EXHIBIT 10(aa) ENZO DIAGNOSTICS, INC. - DAKO A/S DISTRIBUTORSHIP AGREEMENT THIS AGREEMENT, effective upon acceptance by both parties below by and between ENZO DIAGNOSTICS, INC. ("ENZO"), a New York corporation having its principal place of business at 60 Executive Boulevard, Farmingdale, New York 11735, and DAKO A/S ("DAKO") a private Danish Corporation having its principal place of business at Produktionsvej 42, DK-2600 Glostrup, Denmark and its American subsidiary, DAKO CORPORATION a California corporation having its principal place of business at 6392 Via Real, Carpinteria, California 93013. WHEREAS, ENZO owns rights to certain patents and patent applications listed in EXHIBIT A ("PATENTS"); WHEREAS ENZO manufactures and/or sells certain products, including products covered by claims of PATENTS ("PRODUCTS") listed in EXHIBIT B and products not covered by claims of PATENTS listed in EXHIBIT C; WHEREAS DAKO wishes to market and distribute some of said PRODUCTS listed in EXHIBIT B and products listed in EXHIBIT C as agreed upon; NOW, THEREFORE, in consideration of the good and valuable mutual agreements hereinafter set forth, the parties hereto agree as follows: DEFINITIONS: DAKO Affiliate means an entity controlled by or under common control with DAKO as listed in EXHIBIT D. For purposes of this AGREEMENT, control shall mean the ownership of a majority of the voting equity interest. DAKO Distributor means a local company, outside the countries in which a DAKO Affiliate is located, in which DAKO does not sell directly or through a DAKO Affiliate. Dako Distributors listed in EXHIBIT D have rights to sell only in the country in which they are located. DAKO means DAKO A/S, including DAKO Affiliates and DAKO Distributors. 1. Distributor Appointment ENZO hereby appoints DAKO to act as its nonexclusive distributor worldwide for the distribution and sale of such PRODUCTS (EXHIBIT B) and products (EXHIBIT C) as agreed upon, and DAKO agrees to act as such distributor under the terms and conditions set forth herein. DAKO hereby agrees: a. not to purchase any PRODUCTS from other suppliers; b. not to manufacture PRODUCTS; c. to rely on ENZO as its sole source of PRODUCTS; d. not to use any PRODUCT to manufacture new or other PRODUCTS; e. that all PRODUCTS distribributed by DAKO are for research use only and are not intended for or to be used for diagnostic or therapeutic purposes; and f. that except for DISTRIBUTION under the terms and conditions as set forth in this AGREEMENT, purchase does not include any right or license to exploit these PRODUCTS commercially, including any right to sell these PRODUCTS to other distributors who are not DAKO Affiliates or DAKO Distributors (EXHIBIT D) and that any other commercial use or development of these PRODUCTS without the express written authorization of ENZO is strictly prohibited. 2. Relationship between ENZO and DAKO Nothing herein creates or constitutes a partnership or an agreement of agency between the parties with respect to any activities whatsoever. The relationship between ENZO and DAKO shall be that of seller and buyer, and neither party shall conclude any contract or agreement or make any commitment, representation or warranty which binds the other party or otherwise act in the name of or on behalf of the other party. This AGREEMENT may not be assigned or otherwise transferred by DAKO without the prior written consent of ENZO. Any attempted assignment or transfer without such consent shall be void. DAKO certifies that past sales of PRODUCTS as of * were * . A one-time payment of * will constitute full consideration for damages of past infringement. ENZO and DAKO agree that the distribution relationship between them does not constitute, nor does it imply, a license of any of ENZO's technology or patents, nor does it abrogate any of ENZO's rights under its patents. ENZO maintains full rights under its PATENTS. The foregoing statements are paramount to this AGREEMENT. - ---------- * The information omitted is confidential and has been filed separately with the Commission pursuant to Rule 406. 2 3. PRODUCTS and Price and Payment PRODUCTS covered by this AGREEMENT are listed in EXHIBIT B and EXHIBIT C attached hereto. The price to DAKO for each product shall be * times the current domestic (i.e. United States) retail price as reflected by the prices in ENZO's most recently published price list. When yearly retail price of sales of these products by DAKO is greater than 5 million dollars (US), the price to DAKO for each product shall be * times the current domestic (i.e. United States) retail price as reflected by the prices in ENZO's most recent published price list. The current domestic retail prices at the time of execution of this AGREEMENT are listed in EXHIBIT B and EXHIBIT C. Prices to DAKO may be adjusted no more than once during a calendar year. ENZO has the right to adjust prices to DAKO after providing DAKO with forty-five (45) days written notice. Any price adjustment will affect future purchases, but will not affect those already under existing firm purchase order commitment. ENZO or DAKO may propose in writing to add, to modify or to delete PRODUCT or products in EXHIBIT B or EXHIBIT C. Both ENZO and DAKO must agree in writing to such additions, deletions or modifications of PRODUCTS in EXHIBITS B or C before such changes are incorporated therein. 4. Terms of Payment and Audit Payment shall be net, thirty (30) days from the end of the month in which the PRODUCTS are delivered. DAKO agrees to permit its books and records to be examined by ENZO to verify receipts. Examination will take place on reasonable prior notice, as necessary, but not more than once per year. Such examination is to be made by an independent auditor of ENZO's choice, at ENZO's expense, except in the event that the results of the audit reveal a discrepancy benefiting ENZO by five percent (5%) or more, then the audit fees shall by paid by DAKO. 5. PRODUCT Shipments All PRODUCTS shipped by ENZO to DAKO will be shipped F.O.B. Farmingdale, NY. 6. Forecasts and Purchase Orders DAKO shall issue a forecast schedule during the mid-month of each calendar quarter covering its estimated requirements for PRODUCTS for the succeeding two (2) calendar quarters. Such forecast shall be considered for planning purposes only and not a purchase commitment. A purchase order will be issued by DAKO at least sixty (60) days in advance of the requested delivery of PRODUCT. This purchase order will indicate specific delivery and/or shipping requirements. Purchase orders will be delivered to ENZO by Federal Express or similar carrier so - ---------- * The information omitted is confidential and has been filed separately with the Commission pursuant to Rule 24b-2. 3 that the receipt can be confirmed. ENZO shall meet such requirements unless it advises DAKO within ten (10) business days of the date of such purchase order that it is unable to supply PRODUCT as ordered by DAKO whereupon the parties agree to discuss a revised schedule for delivery of PRODUCT to DAKO. After ENZO and DAKO agree to the provisions of a revised schedule, ENZO will make its best efforts to fulfill the provisions of the revised schedule. Each purchase order shall be governed by the relevant provisions of this AGREEMENT (unless otherwise expressly provided in the individual purchase order and confirmed in writing by ENZO) and no term or condition which may appear in the printed matter in DAKO's order form or any form from ENZO shall be binding on either party or apply to any transaction under this AGREEMENT. 7. PRODUCT Deliveries and Specifications Within thirty (30) days after the effective date of this Agreement, ENZO shall provide DAKO with PRODUCT specifications and package inserts for those PRODUCTS in EXHIBIT B that DAKO intends to distribute. When an order is placed by DAKO, ENZO shall ship the PRODUCT in accordance with Section 5 above. Failure by DAKO to notify ENZO of rejection of the PRODUCT within fifteen (15) days of receipt of PRODUCT will constitute acceptance. ENZO shall supply, at the time of shipment of the PRODUCT to DAKO, a statement that the PRODUCT conforms to the PRODUCT specifications. If after receipt of the PRODUCT, DAKO determines that it does not conform to the PRODUCT specification provided by ENZO, and that the failure to conform to the PRODUCT specifications was not the direct result of shipping and handling, DAKO will provide ENZO with documentation of this failure to conform to the PRODUCT specifications. If ENZO accepts the documentation provided by DAKO, ENZO will ship a replacement order. If ENZO does not accept the documentation provided by DAKO, then the differences in the determination of the manufacturing specifications for the allegedly nonconforming PRODUCT will be settled by representatives of the technical staffs of ENZO and DAKO. If DAKO receives a notice from a third party asserting that any of the PRODUCTS of this AGREEMENT infringe on an issued patent in the country of sale, then DAKO shall immediately give written notice to ENZO. Upon notice to ENZO or DAKO from a third party asserting that any of the PRODUCTS of this AGREEMENT infringe on an issued patent in the country in which such PRODUCTS are sold, ENZO has the right to exclude such PRODUCTS from this AGREEMENT for that country and can further instruct DAKO to cease all such distribution of such PRODUCT in that country. Further distribution of PRODUCTS after such instruction from ENZO to DAKO will be at the sole risk of DAKO and DAKO shall indemnify and hold harmless ENZO from all infringement liability and damages with respect to such PRODUCTS, including legal costs and attorneys fees. Notwithstanding any third party infringement claims, all provisions of this AGREEMENT, including Section 7, shall not be affected but shall remain in full force and effect to the fullest extent possible. 4 8. Sales Promotions DAKO shall exert on its own account, its best efforts in sales promotions and advertisement of the PRODUCTS such as individual client contact, direct mailings, catalog listings and trade meeting promotions. ENZO will provide DAKO with one (1) copy of the literature, technical data, specifications and the like describing the PRODUCTS that DAKO is distributing as they are currently produced for the assistance of DAKO in the preparation of advertising, catalog and other sales and promotional material. DAKO will list PRODUCTS in its next available or published product catalog(s) in which the PRODUCTS can be listed after the effective date of this Agreement. DAKO will modify the listings of PRODUCTS in its product catalog(s) as soon as reasonably possible after any corresponding modification of the list of such PRODUCTS in EXHIBIT B and EXHIBIT C that it intends to distribute. 9. PRODUCT Warranty ENZO warrants that the PRODUCTS manufactured by ENZO for distribution by DAKO shall meet the specifications described in ENZO's PRODUCT or package inserts. ENZO's sole obligation is to replace the PRODUCTS with similar PRODUCTS to the extent of the purchase price. THIS WARRANTY IS EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES OR LIABILITIES, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 10. Storage and Stock Rotation ENZO agrees to share with DAKO all necessary storage and stock rotation practices which apply to the PRODUCTS. DAKO further agrees to take diligent care not to ship PRODUCTS to its customers which have expired, been damaged in storage or handling, or improperly stored. DAKO will be responsible for damages arising from its shipment of expired, damaged, or improperly stored PRODUCTS. 11. PRODUCT Labels All PRODUCTS will be labeled with the ENZO DIAGNOSTICS, INC. label. DAKO further agrees to ship all PRODUCTS intact with ENZO's package inserts and any notice(s) appearing thereon. 12. Confidentiality of Information DAKO and ENZO agree that they will not disclose any proprietary and confidential information made available to them by the other party. Both parties further agree that all confidential material will be in writing and marked confidential and that they will not make more copies than necessary of documents or materials which are provided under this AGREEMENT, nor will they distribute such documents or materials, or copies thereof, to any third party. Furthermore, both parties agree to return any such documents or materials, or copies thereof, which are provided under this AGREEMENT if directed or requested to do so. 5 The above obligations shall not apply to those portions of ENZO's and DAKO's proprietary and confidential information which (1) are or become generally publicly available through no act or failure to act by the recipient party, (2) were demonstrably known to both parties prior to disclosure under this Agreement, or (3) are subsequently disclosed by a third party having a legal right to do so and not having a confidential relationship with respect thereto. 13. Force Majeure NO LIABILITY shall result to either party from delay in performance or from nonperformance under this Agreement caused by circumstances beyond the control of the party who has delayed performance or not performed. The nonperforming party shall be diligent in attempting to remove any such cause and shall promptly notify the other party of its extent and probable duration. 14. Duration and Termination This AGREEMENT shall become effective as of the date hereinabove written and shall continue for a period of three (3) years. Unless terminated, it will continue thereafter for successive renewal terms of one (1) year. Either party may terminate this AGREEMENT without cause at any time by giving the other party notice in writing at least six (6) months in advance of the effective termination date stated in such notice. Upon termination of this AGREEMENT all distribution rights to DAKO will be deemed immetiately canceled and returned in toto to ENZO. 15. Indemnification Except to the extent the other is negligent or commits an act of wilful misconduct or in default of the terms hereof, ach party shall hold the other party harmless from responsibility or liability for damages related to the PRODUCTS of this AGREEMENT arising from the fault of such party, its affiliated companies, or its agents or employees. 16. Notices All notices to be given with respect to this AGREEMENT shall be in writing and shall be deemed effectively given: when delivered personally; seven (7) calendar days after being deposited in the mail, registered or certified mail, return receipt requested; when telecopied or faxed, receipt acknowledged; or when telexed, confirmed; 6 addressed as set forth below, or to such other address that either party designates by written notice to the other party; ENZO: Enzo Biochem, Inc. 575 Fifth Avenue, 18th Floor New York, NY 10017 Attn: Dr. Barbara E. Thalenfeld Vice President, Corporate Development Fax No.: (212) 856-0878 DAKO: DAKO A/S Produktionsvej 42 DK-2600 Glostrup Denmark Attn: John Place Business Development Manager Fax No.: 45 42 841822 17. Governing Law This Agreement is made under and shall be governed by the laws of the State of New York. 18. Waiver Waiver by ENZO or DAKO of any provision of this AGREEMENT shall not be deemed a waiver of future compliance therewith and such provision as well as all other provisions hereunder shall remain in full force and effect. 19. Compliance with Laws Each party will comply with all United States laws, ordinances and regulations properly applicable to the manufacture, sale and distribution of the PRODUCTS described herein. Where applicable, the parties will comply with the laws of the country in which the product is being sold. 20. Headings All Headings of the clauses of this AGREEMENT are inserted for convenience only and shall not affect any construction or interpretation of this AGREEMENT. 21. Severability In the event that any clause of this AGREEMENT shall be found to be void or unenforceable, such finding shall not be construed to render any other clause of this AGREEMENT either void or unenforceable, and all other clauses shall remain in full force and effect unless the clause(s) which 7 is/are invalid or unenforceable shall substantially affect the rights or obligations granted to or undertaken by either party. 22. Entirety This AGREEMENT together with the EXHIBITS attached hereto embodies the entire understanding between DAKO and ENZO, and there are no contracts or prior drafts of the AGREEMENT, understandings, conditions, warranties or representations, oral or written, express or implied, with reference to the subject matter hereof which are not merged herein. Except as otherwise specifically stated, no modification here to shall be of any force or effect unless (1) reduced to writing and signed by both parties hereto, and (2) expressly referred to as being modifications of this AGREEMENT. IN WITNESS, WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives. ENZO DIAGNOSTICS, INC. DAKO A/S By: By: ------------------------------ ----------------------------------- Elazar Rabbani Title: President & CEO Title: President --------------------------- -------------------------------- Date: Mar 21 1995 Date: 5 May 1995 ------------------------------ ----------------------------------- * * * * * * * 8 EXHIBIT A ENZO BIOCHEM, INC. ISSUED PATENTS AND PUBLISHED PATENT APPLICATIONS US 4,711,955 US 4,889,798 US 5,328,824 EPO 151,492 A2 EPO 063,8799 B1 Canada 1,314,810 Denmark 164,407 US 4,898,325 Canada 1,219,824 US 5,228,609 EPO 329,198 A EPO 159,719 B1 US 5,241,060 Canada 1,260,372 US 5,260,433 EPO 526,912 A3 EPO 097,373 B1 US 4,987,065 EPO 285,057 A2 EPO 133,473 B1 EPO 302,175 A2 US 4,755,458 EPO 286,898 A2 EPO 173,339 B1 EPO 285,058 A2 Canada 1,260,368 Canada 1,223,831 US 4,746,604 US 4,994,373 Canada 1,268,115 EPO 117,440 B1 EPO 202,688 A2 Canada 1,309,672 Canada 1,295,559 EPO 525,821 A2 EPO 212,546 B1 EPO 128,322 A1 EPO 213,495 A2 EPO 154,788 A2 EPO 224,860 B1 EPO 122,614 B1 Canada 1,315,222 B1 Candad 1,254,525 US 4,687,732 US 4,707,440 EPO 149,654 B1 US 4,843,122 Canada 1,237,369 B1 US 4,943,523 EPO 294,595 A3 US 4,849,208 US 5,082,830 US 4,952,685 EPO 330,221 US 5,002,885 US 5,024,933 A2 US 5,013,831 EPO 343,424 B1 US 5,175,269 EPO 435,150 A2 US 4,849,505 EPO 492,570 A1 The PRODUCTS listed in Exhibit B are covered by one or more patents of Enzo, including the patents listed above. This list may be updated quarterly at Enzo's discretion. 1 EXHIBIT B PRODUCT LISTING IN SITU HYBRIDIZATION ASSAY SYSTEMS