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EXHIBIT 10.28
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Equipment Lease Agreement
for SoftLight (SM) Lasers
Lessee Information:
Name: Medical Supply & Service Co. (MEDIC) ("Lessee")
Address: X.X. Xxx 0000
Xxxxxx, 00000
Xxxxx Xxxxxx
Telephone No.: 000-0-000-0000
Fax No. 000-0-000-0000
Effective Date:November 8, 1996
BACKGROUND
A. ThermoLase Corporation ("ThermoLase") has developed
specially-designed lasers (the "SoftLight Lasers") for use in the
removal of hair and the rejuvenation of skin (the "SoftLight
Procedures").
B. ThermoLase is prepared to lease SoftLight Lasers to Lessee
for use in Saudi Arabia on the terms and conditions set forth
below.
AGREEMENT
ThermoLase and Lessee agree as follows:
1. LEASE; SUBLEASE
1.1 Equipment Leased. ThermoLase agrees to lease to Lessee
up to fifteen (15) SoftLight Lasers capable of performing hair
removal procedures and up to fifteen (15) SoftLight Lasers
capable of performing skin rejuvenation procedures, if different.
Lessee acknowledges that ownership of and title to such
SoftLight Lasers shall remain with ThermoLase, and Lessee shall
take no action adverse to ThermoLase's title to and interest in
such SoftLight Lasers. Lessee shall not directly or indirectly
create or suffer to exist any mortgage, security interest,
attachment, writ or other lien or encumbrance on the SoftLight
Lasers, and will promptly, at its own expense, discharge any such
lien or encumbrance that may arise. After Lessee has
successfully completed ThermoLase's training course relating to
the performance of the SoftLight Procedures, ThermoLase shall use
commercially reasonable efforts to complete shipment of the
SoftLight Lasers to a facility established by Lessee and approved
by ThermoLase (a "Facility") within thirty (30) days after
Lessee's request for such shipment, provided that Lessee has
completed all of the modifications necessary to the Facility to
prepare the Facility in accordance with specifications approved
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by ThermoLase. Lessee shall pay all costs and expenses associated
with the shipment of such SoftLight Lasers from ThermoLase's
facility to the Facility, including without limitation freight,
insurance, customs duties and related charges and taxes,
provided, however, that ThermoLase shall pay or reimburse Lessee,
within thirty (30) days, for any import duties or taxes imposed
by Saudi Arabia up to a maximum of *****************************
************************************. Lessee agrees not to
remove, obscure or otherwise deface any labeling present on any
SoftLight Laser at the time of delivery thereof to Lessee.
1.2 Subleases. Lessee may enter into subleases for the
SoftLight Lasers to the extent reasonably necessary to establish
and operate Facilities in Saudi Arabia. The terms and conditions
of each sublease which relate to the ownership and operation of
the SoftLight Lasers shall be subject to the approval of
ThermoLase, which shall not be unreasonably withheld. Lessee
shall have no obligation to disclose to ThermoLase the economic
terms and conditions of any sublease, except to the extent
necessary for calculating the rent payable to ThermoLase pursuant
to Article 7 hereof. For purposes of calculating the rent
payable to ThermoLase pursuant to Article 7 hereof, reference
shall be made to the aggregate gross revenues of Lessee and all
sublessees.
2. INSTALLATION
2.1 Initial Installation. As soon as reasonably
practicable after delivery of the SoftLight Lasers, ThermoLase
shall install, or cause to be installed, at no additional charge
to Lessee, the SoftLight Lasers at the Facility; provided,
however, that ThermoLase shall have no obligation to install the
SoftLight Lasers unless the installation site (i) meets the
specifications approved by ThermoLase, (ii) remains accessible to
ThermoLase throughout the period of installation and (iii) is
otherwise safe and appropriate for installation of the SoftLight
Lasers. ThermoLase, or its designated agent or subcontractor,
shall perform all unpacking of the SoftLight Lasers at the
Facility. Upon installation thereof, ThermoLase, or its
designated agent or subcontractor, shall perform ThermoLase's
standard acceptance test procedures to confirm that the SoftLight
Lasers operate in substantial conformance with the applicable
specifications.
2.2 Unauthorized Installation, Reinstallation or
Relocation. Any installation or reinstallation of any SoftLight
Laser performed by any person other than ThermoLase, or its
designated agent or subcontractor, without the prior written
consent of ThermoLase, shall be a breach of this Agreement by
Lessee. Lessee shall not relocate the SoftLight Lasers installed
in the Facility without the prior written consent of ThermoLase.
Any such relocation consented to by ThermoLase shall be performed
by ThermoLase, or its designated agent or subcontractor.
ThermoLase hereby disclaims all liability for any and all claims,
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losses, costs and damages to the extent arising from or in
connection with the unauthorized installation, reinstallation or
relocation of any SoftLight Laser.
3. SERVICE AND MAINTENANCE. ThermoLase agrees, provided
it is promptly notified upon the discovery of any defect, to
repair or replace, at ThermoLase's option, a defective SoftLight
Laser or any component thereof, so as to cause the same to
operate in substantial conformance with the protocols set forth
in the SoftLight User's Manual (the "User Manual") when subjected
to normal, proper and intended usage by properly trained
personnel, all in accordance with the User Manual. Such repair
or replacements shall be at ThermoLase's expense, except that
Lessee shall pay all costs and expenses associated with the
shipment of such SoftLight Lasers, including without limitation
freight, insurance, customs duties and related charges and taxes,
provided, however, that ThermoLase shall pay or reimburse Lessee,
within thirty (30) days, for any import duties or taxes imposed
by Saudi Arabia up to a maximum of *****************************
************************************. Lessee agrees to make
SoftLight Lasers installed in the Facility available to
ThermoLase for inspection at any reasonable time and to cooperate
reasonably with ThermoLase in the performance of its obligations
hereunder. Because of the importance of safe and effective
operation of the SoftLight Lasers in compliance with applicable
laws and regulations, it is understood and agreed that Lessee
shall not undertake to provide, or contract with any party other
than ThermoLase (or ThermoLase's designated agent or
subcontractor) to provide, maintenance or other services of any
nature with respect to any SoftLight Laser without the prior
written consent of ThermoLase. ThermoLase shall have the right
to subcontract its obligations under this Section 3. ThermoLase
shall contract its in-country maintenance to Medic during the
term of this agreementThermoLase shall not be responsible for
costs of service or maintenance to the SoftLight Lasers that is
caused by or related to (i) misuse, fault or negligence of or by
Lessee, or (ii) use of the SoftLight Lasers in an operating
environment inconsistent with the User Manual or in combination
with equipment, software or other products not supplied by
ThermoLase. ThermoLase shall furnish off-site telephone and fax
support, in the form of consultations, assistance and advice on
the use and maintenance of SoftLight Lasers, within 2 Business
Days after receipt of Lessee's request therefor. In the event
that the reported defect is not corrected within an additional 5
Business Days after the initiation of such off-site telephone
support, ThermoLase shall repair or replace, at ThermoLase's
option, such defective SoftLight Laser as soon as reasonably
possible. Replacement parts may be new or refurbished, at the
election of ThermoLase. All replaced parts shall be and remain
the property of ThermoLase. If, at any time after arrival at the
Facility, ThermoLase's service representatives are unable to
proceed with the performance of service or maintenance requested
hereunder due to delays caused by Lessee, its agents, employees,
representatives or contractors, Lessee shall reimburse ThermoLase
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upon demand for such delays at ThermoLase's then prevailing
rates. ThermoLase or its designee will conduct training for
franchisee's employee(s) in the U.S. at no cost to franchisee.
Franchisee shall be responsible for all travel, room and board
expenses incurred by its employee(s) during the training.
4. SPARE PARTS AND REPLACEMENT LASERS.
4.1 Spare Parts. ThermoLase shall provide to Lessee, at no
additional cost to Lessee, an initial supply of spare parts for
the SoftLight Lasers and associated equipment. During the term of
this Agreement, ThermoLase shall provide to Lessee, at no
additional cost to Lessee, reasonable additional quantities of
spare parts. In each case, Lessee shall pay all costs and
expenses associated with the shipment of the spare parts,
including without limitation freight, insurance, customs duties
and related charges and taxes, provided, however, that ThermoLase
shall pay or reimburse Lessee, within thirty (30) days, for any
import duties or taxes imposed by Saudi Arabia up to a maximum of
*************************************************************.
4.2 Replacement SoftLight Lasers. ThermoLase shall have
the right to substitute modified or replacement versions of the
SoftLight Laser for any SoftLight Laser then installed in a
Facility. ThermoLase shall substitute improved versions of the
SoftLight Laser within a reasonable period of time after such
improved versions are placed in general commercial service by
ThermoLase. In such event, ThermoLase shall arrange for the
delivery and installation of a new SoftLight Laser at, and
removal of the replaced SoftLight Laser from, the Facility at
ThermoLase's expense, except that Lessee shall pay all costs and
expenses associated with the shipment of such SoftLight Lasers,
including without limitation freight, insurance, customs duties
and related charges and taxes, provided, however, that ThermoLase
shall pay or reimburse Lessee, within thirty (30) days, for any
import duties or taxes imposed by Saudi Arabia up to a maximum of
************************************************************
*****.
5. SUPPLIES
5.1 SoftLight Lotion. Throughout the term of this
Agreement, ThermoLase agrees to supply to Lessee the lotion used
in the SoftLight Procedures (the "SoftLight Lotion") in such
amounts as may be reasonably requested by Lessee (based on
Lessee's use of the SoftLight Lasers as reported to ThermoLase)
for use in connection with the performance of the SoftLight
Procedures under the terms of this Agreement. ThermoLase shall
endeavor to obtain the approval of the SoftLight Lotion by the
Saudi Arabian Standards Organization. ThermoLase shall use
commercially reasonable efforts to ship SoftLight Lotion to
Lessee within fifteen (15) Business Days after receipt of
Lessee's written request therefor. Title to the SoftLight Lotion
shall pass to Lessee upon delivery of possession of the SoftLight
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Lotion by ThermoLase to the carrier, and Lessee shall pay all
costs and expenses associated with shipment of the SoftLight
Lotion, including without limitation freight, insurance, customs
duties and related charges and taxes, provided, however, that
ThermoLase shall pay or reimburse Lessee, within thirty (30)
days, for any import duties or taxes imposed by Saudi Arabia up
to a maximum of *************************************************
****************. Lessee acknowledges and understands that the
composition of the SoftLight Lotion has been carefully developed
in order to maximize the safety and effectiveness of the
SoftLight Procedures in compliance with applicable laws and
regulations, and Lessee covenants and agrees not to (i) modify
the same in any manner or (ii) use a SoftLight Laser in the
absence of the SoftLight Lotion or otherwise in conjunction with
any lotion, gel, compound or other substance which has not been
approved in advance and in writing by ThermoLase as complying
with applicable laws and regulations and satisfying ThermoLase's
safety and efficacy standards with respect to the use of
SoftLight Lasers. ThermoLase reserves the right to modify, from
time to time during the term of this Agreement, the SoftLight
Lotion supplied to Lessee hereunder.
5.2. Other Supplies. All other supplies required in
connection with the performance of the SoftLight Procedures shall
be provided by Lessee at Lessee's sole cost and expense,
including without limitation, smoke evacuator filters, waxing
equipment and supplies, and lotions and cleansers; provided,
however, that ThermoLase reserves the right to inspect such
supplies and to impose minimum standards with respect to such
supplies, which ThermoLase considers, in its reasonable
discretion, to be necessary in order to satisfy ThermoLase's
safety and efficacy standards with respect to the use of
SoftLight Lasers. ThermoLase shall provide Lessee with a list of
such other supplies and the names of suppliers thereof.
6. ADDITIONAL EQUIPMENT
6.1 Additional SoftLight Lasers. ThermoLase will provide
to Lessee up to five (5) additional SoftLight Lasers during any
period of six (6) months, provided that the SoftLight Lasers then
operated by Lessee are generating total revenue to ThermoLase per
semiannual period of at least *********** times the number of
SoftLight Lasers then in operable condition. The rental for such
additional SoftLight Lasers shall be the same as provided in
Section 7.2 below.
6.2 Skin Rejuvenation Process. Lessee acknowledges that
the use of SoftLight Lasers for skin rejuvenation has not yet
been perfected and that ThermoLase may decide to lease to Lessee
SoftLight Lasers specially designed for use in skin rejuvenation
procedures ("Dedicated Lasers"). If ThermoLase decides to place
Dedicated Lasers in general commercial service, then ThermoLase
shall lease Dedicated Lasers to Lessee on the same terms and
conditions as the other SoftLight Lasers described herein.
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7. RENTALS
7.1 Advance Payments. In consideration for the use of the
SoftLight Lasers leased to Lessee pursuant to this Agreement,
Lessee shall pay to ThermoLase: (i) a non-refundable advance
payment of Five Hundred Thousand United States Dollars
(US$500,000), due at the time of execution of this Agreement,
(ii) a non-refundable advance payment of Five Hundred Thousand
United States Dollars (US$500,000), due on the day after the
first anniversary of this Agreement, and (iii) ongoing rentals
as provided in paragraph (b) below.
7.2 Rent. Rent shall be payable monthly within fifteen
(15) days following the end of each calendar month in the amount
of ************************* of gross revenues generated from the
performance of the SoftLight Procedures at the Facilities during
the relevant month, provided, however, that the first payment
shall not be due until fifteen (15) days after the end of the
fourth month after the first Facility commences operations with
respect to revenues generated at such Facility during such
period. The rent shall increase to *************************
*************** beginning one year after the first Facility
commences operations and to ************************** beginning
two years after the first Facility commences operations.
Each payment of rent shall be accompanied by a written report, in
a form to be mutually agreed, specifying the method of
calculation of the rent for the applicable month.
7.3 Taxes. The rent and all other amounts payable pursuant
to this Agreement are to be paid by Lessee without deduction or
withholding for or on account of any and all present and future
taxes and fees, all of which shall be paid by Lessee, provided,
however, that Lessee may withhold from its payment hereunder
Saudi Arabian income taxes payable by ThermoLase. Lessee shall
obtain and provide to ThermoLase any certificate of exemption or
similar document required to exempt any transaction under this
Agreement from any such tax or fee. In addition, if Lessee
withholds any taxes from rent or other amounts payable to
ThermoLase hereunder, then Lessee shall provide to ThermoLase
evidence of the payment of such taxes to the relevant taxing
authority.
7.4 Currency. The rent and all other amounts payable
pursuant to this Agreement shall be payable in United States
Dollars. To the extent that revenues generated at a Facility are
in a currency other than United States Dollars, such revenues
shall be converted into United States Dollars, for the purposes
of calculating rent payable to ThermoLase hereunder, at the
average exchange rate during the relevant calendar month as
published by the Saudi Arabian Monetary Authority (SAMA).
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7.5 Financial Records. Lessee shall keep and maintain, at
each Facility and for a period of not less than five (5) years
after the expiration or earlier termination of this Agreement,
complete and accurate books and records (collectively, the
"Financial Records") covering all financial and other information
required in connection with the determination of the rent payable
hereunder. The Financial Records shall be maintained in
accordance with accounting principles generally accepted in the
Kingdom of Saudi Arabia, consistently applied. Lessee shall
engage an internationally recognized accounting firm to provide
an annual audit and accounting of the business to Lessee and
ThermoLase.
7.6 Audit Rights. At any time during normal business hours
and upon reasonable notice, ThermoLase, or an independent
certified public accountant designated by ThermoLase, shall have
the right, at ThermoLase's expense, to audit and inspect the
Financial Records at the Facilities, including those operated by
a sublicensee, for the purpose of verifying the accuracy thereof
and of the payment of rent required to be made by Lessee under
the terms of this Agreement. If, as a result of such audit or
inspection, ThermoLase shall determine that the rent paid by
Lessee to ThermoLase with respect to the period covered by such
audit or inspection is less than the rent payable hereunder by
Lessee to ThermoLase with respect to said period, ThermoLase
shall promptly furnish to Lessee a copy of such audit or
inspection report (the "Deficiency Report") setting forth the
amount of the deficiency (the "Deficiency") and showing, in
reasonable detail, the basis upon which the Deficiency was
determined. If Lessee disagrees with the Deficiency Report, it
shall have thirty (30) days within which to initiate arbitration
pursuant to Section 13.6 below. If Lessee does not initiate
arbitration, or the arbitrators determine that the Deficiency is
correct or that Lessee owes ThermoLase a different amount (the
"Modified Deficiency"), then Lessee shall pay to ThermoLase,
within thirty (30) days following receipt of the Deficiency
Report, or the arbitrators' decision, as the case may be, a sum
equal to the Deficiency, or the Modified Deficiency, together
with a late fee thereon at the lesser of one and one-half percent
(1-1/2%) per month or the maximum rate allowed by applicable law,
calculated from the date when such amount was originally due
through the date of payment. If the Deficiency or Modified
Deficiency is an amount equal to or greater than five percent
(5%) of the rent payable by Lessee to ThermoLase with respect to
the period covered by such audit or inspection, Lessee shall
promptly reimburse ThermoLase upon demand for the reasonable cost
of such audit or inspection. ThermoLase shall exercise the same
degree of care to safeguard the confidentiality of the Financial
Records as ThermoLase would exercise in safeguarding its own
similar confidential information; provided, however, that
ThermoLase shall be entitled to use the Financial Records in any
proceeding to enforce its rights pursuant to this Agreement or as
may be otherwise required by law.
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8. CONFIDENTIALITY
8.1 Protection. Lessee acknowledges and agrees that
ThermoLase has disclosed, and shall continue to disclose, to
Lessee in connection with the use of the SoftLight Lasers and
performance of this Agreement certain confidential information of
ThermoLase regarding its business operations, trade secrets,
know-how, customer information, pricing, marketing data and other
information of a confidential nature relating to the SoftLight
Lasers and the SoftLight Procedures, including, without
limitation the terms of this Agreement and the User Manual
(collectively, the "ThermoLase Confidential Information"). The
ThermoLase Confidential Information shall remain the sole and
exclusive property of ThermoLase and Lessee shall have no
interest or rights with respect thereto, except to the extent
expressly provided in this Agreement. Lessee agrees to maintain
the confidentiality of the ThermoLase Confidential Information.
Notwithstanding the foregoing provisions of this Section 8.1,
Lessee shall have the right to disclose any information that it
can demonstrate by clear and convincing evidence (i) was
rightfully possessed by Lessee before it was received from
ThermoLase, (ii) is or becomes public otherwise than through any
act or default of Lessee, or (iii) is required by law, court
order or stock exchange rule to be disclosed, provided Lessee
notifies ThermoLase in writing prior to making any such
disclosure so as to afford to ThermoLase a reasonable opportunity
to object or seek an appropriate protective order with respect to
such disclosure.
8.2 Equitable Relief. Due to the fact that the
unauthorized use, transfer, dissemination or disclosure of the
ThermoLase Confidential Information would cause irreparable harm
to ThermoLase, if Lessee breaches the provisions of this Article
8, ThermoLase shall be entitled, in addition to any other rights
and remedies available to ThermoLase, to obtain equitable relief,
including without limitation injunctive relief. If ThermoLase
receives confidential information from Lessee, ThermoLase shall
maintain such information in confidence. If ThermoLase
improperly discloses such information, then Lessee shall be
entitled, in addition to any other rights and remedies available
to Lessee, to obtain equitable relief, including without
limitation injunctive relief.
9. INSURANCE.
Lessee shall operate the business in strict compliance with
all applicable requirements of the Saudi Arabia Ministry of
Health. Lessee shall carry such insurance for the risks of the
business as is customary in Saudi Arabia and commercially
available. Lessee shall consult with ThermoLase regarding the
appropriate extent of insurance coverage.
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10. INDEMNIFICATION.
10.1 By Lessee. Subject to the provisions of Article 11
below, Lessee shall indemnify, defend and hold harmless
ThermoLase, its parents, subsidiaries and affiliates, and their
respective officers, directors, shareholders and employees, from
and against any and all actions, causes of action, suits, claims,
or demands by, or damages, liabilities, costs and expenses
(including without limitation reasonable attorneys' fees and
disbursements and court costs) to, a third party to the extent
arising from or in connection with (i) the negligence (including
without limitation professional malpractice) or willful
misconduct of Lessee, its agents, employees, representatives or
contractors; (ii) failure of Lessee to perform the SoftLight
Procedures in accordance with the protocols set forth in the User
Manual; (iii) failure to operate and maintain each Facility in
accordance with the User Manual; or (iv) any employee, agent or
representative of Lessee under any applicable termination, labor,
social security or other similar laws or regulations.
10.2 By ThermoLase. Subject to the provisions of Article 11
below, ThermoLase shall indemnify, defend and hold harmless
Lessee, its parents, subsidiaries and affiliates, and their
respective officers, directors, shareholders and employees, from
and against any and all actions, causes of action, suits, claims,
or demands by, or damages, liabilities, costs and expenses
(including without limitation reasonable attorneys' fees and
disbursements and court costs) to, a third party to the extent
arising from or in connection with the negligence or willful
misconduct of ThermoLase, its agents, employees, representatives
or contractors.
10.3 Procedures. The indemnified party shall provide
written notice within 7 days of any third party claim to the
indemnifying party. The indemnifying party shall have the right
to assume exclusive control of the defense of such claim or, at
the option of the indemnifying party, to settle the same provided
that no settlement that imposes any obligation on the indemnified
party or affects the indemnified party rights under this
Agreement may be made without the prior written consent of the
indemnified party. The indemnified party agrees to reasonably
cooperate with the indemnifying party in connection with the
performance of the indemnifying party's obligations under this
Article. In the event that the indemnifying party fails to
perform its defense obligations hereunder, the indemnified party
shall have the right to do so at the indemnifying party's
expense.
11. LIMITATION OF LIABILITY.
11.1 Consequential Damages. Notwithstanding anything to the
contrary contained in this Agreement, including without
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limitation the provisions of Article 10 above, neither party
hereto shall be liable to the other for any indirect, special,
consequential, incidental or punitive damages (including without
limitation damages for loss of use of facilities or equipment,
loss of revenue, loss of profits or loss of goodwill) regardless
of (i) the negligence (either sole or concurrent) of either party
and (ii) whether either party has been informed of the
possibility of such damages.
11.2 No Warranty. THERMOLASE PROVIDES HEREIN NO WARRANTY OF
MERCHANTABILITY, OF FITNESS FOR A PARTICULAR PURPOSE, OF NON-
INFRINGEMENT IN SAUDI ARABIA, OR AS TO THE RESULTS THAT MAY BE
ATTAINED BY THE PERFORMANCE, PRACTICE OR OPERATION OF THE
SOFTLIGHT PROCEDURES, INCLUDING WITHOUT LIMITATION THE SOFTLIGHT
LASERS.
12. TERM AND TERMINATION; RESTRICTIVE COVENANT.
12.1 Term. The initial term of this Agreement shall
commence on the Effective Date and continue for five (5) years
from the date on which the first Facility opens to the public,
unless sooner terminated as set forth herein, and shall be
automatically renewed for successive five (5) year terms so long
as Lessee is in full compliance with all terms and conditions of
this Agreement.
12.2 Termination.
(a) This Agreement may be terminated by ThermoLase:
(i) in the event of a breach by Lessee of any
material obligation hereunder (e.g., default in payment,
unauthorized disclosure of ThermoLase Confidential Information)
that is not cured within forty-five (45) days following written
notice thereof; or
(ii) at any time after one year from the date on
which the first Facility opens to the public if during any
semiannual period the total revenue to ThermoLase from Lessee
does not equal or exceed *********** times the number of
SoftLight Lasers which are in operable condition during such
period; or
(iii) in the event of the occurrence of a
change in control of Lessee which has, or in the reasonable
opinion of ThermoLase could have, a material adverse effect on
the business, prospects or operations of Lessee and the failure
of Lessee to promptly pursue (within forty-five (45) days after
receiving written notice thereof from ThermoLase) a remedy
designed to cure (in the reasonable judgment of ThermoLase)
ThermoLase's objections to such change; or
10PAGE
(iv) in the event Lessee contests the validity of
the Licensed Technology or the ownership thereof by ThermoLase;
or
(v) in the event of the termination of the
Franchise and License Agreement between ThermoLase and Lessee.
(b) This Agreement may be terminated without cause by
Lessee upon sixty (60) days written notice to ThermoLase.
12.3 Termination Upon Occurrence of Certain Events.
ThermoLase may terminate this Agreement, effective immediately
and without the requirement of any notice if Lessee: (i) files
for or consents to a general assignment for the benefit of
creditors, (ii) files a petition in bankruptcy or liquidation, or
is adjudicated bankrupt or insolvent or takes similar actions
under the laws of any jurisdiction for the general benefit of
creditors of an insolvent or financially troubled debtor, or
(iii) is the subject of an involuntary bankruptcy or insolvency
proceeding which is not fully dismissed within forty-five (45)
days.
12.4 Additional Rights of ThermoLase. This Agreement may be
suspended by ThermoLase, effective immediately upon written
notice to Lessee, in the event that the marketing clearance
granted to ThermoLase by the U.S. Food and Drug Administration
(the "FDA") or any Saudi Arabian regulatory authority with
respect to the SoftLight Procedures is revoked, rescinded or
suspended for any reason, or any adverse regulatory action is
undertaken by the FDA or any Saudi Arabian regulatory authority
with respect to the validity or scope of such marketing
clearance. If a favorable outcome is achieved with respect to
the matter under which this Agreement was suspended, then the
terms and conditions of this Agreement shall thereafter be
resumed.
12.5 Effect of Termination. Upon expiration or earlier
termination of this Agreement for any reason, all rights and
obligations of the parties under this Agreement shall cease,
except that Lessee shall be obligated to pay to ThermoLase all
outstanding rent and other amounts payable with respect to the
period prior to the effective date of such expiration or earlier
termination. Upon such expiration or earlier termination, Lessee
shall cease all use of the SoftLight Lasers, and ThermoLase shall
remove the SoftLight Lasers, SoftLight Lotion, all User Manuals
and any other materials in Lessee's possession that are related
to the SoftLight Lasers within thirty (30) days. Lessee shall
provide free and ready access to ThermoLase to each Facility, at
ThermoLase's convenience, for the repossession of the SoftLight
Lasers, the SoftLight Lotion, the User Manuals and any other
materials in Lessee's possession that are related to the
SoftLight Lasers. The SoftLight Lasers shall be repossessed by
ThermoLase free of all liens and encumbrances and in good working
order and repair, reasonable wear and tear only excepted.
11PAGE
12.6 No Rights to Compensation Upon Expiration or
Termination. In the event of a termination pursuant to any of
the provisions of this Agreement or upon expiration of this
Agreement, ThermoLase shall not have any obligation to Lessee, or
to any employee of Lessee, for compensation or for damages of any
kind, whether on account of the loss by Lessee or such employee
of present or prospective sales, investments, compensation or
goodwill. Similarly, Lessee shall not have any obligation to
ThermoLase or any employee of ThermoLase for compensation or for
damages of any kind by reason of the termination or expiration of
this Agreement, except for any amounts that may be due and
outstanding under this Agreement as of the date of termination..
12.7 Survival. Notwithstanding anything to the contrary
contained herein, the provisions of Sections 12.5 through 12.7
and Articles 7, 8, 9, 10, 11 and 13 of this Agreement shall
survive any expiration or earlier termination of this Agreement
according to their respective terms.
13. MISCELLANEOUS
13.1 Relationship of the Parties. The parties acknowledge
that no relationship of partnership, joint venture or employment
is created by this Agreement and that neither party shall have
any right, power or authority to act for or to bind the other
party in any way except to the extent expressly provided in this
Agreement. Without in any way limiting the foregoing, Lessee
shall be solely responsible at all times during the term of this
Agreement for all aspects of the professional services delivered
at each Facility and for the selection, training, professional
direction, supervision and employment of all persons, who are
licensed, registered or certified by the jurisdiction in which
each Facility is located to perform such services (collectively,
the "Professional Staff"). No provision of this Agreement is
intended, nor shall it be construed, to permit ThermoLase to
affect or influence the professional judgment of any member of
the Professional Staff involved in the performance of the
SoftLight Procedures at a Facility.
13.2 Lessee Operations. Lessee shall comply with all
national, supra-national, provincial and local laws, rules,
orders, ordinances and regulations of any governmental or other
public authority applicable to the operation of the SoftLight
Lasers.
13.3 Representation and Warranties. Lessee represents and
warrants that all of the information relating to Lessee set forth
on Schedule A attached hereto is true, complete and correct.
ThermoLase represents and warrants that all of the information
relating to ThermoLase set forth on Schedule B attached hereto is
true, correct and complete.
12PAGE
13.4 Notices. Whenever by the terms of this Agreement,
notice, demand or other communication shall or may be given to
either party, the same shall be in writing and, addressed if to
Lessee at the address set forth at the beginning of this
Agreement and if to ThermoLase at ThermoLase Corporation, 00000
Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxxx, XX 00000, Attn: President or to
such other address or addresses as shall from time to time be
designated by written notice by either party to the other as
herein provided. All notices shall be sent by registered or
certified air mail, postage prepaid and return receipt requested,
or by Federal Express or other comparable courier providing proof
of delivery, and shall be deemed duly given and received (i) if
mailed, on the tenth (10th) Business Day following the mailing
thereof, or (ii) if sent by courier, the date of its receipt (or,
if such day is not a Business Day, the next succeeding Business
Day).
13.5 Governing Laws. This Agreement shall be governed by
and construed in accordance with the laws of England, excluding:
(i) its conflict of laws principles; (ii) the United Nations
Convention on Contracts for the International Sale of Goods; and
(iii) the 1974 Convention on the Limitation Period in the
International Sale of Goods (the "1974 Convention") and the
Protocol amending the 1974 Convention, done at Vienna April 11,
1980.
13.6 Arbitration.
(a) Any dispute, controversy or claim arising out of
or relating to this Agreement or to a breach hereof, including
its interpretation, performance or termination, shall be finally
resolved by arbitration. The arbitration shall be conducted by
three (3) arbitrators, one to be appointed by ThermoLase, one to
be appointed by Lessee and a third being nominated by the two
arbitrators so selected or, if they cannot agree on a third
arbitrator, by the Presiding Judge of the London Court of
International Arbitration ("LCIA").
(b) The arbitration shall be conducted in English and
in accordance with the commercial arbitration rules of the LCIA,
which shall administer the arbitration and act as appointing
authority. The arbitration, including the rendering of the
award, shall take place in London, England, and shall be the
exclusive forum for resolving such dispute, controversy or claim.
For the purposes of this arbitration, the provisions of this
Agreement and all rights and obligations thereunder shall be
governed and construed in accordance with the laws of England,
excluding: (i) its conflict of laws principles; (ii) the United
Nations Convention on Contracts for the International Sale of
Goods; and (iii) the 1974 Convention on the Limitation Period in
the International Sale of Goods (the "1974 Convention") and the
Protocol amending the 1974 Convention, done at Vienna April 11,
1980. The decision of the arbitrators shall be binding upon the
parties hereto, and the expense of the arbitration (including
13PAGE
without limitation the award of attorneys' fees to the prevailing
party) shall be paid as the arbitrators determine. The decision
of the arbitrators shall be executory, and judgment thereon may
be entered by any court of competent jurisdiction.
13.7 Entire Agreement. This Agreement constitutes the sole
and entire agreement between ThermoLase and Lessee with respect
to the subject matter hereof, supersedes all prior agreements
between the parties either written or oral and shall not be
supplemented, amended, varied or modified in any manner except by
an instrument in writing signed by duly authorized
representatives of both parties.
13.8 Waiver. No delay or omission on the part of either
party to this Agreement in requiring performance by the other
party or in exercising any right hereunder shall operate as a
waiver of any provision hereof or of any right hereunder, and the
waiver, omission or delay in requiring performance or exercising
any right hereunder on any one occasion shall not be construed as
a bar to or waiver of such performance or right on any future
occasion.
13.9 Remedies Cumulative. Any and all rights and remedies
which either party may have under this Agreement, at law or in
equity, shall be cumulative and shall not be deemed inconsistent
with each other, and any two or more of all such rights and
remedies may be exercised at the same time insofar as permitted
by law.
13.10 Headings. Article and Section headings and the
organization of this Agreement are for descriptive purposes only
and shall not control or alter the meaning of this Agreement.
13.11 Costs. Except as otherwise expressly provided
herein, each party shall bear its own costs and expenses in
performing its obligations under this Agreement. In the event
that one party to this Agreement commences an arbitration or
other action against the other party to this Agreement, the
prevailing party shall be entitled to recover its costs resulting
from such arbitration or action from the non-prevailing party to
the extent so provided in the arbitration award or judgment.
13.12 Force Majeure. Neither party shall be deemed to
be in default under this Agreement if prevented from performing
any obligation hereunder (other than a payment obligation which
arose prior to the event of force majeure) for any reason beyond
its reasonable control, including without limitation Acts of God,
war, civil commotion, fire, flood or casualty, labor
difficulties, shortages of or inability to obtain labor,
materials or equipment, governmental regulations or restrictions,
or unusually severe weather. In any such case, the parties agree
to negotiate in good faith with the goal of preserving this
Agreement and the respective rights and obligations of the
parties hereunder, to the extent reasonably practicable. It is
14PAGE
agreed that financial inability shall not be a matter beyond a
party's reasonable control.
13.13 Successors and Assigns. This Agreement is
personal to Lessee and has been entered into in reliance upon the
competence and skill of Lessee. Accordingly, Lessee may not
assign this Agreement, except to an entity controlled by or under
common control with Lessee, without the prior written consent of
ThermoLase, which consent may be withheld in ThermoLase's sole
and absolute discretion. ThermoLase may assign this Agreement
upon written notice to Lessee. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
13.14 Authority. The individuals executing this
Agreement hereby represent and warrant that they are empowered
and duly authorized to so execute this Agreement on behalf of the
parties they represent.
13.15 Severability. If any provision of this Agreement
is declared invalid or unenforceable by a court or other tribunal
having competent jurisdiction, it is mutually agreed that this
Agreement shall endure except for the part declared invalid or
unenforceable by order of such court or tribunal. The parties
shall consult and use their best efforts to agree upon a valid
and enforceable provision which shall be a reasonable substitute
for such invalid or unenforceable provision in light of the
intent of this Agreement.
13.16 Definition of Business Day. For the purposes of
this Agreement, a "Business Day" means a day on which banks are
open for business in San Diego, California and Riyadh, Saudi
Arabia.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal as of the date first set forth above.
THERMOLASE CORPORATION MEDICAL SUPPLY & SERVICE CO.
By: Xxxx X. Xxxxxx By: Ibrahim El Khereiji
----------------------- -------------------------
Name: Xxxx X. Xxxxxx Name:
Title: President and CEO Title:
15PAGE
Schedule A
Representations and Warranties of Lessee
Lessee represents and warrants to ThermoLase as follows:
(i) Lessee is a Saudi Arabian company duly organized,
validly existing and in good standing under the laws of Saudi
Arabia, with requisite powers adequate for executing and
delivering, and performing its obligations under, this Agreement;
(ii) the execution, delivery and performance of this
Agreement by Lessee have been duly authorized by all necessary
action on the part of Lessee; and
(iii) the execution, delivery and performance of this
Agreement by Lessee do not and will not conflict with or
contravene any provision of the charter documents of Lessee or,
in any material respect, any agreement, document, instrument,
indenture or other obligation of Lessee.
16PAGE
Schedule B
Representations and Warranties of ThermoLase
ThermoLase represents and warrants to Lessee as follows:
(i) ThermoLase is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware with corporate powers adequate for executing and
delivering, and performing its obligations under, this Agreement;
(ii) the execution, delivery and performance of this
Agreement by ThermoLase have been duly authorized by all
necessary corporate action on the part of ThermoLase; and
(iii) the execution, delivery and performance of this
Agreement by ThermoLase do not and will not conflict with or
contravene any provision of the charter documents or by-laws of
ThermoLase or, in any material respect, any agreement, document,
instrument, indenture or other obligation of ThermoLase.
