SUPPLY AGREEMENT
Exhibit 10.1
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith
omits the information subject to the confidentiality request. Omissions are designated as [ * ].
A complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.
THIS SUPPLY AGREEMENT (this “Agreement”) is made effective as of the date of the last signature on
the Agreement (“Effective Date”), by and between TomoTherapy Incorporated, a Wisconsin corporation
with its principal address at 0000 Xxxxxx Xxx, Xxxxxxx, XX 00000, XXX (“TomoTherapy”), and Hitachi
Medical Corporation, a Japanese corporation with its principal address at 0-00-0 Xxxx-Xxxxx,
Xxxxxxx-xx, Xxxxx 000-0000, Xxxxx (“Hitachi”).
RECITALS
A. TomoTherapy manufactures and sells the TomoTherapy® Hi ·Art® treatment system, which includes
hardware, software, other equipment and related services (the “Products”).
B. Hitachi manufactures Xenon gas detectors identified by model number CT-WD-5E, rev NA (the
“Detectors”).
C. TomoTherapy desires to purchase the Detectors from Hitachi in order to incorporate them into the
Products which will be distributed by TomoTherapy directly or indirectly on a worldwide basis.
NOW, THEREFORE, for mutual consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1.0 SUPPLY OF DETECTORS
1.1 Orders.
A. Purchase Order. Subject to the terms and conditions herein, Hitachi agrees to supply and
deliver to TomoTherapy in non-exclusive basis, and TomoTherapy agrees to purchase from Hitachi, the
Detectors by purchase orders (“Purchase Orders”) that TomoTherapy shall send to Hitachi. Purchase
Orders shall contain, among other things, Purchase Order number and date, quantification of
Detectors ordered, the TomoTherapy Part Number, price per unit, requested delivery dates and
delivery instructions and destination. Purchase Orders shall be issued at least 90 days before the
requested shipment date.
B. Order Acknowledgment. Within five (5) working days of its receipt of a Purchase Order,
Hitachi shall either send written acceptance of the Purchase Order to TomoTherapy or written notice
that the shipment may be delayed, with a revised schedule for delivery.
C. Forecasts. Following execution of this Agreement, TomoTherapy shall provide Hitachi with a
forecast of the Detectors TomoTherapy plans to purchase from Hitachi for the initial twelve (12)
months following the Effective Date (the “Initial Forecast”) and shall provide Hitachi with an
update of such forecast periodically every month for the following six (6) months thereafter
(collectively with the Initial Forecast, the “Forecasts”). The Forecasts are for planning purposes
only, and TomoTherapy shall not be bound to make the planned purchases included in the Forecasts.
TomoTherapy will commit to purchase the number of Detectors specified in the first three (3) months
of each Forecast via the submission of one or more Purchase Orders for the detectors to be
delivered in those three (3) months.
D. Minimum Purchase. TomoTherapy agrees to purchase at least [ * ] Detectors in every six
months period starting with April 1 and October 1 (“Minimum Purchase Quantity”) from Hitachi. In
the event that TomoTherapy fails to purchase Minimum Purchase Quantity, it shall be deemed to be a material breach of this Agreement by TomoTherapy and Hitachi shall have the rights specified
under Article 6 of this Agreement.
E. Capacity. Hitachi agrees that no Purchase Order from TomoTherapy shall go unfilled for
reason of lack of capacity of Hitachi to fulfill such Purchase Order so long as the Purchase Order
requests delivery of a quantity that is no more than the guaranteed number of detectors available
for any given month according to the schedule below. For any Renewal Term, as defined in Section
6.1 herein, the capacity shall be discussed and determined by the parties at that time. Should
TomoTherapy request more detectors in the Purchase Order than Capacity, the parties will discuss at
that time the feasibility of Hitachi filling such an order, and the TomoTherapy forecast for future
order quantities. The previous language not withstanding, the quantity limits discussed in this
Section 1.1E shall not apply in the case of a Last Time Buy, as defined in Section 6.2.
| Date | Guaranteed Capacity | |
From the Effective Date through [ * ]
|
[ * ] detectors per month | |
From [ * ] through [ * ]
|
[ * ] detectors per month | |
From [ * ] through the expiration of the contract
|
[ * ] detectors per month |
F. Pricing and Payment of Invoices. The price for each Detector during the Term of this
Agreement is Japanese Yen [ * ]on FOB Japan basis. The parties agree that the pricing structure
will be renegotiated annually upon the anniversary date of this Agreement, taking into
consideration pricing adjustments due to increases or decreases in raw materials, internal
production costs, and the estimated units needed by TomoTherapy during the impending Forecasts.
TomoTherapy shall pay all invoices issued under this Agreement in Japanese Yen by telegraphic
transfer through banks within 45 days from the date of invoice. All bank charges incurred by
TomoTherapy shall be born by TomoTherapy.
G. Delivery Terms. Delivery terms for the Detectors are FOB Japan. Title and risk of loss of
the Detectors transfers from Hitachi to TomoTherapy at the point of FOB Japan.
H. Non-Conforming Detectors. In the event of a discrepancy concerning the quality and/or
quantity of Detectors ordered, and it appears that such discrepancy was caused by negligence or
other conduct on the part of Hitachi or on the part of an individual or entity under Hitachi’s
control, or if the Detectors received by TomoTherapy do not otherwise conform to that ordered for
whatever reason, TomoTherapy may reject all or a portion of the Detectors so received
notwithstanding any prior payment by TomoTherapy for such Detectors. The Detectors shall be
considered to conform to TomoTherapy’s expectations if they meet the specifications described in
Appendix A hereto. TomoTherapy may require Hitachi to (i) refund funds paid by TomoTherapy for the
non-conforming Detectors, (ii) replace such non-conforming Detectors with conforming Detectors at
Hitachi’s sole cost, or (iii) effect any other remedy as the parties may agree. The choice of
remedies (i) through (iii) contained in the immediately foregoing sentence shall be upon mutual
agreement of the parties.
I. Rejection. The Detectors deemed rejected by TomoTherapy will be reported to Hitachi (and
returned to Hitachi upon their request and at their cost) with a Notice of rejection containing the
reasons for and documentation supporting the rejection. Within fourteen (14) days from Hitachi’s
acceptance of notice of rejection, Hitachi will supply replacement product at no additional cost.
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1.2 Technical Information and Support
A. Technical Information. Hitachi shall provide TomoTherapy with technical information and
technical support regarding the Detectors to be reasonably considered necessary for the intended use of the Detectors. Such Technical Information may include but is not necessarily
limited to the Procurement Specification attached hereto as Appendix A. The parties agree that
should TomoTherapy require significant time or resources from Hitachi with respect to the provision
of technical information under the terms of this section, Hitachi shall have the ability to ask for
reasonable NRE as compensation. The terms and conditions of such NRE compensation will be
negotiated by the parties in good faith.
1.3 Quality and Specifications for Performance and Packaging.
A. Specifications and Certifications. Unless otherwise agreed by the parties in writing, the
Detectors sold to TomoTherapy shall conform to the performance specifications set forth in Appendix
A. With each shipment, Hitachi shall provide TomoTherapy with a certification and corresponding
test data demonstrating that the Detectors in that shipment meet or exceed the performance
specifications set forth in Appendix A.
B. Notifications of Changes or Substitutions to Detectors. Hitachi shall provide TomoTherapy
with as much advanced written notice as possible of any change to the form or function of the
Detectors, but under no circumstances shall Hitachi provide TomoTherapy with less than six (6)
months prior notice. Hitachi must obtain TomoTherapy’s prior written consent before making any
material change that might in any way affect quality of performance of the Detectors, including but
not limited to any change in raw material or component, or change in the source of such raw
material or component.
C. Quality Control and Quality Assurance. Hitachi shall maintain its certification under ISO
9001 or an equivalent auditable quality program with comparable requirements during the term of
this Agreement. Hitachi shall maintain a documented process database. Hitachi shall forward its
quality control and quality assurance reports from time to time to TomoTherapy upon TomoTherapy’s
request. TomoTherapy may at any time, with reasonable prior notice to Hitachi, conduct an audit
of Hitachi’s quality control, quality assurance and manufacturing records and processes. If
TomoTherapy identifies any material deficiency during an audit or otherwise, Hitachi will be
required to respond with a corrective action plan to any such findings as soon as possible, and
will provide TomoTherapy with weekly updates as to the progress of such corrective action plan.
D. Customer Complaints or Problems. TomoTherapy agrees to notify Hitachi of all material
customer complaints or problems regarding the Detectors. If TomoTherapy determines that changes to
the design, process, components, materials, assembly or workmanship are beneficial or required to
correct a quality or reliability deficiency, the parties shall, upon notification of such
circumstance, immediately initiate discussions to resolve the problem as soon as possible.
Responses to requests for failure investigation and corrective action shall be performed as soon as
possible with Hitachi providing weekly updates to TomoTherapy on the status of the investigation
and resolution.
E. Detectors Packaging. Detectors to be shipped by Hitachi to TomoTherapy shall be packaged
according to the packaging requirements included in the Procurement Specification attached as
Appendix A hereto.
F. Warranty. Hitachi represents and warrants that the Detectors shall be free from defects in
design, process, components, materials, assembly and workmanship, that the Detectors meet the
performance specifications set forth in Exhibit A,. Any Detector that does not meet the terms of
this warranty during either the first eighteen (18) months after such Detector is shipped by
Hitachi by FOB Japan basis or during the first twelve (12) months after the TomoTherapy Product
that includes the Detector was shipped from TomoTherapy to a TomoTherapy customer, whichever is
earlier, may, at Hitachi’s option, be returned to Hitachi for a full refund or replaced by Hitachi.
Either of the above options shall be at Hitachi’s sole expense. Notwithstanding the foregoing,
TomoTherapy understands and accepts that the Detectors may not meet the Specifications in exposure
of high-energy (Mega Voltage) radiation which is beyond the energy level (Kilo Voltage) of
diagnostic X-ray CT systems, which is not in the scope of Hitachi warranty. HITACHI DOES NOT MAKE
AND HEREBY DISCLAIMS ANY WARRANTY IN REPSECT OF THE DETECTORS OTHER THAN AS PROVIDED ABOVE IN THIS ARTICLE, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PURPOSE.
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1.4 Widespread Failure. For the purposes of this Agreement, “Widespread Failure” means one or
more related defects in the design, material, or workmanship of the Detectors for which Hitachi is
solely responsible, and which (a) are substantially similar in nature or origin, (b) materially
affect the Detector’s safety or efficacy, and (c) are found in fifteen (15) percent of the
installed base of Detectors within any twelve (12) months period during the term of this Agreement,
except that ordinary wear and tear shall not, under any circumstances, be deemed to give rise to an
Widespread Failure situation. In the event of an Widespread Failure, (a) Hitachi covenants that
Detectors not yet delivered to TomoTherapy will be upgraded, prior to delivery, to correct such
Widespread Failure, and (b) with respect to Detectors for which the warranty under subsection F of
Section 1.3 has expired, Hitachi will, at its own expense, provide to TomoTherapy such replacement
components for such Detectors or spare parts as may be required to eliminate the defect giving rise
to such Widespread Failure. TomoTherapy will perform any work relating to the installation or
other use of such replacement components at its own expense. With respect to this Section 1.4,
Hitachi shall assume responsibility for any defects or problems that otherwise fall within the
definition of “Widespread Failure” that are due to defects, flaws or omissions in any component of
the Detectors supplied to Hitachi by any of Hitachi’s vendors or suppliers.
2.0 REGULATION
2.1 Government Approvals. If applicable law in the sales territory of TomoTherapy requires
registration or listing of Detectors in order to offer them for sale or to install them within the
sales territory, such registration or listing shall be sole responsibility of TomoTherapy, unless
Hitachi, at its option, elects to make such registration or listing in its own name. If such
registration or listing is to be obtained or made by TomoTherapy, Hitachi shall cooperate and
assist TomoTherapy in its efforts, and the costs of such registration or listing shall be borne
exclusively by TomoTherapy.
2.2 Export Control Regulations. Neither Hitachi nor TomoTherapy shall dispose of any U.S.
products, know-how, technical data, documentation, or other products or materials furnished to it
pursuant to this Agreement to any party or in any manner which would constitute a violation of the
export control regulations of the United States now or hereafter in effect if the disposition was
made by a U.S. corporation, or a non-U.S. corporation subject to those regulations.
2.3 Safety, Performance or Regulatory Issues. Hitachi agrees to inform TomoTherapy
immediately of any safety, performance or regulatory issues relating to any Detectors, whether sold
to TomoTherapy, sold to a third party or in Hitachi’s possession.
2.4 Conformance to Law. Hitachi warrants and represents that it follows local Japanese law
with respect to its manufacturing, sales, and other business activities and that at this time,
Hitachi is aware of no law or regulation prohibiting the manufacture, sale, or export of the
Detectors to TomoTherapy.
2.5 Compliance with U.S. Foreign Corrupt Practices Act. Hitachi shall not, directly or
indirectly, in the name of or on behalf of, or for the benefit of TomoTherapy, offer, promise or
authorize to pay, or pay any compensation to, or give anything of value to, any official, agent or
employee of any government or governmental agency, or to any political party, or to any officer,
employee or agent thereof. Notwithstanding the provisions of Article 6.0 hereof, any breach of the
provisions of this Section 2.5 shall entitle TomoTherapy to terminate this Agreement effective
immediately upon notice, and with no further liability whatsoever, to Hitachi.
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3.0 RELATIONSHIP BETWEEN THE PARTIES
3.1 Independent Purchaser Status. Hitachi is an independent contractor. Hitachi shall not be
considered an agent or legal representative of TomoTherapy for any purpose, and Hitachi agrees that none of the Hitachi Parties shall be, or be considered, an agent or employee of TomoTherapy.
Hitachi further agrees that none of the Hitachi Parties is granted, nor shall exercise, the right
or authority to assume or create any obligation or responsibility, including without limitation
contractual obligations and obligations based on warranties or guarantees, on behalf of or in the
name of TomoTherapy.
3.2 Controlled Entities. Hitachi’s obligations and responsibilities hereunder shall apply to
any person or entity owned or controlled by Hitachi.
3.3 TomoTherapy’s Sales Terms. TomoTherapy shall in no way be restricted in determining, at
its sole discretion, the prices, terms and conditions under which the Detectors are sold to its
customers.
4.0 INSURANCE, INDEMNIFICATION AND LIMITATION OF LIABILITY
4.1 Insurance. Hitachi shall secure and maintain in force continuously and without
interruption during the Term, the following insurance coverage: general liability insurance,
including product liability coverage, with per-occurrence limits of at least One Million Dollars
($1,000,000).
4.2 Indemnification.
| a. | Hitachi agrees to indemnify and hold harmless TomoTherapy from and
against any and all claims, losses, damages, liabilities, obligations, judgments,
settlements, costs and other expenses, of whatever form or nature, including,
without limitation, attorneys’ fees and other costs of legal defense, whether
direct or indirect, which TomoTherapy may sustain or incur from time to time as a
result of or related to any acts or omissions of Hitachi, including, without
limitation: (i) breach of any of the provisions of this Agreement or of a
representation or warranty made herein, (ii) a Widespread Failure, (iii) the
Detectors’ actual or alleged infringement of intellectual property rights,
including, without limitation, copyrights, trade secrets, trademarks, trade names,
patents and all other intellectual and industrial property rights of every kind and
nature throughout the world and however designated (the “Intellectual Property
Rights”), (iv) an actual or alleged failure of or defect in the Detectors resulting
in actual or alleged damages or injuries, (v) gross negligence or other tortious
conduct, (vi) representations or statements not specifically authorized by
TomoTherapy herein or otherwise in writing, or (vii) violation by Hitachi of any
applicable law, regulation or order. In case of (iii) or (iv) above, TomoTherapy
shall promptly inform of it to Hitachi and place the case under Hitachi’s control. |
| b. | TomoTherapy agrees to indemnify and hold harmless Hitachi from and
against any and all claims, losses, damages, liabilities, obligation, judgments,
settlements, costs and other expenses, of whatever form or nature, including,
without limitation, attorneys’ fees and other costs of legal defense, whether
direct or indirect, which Hitachi may sustain or incur from time to time as a
result of or related to any acts or omissions of TomoTherapy, including, without
limitation, (i) breach of any of the provisions of this Agreement or of a
representation or warranty made herein, (ii) an actual or alleged failure of or
defect in the TomoTherapy product, excluding any defect in the Detectors, resulting
in actual or alleged damages or injuries, (iii) TomoTherapy’s Products’ actual or
alleged infringement of Intellectual Property Rights, excluding any infringement in
the Detectors, (iv) any modification of or addition to the Detectors not provided
or approved by Hitachi, (v) gross negligence or other tortuous conduct, (vi)
representations or statements made by TomoTherapy not specifically authorized by
Hitachi herein or otherwise in writing, or (vii) violation by TomoTherapy of any
applicable law, regulation or order. |
4.3 Hitachi Limitation of Liability. IN NO EVENT SHALL HITACHI BE RESPONSIBLE OR LIABLE TO
TOMOTHERAPY FOR LOST PROFITS, OR LOST BUSINESS OPPORTUNITIES, OR INDIRECT, INCIDENTAL, SPECIAL,
PUNITIVE, OR CONSEQUENTIAL DAMAGES OF TOMOTHERAPY OR ANY OTHERS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS
TERMINATION.
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4.4 TomoTherapy Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL TOMOTHERAPY BE LIABLE
TO HITACHI FOR LOST PROFITS OR LOST BUSINESS OPPORTUNITIES, NOR SHALL TOMOTHERAPY BE SUBJECT TO ANY
CONSEQUENTIAL, SPECICAL, PUNITIVE, INCIDENTAL, INDIRECT OR CONTINGENT DAMAGES WHATSOEVER WITH
RESPECT TO CLAIMS MADE HEREUNDER.
5.0 CONFIDENTIAL INFORMATION
5.1 Hitachi and TomoTherapy each may be referred to separately as (i) the “Provider” in a
context in which the Party being referred to is disclosing, has disclosed, or will disclose
information, and (ii) the “Receiver” in a context in which the Party being referred to is
receiving, has received, or will receive information.
5.2 As used in this Agreement, “Confidential Information” means all information consisting of
or relating to the Provider’s: trade secrets, product designs, patents, patents pending or
contemplated and interpretation of patents, copyright and copyright pending or contemplated,
customer lists, product lines, methods of business operation, technical information, including
without limitation, software and computer programs, economic information data, specifications,
know-how, process information, methods of manufacture, formulas, structures, materials, components,
designs, patterns, prototypes, models, drawings, reports, notes, charts, graphs, distribution and
sale relating to the development and marketing of the Provider’s products and general business
operations..
5.3 Confidential Information includes without limitation all information that is able to be
disclosed, communicated, transferred, reproduced, represented, contained, retained, recorded, or
embodied orally, visually, electronically, digitally, in writing, or through any other medium or
means. In order to be included as Confidential Information hereunder, (i) information disclosed in
written or other tangible form must at the time of disclosure be identified as “Confidential”,
“Secret,” or “Proprietary” or bear a similar legend, and (ii) information disclosed in any other
form must be identified as Confidential Information hereunder in a written notice delivered by the
Provider to the Receiver within fourteen (14) days after the time of disclosure, provided that such
information shall be considered to be Confidential Information throughout at least such fourteen
(14) day period even if no such notice is ultimately delivered.
5.4 Notwithstanding the foregoing, Confidential Information does not include any information
disclosed by the Provider to the Receiver hereunder which the Receiver can convincingly demonstrate
through, among other means, the production of written records or other tangible materials (i) is,
at the time of such disclosure, already generally available to the public through no act or
omission in breach of this Agreement, (ii) becomes, subsequent to such disclosure, generally
available to the public through no act or omission in breach of this Agreement, (iii) is, at the
time of such disclosure, already in the Receiver’s possession through lawful means, and was not
obtained, directly or indirectly, from the Provider or from a third party under an obligation to
keep such information confidential, (iv) comes, subsequent to such disclosure, into the Receiver’s
possession through lawful means and is not obtained, directly or indirectly, from the Provider or
from a third party under an obligation to keep such information confidential, or (v) is, subsequent
to such disclosure, independently developed by employees of the Receiver who have not received such
information.
5.5 The Confidential Information shall (i) be the confidential property of the Provider and be
treated by the Receiver strictly and without exception as such, (ii) be securely retained and
protected by the Receiver without any loss or misplacement throughout the period in which it is in
the Receiver’s possession, (iii) not be disclosed, directly or indirectly, by the Receiver to any
party other than the Provider without the Provider’s prior written approval, and (iv) be used by
the Receiver only for the Permitted Purpose and not for any other purpose, reason, or application
without the Provider’s prior written approval.
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5.6 The Receiver shall use at least the same degree of care to protect and keep confidential
the Provider’s Confidential Information as the Receiver uses to protect and keep confidential its
own Confidential Information. If the Receiver becomes legally compelled to disclose any of the
Provider’s Confidential Information, the Receiver shall immediately so notify the Provider in
writing so as to enable the Provider to respond to such compulsion. Each Party acknowledges that
its breach of this Agreement will cause irreparable harm to the other Party for which money damages
will not be a sufficient remedy. Accordingly, in the event of a breach of this Section 5 by either
Party, the other Party shall be entitled to equitable relief, including without limitation
injunctive relief, in addition to any other legal or equitable remedy to which such Party may be
entitled.
5.7 Upon the Provider’s request, the Receiver shall (i) immediately return to the Provider all
copies of the Provider’s Confidential Information which are in written or other tangible form,
except for that portion of such Confidential Information which consists of items (including without
limitation summaries, memoranda, correspondence, reports, notes, and other materials) that the
Receiver has generated itself based on such Confidential Information (the “Derivatives”), (ii)
immediately destroys all copies of such Confidential Information which are in any other form except
the Derivatives, and (iii) either retain and continue to protect and keep confidential the
Derivatives in compliance with this Agreement or immediately destroy all copies of the Derivatives,
as the Provider may elect. An officer of the Receiver shall prepare a written certification of
each such destruction and promptly deliver such certification to the Provider upon the completion
of each such destruction.
5.8 Period of Confidentiality. The parties agree to keep any Confidential Information, as
defined herein, confidential for the term of this Agreement and for a period of two (2) years after
the termination or expiration of the Agreement or any extension thereof. The previous statement
notwithstanding, the Receiver shall maintain the confidentiality of any information identified by
the Provider as a trade secret as long as the trade secret information remains a protectable trade
secret of the Provider.
6.0 TERM AND TERMINATION
6.1 Term. Unless terminated as provided in Section 6.2 hereof or by mutual written
consent, this Agreement shall continue in full force and effect for an initial term expiring [ * ]
years after the date hereof (the “Initial Term”), and thereafter may be renewed for successive one
(1) year terms (each a “Renewal Term”) by mutual agreement of the parties at least six (6) months
prior to the expiration of the Initial Term or any Renewal Term (collectively, the “Term”).
6.2 Termination. This Agreement may be terminated prior to expiration of the Initial Term or
any Renewal Term, as provided in Section 6.1 hereof, by prior notice to the other party as
follows:
A. By either party, immediately if the other party should fail to perform any of its
obligations hereunder and should fail to remedy such nonperformance within ninety (90) calendar
days after receiving written demand therefore;
B. By either party, effective immediately upon the liquidation, dissolution or termination of
the other party’s existence or business, or if that party becomes the subject of any voluntary or
involuntary bankruptcy, receivership or other insolvency proceedings or makes an assignment or
other arrangement for the benefit of its creditors,
C. By either party, effective immediately, if the other party should attempt to sell, assign,
delegate or transfer any of its rights and obligations under this Agreement without having obtained
the party’s prior written consent thereto except as specified in Section 7.5 herein.
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6.3 Rights of Parties Upon Termination. The following provisions shall apply upon the
termination or nonrenewal of this Agreement:
A. Hitachi shall cease all manufacturing and other activities on behalf of TomoTherapy and
shall return to TomoTherapy and immediately cease all use of Confidential Information previously
furnished by TomoTherapy and then in Hitachi’s possession. TomoTherapy, too, shall return to
Hitachi and immediately cease all use of Confidential Information previously furnished by Hitachi
and then in TomoTherapy’s possession.
B. TomoTherapy shall purchase any and all outstanding Purchase Orders and all parts and
materials that Hitachi has already placed the order with suppliers for producing the Detectors
based on the Forecasts provided by TomoTherapy for the first three months beyond the Purchase
Orders except for the case this Agreement is terminated by TomoTherapy under Section 6.2.A above.
C. Upon termination by Hitachi for any reason other than TomoTherapy’s breach pursuant to
Section 6.2 hereof, TomoTherapy shall have the opportunity to do a Last Time Buy of the Detectors
from Hitachi. The Last Time Buy request shall be in the form of a Purchase Order that identifies
the order as the Last Time Buy, and specifies the quantity and delivery schedule of the Last Time
Buy Detectors. The parties shall discuss and agree on the quantity and delivery schedule of the
Last Time Buy, with the understanding that the quantity of Detectors available for purchase by
TomoTherapy in the Last Time Buy will at minimum be equivalent to the number of Detectors ordered
during the last calendar year of the Agreement. However, should Hitachi’s reason for termination
be due to Hitachi’s inability to source certain components of the Detectors such that continued
manufacture in the absence of other intervention would make it impossible for Hitachi to fulfill
the Last Time Buy request, the parties agree to the following:
| i. | Hitachi shall notify TomoTherapy as soon as
possible about the impending supply shortage. Hitachi and TomoTherapy
will work together to try and locate an alternate source for the
components. |
| ii. | Hitachi agrees, with its commercial best effort
basis, to work with its current supplier to negotiate a similar Last Time
Buy provision to make a last purchase of the components from the supplier
in an amount equivalent to at least enough supply to provide TomoTherapy
with a number of detectors equivalent to the number of Detectors ordered
by TomoTherapy under this Agreement during the last six (6) calendar
months of the Agreement prior to termination. |
D. The following provisions survive termination or nonrenewal of this Agreement for any
reason: Section 1.3F, Section 2.2, Section 2.3, Section 3.2, Article 4.0, Article 5.0, Section
6.3, Section 7.2, Section 7.4, Section 7.6, and Section 7.8.
E. In the event TomoTherapy terminates the Agreement as the result of Hitachi’s failure to
perform or breach pursuant to Section 6.2, or in the event that Hitachi terminates or fails to
renew the Agreement based upon a decision to cease manufacture of the Detectors, the parties shall
negotiate in good faith the possibility and terms and conditions of transfer of Hitachi’s
manufacturing Know-How and any other Hitachi Intellectual Property necessary for the manufacture of
the Detectors.
7.0 GENERAL PROVISIONS
7.1 Entire Agreement. This Agreement, including the Exhibits hereto, as it may be
amended from time to time, represents the entire agreement between the parties concerning the
subject matter hereof and supersedes all prior discussions, agreements and understandings of every
kind and nature between them. Except as otherwise expressly set forth herein, no modification of
this Agreement will be effective unless in writing and signed by both parties.
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7.2 Notices. All notices under this Agreement shall be in writing and given by registered
mail, nationally recognized courier, facsimile, or by electronic transmission addressed to the
parties at the addresses set forth on the first page of this Agreement, or to such other address of
which either party may advise the other pursuant to this Section 7.2. Notices will be
deemed given when sent.
7.3 Force Majeure. Neither party shall be in default hereunder by reason of any failure
or delay in the performance of any of its obligations under this Agreement where such failure or
delay arises out of any cause beyond the reasonable control and without the fault or negligence of
non-performing party. Such causes shall include, without limitation, storms, floods, other acts of
nature, fires, explosions, riots, war, terrorism or civil disturbance, strikes or other labor
unrests, embargoes and other governmental actions or regulations which would prohibit either party
from ordering or furnishing Products or from performing any other aspects of its obligations
hereunder, delays in transportation, and liability to obtain necessary labor, supplies or
manufacturing facilities.
7.4 Severability. If any provision of this Agreement is held invalid by any tribunal in a
final nonappealable decision, such provision shall be deemed modified to eliminate the invalid element
and, as so modified, such provision shall be deemed a part of this Agreement as though originally
included. The remaining provisions of this Agreement shall not be affected by such modification.
7.5 Nonassignment. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the business interests of the parties and may be assigned by either party
only to the acquirer of substantially all of that party’s assets in conjunction with such an
acquisition, or with the written consent of the other party.
7.6 Conciliation and Arbitration. Prior to commencing any legal action, all disputes
arising between the parties concerning (a) the rights and obligations of the parties under this Agreement
or (b) any damages suffered by a party arising from a claimed breach by the other party shall be
brought before a conciliation committee of executives representing both parties. The committee
shall attempt to work out a recommendation for settlement of the dispute and transmit such
recommendation to both parties for due consideration not more than 60 days after one party gives
the other party notice that a dispute exists. Any dispute that cannot be settled amicably by
conciliation within the 60-day period shall be finally heard, settled, and decided under the Rules
of the American Arbitration Association in effect as of the Effective Date by three arbitrators
(one of whom may not be a citizen of the country of either party) appointed in accordance with such
Rules, and Wisconsin law shall govern the interpretation of this Agreement. Service of any matters
in reference to such arbitration shall be given in the manner described in Section 7.2 above. Such
arbitration shall be conducted in English using the English language text of this Agreement, and
the arbitrators shall have a demonstrated fluency in both written and spoken English. The
arbitration shall be held in New York, New York state, unless the parties shall otherwise mutually
agree. The award in such arbitration shall be final and enforceable in any court of competent
jurisdiction.
7.7 Waiver. Both parties agree that the failure of either party at any time to require
performance by the other party of any of the provisions herein shall not operate as a waiver of the
right of the party to request strict performance of the same or like provisions, or any other
provisions hereof, at a later time.
7.8 No Third-Party Beneficiaries. Nothing herein, express or implied, is intended or shall
be construed to confer upon or give to any person, other than the parties hereto and their
successors or permitted assigns, any rights or remedies under or by reason of this Agreement.
7.9 Language. The English language version of this Agreement shall at all times govern and
control the interpretation and enforcement of this Agreement notwithstanding the translation of
this Agreement into any other language.
7.10 Currency. “Yen” shall mean the legal currency of Japan. All
amounts referred to in this Agreement and the Exhibits hereto shall be paid in such currency unless
specifically expressed otherwise.
9
7.11 Recitals. The recitals hereto are an integral part of this Agreement and are incorporated
herein by reference.
7.12 Headings. Any headings used herein are for convenience in reference only and are not
a part of this Agreement, nor shall they in any way affect the interpretation hereof.
7.13 Counterparts. This Agreement may be executed simultaneously in several
counterparts, including facsimile copies, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, TomoTherapy and Hitachi have caused this instrument to be executed by their
duly authorized employees, as of the date first above written.
| TOMOTHERAPY INCORPORATED | HITACHI MEDICAL CORPORATION | |||||
By:
|
/Xxxxx Books/ | By: | /Kazuyoshi Miki/ | |||
Name:
|
Xxxxx Books | Name: | Kazuyoshi Miki | |||
Its:
|
Chief Operating Officer | Its: | Senior Vice President and Executive Officer | |||
Date:
|
June 19, 2008 | Date: | June 25, 2008 | |||
10
APPENDIX A
Procurement Specification for the Detectors
[ * ]
C-1
