EXCLUSIVE DISTRIBUTION AGREEMENT BETWEEN SCANTEK MEDICAL, INC. AND GIBRALTAR GLOBAL MARKETING LLC
BETWEEN
SCANTEK
MEDICAL, INC.
AND
GIBRALTAR
GLOBAL MARKETING LLC
AGREEMENT
dated as of the 7th day of March, 2007 (this “Agreement”), by and between
Scantek Medical, Inc. a Delaware corporation (the “Manufacturer”) with an
address at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, and Gibraltar Global
Marketing LLC, a Delaware limited liability company (the “Distributor”) with an
address at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS,
the
Manufacturer is the owner of the Intellectual Property (as hereinafter defined
in Paragraph “C” of Article “2” of this Agreement); and
WHEREAS,
the
Distributor is desirous of obtaining an exclusive right to distribute the
Product (as hereinafter defined in Paragraph “F” of Article “2” of this
Agreement) in the Territory (as hereinafter defined in Paragraph “I” of Article
“2” of this Agreement) and to sell distribution rights to parts of the
Territory; and
WHEREAS,
the
Manufacturer is willing to grant to the Distributor an exclusive right to
distribute the Product in the Territory upon the terms and conditions
hereinafter set forth.
1
NOW,
THEREFORE,
in
consideration of the mutual covenants herein contained and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged,
IT
IS
AGREED:
1. Recitals.
The
parties hereby adopt as part of this Agreement each of the recitals which is
set
forth above in the WHEREAS clauses, and agree that such recitals shall be
binding upon the parties hereto by way of contract and not merely by way of
recital or inducement and such WHEREAS clauses are hereby confirmed and ratified
as being accurate by each party as to itself.
2. Certain
Definitions.
The
following terms as used in this Agreement shall, unless specifically indicated
otherwise in this Agreement, have the following meanings:
A. “Contract
Year” shall mean the one year period commencing on January 1, 2007. Each
subsequent Contract Year shall commence upon the annual anniversary date of
January 1, 2007.
B. “Dollars”
shall mean United States Dollars.
C. “Intellectual
Property” shall mean all information with respect to the Product (i) which is
the property of the Manufacturer, (ii) which is necessary for the marketing
and
use of the Product including quality control specifications and procedures
used
in connection therewith and information and data with respect to the use of
the
Technology (as defined hereinafter in Paragraph “H” of this Article “2” of this
Agreement) and the Product, and (iii) utilized by the Manufacturer in obtaining
governmental approvals for the sale of the Product.
2
“Intellectual
Property” shall include, but shall not be limited to, all of the following in
the United States and worldwide (regardless of whether presently owned or owned
by the Manufacturer in the future): (i) the Trademark (as hereinafter defined
in
Paragraph “J” of Article “2” of this Agreement) which is registered in the
United States Patent and Trademark Office, (ii) servicemarks, (iii) trade names,
(iv) trade dress, (v) logos, (vi) copyrights, (vii) rights of authorship, (viii)
inventions, (ix) moral rights, (x) Patents (as hereinafter defined in Paragraph
“E” of this Article “2” of this Agreement), (xi) applications, registrations and
renewals in connection with any of the foregoing, (xii) database rights, (xiii)
rights of publicity, privacy and/or rights to enforce defamation claims, (xiv)
rights under unfair competition and unfair trade practices laws, (xv) other
intellectual and industrial property rights related thereto, (xvi) all trade
secrets, or other proprietary rights, currently owned or held or to be owned
or
held in the future by the Manufacturer, as well as any and all Technology,
(xvii) any 510(k) marketing clearances from the Food and Drug Administration,
and (xviii) any over-the-counter clearances (OTC Clearances) from the Food
and
Drug Administration.
D. “Knowledge”
as used in the Distributor’s representations, warranties and covenants shall
mean the actual knowledge of the Distributor’s officers or the constructive
knowledge of such officers as if they had preformed a proper due diligence
review of the subject matter.
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E. “Patents
” shall mean the subject of the Letters Patent of the United States which are
described on Exhibit “A”, which is annexed hereto and made a part hereof and
which are filed and which in the future shall be filed in the United States
Patent and Trademark Office.
F. “Product”
shall mean the BreastCare™/BreastAlert™ Differential Temperature Sensor/Breast
Abnormality Indicator device which is described on Exhibit “B”, which is annexed
hereto and made a part hereof.
G.
“Subdistributor” shall mean any entity which distributes units of the Product
sold to it by the Distributor pursuant to, and subject to, the terms of this
Agreement.
H.
“Technology” shall mean all information which is presently or which shall in the
future be the subject of the Letters Patent of the United States which are
described on Exhibit “A”, which is annexed hereto and made a part hereof. Said
Technology shall include, but shall not be limited to, certain technical trade
secrets and business know-how regardless of whether presently owned or owned
in
the future by the Manufacturer. In addition to patents granted in the United
States, the Technology may in the future be granted patents which are owned
by
the Manufacturer in other countries.
I.
“Territory” shall mean all of the current and future countries and other
governmental entities on the earth, excluding the countries set forth on Exhibit
“C” which is annexed hereto and made a part hereof.
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J.
“Trademark” shall mean information which has been the subject of a registration
which is described on Exhibit “D”, which is annexed hereto and made a part
hereof and which registration has been filed and which may in the future be
the
subject of a registration or registrations to be filed with the United States
Patent and Trademark Office.
3. Exclusivity.
A. Subject
to the terms of this Agreement, including, but not limited to, the Distributor
not being in breach of this Agreement, the Manufacturer hereby grants to the
Distributor during the Term (as hereinafter defined in Article “9” of this
Agreement), a non-assignable, non-transferable exclusive right to distribute
and
sell the Product within, and only within, the Territory.
B. The
Manufacturer hereby grants to the Distributor within, and only within, the
Territory a license pursuant to the terms and conditions of this Agreement,
during the Term, to use, in connection with the sale, marketing and distribution
of the Product, the Intellectual Property, and all applications therefore now
or
hereafter owned by the Manufacturer, the right to make appropriate reference
to
the Intellectual Property on or in connection with the Product and any and
all
packaging materials, print advertisement, pamphlets, brochures, displays,
letterhead or other sales, marketing and distribution materials used in
connection with the Product. No right or license is granted to the Distributor
to make, manufacture or assemble the Product or to use any Intellectual Property
in connection with any manufacturing process, whether within or outside the
Territory. The Distributor shall use the Intellectual Property solely in
connection with the Product manufactured by the Manufacturer.
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C. The
Distributor may sell, market and/or distribute products other than the Product,
provided that the Distributor shall not, directly or indirectly, sell, market
or
distribute any products which, directly or indirectly, compete with any product
of the Manufacturer which screens for, or is a detection modality for breast,
prostate or kidney disease, cancer or strokes or any product which is based
upon
the technology of temperature differentials.
D. The
Distributor shall purchase the Product solely from the Manufacturer.
E. The
Product shall be manufactured by the Manufacturer. The Distributor shall not
attempt, directly or indirectly, to manufacture the Product.
F.
The
Manufacturer shall not, directly or indirectly, sell the Product in the
Territory, except for sales made or shipped by the Manufacturer from Brazil
to
any of the following countries: Argentina, Bolivia, Colombia, Ecuador, Guyana,
Paraguay, Peru, Suriname, Uruguay or Venezuela (“Brazil Originating South
American Sales”); provided, however, that the Distributor shall be entitled to
all profits from Brazil Originating South American Sales, after payment of
the
Manufacturer’s direct expenses, excluding corporate overhead. The Manufacturer
shall remit all such profits to the Distributor within thirty (30) days after
the end of each calendar month. For purposes of this Paragraph “F” of this
Article “3” of this Agreement, a sale of the Product by the Manufacturer made
from the Territory to a buyer outside of the Territory shall not be deemed
as
directly or indirectly selling the Product in the Territory. The Manufacturer
hereby agrees that any distribution agreement which it signs with a distributor
outside the Territory shall restrict such distributor to a specific territory,
and shall provide that such distributor is prohibited from selling the Product
outside of such specific territory.
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G.
The
Distributor shall have the right to retain and utilize Subdistributors;
provided, however, that as a condition of any Subdistributor being retained
and/or utilized, each such Subdistributor shall execute an agreement which
shall
be in the form of Exhibit “E” which is annexed hereto and made a part hereof.
H.
From
March 7, 2007 until September 7, 2007, Life Medical Technologies, Inc. (“Life
Medical”) shall have the right, upon paying one million ($1,000,000) dollars to
the Manufacturer (over and above all other amounts payable by Life Medical
to
the Manufacturer), to have China added to the Territory and removed from the
list of excluded countries on Exhibit “C”.
4. Record
Keeping, Reports.
A.
The
Distributor shall, no later than forty-five (45) days after the end of each
fiscal quarter, furnish the Manufacturer and each Member of the Distributor
with
a detailed statement, certified to be true and correct by both its president
and
treasurer, respectively, or another two executive officers, (provided, however
that the president and the treasurer or such other executive officers shall
not
be the same individual) setting forth for each month of said quarter, all sales
of units of the Product made in the Territory, any trade discounts and
allowances, and all credits for returned units of the Product and other similar
adjustments together with copies of documents which support the detailed
statement.
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B.
The
Distributor shall maintain true, complete, and correct books of account and
records of all transactions within the scope of this Agreement, in accordance
with generally accepted accounting principles, to enable the Manufacturer to
ascertain all amounts sold pursuant to this Agreement. Any duly authorized
representatives of the Manufacturer (“Authorized Representatives”) shall have
the right, during regular business hours, on reasonable notice, for the duration
of this Agreement and for three (3) years thereafter, to examine said books
of
account and records and all other documents (including, but not limited to,
sales invoices) and material in the possession or under the control of the
Distributor with respect to this Agreement and its activities pursuant to this
Agreement; and Authorized Representatives shall have free and full access
thereto for said purposes and for the purpose of making extracts therefrom.
Authorized Representatives shall have the right at such inspection to examine
all information pertinent to this Agreement dating from the commencement date
of
this Agreement.
5. Costs
of Examination.
If,
upon an examination it is revealed that there is due and owing by the
Distributor an amount which exceeds, by two (2%) percent or more, the amount
which was paid to the Manufacturer with respect to any Contract Year, then
the
cost of the examination shall be borne by the Distributor. If, upon an
examination it is revealed that there is due and owing by the Distributor an
amount which does not exceed by two (2%) percent or more the amount which was
paid to the Manufacturer with respect to any Contract Year, then the cost of
the
examination shall be borne by the Manufacturer. For example, if the Manufacturer
were paid one million ($1,000,000) dollars, and the audit reveals that the
Distributor owes the Manufacturer an additional forty thousand ($40,000) dollars
(or four (4%) percent of the one million ($1,000,000) dollars which the
Manufacturer was paid), the Distributor shall bear the cost of the
examination.
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6. Payment
for Product.
A.
The
Distributor shall pay the aggregate sum of the Wholesale Price (as defined
in
Paragraph “C” of this Article “6” of this Agreement) with respect to the Product
it orders no later than sixty (60) days after the date of shipment of the
subject order.
The
Distributor shall furnish the Manufacturer, at the time of placing each order
for the Product, a confirmed, irrevocable Letter of Credit in favor of the
Manufacturer, in the amount of the aggregate sum of the Wholesale Price with
respect to such order for the Product, to be issued by the Clearing House
Payments Company or another entity approved by the Manufacturer, and in a form
approved by the Manufacturer, the payment of drafts drawn thereunder to be
conditioned upon the prior presentation of such documents as required by the
Letter of Credit.
B.
Unless
otherwise advised in writing by the Distributor, the Manufacturer shall ship
the
units of the Product to the Distributor’s principal place of business. The units
of the Product shall be shipped F.O.B. Point of Origin which means that the
Distributor shall obtain title to the Product and be responsible for the risk
of
loss, customs clearing, transportation, the cost of shipment and insurance
of
the Products and all other costs after the Manufacturer has delivered the
Product to the location from which it shall ship the Product to the Distributor
(the “Point of Origin”). The Distributor acknowledges that it is responsible for
the risk of loss, customs clearing, transportation, the cost of shipment and
insurance of the Products and all other costs after the Manufacturer has
delivered the Product to the Point of Origin. The Distributor further
acknowledges that title to the Product has passed to it upon delivery of the
Product to the Point of Origin.
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C.
The
Distributor shall pay to the Manufacturer ($*) with respect to each unit of
the
Product purchased by the Distributor (the “Wholesale Price”).
D.
There
shall be an increase every twelve months, commencing twelve months after the
first day of the calendar month following the date of execution of this
Agreement (the “Commencement Date”), of the Wholesale Price per Product unit
based upon a Wholesale Price of ($*), by an amount which is equal to the
increase in the cost of living (the “COL Index”) from the average for the twelve
months immediately preceding the Commencement Date (the “COL Year”) to the
average for the twelve (12) month period immediately preceding the date in
the
year on which such Wholesale Price shall be payable (each such year is
hereinafter referred to as the “Determination Year”). In order to determine the
average for the COL Year or for the Determination Year, the cost of living
for
each of the twelve months in the COL Year or in the Determination Year, as
the
case may be, shall be added and the resultant figure shall be divided by 12.
All
cost of living computations shall be based upon the Consumer Price Index for
all
Urban Consumers for New York, Northeast New Jersey for “all items” of the Bureau
of Labor Statistics of the United States Department of Labor (the “Index”), or
if, at the time a determination must be made, the Index is no longer published
or issued, such other index as is generally recognized and accepted for similar
determinations. The amount of the increase shall be computed by multiplying
the
($*) Wholesale Price by a fraction, the numerator of which is the average cost
of living for the Determination Year and the denominator of which is the average
cost of living for the COL Year. By way of illustration, assume the following:
(i) the average cost of living for the COL Year is one hundred ($100) dollars
and (ii) the average cost of living for the Determination Year is one hundred
and ten ($110) dollars. In this example, the Wholesale Price per Product unit
which shall be payable for the year shall be ($*), which is the amount arrived
at by multiplying ($*) by one hundred and ten (110%) percent (the ratio of
the
average cost of living for the Determination Year to the average cost of living
for the COL Year: one hundred ten ($110) dollars divided by one hundred ($100)
dollars).
*
-
Deleted due to confidentiality.
10
7. The
Manufacturer’s Representations, Warranties and Covenants.
The
Manufacturer represents, warrants, and covenants to the Distributor
that:
A.
Corporate
Status.
The
Manufacturer is a corporation with all of the requisite power and authority
to
carry on its businesses as presently conducted in all jurisdictions where
presently conducted.
*
-
Deleted due to confidentiality.
11
B.
Authority.
The
Manufacturer has the full right, power and legal capacity to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
constitutes the valid and legally binding obligation of the Manufacturer,
enforceable in accordance with its terms and conditions. The execution and
delivery of this Agreement by the Manufacturer and the consummation by it of
the
transactions contemplated hereby have been duly approved and authorized by
all
necessary action of the Manufacturer's Board of Directors, and no further
authorization shall be necessary on the part of the Manufacturer for the
performance and consummation by the Manufacturer of the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
in accordance with its terms does not and shall not require approval, consent
or
authorization of any third party, including any governmental agency or authority
or any political subdivision thereof.
C.
Compliance
with the Law and Other Instruments.
The
business and operations of the Manufacturer have been and are being conducted
in
accordance with all applicable laws, rules, and regulations of all authorities
which affect the Manufacturer or its properties, assets, businesses or
prospects. The performance of this Agreement shall not result in any breach
of,
or constitute a default under, or result in the imposition of any lien or
encumbrance upon any property of the Manufacturer or cause an acceleration
under
any arrangement, agreement or other instrument to which the Manufacturer is
a
party or by which any of its assets are bound. The Manufacturer has performed
all of its obligations which are required to be performed by it pursuant to
the
terms of any such agreement, contract, or commitment.
12
D.
Intellectual
Property.
The
Manufacturer is the sole and exclusive owner of the Intellectual Property and
has the sole and exclusive right to license the use thereof to the Distributor
free and clear of any lien, encumbrance or any other restriction, except as
set
forth on Exhibit “F”. The Manufacturer has no knowledge that any Product or any
of the Intellectual Property infringes on any trademark, trade name, service
▇▇▇▇, copyright or patent or any trade secret or other proprietary right of
any
other person. The Manufacturer does not know or have any reason to believe
that
there are any claims of any third parties with respect to the use of any of
the
Intellectual Property within the Territory, except as set forth on Exhibit
“G”.
E.
Compliance
with Standards.
The
Manufacturer is currently in compliance with, and shall remain compliant with,
Good Manufacturing Practice standards and with the Food and Drug
Administration’s filing requirements, if any, with respect to the Product.
F. Right
to Use.
The
Manufacturer has not granted and shall not grant, directly or indirectly, to
any
other person any right to use any right or license to use the Intellectual
Property within the Territory.
G. Right
to Distribute.
The
Manufacturer has not granted and shall not, during the Term, grant, directly
or
indirectly, to any other person any right (whether current, future, contingent
or otherwise) to sell the Product in or into the Territory.
H. Litigation.
Except
as
set forth on Exhibit “G”, there are no legal, administrative, arbitration, or
other proceeding or governmental investigations adversely affecting the
Manufacturer or its properties, assets or businesses, or with respect to any
matter arising out of the conduct of the Manufacturer’s business pending or to
its knowledge threatened, by or against, any officer or director of the
Manufacturer in connection with its affairs, whether or not covered by
insurance. Except as set forth on Exhibit “G”, neither the Manufacturer nor its
officers or directors are subject to any order, writ, injunction, or decree
of
any court, department, agency, or instrumentality, affecting the Manufacturer.
13
I. No
Approval.
No
approval of any third party including, but not limited to, any governmental
authority is required in connection with the consummation of the transactions
set forth in this Agreement.
J. Survival.
The
covenants, representations and warranties made by the Manufacturer in or in
connection with this Agreement shall survive the execution and delivery of
this
Agreement and shall continue in full force and effect during the Term and for
two (2) years after the expiration of the Term, it being agreed and understood
that each of such covenants, representations and warranties is of the essence
to
this Agreement and the same shall be binding upon the Manufacturer and inure
to
the Distributor, its successors and assigns.
K. Complete
Disclosure.
The
Manufacturer has no knowledge that any covenant, representation or warranty
of
the Manufacturer which is contained in this Agreement or in a writing furnished
or to be furnished pursuant to this Agreement contains or shall contain any
untrue statement of a material fact, omits or shall omit to state any material
fact which is required to make the statements which are contained herein or
therein, not misleading.
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L. Notification
of an Event.
If,
during the Term, any event occurs or any event known to the Manufacturer
relating to or affecting the Manufacturer shall occur as a result of which
(i)
any provision of this Article “7” of this Agreement at that time shall include
an untrue statement of a fact, or (ii) this Article “7” of this Agreement shall
omit to state any fact necessary to make the statements herein, in light of
the
circumstances under which they were made, not misleading, the Manufacturer
shall
immediately notify the Distributor pursuant to Paragraph “C” of Article “24” of
this Agreement.
M. No
Defense.
It
shall not be a defense to a suit for damages for any misrepresentation or breach
of a covenant, representation or warranty that the Distributor knew or had
reason to know that any covenant, representation or warranty in this Agreement
contained untrue statements.
8. The
Distributor’s Representations, Warranties and Covenants.
The
Distributor represents, warrants and covenants to the Manufacturer as
follows:
A.
Corporate
Status.
The
Distributor is a corporation with all of the requisite power and authority
to
carry on its businesses as presently conducted in all jurisdictions where
presently conducted.
B.
Authority.
The
Distributor has the full right, power and legal capacity to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
constitutes the valid and legally binding obligation of the Distributor
enforceable in accordance with its terms and conditions. The execution and
delivery of this Agreement by the Distributor and the consummation by it of
the
transactions contemplated hereby have been duly approved and authorized by
all
necessary action of the Distributor’s Board of Directors, and no further
authorization shall be necessary on the part of the Distributor for the
performance and consummation by the Distributor of the transactions contemplated
hereby. The execution, delivery and performance of this Agreement in accordance
with its terms does not and shall not require approval, consent or authorization
of any third party, including any governmental agency or authority or any
political subdivision thereof.
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C.
Compliance
with the Laws and Other Instruments.
The
business and operations of the Distributor have been and are being conducted
in
accordance with all applicable laws, rules, and regulations of all authorities
which affect the Distributor or its properties, assets, businesses or prospects.
The performance of this Agreement shall not result in any breach of, or
constitute a default under, or result in the imposition of any lien or
encumbrance upon any property of the Distributor or cause an acceleration under
any arrangement, agreement or other instrument to which the Distributor is
a
party or by which any of its assets are bound. The Distributor has performed
all
of its obligations which are required to be performed by it pursuant to the
terms of any such agreement contract, or commitment.
D.
Right
to Distribute.
The
Distributor shall not grant, directly or indirectly, to any other person other
than a Subdistributor any right to use any right or license to use any
Intellectual Property within the Territory.
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E.
Litigation. There
are
no legal, administrative, arbitration, or other proceeding or governmental
investigations adversely affecting the Distributor or its properties, assets
or
businesses, or with respect to any matter arising out of the conduct of the
Distributor’s business pending or to its knowledge threatened, by or against,
any officer or director of the Distributor in connection with its affairs,
whether or not covered by insurance. Neither the Distributor nor its officers
or
directors are subject to any order, writ, injunction, or decree of any court,
department, agency, or instrumentality, affecting the Distributor.
F.
No
Approval.
No
approval of any third party including, but not limited to, any governmental
authority is required in connection with the consummation of the transactions
set forth in this Agreement.
G.
Survival.
The
covenants, representations and warranties made by the Distributor in or in
connection with this Agreement shall survive the execution and delivery of
this
Agreement and shall
continue in full force and effect during
the Term and for two (2) years after the expiration of the Term, it being agreed
and understood that each of such covenants, representations and warranties
is of
the essence of this Agreement and the same shall be binding upon the Distributor
and inure to the Manufacturer, its successors and assigns.
H.
Complete
Disclosure.
The
Distributor has no knowledge that any covenant, representation or warranty
of
the Distributor which is contained in this Agreement or in a writing furnished
or to be furnished pursuant to this Agreement contains or shall contain any
untrue statement of a material fact, omits or shall omit to state any material
fact which is required to make the statements which are contained herein or
therein, not misleading.
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I.
Notification
of an Event.
If,
during the Term, any event occurs or any event known to the Distributor relating
to or affecting the Distributor shall occur as a result of which (i) any
provision of this Article “8” of this Agreement at that time shall include an
untrue statement of a fact, or (ii) this Article “8” of this Agreement shall
omit to state any fact necessary to make the statements herein, in light of
the
circumstances under which they were made, not misleading, the Distributor shall
immediately notify the Manufacturer pursuant to Paragraph “C” of Article “24” of
this Agreement.
J.
No
Defense.
It
shall not be a defense to a suit for damages for any misrepresentation or breach
of a covenant, representation or warranty that the Manufacturer knew or had
reason to know that any covenant, representation or warranty in this Agreement
contained untrue statements.
9. Term.
Subject
to the provisions of Article “13” of this Agreement, the Term of this Agreement
shall be perpetual.
10. Capitalization
of the Distributor.
The
capitalization of the Distributor shall be at least two hundred fifty thousand
($250,000) dollars as of June 1, 2007, and at least one million ($1,000,000)
dollars as of March 1, 2008, inclusive of, not in addition to, the initial
two
hundred fifty thousand ($250,000) dollars.
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11. Warranties.
A.
All
units of the Product delivered to the Distributor pursuant to this Agreement
shall be of good and merchantable quality, free from defects in material and
workmanship and reasonably fit for their intended purpose.
B.
THE
MANUFACTURER HEREBY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES AND GUARANTIES
WITH RESPECT TO UNITS OF THE PRODUCT PURCHASED HEREUNDER, WHETHER WRITTEN,
ORAL,
IMPLIED OR INFERRED BY TRADE, CUSTOM OR PRACTICE, INCLUDING, WITHOUT LIMITATION,
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
EXCEPT AS PROVIDED IN PARAGRAPH “A” OF THIS ARTICLE “11” OF THIS AGREEMENT. THE
MANUFACTURER SHALL NOT BE LIABLE UNDER ANY CIRCUMSTANCES FOR DAMAGES OF ANY
KIND, WHETHER DIRECT, CONSEQUENTIAL OR OTHERWISE RELATING TO THE PERFORMANCE
OF
ANY UNIT OF THE PRODUCT OR BY ANY FAILURE OF THE MANUFACTURER. IN NO EVENT
SHALL
THE MANUFACTURER’S LIABILITY TO ANY USER OF THE PRODUCT EXCEED THE PURCHASE
PRICE FOR THAT PRODUCT PURSUANT TO THIS AGREEMENT.
C.
The
Distributor shall inspect the units of the Product within seven (7) days after
delivery of the shipment containing such units of the Product. If the
Distributor, prior to the expiration of such seven (7) day period rejects any
units of the Product because such units of the Product do not conform to any
agreed upon specifications, the Manufacturer may substitute a like quantity
of
conforming units of the Product. The Distributor may reject any shipment of
non-conforming units of the Product only within seven (7) days after delivery
of
such shipment, by notice to the Manufacturer, pursuant to Paragraph “C” of
Article “24” of this Agreement, stating the reason for rejection with
specificity. Failure to timely reject or give proper notice of rejection shall
be deemed to constitute acceptance of such shipment. Properly rejected units
of
the Product shall, in the Manufacturer’s sole and absolute discretion, to be
exercised by written notice pursuant to Paragraph “C” of Article “24” of this
Agreement, either (i) be returned to the Manufacturer at the Manufacturer’s
expense or (ii) be destroyed by the Distributor at the Manufacturer’s
expense.
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D.
If any
shipping date is specified, such date represents a good faith estimate by the
Manufacturer. In no event shall the Manufacturer be responsible for a delay
in
shipment or for damages or losses attributable to any such delay.
E.
The
Distributor may not cancel or assign any order given by it to the Manufacturer.
F.
Non
delivery or default by the Manufacturer as to any shipment shall not relieve
the
Distributor from its obligation to accept and pay for any subsequent or prior
installment.
12. Force
Majeure.
Neither
the Manufacturer nor the Distributor shall be responsible for failure or delay
in performing any of its respective obligations pursuant to this Agreement,
due
to causes beyond its control, including, but not limited to, fire, storm, flood,
earthquake, explosion, accident, acts of a public enemy, war (whether or not
declared), rebellion, insurrection, sabotage, acts of terrorism, epidemic,
quarantine restrictions, labor disputes or controversies, labor shortages,
transportation embargoes or failures or delays in transportation, fuel or energy
shortages, power interruptions or failures, acts of God, acts, rules,
regulations, orders or directives of any government or any political
subdivision, agency or instrumentality thereof, or the order of any court or
regulatory or arbitral body of competent jurisdiction, including, but not
limited to, any injunction entered against either the Manufacturer or the
Distributor, as the case may be, or their respective suppliers enjoining it
or
them from manufacturing, selling or distributing the Product.
20
13. Termination.
A.
Notwithstanding anything in this Agreement to the contrary, the Manufacturer
shall have the right to terminate this Agreement in accordance with the
provisions of this Article “13” of this Agreement if, the Distributor shall at
any time commit any of the following breaches of this Agreement or any of the
following defaults in the performance of any of its obligations pursuant to
this
Agreement unless within fifteen (15) calendar days after receipt of written
notice of such default in accordance with Paragraph “C” of Article “24” of this
Agreement the Distributor cures such default; provided, however, that if any
such breach or default resulted from primarily the Manufacturer’s actions or its
officers or agents’ actions or from the Manufacturer’s or its officers’ or
agents’ failure to act as required pursuant to this Agreement, no default shall
be deemed to have occurred:
21
i.
Any
breach by Life Medical of the Acquisition Agreement dated as of the
7th
day of
March, 2007, by and between Scantek and Life Medical;
ii.
The
Distributor’s obligation to submit quarterly reports as set forth in Article “4”
of this Agreement;
iii.
The
Distributor’s obligation to pay the Wholesale Price as set forth in Paragraph
“A” of Article “6” of this Agreement;
iv.
The
Distributor’s obligations with respect to the use of the Patents and the
Trademark as set forth in Article “17” of this Agreement;
v.
The
Distributor’s obligations not to disclose Confidential Information as set forth
in Article “19” of this Agreement; provided, however, that if the Distributor
has taken reasonable measures to protect the Confidential Information from
any
accidental, unauthorized or premature, disclosure or destruction by any of
its
Agents, then such disclosure or destruction of the Confidential Information
by
its Agents shall not be deemed a default pursuant to this Paragraph “A” of this
Article “13” of this Agreement;
vi.
The
Distributor’s obligations not to compete as set forth in Paragraph “B” of
Article “20” of this Agreement; provided, however, that if the Distributor has
taken all reasonable measures to prevent any of its Agents from breaching the
provisions of Paragraph “B” of Article “20” of this Agreement, then such breach
by its Agents shall not be deemed a default pursuant to this Paragraph “A” of
this Article “13” of this Agreement; and
22
vii.
The
Distributor fails to use its best efforts to terminate a Subdistributor for
selling outside the Territory.
The
right
of the Manufacturer to terminate this Agreement pursuant to this Article “13” of
this Agreement or otherwise shall be in addition to and not exclusive of any
other right or remedy that may exist at law, equity or otherwise, that the
Manufacturer may possess pursuant to this Agreement, all of which rights and
remedies shall survive such termination.
B.
Notwithstanding the provisions of Paragraph “A” of this Article “13” of this
Agreement, the Manufacturer shall have the right to terminate this Agreement
without prior notice to the Distributor if:
i.
Any
material representation or warranty of the Distributor contained in this
Agreement is untrue when made;
ii. The
Distributor admits in writing its inability to pay its debts as they
mature;
iii.
The
Distributor files a petition in bankruptcy;
23
iv. The
Distributor makes an assignment for the benefit of its creditors;
v. The
Distributor consents to the appointment of, or possession by, a custodian for
itself or for all or substantially all of its property;
vi. A
petition in bankruptcy is filed with the written consent of the
Distributor;
vii. The
Distributor fails to have a petition in bankruptcy which was filed without
its
consent dismissed within one hundred twenty (120) days from the date upon which
such petition was filed;
viii. Notwithstanding
the one hundred twenty (120) day period set forth in Subparagraph “vii” of this
Paragraph “B” of this Article “13” of this Agreement, the Distributor is
adjudicated bankrupt on a petition in bankruptcy filed against it;
ix. A
court
of competent jurisdiction enters a final non-appealable order, judgment or
decree appointing, without the consent of the Distributor, a receiver, trustee
or custodian for the Distributor or for all or substantially all of the property
or assets of the Distributor; and
x. A
court
of competent jurisdiction enters a final judgment for the payment of money
against the Distributor, which judgment the Distributor shall not discharge
(or
provide for such discharge) in accordance with its terms within one hundred
twenty (120) days of the date of entry thereof, or procure a stay of execution
thereof within one hundred twenty (120) days from the date of entry thereof
and,
within such one hundred twenty (120) day period, or such longer period during
which execution of such judgment shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal.
24
C.
If
upon termination pursuant to this Article “13” of this Agreement, the
Distributor has in its possession or control any units of the Product, the
Manufacturer, in its sole and absolute discretion, shall either (i) allow the
Distributor to sell said units of the Product remaining in its possession or
control for a period of ninety (90) days after termination or (ii) repurchase
said units of the Product remaining in the Distributor’s possession or control
from the Distributor at the price paid by the Distributor for said units of
the
Product which the Distributor shall ship, at the Distributor’s sole expense, to
the Manufacturer. If the Manufacturer allows the Distributor to sell the units
of the Product remaining in its possession or control, then after said ninety
(90) day period, if the Distributor has in its possession or control any
remaining units of the Product, the Distributor shall, at its sole expense,
arrange to ship any such units of the Product to the Manufacturer and the
Manufacturer shall have no obligation to pay for the units of the Product
returned to it.
All
units
of the Product shipped to the Manufacturer shall be shipped F.O.B. Destination
which means that the Distributor shall retain title to the Product and be
responsible for the risk of loss, customs clearing, transportation, the cost
of
shipment and insurance of the Product and all other costs until the Manufacturer
has received the shipment at its principal place of business (the “Point of
Destination”). The Distributor acknowledges that it is responsible for the risk
of loss, customs clearing, transportation, the cost of shipment and insurance
of
the Product and all other costs until the Manufacturer has received the shipment
at the Point of Destination. The Distributor further acknowledges that title
to
all the Product shall remain with it upon shipping F.O.B. Destination until
the
Product is received at the Point of Destination by the
Manufacturer.
25
14. Effect
of Termination.
The
termination of this Agreement for any reason shall not release any party from
any liability, obligation or agreement that, pursuant to any provision of this
Agreement, is intended to survive or be performed after the termination of
this
Agreement.
15. Inventions
or Improvements by the Distributor.
If,
during the Term, the Distributor makes any improvements in the Product or the
Technology or the mode of using them, including, but not limited to, technical
or commercial improvements, becomes the owner of any such improvements either
through Patents or otherwise, or obtains any rights, benefits or privileges
with
respect to the Product or the Technology, including, but not limited to,
obtaining 510(k) marketing clearance from the Food and Drug Administration,
then
it shall and hereby does assign such improvements, rights, benefits or
privileges to the Manufacturer (without cost to the Manufacturer) and shall
give
the Manufacturer full information with respect thereto, including, but not
limited to, the mode of using them. Notwithstanding the foregoing, during the
Term, the Distributor shall be entitled to use any such improvements, rights,
benefits or privileges in conjunction with all rights which are hereby granted
to the Distributor with respect to the Technology. The Distributor shall also
provide the Manufacturer with any and all test results arising from tests of
any
Product as soon as practicable after such results are available.
26
16. Ownership
of Intellectual Property.
All
Intellectual Property shall be the exclusive property of the
Manufacturer.
17. Uses
of Intellectual Property.
A.
Patents.
The
Distributor may, only with the express written consent of the Manufacturer
and
at its own expense, apply for patents in any country on any discovery or
invention which Distributor or its employees shall have obtained prior to the
termination of this Agreement with respect to the Technology, Intellectual
Property or Products. The Distributor shall notify the Manufacturer of its
intention, keep the Manufacturer currently informed of its activities with
respect thereto, and provide the Manufacturer with copies of patent applications
and amendments thereto, patent office communications, and other relevant papers.
All such patent applications shall be submitted in the Manufacturer’s name;
provided, however, that if such patent application cannot be submitted in the
Manufacturer’s name, then such patent application and any patents issued
pursuant to such patent application shall be assigned to the Manufacturer
without cost to the Manufacturer.
B.
Trademark.
During
the Term, the Manufacturer grants to the Distributor the right to affix, without
charge to the Distributor, the Trademark (which is owned by the Manufacturer)
as
a ▇▇▇▇ of certification to the Product distributed in the Territory by the
Distributor, provided:
27
i.
All
labels, advertising, and packaging for units of the Product by the Distributor
must conform to the specifications of the Manufacturer.
ii.
Whenever the Distributor uses the Trademark in advertising or in any other
manner in connection with the sale and distribution of the Product, the
Distributor shall indicate clearly the Manufacturer’s ownership of the
Trademark. The Distributor agrees to affix to each unit of the Product and
to
the package containing each unit of the Product and any papers inserted in
the
Package a notice stating “Licensed under United States Patent Nos. RE 32,000, RE
4,624,264, 4,651,749, 6,086,247, 6,135,968”. The Distributor shall provide the
Manufacturer with samples of all literature, packages, labels, labeling and
advertising prepared by or for the Distributor and intended to be used by the
Distributor. When using the Trademark, the Distributor undertakes to comply
with
all trademark laws, including, but not limited to, compliance with marking
requirements.
iii.
If
required, the Manufacturer shall make application to register the Distributor
as
a Permitted User or Registered User of the Trademark, and if necessary or if
requested by the Manufacturer, the Distributor undertakes to join in such
application and to execute any such documents and to take such action as may
be
necessary or requested by the Distributor to implement such application or
retain, enforce or defend the Trademark.
iv.
The
Distributor acknowledges the Manufacturer's exclusive right, title and interest
in and to the Trademark, and shall not at any time do or cause to be done any
act or thing contesting or in any way impairing or tending to impair any part
of
such right, title and interest. The Distributor shall not in any manner
represent that it has any ownership in the Trademark or registration thereof,
and the Distributor acknowledges that use of the Trademark shall not create
in
the Distributor’s favor any right, title or interest in or to the
Trademark.
28
C.
Nothing contained in this Agreement shall be construed as conferring upon the
Distributor or any of its Subdistributors or customers, directly or by
implication, estoppel or otherwise, any additional license under any trade
secrets or know-how of the Manufacturer, and no such license or other rights
shall arise from this Agreement or from any acts, statements or dealings
resulting from or relating to, this Agreement.
D.
The
Manufacturer assumes no liability to the Distributor or to third parties with
respect to the performance characteristics of the Product sold by the
Distributor.
18. Manufacturer’s
Exclusive Rights, Title and Interest in and to Intellectual
Property.
A.
The
Distributor acknowledges the Manufacturer's exclusive right, title and interest
in and to the Intellectual Property, and shall not at any time do or cause
to be
done any act or thing contesting or in any way impairing or tending to impair
any part of such right, title and interest. The Distributor shall not in any
manner represent that it has any ownership in the Intellectual Property, and
the
Distributor acknowledges that use of the Intellectual Property, shall not create
in the Distributor's favor any right, title or interest in or to the
Intellectual Property other than as expressly provided in this
Agreement.
29
B.
If the
applicable Intellectual Property law requires, the Manufacturer shall make
application to register the Distributor as a Permitted User or Registered User
of the Intellectual Property and if necessary, the Distributor undertakes to
join in such application and to execute any such documents and to take such
action as may be necessary to implement such application.
C.
The
Distributor acknowledges that the use of the Intellectual Property shall not
create in the Distributor any right, title or interest in or to the Intellectual
Property other than as expressly provided in this Agreement.
D.
Upon
termination of this Agreement in any manner as provided in this Agreement,
the
Distributor shall cease and desist from all use of the Intellectual Property
in
any manner.
30
19. Nondisclosure
of Confidential Information.
A.
As
used in this Agreement, “Confidential Information” shall mean oral or written
information which is directly or indirectly presented to the Distributor, its
past, present or future subsidiaries, parents, officers, consultants, directors,
stockholders, affiliates, attorneys, employees, agents and its and their
respective Immediate Families (as defined below; all of the foregoing are
hereinafter collectively referred to as “Agents”) by the Manufacturer,
including, but not limited to, information which is developed, conceived or
created by the Manufacturer, or disclosed to the Distributor or its Agents
or
known by or conceived or created by the Distributor or its Agents during the
Term or after the termination of this Agreement if disclosed to the Distributor
or its Agents or known by or conceived or created by the Distributor or its
Agents as a result of this Agreement, with respect to the Manufacturer, its
business or any of its products, processes, and other services relating thereto
relating to the past or present business or any plans with respect to future
business of the Manufacturer, or relating to the past or present business of
a
third party or plans with respect to future business of a third party which
are
disclosed to the Manufacturer. Confidential Information includes, but is not
limited to, all documentation, hardware and software relating thereto, and
information and data in written, graphic and/or machine readable form, products,
processes and services, whether or not patentable, trademarkable or
copyrightable or otherwise protectable, including, but not limited to,
information with respect to discoveries; know-how; ideas; computer programs,
source codes and object codes; designs; algorithms; processes and structures;
product information; marketing information; price lists; cost information;
product contents and formulae; manufacturing and production techniques and
methods; research and development information; lists of clients and vendors
and
other information relating thereto; financial data and information; business
plans and processes; documentation with respect to any of the foregoing; and
any
other information of the Manufacturer that the Manufacturer informs the
Distributor or its Agents or the Distributor or its Agents should know, by
virtue of its or their position or the circumstances in which the Distributor
or
its Agents learned such other information, is to be kept confidential including,
but not limited to, any information acquired by the Distributor or its Agents
from any sources prior to the commencement of this Agreement. Confidential
Information also includes similar information obtained by the Manufacturer
in
confidence from its vendors, licensors, licensees, customers and/or clients.
Confidential Information may or may not be labeled as confidential.
31
“Immediate
Family” shall include the following: (i) any spouse, parent, spouse of a parent,
mother-in-law, father-in-law, brother-in-law, sister-in-law, child, spouse
of a
child, adopted child, spouse of an adopted child, sibling, spouse of a sibling,
grandparent, spouse of a grandparent, and any issue or spouse of any of the
foregoing, and (ii) such child or issue of such child which is born and/or
adopted during or after the term of this Agreement and the issue (whether by
blood or adoption) of such person; provided, however, that it shall not include
any person who was legally adopted after attaining the age of eighteen (18)
by
any of the persons specified in subparagraph “i” of this Paragraph “A” of this
Article “19” of this Agreement or any spouse or issue (whether by blood or
adoption) of any such person. A parent of a specified person shall include
an
affiliate.
B.
Except
as required in the performance of the Distributor’s or its Agents’ obligations
pursuant to this Agreement, neither the Distributor nor its Agents shall, during
or after the Term, directly or indirectly, use any Confidential Information
or
disseminate or disclose any Confidential Information to any person, firm,
corporation, association or other entity. The Distributor or its Agents shall
take reasonable measures to protect Confidential Information from any
accidental, unauthorized or premature use, disclosure or destruction.
Information shall not be considered Confidential Information if it: (i) is
at
the time of disclosure or thereafter a part of the public domain without breach
of this Agreement by the Distributor or its Agents; provided, however, that
the
act of copyrighting shall not cause or be construed as causing the copyrighted
materials to be in the public domain, (ii) is disclosed as reasonably required
in a proceeding to enforce the Distributor’s rights under this Agreement or
(iii) is disclosed as required by court order or applicable law; provided,
however, that if either the Distributor or its Agents is legally requested
or
required by court order or applicable law, including, but not limited to, by
oral question, interrogatories, request for information or documents, subpoenas,
civil investigative demand or similar process to disclose any Confidential
Information, the Distributor or its Agents, as the case may be, shall promptly
notify the Manufacturer of such request or requirement so that the Manufacturer
may seek an appropriate protective order; provided further, however; that if
such protective order is not obtained, the Distributor and its Agents agree
to
furnish only that portion of the Confidential Information which they are advised
by their respective counsels is legally required.
32
C.
Upon
termination of this Agreement for any reason or at any time upon request of
the
Manufacturer, the Distributor and its Agents agree to deliver to the
Manufacturer all materials of any nature which are in the Distributor's or
its
Agents’ possession or control and which are or contain Confidential Information,
Work Product or Work Products (hereinafter defined), or which are otherwise
the
property of the Manufacturer or any vendor, licensor, licensee, customer or
client of the Manufacturer, including, but not limited to writings, designs,
documents, records, data, memoranda, tapes and disks containing software,
computer source code listings, routines, file layouts, record layouts, system
design information, models, manuals, documentation and notes. The Distributor
and its Agents shall destroy all written documentation prepared by them for
internal purposes based in whole or in part on any Confidential Information
and
such destruction shall be confirmed to the Manufacturer in writing by an officer
of the Distributor and/or its Agents.
33
D.
All
ideas, inventions, discoveries or improvements, whether patentable or not,
conceived by the Distributor or its Agents (alone or with others) during the
Term (“Work Products”) shall be the exclusive property of and assigned to the
Manufacturer or as the Manufacturer may direct without compensation to the
Distributor or its Agents. Any records with respect to the foregoing shall
be
the sole and exclusive property of the Manufacturer and the Distributor or
its
Agents shall surrender possession of such records to the Manufacturer upon
termination of this Agreement. Any Work Product shall be deemed incorporated
in
the definition of Confidential Information for all purposes
hereunder.
E.
Neither the Distributor nor its Agents shall assert any rights with respect
to
the Manufacturer, its business, or any of its products, processes and other
services relating thereto, Work Product or any Confidential Information as
having been acquired or known by the Distributor or its Agents prior to the
commencement of the Term.
20. Protection
of Intellectual Property; Indemnification; Defense; Products
Liability.
A.
If the
Distributor learns of any infringement of any Intellectual Property or imitation
or counterfeiting of any Product, Distributor shall promptly notify the
Manufacturer of such information. Upon learning of such information, the
Manufacturer shall take such action as it deems advisable in its sole and
absolute discretion for the protection of the Intellectual
Property.
B.
In
order to induce the Manufacturer to enter into this Agreement, in addition
to
and in no way limiting Paragraph “C” of Article “3” of this Agreement, the
Distributor agrees, on its own behalf and on behalf of its Agents (with the
exception of the Manufacturer), that neither the Distributor, nor any of its
Agents, shall during the Term and, for a period of five (5) years from the
date
of termination of this Agreement, (i) manufacture any Competing Products (as
defined below), (ii) directly or indirectly sell or market any product which
competes either directly or indirectly with any product of the Manufacturer
that
screens for, or is a detection modality for prostate, cancer, kidney disease
and
strokes or any product which is based upon the technology of temperature
differentials (“Competing Products”), or (iii) directly or indirectly own,
manage, participate in the operation or control of, or be connected as an
officer, director, shareholder, partner, consultant, owner, employee, agent,
lender, donor, vendor or otherwise, or have any financial interest in or aid
or
assist anyone else in the conduct of any competing entity which manufactures,
distributes or offers for sale Competing Products. The Distributor further
agrees, on its own behalf and on behalf of its Agents, that neither it nor
its
Agents shall during the Term and for a period of five (5) years from the date
of
termination of this Agreement (i) personally, or cause others to personally
induce or attempt to induce any employee to terminate their employment with
the
Manufacturer; (ii) interfere with or disrupt the Manufacturer's relationship
with its suppliers, vendors, customers or employees; or (iii) solicit or entice
any person to leave their employ with the Manufacturer.
34
C.
The
Distributor and the Manufacturer each agree, on their own behalf and on behalf
of their Agents, that neither them nor their Agents shall during the Term and
for a period of five (5) years from the date of termination of this Agreement
(i) personally, or cause others to personally induce or attempt to induce any
employee to terminate their employment with the other of the Manufacturer or
the
Distributor, as the case may be; (ii) interfere with or disrupt the other of
the
Manufacturer’s or the Distributor's, as the case may be, relationship with its
suppliers, vendors, customers or employees; or (iii) solicit or entice any
person to leave their employ with the other of the Manufacturer or the
Distributor, as the case may be.
35
D.
The
Distributor and the Manufacturer each agree, on their behalf and on behalf
of
their Agents, that the duration, scope and geographic area for which the
provisions set forth in Paragraphs “B” and “C” of this Article “20” of this
Agreement are to be effective are reasonable. If any court of competent
jurisdiction determines that any provision of this Agreement is invalid or
unenforceable by reason of such provision extending the covenants and agreements
contained herein for too great a period of time or over too great a geographical
area, or by reason of it being too extensive in any other respect, such
agreement or covenant shall be interpreted to extend only over the maximum
period of time and geographical area, and to the maximum extent in all other
respects, as to which it is valid and enforceable, all as determined by such
court in such action. Any determination that any provision of this Agreement
is
invalid or unenforceable, in whole or in part, shall have no effect on the
validity or enforceability of any remaining provision of this
Agreement.
E.
Any
period of time set forth in this Agreement shall not be construed to permit
the
Distributor, the Manufacturer, or either of their Agents to engage in any of
the
prohibited acts set forth in this Agreement after such period if such acts
would
otherwise be prohibited by any applicable statute or legal
precedent.
36
21. Indemnification.
A.
Indemnification
by the Distributor.
In
order to induce the Manufacturer to enter into and perform this Agreement,
the
Distributor does hereby indemnify, protect, defend and save and hold harmless
the Manufacturer and each of its shareholders, affiliates, officers, directors,
control persons, employees, attorneys, agents, partners and trustees and
personal representatives of any of the foregoing (“Indemnified Parties”), from
and against any loss resulting to any of them from any material loss, liability,
cost, damage, or expense which the Indemnified Parties may suffer, sustain
or
incur arising out of or due to a breach by the Distributor of the
representations, warranties and covenants set forth in Article “8” of this
Agreement or in any documents delivered pursuant hereto, or of a breach by
the
Distributor of any of its obligations pursuant to this Agreement or in any
documents delivered pursuant hereto.
B.
Indemnification
by the Manufacturer.
In
order to induce the Distributor to enter into and perform this Agreement, the
Manufacturer does hereby indemnify, protect, defend and save and hold harmless
the Distributor and each of its members, affiliates, officers, managers, control
persons, employees, attorneys, agents, partners and trustees and personal
representatives of any of the foregoing (“Indemnified Parties”), from and
against any loss resulting to any of them from any material loss, liability,
cost, damage, or expense which the Indemnified Parties may suffer, sustain
or
incur arising out of or due to a breach by the Manufacturer of the
representations, warranties and covenants set forth in Article “7” of this
Agreement or in any documents delivered pursuant hereto, or of a breach by
the
Manufacturer of any of its obligations pursuant to this Agreement or in any
documents delivered pursuant hereto.
37
C.
Reasonable
Costs, Etc.
The
indemnification which is set forth in this Article “21” of this Agreement shall
be deemed to include not only the specific liabilities or obligation with
respect to which such indemnity is provided, but also all counsel fees,
reasonable costs, expenses and expenses of settlement relating thereto, whether
or not any such liability or obligation shall have been reduced to
judgment.
38
D.
Third
Party Claims.
If any
demand, claim, action or cause of action, suit, proceeding or investigation
(collectively, the “Claim”) is brought against an Indemnified Party for which
the Indemnified Party intends to seek indemnity from the other party hereto
(the
“Indemnifying Party”), then the Indemnified Party within twenty-one (21) days
after such Indemnified Party's receipt of the Claim, shall notify the
Indemnifying Party pursuant to Paragraph “C” of Article “24” of this Agreement
which notice shall contain a reasonably thorough description of the nature
and
amount of the Claim (the “Claim Notice”). The Indemnifying Party shall have the
option to undertake, conduct and control the defense of such claim or demand.
Such option to undertake, conduct and control the defense of such claim or
demand shall be exercised by notifying the Indemnified Party within ten (10)
days after receipt of the Claim Notice pursuant to Paragraph “C” of Article “24”
of this Agreement (such notice to control the defense is hereinafter referred
to
as the “Defense Notice”). The failure of the Indemnified Party to notify the
Indemnifying Party of the Claim shall not relieve the Indemnifying Party from
any liability which the Indemnifying Party may have pursuant to this Article
“21” of this Agreement except to the extent that such failure to notify the
Indemnifying Party prejudices the Indemnifying Party. The Indemnified Party
shall use all reasonable efforts to assist the Indemnifying Party in the
vigorous defense of the Claim. All costs and expenses incurred by the
Indemnified Party in defending the Claim shall be paid by the Indemnifying
Party. If, however, the Indemnified Party desires to participate in any such
defense or settlement, it may do so at its sole cost and expense (it being
understood that the Indemnifying Party shall be entitled to control the
defense). The Indemnified Party shall not settle the Claim. If the Indemnifying
Party does not elect to control the defense of the Claim, within the aforesaid
ten (10) day period by proper notice pursuant to Paragraph “C” of Article “24”
of this Agreement, then the Indemnified Party shall be entitled to undertake,
conduct and control the defense of the Claim (a failure by the Indemnifying
Party to send the Defense Notice to the Indemnified Party within the aforesaid
ten (10) day period by proper notice pursuant to Paragraph “C” of Article “24”
of this Agreement shall be deemed to be an election by the Indemnifying Party
not to control the defense of the Claim); provided, however, that the
Indemnifying Party shall be entitled, if it so desires, to participate therein
(it being understood that in such circumstances, the Indemnified Party shall
be
entitled to control the defense). Regardless of which party has undertaken
to
defend any claim, the Indemnifying Party may, without the prior written consent
of the Indemnified Party, settle, compromise or offer to settle or compromise
any such claim or demand; provided however, that if any settlement would result
in the imposition of a consent order, injunction or decree which would restrict
the future activity or conduct of the Indemnified Party, the consent of the
Indemnified Party shall be a condition to any such settlement. Notwithstanding
the foregoing provisions of this Article “21” of this Agreement, as a condition
to the Indemnifying Party either having the right to defend the Claim, or having
control over settlement as indicated in this Article “21” of this Agreement, the
Indemnifying Party shall execute an agreement, in the form annexed hereto and
made a part hereof as Exhibit “H”, acknowledging its liability for
indemnification pursuant to this Article “21” of this Agreement. Whether the
Indemnifying Party shall control and assume the defense of the Claim or only
participate in the defense or settlement of the Claim, the Indemnified Party
shall give the Indemnifying Party and its counsel access, during normal business
hours, to all relevant business records and other documents, and shall permit
them to consult with its employees and counsel.
39
22. Equitable
Relief.
If the
Distributor breaches this Agreement, the Manufacturer shall have the right,
at
its election, to obtain equitable relief including, but not limited to, an
order
for specific performance of this Agreement or an injunction, without the need
to: (i) post a bond or other security, (ii) to prove any actual damage or (iii)
to prove that money damages would not provide an adequate remedy. Resort to
such
equitable relief, however, shall not be construed to be a waiver of any other
rights or remedies which the Manufacturer may have for damages or
otherwise.
23. No
Agency.
Except
as provided for in this Agreement, neither party is the legal representative
or
agent of, or has the power to obligate the other for any purpose whatsoever;
and
no partnership, joint venture, agent, fiduciary, or employment relationship
is
intended or created by reason of this Agreement. It is the intent of the parties
hereto that each party shall be an independent contractor of the other. Neither
has the authority to assume or create any obligation or liability, express
or
implied, upon the other’s behalf or in its name or to bind the other in any
manner whatsoever. The Distributor shall not sign any document as an authorized
person of the Manufacturer and none of its employees or members shall hold
themselves out as officers, directors, or shareholders of the Manufacturer,
or
as otherwise having any authority to enter into contracts binding upon the
Manufacturer, or to create any obligations on the part of the Manufacturer.
The
Manufacturer shall not sign any document as an authorized person of the
Distributor and none of its employees or shareholders shall hold themselves
out
as officers, managers, or members of the Distributor, or as otherwise having
any
authority to enter into contracts binding upon the Distributor, or to create
any
obligations on the part of the Distributor.
40
24. Miscellaneous.
A.
Headings.
Headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
B.
Enforceability.
If any
provision which is contained in this Agreement should, for any reason, be held
to be invalid or unenforceable in any respect under the laws of any
jurisdiction, such invalidity or unenforceability shall not affect any other
provision of this Agreement and this Agreement shall be construed as if such
invalid or unenforceable provision had not been contained herein.
C.
Notices. Any
notice or other communication required or permitted hereunder shall be
sufficiently given if sent by (i) mail by (a) certified mail, postage prepaid,
return receipt requested and (b) first class mail, postage prepaid (ii)
overnight delivery with confirmation of delivery or (iii) facsimile transmission
with an original mailed by first class mail, postage prepaid, addressed as
follows:
41
|
To
the Manufacturer:
|
Scantek
Medical, Inc.
|
|
▇▇
▇▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn:
▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
|
|
|
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
With
a copy to:
|
▇▇▇▇▇
& Fraade, P.C.
|
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
|
|
|
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
With
a copy to:
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq.
|
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
Fax
No.: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
To
the Distributor:
|
Gibraltar
Global Marketing LLC
|
|
▇▇
▇▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
|
|
|
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
42
|
With
a copy to:
|
▇▇▇▇▇
& Fraade, P.C.
|
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
|
|
|
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
or in each case to such other address and facsimile number as shall have last been furnished by like notice. If all of the methods of notice set forth in this Paragraph “C” of this Article “24” of this Agreement are impossible for any reason, notice shall be in writing and personally delivered to the aforesaid addresses. Each notice or communication shall be deemed to have been given as of the date so mailed or delivered as the case may be; provided, however, that any notice sent by facsimile shall be deemed to have been given as of the date so sent if a copy thereof is also mailed by first class mail on the date sent by facsimile. If the date of mailing is not the same as the date of sending by facsimile, then the date of mailing by first class mail shall be deemed to be the date upon which notice is given; provided further, however, that any notice sent by overnight delivery shall be deemed to have been given as of the date of delivery.
43
D.
Governing
Law; Disputes.
This
Agreement shall in accordance with Section 5-1401 of the General Obligations
Law
of New York in all respects be construed, governed, applied and enforced under
the internal laws of the State of New York without giving effect to the
principles of conflicts of laws and be deemed to be an agreement entered into
in
the State of New York and made pursuant to the laws of the State of New York.
Except as otherwise provided in Article “22” of this Agreement, the parties
agree that they shall be deemed to have agreed to binding arbitration solely
in
New York, New York, with respect to the entire subject matter of any and all
disputes relating to or arising under this Agreement including, but not limited
to, the specific matters or disputes as to which arbitration has been expressly
provided for by other provisions of this Agreement. Any such arbitration shall
be by a panel of three arbitrators and pursuant to the commercial rules then
existing of the American Arbitration Association in the State of New York,
County of New York. In all arbitrations, judgment upon the arbitration award
may
be entered in any court having jurisdiction. The parties agree, further, that
the prevailing party in any such arbitration as determined by the arbitrators
shall be entitled to such costs and attorney's fees, if any, in connection
with
such arbitration as may be awarded by the arbitrators. In connection with the
arbitrators’ determination for the purpose of which party, if any, is the
prevailing party, they shall take into account all of the factors and
circumstances including, without limitation, the relief sought, and by whom,
and
the relief, if any, awarded, and to whom. In addition, and notwithstanding
the
foregoing sentence, a party shall not be deemed to be the prevailing party
in a
claim seeking monetary damages, unless the amount of the arbitration award
exceeds the amount offered in a legally binding writing by the other party
by
fifteen (15%) percent or more. For example, if the party initiating arbitration
(“A”) seeks an award of one hundred thousand ($100,000) dollars plus costs and
expenses, the other party (“B”) has offered A fifty thousand ($50,000) dollars
in a legally binding written offer prior to the commencement of the arbitration
proceeding, and the arbitration panel awards any amount less than fifty-seven
thousand five hundred ($57,500) dollars to A, the panel should determine that
B
has “prevailed”. The parties specifically designate the courts in the City of
New York, State of New York as properly having jurisdiction for any proceeding
to confirm and enter judgment upon any such arbitration award. The parties
hereby consent to and submit to personal jurisdiction over each of them solely
by the courts of the State of New York in any action or proceeding, waive
personal service of any and all process and specifically consent that in any
such action or proceeding in the courts of the State of New York, any service
of
process may be effectuated upon any of them by certified mail, return receipt
requested, in accordance with Paragraph “C” of this Article “24” of this
Agreement.
44
The
arbitration panel shall have no power to award non-monetary or equitable relief
of any sort. It shall also have no power to award (i) damages inconsistent
with
any applicable agreement between the parties or (ii) punitive damages or any
other damages not measured by the prevailing party’s actual damages; and the
parties expressly waive their right to obtain such damages in arbitration or
in
any other forum. In no event, even if any other portion of these provisions
is
held invalid or unenforceable, shall the arbitration panel have power to make
an
award or impose a remedy which could not be made or imposed by a court deciding
the matter in the same jurisdiction.
Discovery
shall be permitted in connection with the arbitration only to the extent, if
any, expressly authorized by the arbitration panel upon a showing of substantial
need by the party seeking discovery.
All
aspects of the arbitration shall be treated as confidential. The parties and
the
arbitration panel may disclose the existence, content or results of the
arbitration only as provided in the rules of the American Arbitration
Association in New York, New York. Before making any such disclosure, a party
shall give written notice to all other parties and shall afford such parties
a
reasonable opportunity to protect their interest.
45
E.
Assignment
by the Manufacturer.
This
Agreement shall be transferable by the Manufacturer.
F.
Construction.
Each of
the parties hereto hereby acknowledges and agrees that (i) ▇▇▇▇▇ & Fraade,
P.C. drafted this Agreement on behalf of both of the parties to this Agreement,
(ii) each party has been separately advised by counsel other than ▇▇▇▇▇ &
Fraade, P.C. during the course of reviewing this Agreement and (iii) this
Agreement shall not, therefore, be construed more strictly against any party
responsible for its drafting regardless of any presumption or rule requiring
construction against the party whose attorney drafted this
Agreement.
G.
Entire
Agreement.
This
Agreement and all documents and instruments referred to herein (i) constitute
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and thereof, and (ii) are not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder. Each party hereto
agrees that, except for the representations and warranties contained in this
Agreement, neither the Manufacturer nor the Distributor makes any other
representations or warranties, and each hereby disclaims any other
representations and warranties made by itself or any of its officers, directors,
managers, employees, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement
or
the transactions contemplated hereby, notwithstanding the delivery or disclosure
to the other or the other's representatives of any documentation or other
information with respect to any one or more of the foregoing.
46
H.
Further
Assurances.
The
parties agree to execute any and all such other further instruments and
documents, and to take any and all such further actions which are reasonably
required to effectuate this Agreement and the intents and purposes
hereof.
I.
Binding
Agreement.
This
Agreement shall not be binding upon and inure to the benefit of the parties
hereto and their heirs, executors, administrators, personal representatives,
successors and assigns unless and until each of the parties to this Agreement
have executed and delivered to the other party a fully executed copy of this
Agreement.
J.
Non-Waiver.
Except
as otherwise expressly provided herein, no waiver of any covenant, condition,
or
provision of this Agreement shall be deemed to have been made unless expressly
in writing and signed by the party against whom such waiver is charged; and
(i)
the failure of any party to insist in any one or more cases upon the performance
of any of the provisions, covenants or conditions of this Agreement or to
exercise any option herein contained shall not be construed as a waiver or
relinquishment for the future of any such provisions, covenants or conditions,
(ii) the acceptance of performance of anything required by this Agreement to
be
performed with knowledge of the breach or failure of a covenant, condition
or
provision hereof shall not be deemed a waiver of such breach or failure, and
(iii) no waiver by any party of one breach by another party shall be construed
as a waiver of any other or subsequent breach of this Agreement.
47
K.
Counterparts.
This
Agreement may be executed simultaneously in one or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
L.
Modifications. This
Agreement may not be changed, modified, extended, terminated or discharged
orally, but only by an agreement in writing, which is signed by all of the
parties to this Agreement.
M.
Exhibits.
All
Exhibits annexed or attached to this Agreement are incorporated into this
Agreement by reference thereto and constitute an integral part of this
Agreement.
N.
Survival.
All of
the provisions and obligations of this Agreement shall survive the termination
of this Agreement.
O.
Severability.
The
provisions of this Agreement shall be deemed separable. Therefore, if any part
of this Agreement is rendered void, invalid or unenforceable, such rendering
shall not affect the validity or enforceability of the remainder of this
Agreement; provided that if the part or parts which are void, invalid or
unenforceable as aforesaid shall substantially impair the value of the whole
Agreement to either party, that party may cancel, and terminate the Agreement
by
giving written notice to the other party.
48
IN
WITNESS WHEREOF,
the
parties to this Agreement have set their hands and seals or caused these
presents to be signed of the day and year first above written.
| Scantek Medical, Inc. | Gibraltar Global Marketing LLC | ||
| By: | By: | ||
|
▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President |
▇▇▇▇▇▇ ▇▇▇▇▇▇, President |
49
List
of
Exhibits
|
Exhibit
A:
|
Patents
|
|
Exhibit
B:
|
Description
of the Product
|
|
Exhibit
C:
|
Territory
|
|
Exhibit
D:
|
Trademark
|
|
Exhibit
E:
|
Form
of Subdistributor Agreement
|
|
Exhibit
F:
|
Liens
|
|
Exhibit
G:
|
Litigation
|
|
Exhibit
H:
|
Form
of Letter Agreement to be Executed Pursuant to Article “21” of the
Agreement
|
▇▇
▇▇▇▇▇▇▇
▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇:
RE
32,000
RE
4,624,264
4,651,749
6,086,247
6,135,968
U.S.
PATENT APPLICATIONS
|
APPLICATION
NUMBER
|
DATE
OF APPLICATION
|
|
|
08/854144
|
5/14/97
|
|
|
08/926790
|
9/10/97
|
|
|
09/018765
|
2/05/98
|
51
EXHIBIT
B
PRODUCT
KNOWN AS BREASTCARE™ /BREASTALERT™
Notwithstanding
the following more specific description of the Product, the Products shall
include any temperature sensing product manufactured by the Manufacturer using
the patented technology set forth in the Patents listed in Exhibit "A" or
improvements thereto. The BreastCare™ /BreastAlert™ is an early diagnostic
direct reading, digital product to screen the breast for abnormalities,
including cancer.
The
BreastCare™ /BreastAlert™ measures underlying breast tissue temperature and not
skin surface temperature by retaining the emitted heat when BreastCare™
/BreastAlert™ is placed against the breast for 15 minutes. The averaged and
recorded reading on the BreastCare™ /BreastAlert™ has taken into consideration
that the temperature patterns of a woman's breasts are closely symmetrical.
This
method detects abnormalities by comparing the temperature differences in the
corresponding areas of a woman's breasts.
The
BreastCare™ /BreastAlert™ product consists of a pair of non-woven pads made of
spun-fiber material, each of which has three wafer-thin, pliant, aluminum foil,
and temperature responsive segments attached to its inner surface. Each segment
is wedge-shaped and contains 18 columns or bars of thermal dots. These dots
contain chemical heat sensors that change color when exposed to a specific
temperature.
52
EXHIBIT
C
TERRITORY:
EXCLUDED COUNTRIES
|
Afghanistan
|
|
Bosnia
& Herzegovina
|
|
Canada
|
|
Croatia
|
|
France
|
|
Jordan
|
|
Libya
|
|
Morocco
|
|
Qatar
|
|
Serbia
& Montenegro
|
|
Syria
|
|
United
States
|
|
Algeria
|
|
Brazil
|
|
Chile
|
|
Egypt
|
|
Iran
|
|
Kuwait
|
|
Macedonia
|
|
Oman
|
|
Saudi
Arabia
|
|
Slovenia
|
|
Tunisia
|
|
Wales
|
|
Bahrain
|
|
Bulgaria
|
|
China
|
|
England
|
|
Iraq
|
|
Lebanon
|
|
Malaysia
|
|
Pakistan
|
|
Scotland
|
|
Sudan
|
|
United
Arab Emirates
|
|
Yemen
|
53
EXHIBIT
D
TRADEMARK
BreastAlert
BreastCare
54
EXHIBIT
E
FORM
OF
SUBDISTRIBUTOR AGREEMENT
__________,
200__
Dear
Sir
or Madam:
Gibraltar
Global Marketing, a Delaware limited liability company (the “Distributor”) is
the Distributor pursuant to a Distribution Agreement dated as of the
9th
day of
January, 2007, by and between Scantek Medical, Inc. (the “Manufacturer”) and the
Distributor (the “Distribution Agreement”); a copy of the Distribution Agreement
is annexed hereto as Exhibit "A".
The
parties have agreed to the following terms and conditions:
1. The
Subdistributor shall comply with all of the terms and conditions of the
Distribution Agreement, or as it may be amended in the future, which are
applicable to the Distributor and which are incorporated in this Subdistribution
Agreement (this “Subdistribution Agreement”) by reference as if fully set forth
herein.
55
2. All
of
the capitalized terms used herein which are not defined herein shall have the
meaning set forth in the Distribution Agreement.
3. Pursuant
to this Subdistribution Agreement, the Distributor agrees to grant to
_______________ (the “Subdistributor”) an exclusive right to distribute and sell
the Product within the following region: ________________ for a period which
shall commence on ________________ and which shall continue until ___________,
____ (the "Term"), unless otherwise terminated pursuant to Article “8” of this
Subdistribution Agreement.
4. The
Subdistributor agrees to pay the following price (the “Price”) with respect to
each unit of the Product purchased by the Subdistributor:
[Pricing
information to be inserted]
The
Subdistributor shall pay to the Manufacturer the price set forth in the
Distribution Agreement for each unit of the Product.
The
Subdistributor shall pay to the Distributor _________________________
($___________) dollars (this is the difference between the Price and the price
paid by the Subdistributor to the Manufacturer for units of the
Product).
56
5. The
Subdistributor shall purchase the Products solely from the Manufacturer.
6. The
Distributor represents, warrants, and covenants to the Subdistributor that
the
representations, warranties and covenants given by the Distributor in the
Distribution Agreement are true and accurate and shall be binding upon the
Distributor as if they had been given directly to the
Subdistributor.
7. The
Subdistributor represents, warrants and covenants to the Distributor
that:
A. The
Subdistributor is a ___________ with all of the requisite power and authority
to
carry on its businesses as presently conducted in all jurisdictions where
presently conducted.
B. The
Subdistributor has the full right, power and legal capacity to enter into this
Subdistribution Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Subdistribution Agreement by the
Subdistributor and the consummation by it of the transactions contemplated
hereby have been duly approved and authorized by all necessary action of the
Subdistributor’s ___________________, and no further authorization shall be
necessary on the part of the Subdistributor for the performance and consummation
by the Subdistributor of the transactions contemplated hereby. A copy of the
minutes of said action by the Subdistributor’s ____________ is annexed hereto as
Exhibit "B". The execution, delivery and performance of this Subdistribution
Agreement in accordance with its terms does not and shall not require approval,
consent or authorization of any governmental agency or authority or any
political subdivision thereof.
57
C. The
business and operations of the Subdistributor have been and are being conducted
in accordance with all applicable laws, rules, and regulations of all
authorities which affect the Subdistributor or its properties, assets,
businesses or prospects. The performance of this Subdistribution Agreement
shall
not result in any breach of, or constitute a default under, or result in the
imposition of any lien or encumbrance upon any property of the Subdistributor
or
cause an acceleration under any arrangement, agreement or other instrument
to
which the Subdistributor is a party or by which any of its assets are bound.
The
Subdistributor has performed all of its obligations which are required to be
performed by it pursuant to the terms of any such agreement contract, or
commitment.
D. The
Subdistributor has the distributing capacity and the financial resources to
meet
the Subdistributor’s obligations pursuant to this Subdistribution Agreement on a
timely basis.
E. There
are
no legal, administrative, arbitration, or other proceeding or governmental
investigations adversely affecting the Subdistributor or its properties, assets
or businesses, or with respect to any matter arising out of the conduct of
the
Subdistributor’s business pending or to its knowledge threatened, by or against,
any officer or director of the Subdistributor in connection with its affairs,
whether or not covered by insurance. Neither the Subdistributor nor its officers
or directors are subject to any order, writ, injunction, or decree of any court,
department, agency, or instrumentality, affecting the
Subdistributor.
58
F. No
approval of any third party including, but not limited to, any governmental
authority is required in connection with the consummation of the transactions
set forth in this Subdistribution Agreement.
G. The
covenants, representations and warranties made by the Subdistributor in or
in
connection with this Subdistribution Agreement shall survive the execution
and
delivery of this Subdistribution
Agreement
and shall
continue in full force and effect during
the Term and for two (2) years after the expiration of the Term, it being agreed
and understood that each of such covenants, representations and warranties
is of
the essence of this Subdistribution
Agreement
and the same shall be binding upon the Subdistributor and inure to the
Distributor, its successors and assigns.
H. The
Subdistributor has no knowledge that any covenant, representation or warranty
of
the Subdistributor which is contained in this Subdistribution Agreement or
in a
writing furnished or to be furnished pursuant to this Subdistribution Agreement
contains or shall contain any untrue statement of a material fact, omits or
shall omit to state any material fact which is required to make the statements
which are contained herein or therein, not misleading.
I. If,
during the Term, any event occurs or any event known to the Subdistributor
relating to or affecting the Subdistributor shall occur as a result of which
(i)
any provision of this Article “7” of this Subdistribution Agreement at that time
shall include an untrue statement of a fact, or (ii) this Article “7” of this
Subdistribution Agreement shall omit to state any fact necessary to make the
statements herein, in light of the circumstances under which they were made,
not
misleading, the Subdistributor shall immediately notify the Distributor pursuant
to Paragraph “C” of Article “12” of this Subdistribution Agreement.
59
J. It
shall
not be a defense to a suit for damages for any misrepresentation or breach
of a
covenant, representation or warranty that the Distributor knew or had reason
to
know that any covenant, representation or warranty in this Subdistribution
Agreement contained untrue statements.
8. Termination.
A. Anything
in this Subdistribution Agreement notwithstanding the Distributor shall have
the
right to terminate this Subdistribution Agreement immediately if the
Subdistributor shall at any time default in the performance of any of its
obligations under, or otherwise commit any breach of, this Subdistribution
Agreement unless within ten (10) calendar days after receipt of written notice
of such default in accordance with Paragraph "C" of Article "12" of this
Subdistribution Agreement the Subdistributor cures such default or, if there
is
a default which cannot, with due diligence, be cured within ten (10) calendar
days, the Subdistributor institutes within ten (10) calendar days steps
reasonably necessary to remedy the default and thereafter diligently prosecutes
same to disposition. The Distributor’s right to terminate this Subdistribution
Agreement pursuant to this Article "8" of this Subdistribution Agreement or
otherwise shall be in addition to and not exclusive of any other right or remedy
that may exist at law, equity or otherwise, that the Distributor may possess
pursuant to this Subdistribution Agreement, all of which rights and remedies
shall survive such termination. The Distributor shall be required to provide
the
Subdistributor with written notice of default on no more than three (3)
occasions during the Term. After such three (3) occasions, the Distributor
shall
no longer be required to give notice to the Subdistributor and the Distributor
shall have the right to immediately terminate this Subdistribution Agreement
if
the Subdistributor shall fail to perform any of its obligations pursuant to,
or
otherwise commit any breach of, this Subdistribution Agreement.
60
B. Notwithstanding
the provisions of Paragraph “A” of this Article “8” of this Subdistribution
Agreement, the Distributor shall have the right to terminate this
Subdistribution Agreement without prior notice to the Subdistributor
if:
i. The
Subdistributor fails to make any payments when due;
ii. Any
representation or warranty of the Subdistributor contained in this
Subdistribution Agreement is untrue when made;
iii. The
Subdistributor admits in writing its inability to pay its debts as they
mature;
iv. The
Subdistributor files a petition in bankruptcy;
v. The
Subdistributor makes an assignment for the benefit of its
creditors;
61
vi. The
Subdistributor consents to the appointment of, or possession by, a custodian
for
itself or for all or substantially all of its property;
vii. A
petition in bankruptcy is filed with the consent of the
Subdistributor;
viii. The
Subdistributor fails to have a petition in bankruptcy which was filed without
its consent dismissed within one hundred twenty (120) days from the date upon
which such petition was filed;
ix. Notwithstanding
the one hundred twenty (120) day in Subparagraph “viii” of this Paragraph “B” of
this Article “8” of this Subdistribution Agreement, the Subdistributor is
adjudicated bankrupt on a petition in bankruptcy filed against it;
x. A
court
of competent jurisdiction enters a final non-appealable order, judgment or
decree appointing, without the consent of the Subdistributor, of a receiver,
trustee or custodian for the Subdistributor or for all or substantially all
of
the property or assets of the Subdistributor;
xi. A
proceeding is commenced to foreclose the security interest in, or lien on,
any
property or assets to satisfy the security interest or lien therein of any
creditor of the Subdistributor;
xii. A
court
of competent jurisdiction enters a final judgment for the payment of money
against the Subdistributor, which judgment the Subdistributor shall not
discharge (or provide for such discharge) in accordance with its terms within
one hundred twenty (120) days of the date of entry thereof, or procure a stay
of
execution thereof within one hundred twenty (120) days from the date of entry
thereof and, within such one hundred twenty (120) day period, or such longer
period during which execution of such judgment shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal;
or
62
xiii. There
is
an imposition of any attachment or levy, or an issuance of any note of eviction
against the assets or properties of the Subdistributor.
C. If
upon
termination pursuant to this Article “8” of this Subdistribution Agreement, the
Subdistributor still has in its possession or control any units of the Product,
the Subdistributor shall, at its sole expense, arrange to ship any such units
of
the Product to the Distributor. The units of the Product shall be shipped to
the
Distributor F.O.B. Destination which means that the Subdistributor shall retain
title to the Product and be responsible for the risk of loss, customs clearing,
transportation, the cost of shipment and insurance of the Product and all other
costs until the Distributor has received the shipment at its principal place
of
business (the “Point of Destination”). The Subdistributor acknowledges that it
is responsible for the risk of loss, customs clearing, transportation, the
cost
of shipment and insurance of the Product and all other costs until the
Distributor has received the shipment at the Point of Destination. The
Subdistributor further acknowledges that title to all the Product shall remain
with it upon shipping F.O.B. Destination until the Product is received at the
Point of Destination by the Distributor.
63
D. This
Subdistribution Agreement is subject to and subordinated to the Distribution
Agreement. If the Distribution Agreement is terminated, the Subdistributor
shall, at the option of the Manufacturer, continue to distribute the Product
and
shall, promptly, upon the Manufacturer’s request, execute and deliver all
instruments which are necessary and appropriate to continue as a distributor.
The Subdistributor hereby waives all rights under any present or future law
to
elect, solely by reason of the termination of the Distribution Agreement, to
terminate this Subdistribution Agreement.
9. The
termination of this Subdistribution Agreement for any reason shall not release
the Subdistributor or the Distributor from any liability, obligation or
agreement that, pursuant to any provision of this Subdistribution Agreement,
is
intended to survive or be performed after the termination of this
Subdistribution Agreement.
10. Indemnification.
A. Indemnification
by the Distributor.
In
order to induce the Subdistributor to enter into and perform this
Subdistribution Agreement, the Distributor does hereby indemnify, protect,
defend and save and hold harmless the Subdistributor and each of its
shareholders, affiliates, officers, directors, control persons, employees,
attorneys, agents, partners and trustees and personal representatives of any
of
the foregoing ("Indemnified Parties"), from and against any loss resulting
to
any of them from any material loss, liability, cost, damage, or expense which
the Indemnified Parties may suffer, sustain or incur arising out of or due
to a
breach by the Distributor of the representations, warranties and covenants
set
forth in Article “6” of this Subdistribution Agreement or in any of the
documents delivered pursuant hereto, or of a breach by the Distributor of any
of
its obligations pursuant to this Subdistribution Agreement or in any of the
documents delivered pursuant hereto.
64
B. Indemnification
by the Subdistributor.
In
order to induce the Distributor to enter into and perform this Subdistribution
Agreement, the Subdistributor does hereby indemnify, protect, defend and save
and hold harmless the Distributor and each of its members, affiliates, officers,
managers, control persons, employees, attorneys, agents, partners and trustees
and personal representatives of any of the foregoing ("Indemnified Parties"),
from and against any loss resulting to any of them from any material loss,
liability, cost, damage, or expense which the Indemnified Parties may suffer,
sustain or incur arising out of or due to a breach by the Subdistributor of
the
representations, warranties and covenants set forth in Article “7” of this
Subdistribution Agreement or in any of the documents delivered pursuant hereto,
or of a breach by the Subdistributor of any of its obligations pursuant to
this
Subdistribution Agreement or in any of the documents delivered pursuant
hereto.
C. Reasonable
Costs, Etc.
The
indemnification, which is set forth in this Article “10” of this Subdistribution
Agreement shall be deemed to include not only the specific liabilities or
obligation with respect to which such indemnity is provided, but also all
counsel fees, reasonable costs, expenses and expenses of settlement relating
thereto, whether or not any such liability or obligation shall have been reduced
to judgment.
65
D. Third
Party Claims.
If any
demand, claim, action or cause of action, suit, proceeding or investigation
(collectively, the “Claim”) is brought against an Indemnified Party for which
the Indemnified Party intends to seek indemnity from the other party hereto
(the
"Indemnifying Party"), then the Indemnified Party within twenty-one (21) days
after such Indemnified Party's receipt of the Claim, shall notify the
Indemnifying Party pursuant to Paragraph “C” of Article “12” of this
Subdistribution Agreement which notice shall contain a reasonably thorough
description of the nature and amount of the Claim (the "Claim Notice"). The
Indemnifying Party shall have the option to undertake, conduct and control
the
defense of such claim or demand. Such option to undertake, conduct and control
the defense of such claim or demand shall be exercised by notifying the
Indemnified Party within ten (10) days after receipt of the Claim Notice
pursuant to Paragraph “C” of Article “12” of this Subdistribution Agreement
(such notice to control the defense is hereinafter referred to as the “Defense
Notice”). The failure of the Indemnified Party to notify the Indemnifying Party
of the Claim shall not relieve the Indemnifying Party from any liability which
the Indemnifying Party may have pursuant to this Article “10” of this
Subdistribution Agreement except to the extent that such failure to notify
the
Indemnifying Party prejudices the Indemnifying Party. The Indemnified Party
shall use all reasonable efforts to assist the Indemnifying Party in the
vigorous defense of the Claim. All costs and expenses incurred by the
Indemnified Party in defending the Claim shall be paid by the Indemnifying
Party. If, however, the Indemnified Party desires to participate in any such
defense or settlement, it may do so at its sole cost and expense (it being
understood that the Indemnifying Party shall be entitled to control the
defense). The Indemnified Party shall not settle the Claim. If the Indemnifying
Party does not elect to control the defense of the Claim, within the aforesaid
ten (10) day period by proper notice pursuant to Paragraph “C” of Article “12”
of this Subdistribution Agreement, then the Indemnified Party shall be entitled
to undertake, conduct and control the defense of the Claim (a failure by the
Indemnifying Party to send the Defense Notice to the Indemnified Party within
the aforesaid ten (10) day period by proper notice pursuant to Paragraph “C” of
Article “12” of this Subdistribution Agreement shall be deemed to be an election
by the Indemnifying Party not to control the defense of the Claim); provided,
however, that the Indemnifying Party shall be entitled, if it so desires, to
participate therein (it being understood that in such circumstances, the
Indemnified Party shall be entitled to control the defense). Regardless of
which
party has undertaken to defend any claim, the Indemnifying Party may, without
the prior written consent of the Indemnified Party, settle, compromise or offer
to settle or compromise any such claim or demand; provided however, that if
any
settlement would result in the imposition of a consent order, injunction or
decree which would restrict the future activity or conduct of the Indemnified
Party, the consent of the Indemnified Party shall be a condition to any such
settlement. Notwithstanding the foregoing provisions of this Article “10” of
this Subdistribution Agreement, as a condition to the Indemnifying Party either
having the right to defend the Claim, or having control over settlement as
indicated in this Article “10” of this Subdistribution Agreement, the
Indemnifying Party shall execute an agreement, in the form annexed hereto and
made a part hereof as Exhibit “C”, acknowledging its liability for
indemnification pursuant to this Article “10” of this Subdistribution Agreement.
Whether the Indemnifying Party shall control and assume the defense of the
Claim
or only participate in the defense or settlement of the Claim, the Indemnified
Party shall give the Indemnifying Party and its counsel access, during normal
business hours, to all relevant business records and other documents, and shall
permit them to consult with its employees and counsel.
66
11. In
the
event of any breach by the Subdistributor of the provisions of this
Subdistribution Agreement, the Subdistributor acknowledges that the Distributor
will not have an adequate remedy at law and that the Distributor will be
entitled to institute and prosecute proceedings in an appropriate court of
competent jurisdiction and to obtain an injunction restraining the
Subdistributor from violating the provisions of this Subdistribution Agreement
without posting a bond or other security.
12. Miscellaneous.
A. Headings.
Headings contained in this Subdistribution Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Subdistribution Agreement.
B. Enforceability.
If any
provision which is contained in this Subdistribution Agreement or the
Distribution Agreement should, for any reason, be held to be invalid or
unenforceable in any respect under the laws of any jurisdiction, such invalidity
or unenforceability shall not affect any other provision of this Subdistribution
Agreement and this Subdistribution Agreement shall be construed as if such
invalid or unenforceable provision had not been contained herein.
C. Notices.
Any
notice or other communication required or permitted hereunder shall be
sufficiently given if sent by (i) mail by (a) certified mail, postage prepaid,
return receipt requested and (b) first class mail, postage prepaid (ii)
overnight delivery with confirmation of delivery or (iii) facsimile transmission
with an original mailed by first class mail, postage prepaid, addressed as
follows:
67
|
To
the Distributor:
|
Gibraltar
Global Marketing, LLC
|
|
_________________________
|
|
|
_________________________
|
|
|
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
|
|
|
Fax
No.: __________________
|
|
|
With
a copy to:
|
▇▇▇▇▇
& Fraade, P.C.
|
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn.:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
|
|
|
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
To
the Manufacturer:
|
Scantek
Medical, Inc.
|
|
_________________________
|
|
|
_________________________
|
|
|
Attn:
▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
|
|
|
Fax
No.: __________________
|
|
|
With
a copy to:
|
▇▇▇▇▇
& Fraade, P.C.
|
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
|
|
|
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
68
|
To
the Subdistributor:
|
_________________________
|
|
_________________________
|
|
|
_________________________
|
|
|
Attn:
_____________________
|
|
|
Fax
No.: ( )
______________
|
|
|
With
a copy to:
|
_________________________
|
|
_________________________
|
|
|
_________________________
|
|
|
Attn:
_____________________
|
|
|
Fax
No.: ( )
______________
|
or in each case to such other address and facsimile number as shall have last been furnished by like notice. If all of the methods of notice set forth in this Paragraph “C” of this Article “12” of this Subdistribution Agreement are impossible for any reason, notice shall be in writing and personally delivered to the aforesaid addresses. Each notice or communication shall be deemed to have been given as of the date so mailed or delivered as the case may be; provided, however, that any notice sent by facsimile shall be deemed to have been given as of the date so sent if a copy thereof is also mailed by first class mail on the date sent by facsimile. If the date of mailing is not the same as the date of sending by facsimile, then the date of mailing by first class mail shall be deemed to be the date upon which notice is given; provided further, however, that any notice sent by overnight delivery shall be deemed to have been given as of the date of delivery.
69
D. Governing
Law; Disputes.
This
Subdistribution Agreement shall in accordance with Section 5-1401 of the General
Obligations Law of New York in all respects be construed, governed, applied
and
enforced under the internal laws of the State of New York without giving effect
to the principles of conflicts of laws and be deemed to be an agreement entered
into in the State of New York and made pursuant to the laws of the State of
New
York. Except as otherwise set forth in Article “11” of this Subdistribution
Agreement, the parties agree that they shall be deemed to have agreed to binding
arbitration with respect to the entire subject matter of any and all disputes
relating to or arising under this Subdistribution Agreement including, but
not
limited to, the specific matters or disputes as to which arbitration has been
expressly provided for by other provisions of this Subdistribution Agreement
and
that any such arbitration shall be commenced exclusively in New York, New York.
Any such arbitration shall be by a panel of three arbitrators and pursuant
to
the commercial rules then existing of the American Arbitration Association
in
the State of New York, County of New York. In all arbitrations, judgment upon
the arbitration award may be entered in any court having jurisdiction. The
parties specifically designate the courts in the City of New York, State of
New
York as properly having jurisdiction for any proceeding to confirm and enter
judgment upon any such arbitration award. The parties hereby consent to and
submit to the exclusive jurisdiction of the courts of the State of New York
in
any action or proceeding and submit to personal jurisdiction over each of them
by such courts. The parties hereby waive personal service of any and all process
and specifically consent that in any such action or proceeding brought in the
courts of the State of New York, any service of process may be effectuated
upon
any of them by certified mail, return receipt requested, in accordance with
Paragraph “C” of this Article “12” of this Subdistribution Agreement. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
70
The
parties agree, further, that the prevailing party in any such arbitration as
determined by the arbitrators shall be entitled to such costs and attorney's
fees, if any, in connection with such arbitration as may be awarded by the
arbitrators. In connection with the arbitrators’ determination for the purpose
of which party, if any, is the prevailing party, they shall take into account
all of the factors and circumstances including, without limitation, the relief
sought, and by whom, and the relief, if any, awarded, and to whom. In addition,
and notwithstanding the foregoing sentence, a party shall not be deemed to
be
the prevailing party in a claim seeking monetary damages, unless the amount
of
the arbitration award exceeds the amount offered in a legally binding writing
by
the other party by fifteen (15%) percent or more. For example, if the party
initiating arbitration (“A”) seeks an award of one hundred thousand ($100,000)
dollars plus costs and expenses, the other party (“B”) has offered A fifty
thousand ($50,000) dollars in a legally binding written offer prior to the
commencement of the arbitration proceeding, and the arbitration panel awards
any
amount less than fifty-seven thousand five hundred ($57,500) dollars to A,
the
panel should determine that B has “prevailed”.
The
arbitration panel shall have no power to award non-monetary or equitable relief
of any sort. It shall also have no power to award (i) damages inconsistent
with
any applicable agreement between the parties or (ii) punitive damages or any
other damages not measured by the prevailing party’s actual damages; and the
parties expressly waive their right to obtain such damages in arbitration or
in
any other forum. In no event, even if any other portion of these provisions
is
held invalid or unenforceable, shall the arbitration panel have power to make
an
award or impose a remedy which could not be made or imposed by a court deciding
the matter in the same jurisdiction.
71
Discovery
shall be permitted in connection with the arbitration only to the extent, if
any, expressly authorized by the arbitration panel upon a showing of substantial
need by the party seeking discovery.
All
aspects of the arbitration shall be treated as confidential. The parties and
the
arbitration panel may disclose the existence, content or results of the
arbitration only as provided in the rules of the American Arbitration
Association in New York, New York. Before making any such disclosure, a party
shall give written notice to all other parties and shall afford such parties
a
reasonable opportunity to protect their interest.
E. No
Assignment by the Subdistributor.
The
rights granted pursuant to this Subdistribution Agreement shall not be
transferable by the Subdistributor, without the Distributor's prior written
consent. For purposes of this Paragraph “E” of this Article "12" of this
Subdistribution Agreement, any transfer of a controlling interest in the
Subdistributor shall be deemed to be a transfer by the Subdistributor and if
such transfer of a controlling interest has been made without the Distributor's
prior written consent, the Distributor may in its sole and absolute discretion
terminate by written notice pursuant to Paragraph "C" of this Article "12"
of
this Subdistribution Agreement.
72
F. Assignment
by the Distributor.
This
Subdistribution Agreement shall be transferable by the Distributor provided
that
such transferee is the Distributor pursuant to a transfer of the Distribution
Agreement.
G. Construction.
Each of
the parties hereto hereby further acknowledges and agrees that (i) each has
been
advised by counsel during the course of negotiations and (ii) each counsel
has
had significant input in the development of this Subdistribution Agreement
and
(iii) this Subdistribution Agreement shall not, therefore, be construed more
strictly against any party responsible for its drafting regardless of any
presumption or rule requiring construction against the party whose attorney
drafted this Subdistribution Agreement.
H. Entire
Agreement.
This
Subdistribution Agreement and all documents and instruments referred to herein
(i) constitute the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof, and (ii) are not intended to confer upon
any
person other than the parties hereto any rights or remedies hereunder. Each
party hereto agrees that, except for the representations and warranties
contained in this Subdistribution Agreement, the Distributor does not makes
any
other representations or warranties, and hereby disclaims any other
representations and warranties made by itself or any of its officers, directors,
managers, employees, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this
Subdistribution Agreement or the transactions contemplated hereby,
notwithstanding the delivery or disclosure to the other or the other's
representatives of any documentation or other information with respect to any
one or more of the foregoing.
73
I. Further
Assurances.
The
parties agree to execute any and all such other further instruments and
documents, and to take any and all such further actions which are reasonably
required to effectuate this Subdistribution Agreement and the intents and
purposes hereof.
J. Binding
Agreement.
This
Subdistribution Agreement shall be binding upon and inure to the benefit of
the
parties hereto and their heirs, executors, administrators, personal
representatives, successors and assigns.
K. Non-Waiver.
Except
as
otherwise expressly provided herein, no waiver of any covenant, condition,
or
provision of this Subdistribution Agreement shall be deemed to have been made
unless expressly in writing and signed by the party against whom such waiver
is
charged; and (i) the failure of any party to insist in any one or more cases
upon the performance of any of the provisions, covenants or conditions of this
Subdistribution Agreement or to exercise any option herein contained shall
not
be construed as a waiver or relinquishment for the future of any such
provisions, covenants or conditions, (ii) the acceptance of performance of
anything required by this Subdistribution Agreement to be performed with
knowledge of the breach or failure of a covenant, condition or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no waiver
by
any party of one breach by another party shall be construed as a waiver of
any
other or subsequent breach.
74
L. Counterparts.
This
Subdistribution Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
M. Facsimile
Signatures.
Any
signature which is delivered via facsimile shall be deemed to be an original
and
have the same force and effect as if such facsimile signature were the original
thereof.
N. Modifications.
This
Subdistribution Agreement may not be changed, modified, extended, terminated
or
discharged orally, except by a written agreement specifically referring to
this
Subdistribution Agreement which is signed by all of the parties to this
Subdistribution Agreement.
O. Exhibits.
All
Exhibits annexed or attached to this Subdistribution Agreement are incorporated
into this Subdistribution Agreement by reference thereto and constitute an
integral part of this Subdistribution Agreement.
P. Survival.
All of
the provisions and obligations of this Subdistribution Agreement shall survive
the termination of this Subdistribution Agreement.
Q. Severability.
The
provisions of this Subdistribution Agreement shall be deemed separable.
Therefore, if any part of this Subdistribution Agreement is rendered void,
invalid or unenforceable, such rendering shall not affect the validity or
enforceability of the remainder of this Subdistribution Agreement; provided
that
if the part or parts which are void, invalid or unenforceable as aforesaid
shall
substantially impair the value of the whole Subdistribution Agreement to either
party, that party may cancel, and terminate this Subdistribution Agreement
by
giving written notice to the other party.
75
If
the
above reflects our agreement, please sign where indicated below.
| Sincerely, | ||
| Gibraltar Global Marketing, LLC | ||
| |
|
|
| By: | ||
|
▇▇▇▇▇▇ ▇▇▇▇▇▇, President |
||
| Agreed and Accepted: | ||
|
|
||
| By: | ||
|
Title:
|
||
76
EXHIBIT
F
LIENS
| 1. |
Two
UCC-1s filed by ▇▇▇ ▇▇▇▇▇▇▇;
|
| 2. |
Two
UCC-1s filed by Canal Jeans Co.;
|
| 3. |
Two
UCC-1s filed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇; and
|
| 4. |
UCC-1
filed by Trinity ▇▇▇.
|
77
EXHIBIT
G
LITIGATION
1. ▇▇▇▇▇
▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, PLLC and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, individually v. Scantek
Medical, Inc. and ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Case No. 04-3978 in the United States
District Court for the District of New Jersey. ▇▇. ▇▇▇▇▇▇ is seeking (A) the
distribution rights with respect to the Product in the United States and Mexico
and (B) approximately $286,003 in loans made to the Manufacturer and/or
approximately 6,650,000 shares of common stock, par value $.001 of the
Manufacturer (“Common Stock”). ▇▇▇▇▇▇ V, ▇▇▇▇▇, PLLC and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ are
seeking $10,000 and 25,000 shares of Common Stock for legal fees and the costs
and expenses of collection.
The
Manufacturer, prior to the service of the lawsuit, had paid $105,000 plus
interest to ▇▇. ▇▇▇▇▇▇ with respect to one of the loans and issued to him
1,650,000 shares of the 6,650,000 shares of Common Stock ▇▇. ▇▇▇▇▇▇ is seeking.
The Manufacturer believes that (A) there is virtually no basis for ▇▇. ▇▇▇▇▇▇’▇
claim to the remaining 5,000,000 shares of Common Stock, and (B) while ▇▇.
▇▇▇▇▇▇ is entitled to approximately $105,000 in repayment of one loan, ▇▇.
▇▇▇▇▇▇ does not have a valid cause of action with respect to any of his other
claims.
On
October 15, 2004, the Manufacturer filed a Motion to Dismiss based upon
insufficiency of service of process and failure to state a claim for which
relief could be granted, for numerous reasons, including, but not limited to,
(A) the Manufacturer had repaid the only loan evidenced by a promissory note
made pursuant to the terms of the Letter of Intent and (B) the Manufacturer
had
issued 1,650,000 shares to ▇▇. ▇▇▇▇▇▇. Accordingly, the repayment of the
$105,000 loan makes the claim for the balance of the shares claimed by ▇▇▇▇▇▇
moot because those shares were being held in escrow to secure repayment of
the
$105,000 loan, and the issuance of the 1,650,000 shares makes the claim for
the
$33,000 loan moot. ▇▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ requested that the Manufacturer
allow them to (A) withdraw the action in New Jersey and (B) commence the action
in New York. In view of the time and money spent thus far defending the case
in
New Jersey, the Manufacturer was not willing to allow ▇▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇
to withdraw the case in New Jersey. The Manufacturer determined to concede
jurisdiction over it in New Jersey, and informed the Court of its decision.
On
August 8, 2005, the Court issued a decision with respect to the remainder of
the
Manufacturer’s Motion to Dismiss. The Court dismissed many of ▇▇. ▇▇▇▇▇▇’▇
claims against the Manufacturer and dismissed the Complaint in its entirety
with
respect to ▇▇. ▇▇▇▇ for lack of jurisdiction. The Manufacturer intends to
vigorously defend against the remaining claims.
78
On
August
22, 2005, ▇▇. ▇▇▇▇▇▇ commenced an action in the Supreme Court of the State
of
New York against ▇▇. ▇▇▇▇, the Manufacturer’s counsel, ▇▇▇▇▇ & Fraade, P.C.,
the two named partners of ▇▇▇▇▇ & Fraade, P.C. and certain individuals and
entities with which the Manufacturer is engaged in business. ▇▇. ▇▇▇▇▇▇ is
seeking the following damages which he allegedly incurred: (1) compensatory
damages in excess of $10,000,000, (2) punitive damages in excess of $5,000,000
and (3) 3,000,000 shares of Common Stock. ▇▇. ▇▇▇▇ and ▇▇▇▇▇ & Fraade, P.C.
and its named partners intend to vigorously defend against these claims for
which the Manufacturer is potentially liable pursuant to its indemnification
of
▇▇. ▇▇▇▇ and counsel. The Manufacturer believes that ▇▇▇▇▇▇’▇ claims in the New
York litigations against ▇▇. ▇▇▇▇, ▇▇▇▇▇ & Fraade, P.C. and the partners of
▇▇▇▇▇ & Fraade, P.C. have no merit.
79
2. Carriage
House Capital, on May 13, 2004, docketed with the Superior Court of New Jersey
a
judgment against the Manufacturer entered on July 17, 2001 in the Superior
Court
for the State of Arizona in the amount of $10,000 plus interest from November
20, 2000 plus attorneys’ fees and costs in the amount of $6,401.50. The Arizona
judgment also provides for the issuance of 5,000 shares of Common Stock for
every week commencing November 20, 2000 in which the judgment remains
unsatisfied, which was later postponed to December 10, 2000 pursuant to an
agreement between the Manufacturer and Carriage House Capital. On July 14,
2004,
Carriage House Capital filed a motion to compel delivery of the stock and
payment of attorneys’ fees and costs. As of September 16, 2005, the Manufacturer
owed Carriage House 570,000 shares of Common Stock. The manufacturer intends
to
pay the $10,000 plus interest to Carriage House Capital, and to negotiate with
Carriage House Capital to reduce the number of shares of Common Stock to be
issued to Carriage House Capital.
3. Judgment
entered on October 12, 2000 in favor of Tapecon Inc. in the amount of $14,563.82
with costs in an amount of $230.56. On December 8, 2000, Tapecon received
$8,176.81 towards the payment of the judgment.
4. Stursberg
& ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ & McGerity seek to recover fees in the aggregate
amount of $70,358.49 for legal services allegedly performed from 1997 through
1999. Opposing counsel tried to have the case put on the calendar for trial
and
the Manufacturer opposed said action on the basis of incomplete discovery.
On
September 30, 2004, the Court ordered the case to be remanded and reassigned
to
a non-commercial part. The parties have recently reached an oral agreement
with
respect to the payment of the $70,358.49 sought by Stursberg & ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇▇ & McGerity. Commencing on January 15, 2005, the Manufacturer
shall pay $5,000 to Stursberg & ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ & McGerity and on
the fifteenth of each month thereafter, the Manufacturer shall pay Stursberg
& ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ & McGerity $10,000 until the fees have been paid
in full. The Manufacturer has made the $5,000 payment due on January 15, 2005
and the $10,000 payments due through June 15, 2005. Accordingly, the
Manufacturer has paid approximately 78% of the money owed to Stursberg &
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ & McGerity and the amount currently owed is
$15,358.49.
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After
making the May 15, 2005 payment, the Manufacturer requested an extension of
thirty (30) days with respect to the June 15, 2005 payment and subsequent
payments. The Manufacturer had been orally advised by ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ of
Stursberg & ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ & McGerity that the extension would be
granted. However, the Manufacturer was unable to make the next payment on July
15, 2005, and on July 19, 2005, Stursberg & ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ &
McGerity sent it a notice of default with respect to the June 15, 2005 and
July
15, 2005 payments. Although the Manufacturer made the payment due on June 15,
2005 on August 18, 2005, it has not made the remaining payments which were
due
on July 15, 2005 and August 15, 2005. Stursberg & ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ &
McGerity may enter a judgment with the Clerk of the Court for $70,358.49, less
the payments of $55,000 previously made, plus compounded interest at the rate
of
8% per annum from March 15, 1999.
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EXHIBIT
H
FORM
OF
LETTER AGREEMENT TO BE
EXECUTED
PURSUANT TO ARTICLE “21”
OF
THE
AGREEMENT
|
From:
|
The
Indemnifying Party
|
|
(Name
and Address)
|
|
|
To:
|
The
Indemnified Party
|
|
(Name
and Address)
|
Date:
Gentlemen/Ladies:
This
shall confirm and acknowledge that pursuant to Article “21” of the Exclusive
Distribution Agreement (the “Agreement”) dated as of the 9th
day of
January, 2007, by and among Scantek Medical, Inc. and Gibraltar Global
Marketing, LLC, the undersigned acknowledges its liability for indemnification
to you with respect to _________________ (description of claim) (the “Claim”),
and shall not take the position that it is not liable to you with respect to
the
Claim. Such obligation is subject to all of the provisions, terms and conditions
of the Agreement.
82
| Very truly yours, | ||
|
Name of Indemnifying Party |
||
| |
|
|
| By: | ||
|
|
||
|
(Authorized
Signature)
|
|
|
STATE
OF
|
)
|
|
)ss.:
|
|
|
COUNTY
OF
|
)
|
On
the
____ day of __________, ____ before me personally came __________ to me known,
who, being by me duly sworn, did depose and say that that he or she is the
____________ of __________________________, the ___________ described in and
which executed the foregoing instrument; that he or she knows the seal of said
_________________; that the seal affixed to said instrument is such _________
seal; that it was so affixed by order of the board of _________ of said
_______________, and that he or she signed his or her name thereto by like
order.
Notary
Public
83