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EXHIBIT 10.1
DISTRIBUTION AGREEMENT
THIS AGREEMENT, dated as of June 5, 2001, is an amendment and
restatement in its entirety of the Distribution Agreement (the "Distribution
Agreement") dated July 1, 2000 between DEXTERITY SURGICAL, INC. ("Dexterity")
and XXXX CLOSURE SYSTEMS) LLC ("Distributor").
WHEREAS, Dexterity manufactures and is the owner of patents and
trademarks relating to certain laparoscopic and related instrumentation; and
WHEREAS, Distributor desires to purchase Dexterity products for the
purpose of resale to end users within the territory hereinafter described.
NOW, THEREFORE, the parties do hereby agree that the Distribution
Agreement is hereby amended and restated in its entirety, effective the date of
this Agreement.
1. PRODUCTS
The products covered by this Agreement (collectively, the "Products")
are all the Pneumo Sleeve, Protractor and similar or related Products
manufactured or offered for sale by Dexterity during the term of this Agreement,
including all improvements and modifications of such Products. The Products
offered for sale by Dexterity at the date of this Agreement are listed in
Exhibit A hereto. "Pneumo Sleeve Products" mean extracorporeal pneumoperitoneum
surgical devices used or useful in connection with hand assisted laparoscopic or
endoscopic surgery, whether or not substantially similar to the Pneumo Sleeve
Products currently manufactured or offered for sale by Dexterity. "Protractor
Products" mean incision liner and retractor surgical devices used or useful in
connection with hand assisted laparoscopic or endoscopic surgery, whether or not
substantially similar to the Protractor Products currently manufactured by
Dexterity.
2. GRANT OF DISTRIBUTORSHIP
Subject to the terms and conditions hereof, Dexterity hereby grants to
Distributor the right to sell and distribute Products throughout the Territory,
including the right to appoint and terminate sub-distributors for all or any
part of the Territory and for all or any specified Products. Distributor accepts
such grant on such terms and conditions.
Dexterity will not appoint any other person as a distributor of, and
Dexterity will not sell directly to users, any Protractor Products in the
Territory during the term of this Agreement.
Upon prior notice to Distributor, Dexterity may appoint other persons
to distribute, and Dexterity may sell directly to users, Pneumo Sleeve Products
in the Territory during the term of this Agreement.
"Territory" means the entire world.
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3. TERM AND RENEWAL
The initial term of this Agreement shall expire December 31, 2003.
Thereafter, this Agreement shall be renewed for one (1) year periods upon such
terms as the parties may mutually agree.
4. RELATIONSHIP OF THE PARTIES
The relationship of the parties under this Agreement shall be, and at
all times shall remain, one of independent contractors. Distributor shall have
no authority to assume or create obligations on Dexterity's behalf with respect
to the Products or otherwise and shall not take any action which has the effect
of creating the appearance of its having such authority.
5. DISTRIBUTOR'S DUTIES
Distributor shall:
5.1 Submit its orders for the Products on its standard purchase order
form. Dexterity acknowledges that on June 28, 2000 it received from Distributor
the initial stocking order (the "Initial Order") which was based upon the number
of sales representatives employed by Distributor. The Initial Order was
comprised of those Products listed in Exhibit A. Distributor shall purchase
Products no less than the amounts set forth below:
Quarter Ended Quarterly Amount
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September 30, 2000 $ 700,000
December 31, 2000 $ 775,000
March 31, 2001 $ 821,667
June 30, 2001 $ 855,000
September 30, 2001 $ 945,000
December 31, 2001 $ 1,035,000
March 31, 2002 $ 400,000
June 30, 2002 $ 400,000
September 30, 2002 $ 400,000
December 31, 2002 $ 400,000
March 31, 2003 $ 400,000
June 30, 2003 $ 400,000
September 30, 2003 $ 400,000
December 31, 2003 $ 400,000
5.2 Pay for such orders according to the following payment terms: net
fifteen (15) days ARO.
5.3 Utilize reasonable efforts to sell the Products globally.
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5.4 Utilize reasonable efforts to sell the Products to hospitals and
other health care facilities. In this regard, Distributor shall carry the full
line of Products and use reasonable efforts to promote them. Distributor shall
devote reasonable efforts to sell the Products at conventions and other
appropriate trade fairs and sales opportunities in addition to listing the
Products in its catalogs, brochures and other sales information provided to
third parties and potential customers.
5.5 During the term of this Agreement, Distributor will not market or
sell products which directly compete with the Protractor Products, but nothing
in this Agreement is intended to restrict or limit the right of Distributor to
manufacture, sell or otherwise distribute products which directly or indirectly
compete with any other Products.
5.6 Communicate to Dexterity information relative to the sale of the
Products and make available to Dexterity, upon reasonable notice, all records
dealing with the sale of Dexterity Products. Said information shall include
details of bids awarded on the Products, and other sales made of the Products
including the date of contract, items, quantity, and other special information
requested by Dexterity. Said information will be treated by Dexterity management
in a confidential manner.
5.7 Provide necessary current and recurrent training for its sales
force regarding the use and performance of the Products in the intended market,
as reasonably requested by Dexterity.
5.8 Indemnify and hold harmless Dexterity from all claims and
obligations (including attorney's fees) arising out of Distributor's breach of
this Agreement.
5.9 Provide such time for Dexterity representatives to hold formal
sales meetings with the Distributor's sales organization at a minimum of one
time annually or at such other times as Dexterity shall reasonably require. In
this regard, Distributor shall cooperate in organizing such effort between its
sales staff and Dexterity salesmen.
5.10 Bid and supply the Products when such Products are specifically
requested or specified by customers or third parties and shall not offer
substitute products for those requested or specified. Distributor shall not
re-configure, alter, change or otherwise affect the intended function of any
Product sold hereunder.
5.11 Distributor shall maintain complete and accurate records for such
periods as may be required by applicable law, but no less than three years, of
all Product sold by it. Distributor shall, within 10 days following the end of
each calendar month during the term of this Agreement, furnish to Dexterity a
sales tracing report with respect to such calendar month containing the name and
address of each customer and the identity and amount of the Products sold to
such customer. Distributor shall notify Dexterity of any customer complaints or
other occurrences, regarding the Products which are required to be so reported.
Distributor will cooperate fully in effecting any recall of the Products,
including communications with any purchasers or users.
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5.12 Distributor shall furnish booth space for exhibiting the Products
at any national show in which Distributor participates. Distributor shall pay
50% of the costs and expenses of any regional show, approved by Distributor and
Dexterity, at which any of the Products are exhibited on or before December 31,
2001; after such date participation by Distributor in regional shows shall be at
its sole discretion. Distributor shall reimburse Dexterity for any excess of the
costs and expenses of any surgeon training seminar relating to any of the
Products over the aggregate fees paid by surgeons for such seminar.
6. DEXTERITY'S DUTIES.
Dexterity shall support Distributor in its sales efforts on behalf of
the Products. Dexterity's support of the Distributor shall include the
following:
6.1 Ship Products ordered pursuant to this Agreement F.O.B. within
thirty (30) days of receipt of such order. Notwithstanding the foregoing, unless
Dexterity shall not complete a shipment within ninety (90) days after a purchase
order has been received, such purchase order shall be noncancelable by
Distributor.
6.2 Provide Distributor with new product instructions, policy changes,
and price changes relative to the Products.
6.3 Provide catalogs, literature, training and warranty/repair support.
6.4 Provide assistance to Distributor in conducting Distributor's sales
meetings and working with Distributor at the customer level so as to create and
maintain goodwill between the customer and the Distributor relative to the
Products.
6.5 Establish, promote and organize surgeon training seminars.
6.6 Dexterity will be responsible for maintaining, filing, and
notifying the appropriate regulatory agencies with respect to Product
complaints, including the necessary evaluations as specified in 21 CFR Section
803, 804, and 820.198.
6.7 Dexterity shall furnish personnel, product literature, graphics
presentations and sales components at any national show in which Distributor
participates. Dexterity shall pay 50% of the costs and expenses of any regional
show, approved by Distributor and Dexterity, at which any of the Products are
exhibited on or before December 31, 2001. Dexterity shall organize and provide
personnel and any of the Products required in connection with any surgeon
training seminar.
7. TERMINATION.
7.1 This Agreement may be terminated:
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(a) By either party upon the breach of this Agreement by the other
party and the failure of the breaching party to cure such breach within 30 days
after written notice of such breach given to the breaching party by the
non-breaching party;
(b) By Dexterity, upon written notice to Distributor, in the event of
the sale of substantially all of the assets of Dexterity, or the merger of
Dexterity with or into another entity if the holders of voting capital stock of
Dexterity immediately prior to the merger are not the holders of a majority of
the voting capital stock of the surviving corporation, or in the event any
person or entity or "group," as defined in the federal securities laws, becomes
the holder of a majority of the voting capital stock of Dexterity;
(c) By Dexterity, upon written notice to Distributor, in the event
sales of the Products by Dexterity to Distributor during any calendar quarter do
not exceed the amounts set forth below:
Quarter Ended Quarterly Amount
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September 30, 2000 $ 700,000
December 31,2000 $ 775,000
March 31, 2001 $ 821,667
June 30, 2001 $ 855,000
September 30, 2001 $ 945,000
December 31, 2001 $ 1,035,000
March 31, 2002 $ 400,000
June 30,2002 $ 400,000
September 30,2002 $ 400,000
December 31,2002 $ 400,000
March 31, 2003 $ 400,000
June 30, 2003 $ 400,000
September 30,2003 $ 400,000
December 31, 2003 $ 400,000
(d) By Distributor, in the event that an order for relief is entered
against Dexterity in an involuntary case under the Federal Bankruptcy Code, or
an order is entered adjudicating Dexterity as a bankrupt or insolvent, or a
receiver or trustee for Dexterity or any of its property is appointed, or an
order is entered approving a petition seeking reorganization dissolution,
liquidation or other similar relief under the bankruptcy or similar laws of the
United States or any other jurisdiction, or Dexterity files a petition, answer
or other document seeking or consenting to any of the foregoing.
(e) By Dexterity, in the event that an order for relief is entered
against Distributor in an involuntary case under the Federal Bankruptcy Code,
or an order is entered adjudicating Distributor as a bankrupt or insolvent, or a
receiver or trustee for Distributor or any of its property is appointed, or an
order is entered approving a petition seeking reorganization dissolution,
liquidation or other similar relief under the bankruptcy or similar laws of the
United
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States or any other jurisdiction, or Distributor files a petition, answer or
other document seeking or consenting to any of the foregoing.
8. EXPENSES.
All of the expenses incurred by Distributor relating to the sale of the
Products and the provision of related services will be borne by Distributor
except as otherwise expressly provided herein or by written instrument signed by
Dexterity.
9. FORCE MAJEURE.
The obligations of either party to perform under this Agreement shall
be excused during each period of delay caused by matters such as strikes,
government orders or acts of God, which are reasonably beyond the control of the
party obligated to perform.
10. INDEMNIFICATION.
10.1 Distributor hereby agrees to indemnify and hold Dexterity harmless
from and against any and all damages, losses, deficiencies, actions, demands,
judgements, costs and expenses (including reasonable attorneys' fees) of or
against Dexterity resulting from the breach of any warranty or the
nonfulfillment of any undertaking, warranty, covenant or any agreement on the
part of Distributor contained herein.
10.2 Dexterity hereby agrees to indemnify and hold Distributor harmless
from and against any/all damages, losses, deficiencies, actions, demands,
judgements, costs, and expenses (including reasonable attorneys' fees) of or
against Distributor resulting from the breach of any warranty or the
nonfulfillment of any undertaking warranty, covenant or agreement on the part of
Dexterity contained herein.
11. MISCELLANEOUS.
11.1 Notices. Any and all notices, designation, consents offers,
acceptances or any other communication provided for herein shall be given in
writing by certified mail which shall be addressed to each party at the address
specified below, or to such other address as may be designated by him. Notice
may be by facsimile if followed by certified mail, and the date of such
facsimile shall control.
If to Dexterity: (mail only) Xx. Xxxxxxx X. Xxxxxxxxx
Dexterity Surgical, Inc.
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
If to Distributor: Mr. J. Xxxxxxx Xxxxxx
Xxxx Closure Systems, LLC
X.X. Xxx 00000, One Xxxx Drive
Research Xxxxxxxx Xxxx, XX 00000
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11.2 Entire Agreement. This Agreement, including Exhibit A, sets forth
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings between the
parties relating to the subject matter of this Agreement.
11.3 Governing Law. The validity, construction and effect of this
Agreement shall be construed and governed by the laws of the State of
Texas.
11.4 Amendment. This Agreement may not be altered, modified, or amended
in any manner except by an agreement in writing duly executed by both parties
hereto, except as otherwise provided.
11.5 Parties in Interest. This Agreement will bind and inure to the
benefit of the parties and their respective successors and assigns.
EXECUTED as of the date first above written.
DEXTERITY SURGICAL, INC.
By:
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Xxxxxxx X. Xxxxxxxxx, President
XXXX CLOSURE SYSTEMS, LLC
By:
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J. Xxxxxxx Xxxxxx, President
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EXHIBIT A
PRODUCTS
Part
Number Description
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100101 Protractor(R), Small 2.5-6 cm Incision
100201 Protractor(R), Medium 5-9 cm Incision
100301 Protractor(R), Medium Large 9-14 cm Incision
100401 Protractor(R), Large 00-0 xx Xxxxxxxx
000000 Xxxxxx Xxxxxx(X)
