EXHIBIT 10.12
EXCLUSIVE DISTRIBUTORSHIP AGREEMENT
-----------------------------------
THIS AGREEMENT made as of November 12, 1997 to take effect as of December
1, 1997 as specified herein, by and between XXXX Medical Systems, lnc. (and its
successors and assigns, the "Seller"), a California corporation having its
principal office at 000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx
00000, NISSHO IWAI CORPORATION ("Distributor"), a Japanese corporation having
its primary office at 0-0 Xxxxxxx 0-xxxxx, Xxxxxx-xx, Xxxxx 107, and NISSHO IWAI
AMERICAN CORPORATION ("Distributor Agent"), a New York corporation with an
office at 00 Xxxxxxxxxx Xxxxxx Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
(the Distributor and Distributor Agent shall be referred to collectively as
"Distributors").
WITNESSETH
----------
WHEREAS, Seller has been engaged in the manufacture and marketing of the
Products (as hereinafter defined) and desires to expand the sale of same;
WHEREAS, among other things, Distributors are collectively engaged in
exporting, distributing and marketing various products in Japan; and
WHEREAS, Distributors desire to act as, and Seller desires to appoint
Distributors as the sole and exclusive distributors of the Products in the
Territory (as hereinafter defined).
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS
----------------------
The following words shall have the following meanings when used in this
Agreement:
1.1 "Acquisition Closing Date" shall mean the date on which control of the
Seller transfers to another individual or entity in accordance with the
acquisition agreement entered into between the Seller and such acquiring
individual or entity.
1.2 "Agreement" shall mean this agreement and any amendments hereto.
1.3 "Delivery Point" shall mean F.0.B. Seller's manufacturing site which
is currently located at Mountain View, California, or such other location as may
be agreed to in writing from time to time.
1.4 "Individual Contract" shall mean a Purchase Order for the Products
issued by Distributor Agent and accepted by Seller as provided herein.
1.5 "Equipment" shall mean minimally-invasive surgical ablation systems
for the treatment of solid organ tumors consisting of RF Generators, Electrodes
and associated equipment described in Exhibit A and as may be added or modified
in accordance with this Agreement.
1.6 "End-Customer" shall mean ultimate purchaser or user of the Products,
i.e., medical practitioner, hospital and medical facilities.
1.7 "In-Country Caretaker Period" shall mean the period from December 1,
1997 to the day before the Investment Date.
1.8 "Investment Date" shall mean the date when Distributors remit the
funds for investment in Seller pursuant to letter of intent described in Article
2.1.
1.9 "Marks" shall mean all trademarks, tradenames, emblems, designs,
patents and other intellectual property utilized in connection with the Products
and identified in Exhibit C annexed hereto and any abbreviation or modification
thereof.
1.10 "MHW" shall mean the Japanese Ministry of Health and Welfare.
1.11 "MHW Product Approval" shall mean the MHW approval, in whatever form,
for the importation and distribution of Product pursuant to a "me too" or a "new
medical product" application.
1.12 "Minimum Purchase Target" shall mean the minimum target quantity of
Equipment for purchase each Sales Year by Distributors as provided in Exhibit B.
1.13 "Parts" shall mean replacement parts for, or components of, the
Equipment.
1.14 "Product(s)" shall mean, as applicable, the Equipment and/or Parts
and/or other products as provided in Article 4 herein.
1.15 "Purchase Order" shall mean Distributor Agent's standard form
purchase order prevailing from time to time.
1.16 "Purchaser(s)" shall mean intermediate purchasers of the Products.
1.17 "Sales Year" shall mean each successive one-year period with the
first such one year period commencing the first day of the third full month
following the month in which the Distributor obtains initial MHW Product
Approval.
1.18 "Sub-Distributor" shall mean the sub-distributor to the Distributor
as identified in Article 5 herein.
1.19 "Territory" shall mean Japan.
ARTICLE 2. APPOINTMENT: REPRESENTATIONS
---------------------------------------
2.1 Seller hereby appoints Distributors, and Distributors accept the
appointment, as Seller's sole and exclusive distributor for the sale and
distribution of the Products for and in the Territory as of the Investment Date.
subject to the investment requirement defined below. Further, seller appoints
Distributors, and Distributors agree, to act as its in-country caretaker during
the In-country Caretaker Period, provided that Distributors rights and
obligations during this period shall be limited to (a) Product testing, and (b)
preparation of application to obtain MHW Product Approval, and (c) receipt of
the termination fee in accordance with Article 13. In no event shall Distributor
file the MHW Product Approval application with the MHW until after the
Investment Date. It is the desire of the Distributors to make an investment in
the Seller, as more fully described in a letter of intent of even date herewith,
subject to the terms and conditions therein. If this investment is not made by
the close of business on January 15, 1998, this Agreement shall terminate,
unless extended by mutual written agreement.
2.2 During the term of this Agreement, except as stated herein, Seller
shall not directly or indirectly (i) sell, distribute, market, lease or
otherwise make available the Products within the Territory except through
Distributors or (ii) grant a license to anyone other than Distributors for the
manufacture and/or sale of the Products within the Territory. Seller shall take
all commercially reasonable steps to prevent shipment (or trans-shipment) of any
Products by or on behalf of others into the Territory.
2.3 During the term of this Agreement, Distributors and Sub-Distributors
shall not sell, market or service in the Territory any device which are similar
to or competitive with those Products and which are handled by Distributors
under this Agreement.
2.4 Seller shall promptly refer to Distributor Agent all inquiries for the
Products originating in or for ultimate delivery to the Territory.
2.5 The relationship between Seller and Distributors is solely that of
seller and buyer. Distributors shall sell the Products for its own account and
risk as an independent contractor. Nothing contained herein shall be construed
or deemed to make the parties hereto joint ventures or partners or to
constitute either party an agent or employee of the other. Neither party shall
at any time make any representation, either in writing or orally. that it is an
agent, partner or joint venture with the other. Neither party shall have the
right, power or authority to assume or create any obligation, express or
implied, on behalf of the other.
2.6 Each of Seller and Distributors hereby represent and warrant to the
other that: (i) the most recent financial, background and product information
previously furnished to the other is true, correct and complete in all material
respects; (ii) it is a duly organized and validly existing corporation under the
laws of its domiciliary jurisdiction; (iii) it has full power and authority to
execute and deliver this Agreement and to perform and observe the provisions of
this Agreement; (iv) the execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action and do not in any
way contravene any law, obligation or restriction binding on or affecting it or
any of its property; (v) no authorization or approval (including export licenses
and exchange control approval) or other action by, and no notice to or filing
with, any governmental authority or regulatory body, except as referenced
herein. is required for the due execution, delivery and performance of this
Agreement; and (vi) this Agreement has been duly executed and delivered and is a
legal, valid and binding obligation enforceable against it in accordance with
its terms.
ARTICLE 3. PURCHASE AND SALE; PRICE; PAYMENT; INSPECTION; DELIVERY
------------------------------------------------------------------
3.1 The sale and purchase of the Products hereunder shall be based on the
terms and conditions set forth herein and in the applicable Purchase Order,
provided that if any discrepancy should occur between the terms and conditions
of this Agreement and those set out in the printed portion of the Purchase
Order, this Agreement shall prevail. An Individual Contract for the Products
shall be deemed to have been made when Distributor Agent receives Seller's
acceptance of the Purchase Order, such acceptance being indicated by Seller's
countersignature on the Purchase order, Seller's issuance of a sales
confirmation or similar document, Seller's delivery of the products or the like,
provided that if any terms in such sales confirmation or similar document
conflict with, or supplement, the terms of this Agreement or the Purchase Order,
such conflicting or supplemental terms shall be deemed null and void and the
provisions of this Agreement and/or the Purchase Order shall govern. In any
case, Seller shall respond to each Purchase Order within fifteen (15) days after
its
receipt by Seller, and failure by Seller to so respond shall be deemed
acceptance by Seller. Seller shall endeavor to timely fill all Purchase Orders.
3.2 For the purpose of securing orderly shipments, Distributor Agent shall
submit to seller a rolling four-quarter forecast of orders for Equipment
purchases at the beginning of each quarter, of which Distributors, subject to
Article 8.2, agree to purchase as a binding commitment the quantity forecast for
the first two quarters of each such forecast. Distributor Agent shall submit the
sales forecast for the first Sales Year on or about the Investment Date.
3.3 The price and payment terms for the Products set forth in each
Individual Contract shall be in accordance with Exhibit B annexed hereto. The
parties may amend such prices by mutual agreement in writing, to enable both
parties to realize fair profits on their sales by taking into consideration the
normal practices of the trade, if any, and competitive circumstances existing
from time to time, including, in the event Distributor succeeds in obtaining MHW
medical insurance reimbursement points for the Products. Beginning with the
second Sales Year, Seller may make unilateral adjustments to Product prices
consistent with the U.S. Consumer Price Index, provided, the Product price shall
not increase by more than five (5) percent during any one Sales Year.
3.4 Distributors shall have, upon Seller's consent, which consent shall
not be unreasonably withheld, the right to inspect the Products at the place of
manufacture prior to packing thereof. Seller shall timely notify Distributor
Agent of the production schedules for the Products and of the readiness of
Products for packing. Inspection shall be at Distributors' expense. Inspection
of any products by Distributors shall not constitute acceptance thereof nor
shall it constitute a waiver of any claim or right which Distributors or
Purchasers may have with respect thereto.
3.5 Seller shall deliver and Distributor Agent shall take delivery of the
Products at the Delivery Point. Seller shall pack the Products to withstand
normal international transportation, exposure and handling. Upon such delivery,
title to the Products shall pass to Distributors.
ARTICLE 4. PRODUCT MODIFICATIONS; NEW PRODUCTS
----------------------------------------------
4.1 Seller shall notify Distributor Agent sufficiently in advance of any
planned modification in the design or specifications or of any withdrawal of any
Products, taking into account, among other factors (i) the time necessary to
obtain any Japanese governmental permits, licenses, and approvals, including new
or additional MHW Product Approvals. and (ii) the time necessary to publicly
announce and inform End-Customers of the Product withdrawal or modification.
4.2 Any new products (and components thereof) developed or handled by
Seller in the future which are similar to or competitive with the Products shall
be included in the term "Products'' and shall be subject to the terms and
conditions of this Agreement, except for (i) the price therefor, and (ii) the
Minimum Purchase Targets, both of which shall be mutually agreed, to enable both
parties to realize fair profits on their sates by taking into consideration the
normal practices of the trade if any competitive circumstances existing from
time to time, and whether Distributor must obtain MHW Product Approval.
4.3 Seller shall make commercially reasonable efforts to notify
Distributor Agent of any new products which are not similar or competitive with
the Products.
ARTICLE 5. SUB-DISTRIBUTORS
---------------------------
Seller authorizes, and Distributor agrees to, the prompt appointment of the
following entity as Distributor's sub-distributor within the Territory: AIoka
Company, Ltd. ("Sub-Distributor"), 6-22-1 Mure Mitaka-shi Tokyo 181. Japan. Such
appointment shall not take place until after the investment, as defined in
Article 2.1, has been met. Distributor shall not, without the Seller's prior
written consent, which Seller may withhold in its sole and absolute discretion,
appoint any other sub-distributor. Distributor shall cause Sub-Distributor to be
bound by and comply with the relevant Articles contained herein, and any breach
by Sub-Distributor of those Articles shall be deemed to be a breach by
Distributor.
ARTICLE 6. PATENTS TRADEMARKS AND TRADENAMES
--------------------------------------------
6.1 Seller warrants and represents that to the best of its knowledge, it
is the rightful and legal owner of all rights, title, and interest to any and
all Marks used in connection with the manufacture
sale and promotion of the Products.
6.2 Seller hereby grants to Distributors and to Sub-Distributor the sole
and exclusive right and license to use all Marks in connection with the
promotion, sale and distribution of the products in the Territory.
6.3 If Seller adopts any other trademarks, tradenames and the like in
connection with the Products in the future, Seller shall notify Distributor
Agent immediately thereof and same shall be included in the term ''Marks''.
6.4 At Seller's sole expense, Seller shall duly register and keep
effective in the Territory the Marks and shall take all commercially reasonable
steps to duly protect the Marks.
6.5 Seller shall take all commercially reasonable steps to ensure that the
Products are marked labeled and packaged in accordance with this Agreement and
in accordance with all applicable laws, rules and regulations in the Territory.
Distributor shall take all commercially reasonable steps to ensure that the
Products are advertised, distributed and sold in accordance with this Agreement
and in accordance with all applicable laws, rules and regulations in the
Territory.
6.6 Distributor agrees to promptly report complaints from End-Customers
regarding performance of the Products.
ARTICLE 7. MHW PRODUCT APPROVAL; APPROVAL TRANSFER
--------------------------------------------------
7.1 Distributor shall use its best efforts to obtain in the Distributor's
name, (I) "me too" MHW Product Approval, and (ii) any other Japanese
governmental permits, licenses and approvals, within twelve months of the "me
too" MHW Product Approval application filing date, provided that if such are not
achieved within eighteen (18) months from the Investment Date, this Agreement
may terminate at Seller's option subject to the following: In the event the MHW
does not permit classification of the Products under the "me too" MHW Product
Approval category through no fault of Distributor, Distributor shall upon mutual
agreement, apply for "new medical product" MHW Product Approval.
7.2 Upon mutual agreement of the parties, Distributor shall use its best
efforts to obtain in the Distributor's and/or Sub-Distributor's name (i) the
"new medical product" MHW Product Approval and (ii) thereafter, MHW medical
insurance "reimbursement points'' for the Products. Seller shall provide
Distributors free of charge up to one hundred (100) pieces of Electrodes per
applicable organ for any clinical trials of the Product.
7.3 Immediately following the Agreement effective date, Seller shall
provide to Distributor free of charge (i) [***] Generators, (ii) a reasonable
quantity of Electrodes, and (c) any product documentation, including Product
specifications, drawings, and data as required by the MHW or any other
authorizing governmental agency. Seller shall provide to Distributor free of
charge a reasonably sufficient quantity of future Products for Distributors to
complete the MHW Product Approval application process.
7.4 Distributor shall provide Seller with a copy of such MHW Product
Approval application fifteen (15) days prior to its submission to the MHW, and
shall keep Seller promptly informed of the progress of each such application.
Distributor shall assume all costs and expenses incurred in connection with the
MHW Product Approval application, including the conducting of Product clinical
tests.
7.5 In the event this Agreement is terminated pursuant to Article 13
herein, Distributor shall and when applicable, have Sub-Distributors promptly
take all steps necessary to transfer to Seller all MHW Product Approvals as
follows: (i) If termination is pursuant to Article 13.2 or Article 13.4 herein,
and Distributor is the terminating party, or if termination is pursuant to
Article 13.1 or Article 13.3. Distributor shall at Seller's cost and expense
transfer the MHW Product Approvals to seller; (ii) if termination is pursuant to
Article 13.2 or Article 13.4 herein, and Seller is the terminating party or
termination is pursuant to Article 13.5 herein, Distributor shall at its own
cost and expense transfer the MHW Product Approvals to Seller or Seller's
designee. During any period in which transfer of the MHW Product Approval is
pending, Distributor agrees, and where applicable, to have sub-Distributor
agree, to the extent within its control and to the extent permitted by law, to
take such actions to enable the Seller or Seller's designee to make full use of
such MHW Product Approvals.
____________________
*** Material has been omitted pursuant to a request for confidential treatment,
and such Material has been filed separately with the SEC.
ARTICLE 8. SALES PROMOTION; MINIMUM PURCHASE TARGET
---------------------------------------------------
8.1 Distributor agrees to (i) use reasonable commercial efforts to promote
the sate of the products and to serve customers in the Territory, and (ii) meet
the Minimum Purchase Target for each Sales Year, provided, this latter
undertaking shall not constitute a material obligation for purposes of Article
13.2 herein. Any quantity of Products purchased in excess of the Minimum
Purchase Target for a given Sales Year shall be credited towards satisfying the
Minimum Purchase Target for future Sales Years.
8.2 In the event the total quantity of Products for which Purchase
Order(s) have been issued during any Sales Year is less than the Minimum
Purchase Target, Seller shall have, as its exclusive remedy, the option, upon
ninety (90) days written notice to Distributor Agent, of (i) terminating this
Agreement pursuant to Article 13.5 or (ii) converting the exclusive
distributorship granted hereunder to a non-exclusive distributorship, at the
exclusive option of Seller. Should Seller exercise either remedy, Distributor
may, in its sole discretion and without penalty, withdraw the most recent
rolling four-quarter forecast for orders submitted to the Seller pursuant to
Article 3.2., the effect of which shall be to make the purchase commitment
thereunder null and void.
8.3 Upon Seller's reasonable request, Distributors shall furnish Seller
with reports relating to the sale of the Products which may include, but is not
limited to, Product inventory, sales to End-Customers, and Generator placements.
Each party shall furnish the other party with information which is necessary or
helpful with respect to sales promotion of the Products.
8.4 Upon the request of Distributors, Seller shall provide to Distributors
free of charge within two weeks following MHW Product Approval (i) [***]
Generators and [***] Electrodes for promotional use, and (ii) a reasonable
number of catalogs, brochures and other promotional materials in the English
language which may be useful to Distributors sales promotion of the Products.
Seller reserves the right to review and approve all promotional materials
developed by Distributor. For future Products, Seller agrees to discuss with
Distributors the required quantity of samples and promotional materials
necessary for Distributor to effectively engage in sales promotion of such
Products.
8.5 Distributor shall limit promotion of the Products to medical
applications previously approved by the Seller. Should Distributor learn of the
unapproved use or promotion of the Product by a Purchaser or End-Customer,
Distributor shall inform such Purchaser or End-Customer of the approved uses for
the Product and shall take all commercially reasonable steps to discourage such
unapproved use.
ARTICLE 9. TECHNICAL ASSISTANCE
-------------------------------
9.1 At no cost to Distributors, Seller shall provide Distributor with (i)
such technical advice and information as may be deemed necessary for a full
understanding of the Products and (ii) training for a reasonable period of time
for a reasonable number of personnel dispatched by Distributor to Seller's
facilities. The compensation, travel, hotel and other expenses for Distributor's
personnel shall be for Distributor's account.
9.2 Upon mutual agreement of the parties, Seller shall provide technical
support (including the dispatch of Seller's qualified personnel) to ensure the
proper installation, calibration and use of the Products and to provide advice,
training and assistance to Distributors' and Purchasers' personnel and shall
visit potential customers with Distributor to promote the sale and proper use of
the Products. Seller shall provide such personnel at a rate to be mutually
agreed.
9.3 If requested by Distributors, Seller shall from time to time consider
requests to improve or modify the Products in accordance with the requests of
End-Customers in the Territory.
ARTICLE 1 0. WARRANTY
---------------------
10.1 Seller hereby warrants to Distributors, Sub-Distributors, and to
Purchasers that the Products shall (i) strictly conform to the Product
specifications as provided by Seller and received by Distributor from time to
time and all U.S. governmental regulations therefor, (ii) be free from defects
in design, material and workmanship and (iii) be of merchantable quality and fit
for the ordinary purposes for which the Products are used. This warranty shall
survive any inspection, delivery, acceptance or payment by Distributors.
Distributors shall have no obligation to provide any warranty to the Purchasers
with respect to the Products, except that Distributor and Sub-Distributor shall
pass on to End-Customers a copy of Seller's statement of warranty. Seller's
liability under these warranties,
___________________
*** Material has been omitted pursuant to a request for confidential treatment,
and such Material has been filed separately with the SEC.
subject to Article 11 , shall be limited to a refund of the End-Customer's
purchase price or repair or replacement. In no event shall Seller be liable for
the cost of procurement of substitute goods.
10.2 Seller shall promptly repair or replace (i) any Generator which does
not comply with Seller's warranty for a period of twelve (12) months from the
date of delivery to Purchasers or eighteen (18) months from delivery to the
Delivery Point, whichever is earlier, or (ii) any Electrode which does not
comply with Seller's warranty for a period of twenty four (24) months from the
date of delivery to Purchasers or until the date of the Electrode expiration
date, whichever is earlier, provided, Seller warrants that the Electrodes shall
have a minimum shelf-life of twenty-four (24) months, and provided further, that
Seller shall endeavor to achieve a shelf-life of thirty-six (36) months for the
Electrodes before commencement of the first Sales Year. and shall deliver to
Distributors Electrodes with a manufacture date no more than ninety (90) days
from the date of manufacture/sterilization date. Seller represents that it shall
promptly and diligently comply with all its warranty obligations.
10.3 A Product may only be returned with the prior written approval of the
Seller, such approval not to be unreasonably withheld. Any such approval shall
reference a return material authorization number issued by Seller. Repair and
transportation costs for returned Products shall be for Seller's account,
provided, if Seller determines that the returned Products were not defective,
such costs shall be for Distributor's account.
10.4 From the date hereof and until two (2) years after the termination of
this Agreement, Seller shall maintain a general comprehensive product liability
insurance policy in the amount of $2 (two) million per occurrence and $2 (two)
million in the aggregate per year. Distributors and Sub-Distributor shall be
named as additional insureds. Within sixty (60) days from the date hereof,
Seller shall send Distributor Agent a copy of such insurance policy. Such policy
shall provide that Distributors and Sub-Distributor must be notified at least
sixty (60) days prior to such policy's expiration, termination or modification.
ARTICLE 11. INDEMNITY
---------------------
Seller shall indemnify and hold Distributors, Sub-Distributors, its parent,
subsidiaries and affiliates and their directors, officers and employees
("Related Parties") harmless from any and all losses, obligations, liabilities,
costs and expenses including, but not limited to, legal fees and out-of-pocket
expenses arising out of or in connection with (i) any claim of a third party
regarding any breach of warranty, or any product liability claims arising from
the Products that are otherwise not covered by Seller's general comprehensive
product liability insurance, and (ii) any claim of a third party with respect to
the Products including, without limitation any claim of infringement of patent,
trademark or tradename rights, provided that Distributors shall have promptly
informed Seller thereof. In complying with the provisions of this Paragraph,
Seller shall actively and at its own expense defend against any such claim.
Notwithstanding the foregoing, Seller's obligations hereunder shall not extend
to special or consequential damage claims of Distributors, Sub-Distributors, and
Related Parties. Seller's obligations hereunder shall survive the expiration or
termination of this Agreement.
ARTICLE 12. CONFIDENTIALITY
---------------------------
During the term of this Agreement, and for a period of one (1) year
following termination of this Agreement, Distributors agree to maintain such
written information, or such oral information that is reduced to writing and
delivered to Distributor within fifteen (15) days, which are disclosed to
Distributors and clearly marked "confidential", with the same degree of care
Distributors maintain there own such similar information. Distributor may
disclose said information to those individuals or parties who are or who agree
to be bound hereunder. It is further agreed that Distributors' obligations
hereunder shall not pertain to information which (i) becomes generally available
to the public through no act or omission by Distributors. (ii) is disclosed on a
non-confidential basis to Distributors by a third party that appears entitled to
disclose such information on a non-confidential basis, (c) is known to
Distributors prior to its disclosure to Distributors, or (iii) is required to be
disclosed pursuant to court order.
ARTICLE 13. TERM AND TERMINATION; COMPENSATION
----------------------------------------------
13.1 This Agreement shall commence as of the date first above written and
shall terminate at the end of three (3) Sales Years, except that, thereafter at
Distributors' sole option, this Agreement may be renewed for two (2) additional
Sates Years upon Distributors meeting the Minimum Purchase Targets, after which
it shall terminate. If this renewal option becomes exercisable, and Distributors
intend to renew the Term. Distributor Agent shall so notify Seller not less than
ninety (90) days prior to the expiration of the Term. Seller and Distributors
shall make best efforts to negotiate commercially reasonable terms with respect
to the Product price and Minimum purchase Targets for the additional Sales
Years, to enable both parties to realize fair profits on their sales by taking
into consideration market conditions and the normal practices of the trade. If
Seller and Distributor fail to agree to such terms within ninety (90) days of
the start of such discussions, this Agreement shall terminate.
13.2 This Agreement may be terminated by either party upon written notice
to the other if the other party fails to fulfill its material obligations
hereunder and such failure is not cured within sixty (60) days after its receipt
of a written notice requesting a remedy thereof
13.3 This Agreement may be terminated by Seller if there is a change in
the control of the seller, such termination to be effective as of the
Acquisition Closing Date, provided, in the event of such termination. (i) Seller
shall compensate Distributors in accordance with Article 13.7 herein, (ii)
seller (a) shall be obligated to deliver Electrodes and Generators to
Distributors sufficient, considering Distributors current inventory to allow
Distributor to satisfy End-Customer orders placed by Distributor's existing End-
Customers prior to the Acquisition Closing Date, (b) shall be obligated to
deliver Generators to Distributors sufficient, considering Distributors current
inventory, to satisfy End-Customer orders placed within six (6) months after the
Acquisition Closing Date but which arise from quotations made prior to such date
provided that Distributor Agent shall have provided Seller with a list of
outstanding quotes as of the Acquisition Closing Date and further provided that
Seller may. at Sellers sole option, fill such End-Customer orders directly, and
(c) shall be obligated to deliver Electrodes to Distributors sufficient,
considering Distributor's current inventory, to satisfy Distributors existing
End-Customers for orders placed within ninety (90) days after the Acquisition
Closing Date, provided, the quantity of Electrodes ordered do not exceed the
average monthly quantity of Electrodes ordered by Distributors End-Customers for
the preceding twelve months, and provided further, that Seller may, at Sellers
sole option, fill such End-Customer orders directly.
13.4 This Agreement may be terminated by either party upon written notice
if the other party becomes insolvent or any voluntary or involuntary petition in
bankruptcy is filed by or against such party or a trustee is appointed with
respect to any of the assets of such party or a liquidation proceeding is
commenced by or against such party and such proceeding has not been terminated
within ninety (90) days, or if such party discontinues its business.
13.5 Seller may, in accordance with Article 8.2, terminate this Agreement
if the total quantity of Products for which Purchase Order(s) have been issued
is less than the Minimum Purchase Target for any Sales Year.
13.6 Termination of this Agreement shall not relieve either party of its
obligations incurred prior thereto, or any rights or obligations which by their
terms survive or take effect upon termination. Regardless of the reasons for
termination of this Agreement, all outstanding credits and liabilities under the
warranty provisions hereof shall continue to remain in force.
13.7 The parties agree that Distributors shall expend substantial efforts
and costs to develop and maintain a market for the Products. Therefore, in the
event of a termination pursuant to Article 13.3 herein, Seller shall compensate
Distributors with cash payments in accordance with the following schedule,
provided that for purposes of defining the compensation herein with respect to
those periods beyond the Investment Date, if the Acquisition Closing Date occurs
within twenty-one (21) days of execution of a definitive agreement regarding the
acquisition ("agreement date"), the Cash Amount shall be computed as if the
Termination Date is the agreement date:
--------------------------------------------------------------------------------
Termination Date Cash Amount
--------------------------------------------------------------------------------
In-Country Caretaker Period US$ [***]
--------------------------------------------------------------------------------
Investment Date -- Day before date of MHW ProductApproval US$ [***]
--------------------------------------------------------------------------------
Date of MHW Product Approval -- Day before 1st sales Year US$ [***]
--------------------------------------------------------------------------------
During 1st sales Year US$ [***]
--------------------------------------------------------------------------------
___________________
*** Material has been omitted pursuant to a request for confidential treatment,
and such Material has been filed separately with the SEC.
--------------------------------------------------------------------------------
During 2nd sales Year US$ [***]
--------------------------------------------------------------------------------
During 3rd sales Year US$ [***]
--------------------------------------------------------------------------------
Seller shall promptly deliver all amounts payable pursuant to this provision by
wire transfer to Distributor or Distributor Agent, as specified by Distributor,
no later than the Acquisition Closing Date.
13.8 Upon termination of this Agreement. Seller shall have the following
additional obligations with respect to repurchase of Product inventory held by
Distributors or Sub-Distributor: (i) If the termination arises from Article 13.2
or Article 13.4 herein, and the Distributors are the terminating party, or
termination arises from Article 13.3 herein, Seller shall, upon Distributors'
request. promptly repurchase at Seller risk and expense and at the original
invoice price that portion of the Product inventory which has at least twelve
(12) months until the Product expiration date and which was not damaged while in
the care of Distributor; (ii) if the termination arises from Article 13.2 or
Article 13.4 herein, and the Seller is the terminating party, or termination
arises from Article 13.1 or Article 13.5 herein, Seller may, but shall not be
obligated to, repurchase the Product inventory.
ARTICLE 14. FORCE MAJEURE
-------------------------
Neither party shall be responsible to the other party for nonperformance or
delay in performance under this Agreement and/or any Individual Contract due to
acts of God, civil commotion, war, riots, strikes, lockouts, severe weather,
fires, explosions, governmental actions or other similar causes beyond the
control of such party, provided that the party so affected shall promptly give
notice thereof to the other party and shall continue to take all action
reasonably within its power to comply herewith as fully as possible. In any
event the time for performance hereunder shall only be extended for the duration
of the delay.
ARTICLE 15. GENERAL PROVISIONS
------------------------------
15.1 This Agreement constitutes a contract and, except as provided herein,
is not assignable by either party in whole or in part without the prior written
consent of the other party, and any attempted assignment or participation
without such approval shall be null and void. Except as provided herein any such
assignment without the written consent of the other party shall be void. Seller
may assign this Agreement, subject to the existing terms and conditions, to an
individual or entity that acquires controlling interest in Seller, provided,
this Agreement has not been terminated pursuant to Article 13.3.
15.2 Any notice made in relation to this Agreement or performance
thereunder shall be in writing and delivered by hand or sent by prepaid
certified mail, return receipt requested, telefax (with a copy by certified
mail) to the following addresses:
If to Distributors: Nissho lwai American Corporation
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
san Francisco. California 94104-4375
Attn: Takehito Jimbo
Telefax No.: (000) 000-0000
If to Seller: XXXX Medical Systems, Inc.
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxx Xxxxxxx, President
Telefax No.: (000) 000-0000
or such other address as the intended recipient previously shall have designated
in writing. All notices hereunder shall be deemed to be made upon receipt.
Rejection or other refusal to accept or the inability to deliver because of
change of address of which no notice was given shall be deemed to be receipt of
the notice sent.
15.3 This Agreement shall be governed by the laws of the State of
California without reference
_______________________________________________________________________________
*** Material has been omitted pursuant to a request for confidential treatment,
and such Material has been filed separately with the SEC.
*** Material has been omitted pursuant to a request for confidential treatment,
and such Material has been filed separately with the SEC.
such State's conflicts of law rules. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be finally settled as
follows: If action is brought by seller arbitration shall be conducted in Tokyo.
Japan in accordance with the rules then in effect of the Japan Commercial
Arbitration Association by a mutually agreeable number of arbitrators appointed
in accordance with such rules; if action is brought by Distributors, arbitration
shall be conducted in San Francisco, California in accordance with the rules
then in effect of the American Arbitration Association. The arbitrators shall
follow the law governing this Agreement. Judgment upon the award may be entered
in any court having jurisdiction. Notwithstanding the foregoing, either party
may, (i) file suit in any court of competent jurisdiction to seek equitable
relief and/or to enforce an arbitration award and/or (ii) implead the other in
any action, suit or proceeding wherein the impleading party has been made a
party by any third party in respect to any claim for which the impleaded party
is or may be liable to the impleading party.
15.4 The provisions of this Agreement shall be deemed to be severable, and
the invalidity of any provision of this Agreement shall not affect the validity
of the remaining provisions of this Agreement.
15.5 The failure of either party hereto to enforce at any time any of the
provisions hereof shall not be construed to be a waiver of such provisions or of
the right of such party thereafter to enforce any such provisions.
15.6 The paragraph headings herein are for ease of reference only and are
not to be utilized in construing or interpreting this Agreement.
15.7 The prevailing party in an arbitration or lawsuit pursuant to Article
15.3 shall be reimbursed by the other party for all expenses, including, without
limitation, reasonable attorneys' fees and other legal expenses, incurred or
paid by it in exercising or protecting its interests, rights or remedies under
this Agreement, plus interest thereon at the highest rate permitted by
applicable law.
15.8 No provision of this Agreement shall be construed against or
interpreted to the disadvantage of either party hereto by any court or
governmental or judicial authority by reason of such party having or being
deemed to have structured or dictated such provision.
15.9 Notwithstanding anything herein to the contrary, it is intended that
Articles 3, 7, 10, 11, 12, 13, and 15 shall survive the termination or
expiration for any reason of this Agreement.
15.10 All references to dates herein shall mean United States Pacific
Standard Time.
15.11 This Agreement constitutes the entire agreement and understanding of
the parties hereto with respect to the subject matter of this Agreement, and
supersedes all prior discussions, agreements and understandings between the
parties with respect to the subject matter of this Agreement. No amendment or
modification or this Agreement shall be binding on the parties unless made in
writing expressly referring to this Agreement and signed by and authorized
representative of each party.
lN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
XXXX MEDICAL SYSTEMS, INC.
/s/: Xxxxx Xxxxxxx
------------------
Xxxxx Xxxxxxx
President and CEO
NISSHO IWAI CORPORATION
/s/: Xxxxxxx Xxxxxxx
--------------------
Xxxxxxx Xxxxxxx
General Manager
Medical & Electronics Systems Dept.
NISSHO IWAI AMERICAN CORPORATION
/s/:Xxxxxx Xxxxxxxx
-------------------
Xxxxxx Xxxxxxxx
General Manager and Vice President
EXHIBIT A
---------
DESCRIPTION OF THE PRODUCTS; SPECIFICATIONS
-------------------------------------------
Generators
----------
------------------------------------------------------------------------------
Model Number Part Number
------------------------------------------------------------------------------
XXXX Model 500L 700-1 00891
------------------------------------------------------------------------------
Electrodes
----------
------------------------------------------------------------------------------
Model Number Part Number Description
------------------------------------------------------------------------------
XXXX Model 30 700-1 00852/890 4 array, 3cm
------------------------------------------------------------------------------
XXXX Model 30 700-1 00766/952 3 array, 2cm
------------------------------------------------------------------------------
XXXX Model 20 700-1 00767/951 2 array, 2cm
------------------------------------------------------------------------------
EXHIBIT B
---------
PRICE SCHEDULE
--------------
-----------------------------------------------------------------------------
Product Sales Year One Sales Year Two Sales Year Three
-----------------------------------------------------------------------------
Generators $[***]/unit $[***]/unit $[***]/unit
-----------------------------------------------------------------------------
Electrodes $[***]/unit $[***]/unit $[***]/unit
-----------------------------------------------------------------------------
Note: prices are U.S. Dollar. F.0.B. Delivery Point
MINIMUM PURCHASE TARGET
-----------------------
------------------------------------------------------------------------
Product Sales Year One Sales Year Two Sales Year Three
------------------------------------------------------------------------
Generators [***] [***] [***]
------------------------------------------------------------------------
Electrodes [***] [***] [***]
------------------------------------------------------------------------
PAYMENT TERMS
-------------
Net sixty (60) days from date of delivery to Distributor Agent
_____________________________
*** Material has been omitted pursuant to a request for confidential treatment,
and such Material has been filed separately with the SEC.
EXHIBIT C
---------
DESCRIPTION OF THE MARKS
------------------------
JAPANESE PATENTS
-----------------------------------------------------------------------------------------------------------------------
Japanese Patent XXXX PCT Application Filing
Application No. Reference No. Title No. Date Status
-----------------------------------------------------------------------------------------------------------------------
9-509498 00000-000 Xxxxxx and Apparatus for PCT/US96/13285 08/15/96 Pending
Ablation of a Selected Mass
-----------------------------------------------------------------------------------------------------------------------
9-509547 00000-000 Xxxxxx and Apparatus for PCT/US96/13409 08/15/96 Pending
Ablation of a Selected Mass
-----------------------------------------------------------------------------------------------------------------------
9-509548 00000-000 Xxxxxx and Apparatus for PCT/US96/13411 08/15/96 Pending
Ablation of a Selected Mass
-----------------------------------------------------------------------------------------------------------------------
9-509503 00000-000 Xxxxxx and Apparatus for PCT/US96/13300 08/15/96 Pending
Ablation of a Selected Mass
-----------------------------------------------------------------------------------------------------------------------
n/a 13724-775 Multiple Electrode Ablation PCT/US95/10242 08/11/95 Pending
Apparatus
-----------------------------------------------------------------------------------------------------------------------
JAPANESE TRADEMARKS
------------------------------------------------------------------------------
Country Xxxx Class Filing Date Filing No. Status Locator
------------------------------------------------------------------------------
Japan XXXX 10 12/18/96 8-141791 Filed 13724-TM2002
------------------------------------------------------------------------------
LICENSED PATENTS
-------------------------------------------------------------------------------------------------------------------------
U.S. Patent
Serial No. Entitled Date Issued Expiration Date Licensor
-------------------------------------------------------------------------------------------------------------------------
Medical Probe Device and Method
5,366,490 November 22, 1994 November 22, 2011 VidaMed, Inc.
-------------------------------------------------------------------------------------------------------------------------
Medical Probe Device and Method
5,370,675 December 6, 1994 December 6, 2011 VidaMed, Inc.
-------------------------------------------------------------------------------------------------------------------------
BPH Ablation Method and
5,385,544 Apparatus January 31, 1995 January 31, 2012 VidaMed, Inc.
-------------------------------------------------------------------------------------------------------------------------
Steerable Medical Probe with
5,409,453 Stylets April 25, 1995 April 25, 2012 VidaMed, Inc.
-------------------------------------------------------------------------------------------------------------------------
5,421,819 Medical Probe Device June 6, 1995 June 6, 2012 VidaMed, Inc.
-------------------------------------------------------------------------------------------------------------------------
Medical Probe Device with Optical
5,435,805 Viewing Capability July 25, 1995 July 25, 2012 VidaMed, Inc.
-------------------------------------------------------------------------------------------------------------------------
Medical Probe with Biopsy
5,470,308 Stylet November 28, 1995 November 28, 2012 VidaMed, Inc.
-------------------------------------------------------------------------------------------------------------------------
Medical Ablation Apparatus
5,470,309 Utilizing a Heated Stylet November 28, 1995 November 28, 2012 VidaMed, Inc.
-------------------------------------------------------------------------------------------------------------------------
5,484,400 Dual Channel RF Delivery System January 16, 1996 January 16, 2013 VidaMed, Inc.
-------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
European
PCT Serial No. Entitled Licensor
--------------------------------------------------------------------------------------------------
WO 95/17132 Medical Probe Apparatus with Laser and/or Microwave VidaMed, Inc.
--------------------------------------------------------------------------------------------------
Medical Probe Apparatus with Enhanced RF, Resistance
WO 95/18575 Heating, and Microwave Ablation Capabilities VidaMed, Inc.
--------------------------------------------------------------------------------------------------
U.S. PATENTS
-------------------------------------------------------------------------------------------------------------------
Serial #/ Filing Date/
XXXX # Title Patent # Issue Date Status
-------------------------------------------------------------------------------------------------------------------
08/148,441 11/08/93
1002 Medical Probe Device and Method 5,486,161 1/23/96 Issued
-------------------------------------------------------------------------------------------------------------------
Device for Treating Cancer and 08/148,439 11/08/93
1003 Non-Malignant Tumors and Methods 5,458,597 10/17/95 Issued
-------------------------------------------------------------------------------------------------------------------
Device for Treating Cancer and 08/208,676 03/11/94
1004 Non-Malignant Tumors and Methods 5,472,441 12/05/95 Issued
-------------------------------------------------------------------------------------------------------------------
08/291,424 08/16/94
1008 Coiled RF Electrode Treatment Apparatus 5,507,743 04/16/96 Issued
-------------------------------------------------------------------------------------------------------------------
08/295,166 08/24/94
1011 RF Treatment Apparatus 5,599,345 02/04/97 Issued
-------------------------------------------------------------------------------------------------------------------
08/290,031 08/12/94
1012 Multiple Electrode Ablation Apparatus 5,536,267 07/16/94 Issued
-------------------------------------------------------------------------------------------------------------------
08/295,200 08/24/94
1018 RF Treatment System 5,599,346 02/04/97 Issued
-------------------------------------------------------------------------------------------------------------------
08/515,379 08/15/95
1039 Multiple Antenna Ablation Apparatus and Method 5,683,384 11/04/97 Issued
-------------------------------------------------------------------------------------------------------------------
08/576,436 12/19/95
1039CIP5 Multiple Antenna Ablation Apparatus and Method 5,672,173 09/30/97 Issued
-------------------------------------------------------------------------------------------------------------------
08/585,532 01/10/96
1039CIP6 Multiple Antenna Ablation Apparatus and Method 5,672,174 9/30/97 Issued
-------------------------------------------------------------------------------------------------------------------
Multiple Antenna Ablation Apparatus with
1039CIP1 Multiple Sensor Feedback 08/575,208 12/19/95 Allowed
-------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***]
-------------------------------------------------------------------------------------------------------------------
Multiple Antenna Ablation Apparatus and Indication
1039CIP3 Method Sensor Feedback 08/577,208 12/22/95 Allowed
-------------------------------------------------------------------------------------------------------------------
1039CIP4 Multiple Antenna Ablation Apparatus and Method 08/574,618 12/19/95 Allowed
-------------------------------------------------------------------------------------------------------------------
1039CIP8 Multiple Antenna Ablation Apparatus and Method 08/605,323 02/14/96 Allowed
-------------------------------------------------------------------------------------------------------------------
Multiple Antenna Ablation Apparatus and
1039CIP9 Method with Cooling Element 08/616,928 03/15/96 Allowed
-------------------------------------------------------------------------------------------------------------------
*** Material has been omitted pursuant to a request for confidential treatment,
and such Material has been filed separately with the SEC.
U.S. TRADEMARKS
---------------------------------------------------------------------------------------------------------------------------
Application
Trademark Classes Filing Date No. Status Case Number
---------------------------------------------------------------------------------------------------------------------------
XXXX 10,42 06/19/96 75/122,091 Published 13724-TM1001
---------------------------------------------------------------------------------------------------------------------------
XXXX 10,42 11/20/96 75/202,020 Published 13724-TM1013
---------------------------------------------------------------------------------------------------------------------------
XXXX MEDICAL SYSTEMS 10 09/09/96 75/163,081 Allowed 13724-TM1012
---------------------------------------------------------------------------------------------------------------------------
