EXHIBIT 10.16
DISTRIBUTION AGREEMENT
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THIS AGREEMENT dated the lst day of January, 1995 by and between
MICRO-MEDICAL DEVICES, INC., 000 Xxxxxxx Xxx, Xxxxxx Xxxxx Xxxxxxx, XX 00000
("Micro-Medical") and MEDICAL DYNAMICS, INC., ("MEDY"), 00 Xxxxxxxxx Xxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxx 00000, XXX, a company organized and existing under the laws
of the State of colorado.
WITNESSETH:
WHEREAS, Micro-Medical is manufacturing and selling medical products;
WHEREAS, MEDY has appropriated facilities, knowledge and ability to sell
such products;
WHEREAS, MEDY desires to purchase finished products from Micro-Medical for
distribution bearing Micro-Medical labels, trademarks, and trade names; and
WHEREAS, Micro-Medical is willing to manufacture its products with such
labeling, trademarks, and trade names (provided they are in conformance with
applicable law and regulation) for MEDY.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
1. DEFINITIONS
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1.1 The term "Products" as used in this Agreement shall mean the products
listed on Schedule a which may be manufactured by Micro-Medical pursuant to this
Agreement, which products will bear the labels, trademarks, trade names,
identifying marks and technological and ornamental design modifications
according to design criteria submitted by MEDY, as well as spare parts and
accessories, and also all improvements and products in replacement thereof
manufactured by or for Micro-Medical for use in this Products.
1.2 The term "Supplier" as used in this Agreement shall mean any third
party who provides materials, goods or services to Micro-Medical.
2. RELATIONSHIP
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2.1 Micro-Medical hereby agrees to exclusively manufacture for MEDY the
Products pursuant to this Agreement.
2.2 (a) MEDY hereby grants authority to Micro-Medical to use MEDY's labels,
trademarks, trade names, identifying marks and other technological and
ornamental design modifications solely for the manufacture of Products.
(b) Micro-Medical hereby grants authority to MEDY and to any
sub-distributors that may be appointed by MEDY to xxx Micro-Medical's labels,
trademarks as listed in Schedule "B" and trade names in the sale of Products.
2.3 The relationship created between the parties by this Agreement is
solely that of seller and buyer. Purchase and sale of, or any other transaction
concerning the Products shall be carried out by MEDY in the name and for the
account of MEDY and MEDY shall not enter into any agreements with third parties
in any way binding Micro-Medical. MEDY may, in its discretion, establish
subdistributor relationships with third parties at prices and terms as may be
determined by MEDY from time-to-time.
2.4 Nothing herein contained shall constitute this Agreement to be a joint
venture, partnership, or relationship of principal and agent.
2.5 (a) No provisions of this Agreement shall constitute a grant of any
license of any kind to Micro-Medical for the use, manufacture, or sale of any
trademark, tradename, or product which is proprietary to and the property of
MEDY except as specifically set forth herein.
(b) No provisions of this Agreement shall constitute a grant of any
license of any kind to MEDY for the use, manufacture, or sale of any trademark,
tradename, or product which is proprietary to and the property of Micro-Medical
except as specifically set forth herein.
3. PURCHASE ORDERS
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3.1 MEDY shall submit firm, non-cancelable purchase orders for Products
pursuant to this Agreement at least 60 days before delivery of Products is
requested. MEDY submits herewith its initial purchase order for delivery of
Products during the 90 day period beginning 60 days after the execution of this
agreement.
3.2 Products are sold F.O.B. Micro-Medical's facility.
3.3 In case of any conflict or ambiguity between this Agreement and each
separate purchase order, this Agreement shall prevail, unless it is expressly
set forth in writing and executed by the parties hereto, that a deviation from
this agreement shall prevail over a contrary provision in this Agreement. No
unilateral term set forth in any order, invoice or other document, shall be
effective to negate any term contained in this Agreement, irrespective of the
delivery or acceptance of a product under such document.
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4. TERM
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4.1 The term of this Agreement shall be for 66 months from January 1, 1995.
The parties hereto may extend or renegotiate the term by mutual written consent.
4.2 In addition, Micro-Medical hereby grants MEDY a first right of refusal
to distribute all future products directly related to the items described in
Schedule A, and any revisions, modifications, enhancements, or improvements
thereto, or substitutions therefore. Micro-Medical shall give MEDY not less than
60 days notice of any such product and, unless affirmatively rejected by MEDY,
such product will be included herein.
4.3 In addition, Micro-Medical hereby grants MEDY a first right of refusal
to purchase any portion of the products listed on Schedule A for which
Micro-Medical may receive a bona fide offer from a third party ("Third Party
Offer"). Upon receipt of a Third Party Offer, Micro- Medical shall convey the
terms thereof to MEDY which may (within 90 days of the date it receives said
notice from Micro-Medical) exercise its right hereunder and purchase the
products designated in the Third Party Offer at the same price and on the same
terms set forth in the Third Party Offer. If MEDY does not exercise this right
of first refusal, then this Agreement becomes non-exclusive as to any products
purchased pursuant to the Third Party Offer provided such purchase occurs within
30 days after the expiration of MEDY's right of first refusal contained in this
section.
5. TERMINATION
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5.1 MEDY may terminate this Agreement at anytime upon 90 days notice.
5.2 Upon termination, MEDy is still liable for all orders placed prior to
the termination date in accordance with the terms of this Agreement and the
submitted purchase orders and shall promptly return to Micro-Medical all
technical and clinical information in its possession regarding the Products.
5.3 In addition to any termination rights of MEDY granted elsewhere in this
Agreement, MEDY may terminate this agreement without penalty if:
(a) Any Product infringes any claim or patent of any other person; or
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(b) Micro-Medical fails to deliver Products 60 days after the purchase
order therefor is placed by MEDY and accepted by Micro-Medical; or
(c) A petition is filed either voluntarily or involuntarily by or
against Micro-Medical under the federal Bankruptcy Code, or a petition is
filed against Micro-Medical for the appointment of a receiver; or
(d) any governmental approval for any Product or facility
manufacturing any Product is revoked, denied, cancelled, or withdrawn; or
(e) Micro-Medical unreasonably refuses to incorporate any
technological or ornamental design modifications to Products, which
modifications were proposed, in writing, by MEDY; or
(f) If any substantiated action or claim for damages resulting from a
defect in any of the products listed on Schedule a is made against MEDY.
(g) If MEDY notifies Micro-Medical of a substantiated technological
problem with any of the products listed on Schedule A and Micro-Medical is
unable to remedy the problem within 45 days from the date notice of such
problem is given to Micro-Medical by MEDY.
6. PRICING
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6.1 MEDY shall be free to fix its resale prices and other conditions with
its customers and sub-distributors.
6.2 Unless otherwise agreed, all sales of the Products to MEDY shall be at
the price set forth on Schedule "A", which prices will be reviewed by the
parties quarterly during the first year of this contract, and annually
thereafter. No adjustment to the price (either increase or decrease, as a result
of changes in direct costs) shall affect any open purchase order for Products
received prior to such adjustment.
7. CREDIT TERMS
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7.1 Payment terms are 30 days after invoice date on all Products.
7.2 At such time as Micro-Medical receives an order from MEDY,
Micro-Medical will ship the order within 60 days FOB Micro-Medical to the
destination designated by MEDY.
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7.3 In the event that any governmental authority under current law, or any
subdivision thereof, requires the payment of stamp taxes, registration taxes,
turnover taxes, or other taxes or duties levied on a transaction under this
Agreement by reason of the execution or the performance thereof, it shall be the
responsibility of MEDY to pay all such taxes when due. MEDY further agrees to
indemnify Micro-Medical and hold it harmless from all liability of whatever
nature which may be imposed on Micro-Medical arising out of MEDY's failure, for
whatever reason, duly to pay such taxes.
7.4 If Micro-Medical is indebted to MED for any amount at the time any
payment by MEDY to Micro-Medical is due (whether pursuant to Paragraph 15.4 or
otherwise), MEDY may credit 100% of such payment against a reduction in the
amounts due MEDY from Micro- Medical. Such credit will be taken by notice from
MEDY to Micro-Medical.
8. EXPENSES INCURRED BY MEDY
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8.1 MEDY shall pay all expenses incurred by it in performance of its duties
as a seller and distributor of the Products and Micro-Medical shall not be
responsible for any such expenses.
8.2 At its own expense, MEDY shall give appropriate instructions to its
purchasers of the Products for the use of the Products strictly in accordance
with the specifications and manuals applicable to such Products.
9. WARRANTY
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9.1 Micro-Medical warrants that the Products are fit for all purposes
described in Micro- Medical's authorized technical data or sales promotion
materials and are merchantable under their respective descriptions in such data
or promotion materials Micro-Medical hereby disclaims all other warranties
relating to the Products, whether expressed or implied.
9.2 Claims under the above warranty shall be dispatched in writing by MEDY
to Micro- Medical as soon as a warrant claim is received by MEDY but not later
than thirty (30) days after the expiration of the warrant period. The warranty
period shall commence at the time of delivery of MEDY.
10. CHANGES IN THE PRODUCTS
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10.1 MEDY will not incorporate any technological or ornamental design
modifications without the prior written consent of Micro-Medical, which consent
will not be unreasonably withheld.
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10.2 Micro-Medical has the right to make changes to the Products at any
time, provided the changes do not affect the form or the function of the
Product. This does not, however, apply to the Products already subject to an
accepted purchase order from MEDY or to the labeling, trademarks, trade names,
identifying marks or other differentiating technological or ornamental design
modifications incorporated into the Products under this Agreement.
10.3 Micro-Medical and MEDY, b reason of Section 12 hereof, have exchanged
secrecy agreements for the purpose of planning future technology and ornamental
modifications to the Products. The result of such planning will be to determine
what, if any, technological or ornamental design changes will be incorporated
into the Products to be delivered to MEDY pursuant to this Agreement.
11. ASSIGNMENT
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11.1 This Agreement shall not be assignable by either party without the
prior written consent of the other party.
11.2 MEDY may appoint sub-distributors for the Products.
12. CONFIDENTIALITY
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12.1 Any technical, commercial or other information of a confidential
nature disclosed by one party (the "Disclosing Party") to the other party (the
"receiving Party") shall be treated as confidential and the Receiving party
shall not during the duration of this Agreement or for a three (3) year period
after termination, without the prior written consent of the Disclosing Party,
disclose or pass it to any third party except as may be required for the proper
performance of the Receiving Party's duties hereunder, to its employees,
regulatory authorities or customers of MEDY or Micro-Medical or for the purpose
of legally enforcing its rights hereunder. Any transfer of such information to
any person including persons permitted to receive such information as aforesaid,
shall only be done following execution of an undertaking by such person to
maintain the confidentiality of such information. The Receiving Party shall take
steps appropriate under the circumstances to protect the status of such
information as confidential.
12.2 The information which is at time of disclosure or thereafter becomes a
part of the public domain through no fault of the Receiving Party, which has
been independently developed by the Receiving Party as shown by written record,
and hereafter lawfully disclosed to the Receiving Party by the third party which
did not acquire the information under an obligation of confidentiality from the
disclosing party will be excluded from the confidential information.
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13. INFRINGEMENT OF INDUSTRIAL PROPERTY RIGHTS
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13.1 If MEDY or Micro-Medical becomes aware that the sale or use of the
Products might infringe any industrial property right of a third party, MEDY
shall give Micro-Medical or Micro-Medical shall give MEDY, as the case may be,
prompt notice thereof. MEDY shall cooperate with Micro-Medical at the expense of
Micro-Medical in the defense of any action, suit or claim by any third party
alleging any such infringement by Micro-Medical.
13.2 Each party undertakes to inform the other party immediately of all
acts of unfair competition and of all infringements of industrial property
rights of Micro-Medical and MEDY respectively. Micro-Medical and MEDY
respectively shall, at no cost of the other party, give the other party all
reasonable assistance in the protection against such acts and infringements. If
Micro-Medical decides not to protect its rights, MEDY may do so at its own cost
and with the assistance of Micro-Medical.
14. RELIEFS
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14.1 Either party shall e excused from fulfillment of any obligations other
than payment of product under this Agreement only to the extent that and for so
long as such performance is prevented or delayed by causes beyond its control
such as industrial disputes, riots, floods, war, warlike hostilities, fire,
embargo, shortage of labor or parts, power, fuel, means of transportation or
common lack of other necessities, which shall be informed to the other party
without any delay.
15. MISCELLANEOUS
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15.1 Waiver. The failure of any part to insist in any instance upon a
strict performance of the provisions and conditions of this Agreement, shall not
be construed as a waiver for the further of any of the provisions and conditions
herein contained, but the same shall continue and remain in full force and
effect.
15.2 Alteration, Etc. No alteration or amendment to this Agreement shall be
valid unless such alteration or amendment is reduced to writing and signed by
the parties hereto.
15.3 Notices. Any notice required or permitted to be given under this
Agreement by one of the parties to the other, shall be given for all purposes by
delivery in person, by telex, by registered air mail, postage prepaid, telegram
or by telefax addressed to:
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MEDY Medical Dynamics, Inc.
00 Xxxxxxxxx Xxxxx, Xxxx
Xxxxxxxxx, XX 00000
Attn: Van x. Xxxxxxx, President
tel: (000) 000-0000
fax: (000) 000-0000
Micro-Medical Micro-Medical Devices, Inc.
000 Xxxxxxx Xxx
Xxxxxx Xxxxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, M.D., President
tel: (303)
fax: (303)
Each party may change its address by written notice given to the other
party in the manner set forth above.
Unless otherwise specifically provided for herein, such notice shall take
effect upon receipt by addressee, provided that such notice shall be deemed to
have arrived upon the expiration of ten (10) days from the date of sending in
case of mail and forty-eight (48) hours from the hours of sending in case of
telegram, telex, or telefax.
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15.4 Loan. Provided Micro-Medical conveys to MEDY adequate collateral, MEDY
will loan up to $120,000 to Micro-Medical pursuant to the promissory note
attached hereto.
15.5 Sublease. MEDY will sublease ____ square feet of office and other
space in MEDY's existing facilities to Micro-Medical for the term of this
Distribution Agreement. MEDY and Micro-Medical will mutually agree as to the
definition of the space to be subleased. Micro- Medical will pay MEDY $____ per
month as rent for the subleased space during the term of the sublease, which
rent will be subject to adjustments based on any adjustments in MEDY's
underlying lease. Micro-Medical will also reimburse MEDY $___ per month for
anticipated use by Micro-Medical of MEDY's employees. Both the rental payment
and the reimbursement for employees will be paid to MEDY not later than the
first day of each month, commencing June 1, 1995. The rental payment and the
reimbursement for employees are intended to compensate MEDY for actual direct
and indirect expenses incurred by MEDY in providing space and employees to
Micro-Medical; consequently, the parties will review Micro-Medical's use of
MEDY's space not less than quarterly during the first year of this agreement and
annually thereafter, and will adjust the charges to Micro-Medical as the parties
may deem appropriate.
16. APPLICABLE LAW AND ARBITRATION
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16.1 This Agreement and every agreement or sales contract resulting
herefrom, shall be governed by, and construed in accordance with the laws of the
State of Colorado as such law shall from time to time be in effect, and such
laws shall also govern in the settlement, by arbitration, court proceedings or
otherwise, any and all disputes arising between the parties as well as the
validity of the arbitration clause in Article 16.2 below.
16.2 Any controversy or claim arising out of or relating to this contract,
or the breach thereof, shall be settled by binding arbitration in accordance
with the Arbitration Rules of the American Arbitration Association, Judicial
Arbiter Group of Boulder, Colorado, or other recognized arbitration forum in the
Denver, Colorado Metropolitan area, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. All
arbitration proceedings will be held in Denver, Colorado, and the laws of
Colorado (except for conflict of laws principles) shall apply to all matters
arising hereunder.
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IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be
duly executed as of the day and year first above written.
MEDICAL DYNAMICS, MICRO-MEDICAL DEVICES, INC.
By: /s/ Van X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
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Van X. Xxxxxxx, President Xxxxx X. Xxxxx, M.C., President
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SCHEDULE A
All Products Related to the Universal Sterile Endoscopy System TM
including, but not limited to the following:
ITEM PATENT PRICE
---- ------ -----
Sterilizable Video 4.914,521
Camera Cover, being reissue
the following: RE.34,002
1.) Sterile To Be Determined Per Agreement
CCD Drapes
(Single Chip)
(Three Chip)
2.) USES Camera
Sterile Surgical App. No. To Be Determined Per Agreement
Coupler and Drape 08/350,682
Windowed Self- App. No. To Be Determined Per Agreement
Centering Drape 08/318,271
for Surgical Camera
SCHEDULE B
TRADEMARKS OWNED BY MICRO-MEDICAL DEVICES, INC.
"USES" TM
Universal/Sterile Endoscopy System TM
Micro-Endoscopes TM
Micro-Laparoscopes TM
Micro-Arthroscopes TM
Micro-Systoscopes TM
Micro-Systo-Urethroscopes TM
Micro-Uretheroscopes TM
Micro-FiberEndoscopes TM
Micro-Hysteroscopes TM
Micro-Salphingoscopes TM
Steril-CCD TM Coupler/Drape TM
Steri-Stick TM USES Camera TM
SuperNova Light Source TM
Removable Core Endoscopes TM
Tethered Channels TM
Tethered Sheath XX
Xxxxx Imaging Stone Basket XX
Xxxxx Imaging Balloon Catheter TM
Safe Entry System TM
Access Expansion System TM
Biliary Stone Management System XX
Xxxxx Imaging Cholangiogram Catheter XX
Xxxxx Imaging Steerable Guide Wire TM
Liga-Loop TM
Liga-Stitch TM
Electro-Liga-Loop TM
Sterile Endoscopy Systems TM
Sterile Imaging Systems TM
Endotracheal Intubation System TM
Electronic Colposcopy TM
Percutaneous Laparoscopic Gastrostomy TM
Laparoscopic Intraperitoneal Biopsy System TM
Laparoscopic Barbitage System Tm
Laparoscopic Intraperitoneal Biopsy System with Imaging Needle TM
