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EXHIBIT 10.9
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT (this "AGREEMENT") is made and entered
into as of October 1, 1996 (the "EFFECTIVE DATE"), by and between EDUDATA
CORPORATION, a Delaware corporation ("EDUDATA"), and BOSTON MARKETING COMPANY,
LTD., a Japanese corporation ("BMC").
SECTION 1. DEFINITIONS.
1.1. Definitions. For the purposes of this Agreement, the
following terms shall have the following meanings:
"DENTAL MARKET" means persons engaged in (i) the business of
selling dental and/or orthodontic products and/or services, (ii) the practice
of dental or orthodontic medicine, and (iii) the administration of educational
institutions authorized to confer degrees for the study of dentistry and
orthodontics.
"SALE PERIOD" means the period commencing on the Effective
Date and ending on the first anniversary thereof, and every consecutive
twelve-month period thereafter throughout the term of this Agreement.
"SYSTEM DEVICE" means Model No. CS6110 S/B with frame grabber,
CS 6110P S/B with frame grabber and CS6110 S/B without frame grabber, or any
successor devices thereto, which shall be identical to the CCDs and the CCUs
shipped to EDUDATA by BMC since December 1995.
"TELICAM XXXX" shall mean the trademark more particularly
identified on Annex A hereto.
"TERRITORY" means the entire world.
SECTION 2. APPOINTMENT AND ACCEPTANCE.
2.1. Exclusive Appointment. BMC hereby appoints EDUDATA, and
EDUDATA hereby accepts such appointment, as BMC's exclusive distributor of the
System Devices to the Dental Market throughout the Territory. EDUDATA, without
the consent of BMC, shall have the right to appoint subdistributors and sales
representatives to sell the System Devices under the provisions of this
Agreement. BMC shall not sell or otherwise distribute, or appoint any person
to sell or otherwise distribute, the System Devices to the Dental Market in the
Territory
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without the prior written consent of EDUDATA, which consent may be withheld in
EDUDATA's sole and absolute discretion. EDUDATA shall also have a
right-of-first-refusal to be appointed the exclusive distributor within the
Territory of any additional products, accessories or equipment reasonably
associated with the System Devices, having applications to the Dental Market
(collectively, "ADDITIONAL DEVICES"), developed, marketed or sold by BMC
following the Effective Date of this Agreement, and BMC agrees to notify
EDUDATA of the development, marketing and/or sale of any such Additional
Devices as soon as practicable after the commencement of such development,
marketing and/or sales efforts by BMC. The terms and conditions of EDUDATA's
appointment with respect to any Additional Devices shall be agreed to pursuant
to good faith negotiations between the parties.
2.2. Term and Termination of Agreement. The term of this Agreement
shall commence on the Effective Date and shall continue for a period of five
(5) years thereafter, unless sooner terminated as provided in this section (the
"INITIAL TERM"). If at the end of the period ending 180 days prior to the
expiry of the Initial Term, this Agreement has not been terminated, the
parties, by mutual written agreement, may renew this Agreement on the same
terms and conditions as set forth herein for one (1) additional five (5) year
term (the "ADDITIONAL TERM"). During the Initial Term and the Additional Term,
if any, BMC shall only have the right to terminate this Agreement if (a)
EDUDATA fails to purchase an aggregate of 2,500 System Devices during any Sale
Period, (b) EDUDATA purchases CCDs or CCUs for use in its intraoral camera
systems from third parties (provided, however, that BMC shall have no right to
terminate this Agreement if EDUDATA orders System Devices from BMC and BMC
fails to fill such orders on a timely basis) or (c) EDUDATA fails to pay in
full for any System Device within 30 days of such System Device's delivery to
EDUDATA.
SECTION 3. PURCHASE PRICE AND PAYMENT TERMS.
3.1. Price. During the first two Sale Periods under this
Agreement, the price for each System Device shall be $750 (f.o.b. Japan);
provided, however, that BMC shall have the right at any time following six
months written notice to EDUDATA to increase such price. In the event such
price increase is not acceptable to EDUDATA, EDUDATA shall have the right to
terminate this Agreement. The purchase price for each System Device shall be
paid by wire transfer to BMC's Japan office. All prices will be determined and
paid in U.S. Dollars. EDUDATA shall have the right, in its sole and absolute
discretion, to establish the prices, charges and terms governing its sale of
the System Devices to third parties.
3.2. Taxes and Other Charges. The purchase price for the System
Devices does not include taxes and other charges. All shipping, handling,
insurance, brokerage and other charges and all import duties, sales, use or
privilege taxes, value-added taxes, excise or similar taxes, duties or
assessments, and other related charges levied by any jurisdiction pertaining to
the System Devices, other than taxes computed on the basis of the income of
BMC, shall be paid by EDUDATA.
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SECTION 4. WARRANTY; LIMITATION OF LIABILITY
4.1. Product Warranty. BMC warrants to EDUDATA that the System
Devices purchased by EDUDATA pursuant to this Agreement shall be free from
defects in design, materials and workmanship, and that it shall function in
accordance with the specifications provided to EDUDATA by BMC (the "PRODUCT
WARRANTY"). With respect to each System Device, the Product Warranty shall
remain in effect until the earlier to occur of (a) 12 months following the
delivery of such device to EDUDATA and (b) the incorporation of such System
Device into an EDUDATA intraoral camera system. BMC agrees to repair or
replace any defect in design, materials and\or workmanship on any System Device
during the term of the Product Warranty. Any warranty service hereunder shall
include only parts, but shall not include the cost of repairing or replacing
those parts and equipment damaged or rendered inoperable by the customer's
neglect or abuse. The foregoing warranty shall not apply to any System Devices
or parts thereof which have been (a) improperly repaired or altered, (b)
subjected to misuse, misapplication, negligence or accident or (c) used in a
manner contrary to BMC's directions. This warranty does not apply to defects
in materials or designs provided or stipulated by EDUDATA which are not
standard parts provided by BMC in the manufacture of the System Devices.
SECTION 5. TRADEMARKS, TRADE NAMES AND COPYRIGHTS.
5.1. Use of TELICAM Xxxx. During the term of this Agreement, BMC
hereby grants an unconditional and irrevocable license to EDUDATA to use the
TELICAM Xxxx in connection with marketing the System Device in the Territory.
5.2 Identification as Authorized Distributor. EDUDATA shall have
the right to represent itself as the exclusive authorized distributor of the
System Devices.
5.3 EDUDATA's Marks. BMC shall permit EDUDATA to place EDUDATA's,
or any of its subsidiaries' or affiliates' name, trademark, or logo on each
System Device to be distributed by EDUDATA.
5.4 Use of Intellectual Property. Nothing contained herein shall
be construed to allow BMC to use, in any fashion, any patent, copyright, trade
name or other item of intellectual property owned or otherwise held by EDUDATA.
Except as expressly provided herein, nothing contained herein shall be
construed to allow EDUDATA to use, in any fashion, any patent, copyright, trade
name or other item of intellectual property owned or otherwise held by BMC.
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SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. Representations and Warranties of BMC. BMC represents,
warrants and covenants to EDUDATA that:
6.1.1. Distribution Rights. BMC has (a) BMC has the exclusive
right to sell and distribute the System Devices throughout the world, including
without limitation, the right to sublicense the right to sell and distribute
the System Devices in the Territory; (b) BMC has not granted any rights to any
third party operating within the Territory relating to the System Devices; (c)
BMC has not entered into any agreements providing for the sale and/or
distribution of the System Devices to any third party within the Territory; and
that (d) this Agreement is a valid, binding and enforceable obligation of BMC,
has been authorized by all necessary corporate action, and will not violate any
other agreement or relationship to which BMC is a party.
6.1.2. Ownership of Intellectual Property. BMC has the
unrestricted right to use the TELICAM Xxxx within the territory, including
without limitation the right to grant the license to use the TELICAM Xxxx to
EDUDATA set forth in Section 5 of this Agreement; and BMC has not entered into
any agreements with any third party operating within the Territory granting a
right to use of the TELICAM Xxxx.
6.1.3. Knowledge of Violations. To the best of BMC's
knowledge, neither the manufacture, distribution and sale in the Territory of
the System Devices nor the use by EDUDATA of the TELICAM Xxxx will violate or
infringe upon any patent, trademark, service xxxx, trade name, copyright, trade
secret, proprietary right, process or other intellectual property right of any
other person; and further, the transactions contemplated by this Agreement
will not result in any such violation; and
6.1.4. Licenses and Permits. BMC possesses from the
appropriate regulatory agencies, commissions, boards and governmental
authorities, whether national, regional or local state, all licenses, permits,
the authorizations, approvals, franchises and rights which are necessary for
BMC to distribute and sell the System Devices; and all such certificates,
licenses, permits, authorizations and rights have been lawfully and validly
issued, are in full force and effect and to the best of BMC's knowledge will
not be revoked, canceled, withdrawn, terminated or suspended.
6.2. Representations and Warranties of EDUDATA. EDUDATA
represents, warrants and covenants to BMC that:
6.2.1. No Conflict. This Agreement is a valid, binding and
enforceable obligation of EDUDATA, has been authorized by all necessary
corporate action, and will not violate any other agreement or relationship to
which EDUDATA is a party; and
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6.2.2. Licenses and Permits. EDUDATA possesses from the
appropriate regulatory agencies, commissions, boards and governmental bodies
and authorities, whether national, regional or local, all licenses, permits,
authorizations, approvals, franchises and rights which are necessary for
EDUDATA to distribute and sell the System Devices (other than licenses,
permits, authorizations, approvals, franchises and rights which are necessary
for the design, manufacture, distribution and/or sale of medical and/or dental
devices as to which EDUDATA makes no representation, warranty or covenant); and
all such certificates, licenses, permits, authorizations and rights have been
lawfully and validly issued, are in full force and effect and to the best of
EDUDATA's knowledge will not be revoked, canceled, withdrawn, terminated or
suspended.
SECTION 7. TERM AND TERMINATION
7.1. Reasons. Notwithstanding anything to the contrary contained
in Section 2 hereof, and subject to EDUDATA's rights contained in Section 3.1
hereof, this Agreement, including without limitation the license granted
pursuant to Section 5 hereof, shall terminate prior to its scheduled
expiration as follows:
(a) At any time by mutual written consent;
(b) Immediately upon notice by the adversely affected
party, if (i) a party materially breaches any of the terms and conditions of or
representations contained in this Agreement or (ii) fails to cure any such
breach within thirty (30) days of receipt by the breaching party of notice of
such breach except for breaches relating to the non-payment of undisputed
outstanding invoices which shall be cured within three (3) business days; and
(c) Immediately upon notice of the nonaffected party, if
a court having jurisdiction shall (i) enter a decree or order for relief in
respect of a party hereto in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (ii)
appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of a party hereto or of any substantial part of the property
of a party hereto (including, without limitation, such party's subsidiaries, if
any, and their property), or (iii) order the winding up or liquidation of such
party's affairs, where any such decree or order for relief or any such other
decree or order remains unstayed and in effect for a period of sixty (60)
consecutive days.
7.2. Consequences of Expiration or Termination. Upon expiration or
prior termination of this Agreement:
(a) Unfilled Orders. Any orders received by BMC that are
unfilled on the effective date of expiration or termination of this Agreement
shall not be affected by such termination or expiration, and shall be timely
filled by BMC except where termination is due
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to EDUDATA's breach; provided, however, that EDUDATA's termination of this
Agreement pursuant to Section 3.1 shall not be deemed to constitute a breach;
(b) Settling of Accounts; Etc. EDUDATA shall (i) pay to
BMC all amounts owing to BMC under any binding order for System Devices as such
payments become due; (ii) cease to engage in advertising or promotional
activities concerning the System Device and the use of the TELICAM Xxxx or any
other trademark authorized by BMC pursuant to this Agreement; (iii) cease to
represent, in any manner, that EDUDATA has been designated by BMC to sell the
System Device; and (iv) deliver to BMC, at EDUDATA's expense, all documents
concerning the System Devices which are then in EDUDATA's possession and which
contain confidential information of BMC (provided, however that EDUDATA shall
not be required to return order or shipping documents containing information).
BMC shall within thirty (30) days from the date of expiration or termination of
this Agreement (i) refrain from using EDUDATA's trade names, trademarks, and
logos in connection with any of BMC's activities; (ii) cease to represent, in
any manner, that EDUDATA is responsible for the distribution of the System
Devices, and (iii) deliver to EDUDATA, at BMC's expense, all of the EDUDATA
confidential information then in the possession of BMC, its Subsidiaries or its
Affiliates;
(c) Continued Right to Use "Teli" Name. For a period of
six (6) months following the termination of this Agreement, EDUDATA shall have
the right to use the name "Telicam" in connection with its distribution and
sale of intraoral cameras;
(d) Continued Right to Sell System Devices. For a period
ending on the earlier to occur of (i) six (6) months following the termination
of this Agreement and (ii) the sale of the last System Device held by EDUDATA,
EDUDATA and its subdistributors and sales representatives, shall continue to
have the right to sell the System Device;
(e) Claims for Indemnity. NEITHER PARTY SHALL, IN
CONNECTION WITH THE EXPIRATION OR TERMINATION OF THIS AGREEMENT, HAVE THE RIGHT
TO CLAIM ANY INDEMNITY, REIMBURSEMENT OR COMPENSATION FOR ALLEGED LOSS OF
CLIENTELE, GOODWILL, OR THE LIKE OR HAVE ANY OTHER RIGHT TO COMPENSATION FOR
LOSSES OR DAMAGES RESULTING FROM THE EXPIRATION OR TERMINATION, EACH PARTY
ACKNOWLEDGING THAT IT HAS DECIDED AND WILL DECIDE ON ALL INVESTMENTS,
EXPENDITURES AND COMMITMENTS IN FULL AWARENESS OF THE POSSIBILITY OF ITS LOSSES
OR DAMAGES RESULTING FROM SUCH EXPIRATION OR TERMINATION AND IS WILLING TO BEAR
THE RISK THEREOF;
(f) Loss of Profits on Anticipated Sales.
Notwithstanding anything herein to the contrary, any claim of BMC under this
Agreement for loss of profits on anticipated sales as a consequence of a breach
by EDUDATA shall be limited to (i) $750 multiplied by 12,500 less (ii) $750
multiplied by the number of System Devices purchased by EDUDATA pursuant to
this Agreement. The parties agree that in the event of EDUDATA's breach of
this
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Agreement, BMC shall be obligated to use its best efforts to mitigate its
damages; and that the foregoing measure of damages shall not be deemed to be a
provision for liquidated damages; and
(g) Survival. Notwithstanding anything to the contrary
herein contained, the provisions of Sections 7.2, 8.1, 8.5 and 8.6 and
EDUDATA's obligation to pay for all operable System Devices which are delivered
to EDUDATA shall survive the expiration or other termination, for any reason
whatsoever of this Agreement.
SECTION 8. MISCELLANEOUS.
8.1. Indemnification. Each party agrees, if promptly notified by
the other, to indemnify and hold harmless the other from and against all claims
or liabilities resulting directly or indirectly from any breach by the
indemnifying party of any obligation under this Agreement, from any violation
by the indemnifying party of applicable law or regulation, from any
misrepresentation of the indemnifying party, or from any claim arising out of
any breach of any representation or warranty contained herein. In addition,
BMC shall indemnify and hold harmless EDUDATA from and against all claims or
liabilities which EDUDATA may suffer as a direct or indirect result of the
"Teli" name or the System Device infringing upon any patent, trade secret,
trademark or copyright or any other proprietary right held by a third party
when the "Teli" name and/or the System Device are used by EDUDATA in the manner
agreed upon by BMC and EDUDATA. Such indemnification shall include the payment
of reasonable attorneys' fees and other costs incurred by the indemnified party
in defending against such claims except that the indemnifying party must have
the right to control the defense and must approve any settlements.
8.2. Force Majeure. No party shall be liable for failure to
perform or delay in performing any obligation under this Agreement or any
individual contract of sale hereunder if such failure or delay is due to fire,
flood, earthquake, strike, labor trouble or other industrial disturbance, war
(declared or undeclared), embargo, blockade, shortage of labor, materials or
equipment, legal prohibition, governmental action, riot, insurrection, damage,
destruction or any other cause beyond the control of such defaulting party
preventing or delaying the performance.
8.3. Scope of Authority. The relationship of the parties under
this Agreement shall be and at all times shall remain one of independent
contractor. For the purposes of this Agreement, neither EDUDATA nor BMC is a
partner, agent, employee or legal representative of the other party.
8.4. Assignment. No party may transfer the rights or delegate the
duties provided for under the terms of this Agreement without the prior written
consent of the other party. Notwithstanding the foregoing sentence, no consent
shall be necessary for an assignment made by EDUDATA to any Subsidiary of
EDUDATA, to a purchaser of all or substantially all of the
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assets of EDUDATA, or to any corporation into which EDUDATA may merge,
providing that EDUDATA is the surviving corporation subsequent to any such
merger.
8.5. Governing Law. This Agreement and any contract of sale
concluded in accordance with this Agreement shall be interpreted and their
effects shall be determined in accordance with the laws of the State of
California, applicable to contracts made within and to be performed solely
within the State of California.
8.6. Attorneys' Fees. If any action, suit, arbitration or other
proceeding is instituted concerning or arising out of this Agreement, the
prevailing party shall recover all of such party's costs and attorneys' fees
incurred in each and every such action, suit or other proceeding, including any
and all appeals or petitions therefrom. As used herein, "attorneys' fees"
shall mean the full and actual costs of any legal services actually rendered in
connection with the matters involved, calculated on the basis of the usual fee
charged by the attorneys performing such services, and shall not be limited to
"reasonable attorneys' fees" as defined by any statute or rule of court.
8.7. Severability. If any provision of this Agreement is held to
be invalid, illegal or unenforceable for any reason or in any respect
whatsoever, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement, and this Agreement shall be construed
as if such invalid, illegal or unenforceable provision had never been contained
herein.
8.8. Waiver and Amendments. No failure or delay on the part of
either party hereto in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single waiver or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available. No amendment or waiver of any provision of
this Agreement nor consent to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by both of the parties
hereto, and with respect to such waivers or consents shall be effective only in
the specific instance and for the specific purpose for which given.
8.9. Counterparts. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
8.10. Entire Agreement. This Agreement and the annexes hereto, when
signed by the authorized representatives of all parties hereto, shall
constitute the only agreement among them with respect to the distribution of
the System Devices and shall supersede all prior agreements.
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8.11. Consent to Service of Process; Jurisdiction.
8.11.1 Except as provided in Section 8.1.2 below, the
parties hereto agree that any dispute arising out of this Agreement, whether
arising in contract, tort, equity, or otherwise, may be resolved by state or
federal courts located in California. Each of the parties hereto waives in any
such dispute any objection that it may have to such California courts
considering the dispute including, without limitation, any objection to the
laying of venue or based on the ground of forum non conveniens.
8.11.2 Each of the parties hereto agrees that the other
party to this Agreement shall have the right, to the extent permitted by
applicable law, to proceed against it or its property in a court in any
location reasonably selected in good faith to enable such other party to
realize on such property, or to enforce a judgment or other court order entered
in favor of any such other party. Both of the parties hereto waive any
objection that either may have to the location of the court in which the other
party to this Agreement has commenced a proceeding described in this paragraph
including, without limitation, any objection to the laying of venue or based on
the ground of forum non conveniens.
8.11.3 The parties hereto waive any right to have a jury
participate in resolving any dispute, whether sounding in contract, tort, or
otherwise arising out of this Agreement. Instead, any disputes resolved in
court will be resolved in a bench trial without a jury.
8.11.4 Both parties hereby irrevocably designate CT
Corporation System as its designee, appointee and agent to receive, for and on
behalf of it, service of process in any legal action or proceeding with respect
to this Agreement. It is understood that a copy of such process serviced on
such agent will be promptly forwarded by mail to it at its address set forth
below the signatures of the parties below, but the failure to receive such copy
shall not affect in any way the service of such process. Each of the parties
hereto further irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the address
given in this Agreement, such service to become effective four days after such
mailing.
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8.11.5 Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against any other party in any
other jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
BOSTON MARKETING COMPANY, LTD.,
a Japanese corporation,
By: /s/ XXXXXX XXXXXXX
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Its: President
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Notice Address:
Boston Marketing Company, Ltd.
00-0, 0-Xxxxx Xxxxxxx-Xxxxxx
Xxxxxxx-XX, Xxxxx, Xxxxx
Attn: [SIG]
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Telephone: (000) 0000 0000
Fax: (000) 0000 0000
EDUDATA CORPORATION,
a Delaware corporation,
By: /s/ XXXXXX X. XXXXXXXXX
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Its: Chairman
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Notice Address:
EDUDATA CORPORATION
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
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