipment of Products by Distributor to its initial
customer(s) ("Day 1") and such first shipment will occur on or before November
1, 2006. Each successive year shall be for the 12 month period immediately
following the conclusion of the prior year.
5. FUTURE PRODUCTS
Supplier shall offer to DISTRIBUTOR the right to be the exclusive
distributor in the Territory of any and all future lines extensions and products
or components intended to be used with the Products or its components for
alternative hemorrhoid treatment or feminine healthcare treatment ("Future
Products"). At such time when Supplier wishes to distribute any Future Products
in the Territory, it will offer the opportunity to DISTRIBUTOR and the Parties
shall engage in good faith negotiations regarding the terms and conditions,
including but not limited to pricing, pursuant to which the Distributor will
have the right to distribute Future Products in the Territory. If after thirty
(30) days the parties have been unable to reach an agreement and have acted in
good faith, Supplier may enter into negotiations with third parties. If Supplier
intends to enter into an agreement with a third party with respect to
distribution of the Future Products in the Territory, it shall first offer to
DISTRIBUTOR a right of first refusal with respect to such agreement. DISTRIBUTOR
must exercise such right of first refusal within ten (10) business days after
Supplier conveys the terms and conditions of such agreement. Notwithstanding
anything to the contrary set forth in this Agreement, Distributor may not,
directly or indirectly, sell or distribute, or take any actions to sell or
distribute, Future Products outside of the Territory and does not have any right
of first refusal with respect to the sale or distribution of Future Products
outside the Territory.
[*] The redacted information (indicated by "[*]") is confidential information
that has been filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
4
6. TERM OF AGREEMENT
The initial term of this Agreement shall commence on The Effective Date
and, unless sooner terminated as provided in the Agreement, shall continue in
effect for a period of five (5) years after Day 1. This Agreement shall
automatically renew thereafter for successive one (1) year periods unless either
Party gives notice of termination no later than sixty (60) days prior to
expiration of the then-current term.
7. ENGAGEMENT FEE AND SHARED REVENUE
7.1 Upon execution of this Agreement, DISTRIBUTOR shall pay to Supplier
an engagement fee equal to $500,000. The Engagement Fee shall be non-refundable
unless Supplier is in material breach of any of the representations and
warranties set forth in Section 16 hereof, including, without limitation,
Section 16.1.3 relating to ownership of intellectual property. In consideration
of the Engagement Fee, Supplier may not sell or offer an alternative or
competing product that is competitive with the Products in the Territory, such
as the QuantRX/A-Fem Pad, for use in the treatment of hemorrhoids.
Notwithstanding the foregoing, Supplier may make limited internet sales of such
competing products (not to exceed $250,000 in the aggregate) until such time as
DISTRIBUTION'S gross sales exceed $2 million in the aggregate.
7.2 In addition, consideration of Supplier's supply chain and other
services hereunder, DISTRIBUTOR shall pay an amount equal to [*] percent of
its net sales of Products to Supplier. Net sales shall be calculated for the
period ending September 30, 2006 and thereafter for successive three month
periods. The fee shall be due and payable within thirty (30) days after the end
of each three months period. Upon request by Supplier, DISTRIBUTOR shall provide
Supplier with reasonably detailed information supporting its calculation of net
sales. The Supplier will have the right to reasonably audit the sales records of
the Distributor once annually at the Distributor's location and the Supplier's
expense.
8. PRICES AND PAYMENTS
8.1 The Prices for the Products shall be as set forth in Exhibit 1.
Prices include the Product, freight, duties and insurance to the F.O.B.
destination of Portland, Oregon. Supplier shall provide written notice to
DISTRIBUTOR of any price increase no later than ninety (90) days prior to the
effective date of the price increase and may not increase prices prior to
January 1, 2008. Any price increases shall be commercially reasonable.
DISTRIBUTOR shall pay any and all sales taxes or other amounts levied upon the
sale, transportation, delivery use or consumption of the Products.
[*] The redacted information (indicated by "[*]") is confidential information
that has been filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
5
8.2 All purchase orders shall be deemed to incorporate the pricing,
delivery and other terms of this Agreement and no terms or conditions set forth
in any purchase order shall modify the provisions of this Agreement unless
mutually agreed in a writing signed by authorized officers of each Party.
8.3 Distributor's payment for all orders shall be net thirty (30)
days after receipt of invoice by DISTRIBUTOR.
8.4 Interest shall accrue on any delinquent amounts of the lesser of
ten (10%) percent per year and the maximum rate permitted by applicable law.
9. TERMINATION
9.1 If either Party materially breaches or fails to perform any of the
obligations imposed upon it under the terms of this Agreement, the other Party
may terminate the Agreement if the breaching Party fails to cure such breach
within thirty (30) days after receiving written notice of such breach from the
non-breaching party.
9.2 To the extent permitted by law, if either Party becomes insolvent,
is unable to pay its debts when due, files for bankruptcy, is subject of
involuntary bankruptcy, has a receiver appointed, or has its assets assigned for
the benefit of creditors, the other Party may terminate this Agreement
immediately upon notice to the other Party and may cancel any unfulfilled
obligations.
9.3 Upon the termination of this Agreement by either Party for
any reason whatsoever.
9.3.1 DISTRIBUTOR shall immediately remit all sums due and
owing to Supplier or to become due and owing to Supplier whether for Products
purchased prior to the effective date of termination or otherwise;
9.3.2 DISTRIBUTOR shall immediately cease to represent itself
as an authorized distributor of the Products and shall otherwise desist from all
conduct or activity which might lead Distributor's customers or potential
customers or the public to believe that DISTRIBUTOR is authorized by Supplier to
sell Products;
9.3.3 DISTRIBUTOR shall immediately return to Supplier all
brochures, materials and other information which DISTRIBUTOR may have in its
possession concerning the Products;
9.3.4 DISTRIBUTOR shall immediately advise Supplier in writing
as to the quantity of Products it currently possesses as of the termination of
this Agreement and shall follow any reasonable instructions from Supplier
regarding the disposal of any remaining Products; provided, however, Supplier
may, at its sole option, repurchase from DISTRIBUTOR any or all remaining
Products, including demonstration equipment, then constituting the stock and
inventory of DISTRIBUTOR at a price equal to the price paid by DISTRIBUTOR for
such Products.
6
10. THE DISTRIBUTOR'S UNDERTAKINGS.
During the term of this Agreement the Distributor shall faithfully and
diligently perform its obligations as a distributor of the Products in the
Territory, and use its commercially reasonable efforts to promote and increase
the sale of the Products, including without limitation:
10.1 Refrain from exporting the Products outside the Territory, and
refrain from selling the Products, directly or indirectly, to any customer that
the Distributor has reason to believe intends to export the Products outside the
Territory;
10.2 Refrain from acting outside the Territory in any way
whatsoever with respect to the Products;
10.3 Maintain adequate levels of inventory of the Products to meet
its anticipated requirements for the Products from the
customers in the Territory;
10.4 Refrain from having any other person or company distribute
the Products for it without Supplier's prior written approval;
10.5 Appoint and maintain appropriate professional personnel to direct
and handle its activities as a distributor for the Products and provide its
personnel with adequate facilities with respect to the performance of its
obligations hereunder;
10.6 Appoint a product manager who will also be the contact person
with Supplier.
11. SUPPLY CHAIN SERVICE AND PERFORMANCE REQUIREMENTS
11.1 On the first day of each calendar quarter, commencing January 1,
2007, Distributor shall provide Supplier with a rolling good faith forecast
showing anticipated requirements for the subsequent 180 day period (the
"Forecast").
11.2 DISTRIBUTOR will submit fax or electronic purchase orders to
Supplier. Supplier will provide fax or electronic order acknowledgment within
three (3) business days from the receipt of purchase orders. Order
acknowledgement will include: (a) verification at the item level of shipment
date, ship-from location, and shipment mode/carrier, and (b) order confirmation
number.
11.3 DISTRIBUTOR shall be responsible for boxing and packaging the
Products into Units as specified in Section 4. Distributor shall be responsible
for all packaging design and costs.
Supplier agrees to use commercially reasonable efforts to ship
all orders within ten (10) business days following order acknowledgement, unless
directed otherwise by or agreed to by DISTRIBUTOR, but in all events will ship
order within 30 days following order acknowledgement; provided, however, that to
the extent DISTRIBUTOR places an order that is not reasonably related to the
requirements set
7
forth in the Forecast, Supplier shall only be obligated to use commercially
reasonable efforts to fulfill any excess requirements and it shall not be
considered a breach of this Agreement if Supplier fails to ship any such excess
requirements.
11.4 Supplier shall provide a first-pass line fill rate of at least
ninety-five percent (95%), measured monthly. This is defined as total purchase
order lines received one hundred percent (100%) complete on the first-pass
(initial receipt) during the month, divided by the total number of lines
received during the same month. Supplier shall be entitled to partial credit for
partially filled lines.
11.5 Supplier agrees to provide an average lead time of less than or
equal to twenty (20) business days. The average lead time is defined as order
date subtracted from receipt date for each purchase order line received during
the month, divided by the total number of lines received during the same month.
The last receipt date will be used whenever multiple receipts occur for a line.
11.6 Supplier shall provide DISTRIBUTOR with annual calendars
indicating holiday or other closures of shipping and customer service
operations, and will provide at least thirty (30) days advance notice, in
writing, of any changes to this calendar.
11.7 Supplier shall provide a packing list with Distributor's purchase
order number, Supplier's item number, quantity shipped and date shipped with
each shipment. If applicable, the packing list should also provide serial
number, lot of each number, NDC and/or UPC number, and expiration date. There
should be no more than one DISTRIBUTOR purchase order number per Supplier
packing list, and all packing lists should b be printed in Supplier part number
sequence indicating split shipments and backorders, as applicable.
11.8 Supplier shall preserve, package, handle, and pack Products so as
to protect the Products from loss or damage, in conformance with good commercial
practice, government Regulations, and other applicable requirements. Supplier
shall xxxx the exterior of the boxes with the associated Supplier item number
and serial number, lot or batch number; NDC and/or UPC number as applicable, of
the contents. Supplier shall also provide this information on the exterior of
the boxes in bar-code format. Supplier shall be responsible for any loss or
damage due to its failure to properly preserve, package, handle, or pack
Products. DISTRIBUTOR shall not be required to assert any claims for such loss
or damage against the common carrier involved. Supplier will ship Products in
the final packaging as intended to be received by the end user as ordered.
11.9 Supplier will not apply any miscellaneous, transportation,
handling, HAZMAT, accessorial, minimum order or pallet charges, subcharges or
fees to any DISTRIBUTOR purchase orders or deliveries unless: (a) specifically
approved in this agreement, and (b) otherwise agreed by the parties.
11.10 Title to Products and risk of loss or damage will pass to
DISTRIBUTOR when Products are accepted and received by the DISTRIBUTOR location
in Portland,
8
Oregon. Items lost or damaged in transit, including concealed losses and damage,
will be promptly replaced and shipped at no charge to DISTRIBUTOR, or credit for
those items will be immediately issued to DISTRIBUTOR, at DISTRIBUTOR's
discretion.
11.11 Supplier shall comply with all laws, regulations and orders
relating to its performance under this Agreement, including without limitation
all anti-fraud and anti-kickback laws, regulations and orders. DISTRIBUTOR and
Supplier each agree, warrant and certify that in performance of this Agreement
it will fully comply with the provisions of the Social Security Act, Section
1128B(b) (42 U.S.C. Section 1320a-7b(b)) which prohibit the knowing or willful
offer, solicitation or receipt of any remuneration, including discounts and/or
rebates, directly or indirectly, in return for purchasing, leasing or ordering
or arranging for or recommending the purchase, lease or order, or any services
or items, including any Products, for which payment may be made in whole or in
part under a federal health care program. This provision shall survive
termination or expiration of this Agreement for any reason.
12. ADVERTISING, PROMOTIONS, TRADEMARK; AND COPYRIGHTED MATERIAL
12.1 Supplier shall provide sample quantities of current or new sales
literature, artwork, advertising materials, promotional plans and (other
information or programs reasonably related to this Agreement and the Products
("Advertising Materials").
12.2 DISTRIBUTOR will evaluate requirements and define promotional
plans that DISTRIBUTOR will utilize in connection with marketing and promoting
the Products.
12.3 DISTRIBUTOR will have the right in is sole discretion to develop
trademarks, trade dress, sales literature, artwork, advertising materials,
promotional plans and other information and intellectual property relating to
the Products ("Distributor Xxxx and Materials). DISTRIBUTOR will be the
exclusive owner of the Distributor Xxxx and Materials. Nothing in this Agreement
shall be deemed to grant or convey to Supplier any right, title or interest to
the Distributor Xxxx and Materials either during the Term or after Termination
of this Agreement and Supplier shall not use the Distributor Xxxx or Materials
in any manner.
13. SALES, MARKETING AND SUPPORT OBLIGATIONS
13.1 DISTRIBUTOR shall use commercially reasonable efforts to handle
and resolve feedback from its customers. [Supplier shall have ultimate
responsibility for resolution of Product related issues. Supplier shall provide
complete technical support to customers for all Products.] Any questions or
issues related to packaging or Distributor Xxxx and Materials will be the
responsibility of the Distributor.
13.2 Supplier shall provide marketing, demonstration and sales support
for DISBTRIBUTOR's sales and distribution efforts under this Agreement.
9
14. QUALITY ASSURANCE
14.1 Supplier agrees to maintain appropriate certification status and
compliance with the Food and Drug Administration's ("FDA") Quality System
Regulations, the Medical Device Directive and/or all other applicable
regulations. As manufacturer, Supplier will comply in all material respects with
all applicable regulations and standards that pertain to it as a manufacturer of
the Products.
15. MODIFICATION OF PRODUCTS
15.1 DISTRIBUTOR shall have the right to add notations or markings to
the Product packaging with respect to meeting requirements of DISTRIBUTOR
warehouse automation and operating systems. Neither DISTRIBUTOR nor its
customers shall have the right to make any other modifications to the Products
or Product packaging.
15.2 Supplier may consult with DISTRIBUTOR with respect to new Products
and any design changes or modifications to Products; however, Supplier shall not
be required to use the input, suggestions or advice provided by DISTRIBUTOR.
15.3 Supplier shall provided DISTRIBUTOR with written notice of all
material Product modifications or Product packaging modifications not less than
thirty (30) days prior to the last order date for the unmodified Product,
including shipping case dimensions and weight.
16. REPRESENTATIONS AND WARRANTIES
16.1 Supplier, represents, warrants and covenants to DISTRIBUTOR
that:
16.1.1 Supplier is and will continue to be a duly
formed and validly existing entity in good standing under the
laws of the state of its organization.
16.1.2 Supplier has the full right, power and
authority, corporate and/or otherwise, to execute and deliver
this Agreement and to otherwise consummate the transactions
contemplated by this Agreement.
16.1.3 Supplier has sufficient legal and/or
beneficial title and ownership under its intellectual property
rights necessary for it to fulfill its obligations under this
Agreement, and neither the Products nor Distributor's exercise
of any rights to the Products granted under this Agreement
will violate, infringe upon, or misappropriate any
intellectual property rights of any person or entity. There is
no material unauthorized use, infringement or misappropriation
of any its intellectual property rights by third parties
relevant to the Product or other rights granted under this
Agreement. As used herein, "intellectual property rights"
shall mean all intellectual property rights, including, but
not limited to patent rights,
10
copyrights, and rights in trademarks, trade secrets, and
confidential and/or proprietary chemical substances, technical
information, data and assays necessary or useful to make, use
or sell the Product. To the best of Supplier's knowledge,
there is no patent issued to a third party that would be
infringed by the manufacture, use or sale of Product.
16.1.4 The execution, delivery and performance by
Supplier under this Agreement, and the transactions and
actions contemplated hereunder, have been duly authorized by
all necessary actions by Supplier. This agreement, when duly
executed and delivered, constitutes a valid, legal and binding
obligation of Supplier enforceable in accordance with its
terms.
16.1.5 The execution, consummation of the
transactions contemplated by, and/or compliance with the terms
and provisions of this Agreement, will not materially conflict
with, result in a material breach of, or constitute a material
default under any of the terms, conditions or provisions of
Supplier's constituent documents or any agreement, lease,
indenture, mortgage, deed of trust, land contract, license or
other instrument to which Supplier is a party of by which
Supplier may be bound or affected or to which Supplier is
subject, or any law, regulation, order, writ, injunction or
decree of any court or agency or regulatory body.
16.1.6 Supplier is in compliance in all material
respects with all applicable laws and regulations relating to
the sale, distribution or use of the Products in the
Territory. Supplier has completed the general FDA
certification activities and received any and all necessary
FDA clearance for the Products.
16.2 DISTRIBUTOR, represents, warrants and covenants to Supplier
that:
16.2.1 DISTRIBUTOR is and will continue to be a duly
formed and validly existing entity in good standing under the
laws of the state of its organization.
16.2.2 DISTRIBUTOR has the full right, power and
authority, corporate and/or otherwise, to execute and deliver
this Agreement and to otherwise consummate the transactions
contemplated by this Agreement.
16.2.3 The execution, delivery and performance by
DISTRIBUTOR under this Agreement, and the transactions and
actions contemplated hereunder, have been duly authorized by
all necessary actions by DISTRIBUTION. This Agreement, when
duly executed and delivered, constitutes a valid, legal and
binding obligations of DISTRIBUTOR enforceable in accordance
with its terms.
11
16.2.4 The execution, consummation of the
transactions contemplated by, and/or compliance with the terms
and provisions of this Agreement, will not materially conflict
with, result in a material breach of, or constitute a material
default under any of the terms, conditions or provisions of
DISTRIBUTOR'S constituent documents or any agreement, lease,
indenture, mortgage, deed of trust, land contract, license or
other instrument to which DISTRIBUTOR is a party or by which
DISTRIBUTOR may be bound or affected or to which DISTRIBUTOR
is subject, or any law, regulation, order, writ, injunction or
decree of any court or agency or regulatory body.
16.2.5 DISTRIBUTOR is in compliance in all material
respects with all applicable laws and regulations relating to
the sale, distribution or use of the Products in the
Territory. DISTRIBUTOR has completed the general FDA
certification activities and received any and all necessary
FDA clearance for the Products. DISTRIBUTOR is duly registered
as a medical device distributor under applicable FDA rules and
regulations.
17. WARRANTIES
The Products listed on the attached Exhibits are covered by a
written warranty (the "User Warranty"), which is the sole warranty relating to
the customer's use of the Products. Supplier shall provide written User
Warranties with all Products sold to DISTRIBUTOR hereunder and DISTRIBUTOR shall
include the User Warranty in all contracts, sales agreements, or other
documents, with and to end users of the Products. To the extent that the
Distributor provides a warranty to its customers and/or end-users other than the
aforesaid warranty (or the translated version thereof) (the "DISTRIBUTOR
WARRANTY"), Supplier shall not be liable to the Distributor or any other person
for any damage or loss of whatsoever nature resulted from such Distributor
Warranty and the Distributor will assume full liability and indemnify and save
Supplier harmless against any and all loss, damage or expense of any kind
arising out of any claim made against Supplier by any person for breach of the
DISTRIBUTOR WARRANTY, which is in excess of the warranties contained in this
section 16. EXCEPT AS AFORESAID, THE WARRANTIES STATED IN SECTIONS 16 AND 17 ALL
ARE THE SOLE WARRANTIES EXPRESSED OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF
MERCHANTABILITY.
18. COMPLAINTS, QUALITY RECORDS AND RECALLS
18.1 DISTRIBUTOR will promptly notify, in writing, Supplier's quality
assurance department of all Product complaints and regulatory/conformance issues
that may affect the marketability of Products. Supplier shall notify the
appropriate regulatory agent(s) if required and shall conduct any safety
investigations or other necessary follow-up activities. DISTRIBUTOR will provide
any information essential to such activities. Supplier will promptly notify
DISTRIBUTOR if corrective action is necessary in the Territory.
12
18.2 In the event of any recall of a Product required by a governmental
agency for safety or efficacy reasons, or requested by Supplier at its sole
discretion, Supplier agrees to repair or replace at its own cost and expense all
Products subject to the recall and previously delivered to DISTRIBUTOR or
DISTRIBUTOR customers. Supplier also agrees to consult with DISTRIBUTOR to
establish a reasonable process for managing the recall. Supplier shall be
responsible for all reasonable expenditures incurred by DISTRIBUTOR (including,
but not limited to shipping, labor and travel costs) consistent with the recall
process agreed to by the Parties and consistent with HIDA and HDMA industry
guidelines. In the event the recall is not required by a governmental agency for
safety or efficiency reasons, but is instead requested by Supplier at its sole
discretion, Supplier will be responsible for determining the scope of the
recall, including the number of units, timeframe for the recall, and criteria
for completion, at no cost or expense to DISTRIBUTOR.
19. FORCE MAJEURE
No Party to this Agreement shall be liable for failure or delay of
performance of any of its obligations hereunder if such failure or delay is due
to causes beyond its reasonable control including, without limitation, natural
disasters, fires, earthquake or storm, strikes, material shortages, failures of
public utilities or common carriers, acts of war, terrorism or intervention,
acts, restraints or regulations of any governmental authority, including
compliance with any order of any governmental considerations, or other causes
beyond Supplier's or Distributor's reasonable control; provided that such delay
or failure shall be remedied by such Party as soon as possible after removal of
the cause of such failure. A Party suffering such delay or which expects to
suffer such delay shall promptly notify the other Party in writing of the cause
and expected duration of such delay. In the event a delay lasts or is expected
to last more than thirty (30) days, the other Party shall have the option to
immediately terminate this Agreement upon written notice.
20. CONFIDENTIALITY
20.1 Return of Confidential Information. Each Party shall return to the
other all Confidential Information (as defined below) received from that other
Party, along with all copies thereof, immediately upon the termination of this
Agreement.
20.2 Remedies. Each Party shall be liable to the other for damages
caused by any breach of this Section 19 or by any unauthorized disclosure or use
of the other's Confidential Information by such Party or third parties to whom
unauthorized disclosure was made. In addition to any other rights or remedies
which may be available to it, each Party shall be entitled to seek appropriate
injunctive relief or specific performances to prevent unauthorized use or
disclosure of Confidential Information. Each Party acknowledges and agrees that
the unauthorized use or disclosure of the other Party's Confidential Information
will cause irreparable injury to the other Party and that money damages will not
provide adequate remedy to the other Party.
13
20.3 Confidential Information. The business and technical information
developed or acquired by, or entrusted by a third party to, each Party,
including, but not limited to, customer lists, names, contact information,
addresses, telephone numbers, email addresses, Product designs, manufacturing
processes, Product pricing and pricing strategies, business plans, and all
related trade secrets (collectively, "Confidential Information") are the
exclusive property of such Party, are among such Party's valuable assets, and
their value to that Party may be lost by their unauthorized use or disclosure to
persons or entities not related to such Party. Neither Party shall, directly or
indirectly, use the other Party's Confidential Information received hereunder
(other than directly in connection with its obligations hereunder) or disclose
or disseminate it to any party or entity during the term of this Agreement or at
any time thereafter (subject to the exceptions below), regardless of the reason
for such expiration, without the express written consent of the other Party.
This obligation of confidentiality shall not apply to any Confidential
Information which (i) was properly and lawfully known to the receiving Party at
the time of receipt without any misconduct on the receiving Party's part; (ii)
was in the public domain at the time of receipt; (iii) becomes public through no
wrongful act of the Party from a third party who did not thereby violate any
confidentiality obligations to the disclosing Party; or (iv) is required by
applicable law to be divulged.
21. INDEMNIFICATION
Supplier shall, except as otherwise provided below, indemnify, and hold
DISTRIBUTOR harmless from, and defend or settle DISTRIBUTOR against any claim
made or any suit, hearing or proceeding, including, but not limited to, all
losses, costs, damages, and expenses (including, without limitation, reasonable
attorneys fees) incurred by DISTRIBUTOR in connection therewith, brought against
DISTRIBUTOR and its Affiliates, subsidiaries, assigns, subcontractors, and
customers, arising out of or relating to an allegation that any Product
infringes, violates, or misappropriates a patent, copyright, trademark, trade
secret, or other intellectual property right of any third party or that any
Product causes or caused death, personal injury, or illness. DISTRIBUTOR shall
(a) promptly notify Supplier in writing of any such claim, (b) reasonably
cooperate with Supplier in connection with the defense of such claim, and (c)
give Supplier the sole authority to defend or settle the claim (at Supplier's
expense) (but Supplier will not settle any claim without DISTRIBUTOR's advance
written consent, which not be withheld unreasonably). In the event the Product
is held to infringe, violate and/or misappropriate and the use or sale of said
Product is enjoined, or it is reasonably believed that such could be the case,
Supplier shall have the option, at its own expense, to procure for DISTRIBUTOR
the right to continue using or selling said Product, or replace same with a
non-infringing Product, or modify same so it becomes non-infringing. In the
event Supplier is unable to accomplish either of the foregoing remedies after
using commercially reasonable efforts to do so, Supplier shall grant a refund to
DISTRIBUTOR of the price paid by DISTRIBUTOR for any of such Products returned
to Supplier by DISTRIBUTOR. Notwithstanding anything to the contrary above, in
no event shall Supplier have any liability under this Section for any such
claims resulting from (a) modifications to the Products by anyone other than
Supplier where the unmodified Products do not infringe and Supplier did not
authorize the modification; or
14
(b) the combination of the Products with other products not provided or
authorized by Supplier.
22. LIMITATION OF LIABILITY
WITHOUT IN ANY WAY LIMITING THE FOREGOING, EXCLUDING CLAIMS FOR
INDEMNIFICATION UNDER SECTION 20 ABOVE, IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER PARTY (INCLUDING BUT NOT LIMITED TO SUCH PARTY'S AFFILIATES AND
CUSTOMERS) FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE
DAMAGES OF ANY KIND WHATSOEVER INCLUDING BUT NOT LIMITED TO LOST PROFITS, IN
CONJUNCTION WITH OR ARISING OUT OF THE PERFORMANCE UNDER THIS AGREEMENT OR THE
USE OR PERFORMANCE OF PRODUCTS AND SUPPORT SERVICES EVEN IF THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
23. CONFLICT RESOLUTION
23.1 Each Party shall designate (in writing, if required by the other
Party) a relationship manager responsible for the day to day management and
coordination of the Party's performance under this Agreement, and the Parties'
communications, transactions and relationship with each other. The relationship
managers shall address conflicts that arise relative to this Agreement. If these
relationship managers cannot resolve such conflicts, then Supplier and
DISTRIBUTOR shall promptly establish a review board compromised of appropriate
members of management from Supplier and DISTRIBUTOR to resolve the conflict.
23.2 In the event that the review board of the Parties does not resolve
a dispute within thirty (30) days from the date the review board is established,
then the Parties agree to submit the dispute to non-binding mediation in
Philadelphia, PA. If the Parties do not resolve the dispute through mediation
within thirty (30) days thereafter, then either of the Parties may elect to
pursue any remedies available at law.
24. GENERAL
24.1 Entire Agreement. This Agreement constitutes the entire Agreement
between the parties concerning the subject matter hereof and supersedes any
prior written or verbal agreements or understandings in connection herewith. No
amendment, waiver or modification hereto or hereunder shall be valid unless
specifically made in writing and signed by an authorized signatory of each of
the Parties hereto. No form, invoice, xxxx of lading, shipping document, order,
receipt or other document shall operate to supersede, modify or amend any
provisions of this Agreement, even if DISTRIBUTOR has initiated, signed or
otherwise acknowledged such document, unless the document expressly states that
it modifies or amends this Agreement and is signed by an authorized
representative of DISTRIBUTOR and Supplier. Neither Party's failure to exercise
any of its rights under this Agreement will constitute or be deemed a waiver or
forfeiture of those rights. All Exhibits attached to the Agreement shall be
deemed a part of this Agreement and
15
incorporated herein. Terms that are defined in this Agreement, and used in any
Exhibit, have the same meaning in the Exhibit as in this Agreement.
24.2 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail or delivered either by hand or messenger, or sent via fax,
addressed to the address set forth in the introduction paragraph of this
Agreement. Any notice or other communication so addressed and mailed by
registered or certified mail (in each case, with return receipt requested) shall
be deemed to be delivered and given when so mailed. Any notice or other
communication so addressed and delivered by hand, by messenger or by fax shall
be deemed to be given when actually received by the addressee.
24.3 Assignment. Neither Party may assign nor delegate the performance
of its duties hereunder without the other Party's prior written consent, which
shall not be unreasonably withheld. Notwithstanding the foregoing, either party
may assign this Agreement to a wholly owned subsidiary or to a purchaser or
transferee of all or substantially all of the business assets dedicated to the
Products.
24.4 Venue and Jurisdiction. The laws of the Commonwealth of
Pennsylvania will govern any disputes arising in connection with this Agreement
(without regard for its conflicts of laws rules). Subject to Section 22 above,
Supplier and DISTRIBUTOR hereby consent to the exclusive jurisdiction and venue
of the courts located in New York County, New York.
24.5 Attorneys' Fees. In any action relating to this Agreement, the
prevailing Party shall be entitled to recover reasonable attorneys' fees and
other costs incurred therein, in addition to any other appropriate relief.
24.6 Severability. If for any reason any provision of this Agreement
shall be deemed by a court of competent jurisdiction to be legally invalid or
unenforceable, the validity of the remainder of the Agreement shall not be
affected and the offending provision shall be deemed modified to the minimum
extent necessary to make it consistent with applicable law, and, in its modified
form, the provision shall then be enforceable and enforced.
24.7 Captions. The section headings and captions of this Agreement are
for convenience and reference only and in no way define, limit or describe the
scope or intent of this Agreement nor substantively affect it in any way.
24.8 Relationship. The relationship of the Parties shall be that of
independent contractors and nothing in this Agreement shall be deemed to create
a partnership or joint venture between the Parties. Neither Party shall hold
itself out as the agent of the other, nor shall either Party incur any
indebtedness or obligations in the name of, or which shall be binding on the
other, without the prior written consent of the other. Each Party assumes full
responsibility for its own personnel under laws and regulations of the
governmental authorities of the applicable jurisdiction.
16
24.9 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
24.10 Enforcement. Supplier promptly shall notify Distributor, in
reasonable detail, of any known infringement or potential infringement or
intellectual property rights related to the Products. If Supplier fails to take
commercially reasonable steps to xxxxx such infringement or potential
infringement, or, upon inquiry, indicates that it does not intend to do so,
Distributor shall have the right to do so independently upon notice to Supplier.
The total cost of any infringement action commenced or taken by a party related
to the Products shall be borne by the party taking the action, and such party
shall have the right to attain any recovery or damages for infringement derived
therefrom. The party not taking the action shall reasonably cooperate with and
assist the other party with its efforts in taking the action.
24.11 Supplier shall notify Distributor in writing within three (3)
business days after each of the following events: (a) Supplier receives or
delivers a notice of termination of any agreement pursuant to which it is
granted a right to use, distribute, market, sell, offer for sale, make, or
manufacture the Products ("Senior Agreement"); (b) Supplier receives, or
delivers, a notice that it, or, as the case may be, another party, is in breach
of any Senior Agreement; and, (c) Supplier receives or delivers a notice
threatening a termination of a Senior Agreement.
17
IN WITNESS WHEREOF, the Parties have executed this Agreement to be
exercised by their duly authorized representatives.
SYNOVA HEALTHCARE, INC. QUANTRX BIOMEDICAL CORPORATION
a Delaware Corporation
By: /s/ Xxxxxxx Xxxx, CEO By: /s/ Xxxxxx Witshkin
--------------------- --------------------------
Printed: Xxxxxxx Xxxx, CEO Printed: Xxxxxx Witshkin
Its: President and CEO
--------------------------
[Signature Page to Distribution Agreement]
18
EXHIBIT 1
PRODUCTS
THE PRODUCT COMMONLY REFERRED TO BY SUPPLIER AS HEMORRHOID PADS
1. For the purpose of this Agreement, the Products shall mean emollient
coated and uncoated shaped hemorrhoid pads.
2. Hemorrhoid PADs are for use in humans for hemorrhoid treatment and
anal hygiene.
3. Hemorrhoid PADs and emollient are US FDA Class I OTC products, and
described in monographs published by the US FDA, which lists ingredients, use,
and waived claims.
PRICING INFORMATION
$US [*] PER UNIT (24 per Unit) (plus costs of packaging if Distributor engages
Supplier to do packaging).
[*] The redacted information (indicated by "[*]") is confidential information
that has been filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
