Document:

ex10_56.htm

 

 

 

 

AMDL DIAGNOSTICS  INC. & GRIFOLS USA, LLC

 

EXCLUSIVE DISTRIBUTION AGREEMENT

 

 

This Exclusive Distribution Agreement (the “Agreement”) is made and entered into effective as of September 20, 2009 (the “Effective Date”) by and between:

 

A.           AMDL Diagnostics, Inc. (“Company”), a company organized under the laws of Delaware, with its principal place of business at 2492 Walnut Avenue, Suite 100, Tustin, California  92780; and

 

B.           Grifols USA, LLC (“Grifols”) a Florida limited liability company with its principal place of business at 2410 Lillyvale Avenue, Los Angeles, California 90032.

 

Each may be referred to herein as a “Party” or, collectively, the “Parties.”

 

ARTICLE 1

 

DEFINITIONS

 

“Affiliate” shall mean any person, firm or corporation which, directly or indirectly, through one of more of its intermediaries, controls, is controlled by, or is under common control with, a party.  “Control” means the legal or beneficial ownership of 50% or more of the voting or equity interests or the power or right to direct the management and affairs of the business (including acting as the general partner of a limited partnership).

 

“Effective Date” shall have the meaning set forth in the introductory paragraph of this Agreement.

 

“Company Products” are those IVD (in-vitro diagnostic) products identified on the list attached hereto as Exhibit A with respect to all of such IVD products’ intended uses as identified and registered with the United States Food and Drug Administration (FDA), and all improvements thereto.  Company is under no obligation to include new technologies or platforms developed after the effective date of this agreement.

 

“Company Products Territory” shall mean the clinical diagnostic laboratories, reference laboratories, research laboratories, and appropriate healthcare providers in the United States and Puerto Rico.

 

ARTICLE 2

 

DISTRIBUTORSHIP

 

2.1           Appointment of Distributor.  Company hereby appoints Grifols as the Company’s exclusive distributor for all Company Products in the Company Products Territory.  Subject to the terms and conditions set forth herein, Company grants to Grifols, and Grifols hereby accepts, a limited, non-transferable, exclusive right to use its best commercial efforts as Company’s distributor to promote, market and sell the Company Products in the Company Products Territory.  Company acknowledges that in certain instances Grifols may not take physical possession of the Company Products, but instead will direct Company to send the shipment of such Company Products, as applicable, directly to Grifols’ customers.

 

 

 

  

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2.2           Exclusivity.  This appointment covered by this agreement is exclusive.

 

2.3           Use of Trademarks.

 

                            2.3.1              Ownership.  Each Party recognizes the validity of the other Party’s trademarks and trade name registered in such Party’s name or in the name of such Party’s Affiliate (such Party’s “Trademarks”), and each Party acknowledges that it owns no interest in, and agrees not to infringe upon, harm or contest the rights of the other Party’s Trademarks.  Each Party will not take any action in derogation of the other Party’s rights to its Trademarks.

 

                            2.3.2              Use of Trademarks and Trade Names.  So long as this Agreement is in effect, neither Party shall have the right to use the other Party’s Trademarks or trade names in connection with its activities hereunder.  Grifols’ use of Company’s Trademarks shall be limited to Company Products and marketing material provided by Company and pre-approved sales and marketing material produced by Grifols.  Grifols shall not use any of Company’s Trademarks except in connection with its distribution of Company Products under the terms of this Agreement.

 

                             2.3.3              Termination.  Grifols agrees that upon termination of this Agreement for any reason it will discontinue the use of and destroy or return, as directed by Company, any samples and materials as well as advertising, or other materials bearing any of Company’s Trademarks.  Likewise, upon termination of this Agreement, Company shall discontinue the use of and destroy or return, as directed by Grifols, all printed material bearing any of Grifols’ Trademarks.

 

                              2.3.4              Packaging.  Grifols agrees that all packages containing Company Products shall prominently display the Company’s Trademarks and, if desired, the words “Distributed by Grifols USA, LLC.”  All packaging shall comply with the rules and regulations of the FDA and any other regulatory body having jurisdiction over such packaging.

 

2.4           No Competition.  As additional consideration for the exclusive license granted hereunder, during the term of this Agreement and for a period of two (2) years after the termination hereof, Grifols agrees not to manufacture, market, sell or distribute any cancer diagnostic tests or related products that are in direct competition with the Company Products’ intended uses as identified and registered with the FDA.

 

2.5           Quality Agreement.  The Parties agree that upon execution of this Agreement they will negotiate in good faith in an effort to execute a mutually agreeable Quality Agreement within sixty (60) days of the Effective Date to ensure compliance with all regulatory criteria and applicable laws, regulations and statutes.  In the event the Parties cannot agree upon such Quality Agreement, and such Quality Agreement is not executed within the aforementioned sixty (60) day period, this Agreement shall terminate unless the parties agree in writing to extend such negotiation period.

 

 

 

 

  

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ARTICLE 3

 

PRODUCT SUPPLY; MINIMUM PURCHASE REQUIREMENTS

 

3.1           Agreement to Supply; Pricing.  The Company agrees to provide Company Products identified in Exhibit A hereto to Grifols for distribution pursuant to the terms of this Agreement.

 

3.2           Orders.  End users will place orders for the Company Products directly with Grifols.  Company will be responsible for shipping such Company Products directly to Grifols or to the end-users (as the ship-to address).  The orders will include an account number for such customer or end-user, with a ship-to address if the Company Products are shipped directly to the end-user.  The terms and conditions of this Agreement shall apply to all Purchase Orders submitted to Company for the Company Products, and shall supersede any different or additional terms on such Purchase Orders.

 

3.3           Minimum Purchase Requirements.  Subject to the terms of Section 4.1, Grifols shall be required to purchase each quarter during the initial five (5) year term of this Agreement, the following amounts of Products (the “Minimum Purchase Requirements”):

 

	
Dates

	
DR-70® Kit Minimums

	
From

	
To

	  
	
   September 20, 2009

	
November 30, 2009

	
Ramp up phase and DR-70 US launch for FDA cleared usage (i.e., intended use)

 

30

	
   December 1, 2009

	
February 28, 2010

	
   March 1, 2010

 

	
May 31, 2010

	
   50

	
   June 1, 2010

 

	
August 31, 2010

	
   60

	
   September 1, 2010

 

	
November 30, 2010

	
   60

	
   December 1, 2010

 

	
February 28, 2011

	
   70

	
   March 1, 2011

 

	
May 31, 2011

	
   70

	
   June 1, 2011

 

	
August 31, 2011

	
   100

	
   September 1, 2011

 

	
November 30, 2011

	
   100

	
   December 1, 2011

 

	
February 29, 2012

	
   120

 

 

  

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   March 1, 2012

 

	
May 31, 2012

	
   120

	
   June 1, 2012

 

	
August 31, 2012

	
   150

	
   September 1, 2012

 

	
November 30, 2012

	
   150

	
   December 1, 2010

 

	
February 28, 2013

	
   180

	
   March 1, 2013

 

	
May 31, 2013

	
   180

	
   June 1, 2013

 

	
August 31, 2013

	
   210

	
   September 1, 2013

 

	
November 30, 2013

	
   210

	
   December 1, 2013

 

	
February 28, 2014

	
   250

	
   March 1, 2014

 

	
May 31, 2014

	
   250

	
   June 1, 2014

 

	
August 31, 2014

	
   280

	
Five Year Total

	
2,640

 

The parties shall meet at least thirty (30) days prior to the end of the initial five (5) year term to attempt to agree on the Minimum Purchase Requirements for the next five (5) years.  If the parties cannot agree on the per quarter Minimum Purchase Requirements for next five (5) years prior to the expiration of the initial five (5) year term, this Agreement shall automatically terminate at the end of the initial five (5) year term.  The same requirements and procedures shall apply for any subsequent renewal year terms.

 

3.4           Initial Purchase Order Terms.  Grifols shall submit an initial purchase order for 30 DR-70® kits by September 25, 2009 (“Initial Purchase Order”).  The Initial Purchase Order shall be accompanied by a deposit of twenty-five percent (25%) of the total purchase price and a second deposit of twenty-five percent (25%) of the Initial Purchase Order shall be due and payable on October 9, 2009.  The fifty percent (50%) balance due for each kit in the Initial Purchase Order shall be due on shipping to Grifols USA, LLC or designated end user (Grifols’ customer) as required by Section 4.2 below, except if delivery is made before October 9, 2009, as full payment is due prior to shipment.

 

3.5           Shipping/Delivery.  Company shall use its best commercial efforts to deliver the requested Company Products to Grifols’ warehouse facilities or end user, as detailed in Grifols’ written purchase order.  Orders are shipped C.I.F. destination, end-user (in the event of a drop-shipment) or Grifols’ warehouse.  Unless specified in Grifols’ order, Company will select the mode of shipment and the carrier.  Company will be responsible for and shall pay all packing, shipping, freight and insurance charges until the Company Products are delivered to the end-user or Grifols.  Company may seek reimbursement from Grifols for such packing, shipping, freight and insurance charges by issuing an appropriate invoice with detailed backup documentation to Grifols for payment.  Extra charges may apply for expedited delivery.  Company Products shall be returnable in accordance with Company’s Return of Goods Policy set forth in Section 3.7 below.  Company shall bear the risk of loss to the Company Products until delivered by Company or Company’s common carrier responsible for transporting the Company Products to Grifols’ warehouse facilities or end user, at which time, if delivered to Grifols’ warehouse facilities, the risk of loss shall pass to Grifols.

 

 

 

  

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3.6           Acceptance.  Upon delivery of the Company Products to Grifols hereunder, Grifols shall immediately inspect the delivered Company Products for damage and report any damage to sending party in writing within five (5) business days’ receipt of such Company Products.  Unless damage has been noted via the procedure specified in the Return Policy, the Company Products delivered to Grifols hereunder shall be deemed accepted by Grifols.  Except as otherwise provided in this Agreement, each party’s sole obligation with respect to any Company Products determined to be defective or non-conforming by Grifols shall be, at Grifols’ option, to replace Company Product according to the Return Policy.  Except for Company’s indemnification obligations set forth in Section 8.1.1, and except for circumstances involving Company’s gross negligence or intentional misconduct, the remedies in this Section 3.6 shall be Grifols’ sole remedy for the defective Company Product, as applicable.  If, however, such Company Product has been altered from its original state by Grifols, Grifols shall be deemed to have accepted the Company Product.

 

3.7           Return Policy.  Except in circumstances involving delivery of incorrect products from Company, or delivery of Company Products damaged in transit, Company Products are non-returnable and all sales are final.  In the event that one or more kits are believed to be defective, Grifols shall email Company explaining the alleged defect and the Lot Number and Part Number involved.  Company will perform its own test on the Lot and Part and make its own evaluation.  In the event that the kit is deemed to be defective, Company will either replace the defective Lot or Part or replace the entire kit(s) as it deems appropriate.

 

ARTICLE 4

 

RENEWAL PRICES AND PAYMENT

 

4.1           Pricing.  As of the Effective Date, the base price to be paid by Grifols for each DR-70® 96 well kit, excluding shipping, shall be Two Hundred Fifty Dollars ($250).  Such base price shall remain fixed for the initial twelve (12) month period of this Agreement. The price to be paid by Grifols for the Company’s Products in subsequent years shall be determined in the manner set forth herein.  The parties shall meet on an annual basis throughout the five year duration of this Agreement to negotiate, in good faith, the Products’ pricing and the Required Minimum Purchase Requirements for the next subsequent twelve (12) month period.  In no event shall the Product’s pricing for such subsequent twelve (12) month period be a price that is less than the Product pricing for the prior twelve (12) month period.  Such pricing shall be mutually agreed-upon no later than thirty (30) days prior to each year’s anniversary of the Effective Date of this Agreement.  In the event the parties cannot, after such good faith negotiations, agree on such subsequent twelve (12) month period’s pricing, the Agreement shall terminate upon the anniversary of the Effective Date (i.e., the expiration of the then-current twelve (12) month period).  Company agrees to provide a reasonable number of Product samples for Grifols’ or Company’s customers’ evaluations.  Grifols may, at its discretion, determine sale prices to its customers.

 

4.2           Payment Terms.  All Company Products shall be paid for within thirty (30) days after delivery, unless a different payment term is agreed upon by the Parties in writing prior to specific deliveries.  Balances not paid within thirty (30) days may, upon the discretion of Company, bear interest from the date of delivery until paid at the rate of 1.5% per month or the maximum rate permitted by applicable law, whichever is less, unless a portion of such balance is disputed by Grifols.  All undisputed sums shall be paid by Grifols in accordance with this Section 4.2.  If Grifols has billing questions, Grifols must notify Company’s Accounts Receivable Department within thirty (30) days of Grifols’ receipt of such disputed invoice, or said charges will apply.  In addition to the foregoing, in the event of such delinquent and unpaid balances, Company, at its discretion, may suspend shipment of future orders of its Company Products.  Grifols may request that the Company, at no charge, retain or store Company Products which have been ordered under any Purchase Order for up to two (2) months at the Company’s facilities.

 

 

 

  

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4.3           Currency Exchange.  Unless written instructions are otherwise exchanged, all payment hereunder shall be in United States Dollars currency.

 

4.4           Taxes and Duties.  The Company Products prices do not include taxes and other related charges.  Grifols agrees to pay, and to indemnify and hold Company harmless from, any and all of the following: sales, use or privilege taxes, excise or similar taxes, value added taxes, import and export taxes, duties, or assessments and any other related charged levied by any jurisdiction pertaining to the Company Products, other than taxes computed on the net income of Company.

 

ARTICLE 5

 

MARKETING & SALE OF PRODUCTS; COVENANTS OF GRIFOLS

 

5.1           Best Commercial Efforts.  Grifols shall use its best commercial efforts to promote, market, and sell reasonable quantities of Company’s Products in the Company Products Territory and to stimulate and increase interest in the Company Products in the Company Products Territory.  In particular, Grifols agrees to do the following to market and sell the Company’s Products:

 

5.1.1              Present and prominently represent the Company’s Products at appropriate conferences, tradeshows, and industry events;

 

5.1.2              Proactively market Company’s Products via Grifols’ existing customer base and  expand into new accounts when possible; and

 

5.1.3              Promote the Company’s Products through appropriate marketing campaigns as mutually agreed upon by the Parties.

 

5.2           Duties of Distributor.  Grifols hereunder shall use its best commercial efforts to perform such necessary distribution services, including but not limited to the following:

 

5.2.1              Adequate Business Facilities and Inventory.  Grifols shall maintain adequate facilities to market and sell the Company Products in the Company Products Territory.

 

                            5.2.2              Payment of Expenses.  Grifols shall pay all expenses associated with the conduct of its business, including, without limitation, all such costs for employee compensation and benefits, maintenance, and  insurance.

 

                            5.2.3              Sales Responsibilities/Advertising.  In accordance with Company’s written instructions, Grifols shall use and distribute appropriate advertising and technical literature for the Company Products to  effectively market such Company Products and inform customers of the technical aspects of such Company Products unique to such Company Products.  All such materials must be pre-approved in writing by the Company, which approval shall not be unreasonably withheld or delayed.

 

 

 

  

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                            5.2.4              Unauthorized Representations.  Grifols shall make no representation or guarantee to customers regarding the Company Products it is authorized to distribute hereunder or their delivery beyond those stated herein or as authorized in writing by Company.

 

                            5.2.5              Instruction Regarding Products.  Grifols shall instruct its customers as to the warranty, operation, use, maintenance, and care of the Company Products in accordance with the written instructions provided by Company.  It is expressly understood and agreed by the Parties that Grifols will not be offering and in no way shall be responsible for any warranty on any of the Company Products.

 

                           5.2.6              Forecast.  Grifols shall submit to Company and update on or about the first day of each month a twelve (12) month rolling forecast of Grifols’ intended purchases of Company Products in a format to be mutually determined by the parties.

 

                           5.2.7              Purchase orders.  Grifols shall submit its Purchase Orders in writing, to fax no. (714) 505-4464, electronically, and signed by an authorized representative of Grifols.  Unless otherwise agreed by the Company, all orders must have a shipping or delivery date not less than fourteen (14) days later than the date the order is placed.  Notwithstanding the foregoing, all orders are subject to acceptance by the Company based upon availability of Company Products.  The Company will use its best efforts to meet all Purchase Orders as long as such Purchase Orders are consistent with Grifols’ forecast for orders as set forth in paragraph 5.2.6 above.  Orders in excess of the forecast may be shipped by the Company when Products become available.

 

                           5.2.8              Compliance with Applicable Laws.  Grifols shall comply with all laws and regulations and requirements applicable to a third-party distributor of Company Products, and with all laws and regulations and requirements of governmental agencies having jurisdiction within the Company Products Territory.

 

5.3           Reports.  Grifols shall provide Company with such written and oral reports as Company may from time to time reasonably request on (i) the potential customers and market data for the marketing and sale of Company Products in the Company Products Territory; (ii) the activities performed by Grifols for Company; (iii) the names of potential customers contacted by Grifols, including the nature and result of such contact; and (iv) Company Products sales, including customer name, quantity, type, and price.  This information will be provided by Grifols to Company on a monthly basis and in a predetermined and mutually agreeable report format.  Grifols shall also maintain separate and detailed accurate and complete records of all transactions concerning the distribution services provided hereunder, including, but not limited to, such records that identify all customer purchases, and such records that possess the capability to notify all purchasers in the event of a corrective action.

 

5.4           Product Complaints.  If either Grifols or Company learns of any complaints/claims concerning the Company Products, the party learning of such complains or claims shall advise the other party within 24 hours by telephone, confirmed in writing within 3 business days thereafter.

 

5.5           Records.  At the reasonable and prior written request of Company hereunder, Grifols shall permit Company to examine Grifols records applicable to the obligations set forth in this Agreement, with such examination occurring during business hours and with reasonable frequency and written notice to Grifols to verify compliance with this Agreement.

 

 

 

  

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5.6           Recalls or Corrective Actions.  Grifols shall fully cooperate with Company in any decision to by Company with respect to Company Products, to recall, retrieve and/or replace its Company Products.  All costs and expenses associated with such recalls and corrective actions shall be borne solely by Company.

 

5.7           Licenses.  Grifols represents and warrants that it has the necessary legal authority under its licenses and applicable law to perform the distribution activities hereunder.

 

5.8           Compliance.  Grifols shall comply with all applicable laws, rules and regulations in connection with the activities contemplated by this Agreement.  The parties further agree to use their best efforts to negotiate and execute any amendments hereto that may be deemed necessary or appropriate to maintain compliance with any applicable laws, rules, regulations, orders or injunctions applicable to either party.

 

5.9           No Alteration.  Each party shall not remove, obliterate, or in any other manner affect, any trademark, trade name, certification mark, testing seal, means of identification, instructional or safety warning, or other marking of the other, whether affixed to the Company Products or otherwise.  Grifols shall not make any changes in the literature, warnings, labels or advertising under which Company prescribes that the Company Products are to be sold without Company’s prior written authorization, and Company shall deliver to Grifols all such literature, warning, labels and materials to be provided by Grifols to its customers.

 

ARTICLE 6

 

CUSTOMER TRAINING AND TECHNICAL SUPPORT

 

6.1           Training.  Grifols shall be responsible for training the customers purchasing Company Products hereunder on the proper use of Grifols’ instruments when used with Company Products.  All other training with respect to the Company Products shall be the sole responsibility of Company.

 

6.2           Customer Support.  Company shall cooperate with Grifols to develop a training protocol for Grifols’ personnel.

 

6.3           Company Representative Participation.  For specific training or marketing activities, including, but not limited to, Grifols sales staff training events, significant reagent purchases, national conferences and regional seminars, Grifols and Company shall plan and execute these activities with mutual participation and upon mutual agreement.  Company and Grifols will each be responsible for their respective representatives’ travel costs incurred for these specific activities.

 

ARTICLE 7 – REPRESENTATIONS/WARRANTIES

7.1           General Warranty.  COMPANY WARRANTS THAT THE COMPANY PRODUCTS WILL, AT ALL TIMES DURING THE TERM OF THIS AGREEMENT, COMPLY WITH ALL APPLICABLE FEDERAL, STATE, AND LOCAL REGULATIONS AND LAWS, AND ARE FREE FROM DEFECTS IN DESIGN, MATERIALS, AND WORKMANSHIP.  IN ADDITION TO ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, AS ESTABLISHED BY APPLICABLE LAW, COMPANY EXPRESSLY REPRESENTS AND WARRANTS THAT THE PRODUCTS PROVIDED TO GRIFOLS FOR DISTRIBUTION HEREUNDER AND EVERY ELEMENT THEREOF, AND THE USE OF SUCH PRODUCTS IN THE CUSTOMARY MANNER OR IN A MANNER SUGGESTED OR RECOMMENDED BY COMPANY OR IN A MANNER INTENDED BY GRIFOLS AND WHICH IS KNOWN TO COMPANY, DO NOT INFRINGE ON ANY PATENT, TRADEMARK, OR COPYRIGHT.  NO PERSON IS AUTHORIZED TO MAKE ANY OTHER REPRESENTATION OR WARRANTY CONCERNING THE COMPANY PRODUCTS OTHER THAN AS PROVIDED IN THIS SECTION.  ALL REPRESENTATIONS AND WARRANTIES OF COMPANY MADE HEREUNDER SHALL RUN TO GRIFOLS’ SUCCESSORS, ASSIGNS, CUSTOMERS, AND USERS, AS APPROPRIATE.

 

 

 

  

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7.2           Limitation of Liability.  EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 8.1 OF THIS AGREEMENT, AND CIRCUMSTANCES INVOLVING COMPANY’S GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT, GRIFOLS AND COMPANY AND/OR THEIR RESPECTIVE AFFILIATES’ LIABILITY TO THE OTHER PARTY HEREUNDER OR ANY THIRD PARTY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE PRODUCTS WILL BE LIMITED TO THE TOTAL PAYMENTS MADE BY THE DISTRIBUTING PARTY TO THE OTHER PARTY FOR THE COMPANY PRODUCTS, ORDERED IN THE 12 MONTHS IMMEDIATELY PRECEDING THE FIRST OCCURRENCE OF THE EVENTS GIVING RISE TO SUCH LIABILITY.

7.3           Consequential Damages Waiver. NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT TO THE CONTRARY, AND EXCEPT FOR CIRCUMSTANCES INVOLVING COMPANY’S GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT, GRIFOLS AND COMPANY AND/OR THEIR RESPECTIVE AFFILIATES WILL NOT BE LIABLE FOR ANY LOSS OF USE, INTERRUPTION OF BUSINESS, OR ANY OTHER INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING LOST PROFITS) REGARDLESS OF THE FORM OF ACTION, WHETHER CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY OR OTHERWISE, INCURRED BY THE OTHER PARTY, EVEN IF GRIFOLS OR COMPANY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

ARTICLE 8

 

INDEMNIFICATION

 

8.1           Indemnification.

 

                           8.1.1              Company shall defend, indemnify and hold harmless Grifols, its affiliates, and all agents, employees, officers and directors thereof (collectively, the “Grifols Indemnified Parties”) from and against any liability, loss, damage, cost, expense (including reasonable attorney’s fees), claim, suit or proceeding made against one or more of the Grifols Indemnified Parties arising from or relating to (i) any claims, warranties or representations made by Company with respect to the Company Products; (ii) any negligence, misrepresentation, error or omission on the part of Company; and (iii) any breach by Company of any of its warranties, representations and obligations hereunder.

 

                            8.1.2              Grifols shall indemnify, defend and hold Company and its officers, employees, agents, representatives, Affiliates and their respective successors and assigns (collectively, “Company Indemnified Person(s)”) harmless from and against any liabilities asserted against any Company Indemnified Person arising out of, attributable to, or in connection with any breach by Grifols of any of Grifols’ representations, warranties or obligations under this Agreement.

 

 

 

  

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ARTICLE 9

 

INSURANCE

 

9.1           Insurance.

 

                            9.1.1              Each Party shall obtain and maintain during the term of this Agreement general liability insurance in the amount of at least Two Million Dollars ($2,000,000) per occurrence, issued by a reputable insurance carrier reasonably acceptable to the other party.

 

                            9.1.2              Company’s insurance hereunder shall include, but shall not be limited to, Product Liability Insurance, in the amount of no less than Two Million Dollars ($2,000,000) in the aggregate.  Upon request, such Party shall provide to the other party a certificate of insurance issued by the insurance carrier verifying the issuance of the required insurance policy.  Company shall identify Grifols as an additional named insured on Company’s policy(ies) procured and maintained in accordance with this Section 9.1.2.

 

ARTICLE 10

 

TERM AND TERMINATION

 

10.1           Term.  This Agreement shall become effective as of the Effective Date, and unless earlier terminated under this Article, this Agreement shall end on July 19, 2014.  Unless otherwise set forth herein, this Agreement shall thereafter automatically renew for additional terms of one year each if the parties timely agree on the Required Minimum Purchasers and Product pricing for each subsequent year.

 

10.2           Termination Without Cause.  Either Party may terminate this Agreement without cause and at any time after the second (2nd) anniversary of the Effective Date upon serving one (1) calendar year’s prior written notice to the other Party.  For the sake of clarity, the earliest either Party may so terminate this Agreement without cause pursuant to this Section 10.2 is on the third (3rd) anniversary of the Effective Date.

 

10.3           Other Rights of Termination.  Either Party may terminate this Agreement upon written notice to the other Party upon the occurrence of any of the following events:

 

10.3.1              any material breach of this Agreement;

 

                            10.3.2              if either Party shall be restrained, prevented or hindered for a continuous period of sixty (60) days from transacting a substantial part of its business by reason of a judgment, decree, order, rule or regulation of any court, or of any administrative or governmental authority or agency; or

 

                            10.3.3              if either Party shall become subject to any action or proceeding in the nature of a bankruptcy proceeding under United States or other law or shall make an arrangement with its creditors, or shall make an assignment for the benefit of its creditors, or a receiver, custodian, trustee, liquidator or comparable officer shall be appointed for such Party or its business.

 

10.4           Effect of Termination.  Upon any expiration or termination of this Agreement:

 

 

 

  

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10.4.1              Neither party shall thereby be discharged from any liability or obligation to the other party which became due or payable prior to the effective date of such expiration or termination;

 

10.4.2              Those Sections of this Agreement which by their nature extend beyond termination, including but not limited to those in Articles 8 (“Indemnification”) and 11 (“General Provisions”) shall continue;

 

                            10.4.3              Grifols’ appointment as an authorized distributor of Company as more fully set forth herein shall immediately terminate, and Grifols shall immediately cease any representations that it is an authorized distributor;

 

                             10.4.4              Grifols will, upon request by Company, transfer to Company any product registrations, licenses or permits or other similar items which may have been obtained in the name of Grifols, or jointly in the name of Company and Grifols, pursuant to this Agreement; and

 

10.4.5              The payment date of all monies due to one party by the other party shall automatically be accelerated so that they shall become due and payable on the effective date of expiration or termination.

 

ARTICLE 11

 

GENERAL PROVISIONS

 

11.1           Assignment.  This Agreement shall be binding upon and shall inure to the benefit of the parties and their permitted successors and assigns, but shall not be assignable by Grifols without the prior written consent of Company, which shall not be unreasonably withheld or delayed, unless such assignment by Grifols is to an affiliate, subsidiary, or parent corporation of Grifols.

 

11.2           Choice of Law; Venue.  This Agreement will be governed by and construed according to the laws of the State of California, U.S.A., without regard to that body of law controlling conflicts of laws.

 

11.3           Amendment.  This Agreement may be amended or supplemented only by a writing that refers explicitly to this Agreement and that is signed on behalf of both parties.

 

11.4           Waiver.  No waiver will be implied from conduct or failure to enforce rights.  No waiver will be effective unless in writing signed on behalf of the party against whom the waiver is asserted.

 

11.5           Force Majeure.  Neither party will have the right to claim damages or to terminate this Agreement as a result of the other party’s failure or delay in performance due to circumstances beyond its reasonable control (except for obligations relating to fees payable under this Agreement) including, but not limited to, labor disputes, strikes, lockouts, shortages of or inability to manufacture or obtain the Company Products hereunder, labor, energy, components, raw materials or supplies, war, riot, insurrection, epidemic, acts of God, or governmental action not the fault of the nonperforming party.

 

11.6           Severability.  If any provision of this Agreement is held unenforceable or invalid by a court of competent jurisdiction, such unenforceability or invalidity shall not render this Agreement unenforceable or invalid as a whole.  Rather, such provision shall be stricken from this Agreement and the remaining provisions shall be fully enforceable.

 

 

 

  

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11.7           Notices.  All notices shall be in writing and shall be by personal delivery, or by certified or registered mail, return receipt requested, and deemed given upon personal delivery, or five (5) days after deposit in the mail.  Notices shall be sent to the addresses set forth below or such other address as either party may specify in writing:

 

Grifols:

 

Grifols USA, LLC

2410 Lillyvale Avenue

Los Angeles, California 90032

Attn:  Legal Department

Company:

AMDL Diagnostics, Inc.

2492 Walnut Avenue, Suite 100

Tustin, California  92780

Attn:  Akio Ariura, Chief Operating Officer

 

11.8           Relationship of Parties; Use of Names.  The parties to this Agreement are independent contractors.  Neither party has authority to bind the other or to incur any obligation on the other party’s behalf.  Neither party will use the name of the other party except as necessary to comply with any applicable regulations.

 

11.9           Confidentiality.  The parties to this Agreement respect the confidentiality of its contractual relationships.  Each party agrees to not disclose any confidential information received from the other party in connection with this Agreement to any third party unless (i) such disclosure is approved in writing by the non-disclosing party or (ii) such disclosure is required by law or governmental regulation and the party requested to disclose such information has notified the other party in advance in writing.  Neither party shall have any obligation with respect to the confidential information of the other party if (i) at the time of receipt, such information is in the public domain or subsequently enters the public domain without fault of the receiving party, (ii) at the time of receipt, the information was already known to the receiving party as evidenced by appropriate written records, (iii) such information becomes available to the receiving party from a bona-fide third-party source other than the disclosing party provided that such third-party source is not bound to any confidentiality obligations to the disclosing party; and (iv) such information is independently developed by the receiving party, as documented by appropriate written records.  Upon termination or expiration of this Agreement, the receiving party shall cease all use of the other party’s confidential information and, if requested, return all confidential information received.  The obligations set forth in this Section 11.9 shall continue beyond the termination or expiration of this Agreement, and for so long as either party possesses confidential information of the other party.

 

11.10           Arbitration.  Any disputes arising under this Agreement will be submitted to binding arbitration through the American Arbitration Association.  Each party shall select one arbitrator and the two arbitrators so selected shall select a third arbitrator so that the three arbitrators shall govern the arbitration process and issue decisions that shall be binding upon the parties.  Any such arbitration shall take place in Los Angeles, California.

 

 

 

  

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11.11           Legal Fees.  In the event of any legal action, arbitration or other proceeding arising out of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and other costs incurred therein, in addition to any other relief to which it may be entitled.

 

11.12           Audit Rights.  At the reasonable and prior written request of Grifols to Company hereunder, Company shall permit Grifols to examine Company’s records applicable to the obligations set forth in this Agreement, with such examination occurring during business hours and with reasonable frequency and written notice to Company, to allow Grifols to verify Company’s compliance with this Agreement.

 

11.13           Entire Agreement.  This Agreement, including all exhibits to this Agreement, which are hereby incorporated by reference, represents the entire agreement between the parties relating to its subject matter and supersedes all prior representations, discussions, negotiations and agreements, whether written or oral.

 

11.14           Authority to Execute.  Each of the undersigned represents and warrants that he/she has the right, legal capacity and authority to enter into this Agreement and that the execution of this Agreement has been authorized by the party on whose behalf the undersigned is executing this Agreement.

 

 

 

	 GRIFOLS USA, LLC	 	 AMDL DIAGNOSTICS, INC.
	 	 	 
	 	 	 
	 By:	 /s/	 	 By:  	 /s/
	 	 William Stopher, President & CEO	 	 	 Akio ariura, Chief Operating Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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EXHIBIT A

COMPANY PRODUCTS

Catalog Number DR2102: AMDL-ELISA DR-70® (FDP) FOR  US FDA APPROVED USAGE. Micro-titer plate based in vitro 96 well diagnostic kit.*

*Catalog number(s) will be revised as necessary to reflect next generation, improvements to current versions, new products, and new IVD Indications as identified and registered with the FDA.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

14 of 14ex10_57.htm

 

 

 

 

 

AMDL DIAGNOSTICS INC. & TAROM APPLIED TECHNOLOGIES

 

DISTRIBUTION AGREEMENT

 

 

This Distribution Agreement (“Agreement”) is made and entered into this 30th day of September, 2009 (“Effective Date”) by and between AMDL Diagnostics Inc., (“AMDL” or “Company”), having its principal place of business at 2492 Walnut Avenue, Suite 100, Tustin, California 92780-6953 and Tarom Applied Technologies, Ltd. having its principal place of business at 93 Jabotinsky St. Petach-Tikva, Israel (hereinafter “Tarom Applied Technologies" or “Distributor”).

 

RECITALS

 

	
  

	
A.

	
AMDL is, among other things, engaged in the business of developing and manufacturing cancer diagnostic tests.

 

	
  

	
B.

	
Distributor is, among other things, engaged in the business of marketing and selling medical devices and healthcare products to clinical and research laboratories, pharmaceutical and biotechnologies industries and other health care providers.

 

	
  

	
C.

	
Distributor desires to obtain the exclusive right to market, sell and distribute the products (the “Products”) which are set forth on Exhibit A hereto in the “Territory” (as defined in Section 1(c) below), all in accordance with the terms and conditions set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties hereinafter set forth, the parties hereby covenant and agree as follows:

 

1.           GRANT OF DISTRIBUTORSHIP.

 

(a)           Upon the terms and subject to the conditions set forth herein, Company hereby grants to Distributor the exclusive right during the term hereof, within the Territory, to distribute market and sell the Products which are set forth on Exhibit 1 (the “Distributorship”).

 

(b)           For purposes of this Agreement, the “Territory” includes the following countries: Israel.

 

(c)           During the Term (as hereinafter defined), Distributor shall be permitted to use all trademarks and trade names of Company associated with the Products and all Products shall bear the trade names and trademarks applied by Company at its production facility.  Distributor, at its own expense may add its name, logo, and the words, “Distributor in Israel” to Product packaging and labels.

 

  

  

  

 

2.           ACCEPTANCE OF DISTRIBUTORSHIP.  Distributor hereby accepts the Distributorship and agrees to make all sales hereunder in accordance with this Agreement.  Distributor further agrees to use its reasonable efforts to promote sales of the Products within the Territory and not to distribute, market or sell any Products outside thereof.

 

 

3.           CONDITIONS OF SALE TO DISTRIBUTOR.  Company’s Conditions of Sale as set forth in Exhibit 2 hereto, effective on the date of each Distributor order to Company are made a part of this Agreement, are incorporated herein by this reference and shall be applicable to all orders placed by Distributor. Subject to Section 5 of this Agreement, the Company may modify the Conditions of Sale by providing the Distributer a 3 (three) months prior written notice. Upon delivery of same to Distributor the modified Conditions of Sale shall become effective for all orders placed after the date of delivery.

 

 

4.           TERM.

 

(a)           Initial Term and Renewal Terms.  The initial term of this Agreement shall commence on the date hereof, and shall end on September 30th, 2011 (the "Initial Term"), unless earlier terminated pursuant to the provisions of Section 10.

 

(b)           Renewal Terms.  Following the expiration of the Initial Term and each Renewal Term (as defined below), this Agreement shall be automatically extended for additional 12 (twelve) month period (the “Renewal Term(s)”), unless earlier terminated pursuant to the provisions of Section 10.

 

 

5.           PRICES; PAYMENT; DELIVERY.

 

(a)           Prices.  The prices for Products to be sold to Distributor pursuant to this Agreement shall be as set out in Exhibit 3 and shall remain fixed from the date this Agreement is executed through September 30, 2011. The purchase price shall be subject to adjustment thereafter effective with each Renewal Term.  Notwithstanding the foregoing, Company and Distributor may agree to alter pricing during the term of this Agreement; however, any such adjustment shall only be effective if entered into in writing by both parties hereto.

 

(b)           Resale Prices.  Distributor shall have the right to resell the Product within the Territory at such prices as Distributor, in its sole and absolute discretion, shall determine.  Within ten (10) days of the date hereof, Distributor shall provide the Company with a list of the initial sales prices to be charged to its customers.  Distributor shall provide a copy of any new or revised sales price for the Products, within ten (10) days of any such change. The Distributor shall be entitled to provide discounts from the sales prices, as it deems fit in its sole discretion.

 

 

 

  

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(c)           Orders.  All orders of the Products shall be placed directly to the Company.  All orders shall be e-mailed or faxed to the e-mail address or fax number listed below:

 

sales@amdl.com

(714) 505-4464 – facsimile

All orders shall be faxed or e-mailed to Company at least two weeks prior to the requested delivery date.  All orders to Company should specify the following:

 

(i)           Quantity ordered (in 96 well units);

(ii)           Purchase Order Number; and

(iii)           Requested delivery dates.

 

(d)           Payment.  Except with respect to the first shipment, the Distributor will remit full payment to Company, by wire transfer, within sixty (60) days of the date of the invoice sent by the Company, which shall be issued following the delivery of the Products to the Distributor. The payment terms for the first shipment shall be paid by the Distributor by wire transfer prior to shipment of the Products.   All monies due to Company pursuant to this Agreement shall be payable in United States currency.  In the event of any dispute arising over any part of an invoice or the total amount due under an invoice, all undisputed amounts shall be paid by Distributor in accordance with this Section.

 

(e)           Shipping and Packaging.  The Products shall be packaged in accordance with the required specifications as agreed between Company and Distributor.  Shipping and handling is not included in the Product purchase price and will be a further obligation of Distributor.  All charges for shipping shall be paid by Distributor.

 

(f)           Delivery.                       Company will ship each order to Distributor at Tarom Applied Technologies, Ltd. 93 JABOTINSKY ST., PETACH-TIKVA 49517, P.O.BOX 39338 TEL-AVIV 61392 Israel or such other address as may be indicated on any such order.  All Product shipped to Distributor will include the marking “For Use Outside the United States Only.”  Company shall have no responsibility for any written orders until received from Distributor.

 

 

6.           CONFIDENTIAL INFORMATION.

 

(a)           All Product lists, catalogs, circulars, sales leaflets, advertising materials, other marketing aids, customer names, prices and any other confidential information of any party (the "Confidential Information") furnished by the disclosing party to the receiving party pursuant to this Agreement are the property of the disclosing party, are of a confidential nature and not intended to be disclosed to others and shall be utilized by the receiving party solely for the purpose of this Agreement.  The receiving party shall not, for any reason whatsoever, divulge or communicate directly or indirectly any part of the Confidential Information to any third party, except where permitted under this Agreement.

 

 

 

  

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(b)           The receiving party shall have the right to communicate the Confidential Information to employees, subsidiary dealers, assistants and after-sales personnel when necessary for the purposes of this Agreement and shall assume at its cost all reasonable precautions and measures necessary for the purpose of discharging its obligations pursuant to this Section 6.

 

(c)           The receiving party shall utilize the same degree of care it uses to protect its own confidential information, but in no event less than a reasonable degree of care.  Information shall not be deemed as Confidential Information, for purposes of this Agreement, if:  (a) such information shall become known to others without disclosure by  the receiving party, (b) reasonably believed by the receiving party to have been lawfully obtained by the receiving party from a third party under no obligation of confidentiality, (c) independently developed by the receiving party without any use of the Confidential Information, (d) previously known to, developed by or in the possession of the receiving party at the time of receipt thereof from the disclosing party, or (e) approved in writing by the disclosing party for disclosure.

 

(d)           The obligations of Distributor and the Company under this Section shall survive the expiration or termination of this Agreement.

 

 

7.           TRADEMARKS AND TRADE NAMES.

 

(a)           Ownership.  Distributor recognizes the validity of Company’s trademarks and trade name, acknowledges that the same are the property of Company, and agrees that Distributor owns no interest in, and agrees not to infringe upon, harm or contest the rights of Company to its trademarks and trade names.  Distributor will not take any action in derogation of Company’s rights to its Trademarks.

 

(b)           Use of Trademarks and Trade Names.  Distributor shall have the right to use Company’s trademarks or trade names solely in connection with its activities as Distributor during any period this Agreement is in effect.  Use shall be limited to Products purchased from Company, sales and marketing material provided by Company and pre-approved sales and marketing material produced by Distributor.  Distributor shall not use any of Company’s trademarks or trade names, except in connection with its role as Distributor under the terms of this Agreement.

 

(c)           Termination.  Distributor agrees that upon termination of this Agreement for any reason it will discontinue the use of and destroy or return as directed by Company, any marketing samples and materials as well as any advertising, or other marketing materials bearing any of Company’s trademarks or trade names.

 

 

 

 

  

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8.           DISTRIBUTOR’S GENERAL COVENANTS.

 

Distributor shall do all of the following:

 

(a)           Prepare application to all regulatory bodies in the Territory whose approval is required to market the Products, including organization, management and completion of required clinical tests.  Application shall be reviewed and approved by Company prior to submission.  All expenses associated with testing, preparation and submission of application will be paid by Distributor that shall be promptly reimbursed by the Company for such expenses in full.  Any rights associated with the regulatory approval shall be exclusive to Distributor and the Company shall be named a co-applicant.  Upon termination of this Agreement, all rights associated with the regulatory approval shall revert exclusively to Company. For the purpose of receiving the required regulatory approvals, the Company shall provide the Distributor, at half price, with evaluation kits as shall be reasonably requested by the Distributor;

 

(b)           maintain (whether directly or through the use of contracted sales agents) a trained sales force of adequate size to provide commercially reasonable customer service, and provide medical technologists, or other qualified personnel, for training at Company’s facility in Tustin, California. The Company shall train technical and sales staff of the Distributor’s and the Distributer customers, as necessary.  All expenses associated with Distributor personnel, including but not limited to travel, lodging and related expenses, will be the sole responsibility of Distributor. The training itself shall be free of charge;

 

(c)           use its reasonable efforts to promote, market and extend sales of the Products in the Territory and to meet the demand therefore on reasonable terms and at competitive prices, and instruct customers about product efficiency and differentiation with competitive products;

 

(d)           supply Company non binding quarterly sales projections on a regular basis to enable production planning, and sales reports indicating numbers of customers called on, customers ordering, and other documentation indicating Distributor’s sales effort and progress;

 

(e)           work diligently to obtain orders and to enhance the reputation of Company and the Products and shall at all times act in a responsible and ethical way in connection with the promotion and sale of the Products;

 

(f)           respond promptly and appropriately to costumers' requests for information concerning the Products and their use;

 

(g)           respond promptly and appropriately to customers' orders, service requests and complaints;

 

 

 

 

  

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(h)           not manufacture, market, sell or distribute products competitive with the Products during the term of this Agreement and for one (1) year after the termination of this Agreement; Notwithstanding the aforementioned, the Distributer shall be entitled to manufacture, market, sell and distribute products of its suppliers as of the date of this Agreement.

 

(i)           participate in all fairs or exhibitions in the Territory where such participation will, in the reasonable judgment of Distributer, promote the Products;

 

(j)           actively cooperate with Company in implementing sales programs, advertising programs or other promotional programs regarding the Products in the Territory, sponsored by Company;

 

(k)           submit to Company all advertising, labeling and other promotional materials with respect to the Products before utilizing the same. The Distributor shall not be obligated to translate such promotional material which may be written in Hebrew;

 

(l)           not publish, cause to be published, encourage or permit any advertising or practice which might deceive the public or might be detrimental to the good name, trade marks, goodwill or reputation of Company;

 

(m)           in all correspondence and other dealings relating directly or indirectly to the sale of the Products, make clear to all concerned that Distributor is acting as independent contractor and not as agent for or partner of Company;

 

(n)           not in any manner (i) pledge the credit of Company or (ii) receive any money on behalf of Company or (iii) commit Company to any obligation or give any representation, warranty or promise on Company’s behalf or (iv) give any representation or warranty regarding the Products other than those contained in Company’s current literature;

 

(o)           not sell or make available for sale any of the Products to anyone other than appropriately licensed medical professionals in the Territory;

 

(p)           refer to Company all inquiries and orders Distributor may receive for the Products which relate to areas outside the Territory;

 

(q)           maintain adequate facilities (including inventories and price lists) and staff reasonably sufficient to serve the needs of the Territory;

 

(r)           when Company’s trade names or trademarks for the Products are used in any advertising, sales material or promotional material relating to the Products, Distributor shall not alter, remove or interfere with any of the Company's markings or nameplates or other trademarks attached to Products;

 

(s)           immediately and in writing bring to the attention of Company any improper or wrongful use in the Territory (or elsewhere) of Company patents, trademarks, designs or other industrial or commercial property rights (if any) known to Distributor and shall take such reasonable steps as may be requested by Company at the Company's expense, to safeguard Company’s proprietary rights and interests therein;

 

 

 

  

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(t)           subject to the provisions of Section 9 (d) and in accordance with the provisions of Section 12, shall be responsible for obtaining all licenses and permits and for satisfying all laws, regulations and formalities as may be required to import the Products into the Territory in accordance with then prevailing law or regulations.  All licenses and permits shall be obtained in the name of Company and Distributor shall have no right of ownership of such licenses or permits.  Distributor shall not dispose of any product, software, know-how, technical data, documentation or other products or materials furnished to it pursuant to this Agreement to any party or in any manner which would constitute a violation of the export control regulations of the United States now or hereafter in effect if the disposition was made by a U.S. corporation, or a non-U.S. corporation subject to those regulations. The Company undertakes to provide the necessary assistance as shall be required from time to time to obtain and maintain the said licenses and permits.

 

(u)           shall comply with all laws of the Territory regarding sales and distribution of the Product, including specifically the labeling laws of the Territory;

 

(v)           shall be responsible for and shall pay, or reimburse Company, as applicable, for all taxes, duties, import deposits, assessments and other governmental charges, however designated, which are now or hereafter imposed under or by any governmental authority or agency of the Territory, that are (i) associated with the performance by Distributor of its obligations hereunder, (ii) the payment of any amount by Company pursuant to this Agreement, based on the Product or its use, or (iii) relate to the import of the Product into the Territory in accordance with then prevailing law or regulations;

 

(w)           shall supply Company on a timely basis with the necessary information and documentation requested by Company in order for Company to comply with any and all regulatory or other requirements related to the Products or the activities undertaken by Company under this Agreement;

 

(x)           comply with international laws and regulations applicable to the Distributor relating to, imposing liability or standards concerning, or otherwise addressing the environment, health, and/or safety in effect on the date of execution of this Agreement and thereafter, all with respect to the sale of the Products in the Territory;

 

(y)           promptly and in writing pass to Company details of any complaints received from customers of Distributor or others relating to the Products or Distributor’s services;

 

(z)           supply to Company copies of any reports, tests or results of clinical trials on the Products that come into its possession whether carried out by or for Distributor or by or for its customers, provided that such information is not considered by law or by any agreement as confidential information;

 

 

 

 

  

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(aa)           subject to the provisions of Section 11, not at any time after the termination of this Agreement,  represent itself or cause or permit itself to be represented as being in any way a seller or Distributor of the Products.

 

 

9.           COMPANY’S GENERAL COVENANTS.

 

Company shall do all of the following:

 

	
  

	
(a)

	
The Company shall appoint the Distributer as the Company's exclusive distributor of the Products in the Territory. The Company shall not at any time during the continuance of this Agreement appoint any other person in the Territory as a distributor of the Products.  The Company, whether by itself or through any third party, shall not sell the Products in the Territory.

 

	
  

	
(b)

	
help the Distributor to solve Product related technical problems that might arise with marketing the Product;

 

	
  

	
(c)

	
provide the Distributor with technical literature and forward any inquiries, order or requests for information which are generated by potential customers located in the Territory;

 

	
  

	
(d)

	
Collaborate with the Distributer, including without limitation by providing any material and information necessary, in order to obtain any required license and/or permit and satisfy all law and regulations of the Territory;

 

	
  

	
(e)

	
inform, in writing, the Distributor of all significant new developments related to the Product(s) at least two (2) months prior to the date on which such developments are implemented in the Product(s);

 

	
  

	
(f)

	
use its best efforts to insure that Product(s) shipped to Distributor shall have a useful shelf life of no less than 180 days at the time of shipment;

 

	
  

	
(g)

	
immediately and in writing advise the Distributor any improper or wrongful use in the Territory of Company patents, trademarks, designs or other industrial or commercial property rights (if any) known to Company;

 

	
  

	
(h)

	
immediately in writing advise the Distributor details of any complaint received from any source in the Territory about Company and the Products;

 

 

 

  

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(i)

	
supply to the Distributor copies of any new information, related to the Product and keep the Distributor informed about any changes in the Products, at least two (2) months prior to the date on which such changes are made to the Product(s);

 

	
  

	
(j)

	
provide product warranty as set forth in Appendix 2.

 

10.           TERMINATION.  Company may terminate the Distributorship by giving prior written notice to Distributor of such termination upon the occurrence of any of the following events:

 

(a)           any material breach of this Agreement, which was not been cured within 30 days as of the date of receipt of a written notice of default.

 

(b)           dissolution of Distributor for any reason;

 

(c)           if Distributor shall be restrained, prevented or hindered for a continuous period of sixty (60) days from transacting a substantial part of its business by reason of a judgment, decree, order, rule or regulation of any court, or of any administrative or governmental authority or agency;

 

(d)           if Distributor shall become subject to any action or proceeding in the nature of a bankruptcy proceeding under United States or other law or shall make an arrangement with its creditors, or shall make an assignment for the benefit of its creditors, or a receiver, custodian, trustee, liquidator or comparable officer shall be appointed for Distributor or its business.

 

(e)           following the expiration of the Initial Term, notwithstanding the foregoing, each of the Parties may terminate this Agreement upon one hundred and eighty (180) days written notice to the other party, subject and in accordance to Section 11 of this Agreement.

 

 

11.           CONSEQUENCES OF TERMINATION.  Upon termination:

 

(a)           Distributor shall forthwith return, at the Company's request and expense, to Company all written sales and marketing materials theretofore received from Company and any notes, copies or reproductions thereof;

 

(b)           Distributor shall forthwith discontinue the use of all trade names, trademarks and emblems used in connection with the Distributorship and the use of any and all signs and printed goods bearing Company’s trade name or trademarks, and any reference whatsoever thereto and

 

(c)           The parties’ obligations pursuant to Sections 6 (Confidential Information), 7 (Trademarks and Tradenames), 12 (Compliance with Laws and Regulations)  and 14 (Indemnification) shall survive termination of this Agreement.  All other provisions shall terminate upon termination of this Agreement;

 

 

 

  

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(d)           Notwithstanding anything in the contrary set forth in this Agreement, in any event of termination of this Agreement, the Distributor's outstanding obligations towards any of its costumers and the Company's obligations towards the Distributor in accordance with this Agreement shall be in effect until the Distributor's obligations towards its costumers are expired or terminated.

 

 

12.           COMPLIANCE WITH LAWS AND REGULATIONS.

 

(a)           The Distributor shall comply with all applicable laws, ordinances and regulations and agrees to obtain all necessary licenses, permits and approvals necessary for the operation of the Distributorship.  Such compliance shall include, without limitation, compliance with all laws, ordinances and regulations promulgated by any applicable agency governing approval of medical test kits in the Territory (i.e., the local equivalent of the United States Food and Drug Administration).

 

(b)           The Distributor shall comply with all manufacturing disclosure laws and specifically indicate that the Products are manufactured by Company.

 

(c)           Distributor agrees to act within 90 days of the execution of this Agreement to properly register Company’s DR-70® and other Company products which have been approved by FDA so as to be freely available for sale and use throughout the Territory.

 

 

13.           INSPECTION OF DISTRIBUTORSHIP.  For the protection of Company and to maintain Company’s high standard of quality and service, Company reserves the right to inspect the procedures used by the Distributor.  Company will notify the Distributor of any failure to meet Company’s high standard of maintaining, servicing, promoting, selling and distributing the Products as determined by such inspection.  In the event the Distributor does not cure any failure within thirty (30) days after written notice, then such failure shall constitute a material breach of this Agreement.

 

 

14.           INDEMNIFICATION.

 

(a)           Indemnification by Company.  Company agrees to indemnify, defend, save and hold harmless Distributor and its successors and assigns, from and against any losses, damages or expenses of any nature whatsoever (including without limitation reasonable attorney's fees and other costs and expenses incident to any suit, action or proceeding) which are caused by or arise out of (a) any breach or default in the performance by Company of any covenant or agreement of Company contained in this Agreement, (b) manufacturing defect in the Products covered by the limited warranty set forth in Exhibit 2 of this Agreement, or (c) the actual fraud or negligence of Company.

 

 

 

 

  

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(b)           Indemnification by Distributor.  Distributor agrees to indemnify, defend, save and hold harmless Company and its successors and assigns from and against any losses, damages or expenses of any kind or nature whatsoever (including without limitation reasonable attorney's fees and other costs and expenses incident to any suit, action or proceeding) which are caused by or arise out of (a) any breach or default in the performance by Distributor of any covenant or agreement of Distributor contained in this Agreement, (b) any act or omission on the part of Distributor or its employees or agents in contradiction to the use or maintenance as prescribed by the Company which results in damage to the Products or which constitutes an abuse, misuse or misrepresentation of the Product, or (c) the actual fraud of Distributor.

 

15.           GENERAL PROVISIONS.

 

(a)           Amendment.  This Agreement may be amended only by a writing signed by all of the parties.

 

(b)           Governing Law.  It is the intention that the laws of the State of California, United States of America, applicable to contracts to be wholly performed within such State shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties hereunder.

 

(c)           Jurisdiction.   Any dispute arising under or in relation to this Agreement shall be resolved in the competent courts of London, England, and each of the parties hereby irrevocably submits to the exclusive jurisdiction of such courts.

 

(d)           Notices.  All notices, demands or other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered to the respective address of each party set forth on the first page of this Agreement or such other addresses as the parties may have furnished to each other pursuant to the provisions of this Section.  Any such notice, demand or other communication shall be deemed to have been given on the date actually delivered, if delivered in person; upon the seventh (7th) day after the date deposited in the mails of the United States of America, as the case may be, postage prepaid, if mailed certified or registered air mail; upon the date dispatched, if dispatched by telex; or upon the date of actual receipt, if otherwise delivered, as the case may be.

 

(e)           Currency of Payment.  All payments required to be made under this Agreement shall be made and expressed in terms of United States dollars or other applicable currency of the United States of America.

 

(f)           Assignments and Sublicenses.  Distributor shall not assign or sublicense any rights available under this Agreement without receiving the Company's prior written consent, which shall not be unreasonably delayed or denied. Notwithstanding the forgoing, the Distributor shall be entitled to assign this Agreement without the const of the Company in the event that the assignment is due to an Exit Event (as such term is defined below).

 

 

 

  

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“Exit Event” means: (a) any sale, merger, reorganization or other similar transaction of the Distributor, or (b) any sale of all or substantially all of the assets of the Distributor.

 

(g)           Costs and Expenses.  Except as otherwise expressly provided by this Agreement, each of the parties shall bear all costs and expenses of performance by such party of its duties and obligations under this Agreement without any rights of contribution or reimbursement by the other party hereto of any kind or nature whatever.

 

(h)           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute a single instrument.

 

(i)           Captions and Section Headings.  Captions and section headings used herein are for conveniences only and are not part of this Agreement and shall not be used in construing it.

 

(j)           Force Majeure.  The duties and obligations of the parties hereunder shall, at all times during the term hereof, be subject to delays, or impossibility, impracticability or disability from any act, cause, contingency or circumstance beyond the control of such party, including, without limitation, any governmental action, regulation or restriction (whether foreign, federal or state), war, civil commotion, disobedience’s, riot or revolution, lack or shortage of, or inability to obtain, any labor, machinery, materials, supplies or equipment from normal sources of supply, strike, work stoppage or slow down, walk out or other labor dispute, fire, flood or other natural calamity, destruction or any adverse condition or any other accident, contingency or circumstance within or without the Territory or the United States of America beyond the control of the parties hereto.

 

(k)           Independent Contractor.  It is the intention of the parties that Company and Distributor are, and shall be deemed to be, independent contractors with respect of the subject matter hereof.  Nothing contained herein shall be deemed or construed in any manner whatsoever as creating any partnership, joint venture or other similar relationship between Company and Distributor.

 

(l)           Waiver.  No waiver of any term, provision or condition of this Agreement, whether by conduct, or otherwise, in any one or more instances, shall be deemed to be or be construed as a further or continuing waiver of any such term, provision or condition or as a waiver of any other term, provision or condition of this Agreement.

 

(m)           Entire Agreement.  This Agreement is intended by Company and Distributor as the final expression of their agreement and constitutes and embodies the entire agreement and understanding between them and is a complete and exclusive statement of the terms and conditions hereof and thereof, and shall supersede any and all prior correspondence, conversation, negotiations, memoranda, agreements or other understandings relating to the DR-70® test kit and any other Company Products.

 

 

 

  

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16.           LIMITATION OF LIABILITY

 

(a)            IN NO EVENT SHALL THE DISTRIBUTOR BE LIABLE TO THE COMPANY FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR REVENUE, LOSS OF USE OF PRODUCTS OR FACILITIES OR SERVICES, DOWNTIME COST, OR CLAIMS OF CUSTOMERS OF THE DISTRIBUTOR FOR SUCH OTHER DAMAGES.

 

(b)            THE MAXIMUM CUMULATIVE LIABILITY OF THE DISTRIBUTOR  TO THE COMPANY OR ANY THIRD PARTY IN CONNECTION WITH THIS AGREEMENT WILL NOT EXCEED THE LESSER OF THE AMOUNTS PAID BY DISRIBUTOR TO COMPANY UNDER THIS AGREEMENT OR ONE HUNDRED THOUSAND UNITED STATES DOLLARS (US$ 100,000).

 

                                (c)           All causes of action against the Distributor arising out of or relating to this Agreement or the performance hereof shall expire unless brought within one (1) year of the time of accrual thereof.

 

 

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly executed as of the Effective Date.

 

 

 

	 	"Distributor"	 	 "Company"	 
	 	Tarom Applied Technologies, Ltd.	 	 AMDL, Inc.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 By:	 /s/	 	 By:  	 /s/	 
	 Zvi Bar, CEO	 	 Akio Ariura, COO	 

 

 

 

 

 

 

 

 

 

 

 

  

13

  

 

 

 

 

EXHIBIT 1

 

TO SALES AND DISTRIBUTION AGREEMENT

 

Dated September 30th, 2009

 

PRODUCT LIST

 

 

1.           The Product(s) covered by this Agreement is (are):

 

(a)           Micro-titer plate based DR-70® in vitro 96 well diagnostic kit.

 

	
  

	
2.

	
The agreed minimum purchase per quarter by Distributor, for the Initial Term of this Agreement, is as follows:

 

 

	
Dates

	
Number of DR-70® Test Kits

	
From

	
To

	  
	
September 30, 2009

	
December 31, 2009

	
TBD

	
January 1, 2010

	
March 31, 2010

	
TBD

	
April 1, 2010

	
June 30, 2010

	
TBD

	
July 1, 2010

	
September 30, 2010

	
TBD

	
October 1, 2010

	
December 31, 2010

	
TBD

	
January 1, 2011

	
March 31, 2011

	
TBD

	
April 1, 2011

	
June 30, 2011

	
TBD

	
July 1, 2011

	
September 30, 2011

	
TBD

 

 

 

 

 

  

1

  

 

EXHIBIT 2

 

TO SALES AND DISTRIBUTION AGREEMENT

 

Dated September 30, 2009

 

 

CONDITIONS OF SALE

 

 

These terms and conditions govern all sales and shipments by Company and Company hereby gives notice of objection to any different or additional terms and conditions, except for such as may be expressly accepted by Company in writing.

 

Taxes

 

The price does not include any foreign or United States or provincial, state or local property, license, privilege, sales, use, excise, gross receipts, export or other like taxes which may now or hereafter be applicable, which are all deemed the obligation of the Distributor.  To the extent payment is made by the Company of any such taxes, Distributor agrees to reimburse Company for same.

 

Excusable Delay

 

Company shall not be liable for loss, damage, detention or delay, nor be deemed to be in default from causes of Force Majeure (as such term is referred to in section 15(k) of the Agreement accompanying herein.

 

In the event of delay in performance due to any such cause, the date of delivery will be postponed by such length of time as may be reasonably necessary to compensate for the delay.

 

Limited Warranty

 

Company warrants that the products sold by it will be free of defects in workmanship or material as of the date of shipment to Distributor.  Should the Products upon delivery fail to conform to this warranty, Company shall, upon prompt written notice from Distributor and at the Company's expense, correct such non-conformity either by replacement or by refund of the purchase price, at Company’s option in its sole discretion.    THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES OF QUALITY WHETHER WRITTEN, ORAL, OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

The foregoing shall not apply to any Product or part which has been (a) improperly altered, (b) subjected to misuse, misapplication, negligence or accident by the Distributor or its costumers, or (c) used by the Distributor or its costumers in a manner contrary to Company’s written directions, or (d) to defects in materials provided or design stipulated by Distributor.

 

 

 

  

1

  

 

 

LIMITATION OF LIABILITY

 

WHETHER ON ACCOUNT OF ANY ALLEGED BREACH OF THIS AGREEMENT OR DEFECTS CLAIMED FOR PRODUCTS FURNISHED HEREUNDER, DELAYS IN DELIVERY OR ANY OTHER CLAIM BASED UPON OR WITH RESPECT TO SUCH PRODUCTS, IN NO EVENT SHALL COMPANY BE LIABLE TO DISTRIBUTOR FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES including, but not limited to, loss of profits or revenue, loss of use of products or facilities or services, downtime cost, or claims of customers of the Distributor for such other damages.

 

LIABILITY CAP

 

THE MAXIMUM CUMULATIVE LIABILITY OF COMPANY TO DISTRIBUTOR OR ANY THIRD PARTY IN CONNECTION WITH THIS AGREEMENT WILL NOT EXCEED THE LESSER OF THE AMOUNTS PAID BY DISTRIBUTOR TO COMPANY UNDER THIS AGREEMENT OR [ONE HUNDRED THOUSAND UNITED STATES DOLLARS (US$100,000).

 

All causes of action against Company arising out of or relating to this Agreement or the performance hereof shall expire unless brought within one (1) year of the time of accrual thereof.

 

 

Return Policy

 

The Products are non-returnable and all sales are final:

 

In the event that one or more kits are believed to be defective:

 

Distributor shall email Company explain the alleged defect and the Lot Number and Part Number involved.  The Company will perform its own test on the Lot and make its own evaluation during a reasonable time.   In the event that the Product is deemed to be defective, the Company will, at its expense, either replace the defective part or replace the entire Product(s) as it deems appropriate.

 

This return policy applies only if the Products are shipped, stored and used by Distributor in accordance with the instructions in the assay booklet, attached herein as Exhibit 4.

 

 

 

 

 

 

  

2

  

EXHIBIT 3

 

TO SALES AND DISTRIBUTION AGREEMENT

 

PRICE LIST

 

 

As of the date of the execution of this Agreement, the base price to be paid by Distributor to Company for the DR-70® kit listed in Exhibit A hereof is $500.00 U.S. per 96 well kit, excluding shipping.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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EXHIBIT 4: Assay Booklet Instructions/Insert

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00172-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00172-of-00352.parquet"}]]