DISTRIBUTION AND MARKETING AGREEMENT
This DISTRIBUTION AND MARKETING AGREEMENT, including the attached
Exhibits ("Agreement"), is made and entered into as of ______________, 1998
(the "Effective Date") by and between CIPHERGEN BIOSYSTEMS, INC., a
California corporation with offices at 000 Xxx Xxxxxxx Xxxx, Xxxx Xxxx, XX
00000, XXX ("CBI"), and Ciphergen Biosystems K.K., a Japanese corporation
with offices at ______________, Japan ("JVC").
BACKGROUND
A. CBI is engaged in the business of developing, manufacturing,
distributing, and selling Products (as defined below); and
B. JVC desires to solicit orders for Products from, and distribute
and sell Products to, customers in the Territory (as defined below); and
C. JVC desires to purchase from CBI, and CBI desires to sell to JVC,
such Products for the purpose of resale to customers in the Territory.
NOW, THEREFORE, in consideration of the mutual promises contained herein, CBI
and JVC agree as follows:
1. DEFINITIONS
1.1 "AFFILIATE" means any entity which is controlled by CBI or JVC.
An entity shall be regarded as in control of another entity for purposes of
this definition if it owns or controls more than fifty percent (50%) of the
shares of the subject entity entitled to vote in the election of directors
(or, in the case of an entity that is not a corporation, for the election of
the corresponding managing authority); provided, however, that in any country
where the local law does not permit equity participation of at least 50%,
then Affiliate will include any company in which CBI or JVC owns or controls,
directly or indirectly, the maximum percentage of such outstanding stock or
voting rights permitted by law.
1.2 "CHANGE IN CONTROL" with respect to a Party means (i) a merger
of that Party with or into another Person, or a sale of all or substantially
all of a Party's assets to another Person, if as a result of the merger or
asset sale the holders of a majority of the Party's voting securities before
the transaction hold less than a majority of the voting securities of the
surviving entity, or (ii) the acquisition by a Person or a group acting in
concert of a majority of a party's voting securities.
1.3 "CONSUMABLES" means CBI's ProteinChip-TM- arrays generally made
available by CBI for use with Systems and items that CBI sells in the United
States and Europe in one time or limited reuse with the Systems for life
sciences research market applications.
1.4 "CUSTOMERS" means end users of Products in the Territory and in
the Field.
1.5 "EFFECTIVE DATE" means the date first above written in the
caption.
1.6 "FIELD" means life science research for internal purposes only.
JVC's Customers of Products may not sell clinical diagnostic products or
services nor sell information or data generated from Products acquired from
JVC.
1.7 "PARTY" or "PARTIES" means CBI and JVC.
1.8 "PERSON" or "PERSONS" means a natural individual, partnership,
firm, company, corporation, and any other form of business association.
1.9 "PRODUCTS " means Systems and Consumables manufactured by CBI
and/or any third party who has been allowed by CBI to manufacture the same.
1.10"SC" means Sumitomo Corporation.
1.11"SYSTEMS " means CBI's Protein Biology System I and its
successors based on CBI's Surface Enhanced Laser Desorption/Ionization
(SELDI-TM-) technology, generally made available in the life sciences
research market in the United States and Europe.
1.12 "SOFTWARE" means machine control software and bioinformatics
software supplied with Systems for use in connection with the Products.
1.13 "SYSTEM SPECIFICATIONS" means operator's guide, package
inserts, packaging specifications, label claims, instructional manuals and
other material provided by CBI for use with Systems and Consumables.
1.14 "SC" means Sumitomo Corporation.
1.15 "TERM" is defined in Section 12.1.
1.16 "TERRITORY" means Japan.
1.17 "WORKING DAYS" means Monday through Friday, other than public
holidays of the United States, the State of California, and Japan.
2. GRANT OF DISTRIBUTION RIGHTS
2.1 APPOINTMENT.
(a) Subject to the terms and conditions of this Agreement,
CBI hereby grants to JVC the exclusive right, to market, sell and distribute
in the Territory CBI's Products to Customers solely for use in the Territory
and in the Field.
(b) Rights granted under 2.1(a) shall not include any
patents, copyrights, maskwork rights, trade secrets, know-how or any other
intellectual property of CBI.
-2-
(c) CBI agrees not to grant licenses on any of its patents,
copyrights, maskwork rights, trade secrets, know-how or any other
intellectual property to any other Person without specifically excluding the
right to market, sell and distribute in the Territory CBI's Products to
Customers in the Territory and in the Field.
(d) CBI shall not (i) appoint any distributor of Products
other than JVC in the Territory and in the Field; and (ii) sell or resell any
Products to third parties other than JVC in the Territory and in the Field.
2.2 SOFTWARE LICENSE; NOTICES.
(a) CBI hereby grants to JVC a limited, non-exclusive,
nontransferable, royalty-free license to use the Software, solely for the
purposes of (i) demonstrating the Products, (ii) training and instructing JVC
personnel, and (iii) allowing Customer use of the Products, in each case in
accordance with the terms and conditions of this Agreement.
(b) Software provided to JVC hereunder is subject to this
license and is not a sale of title to the Software and it is understood and
agreed that CBI retains all right, title, and interest in and to Software.
JVC agrees not to directly or indirectly reverse engineer, disassemble,
decompile, or otherwise attempt to derive source code from the Software and
not to copy the Software or use it for any other purpose except as expressly
licensed.
(c) The terms of Section 2.2(b) apply in full force and
effect to JVC's Customers, and JVC shall ensure that its Customers comply
with the requirement not to directly or indirectly reverse engineer,
disassemble, decompile, or otherwise attempt to derive source code from the
Software and not to copy the Software or use it for any other purpose except
as expressly licensed.
(d) JVC agrees not to modify, delete, or obscure any and
all proprietary notices affixed to the Products, including, without
limitation, the Software.
(e) JVC agrees to localize the Software for use in the
Territory. CBI retains all right, title, and interest in any and all
resulting copyrightable materials from such localization.
2.3 NO RIGHTS BEYOND PRODUCTS. It is understood and agreed that the
foregoing rights do not include the right to market, license, sell or
otherwise distribute any information or data derived from or with the use of
Products.
2.4 RESERVATION OF RIGHTS. Except as expressly provided in this
Section 2, no right, title, or interest is granted, whether express or
implied, by CBI to JVC. Nothing in this Agreement shall be deemed to grant to
JVC rights in any products or technology other than the Products, nor shall
any provision of this Agreement be deemed to restrict CBI's right to exploit
technology, know-how, patents, or any other intellectual property rights
relating to the Products and applications other than Products. CBI reserves
the rights to market, sell, or otherwise distribute, directly or indirectly,
Products in the Territory for use outside the Field.
-3-
3. PAYMENT
3.1 PAYMENT
(a) JVC shall pay 80% of CBI's then published U.S. list
price for the applicable Products. JVC shall pay 40% of CBI's then published
U.S. list price for the Consumables purchased by JVC for internal use at JVC
and for Customer demonstration. Limited quantities of such Consumables
supplied to JVC shall be specified in the annual Business Plan (as defined in
Section 1.6 and as required by Section 4.6 of the Joint Venture Agreement).
(b) CBI shall submit an invoice to JVC upon shipment by CBI
of each Product ordered by JVC. Each such invoice shall state JVC's aggregate
and unit transfer price for Products in a given shipment, plus any freight,
taxes or other costs incident to the purchase or shipment initially paid by
CBI but to be borne by JVC hereunder. Such payment shall be made in U.S.
dollars net thirty (30) days by wire transfer after the date of shipment by
CBI to JVC and deposited by wire into a bank account designated by CBI.
(c) Any payment for Products due which is not paid within
five (5) days of the date such payments are due in accordance with Section
3.1(a) shall bear interest at the lesser of one and one-half percent (1-1/2%)
per month or the maximum rate permitted by law, calculated on the number of
days such payment is delinquent. This Section 3.1(b) shall in no way limit
any other remedies available to CBI.
3.2 TAXES. Any and all amounts payable hereunder by JVC under
Section 3 do not include any government taxes (including without limitation
sales, use, excise, and value added taxes) or duties imposed by any
governmental agency that are applicable to the export, import, or purchase of
the Products (other than taxes on the net income of CBI), and JVC shall bear
all such taxes and duties. JVC shall be responsible to pay all taxes, costs,
or payments, if any, which result from compliance with applicable currency
control restrictions including the Revised Foreign Exchange and Foreign Trade
Control Act (Revised FECA). Any such taxes which are otherwise imposed on
payments to CBI or JVC shall be the sole responsibility of JVC. When CBI has
the legal obligation to collect and/or pay such taxes, the appropriate amount
shall be added to JVC's income and/or paid by JVC, unless JVC provides CBI
with a valid tax exemption certificate authorized by the appropriate taxing
authority. JVC shall provide CBI with official receipts issued by the
appropriate taxing authority or such other evidence as is reasonably
requested by CBI to establish that such taxes have been paid.
3.3 RECORDS; INSPECTION. JVC shall keep complete, true and accurate
books of account and records for the purpose of determining the amounts
payable under Section 3.1. Such books and records shall be kept at JVC's
principal place of business for at least three (3) years following the end of
the calendar quarter to which they pertain. Such records will be open for
inspection during such three (3) year period by a representative or agent of
the other Party for the purpose of verifying the amounts payable under
Section 3.1. Such inspections may be made no more than once each calendar
year, at reasonable times mutually agreed upon by CBI and JVC (each
-4-
referred to as "Inspecting Party"). The Inspecting Party's representative or
agent shall execute a confidentiality agreement prior to commencing any such
inspection. Inspections conducted under this Section 3.4 shall be at the
expense of the Inspecting Party's, unless a variation or error producing an
underpayment in amounts payable exceeding five percent (5%) of the amount
paid for any period covered by the inspection is established in the course of
any such inspection, whereupon all costs relating to the inspection for such
period and any unpaid amounts that are discovered will be paid by the
inspected Party, together with interest on such unpaid amounts at the rate
specified in Section 3.1(c) above.
4. PURCHASE AND SALE
4.1 FORECASTS AND PURCHASE ORDERS. Beginning on the Effective Date,
and thereafter sixty (60) days prior to the first day of each calendar
quarter, JVC shall provide to CBI a good faith, quarterly written forecast of
Products that JVC expects to purchase and prospective customers over the
twelve (12) months commencing with the first day of the next calendar quarter
("Forecasts"). The Parties acknowledge that the Forecasts are for CBI's
planning purposes only and shall not be binding upon the Parties. JVC and CBI
shall meet, by telephone or in person, not less than once per calendar
quarter to review Forecasts.
4.2 ORDER AND ACCEPTANCE. All orders shall be by means of signed
written Purchase Orders by JVC to a CBI employee designated in writing by
CBI, sent to CBI at CBI's address for notice hereunder and proposing a
delivery date that is consistent with the Forecasts and not less than sixty
(60) days after CBI's receipt of such Purchase Order unless CBI waives this
notice requirement when requested by JVC for a particular order ("Purchase
Orders"). Orders shall be placed by a signed written Purchase Order, which
may be provided to CBI by fax or e-mail. CBI shall accept Purchase Orders by
fax, e-mail or in writing within fourteen (14) days of receipt, it being
understood that no Purchase Order shall be binding upon CBI until accepted by
CBI. CBI shall fulfill Purchase Orders accepted by CBI pursuant to the terms
and conditions of this Agreement. CBI shall maintain full production capacity
to meet the Purchase Order, but does not guarantee delivery of Products for
delivery dates less than sixty (60) days of the Purchase Order. No partial
shipment of an order shall constitute the acceptance of the entire order,
absent the written acceptance of such entire order. Once accepted by CBI, JVC
may cancel or reschedule Purchase Orders for Products only with CBI's prior
written approval.
4.3 SHIPPING. All Products delivered pursuant to the terms of this
Agreement shall be suitably packed for surface or air shipment, in JVC's
discretion, in CBI's standard shipping cartons, and delivered, at JVC's
direction, to JVC or a carrier agent, F.O.B. (as the term "F.O.B." is defined
under Section 2319 of the California Uniform Commercial Code as of the
Effective Date) the shipping location designated by CBI (the "Shipping
Location"), at which time risk of loss shall pass to JVC. CBI shall ship
Products using the carrier specified in JVC's Purchase Order provided that if
JVC does not provide instructions with respect to the carrier to be used, CBI
shall select the carrier. All freight, insurance, and other shipping
expenses, as well as any special packing expenses incurred by CBI at the
request of JVC, shall be paid by JVC. JVC shall also bear all applicable
taxes, export taxes, duties and similar charges, and any charges that may be
assessed against the Products after
-5-
delivery to JVC or the carrier at the Shipping Location. All shipments and
freight charges shall be deemed correct unless CBI receives from JVC, no
later than forty-five (45) days after the shipping date of a given shipment,
a written notice specifying the shipment, the purchase order number, and the
exact nature of the discrepancy between the order and shipment or discrepancy
in the freight cost, as applicable.
4.4 RETURNS. JVC may return Products only with CBI's prior written
approval. Products returned to CBI other than under Section 6 shall be
returned F.O.B. the destination point designated by CBI (as the term "F.O.B."
is defined under Section 2319 of the California Uniform Commercial Code as of
the Effective Date) and shall be subject to a restocking fee in an amount
equal to ten percent (10%) of the transfer price paid by JVC to CBI for such
Products computed in accordance with Section 3.1(a). JVC shall also bear all
applicable taxes, export taxes, duties and similar charges, and any charges
that may be assessed against the Products in connection with such delivery to
CBI at the destination point.
5. INSPECTION AND ACCEPTANCE
JVC shall inspect all Products promptly upon receipt thereof and may
reject any Product that fails to conform to the warranties set forth in
Section 6 below at the time of delivery to JVC, provided that JVC complies
with the provisions of Section 6.3 below. JVC may reject any Product rejected
by Customers within thirty (30) days of rejection by Customers. Except as set
forth in this Section 5 and Section 6 below, JVC shall return Products to CBI
only with CBI's prior written approval.
6. LIMITED WARRANTY
6.1 STANDARD CBI SYSTEMS AND CONSUMABLES WARRANTY. CBI warrants to
JVC that subject to the exclusions set forth in this Section 6.1 and in
Section 6.2 below, the Systems and Consumables shall substantially conform to
System Specifications, during the one-year warranty period after
installation, covering parts and labor. The foregoing warranty is contingent
upon proper use of the Systems and Consumables with the supplied Software in
the applications for which they were intended as indicated in the Systems and
Consumables label claims. The above limited warranty applies only to defects
reported to CBI in accordance with CBI's standard reporting procedures
described in the System Specifications and does not apply to any Systems and
Consumables which, after dispatch from the Shipping Location, (i) have been
altered, (ii) have not been maintained in accordance with any transportation,
storage, handling or maintenance instructions supplied by CBI, (iii) have
been damaged by negligence or accident, or (iv) have been damaged by acts of
nature, vandalism, burglary, neglect, or misuse. In the event of any breach
of the above limited warranty, JVC's exclusive remedy and CBI's sole and
exclusive liability shall be, at CBI's sole election, within thirty (30) days
after the end of the quarter during which defects are reported to CBI, to
replace the Systems and Consumables, with Software supplied therewith, at
CBI's expense or to provide JVC with a credit or refund in the amount of the
transfer price paid by JVC for the non-conforming Systems, Consumables and
Software.
-6-
6.2 DISCLAIMER OF OTHER WARRANTIES. Except for the limited
warranties provided in Section 6.1 above, CBI grants no other warranties or
conditions, express or implied, by statute, or otherwise, regarding any or
all of CBI Products and specifically disclaim the implied warranties of
fitness for a particular purpose, merchantability, and noninfringement. CBI
does not warrant that operation of the Systems, Consumables and Software will
be uninterrupted or error-free. Any other representations or warranties made
by any person or entity, including employees or representatives of CBI, that
are inconsistent herewith shall be disregarded and shall not be binding upon
CBI. In no event shall CBI be liable to JVC or any third party for lost
profits, or for any special, consequential, incidental, or indirect damages
for breach of warranty. This limitation shall apply even where CBI has been
advised of the possibility of such damage and notwithstanding the failure of
the essential purpose of any limited remedy stated herein.
6.3 END USER WARRANTY AND REPRESENTATIONS. JVC shall pass on to
Customers the foregoing standard limited warranties and disclaimer set forth
in this Section 6. JVC further agrees not to represent the Products in a
manner that is inconsistent with the CBI's System Specifications and any
other promotional or instructional manuals produced by CBI or to otherwise
misrepresent the Products.
7. EXCHANGE OF DATA
7.1 EXCHANGE. JVC shall promptly provide to CBI all Product data
("Data") made, developed, or acquired by or for JVC with respect to Products.
CBI shall provide to JVC access to data from Product studies that CBI
possesses as of the Effective Date and that is reasonably necessary for JVC
to obtain those governmental approvals that JVC is responsible for obtaining
pursuant to Sections 8.1 and 8.2 below, to the extent that CBI has the right
to disclose such data to JVC for the foregoing purposes. JVC will provide to
CBI access to and copies of all government approval applications and other
regulatory and governmental filings made by JVC with respect to Products
(including, without limitation, pricing approvals), together with the
underlying data, promptly after submission to government authorities and
shall provide to CBI copies of all correspondence with government authorities
with respect to the Products promptly after receipt or submission thereof.
All such data, applications, filings and correspondences necessary for
government approval and compliance shall be translated into English and
provided to CBI.
7.2 DISCLOSURE. CBI may use, reference, and provide copies of
regulatory and governmental filings and Data made, developed, or acquired by
JVC relating to the Products, to third parties as is reasonably necessary or
useful for CBI's business and/or as required by law or regulation. JVC will
only use, reference, and disclose Data relating to the Products to third
parties as required to obtain governmental approval to market and distribute
Products pursuant to Section 8, as required by law or regulation, or, to the
extent CBI has authorized JVC to do so and only with CBI's prior written
approval which shall not be unreasonably withheld, to market, sell,
distribute and promote the Products. JVC shall not enter into any agreements
with third parties or Affiliates involving the development or dissemination
of Data for sale or otherwise.
8. GOVERNMENT APPROVAL
-7-
8.1 HEALTH REGULATORY APPROVAL. JVC, at JVC's expense, shall use
commercially reasonable efforts to obtain regulatory approvals from the
Ministry of Health and Welfare (KOSEISHO) and other regulatory agencies in
the Territory to the extent required by the foregoing regulatory authorities
to market, sell and distribute the Products in the Territory. To the extent
permitted by law, all regulatory approvals obtained by JVC shall be made in
CBI's name.
8.2 REGISTRATIONS, LICENSES AND PERMITS. Except as expressly
provided in Section 7.1 above, if and as required from time to time under the
laws of any jurisdiction within the Territory, JVC, at JVC's expense, shall
obtain all registrations, licenses, and permits required to comply with the
laws and regulations within the Territory for marketing, sale and
distribution of the Products. JVC shall provide to CBI complete copies of all
applications, and all registrations, licenses and permits obtained therefrom
relating to the Products. To the extent permitted by law, all registrations,
approvals, and government authorizations obtained by JVC in the Territory
with respect to the Products shall be in the name of CBI. Upon the
expiration, cancellation, or termination of this Agreement, all
registrations, approvals, and government authorizations shall be transferred
and delivered to, and shall inure to the benefit of CBI or its designee, to
the extent that this is permissible under applicable law, at no cost to CBI
other than lawfully imposed transfer fees.
9. REPORTS
9.1 ANNUAL BUSINESS PLANS. JVC shall develop an English version of
annual business plan for the Products which shall include, without
limitation, promotion strategy and tactics, and sales and other marketing
plans ("Business Plan" as defined in Section 1.6 and required by Section 4.6
of the Joint Venture Agreement). Any such Business Plan shall be provided to
CBI for prior review and approval, which approval shall not be unreasonably
withheld. The Business Plan for the first year of this Agreement shall be
provided to CBI within three (3) months after the Effective Date. Thereafter,
if requested, Business Plans shall be provided to CBI for review and approval
by CBI not later than ninety (90) days before January 1 of the year to which
such Business Plan pertains. JVC's Board of Directors shall discuss and
update the Business Plan at least once every calendar year.
9.2 SALES AND INVENTORY REPORTS. If requested by CBI, JVC shall
provide to CBI semi-annual sales and inventory reports setting forth JVC's
sales and inventory of Products, on a Product-by-Product basis, during the
prior six (6) month period. If requested, such sales and inventory reports
shall be submitted to CBI within thirty (30) days after June 30 and December
31 of each calendar year.
9.3 MARKETING REPORTS. At CBI's request, JVC shall provide CBI,
within ten (10) Working Days after the end of each calendar quarter, a
general description of JVC's activities in promoting the Products in the
Territory during the previous calendar quarter.
9.4 AUDITS. Without limiting the provisions of Section 3.3 above,
CBI reserves the right to authorize a CBI representative, at CBI's expense,
to audit JVC's records other than the books and records described in Section
3.3, relating to the Products, including, without limitation, sales and
-8-
inventory records. Upon prior written notice, JVC shall provide reasonable
access to such inventory records during normal business hours at JVC's
business locations. JVC shall maintain all such records relating to Products
at its principal place of business for a minimum of five (5) years.
10. ADDITIONAL OBLIGATIONS OF JVC
10.1 INVENTORY. JVC shall maintain a quantity of each Product at all
times during the Term of this Agreement as reasonably necessary in order to
meet the demand of JVC's Customers and potential Customers.
10.2 TRANSLATION. JVC shall at its cost provide any and all
resources necessary to translate all required manuals, instructions,
literature, and package insert data sheets for use in the Territory, and
shall provide CBI and the applicable regulatory authorities sufficient
quantities of such materials to meet governmental and/or regulatory, and
market support requirements.
10.3 TRAINING. JVC shall maintain knowledgeable sales and marketing
personnel to provide instructions to Customers in the use of the Products.
JVC agrees that such sales and marketing personnel will, at JVC's expense,
attend a hands-on sales training session provided by CBI with respect to the
Products. CBI agrees to provide such training at CBI's expense under Section
11.1, except that CBI shall not pay for travel or other similar expenses
incurred by JVC personnel.
10.4 BUSINESS OBLIGATIONS. Any and all obligations associated with
JVC's business shall remain the sole responsibility of JVC. Any and all sales
and other agreements between JVC and its customers are and shall remain JVC's
exclusive responsibility and shall have no affect on JVC's obligations
pursuant to this Agreement.
10.5 COPYRIGHT AND TRADEMARK PROTECTION; NOTICE OF INFRINGEMENT. JVC
shall promptly notify CBI of the requirements for copyright and trademark
protection and registration for the Products in the Territory and, at CBI's
request, shall assist CBI in fulfilling such requirements. JVC agrees to
notify CBI of any infringement in the Territory of CBI's intellectual
property rights immediately after JVC becomes aware of any such infringement.
If Baylor University ("Baylor") or Molecular Analytical Systems, Inc. ("MAS")
notifies CBI of any third party claim that a Product infringes on the third
party's patent or of any action by Baylor or MAS against a third party whose
product infringes on patents held by Baylor or MAS and applicable to any
Product, CBI shall immediately notify JVC. CBI shall immediately notify JVC
of any breach of the agreements between Baylor and MAS, and between MAS and
CBI which could reasonably be expected to result in termination or
modification of MAS's or CBI's license to the technology embodied in the
Products. CBI shall, promptly after signing this Agreement, send Baylor and
MAS a written request for them to send SC a copy of any notice sent to CBI of
such an infringement action or breach.
10.6 FOREIGN CORRUPT PRACTICES ACT. In conformity with the United
States Foreign Corrupt Practices Act, JVC (including employees, agents, and
Affiliates of JVC) shall not directly or indirectly make any offer, payment,
promise to pay, or authorize payment, or offer a gift, promise to give, or
authorize the giving of anything of value for the purpose of influencing an
act or decision of
-9-
an official of any government within the Territory or the United States
Government (including a decision not to act) or inducing such official to use
his or her influence to affect any such governmental act or decision in order
to assist JVC in obtaining, retaining, or directing any such business.
10.7 ADVERTISING AND PROMOTIONS. JVC shall be responsible for all
Product marketing commitments and procedures in the Territory in the Field.
JVC shall use reasonable efforts to advertise and promote the Products and to
transmit Product information and promotional materials to its Customers, in
order to maximize Product sales in the Territory. Such advertising and
promotion may take the form of, but shall not be limited to, magazine
advertising, direct mail promotion, trade show displays, educational seminars
and other activities related to promoting Products.
10.8 MATERIALS. JVC shall provide to CBI for purposes of review,
comment, and revision by CBI all promotional, advertising, instructional and
educational materials and programs, package data sheets, and other literature
relating to the Products ("Materials") at least thirty (30) days prior to the
commercial release of such materials or commencement of such programs. JVC
shall provide CBI with English versions of the Materials. JVC, at JVC's
expense, shall produce Japanese language samples of promotional and marketing
support materials for the Products. Such materials shall include, without
limitation, brochures and advertising literature.
10.9 PRODUCT PACKAGING AND LABELING. JVC shall not repackage
Products supplied to JVC by CBI hereunder without the prior written consent
of CBI. In addition, except for the addition of information required by
applicable laws and regulations within the Territory, JVC shall not relabel
Products supplied to JVC by CBI in Japanese or English without the prior
written consent of CBI. CBI hereby agrees that, subject to the terms and
conditions of Section 14, JVC may label the Products with the JVC tradename
and trademarks, provided JVC agrees to label all Products with the following
legend in the Japanese language: "Distributed under authority from Ciphergen
Biosystems, Inc.", or a substantially equivalent legend.
10.10 ACCESS. JVC shall, at CBI's request, allow representatives of
CBI to visit Customers, purchasers, and any other end users of Products in
the Territory with JVC personnel and/or independently to discuss the Products
and their performance and potential new products.
11. ADDITIONAL OBLIGATIONS OF CBI
11.1 TRAINING. CBI shall provide regularly scheduled hands-on sales
training sessions in the use of Products for JVC's sales, marketing and
technical support personnel involved in Product sales and service. All
expenses incurred by JVC's personnel in connection with all training
including, without limitation, travel and lodging expenses, shall be borne by
JVC. Travel and lodging expenses of CBI's personnel in connection with such
training shall be borne by CBI. Training shall be conducted at mutually
agreed facilities in Japan or in the United States.
11.2 TECHNICAL SUPPORT. CBI shall provide any reasonably necessary
technical support to JVC in respect of the Products until six (6) months
following the Effective Date, after which time
-10-
CBI shall provide reasonable technical support to JVC, in a form and amount
and on terms to be agreed by the CBI and JVC.
11.3 EQUIPMENT DEMONSTRATIONS. At JVC's request, CBI shall perform
equipment demonstrations in Japan or in the United States, including and up
to four (4) visits ("Visits") to Japan each year. Equipment demonstrations
may be held at Customers' onsite facilities as agreed upon by JVC and CBI.
11.4 SEMINARS. At JVC's request, CBI shall conduct educational or
practical seminars in Japan or in the United States, during the Visits under
Section 11.3. Seminars may also be held at Customers' onsite facilities as
agreed upon by JVC and CBI.
11.5 PAYMENT. JVC shall pay CBI 37,500,000 yen in cash as a
non-refundable, advance payment for CBI services under Sections 11.1, 11.2,
11.3, and 11.4 above. Payment shall be made in United States dollars in
immediately available funds to a bank account designated by CBI by wire
transfer within 15 days of the Effective Date.
12. TERM AND TERMINATION
12.1 TERM. The initial term ("Initial Term") of this Agreement shall
commence on the Effective Date and continue in full force and effect until
ten (10) years from the Effective Date, unless earlier terminated pursuant to
this Section 12. Thereafter, this Agreement will automatically renew for
additional renewal terms of one (1) year (each a "Renewal Term"), unless
earlier terminated by either Party pursuant to this Section 12 or by written
notice to the other Party at least sixty (60) days prior to the expiration of
the Initial Term or any Renewal Term. The Initial Term and Renewal Terms are
referred to collectively herein as the "Term."
12.2 TERMINATION FOR CAUSE. If a Party has breached or defaulted in
the performance of any of its material obligations hereunder, and such breach
or default has not been cured within ten (10) days, the non-breaching Party
may terminate this Agreement by written notice.
12.3 TERMINATION UPON BANKRUPTCY, INSOLVENCY OR INVOLUNTARY
LIQUIDATION OR DISSOLUTION OF JVC. If, before CBI Buyout, JVC becomes subject
to any of the following, this Agreement shall terminate. If, after CBI
Buyout, JVC becomes subject to any of the following, this Agreement shall
continue and shall become assignable to SC if JVC is liquidated or dissolved.
(a) JVC becomes insolvent or unable to pay any or all of
its debts as they mature or ceases to pay any or all of its debts as they
mature in the ordinary course of business.
(b) Appointment of a custodian for all or substantially all
of JVC's assets.
(c) The determination by a court or tribunal of competent
jurisdiction that the JVC is insolvent.
-11-
(d) Any application or petition is submitted, by or for
JVC, for commencement of proceedings of bankruptcy, composition or other
similar proceedings under the applicable law.
(e) Proceedings for liquidation or dissolution are
commenced involuntarily.
12.4 TERMINATION UPON VOLUNTARY LIQUIDATION OR DISSOLUTION OF JVC.
If, before CBI Buyout, JVC is voluntarily liquidated or dissolved, this
Agreement shall terminate. If, after CBI Buyout, JVC is voluntarily
liquidated or dissolved, and SC at that time has an equity interest in JVC,
this Agreement shall continue and be assigned to SC.
12.5 TERMINATION UPON GOVERNMENTAL ALTERATION OR MODIFICATION. If
any government or agency having jurisdiction over JVC requires alteration or
modification of this Agreement or the Joint Venture Agreement, and the JVC is
liquidated or dissolved upon such alteration or modification, this Agreement
shall terminate.
12.6 TERMINATION RELATING TO SALES OF COMPETING PRODUCTS. JVC shall
not distribute in the Territory any products that compete with Products in
the Field. CBI may, at its sole discretion, terminate this Agreement with ten
(10) days notice if JVC shall directly or indirectly develop, market, sell,
or otherwise distribute any products, components, chips, chip arrays, which
could compete with the Products in the Field, or any information or data
derived from the use of Systems, Consumables and Software, or JVC appoints or
licenses any third party to develop, market, sell, or otherwise distribute
any products or components which could compete with Products in the Field
during the Term of this Agreement.
12.7 EFFECT OF TERMINATION.
(a) Expiration or termination of this Agreement for any
reason shall not release any Party hereto from any liability which, at the
time of such termination, has already accrued to the other Party or which is
attributable to a period prior to such termination nor preclude either Party
from pursuing any rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement. It is understood and
agreed that monetary damages may not be a sufficient remedy for any breach of
this Agreement and that the non-breaching Party may be entitled to injunctive
or other equitable relief as a remedy for any such breach. Such remedy shall
not be deemed to be the exclusive remedy for any such breach of this
Agreement, but shall be in addition to all other remedies available at law or
in equity.
(b) Within ten (10) days after the effective date of
termination of this Agreement, JVC shall use its reasonable efforts to
provide CBI with a complete inventory of Products in JVC's possession, in
transit to JVC from CBI or otherwise in JVC's control. Upon any expiration or
other termination of this Agreement, CBI may inspect JVC's Product inventory
and audit JVC's records in the manner provided in Section 9.4 above.
(c) Upon expiration or any termination of this Agreement,
CBI or its designee may repurchase (and in the event that CBI terminates this
Agreement pursuant this Section 12, CBI
-12-
or its designee shall repurchase) and JVC shall sell to CBI or its designee,
all of JVC's inventory of Products existing on the effective date of
termination and ordered from CBI during the six (6) month period prior to the
effective date of termination. The price of inventory repurchased upon JVC's
termination of this Agreement pursuant to this Section 12 shall be the
transfer price paid by JVC net of any prior JVC price adjustment, credits or
other allowances. If CBI terminates this Agreement pursuant to this Section
12, then a restocking charge of ten percent (10%) of the repurchase price
shall be deducted from the transfer price for Products repurchased upon
termination. Products repurchased from JVC by CBI pursuant to this Section
12.6(c) shall be shipped promptly by JVC, at CBI's expense, to a location
specified by CBI.
12.8 RETURN OF MATERIALS. Within thirty (30) days after the
effective date of termination of this Agreement, JVC shall destroy all
tangible items bearing, containing, or contained in, any of the foregoing, in
its possession or control and certify such destruction, or prepare such
tangible items for shipment, as CBI may direct, at CBI's expense. Effective
upon the termination of this Agreement, JVC shall cease to use all trademarks
and trade names of CBI, including without limitation the Marks (as defined
under Section 14.2 below).
12.9 NO RENEWAL, EXTENSION OR WAIVER. Acceptance of any order from,
or sale of, any Product to JVC after the date of termination of this
Agreement shall not be construed as a renewal or extension of this Agreement,
or as a waiver of termination by CBI.
12.10 LIMITATION OF LIABILITY UPON TERMINATION. In the event of
termination by either Party in accordance with any of the provisions of this
Agreement, neither Party shall be liable to the other, because of such
termination, for compensation, reimbursement or damages on account of the
loss of prospective profits or anticipated sales or on account of
expenditures, inventory, investments, leases or commitments in connection
with the business or goodwill of CBI or JVC.
12.11 SURVIVAL OF CERTAIN TERMS. The provisions of Sections 1, 3.2,
6, 13, 14.1, 14.3, 15, and 16.14 shall survive the expiration or termination
of this Agreement for any reason.
13. LIMITED LIABILITY TO JVC AND OTHERS
CBI's liability arising out of this agreement and/or the sale of the
Products shall be limited to the aggregate amounts paid by JVC to CBI for the
Products under this agreement. In no event shall either Party be liable for
costs of procurement of substitute goods by anyone. In no event shall either
Party be liable to the other Party or any other Person for any special,
consequential or incidental damages, however caused and on any theory of
liability arising out of this agreement, and whether or not such Party has
been advised of the possibility of such damage. These limitations shall apply
notwithstanding any failure of essential purpose of any limited remedy
provided herein. Notwithstanding the foregoing provisions of this Section 13,
the foregoing limitations of liability set forth in this Section 13 shall not
apply to liability arising under Sections 2, 7, 10.5, 14, 15, or 16.14 and
shall not affect the remedies expressly provided in Section 6.
14. TRADEMARKS AND TRADE NAMES
-13-
14.1 RIGHTS. All trademarks, marks, trade names, trade dress,
designs, artwork, photographs, samples, literature, sales and promotional
aids of every kind relating to the Products shall remain the property of CBI.
JVC shall not file any application for the foregoing intellectual property
rights without CBI's prior written consent.
14.2 IDENTIFICATION. During the term of this Agreement, JVC shall
have the right and agrees to advertise and promote the Products under CBI's
trademarks and trade names identified on EXHIBIT A ("Marks"), and as such
marks as may be added to EXHIBIT A by CBI's written notice to JVC and as
modified by CBI pursuant to this Section 14. CBI reserves the right to modify
Marks or substitute alternative marks for any or all of the Marks at any time
upon thirty (30) days prior written notice. JVC agrees to use the Marks in
connection with Products as may be designated in writing by CBI. The rights
granted under this Section 14 shall automatically terminate on termination or
expiration of this Agreement.
14.3 USE. JVC shall not remove, modify, translate or obscure Marks
affixed to Products without the prior written consent of CBI. Except as set
forth in this Section 14.2, nothing contained in this Agreement shall grant
to JVC any right, title, or interest in or to Marks, whether or not
specifically recognized or perfected under applicable laws, and JVC
irrevocably assigns to CBI all such right, title, and interest, if any, in
any Marks. At no time during or after the term of this Agreement shall JVC
challenge or assist others to challenge Marks or the registration thereof or
attempt to register any trademarks, marks, or trade names confusingly similar
to Marks. All representations of Marks that JVC intends to use shall first be
submitted to CBI for approval (which shall not be unreasonably withheld) of
design, color, and other details, including any Japanese translation thereof
or shall be exact copies of those used by CBI. In addition, JVC shall fully
comply with all reasonable guidelines, if any, communicated by CBI concerning
the use of Marks.
15. CONFIDENTIALITY
JVC may provide information, technical and otherwise, about Products
to prospective Customers if and only if a prospective Customer has signed
CBI's standard form confidentiality agreement, a copy of which is attached as
EXHIBIT B. CBI may, within fifteen (15) days prior notice to the JVC, amend
or change the form confidentiality agreement.
16. GENERAL PROVISIONS
16.1 ARBITRATION; FORUM.
(a) All other disputes, controversies or claims arising out
of or relating to this Agreement, or the breach, termination or validity
thereof, shall be resolved by one arbitrator under the Rules of International
Chamber of Commerce which rules are hereby incorporated by reference into
this Section 16. The place of arbitration shall be Honolulu, Hawaii. The
language to be used in the arbitration proceedings shall be English. The
arbitrator may be of any nationality, but must have knowledge of the life
sciences research market in Japan and in the United States. The arbitral
award shall be rendered in writing and state the reasons for the award.
Judgment on any award may be
-14-
entered by any court of competent jurisdiction or application may be made to
such a court for judicial acceptance of the award and any appropriate order
including enforcement.
(b) In case of litigation arising out of this Agreement,
the prevailing Party shall be entitled to recover its reasonable attorneys'
fees and expenses from the other Party. In case of arbitration, the
arbitrators shall award reasonable attorneys' fees and expenses to either
Party in such manner and to such extent as the arbitrators deem equitable.
(c) Notwithstanding the foregoing, the Parties may apply to
any court of competent jurisdiction for a temporary restraining order,
preliminary injunction, or other interim or conservatory relief, as
necessary, without breach of this section, and without any abridgement of the
powers of the arbitrator.
16.2 INDEPENDENT CONTRACTORS. The relationship of the Parties
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement shall be construed to (i) give either Party the
power to direct or control the day-to-day activities of the other, (ii)
constitute the Parties as partners, joint venturers, co-owners or otherwise
as participates in a joint or common undertaking, or (iii) allow a Party to
create or assume any obligation on behalf of the other Party for any purpose
whatever. Neither Party will represent that it has any authority to assume or
create any obligation, express or implied, on behalf of the other Party, or
to represent the other Party as agent, employee, or in any other capacity.
16.3 FORCE MAJEURE. If the performance of this Agreement or any
obligations hereunder is prevented, restricted or interfered with by reason
of fire or other casualty or accident, strikes or labor disputes, war or
other violence, any law, order, proclamation, regulations, ordinance, demand
or requirement of any government agency, or any other act or condition beyond
the reasonable control of the Parties hereto, the Party so affected upon
giving prompt notice to the other Parties shall be excused from such
performance during such prevention, restriction or interference.
16.4 LAW TO GOVERN. This Agreement shall not be governed by the 1980
United Nations Convention on Contracts for the International Sale of Goods.
This Agreement and all acts and transactions pursuant hereto and the rights
and obligations of the Parties hereto shall be governed, construed and
interpreted in accordance with the laws of the State of California, without
reference to rules of conflicts or choice of laws.
16.5 PUBLICITY. Prior to issuing any reports, statements, press
releases or other disclosures to third parties regarding this Agreement or
the transactions contemplated herein, the Parties shall exchange copies of
such documents and shall consult with each other regarding their content.
Except as otherwise required by law, neither Party shall issue any such
disclosure without the prior approval of the other Party.
16.6 NOTICES AND OTHER COMMUNICATIONS. Every notice by either CBI or
JVC shall be in writing and delivered either by personal delivery, or by
Express Mail or any similar overnight courier service, or by registered or
certified mail, postage prepaid, or by facsimile or electronic mail,
-15-
addressed to the Party for whom intended at its address set forth above, or
at such other address as the intended recipient previously shall have
designated by written notice to the other Party. All notices delivered in
person shall be deemed to have been delivered to and received by the
addressee and shall be effective on the date of personal delivery. All
notices delivered by Express Mail or any other similar overnight courier
service shall be effective upon receipt. All notices delivered by registered
or certified mail, or by fax or e-mail, shall be effective upon receipt.
16.7 COUNTERPARTS. This Agreement may be executed in any number of
English language counterparts or duplicate originals, and each such
counterpart or duplicate original shall constitute an original instrument,
but all such separate counterparts or duplicate originals shall constitute
one and the same instrument.
16.8 WRITTEN AGREEMENT TO GOVERN. This Agreement sets forth the
entire understanding and supersede all prior and contemporaneous agreements
and discussions between the Parties relating to the specific subject matter
contained herein and therein, and neither Party shall be bound by any
definition, condition, representation, warranty, covenant or provision other
than as expressly stated in or contemplated herein or therein or as
subsequently shall be set forth in writing and executed by a duly authorized
representative or agent of CBI or JVC to be bound thereby.
16.9 NO WAIVER OF RIGHTS. All waivers hereunder must be made in
writing, and failure at any time to require the other Party's performance of
any obligation under this Agreement shall not affect the right subsequently
to require performance of that obligation. No waiver of any breach of any
provision of this Agreement shall be construed as a waiver of any continuing
or succeeding breach of such provision or a waiver or modification of such
provision.
16.10 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement should be
prohibited or invalid under applicable law, (including, without limitation,
objections by the Japanese Fair Trade Commission) such provisions shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement. In such event, the Parties agree to negotiate, in good faith,
a valid, legal and enforceable substitute provision which most nearly effects
the Parties' intent in entering into this Agreement.
16.11 SUBJECT HEADINGS. The subject headings of the Sections of this
Agreement are included for the purposes of convenience only, and shall not
affect the construction or interpretations of any of its provisions.
16.12 FURTHER ASSURANCES. The Parties shall each perform such acts,
execute and deliver such instruments and documents, and do all such other
things as may be reasonably necessary to accomplish the transactions
contemplated in this Agreement.
16.13 EXPENSES AND FINDER'S FEES. The Parties shall each bear their
own costs and expenses (including attorneys' fees) incurred in connection
with the negotiation and preparation of
-16-
this Agreement and the consummation of the transactions contemplated hereby.
Each Party shall indemnify the other against any claim for brokerage or finder's
fees arising out of the transactions contemplated herein by any person claiming
to have been engaged by the indemnifying Party based upon any action or
communication, or any alleged action or communication, by the indemnifying Party
or any of its officers or employees.
16.14 CONFIDENTIALITY OF AGREEMENT. CBI and JVC shall hold in
confidence and not disclose to any third party, without the prior written
consent of the other Party, the terms and conditions of the Agreement,
provided that each Party may disclose the terms and conditions of this
Agreement:
(a) as required by any court or other governmental body;
(b) as otherwise required by law;
(c) to legal counsel of the Parties;
(d) in confidence, to accountants, banks and financing
sources and their advisors;
(e) in connection with the enforcement of this Agreement or
rights under this Agreement; or
(f) in confidence, in connection with a merger or
acquisition or proposed merger or acquisition, or the like.
16.15 LANGUAGE. This Agreement is in the English language only,
which language shall be controlling in all respects, and all versions hereof
in any other language shall be for accommodation only and shall not be
binding upon the Parties hereto. All communications and notices to be made or
given pursuant to this Agreement shall be in the English language.
16.16 ASSIGNMENT. This Agreement shall inure to benefit of, and
shall be binding upon, the Parties and their respective successors and
assigns. No Party may assign or delegate this Agreement or any of its rights
or duties under this Agreement, except that a Party may transfer this
Agreement, without the consent of the other Party, to a Person or entity into
which it has merged or which has otherwise succeeded to all or substantially
all of the business and assets of the assignor ("Successor"), and which has
assumed in writing the assignor's obligations under this Agreement. Such a
Change of Control shall have no effect whatsoever on either party's rights
under this Agreement. CBI agrees that as a part of CBI's Change of Control,
CBI shall cause the acquiror to sign an agreement confirming the terms and
conditions of this Agreement.
-17-
IN WITNESS WHEREOF, the undersigned are duly authorized to execute
this Agreement on behalf of CBI and JVC as applicable.
CIPHERGEN BIOSYSTEMS, INC. Ciphergen Biosystems K.K.
("CBI") ("JVC")
By: By:
---------------------------------- -------------------------------
Print Name: Print Name:
-------------------------- -----------------------
Title: Title:
------------------------------- ----------------------------
-18-
EXHIBIT A
---------
MARKS
ProteinChip Array-TM-
SELDI-TM-
