EXHIBIT 10.8
STRATEGIC ALLIANCE AND EXCLUSIVE DISTRIBUTION AGREEMENT
THIS STRATEGIC ALLIANCE AND EXCLUSIVE DISTRIBUTION AGREEMENT (this "Agreement")
is entered into as of the 31st day of May, 2000, (the "Effective Date") by and
between PHYSIOMETRIX INC., a Delaware corporation having its principal place of
business at 000 Xxxxxxxxx Xxx, Xxxxx Xxxxxxxxx, XX ("Physiometrix"), and XXXXXX
HEALTHCARE CORPORATION, a Delaware corporation having its principal place of
business at Xxx Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx ("Xxxxxx").
RECITALS
A. Physiometrix has developed proprietary technology embodied in
devices currently comprised of a PSA 4000 ("PSA 4000") component and a PSArray
("PSArray") component (generally referred to as "PSA" and further defined
herein), which when used together are designed to monitor the brain state of a
human.
B. Physiometrix desires to establish a strategic relationship for
marketing and distribution of the PSA in the United States and potentially other
countries.
X. Xxxxxx has substantial experience in the marketing and distribution
of medical supplies and devices for use by health care practitioners in various
health care markets.
D. Physiometrix and Xxxxxx desire to enter into an agreement granting
Xxxxxx exclusive distribution rights for the PSA in the "Territory" in the
"Field" as defined below.
AGREEMENT
THEREFORE, the parties, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, agree as follows:
1. DEFINITIONS
1.1 "AFFILIATE" shall mean any company or entity controlled by,
controlling or under common control with a party, specifically, any company
fifty percent (50%) more of whose voting stock or participating profit interest
is owned or controlled, directly or indirectly, by a party and any company which
owns or controls, directly or indirectly, fifty percent (50%) or more of voting
stock of a party.
1.2 "FIELD" shall mean any health care practitioner, company,
institution or facility.
1.3 "GAAP" shall mean United States generally accepted accounting
principles, as the same may be modified from time to time by action of
accounting standards boards, the Securities and Exchange Commission and other
proper authorities.
1.4 "GROSS PROFIT" shall mean total Net Sales of Products for a
calendar quarter minus
Physiometrix's actual cost of manufacture of such Products (determined using
GAAP consistently applied and including the component cost rollup set forth in
Exhibit E but not costs incurred due to higher than anticipated scrap rates,
rework or capital equipment not related to the production and supply of Products
under this Agreement).
1.5 "JOINT STEERING COMMITTEE" shall have the meaning set forth in
Article 10.
1.6 "LICENSED TRADEMARKS" shall have the meaning set forth in
Section 4.1.
1.7 "NET SALES" shall mean the actual gross amount charged on account
of the sale of Products sold by or on behalf of Xxxxxx or its affiliates less
(i) any credits on returns to the extent actually incurred or allowed on account
of the sale of such Products, (ii) discounts and chargebacks allowed and taken,
in amounts customary in the trade, for reasons such as quantity purchases and
prompt payment by wholesalers and sub-distributors, or buying group
administration fees reasonably allocable to such Products(iii) taxes, including
but not limited to, sales, use, turnover, excise, import and other taxes or
duties, imposed by a governmental agency on such sale or transfer. No deduction
shall be made for commissions paid to individuals, whether they are employed by
independent sales agencies or regularly employed by Xxxxxx, and on its payroll,
or for the cost of collections. Amounts received by Xxxxxx or its Affiliates for
the sale of the Products among Xxxxxx or its Affiliates for resale or other
disposition shall not be included in the computation on Net Sales hereunder;
provided, however, that the subsequent resale or other disposition of such
Products to third parties, whenever made directly by Xxxxxx or indirectly
through an Affiliate, will be included in the computation of Net Sales.
1.8 "PHYSIOMETRIX TECHNOLOGY" shall mean (i) the inventions disclosed
in the patents and patent applications that are listed in Exhibit A (as it may
be amended from time to time) and any continuations, continuation-in-parts,
divisionals, reissues, reexaminations, renewals, or extensions thereof and (ii)
all know-how, technology, trade secrets data, copyrights, processes and methods,
or other information owned, controlled or licensed by Physiometrix during the
term of this Agreement that is necessary or useful for the marketing, sale,
offer for sale, importing or distribution the PSA.
1.9 "PSA" AND "PRODUCT" shall mean those products and accessories
utilized for patient state monitoring and including Physiometrix Technology
including those components described in the Specifications set forth in Exhibit
D, together with parts and components necessary for the repair and replacement
thereof, and all modifications, improvements, and developments pertaining to
such products, accessories and components hereunder.
1.10 "PSA 4000" shall mean that device, as further described in the
Specifications set forth in Exhibit D, designed to receive signals indicative of
a patient's EEG signals, manipulate those signals and display the brain state of
a patient, and any improvements to that device.
1.11 "PSARRAY" shall mean the disposable array component of the PSA, as
further described in the Specifications set forth in Exhibit D. and to any other
disposable headpiece component used for capturing data regarding patient brain
state which has been or will be
developed for use with the PSA 4000.
1.12 "REGULATORY APPROVAL" shall mean, with respect to a country, all
approvals, licenses, registrations, clearances or authorizations of the FDA or
any other federal, state or local regulatory agency, department, bureau or other
government entity, necessary for the use, manufacture, storage, import,
transport and sale of the PSA in such country.
1.13 "SPECIFICATION" shall mean the specifications for the PSA 4000 and
PSArray listed on Exhibit D to the Agreement, as amended for time to time.
1.14 "SUBDISTRIBUTOR" shall have the meaning set forth in Section 6.2.
1.15 "TERRITORY" shall initially mean the United States of America its
territories and possessions including Puerto Rico and the Virgin Islands.
Pursuant to Section 2.4, Xxxxxx and Physiometrix may enter into agreement(s)
which expand the Territory, and in such event, Exhibit C may be amended from
time to time to reflect such agreements.
2. EXCLUSIVE DISTRIBUTION RIGHTS.
2.1. Subject to the terms and provisions of this Agreement,
Physiometrix hereby grants to Xxxxxx the exclusive right to distribute, market
and sell the Products, in the Field and in the "Territory" as defined in
Exhibit C.
2.2 Physiometrix shall forward all lists in its possession of existing
or potential customers in the Territory and within the Field for the PSA which
Physiometrix or someone on behalf of Physiometrix may have compiled so that
Xxxxxx may, in accordance with and pursuant to the terms of this Agreement, take
orders from and distribute the Products to such customers. Sales to such
customers shall be included in the minimum purchase and distribution
requirements of Section 7.
2.3. Xxxxxx shall not actively distribute, market or sell any Products
outside of the Territory (as now defined and as amended) other than sales and
distribution activities conducted outside the Territory in connection with sales
and distribution of Products to customers in the Territory in the ordinary
course of business, or knowingly export Products from the Territory (other than
the return of Products for repair, restocking, refund or rotation in the
ordinary course of business) (whether directly or indirectly through its
Subdistributors (as defined herein), if any) without the prior written consent
of Physiometrix. Xxxxxx shall have no right to promote, use or sell the PSA
other than as expressly agreed herein, and shall not sell any of Physiometrix's
other products without Physiometrix's prior written consent.
2.4 RIGHT OF FIRST REFUSAL FOR COUNTRIES OUTSIDE THE TERRITORY. If
during the Term of this agreement Physiometrix elects to distribute, market or
sell the PSA in any country outside the Territory, Physiometrix will notify
Xxxxxx of such election in writing (the "Notice of Election"). Xxxxxx shall have
15 days after the receipt of such notice to deliver to Physiometrix a written
notice confirming Xxxxxx'x interest in acquiring such distribution, marketing
and sale
rights in the Field (the "Notice of Interest"). If Xxxxxx delivers a Notice of
Interest to Physiometrix, the parties shall negotiate in good faith a definitive
agreement setting forth the terms under which Xxxxxx would distribute the PSA in
the relevant countries (whether by amendment to this agreement or otherwise). If
the parties have not executed a distribution agreement within 60 days after
Xxxxxx'x receipt of the Notice of Election, Physiometrix will have the right to
enter into one or more distribution agreements with respect to the PSA in the
Field in such countries on terms which are generally no better than the terms
offered by Xxxxxx.
2.5 Except from and after the date Physiometrix terminates the
exclusivity granted to Xxxxxx hereunder as, when and to the extent specifically
permitted in Section 7.2 or 26.6 of this Agreement, Physiometrix shall not
supply any Products to any third party other than Xxxxxx for resale in the
Territory within the field during the Term (as defined herein) of this
Agreement.
3. PRODUCTS/NON-COMPETE.
3.1. Xxxxxx shall purchase Products solely from Physiometrix and shall
include the Products in its portfolio of product offerings to customers and
prospective customers in the Territory. Subject to the terms of this Agreement,
Physiometrix shall supply or cause to be supplied to Xxxxxx, and Xxxxxx shall
purchase from Physiometrix, all of Xxxxxx'x requirements of PSA 4000's and
PSArrays for commercial resale in the Field and in the Territory in such
quantifies as Xxxxxx shall order pursuant to and in accordance with the terms
set forth in Article 8, during the Term of this Agreement.
3.2. Xxxxxx shall not engage, directly or indirectly, in the
development, manufacture, distribution, marketing or sale of any devices or
components thereto for monitoring the brain state of a patient during
anesthesia, which product employs Physiometrix Technology or in the Territory,
is substantially similar to or competitive with the Products, other than
pursuant to this Agreement from the date of this Agreement through the first to
occur of the following, as applicable, (i) through the period ending the last
day of the Term if the Term (a) is terminated by Physiometrix upon a Xxxxxx
Default (as hereinafter defined) or (b) otherwise expires as provided in this
Agreement, or (ii) the date of termination by Xxxxxx for an Physiometrix Default
(as hereinafter defined).
4. LICENSE FOR TRADEMARKS AND TRADE NAME.
4.1 Subject to the terms and conditions of this Agreement, Physiometrix
hereby grants to Xxxxxx and to the distributors listed in Exhibit C
non-exclusive, royalty-free right to use the trademarks set forth on Exhibit B
hereto (the "Licensed Trademarks") in connection with the marketing,
distribution and sale of Products in the Territory for the Term of the
Agreement. Physiometrix shall apply for and perfect registration of the Licensed
Trademarks in all Countries in the Territory (as hereinafter defined) as
Physiometrix shall determine at their sole discretion to be necessary and
appropriate for the protection of the Licensed Trademarks in each Country in the
Territory.
4.2. Xxxxxx shall use the Licensed Trademarks only in the form
determined by the Joint Steering Committee and shall adopt reasonably
conspicuous notices as requested by Physiometrix, and in a form approved by the
Joint Steering Committee, in order to identify Physiometrix as the owner of the
Licensed Trademarks and Xxxxxx or it Subdistributors as a permitted user
thereof. Xxxxxx shall not use any of the Licensed Trademarks on or in connection
with any goods or services other than the PSA.
4.3. To maintain and enhance the goodwill and image of quality
associated by the public with the Licensed Trademarks, Xxxxxx shall conduct its
business operations in respect of the Products in accordance with all applicable
statutes, laws, ordinances, and regulations of any country or governmental
entity in the Territory or otherwise having jurisdiction over Xxxxxx or its
activities hereunder, including without limitation, laws and regulations of the
Territory governing use of the Licensed Trademarks.
4.4 Xxxxxx shall use the Licensed Trademark in a manner so as to avoid
the likelihood of confusion with trademarks and trade names belonging to others,
Xxxxxx shall not use the Licensed Trademarks, in whole or in part, in such
manner that any of the Licensed Trademarks may in any way be diluted in respect
of distinctiveness or validity, or may in any way impair or negate any of the
rights of Physiometrix. Xxxxxx shall not advertise, exploit, promote, market, or
otherwise offer Products in any manner which may adversely affect the reputation
of Physiometrix.
5. TERM.
5.1 Subject to earlier termination as provided herein, this Agreement
shall be for an Initial Term of five (5) years commencing on the date
Physiometrix fulfills a conforming Purchase Order delivered under Section 8.3
and which is accepted by Xxxxxx under Section 9.3 representing the quantities
Xxxxxx reasonably believes are necessary for commercial launch of Products. The
Initial Term may be extended for additional, successive years, by mutual consent
of the parties within 180 days of the expiration of the Initial Term (the
"Renewal Terms"). Should the parties agree to such renewal at the end of the
Initial Term, the Renewal Term shall be automatically extended for additional
one (1) year terms unless written notice of termination is given by either party
not later than 180 days prior to the expiration of the Renewal Tenn.
5.2 "Term" the Initial Term and any Renewal Terms are collectively
referred to herein as the Term.
6. ASSIGNMENT AND SUBDISTRIBUTOR RIGHTS
6.1. Either party may assign this Agreement and any of its rights or
obligations hereunder only with the prior written consent of the other party
which shall not unreasonably be conditioned, delayed or denied, except that
either party may assign this agreement or any of its rights or obligations
hereunder (i) to any of its Affiliates, or (ii) in connection with a merger or
similar reorganization or the sale of all or substantially all of its assets to
which this Agreement relates. This agreement shall survive any such merger or
reorganization of either Party with or into, or such sale of assets to, another
party. Except as provided herein, any assignment of this
Agreement or any of its rights or obligations hereunder without the prior
written consent of the other party shall be void and of no effect.
6.2. Exhibit C lists those countries in the Territory in which Xxxxxx
plans to market the Products and any Xxxxxx Distribution Agreements (as
hereinafter defined) in effect in such countries. As provided in section 2.4,
Exhibit C may be amended to add additional countries from time-to-time to be
included in the Territory, and any Xxxxxx Distribution Agreements then in effect
in such countries. Xxxxxx shall be entitled to appoint dealers or other third
parties ("Subdistributors") in the Territory during the Term of this Agreement
to distribute, market and sell the Products in the Territory, provided that each
such Subdistributor is either (i) an Affiliate of Xxxxxx, (ii) party to a Xxxxxx
Distribution Agreement and that party meets standard Xxxxxx distribution
requirements, or (iii) approved by Physiometrix in writing prior to being
engaged by Xxxxxx.
6.2.1. Xxxxxx hereby represents and warrants that if it is a
party to exclusive or preferred distribution agreements in the Territory (the
"Xxxxxx Distribution Agreements") with the non-Affiliate persons or entities set
forth and to be set forth on Exhibit C hereto, with respect to each such Xxxxxx
Distribution Agreement, (i) the delivery and performance by Xxxxxx of its
obligations under this Agreement will not conflict with or otherwise constitute
a default under or violate the terms or provisions of any Xxxxxx Distribution
Agreement; and (ii) the persons or entities party to such Xxxxxx Distribution
Agreements may become Subdistributors of the Products upon their addition to
Exhibit C.
6.2.2. Xxxxxx shall require each non-Affiliate Subdistributor
to agree in writing to be bound, and represents and warrants that each of its
Affiliates performing distribution functions under this Agreement will be bound,
by and subject to the duties and obligations of Xxxxxx under this Agreement
insofar as such duties and obligations relate to the activities of
Subdistributor in the Territory, and agrees that the rights of Subdistributror
under the Xxxxxx distribution agreement shall terminate and be of no force and
effect upon termination of this Agreement, and unless such termination is due to
a Physiometrix Default under Section 25.2 without any further liability or
obligation of Physiometrix. Xxxxxx shall be fully responsible for and liable to
Physiometrix with respect to the activities of any Subdistributor with respect
to Products and the Agreement, and appointment by Xxxxxx hereunder shall not
release Xxxxxx from any obligations or liabilities to Physiometrix hereunder.
6.3. Xxxxxx shall include in its agreements with non-Affiliate
Subdistributors provisions which prohibit such Subdistributor from (i) actively
distributing, marketing, selling, exporting or supplying the Products, either
directly or indirectly, outside the Territory; (ii) advertising or conducting
any promotional or marketing activities with respect to the Products outside the
Territory.
6.4. If Xxxxxx becomes aware that any Products are being distributed,
marketed or sold outside the Territory by any Subdistributor of Xxxxxx, Xxxxxx
shall notify Physiometrix within fifteen (15) business days of learning of such
distribution. If Physiometrix provides written notice to Xxxxxx that any
Products are being distributed, marketed or sold outside the Territory by
any Subdistributor of Xxxxxx and Xxxxxx fails to exercise commercially
reasonable efforts to cause such Subdistributor to cease such activities outside
the Territory, such failure shall constitute a Xxxxxx Default (as defined in
Section 25.2).
6.5 Any and all duties, taxes or other charges relating to the export
of Products from the United States and/or import of Products into the Territory
shall be the responsibility and obligation of Xxxxxx.
7. PRICING, MINIMUM PURCHASE AND DISTRIBUTION REQUIREMENTS.
7.1. PRICING. The initial per unit transfer price for the Products
during the first year after the Effective Date is set forth in Exhibit E.
Thereafter, on an annual basis the Joint Steering Committee shall set the per
unit transfer price for the Products, and such per unit transfer price shall be
set so as to preserve the initial, anticipated relative profitability positions
of the parties as set forth herein.
7.2. MINIMUM DISTRIBUTION REQUIREMENTS. The quarterly minimum total
amounts of Products to be purchased from Physiometrix by Xxxxxx (hereafter
"Minimums") for the first six (6) full calendar quarters (which calendar quarter
shall include the calendar quarters beginning July 1 ("Q1") and October 1, 2000
("Q2") and January 1 ("Q3"), April 1 ("Q4"), July 1 ("Q5") and October 1, 2001
("Q6") ) is set forth in Exhibit F. Before the end of the calendar quarter
commencing October 1, 2001, the Joint Steering Committee shall meet and
establish the Minimums for the next annual period of the Term and shall
thereafter establish Minimums prior to the end of the last calendar quarter of
each subsequent annual period during the Term. In the event that Xxxxxx fails to
deliver conforming purchase orders under Section 8.3 having a total invoice
amount greater than the Minimum for any calendar quarter and fails in the
subsequent quarter to deliver conforming purchase orders under Section 8.3 in an
amount greater than the sum of the shortfall and the Minimum for such subsequent
quarter, Physiometrix shall be entitled to revoke the exclusivity granted to
Xxxxxx hereunder by delivery of written notice to Xxxxxx and, thereafter, (i)
Physiometrix shall be entitled to manufacture, market, distribute and sell the
Products in the Field in the Territory directly or through persons other than
Xxxxxx, (ii) this Agreement shall otherwise remain in effect for the remainder
of the Term unless terminated in accordance with the provisions hereof. The
revocation of exclusivity shall be Physiometrix's sole remedy for Xxxxxx'x
failure to purchase total amounts of Products equal to or greater than the
Minimums under this Section 7.
7.3. For the purpose of this Section 7, PSA 4000s and PSArrays will be
deemed purchased by Xxxxxx when a conforming purchase order with a scheduled
shipment date during the quarter in which such purchase order is placed has been
delivered and accepted by Physiometrix in accordance with Section 8.3.
8. ORDERS, INVOICE PRICES AND PAYMENT TERMS.
8.1. In order to facilitate Physiometrix's scheduling of production of
the Products, Xxxxxx
will also supply Physiometrix on a monthly basis by code the prior month's sales
and closing stock on hand. The Joint Steering Committee shall determine the
minimum stock level for the Products.
8.2. The Joint Steering Committee shall establish (i) a rolling one
year forecast by quarters for Products and (ii) minimum delivery period for such
products. The initial rolling one year forecast shall be established by the
Joint Steering Committee within 30 days of the Effective Date.
8.3 Xxxxxx shall deliver a purchase order on or before the fifth (5th)
business day of each quarter. A conforming Xxxxxx Purchase Order must (i)
conform to the requirements of this Agreement, (ii) specify a delivery period
for the Products no shorter than the delivery period established under Section
8.2, (iii) specify a quantity by product code, and (iv) specify the language(s)
based on requirements for individual countries in the Territory for Product
labeling of the PSA. Physiometrix will acknowledge and notify Xxxxxx of
Physiometrix's receipt of a conforming Purchase Order within five (5) working
clays of receipt of such order. If Physiometrix fails to acknowledge and notify
Xxxxxx of receipt of a conforming Purchase Order within five (5) working days,
such Purchase Order shall be deemed received and accepted by Physiometrix.
8.4. The components of the PSA (the PSA 4000s and the PSArrays) shall
be delivered within the delivery date specified on a conforming Purchase Order
after receipt by Physiometrix of such conforming Purchase Order from Xxxxxx in
accordance with Section 8.2, or such other period as may be mutually agreed by
the parties. The delivery must include at least 90% of the number components of
the PSA (the PSA 4000s and the PSArrays) ordered pursuant to the conforming
Purchase Order. Xxxxxx shall take title and assume the risk of loss of the
Products upon delivery of the Products to a Xxxxxx designated carrier.
8.5. All Invoice Prices are quoted F.O.B. Physiometrix's facility
(currently located in North Billerica, Massachusetts) to a carrier designated by
Xxxxxx at Xxxxxx'x sole discretion at which time title for and risk of loss of
the Products shall pass to Xxxxxx. Physiometrix shall deliver an invoice to
Xxxxxx after delivery of the Products to the carrier for shipment to Xxxxxx'x
facility in accordance with the terms of the applicable purchase order. Such
invoice shall include such documents required to identify the product. Payment
of the Invoice Prices for Products purchased by Xxxxxx shall be made in U.S.
dollars, net forty-five (45) days from date of invoice, subject to receipt of
delivery by Xxxxxx of Products covered by the invoices and (i) adjusted for
discrepancies pursuant to Section 9.3. In the event any invoice is not paid
within forty-five (45) days of the date of the invoice, such amount shall accrue
interest at the rate of twelve percent (12%) per annum until paid.
8.6 Xxxxxx shall be responsible for all taxes (excluding Physiometrix
income taxes), fees and duties incurred in the purchase of Products from
Physiometrix.
8.7. Unless otherwise expressly agreed in writing, the terms included
in this Agreement shall have precedence over any conflicting terms included in
either party's standard terms and
conditions in connection with purchase orders placed or accepted under this
Agreement.
9. FAILURE OF PHYSIOMETRIX TO FULFILL PURCHASE ORDERS.
9.1. If at any time Physiometrix anticipates that it will have
difficulty in timely fulfilling any or all of the accepted amount of Products in
a Xxxxxx purchase order, Physiometrix shall notify Xxxxxx of such difficulty as
soon as practicable.
9.2. In the event Physiometrix fails to deliver Products to the carrier
as provided in Section 8.3 within the delivery period established by the Joint
Steering Committee after receipt of a conforming Purchase Order (or within the
Xxxxxx specified time if such period is longer) during any Calendar Quarter and
which deliveries are subsequently accepted by Xxxxxx under Section 9.3, Xxxxxx
shall be relieved of the Minimums under this Agreement for such quarter and the
Minimum for such quarter shall become the Minimum for the succeeding quarter
with the Minimums for subsequent quarters being delayed by a calendar quarter .
Notwithstanding the foregoing, in the event that Xxxxxx delivers Purchase Orders
for a quantity of Products scheduled for delivery during a particular calendar
quarter that is greater than [1.10] times the quantities of Products covered by
the most recent rolling forecast established by the Joint Steering Committee
pursuant to Section 8.2 prior to the first day of such calendar quarter and such
forecast is greater than the Minimum for such calendar quarter, Physiometrix
shall not be obligated to accept Purchase Orders or deliver Product quantities
for such excess amount, and the failure of Physiometrix to do so shall not give
rise to any abrogation of Minimum under this Agreement or otherwise constitute a
breach of this Agreement.
9.3. All PSA 4000s and the PSArrays are subject to inspection by Xxxxxx
to verify conformity with the order. Xxxxxx must advise Physiometrix in writing
of any discrepancies in shipment or invoice with respect to the timing, number,
types, or condition of Products as shipped and invoiced by Physiometrix within
thirty (30) days of the date of receipt of the Products by Xxxxxx. Otherwise,
Xxxxxx shall be deemed to have accepted the timing, number, types and condition
of Products and invoice received with respect to such Purchase Order. Such
acceptance by Xxxxxx shall not relieve Physiometrix of its warranty obligations
with respect to such Products as provided in Section 18.3.
10. JOINT STEERING COMMITTEE.
10.1 MAKEUP AND MEETINGS. Promptly after execution of this Agreement,
Physiometrix and Xxxxxx shall establish a Joint Steering Committee having 6
members, by each designating three representatives. The representatives shall
include for Xxxxxx; a Vice President of Marketing, a Director of Finance and one
additional designee and for Physiometrix comparable level managers including
manager(s) having responsibility for marketing and finance. The Joint Steering
Committee will meet at least once each calendar quarter during the Term of the
Agreement and at other times to be mutually agreed upon. Meetings are to be held
at locations alternately designated by Physiometrix and Xxxxxx with Physiometrix
designating the first location.
10.2 PURPOSE. The Joint Steering Committee shall be the body for making
the decisions which are designated to it under this Agreement. All decisions are
to be unanimous. If the Joint Steering Committee is unable to reach an agreement
the decision will be first referred to executive level management of each
company and if such management is unable to reach agreement, the decision shall
go to arbitration under Article 44.
10.3 In addition to the decisions designated to the Joint Steering
Committee in the other Sections of this Agreement, the Joint Steering Committee
shall be responsible for the following
10.3.1 Establishment of an overall sales and marketing plan
for the marketing, sale and promotion of the Product(s) (the "Marketing Plan"),
and review the progress of the parties' marketing efforts under the Marketing
Plan.
10.3.2 Establishments of the anticipated selling prices and
Minimums under Section 7.2 and appropriate annual revision of the anticipated
selling prices and Minimums based upon market conditions and other factors.
Notwithstanding the foregoing, Xxxxxx has total discretion in the actual sale
prices it charges third parties for the Products.
10.3.3 Coordination of Physiometrix's and Xxxxxx'x sales and
marketing efforts; tracking of sales activity; and determination of appropriate
sales and marketing efforts and expenditures.
10.3.4 Establishment, implementation and updating of a
research and development plan to improve product performance and features to
improve the marketability of Products.
10.3.5 Establishment of PSA 4000 multi-year service plans for
offer to third parties and the pricing for such plans.
11. ADJUSTMENTS
11.1 During a calendar quarter, should Xxxxxx fail to place conforming
Purchase Orders for a total unit volume equal to the established Minimum for
such quarter (hereafter "Shortfall Quarter") causing Physiometrix's actual per
unit cost of manufacture for the Products on any Conforming Purchase Order
placed by Xxxxxx during such quarter to be greater than the estimated actual
cost of manufacturing utilized by the Joint Steering Committee in setting the
Product Pricing under Section 7.1 due to under-absorption of fixed manufacturing
costs, the Product Pricing for the successive Quarter shall be adjusted such
that the difference in expense incurred by Physiometrix between the estimated
cost of manufacture and the actual cost of manufacture for the products ordered
in the Shortfall Quarter, will be made up should Xxxxxx place conforming
Purchase Orders for a total purchase price amount equal to the Minimum for such
successive quarter. Should Xxxxxx place conforming Purchase Orders in a total
net sales amount amount greater than the Minimum in such successive quarter, the
per unit product pricing for the purchase order amount in excess of the Minimum
shall be equal to the Product
Pricing under Section 7.1.
11.2 During a calendar quarter not following a Shortfall Quarter,
should Xxxxxx place conforming Purchase Orders scheduled for shipment during
such calendar quarter in a total net sales amount greater than the Minimums, on
the excess amount the per unit Product Pricing under Section 7.1 shall be
reduced by 5% only if Xxxxxx'x actual average selling price of Products for such
calendar quarter is equal to or greater than the anticipated selling price
determined by the Joint Steering Committee for such calendar quarter.
11.3 To the extent that Xxxxxx'x actual average selling price for
Products during a calendar quarter exceeds 110% of the anticipated selling price
determined by the Joint Steering Committee for such calendar quarter, any Net
Sales revenue attributable to such excess average selling price above the 110%
shall be divided equally between Physiometrix and Xxxxxx. To the extent that
Xxxxxx'x actual average selling price for Products during a calendar quarter is
less than 90% of the anticipated selling price determined by the Joint Steering
Committee for such calendar quarter, any reduction in Net Sales revenue
attributable to such average selling price below 90% of the anticipated selling
price shall be shared equally between Physiometrix and Xxxxxx by an appropriate
credit.
11.4. Xxxxxx shall keep records showing the sales of all Products by
territory and in sufficient detail to enable Joint Steering Committee to
determine the total Net Sales amounts. Physiometrix shall keep records showing
the reasonable costs of manufacturing of all Products sold to Xxxxxx in
sufficient detail to enable Joint Steering Committee to set the Product Pricing
under Section 7.1. Such records shall be maintained for at least five (5) years
following the latest date covered by such records, and shall be made available
upon five (5) business days advance notice during reasonable business hours for
examination at the requester's expense and not more often than once each year by
a nationally recognized certified public accountant, selected by Requester, for
the sole purpose of verifying the correctness of calculations of Product Pricing
under this Agreement. The accounting expense shall be paid by the requester,
unless such audit reveals material discrepancies (in excess of 10%). If material
discrepancies do result, the non-requester shall bear the accounting expense,
and shall pay any amounts due to the requester, including interest, within
thirty (30) business days of the completion of the audit. Any records or
accounting information received from the non-requester shall be Confidential
Information for purposes of Article 19. The terms of this section shall survive
any termination or expiration of this Agreement for a period of five (5) years.
12. PACKAGING, LABELING AND TRADEMARK MATERIALS.
12.1. Physiometrix shall label and package all PSA components with the
Xxxxxx and Physiometrix wordmarks, in accordance with the specifications. The
Xxxxxx wordmark and Physiometrix wordmark shall share equal prominence. The
Joint Steering Committee shall review all labels, labeling and packaging. To the
extent permitted or required by applicable regulations and regulatory
authorities in the Territory all packaging for the Products shall (i)
prominently display the Licensed Trademarks, as appropriate; and (ii) identify
Physiometrix as manufacturer and Xxxxxx as distributor of the Products.
12.1.1 To maintain and enhance the goodwill and image of
quality associated by the public with the Xxxxxx and Physiometrix wordmarks,
each party shall conduct its business operations in respect of the Products in
accordance with all applicable statutes, laws, ordinances, and regulations of
any country or governmental entity in the Territory or otherwise having
jurisdiction over Xxxxxx or its activities hereunder, including without
limitation, laws and regulations of the Territory governing use of the Licensed
Trademarks.
12.2. Physiometrix shall assure that the content and format of all
labels and labeling and packaging conform with the regulatory requirements of
the Territory.
12.3. All labeling, tags, printed materials, advertising materials,
marketing materials, or any other materials which bear a Licensed Trademark (the
"Trademark Materials") shall be approved by Physiometrix to assure that
Physiometrix trademarks conform to Physiometrix standards prior to use by
Xxxxxx, which approval shall not unreasonably be conditioned, delayed or denied.
13. SALES PROMOTION AND TRAINING.
13.1. Xxxxxx shall promote and sell the Products in the Territory
provided that Xxxxxx shall not be held to "best efforts" as construed by
judicial precedent under the Uniform Commercial Code but rather marketing
efforts in Xxxxxx'x discretion consistent with its policies and procedures,
including same or similar marketing of its own or third party products. To that
effect, Xxxxxx shall maintain and utilize a competent and adequate staff,
organization and facilities to satisfy its obligations under this Agreement.
13.1.1 The expected sales and marketing expenditures by Xxxxxx
corresponding to the Minimums for the first six (6) calendar quarters are set
forth in Exhibit F. Subsequent quarterly expected sales and marketing
expenditures by Xxxxxx are to be established by the Joint Steering Committee.
The failure of Xxxxxx to expend the expected amounts is not a breach of this
Agreement.
13.2. Upon reasonable notice and during reasonable business hours,
Physiometrix shall make its personnel reasonably available for orientation and
training of Xxxxxx'x personnel with respect to selling, handling and storing the
Products (e.g. Xxxxxx sales meetings) in a manner determined by the Joint
Steering Committee. Each party shall bear its own respective costs and expenses
for orientation and training, unless otherwise agreed to by the parties.
13.3 Physiometrix will provide to Xxxxxx training materials for the
Product(s) prepared by Physiometrix for use in training sales representatives.
Xxxxxx may copy any training materials provided by Physiometrix for future
training programs conducted by Distributor. Any training materials developed by
Xxxxxx shall be subject to Physiometrix' prior approval.
13.4 The Xxxxxx Anesthesia sales force will use commercially reasonable
efforts to ensure that its sales force is fully trained with respect to the
Product(s).
13.5 Physiometrix will supply to Xxxxxx commercially reasonable
quantities of Products for use as samples. The Joint Steering Committee shall
establish the price and quantities of such samples; however, the price will be
equal to or greater than the reasonable manufacturing costs of such samples.
13.6 All expenses incurred by each party in connection with the
performance of its obligations in this Article 13 will be borne solely by such
party (except as indicated in 13.2). Xxxxxx will be responsible for appointing
its own employees, agents and representatives, whom Xxxxxx will compensate.
14. SALES AND CUSTOMER INFORMATION
14.1 Xxxxxx shall establish and maintain records sufficient to enable
Physiometrix to respond to product warranty, product recall and product
regulatory concerns and otherwise discharge its obligations to purchasers of
Products.
14.2. In the event that Physiometrix and/or Xxxxxx must respond to
product warranty, product recall, or product regulatory concerns, or otherwise
discharge their obligations to Xxxxxx customers purchasing the Products,
respectively both Xxxxxx and Physiometrix shall be jointly responsible for the
quick and effective communication of the required information. Xxxxxx shall be
primarily responsible, at its own expense, for direct contact with Xxxxxx
customers. Xxxxxx shall make available to Physiometrix or its authorized
representatives all such information as may be necessary to discharge its
obligations. Such Xxxxxx information may include, but not be limited to, the
nature of the complaint or inquiry, the product code, product serial number or
manufacturing lot number, purchase order number, invoice number, invoice date
and shipping date. Physiometrix shall be responsible, at its own expense, for
providing any technical or other informational support required by Xxxxxx in
order to accurately and timely respond to its customers' questions. Such
Physiometrix technical or informational support may include, but not be limited
to, product failure investigations, and documentation generated arid maintained
in compliance with the Quality System regulation (21 CFR 820 ET SEQ.) or with
other international laws, regulations or standards.
14.3. All publicity, advertisement and promotion of the Products by
Xxxxxx shall be made in conformity with product specifications provided by
Physiometrix and, without limiting the generality of the foregoing, all
regulatory and/or clinical claims regarding performance of the Products shall
strictly conform to such claims established by Physiometrix.. Xxxxxx shall not
use any material or make any statements in its publicity, advertising or
promotion of the Products that are false or misleading.
14.4. In the event of termination of this Agreement by Physiometrix for
any reason other than a Physiometrix Default, Xxxxxx shall make available to
Physiometrix or its authorized representatives such information as is necessary
for Physiometrix to retain the market for the Products in the Territory. Such
information may include, but not be limited to, customer name and address data,
sales history for the preceding twenty-four (24) months for each customer
showing unit sales by product and Net Sales of the Products, and non-exclusive
distributor relationships. Xxxxxx shall not be obligated to provide such
information upon conversion of its exclusive distribution rights to
non-exclusive rights with Physiometrix in accordance with Section 7.2 or 26.6.
15. STOCK, WAREHOUSING, PRODUCT RETURNS AND PRODUCT SERVICING
15.1. Xxxxxx, or an Affiliate or a non-Affiliate Sublicensee, shall
maintain at all times such inventories of Products and related literature and
technical documentation that are adequate to support the sales and service of
the Products.
15.2. Xxxxxx shall store its stock of and deliver the Products in
accordance with the storage statements on the Products' labeling in order to
preserve and protect the Products.
15.3. Subject to at least five (5) business days prior notice, Xxxxxx
shall permit Physiometrix's representatives at all reasonable times to inspect
its stores and warehouses and to take samples of Products in storage, which
samples shall be returned to Xxxxxx in saleable form or fully credited to
Xxxxxx. Xxxxxx shall comply strictly with all reasonable directions of
Physiometrix in relation to storage, delivery and other matters to ensure the
quality of the Products.
15.4. Upon request of Physiometrix, Xxxxxx shall destroy, return to
Physiometrix or make such disposition as Physiometrix shall reasonably direct,
at Xxxxxx s cost and expense, any portion of the Products in Xxxxxx'x inventory
determined by Physiometrix to be outdated or otherwise to require such
disposition; provided, however, such disposition is the result of discovery of a
manufacturing, design or materials defect (whether resulting from a recall or
arising due to regulatory requirements or otherwise), such disposition shall be
at the cost and expense of Physiometrix. In the event such return or destruction
is the result of discovery of a manufacturing, design or materials defect
(whether resulting from a recall or arising due to regulatory requirements or
otherwise), Physiometrix shall either replace such Products or credit Xxxxxx in
an amount equal to the Invoice Price for such Products. Physiometrix shall have
no liability for material that is outdated as the result of Xxxxxx'x inventory
management practices.
16. CHANGES TO PRODUCTS AND NEW PRODUCT DEVELOPMENT.
16.1. Physiometrix shall bear its own internal cost of engineering or
design changes to the Products made in response to decisions of the Joint
Steering Committee under Section 10.3.4 or actions by or requirements of
governmental or regulatory authorities within the Territory. Physiometrix may,
at any time, either add to, delete from or change any aspect of the PSA pursuant
to any updating, obsolescence or other change occurring within the ordinary
course of Physiometrix' business. Such changes shall not include alterations to
the PSA which would change the functionality of the Products or result in any
incompatibility between the PSArray and PSA4000. In the event that such
additions, deletions or changes would result in a delay in supplying the new and
improved PSA to Xxxxxx, Physiometrix will use commercially reasonable efforts to
continue supplying the previous model of the PSA, including the PSA 4000 and
PSArray, as applicable, until sufficient quantities of the changed PSA are
available for sale to Xxxxxx by Physiometrix. Xxxxxx shall not be required to
purchase any Minimums of the altered PSA while having any remaining inventory of
the previous model of the PSA. However, nothing in this Section 16.1 shall alter
the rights and obligations of the Parties described in Section 9.
16.2. RIGHT OF FIRST REFUSAL FOR NEW TECHNOLOGY. If during the term of
this agreement Physiometrix elects to distribute, market or sell any new
products developed or licensed by Physiometrix for measurment of the brain state
of a patient which is not Physiometrix Technology (the "New Technology") in any
country inside or outside the Territory, Physiometrix will notify Xxxxxx of such
election in writing (the "Notice of Election"). Xxxxxx shall have 15 days after
the receipt of such notice to deliver to Physiometrix a written notice
confirming Xxxxxx'x interest in acquiring such distribution, marketing and sale
rights for the New Technology (the "Notice of Interest"). If Xxxxxx delivers a
Notice of Interest to Physiometrix, the parties shall negotiate in good faith a
definitive agreement setting forth the terms under which Xxxxxx would distribute
the New Technology in the relevant countries (whether by amendment to this
agreement or otherwise). If the parties have not executed a distribution
agreement within 60 days after Xxxxxx'x receipt of the Notice of Election,
Physiometrix will have the right to enter into one or more distribution
agreements with respect to the New Technology in the Field in such countries on
terms generally no better than the terms offered by Xxxxxx.
16.3. Any "New Indication Product" of Physiometrix shall not be subject
to the terms and conditions of this Agreement unless mutually agreed by the
parties. For purposes of this Agreement, a "New Indication Product" shall mean
any product of Physiometrix based upon new clinical claims and/or indications
other than measurement of the brain state of a patient that differentiate such
product from the Products and from New Technology. Physiometrix shall be
entitled to manufacture, market, distribute and sell any and all New Indication
Products within the Territory without any obligation to Xxxxxx hereunder.
17. REGULATORY MATTERS, PRODUCT COMPLAINTS AND FIELD CORRECTIVE ACTIONS.
17.1 Physiometrix shall be responsible for obtaining regulatory
approval or clearance for the Products for their marketing sale and distribution
in the United States and shall use reasonable efforts in securing such approvals
and clearances. Xxxxxx shall provide reasonable assistance to Physiometrix in
the securing of such approvals and clearance. The Joint Steering Committee shall
determine in what proportion shall Xxxxxx and/or Physiometrix bear the expense
and responsibility for obtaining regulatory approval to market the Products in
such other countries in which Xxxxxx may be appointed Physiometrix' exclusive
distributor of the Products.
17.2. Xxxxxx shall deliver written notice to Physiometrix of any
product complaints it receives regarding or relating to the Products promptly
upon receipt of such complaints by Xxxxxx'x compliant handling unit, the IV
Systems Professional Services Group. Xxxxxx shall cooperate with and promptly
make available to Physiometrix such information relating to the complaint on the
Products as is available to Xxxxxx and necessary to properly report such
complaint to the appropriate regulatory authorities. Physiometrix shall be
responsible for and Xxxxxx shall be relieved of any responsibility for reporting
any and ALL Product complaints to the
United States Food and Drug Administration and to international governmental
agencies requiring the filing of such reports. Physiometrix shall give immediate
written notice to Baxter of product complaints it receives regarding or relating
to the Products and provide such information and documentation to Xxxxxx as is
necessary for Baxter to evaluate such complaints with respect to Xxxxxx'x
existing inventory and previously distributed products.
17.3. Each party shall promptly notify the other party of a party's
belief that recall or other field corrective action (as defined in 21 USC 518
and its implementing regulations) (hereinafter collectively referred to as
"Corrective Action") with respect to Products is necessary. Such belief may be
based on product complaints received by the party or other information regarding
the Products which comes to the attention of a party, including, without
limitation, information regarding the manufacturing process or its output. The
parties shall meet promptly after such notification at a time and place mutually
agreeable to the parties to determine whether Corrective Action should be
undertaken and, if Corrective Action is to be taken, to develop a coordinated
response to such Corrective Action. Neither party shall unreasonably withhold
any information from the other party involving patient safety, efficacy of a
Product or of a Corrective Action. Each party shall review with the other party
any statements to be made to any THIRD parties (including, without limitation,
governmental or administrative officials, or the general public) relating to a
Corrective Action prior to the publication or release of such statements.
17.4. In the event that a Corrective Action or like procedures are
necessary, each party shall cooperate fully with the other to ensure expeditious
completion of such Corrective Action. If a Corrective Action relates to a
manufacturing, design or materials defects, Physiometrix may elect to repair,
re-work, or replace defective Products and shall be responsible for or pay all
reasonable costs and expenses directly related to the Corrective Action,
including, without limitation, repair and replacement costs, notification costs
and shipping costs (hereinafter collectively referred to as "Correction Costs")
and Xxxxxx shall be relieved of Minimums under Section 7.2 until such Corrective
Action has been fully completed. If a Corrective Action relates to marketing,
distribution or handling by Xxxxxx of Products, Xxxxxx shall be responsible for
and pay all Correction Costs. In the event that Correction Costs are incurred by
a party which are paid by the other party pursuant to this Section 17.3, the
responsible party shall reimburse the incurring party for any such reasonable
Correction Costs within thirty (30) days of receipt of a xxxx from the incurring
party for such Correction Costs. If the Corrective Action
17.5 Upon request by Xxxxxx, Physiometrix shall obtain incoming
manufacturing process and test data information in writing which may include
yield, failure analysis, and corrective actions related to the Products. If the
requested information is not normally maintained by Physiometrix or is not
maintained in a format requested by Xxxxxx, Xxxxxx shall pay any expense
incurred by Physiometrix in obtaining such information.
17.6. The obligations of Physiometrix and Xxxxxx set forth in this
Section 17 are intended to comply with the laws, rules and regulations, of each
Country in the Territory. The requirements of this Section 17 shall therefore be
construed and interpreted to comply with all such laws, rules and regulations.
To the extent provisions of this Section 17 do not adequately reflect any such
law, rule or regulation, such provisions shall be revised to the extent
reasonably
necessary to make such provisions legal and valid in accordance with such laws,
rules and regulations.
18. REPRESENTATIONS AND WARRANTIES.
18.1.Physiometrix represents and warrants and covenants to Xxxxxx as
follows:
18.1.1. All Products to be delivered to Baxter hereunder will
be manufactured, packaged and labeled in compliance with applicable laws,
regulations and regulatory agency requirements in effect in the Territory on the
date of delivery and with the Specifications in Exhibit D. Without limitation of
such warranty, no Product shall be adulterated or misbranded or be an article
which may not, under the laws of any jurisdiction in the Territory, be
introduced into interstate commerce or imported on the date of Physiometrix'
delivery to Xxxxxx. Should Physiometrix be responsible under Section 17.l to
obtain regulatory approval or clearance in any country within the Territory,
Physiometrix shall deliver to Xxxxxx all packaging, instructional and labeling
inserts (collectively "Labeling" or "Product Materials") at such time as they
shall become available, for the Products, in languages required by each country
within the Territory. The Labeling and Product Materials will be accurate and
complete and constitute all such labeling and package inserts required for the
Products in the Territory.
18.1.2. Physiometrix has all requisite right, power and
authority to enter into this Agreement and to perform its obligations hereunder.
The entry into and performance of this Agreement by Physiometrix has been duly
authorized by all necessary corporate action on the part of Physiometrix and
this Agreement constitutes a valid agreement, binding upon and enforceable
against Physiometrix in accordance with its terms. The execution and delivery of
this Agreement by Physiometrix and the consummation of the transactions herein
provided will not: (i) conflict with any agreement, document or instrument to
which Physiometrix is a party; (ii) violate any order, writ, injunction or
decree of any court, administrative agency or governmental body or require the
approval, consent or permission of any governmental or regulatory body or
authority of which Physiometrix is aware, having authority over Physiometrix.
18.1.3. Without limiting the generality of the foregoing, (i)
the appointment of Xxxxxx hereunder as Exclusive Distributor in the Territory
does not conflict with, violate or breach any other agreements relating to the
Products to which Physiometrix is a party and (ii) this agreement is a legal and
valid obligation binding upon Physiometrix and is enforceable in accordance with
its terms.
18.2. Xxxxxx represents and warrants to Physiometrix that (i) the
execution of this Agreement has been duly authorized by requisite corporate
action of Xxxxxx, (ii) this Agreement does not conflict with any other
agreements for distribution of products in the Territory to which Xxxxxx is a
party, and (iii) this agreement is a legal and valid obligation binding upon
Xxxxxx and is enforceable in accordance with its terms.
18.3 Physiometrix warrants to Xxxxxx that the Products will meet the
then current specifications and will be free from defects in design,
manufacturing, materials and
workmanship for a period of twelve (12) months from the date of delivery to
users of such Products. However, this warranty shall not apply, and Physiometrix
shall be under no obligation to repair or replace Products or incur any
liability to Xxxxxx under this Section 18.3, in relation to Products which (i)
are not properly stored or maintained in accordance with their instructions,
(ii) which have been altered, modified, or changed by any person other than
Physiometrix or its designee or (iii) has been subject to unusual physical
stress, abuse, or negligent or accidental handling. Any Product which Xxxxxx or
a purchaser of Products finds to be defective may be returned by Xxxxxx to
Physiometrix. Prior to such return, Xxxxxx must first obtain a return of
materials authorization (RMA) number from Physiometrix. Any returned Product
must be accompanied by the RMA number assigned to such return. Physiometrix
shall repair or replace such Product or credit Xxxxxx'x account, at
Physiometrix' sole election in accordance with the limited warranty and free of
charge to Xxxxxx, and shall pay all reasonable shipping and handling costs of
Xxxxxx in relation to such defect, provided that Xxxxxx shall have notified
Physiometrix in writing of the defect within thirty (30) days of it being
discovered by Xxxxxx or brought to Xxxxxx'x attention. Except for rights for
indemnification pursuant to section 21.1, the preceding repair and replacement
warranty is Xxxxxx'x sole remedy against Physiometrix in the event of defects in
materials, design or workmanship in the Products.
18.4 Physiometrix warrants that, with respect to the Physiometrix
Technology, (i) all the patents and applications, of which Physiometrix is
aware, covering the Products are listed in Exhibit A; (ii) it is not aware of
any communications alleging that they have violated or, by conducting the
business as currently proposed under the Agreement, would violate any of the
intellectual property rights of any other person or entity related to the
Products; (iii) it has no knowledge of anything which would render any of the
patents or applied for patents, set forth in Exhibit A, invalid or
unenforceable; and (iv) it has no knowledge of any commercial use of such
patents other than by Physiometrix.
18.5 Xxxxxx recognizes and acknowledges that THE WARRANTY SET FORTH IN
SECTION 18.3 AND 18.4 IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED,
INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
18.6 As required under U.S. Food and Drug Administration's Quality
System Regulation (21 CFR 820 ET. SEQ.), Physiometrix shall either (i) comply
with Xxxxxx'x guideline for approved quality suppliers. Upon reasonable notice
of not less than five (5) business days, Physiometrix shall permit Xxxxxx
personnel to enter any facility where the Products (finish goods) are
manufactured, packed, processed or held for the purposes of a Xxxxxx Supplier
Quality Assessment.
19. CONFIDENTIAL INFORMATION.
19.1. All information and materials containing information provided by
either party to the other relating to this Agreement, including without
limitation customer requirements, lists, preferences and methods of operation,
the technology, any know-how, data, process, or technique of Physiometrix
relating to the PSA, and any research project, work in process, future
development, scientific, engineering, or manufacturing information, know-how,
designs, drawings, management information reports and other computer-generated
reports, pricing policies and details, details of contracts, operational
methods, plans or strategies, business acquisition plans, new personnel
acquisition plans and the business affairs of such party, whether in oral,
graphic or written form, as the case may be, are and shall i~ treated as
confidential, provided such information and materials are clearly marked
"confidential" and, if verbal, are reduced to writing and marked "confidential"
within ten (10) days after disclosure. The parties agree for themselves and on
behalf of their respective directors, officers, shareholders, affiliates,
employees and agents to whom such information and materials are disclosed, that
they shall keep such information and materials confidential and retain them in
strictest confidence both during and for a three (3) year period after the Term.
Such information shall not be disclosed to any person except to officers,
employees or agents of each, as the case may be, requiring such information or
materials to perform this Agreement, and shall not be used, directly or
indirectly, for any purposes or in connection with any business activities
except in connection with this Agreement. Confidential Information shall not be
used for any purpose or in any manner that would constitute a violation of any
laws or regulations, including without limitation the export control laws of the
United States. Confidential Information shall not be reproduced in any form
except as required to accomplish the intent of this Agreement. Each party will
promptly notify the other upon discovery of any unauthorized use or disclosure
of the Confidential Information.
19.2. This obligation of confidentiality shall not apply to any
information which: (i) was known to the receiving party at the time of receipt
as evidenced by its written records; (ii) was in the public domain at the time
of receipt; (iii) becomes public through no fault of the party obligated to keep
it confidential; (iv) such party legitimately learns from third parties who are
under no obligation of confidentiality with respect to the information; (v) is
required by applicable law or court order to be divulged; or (vi) is developed
by the receiving party independently of confidential information received from
the disclosing party.
20. INTELLECTUAL PROPERTY
20.1. Xxxxxx shall not register trademark with respect to the Products
or Trademark Materials, and shall not at any time do or cause to be done, any
act impairing or intending to impair any right, title or interest of
Physiometrix in the Licensed Trademarks or patents or applications listed on
Exhibit A.
20.2. In the event any patent covering the Products or Licensed
Trademark is infringed in the Territory by anyone not having rights thereto, the
party gaining knowledge of such infringement shall immediately notify the other
party. Such notice shall include sufficient information and data so the party
receiving the notice may determine whether or not an infringement exists. If
Physiometrix desires to send a cease and desist notice to the infringer, then
the Xxxxxx shall, in its sole discretion, may join in sending such notice. If,
within sixty (60) days thereafter, the infringer does not cease and desist from
such infringement, then Physiometrix may, at its sole discretion, elect to
commence legal action for infringement of such patent and/or Licensed Trademark.
In such an event, Physiometrix shall notify Xxxxxx of its intent to commence
such legal action and Xxxxxx, if Physiometrix so requests, may join in such
action at its discretion, and shall join in such action if required by law or
otherwise necessary to provide an adequate remedy to Physiometrix. In any event,
Xxxxxx shall cooperate fully with Physiometrix in any such legal action at the
expense of Physiometrix. Physiometrix shall retain all amounts recovered in
connection with such litigation and may settle such litigation in its sole
discretion.
21. INDEMNIFICATION AND INSURANCE
21.1. Physiometrix shall indemnify and hold harmless Xxxxxx, its
officers, shareholders, directors and employees, agents, successors and assigns,
against any and all liability, damage, loss, cost or expense resulting from any
third party claims made or suits brought due to or arising out of (i)
manufacturing, design, material, functional defects or product label statements
or representations occurring in Products sold to Xxxxxx, (ii) personal injury or
property damage caused by the Products at any time (except to the extent covered
by Xxxxxx'x indemnification obligations set forth in Section 22.2), or (iii)
breach of a warranty, representation or obligation of Physiometrix in this
Agreement. Xxxxxx shall promptly notify Physiometrix within ten (10) business
days of receipt of written notice of any such third-party claims or suits,
whereupon Physiometrix shall fully cooperate with Xxxxxx in the defense thereof
and in any reasonable action Physiometrix deems appropriate in response to such
claims or suits. Physiometrix, at its own expense, may at its election, through
its own attorneys, participate in the defense of such claims or suits. At
Xxxxxx'x option, Physiometrix shall also defend any such claims or suits in
which event Xxxxxx shall fully cooperate with Physiometrix in defense thereof
and in any reasonable action Physiometrix deems appropriate in response to such
claims or suits and Xxxxxx, at its own expense, at its election, through its own
attorneys, may participate in the defense of such claims or suits.
Notwithstanding the foregoing, Physiometrix shall be entitled to assume the
defense of any claims or suits involving the Licensed Trademarks or other
intellectual property related to the Products.
21.2. Physiometrix shall, at its expense, indemnify, defend and hold
Xxxxxx and its agents and employees harmless from and against all costs and
liabilities incurred in connection with any claim, action, suit or proceeding
maintaining that any patent, trademark or other intellectual property rights of
any third party are infringed or violated by the import, distribution or sale of
the PSA in the Territory as provided in this Agreement. Physiometrix may, with
Xxxxxx'x agreement, (i) obtain for Xxxxxx the right to continue to market, sell
and distribute the relevant product in the Territory (a "Third Party License")
or (ii) replace or modify the relevant product so as to make the product
non-infringing. If (i) and (ii) are not commercially and technically reasonable,
or if Xxxxxx and Physiometrix cannot agree as described in this section 21.2,
the parties may terminate the Agreement to distribute the relevant Product in
the Territory, Physiometrix shall repurchase such Products and refund Xxxxxx'x
purchase price, and Xxxxxx at Physiometrix' expense, will remove all such
products from the Territory and will cease distributing such product in the
Territory.
21.3. Xxxxxx shall defend, indemnify and hold harmless Physiometrix,
its partners, shareholders, officers, directors and employees, agents,
successors and assigns, against any and all liability, damage, loss, cost or
expense resulting from any third party claims made or suits
brought due to or arising out of: (i) Product distributed and/or sold by Xxxxxx
or on its behalf to the extent it is based upon an allegation of false or
misleading advertising by Xxxxxx (except for Physiometrix or Physiometrix
Product Claims) involving any such Licensed Product; (ii) use by Xxxxxx of a
Licensed Trademark in a manner not authorized by this Agreement; (iii) breach of
a warranty, representation or obligation of Xxxxxx in this Agreement; or (iv)
damage to any Product due to mishandling by Xxxxxx or any Subdistributor.
Physiometrix shall notify Xxxxxx within ten (10) business days of receipt of
written notice of any such claims or suits whereupon Xxxxxx shall assume, and
Physiometrix shall fully cooperate with Xxxxxx in, the defense thereof and in
any reasonable action Xxxxxx xxxxx appropriate in response to such claims or
suits. Physiometrix, at its own expense, may at its election,
21.4. Neither party shall be responsible or bound by any settlement
made by the other party without its prior written consent such consent not to be
unreasonably withheld.
21.5. The duties to indemnify and hold harmless from liability set
forth in this Section 21 shall survive termination of this Agreement and shall,
without limitation, apply to all damages, interest, reasonable legal fees, costs
and expenses which may be levied against or incurred by the indemnified party in
connection with any such suit, action, legal proceeding, claim or demand;
provided, however, such liability shall not extend to special, indirect or
consequential damages.
21.6. Physiometrix and Xxxxxx each agree to procure and maintain for
one (1) year following expiration or termination of this Agreement general
comprehensive liability insurance covering each occurrence of bodily and
property damage in the amount of not less than $3 million with endorsements for
completed operations, blanket liability and suppliers liability. Each party upon
the request of the other party shall furnish a certificate of insurance
evidencing the foregoing coverages and limits naming the other party, its agents
and assignees as an additional insured and stating that the insurer shall
endeavor to give the additional insured written notice at least thirty (30) days
prior to any cancellation, non-renewal or material change in coverage.
Notwithstanding the foregoing, Xxxxxx may self insure such potential liability
in whole or in part.
22. COPYRIGHTS.
22.1. Any copyrightable software utilized in the Products or which is
created by Physiometrix in the creation of product labeling or product inserts
by Physiometrix shall be the sole and exclusive property of Physiometrix. Xxxxxx
shall execute such assignments or other documents as may be necessary to perfect
and confirm Physiometrix's ownership of such copyrights.
23. OWNERSHIP EXCLUSIVE TO PHYSIOMETRIX.
23. I. Any interest that Xxxxxx or its Subdistributors may acquire, in
any country, in any of the Licensed Trademarks in Exhibit B will inure to the
benefit of Physiometrix. Rights granted to Xxxxxx under this Agreement shall not
affect the exclusive ownership of Physiometrix in and to the Licensed
Trademarks.
23.2. Upon termination of this Agreement, any and all interests or
rights of Xxxxxx to the Licensed Trademarks in Exhibit B shall automatically
revert to Physiometrix. Xxxxxx shall, upon termination, convey, by assignment or
otherwise, to Physiometrix immediately any interest Xxxxxx may acquire, together
with any goodwill associated therewith, and fully cooperate with Physiometrix to
perfect the vesting or ownership of such rights in Physiometrix.
23.3. Xxxxxx acknowledges the validity of Physiometrix's right, title
and interest in and to the Licensed Trademarks Exhibit B, including
Physiometrix's right to register or have registered as the owner of any and all
Licensed Trademarks, under the laws of each jurisdiction in the Territory.
23.4 Xxxxxx shall not contest Physiometrix' rights in and to the
Licensed Trademarks, the validity of any registration thereof, or the use of the
Licensed Trademarks other than as provided herein.
24. REGISTERED USER OF LICENSED TRADEMARKS.
24.1. From time to time and in its sole discretion, Physiometrix may
apply to register and/or renew registrations for trademarks, including the
Licensed Trademarks, for use in association with the Products pursuant to the
applicable laws of the Territory, and may apply to register Xxxxxx as a
registered user thereof in respect of the Products in the Territory as may be
required for Xxxxxx'x proper performance under this Agreement or as
Physiometrix, in its discretion, may deem appropriate.
24.2. At Physiometrix's request, Xxxxxx shall enter into separate
registered user agreements with respect to such trademarks and/or Licensed
Trademarks, and thereafter, take all steps necessary to register itself with
appropriate authorities as a permitted user thereof in the Territory.
24.3. Physiometrix may notify appropriate authorities of the
termination of this Agreement (either in its entirety, or with respect to any
Licensed Trademark or Product), whereupon Xxxxxx shall do all things necessary,
including the submissions of petitions and documents to the required
authorities, to permit Physiometrix to cancel all relevant entries regarding
Xxxxxx'x use of the Licensed Trademarks.
25. TERMINATION.
25.1. This Agreement may, at the option of Xxxxxx, be terminated
immediately upon the occurrence of any one of the following events by delivery
of written notice to Physiometrix (each, a "Physiometrix Default"):
25.1.1 If Physiometrix fails or neglects to perform, keep or
observe any of Physiometrix's material covenants, agreements or obligations
under this Agreement (other than
failure to deliver Products as provided in Section 9.2), and such failure is not
cured and Physiometrix does not make a good faith effort to cure such failure
within thirty (30) days after Xxxxxx gives Physiometrix written notice of such
default;
25.1.2. If any representation or warranty of Physiometrix in
this Agreement is untrue or incorrect in any material respect;
25.1.3. If any material portion of Physiometrix's assets are
seized, subjected to a writ of distress warrant, or are levied upon, or comes
within the possession of any receiver, trustee, custodian or assignee for the
benefit of creditors and the same is not terminated or dismissed within sixty
(60) days thereafter;
25.1.4. If a petition under the United States Bankruptcy Code
or any similar law or regulation shall be filed by Physiometrix or if
Physiometrix shall make an assignment for the benefit of its creditors or if any
proceeding is filed by Physiometrix for its dissolution or liquidation;
25.1.5. If Physiometrix is enjoined, restrained or in any way
prevented by court order from conducting all or any material part of its
business affairs or if a petition under the United States Bankruptcy Code or any
similar law or regulation is filed against Physiometrix or if any case or
proceeding, is filed against Physiometrix for its dissolution or liquidation and
such injunction, restraint or petition is not dismissed or stayed within ninety
(90) days after the entry or filing thereof;
25.1.6. If an application is made by Physiometrix for the
appointment of a receiver, trustee or custodian for any of its assets other than
a custodian pursuant to a voluntary custodial agreement entered into to perfect
a security interest, or if an application is made by any person other than
Physiometrix for the appointment or a receiver, trustee, or custodian for any of
its assets and the same is not dismissed within ninety (90) days after the
application therefor, or
25.2. This Agreement may, at the option of Physiometrix, be terminated
immediately upon the occurrence of any of the following events by delivery of
written notice to Xxxxxx (each, a "Xxxxxx Default"):
25.2.1. As provided in Sections 6.4;
25.2.2. If Xxxxxx fails or neglects to perform, keep or
observe any of Xxxxxx'x material covenants, agreements or obligations under this
Agreement (other than failure to purchase Products as provided in Section 9.2 or
pay amounts due hereunder), and such failure is not cured and Xxxxxx does not
make a good faith effort to cure such failure within thirty (30) days after
Physiometrix gives Xxxxxx written notice of such default;
25.2.3. If any representation or warranty of Xxxxxx in this
Agreement is untrue or incorrect in any material respect;
25.2.4. Xxxxxx becomes bankrupt or is the subject of
proceedings for liquidation or dissolution, or ceases to carry on business or
becomes unable to pay its debts as they become due; or
25.2.5. Xxxxxx violates or otherwise breaches its obligations
under Section 26 or any of the agreements executed and delivered thereunder.
25.3 After eighteen months from the Effective Date, either party may
terminate this Agreement by giving notice six months prior to the date of such
termination.
26. RIGHTS AND OBLIGATIONS UNDER TERMINATION.
26.1. If this Agreement is terminated by Physiometrix pursuant to
Section 25.2 prior to expiration of the Term, Xxxxxx shall immediately: (i)
cease to have any right or license to use the Licensed Trademarks; (ii) cease to
have any right to market, distribute or sell the Products and any components
thereof; (iii) refrain from using any inventions or designs which are the
subject of any patent, design registration, copyright, trademark, or other
similar industrial property right owned by Physiometrix; (iv) be subject to the
restrictions set forth in Section 3.2; (v) pay all -,mounts due to Physiometrix;
(vi) return all documentation, promotional material, Trademark Materials and
confidential information in Xxxxxx'x possession provided by Physiometrix; (vii)
execute all documents and take all action as may be reasonably required by
Physiometrix to transfer to Physiometrix all goodwill and rights in the Licensed
Trademarks.
26.2. Within ten (10) days after termination of this Agreement, for any
reason (other than by reason of an Physiometrix Default), Xxxxxx shall furnish
Physiometrix with a list of all Products and related components in Xxxxxx'x
inventories or possession as of the date of termination.
26.3. Upon termination of this Agreement, for any reason other than a
Physiometrix default, Physiometrix shall at its election either (i) repurchase
from Xxxxxx, and Xxxxxx hereby agrees to sell to Physiometrix at the Invoice
Prices paid to Physiometrix by Xxxxxx for all Products, and related components
then in Xxxxxx'x possession or inventories (provided that such Products are
saleable, in their original packages and unaltered from their original form and
design, or (ii) cooperate with Xxxxxx in the orderly liquidation of' Products
held by Xxxxxx at prices no less than the Invoice Prices, at the direction and
under the supervision of Physiometrix.
26.4 Upon termination of this Agreement for any reason (other than by
reason of an Physiometrix Default), Xxxxxx shall turn over and deliver to
Physiometrix all documents, computer files and other information and records
related to the Products including any customer complaint files which may be
maintained by Xxxxxx to such address as Physiometrix may designate. All accounts
receivable for Products shipped to customers in the Territory prior to the
termination date of this Agreement shall remain the property of Xxxxxx upon
termination of this Agreement. All open customer purchase orders for which
Products have not been shipped to customers in the Territory prior to the
termination date of this Agreement shall become the property of Physiometrix on
the termination date of this Agreement. Any outstanding purchase
orders of Subdistributors shall revert to Physiometrix.
26.5 Upon the negotiation of a reasonable fee, Xxxxxx shall assign or
cause to be assigned to Physiometrix, or its designee, all governmental
approvals, clearances, registrations or permits which Xxxxxx may have obtained
for the Product pursuant to Section 17.1. Such fee shall reflect the reasonable
costs incurred by Xxxxxx in order to obtain such approval, clearance,
registration, or permit (e.g. filing fees, costs of bench or clinical studies,
costs of preparing the submission, etc.). The parties shall negotiate in good
faith to determine the amount to be tendered to Xxxxxx. In the event such an
assignment is not permitted by law, Xxxxxx will cooperate in the cancellation of
such approval, clearance, registration, or permit standing in its name.
26.6 Upon termination of this Agreement for any reason (other than by
reason of an Physiometrix Default), or upon receipt of a notice of termination
by Xxxxxx under Section 25.3, Physiometrix and any of its assignees or licensees
shall thereafter have the right, without paying any compensation, fee,
indemnity, goodwill or other remuneration whatsoever to Xxxxxx, to deal with
Xxxxxx'x customers and sell the Products in the Territory.
27. GOVERNING LAW.
27.1. This Agreement shall be governed by, and construed in accordance
with, the laws of the United States of America and the State of Delaware. Any
claim or controversy arising out of or related to this Agreement or any breach
hereof shall be submitted to a court of applicable jurisdiction in the State of
Delaware, and each party hereby consents to the jurisdiction and venue of such
court.
28. RELATIONSHIPS OF PARTIES.
28.1. It is expressly understood that Physiometrix and Xxxxxx are not
partners, and that neither party has any right, title or interest in and to the
business of the other, nor the right to bind the other in any respect
whatsoever, and nothing herein contained shall be deemed, held or construed as
making either party a partner, employee, associate or agent of the other. It is
expressly understood that there is no fiduciary relationship of any kind between
the parties.
29. LICENSE NOT CONVEYANCE.
29.1. Except as otherwise set forth herein, nothing in this Agreement
is intended to be, nor shall anything herein be construed or interpreted to be,
a conveyance or transfer to Xxxxxx of title or ownership in or to any of the
Licensed Trademarks.
30. NO WAIVER.
30.1. The failure of either party to enforce at any time the provisions
hereof shall not be construed to be a waiver of such provision, or any other
provision or of the rights of such party thereafter to enforce such provision or
other provisions.
31. EXERCISE OF RIGHTS.
31.1 The various rights, remedies, powers, options and elections
expressed or contained herein are cumulative, and no one of them shall be deemed
to be exclusive of the others or of such other rights, remedies, powers, options
or elections as are now, or may hereafter be, conferred by law, except as
expressly provided herein.
32. TOTAL AGREEMENT
32.1. This Agreement contains the entire understanding of the parties
and supersedes and merges all prior and contemporaneous agreements and
discussions between the parties. Any and all representations or agreements by
any agent or representative of either party not contained in this Agreement
shall be null, void and of no effect. This Agreement may not be changed in any
way, except by an instrument in writing referencing this agreement, signed by
both parties.
33. NOTICE.
33.1. Any notice or other communication required or which may be given
pursuant to this Agreement shall be in writing and shall be delivered
personally, telegraphed or telexed with a copy sent contemporaneously by
registered mail, postage prepaid, or sent by certified, registered, or express
mail, postage prepaid, to the relevant address set forth below. Any such notice
or communication shall be deemed given or received when so delivered personally,
telegraphed or telexed, or if mailed, three (3) business days after so deposited
in the mail.
---------------------------------------- ---------------------------------------
IF TO PHYSIOMETRIX: WITH A COPY TO:
---------------------------------------- ---------------------------------------
Physiometrix Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
---------------------------------------- ---------------------------------------
000 Xxxxxxxxx Xxx. 650 Page Mill Road
---------------------------------------- ---------------------------------------
No. Xxxxxxxxx, Xx. 00000
---------------------------------------- ---------------------------------------
Xxxx Xxxx, XX 00000-0000
---------------------------------------- ---------------------------------------
Attn: Xxxxxx X. Xxxxx Attn:, Xxxxxxxxxxx X. Xxxxxxxx, Esq.
---------------------------------------- ---------------------------------------
Telephone: 000-000-0000 Telephone: (000) 000-0000
---------------------------------------- ---------------------------------------
Fax: (000-000-0000 Fax: (000) 000-0000
---------------------------------------- ---------------------------------------
---------------------------------------- ---------------------------------------
IF TO XXXXXX: WITH A COPY TO:
---------------------------------------- ---------------------------------------
Xxxxxx Healthcare Corporation Office of the General Counsel
---------------------------------------- ---------------------------------------
Route 120 and Xxxxxx Xx. One Xxxxxx Parkway
---------------------------------------- ---------------------------------------
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
---------------------------------------- ---------------------------------------
Attention: Xxx Xxxxx
---------------------------------------- ---------------------------------------
Telephone:(000)000-0000
---------------------------------------- ---------------------------------------
Fax: (000)000-0000
---------------------------------------- ---------------------------------------
34. AMENDMENTS.
34.1. No amendment or modification of this Agreement shall be valid or
binding unless first reduced to writing and executed by both parties hereto.
35. SINGULAR OR PLURAL.
35.1. In any place or places in this Agreement in which the context may
require such substitution, the plural shall be substituted for the singular
number, or vice versa.
36. HEADINGS.
36.1. Section headings used in this Agreement are for convenience only
and shall not in any way affect the construction of this Agreement.
37. BINDING EFFECT.
37.1. This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto, and their respective successors and permitted assigns.
38. SEVERABILITY.
38.1. If for any reason any provision of this Agreement, including but
not limited to, any provision relating to Termination of this Agreement, shall
be deemed by a court of competent jurisdiction to be legally invalid or
unenforceable in any jurisdiction to which it applies, the validity of the
remainder of this Agreement shall not be affected and such provision shall be
deemed modified to the minimum extent necessary to make such provision
consistent with applicable law, and, in its modified form, such provision shall
then be enforceable and enforced.
39. FORCE MAJEURE.
39.1. Neither party to this Agreement shall be liable for failure to
perform on its part any provision or part of this Agreement when such failure is
due to fire, flood, or other act of God, strike, labor dispute, or other
industrial disturbance, unavoidable accident, war, embargo, inability to obtain
materials or transportation, or governmental actions for the period of delay
imposed by such cause.
40. SURVIVAL.
40.1. The obligations of the parties hereto, to the extent such
obligations are to be performed after termination of this Agreement, shall
survive expiration or termination of this Agreement.
41. COUNTERPART EXECUTION.
41.1. This Agreement may be executed in two (2) or more counterparts,
each of which. shall be deemed an original, but all of which together shall
constitute but one (1) and the same instrument.
42. EXPORT COMPLIANCE
42.1 Xxxxxx understands and recognizes that the PSA and other materials
made available to it hereunder may be subject to export administration
regulations of the United States Department of Commerce and other United States
government regulations related to the export of medical products. Xxxxxx
represents that it is familiar with and agrees to comply with all such
regulations, including any future modifications thereof, in connection with the
distribution of the PSA or clinical data relating to the PSA except for exports
where Physiometrix is the exporter of record. Xxxxxx hereby agrees to indemnify
and hold Physiometrix harmless from any breach of this section 42.1 for any
exports where Xxxxxx is the exporter of record.
42.2 Xxxxxx hereby agrees that it shall refrain from any acts that
would violate, or cause Physiometrix to violate, the United States Foreign
Corrupt Practices Act. Xxxxxx hereby agrees to indemnify and hold harmless
Physiometrix from any breach of this section 42.2 in the countries in the
Territory listed in Exhibit D.
43. RIGHT OF FIRST REFUSAL. If during the Term of this agreement should
Physiometrix solicits or otherwise becomes the subject of an offer in connection
with a merger or similar reorganization or the sale of all or substantially all
of its assets to which this Agreement relates, Physiometrix will notify Xxxxxx
of such offer in writing (the "Notice of Election"). Physiometrix and Xxxxxx
shall negotiate in good faith for 15 days after the receipt of such Notice of
Election a mutually acceptable alternate transaction. If the parties are unable
to agree on alternate transaction within such 15 days, Physiometrix will have
the unfettered right to accept such offer on any terms Physiometrix may, in its
sole discretion, deem appropriate.
44. DISPUTE RESOLUTION
44.1 In the event of any dispute, controversy or claim arising out of
or relating to this Agreement or to breech hereof, including interpretation,
performance or termination, the parties agree to commence good faith discussion
between their designees toward resolution of such issues. If, after thirty (30)
days, the parties are unable to reach a resolution, the parties shall within
fifteen (15) days make a determination as to whether such issue is to be
resolved by a third party accountant. If the parties determine that such issue
is to be resolved by a third party accountant then the issue shall be shall be
submitted to a firm of independent public accountants with substantial
experience in auditing healthcare product companies ("Third Party Accountant")
selected by the independent public accountants of Xxxxxx and Physiometrix to
resolve the dispute. The Third Party Accountant's resolution of the issue shall
be final and binding upon the parties hereto. All fees and expenses of the Third
Party Accountant shall be shared
equally between the parties. Should the parties disagree upon submission of the
issue to the Third Party Accountant, the selection of the Third Party Accountant
or make a determination that the issue is not proper for resolution by a Third
Party Accountant such issues shall be finally resolved by arbitration, under the
American Arbitration Association ("AAA") Rules of Arbitration. The arbitration
shall be conducted by one arbitrator mutually selected by the parties. If the
parties cannot agree on an arbitrator, then there shall be three (3)
arbitrators, one to be appointed by Physiometrix, one to be appointed by Xxxxxx
and a third being nominated by the two arbitrators so selected or, if they
cannot agree on a third arbitrator, by the President of the AAA.
44.2 The Arbitration shall be conducted in English and in accordance
with the rules of the AAA. The arbitration, including the rendering of the
award, shall take place in Wilmington, Delaware. The decision of the
arbitrator(s) shall be binding on the parties hereto, and the expense of the
arbitration (including without limitation the award of attorney's fees to the
prevailing party) shall be paid as the arbitrator(s) determine. The decision of
the arbitration shall be executory, and judgment thereon may be entered by any
court of competent jurisdiction.
EXECUTION
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, in duplicate, by their duly authorized officers as of the date set
forth above.
"Physiometrix"
Physiometrix Inc.
(a Delaware Corporation)
By:
----------------------------------
Xxxx X. Xxxxxxxx
President
"Xxxxxx"
Xxxxxx Healthcare Corporation
(a Delaware Corporation)
By:
---------------------------------
Xxxxx X. Xxxxx
General Manager
Global Anesthesia
LIST OF EXHIBITS
EXHIBIT A PATENTS AND PATENT APPLICATIONS
EXHIBIT B LICENSED TRADEMARKS
EXHIBIT C TERRITORY AND XXXXXX DISTRIBUTION AGREEMENTS
EXHIBIT D PRODUCT SPECIFICATIONS
EXHIBIT E INITIAL PRODUCT PRICING
EXHIBIT F QUARTERLY MINIMUMS AND SALES AND MARKETING EXPENDITURES
EXHIBIT A
PATENTS AND PATENT APPLICATIONS
EXHIBIT B
LICENSED TRADEMARKS
EXHIBIT C
TERRITORY AND XXXXXX DISTRIBUTION AGREEMENTS
UNITED STATES OF AMERICA AND ITS TERRITORIES AND POSSESSIONS
EXHIBIT D
PRODUCT SPECIFICATIONS
EXHIBIT E
INITIAL PRODUCT PRICING AND ESTIMATED MANUFACTURING COST
EXHIBIT F
QUARTERLY MINIMUMS AND SALES AND MARKETING EXPENDITURES
QUARTERLY MINIMUMS UNDER SECTION 7.2
HARDWARE
Q3 2000 UNITS
Q4 2000 UNITS
Q1 2001 UNITS
Q2 2001 UNITS
Q3 2001 UNITS
Q4 2001 UNITS
SENSORS
Q3 2000 UNITS
Q4 2000 UNITS
Q1 2001 UNITS
Q2 2001 UNITS
Q3 2001 UNITS
Q4 2001 UNITS
EXPECTED SALES AND MARKETING EXPENDITURES UNDER SECTION 13.1.1
Q3 2000 $
Q4 2000 $
Q1 2001 $
Q2 2001 $
Q3 2001 $
Q4 2001 $
