CERTAIN INFORMATION HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2.
EXHIBIT 10.11
DISTRIBUTOR AGREEMENT
BETWEEN
CNS, INC.
AND
EISAI CO., LTD.
TABLE OF CONTENTS Page
----------------- ----
ARTICLE I - DEFINITIONS........................................................1
1.1 Party...........................................................1
1.2 Products........................................................1
1.3 Term of this Agreement..........................................2
1.4 Territory.......................................................2
1.5 Trademarks......................................................2
1.6 Year............................................................2
ARTICLE II - DISTRIBUTION AND OTHER RESPONSIBILITIES...........................2
2.1 Appointment.....................................................2
2.2 Acceptance, Activity, and Compensation..........................2
2.3 Facilities and Capability.......................................3
2.4 Promotion.......................................................3
2.5 Market Information..............................................3
2.6 Business Planning and Review....................................4
2.7 Not an Agent....................................................4
2.8 Conflict of Interest............................................5
2.9 Expenses........................................................5
2.10 Goodwill........................................................5
2.11 Nondisclosure...................................................5
2.12 Performance Objectives..........................................6
2.13 Other Responsibilities of EISAI.................................6
ARTICLE III - PURCHASE AND SUPPLY OF PRODUCTS..................................6
3.1 Purchase and Supply.............................................6
3.2 Prices, Terms, and Conditions...................................6
3.3 Inventories:....................................................6
ARTICLE IV - TRADEMARKS........................................................7
4.1 Trademarks......................................................7
4.2 Infringement....................................................8
ARTICLE V - TERM AND TERMINATION...............................................8
5.1 Duration........................................................8
5.2 Termination by Either Party.....................................8
5.3 Termination by CNS..............................................9
5.4 Reasonable Notice:..............................................9
5.5 Effect of Termination or Expiration.............................9
i
ARTICLE VI - INDEMNIFICATION..................................................10
6.1 Indemnification by CNS.........................................10
6.2 Indemnification by EISAI.......................................10
6.3 Qualifications.................................................10
ARTICLE VII - MISCELLANEOUS PROVISIONS........................................10
7.1 Notice:........................................................10
7.2 Validity:......................................................11
7.3 Compliance with Law; Governing Law; Disputes...................11
7.4 Assignment.....................................................12
7.5 Non-waiver.....................................................12
7.7 Headings.......................................................12
7.8 Entire Agreement...............................................12
Schedule A - Products and Territory...................................14
Schedule B - Trademarks...............................................15
Schedule C - Performance Objectives...................................16
ii
CNS DISTRIBUTOR AGREEMENT
EISAI CO., LTD.
Agreement made effective as of the 1st day of August, 2000 (the
"Effective Date") by and between CNS, Inc., a corporation whose principal
offices are located 0000 Xxxxxxx Xxxx, Xxxx Xxxxxxx, Xxxxxxxxx 00000 XXX
(hereinafter referred to as "CNS") and EISAI Co., Ltd., a Japanese company whose
principal offices are located at 0-0-00 Xxxxxxxxxx, Xxxxxx-xx, Xxxxx 000-0000
Xxxxx (hereinafter referred to as "EISAI").
WHEREAS, CNS wishes to arrange for the promotion, sale and distribution
of the Products (hereinafter defined) in the Territory (hereinafter defined) on
the terms and conditions set forth below; and
WHEREAS, EISAI wishes to become a distributor of the Products for CNS in
the Territory and represents that it possesses qualified personnel and
sufficient financial and physical resources to promote fully CNS's Products in
the Territory.
NOW, THEREFORE, in consideration of the above and of the mutual promises
set forth below, the parties hereby agree as follows:
ARTICLE I - DEFINITIONS
In this Agreement each of the terms listed below has the meaning
indicated. Words incorporating the singular shall also include the plural and
vice versa where context requires.
1.1 PARTY: CNS or EISAI as the case may be, when used in the singular,
and both CNS and EISAI when used in the plural.
1.2 PRODUCTS: CNS's tan and clear Breath Right(R) nasal strips, in
finished, packaged form, and any other Products defined in Schedule A, attached
hereto, as such Schedule A may be updated from time to time by agreement of the
Parties; provided, however, that (a) CNS may elect not to offer all of its
products to EISAI for distribution under this Agreement; (b) CNS may
unilaterally delete from the list of Products at any time, upon one hundred and
eighty (180) days'
1
notice to EISAI, those products which CNS no longer offers generally for sale to
distributors in the same form or with the same specifications; and (c) CNS may
delete any Products from the list of Products at any time, for any reason, upon
one hundred twenty (120) days' notice thereof to EISAI, with the agreement of
EISAI or if CNS offers a comparable replacement for the Product to be deleted
from the list. The quality agreement which contains the specifications, handling
instructions, special precautions and other information relating to the Products
shall be separately agreed by CNS, EISAI and HERUSU.
1.3 TERM OF THIS AGREEMENT: That period from the Effective Date until
the expiration or termination of this Agreement as provided herein, including
any extension or renewal.
1.4 TERRITORY: All areas and territories of Japan.
1.5 TRADEMARKS: Trademarks as shown on Schedule B of this Agreement
attached hereto and made a part hereof, and including any other trademarks,
trade names and designs that EISAI knows or are associated with the Products,
whether registered or unregistered. CNS may from time to time add trademarks to
the list on Schedule B through simple notice thereof to EISAI or by unilaterally
providing to EISAI a new Schedule B.
1.6 YEAR: The first Year of this Agreement shall be the period from
August 1, 2000, to March 31, 2001. Thereafter, Years of this Agreement shall be
the twelve (12) month periods commending on April 1 and ending on the following
March 31.
ARTICLE II - DISTRIBUTION AND OTHER RESPONSIBILITIES
2.1 Appointment: CNS hereby appoints EISAI as its exclusive distributor
for the Territory with the right to appoint sub-distributors and agrees that CNS
will not appoint or sell the Products to another distributor in the Territory,
except to HERUSU as supplier to EISAI, so long as EISAI is not in breach of any
terms or provisions of this Agreement subject to Clause 5.2, 5.3 and 5.4 herein.
CNS will attempt to ensure EISAI's exclusivity for sale of Products in the
Territory, but in cases where CNS is prevented by law from restricting sales by
CNS's other distributors or representatives out of their respective territories
into the Territory, CNS assumes no responsibility for such sales. Without paying
any fees or incurring any similar liabilities or obligations, CNS shall exert
reasonable efforts to arrange a smooth transition of information and business to
EISAI from CNS's previous distributor for the Territory.
2.2 Acceptance, Activity, and Compensation: EISAI hereby accepts the
appointment and agrees that it will diligently promote, sell, and distribute the
Products in the Territory in accordance with the terms and conditions of this
Agreement. Eisai shall also provide all customary distributor services,
including without limitation delivery, distribution, stock counts and inventory
control, regulatory responsibilities, order taking, invoicing, collection,
credit risk,
2
sales promotion, merchandising, free goods, trade discounts, rebates and
year-end bonuses, and reporting on and analysis of competitive activities and
products. Eisai further agrees to perform other related activities described
herein, including but not limited to those referenced in Section 2.13 below.
Among other obligations, EISAI agrees to purchase Products exclusively from
HERUSU for the Territory. EISAI shall not itself or through an affiliated party
solicit orders for Products from customers outside the Territory or sell
Products to customers outside the Territory. The sole compensation to EISAI for
its sales, marketing, information, enhancement of goodwill, and other aspects of
distribution pursuant to this Agreement but not as indemnification as provided
in Sections 4.2 and 6.1 below shall be its profit on the resale of the Products
in the Territory, and such profit shall be deemed to include all termination
obligations and other payments which CNS might, but for this provision, have had
to pay EISAI under the Agency law or applicable Laws in the Territory
("Compensation for Termination").
2.3 Facilities and Capability: EISAI shall maintain a suitable place of
business and adequate facilities to enable it to perform its obligations under
this Agreement. EISAI shall not establish or maintain an office or warehouse
outside the Territory in connection with the sale of the Products outside the
Territory. EISAI represents that it already possesses sufficient facilities and
employs sufficient personnel to perform its responsibilities under this
Agreement, that it does not need to expand or to hire additional people in order
to represent and distribute the Products as provided herein.
2.4 Promotion:
2.4.1 EISAI shall use its best efforts to acquire
sub-distributors that EISAI deems reasonably acceptable to CNS and
otherwise to expand the market for the Products in the Territory and
carry out a merchandising policy designed to preserve the goodwill that
is currently associated with the name of CNS and with the Products.
2.4.2 EISAI shall provide advice and assistance to CNS in CNS's
efforts to advertise the Products to consumers in the Territory, such
advice and assistance to include but not be limited to the placement of
advertising; provided, however, that CNS shall bear the expense of all
such consumer advertisement.
2.4.3 CNS shall supply EISAI with samples of package design and
promotional and sales materials from the U.S. market for adaptation to
the market of the Territory at the expense of EISAI. All promotion and
packaging materials or programs that relate to the Products and that are
developed by or for EISAI shall be submitted to CNS for approval prior
to the distribution, use or implementation thereof.
2.4.4 EISAI shall be responsible for the development and
implementation of all sales promotions, including but not limited to
special trade
3
discounts, and other trade incentives. Any direct or indirect expenses
associated with such sales promotions shall be the sole responsibility
of EISAI.
2.5 Market Information: If so required by CNS, EISAI shall remain fully
knowledgeable about the market for the Products in the Territory and shall keep
CNS fully informed with respect thereto, and shall advise CNS of any changes in
applicable laws and regulations pertaining to the quality and marketability of
the Products in the Territory.
4
2.6 Business Planning and Review:
2.6.1 After the second Year of this Agreement, EISAI shall
supply to CNS at least two (2) months before the end of each Year during
the term hereof an annual business plan for promotion and sale of the
Products in the Territory ("Business Plan"). The Business Plan presented
by EISAI shall include such matters as targeted levels for CNS's
advertising spending in the Territory, supply of free samples to be
distributed to consumer at the cost of CNS ("Consumer Samples"), and the
supply of ten (10) strip samples to be distributed to customer at the
cost of EISAI ("Customer Sample"). CNS and EISAI shall consult and
decide on the Business Plan. In the event that the parties can not reach
an agreement on such Business Plan prior to the commencement of the
Year, final decisions on consumer activities shall be vested in CNS and
final decisions on customer activities shall be vested in EISAI.
2.6.2 EISAI shall furnish quarterly to CNS, upon CNS's request,
such other periodic forecasts, budgets, promotional schedules, and
recommendations for the Territory as CNS may reasonably request and
shall confer with CNS quarterly to provide an update and progress report
with respect to the Business Plan.
2.6.3 In addition to the quarterly updates provided for in
Section 2.6.2, during the Term of this Agreement, EISAI shall submit to
CNS good faith twelve-month forecasts of quantities to be supplied by
HERUSU by the end of January each year and monthly sales reports
transmitted no later than ten (10) business days after the end of each
month, including at least (1) Product sales by type and number of
Product units sold; (b) a comparison of current sales against the sales
forecast; and (c) inventory on hand at the end of such month, as well as
other information and reports in such form as agreed by the Parties or
as CNS may reasonably request for the purpose of keeping CNS advised of
the current competitive conditions in the Territory and the progress of
EISAI in promoting and selling the Products, including but not limited
to wholesaler information such as names, addresses, purchase volumes,
phone and fax numbers, upon request by CNS.
2.6.4 For efficient ordering and execution of volume sales as
forecast in this Agreement, EISAI shall provide promptly to HERUSU Co.,
Ltd., ("HERUSU") copies of all forecasts that EISAI supplies to CNS.
2.7 NOT AN AGENT: At all times during the term of this Agreement, EISAI
shall act as an independent contractor. Neither the making of this Agreement nor
the performance of any of the provisions hereof shall be construed to constitute
EISAI as an agent or legal representative of CNS for any purpose; nor shall this
Agreement be deemed to establish a joint venture or partnership. Each purchase
of the Products by EISAI from CNS pursuant to this Agreement, each sale of the
Products made by EISAI and each agreement or commitment made by EISAI to any
person, firm or corporation with respect thereto shall be made by EISAI for its
own account
5
as principal and at its own expense. EISAI will have no authority to represent
CNS in the Territory or elsewhere as agent nor to bind CNS by any conduct,
representations, or understanding concern CNS or the Products. The Parties agree
that they do not intend to create and do not hereby create a franchise
relationship under the laws of any jurisdiction.
2.8 Conflict of Interest: During the term of this Agreement, EISAI shall
not, directly or indirectly, manufacture, distribute or sell products in the
Territory which in CNS's reasonable judgment are similar to or might compete or
interfere with the sale of the Products except the products which EISAI sells
prior to the launch of the Products. In the event that the parties agree to add
a new product to Schedule A, EISAI shall inform CNS if EISAI has any similar
product currently on sale which may compete with the CNS product to be added to
Schedule A. Eisai shall so inform CNS early in the course of discussions and
before the Parties agree to add the product to Schedule A.
2.9 Expenses: Except as provided elsewhere in this agreement or as the
Parties may otherwise expressly agree in writing from time to time, EISAI shall
bear the costs and expenses for the performance of EISAI's obligation hereunder,
including, but not limited to, bad debt expenses, inventory losses, commissions,
taxes, and promotion to the distribution network. In no event shall CNS be
liable for any such costs and expenses therefor incurred by EISAI unless CNS has
specifically agreed in writing, in advance, to pay such expenses.
2.10 Goodwill: EISAI shall use its best efforts to preserve and enhance
the goodwill of the Products and the Trademarks. The Parties agree that all
goodwill associated with the Products and the Trademarks in the Territory shall
accrue solely to the benefit of CNS.
2.11 Nondisclosure: The Parties agree that, to the extent that the
confidentiality agreement in force between them as of May 19, 2000, may be
limited, invalidated, or terminated, and the following terms and conditions
shall apply to the confidential information disclosed by the Parties
("Confidential Information").
2.11.1 The party which receives the Confidential Information
("Receiving Party") shall not disclose to any third party any
Confidential Information relating to business or methods of carrying on
business or any other information it receives from the Party which
discloses Confidential Information ("Disclosing Party") without prior
written consent of the Disclosing Party. Receiving Party shall return
all such information to Disclosing Party upon termination or expiration
of this Agreement. Except as indicated in Section 2.11.2, information
that shall be considered to be confidential is all information
concerning the Products, future unpublished product tests and
specifications, future product plans, marketing and sales information,
technical dossiers, product drawings, customer names, customer
addresses, customer order history, and other customer data and
information that the Receiving Party should reasonably understand to be
confidential; however, in the case of termination of this Agreement,
information relating to customer names, addresses, and order history
directly or indirectly supplied by Eisai to CNS shall
6
be excluded from this confidentiality obligation for the purpose of
disclosure to EISAI's successor.
2.11.2 Information is not considered as confidential if a) it
becomes public through no fault of the Receiving Party; b) the Receiving
Party develops the information independently prior to the receipt of
such information; c) the Receiving Party has already possessed the
information at the time of receiving it; d) the Receiving Party receives
the information from a third party without restriction and without
breach of any confidentiality agreement.
2.12 Performance Objectives: Performance Objectives for the initial two
Years of this Agreement are as specified in Schedule C. For each Year thereafter
during the Term of this Agreement, the Parties shall agree in writing on
Performance Objectives, as an update to Schedule C, at least two (2) months
before the end of the current Year. Performance Objectives shall be updated as a
part of the business plan referenced in Section 2.6.1 and shall include sales
objectives of EISAI, volume of Customer Samples, trade promotion spending by
EISAI, CNS's volume of Consumer Samples of Products, and CNS's advertising
spending.
2.13 Other Responsibilities of EISAI: EISAI agrees to perform certain
additional duties specific to EISAI and/or the Territory, which duties are
detailed in Schedule D and are considered by the Parties to be material to this
Agreement.
ARTICLE III - PURCHASE AND SUPPLY OF PRODUCTS
3.1 Purchase and Supply: EISAI shall purchase for its own account and in
its own name exclusively from HERUSU, such quantities of the Products as may be
deemed necessary or desirable to meet fully and promptly all demand therefor
from the customers in the Territory and to market the Products effectively in
the Territory, subject to the terms and conditions herein. EISAI shall give to
CNS and to HERUSU as much advance notice of supply requirements for the Products
as reasonably practicable and shall observe the combined lead times specified by
CNS and HERUSU. However, EISAI shall be released from this obligation during the
three (3) months period prior to any termination.
3.2 Prices, Terms, and Conditions: EISAI shall purchase Products, only
from HERUSU, at the prices and on the terms and conditions agreed between EISAI
and HERUSU.
3.3 Inventories: EISAI shall establish and maintain at all times at
least sufficient inventory of the Products to supply, fully and promptly, all
demand for the Products by the customers in the Territory for one month. Such
demand will be measured at any time by the greater of (a) the most recent
month's sales and (b) EISAI's sales projections that include the next month.
However, EISAI shall be released from this obligation during the three (3)
months period prior to any termination.
7
3.4 Warranties and Claims:
3.4.1 Warranties: CNS warrants the Products only as specified in
a warranty provided by CNS on the packaging of the Products or packed
with the Products. The Parties recognize that a substitute warranty may
be provided by HERUSU on the packaging of the Products or packed with
the products. The Parties agree that any and all warranty-related claims
concerning the Products must be presented by EISAI to HERUSU, rather
than CNS, for action.
3.4.2 Claims: EISAI shall as a courtesy notify CNS immediately
of any likelihood of claim under the foregoing warranty and shall give
such notification to CNS at substantially the same time as EISAI
notified HERUSU of the likelihood of claim. EISAI shall also inform CNS
immediately of any likelihood of claim from any consumer or consumers
with regard to any of the Products. The Parties shall provide each other
all reasonable assistance and cooperation with regard to any such claim
by consumers. Indemnification with respect to such claims shall be
conducted as provided in Section 6.3 below.
3.4.3 Disclaimer of Liability: The warranty referred to in
Clause 3.4.1 is the only warranty or representation made by CNS with
respect to the Products. ALL OTHER EXPRESSED AND IMPLIED WARRANTIES ARE
SPECIFICALLY DISCLAIMED, INCLUDING THOSE OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE. IN NO CASE WILL CNS BE LIABLE FOR SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES EVEN IF CNS HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
ARTICLE IV - TRADEMARKS
4.1 Trademarks: CNS has registered or otherwise gained rights in the
Territory with respect to some or all of the Trademarks referenced in Schedule
B. CNS hereby licenses EISAI to use the Trademarks, free of charge, only during
the term of this Agreement, only as provided herein and only in connection with
EISAI's sale of the Products, to indicate the source of such Products. EISAI
shall have no rights under this Agreement in or to the Trademarks, and shall not
during or after the term of this Agreement represent that it is the owner of the
Trademarks, whether or not such Trademarks are registered nor shall EISAI
dispute the validity of the Trademarks during or after the Term of this
Agreement.
4.1.1 EISAI shall sell the Products only (a) with labeling and
packaging of which the format and type have been supplied or approved by
CNS and (b) under the Trademarks specified or approved by CNS.
8
4.1.2 EISAI shall not at any time register or cause to be
registered in its name or in the name of another, nor use or employ
during or after the term of this Agreement, any of the Trademarks or any
trade name or design resembling or similar to any of the Trademarks.
4.1.3 EISAI agrees that upon termination or expiration of this
Agreement EISAI will discontinue forthwith all use of the Trademarks,
subject to Section 5.5 herein and shall not thereafter directly or
indirectly sell or distribute any products bearing trademarks, names, or
designs confusingly similar to the Trademarks or otherwise use trade
names or designs confusingly similar to the Trademarks.
4.2 Infringement: EISAI shall, for the benefit of CNS, undertake to
monitor the infringement of the Trademarks in the Territory. EISAI shall
promptly send a report to CNS in the event EISAI should become aware of any
infringement or threatened infringement by a third party of the Trademarks or
any patents of CNS in the Territory. CNS shall promptly take all necessary steps
to remove or prevent such infringement and EISAI shall fully cooperate with CNS
upon request. EISAI shall not pay, settle, or otherwise compromise or conclude
any action or claim based on or involving any of the Trademarks or any patents
without the prior written approval of CNS.
ARTICLE V - TERM AND TERMINATION
5.1 Duration: This Agreement shall become effective as of the Effective
Date, shall continue in effect until March 31, 2003, and shall be automatically
renewed thereafter for successive two-year terms, unless either Party gives
notice to the other at least one hundred and eighty (180) days before the end of
the then current term, indicating such Party's intent not to renew unless
renewal is enforced under other provisions of this Agreement. Terms and
conditions shall remain unchanged upon renewal.
5.2 Termination by Either Party: Notwithstanding any other provisions of
this Agreement, either Party, at its option, may terminate this Agreement
immediately upon written notice to the other Party in the event that the
repackaging agreement between CNS and HERUSU for the Territory terminates or
upon written notice hereunder that the other Party to this Agreement:
5.2.1 commences or has commenced against it any proceeding in
bankruptcy, insolvency, dissolution, composition, or reorganization
pursuant to bankruptcy or similar laws, or makes an assignment for the
benefit of its creditors;
5.2.2 becomes insolvent or unable to pay its debts when due or
admits its inability to pay its debts;
9
5.2.3 is in material breach or material default in the
performance of any of the provisions of this Agreement; provided that
such breach or default has not been remedied within such thirty (30)
days;
5.2.4 receives notice that all or any substantial portion of its
capital stock or assets will be expropriated by any governmental
authority; or
5.2.5 is acquired by, merges with, or comes under the control of
another company, person or firm. In this context, control means that
fifty percent (50%) or more of the securities representing voting
control of the other party comes under the control of third party,
another company, person or firm.
5.3 Termination by CNS: Notwithstanding anything to the contrary above,
CNS may also terminate this Agreement effective immediately upon written notice
to EISAI if EISAI sells Products to other countries without CNS's prior written
authorization.
5.4 Reasonable Notice: The parties recognize and agree that the
termination notice periods provided in this Sections 5.2 and 5.3 are reasonable
under the circumstances, and they agree not to assert otherwise at any time.
5.5 Effect of Termination or Expiration: In the event of termination or
expiration of this Agreement EISAI shall immediately cease acquiring and
distributing the Products, except that EISAI shall have the right during the
three (3) months immediately following termination to sell off its inventory of
the Products in compliance with good business practices, and the Parties agree
further that:
5.5.1 Such termination shall not prejudice the rights and
obligations of CNS and EISAI accrued up to and including the date of
such termination.
5.5.2. Provisions of Sections 2.11, 3.4, 5.5, 5.5.3, 7.2, and
7.3 shall survive termination of this Agreement.
5.5.3 In the event of any expiration, termination or non-renewal
of this Agreement pursuant to the terms hereof, except as provided in
Article 6, EISAI shall not be entitled to any compensation, damages,
payment for goodwill that has been established, severance pay,
Compensation for Termination, or any other amount for any other cause,
by reason of the termination of the relationship between CNS and EISAI,
or the expiration, termination, or non-renewal of this Agreement or any
rights hereunder, despite any applicable law within or without the
Territory to the contrary.
5.5.4 In the event of termination or non-renewal of this
Agreement, EISAI shall return to CNS all unused promotional or other
materials relating to the sale of the Products and any and all other
property of CNS in the possession or control of EISAI.
10
5.5.5 In the event of termination or non-renewal of this
Agreement, EISAI shall, upon request of CNS, assist CNS in the transfer
of the distribution business of the Products to CNS's designee.
ARTICLE VI - INDEMNIFICATION
6.1 Indemnification by CNS: Subject to provisions of Section 6.3 below,
CNS shall indemnify and hold EISAI harmless from and against any losses,
obligations, liabilities, costs and expenses, including legal and other fees,
due to any claim of a third party arising from the act of omission or negligence
of CNS or its employees and agents in connection with its obligations hereunder.
6.2 Indemnification by EISAI: Subject to provisions of Section 6.3
below, EISAI shall indemnify and hold CNS harmless from and against any losses,
obligations, liabilities, costs and expenses, including legal and other fees,
due to any claim of a third party arising from the act or omission or negligence
of EISAI or its employees and agents in connection with its obligations
hereunder.
6.3 Qualifications: To qualify for indemnification with respect to any
claim as provided in Section 6.1 or 6.2 above, the Party seeking indemnification
(the "Requesting Party') must (a) give the other Party (the "Indemnifying
Party") prompt notice of the claim with regard to which indemnification is being
sought (the "Claim"); (b) allow the Indemnifying Party, upon reasonable notice
to the Requesting Party and at the Indemnifying Party's option, to conduct or
participate in the defense, negotiation, and settlement of the Claim, at the
expense of the Indemnifying Party; (c) render all reasonable assistance to the
Indemnifying Party in the defense, negotiation, or settlement of the Claim; and
(d) refrain from settling or compromising the Claim or the position or defense
of the Indemnifying Party without prior written consent of the Indemnifying
Party, which consent the Indemnifying Party shall not unreasonably deny or
delay. The parties agree that any portion of the losses, obligations,
liabilities, costs and expenses referred to in Section 6.1 or 6.2 above that is
attributable to a willful or negligent act or failure to act, on the part of the
Requesting Party or any of its employees or agents is excluded from the
indemnification provided herein.
ARTICLE VII - MISCELLANEOUS PROVISIONS
7.1 Notice: Any notice required or permitted to be given under this
Agreement shall be deemed to have been duly given if hand delivered or delivered
by facsimile, registered mail, or commercial messenger service to the address
listed at the beginning of this Agreement for the Party to be notified. If a
Party gives notice according to this Section 7.1, updating and amending that
Party's address, then the address required for such notification by the other
Party shall be the
11
address as so updated or amended. All notices are effective upon receipt or
rejection by the Party to be notified.
7.2 Validity: In the event that a provision of this Agreement is held
invalid by a court of competent jurisdiction, the remaining provisions shall
nonetheless be enforced in accordance with their terms. Further, in the event
that any provision is held to be overbroad as written, such provision shall be
deemed amended to narrow its application to the extent necessary to make the
provision enforceable according to applicable law and shall be enforced as
amended.
7.3 Compliance with Law; Governing Law; Disputes:
7.3.1 Compliance: EISAI shall comply with all applicable
statutes, regulations, and ordinances and other laws.
7.3.2 Governing Law: This Agreement shall be deemed to have been
made in the State of Minnesota, USA, and shall be governed by and
interpreted in accordance with the laws of the State of Minnesota,
without regard to the rules of any jurisdiction with respect to
conflicts of laws.
7.3.3 Arbitration: In the event of any disputes arising in
connection with this Agreement, both Parties agree to make every effort
to resolve the disputes amicably between themselves. Any disputes not so
settled shall be finally settled by binding arbitration under the
arbitration rules of the American Arbitration Association ("AAA"), with
the following stipulations: (a) the language of the arbitration shall be
English; provided, however, that documents in other languages shall be
permitted as exhibits if mutually acceptable English translations are
supplied by the offering party at its expense; (b) there shall be three
(3) arbitrators, CNS shall appoint one of such arbitrators and EISAI
shall appoint one of such arbitrators. Another arbitrator shall be
appointed jointly by the Parties or, should they be unable to agree on a
single arbitrator within thirty (30) days after notification by one
Party to the other and to the AAA of invocation of provisions of this
Section 7.3 to commence arbitration, then the arbitrator shall be the
arbitrator chosen by the AAA under its rules; (c) the arbitrator is
authorized to grant any relief appropriate under the applicable law,
including without limitation declaratory relief and/or specific
performance, and is further authorized and encouraged to award costs and
fees in accordance with his or her assessment of the relative equities
and validity and reliability of claims and defenses in the controversy,
but is not empowered to award punitive damages against either Party.
Both Parties consent to the jurisdiction of any court for enforcement of
any arbitral award issued hereunder. During the pendency of any
arbitration or court action initiated by EISAI against CNS in connection
with this Agreement, EISAI's exclusivity with respect to sales in the
Territory is suspended, and CNS may sell Products into the Territory
either directly or through distributors or agents located inside or
outside the Territory. The place of arbitration shall be Minneapolis,
Minnesota, USA.
12
7.4 Assignment: This Agreement shall be binding upon and shall inure to
the benefit of the Parties hereto and their respective successors and assigns.
EISAI shall not directly or indirectly transfer, assign, or otherwise encumber
this Agreement without the prior written consent of CNS.
7.5 Non-waiver: The failure of either Party to terminate this Agreement
or exercise any of its other rights under this Agreement, even after breach of
this Agreement by the other Party or after such other Party's failure to comply
with any provision hereof, shall not be deemed a waiver of rights of termination
or any other rights, with regard to either the event or incident in question or
any future event or incident, whether similar or dissimilar.
7.6 Force Majeure: If the performance of any obligation under this
Agreement, other than payment of money, is prevented or delayed for any cause
beyond the reasonable control of the Party whose performance is prevented or
delayed, such Party shall be excused from performance so long as and to the
extent that such cause continues to prevent or delay performance; provided,
however, that such defaulting Party shall promptly notify the other Party of the
existence of such cause and shall at all times use its best efforts to resume
promptly and complete its performance.
7.7 Headings: The titles and headings used in this Agreement are solely
for convenience and are not to be used in the interpretation of any provisions
hereof.
7.8 Entire Agreement: This Agreement, together with its Schedules,
constitutes the entire Agreement between the Parties and supersedes any and all
prior and contemporaneous oral or written understandings between the Parties
relating to the subject matter hereof. No amendment is valid unless in writing
and signed by both Parties. Notwithstanding any translation hereof, the English
language version shall control.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized offices in two copies each of which shall be
deemed an original as of the Effective Date:
CNS, INC. EISAI CO., LTD.
/s/ Xxxxx Xxxxxxx /s/ Xxxxxxxxx Xxxxx
----------------------------------- ----------------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxxxxxx Xxxxx
Title: President and COO CNS, Inc. Title: Cooperate Officer
Consumer Health Division
Eisai Co., Ltd.
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CNS DISTRIBUTOR AGREEMENT
EISAI CO., LTD.
SCHEDULE A - PRODUCTS AND TERRITORY
PRODUCTS:
From the Effective Date forward until otherwise agreed or terminated,
Breathe Right(R) nasal Strips, both tan and clear.
In and after the second Year of this Agreement,
Breathe Right(R) nasal strips for colds and for children.
The Parties shall exert their best efforts jointly to launch
these products in the market in the Territory in the second year
of this Agreement.
And other such products as may be added from time to time.
Unless otherwise expressly agreed in writing, the rights of EISAI do not include
or apply to any products of CNS not listed above.
14
CNS DISTRIBUTOR AGREEMENT
EISAI CO., LTD.
SCHEDULE B - TRADEMARKS
Trademarks:
Breathe Right(R)
And other such trademarks as may be added from time to time.
15
CNS DISTRIBUTOR AGREEMENT
EISAI CO., LTD.
SCHEDULE C - PERFORMANCE OBJECTIVES
EISAI and CNS shall agree on annual volume targets, support and business plans
that will be executed by CNS and EISAI as follows:
The volume targets shall not be construed as a commitment of minimum purchase or
sales quantity. Advertising spend and sample quantities shall not be construed
as commitments of CNS.
------------------------------ ---------------- -----------------------------------------------------
6 months 12 months from April each year
------------------------------ ---------------- -----------------------------------------------------
Oct 00-Mar 01 2001 2002*** 2002*** 2004***
------------------------------ ---------------- -----------------------------------------------------
Volume* [* * *] [* * *] [* * *] [* * *] [* * *]
-----------------------------------------------------------------------------------------------------
CNS Ad Spend [* * *] [* * *] [* * *] [* * *] [* * *] [* * *]
-----------------------------------------------------------------------------------------------------
CNS Free Strips for [* * *] [* * *] [* * *] [* * *] [* * *]
Consumer Sample [* * *]
-----------------------------------------------------------------------------------------------------
EISAI Trade Spend [* * *] [* * *] [* * *] [* * *] [* * *] [* * *]
-----------------------------------------------------------------------------------------------------
EISAI Customer Sample [* * *] [* * *] [* * *]
-----------------------------------------------------------------------------------------------------
* Products (unit boxes of 10 strips) [* * *], includes Eisai inventory
purchase in Year 1.
** Volume Target in year 2001 includes the sales of Breathe Right(R)
nasal strips for colds and for children.
*** All figures above for years 2002 to 2004 are suggestive only and are not
to be considered as agreed between the parties until the parties have
agreed to them in connection with the business plans for the respective
years.
CNS and EISAI shall review and agree on the amount of sales volume
target, CNS Ad Spend, Consumer Sample, Eisai Trade Spend and EISAI Customer
Sample for years 2002 to 2004 prior to the commencement of each year.
16
CNS DISTRIBUTOR AGREEMENT
EISAI CO., LTD.
SCHEDULE D - ADDITIONAL DUTIES OF EISAI
In addition to the activities of EISAI as specified in this Agreement,
EISAI shall perform the duties outlined below:
(NONE SPECIFIED AT THE TIME OF EXECUTION OF THIS AGREEMENT)
17
