Exhibit 10.36
HOLOGIC, INC.
UNITED STATES DISTRIBUTION AGREEMENT
(EXCLUSIVE - SAHARA PRODUCT LINE/ UNITED STATES)
This Agreement is made as of October 1, 1997 (the "Effective Date") by and
between:
HOLOGIC, INC., a corporation organized under the laws of the State of Delaware,
which has a usual place of business at 590 Lincoln Street, Waltham,
Massachusetts 02154, United States of America, its subsidiaries and affiliates
(hereinafter "Hologic") and
PHYSICIAN SALES AND SERVICE, INC., a corporation which has a usual place of
business at 4345 Southpoint Boulevard, Jacksonville, Florida 32216, its
subsidiaries and affiliates (not including Diagnostic Imaging, Inc., or its
subsidiaries) (hereinafter referred to as "Distributor").
1. Facts.
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Hologic designed and created the SAHARA Product as hereinafter defined, and
is the owner of all trade secret, trademark, patent, and other intellectual
property rights associated with the SAHARA Product. Distributor desires to
obtain certain rights for PSS to act as distributor for its SAHARA Product line
for resale to certain Target Customers in the Territory for the Term of this
Agreement, as these terms are hereinafter defined.
2. Definitions.
(a) "SAHARA Product," as used in this Agreement, means the items described
in Exhibit A, which is attached hereto and incorporated herein, together with
Successor Products as defined in Section 5(a) hereto.
(b) "Target Customers," as used in this Agreement, means the persons and
entities to whom the Distributor is authorized to sell in the Territory, not
including Reserved Customers, as said Target Customers are described in Exhibit
C which is attached hereto and incorporated herein..
(c) "Reserved Customers," as used in this Agreement, means the persons and
entities to whom the Distributor is NOT authorized to sell, and which Reserved
Customer are reserved for Hologic or third party sales, as said Reserved
Customers are described in Exhibit C which is attached hereto and incorporated
herein.
(d) "Territory," as used in this Agreement means the respective geographic
areas described in Exhibit C which is attached hereto and incorporated herein.
3. Exclusive Distribution Rights.
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(a) Subject to the terms of this Agreement, Hologic hereby grants to
Distributor an EXCLUSIVE license to distribute its SAHARA Product solely to
Target Customers as described in Exhibit C in the Territory provided that
Hologic reserves the right to market, sell and license SAHARA Product for
placement at Target Customers in the Territory (including without limitation
through its affiliates, third-party pharmaceutical manufacturers, and with the
assistance of sales agents), in accord with the terms set out in Exhibit C
hereto. Hologic also reserves the right to market, sell, and license SAHARA
Product directly or indirectly to Reserved Customers inside (and outside) of the
Territory. Distributor shall not market, sell, license or accept orders from
Reserved Customers, or for installation outside of the Territory without the
advance written consent of Hologic. Distributor's rights pursuant to this
Section 3(a) may be sublicensed to subdistributors in the Territory only with
Hologic's prior written consent, which consent may be withheld for any reason.
(b) Subject to the terms of this Agreement, Hologic hereby grants
Distributor (but not their subdistributors) a non-exclusive, non-transferable
license to represent themselves as an "Authorized Distributor" of the SAHARA
Product and to use Hologic trademarks identified in Exhibit D (attached hereto
and incorporated herein) in connection therewith.
4. Obligations of Distributor.
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Distributor shall:
(a) Establish for each year period of the Term, commencing as of the
Effective Date, a mutually agreed Sales Target, together with a Product Plan
with quarterly targets and milestones, noting significant actions necessary to
accomplish the said Sales Target, comply with the Product Plan, and use its best
efforts to meet said Sales Target.
(b) Use its best efforts to market and sell, at least as aggressively as
it does similar products, the SAHARA Product to Target Customers in the
Territory.
(c) During the Term of this Agreement, not represent or offer for sale, or
enter into any negotiation or discussion with any third party to represent or
offer for sale, any product or device directly competitive with the SAHARA
Product, including Dual X-Ray Absorptiometry ("DXA"), peripheral DXA, bone
ultrasound, Single X-Ray Absorptiometry ("SXA"), Radiological Absorptiometry
("RA"), or Quantitative Computed Tomography ("QCT") bone devices (hereafter
"Competitive Product").
(d) Meet with and provide Hologic with a written business report on a
quarterly basis, describing its sales and marketing activities for the preceding
quarter and providing a forecast and summary of marketing and promotional
activities scheduled for the next quarter.
(e) Not incur any liability on behalf of Hologic, nor in any way pledge or
purport to pledge Hologic's credit; nor describe or hold itself out as an
employee of Hologic; nor describe
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itself other than as a distributor of the SAHARA Product; nor make any claims,
warranties or representations with respect to the SAHARA Product except such
which have been previously approved in writing by Hologic; and
(f) Not distribute advertising or other printed matter created by
Distributor referring to the SAHARA Product without the specific prior approval
in writing of Hologic with regard to the form, manner, extent and wording of
each such item of advertising and printed matter. Advertising copy, brochures,
promotional materials and manuals provided to Distributor by Hologic shall be
deemed to be so approved by Hologic, unless Hologic otherwise informs
Distributor in writing. All advertising by Distributor shall be without
recourse to Hologic for any expense incurred unless such expense shall have been
specifically authorized in writing by Hologic.
5. Obligations and Rights of Hologic.
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(a) Hologic will continue to offer for sale the SAHARA Product, or a
Successor Product, for the term of this Agreement. Hologic reserves the right,
in its absolute and sole discretion, at any time and from time to time, to
modify, alter or improve the SAHARA Product, or to discontinue the SAHARA
Product (provided that it offers for sale a Successor Product), always providing
Distributor with reasonable notice thereof, using its best commercial efforts to
provide Distributor with a minimum of 90 days notice. The term "Successor
Product," as used in this Agreement shall mean all products sold by Hologic in
the Territory to Target Customers utilizing ultrasound technology (but not x-ray
or other technologies) to analyze bone structure for the purpose of assisting in
the diagnosis of bone disease or other bone conditions in humans, including
replacements for and enhancements to the SAHARA Products listed on Exhibit A
hereto.
(b) Hologic shall supply Distributor with (i) reasonable quantities of
brochures, other promotional materials, and manuals for the SAHARA Product; and
(ii) the artwork and mechanicals required to support Distributor's production of
its brochures and other promotional materials. Such materials shall be in
English and shall be provided free of charge.
(c) Hologic will provide such other marketing incentive programs as
Hologic may, in its sole discretion, determine.
(d) Prior to any Hologic announcement for sale in the Territory of any new
product line directed primarily at Target Customers in the Territory (most
particularly any biochemical marker product) (and prior to entering into
distribution agreements relating thereto) Hologic will provide Distributor with
information as to its general marketing and sales goals for said new product
line, in order that Distributor may provide to Hologic a proposal to distribute
said product line under the terms of this Agreement or such other terms as may
be appropriate.
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6. Prices, Payment, and Shipping.
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(a) Hologic's current Distributor Prices (F.O.B. customer (two day
delivery - air or ground shipment at Hologic's option)) are as set forth in
Exhibit A-1 hereto. Expenses associated with Hologic compliance with any request
for any other method of packaging or shipping will be Distributor's sole
responsibility. At any time after one (1) year following the Effective Date of
this Agreement, Hologic may change its Distributor Prices at its sole discretion
upon ninety (90) days advance written notice. SAHARA Product ordered before,
but shipped after the effective date of any price change shall be charged for at
the lower of the price before and after said change.
(b) RESERVED - SUBSECTION NOT USED.
(c) Payment for all SAHARA Product ordered (and shipping services
provided) shall be due as specified on Exhibit A hereto.
(d) Distributor will pay or reimburse Hologic for any taxes, however
designated, arising from or based upon Hologic's sale of the SAHARA Product to
Distributor, this Agreement, the licenses granted pursuant to this Agreement, or
Distributor's use or sale of the SAHARA Product ("Taxes"), but not including any
income or corporate excise tax assessed against, or levied on, Hologic. If
applicable, Distributor shall furnish Hologic with whatever certificates or
other instruments may be necessary or appropriate to evidence that Hologic's
sales of the SAHARA Product to Distributor are not subject to Taxes under
applicable law.
(e) Distributor shall order SAHARA Product by submitting a written
purchase order, which order shall be valid solely for the purpose of identifying
SAHARA Product ordered, prices, and requested delivery date(s); no other terms
on any such purchase order shall be valid or a part of the agreement between
Hologic and Distributor. Distributor shall provide at the same time such
documents executed by the customer as Hologic deems necessary to evidence the
customer's acceptance of Hologic's software and warranty terms, (Hologic's
current form to be attached as Exhibit E hereto). Hologic will confirm by
Sales Order Acknowledgment, the delivery dates for ordered SAHARA Product, and
shall use reasonable efforts to meet Distributor's requested delivery dates, but
shall not have any liability for failure to do so. Orders shall contain no
variations from Hologic's standard product offering or description without
Hologic's advance written consent. While Hologic shall have the right in its
sole discretion to refuse to accept any order, before doing so it shall consult
with Distributor as to its reasons for doing so; and in no case shall any
Hologic refusal to accept any such order be used in conjunction with Sales
Targets outlined in Attachment B as grounds for termination.
7. Independent Contractor - Expenses.
(a) Distributor is engaged in business as an independent distributor, and
the parties acknowledge and agree that Distributor, in the performance of its
duties and obligations pursuant to this Agreement, shall be acting as an
independent contractor and not as an employee, agent or sales representative of
Hologic.
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(b) Distributor shall bear all expenses incurred by it in acting
hereunder, including (without limiting the generality of the foregoing) all
office expenses, traveling and entertainment expenses, postage and salaries of
its salesmen and its other personnel, as well as all advertising and promotional
expenses except as provided in Section 5 hereof.
8. Term.
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(a) This Agreement shall commence on the Effective Date hereof, shall
extend for a period of two (2) years following the date of first approval by the
United States FDA for sale of the Product in the United States ("FDA Approval")
(the "Term"), and shall expire on the second anniversary date of FDA Approval.
The parties may extend this Agreement by mutual consent in writing at any time
prior to its expiration.
(b)(i) Either party may terminate this Agreement for cause upon the
material breach of any provision of this Agreement by the other party, effective
ninety (90) days following receipt of written notice by the other party and
opportunity to cure. Beginning six months after FDA Approval, if Distributor
does not meet its Minimum Sales Target as specified in Exhibit B for any quarter
period, the parties shall consult as to the reasons therefor, and for thirty
(30) days following the end of such quarter, Hologic may terminate this
Agreement for cause on sixty (60) days advance written notice.
(b)(ii) Either party may terminate this Agreement without cause and for no
reason, effective one-hundred eighty (180) days following receipt of written
notice by the receiving party.
(c) Notwithstanding the foregoing, this Agreement shall terminate (i)
without notice, effective immediately, in the event of the bankruptcy or
insolvency of Distributor, or in the event Distributor enters into a composition
with its creditors, or (ii) upon notice, effective immediately, if Distributor
undergoes a Change In Its SAHARA Management or (iii) upon notice, effective
immediately, if Distributor becomes Controlled By any developer, manufacturer,
seller or marketer of a Competitive Product. For purpose of this provision, a
"Change In Its SAHARA Management" shall be deemed to have occurred if
Distributor makes a change in its senior officers with responsibility for sales
and marketing of the SAHARA Product, which in the opinion of Hologic after
consultation with Distributor will reduce or impair said sales and marketing of
the SAHARA Product (c); and the term "Controlled By" shall be deemed to mean
the acquisition, directly or indirectly, of twenty percent (20%) or more of any
class of voting securities of the subject company, or the right to elect or
appoint one or more members of the board or directors or management thereof, or
the capability to exert a controlling influence on any management policy.
(d)(i) Immediately upon expiration or termination of this Agreement by
either party, Distributor will discontinue marketing the SAHARA Product, and
Hologic will repurchase all of Distributor's remaining inventory of the SAHARA
Product at the invoice price. Distributor will prepare and provide to Hologic
within fifteen (15) days of any such expiration or termination a list of all
then-active prospective customers and the type and amount of SAHARA Product
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expected to be sold to said customers during the six month period following the
effective date of expiration or termination of this Agreement. For said six
month period, so long as Distributor is in compliance with the terms of this
Section, Hologic will honor any orders placed by Distributor for drop shipment
during said period to said customers, at prices no less favorable to Distributor
than Hologic's prices to other distributors for similar quantities of SAHARA
Product under similar terms and conditions, and subject to the provisions of
this Agreement.
(d)(ii) If Distributor terminates this Agreement pursuant to Section
8(b)(ii) without cause, or if Hologic terminates this Agreement pursuant to
Section 8(b)(i) for cause, Distributor shall not represent, attempt to sell, or
solicit orders for, any Competitive Product for one hundred eighty (180) days
following said termination of this Agreement.
(e) Upon expiration or termination of this Agreement, Distributor shall
promptly return to Hologic all technical information and literature relating to
SAHARA Products, including price lists, samples, documents and papers that may
have been supplied to Distributor by Hologic.
9. Customer Support and Warranties.
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(a) Except as provided In Exhibit F hereto, Hologic shall be solely
responsible for customer support and warranty service for all SAHARA Product
purchased pursuant to this Agreement in accord with the terms set forth on
Exhibit E hereto. Unless otherwise agreed in writing in advance, Hologic shall
be solely responsible for all claims, suits, or other legal proceedings founded
upon on any allegation of breach of customer support, warranty or product
liability relating to SAHARA Product purchased pursuant to this Agreement in,
except insofar as any such claim may be founded on Distributor's
responsibilities pursuant to this Agreement (including Exhibit F), or on
Distributor's breach of this Agreement, willful act or negligence ("Product
Claim"). Provided that Distributor gives Hologic prompt written notice of any
such Product Claim, and that Distributor cooperates fully with Hologic's defense
thereof and does not enter into any settlement or other voluntary resolution of
such Product Claim, Hologic will indemnify and hold Distributor harmless from
and against any loss, cost, damage, or other expenses incurred by Distributor as
a result of such Product Claim. This indemnification provision shall be null and
void and Hologic shall have no liability to the extent that any such Product
Claim is based on any use of the SAHARA Product in accord with Distributor
directions or claims not approved in writing by Hologic, or if the SAHARA
Product has been modified or tampered with in any way by or with Distributor's
approval without the express written consent of Hologic, or if Distributor, or
any of its subsidiaries or affiliates, have any interest in said Product Claim.
Hologic shall cause Distributor to be named as an additional named insured on
its product liability and excess liability insurance policies relating to its
SAHARA and Successor Products.
(b) Except as expressly set forth herein, or in Hologic's warranty
accompanying the SAHARA Products as packaged and shipped by Hologic (and
accordingly subject to all conditions and limitations set forth therein),
HOLOGIC MAKES, AND DISTRIBUTOR AND ITS CUSTOMERS RECEIVE, NO WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING
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WITHOUT LIMITATION NO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR AGAINST INFRINGEMENT.
10. Software License and Intellectual Property Rights
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(a) Under this Agreement, computer software ("Software") may be delivered
in printed or machine-readable form. Title to the Software, including all
patents, copyrights and property rights applicable thereto, and all foreign
language versions thereof (whether prepared by Distributor or Hologic or a third
party), shall at all times remain with Hologic. Software is valuable to Hologic
and shall be treated as confidential information subject to the Confidential
Information provisions of this Agreement. Distributor shall maintain all
copyright, proprietary and other notices on the Software, and shall not
decompile, disassemble or reverse engineer the Software, and shall not make it
available to any party except employees using the Software as part of their
duties.
(b) Subject to the provisions of Article 10(a) hereof, Distributor is
granted a non-exclusive royalty-free license to use Software for the Term of
this Agreement solely on scanning equipment purchased under this Agreement and
on which the Software is first installed, for performing and analyzing scans
acquired on said equipment, and for no other purpose or business. No license is
provided to use Software for multi-site quality control or data review purposes.
(c) Subject to the provisions of Article 10(a) hereof, Distributor is
granted a non-exclusive royalty-free license for the Term of this Agreement to
transmit Software with equipment purchased hereunder to its customers solely for
operation of scanning equipment purchased from Distributor and on which the
Software is first installed, provided that such customer first agrees in writing
to be bound by terms and conditions set out in Exhibit E hereto. Hologic shall
have the right to audit Distributor's compliance with this subsection upon
reasonable notice. Distributor shall promptly notify Hologic of any violation of
any license or sublicense or suspected misuse of Software in the Territory, and
take all reasonable steps to cure said violation or misuse. Except as expressly
provided by this section, Distributor has no right to use, sell, assign,
transfer, copy or sublicense Software.
11. Infringement.
In the event that any claim, suit, or other legal proceeding is threatened
or commenced against Distributor that is founded, in whole or in part, on an
allegation that the SAHARA Product infringes any trade secret, trademark, patent
or other intellectual property rights belonging to a third party, Distributor
will give Hologic prompt written notice of such legal proceeding and Hologic may
elect to assume sole control of the defense to or settlement of such dispute.
Distributor shall cooperate fully with Hologic in any defense, settlement or
compromise made by Hologic. Distributor shall not enter into any settlement
agreement or other voluntary resolution of any such claim, suit, or other legal
proceeding without obtaining Hologic's prior written consent thereto. If
Distributor has complied with the procedures set forth in this Section
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9(c), Hologic will indemnify and hold Distributor harmless from and against any
loss, cost, damage, or other expenses incurred by Distributor as a result of
such claim, suit or legal proceeding. If a final injunction is obtained against
Distributor's use of the SAHARA Product, or if in the opinion of Hologic the
SAHARA Product is likely to become the subject of a successful claim of
infringement, Hologic may, at its option and expense, (i) procure for
Distributor the right to continue distributing and/or using the SAHARA Product,
(ii) replace or modify the SAHARA Product so that it becomes non-infringing, or
(iii) if neither (i) or (ii) are reasonably available, accept return of SAHARA
Product held by Distributor and grant a credit therefor as depreciated, and
terminate this Agreement without further obligation or liability. This
indemnification provision shall be null and void and Hologic shall have no
liability to the extent that any claim is based on any use by or expressly
approved by Distributor of the SAHARA Product in combination with any item not
supplied or approved for use by Hologic, or if the SAHARA Product has been
modified or tampered with in any way by or with Distributor's approval without
the express written consent of Hologic, or if Distributor, any of its
subsidiaries or affiliates, or customer has any interest in said claim, suit or
legal proceeding. or any license to any right so asserted.
12. LIMITATION OF LIABILITY
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EXCEPT WITH RESPECT TO CLAIMS PURSUANT TO SECTIONS 4(C), 9, 10, 11, 14, 16
17(c) OR 17(d) HEREOF, NEITHER PARTY BE LIABLE FOR ANY LOSS OF DATA, PROFITS OR
USE OF THE SAHARA PRODUCTS, OR FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE USE OR
PERFORMANCE OF THE SAHARA PRODUCT. THIS PROVISION SHALL NOT APPLY TO
DISTRIBUTOR CLAIMS AGAINST HOLOGIC FOR DAMAGES INCURRED AND CLAIMED BY
DISTRIBUTOR'S CUSTOMERS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
THE USE OR PERFORMANCE OF THE SAHARA PRODUCT.
13. Non-assignment.
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This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; provided that any
assignment or transfer of this Agreement or any of the rights or obligations
hereunder by Distributor without the written consent of Hologic shall be void
and of no effect.
14. Confidentiality Provisions.
--------------------------
(a) Each party (Receiving Party) agrees that it and its employees, agents
and sub-Distributors shall treat and maintain as the disclosing party's
(Disclosing Party's) confidential property, and not use or disclose to others
during or for a period of three (3) years from the date this Agreement expires
or is terminated, any business, financial or technical information, or other
information of a confidential or proprietary nature, of or concerning the
Disclosing Party,
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including information regarding the Disclosing Party's plans, programs, plants,
processes, products, costs, equipment, operations or customers, (the
"Confidential Information") which may come within the knowledge of the Receiving
Party or its employees, agents or sub-Distributors in connection with the
services performed hereunder, unless in each instance the Receiving Party
secures the prior written consent of the Disclosing Party. The terms of this
Agreement are agreed to comprise such Confidential Information.
(b) Without limiting the foregoing, each party agrees that all drawings,
specifications, calculations, data, customer lists, memoranda, notes, other
material, that contains Confidential Information (collectively, the
"Confidential Material") which are made available to a Receiving Party shall not
be used except in working for the Disclosing Party and that upon the termination
of this Agreement, or at any time upon request, the Receiving Party shall return
to the Disclosing Party (or, at the Disclosing Party's election, destroy) all
such Confidential Material.
(c) The obligations set forth in this Section shall not preclude a
Receiving Party from using or disclosing in any manner information which is, at
the time of use or disclosure, public knowledge other than by a breach of duty
by said party, or is disclosed pursuant to any requirement of law or regulation,
or an order of a court or governmental agency, provided that the Receiving Party
first notifies Disclosing Party and affords it an opportunity to obtain legal
protection for the information to be so disclosed, and/or to oppose such order.
15. Notices.
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Any notice required or permitted to be given under this Agreement shall be
in writing and shall be sufficiently given when delivered in person or deposited
in the United States mail (registered or certified) postage prepaid, addressed
as follows:
If to Hologic, addressed to:
HOLOGIC, Inc.
590 Lincoln Street
Waltham, MA 02154 (USA)
Attention: Mark A Duerst, Vice-President - Sales & Marketing
Copy To: Law Department
If to Distributor, addressed to:
Physician Sales and Service
4345 Southpoint Boulevard
Jacksonville, Florida 32216
Attention: Douglas Harper, Senior Vice President
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or to such other addresses as may be specified from time to time in a written
notice given by such party. Both parties agree to acknowledge receipt of any
notice delivered in person.
16. Trademarks and Trade Names.
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(a) Distributor acknowledges that Hologic is the sole owner of the
trademarks and trade names which designate and identify the SAHARA Product and
business (the "Marks"). Hologic's current Marks associated with the SAHARA
Product are listed in Exhibit D hereto.
(b) Distributor agrees that it may only use those Marks which identify the
Product it is authorized to sell and then only to further the promotion and sale
of the SAHARA Product such Marks identify. Distributor may only use such Marks
in their standard form and style as they appear upon the SAHARA Product or as
instructed in writing by Hologic. No other letter(s), word(s), design(s),
symbol(s), or other matter of any kind shall be superimposed upon, associated
with or shown in such proximity to the Marks so as to tend to alter or dilute
them.
(c) In all advertisements, sales and promotional literature or other
printed matter in which any of such Marks appear, Distributor must identify
itself by full name and address and state its relationship to Hologic. Every
such Mark used or displayed by Distributor must be identified as a Mark owned by
Hologic, in a form and manner approved by Hologic.
(d) On its letterheads, business cards, invoices, statements, etc.,
Distributor may identify itself as a distributor of the applicable unit of
Hologic.
(e) Distributor agrees that it will never use the Marks or any trademark
or trade name of Hologic or its subsidiaries or affiliates, or any simulation of
such marks or names as a part of Distributor's corporate or other trading name
or designation of any kind.
(f) Upon expiration or in the event of any termination of this Agreement,
Distributor shall promptly discontinue every use of the Marks or any other
confusingly similar word or symbol and will also promptly discontinue use of any
language stating or suggesting that Distributor is a distributor of Hologic.
17. Miscellaneous.
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(a) Section Headings as to the contents of particular paragraphs are for
convenience only and are in no way to be construed as part of this Agreement, or
as a limitation of the scope of the particular paragraph to which they refer.
(b) Force Majeure. Neither party shall be deemed to be in default pursuant to
this Agreement so long as its failure to perform any of its obligations
hereunder is occasioned solely by fire, labor disturbance, acts of civil or
military authorities, acts of God, or any similar cause beyond such party's
control.
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(c) USA Export Controls. Notwithstanding anything contained in this Agreement
to the contrary, Distributor agrees not to export, re-export, or knowingly
permit the re-exportation of the SAHARA Product to any country now or hereafter
included in the US Department of Commerce's list of countries to which
exportation of the SAHARA Product is or may be restricted or prohibited, unless
that exportation or re-exportation is specifically authorized by a special
license issued by the US Office of Export Administration. This provision shall
not be interpreted to expand the definition of "Territory" set forth in Section
2 (d) of this Agreement in any way.
(d) Compliance with Laws. Each Party shall comply with all laws, rules,
regulations, governmental requirements and industry standards existing in the
Territory from time to time with respect to the SAHARA Product and its
activities, as well as all applicable laws of the United States, including the
Foreign Corrupt Practices Act and regulations promulgated thereunder.
(e) Choice of Law. This Agreement shall, for all purposes, be construed and
enforced in accordance with the internal laws of the Commonwealth of
Massachusetts, not including its choice of laws provisions or the United Nation
Convention on the International Sale of Goods. Any controversy or claim arising
out of or relating to this Agreement, or breach thereof, which the parties fail
to resolve by agreement, shall be settled by binding arbitration in the
Commonwealth of Massachusetts in accordance with the commercial arbitration
rules of the American Arbitration Association, applying the laws of the
Commonwealth of Massachusetts as provided in this paragraph. Judgment upon any
arbitration award so rendered may be entered in any court having jurisdiction,
or application may be made to any such court for confirmation of such award or a
judicial acceptance of such award, and for an order of enforcement or other
legal remedy, as the case may be. If any portion of this Agreement shall be
found to be unenforceable, such provision shall be construed by limiting and
reducing its effect so as to be enforceable to the full extent compatible with
respect to applicable law. The unenforceability of any one clause hereof shall
in no way impair the enforceability of any other clause hereof.
(f) Waiver and Severability. Any waiver by either party of any provision of
this Agreement shall not be construed or deemed to be a waiver of any other
provision of this Agreement nor a waiver of a subsequent breach of the same
provision. If any portion of this Agreement shall be found to be unenforceable,
such provision shall be construed by limiting and reducing its effect so as to
be enforceable to the full extent compatible with respect to applicable law. The
unenforceability of any one clause hereof shall in no way impair the
enforceability of any other clause hereof.
(g) Entire Agreement. This Agreement contains the entire Agreement of the
parties, and supersedes all prior agreements, understandings, representations,
conditions, warranties, and covenants, whether oral or written, between Hologic
and Distributor. Any provision of any Distributor purchase documentation which
is inconsistent with this Agreement shall be of no force or effect unless
specifically agree to by Hologic as follows. This Agreement may not be changed
or amended unless in a writing specifically referencing this Agreement,
purporting to do so, and signed by both parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written by their respective
authorized officials.
PHYSICIAN SALES AND SERVICE, INC. HOLOGIC, INC.
By: /s/ Douglas J. Harper By: /s/ Steve L. Nakashige
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Printed Name: Douglas J. Harper Printed Name: Steve L. Nakashige
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Title: Senior Vice President Title: President & COO
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EXHIBIT A
SAHARA PRODUCT, DISTRIBUTOR PRICING,
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AND PAYMENT TERMS
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SAHARA PRODUCT DESCRIPTION DISTRIBUTOR PRICING
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Hologic Bone Analyzer Products, utilizing
ultrasound technology but not x-ray
technology, currently consisting of:
SAHARA ultrasonic bone densitometers SEE PRICE LIST ATTACHED AS EXHIBIT A-1
Notes
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1. F.O.B. customer prices include a constructed shipping charge generally
reflecting average costs associated with shipment of the products in question
to customer sites in the 48 contiguous United States. F.O.B. customer prices
for Alaska and Hawaii are available upon request. For F.O.B. Factory
purchases, shipping charges will be prepaid and added to invoice and are due
upon installation.
2. Delivery: Normally approximately 60 days following receipt of order.
Hologic will use reasonable commercial efforts to expedite Distributor orders
which request more rapid delivery.
3. Warranty: Customer warranty is twelve (12) months from date of installation.
Warranty includes computer and peripheral equipment supplied with system.
4. Customer Installed. SAHARA Product is to be installed and set up by the
customer. Hologic provides written training materials and a videotape.
5. SAHARA Product sold in the U.S. are not authorized for re-export. Warranty
and service will be provided in the United States only.
PAYMENT TERMS
- -------------
Payment in full (for all product and any shipping services, etc.) due 30 days
following delivery.
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Attachment A-1
SAHARA Prices:
- --------------
List Price Dealer Price
-------------- -------------------
FOB Customer
Sahara Clinical: [Language [Language Deleted
Deleted Due Due To
To Confidential
Confidential Treatment Request.]
Treatment
Request.]
Sahara Research
with workstation/printer: [Language [Language Deleted
Deleted Due Due To
To Confidential
Confidential Treatment Request.]
Treatment
Request.]
Sahara Research Software: [Language [Language Deleted
Deleted Due Due To
To Confidential
Confidential Treatment Request.]
Treatment
Request.]
NOTES:
- ------
Hologic shall also use its best commercial efforts to arrange for
Distributor to represent Hologic's SAHARA product line for lease pursuant
to Hologic's then-current Fee Per Scan (FPS) lease program, with a
commission to be agreed from time to time.
F.O.B. Customer Prices are quoted on the basis of two day delivery -
(using air or ground shipment at Hologic's option). Incremental expenses
associated with Hologic compliance with any request for any other method of
packaging or shipping will be Distributor's sole responsibility.
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EXHIBIT B
SALES TARGET AND SALES PLAN
---------------------------
SALES TARGET
------------
For the first two quarters following FDA Approval, the parties shall work
together to maximize sales of the SAHARA Product, but there shall be no Sales
Target or binding Minimum Sales Target. Beginning with Targets for the third
quarter following FDA Approval, unless otherwise mutually agreed, Distributor's
initial Sales Target (non-binding) shall be [Language Deleted Due To
Confidential Treatment Request.] with a Minimum Sales Target of [Language
Deleted Due To Confidential Treatment Request.], provided that the parties shall
consult as part of each business review described in Section 4(d) of the
Agreement, with respect to the Sales Targets and Minimum Sale Targets for
upcoming quarters and endeavor to agree as to any adjustments the above-stated
initial Targets to reflect market conditions. Distributor's Sales Target (non-
binding) and Minimum Sales Target for the second year following FDA Approval may
also be adjusted in this way from the above-stated initial Targets as mutually
agreed.
SALES PLAN
----------
(a) Distributor to assign a team to work with Hologic marketing in support of
Sahara introduction. Distributor to provide a training schedule sufficient to
ensure complete training of all PSS staff on Sahara prior to launch. Distributor
to coordinate special [Language Deleted Due To Confidential Treatment Request.]
designed to sell [Language Deleted Due To Confidential Treatment Request.] per
branch to the local luminary sites and opinion leaders. Distributor and Hologic
shall continue to consult and agree upon, and implement an optimal training
program for Distributor's sales staff and subdistributors, which program shall
include in-person training by Hologic personnel within an agreed time following
commencement of this Agreement, and follow-up training during each year
thereafter
(b) Distributor will inform and assign all of its sales personnel and sub-
distributors in the Territory to market and sell the SAHARA Product, will
provide for appropriate training, and will use its usual marketing efforts to
promote the SAHARA Product, including calling on general prospects, and follow-
up calls to interested prospects, and participation in significant trade shows
aimed at Target Customers in the Territory.
(c) For the duration of this Agreement, Distributor shall designate a full-time
SAHARA Product Manager whose assignment will be to oversee distributor's
relationship with Hologic under this Agreement, to manage distributor's
marketing program for SAHARA Product in the Territory, to serve as the primary
contact with Hologic, and to be responsible for compliance with section 4(d) of
this Agreement.
(d) Distributor hereby agrees to purchase [Language Deleted Due To Confidential
Treatment Request.] Sahara Clinical systems for delivery on or before the date
of FDA Approval
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of the SAHARA Product, for use as field demonstration equipment by Distributor's
branches and offices("Demonstration Systems") at a special price of [Language
Deleted Due To Confidential Treatment Request.] per system and a total price of
[Language Deleted Due To Confidential Treatment Request.] to be paid for as
follows: Distributor shall make a downpayment of [Language Deleted Due To
Confidential Treatment Request.] within thirty (30) days of FDA Approval to be
applied against the total price of [Language Deleted Due To Confidential
Treatment Request.] specified above, and representing purchase of [Language
Deleted Due To Confidential Treatment Request.] Demonstration Systems.
Thereafter, the Dealer Price for each system sold to Distributor pursuant to
this Agreement shall be increased by [Language Deleted Due To Confidential
Treatment Request.] per system to be applied as a credit against Distributor's
remaining balance due (of [Language Deleted Due To Confidential Treatment
Request.]), until said balance due is eliminated, and all Demonstration Systems
are fully paid for (after [Language Deleted Due To Confidential Treatment
Request.] systems are purchased and paid for, representing [Language Deleted Due
To Confidential Treatment Request.] times [Language Deleted Due To Confidential
Treatment Request.] equaling [Language Deleted Due To Confidential Treatment
Request.]). After said balance is eliminated and the total price for all
Demonstration Systems is paid, the Dealer Price for each system shall revert to
the price stated on Attachment A-1 hereto. If Distributor has not sold
sufficient systems subject to the above-described credit within six-months
following FDA Approval, it will pay any remaining balance due or return
sufficient Demonstration Systems for full credit (at [Language Deleted Due To
Confidential Treatment Request.] per system) to eliminate said balance. All
returned Demonstration Systems shall be in good order and condition and
Distributor shall use its best efforts to also return the carrying case,
phantom, and all parts originally delivered. All SAHARA Product purchased
pursuant to this Section shall be used solely for marketing and demonstration
use, and shall not be sold for six (6) months after purchase.
(e) The parties shall consult and enter into an agreement in accord with the
following principles as to continuation of the above-described Demonstration
System program for each six-month period following six months following FDA
Approval: Distributor shall maintain an ongoing inventory of at least the number
of Demonstration Systems held following six months following FDA Approval, with
a goal of at least one (1) Demonstration System per branch. Hologic shall make
available special purchase terms for Demonstration Systems in accord with the
principles set out in paragraph (d) above, sufficient to permit Distributor to
replenish and maintain its ongoing inventory of Demonstration Systems in good
working condition. Distributor may purchase reasonable additional quantities of
demonstration systems at an additional discount of [Language Deleted Due To
Confidential Treatment Request.] off of Hologic's then-current Dealer prices.
(f) DELETED
(g) Distributor agrees to accumulate a "Sahara prospect database" based upon
submission of prospect names by its field staff. Database to be collected prior
to Sahara introduction and to be used in product launch marketing activities by
Distributor.
(h) Distributor shall provide Hologic with the opportunity to be a "Can-Do"
vendor for Distributor's financial year 1998 (beginning 4/1/98) and shall allow
Hologic the opportunity to make presentations to its sales force and to showcase
its products including an exhibit, if desired,
-16-
during Distributor's 1998 Sales Meeting, all under conditions and charges to be
agreed, and at least as favorable conditions and charges to Hologic as granted
to any other vendor selling an equal or lesser dollar volume of product to
Distributor.
-17-
EXHIBIT C
TERM, TERRITORY,
----------------
TARGET CUSTOMERS, AND RESERVED CUSTOMERS
----------------------------------------
TERM: two (2) years from the Date of FDA Approval (See Section 8(a)).
TERRITORY: United States of America, not including its territories or
possessions.
TARGET CUSTOMERS: All physicians and chiropractors and their ambulatory care
clinics and offices, except RESERVED CUSTOMERS.
RESERVED CUSTOMERS:
Radiologists: All radiologists and their clinics and offices, and all
medical organization controlled and/or administered by
radiologists, including clinics and centers providing imaging
or mammography which are controlled and/or administered by
radiologists.
Hospitals: Any organization purchasing for the use of a hospital and/or
Radiologists, not including purchases for permanent
installation or use at (as evidenced by ship-to addresses of)
ambulatory care centers and/or physician office sites of
primary care (non-Radiologist) physicians and chiropractors.
National Accounts:
The parties understand that Hologic shall have the right to add as National
Accounts buying contracts with organizations which may increase Hologic's market
acceptance with Reserved Customers, such as hospital chains, group purchasing
organizations, physicians groups, and pharmaceutical companies. However, before
doing so, Hologic agrees to consult with PSS and discuss any proposals that if
accepted, would impact the pricing or sales of products to Target Customers,
with the aim of attempting to mutually agree to pricing and terms. In the event
that Hologic enters into any such National Account agreement that significantly
impacts PSS's available target market, it must also adjust Sales Targets and
Minimum Sales Targets to take account thereof.
-18-
NOTE: If Distributor wishes to make a sale to Target Customers which involves
installation of any SAHARA Product in the office or other facility of a Reserved
Customer, it shall first consult with Hologic, and upon Hologic's approval, the
parties shall determine how to allocate sales effort and sales prices. If
Hologic sells any SAHARA Product for installation in the office or other
facility of a Target Customer which does not also include a sale to a Reserved
Customer, it shall first consult with Distributor prior to entering into such
agreement and agree as to appropriate compensation and revenue recognition, or
pay to Distributor an amount equal to the difference between the greater of
Hologic's net sales price therefor or [Language Deleted Due To Confidential
Treatment Request.], and the Dealer price listed on Exhibit A-1.
-19-
EXHIBIT D
HOLOGIC MARKS
-------------
(as of date of Agreement)
-------------------------
HOLOGIC (logo)
SAHARA
Subject to change and addition of Marks.
-20-
EXHIBIT E
HOLOGIC WARRANTY AND SOFTWARE LICENSE CERTIFICATE
-------------------------------------------------
TO BE ATTACHED
--------------
-21-
EXHIBIT F
AGREEMENT RESPECTING DISTRIBUTION OF
------------------------------------
SAHARA CONSUMABLES/ACCESSORIES
------------------------------
In addition, Distributor shall have the rights to distribute and sell Sahara
Consumables/Accessories pursuant to the terms of this Exhibit F.
1. The term "Sahara Consumables/Accessories" as used in this Exhibit F, shall
mean the items described in Exhibit F-1 hereto, which is attached and
incorporated herein. Except as modified by this Exhibit F, the term "SAHARA
Product" as used in the Agreement shall be read to include Sahara
Consumables/Accessories.
2. Distribution Rights. Subject to the terms of this Exhibit F and
notwithstanding anything to the contrary in the Agreement, Hologic hereby grants
to Distributor an EXCLUSIVE license to distribute Sahara Consumables/Accessories
solely to Target Customers (as described in Exhibit C of the Agreement) in the
Territory, provided always that Hologic reserves the right to market, sell and
license Sahara Consumables/Accessories directly or indirectly to (a) Reserved
Customers and (b)Target Customers to which Hologic has sold any SAHARA Product
inside (and outside) of the Territory. Distributor shall not market, sell,
license or accept orders from Reserved Customers, or from any customer for
installation or use outside of the Territory without the advance written consent
of Hologic. Distributor's rights pursuant to this Section may be sublicensed to
subdistributors in the Territory only with Hologic's prior written consent,
which consent may be withheld for any reason.
3. Obligations of Distributor. As these terms are used in the Agreement,
Distributor's Sales Targets and Product Plans with respect to Sahara
Consumables/Accessories shall be as set out in Exhibit F-2 hereto.
Distributor's turnaround on customer orders for Sahara Consumables/Accessories
shall not exceed its average turnaround for other consumable products offered
for sale by Distributor. Distributor shall provide Hologic, as part of its
quarterly business report with information demonstrating compliance with this
provision, and with any customer complaint respecting delivery delays and the
parties shall agree upon a joint action plan to remedy any underlying problem.
4. Forecasts, Prices, Payment, and Shipping.
(a) On or before the date of Distributor's first order of a SAHARA Product or
thirty (30) days following FDA approval to market the SAHARA Product in the
United States, whichever date is earlier, Distributor shall place the
Initial Stocking Order for Sahara
-22-
Consumables/Accessories set out in Exhibit F-2, and provide a forecast for
its purchases thereof for each of the following six months ("Rolling
Forecast"). On or before the first day of each subsequent calendar quarter,
Distributor shall update said Rolling Forecast
(b) Hologic's current Distributor Prices (F.O.B. Waltham) and payment terms are
as set forth on Exhibit F-1 hereto. Minimum order quantities and minimum
inventory levels shall be as set forth on Exhibit F-2.
5. Term and Termination. If (a) Distributor has not met its Sales Target as
specified in Exhibit F-2 for any quarter period, or (b) the parties have not
reached agreement as to a joint action plan to remedy delivery problems
identified pursuant to Section 3 of this Exhibit F with respect to any prior
quarter, the parties shall consult as to the reasons therefor, and for thirty
(30) days following the end of such quarter, Hologic may terminate Distributor's
Exclusive right to market, sell and license Sahara Consumables/Accessories
pursuant to this Exhibit F upon notice, and may thereafter appoint additional
distributors and representatives for Sahara Consumables/Accessories.
Except as expressly provided to the contrary in this Exhibit F, all provisions
of the Agreement shall apply to Distributor's activities pursuant hereto
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the date of the Agreement of which this Exhibit F is a part.
DISTRIBUTOR HOLOGIC, INC.
By: ______________________________ By : ___________________________________
Printed Name: ____________________ Printed Name: _________________________
Title: ___________________________ Title: ________________________________
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