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EXHIBIT 10.27
DISTRIBUTION AGREEMENT
This Distribution Agreement ("Agreement"), effective May 1, 1997, is
entered into by and between ORIGIN MEDSYSTEMS, INC., 000 Xxxxxxxxxxxx Xxxxx,
Xxxxx Xxxx, Xxxxxxxxxx, 00000, XXX, hereinafter called "ORIGIN", and LIFEQUEST
MEDICAL, INC., whose principal place of business is 0000 XxXxxxxxxx Xxxxxxx,
Xxx Xxxxxxx, Xxxxx, 00000, XXX, hereinafter called "DISTRIBUTOR."
RECITALS
A. ORIGIN has established an excellent worldwide reputation as a
manufacturer and seller of high quality lines of medical products which have
been sold and used successfully throughout the world.
B. DISTRIBUTOR has acquired two of Origin's existing distributors,
Xxxxx Medical, Inc. ("Xxxxx") and Xxx-U-Med, and desires to sell ORIGIN
products to the accounts and in the territories that those distributors sold
ORIGIN products, and to certain other accounts and in certain other
territories.
C. DISTRIBUTOR represents that it and each of Distributor's
representatives identified on Exhibit A (the "Representatives') have the
capability and resources to promote and sell ORIGIN products in those accounts
and territories listed on Exhibit A hereto, hereinafter referred to as the
"Primary Area of Responsibility," and to fulfill the needs and requirements of
customers for ORIGIN products there.
D. ORIGIN desires to appoint DISTRIBUTOR to promote, sell and
distribute ORIGIN products in the Primary Area of Responsibility in accordance
with the terms and conditions stated herein.
AGREEMENT
IN CONSIDERATION OF THE FOREGOING, it is mutually agreed by and between
the parties as follows:
1. Termination of Existing Agreements; Grant.
(a) ORIGIN and DISTRIBUTOR hereby agree that the distribution
agreements between ORIGIN and Xxxxx dated November 25, 1996, and between ORIGIN
and Val-U-Med dated August 8, 1996, are hereby terminated and are of no further
force and effect.
(b) ORIGIN hereby grants to DISTRIBUTOR THE right to purchase
from ORIGIN those products identified pursuant to Paragraph 2 of this
Agreement, for sale in the Primary Area of Responsibility. DISTRIBUTOR, through
the Representatives, shall have the exclusive rights to sell the products to
the accounts and areas identified in the Distributor Territory Addendum(a)
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attached as Exhibit A hereto. ORIGIN appoints DISTRIBUTOR, through the
Representatives, as its representative in the Primary Area of Responsibility to
promote, sell, market, and distribute ORIGIN products there. DISTRIBUTOR hereby
accepts the appointment and agrees to represent ORIGIN on the terms and
conditions set forth herein. ORIGIN shall make available for purchase by
DISTRIBUTOR sufficient quantities of products from those available for sales to
meet DISTRIBUTOR's reasonable needs and requirements in order to fulfill the
terms and conditions of this Agreement. ORIGIN and DISTRIBUTOR may add
additional accounts and/or territories to the Primary Area of Responsibility by
both parties executing a revised or new Distributor Territory Addendum.
(c) ORIGIN shall have the right to make sales directly to
customers other than those listed in attached Exhibit A, which is incorporated
herein by reference and made apart hereof. In addition, ORIGIN may sell
private-labeled ORIGIN products directly or through others in the Primary Area
of Responsibility.
(d) DISTRIBUTOR and ORIGIN agree that the forecast attached
with the Distributor Territory Addendum as Exhibit A hereto represents the
forecast for each Representative in his area of responsibility identified on
Exhibit A for calendar year 1997 for the total amount (in U.S. Dollars) of
products to be purchased by DISTRIBUTOR from ORIGIN during each month of the
1997 calendar year of this Agreement ("Annual Purchase Commitment"). For each
calendar year after 1997 that this Agreement is in effect, DISTRIBUTOR and
ORIGIN shall mutually agree in writing on a reasonable Annual Purchase
Commitment for the following year. Failure to do so will result in a
probationary three (3) month period. After the probationary period, ORIGIN
shall have the right, at anytime, to terminate DISTRIBUTOR's exclusive right to
sell ORIGIN products in all or any portion of the Primary Area of
Responsibility by notifying DISTRIBUTOR OF such termination.
If a Representative fails to purchase enough Products to satisfy the
sales forecast for his accounts and/or area in any calendar quarter, ORIGIN
shall have the right, at anytime by providing written notice to DISTRIBUTOR, to
terminate this Agreement as to the accounts and/or area covered by that
Representative as set forth on Exhibit A.
(e) DISTRIBUTOR agrees to use its best efforts to develop a
market for ORIGIN products and to enhance ORIGIN's image in the marketplace as
a provider of quality products. At the beginning of each calendar year,
DISTRIBUTOR and ORIGIN shall mutually agree in writing on the sales promotion
activities and performance criteria to be met by DISTRIBUTOR for that calendar
year. DISTRIBUTOR shall provide ORIGIN with information concerning products,
competitors, competitor prices, marketing programs and strategies, and with
unit sales reports by customer, ORIGIN product inventory, key accounts and
DISTRIBUTOR business plans. DISTRIBUTOR shall provide ORIGIN with an annual
analysis of the market, including total market size, market share data and
competitive activities. Such information shall, be provided to enable ORIGIN to
assist DISTRIBUTOR in fully developing the market demand for ORIGIN products
and
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in developing appropriate marketing and business plans for the mutual advantage
of DISTRIBUTOR AND ORIGIN.
2. Products.
The products covered by this Agreement are ORIGIN products, as
identified on attached Exhibit D, which is incorporated herein by reference and
made a part hereof, to be sold in the Primary Area of Responsibility as of the
date of this Agreement. If ORIGIN, in its sole discretion, decides to make a
new product available for sales in the Primary Area of Responsibility, ORIGIN
will discuss with DISTRIBUTOR the addition of such product to this Agreement.
In the event ORIGIN decides not to add the product to this Agreement, or if
DISTRIBUTOR decides that it does not want to add the product to this Agreement,
ORIGIN shall have the right to have the product distributed by another
representative. ORIGIN has the right, at its sole discretion, to add to, delete
from or otherwise modify Exhibit D, except those products listed on Exhibit E,
upon thirty (30) days prior written notice to DISTRIBUTOR. ORIGIN may also
discontinue one or more of the products listed oil Exhibit E, but only if
ORIGIN discontinues manufacture of such product.
3. Prices.
(a) Prices to DISTRIBUTOR shall be in United States dollars
and, initially, according to Exhibit C. ORIGIN shall I not increase the prices
during calendar year 1997 without DISTRIBUTOR's written permission. After
calendar year 1997, changes in price may be made by ORIGIN, subject to thirty
(30) days' notice in advance to DISTRIBUTOR; provided, however, that any
increase in 1998 shall not be greater than two and one-half percent (2.5%) of
the calendar year 1997 prices.. All prices are calculated for delivery F.O.B.
destination. Prices to DISTRIBUTOR do not include any federal, state or local
taxes that may be applicable to products. When ORIGIN has the legal obligation
to collect such taxes, the appropriate amount shall be added to DISTRIBUTOR's
invoice and paid by DISTRIBUTOR unless DISTRIBUTOR provides ORIGIN with a valid
tax exemption certificate authorized by the appropriate taxing authority.
(b) The difference in the cost to DISTRIBUTOR of ORIGIN
products and the selling priced charge by DISTRIBUTOR to its customers
represents a payment to DISTRIBUTOR for the following: sales commission,
promotional allowance, compensation for development of goodwill, for
development and maintenance of a sales organization, and/or allowance for
in-service training and other user education.
(c) Pursuant to this Agreement the DISTRIBUTOR will submit
purchase orders for the products ("Purchase Orders"). Such Purchase Orders
shall be subject to the terms and conditions contained herein.
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4. Payment
Full payment to ORIGIN of DISTRIBUTOR's purchase price (including
any freight, taxes or other applicable costs) shall be made in the United
States in United States dollars within thirty (30) days of the date of ORIGIN's
invoice to DISTRIBUTOR. Payments not made when due will bear interest at the
rate of 12% per year or the maximum amount permitted by law, whichever is less.
5. Diligence and Conflict of Interest
(a) DISTRIBUTOR shall exercise due diligence and its best
efforts in promoting and selling ORIGIN products within the Primary Area of
Responsibility, and to enhance, develop, and expand the popularity of, and
demand for, ORIGIN products. DISTRIBUTOR shall promote the products of other
companies only if such promotion will not, in ORIGIN's sole judgment, prejudice
ORIGIN's business interests or create a conflict of interest in handling
ORIGIN's confidential or proprietary information. Immediately prior to the
execution of this Agreement, DISTRIBUTOR shall provide ORIGIN with a list of
the companies and products that it currently represents and shall notify ORIGIN
in writing of any new companies or products at such time as its promotion of
those new companies or products commences.
(b) DISTRIBUTOR shall maintain the financial capability to
perform the Distribution Agreement and shall, at its own expense, establish and
maintain sales, marketing and distribution, organization and personnel of
sufficient size to adequately and effectively sell ORIGIN products in the
Primary Area of Responsibility.
(c) DISTRIBUTOR shall maintain adequate and accurate books and
records with respect to he sale or distribution of ORIGIN products. DISTRIBUTOR
is responsible for maintaining lot number traceability, so as to know which
customers received which lot numbers of product. ORIGIN shall have the right
during reasonable business hours, to inspect the facilities of DISTRIBUTOR
which are used or provided in connection with the sale, administration and
stocking of ORIGIN products, and to inspect such books and records. Upon
termination of this Agreement, DISTRIBUTOR shall, within thirty (30) days of
written request from ORIGIN, furnish a list, by name and address, of all
customers and users of ORIGIN products made or supplied by DISTRIBUTOR during
the term of this Agreement.
(d) DISTRIBUTOR shall provide in-service training for
personnel of customers acquiring ORIGIN products and shall provide necessary
user education for such personnel. ORIGIN shall provide DISTRIBUTOR with
marketing and technical information concerning the products as well as
reasonable quantities of brochures, instructional material, advertising
literature and other product data, provided that all such material will be
printed in the English language. In addition, ORIGIN will supply each
Representative with up to one thousand dollars ($ 1,000) per month in sample
products. The price for such sample products shall be one-half (50%) of the
regular price of such products. The Representative must indicate that the
products being purchased are sample products at the time he or she makes the
purchase, and no part of the one thousand dollars ($ 1,000) per month limit
will carry over from month-to-month.
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(e) Within 10 days of the end of each calendar month,
DISTRIBUTOR agrees to provide ORIGIN customer service representatives with a
detailed transactional analysis of all product transactions by the
Representatives or DISTRIBUTOR during the preceding calendar month. The
transactional analysis shall include, at a minimum, each customer name, and the
quantity and ORIGIN product numbers of any products sold or transferred to such
customer.
(f) Both ORIGIN and DISTRIBUTOR understand, acknowledge and
agree that the continued maintenance of an image of excellence and high level
ethical marketing of ORIGIN products, as outlined in the Guidant Corporation
Code of Business Conduct, is essential to the continued success of both
parties. DISTRIBUTOR agrees that its sales, marketing, distribution, or
advertising will not reflect unfavorably on, or dilute in anyway, ORIGIN's
image of excellence and high level ethical marketing. DISTRIBUTOR agrees that
it shall not do anything, directly or indirectly, to impair the current image
or to lower the prestige or quality of ORIGIN products.
6. Delivery, Title, Risk of Loss, and Returns.
(a) Firm Purchase Orders are to be placed by DISTRIBUTOR at
least thirty (30) days prior to the required delivery date, and ORIGIN shall
use reasonable commercial efforts to accommodate firm Purchase Orders placed
with a shorter lead time. Products shall be shipped at DISTRIBUTOR's expense in
such manner as ORIGIN shall deem appropriate, or as otherwise directed. Title
and risk of loss for ORIGIN products shall remain with ORIGIN while in transit
until delivery to Distributor, at which time title and risk of loss will shift
to DISTRIBUTOR. DISTRIBUTOR will obtain insurance sufficient to cover the value
of each shipment or shall instruct ORIGIN to obtain such insurance and to xxxx
DISTRIBUTOR therefor.
(b) DISTRIBUTOR shall inspect all products promptly upon
receipt thereof and may reject any product that fails in any material way to
meet the specifications set forth in ORIGIN's current brochure for that
product. Any product not properly rejected within thirty (30) days of receipt
of that product by DISTRIBUTOR (the "Rejection Period") shall be deemed
accepted. To reject a product, DISTRIBUTOR shall, within the Rejection Period,
notify ORIGIN of its rejection and request a Material Return Authorization
("MRA") number. ORIGIN shall provide the MRA number to DISTRIBUTOR within seven
(7) days of receipt of the request. Within seven (7) days of receipt of the MRA
number, DISTRIBUTOR shall return to ORIGIN the rejected product, freight
prepaid, in its original shipping carton with the MRA number displayed on the
outside of the carton. ORIGIN reserves the right to refuse to accept any
rejected products that do not bear all MRA number on the outside of the carton.
As promptly as possible but no later than thirty (30) working days after
receipt of properly rejected products, ORIGIN shall, at its option and expense,
replace the products. ORIGIN shall pay the shipping charges back to DISTRIBUTOR
for properly rejected products; otherwise, DISTRIBUTOR shall be responsible for
the shipping charges.
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(c) After the Rejection Period, DISTRIBUTOR may not return a
product to ORIGIN for any reason without ORIGIN 's prior written consent. For
any product for which ORIGIN gives such consent, ORIGIN shall charge twenty
percent (20%) of DISTRIBUTOR's purchase price for that product and shall credit
the balance of the purchase price to DISTRIBUTOR's account within thirty (30)
days upon receipt of returned product. DISTRIBUTOR shall be responsible for all
shipping charges.
7. Warranty
(a) DISTRIBUTOR shall pass onto its customers ORIGIN's
standard limited warranty for products, including the limitations set forth in
Subsections7(b) and 7(c) below. ORIGIN warrants that its products are free from
any deficiencies for a period of twelve (12) months from the date of shipment
to DISTRIBUTOR, and will replace any deficient products free or refund the
purchase price, at ORIGIN's option during said period. This warranty is
contingent upon proper use of products in the application for which they were
intended and does not cover products that were modified without ORIGIN's
approval or that were subjected by the customer to unusual physical stress.
(b) EXCEPT FOR THE EXPRESS WARRANTY SET FORTH ABOVE, ORIGIN
GRANTS NO OTHER WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE,
REGARDING THE PRODUCTS, THEIR FITNESS FOR ANY PURPOSE, THEIR QUALITY, THEIR
MERCHANTABILITY, OR OTHERWISE.
(c) ORIGIN'S LIABILITY UNDER THE WARRANTY SHALL BE LIMITED TO
A REFUND OF THE CUSTOMER'S PURCHASE PRICE. IN NO EVENT SHALL ORIGIN BE LIABLE
FOR THE COST OF PROCUREMENT OF SUBSTITUTE GOODS BY THE CUSTOMER OR FOR ANY
SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR BREACH OF WARRANTY.
8. Protection of Rights
(a) DISTRIBUTOR shall not dispute or contest or assist others
to dispute or contest the validity of any of ORIGIN's or its affiliated
companies' rights to letters patent, trademarks, copyrights, product
registrations and approvals, interest, know-how or other intangible property
concerning ORIGIN products. This covenant not to contest shall not, however,
apply to the validity of any U.S. letters patent owned by ORIGIN or to the
extent the covenant is invalid under applicable law.
(b) DISTRIBUTOR shall not omit or alter patent numbers, trade
names or trademarks, numbers or series, or any other ORIGIN markings affixed on
the products obtained from ORIGIN or alter product labeling without prior
written consent from ORIGIN. DISTRIBUTOR shall, however, be entitled to xxxx
the products with its trademark or trade name in a prominent
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place, subject to ORIGIN's prior written consent. DISTRIBUTOR is not authorized
to use the trademark and trade name "ORIGIN" in any manner except to indicate,
during the term of this Agreement, that it is an independent DISTRIBUTOR for
ORIGIN and is selling ORIGIN products. DISTRIBUTOR shall acquire no rights in
the ORIGIN trademark and trade name, or any other trademark owned by ORIGIN.
(c) DISTRIBUTOR understands and agrees that it is not
authorized to use the name "Origin Medsystems, Inc." or "ORIGIN" in connection
with its general business or to imply to third parties that its relationship
with ORIGIN is other than as a sales DISTRIBUTOR under this Agreement.
DISTRIBUTOR shall hold ORIGIN harmless and indemnify it against any liability,
including attorneys' fees and other costs of defense, resulting from actions of
third parties claiming injury or loss as a result of the failure by DISTRIBUTOR
to honor this paragraph.
(d) DISTRIBUTOR agrees to protect ORIGIN's products against
imitations and unfair competition by others, and will give ORIGIN written
notice of any such conduct. DISTRIBUTOR agrees to cooperate with ORIGIN, at
ORIGIN's request and expense, and take whatever action is required to cause the
termination of such conduct. ORIGIN reserves the right to take whatever action
it deems appropriate to protect its trademarks and trade names.
(e) All representations of ORIGIN's trademarks that
DISTRIBUTOR intends to use shall first be submitted to ORIGIN for approval
(which shall not be unreasonably withheld) of design, color, and other details
or shall be exact copies of those used by ORIGIN. If any of ORIGIN's trademarks
are to be used in conjunction with another trademark on or in relation to
ORIGIN products, then ORIGIN's xxxx 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.
(f) ORIGIN products are offered for sale and are sold 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 any of ORIGIN's products. DISTRIBUTOR shall take appropriate steps
with its customers, as ORIGIN may request, to inform them of and assure
compliance with the restrictions contained in this Subsection 8(f).
9. Independent Contractor Relationship
It is understood that both parties hereto are independent
contractors and engaged in the operation of their own respective businesses.
Neither party hereto is to be considered the agent of the other party for any
purpose whatsoever, and neither party has any authority, express or implied, to
enter into any contracts or assume any obligations for the other party, to
pledge the credit, or make any warranties or representations on behalf of the
other party, except where expressly authorized in writing to do so. Nothing in
this Agreement or in the activities of either party shall be deemed to create
an agency, partnership, or joint venture relationship.
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10. Indemnity, Legal Actions, and Product Condition.
(a) DISTRIBUTOR agrees to save and hold ORIGIN harmless from
any and all claims, costs, liabilities and responsibilities, regardless of the
claimant or his place of filing a claim, resulting from or in any way
associated with the functioning or performance of DISTRIBUTOR as a distributor,
supplier and seller, or other related descriptive classifications, for products
supplied to DISTRIBUTOR by ORIGIN. DISTRIBUTOR shall be the warrantor or
guarantor of the safety, operation and performance of the products covered by
this Agreement to whatever extent such a warranty or guarantee is made by
DISTRIBUTOR. The foregoing indemnity shall not extend to claims arising out of
a product defect that rendered the product unreasonably dangerous at the time
it was sold by ORIGIN. ORIGIN shall be responsible for any of its products
that fail to meet label specifications at the time of delivery to DISTRIBUTOR.
After delivery to DISTRIBUTOR, DISTRIBUTOR is fully responsible for any
repackaging, or re-labeling and holds ORIGIN harmless from any claims, costs,
liabilities, and responsibilities resulting in any way from any such changes
made by DISTRIBUTOR.
(b) DISTRIBUTOR agrees not to join ORIGIN or any ORIGIN
employee as a party defendant or plaintiff, or any interest thereof, in any
action at law or in equity or in any other proceeding, regardless of the
descriptive classification, arising out of the liabilities, duties and
responsibilities above described which DISTRIBUTOR assumes or performs.
DISTRIBUTOR shall promptly notify ORIGIN of any and all actions at law or
equity or claims or governmental administrative proceeding arising out of the
operation or performance of this Agreement.
(c) ORIGIN warrants that all products are in operating
condition at the time of shipment. Nothing herein shall relieve ORIGIN of any
obligation or liability existing under applicable law regarding claimed defects
in the products supplied to DISTRIBUTOR by ORIGIN, provided that (i) such
defect existed at the time the product was shipped by ORIGIN; (ii) no
modifications in design have been made by or with the approval of DISTRIBUTOR
or by the customer which affect the stability or reliability of the product;
(iii) the product has not been subject to misuse, negligence or accident; (iv)
the instrument has not had the serial or lot number altered, effaced or
removed; (v) the instrument has been used in accordance with its instructions
for use; (vi) the Product has been packed for shipment to final customer in
such a way as to protect sterility and functionality of Product; and (vii) any
re-labeling done by distributor does not physically cover required information,
and was applied correctly according to all applicable laws and regulations.
11. Inability to Deliver.
(a) Nonperformance of either party shall be excused to the
extent that performance is rendered impossible due to industrial conflicts,
mobilization, requisition, embargo, currency restriction, insurrection, general
shortage of transport, material or power supply, fire, explosion, stroke of
lightning, force majeure and similar casualties or other events beyond ORIGIN's
control, as well as default in deliveries from subcontractors due to such
circumstances as defined in this clause.
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(b) If the performance of this Agreement by either party is
made commercially impracticable (i) by the occurrence of an economic
contingency the non-occurrence of which was a basic assumption oil which this
Agreement was made or (ii) by compliance in good faith with any applicable
foreign or domestic governmental law, regulation, or order, then this Agreement
shall terminate immediately. For purposes of this Agreement, currency
devaluation, currency restrictions, currency and exchange controls, and other
monetary controls, restrictions, and restraints shall not be considered to
render the performance of this Agreement by DISTRIBUTOR commercially
impracticable, or otherwise be considered force majeure with respect to
DISTRIBUTOR.
12. Proprietary Information
DISTRIBUTOR acknowledges that it has access to valuable ORIGIN
proprietary information, including but not limited to, technical data and
customer and marketing information, all of which are the property of ORIGIN,
have been maintained confidential, and are used in the course of ORIGIN's
business. DISTRIBUTOR shall not, either during the term of this Agreement or
thereafter, disclose such ORIGIN proprietary information to anyone other than
those of its employees having a need to know and shall refrain from use of such
information other than in the performance of this Agreement. In addition,
DISTRIBUTOR shall take all reasonable precautions to protect the value and
confidentiality of such information to ORIGIN. All records, files, notes,
drawings, prints, samples, advertising material and the like relating to the
business, products or projects of ORIGIN, and all copies made from such
documents, shall remain the sole and exclusive property of ORIGIN and shall be
returned to ORIGIN immediately upon written request by ORIGIN. DISTRIBUTOR
agrees to continue to maintain all proprietary information confidential and to
refrain from using such proprietary information in any future manufacturing or
marketing operations anywhere in the world for a period of five (5) years
following termination of this Agreement, unless written authorization to do so
is first obtained from ORIGIN. Neither party shall be obligated or required to
maintain in confidence any information which it can demonstrate with written
records (i) is in the public domain or known to the receiving party prior to
disclosure by the disclosing party; or (ii) becomes known to the public after
disclosure by the disclosing party, other than through breach of this
Agreement; or (iii) becomes known to the receiving party from a source other
than the disclosing party without breach of any obligation of confidence; or
(iv) is or has been furnished to a third party by the disclosing party without
restriction on the third party's right to disclose.
13. Government Regulations
DISTRIBUTOR agrees that it shall not allow either the products
supplied to it by ORIGIN, ORIGIN's trademarks, any proprietary data of ORIGIN,
or any direct product of such data, to be knowingly made available, either
directly or indirectly, or in any way to be knowingly given, transferred, sold
or reexported to any country in violation of its laws and export control
regulations or applicable laws of any country (or the European Economic
Community). United States laws and
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export control regulations governing the exportability of technical data and
products to nations are subject to change.
DISTRIBUTOR will promptly notify ORIGIN by phone or in writing if
any of its end users notify DISTRIBUTOR that any ORIGIN products are found by
such end-users, upon incoming inspection, to be defective or to fail to meet
applicable specifications. If such notification is by phone DISTRIBUTOR shall
follow-up with a confirmation in writing. If any of DISTRIBUTOR's customers
notify DISTRIBUTOR of an alleged failure in the performance of the products,
DISTRIBUTOR will notify ORIGIN in writing, in reasonable detail, promptly, but
no later than twenty-four (24) hours after DISTRIBUTOR's receipt of such
complaint, describing the particulars of the complaint.
If either DISTRIBUTOR receives a complaint, oral or written,
regarding any of the ORIGIN products, it will notify ORIGIN, in writing and in
reasonable detail of such complaint as soon as is practicable, but in no event
later than three days after its receipt of the complaint, and will provide all
information necessary for ORIGIN to comply with any applicable regulatory and
legal requirements. ORIGIN will be responsible for evaluating in detail all
customer complaints that relate to any ORIGIN products.
If ORIGIN desires to undertake a recall of any product, ORIGIN
will immediately notify the DISTRIBUTOR, and the parties will promptly discuss
such recall, with such notification and discussion being made prior to any
recall, to the extent permitted, in ORIGIN's judgment, by any applicable legal
or safety constraints. DISTRIBUTOR will maintain complete and accurate records,
for such periods as may be required by applicable law, of all products sold by
it, and will provide access to such records to the extent necessary to
effectuate any recall. DISTRIBUTOR will cooperate with ORIGIN as to the
initiation and conduct of any recall, including communications with any
purchasers and end-users and any applicable regulatory authorities.
14. Unfair Competition and Patent Infringement
(a) DISTRIBUTOR shall promptly advise ORIGIN of any
infringement or potential infringement by third parties of which DISTRIBUTOR
becomes aware of any issued patents relating to the products supplied by ORIGIN
under this is Agreement. ORIGIN shall have the right, but not the obligation,
to xxx alleged infringers. If suit is brought by ORIGIN , ORIGIN shall control
the prosecution thereof and be entitled to retain any amounts recovered in full
by reason of such infringement. DISTRIBUTOR agrees to cooperate with and assist
ORIGIN in any such suit. ORIGIN shall reimburse DISTRIBUTOR for costs related
to such assistance. ORIGIN shall have the exclusive right to negotiate and
approve any settlement of such suits.
(b) In the event that DISTRIBUTOR joins ORIGIN by mutual
agreement in litigation relating to such infringement, DISTRIBUTOR shall bear
an agreed proportion of the legal costs. Should any damages or costs in such
litigation be awarded to ORIGIN and DISTRIBUTOR,
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DISTRIBUTOR shall be entitled to recover the same proportion thereof as its
contribution to expenses.
(c) ORIGIN represents that it has no knowledge of any patent
rights that would be infringed by use or sale of ORIGIN products in the Primary
Area of Responsibility, or use of its proprietary in formation, but ORIGIN does
not warrant that the manufacture, use or sale of any of its products, or
utilization of any of its proprietary information, is free of liability for
infringement or charges of infringement of patent rights owned by third
parties. In the event that ORIGIN is enjoined front making and selling and/or
DISTRIBUTOR is enjoined from selling products as a result of charges of
infringement of patent rights, such injunction shall not constitute a breach of
this Agreement.
15. Term and Termination
(a) Except as otherwise provided in this Section 15, this
Agreement shall have an initial term that commences on the date first written
above and ends on May 1, 1999. In addition, if Distributor satisfies its Annual
Purchase Commitment, this Agreement shall extend for an additional one year
period, provided the parties agree to the Annual Purchase Commitment for the
next calendar year. If Distributor does not satisfy its Annual Purchase
Commitment, and ORIGIN does not provide at least sixty (60) days not ice to
Distributor of renewal for another contract year prior to end of the term, then
ORIGIN shall have the right to terminate the Agreement at any time upon written
not ice to DISTRIBUTOR.
(b) ORIGIN shall have the power to terminate this Agreement as
to all or any portion of the Primary Area of Responsibility immediately for
just cause, at anytime, should the DISTRIBUTOR breach any provision of this
Agreement, including any of the following:
i. failure by DISTRIBUTOR to comply with any of the requirements of
Section 5;
ii. failure by DISTRIBUTOR to make payment for products purchased in
accordance with ORIGIN 's established policy and this Agreement;
iii. failure to establish and maintain a sales and service
organization of sufficient size to adequately and effectively sell ORIGIN
products in the Primary Area of Responsibility;
iv. failure to honor warranties;
v. engaging in any activity that is detrimental to ORIGIN, ORIGIN
products, or ORIGIN's reputation;
vi. failure to maintain adequate books and records with respect to
the names and
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addresses of customers including lot number traceability (commencing after
calendar year 1997 for lot number traceability), and the sale and distribution
of ORIGIN products;
vii. failure to make any purchases required by this Agreement;
viii. failure to comply with local law applicable in the Area of
Primary Responsibility including by way of explanation but not by limitation
compliance with any local currency restrictions or restrictions on payment of
commissions to sales representatives;
ix. violation of any of the obligations of DISTRIBUTOR with respect
to patents, trademarks, copyrights, labeling, products registrations, interest~
know-how re-packaging, trade names or ORIGIN proprietary information;
x. violation of the commitments of DISTRIBUTOR with respect to
approvals and compliance with laws and regulations or violation of the
prohibition against assignment;
xi. any event, action or failure that constitutes cause for
termination under applicable law;
xii. change in ownership of DISTRIBUTOR that, in ORIGIN's opinion,
affects the management of DISTRIBUTOR; or
xiii. failure to achieve sales forecasts as to any territory and/or
area as described in Section I (b); provided, however, that if such failure
occurs only in one territory and/or area, then ORIGIN's right to terminate
shall be limited to that territory and/or area.
DISTRIBUTOR shall have twenty (20) days after written notice specifying a
breach to cure such breach. If, under the circumstances present, it would
appear that any breach is final, or cannot be cured, ORIGIN may terminate the
Agreement immediately for cause by giving notice to this effect.
(c) Either ORIGIN or DISTRIBUTOR may terminate this Agreement
in the event that the other becomes insolvent, files a petition in bankruptcy,
or is declared bankrupt, or makes an assignment for benefit of creditors, or
there is reasonable evidence indicating the possibility of such filing or
assignment, during the term that this Agreement is in effect. Termination under
this provision shall be effective twenty (20) days following written notice
that this Agreement is being terminated for the reason stated in this
Subsection.
(d) DISTRIBUTOR may terminate this Agreement immediately for
just cause should ORIGIN breach any provision of this Agreement.
(e) After termination of the Agreement for whatever reason,
the debt-claims which any party may have against any other party under this
Agreement become immediately due, whatever the nature of such debt-claims. Both
DISTRIBUTOR and ORIGIN shall be entitled to cancel all
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Purchase Orders, to the extent products have not been delivered to DISTRIBUTOR,
which are outstanding at the time of notice of termination; provided however
that, subject to payment in advance to ORIGIN , DISTRIBUTOR shall be entitled
to receive ORIGIN products, necessary to fulfill valid and binding Purchase
Orders accepted by DISTRIBUTOR prior to notification of termination of this
Agreement. Prior to filling orders for such products, ORIGIN shall be entitled
to request and receive documentary evidence of all such outstanding Purchase
Orders and an accounting of DISTRIBUTOR's existing inventory of ORIGIN
products.
(f) omissions that indicate or suggest a relationship with
ORIGIN. DISTRIBUTOR shall not make or retain any copies of any confidential
items or in formation or any product literature which may have been entrusted
to it and shall return to ORIGIN all ORIGIN property, promotional material, and
proprietary information.
(g) Upon termination of this Agreement, DISTRIBUTOR shall not
be entitled to any termination compensation, consequential damages, indemnity
or other payment for goodwill, lost profits, costs of re-establishment or
replacement of the business or any other expenses, or rights relating to the
business established by DISTRIBUTOR or to termination of this Agreement except
as specified in Section 15(b). DISTRIBUTOR recognizes that prices charged by
ORIGIN to DISTRIBUTOR allow DISTRIBUTOR to obtain a reasonable return for its
entire services and profit on resale, including costs of establishing and
maintaining its organization. DISTRIBUTOR expressly acknowledges any rights to
such indemnity afforded to him by law or custom, and to the extent permissible
under applicable law, expressly and completely waives its rights to such
indemnity benefits. DISTRIBUTOR agrees to indemnify and hold ORIGIN harmless
from all losses, damages, amounts, costs and expenses incurred by ORIGIN as a
result of claims or actions brought by employees, agents, or representatives of
DISTRIBUTOR for any severance pay, compensation, disability payment or social
security payment or compensation.
(h) Upon any termination of this Agreement, ORIGIN shall buy
back from DISTRIBUTOR, at landed cost, any and all unsold unopened ORIGIN
products in DISTRIBUTOR's possession that have been purchased from ORIGIN which
are in marketable condition and have an expiration date that is greater than 90
days from the date of buy-back, if applicable, and are of a product designation
then included in the products being offered for sale by ORIGIN. The aggregate
amount to be paid to DISTRIBUTOR under this provision maybe offset by ORIGIN
against any claims it has against DISTRIBUTOR, including for payment of goods
supplied under this Agreement.
16. Notices.
(a) All notices given under this Agreement and the provisions
contained herein shall be sent by first class registered or certified airmail,
postage prepaid and return receipt requested, or by Telex or Telecopier, to the
address first set forth above, or such other address provided by one party to
the other in accordance with this Section.
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(b) Notices shall be considered delivered when mailed or sent
by Telex or Telecopier or facsimile in accordance with the provisions of
subparagraph (a) above, subject to proof of receipt by Telex, Telecopier or
Facsimile confirmation or by mail receipt.
17. Changes and Additions to Agreement.
The Distribution Agreement constitutes the final agreement
between the parties and supersedes all prior agreements and understandings,
oral or written, all of which are merged herein. Modification, assignment, or
any future representation, promise or agreement in connection with the subject
matter of the Distribution Agreement shall be binding on ORIGIN and DISTRIBUTOR
unless made in writing and signed by all officer of each.
18. Governing Law and Jurisdiction
The Distribution Agreement shall be deemed to have been executed
and delivered in San Mateo, California, and all questions arising out of or
under this Agreement shall be governed by the laws of the State of California,
United States of America. All claims, actions, and lawsuits seeking damages for
personal injuries or death resulting from the use of an ORIGIN product shall be
subject to, and governed by the laws of the jurisdiction where the injury or
death is alleged to have occurred. In case of any litigation arising out of any
dispute between the parties concerning this interpretation or the compliance
with this Agreement, the parties hereby unconditionally and irrevocably submit
to the exclusive jurisdiction and venue of the California Courts and all courts
of appeal therefrom. Each party waives any right it has to any action being
brought in those Courts, to claim that the action has been brought in an
inconvenient forum, or to claim that those Courts do not have jurisdiction.
However, ORIGIN shall be entitled at its discretion to seek relief in a court
of competent jurisdiction in the district in which DISTRIBUTOR is domiciled.
19. Miscellaneous Provisions
(a) ORIGIN shall have the right to manufacture in the Primary
Area of Responsibility. DISTRIBUTOR is granted no rights under this Agreement
to manufacture any product.
(b) Each of the parties hereto represents and warrants that it
has not employed any broker or finder in connection with this Agreement or the
transactions contemplated hereby.
(c) DISTRIBUTOR shall not assign any rights or benefits or
obligations of the Distribution Agreement to any party without the prior
written consent of ORIGIN, and any purported assignment without such consent
shall be void. ORIGIN shall have the right, at its option, to terminate the
Distribution Agreement upon the making of any such purported assignment.
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(d) If any provision or provisions of the Agreement shall be
held by a court of competent jurisdiction to be contrary to law, such provision
or provisions, shall be deemed to be null and void and the remainder of the
Agreement shall be in full force and effect. The parties specifically declare
that they would have entered into the Agreement if such void provision, or
provisions, if any, had been entirely omitted.
(e) During the term of this Agreement and for a period of one
(1) year after termination thereof for any reason whatsoever, ORIGIN shall not
solicit, recruit, employ, or compensate, directly or indirectly, any person
engaged or previously engaged by DISTRIBUTOR as an employee, independent
contractor or in any other capacity, who is or was involved in the sale of
ORIGIN products, without the prior written consent of the President of
DISTRIBUTOR. During the term of this Agreement and for a period of one (I) year
after termination thereof for any reason whatsoever, DISTRIBUTOR shall not
solicit, recruit, employ, or compensate, directly or indirectly, any person
engaged or previously engaged by ORIGIN as an employee, independent contractor
or in any other capacity, to work for any business that is in competition in
any manner whatsoever with the business of ORIGIN .
Executed on ____________, 199____
ORIGIN MEDSYSTEMS, INC.
By:
-----------------------------------
XX XXXXXXXXXX, GENERAL MANAGER
Executed on ____________, 199____
LIFEQUEST MEDICAL, INC.
By:
-----------------------------------
Title:
--------------------------------
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DRAFT OF 11/12/98
DECLARATION OF PROTECTIVE COVENANTS
THE STATE OF TEXAS )
)
COUNTY OF BEXAR )
This Declaration of Protective Covenants (this "Declaration") is made
this _____ day _____________________, of 19__, by [Development Strategies, Inc.,
a Texas corporation ("Development Strategies")] and Alamo Concrete Products,
Ltd., a Texas limited partnership ("Alamo").
RECITALS
A. [Development Strategies] is the owner of those certain parcels of
real property more particularly described in Exhibit A attached hereto and made
a part hereof for all purposes (the "Development Strategies Parcels").
B. Alamo is the owner of that certain parcel of real property more
particularly described in Exhibit B attached hereto and made a part hereof for
all purposes (the "Alamo Parcel").
C. [Development Strategies] and Alamo wish to impose certain
restrictions on the Development Strategies Parcels and the Alamo Parcel for the
express benefit of all such parcels.
AGREEMENTS
NOW THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00) each to the other in hand paid, and for other good and valuable
consideration, the receipt and sufficiency of which consideration are hereby
acknowledged and confessed, [Development Strategies] and Alamo agree as follows:
1. Recitals; Terms The foregoing recitals are hereby incorporated
herein for all purposes. [Development Strategies] and Alamo are sometimes herein
collectively referred to as "Declarants", and the Development Strategies Parcels
and the Alamo Parcel are sometimes herein collectively referred to as the
"Restricted Parcels".
2. Restrictions Declarants hereby impose on the Restricted Parcels
the following covenants, conditions and restrictions (collectively, the
"Restrictions"), which Restrictions shall apply only to the Restricted Parcels
for the benefit of all owners thereof and their respective successors and
assigns (collectively, the "Benefitted Parties"):
17
[Insert Restrictions]
3. Other Matters of Record The Restrictions imposed by this
Declaration shall be applicable in addition to, and not in lieu of, any other
recorded covenants, conditions, restrictions or easements, if any affecting the
Restricted Parcels.
4. Run With The Land The Restrictions imposed by this Declaration
shall run with the title to each of the Restricted Parcels and shall (i) be
binding on all parties having any right, title or interest in any portion of the
Restricted Parcels, their heirs, successors, successors-in-title and assigns,
including, without limitation, all tenants, licensees, invitees and guests of
any Restricted Parcel (and including, without limitation, Declarants, to the
extent Declarants shall retain any right, title or interest in any Restricted
Parcel), and (ii) inure to the benefit of the Restricted Parcels and the
Benefitted Parties.
5. Enforcement
a. All of these Restrictions shall be enforceable, in whole or in
part, by the Benefitted Parties. Any such party for whose benefit these
Restrictions shall run may enter proceedings at law or in equity to
restrain violation hereof and to recover damages for the breach or
violation hereof. Notwithstanding anything to the contrary contained
herein, no Benefitted Party shall have any obligation to enforce any
of the provisions hereof and failure to do so shall never be grounds
for any liability or the recovery of any damages against any Benefitted
Party.
b. In any proceeding to enforce or to restrain the violation of
these Restrictions, the losing party or parties in such proceeding
shall pay the attorneys' fees of the prevailing party or parties in
such amount as may be fixed by the court or other trier of fact in such
proceedings.
6. Term Unless earlier terminated or modified in accordance with the
provisions of Section 7 of this Declaration, these Restrictions shall remain in
full force and effect for a period of thirty (30) years from and after the date
first set forth in this Declaration.
7. Termination; Modification; Amendment; Waiver Unless otherwise
required by applicable Texas or federal law, neither this Declaration nor any
provision hereof, nor any covenant, condition, restriction or reservation
contained herein may be terminated, modified, amended or waived, as to all or
any portion of the Restricted Parcels, except by an instrument signed by the
owner or owners of at least seventy-five percent (75%) in area of the Restricted
Parcels and properly acknowledged and recorded in the appropriate public
records.
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8. Miscellaneous
a. Severability. The invalidation of any one of these Restrictions,
or the failure to enforce any of these Restrictions at the time of its
violation, shall in no event affect any of the other Restrictions nor
be deemed a waiver of the right to enforce the same or any other
Restriction thereafter.
b. Constructive Notice and Acceptance. Every person who, now or
hereafter, owns or acquires any right, title or interest in or to any
portion of the Restricted Parcels, is and shall be conclusively deemed
to have consented and agreed to every covenant, condition and
restriction herein contained, whether or not any reference to this
Declaration shall be contained in the instrument by which such person
acquires an interest in such portion of the Restricted Parcels.
c. Titles. The titles, headings and captions used in this
Declaration are for convenience only, shall in no way define or limit
the scope or contents of this Declaration and shall not be considered
in the construction or interpretation of this Declaration or any part
hereof
d. Conflict with Applicable Law. To the extent that any of the terms
and provisions of, or actions required or permitted by, this
Declaration are prohibited by the statutes, rules, regulations,
ordinances, orders, directives or decisions of any state, federal, city
or county governmental authority or any subdivision thereof, such
requirements shall control, and this Declaration shall be deemed
amended only to the extent necessary to comply with such requirements.
EXECUTED as of the dates set forth in the acknowledgements of each
party below, to be effective, however, as of the date first set forth above.
After Recording Please Return To:
Xxxxx X. Xxxxxxx
Xxxxxxxxx & Xxxxxxxx L.L.P.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
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