Exhibit 10.22
DISTRIBUTION AGREEMENT
THIS AGREEMENT, effective as of August 28, 1998, between CARDIOVASCULAR
DIAGNOSTICS, INC., a corporation organized and existing under the laws of North
Carolina, with its principal offices located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxx Xxxxxxxx ("CVDI"), and CHIRON DIAGNOSTICS CORPORATION, a Delaware
corporation with its principal offices at 00 Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxxxx ("Chiron Diagnostics").
W I T N E S S E T H:
WHEREAS, CVDI, among other things, is engaged in the manufacture of
certain hemostasis diagnostic products;
WHEREAS, Chiron has experience and capability in the marketing and
distribution of such products and desires to distribute CVDI's hemostasis
products by itself and through its Affiliates and distributors (hereinafter
Chiron Diagnostics, its Affiliates and distributors shall collectively be
referred to as "Chiron"); and
WHEREAS, simultaneously herewith, Chiron will invest $6,000,000 in CVDI
through its purchase of shares of Common Stock of CVDI.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS.
The following capitalized terms shall have the meanings set forth below:
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[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SEC.
1.1 "ACT" means the Food, Drug and Cosmetic Act (21 U.S.C. xx.xx.
301 et seq.) and the regulations promulgated thereunder and all
foreign equivalents thereof.
1.2 "AFFILIATE" means any person or entity which, directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, a party. "Control"
means the direct or indirect, legal or beneficial, (a) ownership of
more than 50% of the outstanding voting rights of such person or
entity or (b) the power or ability to direct the management or
policies of such person or entity.
1.3 "CONTROLS" means Products manufactured by CVDI which are used
for quality control purposes.
1.4 "FDA" means the United States Food and Drug Administration or
any successor agency, and all foreign equivalents thereof.
1.5 "GOOD MANUFACTURING PRACTICES" OR "GMP" means the applicable
current good manufacturing practices promulgated from time to time
by the FDA in accordance with the Act, and all foreign equivalents
thereof.
1.6 "HOME MARKET" means the market for Products used by patients
performing tests on themselves at home (i.e., outside of hospital,
institutional or physician office locations).
1.7 "INSTRUMENTS" means CVDI's manual, compact, single test,
portable analyzer, the TAS (thrombolytic assessment system), which
provides point of patient care evaluations of hemostasis, and the
Accent, portable compact microprocessor-based docking station to be
used in conjunction with the TAS for purposes of heparin
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management during surgical procedures. Instruments sold by Chiron
hereunder shall bear a Chiron label for all Instruments sold
subsequent to an initial interim period, approximately 120 days
after CVDI receives the necessary approved artwork from Chiron.
1.8 "NEW PRODUCTS" means improvements and enhancements to Routine
Products.
1.9 "PRODUCTS" means Routine Products, New Products, Specialty
Products and Instruments.
1.10 "ROUTINE PRODUCTS" means CVDI HMT, PT, aPTT and LHMT test
cards.
1.11 "SPECIALTY PRODUCTS" means any test cards sold by CVDI,
excluding Routine Products and New Products, as they become
available.
1.12 "SPECIFIED MARKETS" means the market for Products in the
hospital. Chiron shall be entitled to provide written notice to CVDI
that Chiron desires to add distribution rights in any market in
addition to the hospital market, other than the Home Market, for a
period of 120 days subsequent to the effective date of this
Agreement and any such market shall be added to the definition of
Specified Markets..
1.13 "TERRITORY" means the countries listed on Schedule 1.13.
2. DISTRIBUTION OF PRODUCT.
2.1 EXCLUSIVE RIGHTS.
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(a) GRANT. Subject to the limitations contained herein, CVDI
hereby grants to Chiron the sole and exclusive right to
sell, market, promote, distribute, and otherwise transfer,
dispose, provide and place ("sell"): (i) Routine Products
and New Products within the Territory in the Specified
Markets, and (ii) Specialty Products within the Territory
in the Specified Markets, but excluding the United States
and Canada from the definition of Territory for Specialty
Products. CVDI shall not, directly or indirectly, through
technology licensing or otherwise, grant any third party
any right to sell Routine Products in the Territory in the
Specified Markets during the term of this Agreement. CVDI
hereby grants to Chiron the non-exclusive right to sell,
market, promote, distribute, and otherwise transfer,
dispose, provide and place ("sell") Instruments within the
Territory in the Specified Markets during the term of this
Agreement. It is anticipated by the parties that Chiron
shall prepare for its distribution obligations between the
date hereof and the end of calendar year 1998 and that it
shall begin distribution on or about January 1, 1999.
(b) EXCEPTIONS. The rights granted in paragraph (a) above shall be
subject to the following exceptions:
(i) Notwithstanding any other provision or
implication of this Agreement, CVDI shall retain the
right to provide Routine Products, New Products and
Specialty Products to collaborative partners and other
entities participating in such collaborations and such
Routine Products, New Products and Specialty Products
shall bear the Chiron label in the
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Territory in the Specified Markets. Collaborative
partners shall mean entities collaborating with CVDI in
the development of new products.
(ii) Notwithstanding any other provision or
implication of this Agreement, none of the terms of this
Agreement shall apply to CVDI's sale of Products to the
customers of Dade International Inc. ("Dade") with whom
CVDI has contracted to supply Routine Products prior to
the Effective Date of this Agreement. Any sales to Dade
shall be: (i) made in accordance with the letter of
termination delivered to Dade by CVDI in connection with
Chiron's execution of this Agreement and in accordance
with the termination provisions of the Distribution
Agreement dated October 16, 1996, between CVDI and Dade,
(the "Dade Agreement"); and (ii) made for resale to
existing Dade customers that purchased Instruments prior
to termination of the Dade Agreement as specified in
such Dade Agreement..
2.2 EXCLUSIVITY. During the term of this Agreement, Chiron shall
not sell in the Territory in the Specified Markets any whole
blood or plasma, point of care Products except under the terms
of this Agreement. Neither Chiron nor any of its Affiliates or
distributors shall distribute Products outside the Territory.
2.3 REQUIREMENTS. Chiron shall purchase, and CVDI shall supply,
subject to the limitations of Section 5.7, all of Chiron's
requirements of Products, including Routine Products, New
Products, Specialty Products and Instruments for resale within
the Territory. During the term of this Agreement, and for a
period ending the later of five
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(5) years from the effective date hereof or three (3) years
subsequent to termination hereof, neither Chiron nor any of
its Affiliates shall manufacture any Products (using
technology based upon iron oxide particles in combination with
reagents in the presence of magnetic fields) or purchase any
Products (using technology based upon iron oxide particles in
combination with reagents in the presence of magnetic fields)
from a supplier other than CVDI.
2.4 PERFORMANCE REQUIREMENTS. Chiron shall use reasonable efforts,
as determined in Chiron's sole discretion, to promote the sale
of the Products. Chiron and CVDI contemplate that the
promotional efforts may include preparing promotional
materials to be used in the Territory by Chiron, participating
in appropriate trade shows, advertising in trade publications
applicable to the Territory and directly soliciting orders
from customers within the Territory by the appropriate Chiron
sales force as determined in Chiron's sole discretion. Chiron
shall be responsible for training customers with respect to
Products sold. CVDI will provide technical support to
customers in the United States through December 31, 1999, at
no additional cost to Chiron, except that Chiron shall pay
CVDI's travel and related expenses associated with providing
such technical support. Chiron will develop its own customer
technical support capabilities and will assume sole
responsibility for providing technical support to customers
after December 31, 1999. After December 31, 1999, Chiron shall
be entitled to contract with CVDI to supply technical support
and training on terms as mutually agreed upon by CVDI and
Chiron. CVDI and Chiron shall comply with the Act and other
applicable, legal, health and safety requirements, laws and
regulations in
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all of their marketing and sales activities. Chiron shall not
promote the Products for any uses not approved for Products by
applicable regulatory agencies.
2.5 TERMS AND CONDITIONS. All orders for Products shall be
initiated by written purchase orders. No order shall be
binding unless consistent with this Agreement. Acceptance by
CVDI of Chiron's purchase order is expressly limited to and
conditioned upon, and only upon, Chiron's acceptance of the
terms and conditions set forth in this Agreement, which may
not be changed or waived except in a writing signed by the
parties. Chiron's purchase orders submitted to CVDI shall be
governed by the terms of this Agreement and CVDI's published
Standard Terms and Conditions of Sale as in effect at the time
of such purchase; provided, however, that in the event of a
conflict between the terms of this Agreement and CVDI's
Standard Terms and Conditions of Sale, this Agreement shall
control and any additional, inconsistent or different terms
and conditions contained in any purchase order,
acknowledgment, confirmation, acceptance, invoice, or other
documents supplied by Chiron or CVDI are hereby expressly
rejected. A copy of CVDI's Standard Terms and Conditions of
Sale is attached hereto as Schedule 2.5. CVDI shall not
arbitrarily change its Standard Terms and Conditions. CVDI
shall limit its changes to correcting typographical errors,
conforming the terms and conditions to applicable law, and
changes to make the Standard Terms and Conditions consistent
with terms and conditions offered in the marketplace for
comparable products. CVDI shall advise Chiron in writing at
least thirty (30) days in advance of any proposed changes
(other than minor non-material corrections) to the Standard
Terms and Conditions. Chiron and CVDI agree that such
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orders and documents may include provisions which identify
Products, quantities of Products, shipping dates, delivery
information and prices and billing information in a manner not
inconsistent with this Agreement and such provisions shall be
binding on the parties.
2.6 REJECTION. Chiron and its distributors shall notify CVDI of
obvious damage relating to the manufacturing or packaging of
the Products (other than damage solely associated with the
shipping of the Products) within forty-five (45) days of their
respective receipt of the Products. Any such Product not
rejected for obvious damage within forty-five (45) days after
receipt by Chiron or its distributors (the "Rejection Period")
shall be deemed accepted. A rejection by Chiron shall mean
that CVDI has received within the Rejection Period written
notice of such rejection stating with particularity the reason
therefor. CVDI shall as promptly as possible replace any
rejected Products at no cost to Chiron or its distributors.
After the Rejection Period, Chiron may not return any such
obviously damaged Products for any reason without CVDI's prior
written consent.
2.7 EXPANSION OF TERRITORY.
(a) CVDI will promptly advise Chiron in writing of
opportunities for extension of Chiron's distribution rights
into any country outside the Territory in which CVDI desires
to expand or any country where existing rights lapse or are
subject to competitive bid or in any country in which CVDI
currently has a distribution agreement, in each case where
Chiron has a distribution network in place. CVDI agrees not to
enter into any contract for distribution rights in
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such other country until the earlier of the receipt of a
proposal from Chiron regarding such country or the expiration
of the ninety (90) day period following Chiron's receipt of
written notification pursuant to this sub-section. In
considering the award of any expansion territory, the parties
hereto agree to consider the relationship of CVDI and Chiron
and Chiron's performance hereunder as a criteria in making any
such award. Nothing in this sub-section shall limit the rights
of CVDI to solicit, review or negotiate with any party at any
time with respect to areas outside the Territory as the same
may exist from time to time.
(b) Notwithstanding the foregoing, if CVDI determines to
enter into any agreement or significant negotiations with a
third party granting distribution rights to such party with
respect to (i) Specialty Products in the United States or
Canada or (ii) Products in the Home Market, CVDI will promptly
advise Chiron in writing prior to entering into any such
negotiations or agreement granting any such distribution
rights to a third party. CVDI agrees not to enter into a
distribution agreement for (i) Specialty Products in the
United States or Canada or (ii) Products in the Home Market
until the earlier of the receipt of a proposal from Chiron
regarding such rights or the expiration of the ninety (90) day
period following Chiron's receipt of written notification
pursuant to this sub-section. In considering the award of any
such rights, CVDI agrees to consider the relationship of CVDI
and Chiron and Chiron's performance hereunder as a criteria in
granting such distribution rights. Nothing in this Sub-
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section shall limit the rights of CVDI to solicit, review or
negotiate with any party at any time with respect to such
distribution rights. The provisions of this subparagraph
relating to Chiron's opportunity to gain distribution rights
in the Home Market shall not be available to Chiron if Chiron
determines to enter any agreement with a third party relating
to the Home Market or if Chiron enters into significant
negotiations with a third party regarding the Home Market if
such third party is not CVDI. Chiron shall discuss with CVDI
its plans regarding the Home Market prior to entering the Home
Market and prior to entering into an agreement with a third
party relating to the sale of products to the Home Market.
(c) CVDI will use its best efforts to facilitate and aid
Chiron's negotiations with Tokuyama Soda Company, Ltd.,
(excluding the payment of any money) regarding distribution of
CVDI PT and aPTT cards in Japan, Korea and Taiwan.
(d) CVDI and Chiron will jointly develop and agree to a
worldwide distributor transition plan no later than November
30, 1998, such plan to provide for granting distributor
relationships in favor of Chiron as and when permitted under
any such existing distribution agreements.
3. MARKETING AND SUPPORT ACTIVITIES.
3.1 MARKETING MEETINGS; REPORTS. The parties shall meet at least
quarterly to discuss performance, sales and marketing plans,
pricing, customer support, product
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improvement suggestions and other information concerning the
marketing and development of the Products. Chiron shall
provide information available to it about the Products and
their ability to compete with other diagnostic products for
related uses and to meet customer needs. Chiron shall provide
CVDI general information regarding sales of the Products such
as broad pricing trends by geographic region as well as sales
information indicating sales by country or geographic region,
where available to Chiron.
3.2 PROMOTIONAL MATERIAL. CVDI will furnish Chiron with examples
of promotional literature and advertisements it prepares for
the Products. Chiron shall not copy or utilize any promotional
material prepared by it without obtaining the prior written
approval thereof from CVDI. CVDI's approval shall not be
unreasonably withheld or delayed. Chiron shall submit by
courier camera ready copy for the labels and package inserts
to CVDI for approval. CVDI shall respond within fourteen (14)
days of receipt. If no written objection is received from CVDI
within fourteen (14) days after the courier package is
received by CVDI, Chiron will contact CVDI to obtain CVDI's
approval for the copy as submitted, or as modified in
accordance with CVDI's instructions. If no written objection
is received by Chiron, approval by CVDI will be deemed to have
been granted after such contact and the lapse of ten (10)
days. CVDI and Chiron shall comply with all requirements of
the Act, local laws, regulations and other laws in their
advertising and other promotional activities.
3.3 PACKAGING, LABELING. CVDI shall manufacture, label and package
the Products in final form for distribution by Chiron. Chiron
shall provide camera ready copy for the
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labels containing Chiron trade dress. In addition to all
applicable legal requirements, the labels shall comply with
the requirements set forth in Section 3.4 below, shall display
"CVDI" and shall identify CVDI as the manufacturer of the
Products. Chiron shall not repackage or label any Products and
shall not alter any Products or any package or label used in
connection with any Products except as specifically authorized
by CVDI. In the event that CVDI shall authorize or require
repackaging or re-labeling, Chiron shall comply in all
respects with the instructions of CVDI, at the expense of
CVDI.
3.4. TRADEMARKS AND TRADE NAMES. CVDI hereby grants Chiron, the
nontransferable right to use in the Territory the trademarks
and tradenames listed on Schedule 3.4, and any other
trademarks owned by CVDI which it may designate in writing for
use by Chiron (the "Trademarks"), in connection with the
marketing and sale of the Products for the duration of the
Agreement. Chiron's distributors and Affiliates shall be
entitled to the use of such Trademarks, subject to the terms
and conditions of this Agreement, so long as such use is
authorized only in connection with distribution of Products
hereunder and subject to terms and conditions substantially
similar to those contained in this Agreement. The Products
shall be marketed and sold only under the Trademarks and the
name "CVDI" as required under Section 3.3 and such other marks
as Chiron may use for its other products. Each Product
marketed and sold shall conspicuously bear the name and
Trademarks of CVDI in addition to any Chiron marks. Chiron
acknowledges that it has and will obtain no proprietary
interest in the Trademarks and agrees not to use the same as
part of its corporate or business name.
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Subject to the sale of any inventory existing as of the date
of any such termination, Chiron's, its distributors' and its
Affiliates' right to the use of any Trademark or other
property of CVDI shall terminate immediately upon termination
of this Agreement. Chiron shall use the Trademarks only in the
manner prescribed by CVDI. Chiron hereby grants CVDI the
nontransferable right to use in the Territory the trademarks
and tradenames listed on Schedule 3.4, and any other
trademarks owned by Chiron which it may designate in writing
for use by CVDI (the "Chiron Trademarks"), in connection with
the marketing and sale of the Products. During the term of
this Agreement, the Products shall be marketed and sold by
Chiron only under the Trademarks, the Chiron Trademarks, and
such other marks as CVDI may use for its other products. CVDI
acknowledges that it has and will obtain no proprietary
interest in the Chiron Trademarks and agrees not to use the
same as part of its corporate or business name. Subject to the
sale of any inventory or work-in process existing at the date
of any such termination, CVDI's right to the use of any Chiron
Trademark or other property of Chiron shall terminate
immediately upon termination of this Agreement. CVDI shall use
the Chiron Trademarks only in the manner prescribed by Chiron.
The Products are offered for sale and sold by Chiron and CVDI
subject in every case to the condition that such sale does not
convey any licenses, express or implied, to manufacture,
duplicate or otherwise copy or reproduce any Product. In the
event of termination of this Agreement, Chiron shall not
manufacture or have manufactured any devices, cards,
components or assemblies utilizing any information belonging
to CVDI.
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3.5 MARKETING ASSISTANCE/TRAINING. CVDI agrees to provide
technical training, and technical assistance to Chiron
personnel at periodic intervals, with the frequency and
content to be determined by mutual agreement. Such training
will be provided by CVDI at no additional cost to Chiron,
except that Chiron shall pay CVDI's travel and related
expenses associated with providing such training.
3.6 SERVICE. Except as otherwise provided in this Section, CVDI
agrees to provide service and maintenance for Instruments sold
by Chiron for its standard fees as set forth on Schedule 3.6,
and thereafter, as such fees change from time to time, and in
accordance with CVDI's then applicable standard service
agreement. CVDI shall offer to Chiron service contracts for
Instruments to Chiron customers to provide maintenance and
services in accordance with its standard contract. CVDI shall
provide Chiron with its service contract price list and, at
its option, Chiron shall be entitled to sell such contracts to
Chiron customers on behalf of CVDI. Chiron shall xxxx for the
service contracts which it sells and payment by Chiron to CVDI
shall be within thirty (30) days after Chiron receives payment
for such service/maintenance contract. Service and maintenance
shall be provided by CVDI or an independent third party
service company. To the extent that CVDI intends to contract
with a third party for service and maintenance of the
Products, CVDI will promptly advise Chiron in writing of the
opportunity for Chiron to perform such service and
maintenance.
3.7 PRODUCT WARRANTY. Neither party nor its subdistributors shall
make any representation or warranty about the Products,
whether in writing or orally, except as is contained in
written materials delivered to Chiron by CVDI expressly for
use in
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promoting the sale of the Product or as may otherwise be
agreed to by CVDI in writing.
4. PRODUCT DEVELOPMENT.
4.1. DEVELOPMENT BY CVDI. CVDI shall consult with Chiron from time
to time about improvements which may be desired by Chiron and
end users without obligation to CVDI. Chiron may, in its sole
discretion, provide product suggestions, information about
integration with its critical care instruments and data
management systems, results of focus sessions and other
expectations of end users, and access to technology available
to it which may be useful to CVDI. CVDI will evaluate
integrating its technology into Chiron's products. Chiron
agrees to take no action to modify or change CVDI's technology
or the Products in any way without the prior written consent
of CVDI.
4.2 RIGHTS TO PRODUCTS AND NEW PRODUCTS. CVDI shall own all right,
title, and interest in and to the know-how and technology
relating to the Products.
5. REGULATORY COMPLIANCE.
5.1 REGISTRATIONS.
(a) CVDI shall use commercially reasonable efforts to
obtain and maintain regulatory approvals and requirements for
it to sell the Products in the Territory. CVDI agrees to
cooperate with Chiron in any regulatory process to permit
Chiron to participate in such process where feasible. CVDI
shall have
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sole discretion as to the commercial reasonableness of any
acts required on its part to maintain any regulatory approval
or requirement.
(b) CVDI shall promptly provide to Chiron copies of all
required Product notifications and registrations to regulatory
agencies (including device listing reports).
5.2 REPORTING OBLIGATIONS. Chiron shall maintain, or cause to be
maintained, all complaint files and other records required to
be maintained by the FDA and other regulatory agencies with
respect to Products purchased by Chiron from CVDI. CVDI shall
promptly provide to Chiron copies of all complaints received
with respect to the Products sold to Chiron as well as
responses sent, if any. Chiron shall promptly provide CVDI
with copies of any complaints relating to the Products
received by Chiron. Except to the extent Chiron is otherwise
required by law, CVDI shall submit to the FDA all reports of
complaints, malfunctions, failures or deterioration in the
characteristics or performance or instructions for use or
inadequacy in labeling which may have led or lead to death or
serious injury and all other information about the Products
required to be submitted to any regulatory agency, including
the reports required under 21 CFR Parts 803 and 804 applicable
to the Products.
5.3 MANUFACTURING. CVDI shall use its best efforts to comply with
all applicable GMP requirements, including all national
technical and quality standards applicable to the Products
which are incorporated into GMP. From time-to-time, with
reasonable prior notice to CVDI, Chiron may inspect CVDI
facilities and upon reasonable request, review CVDI's methods
used to audit its subcontractors for GMP compliance. CVDI
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shall have sole discretion as to the commercial reasonableness
of any acts required on its part with respect to GMP
compliance, provided, however, CVDI shall notify Chiron of any
citations from discussions with a regulatory body where such
discussions and citations relate to a material aspect of GMP
compliance.
5.4 SAMPLES. CVDI shall retain samples of each lot of the Products
for time periods which are in accordance with GMP.
5.5 PRODUCT RECALLS AND FIELD CORRECTIVE ACTIONS. In the event (i)
any government authority issues a directive or order that a
Product be recalled, (ii) a court of competent jurisdiction
orders such a recall or (iii) CVDI determines that a Product
should be recalled or that a Field Corrective Action should
occur, the parties shall take all appropriate corrective
action. Chiron will provide notice to customers of the recall
of the Products. Upon determination of the party responsible
for the recall or Field Corrective Action, such party shall be
responsible for the cost of notifying end users and for
determining the corrective actions to be taken and the costs
associated with such actions. CVDI and Chiron shall fully
cooperate with one another and provide all reasonable
assistance in conducting any recall or Field Corrective Action
under this Paragraph. Chiron shall maintain records of all
sales of the Products sufficient to carry out a recall with
respect to Products purchased under the Agreement.
5.6 GENERAL OBLIGATIONS OF CVDI AND CHIRON.
(a) Except as otherwise expressly provided in the
Agreement, CVDI shall manufacture, test, package, and label
the Products pursuant to the terms,
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conditions and subject to the limitation contained in this
Agreement. Chiron shall price, invoice and have shipped in the
Territory or in the Specified Markets, all Products pursuant
to the terms, conditions and subject to the limitations
contained in this Agreement.
(b) CVDI shall manufacture, test, package, label and
release and Chiron shall maintain, store and ship the Products
in accordance with all applicable GMP requirements.
(c) Each party shall promptly notify the other party of,
and shall provide the other party with copies of, any
correspondence and other documentation received or prepared in
connection with any of the following events: (1) receipt of
any material correspondence from the FDA in connection with
the manufacture, sale or use of the Products; (2) any recall
of the Products; (3) the withdrawal of the Products from the
market; (4) any regulatory comments relating to the
manufacture of the Products requiring a response or action by
either party.
(d) CVDI shall maintain all manufacturing and analytical
records, all records of shipments of the Products from CVDI,
and all validation data relating to the Products for the time
periods required by applicable laws and regulations. CVDI
shall make such data available to the FDA upon request of the
FDA, such request being made either directly to Chiron or to
CVDI, or otherwise as required by applicable law.
5.7 ORDERS.
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(a) FORECASTS. Beginning with the execution hereof,
Chiron shall provide monthly, by the fifteenth day of each
month, its estimated forecast of its requirements for the
Products for each of the six (6) months following the end of
the month in which such forecast is submitted (each a
"Forecast"). All Forecasts under this Agreement and updates
thereof for any period will constitute a firm obligation of
Chiron to purchase the quantities of Products indicated for
the first three months of such Forecast.
(b) DELIVERY. CVDI shall use its best efforts to supply
the Products ordered by Chiron and shall supply Products in
accordance with the delivery schedule and in the quantities
specified by Chiron provided; however, CVDI shall not be
obligated to deliver Products to the extent that orders for
such Products exceed 125% of the quantities stated in the
portion of any forecast which contains the firm obligation of
Chiron to purchase Products. CVDI shipments of Products shall
be delivered FOB freight collect CVDI's distribution site,
Raleigh, North Carolina, to Chiron's carrier at which time
title, ownership and risk of loss and damage shall pass to
Chiron. CVDI shall deliver Products, properly packed for
distribution (including, but not limited to refrigerated
distribution), to the carrier selected by Chiron at its
distribution site. All freight and insurance expenses, as well
as any special handling or special packing expenses requested
by Chiron, shall be paid by Chiron. (Packing for refrigerated
distribution is not a special packing expense.) Chiron shall
bear any and all applicable taxes, duties and similar charges
that may be assessed against the Products after
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delivery to the carrier at CVDI's distribution site. CVDI
shall include shipping documents with Products in accordance
with Chiron's reasonable requests.
5.8 PACKAGING. All labels and labeling produced by CVDI for
Products, including packaging layout, design and color, shall
be consistent with artwork supplied or approved by Chiron.
CVDI shall provide all necessary labels and package inserts
for all Products, as well as for the shipping container, which
labels and package inserts shall comply with applicable FDA
requirements. Chiron shall not use any other labels or package
inserts for any of such Products.
5.9 TAXES; DUTIES. The actual amount of sales, use, excise,
value-added and similar taxes levied upon or applicable to the
transfer of Products to Chiron are payable by Chiron. Chiron
and its Affiliates shall pay all duties, tariffs, surcharges
and other customs and other governmental fees levied in
connection with the export of Products outside of the United
States but within the Territory.
6. PRODUCT WARRANTY.
6.1 STANDARD LIMITED WARRANTY. CVDI warrants that the Routine
Products, New Products and the Specialty Products shall, at
the time of shipment, (a) comply with the requirements of the
Act, if applicable, and shall until their expiration date
conform to the labeling and package inserts approved by CVDI;
(b) will not be products that are adulterated or misbranded
within the meaning of the Act; (c) shall have been
manufactured, packaged, stored and shipped in conformity with
applicable GMP
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requirements; and (d) will not be products that may not be
introduced into interstate commerce pursuant to applicable
federal or state law.
CVDI will use its best efforts to give Chiron a minimum of
ninety (90) days advance notice of any material changes in the
form or functionality of the Products. CVDI warrants that all
Instruments shall, until the earlier of twenty-four (24)
months from shipment by CVDI or twelve (12) months after the
date of installation with the customer: (a) comply with the
requirements of the Act, if applicable, and shall conform to
the labeling and package inserts approved by CVDI; (b) will
not be products that are adulterated or misbranded within the
meaning of the Act; (c) shall have been manufactured,
packaged, stored and shipped in conformity with applicable GMP
requirements; and (d) will not be products that may not be
introduced into interstate commerce pursuant to applicable
federal or state law.
This limited warranty is contingent upon proper use of a
Product in the application for which such Product was intended
and does not cover Products that were modified without CVDI's
written approval, that have expired, or that were improperly
stored or handled. Except as set forth in Schedule 6.1, as of
the date of the execution of this Agreement, CVDI has no
knowledge that any of the Products, or the sale or use of any
of the Products for their intended purposes infringe any
intellectual property of any third party.
6.2 NO OTHER WARRANTY. EXCEPT FOR THE EXPRESS LIMITED WARRANTIES
SET FORTH IN SECTION 6.1 ABOVE, CVDI GRANTS NO WARRANTIES FOR
THE PRODUCTS, EXPRESS OR IMPLIED, EITHER IN FACT OR BY
21
OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND CVDI
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF QUALITY,
WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE OR WARRANTY OF NON-INFRINGEMENT.
6.3 REMEDY AND LIMITATION OF LIABILITY. EXCEPT AS OTHERWISE
PROVIDED HEREIN, CVDI'S LIABILITY AND CHIRON AND ITS
AFFILIATES, ITS DISTRIBUTORS AND ITS CUSTOMERS SOLE REMEDY
UNDER THE LIMITED WARRANTY UNDER ARTICLE 6 HEREOF WITH RESPECT
TO ANY PRODUCTS SHALL BE LIMITED TO A REFUND OF CHIRON'S COST
OF THE PRODUCTS OR REPAIR OR REPLACEMENT, IN ALL EVENTS AT
CVDI'S SOLE DISCRETION. EXCEPT AS OTHERWISE PROVIDED HEREIN,
IN NO EVENT SHALL CVDI BE LIABLE FOR THE COST OF PROCUREMENT
OF SUBSTITUTE PRODUCT OR FOR ANY-SPECIAL, CONSEQUENTIAL OR
INCIDENTAL DAMAGES FOR BREACH OF WARRANTY OR OTHERWISE. CVDI
SHALL BEAR THE EXPENSE OF FREIGHT FOR ALL RETURNED GOODS.
6.4 CARD DATING. CVDI guarantees to deliver all Routine Products
within three (3) months of the date of manufacture and with a
minimum of nine (9) months dating at the time of such
delivery.
6.5 ASSERTION OF CLAIMS. In any case where Chiron expects to make
a claim against CVDI with respect to nonconforming Product,
Chiron shall retain the Product for the lesser of thirty (30)
days or receipt of written authorization and instructions of
CVDI
22
either to dispose of the Product or to return the Product to
CVDI. Chiron will provide CVDI proof of destruction of cards
when requested by CVDI.
6.6 YEAR 2000 COMPLIANCE. Subject to the limitations set forth in
this Article 6, CVDI certifies to Chiron that all Products are
year 2000-compliant.
23
7. PAYMENTS FOR PRODUCT.
7.1 PURCHASE PRICE. Except as provided otherwise herein, Chiron or
an Affiliate of Chiron shall pay CVDI a purchase price per
Routine Product (the "Card Purchase Price") of US$[ ]. Except
as otherwise provided herein, Chiron or an Affiliate of Chiron
shall pay CVDI a purchase price per Instrument (the
"Instrument Purchase Price") of US$[ ]. The parties shall
negotiate in good faith the purchase price of Specialty
Products. Schedule 7.1 sets forth the initial prices at which
CVDI will sell to Chiron Products other than Instruments and
Routine Products. Such prices are subject to adjustment from
time to time but prices shall not be increased to exceed the
increase in the Producer Price Index for the immediately prior
calendar year, such an adjustment to begin not earlier than
January 1, 2000.
7.2 CHIRON COMMITMENT. Chiron agrees to purchase from CVDI a
minimum of [ ] Instruments by December 31, 1999, and minimums
of (i) an additional [ ] Instruments by December 31, 2000,
(ii) an additional [ ] Instruments by December 31, 2001, (iii)
an additional [ ] Instruments by December 31, 2002 and (iv)
and additional [ ] Instruments by December 31, 2003. Chiron
agrees that its commitment to purchase the minimum number of
Instruments in any given calendar year shall be deemed
fulfilled only if it purchases at least 40% of the applicable
minimum number semi-annually (by June 30 and by December 31)
in each such calendar year.
------------------
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SEC.
24
7.3 ADJUSTMENTS TO THE PURCHASE PRICE. The Card Purchase Price
shall be subject to adjustment as set forth below based on
CVDI test card volume.
Annualized Monthly Card Purchase
CVDI Card Volume CVDI Card Volume Range Price
0 to [ ] cards 0 to [ ] cards $[ ]
[ ] to [ ] to
[ ] cards [ ] cards $[ ]
[ ] to [ ] to
[ ] cards [ ] cards $[ ]
[ ] to [ ] to
[ ] cards [ ] cards $[ ]
[ ] to [ ] to
[ ] cards [ ] cards $[ ]
For purposes of adjusting the Card Purchase Price, test card
volume shall include volume from all revenue sources for sales of
test cards by CVDI ("CVDI Card Volume").
The Card Purchase Price shall initially be US$[ ]. If in any
three (3) consecutive months during the term of this Agreement, the
CVDI Card Volume in each such month (the "Monthly CVDI Card Volume")
exceeds the Monthly CVDI Card Volume Range shown above for the Card
Purchase Price then in effect, the Card Purchase Price for purchases
subsequent to that three (3) month period shall be adjusted as shown
above to reflect the increase in Monthly CVDI Card Volume, and such
adjusted price shall remain in effect until at the end of any month,
either (a) Monthly CVDI Card Volume for each of the preceding three
(3) consecutive months (including that month) exceeds the Monthly
CVDI Card Volume Range shown above for the Card Purchase Price then
in effect or (b) Monthly CVDI Card
------------------
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SEC.
25
Volume for that month falls below the Monthly CVDI Card Volume Range
shown above for the Card Purchase Price then in effect, and in each
case, the Card Purchase Price shall be adjusted up or down
accordingly. For example, if Monthly CVDI Card Volume increases to
between [ ] and [ ] cards each month and Monthly CVDI Card Volume is
maintained at this level for three (3) consecutive months, the Card
Purchase Price for purchases subsequent to that three (3) month
period would be adjusted down to $[ ]. Such adjusted price would
remain in effect until either (a) Monthly CVDI Card Volume exceeds [
] cards in each of any three (3) consecutive months, in which case
the Card Purchase Price would be adjusted downward, or (b) Monthly
CVDI Card Volume falls below [ ] cards in any month, in which case
the Card Purchase Price would be adjusted upward to the Card
Purchase Price payable for the actual Monthly CVDI Card Volume
achieved. CVDI shall review with Chiron, on an annual basis, market
conditions and other factors which may affect pricing; provided,
however, there shall be no obligation on the part of CVDI to change
its pricing as a result of any such meeting.
(b) SAMPLES, ETC. Upon Chiron's request, during each
calendar year in which this Agreement is in effect, CVDI shall
supply (i) an estimated [ ] (with up to [ ] available) Routine
Product test cards (excluding CVDI LHMT test cards) for
training purposes, such cards to be priced at a [ ]% discount
on the Card Purchase Price then in effect, and (ii) samples of
all other test cards for demonstration purposes, such cards to
be priced at the
------------------
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SEC.
26
Card Purchase Price then in effect. Products provided in
accordance with clause (i) above will be clearly marked as
samples not for patient evaluation purposes.
7.4 MINIMUM SALES TO MAINTAIN DISTRIBUTION RIGHTS.
(a) CVDI shall be entitled to terminate this Agreement
in the event that Chiron fails to meet its semiannual or
annual minimum sales of Products to end users in the United
States or Canada, or ship to distributors in other countries
in the Territory, calculated at the end of each six (6) month
calendar period (by June 30 and by December 31) or calendar
year (by December 31), as applicable, and determined by
reference to sales levels as follows:
2001 2002 2003
---- ---- ----
Annual Minimum Sales of
Routine Cards and Specialty
Cards by Chiron (by December
31) [ ]
Semiannual Minimum Sales of
Routine Cards and Specialty
Cards by Chiron (by June 30
and by December 31) [ ]
Annual Minimum Sales of TAS
analyzers by Chiron (by
December 31) [ ]
Semiannual Minimum Sales of
TAS analyzers by Chiron (by
June 30 and by December 31) [ ]
In the event Chiron fails to meet its semi-annual minimum
sales as set forth above in any period, prior to any
termination by CVDI, Chiron and CVDI
------------------
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SEC.
27
shall have thirty (30) days to develop a mutually agreeable
plan to meet the relevant annual sales amount. If a mutually
agreeable plan is executed before the end of such period, CVDI
shall have no right of termination with respect to such
semi-annual period.
(b) Notwithstanding anything to the contrary in this
Agreement, at any time upon sixty (60) days' written notice
where Chiron fails to maintain a distribution network or other
sales presence in any country within the Territory other than
the United States and Canada, and such failure persists beyond
such sixty (60) day period, CVDI shall be entitled to
terminate this Agreement with respect to the grant of
distribution rights for that specific country.
7.5 PAYMENT. All CVDI invoices shall be paid net 30 days from date
of invoice in US Dollars; provided, however, that if a
customer will only accept a single lot of material over an
extended period of time, payment for such CVDI invoices shall
be paid net sixty (60) days from date of CVDI's invoice in US
Dollars. Chiron shall provide CVDI with documentation of such
arrangements. Any invoiced amounts not paid when due shall be
subject to a service charge at the lower of the rate of one
and one-half (1.5%) percent per month or the maximum rate
permitted by law. If Chiron fails to make any payment to CVDI
when due, CVDI shall give Chiron written notice of such
non-payment and Chiron shall have ten (10) days from the
receipt of such notice to make the payment. CVDI may upon
thirty (30) days written notice to Chiron without affecting
any other rights under this Agreement, terminate this
Agreement or cancel or
28
delay shipments hereunder to Chiron for non-payment by Chiron
after such ten (10) day period.
8. CONFIDENTIALITY.
8.1 "PROPRIETARY INFORMATION" means: all financial information,
marketing information, sales information, customer
information, raw materials, know-how, drawings, compositions,
manufacturing and other specifications, analytical procedures,
flow sheets, reports, market studies, preclinical and clinical
test results, FDA and other regulatory submissions, software
and other medical, research, technical, and marketing
information disclosed, directly or indirectly, by either party
or any of its Affiliates to the other party, retroactively to
December 17, 1997, in writing, marked "Confidential",
"Proprietary" or the like, or, if transmitted orally or by
observation of equipment or other material, confirmed by a
writing so marked within sixty (60) days of its disclosure, or
which by its nature is information normally intended to be
held in confidence, unless the same: (a) is or becomes public
knowledge through no fault of the receiving party; (b) is
legally in the possession of the receiving party prior to
receipt from the disclosing party; (c) is subsequently and
lawfully received from a third party without its breach of any
nondisclosure obligation; or (d) is independently developed by
employees of the receiving party who have had no access to the
Proprietary Information of the disclosing party.
Notwithstanding the immediately preceding sentence, CVDI
agrees that all new materials and other information which
Chiron provided to CVDI prior to December 17, 1997, shall be
treated as Proprietary Information.
29
8.2 NON-DISCLOSURE. During the duration of this Agreement and for
a period of five (5) years thereafter, neither party shall
disclose to third parties, or use for its benefit, in whole or
in part, any Proprietary Information received from other
party, except to the extent required to comply with the Act or
other laws. Each party shall take all reasonable steps to
minimize the risk of disclosure of Proprietary Information,
including, without limitation:
(a) ensuring that only its employees whose duties
require them to possess such information have access thereto;
and
(b) exercising at least the same degree of care that it
uses for its own Proprietary Information.
8.3 DUTIES UPON TERMINATION. Except as otherwise permitted under
this Agreement, upon request by the disclosing party after
expiration or termination of this Agreement, the other party
shall either return all of such disclosing party's Proprietary
Information (including data, memoranda, drawings and other
writings and tapes and all copies thereof) received or
prepared by it or destroy the same, and in any event shall
make no further use of such Proprietary Information at any
time provided, however, that counsel for the receiving party
may keep one copy of the Proprietary Information for purposes
of ascertaining the receiving party's obligations pursuant to
this Section 8.
8.4 USE OF PROPRIETARY INFORMATION. During the duration of this
Agreement and for a period of five (5) years thereafter,
neither party shall use the other party's Proprietary
Information for any purposes, except to perform its
obligations hereunder. In no event
30
shall Chiron use any Proprietary Information for commercial
purposes subsequent to the termination of this Agreement.
8.5 INJUNCTIVE RELIEF. Each party acknowledges that the other
party would not have an adequate remedy at law for breach of
any of the covenants contained in this Section 8 and hereby
consents to the enforcement of same by the other party by
means of temporary or permanent injunction issued by any court
having jurisdiction thereof and further agrees that the other
party shall be entitled to assert any claim it may have for
damages resulting from the breach of such covenants in
addition to seeking injunctive or other relief. The provisions
of this Agreement relating to Proprietary Information shall
supercede any prior agreements relating to Proprietary
Information between Chiron and CVDI.
9. INDEMNIFICATION.
9.1 INDEMNIFICATION BY CVDI. Subject to Chiron's compliance with
its obligations set forth in Section 9.3 below, CVDI shall
indemnify, defend and hold Chiron, its Affiliates,
subdistributors, their directors, officers, employees and
agents harmless from and against any and all losses, damages,
liabilities, claims, demands, judgments, settlements, costs
and expenses (including, without limitation, reasonable
attorneys' fees and other costs of defense) (collectively
"Losses") attributable to, or arising out of a breach by CVDI
of any of CVDI's warranties, representations, covenants or
obligations hereunder or any claim, lawsuit or other action by
a third party for, breach of contract, personal injury or
property damage to the extent caused by a breach by CVDI of
this Agreement, or out of or connected with the use or sale of
the Product to
31
the extent directly caused by CVDI's fault, negligence or
breach of any of its obligations hereunder concerning the use
or sale of the Product.
9.2 INDEMNIFICATION BY CHIRON. Subject to Chiron's compliance with
its obligations set forth in Section 9.3 below, Chiron shall
indemnify, defend and hold CVDI and its Affiliates, their
shareholders, directors, officers, employees and agents
harmless from and against any and all Losses attributable to,
or arising out of a breach by Chiron of any of Chiron's
warranties, representations, covenants or obligations
hereunder, or any claim, lawsuit or other action by a third
party for, breach of contract, personal injury or property
damage to the extent caused by a breach by Chiron or any of
its Affiliates of this Agreement, or out of or connected with
the use or sale of the Product to the extent directly caused
by Chiron's fault, negligence or breach of any its obligations
hereunder concerning the use or sale of the Product.
9.3 NOTICE AND ASSISTANCE. A party (the "indemnitee") which
intends to claim indemnification under this Section 9 shall
promptly notify the other party (the "indemnitor") in writing
of any action, claim or other matter in respect of which the
indemnitee or any of its employees or agents intend to claim
such indemnification. The indemnitee shall permit, and shall
cause its employees and agents to permit, the indemnitor, at
its discretion, to settle any such action, claim or other
matter and agrees to the complete control of such defense or
settlement by the indemnitor; provided, however, that such
settlement does not adversely affect the indemnitee's rights
hereunder or impose any obligations on the indemnitee in
addition to those set forth herein in order for it to exercise
such rights. No such action, claim or other matter shall
32
be settled without the prior written consent of the indemnitor
and the indemnitor shall not be responsible for any legal fees
or other costs incurred other than as provided herein. At the
expense of the indemnitor, the indemnitee shall render the
indemnitor all assistance reasonably necessary in defending
against such claim, suit, or action. The indemnitee party
shall have the right at its expense, to retain separate
counsel to act in an advisory capacity in connection with any
matter involving a claim for indemnity and the indemnitor will
cooperate with such counsel.
10. PATENTS.
10.1 OWNERSHIP. Except as provided herein with respect to
trademarks, Chiron acknowledges that it does not have, nor
does it hereby acquire, any right, title and interest in and
to any patents, patent applications, trademarks or other
proprietary rights of CVDI owned by CVDI at the time of the
execution of this Agreement. Except as provided herein with
respect to trademarks, CVDI acknowledges that it does not
have, nor does it hereby acquire, any right, title and
interest in and to any patents, patent applications,
trademarks or other proprietary rights of Chiron owned by
Chiron at the time of the execution of this Agreement.
10.2 PATENT INFRINGEMENT.
(a) DEFENSE. Chiron agrees that CVDI has the right to
defend or at CVDI's option to settle, and CVDI agrees at
CVDI's expense, to defend or at CVDI's option to settle, each
claim, suit or proceeding brought against Chiron or Chiron's
customers arising out of or related to an allegation of
infringement of
33
any United States patent, copyright, or trademark or
misappropriation of trade secrets by the sale of Products sold
hereunder or the use thereof, subject to the limitations
hereinafter set forth. CVDI shall have sole control of any
such action or settlement negotiations, and CVDI agrees to
pay, subject to the limitations hereinafter set forth, any
final judgment (including all prejudgment and post-judgment
interest) entered against Chiron or Chiron's customers on such
issue in any such suit or proceeding defended by CVDI. Chiron
agrees that CVDI at CVDI's sole option, shall be relieved of
the foregoing obligations unless Chiron shall notify CVDI
promptly in writing of such claim, suit or preceding and give
CVDI authority to proceed as contemplated herein, and at
CVDI's expense, cooperates with CVDI to settle and/or defend
any such claim, suit or proceeding. CVDI shall not be liable
for any costs or expenses incurred without CVDI's written
authorization.
(b) LIMITATION. Notwithstanding the provisions of
subsection 10.2(a) above, CVDI assumes no liability for (i)
infringements covering completed Products when used in
combination with another product or products or any
composition, assembly, combination method or process in which
any of the Products may be used when used in combination with
another product or products; provided, however, that such
limitation shall not apply where the sale or use of the
Product (whether or not in any composition, assembly,
combination, method or process) is a sale for a use or a use
intended or approved by CVDI; (ii) infringements involving any
marking or branding not
34
applied by CVDI or applied at the request of Chiron; or (iii)
infringements involving the modification or servicing of the
Products, or any part thereof unless such modification or
servicing was performed by CVDI or in accordance with CVDI's
written instructions or approved by CVDI.
(c) THE FOREGOING PROVISIONS OF THIS SECTION 10.2 STATE
THE ENTIRE LIABILITY AND OBLIGATION OF CVDI AND THE EXCLUSIVE
REMEDY OF CHIRON, ITS AFFILIATES, DISTRIBUTORS AND CUSTOMERS
WITH RESPECT TO ANY ALLEGED INFRINGEMENT OF PATENTS,
COPYRIGHTS, TRADEMARKS, OR OTHER INTELLECTUAL PROPERTY RIGHTS
BY THE PRODUCTS OR ANY PART THEREOF.
(d) PATENT ENFORCEMENT. If Chiron believes that a third
party is reasonably likely infringing CVDI's patent rights in
the Territory, Chiron shall promptly notify CVDI of that fact
and shall provide to CVDI reasonable evidence of any such
claim based upon materials available to Chiron. Upon receipt
of evidence satisfactory to CVDI of infringement, in CVDI's
sole discretion CVDI shall then have the sole right to take
action against such infringing third party. If CVDI fails to
take commercially reasonable action within two (2)months to
stop such infringement, and such infringement, if allowed to
continue, would have a substantial effect on Chiron's sales of
the Product, Chiron shall then be entitled to take
commercially reasonable action to stop such infringement,
including the filing of suit; provided, that Chiron shall not
have such right so
35
long as CVDI is then diligently taking action against at least
one infringing third party in at least one country in the
Territory. For purposes of this Section 10.2(b), "commercially
reasonable action" requires at a minimum advising the
infringing party to cease and desist its infringement. For
purposes of this Section 10.2(b), "substantial effect on
Chiron's sales of the Product" means a third party offering
for sale the Product or an equivalent of the Product. For
purposes of this Section 10.2(b), "diligently taking action"
means that CVDI has filed at least one patent infringement
lawsuit against at least one infringer in at least one
country. Any recovery of damages or settlement amounts from
any court actions or out of court actions shall be divided as
follows: one hundred percent to cover costs of the parties
until expenses are reimbursed in full and thereafter seventy
five percent to CVDI and twenty-five percent to Chiron. CVDI
shall have the right to settle any such action. Chiron shall
have the right to renegotiate its minimum performance
obligations under Sections 7.2 and 7.4 to the extent they may
be affected by such third party sales of the Product(s) in the
Territory.
(e) COOPERATION. If either party takes action against a
third party pursuant to this Section 10.2, or if a third party
claims the manufacture, use or sale of Product in the
Territory infringes its patent or other proprietary rights,
the other party agrees to provide reasonable assistance by
supplying information within its control which may assist the
party taking the enforcement action or defending such claim.
36
10.3 DISTRIBUTION RIGHTS. CVDI hereby grants to Chiron the right to
act as its authorized distributor in the Territory to sell the
Products for the term of this Agreement. During the term of
this Agreement CVDI shall not bring any claim or action
against Chiron or any of its Affiliates for the infringement
or misappropriation of any intellectual property owned or
licensed to CVDI based upon the use or sale by Chiron or any
of its Affiliates of Products pursuant to the terms and
conditions of this Agreement.
11. TERM; TERMINATION.
11.1 TERM. The initial term of this Agreement shall be from the
Effective Date until December 31, 2003, unless terminated
earlier under the provisions of this Agreement. The parties
intend to renew this Agreement at the end of each five-year
period (subject to the parties' renegotiation in good faith of
minimum purchase and price provisions) unless at least one
hundred eighty (180) days prior to the end of any five year
term, either party provides to the other written notice of its
intent to terminate. CVDI shall evaluate the performance of
Chiron during each such five-year term and shall not be deemed
to be acting in good faith with respect to any renewal in the
event that it is unwilling to renew where (i) Chiron is
achieving its minimum sales obligations and (ii) Chiron is
willing to commit to increasing minimum sales requirements
each year of the renewal period to be negotiated in good
faith.
11.2 TERMINATION FOR CAUSE -- EITHER PARTY. Without prejudice to
any other rights it may have hereunder or at law or in equity,
either party may terminate this Agreement immediately by
written notice to the other party upon the occurrence of any
of the following:
37
(a) the other party becomes insolvent, an order for relief is
entered against the other party under any bankruptcy or
insolvency laws or laws of similar import;
(b) the other party makes an assignment for the benefit of its
creditors or a receiver or custodian is appointed for it or
its business is placed under attachment, garnishment or other
process involving a significant portion of its business;
(c) after sixty (60) days' written notice from the terminating
party without cure by the other party of any material breach
of this Agreement by the other party not involving minimum
sales or payments;
(d) the failure by Chiron to make any payment due under this
Agreement consistent with the terms contained in Section 7.3;
(e) the failure by Chiron to maintain sales to end users as set
forth in sub-section 7.4(b);
(f) after sixty (60) days written notice from CVDI, without cure
by Chiron, in the event of the sale of products by a
distributor appointed by Chiron in the Territory which are
competitive with the Products; or
(g) the "change of control" of CVDI. Change of control of CVDI
shall be defined as (i) the merger or consolidation of CVDI
with a third party where CVDI is not the surviving entity or
(ii) the sale of all or substantially all of CVDI's assets or
(iii) the sale or transfer of all or substantially all of
CVDI's rights related to
38
the manufacture and sale of products
in CVDI's Routine Product or Specialty Product division.
(h) The "change of control" of Chiron where Chiron or the
successor entity, as the case may be, competes with CVDI
with respect to rapid diagnostic testing of hemostasis in
the Territory in the Specified Markets. For purposes of
this Section 11.2(h), "change of control" of Chiron shall
have the meaning set forth in Section 10.1(d) of the Common
Stock Purchase Agreement between Chiron and CVDI, dated as
of the date hereof.
11.3 RIGHTS AND DUTIES UPON TERMINATION.
(a) Termination of this Agreement, for whatever reason, shall not
affect any rights or obligations accrued by either party prior
to the effective date of termination, including under any
purchase order for Products placed prior to the effective date
of termination.
(b) Except as provided otherwise in this Section 11.3, upon
termination of this Agreement, CVDI shall use reasonable
efforts to continue to sell and supply Products to Chiron and
its Affiliates in such quantities as ordered but in quantities
no greater than reasonably appropriate in connection with
fulfilling contractual commitments to customers of Chiron, its
Affiliates and its subdistributors for a period not to exceed
twelve (12) months; provided, however, that such customers are
end-user customers that purchased Products during the six (6)
months immediately prior to the termination of this
39
Agreement; and provided further, that if this Agreement is
terminated pursuant to Section 11.2(g) and Chiron has met its
minimum purchase requirements under this Agreement through the
date of its termination, CVDI shall fulfill such contractual
commitments for a period of twenty-four (24) months. Prices
for Products shall remain at the level of the immediately
prior year adjusted solely for increases/decreases in
material, labor, and reasonable overhead; provided, however,
that if the termination of this Agreement does not relate to
Section 11.2(c) or Section 11.2(d) or Section 11.2(e), any
such price increases shall be limited to increases in the
Producer Price Index over the index for the year prior to any
such termination. Upon termination of this Agreement, and to
the extent permitted under applicable law, in each and every
case for a price paid by CVDI equal to the cost and expense
incurred by Chiron and its Affiliates to obtain such approvals
and registrations, Chiron, upon CVDI's request, shall assign
to CVDI (or such other entities designated by CVDI) all
product approvals, registrations and regulatory approvals to
sell Products in each country in the Territory; or, if
assignment of any such registration or approval is not
permissible under applicable law, where requested by CVDI,
Chiron shall grant CVDI (or its designee) a right of reference
to such registrations and approvals. Chiron shall otherwise
use reasonable efforts to enable CVDI to import and sell the
Products in such countries.
(c) Upon termination of this Agreement by Chiron, CVDI will not
sell cards bearing Chiron marks except to Chiron.
40
(d) Sections of this Agreement shall survive any termination of
this Agreement which relate to confidentiality and
indemnification, or otherwise which by their nature cannot be
accomplished or fulfilled prior to termination or which relate
to obligations of the parties accrued prior to termination.
11.6 NON-COMPETITION. Chiron shall not, during the term of this
Agreement, manufacture, sell, distribute or cause to be
distributed a competing point of care coagulation product in
the Territory in the Specified Markets.
12. ARBITRATION.
Except for terminations pursuant to Section 11.3 above, all disputes,
controversies and differences which may arise between the parties out of,
in relation to or in connection with this Agreement, or for the breach
thereof, or any claim based on or arising from any alleged wrongful
conduct or omission related to this Agreement, may upon mutual agreement
of the parties, be determined by arbitration. The arbitration shall be
conducted in accordance with the Rules of the American Arbitration
Association ("AAA"), Supplementary Procedures for Large Complex Disputes,
in effect as of the commencement of the arbitration, as modified by the
provisions of this paragraph. The arbitration shall be held in Raleigh,
North Carolina if the arbitration is called for by CVDI and in Boston,
Massachusetts if the arbitration is called for by Chiron. Whenever a party
desires to request arbitration proceedings, such party shall first cause
its chief executive officer or other designated and authorized officer to
contact the other party; which shall cause its chief executive officer or
other designated and authorized officer to make good faith efforts to
resolve any such dispute prior to arbitration or litigation.
41
No provision of this section shall limit the right of either party to this
Agreement to obtain provisional or ancillary remedies from a court of
competent jurisdiction before, after or during the pendency of any
arbitration if injunctive relief from the court is necessary to prevent
serious and irreparable injury to one party or the other. The parties
acknowledge that for purposes of this Agreement (1) preliminary
injunctions, appointments of receivers, attachments, temporary protective
orders and writs of possession constitute "provisional remedies," and (2)
judicial actions to enforce a decision reached pursuant to this section
constitute "ancillary remedies."
13. MISCELLANEOUS.
13.1 CHOICE OF LAW. This Agreement and all purchase orders issued
hereunder shall be governed and interpreted, and all rights
and obligations of the parties shall be determined, in
accordance with the laws of the State of North Carolina,
without regard to its conflict of laws rules.
13.2 NOTICES. All notices, approvals or other communications
required hereunder shall be in writing and shall be deemed to
have been duly given if delivered personally to such party or
sent to such party by facsimile transmission (confirmed in
writing by other permitted means), air courier or by certified
mail, postage prepaid, to the following addresses:
To Chiron:
Chiron Diagnostics Corporation
00 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Senior Vice President and General Manager Critical Care
Fax: (000) 000-0000
42
and with a copy to:
Chiron Diagnostics Corporation
00 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
To CVDI:
Cardiovascular Diagnostics, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: President
Fax: (000) 000-0000
and with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Wyrick, Robbins, Xxxxx & Xxxxxx, LLP
0000 Xxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Fax (000) 000-0000
or to such other address as the addressee may have specified
in notice duly given to the sender as provided herein. Such notice,
request, demand, waiver, consent, approval or other communications
will be deemed to have been given as of the date so delivered,
transmitted by facsimile or fifteen (15) days after so mailed.
13.3 SEVERABILITY. In the event that any provision of this Agreement
shall be found in any jurisdiction to be in violation of public
policy or illegal or unenforceable in law or equity, such finding
shall in no event invalidate any other provision of this Agreement
in that jurisdiction, and this Agreement shall be deemed amended to
the minimum extent required to comply with the law of such
jurisdiction.
43
13.4 ENTIRE AGREEMENT. This Agreement states the entire agreement
between the parties hereto about the transactions contemplated
hereby and may not be amended or modified except by written
instrument duly executed by the parties hereto.
13.5 NO WAIVER. The failure of either party hereto to enforce at any
time, or for any period of time, any provision of this Agreement
shall not be construed as a waiver of such provision or of the
right of such party thereafter to enforce each and every provision.
13.6 ASSIGNMENT, BINDING EFFECT. Neither party shall assign this
Agreement nor any of their respective rights or obligations
hereunder without the prior written consent of the other party,
except that either party may assign this Agreement to any of its
Affiliates or to any person to which substantially all of the
assets comprising its hemostasis products business are transferred
by operation of law or otherwise, including, but without
limitation, by merger or transfer of stock. Any other attempted
assignment without such consent shall be void. Any assignee or
transferee of this Agreement and/or the rights or obligations
hereunder shall expressly assume in writing all obligations of the
assignor/transferor pursuant to this Agreement. In performing this
Agreement, Chiron may, upon sixty (60) days advance written notice,
delegate to its Affiliates its obligations hereunder. Chiron
Diagnostics shall remain primarily liable to CVDI despite such
delegation.
13.7 INDEPENDENT CONTRACTOR. Each party shall act as the independent
contractor of the other party. Neither party shall be the legal
agent of the other for any purpose whatsoever and therefore has no
right or authority to make or underwrite any promise, warranty or
representation, to execute any contract or otherwise to assume any
44
obligation or responsibility in the name of or in behalf of the
other party, except to the extent specifically authorized in
writing by the other party. Neither of the parties hereto shall be
bound by or liable to any third persons for any act or for any
obligation or debt incurred by the other toward such third party,
except to the extent specifically agreed to in writing by the party
so to be bound.
13.8 HEADINGS. All section headings contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement
and shall not affect in any way the meaning or interpretation of
this Agreement.
13.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart,
each of which when executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall
constitute but one and the same instrument. It shall not be
necessary in making proof of this Agreement or any counterpart
hereof to account for any of the other counterpart.
13.10 FORCE MAJEURE. Neither party shall be deemed to be in default for
failure or delay in performance to the extent of causes which are
reasonably unforeseeable or, if foreseeable, reasonably unremediable
in spite of diligent efforts to effect a reasonable remedy, and
which are caused by act or omission of any governmental authority or
of the other party, compliance with new governmental regulations,
insurrection, riot, embargo, delays or shortages in transportation
or inability to obtain necessary materials, and Acts of God or
Nature.
45
13.11 INSURANCE. CVDI and Chiron shall at all times maintain insurance,
including product liability insurance, in the amount of
$5,000,000.00. Each party shall, at the request of the other party,
provide such evidence of such insurance as requested, including a
certificate of insurance. Such insurance shall not be canceled
without at least thirty (30) days prior written notice to Chiron.
13.12 BOOKS AND RECORDS. CVDI and Chiron shall, during the term of this
Agreement and for three (3) years thereafter, make and keep full and
accurate books and records showing the quantities of Products sold
in sufficient detail to determine applicable pricing pursuant to
Section 7.3 and applicable Card, commission, and Instrument credits
pursuant to Sections 3.6, 5.6, 5.7, and 7.2. Each party shall be
permitted to designate an independent third party such as a
nationally recognized accounting firm to inspect the applicable
books and records of the other party from time to time, during
regular business hours to the extent necessary to verify applicable
pricing and credits. The designated party shall report its findings
to the requesting party. Each party agrees to treat as Proprietary
Information all information learned in the course of any such
inspection hereunder, except when it is necessary for the party to
reveal such information in order to enforce its rights under this
Agreement. Notwithstanding anything to the contrary contained
herein, the party to be inspected may waive at any time the
requirement contained in this section relating to the use of an
independent third party.
13.13 PRESS RELEASES; PUBLICITY. Neither party shall publicly disclose or
announce any term of this Agreement; provided, however, that a party
may issue a press release disclosing
46
the existence of this Agreement and other terms only upon prior
written agreement of the other party, further provided, that each
party shall at all times be entitled to make disclosures required
by applicable securities laws.
[The next page is the signature page.]
47
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as
of the day and year first above written.
CARDIOVASCULAR
DIAGNOSTICS, INC. CHIRON DIAGNOSTICS CORPORATION
By____________________________ By:__________________________________
As its As its
48
SCHEDULE 1.13
TERRITORY
EUROPE OR EUROPE
MANAGED BY EUROPE (CON'T) AMERICAS ASIA
Albania* Lithuania* Argentina* Australia
Angola* Malta* Bahamas* China (JV)
Xxxxxxx Xxxxxxx* Xxxxxxx* Xxxx Xxxx
Xxxxxxx* Xxxxxxxxxxx Bolivia* India*
Belgium Niger* Brazil Indonesia*
Belgium Nigeria* Canada** Malaysia*
Bulgaria* Norway Caribbean Islands* New Zealand*
Cyprus* Oman* (except for Cuba) Pakistan*
Czech Republic Poland Chile* Philippines*
Denmark Portugal Columbia* Singapore*
Egypt* Qatar* Costa Rica* Thailand
Ethiopia* Romania* Dominican
Finland Russia Republic*
France Saudi Arabia Ecuador*
Gambia* Slovakia* El Salvador*
Germany South Africa* Mexico
Ghana* Spain Nicaragua*
Gibraltar* Sudan* Panama*
Greece* Sweden Paraguay*
Hungary* Switzerland Peru*
Iceland* Syria* Puerto Rico*
Iran* Tanzania* United States**
Iraq* Turkey Uruguay
Ireland Uganda* Venezuela*
Israel* Ukraine*
Italy United Arab
Jordan* Emirates*
Kenya* United Kingdom
Kuwait* Yemen*
Latvia* Zambia*
Lebanon* Zimbabwe*
* Distributor Countries
** Chiron has no distribution rights with respect to Canada and the United
States for Specialty Products
Schedule 2.5
STANDARD TERMS AND CONDITIONS OF SALE
I. DEFINITIONS
CVDI: Cardiovascular Diagnostics, Inc. The person or
organization that has placed an Order with CVDI or with
whom CVDI has concluded an agreement.
Standard Terms: These Standard Terms and Conditions of Sale.
Products: The whole of the Products the subject of this
Contract, as specified in the Offer or in the Order.
Offer: The written proposition, made by CVDI, which
includes these Standard Terms, a specification of the
Products and the current price.
Order: The written request, made by the Buyer,
including a specification of the Products to be ordered.
II. OFFERS, GOODS, AND SPECIFICATIONS
1. All offers, Orders and Contracts of Sale by CVDI shall be
subject to these Standard Terms
2. These standard Terms can only be amended with the specific
written consent of CVDI.
III. ORDERS
1. No Order shall be binding on CVDI until expressly accepted by
CVDI in writing.
2. No Order may be cancelled and/o amended by the Buyer except
with the written consent of CVDI.
3. Subject to the terms and conditions contained in the
distribution agreement between CVDI and Chiron, which shall
govern and be superior to these Standard Terms and Conditions
of Sale, and subject to any special terms agreed upon in
writing between CVDI and Chiron, these Standard Terms and
Conditions of Sale represent the Understanding between the
parties and shall supersede and exclude any previous
agreements between CVDI and the Buyer in relation to their
subject matter and all terms and/or General Conditions of
whatever nature which the Buyer may in any way seek to impose.
Schedule 2.5-1
IV. PRICES
1. Unless otherwise agreed upon, all prices mentioned in CVDI
current standard price list are based on delivery FOE, CVDI.
2. The price shall be exclusive of, and the Buyer shall pay, all
duties or taxes arising in connection with the sale unless
otherwise agreed to by CVDI in writing.
V. PAYMENT
1. Subject to any agreement to the contrary, payment must be made
within 30 days from the date of the invoice.
2. If the Buyer commits any breach of this Contract, all monies
accrued and owing under this Contract shall immediately become
due and payable.
3. In the event of any late payment, the Buyer shall pay CVDI
interest from the date payment became due, to be calculated at
the Wall Street Journal Prime Rate increased by 5% per month.
4. All payments shall be made in full without deducting any right
of equity, set-off or counterclaim.
VI. CARRIAGE AND DELIVERY
1. Unless otherwise agreed upon, delivery of the Products shall
be FOB, CVDI.
2. Any delivery time specified by the Buyer or indicated by CVDI
is an estimate only and CVDI shall not have any liability
whatsoever for failure to deliver the Products at or within
any such delivery time. In case of any late deliver, CVDI must
be formally declare to be in default and must be granted a
reasonable term to comply with its delivery obligation.
3. If the Buyer refuses to take prompt deliver or is negligent in
providing necessary information or instructions in accordance
with these Standard Terms, then the Products shall be stored
at the Buyers risk. The Buyer shall pay CVDI all additional
deliver, storage and insurance costs and any other costs
incurred along with any loss arising in connection with this
neglect or refusal.
4. The Buyer shall inspect all Products promptly upon receipt
thereof. Such inspection shall include, without limitation, a
quality control analysis. Any
Schedule 2.5-2
Product not properly rejected within 4 weeks after receipt by
the Buyer shall be deemed accepted. The Buyer shall be deemed
to have received the correct quantity of the Products upon
CVDI's delivery note being signed on behalf of the Buyer or by
its carrier. In the event of an incomplete or excessive
delivery, the Buyer shall not be entitled to reject the
Products included in the Contract or to treat the Contract as
repudiated.
5. They Buyer shall notify CVDI in writing within 5 days from the
moment of discovery of any other defect or within 5 days from
the moment the defect should have been discovered. Save only
as provided under these General Conditions, CVDI shall not be
held liable for any defect which is not so notified. Unless
expressly agreed otherwise, the risk of loss ensuing from
loading and transporting the Products shall be borne by the
Buyer even if the transport is handled by CVDI at the Buyer's
request.
VII. RETENTION OF TITLE.
1. Notwithstanding delivery, title to the Products shall remain
in CVDI and shall not pass to the Buyer until CVDI has
received payment in full with respect to all Products
delivered or to be delivered, work done in relation to sales
agreements, interest owed and/or accrued including any cost
which may arise in respect of letters of credit, bills of
exchange or cheques along with any storage and other costs,
resulting from a breach of the sales agreement by the Buyer.
VIII. INTELLECTUAL PROPERTY RIGHTS.
1. All patents, designs, trademarks, copyrights and other
industrial or intellectual property rights of CVDI of whatever
nature in respect of the Products, any of their constituent
parts, their packaging or other material supplied with the
Products shall remain the absolute property of CVDI and shall
remain vested in CVDI.
2. The Buyer shall indemnify CVDI against any and all loss,
damage, claims, costs, and expenses suffered or incurred by
CVDI in connection with any material, information or
instruction supplied by the Buyer in relation to the Products,
including the industrial or intellectual property rights as
stated in Article VIII.1.
IX. LIABILITY.
1. CVDI's liabilities regarding the Products shall be limited in
accordance with the provisions of CVDI's Standard Limited
Warranty attached hereto as Exhibit A and incorporated by this
reference. CVDI does not give any warranty beyond these
specifications.
Schedule 2.5-3
2. CVDI's aggregate liability to the Buyer in respect of any and
all causes of action arising at any time in connection with
the Products, including but not limited to action in relation
to negligence, shall be limited to the amount paid the Buyer
for the Products or replacement of the Product at CVDI's
option. In no event shall CVDI be liable for costs of
procurement of substitute goods by anyone. In no event shall
CVDI be liable for any special, consequential, incidental, or
indirect damages, including but not limited to damages
resulting from late delivery and loss of profit.
X. ALTERATIONS TO THE PRODUCTS AND DESCRIPTION.
1. After delivery of the Products, the Buyer shall not alter the
Products or alter any marks, designs or artwork on the
Products or on the packaging. The Buyer shall not apply its
own marks on the Products or on their packaging, and shall not
cause, allow or permit any third party to do so.
XI. DEFAULT.
1. If any of the following events occur, all monies accrued and
owing under the Contract shall become immediately due and
payable and CVDI shall be entitled at any time thereafter to
terminate the Contract and any other Contract between CVDI and
the Buyer by written notice, or to suspend further deliveries
of Products, without prejudice to its right to full
indemnification:
- if the Buyer defaults or commits a breach of the Contract or
of any other obligations to CVDI and if, in CVDI's reasonable
judgement, termination of the contract or suspension of
further deliveries is justified;
- if an attachment or execution is levied upon the Buyer's
property and/or assets;
- if the Buyer makes, offers or proposes a settlement,
arrangement or composition with its creditors. If a resolution
or petition to wind up the Buyer's business is passed or
presented, if a petition for an administrative order in
respect of the Buyer is presented, if a petition for a
bankruptcy order is made against the Buyer, or if a receiver,
liquidator, trustee or manager of the Buyer's undertaking,
property, assets or any part thereof is appointed;
- If CVDI considers that the Buyer may be unable to provide
payment in full and/or to perform any of its other obligations
under the Contract, and the Buyer is (in CVDI's reasonable
judgement) not able to provide security covering his
obligation.
Schedule 2.5-4
2. Should the Buyer fail to fulfill one or more of his
obligations, all reasonable costs incurred in and out of court
in order to realize fulfillment will be at his expense. Such
costs will in any event include those for collecting agencies,
bailiffs and attorneys.
XII. FORCE MAJEURE.
1. CVDI shall not be liable, if it is prevented from or hindered
or delayed in performing any of its obligations by reason of
force majeure. Force majeure shall consist of, but shall not
be limited to, the following:
- strike, lock-out or trade dispute (in each case whether
involving CVDI's or a third party's employees);
- non-availability, interruption, failure of or delay in CVDI's
usual supply sources, manufacturing facilities, transportation
routes or facilities;
- breakdown of machinery or power failure;
- default or delay by CVDI's sub-Contractors, acts of national
or local government or other authorities;
- xxxxx, xxxxxxx, fire, flood, explosion, accident, theft, civil
disturbance, insurrection or war.
XIII. GOVERNING LAW.
1. These Standard Terms and any Contract in conjunction therewith
shall be governed by the laws of the State of North Carolina.
2. In any proceeding instigated by the Buyer in respect of any
matter which may arise in connection with the contract or
these Standard Terms, the courts of North Carolina shall have
exclusive jurisdiction. In any such proceedings brought by
CVDI, CVDI shall be at liberty to bring the proceeding before
the courts of North Carolina or any other court which would
have jurisdiction in the absence of this clause.
Schedule 2.5-5
Schedule 3.4
CVDI TRADEMARKS
TAS(R)
PT-ONE(R)
PTNC(TM)
LHMT(TM)
EQC(TM)
TAS ACCENT(TM)
ECT(TM)
HMT(TM)
HTT(TM)
PRT(TM)
CHIRON TRADEMARKS
To Be Supplied By Chiron
Schedule 3.4 - 1
SCHEDULE 3.6
SERVICE AND MAINTENANCE
Service Fee $[ ] (includes 1st hour of
labor)
plus Each additional hour of labor [ ]
plus QA Testing [ ]
plus Handling Fee [ ]
plus Cost of any replacement parts $$$
plus All related shipping charges, $$$ (minimum shipping charge for
if not shipped against all international shipments
customer's shipping account is $225.000 per analyzer
(UPS or FEDEX) which includes freight
charges as well as any
related import duties and
taxes)
Note 1: Minimum charge for a TAS repair is $[ ].
Note 2: TAX repairs usually take approximately 2 hours to assess the
problem and service the analyzer.
Note 3: Any necessary part replacements will be communicated to the customer
prior to any repair service and will only be performed after obtaining
customer authorization.
------------------
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SEC.
Schedule 3.6 - 1
SCHEDULE 6.1
INFRINGEMENT
See materials regarding Litigation with Boehringer Mannheim Corporation
previously provided by Chiron.
Schedule 6.1 - 1
Schedule 7.1
PRICING
INITIAL SALES PRICE
PRODUCTS CATALOG # TO CHIRON
--------------------------------------------------------------------------------
Controls $ [ ] each
Service Contracts $ [ ] each
$ [ ] per
Sample Card
------------------
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SEC.
Schedule 7.1 - 1
EXHIBIT A
CVDI STANDARD LIMITED WARRANTY
Cardiovascular Diagnostics, Inc. ("CVDI") provides a 12 month warranty on
new TAS Analyzers from the time of delivery to the end-year. Any instrument
covered under warranty will be replace within 10 working days of notification to
CVDI's technical services department. Upon receiving the replacement unit, the
customer shall return the defective unit to CVDI via air freight at CVDI's
expense.
This warranty cover the TAS Analyzer's shelf life under normal conditions
and is contingent upon proper use of a TAS Analyzer in the application for which
such product was intended and does not cover products which were modified
without CVDI's approval, which have expired, which were subjected to unusual
physical, chemical or electrical stress or temperature fluctuations, or which
were not stored in accordance with the specifications provided by CVDI.
EXCEPT FOR THIS EXPRESS LIMITED WARRANTY, CVDI GRANTS NO WARRANTIES FOR
THE PRODUCTS, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY
STATUTE OR OTHERWISE, TO DISTRIBUTOR, ITS CUSTOMERS OR ANY OTHER PARTY, AND CVDI
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF QUALITY, WARRANTY OF
MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF
NONINFRINGEMENT.
CVDI'S LIABILITY ARISING OUT OF THIS WARRANTY SHALL BE LIMITED TO THE
AMOUNT PAID BY THE CUSTOMER FOR THE PRODUCTS OR REPLACEMENT
Exhibit A - 1
OF THE PRODUCTS, AT CVDI'S OPTION. IN NO EVENT SHALL CVDI BE LIABLE FOR COSTS OF
PROCUREMENT OF SUBSTITUTE GOODS BY ANYONE. IN NO EVENT SHALL CVDI BE LIABLE OF
ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES, HOWEVER CAUSED, ON
ANY THEORY OF LIABILITY, WHETHER OR NOT CVDI HAS BEEN ADVISED ON THE POSSIBILITY
OF SUCH DAMAGE.
Exhibit A - 2
