Exclusive Distribution Agreement

Exhibit 10(l)


Portions of this document indicated by an ++ have been omitted and filed
separately with the Securities and Exchange Commission pursuant to
a request for confidential treatment of such information


EXCLUSIVE DISTRIBUTION AGREEMENT


THIS EXCLUSIVE DISTRIBUTION AGREEMENT (this "Agreement") is made and entered into as of August 15, 2001 (the "Effective Date"), by and between INTELLIGENT SYSTEMS SOFTWARE, INC., a Florida corporation ("Manufacturer"), and INSTRUMENTARIUM IMAGING INC., a Delaware corporation ("Distributor").


WITNESSETH:


In consideration of the mutual covenants and conditions herein contained, and intending to be legally bound hereby, the parties mutually agree as follows:


1. Products and Territory.


1.1 Manufacturer hereby appoints Distributor as its exclusive authorized distributor in the United States, during the term of this Agreement, for the sale of Manufacturer's MammoReader system (the "MammoReader") and the other products described on Schedule A attached hereto (the "Products"), as revised and updated from time to time upon the mutual agreement of Manufacturer and Distributor. Distributor shall not, without the prior written consent of Manufacturer, sell, market or distribute any version of any Product other than the version Manufacturer shall designate from time to time as its most current version.


1.2 Distributor shall use its commercially reasonable best efforts to promote and sell the Products to the maximum number of customers for installation in the United States. Distributor agrees not to knowingly sell any Products for installation outside of the United States. In the event Distributor receives an inquiry from a potential purchaser of Products for installation outside of the United States, Distributor agrees to promptly forward the inquiry to Manufacturer.


1.3 Distributor hereby represents and warrants to Manufacturer that Distributor has sufficient financial resources, experience and qualified personnel to perform in full all of its financial, sales and operational obligations contained in this Agreement.


1.4 Distributor shall supply to Manufacturer, on a monthly basis, a 12-month rolling forecast of sales of Products (the "Forecast"). The first Forecast shall be delivered upon commencement of the first 12-Month Period and shall be for the period of the next three full calendar months following such date. Commencing on the first day of the calendar month following such commencement date, the Distributor shall provide a Forecast on the first day of each month for the third month thereafter. Each Forecast shall not be considered to constitute firm orders but rather non-binding forecasts based on Distributor's commercially reasonable estimates.


2. Period Definitions.


As used herein, "6-Month Period" and "9-Month Period" shall mean the 6 months and 9 months, respectively, following the date of U.S. Food and Drug Administration ("FDA") approval of the sale of the MammoReader in the United States (the "Approval Date"). As used herein, "12-Month Period" shall mean the 12 months following the date of such approval and the subsequent 12-month periods following such initial 12-month period. "Second Year 6-Month Period" and "Third Year 6-Month Period" shall mean the 6 months periods beginning on the commencement date of the second 12-Month Period and the third 12-Month Period, respectively.


3. Prices and Payment.


3.1 Distributor shall order Products from Manufacturer by submitting a written purchase order identifying the type and number of units of Products ordered, requested delivery dates and any export/import information required to enable Manufacturer to fill the order (the "Purchase Order"). All orders for Products are subject to acceptance by Manufacturer at Manufacturer's office at 6405 Congress Avenue, Boca Raton, Florida 33487. Manufacturer shall have no liability to Distributor with respect to purchase orders which are not accepted.


3.2 The price of each Product sold to Distributor shall be the list price therefor set forth on Schedule A, less ++. Such list price may be decreased from time to time by Manufacturer in its sole discretion upon 30 days prior written notice to Distributor. Such list prices may be increased from time to time by mutual agreement of Manufacturer and Distributor.


3.3 In consideration of the exclusive distributorship granted hereby, Distributor agrees to resell the Products for the list prices set forth on Schedule A.


3.4 The ultimate shipment of orders to Distributor shall be subject to the right and ability of Manufacturer to make such sales and obtain required licenses and permits, under all applicable statutes, rules and regulations of the United States and agencies or instrumentalities thereof, including the FDA, presently in effect or which may be in effect hereafter.


3.5 (a) Distributor hereby agrees (i) to comply with decrees, statutes, rules and regulations of the United States and agencies or instrumentalities thereof in the performance of its duties under this Agreement; (ii) to maintain the necessary records to comply with such statutes, rules and regulations; and (iii) to indemnify and hold harmless Manufacturer from any and all fines, damages, losses, costs and expenses (including reasonable attorneys' fees) incurred by Manufacturer as a result of any breach of this subsection by Distributor.


(b) Manufacturer hereby agrees (i) to comply with decrees, statutes, rules and regulations of the United States and agencies or instrumentalities thereof in connection with the manufacture and sale of the Products and in the performance of its duties under this Agreement, (ii) to maintain the necessary records to comply with such statutes, rules and regulations; and (iii) to indemnify and hold harmless Distributor from any and all fines, damages, losses, costs and expenses (including reasonable attorneys' fees) incurred by Distributor as a result of any breach of this subsection by Manufacturer.


[++ represents confidential treatment request]


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3.6 Unless Distributor requests otherwise and Manufacturer agrees in writing, all Products ordered by Distributor shall be packed for shipment and storage in accordance with Manufacturer's standard commercial practices, either for shipment to Distributor or for direct drop shipment directly to purchasers from Manufacturer. Manufacturer shall deliver the Products into the possession of a common carrier designated by Distributor and reasonably acceptable to Manufacturer, no later than the date specified for such delivery on the relevant purchase order for such Products. Risk of loss and damage to a Product shall pass to Distributor upon the delivery of such Product to the common carrier F.O.B. Manufacturer's Boca Raton, Florida shipping facility. All claims for non-conforming shipments must be made in writing to Manufacturer within 10 days of the completion of the installation of the Products, but in no instance later than 21 days after such delivery of the Product to the common carrier.


3.7 All amounts due and payable with respect to Products delivered by Manufacturer shall be paid in full within 30 days after the date of Manufacturer's invoice covering such Products. All such amounts shall be paid in United States dollars by wire transfer, to such bank or account as Manufacturer may from time to time designate in writing to Distributor, or by corporate check. No part of any amount payable to Manufacturer hereunder may be reduced due to any counterclaim, set-off, adjustment or other right which Distributor might have against Manufacturer, any other party or otherwise. Any payments not paid by Distributor within the 30-day period shall bear interest at the rate of one percent per month commencing on the close of business the day immediately following the day on which the payment is due.


3.8 In the event of any discrepancy between any purchase order accepted by Manufacturer and this Agreement, the terms of this Agreement shall govern.


3.9 Distributor shall be responsible for all expenses of sale and shipment of Products, including freight, insurance, sales taxes and customs duties. Distributor shall reimburse Manufacturer for any such expenses paid by Manufacturer upon receipt of Manufacturer's invoices therefor.


3.10 Manufacturer agrees to be responsible to pay any rebates payable to group purchasing organizations with respect to resales of Products made by Distributor, provided, that Manufacturer is provided a copy of the group purchasing organization's invoice at the time Manufacturer accepts the purchase order for such Products.


4. Other Obligations of Distributor.


4.1 Distributor shall employ competent and experienced personnel to market the Products.


4.2 Distributor shall, at its own expense, install and set up all of the Products sold by it at its customers' premises and train the customers' personnel in the proper operation of the Products.


4.3 Distributor shall advertise and otherwise promote the sale of the Products, including, without limitation, the establishment of promotional campaigns, advertisement of the Products in trade journals and attendance at trade shows, and shall, within 30 days of the commencement of each 12-Month Period, provide Manufacturer with Distributor's promotional strategic plan (and any amendments thereto) for Manufacturer's review.


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4.4 Distributor shall be required to use the brand name of the Product, as chosen solely in the discretion of Manufacturer (the "Brand Name"), on all packaging, promotional materials, advertising materials, press releases, articles and any other written materials in which the Product appears or is mentioned. Anytime the Brand Name is required to appear, Manufacturer's name shall also appear clearly indicating that Manufacturer is the manufacturer of the Product.


5. Manufacturer's Obligations.


Manufacturer shall provide Distributor, without charge, with such marketing, technical and sales assistance as Manufacturer may in its reasonable discretion consider necessary to assist with the promotion of the Products. Manufacturer shall also provide Distributor with such amount of Product training as Manufacturer determines is reasonably necessary to assist Distributor in effectively carrying out its obligations under this Agreement. Manufacturer shall be responsible for developing and printing sales and marketing literature for the Products and shall provide Distributor with reasonable quantities of such literature to facilitate Distributor's sales efforts.


6. Relationship of the Parties.


6.1 Distributor shall be considered to be an independent contractor of Manufacturer. The relationship between Manufacturer and Distributor shall not be construed to be that of employer and employee, nor to constitute a partnership, joint venture or agency of any kind.


6.2 Distributor shall pay all of its expenses, including without limitation all travel, lodging and entertainment expenses incurred in connection with its services hereunder and all training provided hereunder. Manufacturer shall not reimburse Distributor for any expenses.


6.3 Neither party shall have the right to enter into any contrac ...