Delaware corporation having its principal place of business a 1220 Charleston Road, Mountain View, California U.S.A. 94039-7393 and U.S.-China Industrial Exchange, Inc.(”Distributor”) having its principal place of business at 7201 Wisconsin Avenue, Suite 703, Bethesda, Maryland 20814, U.S.A. In consideration of the mutual covenants herein, the parties hereby agree as follows: 1. PRODUCTS. The products of Acuson subject to this Agreement(”Products”) are thosedelineated on Exhibit A. These Products may be changed from time to time by Acuson giving Distributor not less than (30) days prior notice of any such changes. 2. TERRITORY. The Territory covered by this Agreement(”Territory”) is as set forth on Exhibit A. 3. DISTRIBUTION APPOINTMENT AND DISTRIBUTOR ‘s Responsibilities. 3.1 Authorized Distributor. During the term of this Agreement, Distributor shall be Acuson „s authorized distributor solely within the Territory for the sale of Products to customers for use in diagnostic and therapeutic applications (”customers”). Subject toSection 5.4, Distributor acknowledges that Acuson may call on customers in the Territory and may sell the Products in the Territory itself. 3.2 Sales. Distributor shall use its best efforts fully and actively to promote, maintain and increase sales of the Products in the Territory. 3.3 Training. Distributor shall train all customers in the Territory in the use of the Products. Such training shall be performed as soon as practicable following installation to ensure that the customer is properly using the Products. 3.4 Promotional Activities. Distributor shall (i) maintain a sales organization which in the opinion of Acuson is adequately qualified and trained, and, unless Acuson otherwise agrees in writing, which at a minimum must include the equivalent of two full-time sales persons in the Territory and two full-time field application specialists;(ii) maintain an active sales program for all potential and actual customers of the Products; (iii) promote and advertise Products and participate in trade shows; and (iv) prepare and distribute any and all sales aids, sales literature, other promotional materials, training aids and literature as needed or as reasonably requested by Acuson. Distributor agrees to provide additional sales and field application support as may be required to support new Products. 3.5 Promotional Distributor Materials. Distributor shall not give a customer any warranty for the Products other than as set forth in Section 6, unless otherwise agreed by Acuson.Distributor shall obtain prior written approval from Acuson prior to distribution of any promotional material. 3.6 Service. Distributor shall maintain a technically qualified service capability and use its best efforts to service and maintain all Products in the Territory, and shall maintain an adequate inventory of spare parts which shall be used for repairs and replacements of Products whether under Acuson „s standard warranty or not. Acuson shall issue credit for or replace the part in Distributor „s inventory upon receipt of a complete report on the failure and, at Acuson „s reasonable request, return of the failed part. Distributor shall provide Acuson reports of Distributor „s service activities, in such form and at such times as Acuson may reasonably request. 3.7 Customs and Freight Charges. Distributor shall perform and be financially responsible for all functions to clear Products through non-United States customs, and arrange and pay for transportation of the Products from Acuson „s facility in Mountain View, California, U.S.A. to the customer. 3.8 Demonstration System. Distributor agrees to keep at least one dedicated Demo system in the Territory at all times. Accordingly, if Distributor sells its Demo system, Distributor agrees immediately to purchase another Demo system, from Acuson on mutually acceptable terms. Distributor may purchase a maximum of one Demo system every two years. 3.9 Reports At least 30 days prior to the beginning of each calendar quarter, Distributor shall provide Acuson with forecasts by quarter of anticipated customer sales and purchases from Acuson, by Product, for the next four quarters; and provide Acuson with such other reports as Acuson may reasonably request. 3.10 Records. Distributor shall maintain a complete record of all sales of Products, showing customer name, date of sale, instrument model and serial number, and copies of all sales order acknowledgments and invoices for all Products.Distributor shall also maintain a compete record of all service calls relating to Products, showing customer name, date of call, instrument model and serial number, nature of call, service work performed and other information as Acuson may reasonably request. The records referred to in this Section, or copies thereof, shall be supplied to Acuson upon its request. 3.11 Customer Complaints. Distributor shall notify Acuson immediately of any complaints or problems concerning the Products or any misuse of the Products. 3.12 Notification of Infringement. Distributor shall notify Acuson immediately of any actual, suspected or alleged infringement of Acuson patents, trademarks or copyrights that it becomes aware of in the Territory. 3.13 Competitive Products. Without Acuson „s prior written consent. Distributor shall not distribute or sell any products competitive with or similar to Products and/or services relating thereto. 3.14 Confidential Information. During the term of this Agreement and at all times thereafter, Distributor shall acknowledge as proprietary and keep confidential(i) allconfidential or proprietary information covering Products and/or processes, including without limitation, technical specifications, engineering data, diagnostic software and printed circuit boards, price lists and customer lists, (ii) any information disclosed to Acuson by any third party which Acuson is obligated to treat as confidential or proprietary, or (iii) any information pertaining to the business of Acuson or any of its customers, consultants or affiliates, acquired or learned by Distributor during the term of this Agreement, or (iv) any other information designated by Acuson as confidential or proprietary. Distributor acknowledges that the information referred to in this Section 3.14 (Proprietary Information”) shall at all times remain the property of Acuson and shall be deemed furnished to Distributor in confidence. Distributor shall use Proprietary Information only in connection with its obligations under this Agreement. 3.15 Government Authorizations. Distributor shall obtain and continue to maintain in good standing all licenses, permits and other governmental approvals and/or authorizations required in connection with this Agreement and the sale of Products in the Territory, including without limitation, import licenses and foreign exchange permits. Distributor shall keep Acuson apprised of the status of such licenses, permits and approvals /authorizations. 3.16 Expenses. Except as otherwise specifically provided in this Agreement, Distributor shall pay its own expenses I carrying out its obligations under this Agreement. 4 ACUSON „S RESPONSIBILITIES 4.1 Assistance. Acuson shall make available a reasonable supply of sales literature, including catalogues, data sheets, brochures and similar material, all in English language, or in a foreign language as far as it is available, and furnish reasonable sales technical assistance from time to time, including sales and service training of Distributor „s employees. Payment of the costs for such training shall be mutually agreed upon. 4.2 Inquiries. Acuson shall promptly forward to Distributor all Product inquiries received from customers within the Territory during the term of this Agreement. 5. ORDER ACCEPTANCE, DELIVERY TERMS AND PAYMENTS 5.1 Orders. Orders by Distributor are subject to acceptance by Acuson at Acuson „s facility in Mountain View, California U.S.A., or at such other facility as Acuson may from time to time determine. All orders shall be accepted subject to the terms and conditions of Acuson „s then current terms and conditions of sale (the current version of which is attached hereto as Exhibit C), unless otherwise provided in this Agreement. Such order terms may be changed by Acuson at any time, but no such change shall have any effect o orders already accepted by Acuson. Purchase orders must be addressed to Acuson at the address set forth on the first page of this Agreement. The provisions of this Agreement shall supersede any provisions contained in Distributor „s purchase orders and any other communications from Distributor and/or its customers. Purchase orders may be declined or accepted, wholly or in part, at Acuson „s sole discretion.Acuson will not unreasonably withhold acceptance. 5.2 Price. Acuson shall sell Products to Distributor at the prices listed in the then current version of Exhibit A, less applicable discounts listed in then current version of Exhibit B. Prices quoted are F.O.B.Acuson „s facility in Mountain View, California, U.S.A. Acuson may change prices and/or discounts from time to time upon ninety (90) days written notice. No commission or other form of compensation shall be payable by Acuson to Distributor. Distributor shall pay (and shall indemnify Acuson against) all applicable taxes and fees, including without limitation, a value added, personal property, use of similar taxes, customs duties, import ant and similar charges incurred or payable with respect to the import and sale of the Products in the Territory. 5.3 Title. Subject to Section 8, title to and risk of loss of Products shall pass to Distributor upon delivery of the Products to Distributor or Distributor „s customer, whichever occurs first. 5.4 Payments. All payments for Products shall be due and paid in full within 30 days from the date of Acuson „s invoice by letter of credit acceptable to Acuson in accordance with the payment terms set forth on Exhibit A. In event that a customer located in the Territory orders directly form Acuson, all payments for Products shall be due and paid in full by letter of credit \acceptable to Acuson within thirty (30) days from the date of Acuson „s invoice. Acuson agrees to pay Distributor a sum equivalent to the discount structure agreed upon in Exhibit B within thirty (30) days from receipt of payment in full by the customer. 6. WARRANTY Acuson warrants that the Products will be free from defects in materials and workmanship for a period ending thirteen (13) months from date of shipment, provided that options added after initial installation of the Acuson 128 or the Acuson 128XP are covered by the foregoing warranty for a period of one (1) year after the date of the installation of the option or until the end of the 13 month period referred to above, whichever is longer. The Products furnished under this Agreement may contain components or parts that have been reprocessed to assure compliance with performance and reliability specifications. Acuson „s sole liability under valid warranty claims will be limited, at Acuson „s option, to repair or replacement of defective parts of the Products during Acuson „s normal business hours. Upon replacement, any removed part shall become the property of Acuson. All warranty replacement or repair of parts will be limited to Product malfunctions which, in the reasonable opinion of Acuson, are due and traceable to defects in original material and workmanship. In order to enable Acuson to properly administer this warranty, Distributor will notify Acuson promptly in writing of any claims and will provide Acuson with the opportunity to inspect and test each Product claimed to be defective.This warranty does not extend to Products or parts thereof that have been subjected to misuse, abuse, improper application, alteration, accident, negligence or incorrect repair or servicing not performed or authorized by Acuson. THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ACUSON SHALL NOT BE LIABLE FOR ANY LOSS, DDMAGE OR EXPENSE OF ANY KIND WHATSOVER CAUSED BY THE EQUIPMENT OR BY ANY DEFECT THEREIN. THE USE OR MAINTENANCE THEREOF, OR ANY SERVICING OR ADJUSTMENT THERETO, NOT EXPRESSLY COVERED BY THE WARRANTY CONTAINED HEREIN. 7. LIMITATION OF LIABILITY. In no event whether in contract, tort (including negligence), strict liability or otherwise will Acuson be liable (a) for special, indirect or consequential damages or for any lost profits, or (b) to Distributor or any other person for an amount greater than the purchase price actually paid to Acuson for the Product with respect to which such liability relates. 8. SOFTWARE LICENSE. Acuson or its suppliers retain(s) ownership of and title to any computer program supplied with or in connection with the Products, to any diagnostic, remedial or installation software and printed circuit boards provided to Distributor and to the trade secrets embodied in such computer programs, software and boards. Subject to acceptance of the obligations in this Section and to the fulfillment of these obligations, Acuson grants Distributor „s immediate customer a perpetual, non-exclusive license to use such computer program, software and boards solely in the form and on the medium in which such program, software or board is delivered for the purpose of operating the Products in accordance with the instructions set forth in the Operator „s Manual supplied with the Product and for no other purposes whatsoever. Acuson grants Distributor a non-exclusive license only during the term of this Agreement to use such diagnostic, remedial and installation software and printed circuit boards, solely in the form an don the medium in which such software and boards are delivered, for the purpose of servicing Products sold to customers pursuant to this Agreement in accordance with service instructions supplied by Acuson and for no other purpose whatsoever. Neither Distributor nor its customer may reverse assemble, reverse compile or otherwise reverse engineer such computer programs, software or printed circuit boards, nor may it make a copy thereof or apply any techniques to derive the trade secrets embodied therein. Distributor agrees that it will forward to Acuson the customer „s written consent to comply with the terms of this Section. In event of a failure by Distributor or Distributor „s customer to comply with the terms of this license, the license granted by this Section shall terminate. Further, because unauthorized use of such computer programs, software and boards will leave Acuson without an adequate remedy at law, injunctive or other equitable relief will be appropriate to restrain such use, threatened or actual.Distributor „s customer may assign such customer „s license hereunder to its immediate purchaser by forwarding to Acuson the purchaser „s written consent to comply with the terms of this Section. Distributor further agrees that(I) any of Acuson „s suppliers of software is a direct and intended beneficiary of this software license and may enforce it directly against Distributor „s customers with respect to software supplied by such Supplier, and (ii) NO SUPPLIER OF ACUSON SHALL BE LIABLE TO DISTRIBUTOR ANY CUSTOMER FOR ANY GENERAL, SPECIAL, DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR OTHER DAMAGES ARISING OUT OT THE SUBLICENSE OF THE SOFTWARE AND COMPUTER PROGRAMS SUPPLIED WITH THE PRODUCTS. 9. INDEPENDENCE OF DISTRIBUTOR; REFERENCE TO ACUSON. Distributor agrees to conduct business in its name as an independent distributor and contractor. No employment, agency, joint venture, or similar arrangement is created or intended between Acuson and Distributor. Distributor has no right or authority to act for or bind Acuson in any respect or to make any representations or warranties, express or implied, on behalf of Acuson. However, so long as this Agreement remains in effect, Distributor may indicate to the public that it is an authorized distributor of the Products and may advertise such Products under Acuson trademarks, logos and symbols. 10. COMPLIANCE WITH UNITED STATES EXPORT REGULATIONS. Distributor acknowledges that Acuson has informed it that United States law and the United States Export Administration Regulations (”EAR”) govern an may forbid the export, reexport or other disposition, without prior United States government approval, of Products, spare parts and related technical data received by Distributor or its customers in the Territory. Distributor therefore warrants that it will adhere to all provisions of United States law and the EAR and to the terms , conditions, required procedures and documentation of any export license available or issued for delivery to Distributor or its customers of Products, spare parts or technical data. Upon request, Distributor shall provide Acuson all customer information and documentary assistance required to maintain strict compliance with such law, the EAR and such license(s). Distributor shall take all actions within its power which may be reasonably necessary to assure that no customer contravenes any United States law, the EAR or the provisions of any such license. Acuson shall be relieved of all obligations to provide Products, spare parts or technical data to Distributor or any customer, should Distributor or such customer violate United States law, the EAR or the provisions of any export license(s), or should such license(s) be suspended or revoked by the United States government. 11. FORCE MAJEURE. If the performance of this Agreement or any obligation hereunder (except payment of monies due) is prevented, restricted or interfered with by reason of fire or other casualty or accident, strikes or labor disputes, problems in procurement of raw materials, power or supplies, war or other violence, any law, order, proclamation, regulation, ordinance, demand or requirement of governmental agency or intergovernmental body, or any other act or condition whatsoever beyond the reasonable control of a party hereto (an “Event of Force Majeure”), the party so effected, upon giving notice to the other party, shall be excused from such performance to the extent and throughout the duration of such prevention, restriction or interference. Notwithstanding theforegoing, should an Event of Force Majeure remain in effect for a period of six (6) months, Acuson and Distributor hereby agree to promptly renegotiate the terms of this Agreement, and if an agreement cannot be reached within sixty (60) days of the end of such six (6) month period, the party not so effected by the Event of Force Majeure shall have the option to terminate this Agreement and if such party so elects, then this Agreement shall automatically terminate and be of no further force or effect, subject to Sections 13.5, 13.6, 13.7, and 13.8. 12. ASSIGNABILITY, DISTRIBUTOR „S ORGANIZATION. (a) This Agreement shall be binding on the parties hereto, their successors, and permitted assigns. This Agreement may not be assigned by Distributor in whole or in part, directly or indirectly, by operation of law, or otherwise, without the prior written approval of Acuson. Any such purported transfer shall be void and of no effect. (b) This Agreement has been entered into by Acuson relying upon Distributor „s present organization and personnel. Distributor shallimmediately advise Acuson of any changes affecting Distributor „s ability to perform hereunder or any changes affecting the ownership or control of Distributor. 13. DURATION AND TERMINATION. Except as otherwise provided in this Agreement, the term of this Agreement shall be as set forth on Exhibit A. 13.1 Termination by Acuson on 60 Days Notice. Acuson shall have the right upon 60 days notice to Distributor to terminate this Agreement and to appoint other distributors or make any other arrangements regarding sales of the Products in the Territory (I) if, during the term of this Agreement, Distributor fails to dedicate the equivalent of two full-time field sales persons and two full-time field application specialists to sell and promote Products in accordance with Section 3.4 or(ii) if, during any calendar year, Distributor fails to purchase any pay for Products in an amount that at least equals the minimum quotas set forth in Exhibit D. 13.2 Termination by Either Party. Should the following event occur, either party may terminate this Agreement immediately by giving the other party notice of suchtermination: If any proceeding in bankruptcy, reorganization or arrangement for the appointment of an assignee, referee, receiver or trustee for Distributor or any other proceeding under any law for the relief of creditors hall be instituted by or against distributor or if Distributor admits in writing of its inability to pay its debts as they mature. 13.3 Immediate Termination by Acuson.Should any of the following events occur, Acuson may terminate this Agreement immediately by giving Distributor notice of such termination: (i) The material breach by Distributor of any of the provisions of this Agreement, including failure to remit payments for Products as provided in Section 5.4; (ii) Any sale, transfer or relinquishment by operation of law or otherwise, of any substantial interest in the ownership of Distributor;(iii) Any material or other substantial change in the management or organization of Distributor, which in Acuson „s opinion, significantly impairs Distributor „s ability to distribute and support Products in the Territory. 13.4 Termination by Distributor. Distributor may terminate this Agreement immediately by giving Acuson notice if there is a material breach by Acuson of any of the provisions of this Agreement. 13.5 Effect of Termination. All orders not shipped by the date of termination shall be deemed canceled unless otherwise agreed by Acuson. Termination of this Agreement for any reason whatsoever shall not relieve Distributor of its obligation to make prompt payment in full of any and all amounts owed to Acuson which are accrued and outstanding as of the date of termination and shall not relieve either party from any other liability or obligation which has previously accrued as of such date. Acuson „s right of termination under Section 13.1(i) or 13.3 is in addition to any other right or remedy Acuson may have as a result of Distributor „s breach of this Agreement. The provisions of Section 3.14 shall survive termination of this Agreement. 13.6 No Damages Upon Termination. It is expressly understood and agreed that the rights of termination as provided in this Agreement are absolute and that both parties have considered, (i) making expenditures in preparing for performance of this Agreement and (ii) possible losses and damages incident and resulting to them in the event of its termination. Therefore, in agreeing to said terms of termination, it is with full knowledge of such possibilities, and except as expressly provided herein, neither party shall have any liability to the other for compensation, damages or otherwise by reason of such termination in accordance with the terms of this Agreement. 13.7 Return of Materials. Upon termination of this Agreement for any reason, Distributor shall immediately cease using any materials which indicates it is an authorized distributor of Acuson and cease using any Acuson trademark, logo, symbol or any mark or name confusingly similar thereto. In addition, upon such termination, all rights to use Acuson „s trademarks, logos and symbols shall terminate.Distributor shall also deliver to Acuson (a) all records and copies thereof relating to service and sales, including those referred to in Sections 3.6, 3.9, and 3.10, (b) all operator of service manuals and materials, diagnostic software and printed circuit boards, sales aids, sales literature, other promotional materials, training aids and literature in Distributor „s possession or under Distributor „s control, and all copies thereof, and (c) all documentation and copies thereof containing or concerning Proprietary Information. Distributor shall make no further use of any of the materials referred to in this Section 13.7. 13.8 Inventory. The parties agree to use best efforts to reach a mutually acceptable agreement on Products (including spare parts purchased from Acuson) which are in Distributor „s inventory as of the date of termination of this Agreement. 14. SOLE UNDERSTANDING/MODIFICATION. 14.1 Sole Understanding. This Agreement is the entire and sole agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements, understandings and communications related thereto, whether oral or written. 14.2 Modification. This Agreement can be modified or amended only with the written agreement of an authorized signatory of the parties hereto. 15. CONSTRUCTION AND GOVERNING LAW. 15.1 Governing Language. In the event that this Agreement is translated into any language other than English, the English language version of this Agreement shall be controlling and govern. 15.2 No Waiver. The failure by Acuson to enforce or take advantage of any of the provisions of this Agreement shall not constitute nor be construed as a waiver of such provisions or of the right subsequently to enforce or take advantage of each and every such provision. 15.3 Notices. Any notices made pursuant to this Agreement shall be in writing and shall be deemed delivered upon receipt (or upon refusal of acceptance of delivery) and shall be hand delivered, telexed or mailed, airmail, postage prepaid, addressed to Distributor or Acuson, as the case may be, at the address shown on page 1 of this Agreement or such other address as a party may designate by notice in accordance with this Section. 15.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, U.S.A. applicable to contracts made and wholly to be performed in California by residents of California. 15.5 Compliance with Law. Distributor agrees to comply with all applicable laws, rules and regulations of the Territory and to do nothing to cause Acuson to violate the law, rules and regulations of the U.S.A. If this Agreement or the performance hereof, is determined to be contrary of the laws, rules or regulations of the Territory or of the U.S.A., this Agreement will automatically terminate subject to Sections 13.5, 13.6, 13.7 and 13.8. In Witness Whereof, the undersigned have executed and delivered this Agreement by their duly authorized representatives as of the date first above written. ACUSON CORPORATION EXCHANGE,INC. By: /s/ F. Steven Feinberg Name: F. Steven Feinberg Jr. Title: VP, Asia-Pacific/Latin America Presidentand General Counsel U.S.-CHINA INDUSTRIAL By: /s/ Robert C. Goodwin, Jr. Name: Robert C. Goodwin, Title: Executive Vice THIS AGREEMENT, IS MADE AND ENTERED INTO THIS _____ DAY OF ___________, _______ BY AND BETWEEN ____________________________, A _______________ CORPORATION WITH OFFICES AT _________________________________________, THE UNITED STATES OF AMERICA, (HEREINAFTER CALLED “MANUFACTURER”) AND ________________________ (”DISTRIBUTOR”), WITH OFFICES AT ____________________________________. THE PARTIES HERETO AGREE AS FOLLOWS: I. ASSOCIATION Distributor shall act as an exclusive distributor of Manufacturer „s ______________________________________ as described in attached Exhibit A(”Products”) throughout the countries of ________________________________________________ (the “Territory”). II. DUTIES 1. Distributor agrees to actively and diligently promote the sale of the Products in the Territory during the Term hereof. Manufacturer shall refer to Distributor inquiries for Products in the Territory. 2. Distributor agrees to promote in the Territory the Manufacturer „s names and the Products during the Term hereof. Distributor agrees tonotify Manufacturer of any leads of interest granted for any products. III. ASSISTANCE BY MANUFACTURER Manufacturer agrees to furnish Distributor with reasonable quantities of Manufacturer „s catalogs, manuals, advertising literature and other sales aids that may be available by Manufacturer. Any such sales aids provided shall be in English. Manufacturer further agrees to provide Distributor with reasonable home office support and technical assistance upon terms and conditions to be agreed upon from timeto time. IV. INTELLECTUAL PROPERTY RIGHTS Distributor shall not use Manufacturer „s trade names and/or trademarks without the prior, express written consent of Manufacturer. Under no circumstances shall Distributor, at any time, use Manufacturer „s trade names, trademarks or other proprietary information as part of Distributor „s corporate or trade name. Upon termination of this Agreement, Distributor shall remove all references to Manufacturer from its letterheads, advertising literature and places of business, andshall not thereafter use any similar or deceptive name or trademarkintending to give the impression that there is any relationship between the parties. V. SALES FORCE Distributor shall maintain a competent and experienced sales force sufficient to adequately serve the Territory. VI. CUSTOMER SERVICING Distributor shall maintain in the Territory sufficient inventory of the Products so as to permit filling and shipping against current customer orders normally shipped from Distributor „s warehouse stock. Distributor agrees to notify Manufacturer if it opens any new offices or branches or closes or ceases to operate through one of its offices or branches. VII. ORDERS/ACCEPTANCE/PRICE AND TERMS 1. All orders from Distributor are subject to approval and final acceptance by Manufacturer. Price lists to Distributor shall be as set forth in Exhibit B (as revised from time to time byManufacturer in its sole discretion) in effect on date of shipment. Fornonstandard Products which are sold to Distributor for resale, the price shall be as quoted to Distributor at time of inquiry, provided that the inquiry is within thirty (30) calendar days of order entry. 2. Payment to Manufacturer by Distributor shall be in United States currency. Upon the placing of order(s), Distributor shall cause an irrevocable confirmed letter of credit to be issued by a United States financial institution satisfactory to Manufacturer, in favor of said Manufacturer, unless another arrangement is previously approved in writing by Manufacturer. VIII. WARRANTY AND FORCE MAJEURE 1. Manufacturer warrants that all Products delivered hereunder shall be of Manufacturer „s standard quality. MANUFACTURER MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED: THERE ARE NO IMPLIED WARRANTIES INCLUDING WARRANTY OF MERCHANTABILITY OR FITNESS FOR APARTICULAR PURPOSE. 2. Manufacturer shall not be liable for damages resulting from delays in shipment or inability to ship due to normal production and shipment delays or those resulting from acts of God, fires, floods, wars, sabotage, accidents, labor disputes or shortages, plant shutdown or equipment failure, voluntary or involuntary compliances with anylaw, order, rule or regulation of governmental agency or authority; orinability to obtain material (including power and fuel), equipmentor transportation, or arising from any other contingency, circumstances or event beyond the control of the Manufacturer. IX. LIMITATION OF LIABILITY No claims of any kind, whether as to materials delivered or for nondelivery of materials from Manufacturer, and whether arising in tort or contract, shall be greater in amount than the purchaseprice of the products in respect of which such damages are claimed;and the failure to give notice of the claim to Manufacturer where theorder was placed within sixty (60) calendar days from the date fixed for delivery shall constitute a waiver by Distributor of all claims inrespect of such Products. In no event shall Manufacturer be liable for special, indirect or consequential damages. Any claim with respect todefective Products or breach of warranty must be promptly made and shall apply to Products properly used, stored, applied and maintained. X. RELATIONSHIP BETWEEN MANUFACTURER AND DISTRIBUTOR Distributor is not an agent, employee or legal representative of Manufacturer, but an independent contractor. Distributor does not have any authority to assume or create any obligation or responsibility on behalf of Manufacturer or bind Manufacturer in any manner whatsoever. The relationship between manufacturer and Distributor is that of vendor and vendee. Distributor further agrees to defend, indemnify and hold Manufacturer harmless from and against any and all claims of third parties that would not have arisen but for an act or omission byDistribution that is contrary to the above-acknowledged relationship orany other term hereof. XI. TERM/CANCELLATION 1. This Agreement shall become effective as of the date hereof upon execution by an officer or other authorized representative of the Manufacturer in the United States and by an authorized representative of Distributor and shall remain in effect for _________ years thereafter unless previously terminated by either party for any otherreason upon not less than thirty (30) calendar days prior writtennotice to the other party. 2. Without limitation, the following events shall constitute grounds for termination by Manufacturer: (a) if Distributor shall file or have filed against it a petition in bankruptcy or insolvency or if Distributor shall make an assignment for benefit of its creditors of if Distributor „s viability as a going concern should, in Manufacturer „s judgment, become impaired; ((b) if Distributor fails to provide and maintain a proper and sufficient sales force;(c) if Distributor degrades and places in bad repute the name and reputation of Manufacturer expressly or by virtue of its methods of handling and/or promoting the Products;(d) if Distributor fails to meet any other of its obligations hereunder; or(e) if Distributor fails to meet minimum purchase goals, as defined in Exhibit C. 3. Except as may be otherwise determined pursuant to the laws of the jurisdiction where Distributor has its principle office, Manufacturer shall have no liability to Distributor by any reason of any termination or cancellation of this Agreement by Manufacturer,including without limitation, liability for direct or indirect damages on account of loss of income arising from anticipated sales, compensation,or for expenditures, investments, leases or other commitmentsor for loss of goodwill or business opportunity or otherwise. 4. Upon termination by either Manufacturer of Distributor, Manufacturer shall have the option of buying back from Distributor any new unsold Products purchased from Manufacturer, at the prices charged to Distributor, less Manufacturer „s then applicable restocking charge, if any, and less any additional expenses incurred by Manufacturerarising out of termination by Distributor XII. NONDISCLOSURE All information transferred or otherwise revealed to Distributor by Manufacturer under this Agreement, including but not limited to, engineering information, manufacturing information, technology, knowhow and price books or lists, will at all times remain Manufacturer „s property. Distributor shall at all times hold such informationconfidential and shall not disclose any such information if nototherwise within the public domain. Upon any termination of this Agreement, or as Manufacturer directs from time to time, Distributor shall promptly return all such information to Manufacturer, together with any copies or reproductions thereof. Distributor „s obligations under this section shall survive any termination of the Agreement. XIII. CERTAIN PRACTICES Distributor acknowledges that certain laws of the United States applicable to the Manufacturer, but which may not be applicable to Distributor, impose fines or penalties on Manufacturer in the event Manufacturer makes payments to foreign government officials for thepurpose of influencing those officials in making a businessdecision favorable to Manufacturer. In addition, Manufacturer andDistributor may be subject to similar laws or requirements of the country of destination of the Products. Distributor agrees upon reasonable request by Manufacturer to give Manufacturer reasonable written assurance that the Distributor has done nothing to cause liability to Manufacturer under the above-mentioned laws. XIV. NOTICES All notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been served or delivered1. when personally served or delivered to one party by the serving or delivering party; or2. when deposited in the mail, postage prepaid by the serving or delivering party addressed to the other party as follows: If to Manufacturer: ___________________________ ___________________________ ___________________________ ___________________________ If to Distributor: ___________________________ ___________________________ ___________________________ ___________________________ XV. VARIOUS This Agreement constitutes the entire and only agreement between the Manufacturer and Distributor with respect to its subject matter and there are no understandings or representations of any kind,express, implied, oral, written statutory or otherwise, not expresslyset forth herein. No alteration or modification of this Agreement shallbe binding unless in writing and signed by the party to be boundthereby. 1. This Agreement is not assignable in whole or in part by either party without express written consent of the other. 2. If Distributor consists of either two or more individuals or partners, each shall execute this Agreement on behalf of Distributor and each individual signing shall be jointly and severally liable to Manufacturer with respect to the obligations of Distributor under this Agreement. 3. This Agreement shall be interpreted and enforced in accordance with the laws of the United States of America and the official language of this Agreement for all purposes shall be English. DISTRIBUTOR: ___________________________ By: Title: MANUFACTURER ________________________ By: Title: Exhibit AProduct Line:Territory: Appendix BDistributor Price List Appendix CExclusionsSample Clause:Foreign Corrupt Practices Act BUSINESS PRACTICES A. In the performance of their obligations under this Agreement, Agent shall comply strictly with all laws, regulations, orders and policies having the force of law, of _____________________________, and where applicable, all laws, regulations, orders and policies having the force of law of any other jurisdiction, including without limitation, the United States of America. B. In furtherance of the Agent „s obligations hereunder, the Agent represents, warrants and agrees that, in connection with the performance of its duties hereunder, it shall not make any payments,in money or any other item of value or make any offers or promises topay any money or any other item of value to (a) any governmentofficial, (b) any foreign political party, (c) any candidate for foreign political officer or (d) any other person or entity, with the knowledge that such payment, offer or promise to pay will be made to any government official for the purpose of influencing such government official to make one or more business decisions favorable to Principal, Agent, or both. C. Agent further represents that no government official is a principal, owner, officer, employee or agent of any entity in which Agent has an interest, and no government official has any material financial interest in the business of the Agent. D. In the event of any breach by Agent of any of its representations, warranties or covenants contained in this Article, Principal may, in its sole discretion in addition to any other remedy provided herein or otherwise provided by law, immediately terminate this Agreement without notice or indemnity and in such event, Agent shall forever forfeit all rights to all fees and commissions which shall accrue and/or have been earned but which have not been paid as of the date of such termination. INDEMNIFICATION Notwithstanding the provisions set forth above in Article ____, Agent shall indemnify and hold harmless Principal against and from any claim,loss, damage or expense (including attorneys „ fees anddisbursements) (a) arising from any breach by Agent of anyrepresentation, warranty, covenant or other obligation of Agent under Article ____ of this Agreement, (b) resulting from any unlawful actcommitted by Agent or any agent of Agent thereof, or (c) which Principal may sustain by reason of any act, omission or is representation of Agent or Supervisor or any agent thereof. Territory and markets: The contract must clearly describe the distributor „s territory or business area. The contract should define the market or customer category. For example, you may want yourcompany to handle certain major customers (like national accounts)directly and the distributor to handle other outlets. Will theterritory be broad (such as the entire U.S.) or narrow (such as Hackensack, New Jersey)? Exclusive versus nonexclusive: The contract should specify whether the distributor is to have exclusive or nonexclusive rights to the company „s products in a particular territory. But be careful here, you don „t want to give exclusivity for one territory or marketif you face significant risk of lousy performance by thedistributor. If you are going to give exclusive rights, consider setting sales goals that the distributor has to meet in order to maintain exclusivity. Obligations of the distributor: The distributor „s obligations must be spelled out. Ideally, you want a clause that says the distributor must use its “best efforts to market your products,”although the distributor will resist this phrase. So, consider setting forth in the contract the specific steps that the distributor must take (contacting all the major potential customers, appointing dealers, preparing marketing material and promotional activities, and so on). Trademarks and logos: The Distribution Agreement should prohibit the distributor from using the company „s name, trademark, and logos in advertising, point of sale activities, and marketing materials except as provided in the Distribution Agreement or with the company „s prior written consent. This restriction is important to ensure that your company „s goodwill, reputation, and brand name are not hurt bythe distributor „s activities. Product issues: The contract needs to clearly identify the product or products that the Distribution Agreement covers. The agreement may also cover the issue of product availability and allocation of product among other distributors. The Distribution Agreement should also cover how the distributor will handle product inventory and what rights of return will be available. Service: You should decide the terms for servicing the product. Will the distributor handle product servicing or warranty claims? Does the distributor have the expertise to do so? How will you compensate the distributor for servicing the product? Price: The contract needs to provide a pricing section. Generally, the price follows a schedule or the seller announces the price from time to time. The seller then typically provides an agreed discount to the distributor. You need to maintain flexibility on the price you can charge for your products. Payment terms: Industry practices often dictate payment terms. Ideally, you would like to get an up-front deposit on a distributor „s order with full payment due either 30 or 60 days after shipment. Make sure that you are comfortable with the distributor „s creditworthiness. Contract term and termination: The distributor „s term of the appointment and how such a term can be terminated or reviewed are very important issues in a Distribution Agreement. Try to get theright to terminate the contract for any reason, as long as you give atleast 6090 days notice. Such a termination right gives you maximumflexibility to get out of a relationship that isn „t working. Also, add a provision that allows you to immediately terminate the contract if the distributor breaches its obligations or becomes bankrupt or insolvent. You must also address the potentially complicated issue of what happens after termination with respect to products, sums owed, and servicing obligations.
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