##### 



th
 ® 6,475,164)
 ®
 ®
 ®
  1.
    
    APPOINTMENT OF DISTRIBUTOR.CytoCore hereby appoints Distributor as the Exclusive Distributor of the Products in the
Area set forth on Schedule A annexed hereto as of the Effective Date and such other
products (if any) as may be added to the Schedule by mutual agreement (Products).
CytoCore may delete any Products from Schedule A at any time at its sole discretion upon
30 days written notice to Distributor.2
    
    SUPPLY OF PRODUCTSa.
    
    CytoCore or its designee shall sell and Distributor shall purchase such minimum quantities of
Products
(as are agreed herein in accordance with section 4.b. hereof) for sale in the Area. CytoCore
may from
time to time change the source of supply of Products and, if CytoCore or its designated
supplier shall
discontinue the manufacture, sale or promotion of any Product, CytoCore shall delete such
Product from
Schedule A and cease selling the Product to Distributor. Distributor shall be entitled to
continue selling
such Product in the Area until such time as the stocks of such Product held by Distributor
have been
exhausted unless CytoCore advises Distributor to return such inventory to CytoCore.b.
    
    CytoCore or its designee shall sell and Distributor shall purchase Products at prices
established in
accordance with Schedule B. Prices for all Products shall be subject to change by CytoCore
twice each
year after December 31, 2009, with written notice to Customer. Price adjustment
descriptions and
formula are set forth on Schedule B.c.
    
    All prices and charges are F.O.B. Origin, freight prepaid and charged back so that
Distributor shall pay delivery charges from the plant to the Distributor location or from
the warehouse to the Distributor location. CytoCore shall not be liable for delays in
deliveries caused by a recognized delivery service or common carrier. Any and all Products
delivered or made available to Distributor shall be conclusively deemed accepted by
Distributor without objection unless, within five (5) days following the delivery thereof,
Distributor rejects such Products by delivering to CytoCore a written notice describing with
particularity the basis upon which such Products are rejected. Distributor shall not be
entitled to reject any Products that conform in all material respects to CytoCores
published Product specifications.d.
    
    Distributor shall not knowingly re-export or sell Products outside the Area without the
prior written consent




---



##### 



of CytoCore, except that nothing in this Agreement shall prevent Distributor from accepting
unsolicited orders from outside the Area for the Products as long as there is no exclusive
distributor for that Area.e.
    
    Distributor will be invoiced by CytoCores direct billing procedure. Payment shall be due
within thirty (30)
days from the invoice date. A discount of 1% of the invoice price (exclusive of freight and
taxes) will be
allowed if CytoCore receives payment with fifteen (15) days of invoice date. All late
payments shall
accrue interest from the due date at a rate of one and one-half percent (11/2%)
per month or, if lower, the
highest rate allowed by law. If Distributor fails to pay any amounts when due, CytoCore may,
without
liability, cease performing any Services or delivering any Products until full payment for
all outstanding
amounts is received. CytoCore reserves the right at any time to alter or suspend credit or to
change any
credit terms provided herein when, in its sole discretion, the financial condition of
Distributor so warrants.
Should any portion of an invoice become disputed, Distributor agrees to promptly notify
CytoCore of the
dispute and to deduct and pay the undisputed amount in accordance with the foregoing. The
parties shall
use their best efforts to resolve a disputed invoice amount within thirty (30) days.CytoCore is required to charge applicable state and local taxes (Applicable Taxes) on
every item for which a sales tax exemption certification has not been provided. In the event
that Distributor seeks to claim any exemption from Applicable Taxes in any transaction,
Distributor agrees to promptly furnish CytoCore tangible copies of any appropriate or
required exemption certificates or other required documentation deemed necessary or
desirable by CytoCore to properly support any such claimed exemptions. Failure on
Distributors part to promptly provide any such exemption certificates or other documentation
to CytoCore upon request will give CytoCore the right to immediately invoice Distributor for
all Applicable Taxes due as if the claimed exemption did not apply. IN ANY EVENT,
DISTRIBUTOR AGREES TO RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS CYTOCORE FROM ANY TAXES
INCURRED BY CYTOCORE AS THE RESULT OF ANY CLAIMED EXEMPTION FROM APPLICABLE TAXES.f.
    
    Except as provided in subsection 2.(e) above, Distributor shall not be entitled by reason of
any set off,
counter claim, abatement, or other similar deduction to withhold payment of any invoiced
amount due to
CytoCore.g.
    
    Distributor shall submit written purchase orders, or electronic equivalents, to CytoCore or
its designee
stating both the quantities of Products to be purchased and delivery schedules therefore in
accordance
with the purchasing procedures mutually agreed upon by CytoCore and Distributor. CytoCore,
upon
acceptance of Distributors purchase order, shall use its commercially reasonable efforts to
deliver or
cause to be delivered to Distributor the quantities of Products set forth in such purchase
orders at the
times specified therein. For its convenience, Distributor may use its preprinted forms to
order Products,
and CytoCore may use its preprinted forms to acknowledge same; provided, however, that the
provisions
of this Agreement shall override the provisions of such forms and govern the transaction and
that neither
this Agreement nor any provision hereof shall be deemed to be superseded or otherwise changed
in any
way by any preprinted or other provision contained in any such forms.3.
    
    RETURN OF PRODCUT INVENTORY OR SALVAGE OF DAMAGED PRODUCTS TO CYTOCORECytoCore shall be obliged to accept the return of the Products from Distributor only
according to the policy set forth in Schedule D attached hereto.4.
    
    DISTRIBUTION AND PROMOTION OF PRODUCTSa.
    
    During the first six (6) months from the Effective Date (Implementation Period), and
annually thereafter,
the parties shall work together and provide the other party with all reasonable assistance
and information
in order to produce a business plan in respect of the Products including, without
limitation, minimum
purchase requirements (Schedule A) for the Products in the Area, advertising and marketing
expenses
committed by each party and any other aspect relevant to the distribution, sale and
promotion of the
Products in the Area (Business Plan).b.
    
    No later than one (1) month prior to the end of the Implementation Period the parties will
meet to discuss
the minimum purchase requirements of Distributor for the Products for the twelve (12) month
period
following the Implementation Period. The attainment of such minimum purchase requirements is
an
essential condition to the continuation of this Agreement, and failure shall give CytoCore
the right to
terminate this Agreement pursuant to sections 5(a) and 12(b) (6).
 2




---



##### 



c.
    
    Distributor shall use its best efforts to create and maintain a market for and to increase
the sales of
Products in the Area, shall provide at its sole expense an organization for the continuous
sale, promotion
and distribution of the Products throughout the Area, and shall sell, ship, and invoice the
Products to
qualified purchasers in the Area. In the Area, Distributor shall use its own employed sales
force to sell,
promote and distribute the Products. CytoCore shall not be obligated to provide any resources
to
Distributor for the obligations stipulated in this Agreement, except for initial appropriate
training of
Distributors sales force and the provision of appropriate marketing materials. These
services and
materials will be provided to Distributor without cost.d.
    
    Distributor shall maintain a minimum inventory of Products not less than one (1) month as set
forth in the
Forecast, as amended from time to time.e.
    
    Distributor agrees to keep in full force and effect and maintain at its sole cost and expense
the following
policies of insurance during the entire duration of the Agreement:
 (a)
    
    Types and Limits of Insurance.
 (1)
    
    Workers Compensation with statutory limits and Employers Liability
Insurance limits of
$500,000 per employee, accident or disease.(2)
    
    Commercial General Liability Insurance providing coverage for
bodily injury and property
damage arising out of the work to be performed and including coverage for
personal and
advertising injury and contractual liabilities providing limits of not less
than $1,000,000 per
occurrence.(3)
    
    Professional Liability Insurance including coverage for wrongful
acts, errors and
omissions, with limits of not less than $1,000,000 per claim.
 (b)
    
    All such insurance shall be with insurance companies that maintain a rating of
not less than A- VII
in the most current publication of Bests Insurance Reports published by A.M. Best.(c)
    
    Distributor shall provide certificates of insurance signed by an authorized
representative of the
respective carriers within 10 days of the Effective Date of this Agreement. All such
certificates
will contain no less than thirty (30) days prior written notice of cancellation,
non-renewal, or
material change in coverage.
 5.
    
    Terma.
    
    This Agreement shall begin on the Effective Date and shall continue in effect, unless sooner
terminated
as provided herein, for a period of three (3) years (Initial Term). At the end of the
Initial Term this
Agreement will be automatically extended for further one (1) year periods unless one of the
parties has
advised the other in writing at least ninety (90) days prior to expiration of the Initial
Term that it intends to
terminate this Agreement.b.
    
    In addition to the right of termination granted by Section 12, CytoCore shall have the right
to terminate
this Agreement at any time prior to the expiration of its term upon ninety (90) days prior
written notice
should Distributor fail to attain the annual minimum purchase requirements referred to in
section
4a.above. Distributor shall notify CytoCore as soon as Distributor becomes aware that the
annual
minimum purchase requirements are unlikely to be attained. In the event CytoCore
terminates this
Agreement before the end of the Initial Term, CytoCore shall repurchase from Distributor the
inventory of
Products at prices prevailing at the start of the calendar year in which such Products are
to be
repurchased by CytoCore. Such inventory of Products must be in saleable condition, in
unopened full
cartons, and have at least nine (9) months shelf life before expiration.c.
    
    In addition to such other rights of termination granted by section 12, CytoCore shall have
the right to
terminate of this Agreement at any time if the continued performance under this Agreement
becomes
impractical due to the enactment of, or threatened enactment of, any ordinance, statute,
regulation, law
or similar provision by any local, state or national government. This Agreement shall
terminate sixty (60)
days after the date of written notice by CytoCore to Distributor.
 3




---



##### 



6.
    
    INTELLECTUAL PROPERTYa.
    
    This Section 6 will be binding upon Distributors Shareholders, beneficial owners, directors,
officers and
employees as if they were actual signatories to this Agreement.b.
    
    Distributor acknowledges and agrees that CytoCore or its Affiliate are the owners of all
Intellectual
Property Rights incorporated on, in or relating to the Products. For the purposes of this
Agreement,
Intellectual Property Rights includes all intellectual property rights including (without
limitation) patents,
supplementary protection certificates, pending patents, utility models, trade marks,
database rights,
rights in designs, copyrights (whether or not any of these rights are registered, and
including applications
and the right to apply for registration of any such rights) and all inventions, know-how,
trade secrets,
techniques and confidential information, and ail rights and forms of protection of a similar
nature or having
equivalent or similar effect to any of these which may subsist anywhere in the world, in each
case for their
full term, and together with any renewals or extensions. Distributor acknowledges that it
neither has nor
shall secure by this Agreement or by its acts during the term of this Agreement any right to
any
Intellectual Property Rights incorporated on, in or relating to the Products. Distributor
agrees that title to
and the right to use all such Intellectual Property Rights incorporated on, in or relating to
the Products
shall at all times be vested in CytoCore or its Affiliates whether or not such Intellectual
Property Rights
are incorporated on, in or relating to the Products become vested in Distributor.
Distributor hereby
assigns to CytoCore, including by way of present assignment of present and future rights, any
Intellectual
Property Rights incorporated on, in or relating to the Products, together with all of the
goodwill associated
therewith to hold the same unto CytoCore, its successors and assigns.c.
    
    Without CytoCores prior written permission, Distributor shall make no use of Intellectual
Property Rights
in or relating to the Products as part of or in conjunction with or in relation to or
associated with
Distributors company name, commercial name, tradename, corporate name, divisional name,
subsidiary
name, nickname, translated name, transliterated name, trading style, or similar name
(hereinafter referred
to as (...).d.
    
    Distributor shall comply, at all times, with such rules and regulations as CytoCore may issue
with respect
to the reproduction or reference to any Intellectual Property Rights incorporated on, in or
relating to the
Products. In particular, Distributor shall ensure that on all advertising and promotional
materials to be
used and/or prepared by Distributor relating to the Products, the symbol ® shall be used in
conjunction
with any registered trade marks or service marks owned by CytoCore or TM in the case of any
unregistered trade marks owned by CytoCore.e.
    
    Distributor shall not use any of CytoCores trade marks in any way which would tend to allow
them to
become generic, lose their distinctiveness, become liable to mislead the public, or be
materially
detrimental to or inconsistent with the good name, goodwill, reputation and image of CytoCore
or any
affiliate and shall use its best efforts not to do anything which would bring into disrepute
CytoCore, the
Products or any of CytoCores trade marks.f.
    
    In any infringement proceedings which are brought by CytoCore, CytoCore shall be entitled to
claim in
respect of any loss suffered or likely to be suffered by the Distributor, and any costs or
damages awarded
in respect of such claim shall first be applied to satisfy CytoCores costs and expenses and
shall then be
apportioned between CytoCore and Distributor in accordance with their respective losses.g.
    
    Distributor shall, on CytoCores reasonable request, give to CytoCore or its authorized
representative any
information as to its use of Intellectual Property Rights incorporated on, in or relating to
the Products
which it may require and will render any reasonable assistance required at reasonable cost in
maintaining registrations of the Intellectual Property Rights incorporated on, in or relating
to the Products.h.
    
    Distributor agrees that it will not seek to (i) challenge, through the courts,
administrative governmental bodies, private organizations or in any other manner, the rights
of CytoCore to exploit the Intellectual Property by any means whatsoever or (ii) thwart,
hinder or subvert the intent of the preceding grants and conveyances to CytoCore, or the
collection by CytoCore of any proceeds relating to the rights conveyed under this Agreement.7.
    
    ADVERTISING AND PROMOTION OF PRODUCTSa.
    
    As part of the Business Plan to be produced in accordance with section 4a, CytoCore shall, at
its sole discretion, from time to time deliver to Distributor advertising, promotional and
instructional programs for the Products. Such programs may be modified by CytoCore in its
sole discretion at any time.
 4




---



##### 



Advertisements and the media in which it is to be used, as well as all promotional and
instructional materials to be used, must be approved in advance in writing by CytoCore.b.
    
    CytoCore recognizes that Distributor may from time to time request authorization in writing
from CytoCore to use the Intellectual Property Rights on, in or relating to the Products.
CytoCore grants a non-exclusive royalty-free license to Distributor to use in the Area the
Intellectual Property Rights on, in or relating to the Products for the purposes only of
fulfilling any orders made pursuant to this Agreement, and performing its obligations under
this Agreement. The right of Distributor to use such Intellectual Property Rights on, in or
relating to the Products may unilaterally be revoked by CytoCore at any time and Distributor
shall immediately stop such use upon receipt of notification from CytoCore.8.
    
    RECORDS. REPORTS. AND INSPECTION.Distributor shall provide CytoCore, on a monthly basis, a complete list of customers to whom
it has sold Products and the quantities of such sales.9.
    
    GENERAL MATTERSa.
    
    The formulae, ingredients or specifications for Products may be changed at any time by
CytoCore at its
sole discretion when such changes are deemed necessary for any reason to CytoCore including
compliance with applicable laws and regulations. When necessary for the maintenance of any
applicable
registrations, approvals, or consents, CytoCore shall inform Distributor of such changes.b.
    
    Should it be necessary, during the term of this Agreement, to recall the Products due to an
error
imputable to the manufacture of the Products, or to any third party who handled, worked with
or gave
advice in respect of the Products or for any other reason, Distributor shall cease selling
such Products in
the Area and shall provide CytoCore with all reasonable assistance to recall any such
Products and shall,
at all terms, act in accordance with CytoCores directions. The return of said Products
will be in
accordance with schedule D hereof.c.
    
    Distributor shall promptly send to CytoCore any data, report or information regarding
Products which may
come to Distributors attention in the Area during the term of this Agreement and shall
report promptly to
CytoCore any unexpected or serious adverse reactions which arise in patients using Products.
The
person to contact with respect to any such reactions is CytoCores Quality Assurance Manager.
CytoCore may in its sole discretion decide to cease the distribution of any of the Products
by Distributor in
the Area in circumstances where it appears to CytoCore, acting reasonably, that any of the
Products may,
for whatever reason, be injurious to health or unfit for human consumption or where the
continued sale of
a Product would be inconsistent with the principles and standards applicable to careful
medical device
production. The costs associated with any Product recall (including, for the avoidance of
doubt, the cost
of any of the Products and the costs involved in recalling any of the Products) will be borne
by CytoCore.
If either party becomes aware of any circumstances which may require the distribution of any
of the
Products to be suspended under this subsection 9c, it shall immediately notify the other
party of such
circumstances. Distributor shall execute any documents and do all such acts and things in
accordance
with the reasonable directions of CytoCore to assist with the recall of any Products.
CytoCore shall, in its
sole discretion, determine when the distribution and sale of the affected Product can
recommence. In the
event of a recall, the agreed minimum purchase levels will be reviewed by mutual consent.10.
    
    FORCE MAJEURENeither CytoCore, nor its Affiliates, or their suppliers shall be liable for any failure or
delay in the delivery of Products occasioned in whole or in part by force majeure, Act of
God, strike, lockout, fire, inability to obtain materials or shipping space, boycott,
breakdown, war, terrorism, civil commotion, destruction of plant, delay of carriers, any
governmental act, requirement, or regulation, or any other cause beyond its control. IN NO
EVENT WILL CYTOCORE BE LIABLE FOR CONSEQUENTIAL OR SPECIAL DAMAGES DUE TO ANY SUCH CAUSE.11.
    
    OTHER OBLIGATIONS OF DISTRIBUTORa.
    
    Neither Distributor, nor its affiliates or subsidiaries may sell, promote or otherwise
distribute any products which compete directly with the Products. Distributor shall not
establish any branch, or maintain any distribution depot, outside of its Area for the sale of
the Products.This provision will apply to other business entities owned by Distributors
shareholders, directors, beneficial owners, or employees as if such individuals or entities
were actual signatories to this Agreement.
 5




---



##### 



b.
    
    Distributor shall maintain in confidence and not use except for purposes of this Agreement
any
confidential information furnished to it by CytoCore including information contained in any
report furnished
by Distributor hereunder, all confidential Product information and all advertising programs
and plans.
Distributor shall impose the same obligation upon its agents, if any, permitted under
subsection 14(b)
hereof. This Section 1 will be binding upon Distributors Shareholders, beneficial owners,
directors,
officers, employees and agents, including advertising agencies as if they were original
signatories to this
Agreement. This subsection 11B shall not affect Distributors right to use or disclose
information that: (i)
is or may hereafter be in the public domain; (ii) the Distributor can show was Known to it
without any
confidentiality obligation prior to the disclosure by CytoCore; (iii) is disclosed to the
Distributor by a third
party, without violation of any confidentiality obligation, subsequent to disclosure by
CytoCore; (iv) is
independently developed by the receiving party without use of the Confidential Information of
CytoCore; or
(v) is required to be disclosed pursuant to governmental or judicial process, provided that
notice of such
process is promptly provided to CytoCore in order that it may have every opportunity to
intercede in such
process to contest such disclosure.c.
    
    On an annual basis Distributors chief financial officer, or independent public accountant,
must verify in
writing to CytoCore that its financial condition meets 3 out of the following 4 metrics:
 >  >  >  >
 These ratios were calculated using data published in Dun & Bradstreets Industry Norms &
Financial Ratios for SIC 5097 (Medical Equipment and Device Wholesalers).12.
    
    TERMINATION FOR CAUSE
  a.
    
    This Agreement may be terminated with cause upon notice, which shall become effective
ten (10) days
after receipt. To the extent that the form of notice or the time period of notice permitted
herein shall
conflict with applicable law, then such alternate form of notice or notice period of such
applicable law
shall be deemed to be incorporated into this Agreement.b.
    
    To the extent that the CytoCore shall elect to terminate this Agreement for cause or to
the extent that any
applicable law shall determine that cause is required for the termination or non-renewal of
this
Agreement, good cause shall include, but not be limited to, the following:
     c.
    
    The transfer by any means of more than ten percent (10%) of Distributors assets (other than
in the ordinary
course of business) or the transfer of more than ten percent (10%) of the stock of the
Distributor, if the Distributor is a corporation; or the transfer, removal, resignation,
withdrawal, elimination or any other change of principal owners or principal managers of
the Distributor for any reason without prior written approval of CytoCore, which shall not
be unreasonably withheld;d.
    
    A misrepresentation to CytoCore by the Distributor or by any principal owner or
principal manager in
applying for the appointment as the Distributor under this Agreement or, after
appointment, as to the
records of the Distributor, the status of current accounts or orders for Products or
concerning the
beneficial ownership or management of the Distributor;e.
    
    Any attempted sale, transfer or assignment, voluntarily or involuntarily, by operation
of law or otherwise,
including merger, consolidation or reorganization to which the Distributor is a party, by
the Distributor of
this Agreement or any of the rights granted to the Distributor under the provisions of this
Agreement; or
 6




---



##### 



any attempted transfer, assignment or delegation, voluntarily or involuntarily, by operation of
law or otherwise, by the Distributor of any of the responsibilities assumed by the Distributor
under the provisions of this Agreement, without the prior written consent of CytoCore;f.
    
    Conviction of any principal owner or principal manager of the Distributor of any crime
which, in the
opinion of CytoCore, may adversely affect the reputation of CytoCore or the reputation of
CytoCores
Products;g.
    
    Any submission by the Distributor to CytoCore of any false or fraudulent claim, or statement
in support
thereof, for payment, for parts, for compensation or for any discount, allowance, refund or
credit, warranty
claim, or any claim made by the Distributor to CytoCore;h.
    
    Willful failure by the Distributor to comply with the provisions of any law or regulation
relating to the operation of its business as a Distributor or to the sales or servicing of
the Products;i.
    
    Failure by the Distributor to perform any of the other obligations, duties or
responsibilities under this Agreement, which continues for a period of thirty (30) days after
notice thereof from CytoCore;j.
    
    The decision by CytoCore to: (a) discontinue the Product line or lines that are the subject
matter of this Agreement; or (b) withdraw from all or a substantial portion of the geographic
market in which the Area is located; or (c) sell, convey, merge or otherwise transfer all or
a substantial portion of the part or parts of the business of CytoCore responsible for the
Product line or lines that are the subject matter of this Agreement.k.
    
    In the event that Distributor shall be declared bankrupt or insolvent, or have a receiver
appointed over its property or shall petition for reorganization or other remedy under the
bankruptcy laws as now or hereafter existing, or make any assignment for the benefit of
creditors or pursue any other remedy under any other insolvency laws, to the extent permitted
by law, this Agreement may be terminated by CytoCore, effective immediately upon the mailing
of a notice of such termination by certified mail. In the event of termination of this
Agreement under this subsection k, all amounts owed to CytoCore shall be immediately due and
payable.l.
    
    In the event of termination of this Agreement by either party as provided herein the
following provisions shall apply:
 (i.)
    
    CytoCore is relieved from any obligation to make any further shipments
hereunder, and may cancel all of the Distributors unshipped orders for any
Products, irrespective of previous acceptance by CytoCore, except those Products
which are proved to CytoCores satisfaction to have been sold by the Distributor
prior to the receipt by the Distributor of notice of termination. CytoCore shall
have no obligation or liability to the Distributor or its prospective customers in
connection with any such cancellation. If CytoCore accepts such an order and the
Product is shipped, CytoCore will arrange for the delivery and warranty service of
the Product. The acceptance of orders from the Distributor or the continuous sale
of Products to the Distributor or any other act after termination of this Agreement
shall not be construed as a renewal of this Agreement for any further term nor as a
waiver of the termination.(ii.)
    
    Upon termination of this Agreement or of any schedule hereto, the
Distributor shall return to CytoCore, upon CytoCores request and at CytoCores
expense, promptly and without charge (except as hereinafter provided) all
documents regarding Products, Product customer lists, price books, and service
policy manuals, service bulletins, sales aids, such as videos, CDs, filmstrips
and recordings, and other publications of CytoCore and its affiliates which the
Distributor has on hand relating to Products.(iii)
    
    Upon termination of this Agreement Distributor shall cease to display
or use any Intellectual Property Rights on, in or relating to the Products or
signs, labels or other indications identifying Distributor or any products in any
way with CytoCore and shall deliver to CytoCore all printed material, including
advertising, promotional and instruction material, and all labels and packages,
relating to Products, together with all samples, parts, tools, or other equipment
relating to Products that CytoCore may have furnished free of charge (other than
for shipping and import costs) to Distributor and together with all records of
Distributors sales necessary for CytoCore to ascertain any outstanding guarantee
obligations thereunder.
 m.
    
    The Distributor shall be solely responsible for all commitments incurred or assumed by it
during the term of this Agreement or hereafter, and CytoCore shall not be held responsible in
any manner therefore,
 7




---



##### 



irrespective of any suggestion or recommendation with respect thereto by CytoCore or any of
its employees or representatives unless CytoCore has expressly agreed in writing to assume
the responsibility.n.
    
    In the event of any termination of this Agreement, all obligations owed by the
Distributor to CytoCore shall become immediately due and payable on the effective date of
termination whether otherwise then due or not (without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Distributor); and CytoCore may
offset and deduct from any or all sums owed to the Distributor any or all sums owed by the
Distributor, rendering to the Distributor the excess, if any.o.
    
    Neither CytoCore nor the Distributor shall, by reason of the termination of the
Agreement, be liable to the other for compensation, reimbursement, or damages either on
account of present or prospective profits on sales or anticipated sales, or on account of
expenditures, investments or commitments made in connection therewith or in connection with
the establishment, development or maintenance of the business or goodwill of CytoCore or
the Distributor, or on account of any cause or thing whatsoever, provided, however, that
such termination shall not affect the rights or liabilities of the parties with respect to
Products previously sold hereunder or with respect to any indebtedness then owing by either
party to the other. Distributor shall accept all rights granted and all obligations assumed
hereunder including those in connection with such expiration or termination in full
satisfaction of any claim resulting from such expiration or termination.p.
    
    Unless otherwise provided by applicable law, in the event this Agreement is terminated,
CytoCore will repurchase at Distributors request all new, unused, current, complete and
undamaged Products at the original invoice prices, less any applicable discounts or
payments made thereon, less a 10% handling charge computed on Distributors net price. In
addition, such return of Products will be in accordance with Schedule D hereof.q.
    
    Neither party will be in breach of this Agreement unless the other party provides
written notice to the allegedly breaching party of any violation of this Agreement and the
allegedly breaching party fails to cure this violation within 30 days after receiving this
notice. If the default is not cured by the end of the 30 day period, then termination will
be effective without further notice. Notwithstanding the above, a breach by Distributor of
any part of sections 2, 5, or 6 of this Agreement is not subject to cure and, accordingly,
any such breach gives CytoCore the right to terminate the Agreement immediately upon
written notice to Distributor.13.
    
    INDEMNIFICATIONEach party (indemnifying Party) shall at all times (both during and after the term hereof)
defend, indemnify, and hold the other party and its agents, officers, affiliates, directors,
and employees (each of them, individually, an Indemnified Party) harmless against and from
any and all third party actions, suits, liabilities, settlements, losses, damages, charges,
costs, counsel fees, and all other expenses relating to or arising in connection with any and
all claims (whether or not groundless) relating to or arising out of this Agreement relating
to personal injury or death to persons and damage to real and personal property of the
Indemnified Party to the proportionate extent caused by the actual or alleged negligence,
dishonesty, willful misconduct, or negligent omission by the Indemnifying Party, or any of
its employees or agents; and in case any action, suit or proceeding shall at any time (either
during or after the term hereof) be brought against an Indemnified Party by reason of any
such claim, the Indemnifying Party shall resist and defend such action, suit or proceeding,
at the sole expense of the Indemnifying Party by counsel of its choice, provided that (i) the
Indemnified Party notifies the Indemnifying Party promptly in writing of the claim; and (ii)
the Indemnified Party provides the Indemnifying Party with all reasonably necessary
assistance, information, and authority to perform the foregoing at the Indemnified Partys
expense. Neither partys liability hereunder shall include consequential, incidental,
special, or punitive damages, including without limitation lost profits and/or lost business
opportunities, whether arising in tort, warranty contract or strict liability.14.
    
    ASSIGNMENTa.
    
    CytoCore may assign all or any part of this Agreement to any Affiliate. Subject to subsection
14b,
below, in all other respects this Agreement and the distributorship and/or
sub-distributorship
shall be non-assignable. Any non-permitted assignment shall be void.b.
    
    Distributor may, with CytoCores prior written consent, appoint agents
for the
distribution, sale and promotion of the Products provided that:
 8




---



##### 



(1)
    
    no such agent shall relieve Distributor of any of its obligations under his Agreement;(2)
    
    Distributor shall ensure that any agent agrees to be bound by the terms of this
Agreement;
and,(3)
    
    such agent shall only be used to supplement the existing structure of CytoCores
business
and not for the purposes of creating other opportunities for Distributor.
 15.
    
    NOTICESAny notice or report pursuant to this Agreement shall be deemed duly given if sent by
prepaid registered mail letter (air mail, if sent overseas), or facsimile addressed to the
party at the address or fax number, as applicable, set forth at the beginning of this
Agreement, or to such other address or fax number as shall have been furnished in writing.16.
    
    SEVERABLE CONDITIONS/UNENFORCED PROVISIONSa.
    
    Any provision of this Agreement held to be void, invalid, or unenforceable, will be construed
as severable
and will not in any way affect render void, invalid, or unenforceable any other provision of
this Agreement,
and this Agreement will be carried out as if such void, invalid, or unenforceable provision
was not a part
of this Agreement.b.
    
    Failure by any party to exercise any right given in this Agreement or to insist on strict
compliance by the
other party of any obligation under this Agreement does not constitute a waiver of the
Partys right to later
demand exact compliance with the terms of this Agreement.17.
    
    GOVERNING LAW.
 (i)
    
    All controversies and disputes arising out of or under this Agreement will be
determined pursuant to the laws of the State Delaware, regardless of applicable
principles of conflicts of laws. The Parties irrevocably submit to the exclusive
jurisdiction of (i) the Courts of the State of Illinois, and (ii) if federal
jurisdiction exists, to the Federal District Court, Northern District of Illinois for
the purposes of any suit, action, or other proceeding arising out of the Agreement.
The Parties hereby irrevocably waive any objection, including that of inconvenient
forum, which they may now or hereafter have to the laying of venue for any suit,
action or proceeding arising out of or relating to the Agreement in the Courts of the
State of Illinois, or in the Federal District Court, Northern District of Illinois. In
the event of litigation, this Agreement may be filed as a written consent to a trial
by the court.(ii)
    
    THE PARTIES AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY AND
ALL CLAIMS OR CAUSES OF ACTION BASED UPON OR ARISING OUT OF THE AGREEMENT.
 18.
    
    ENTIRE AGREEMENTThis Agreement, including its Schedules, contains the entire understanding of the parties
with respect to the matters herein contained and voids all prior understandings, if any,
between the parties with respect to the distribution of the Products. With the exception of
changes that may be made by CytoCore at its sole discretion to Schedule A as set forth in
section 2 (a), the Agreement may be changed from time to time only by an instrument in
writing signed by an officer of CytoCore and an authorized representation of Distributor.19.
    
    THIRD PARTY RIGHTSThis Agreement and the rights and obligations created under it shall be binding upon and inure
solely to the benefit of the parties hereto and their respective successors and permitted assigns,
and nothing in this Agreement, express or implied, is intended or should be construed to confer
upon any other person any right, remedy or claim under or by virtue of this Agreement.20.
    
    INDEPENDENT PARTIES
 9




---



##### 



In all dealings within the scope of this Agreement, the parties acknowledge and agree that the
relationship created by this Agreement is that of independent contracting parties and is not,
and will not be deemed to be any other relationship, including, without limitation, that of
joint venturers, joint employers, or a partnership. Personnel employed by, or acting under the
authority of, a party to this Agreement are not employees or agents of the other party.
CytoCore and Distributor assume full responsibility for the acts, supervision and control of
their own respective employees. Distributor is not a general agent of CytoCore. When conducting
business under this Agreement, Distributor must identify itself as an Authorized Distributor
of CytoCore. Distributor has not paid and will not be required to pay any franchise fee or
other fee to be a Distributor for CytoCore or to use CytoCores name or other intellectual
property. This Agreement does not create any franchise between the parties.21.
    
    COMPLIANCE WITH LAWSThis Agreement is subject to changes or modifications necessary to comply with the laws,
orders, or regulations of, and any necessary approvals of, local, state and federal regulatory
agencies having jurisdiction over the offering or provision of the Products in the Area or
Distributors activities in connection therewith. Accordingly, CytoCore may add, delete,
suspend or modify the rates for, and features included with the Product, and determine whether
these changes apply to both existing and future Distributors. CytoCore will notify Distributor
as soon as practicable of each modification. Distributor may not take any action inconsistent
with any efforts by the CytoCore before regulatory authorities or others regarding any
modification of Product prices or modifications. Distributor shall strictly comply with all
applicable laws and regulations, including the Federal Food, Drug and Cosmetic Act (including
all laws which it administers), all laws and regulations promulgated under the U.S, Medicare
program including its anti-fraud provisions, export laws and regulations in connection with the
Products and other materials provided hereunder. Distributor shall insure that all of its
personnel strictly adhere to all applicable laws relating to the use and sale of the Products.
Distributor shall not, and shall not permit any other person or entity to, export or re-export,
directly or indirectly, any Product or technical data (as defined by the U.S. Export
Administration Regulations) produced or provided under or in connection with this Agreement, or
export or re-export, directly or indirectly, any direct product of any of the foregoing,
including software, to any person, entity, government or destination for which such export or
re-export is restricted or prohibited by U.S. or non-U.S. law, without obtaining prior
authorization from U.S. Department of Commerce and other competent government authorities to
the extent required by those laws. If, in CytoCores opinion, a Business Associate Agreement
with Distributor is required by Federal or State laws, such agreement will be duly executed,
without additional compensation, by Distributor.22.
    
    MANUFACTURERS LIMITED WARRANTYThe manufacturers limited warranty as set forth on Schedule C is the only warranty, except
for warranty of title, provided with the Products furnished under this Agreement. Distributor
must make the limited warranty statement readily available to Distributors end-user purchasers
prior to sale. Any warranty statements made by Distributor that are in addition to the
statements in the limited warranty apply against Distributor only and any costs, administrative,
legal, or otherwise connected with any such additional warranty statements must be borne by
Distributor. Distributor agrees to indemnify, defend and hold CytoCore harmless from all direct
and indirect results and claims flowing from such statements.23.
    
    DISCLAIMER OF WARRANTIESEXCEPT FOR THE WARRANTY OF TITLE, AS STATED ABOVE, CYTOCORE MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, AS TO ANY PRODUCTS. CYTOCORE SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER WARRANTY OF FITNESS OR
QUALITY.
 10




---



##### 



24.
    
    LIMITATION OF LIABILITIESIN NO EVENT WILL CYTOCORE BE LIABLE TO DISTRIBUTOR FOR LOST PROFITS OR REVENUES, WHETHER
PRESENT OR PROSPECTIVE, FOR LOSS OF TIME OR BUSINESS REPUTATION, INCONVENIENCE, LOSS OF USE OF
ANY EQUIPMENT OR PROPERTY DAMAGE CAUSED BY ANY PRODUCTS SOLD UNDER THIS AGREEMENT OR THEIR
FAILURE TO WORK, OR FOR ANY OTHER INDIRECT, SPECIAL, RELIANCE, INCIDENTAL OR CONSEQUENTIAL LOSS
OR DAMAGE ARISING OUT OF THIS AGREEMENT OR ANY OBLIGATION RESULTING THEREFROM, OR FROM THE USE
OR PERFORMANCE OF ANY PRODUCTS. THESE LIMITATIONS OF LIABILITY APPLY TO ALL CAUSES OF ACTION IN
ANY WAY RELATED TO THIS AGREEMENT OR THE PRODUCTS, INCLUDING, WITHOUT LIMITATION, ALLEGED
BREACH OF WARRANTY, BREACH OF CONTRACT, PATENT OR COPYRIGHT INFRINGEMENT, OR TORT, WHETHER IN
NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE, EVEN IF CYTOCORE HAS BEEN ADVISED OF THE
POSSIBILITY OF ANY SUCH LOSSES OR DAMAGES. IN THE EVENT OF ANY LIABILITY OF CYTOCORE TO
DISTRIBUTOR RELATED TO PRODUCTS SOLD UNDER THIS AGREEMENT, THIS LIABILITY WILL BE LIMITED TO
THE LESSER OF (A) DISTRIBUTORS PROVEN DIRECT DAMAGES AND (B) THE PURCHASE PRICE OF THE
PRODUCTS WITH RESPECT TO WHICH THE ALLEGED LOSSES OR DAMAGES ARE CLAIMED.25.
    
    AMENDMENTThis Agreement may only be amended or superseded by written agreement executed by authorized
representatives of both parties, except as otherwise explicitly stated in this Agreement. Each
such modification will be effective only in the specific instance for the specific purpose for
which given. No course of dealing, course of performance, or usage of trade may be invoked to
modify or supplement in any way the terms and conditions of this Agreement. No other
understandings or representations, whether oral or in writing, will amend or supersede this
Agreement.26.
    
    INTERPRETATIONCytoCore and Distributor acknowledge that they have read this Agreement and understand and
accept the terms, conditions and covenants contained in it as being reasonably necessary to
maintain CytoCores high PRODUCT standards and thereby to protect and preserve the goodwill of
CytoCores Products and its Intellectual Property. Distributor has independently investigated
the business outlined in this Agreement and the profitability (if any) and risks, and is not
relying on any representation, guarantee, or statement of CytoCore other than as set forth in
this Agreement.27.
    
    ALLOCATION OF RISKCytoCore and Distributor each acknowledge that the limitations and exclusions contained in this
Agreement have been the subject of active and complete negotiation between the parties and
represent the parties agreement based upon the level of risk to CytoCore and Distributor
associated with their respective obligations under this Agreement and the payments to be made
to Distributor and charges incurred by Distributor pursuant to this Agreement. The parties
agree that the terms and conditions of this Agreement will not be construed in favor of or
against any party by reason of the extent to which any party or its professional advisors
participated in the preparation of this Agreement.28.
    
    SURVIVALUnless otherwise indicated herein, all provisions of this Agreement regarding payment,
indemnification, liability and limitations on liability, disclaimers of warranty,
confidentiality and/or protection of proprietary rights and trade secrets shall survive the
expiration or termination of this Agreement and remain in full force and effect in perpetuity
thereafter. In addition, upon the expiration of this Agreement all rights granted or
obligations undertaken hereunder shall terminate forthwith except rights and obligations which
arose prior to such expiration or termination and those set forth in sections 6, 9, , and 12,
and in subclasses 11 (b), (c) and (d).
 11




---



##### 



By:
    
    Illegible
    
    
    
    By:
    
    CytoCore, Inc.Name:
    

    Illegible

    
    
    

    Name:Title:
    
    PRESIDENT
    
    
    
    Title:Date:
    
    February 16,2008
    
    
    
    Date:
    
    February      , 2008
 12




---



##### 



Schedule A: Area Appointment and Product Schedule:
 Area Appointment:
 Product Schedule:  SoftPap  SoftPAP
 Minimum Purchase Requirement:
  # OBGYN
    
    Annual Pap
    
    Minimumin Area
    
    Specimens
    
    Purchases (Each)
    
    % OpportunityYear 1 (2008)
    
    
    1,434
    
    
    
    2,581,200
    
    
    
    195,741
    
    
    
    8
    %Year 2 (2009)
    
    
    1,434
    
    
    
    2,581,200
    
    
    
    1,338,998
    
    
    
    52
    %Year 3 (2010)
    
    
    1,434
    
    
    
    2,581,200
    
    
    
    2,323,080
    
    
    
    90
    %
 Schedule B: Product Prices And Escalation Provisions:
 Product Pricing:
 SoftPAPcervical cell collector:
    
    $5.00 per unitNon-disposable SoftPAPhandle:
    
    $35.00 each
 Escalation Provision:
  Schedule C: CytoCore Warranty Policies
 SoftPap
 SoftPAP
 13




---



##### 



Schedule D: CytoCores Product Return Policy
 1.
    
    PURPOSE
 1.1.
    
    This document describes the procedure for handling of returned goods.
 2.
    
    SCOPE
 2.1.
    
    This procedure applies to materials shipped by CytoCore to distributors or customers.
This procedure applies to returned medical devices that have been returned under the
following conditions:
 
    
    Material was received by the customer, opened or partially used, returned remaining quantities to
CytoCore.
    
    Material was received by the customer/distributor, unopened and returned to CytoCore.
    
    Material was undelivered due to shipping requirements or related complications.
 3.
    
    RESPONSIBILITY
 3.1.
    
    QA is responsible for handling and documentation of returned goods and is responsible
for inspecting returned goods to determine their incoming status.
 4.
    
    REFERENCES
 4.1.
    
    QAP-005 Complaint Handling4.2.
    
    QAP-005-F1 Complaint/RGA Form4.3.
    
    WRP-001-F1 Incoming Material Log
 5.
    
    PROCEDURE
 5.1.
    
    General
 5.1.1.
    
    Document all requests for returned goods on the Complaint/RGA Form QAP-005-F1.5.1.2.
    
    Returned Good are accepted under the following circumstances.
 
    
    CytoCore shipping error (wrong quantity/wrong item shipped)
    
    Defective merchandise (within warranty period)
    
    Unopened merchandise (in whole packaged unit quantities).
    
    At the discretion of the Marketing Director
    
    Merchandise that is past its expiration date will not be accepted.
 5.1.3.
    
    Enter the return of goods (or complaint) into the complaint log. Assign a tracking number following
QAP-005.5.1.4.
    
    Provide the customer with the tracking number and instructions for marking the tracking number on
the outside of the shipping carton.5.1.5.
    
    Forward QAP-005-F1 to Quality Assurance for notification and investigation.
 5.2.
    
    Receiving Returned Goods
 5.2.1.
    
    QA (or designee) shall log in the receipt of the material into the Incoming Material Log (WRP-001-F1).5.2.2.
    
    QA will inspect the containers for damage, contamination, and broken seals.
 14




---



##### 



5.2.3.
    
    All returned materials will be quarantined until and appropriate investigation and
inspection can be
performed by quality assurance.5.2.4.
    
    If appropriate, QA will contact the person returning the goods with any questions or will provide an
appropriate follow-up.5.2.5.
    
    Quality Assurance will prepare an inspection file to document the return and inspection of any
returned goods.5.2.6.
    
    Goods that were received by the customer and returned unopened and in whole unit quantities can
be returned to the approved inventory and be redistributed as needed.5.2.7.
    
    Any goods that were opened by the customer cannot be returned to the approved inventory. Items
that were opened by the customer may be investigated to determine the root cause for the reason for
the return.5.2.8.
    
    After the investigation into any returned goods is complete the completed QAP-005-F1 will be
forwarded to the accounting department for notification of the return and to issue any refunds (as
appropriate).5.2.9.
    
    If appropriate (as determined by QA)  returned merchandise may be reworked, tested, and returned
to approved inventory.
 15




---



##### 



Addendum #1 to Distribution Agreement
By and between CytoCore Inc. and Co- Medical Inc.
dated February 16th, 2008 (the Agreement)
  1.
    
    Section 13, Indemnification, of the Agreement is revised by
re-designating the first paragraph
thereof as (a) and adding a new paragraph (b) that reads as follows:
  2.
    
    The agreement is amended by adding a new Section 29, Non-Solicitation of
Employees,
thereto that reads as follows:
 NON-SOLICITATION OF EMPLOYEES.
  3.
    
    All other terms of the Agreement shall remain unchanged and in full force and effect.
 CytoCore Inc.
    
    
    
    Co-Medical Inc.By:
    
    /s/ Robert F. McCullough Jr
    
    
    
    By:
    
    /s/ DOUG OVERTURFName:
    
    Robert F. McCullough Jr
    
    
    
    
    
    Name:
    
    DOUG OVERTURFTitle:
    
    CEO
    
    
    
    
    
    Title:
    
    PRESIDENT
 1