EXHIBIT 10.5
Distribution Agreement
This Distribution Agreement (the "Agreement") is entered into on this [#] day of
[Month], 2001.
BETWEEN
(1) VidaMed, Inc., a Delaware corporation with offices at 00000 Xxxxxxx
Xxxxxxx, Xxxxxxxxxx, 00000, XXX ("VidaMed"); and
(2) [Company Name], a [Country and Type of Entity], having an address at
[Address] ("Distributor").
WHEREAS the parties agree as follows:
1. DEFINITIONS
1.1 "Effective Date" means the date first mentioned above.
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1.2 "Minimum Performance" means the sale during the Term of this Agreement of
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a minimum number of Products each year as set forth in Exhibit B2.
1.3 "Products" means those products listed on attached Exhibit A, which
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products may be changed, abandoned or added by VidaMed at any time, at its
sole discretion.
1.4 "Territory" means [Country].
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1.5 "VidaMed Trademarks" means the trademarks listed in Exhibit F together
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with any further trademarks and tradenames of which VidaMed may become the
proprietor on or in relation to the Products at any time during this
Agreement that VidaMed may choose to add to Exhibit F during the Term of
this Agreement.
2. APPOINTMENT
2.1 Appointment. VidaMed hereby appoints Distributor as its distributor for
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the promotion, marketing and resale of the Products in the Territory, and
Distributor agrees to act in that capacity, subject to the terms and
conditions of this Agreement. VidaMed shall not without prejudice to
Section 2.2:
(a) appoint any other person, firm or company in the Territory as a
distributor for the Products in the Territory; or
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(b) supply to any other person, firm or company in the Territory any of
the Products, whether for use or resale.
Distributor shall be entitled to describe itself as VidaMed's "Authorised
Distributor" for the Products, but shall not hold itself out as VidaMed's
agent for sales of the Products or as being entitled to bind VidaMed in
any way.
2.2 Subdistributors. Distributor may exercise its distribution rights to
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distribute Products in the Territory through the use of any third party
subdistributor ("Subdistributor") subject to:
(a) Subdistributor entering into a written agreement with Distributor
containing terms substantially similar to the restrictions on
Distributor contained in this Agreement, or (if Subdistributor is a
subsidiary of Distributor) Distributor procuring that Subdistributor
complies with the terms of this Agreement as if it were a party to
it;
(b) Distributor warrants that no person or entity shall be appointed a
Subdistributor for VidaMed products until Distributor has confirmed
that Subdistributor has met and continues to maintain the level of
training and technical expertise equal to that required of
Distributor under Section 3.5 below;
(c) The Distributor accepts full liability for the conduct and technical
competence of any Subdistributor it appoints; and
(d) Distributor shall provide within fifteen days after the end of each
calendar quarter a listing of the names of all its Subdistributors
with a report on sales activity of Subdistributors for the previous
quarter and sales projections for the current calendar quarter.
2.3 Reservation of Rights. VidaMed reserves the right to appoint other
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authorized distributors or resellers outside the Territory without
restriction as to number and location. Nothing in this Agreement shall be
construed to preclude VidaMed from marketing, selling, leasing or
servicing any of the Products outside the Territory. Distributor herewith
conveys and assigns all goodwill resulting from or attributable to
Distributor's efforts in the Territory to VidaMed. Distributor shall not
attempt to assert rights against VidaMed not permitted under this
Agreement. All rights in and to this Agreement and the Trademarks and
Tradenames stated herein not otherwise determined under this Agreement are
reserved to VidaMed.
2.4 Independent Contractors. The relationship of VidaMed and Distributor
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established by this Agreement is that of independent contractors, and
nothing contained in this Agreement shall be construed (i) to give either
party the power to direct or control the day-to-day activities of the
other or (ii) to constitute the parties as partners, joint venturers,
co-owners or otherwise as participants in a joint or common undertaking.
All financial obligations associated with
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Distributor's business are the sole responsibility of Distributor. All
sales and other agreements including appointment of any Subdistributor
between Distributor and its customers are Distributor's exclusive
responsibility and shall not affect VidaMed's obligations under this
Agreement. Distributor shall be solely responsible for, and shall
indemnify, defend and hold VidaMed harmless from, all liabilities, claims,
damages, and lawsuits arising from the acts and omissions of Distributor,
its employees, servants, agents, Subdistributor or any of them.
2.5 Conflict of interest. Distributor agrees that any efforts by Distributor
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to sell competing products in the Territory would constitute a conflict of
interest with respect to Distributor's obligations to market the Products,
and Distributor warrants that it does not currently manufacture or offer
for sale any products which compete with the Products. If Distributor
chooses to market, promote or distribute, directly or indirectly, alone,
or in any capacity with another firm, whether as an agent, consultant,
indepedent contractor, distributor, broker or otherwise, products that in
VidaMed's reasonable judgment compete with the Products, Distributor shall
notify VidaMed of its intent at least sixty (60) days prior to commencing
such activity and VidaMed shall have the right to terminate this Agreement
upon thirty (30) days notice to Distributor without any liability to
VidaMed. Failure to so notify VidaMed shall be deemed to be a material
breach of this Agreement. A product shall be deemed to compete with the
Products if it has in VidaMed's reasonable judgment substantially the same
functionality as a Product.
2.6 Territory. Distributor agrees that it shall not promote, market or
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establish any branch or maintain any distribution depot for the Products
outside of the Territory. Distributor shall promptly submit to VidaMed,
for VidaMed's attention and handling, the originals of all inquiries
received by Distributor from potential customers outside the Territory.
2.7 Sales by VidaMed. VidaMed agrees during the term of this Agreement, to the
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extent permitted by law and except as otherwise provided herein, not to
appoint any other manufacturer's representative, distributor or dealer in
the Territory as a distributor or reseller of the Products. However,
nothing contained herein will prohibit VidaMed from soliciting orders or
selling in the Territory on its own behalf should VidaMed, in its sole
discretion, determine that such is required for the adequate
representation of its Products. VidaMed does not intend to compete
directly with Distributor for orders in the Territory, but does reserve
the right to sell directly or through other outlets if Distributor is
unable or unwilling to sell and service certain customers, if the customer
is dissatisfied with services provided by Distributor, or if the customer
refuses to do business with Distributor. In that event, VidaMed may sell
to such customer directly or through others without liability to the
Distributor and VidaMed will pay to Distributor the difference between the
selling price to the customer and the standard selling price to
Distributor less any expenses incurred by VidaMed in a sale in the
Territory. VidaMed assumes no responsibility with regard to sale of
Products in the Territory by its other distributors or agents.
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2.8 Improvements and New Products. Notwithstanding any other provision of this
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Agreement, Distributor will not have any right to distribute improvements
to the Products or additional VidaMed products developed, manufactured,
produced or sold by VidaMed, which improvements or additional products
have not been included in this Agreement pursuant to Exhibit A, and
nothing contained herein will prohibit VidaMed from itself selling, or
entering into any distribution, sales agent or other agreements with other
persons, entities or organizations in the Territory for, such improvements
or additional VidaMed products.
3. OBLIGATIONS OF DISTRIBUTOR
3.1 Promotion of the Products. Distributor shall use its best efforts to
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vigorously promote the Products in the Territory and realize the maximum
sales potential for the Products in the Territory. Such promotion shall
include, without limitation, promptly responding to all inquiries from
customers, including complaints, process all orders, and effect all
shipments of the Products, diligently investigating and pursuing all leads
with respect to potential customers referred to it by VidaMed and, upon
request of VidaMed, reporting the status of such leads and inquiries,
active participation and advertisement of the Products in trade
publications within the Territory, active participation in trade shows and
exhibitions with VidaMed participation as appropriate, and direct
solicitation of orders from customers for the Products. Distributor shall
stock an adequate inventory of products as appropriate to fulfill the
demand for Products in the Territory. In no event shall Distributor make
any representation, guarantee or warranty concerning the Products except
as expressly authorized by VidaMed.
3.2 Attendance at Meetings. Distributor shall, at Distributor's own expense,
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send at least one suitably qualified representative to:
(a) attend such meetings organised by VidaMed as VidaMed shall
reasonably request, including, without limitation, the VidaMed
distributor meeting;
(b) attend each year, at least one other relevant international meeting;
and
(c) attend and provide support for the Products at appropriate medical
trade shows and congresses in the Territory, as agreed upon by
VidaMed and Distributor.
3.3 Inventory. Distributor shall, at Distributor's own expense, maintain a
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sufficient and balanced inventory of the Products at all times during the
term of this Agreement as necessary in order to meet the requirements of
any customer or potential customer within the Territory within one (1)
week after receipt by Distributor of an inquiry or purchase order from
such customer or potential customer. Distributor shall ensure at all times
proper storage and handling procedures for the Products, taking all steps
to avoid subjecting the Products to excessive heat, sunlight, humidity,
dryness, insects or animals, or other damaging conditions.
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3.4 Inventory Reports. During the term of this Agreement, within five (5) days
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after the end of each month Distributor will provide VidaMed with a report
in the form of Exhibit G listing, among other things, the quantities of
each Product sold since the last report and the quantity of each Product
currently in inventory. The report will also contain a report of
maintenance activity, including the quantities, serial or lot number of
each Product, and the number and types of failures, if any, found during
such month.
3.5 Personnel. The parties agree that the Products cannot be effectively
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marketed, supported or maintained unless Distributor hires, trains and
supports sufficient sales and technical staff to meet its obligations
under this Agreement. Therefore, Distributor shall ensure at least one
individual is trained and dedicated to supporting VidaMed Products and:
(a) employ a sufficient number of competent full time sales personnel to
promote the Products and to generate substantial sales in the
Territory. Distributor shall equip its sales personnel with adequate
training, marketing, technical and sales literature, including such
materials as may be made available by VidaMed;
(b) employ a sufficient number of full time technical staff having the
knowledge and training necessary to meet Distributor's obligations
to maintain and support the Products distributed within the
Territory;
(c) have at least one (1) of Distributor's employees who are responsible
for training others with respect to marketing and clinical use of
the Products and who shall attend at least one (1) day of training
each year by VidaMed at a location within the Territory specified by
VidaMed. If at any time Distributor employs fewer than five (5)
employees who have completed such training, Distributor shall so
notify VidaMed, and upon request by VidaMed shall have the required
number of its employees attend such training; and
(d) promptly notify VidaMed of any change in Distributor's marketing,
sales, administrative or technical support services or staff which
could affect Distributor's ability to meet its obligations under
this Agreement.
3.6 Customer and Sales Reporting. Distributor shall at its own expense and
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consistent with the marketing and distribution policies of VidaMed from
time to time:
(a) provide adequate contact with existing and potential customers
within the Territory on a regular basis, consistent with good
business practice;
(b) keep VidaMed promptly apprised of potential competitors and
competitive products in the Territory;
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(c) assist VidaMed in assessing customer requirements for the Products,
including modifications and improvements thereto, in terms of
quality, design, functional capability, and other features;
(d) submit market research information, as reasonably requested by
VidaMed, regarding competition and changes in the market within the
Territory; and
(e) provide VidaMed, as frequently as reasonably requested by VidaMed,
but not more often than once every four months, with a list of
Distributor's customers, their addresses, telephone numbers, the
quantities and types of Products purchased including the serial
numbers of each new generator sold to each new customer.
3.7 Books and Records. Distributor shall maintain and make available to
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VidaMed accurate books, records, and accounts relating to the business of
Distributor subject to the European Community's Medical Devices Directive
relating to the Products.
3.8 Right of Inspection. Subject to agreement with the Distributor, VidaMed
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shall have the right, upon reasonable notice and during normal business
hours, to inspect Distributor's place of business and records for the
purpose of determining that Distributor is meeting its obligations under
this Agreement. This right will be restricted to matters relating to
VidaMed and its products and such other inspection as may be reasonably
required to check Distributor's compliance with Section 2.5.
3.9 Import Permits. Distributor shall be responsible for obtaining the
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appropriate licenses or permits required to import Products into each
destination country in the Territory. To the extent permitted by law
within the Territory, all such licenses and permits shall specify VidaMed
as the approved entity for importation of the Products in the Territory,
and VidaMed shall have the exclusive rights to all such licenses or
permits if this Agreement is terminated for any reason.
3.10 Registrations, Licenses and Permits. Distributor shall be responsible, at
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its expense, for obtaining any registrations, licenses and permits
required to comply with the laws and regulations of each county in the
Territory for sale and distribution of the Products and the conduct of its
business operations in accordance with this Agreement; provided, however,
that such activities shall be conducted in VidaMed's name and on VidaMed's
behalf, and no activities in connection with obtaining such registrations,
licenses or permits shall be initiated by Distributor without VidaMed's
prior written approval. In particular, the Distributor shall register the
Product and its approvals with the Distributor's national regulatory body
in VidaMed's name, and provide VidaMed evidence of such registration. In
the event that all necessary registrations, licenses and permits required
to sell and distribute the Products in the Territory are not obtained
within six (6) months after the Effective Date of this Agreement,
Distributor and VidaMed jointly shall review all actions taken and
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determine what further actions, if any, should be undertaken. VidaMed
shall have the exclusive right to use all such registrations, licenses or
permits if this Agreement is terminated for any reason.
3.11 Health and Safety Laws and Regulations. Distributor shall comply fully
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with any and all applicable health and safety laws and regulations of the
Territory as they relate to the Products. In addition, Distributor shall
monitor the appropriate information sources closely for changes in such
laws and regulations, and other requirements in the Territory relating to
the distribution of Products in the Territory, and notify VidaMed promptly
in writing of any and all such changes.
3.12 Preclinical and Clinical Trials. Distributor shall assist and support
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VidaMed in organizing and conducting preclinical and clinical trials
required to obtain registrations, licenses and permits required to comply
with the laws and regulations of the Territory for sale and distribution
of the Products; provided, however, that no activities in connection with
organizing and conducting such trials shall be initiated by Distributor
without VidaMed's prior written approval.
3.13 Representations. Distributor shall not make any false or misleading
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representations or statements to customers or others regarding VidaMed or
the Products. Distributor shall not make any representations, warranties
or guarantees with respect to the specifications, features or capabilities
of the Products that are not consistent with VidaMed's documentation
accompanying the Products or VidaMed's literature describing the Products,
including VidaMed's standard limited warranty and disclaimers. Distributor
shall hold VidaMed harmless from and indemnify it against any liability
which may arise out of, or result from, any such false representation.
3.14 Finances. Distributor shall maintain a net worth and working capital
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sufficient, in VidaMed's reasonable judgment, to enable Distributor to
perform and discharge fully and faithfully Distributor's obligations under
this Agreement. At the request of VidaMed, Distributor shall provide
financial data and credit information concerning Distributor, including
but not limited to a current balance sheet and statement of operations and
banking and credit references.
3.15 Insurance. Distributor shall insure, at its own cost, with a reputable
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insurance company, all stocks of the Products as are held by it against
all risks to at least the full replacement value of such stocks and to
produce to VidaMed on demand full particulars of such insurance and the
receipt for the then current premium.
3.16 Changes to Distributor's Business. Distributor shall inform VidaMed
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immediately of any changes in Distributor's organisation or method of
doing business which might affect the performance of Distributor's duties
under this Agreement.
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3.17 Customer Complaints. Upon receipt of any customer complaint regarding the
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Product, Distributor shall complete the Product Complaint Notification
Form attached in Exhibit G and send such form to VidaMed within one (1)
day of receipt of such complaint. Distributor shall establish and maintain
a complaint file of all Product Complaint Notification Forms sent by
Distributor to VidaMed and any other information, including written and
oral communications, received by Distributor concerning a complaint
regarding the Product, including without limitation any complaint
involving a death or serious injury involving the use of the Product or
any malfunction of the Product.
3.18 Records and Recall. Distributor shall maintain complete and accurate
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records of all Products sold by Distributor and shall maintain and provide
such other records and reports as VidaMed may reasonably request.
Distributor shall notify VidaMed immediately and confirm such notice in
writing if it obtains information indicating that any of VidaMed's
Products may have to be recalled, either by virtue of applicable law or
good business judgment. In the event of a recall of any of the Products,
Distributor shall cooperate fully with VidaMed in effecting such recall,
including without limitation, promptly contacting any purchasers that
VidaMed desires to be contacted and promptly communicating to such
purchasers the information or instructions VidaMed desires to be
transmitted, all of which will be provided by Distributor at its own
expense. Distributor agrees to comply with any and all traceability
programs in effect at any time as initiated by VidaMed. VidaMed may
examine and make transcripts of any records required as part of a
traceability program at reasonable times during business hours.
4. OBLIGATIONS OF VIDAMED
4.1 Supply of Supporting Documents and Information. VidaMed shall make
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available to the Distributor all data documents and information relating
to the Products which the Distributor reasonably requires to enable it to
carry out its obligations under Section 3.10.
4.2 Supply of Promotional Material. VidaMed shall make available to
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Distributor a reasonable amount of promotional material developed by
VidaMed (e.g., brochures, data sheets, advertising materials), at
VidaMed's standard charges to distributors for such items. Distributor
shall not translate any manuals or written materials supplied by VidaMed
without VidaMed's prior written approval. VidaMed shall have a right of
prior approval of any sales promotion materials, sales aids or
advertisements pertaining to Products which the Distributor intends to use
or publish in the Territory.
4.3 Joint Marketing Campaign. VidaMed shall agree with Distributor a joint
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marketing campaign for the Territory to last for the duration of this
Agreement. Such campaign shall include advertisements and other
promotional material, seminars and conferences and such other methods of
promotion as the parties shall agree in order to effectively market the
Products in the Territory. The form and content of all methods of
promotion (and any
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alterations thereto) shall be agreed by the parties in advance. The costs
of such campaign shall be borne by Distributor unless previously agreed
otherwise by VidaMed.
4.4 Training. VidaMed shall provide the one (1) training course per year
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required under Section 3.5(c) above without charge. Additional training
shall be available at VidaMed's then-standard rates for such training.
Distributor shall pay all travel and living expenses for its own personnel
to attend such training.
4.5 Technical Support. Distributor and VidaMed shall meet regularly at a place
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appointed by VidaMed (approximately once every three to six months) to
ensure that Distributor receives adequate and necessary technical support
for Distributor's sales activities.
4.6 Telephone Marketing and Technical Support. VidaMed shall provide a
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reasonable level of telephone marketing and technical support to employees
of Distributor who have been trained by VidaMed during VidaMed's normal
business hours to answer Distributor's questions related to Products.
4.7 Product Changes. VidaMed reserves the right, in its sole discretion and
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without incurring any liability to Distributor, to:
(a) alter the specification for any Product or component thereof;
(b) discontinue the manufacture of any Product or component thereof;
(c) discontinue the development of any improvement to a Product or new
product, whether or not such improvement or product has been
announced publicly; or
(d) commence the manufacture and sale of improvements to Products or new
products having features which make any Product wholly or partially
obsolete, whether or not Distributor is granted any distribution
rights in respect of such improvement or new products.
Notwithstanding the above, VidaMed shall use reasonable efforts to provide
Distributor with prompt written notice of such decisions and will fill all
accepted purchase orders from Distributor for any such altered or
discontinued Products of which manufacturing and commercial deliveries
have commenced.
5. PRICING AND PAYMENT
5.1 Prices. VidaMed shall sell Products to the Distributor for the prices set
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out in Exhibit A. VidaMed may publish recommended resale prices in respect
of the Products but Distributor shall be free to sell, advertise and
display the Products in the Territory at whatever price Distributor shall
choose.
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5.2 Price Changes. VidaMed may revise the prices in Exhibit A at any time upon
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sixty (60) days prior written notice to Distributor. Upon notice of a
change in such prices and prior to the effective date of such change,
Distributor shall have the right to order any quantity of Product at the
price in effect prior to such change provided that Distributor agrees to
take possession of such Product within sixty (60) days of the date on
which VidaMed notified Distributor of such change.
5.3 Payment. All payments due to VidaMed hereunder shall be made in United
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States dollars and payment shall be made within sixty (60) days from the
date of invoice ( together with value added tax). Distributor must give
VidaMed written notice of any discrepancies among the purchase order, the
invoice, and the Products received, within thirty (30) days after receipt
of the Products or the invoice, whichever occurs later. Interest at the
rate of 1.5% per month, or such lesser rate as is the maximum rate of
interest permitted by law, will be charged on all overdue accounts. In the
event that Distributor fails to meet such terms of payment, in addition to
and not by way of limitation of VidaMed's other rights under this
Agreement and at law, VidaMed reserves the right at any time to alter
terms of payment so that future shipments will be made only on such basis
as VidaMed determines will ensure payment for such shipments.
5.4 Costs, Charges and Taxes. Any and all expenses, costs and charges incurred
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by Distributor in the performance of its obligations under this Agreement
shall be paid by Distributor. In addition, Distributor shall be
responsible for the collection, remittance and payment of any or all
taxes, charges, levies, assessments and other fees of any kind imposed by
governmental or other authority in respect of the purchase, sale,
importation, lease or other distribution of the Products.
5.5 Retention of Title. Title to the Products shall not pass to Distributor
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until VidaMed has received payment in full of the price therefor. Until
title in the Products has passed, Distributor shall be in possession of
the Products in a fiduciary capacity and shall not part with possession of
the Products, shall take proper care of the Products and shall keep them
free from any charge, lien or other encumbrance and store the Products in
such a way to show clearly that they belong to VidaMed.
6. PURCHASES BY DISTRIBUTOR
6.1 Marketing Plan. Distributor shall produce a marketing plan in accordance
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with Exhibit H, the first of which shall be received and approved by
VidaMed prior to the signing of this Agreement, and subsequently as part
of the sales forecast in Section 6.2 below.
6.2 Forecasts. Distributor will provide VidaMed each month with a rolling
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binding forecast of its expected unit sales of Products and revenues from
such sales during the six (6) month period beginning with the month in
which the forecast is provided to VidaMed. The first
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such forecast shall be due within five (5) days after the Effective Date,
with subsequent forecasts due on the fifth day of each calendar month
during the term of this Agreement. Distributor shall provide VidaMed each
month a completed Distributor Monthly Report in the form of Exhibit G,
which report shall contain the forecasts required to be furnished under
this Section 6.2 and such other information requested by VidaMed.
6.3 Order and Acceptance. All orders for Products submitted by Distributor
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(the "Orders") shall be initiated by written purchase orders sent to
VidaMed and requesting a delivery date, during the term of this Agreement
and providing details of all information and documents required to be
included with the Products when shipped; provided, however, that an Order
may initially be placed by facsimile if a written confirming purchase
Order is received by VidaMed within five (5) days after said facsimile
Order. The country in the Territory for all Orders shall specified in the
Order. To facilitate VidaMed's production scheduling, Distributor shall
submit purchase Orders to VidaMed at least thirty (30) days prior to the
requested delivery date. No Order shall be binding upon VidaMed until
accepted by VidaMed in writing (and VidaMed will accept or reject any
Order within fifteen (15) days after receiving it) and VidaMed shall have
no liability to Distributor with respect to purchase Orders that are not
accepted. No partial shipment of an Order shall constitute the acceptance
of the entire Order, absent the written acceptance of such entire Order.
Distributor shall accept or reject Products delivered hereunder within
thirty (30) days of receipt.
6.4 Terms of purchase orders. The purchase and delivery of Products sold by
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VidaMed to Distributor hereunder shall be governed by the terms and
conditions of this Agreement and nothing contained in any purchase order,
acknowledgment or other such document issued by either party shall in any
way modify such terms of purchase or add any additional terms or
conditions.
6.5 Minimum Purchase Commitment. Distributor agrees to the minimum annual
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purchase commitment set forth in Exhibit B, and agrees to order, pay for
and accept delivery of Products to achieve this minimum purchase
commitment. Distributor agrees to place an initial stocking order
immediately upon execution of this Agreement for shipment within thirty
(30) days, for the quantity of Products set forth in attached Exhibit B-1.
Distributor understands and agrees that the establishment and achievement
of the Minimum Performance pursuant to this Section 6.5 is the essence of
this Agreement and that any failure by Distributor to satisfy its
obligation under this Section 6.5 will entitle VidaMed to terminate this
Agreement immediately pursuant to Section 14.4, or, alternatively, VidaMed
will be entitled, in its sole discretion, to convert this Agreement into
an entirely non-exclusive distributor agreement. Termination of this
Agreement under Section 14.4 will not, under any circumstances, relieve
the Distributor of its obligation to pay any sums owed to VidaMed under
the terms of this Agreement, including without limitation the minimum
annual purchase commitment set forth in Exhibit B-2. Conversion of this
agreement to an entirely non-exclusive agreement will not, under any
circumstances, relieve the Distributor of its
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minimum annual purchase commitment set forth in Exhibit B-2 for the year
in which such conversion occurs.
6.6 Cancellation and Reschedule of Orders. Shipments of Products under order
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in accordance with this Agreement may be deferred or canceled by
Distributor, upon prior approval by VidaMed.
6.7 Shipping. Unless the parties otherwise agree in writing, all Products
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delivered pursuant to the terms of this Agreement shall be suitably packed
for shipment in VidaMed's standard shipping cartons, marked for shipment
at Distributor's address set forth below, and delivered to Distributor or
its carrier agent ex-works VidaMed's manufacturing plant or such other
shipping location as VidaMed may designate at its sole discretion, at
which time title to such Products and risk of loss shall pass to
Distributor. Unless otherwise instructed in writing by Distributor,
VidaMed shall select the carrier. All freight, insurance, and other
shipping expenses, as well as any special packing expense, shall be paid
by Distributor. Distributor shall also bear all applicable taxes, duties,
and similar charges that may be assessed against the Products after
delivery to the carrier at VidaMed's plant.
6.8 Acceptance. The Products delivered by VidaMed will be subject to
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inspection and test by Distributor, and in the event any Product is
defective in material or workmanship, Distributor shall have the right to
reject it within thirty (30) days after delivery (the "Rejection Period").
Products rejected by Distributor shall have a failure report attached, and
shall be forwarded to VidaMed freight collect. The rejected Products will
be repaired or replaced at VidaMed's option and returned to Distributor
freight prepaid. VidaMed shall use commercially reasonable efforts to
repair or replace the defective Products within thirty (30) days of its
receipt. In the event VidaMed is unable to repair or replace such
defective Products, VidaMed shall refund the purchase price paid by
Distributor for such defective Products. If rejected Products are found
not to be defective after return to VidaMed, the Products will be
reshipped to Distributor at Distributor's expense, and each such unit will
be subject to a service charge of 5%.
6.9 Returns. In the event Distributor returns to VidaMed any Product which is
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not defective, VidaMed shall charge Distributor a restocking fee upon
return of each Product equal to ten percent (10%) of the price paid by
Distributor for that Product and shall credit the balance of this price to
Distributor's account. Distributor shall be responsible for all charges
incurred in respect of the redelivery of the Products. Before returning
any Product to VidaMed for repair or servicing, Distributor shall request
a Return Material Authorization ("RMA") from VidaMed, and instructions for
returning Products, including the location for the returned Products which
shall be at VidaMeds choice, and any and all returned Products shall be
accompanied by such RMA.
7. MAINTENANCE
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7.1 Maintenance. VidaMed will provide all maintenance and repair services to
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the Distributor and end user customers for both Products under warranty
(in accordance with Section 8.1 below) and for Products whose warranty has
expired. Products whose warranty has expired shall be repaired at
Vidamed's maintenance and repair fees then in effect. Distributor shall
not, without VidaMed's prior written consent, perform any maintenance or
repairs with respect to the Products. Distributor shall request a RMA
before returning any Product for repair.
7.2 Non-Warranty Repair Service. Products that do not qualify under the
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VidaMed warranty may be returned to VidaMed for repair. Charges will be on
a time and materials basis at VidaMed's then current rates. Before
returning any Product to VidaMed for repair or servicing, Distributor
shall request a RMA from VidaMed, and instructions for returning Products,
any and all returned Products shall be accompanied by such RMA. VidaMed
shall use reasonable endeavours to ship Products sent in for repair within
thirty (30) work days of receipt. Distributor is responsible for shipping
charges to VidaMed. VidaMed will return ship by the method recommended by
Distributor. Distributor will be responsible for any charges for shipping
and handling in addition to such other reasonable charges in respect of
labour and materials as VidaMed shall from time to time require.
7.3 Problem Reporting. Distributor will keep VidaMed informed as to problems
-----------------
encountered with respect to the Products and any resolutions, and to
communicate promptly to VidaMed any and all modifications, design changes
or improvements of the Products suggested by any customer, or any employee
or agent of Distributor, and Distributor hereby assigns to VidaMed any
right, title or interest that Distributor may have in such information.
8. WARRANTY
8.1 Warranty to Distributor. VidaMed's obligations with respect to the
-----------------------
Products are strictly limited to VidaMed's standard written warranty, as
set forth in Exhibit E attached hereto (the "Warranty"). The Warranty made
and issued by VidaMed with respect to a Product in the ordinary course of
its business as of the time such Product is delivered to Distributor will
not run in favor of Distributor but will run (if at all) in favor of any
end-users purchasing Products new from or through Distributor. In the
event of a breach of the Warranty, VidaMed will, at no charge to the
customer, repair or replace all defective Products at its facilities.
Prior to returning any Product alleged to be defective, Distributor will
notify VidaMed in writing of the claimed defect and will include the model
and lot/serial number of such Product, as well as the number and date of
the invoice therefor.
8.2 Limitation. VIDAMED'S ONLY WARRANTY WITH RESPECT TO THE PRODUCTS WILL BE
----------
THE WARRANTY REFERRED TO IN SECTION 8.1 ABOVE, WHICH WILL NOT RUN IN FAVOR
OF DISTRIBUTOR BUT MAY RUN IN FAVOR OF END-USER CUSTOMERS PURCHASING
PRODUCTS NEW FROM OR THROUGH
Page 13
DISTRIBUTOR. VIDAMED EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY
OF ANY KIND OR NATURE TO DISTRIBUTOR, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
(EVEN IF THAT PURPOSE OR USE IS KNOWN TO VIDAMED) AND ALL OBLIGATIONS OR
LIABILITIES ON THE PART OF VIDAMED FOR DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THE USE, REPAIR OR PERFORMANCE OF THE PRODUCTS. In
addition, the Warranty in Section 8.1 shall not apply to Products that
have been modified or altered in any manner by anyone other than VidaMed,
which have been used in any manner other than for which the Product was
intended, or to defects caused (a) through no fault of VidaMed during
shipment or other transportation to or from Distributor; (b) by the use or
operation in an application or environment other than that intended or
recommended by VidaMed; (c) by service by anyone other than employees of,
or persons approved in writing by, VidaMed; or (d) by accident,
negligence, misuse, other than normal electrical or physical stress, or
other causes other than normal use. Replacement Products and parts
supplied under this warranty shall carry only the unexpired portion of the
original warranty.
8.3 Warranty Repair. In the event that VidaMed receives notice from
---------------
Distributor during the warranty period that a Product ("Nonconforming
Item") does not conform to its Warranty, VidaMed's sole liability, and
Distributor's exclusive remedy, shall be for VidaMed, at its sole option,
to either repair or replace the Nonconforming Item. Nonconforming Items
replaced under the terms of any such Warranty may be refurbished or new
equipment substituted at VidaMed's option. A Nonconforming Item may only
be returned with the prior written approval of VidaMed. Any such approval
shall reference a Return Material Authorization (RMA) number issued by
authorized VidaMed service personnel. Transportation costs, if any,
incurred in connection with the return of a defective Nonconforming Item
to VidaMed shall be borne by Distributor. Any transportation costs
incurred in connection with the redelivery of an Nonconforming Item to
Distributor returned in the manner provided above shall be borne by
VidaMed if actually nonconforming. In the event a returned Nonconforming
Item is found not to be Nonconforming, all costs to return such item to
Distributor shall be borne by Distributor, and such items will be subject
to a service charge of two hundred and fifty dollars (US$250), which
amounts shall be invoiced to Distributor and shall be payable within
thirty days of the date of invoice. All claims by Distributor pursuant to
the foregoing warranty shall be made in a writing (including a telecopy)
stating (1) the serial or lot number of the allegedly defective
Nonconforming Item, (2) the date such Nonconforming Item was delivered to
or installed for a customer, and (3) a reasonably detailed description of
the defect.
8.4 Disclaimer. Subject to Section 9 below and except as set forth above,
----------
VidaMed makes no warranties or conditions, expressed, implied statutory or
otherwise, respecting products, spare parts or this agreement. All
conditions, warranties and representations expressed or implied by law in
relation to the products are hereby excluded.
Page 14
9. LIMITATION OF LIABILITY
VidaMed's liability arising out of this Agreement and/or the sale of the
Product whether for negligence, breach of contract, misrepresentation or
otherwise shall in no circumstance exceed the amount paid by Distributor for the
Products in question. In no event shall VidaMed be liable for:
(a) damage to or loss of the Products or any part of them whilst in
transit;
(b) for defects in the Products caused by abnormal or unsuitable
conditions of storage or use or any act, neglect or default of the
Distributor or of any third party;
(c) the cost of procurement of substitute products by Distributor;
(d) the use of any Product in combination with an apparatus or device
not manufactured, supplied or approved by VidaMed;
(e) the use of any Product in a manner for which it was not designed or
intended to be used;
(f) any modification of any Product by Distributor or any third party
which causes it to become infringing; or
(g) (except in respect of death or personal injury caused by VidaMed's
negligence), VidaMed shall not be liable to Distributor for any
loss, damage or injury or for any indirect, punitive, special or
consequential loss or damage (whether for loss of profit or
otherwise), costs, expenses or other claims which arise out of or in
connection with the supply of the products or their use or resale by
Distributor, even if VidaMed has been advised of the possibility of
such potential loss or damage.
10. PROPERTY RIGHTS
10.1 Property rights. Except as expressly set forth herein, Distributor and
---------------
VidaMed agree that VidaMed owns all right, title, and interest in the
Products and in all of VidaMed's patents, VidaMed Trademarks, trade names,
inventions, copyrights, know-how, and trade secrets relating to the
design, manufacture, operation or service of the Products. The use by
Distributor of any of these property rights is authorized only for the
purposes herein set forth, and upon termination of this Agreement for any
reason such authorization shall cease.
10.2 No Warranty. VidaMed makes no representation or warranty as to the
-----------
validity or enforceability of the VidaMed Trademarks nor as to whether the
VidaMed Trademarks infringe upon any intellectual property rights of third
parties within the Territory.
Page 15
10.3 Use of VidaMed's Trademarks. During the term of this Agreement,
---------------------------
Distributor shall indicate to the public that Distributor is an authorized
distributor of VidaMed's Products and advertise within the Territory such
Products under the VidaMed Trademarks. Distrubutor shall not alter or
remove any VidaMed Trade Xxxx applied to the Products. Except as set forth
in this Section 10.3, nothing contained in this Agreement shall grant to
Distributor any right, title or interest in the VidaMed Trademarks. At no
time during or after the term of this Agreement shall Distributor attempt
to register any trademarks, masks or trade names confusingly similar to
the VidaMed Trademarks.
10.4 Approval of Representations. All representations of the VidaMed Trademarks
---------------------------
that Distributor intends to use shall first be submitted to VidaMed for
approval, which shall not be unreasonably withheld, of design, color, and
other details or shall be exact copies of the VidaMed Trademarks. If any
of the VidaMed Trademarks are to be used in conjunction with another
trademark on or in relation to the Products, then the VidaMed Trademarks
shall be presented equally legibly, equally prominently, and of greater
size than the other but nevertheless separated from the other so that each
appears to be a xxxx in its own right, distinct from the other xxxx.
10.5 Sale Conveys no Right to Manufacture Copy or Modify. The Products are
---------------------------------------------------
offered for sale and are sold by VidaMed subject in every case to the
condition that such sale does not convey any license, expressly or by
implication, to manufacture, duplicate or otherwise copy or reproduce or
modify any of the Products. Distributor shall take appropriate steps with
Distributor's customers, as VidaMed may request to inform them of and
assure compliance with the restrictions contained in this Section 10.5
10.6 Notice and Assistance. Distributor shall, at the expense of VidaMed, take
---------------------
all such steps as VidaMed may reasonably require to assist VidaMed in
maintaining the validity and enforceability of the VidaMed Trademarks and
any other intellectual property of VidaMed during the term of this
Agreement. In addition, Distributor shall promptly and fully notify
VidaMed of any actual, threatened or suspected infringement in the
Territory of any VidaMed Trade Xxxx or other intellectual property of
VidaMed which comes to Distributor's notice and Distributor shall, at the
request and expense of VidaMed, do all such things as may be reasonably
required to assist VidaMed in taking or resisting any proceedings in
relation to any such infringement or claim.
10.7 Patent Marking. Distributor shall not remove from the Products any patent
--------------
notices marked on the Products, and shall label the packaging materials of
the Products with such patent notices as VidaMed may request.
11. INDEMNITY
Page 16
11.1 Intellectual Property Indemnity. VidaMed shall indemnify, defend and hold
-------------------------------
Distributor harmless against all liabilities and expenses paid to third
parties as a result of any claim or suit for an alleged direct
infringement of any third party intellectual property rights arising from
the sale or use by Distributor of the Products as contemplated herein;
provided that Distributor (a) promptly notifies VidaMed of the claim, (b)
grants VidaMed full control over the defence or settlement thereof and (c)
cooperates fully with VidaMed, at VidaMed's request and expense, in
defence thereof. If a Product is, or in the opinion of VidaMed may become,
the subject of any claim or suit for infringement of any such rights, then
VidaMed may, at its option and expense: (i) procure for Distributor the
right to distribute or use, as appropriate, such Product; or (ii) modify
or replace the Product, or part thereof, with other suitable Products or
parts that are substantially equivalent in functionality and performance;
or (iii) accept return of such Product, or part thereof, and refund the
aggregate payments paid therefor by Distributor, less a reasonable sum for
use and damage as amortized over a forty-eight (48) month period.
Notwithstanding the above, VidaMed shall not be liable for any costs or
expenses incurred without its prior written authorization.
11.2 Limitation. Notwithstanding the provisions of Section 11.1 above, VidaMed
----------
assumes no liability for (i) any infringement claims with respect to any
product or process in or with which any of the Products may be used but
not covering the Products standing alone; (ii) any trademark infringements
involving any marking or branding not applied by VidaMed or involving any
marking or branding applied at the request of Distributor; or (iii) the
modification of the Products, or any part thereof, unless such
modification was made by VidaMed.
11.3 Entire Liability. The foregoing provisions of this Section 11 states the
----------------
entire liability and obligation of Vidamed and the exclusive remedy of
Distributor and its customers, with respect to any alleged infringement of
patents or other intellectual property rights by the Products or any part
thereof. All warranties of non-infringement, statutory, implied or
otherwise, are hereby expressly disclaimed.
11.4 Insurance. Each party will carry product liability insurance covering any
---------
loss, damage, expense or liability incurred or suffered by any party other
than VidaMed and Distributor arising out of any use of a Product. Such
policy or policies will (a) have aggregate limits of liability of not less
than $1,000,000 with respect to any incident or occurrence and of not less
than $10,000,000 in the aggregate; (b) name both VidaMed and Distributor
as insured parties; (c) provide for a deductible or retained amount of not
more than $25,000; and (d) provide that such policy may not be canceled
except upon not less than 30 days' written notice to both VidaMed and
Distributor. Each party will provide such evidence of the effectiveness of
such insurance to the other party as may be reasonably requested.
12. CONFIDENTIALITY
Page 17
Distributor acknowledges that by reason of Distributor's relationship to
VidaMed hereunder Distributor will have access to certain information and
materials concerning VidaMed's business, plans, customers, technology and know
how and products that are confidential and of substantial value to VidaMed,
which value would be impaired if such information were disclosed to third
parties. Distributor agrees that Distributor will not use in any way for
Distributor's own account or the account of any third party, nor disclose to any
third party, any such confidential information revealed to Distributor by
VidaMed. Distributor shall take every reasonable precaution to protect the
confidentiality of such information. Upon request by Distributor, VidaMed shall
advise whether or not VidaMed considers any particular information or materials
to be confidential. Distributor shall not publish any technical description of
the Products beyond the description published by VidaMed (except to translate
that description into appropriate languages for the Territory). In the event of
termination of this Agreement, there shall be no use or disclosure by
Distributor of any confidential information of VidaMed, and Distributor warrants
that it shall not at any time manufacture any compositions, devices, components
or assemblies utilizing any of VidaMed's confidential information. Upon request
of VidaMed or termination of this Agreement, Distributor shall return all such
Confidential Information to VidaMed.
13. COMPLIANCE WITH LAW
13.1 Export Control Regulations. Any and all obligations of VidaMed to provide
--------------------------
the Products, as well as any technical assistance, shall be subject in all
respects to such United States laws and regulations as shall from time to
time govern the license and delivery of technology and products abroad by
persons subject to the jurisdiction of the United States, including the
United States Foreign Assets Control Regulations, Transaction Control
Regulations and Export Control Regulations, as amended, and any successor
legislation issued by the Department of Commerce, International Trade
Administration, or Office of Export Licensing. Without in any way limiting
the provisions of this Agreement, Distributor agrees that, unless prior
authorization is obtained from the office of Export Licensing, it shall
not export, reexport, or transship, directly or indirectly, to country
groups Q, S, W, Y, or Z (as defined in the Export Administration
Regulations), or Afghanistan or the People's Republic of China (excluding
Taiwan) any of the technical data disclosed to Distributor or the direct
product of such technical data.
13.2 Governmental Consent. Distributor represents and warrants that, as of the
--------------------
Effective Date of this Agreement, no consent, approval or authorization
of, or designation, declaration or filing with, any governmental authority
in the Territory which has not been made or obtained by Distributor prior
to the Effective Date is required in connection with the valid execution,
performance and delivery of this Agreement. Distributor shall be
responsible for timely filings of this Agreement with any required
government agencies or commissions in the Territory. In the event any such
agency or governmental entity objects to or disapproves of this Agreement
or any provision hereof, VidaMed shall have the right to immediately
terminate the Agreement.
Page 18
13.3 Currency Control. Distributor represents and warrants that, on the
----------------
Effective Date of this Agreement, no currency control laws applicable in
the Territory prevent the payment to VidaMed of any sums due under this
Agreement.
13.4 Foreign Corrupt Practices Act. In conformity with the United States
-----------------------------
Foreign Corrupt Practices Act and with VidaMed's established corporate
policies regarding foreign business practices, Distributor and its
employees and agents shall not directly or indirectly make an offer,
payment, promise to pay, or authorize payment, or offer a gift, promise to
give, or authorize the giving of anything of value for the purpose of
influencing an act or decision of an official of any government within the
Territory or the United States Government (including a decision not to
act) or inducing such a person to use his influence to affect any such
governmental act or decision in order to assist VidaMed in obtaining,
retaining or directing any such business.
13.5 Intellectual Property Rights Registrations. Distributor shall promptly
------------------------------------------
notify VidaMed in writing of, and shall assist VidaMed with any
registrations or filings required to obtain patent, copyright, trademark
or other intellectual property rights protection, in VidaMed's name, for
the Products in the Territory under applicable law. VidaMed shall be
responsible for all fees or expenses incurred in connection with such
intellectual property rights registrations or filings.
13.6 Non-Compliance as Material Default. Non-compliance by Distributor or its
----------------------------------
employees or agents with this Section 13 shall be deemed to constitute a
material default under this Agreement.
14. TERM AND TERMINATION
14.1 Term. This Agreement shall continue in force until [DATE] unless
----
terminated earlier under the provisions of this Section 14. At the end of
such term, this Agreement shall terminate automatically without notice
unless prior to that time the parties have agreed in writing to renew the
Agreement.
14.2 Termination for Cause. If either party defaults in the performance of any
---------------------
material provision of this Agreement, then the non-defaulting party may
give written notice to the defaulting party that if the default is not
cured within sixty (60) days the Agreement shall be terminated. If the
non-defaulting party gives such notice and the default is not cured during
such sixty-day period, then the Agreement shall automatically terminate at
the end of that period.
14.3 Termination for Insolvency. This Agreement shall terminate, without
--------------------------
notice, (i) upon the institution by or against Distributor of insolvency,
receivership or bankruptcy proceedings or any other proceedings for the
settlement of Distributor's debts, (ii) upon Distributor's making an
assignment for the benefit of creditors, or (iii) upon Distributor's
dissolution.
Page 19
14.4 Low Orders. VidaMed shall have the option to terminate this Agreement with
----------
immediate effect at any time within three months after the end of any of
the calendar years specified in Exhibit B2 if the Minimum Performance for
that year, as specified in that Exhibit, has not been achieved.
14.5 Failure to Pay Invoices. VidaMed shall have the option to terminate the
-----------------------
Agreement with immediate effect at any time Distributor has an outstanding
account balance due to VidaMed which is more than 60 days past due.
14.6 Force Majeure. Either party may terminate this Agreement by giving written
-------------
notice to the other party should an event of Force Majeure (as defined in
Section 15.3 below) prevent such other party's performance under this
Agreement for a period of 90 consecutive days as more specifically
provided in Section 15.3 below.
14.7 Limitation on Liability. It is expressly understood and agreed that the
-----------------------
right of termination set forth in this Section 14 is absolute, and that
the parties have considered the possibility of such termination and the
possibility of loss and damage resulting therefrom in making expenditures
related to the performance of this Agreement. It is the express intent and
agreement of the parties that neither party, except as otherwise provided
in this Agreement, shall be liable to the other for compensation,
reimbursement or damages on account of the loss of prospective profits or
anticipated sales or on account of expenditures, inventory, investments,
leases or commitments in connection with the business or goodwill of
VidaMed or Distributor by reason of the termination of this Agreement in
accordance with its terms.
14.8 Effect of Termination.
---------------------
(a) Distributor shall be permitted for a period of six (6) months
following termination to sell and distribute such stocks of the
Products as it may at the time of termination of this Agreement have
in its possession or under its control. At the end of such period,
Distributor shall give VidaMed the right to repurchase Distributor's
remaining inventory of Products that have not expired, are in their
original packaging and are in marketable condition (if any) at the
prices Distributor paid for such Products less any shipping and
packaging charges and taxes and less a 25% restocking fee, FCA
(Incoterms 1990) VidaMed's facility. VidaMed may deduct any amounts
owed to it by Distributor, whether for payment of Products or
otherwise, from the amount due Distributor for the repurchase by
VidaMed of such inventory of Products.
(b) Termination shall not, under any circumstances, relieve the
Distributor of its obligation to pay any sums owed to VidaMed under
the terms of this Agreement, including without limitation the
minimum annual purchase commitment set forth in Exhibit B-2.
Page 20
(c) Upon expiration or termination of this Agreement, VidaMed may cancel
any or all unfilled orders.
(d) Within 15 days of the effective date of termination of this
Agreement, Distributor shall furnish VidaMed a list of names of
customers who have purchased Products within the last 36 months and
information on the status of all sales efforts related to the
Products at the time of such termination. The information required
to be furnished under this Section 14.8(d) shall not be deemed
proprietary information of Distributor.
(e) Within thirty (30) days after expiration or the termination of this
Agreement, Distributor shall return all samples, instruction books,
technical pamphlets, catalogues, advertising materials,
specifications and other materials, documents or papers whatsoever
sent to Distributor and relating to VidaMed's business at VidaMed's
expense. Distributor shall not make, use, dispose of or retain any
copies of any confidential items or information which may have been
entrusted to Distributor.
(f) Upon expiration or termination of this Agreement, Distributor shall
immediately cease to use the VidaMed Trademarks and any other
intellectual property rights of VidaMed and the license granted
pursuant to Section 10.1 shall immediately terminate.
(g) Sections 9, 10, 11, 12, 13, 14 and 15 shall survive expiration or
termination of this Agreement for any reason.
15. GENERAL PROVISIONS
15.1 Choice of Language. The original of this Agreement has been written in
------------------
English. Distributor hereby waives any right it may have under the law of
Distributor's country to have this Agreement written in the language of
Distributor's country.
15.2 Waiver. Any delay or omission by either party to exercise any right or
------
remedy under this Agreement shall not be construed to be a waiver of any
such right or remedy or any other right or remedy hereunder. All of the
rights of either party under this Agreement shall be cumulative and may be
exercised separately or concurrently.
15.3 Force Majeure. Neither party shall be liable to the other for its failure
-------------
to perform any of its obligations hereunder during any period in which
such performance is delayed by circumstances beyond its reasonable control
including, but not limited to, fire, flood, earthquake, war, embargo,
strike, riot, inability to secure materials and transportation facilities,
failure of suppliers, or the intervention of any governmental authority
("Force
Page 21
Majeure"). If either party is affected by Force Majeure, it shall
forthwith notify the other of the nature and extent thereof. If such Force
Majeure shall continue for more than ninety (90) consecutive days, the
party injured by the inability of the other to perform shall have the
right upon written notice to either (1) terminate the Agreement, or (2)
treat this Agreement as suspended during the delay and reduce any
commitment in proportion to the duration of the delay.
15.4 Publicity. Neither party shall issue press release or similar public
---------
disclosure of any nature regarding this Agreement without the other
party's prior written approval, which approval shall not be unreasonably
withheld. However, such approval shall be deemed to have been given to the
extent such disclosure is required by professional business advisors and
financing sources of VidaMed, Distributor, or to comply with governmental
requirements.
15.5 Headings. The headings used in this Agreement are inserted for convenience
--------
only and shall not affect the construction or interpretation of any
provision.
15.6 Notices. Any notice required or permitted by to this Agreement shall be
-------
made in writing. All notices shall be sent by registered or certified
mail, return receipt requested, or by commercial carrier, in each case
postage prepaid. All such notices shall be deemed to have been given three
(3) days after dispatch in such manner, addressed as shown below or to
such other address as a party may indicate by notice:
To VidaMed: To Distributor:
00000 Xxxxxxx Xxxxxxx [XXXX XX XXXXXXXXXXX]
Xxxxxxx, XX 00000 XXX [ADDRESS]
Tel: (000) 000-0000 [ADDRESS]
Fax: (000) 000-0000 Tel: [TELEPHONE #]
Attn: President and CEO Fax: [FAX #]
Attention: [NAME OF CONTACT]
15.7 Severability. If any provision of this Agreement is held invalid by any
------------
law, rule, order or regulation of any government, or by the final
determination of any court of competent jurisdiction, such invalidity
shall not affect the enforceability of any other provisions not held to be
invalid.
15.8 Non-Assignability and Binding Effect. A mutually agreed consideration for
------------------------------------
VidaMed's entering this Agreement is the reputation, business standing,
and goodwill already honored and enjoyed by Distributor under
Distributor's present ownership, and, accordingly,
Page22
Distributor agrees that Distributor's rights and obligations under this
Agreement may not be transferred or assigned directly or indirectly
without the prior written consent of VidaMed. VidaMed may assign this
Agreement in connection with the sale of all or substantially all of its
business assets relating to this Agreement, whether by merger, sale or
otherwise. Subject to the foregoing sentence, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
successors and assigns.
15.9 Relationship. This Agreement does not make either party the employee,
------------
agent or legal representative of the other for any purpose whatsoever. In
fulfilling its obligations pursuant to this Agreement each party will be
acting as an independent contractor. This Agreement will not be construed
in any way to deem Distributor an agent or franchisee of VidaMed for any
purpose whatsoever. Distributor acknowledges that it has paid no fee or
other consideration for any right under this Agreement. It is the express
intent of the parties, pursuant to their right to freedom of contract,
that this Agreement will govern the obligations of each to the other and
the right of each resulting from such relationship and that no federal or
state franchise law or any other law purporting to alter the relationship
between VidaMed and Distributor, presently in force or hereafter enacted,
may apply to the rights and obligations of and between the parties under
this Agreement.
15.10 Entire Agreement. This Agreement with its Exhibits, sets forth the entire
----------------
agreement and understanding of the parties relating to the subject matter
herein and supersedes all prior discussions and negotiations, whether oral
or written, between them. No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, shall be
effective unless in writing signed by the party to be charged.
15.11 Counterparts. This Agreement may be executed in two or more counterparts,
------------
each of which shall be deemed an original and all of which together shall
constitute one instrument.
16. GOVERNING LAW AND ARBITRATION.
16.1 Governing Law. This Agreement shall be governed by, construed and
-------------
interpreted in accordance with the law of the State of California, without
regard to its choice of law rules.
16.2 Arbitration. Any dispute, controversy or claim arising out of or relating
-----------
to this Agreement, or the breach, termination or invalidity thereof, shall
be finally settled by arbitration in accordance with the commercial
arbitration rules of the International Chamber of Commerce in effect on
the date of this Agreement by a single arbitrator who shall be experienced
in the medical device industry and who shall be appointed in accordance
with such rules. The place of arbitration shall be San Francisco,
California. The arbitration shall be conducted in the English language. No
provision hereof will prevent VidaMed at any time from bringing emergency
or temporary actions or obtaining court or administrative orders or
injunctions to protect its rights to its Products, its intellectual
property, product certifications, and
Page 23
Distributor will be responsible for all costs and expenses incurred by
VidaMed in connection with such proceedings if VidaMed is successful in
obtaining any such protective action.
Page 24
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE DULY EXECUTED THIS AGREEMENT
EFFECTIVE AS OF THE DATE FIRST SET FORTH ABOVE.
for and on behalf of )
VIDAMED, INC. ) By
) ------------------------
------------------------
Authorised Signatory
Title:
------------------------
for and on behalf of )
[NAME OF DISTRIBUTOR] ) By
) ------------------------
)
------------------------
Authorised Signatory
Title:
------------------------
Page 25
