EXCLUSIVE DISTRIBUTION AGREEMENT
Contract No: COD-009-08
THIS EXCLUSIVE DISTRIBUTION AGREEMENT (the “Agreement”), entered into as of December, 24, 2008 (the “Effective Date”), is made by and between INSPIRE MD LTD. of 0 Xxxxxxx Xxxxxx Xx. Xxx Xxxx 00000, Israel, a Corporation organized and existing under the laws of Israel and any of its affiliated companies (under formation) (individually and collectively referred to as the “Supplier”), and Tzamal-Jacobsohn Ltd. from 00, Xxxxxxxxxxx Xx,. Xxxxxx Xxxxxxx, XXX 0000, Xxxxxx Xxxxx 00000 Xxxxxx (the “Distributor”) (each of the Company and the Distributor, a “Party” and together, the “Parties”).
Contract No: COD-009-08
(a) Product(s) Promotion. Distributor shall use its best efforts to introduce to the market, promote, obtain orders for the Product(s) in the Territory. For the execution of said promotion, Distributor shall employ highly qualified sales and technical personnel familiar with the Product(s). Distributor agrees that it shall execute its obligation under this section in a manner that reflects positively on the Supplier and the Product(s) and shall not perform any act or omission which may harm the goodwill of, or be injurious to, the Product(s) or Supplier. Further, all marketing material, Product(s) information, brochures and the like, containing information relating to the Product(s) requires the approval of the Supplier prior to its distribution to end users or prospects Distributor engages.
(1) Distributor shall comply with any and all safety regulations and standards and such other regulations or requirements as are or may be promulgated by authorized governmental authorities and required in order to carry out the terms of this Distribution Agreement.
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Contract No: COD-009-08
(2) Distributor shall provide Supplier with all information pertaining to adverse events or safety issues related to the Product(s) within one working day. Further, Distributor shall promptly provide Supplier with all information alleging Product(s) deficiencies related to the identity, quality, durability, reliability, effectiveness, or performance of the Product(s).
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backward traceability to Inspire (and where applicable, to the Authorized Representative (name and address of the Authorized Representative printed on Product packaging); and
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reasonable product traceability to users to minimize the risks in case of recall; and
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language requirements according to national legislation; and
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compliance with any other responsibilities, liabilities, and obligations as set forth in Council Directive 93/42/EEC for manufacturers and any other laws, statutes, directives and regulations promulgated by any governmental body that may apply to the manufacturing and distribution of products.
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Contract No: COD-009-08
This Agreement shall commence and be effective as of the Effective Date and shall continue for a term of 4 years (the “Term”) commencing with the Effective Date of this Agreement, unless terminated pursuant to Section 9 below. The Term shall be automatically extended to an additional term (“Renewal”) unless a written notice of termination has been provided by one party to the other ninety (90) days prior to the date on which this Agreement otherwise would have expired. The terms of this Agreement shall apply to any Renewal, except if otherwise agreed on in writing by the parties.
(a) Transfer prices of the Product(s) from Supplier to Distributor are specified in Exhibit C to this Agreement (the “Prices”), CIF Israel at the Supplier’s sole decision.
Distributor shall complete the appropriate import/export forms as required by applicable laws and shall pay all other fees associated with the sale and delivery of all Product(s) hereunder, Including but not limited to customs clearance or customs tax as may apply.
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Contract No: COD-009-08
(b) Supplier shall have the right to change the Prices with a sixty (60) days prior written notice (the “Price Notice”) to Distributor. Orders placed by Distributor prior to the last day of the Price Notice period shall not be effected by said price change, and any written quote provided by the Distributor to prospect end-users prior to the Price Notice shall be subject to the previous pricing, provided that a copy of such quote has been provided by Distributor to the Supplier prior to the Price Notice.
(a) Identify each unit of Product(s) ordered;
(b) Indicate quantity, price (determined in accordance with the provisions of this Agreement) and shipping instructions; and
(c) Specify Distributor’s requested delivery dates.
Supplier is not bound by any term, condition or other provision in any purchase order that conflicts with the terms of this Agreement, unless such purchase order was confirmed in writing by Supplier.
3.5 After Purchase order is received and confirmed by Supplier, sales transaction shall be deemed complete and final.
(a) Payments for Product(s) shall be made in accordance with the payments schedule set forth in Exhibit D, by Distributor to Supplier pursuant to all additional terms listed therein.
(c) Distributor’s obligation to pay for all Product(s) ordered and all charges which it has incurred in connection with the execution of this Agreement shall survive termination or expiration of this Agreement.
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Contract No: COD-009-08
(d) Supplier may list Distributor at the Supplier’s Website as a Distributor in the Territory.
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Contract No: COD-009-08
5. Warranty and Maintenance
5.1 Warranty, Maintenance Obligations of Supplier to Distributor.
(a) All Warranty claims against Supplier shall be made by Distributor, regardless of whether Distributor has transferred title or possession of the Product(s) to other parties.
(b) The Warranty is contingent upon the proper use of the Product(s), and does not cover Product(s) that have been modified without Supplier’s approval, or that have been subject to unusual physical or electrical stress, misuse, unauthorized use, negligence or accident, or that have passed their expiration date.
(c) Supplier makes no warranty in respect of accessories and other parts made by other suppliers that have been attached or connected to the Product(s).
(d) THE FOREGOING WARRANTIES SET FORTH IN SECTION 5.1 ABOVE ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EITHER WRITTEN, ORAL OR IMPLIED, WHICH ARE HEREBY SPECIFICALLY DISCLAIMED AND EXCLUDED BY SUPPLIER, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE AND NON-INFRINGEMENT OR ANY IMPLIED WARRANTIES ARISING BY COURSE OF DEALING OR USAGE OF TRADE). THE SOLE AND EXCLUSIVE REMEDIES OF DISTRIBUTOR FOR BREACH OF PRODUCT(S) WARRANTY SHALL BE LIMITED TO THE REMEDIES PROVIDED IN THIS AGREEMENT.
(f) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, SUPPLIER SHALL NOT BE LIABLE TO ANY PERSON FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES, HOWEVER ARISING, INCLUDING, BUT NOT LIMITED TO, DAMAGES TO OR LOSS OF PROPERTY OR EQUIPMENT, LOSS OF PROFIT, LOSS OF USE OF DATA, LOSS OF REVENUES OR DAMAGES TO BUSINESS OR REPUTATION ARISING FROM THE PERFORMANCE OR NON-PERFORMANCE OF ANY ASPECT OF THIS AGREEMENT OR ANY ORDER HEREUNDER, OR FROM ANY CAUSE WHATSOEVER ARISING FROM OR IN ANY WAY CONNECTED WITH THE MANUFACTURE, SALE, HANDLING, REPAIR, MAINTENANCE OR USE OF THE PRODUCT(S), WHETHER OR NOT SUPPLIER SHALL HAVE BEEN MADE AWARE OF THE POSSIBILITY OF SUCH LOSS. ANY OTHER PRODUCT(S) REPRESENTATIONS OR WARRANTY MADE BY ANY OTHER PERSON OR ENTITY, INCLUDING EMPLOYEES OR REPRESENTATIVES OF DISTRIBUTOR THAT ARE INCONSISTENT HEREWITH, SHALL BE DISREGARDED AND SHALL NOT BE BINDING UPON SUPPLIER. IN NO EVENT SHALL SUPPLIER’S LIABILITY FOR PARTICULAR UNITS OF THE PRODUCT(S) HEREUNDER EXCEED THE PURCHASE PRICE OF SUCH UNITS.
(g) This Section 5.1 shall survive expiration or termination of this Agreement.
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Contract No: COD-009-08
5.2 Warranty and Maintenance Obligations of Distributor to Customers.
(a) Distributor shall make no warranties or guarantees with respect to Product(s) or the use thereof except as provided herein or otherwise authorized in writing by Supplier.
(b) Distributor shall educate and inform End Users of the proper and safe use of the Product(s). In the event that Distributor learns or becomes aware of any information indicating that any of the Product(s) have failed to perform satisfactorily, or receives any complaints or information from anyone concerning the safety and/or merchantability of any of Product(s), Distributor shall notify Supplier immediately. Distributor shall maintain a file of customer suggestions, comments, incident reports and Distributor responses and shall forward all such information to the Supplier in writing on the last day of each quarter this Agreement is in effect and for a period of 6 months from the termination of this Agreement if such information becomes available after termination.
6.1 Distributor acknowledges and agrees that:
(a) All intellectual property rights pertaining to the Product(s), including but not limited to patents, know-how, copyright, trademarks, whether protectable or not, registered and unregistered, owned and/or otherwise used by Supplier and all goodwill related thereto (collectively, the “IP Rights”) are and shall remain at all time, as between Supplier and Distributor, the exclusive property of Supplier and may not be exploited, reproduced or used by Distributor except as expressly permitted under this Agreement.
(b) Distributor shall not have or acquire any right, title or interest in or otherwise become entitled to any IP Rights by taking delivery of, making payment for, distributing and/or selling or otherwise using or transferring the Product(s).
(c) Distributor shall take all reasonable measures to ensure that all IP Rights of Supplier shall remain with Supplier, including promptly notifying Supplier of any possible infringement by third parties of Supplier’s IP Rights and participating with Supplier, at Supplier’s expense, in any legal action against such infringement that in Supplier’s sole judgment is required for protection or prosecution of Supplier’s rights.
(d) Supplier shall be the owner of the Product Registration in the Territory.
6.2 Without derogating from Section 6.1 above:
(a) Supplier may at any time affix Supplier’s trade name, service marks or trademarks (the “Trademarks”) to any of the Product(s) and use the Trademarks in relation to any services Supplier provides hereunder in connection with the Product(s); Distributor shall not make any changes to the Trademarks used on Products by Supplier.
(b) Distributor shall not have or acquire any right, title or interest in or otherwise become entitled to use any of the Supplier’s Trademarks, either alone or in conjunction with other words or names, or use the goodwill thereof, without the express written consent of Supplier in each instance; and
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Contract No: COD-009-08
(c) Distributor shall not to apply for or oppose registration of any trademarks, including the Trademarks, used by Supplier.
6.3 Nothing contained in this Agreement shall be construed as conferring on either party any right or imposing any obligation to use in advertising, publicity or otherwise any trademark, name or symbol of the other party, or any contraction, abbreviation or simulation thereof, except as expressly provided for in this Agreement.
6.4 Distributor acknowledges that no license or right is granted hereby with respect to Supplier’s intellectual property.
7.1 Without the written consent of the other party, neither party shall disclose to any third party, or use for its own benefit or the benefit of others, either during or after the Term of this Agreement, any confidential or proprietary business or technical information of the other party that has been identified as confidential or proprietary by the disclosing party in accordance with Section 7.2 below.
7.2 To be considered proprietary information, the information must be (i) disclosed in writing or other tangible form and marked confidential or proprietary, or (ii) disclosed orally or visually, identified as confidential at the time of disclosure and reduced to writing and marked confidential or proprietary within thirty (30) days of the disclosure thereof.
7.3 Proprietary information shall not include information which (i) is already rightfully known or becomes rightfully known to the receiving party independent of proprietary information disclosed hereunder; (ii) is or becomes publicly known through no wrongful act of the receiving party; (iii) is rightfully received from a third party without similar restrictions and without breach of this Agreement; or (iv) in the opinion of counsel, is required to be disclosed to comply with any applicable law, regulation or order of a government authority or court of competent jurisdiction, in which event the receiving party shall, prior to such disclosure, advise the other party in writing of the need for such disclosure and use its reasonable best efforts to obtain confidential treatment of such information.
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Contract No: COD-009-08
(a) General liability insurance in the amount of $500,000 per occurrence (which may be provided by a combination of primary and umbrella insurance); and
(b) Product(s) liability insurance in the amount of $500,000 per occurrence (which may be provided by a combination of primary and umbrella insurance).
(c) The insurance provided above shall include endorsements providing “contractual liability” coverage or equivalent terms; must be effective for claims or suits filed in the Territory.
Each of Supplier and Distributor shall provide a certificate of insurance covering the above requirements within thirty (30) days of execution of the Agreement, and upon each renewal of such insurance.
9.1 The Supplier may terminate this Agreement with thirty (30) days written notice if the Distributor:
(a) Is in default of its payment obligations hereunder, and such default continues for fifteen (15) days following receipt of written notice; or,
(b) Is in default of any other material obligation hereunder and such default continues for thirty (30) days following receipt of written notice; or
(c) Fails to meet 85% of the Minimum Sales or Order Values as defined in Exhibit C.
(d) Distributes or attempts to distribute the Products outside of the Territory.
9.2 Either party may terminate this Agreement if the other party is declared bankrupt or is involved in any insolvency proceedings, attachment or other proceedings, which, in the reasonable opinion of either party prevents the other party from performing its obligations under this Agreement.
9.3 Either party may terminate this Agreement for any reason or without reason with 12 (twelve) months written notice (hereinafter “Termination Notice”) without further penalties or indemnification, provided however that Distributor may conclude any Pending Sale. For the purpose of this Section, Pending Sale shall be defined as any sale to a prospect end-user that the Distributor has provided with a written sales-quote prior to the end of the Termination Notice, to a total of no more than ten Pending Sales.
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Contract No: COD-009-08
9.4 Should the Supplier terminate this Agreement without reason, subject to section 9.3 above, the Distributor shall be entitled to return the Supplier the stents as set forth in Exhibit D, Section 3(b) and the Supplier shall return the Distributor the respective amount paid.
9.5 Termination of this Agreement shall not affect any obligations of either party incurred hereunder prior to such termination, or any obligations that expressly survive termination of this Agreement.
9.6 Distributor is aware that in certain jurisdictions and/or countries, local authorities require that a sole named importer of the Product is authorized to distribute the Product in the Territory. Therefore, distributor agrees to execute all documents required by the relevant authorities for the purpose of execution of this Agreement and shall further provide the Supplier, upon its first request with all documents and signatures required for the purpose of disengaging distributor as the Supplier’s sole names distributor in the Territory as set forth in Exhibit F of this Agreement.
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Contract No: COD-009-08
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Contract No: COD-009-08
Inspire MD Ltd.
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Distributor
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Signature: | /s/ Xxxxx Xxxxxx | Signature: | /s/ Xxxxx Xxxx | |
Name: | Xxxxx Xxxxxx | Name: | Xxxxx Xxxx | |
Title: | President | Title: |
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Contract No: COD-009-08
EXHIBIT A – PRODUCTS’
MGuard Coronary Stent System
Contract No: COD-009-08
EXHIBIT B - TERRITORY
Israel
Contract No: COD-009-08
EXHIBIT C – STENT PRICES AND SALES MINIMUMS PRICES:
Prices:
Price per Stent System:
€450 (CIF Israel), VAT not included
1. Annual Sales Minimum:
2009
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2010
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2011
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2012
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Stent Quantity
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1,000
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1,200
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1,400
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1,600
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Total Order Value (in €)
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450,000
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540,000
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675,000
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810,000
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2. Quarterly Sales Minimum:
Q1
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Q2
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Q3
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Q4
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Stent Quantity
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500*
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100
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200
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200
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Total Order Value (in €)
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225,000
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45,000
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90,000
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90,000
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*400 units will be purchased upon signing of the Agreement.
Contract No: COD-009-08
EXHIBIT D – PAYMENT SCHEDULE
1. Payment terms shall be 90 days from issuance of a pro-forma invoice by the Supplier.
2. Payment shall be made by one of the following methods:
(a) Irrevocable Letter of Credit issued by a bank certified by the Supplier’s bank and upon approval of the Distributor’s order by the Supplier.
(b) Deferred bank check.
3. Payment for the first order of 400 stents shall be as follows:
(a) For 200 stents – €90,000 in bank check dated 90 days from the date of Agreement.
(b) For 200 stents – €90,000 in bank check dated December 31, 2009. Should the Distributor meet the annual sales minimums as detailed in Exhibit C, the total sum will be deferred by 365 additional days.
Contract No: COD-009-08
EXHIBIT E –PURCHASE ORDER
Purchase Order
Contract No: COD-009-08
EXHIBIT F
DISTRIBUTOR WAIVER
To: Inspire MD Ltd.
Xxxxxxx Xxxxxx 0
Xxx Xxxx, Xxxxxx
Distributor Waiver
Tzamal-Jacobsohn Ltd. 00, Xxxxxxxxxxx Xx. Kiivat Mate/on, POP 7004, Petach Tikva 00000 Xxxxxx hereby undertakes to sign, execute and deliver to you all required documents requested by the local regulatory authorities or other authorities as may be relevant, in order to allow Inspire MD to name another local importer for the purpose of distributing its products in. Tzamal-Jacobsohn Ltd. understands and acknowledges that Inspire would suffer irreparable damages and great financial loss if it is unable to appoint a distributor of its choice in the Territory and therefore Tzamal-Jacobsohn Ltd. undertakes to perform the above in a timely and efficient manner. Further, Tzamal-Jacobsohn Ltd. waives any rights with respect to it being the named importer in the Territory, or the registration rights to the Product(s) as provided for in the Distribution Agreement executed between Tzamal-Jacobsohn Ltd. and the Supplier.
This letter does not release Inspire of any obligations it has towards Tzamal-Jacobsohn Ltd., including any financial claims Tzamal-Jacobsohn Ltd. may have for services it preformed under the Distribution Agreement.
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NAME
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TITLE
__________________________________
DATE
Contract No: COD-009-08
EXHIBIT G
OPTION GRANT AGREEMENT
Inspire MD Ltd.
(2006 Employee Stock Option Plan)
Stock Option Agreement
Section 3(i) Option
THIS STOCK OPTION AGREEMENT entered into as of ___________ between Inspire MD Ltd. (the “Company”), and Tzamal-Jacobsohn Ltd.-(the “Optionee”).
1. The Company, in accordance with the allotment made by the Company’s Board of Directors (the “Board of Directors”) and subject to the terms and conditions of the 2006 Employee Stock Option Plan of the Company (the “Plan”), grants to the Optionee an option (the “Option”) to purchase an aggregate of _________ Ordinary Shares posy-split (the “Option Shares”) of the Company at a per-share exercise price of $14, each such Option Share representing the right to acquire an Ordinary Share of the common stock of the Company.
2. The Company has designated the Option Shares as ‘3(i) Options’ (i.e. Options granted pursuant to Section 3(i) of the Israeli Income Tax Ordinance (New Version), 5721-1961 (the “Ordinance”).
3. The term of the Option shall be three years from the date hereof, subject to earlier termination as provided in the Plan.
4. Unless determined otherwise by the Board of Directors, _________ Option Shares shall vest upon the execution of this agreement.
5. The Option shall be exercised by giving five business days’ written notice to the Company at its then principal office, addressed for the attention of the chairman of the Board of Directors, in the form prescribed from time to time by the Company (a “Notice of Exercise”), stating that the Optionee is exercising the option hereunder, specifying the number of shares being purchased and accompanied by payment in full of the aggregate purchase price therefore in cash or by certified check and made in NIS in accordance with the terms of this Agreement.
6. The Optionee hereby grants the chairman of the Board of Directors an irrevocable proxy (a “Voting Proxy”) to represent the Optionee at all meetings of the shareholders of the Company, and to abstain from voting the Optionee’s Option Shares at such meetings. Upon the consummation of an IPO of Company shares, the Voting Proxy will be deemed cancelled and of no further effect.
Contract No: COD-009-08
7. All rights attaching to any shares received following exercise of the Option, and other shares received subsequently following any realization of rights (including bonus shares), will be subject to the same taxation treatment applicable to such received shares.
8. The Company shall not transfer to Optionee any shares allocated or issued upon exercise of the Option prior to the full payment of the Optionee’s tax liabilities arising from or relating to this option or any shares allocated or issued upon exercise of this option.
9. The Company may, if required under any applicable law, require that an Optionee deposit with the Company, in cash, at the time of exercise, such amount as the Company deems necessary to satisfy its obligations to withhold taxes or other amounts incurred by reason of the exercise or the transfer of shares thereupon.
10. Notwithstanding anything herein to the contrary, if at any time the Board of Directors shall determine, in its discretion, that the listing or qualification of the shares of Common Stock subject to the Option on any securities exchange or under any applicable law, or the consent or approval of any governmental agency or regulatory body, is necessary or desirable as a condition to, or in connection with, the granting of an option or the issue of shares hereunder, the Option may not be exercised in whole or in part unless such listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Board of Directors.
11. In the event that any person or entity makes an offer to purchase all or substantially all of the issued and outstanding share capital of the Company or all or substantially all of the assets of the Company, or to exchange all or substantially all of the shares of the Company for securities of another company, and shareholders holding more than 60% of the issued and outstanding share capital of the Company accept such offer, then the Optionee shall be obligated to sell or exchange, as the case may be, any shares the Optionee acquired under this Agreement, in accordance with the instructions issued by the Board, whose determination shall be final.
12. Nothing in the Plan or herein shall confer upon the Optionee any right to continue in any engagement with the Company or with any corporate entity affiliated with the Company (an “Affiliate”), or interfere in any way with any right of the Company or any Affiliate to terminate such engagement at any time for any reason whatsoever without liability to the Company or any Affiliate. Nothing in the Plan or herein shall confer upon the Optionee any right to be employed by the Company or any Affiliate.
13. The Company and the Optionee (by the Optionee’s acceptance of the Option) agree that they will both be subject to and bound by all of the terms and conditions of the Plan, a copy of which is attached hereto and made a part hereof. Any capitalized term not defined herein shall have the meaning ascribed to it in the Plan. In the event of a conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall govern.
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Contract No: COD-009-08
14. The Optionee (by the Optionee’s acceptance of the Option) represents and agrees that he or she will comply with all applicable laws relating to the Plan and the grant and exercise of the Option and the disposition of the shares acquired upon exercise of the Option.
15. The Option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee or the Optionee’s legal representatives.
16. This Agreement shall be binding upon and inure to the benefit of any successor or assign of the Company and to any heir, distributor, executor, administrator or legal representative entitled to the Optionee’s rights hereunder.
17. This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Israel.
18. The invalidity, illegality or unenforceability of any provision herein shall not affect the validity, legality or enforceability of any other provision.
19. The Optionee (by the Optionee’s acceptance of the Option) agrees that the Company may amend the Plan and the options granted to the Optionee under the Plan, subject to the limitations contained in the Plan.
Inspire MD Ltd.
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OPTIONEE
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By: | Signature: | |||
Name: | Name: | |||
Title: | ID No.: |
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