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DISTRIBUTION AGREEMENT

Distribution Agreement

DISTRIBUTION AGREEMENT
 | Document Parties: SYNOVA HEALTHCARE GROUP INC | A-FEM MEDICAL CORPORATION You are currently viewing:
This Distribution Agreement involves

SYNOVA HEALTHCARE GROUP INC | A-FEM MEDICAL CORPORATION

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Title: DISTRIBUTION AGREEMENT
Date: 4/17/2006
Law Firm: Blank Rome    

DISTRIBUTION AGREEMENT
, Parties: synova healthcare group inc , a-fem medical corporation
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<PAGE>
                                                                   Exhibit 10.23
                                                                   -------------


CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS ARE MARKED AS "[XXXX]" ALONG WITH A
FOOTNOTE INDICATING THAT THE INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. AN UNREDACTED COPY OF THIS EXHIBIT HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT.


                             DISTRIBUTION AGREEMENT



BETWEEN:       A-FEM MEDICAL CORPORATION ("A-Fem"), a Nevada corporation;

AND:           SYNOVA HEALTHCARE, INC. ("Distributor"), a Delaware corporation.

DATED:         Effective December 5, 2005 (the "Effective Date").


R E C I T A L S:
----------------

         A. A-Fem is in the business of developing, manufacturing and selling
non-invasive medical diagnostics and healthcare-related products, including the
product listed in Exhibit A (the "Licensed Product").

         B. Distributor is in the business of marketing, distributing and
selling non-invasive medical diagnostics and healthcare-related products.

         C. The parties desire that A-Fem deliver the Licensed Product to
Distributor, which will market, distribute and sell it in accordance with the
terms and conditions set forth in this Distribution Agreement (this
"Agreement").


A G R   E E M E N T:
-------------------

         In consideration of the foregoing Recitals (which are incorporated in
this Agreement by this reference) and the mutual covenants, terms and conditions
set forth below, the parties agree as follows:

         1. APPOINTMENT. A-Fem appoints Distributor as exclusive distributor of
FSH-related rapid diagnostics for both retail and professional sale of the


Page 1 -- DISTRIBUTION AGREEMENT

<PAGE>


Licensed Product(s) within the following countries (the "Territory"), upon the
terms and conditions set forth in this Agreement:

                  -         United States of America
                  -         Canada
                  -         Mexico
                  -         All countries of Central America

Distributor may not sell the Licensed Product in any area outside the Territory
(including sales within the Territory with knowledge that resales of them
outside the Territory will be offered or made) without A-Fem's prior written
consent in each instance.

         2. ORDERS. Distributor shall purchase, and A-Fem shall supply, or cause
to be supplied, to Distributor such quantities of the Licensed Product as may be
ordered by Distributor from time to time, subject to the other terms and
conditions of this Agreement. The parties agree that Distributor will order at
least the following number of Licensed Products during each 12-month period of
this Agreement, commencing on the Effective Date (each, a "Distribution Year"):

                  Quantity                   Distribution Year
                   --------                   -----------------
                  100,000                    First 12 Months
                  250,000                    Second 12 Months
                  350,000                    Third 12 Months
                   500,000                    Fourth 12 Months
                  600,000                    Fifth 12 Months

The foregoing schedules reflects the anticipated time required to obtain 501(k)
registration from the United States Food and Drug Administration (the "FDA") for
the Licensed Product by Distributor prior to offering the Licensed Product for
sale in general commerce. Distributor is not required to place orders until
receipt of the 501(k) registration.

         3. TERM. This Agreement and the appointment of Distributor under it
shall continue for a term of five years commencing on the Effective Date of this
Agreement, but subject to earlier termination as provided in Section 14 below
during such initial term (or during any renewal term). This Agreement may be
renewed for consecutive renewals of two years each upon the parties' written
agreement on pricing (subject to the limitations of Section 4.2 below) and
minimum order amounts at least 90 days prior to the end of the initial and each
renewal term, as applicable, except that either party may terminate this
Agreement for any reason or for no reason at the end of the initial or any
renewal term by giving the other party not less than 90 days' written notice of
termination prior to the end of the initial or any renewal term.




Page 2 -- DISTRIBUTION AGREEMENT
<PAGE>


         4. PURCHASE PRICE.

                  4.1 Purchase Price. A-Fem shall charge Distributor, and
Distributor shall pay for the quantities of Licensed Product ordered by
Distributor pursuant to this Agreement, at the purchase prices set forth in
Exhibit A (the "Purchase Price"). The Purchase Price is and shall be FOB place
of shipment; Distributor shall be responsible for, or reimburse A-Fem for if
invoiced, insurance, freight and applicable taxes.

                  4.2 Price Adjustment. Except as otherwise set forth in this
Section 4.2, no adjustment in the Purchase Price shall be permitted during the
initial term of this Agreement. The Purchase Price for the Licensed Product will
be firm for the first three Distribution Years (the "Fixed Price Period"). After
this period, but not more than once any calendar year, A-Fem may adjust the
Purchase Price upon at least 90 days' advance written notice to Distributor.
Adjusted Purchase Prices shall apply to Licensed Product orders placed by
Distributor during the period for which the Purchase Price is adjusted. A-Fem
will adjust the Purchase Price only to the extent such adjustment directly
correlates to price changes in raw materials utilized by or charged to A-Fem in
the manufacturing of the Licensed Product; provided, however, in no event shall
any increase in the Purchase Price exceed the previous Distribution Year
Purchase Price by greater than [XXXX](1).

                  4.3 Payment. Distributor agrees to pay each invoice of A-Fem
within 60 days after Distributor's receipt of the Licensed Products that are the
subject of the invoice. If Distributor reasonably disputes any invoice for good
cause and in good faith, Distributor will notify A-Fem within 10 days of invoice
receipt, stating the specific reason(s) for the dispute.

                  4.4 Late Payment. Unpaid amounts will bear interest at 1.0%
per month (12% per annum) from the due date until paid in full, calculated on a
non-compounding daily basis, in addition to A-Fem's other rights and remedies
set forth in Sections 14 and 15 below. However, if any payment by Distributor
would result in a payment of interest in excess of the maximum rate of interest
legally permissible, then Distributor's obligation to make such payment shall be
deemed automatically reduced to such maximum rate, so that in no event will
Distributor be obligated to make any payment which would result in the payment
of interest in excess of such maximum rate. Any such excess payments shall be
applied as prepayments on orders made after those for which the interest was
charged.

                  4.5 Title; Risk of Loss. Title to ordered Licensed Products
will pass to Distributor upon the later of tender of delivery or payment. Risk
of loss will pass to Distributor upon tender of delivery.

         5.        OPERATIONS.

                  5.1 Orders. Distributor will place orders for Licensed
Products under written purchase order forms, specifying quantities ordered,

----------
(1) Omitted and filed separately with the Securities and Exchange Commission
    under an application for confidential treatment.

Page 3 -- DISTRIBUTION AGREEMENT
<PAGE>


delivery dates, and delivery and shipping instructions. Any conflict between the
provisions of this Agreement and any purchase order or any acknowledgement,
acceptance or other document of A-Fem shall be resolved in favor of this
Agreement.

                  5.2 Acceptance of Orders; Filling. All orders received by
A-Fem shall be subject to acceptance by A-Fem. A-Fem shall notify Distributor in
writing within 45 days after receiving the order from Distributor of the
quantities of Licensed Products that A-Fem will be able to supply. A-Fem will
use its best efforts to fill accepted orders as promptly as practicable, subject
to delays caused by government orders, actions or requirements, transportation
conditions, inclement weather, labor or material shortage, strike, riot,
terrorist act, fire, natural disaster or other cause beyond A-Fem's control. In
all cases, A-Fem will use its best efforts to advise Distributor in advance of
any inability to make full and timely delivery of Licensed Products ordered by
Distributor. A-Fem may ship partial orders, and Distributor shall make payment
therefor, provided the entire order is delivered as provided above.

                  5.3 Distributor's Efforts, Facilities and Personnel.
Distributor agrees to use its best efforts to promote demand for and sale of the
Licensed Product throughout the Territory. Distributor will at all times
maintain sales, warehouse, distribution and other facilities and properties as
are adequate and appropriate to perform Distributor's duties under this
Agreement. Distributor will appoint, train and support such sales
representatives and other marketing personnel as are adequate and appropriate to
serve the Territory for the Licensed Product. A-Fem may, through its employees
or authorized representatives and at A-Fem's sole expense, inspect Distributor's
facilities and properties, wherever located, to determine and assure
Distributor's compliance with the terms of this Agreement. Distributor shall be
responsible for and pay all costs of promoting and advertising the Licensed
Product within the Territory.

                   5.4 Prices Charged by Distributor. Distributor may charge to
and collect from its purchasers such prices for the Licensed Products as
Distributor may determine, provided that Distributor otherwise complies with
applicable laws. Distributor may charge to and collect from its purchasers
freight, taxes and related costs incurred by Distributor.

                  5.5 Common Carriers. Whenever A-Fem shall deliver or cause to
be delivered to a common carrier any Licensed Products ordered by Distributor,
whether or not the particular carrier has been designated in the shipping or
routing instructions of Distributor, A-Fem shall not be responsible for any
delays or damages in shipment, and the common carrier is hereby declared to be
the agent of Distributor.

         6. MANUFACTURE, PACKAGING AND QUALITY ASSURANCE.

                  6.1 Specifications. A-Fem and Distributor shall reasonably
agree in writing on the product, labeling, packaging and performance


Page 4 -- DISTRIBUTION AGREEMENT
<PAGE>


specifications (the "Specifications") to be established for the Licensed Product
to the extent not established by the terms of this Agreement.

                  6.2 Manufacture. A-Fem shall manufacture or cause to be
manufactured the Licensed Products in accordance with all applicable laws and
regulations, including without limitation the current and any future quality
systems and good manufacturing practices regulations under 21 CFR Part 820, as
amended, to the extent such regulations are applicable to the Licensed Product.

                  6.3 Product Description and Packaging. A-Fem shall package and
supply the Licensed Products in the manner reasonably agreed upon by the
parties. The agreed Purchase Price is based on four-color printing of packaging.
Any additional colors will entitle A-Fem to increase the Purchase Price. To the
extent that A-Fem is to use particular art work in connection with the packaging
of the Licensed Products, then unless otherwise agreed upon by the parties,
Distributor will specify and provide A-Fem with such art work. Distributor shall
provide English translations for any art work/packaging in Spanish, French or
other language.

                  6.4 Changes to Product. A-Fem shall notify Distributor in
writing at least 90 days prior to any proposed changes in its manufacturing
procedures, materials, equipment or processes which affect Licensed Product fit,
form or function. As and to the extent reasonably agreed upon in writing by the
parties, A-Fem may change the Licensed Product and any Specifications related to
it.

                  6.5 Rejected Goods/Shortages.

                      (a) Distributor shall notify A-Fem of any Licensed
Products shipped to Distributor that Distributor believes do not conform to the
Specifications or are the subject of a manufacturing or other defect, or of any
shortage in quantity of any Licensed Product shipment (each, a "Rejection
Event"), within 90 days after Distributor's receipt of such shipment.

                      (b) Upon A-Fem's confirmation of a Rejection Event, A-Fem
shall, in its discretion and at its sole expense, replace all such Licensed
Product or make up the shortage within 30 days of receiving notice of the
Rejection Event from Distributor. A-Fem shall make mutually agreeable
arrangements with Distributor for the return or destruction of any rejected
Licensed Product, with the actual reasonable cost thereof to be paid or
reimbursed by A-Fem. Distributor shall have no claim against A-Fem for any
Rejection Event except for defect or shortage attributable to A-Fem and as
expressly provided in this Agreement.

                  6.6 Expiration Period. All Licensed Products supplied by A-Fem
to Distributor shall have an expiration date (assuming storage and shipment
under normal environmental conditions) of not less than 22 months after the date
of delivery of such Licensed Product to Distributor, unless advance written
approval is obtained from Distributor by A-Fem to ship Licensed Product with a
shorter expiration period.

                   6.7 Audit. Distributor reserves the right to audit A-Fem's
facilities, at Distributor's sole expense, as reasonably necessary to verify
compliance by A-Fem with the terms and conditions of this Agreement. Exercise by
Distributor of such right shall be subject to the following conditions: (a)
without good cause shown (for example, A-Fem's failure to remedy problems),
Distributor shall be entitled to conduct only one audit per Distribution Year;
(b) Distributor audits shall be conducted only after at least 30 days' advance


Page 5 -- DISTRIBUTION AGREEMENT
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written notice of the audit is provided by Distributor to A-Fem; and (c) all
information gathered and data reviewed during any such audit shall be
"Confidential Information" subject to the provisions of Section 12 below. A-Fem
shall at all times maintain complete and accurate books and records pertaining
to performance of its obligations set forth in this Agreement. A-Fem shall
provide commercially reasonable cooperation to Distributor in the performance of
audits by or on behalf of Distributor, including without limitation, providing
reasonable access to documents relevant to the manufacture of Licensed Products
sold to Distributor, subject to the provisions of Section 12.

         7. CUSTOMER SUPPORT, COMPLAINTS AND RETURNS.

                  7.1 Customer Complaints. A-Fem shall respond in writing to any
inquiry, customer complaint, nonconformity or corrective or preventative action
request with respect to the Licensed Products the subject of this Agreement
within 10 days after written request therefor. A-Fem shall promptly provide a
copy of all such writings to Distributor.

                  7.2 Returned Product. In the event any customer of Distributor
rejects or returns a Licensed Product to Distributor as a result of performance
problems or other deficiencies, noncompliance of any Licensed Product with its
Specifications, within two years after shipment of same to Distributor, and such
deficiency is validated by A-Fem, A-Fem shall, at its sole expense, promptly
replace such Licensed Product and ship the Licensed Product in accordance with
Distributor's reasonable instructions therefor. A-Fem shall not be responsible
for the cost of shipment to A-Fem of customer returns. A-Fem shall not repackage
any returned Licensed Product for sale to Distributor. Distributor's sole
remedies for defective Licensed Products are set forth in Sections 6.5 above and
this Section 7.2.

         8. LIMITED LIABILITIES AND WARRANTIES OF A-FEM AND DISTRIBUTOR.

                   8.1 A-Fem represents and warrants to Distributor that: (a)
each lot of Licensed Product delivered pursuant to this Agreement will continue,
until the applicable expiration date, to conform to the Specifications, and
shall be free from defects in materials and workmanship; (b) A-Fem has good and
marketable title to the Licensed Product, which shall be transferred to
Distributor as set forth in this Agreement; and, (c) no Licensed Product, and no
exercise by Distributor of any of the rights granted to it under this Agreement,
misappropriates, infringes, violates, or interferes with any patent, trademark,
copyright, trade secret, or other intellectual property or proprietary right of
any person.

                  8.2 Neither party shall be liable to the other for any
indirect, special, consequential, incidental, punitive, extra-contractual, or
exemplary damages of any kind arising from or connected with this Agreement,
including, without limitation, lost profits, lost revenues, or loss of business,
regardless of legal theory (including, without limitation, strict liability or
negligence), whether or not foreseeable, even if either party has been advised
of the possibility thereof and even if the remedies otherwise provided by this
Agreement fail of their essential purpose.


Page 6 -- DISTRIBUTION AGREEMENT
<PAGE>


                  8.3 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH PARTY
DISCLAIMS ALL WARRANTIES WITH RESPECT TO THE LICENSED PRODUCT, EXPRESS OR
IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR
PURPOSE. Distributor agrees that it is not authorized to make any warranty or
representation respecting A-Fem's products.

         9. REGULATORY MATTERS.

                  9.1 510(k). Distributor shall be responsible for and bear the
cost of any 510(k) registrations, filings or updates necessary with the FDA
and/or United States Center for Disease Control in order for Distributor to
market the Licensed ProductS in the United States. Distributor shall own all
such 501(k) registrations, updates and filings.

                  9.2 Regulatory Inquiry. Each party shall promptly and in any
event within 15 days after receipt of any notice of inquiry from any local,
state, national or international regulatory agency or government department,
inform the other in writing of such formal or informal inquiry relating to any
Licensed Product.

                  9.3 Recall. If any Licensed Product defect or any final,
non-appealable governmental or court action or any voluntary action by reason of
a Licensed Product defect results in: (a) the recall, destruction or withholding
from market of any Licensed Product sold under this Agreement (a "Recall"); or
(b) institution of a field correction of any Licensed Product sold under this
Agreement (a "Field Correction"), A-Fem shall bear all costs and expenses of and
shall be responsible for all corrective actions and agency communications
associated with such Recall or Field Correction other than those by reason of
Distributor's negligence or misconduct. Distributor shall provide A-Fem with
reasonable access to those customers of Distributor affected by the Recall or
Field Correction, to the extent practicable, and all information received or
compiled by Distributor from such customers or otherwise with respect to such
Recall or Field Correction, except as otherwise prohibited by law. Upon
institution of a Recall or Field Correction, A-Fem shall within 15 days
communicate its intention to Distributor and provide Distributor with data and
information relating to the Recall or Field Correction and a reasonable
opportunity to evaluate and comment on its implementation.

                  9.4 Medical Device Reports. A-Fem shall notify Distributor in
writing within 30 days of any event or complaint that gives rise or could give
rise to the need to file a Medical Device Report (an "MDR") within the meaning
of the U.S. Federal Food, Drug and Cosmetic Act, as amended (the "Act"), with
respect to the Licensed Product or the manufacture, distribution or use thereof
in accordance with the MDR regulation, 21 CFR Part 803, as amended. If, as a
result of any corrective action or any final, non-appealable or non-appealed
governmental or court action, an MDR is required to be issued for the Licensed
Products sold under this Agreement, A-Fem shall bear the costs and expenses of
and shall be responsible for all corrective actions associated with such MDR.



Page 7 -- DISTRIBUTION AGREEMENT
<PAGE>


                  9.5 MSDS. A-Fem shall promptly provide to Distributor upon
request all required Material Safety Data Sheets ("MSDS") for any Licensed
Product containing hazardous che


 
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