EXCLUSIVE DISTRIBUTION AGREEMENT

A. 

The MANUFACTURER is the sole owner of all rights, title, and interest in and to certain inventions, technology, and know-how relating to its hyperthermia cancer therapy products, namely the BSD 2000 and BSD 500 as well as the tumor ablation products (MicroThermX) to be introduced to the market (hereinafter referred to as "PRODUCTS") and other applications, and MANUFACTURER has the right to grant exclusive distributorships thereunder.

B. 

DISTRIBUTOR is now desirous of acquiring from MANUFACTURER an exclusive distributorship to market and sell the PRODUCTS.

C. 

The MANUFACTURER is willing to grant an exclusive distributorship based upon the terms and conditions hereafter set forth.

1.1 

The term "TECHNOLOGY" related to hyperthermia and ablation cancer therapy products as used in this Agreement, shall mean any confidential or proprietary technical information, know-how, trade secrets, written documentation, machine readable documentation, detailed drawings, data, methods, processes, specifications, quality and inspections standards, sales literature, advertising and marketing materials, reports and training materials.

2.1 

Subject to the other terms and conditions set forth herein, MANUFACTURER hereby grants to DISTRIBUTOR the right to sell, and otherwise to commercialize the Hyperthermia PRODUCTS for sales in Russia as well as all European Countries ( with the exception of Poland )  ( all hereinafter referred to as "TERRITORY"). DISTRIBUTOR agrees that it will not make sales of these products except in the TERRITORY unless prior authorization is granted on specific projects in writing from MANUFACTURER.

2.2 

Subject to the other terms and conditions set forth herein, MANUFACTURER hereby grants to DISTRIBUTOR the right to sell, and otherwise to commercialize it’s Tumor Ablation PRODUCTS for sales in Germany, Switzerland and Austria.  DISTRIBUTOR agrees that it will not make sales of this product except in the TERRITORY unless prior authorization is granted on specific projects in writing from MANUFACTURER.   

3.1 

DISTRIBUTOR covenants that it will in good faith commit itself to a thorough, vigorous, and diligent program of exploiting the PRODUCTS hereof in accordance with the best business customs of the industry, exerting its best efforts, so that full utilization of the PRODUCTS will result.  This shall include exposure of PRODUCTS to hospitals, medical clinics, individual medical practitioners, and appropriate medical equipment sub-dealers, outlets and markets throughout the country(s) in section 2.

3.2 

DISTRIBUTOR further agrees to commit to annual sales projections established in writing by mutual agreement by the two parties.  In the event that DISTRIBUTOR does not, at any future date, fulfill its projected sales or shows lack of progress to that end, MANUFACTURER shall have the right, at it’s option to terminate this Agreement pursuant to section 6.  Failure to reach agreement on sales projections may also be cause for termination.

3.3 

DISTRIBUTOR further agrees to provide technical service and support for the PRODUCTS sold in the TERRITORY.  To this end, DISTRIBUTOR will comply with the training requirements outlined in section 12 and further agrees to order and keep in stock sufficient spare parts to be able to service equipment in a timely manner.   Failure to provide this support and/or comply with the training requirements shall be cause for termination.

4.1 

Current pricing as of this contract to the DISTRIBUTOR shall be per quotation from MANUFACTURER or via published price lists from MANUFACTURER.  DISTRIBUTOR shall receive 25% discount off list prices at time of purchase order.  See attachment for current MANUFACTURER list pricing.

4.2 

From time to time MANUFACTURER shall have the right to change prices of PRODUCTS.  Unless otherwise specified by MANUFACTURER, in   writing, new published pricing shall be effective 90 days from the date of issue of new price lists.

4.3 

DISTRIBUTOR shall purchase all spare and replacement parts directly from MANUFACTURER

5.1 

DISTRIBUTOR agrees that all purchase orders for PRODUCTS shall be purchased with a 50% payment at time of placement of purchase order and 50% payment at time of shipment of product, according to the terms set forth in MANUFACTURER's quotation as agreed by both parties unless other terms or conditions are agreed upon in writing by DISTRIBUTOR and MANUFACTURER prior to new orders being placed.  Spare parts orders shall be payable net 45 days after shipment.

5.2 

All moneys payable hereunder shall be paid in United States Dollars at such locations in the United States of America as MANUFACTURER may from time to time designate; unless, any payments due and payable in the United States is not at that time permitted by law or by reason of the decision of any competent authority in the country involved, then, in such event, DISTRIBUTOR shall discharge its obligation for payment in such other currency and at such place as may be permitted and agreed to by MANUFACTURER.

6.1 

With respect to the DISTRIBUTOR and rights granted hereby, this Agreement shall commence upon the executing hereof and, unless terminated earlier, shall continue year to year with automatic 12 (twelve) month extensions if all conditions of this Agreement have been met, subject to new sales projections which will serve as minimum purchase volume targeted amounts (as mutually agreed) as described in Subparagraph 3.1 and 3.2.

6.2 

If any payment to MANUFACTURER is in arrears for thirty (30) days after the due date, or if DISTRIBUTOR fails to achieve minimum sales performance or defaults in performing any of the other terms of this Agreement, and continues in default for a period of fifteen (15) days after written notification as provided herein, or if DISTRIBUTOR becomes insolvent or files for bankruptcy or enters into an agreement with creditors, or if a receiver is appointed for it, MANUFACTURER shall have the right to terminate this Agreement upon giving a fifteen (15) day notice to DISTRIBUTOR.

6.3 

As a course of normal business, the MANUFACTURER has reasonable expectations in regards to performance, communications, promotions, etc.  If, at any time during this agreement, the DISTRIBUTOR fails to meet these expectations, the MANUFACTURER shall promptly notify the DISTRIBUTOR in writing.  Failure by the DISTRIBUTOR to remedy the situation within 30 days to the satisfaction of the MANUFACTURER shall be sufficient grounds for immediate termination of this agreement

6.4 

Subsequent to the termination of this Agreement as provided for in Subsection 6.1 - 6.3, DISTRIBUTOR agrees that it will not engage in the use, sale or other commercialization or in any other manner for it's own benefit or any person, firm, corporation, association, or other entity of the TECHNOLOGY for a period of five (5) years and that it will not sell the PRODUCTS or competitive products during that period.  This excludes any PRODUCTS that the DISTRIBUTOR currently manufactures, or subsequent developments of this technology that is not derived from technology offered by the MANUFACTURER. DISTRIBUTOR agrees that it will not use its knowledge of the MANUFACTURER’S systems to build or develop competing products that use phased–array technology to treat deep tumors or any other software or hardware technology utilized by the MANUFACTURER of which the DISTRIBUTOR becomes aware because of its activities associated with this agreement.  At the termination of this agreement, any items remaining in stock may be returned to the MANUFACTURER at a mutually agreed upon price.

6.4

Upon termination of this Agreement for any reason, nothing herein shall be construed to release either party of any obligation that matured prior to the effective date of such termination, and any unpaid payments under this Agreement shall become immediately due and payable.

6.5 

Notwithstanding the above, DISTRIBUTOR shall have no obligation to purchase the minimum purchase requirements herein for any period after the day of notification of termination by DISTRIBUTOR or notification of default by MANUFACTURER, unless such default is remedied as contained herein.  DISTRIBUTOR shall not be liable to purchase any units beyond those already ordered and paid for in the event of termination or default.

7.1 

Should MANUFACTURER or DISTRIBUTOR become aware of any infringement or alleged infringement in the country in paragraph 2, that party shall immediately notify the other party in writing of the name and address of the alleged infringer, the alleged acts of infringement, and any available evidence of infringement.  MANUFACTURER and DISTRIBUTOR agree to work jointly (on a best efforts basis) to prevent any infringement and defend the patent or any additional patent MANUFACTURER may apply for in the future upon which the TECHNOLOGY is based.