EXHIBIT 10.1
EXECUTION COPY
EXCLUSIVE SUPPLY AND PROMOTION AGREEMENT
THIS EXCLUSIVE SUPPLY AND PROMOTION AGREEMENT (as such may be modified or
amended, the "AGREEMENT"), dated and effective as of June 22, 2001 (the
"EFFECTIVE DATE"), is made by and between Ethicon Endo-Surgery, Inc., a
corporation organized under the laws of the State of Ohio with a business
address at 0000 Xxxxx Xxxx, Xxxxxxxxxx, XX 00000 ("EES"), and Vista Medical
Technologies, Inc., a corporation organized under the laws of the State of
Delaware with a business address at 0000 Xxxxxxx Xxxxxxx, Xxxxx X, Xxxxxxxx, XX
00000 ("VISTA").
WHEREAS, Vista (A) develops, manufactures and markets medical products,
including a 3-D head mounted visualization display device for surgeons
performing surgical procedures; (B) organizes and sponsors laparoscopic
bariatric surgery (i.e., gastric bypass surgery) training programs (the
"CLINICS") to promote the use of Vista's visualization display devices among
surgeons performing laparoscopic bariatric surgery ("LBS") on morbidly obese
persons; (C) organizes and sponsors for Clinic participants post-proctoring
mentorship programs (the "PROGRAMS"); and (D) is developing visualization
technology including "Visi-Tools" technology.
WHEREAS, EES develops, manufactures and markets medical products, including the
products identified by product code on EXHIBIT A hereto and on any and all
amendments to such Exhibit A (the products (whether non-sterile or sterile)
listed on Exhibit A, as such may be amended from time to time hereafter, are
collectively referred to herein as, the "PRODUCTS").
WHEREAS, Vista desires to promote its Clinics and Programs and to use the
non-sterile Products ***.
WHEREAS, EES desires to promote the Products and acquire rights to certain of
Vista's visualization technology.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
undertakings contained herein, the parties hereby agree as follows.
SECTION 1. DEFINITIONS
The following terms, when used with initial capital letters in this Agreement,
shall have the following meanings:
"Affiliate" is any entity that directly or indirectly controls, is
controlled by, or is under common control with a party hereto, and for such
purpose "control" shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the entity,
whether through the ownership of voting securities, by contract or otherwise.
"Visi-Tools IP" shall mean the intellectual property, trade secrets,
know-how, technology and information, whether or not protected by patents, owned
or otherwise controlled by Vista that are required in order to implement,
utilize or commercialize Vista's "Visi-Tools Technology.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
"Visi-Tools Technology" shall mean Vista's visual instrument concepts
that involve, and technologies for, *** for purposes of normal and magnified
visualization, as well as `picture in picture' display in Vista's head-mounted
or other viewing technology.
SECTION 2. RIGHTS AND RESPONSIBILITIES OF THE PARTIES
2.1 RIGHTS AND RESPONSIBILITIES OF EES.
(a) SUPPLY OBLIGATIONS. EES shall manufacture for Vista's Clinics
the Products in accordance with its product specifications; PROVIDED, THAT, such
Products shall be, and shall be labeled, "non-sterile". EES shall deliver the
non-sterile Products to the location(s) mutually agreed upon by the parties.
EES's designated local account representative, after consulting with Vista and
after reviewing the schedule of planned Clinics and the number of registered
participants, will order non-sterile Products in an amount, as determined in the
sole discretion of such representative, necessary to support upcoming Clinics.
The non-sterile Products will be ordered through EES's Training Institute's
Remote Education Support Organization. The quantity of non-sterile Products to
be delivered shall be determined at the sole discretion of EES after reviewing
the submitted order form, the schedule of planned Clinics and the number of
registered participants. EES will pack the non-sterile Products in a manner to
enable such Products to withstand the effects of shipping and handling. Costs
incurred to manufacture the non-sterile Products and to ship such Products
utilizing carriers chosen by EES will be borne by EES.
(b) PAYMENT OBLIGATIONS. During the term of this Agreement and
unless otherwise provided for in Section 10 hereof, EES shall pay to Vista ***
which fee shall be payable as follows:
(i) During the initial 12-month term of this Agreement,
*** shall be paid on the Effective Date and *** shall be paid on or, at the sole
discretion of EES, prior to January 15, 2002;
(ii) During each subsequent 12-month term, if any, of this
Agreement, *** shall be paid within 10 days after such additional term commences
and *** shall be paid on or, at the sole discretion of EES, prior to January
15th of the calendar year following the calendar year in which the current term
commenced.
(c) DESIGNATION OF SALES REPRESENTATIVES. As promptly as
practicable after the Effective Date, and from time to time thereafter, EES will
designate sales training representatives (the "REPRESENTATIVES") to attend, at
EES's cost and expense, the Clinics and Programs and to provide support
necessary to familiarize Clinic and Program participants with the use of the
Products. EES will notify its designated divisional sales management and the
designated local account representatives that are responsible for servicing the
Clinics and Programs of the names of the designated Representatives. Unless
authorized by Vista the
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Representatives will not act as Vista's agents.
(d) FINANCIAL ASSISTANCE. EES will use reasonable efforts to
investigate the possible access by financially qualified Clinic and Program
participants to financing programs, sponsored by Xxxxxxx & Xxxxxxx Finance
Corporation, that support deferral of start-up acquisition costs necessary to
undertake institutionalization of an LBS program by such participants.
(e) INSPECTION RIGHTS. In the event EES provides reasonable notice
to Vista of its desire to inspect and audit the Clinics and Programs to assure
compliance by Vista of the provisions of this Agreement and applicable laws and
regulations, Vista shall cooperate in good faith with EES to provide such access
to EES and its representatives. EES acknowledges that Vista does not control the
facilities (e.g., hospitals) or access to the facilities where the Clinics and
Programs are held. Vista shall, within 30 days, remedy or cause the remedy of
any deficiencies which may be noted in any such audit or, if any such
deficiencies can not reasonably be remedied within such 30-day period, present
to EES a written plan to remedy such deficiencies as soon as possible. The
failure by Vista to remedy or cause the remedy of any such deficiencies within
such 30-day period or to present such a plan within such 30-day period and then
use its reasonable and diligent efforts to remedy or cause the remedy of such
deficiencies in accordance with such written plan, as the case may be, shall be
deemed a breach of this Agreement. Vista acknowledges that the provisions herein
granting EES certain audit rights shall in no way relieve Vista of any of its
obligations under this Agreement, nor shall such provisions require EES to
conduct any such audits.
2.2 RIGHTS AND RESPONSIBILITIES OF VISTA.
(a) EXCLUSIVITY. During the term of this Agreement and solely with
respect to the specific functions and applications addressed by the Products,
Vista will exclusively use in the Clinics the non-sterile Products and Vista
will exclusively promote in the Programs the sterile Products; provided, that
Vista shall not be required to exclusively use or promote any additional product
that is added by EES to Exhibit A and becomes a "Product" after the Effective
Date if, and only for as long as, such new Product (i) directly competes with an
existing product manufactured by Vista that is (at the time EES adds such
additional product to Exhibit A) used in the Clinics or Programs or (ii) is
substantially similar to a third party's product which Vista is (at the time EES
adds such additional product to Exhibit A) contractually obligated to a third
party to use in the Clinics or promote in the Programs. Subject to Section 3.1,
Vista shall not use, and shall cause its Affiliates, Medical Directors (as
defined hereinafter in Section 5.1(d)), and Clinic and Program participants to
not use, in the Clinics and Programs products manufactured and/or distributed by
third-parties that compete with the Products or are substantially similar to the
Products. ***
(b) RESPONSIBILITY TO HOLD CLINICS AND PROGRAMS. During each
12-month period
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during the term of this Agreement beginning on the Effective Date and each
anniversary thereof, Vista agrees to conduct, without any payments (other than
payments specified in Section 2.1(b)) from EES, for the benefit of qualified
physicians and their operating room supporting personnel (collectively, the
"O.R. TEAM"), *** . Vista shall provide EES's designated mechanical device
marketing management and designated divisional sales management with notice of
such Clinics and Programs. Each such notice shall be delivered within 10 days
after a Clinic or Program is scheduled, but in no event less than 10 days before
the Clinic or Program is to occur, and shall include a good faith estimate of
the number of anticipated Clinic and/or Program participants. The Clinics and
Programs will only be operated under the direction of the physicians (the
"MEDICAL DIRECTORS") named on EXHIBIT B (as such may be amended pursuant to
Section 11.6) and each such Medical Director identified on Exhibit B will be a
party to a clinical consulting agreement with Vista at all times that such
Medical Director directs the operations of a Clinic or Program. Each Clinic will
meet the guidelines established in the "Framework for Post-Residency Surgical
Education and Training".
If the actual number of Clinics conducted in any 12-month period shall be *** ,
the difference shall be referred to herein as the "CLINIC SHORTFALL". If the
actual number of Programs conducted in any 12-month period shall be *** , the
difference shall be referred to herein as the "PROGRAM SHORTFALL". In the event
EES exercises its right to extend any term of this Agreement, any Clinics and
Programs conducted by Vista during such subsequent term will not be counted in
determining whether Vista has satisfied its obligation to conduct *** Clinics
and *** Programs in a given 12-month period until the Clinic Shortfall or
Program Shortfall, as the case may be, has been satisfied. In the event the
Agreement is terminated by EES or expires, Vista's exclusivity obligation under
Section 2.2(a) shall survive termination or expiration of this Agreement with
respect to Clinics and Programs conducted in subsequent periods but only to the
extent the number of subsequent Clinics satisfies the Clinic Shortfall and the
number of subsequent Programs satisfies the Program Shortfall.
(c) RESPONSIBILITY TO PRODUCE TRAINING AND PROMOTIONAL LITERATURE.
Vista will provide, at its sole cost and expense, all the necessary and
appropriate (i) training materials (both CME and non-CME) for the Clinics and
Programs, and (ii) promotional materials for LBS, the Clinics and Programs for
use by the Representatives. Vista will deliver to EES a sample of the training
and promotional materials prepared by Vista and such materials will be subject
to EES's copy review procedures and comments prior to their distribution.
(d) RESPONSIBILITY TO TRAIN EES'S REPRESENTATIVES. Vista will
admit, at EES's sole cost and expense, the Representatives into the Clinics and
Programs. In addition, Vista will provide semi-annually, at EES's request, at
least 4 hours of additional education and training on the features and benefits
of LBS, the Clinic and the Program to the Representatives.
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(e) RESPONSIBILITY TO COMPENSATE EES'S REPRESENTATIVES. *** for
each O.R. Team that participates in a Clinic as a direct result of the
promotional efforts undertaken by such Representative.
(f) RESPONSIBILITY TO ADHERE TO LAWS AND REGULATIONS. Vista will
not, and will use its reasonable and diligent efforts to ensure that Medical
Directors and Clinic and Program participants do not, submit for Medicare
reimbursement the cost of any Product provided by EES hereunder. Vista further
agrees to demonstrate each Product only in accordance with such Product's
labeled indications and instructions for use.
(g) RESPONSIBILITY TO MAINTAIN INSURANCE: Vista shall obtain, pay
for and maintain product liability insurance covering bodily injury and property
damage arising out of the use of the Products with limits of not less than ***
per occurrence and *** as an aggregate per year.
2.3 MUTUAL RESPONSIBILITIES. During the term of this Agreement, the parties
in good faith will collaborate with each other for the following purposes: (a)
to devise marketing and market development strategies which focus on, without
limitation, the promotion of LBS, Vista's LBS training and the Products at
conventions, through professional organizations and through advertising
campaigns; (b) to assess cooperative technology opportunities to incorporate the
Visi-Tools IP and Visi-Tools Technology into EES's instruments and systems; (c)
to identify additional surgical procedure opportunities amenable to the type and
level of service being provided in the Clinics and Programs and, if appropriate,
expand the scope of this exclusive relationship to incorporate such additional
identified and approved procedures.
SECTION 3. FAILURES TO SUPPLY
3.1 FAILURE TO SUPPLY. In the event that EES shall fail to supply any
non-sterile Product in such quantities as Vista shall reasonably require for the
Clinics, then Vista shall be permitted to obtain a substitute product from
another supplier but only for so long as EES shall fail to supply such Product.
SECTION 4. RIGHT OF FIRST NEGOTIATION
During the term of this Agreement and in consideration for the fees payable by
EES hereunder, Vista hereby grants EES the right of first negotiation to acquire
from Vista title to or the right to use, offer for sale, sell, market and/or
distribute the Visi-Tools Technology and the Visi-Tools IP. EES shall have 30
days from the time it receives from Vista material written information about any
Visi-Tools Technology or Visi-Tools IP to notify Vista in writing if it is
interested in discussing terms for EES to purchase, license or otherwise have
access to such. If EES so notifies Vista of its interest in the Visi-Tools
Technology or Visi-Tools IP, then the parties shall for a period of 45 days
negotiate, in good faith, the terms of such transaction. In no event shall
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Vista enter into an agreement with a third party to sell, assign, license,
transfer or otherwise make available the Visi-Tools Technology or Visi-Tools IP
to such third party upon material terms and conditions which are materially more
favorable to such third party than such material terms and conditions which EES
offered to Vista in connection therewith. Vista hereby covenants that only for
so long as this right of first negotiation survives neither Vista (nor any of
its Affiliates) shall enter into any of the agreements, contracts,
understandings or arrangements described in Section 5.1(e) without the consent
of EES; provided, that such consent shall not be required with respect to any
Visi-Tools Technology or Visi-Tools IP that, in accordance with this section,
was first presented to EES and thereafter either EES failed to notify Vista of
its interest therein or access to such was negotiated between the parties. This
right of first negotiation shall survive any termination of this Agreement,
whether occurring during the initial term or any extended term, but such right
shall survive in the case of the initial term, until June 22, 2002 and in the
case of each extended term, until the 6-month anniversary of the commencement of
such extended term.
SECTION 5. REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF VISTA. Vista represents and warrants
to EES as of the date hereof as follows:
(a) DUE ORGANIZATION AND AUTHORIZATION. Vista is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and authority to enter
into and perform its obligations under this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by Vista have been duly authorized by all necessary corporate action on
the part of Vista and this Agreement has been duly executed and delivered by a
duly authorized officer of Vista and constitutes a valid and legally binding
obligation of Vista in accordance with its terms.
(b) NO VIOLATION. That the performance of Vista's obligations
under this Agreement will not result in a violation or breach of, and will not
conflict with or constitute a default under any agreement, contract, commitment
or obligation to which such party or any of its Affiliates is bound. Neither the
execution and delivery of this Agreement by Vista nor the consummation by Vista
of the transactions contemplated hereby nor compliance by Vista with any of the
provisions hereof shall: (i) conflict with or result in any breach of any
provisions of the Certificate of Incorporation or By-laws of Vista; (ii) require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority; (iii) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Vista; or (iv) require any consent, approval, authorization, or permit under any
contract, agreement or commitment.
(c) INVESTIGATIONS; LITIGATION. There have been no, and there are
no pending or threatened, actions, suits, proceedings, claims or investigations
concerning Vista or any of its
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Affiliates with respect to the Clinics or Programs or the transactions
contemplated hereby.
(d) CONDUCT OF THE BUSINESS. Vista operates only the Clinics
specified on Exhibit B and only at the locations specified on Exhibit B. The
Clinics and Programs are operated under the direction of the physicians (the
"MEDICAL DIRECTORS") named on Exhibit B. Each Medical Director identified on
Exhibit B is party to a clinical consulting agreement with Vista. Each Clinic
meets the guidelines as established in the "Framework for Post-Residency
Surgical Education and Training" and is endorsed by The Society of American
Gastrointestinal Endoscopic Surgeons (SAGES).
(e) AUTHORITY TO GRANT RIGHT OF FIRST NEGOTIATION. Vista is
empowered to grant EES the right of first negotiation set forth in Section 4.
There are no outstanding encumbrances and there are no agreements, contracts,
understandings or arrangements of any kind pursuant to which any third-party may
acquire from Vista, or has the right to use, offer for sale, sell, market or
distribute, any of the Visi-Tools IP or Visi-Tools Technology.
5.2 REPRESENTATIONS AND WARRANTIES OF EES. EES represents and warrants to
Vista, as of the date hereof, as follows:
(a) DUE ORGANIZATION AND AUTHORIZATION. EES is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio, and has all requisite corporate power and authority to enter into and
perform its obligations under this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby by EES
have been duly authorized by all necessary corporate action on the part of EES
and this Agreement has been duly executed and delivered by a duly authorized
officer of EES and constitutes a valid and legally binding obligation of Buyer
in accordance with its terms.
(b) NO VIOLATION. That the performance of EES's obligations under
this Agreement will not result in a violation or breach of, and will not
conflict with or constitute a default under any agreement, contract, commitment
or obligation to which such party is bound.
(c) SUPPLY OF PRODUCT. EES expressly warrants and represents that
it owns all of the right, title and interest in and to the Products and it is
empowered to supply the Products.
SECTION 6. WARRANTY DISCLAIMER
The Products are being provided to Vista AS IS. Except for the warranty provided
in Section 5.2(c) above, EES DISCLAIMS ALL OTHER WARRANTIES WITH RESPECT TO THE
PRODUCTS, EXPRESS OR IMPLIED, INCLUDING (i) ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE (ii) ANY WARRANTY WITH RESPECT TO THE DESIGN,
MATERIAL OR WORKMANSHIP OF THE PRODUCTS, AND (iii) ANY WARRANTY AS TO COMPLIANCE
BY THE
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PRODUCTS WITH ANY APPLICABLE LAW CONCERNING SAFETY IN DESIGN OR OPERATION, and
Vista hereby acknowledges and agrees that EES shall have no liability to Vista
with respect to the foregoing.
SECTION 7. INDEMNIFICATION
7.1 INDEMNIFICATION BY VISTA. Vista shall indemnify and hold EES (and its
Affiliates) harmless from and against all liabilities, claims, demands, damages,
expenses and losses (including reasonable attorneys' fees) (collectively
"DAMAGES") that may be sustained, suffered or incurred by EES (or its
Affiliates) arising directly from or by reason of (a) the breach by Vista of any
of the warranties, representations, covenants and agreements made by Vista
herein, (b) claims of trademark or copyright infringement made with respect to
use of Vista's training and promotional materials and (c) personal injury claims
by third parties arising from the use or application of any Product provided to
Vista pursuant to this Agreement (other than personal injury claims by O.R. team
members arising from the use of any non-sterile Product during the Clinics). In
the case of Damages arising directly from or by reason of Section 7.1(a) or
7.1(b), Vista's indemnification obligations for such Damages shall be limited to
the fees paid by EES to Vista hereunder.
7.2 INDEMNIFICATION BY EES. EES shall indemnify and hold Vista harmless
from and against all Damages that may be sustained, suffered or incurred by
Vista arising directly from or by reason of (a) the breach by EES of any of the
warranties, representations, covenants and agreements made by EES herein, (b)
claims of patent infringement made with respect to the use of any Product in
accordance with this Agreement and (c) personal injury claims by third parties
arising from the use or application of any sterile product (similar in form and
function to the Products) distributed by EES. In the case of Damages arising
directly from or by reason of Section 7.2(a) or 7.2(b), EES's indemnification
obligations for such Damages shall be limited to the fees paid by EES to Vista
hereunder.
7.3 PROCEDURES. Each indemnified party agrees to give the indemnifying
party prompt written notice of any matter upon which such indemnified party
intends to base a claim for indemnification (an "INDEMNITY CLAIM") under this
section. The indemnifying party shall have the right, with counsel reasonably
satisfactory to the indemnified party, to participate jointly with the
indemnified party in the indemnified party's defense, settlement or other
disposition of any Indemnity Claim. With respect to any Indemnity Claim relating
solely to the payment of money damages and which could not result in the
indemnified party's becoming subject to injunctive or other equitable relief or
otherwise adversely affect the business of the indemnified party in any manner,
and as to which the indemnifying party shall have acknowledged in writing the
obligation to indemnify the indemnified party hereunder, the indemnifying party
shall have the sole right to defend, settle or otherwise dispose of such
Indemnity Claim, on such terms as the indemnifying party, in its sole
discretion, shall deem appropriate; provided that the indemnifying party shall
provide reasonable evidence of its ability to pay any damages claimed and with
respect to any such settlement shall obtain the written release of the
indemnified party from the Indemnity Claim. The indemnifying party shall obtain
the written consent of the indemnified party prior to ceasing to defend,
settling or otherwise
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disposing of any Indemnity Claim if as a result thereof the indemnified party
would become subject to injunctive or other equitable relief or the business of
the indemnified party would be adversely affected in any manner.
SECTION 8. TRADEMARKS; CONFIDENTIAL INFORMATION AND PUBLICITY
8.1 TRADEMARKS AND COPYRIGHTS. Nothing herein shall be deemed to give one
party any right to trademarks or copyrights of the other party or to their use
except that each party shall have the right to use the other party's trademarks
and copyrights promoting the Clinics and Programs during the term of this
Agreement if it chooses to do so, but such use shall require the consent of such
other party.
8.2 CONFIDENTIAL INFORMATION. All written information exchanged between the
parties while this Agreement is in effect that is either clearly designated by
the disclosing party as "confidential" or may be reasonably understood from the
notices or legends affixed to it that it is proprietary to the disclosing party,
shall be treated as confidential information. Each party agrees that such
confidential information received from the other party under this Agreement
shall be maintained in confidence for three years after such exchange, and the
receiving party agrees not to use (other than in the performance of its
obligations hereunder) or disclose such information to any third party without
the prior written approval of the other party, unless such information (a) has
become public knowledge through no fault of the party receiving such
information, or (b) comes to such receiving party from a third party under no
obligation of confidentiality with respect to such information, or (c) was in
the possession of such receiving party prior to the date of disclosure or is
independently developed by or on behalf of such party without reliance on the
confidential information received hereunder, or (d) is requested to be disclosed
in compliance with applicable laws or regulations or is otherwise required to be
disclosed in compliance with an order by a court or other regulatory body having
competent jurisdiction; provided however that a party may disclose the existence
of this Agreement and the material terms of this Agreement to prospective
financing sources and acquirors who are under an obligation of confidentiality
to such party; and provided, further, that the disclosing party shall comply
with Section 8.3.
8.3 PUBLICITY. The parties hereto covenant and agree that each will not
make any public announcement, press release or statement of the existence of, or
reveal publicly the terms, conditions and status of, the transactions
contemplated herein, without the prior written consent (which shall not be
unreasonably withheld) of the other party as to the content of, time and manner
of the release of such announcement, release or statement. In the event that
Vista determines that it is required to file this Agreement as an exhibit to a
periodic filing required under the Securities and Exchange Act of 1934, as
amended, it shall notify Vista of such proposed filing and EES shall have the
right to require EES to redact certain sensitive terms of this Agreement prior
to the filing. The parties hereby agree to the release of a press release
attached hereto as EXHIBIT C promptly following the execution of this Agreement.
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SECTION 9. TERM
The initial term of this Agreement shall be for a period of *** from the
Effective Date unless earlier terminated as expressly provided under the terms
of this Agreement. EES, at its sole election, may extend the term of this
Agreement for up to four additional *** periods by giving Vista, at least
60 days prior to the end of the then current term, written notice of each such
election.
SECTION 10. TERMINATION
10.1 TERMINATION FOR BREACH. This Agreement may be terminated, prior to the
expiration of its initial or any additional term, by either party by giving
written notice of its intent to terminate and stating the grounds therefor if
the other party shall materially breach or materially fail in the observance or
performance of any representation, warranty, covenant or obligation under this
Agreement (i.e., a termination for "CAUSE"). The party receiving such notice
shall have 30 days from the date of receipt thereof to cure the purported breach
or failure. In the event such breach or failure is cured to the satisfaction of
the non-defaulting party, the notice of termination shall be of no effect. In
the event EES delivers such a notice of termination, EES's payment obligations
under Section 2.1(b)hereof automatically shall be suspended until the purported
breach or failure is timely cured in accordance with this Section 10.1. If the
purported breach or failure is not timely cured and the Agreement terminated,
EES shall be relieved from its payment obligations under Section 2.1(b) hereof
and shall have no liability to Vista therefor.
10.2 TERMINATION BY EES WITHOUT "CAUSE". Notwithstanding anything to the
contrary in this Agreement, EES may terminate this Agreement without Cause at
any time during the initial or any additional term upon 90 days' prior written
notice. The giving of such notice during any additional term will automatically
relieve EES of its obligation under Section 2.1(b) hereof to pay the second ***
of the annual fee for such additional term and EES shall have no liability to
Vista therefor.
10.3 EFFECT OF TERMINATION. Other than as provided in Sections 10.1 and 10.2
above, termination of this Agreement for any reason shall not release either
party from any liability which at such time has already accrued or which
thereafter accrues from a breach or default prior to such termination, nor
affect in any way the survival of any other right, duty or obligation of either
party hereto which under the terms of this Agreement survives such termination
including, without limitation, Sections 7, 8.2 and 11.3.
SECTION 11. MISCELLANEOUS
11.1 NOTICES. All communications and notices required or called for under
this Agreement shall be in writing and shall be transmitted by (a) first class
US mail, postage prepaid, and shall be deemed delivered three business days
after mailing, or (b) national overnight delivery service, and shall be deemed
delivered on the next business day after mailing or (c) by facsimile, and
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shall be deemed delivered on the next business day after transmission
provided the sender has confirmation of the transmission. Unless a change of
address notice is provided by a party to the other party, notices to EES
shall be sent to the address set forth in the beginning of this Agreement or
to facsimile number (000) 000-0000 and to the attention of *** and notices to
Vista shall be sent to the address set forth in the beginning of this
Agreement or to facsimile number (000) 000-0000 and to the attention of Xxxx
Xxxx.
11.2 GOVERNING LAW. This Agreement shall be governed by the internal law
(and not the law pertaining to conflicts or choice of laws) of the State of New
York in all respects, including all matters of validity, construction and
performance of this Agreement.
11.3 ARBITRATION. All controversies and claims arising out of or relating to
this Agreement or the validity, inducement, or breach thereof, shall be settled
by arbitration before a single arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA") then
pertaining, except where those rules conflict with this provision, in which case
this provision controls. The parties hereby consent to the jurisdiction of the
federal district court for the district in which the arbitration is held for the
enforcement of this provision and the entry of judgment on any award rendered
hereunder. Should such court for any reason lack jurisdiction, any court with
jurisdiction shall enforce this clause and enter judgment on any award. The
arbitrator shall be an attorney who has at least 15 years of experience with a
law firm or corporate law department of over 25 lawyers or was a judge of a
court of general jurisdiction. The arbitration shall be held in California if
initiated by Vista and Ohio if initiated by EES and in rendering the award the
arbitrator must apply the substantive law of New York (except where that law
conflicts with this clause), except that the interpretation and enforcement of
this arbitration provision shall be governed by the Federal Arbitration Act. The
arbitrator shall be neutral, independent, disinterested, impartial and shall
abide by The Code of Ethics for Arbitrators in Commercial Disputes approved by
the AAA. The arbitrator (a) shall not have any power or authority to add to,
alter, amend or modify the terms of this Agreement; (b) shall establish and
enforce appropriate rules to ensure that the proceedings, including the
decision, be kept confidential and that all confidential information of the
parties be kept confidential and be used for no purpose other than the
arbitration and (c) shall have the power to enforce specifically this Agreement
and the terms and conditions hereof in addition to any other remedies at law or
in equity. Within 45 days of initiation of arbitration, the parties shall reach
agreement upon and thereafter follow procedures assuring that the arbitration
will be concluded and the award rendered within no more than six months from
selection of the arbitrator. Failing such agreement, the AAA will design and the
parties will follow procedures that meet such a time schedule. Each party has
the right before or, if the arbitrator cannot hear the matter within an
acceptable period, during the arbitration to seek and obtain from the
appropriate court provisional remedies such as attachment, preliminary
injunction, replevin, etc., to avoid irreparable harm, maintain the status quo
or preserve the subject matter of the arbitration. THE ARBITRATOR SHALL NOT
AWARD ANY PARTY PUNITIVE, EXEMPLARY, MULTIPLIED OR CONSEQUENTIAL DAMAGES, AND
EACH PARTY
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Confidential Treatment and filed separately with the Commission.
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HEREBY IRREVOCABLY WAIVES ANY RIGHT TO SEEK SUCH DAMAGES. NO PARTY MAY SEEK
OR OBTAIN PREJUDGMENT INTEREST OR ATTORNEYS' FEES OR COSTS.
11.4 RELATIONSHIP OF THE PARTIES. The parties hereto are entering into this
Agreement as independent contractors, and nothing herein is intended or shall be
construed to create between the parties a relationship of principal and agent,
partners, joint venturers or employer and employee. Neither party shall hold
itself out to others or seek to bind or commit the other party in any manner
inconsistent with the foregoing provision.
11.5 ENTIRE AGREEMENT. The parties have, in this Agreement, incorporated all
representations, warranties, covenants, and agreements on which they have relied
in entering into this Agreement, and, except as provided for herein, neither
party makes any commitment to the other concerning its future action.
Accordingly, this Agreement (a) constitutes the entire agreement and
understanding between the parties with respect to the subject matter hereof and
there are no promises, representations, conditions, provisions or terms related
thereto other than those set forth in this Agreement and (b) supersedes all
previous understandings, agreements and representations between the parties,
written or oral. VISTA AGREES THAT THE REPRESENTATIONS AND WARRANTIES GIVEN
HEREIN BY EES ARE IN LIEU OF, AND VISTA HEREBY EXPRESSLY WAIVES ALL RIGHTS TO,
ANY IMPLIED WARRANTIES WHICH MAY OTHERWISE BE APPLICABLE BECAUSE OF THE
PROVISIONS OF THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATUTE, INCLUDING,
WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
11.6 MODIFICATIONS AND AMENDMENTS. No modification, change or amendment to
this Agreement shall be effective unless in writing signed by each of the
parties hereto; provided, that, EES in its sole discretion can modify, change or
amend Exhibit A hereto to delete or add products; and provided; further, that
Vista can modify, change or amend Exhibit B subject to the consent of EES, which
cannot be unreasonably withheld or delayed.
11.7 WAIVER. The failure of either party to enforce at any time for any
period the provisions of this Agreement shall not be construed to be a waiver of
such provisions or of the right of such party thereafter to enforce each such
provision.
11.8 ASSIGNMENT. This Agreement may not be transferred or assigned by either
party without the prior written consent (which shall not be unreasonably
withheld) of the other, except that (a) EES may assign its rights and/or
obligations hereunder to any of its Affiliates or to a successor to its business
and (b) Vista may assign, in whole not in part, its rights and obligations
hereunder to a successor to substantially all of its business (including the
Visi-Tools IP and Visi-Tools Technology). Subject to the foregoing sentence,
this Agreement shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.
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11.9 SEVERABILITY. In the event that any one or more of the provisions (or
any part thereof) contained in this Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by law, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any other such instrument. Any term or provision of this
Agreement which is invalid, illegal or unenforceable in any jurisdiction shall,
to the extent the economic benefits conferred by this Agreement to both parties
remain substantially unimpaired, not affect the validity, legality or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction.
11.10 BANKRUPTCY All rights to intellectual property granted under or
pursuant to this Agreement by Vista to EES are for all purposes of Section
365(n) of Title 11, U.S. Code (the "BANKRUPTCY CODE"), licenses of rights to
"intellectual property" as defined in the Bankruptcy Code. The parties agree
that EES, as a beneficiary of such rights under this Agreement, shall retain and
may fully exercise all of its rights and elections under the Bankruptcy Code.
Vista agrees during the term of this Agreement to create and maintain current
copies or, if not amenable to copying, detailed descriptions or other
appropriate embodiments, of all such intellectual property. If a case is
commenced by or against Vista under the Bankruptcy Code, then, unless and until
this Agreement is rejected as provided in the Bankruptcy Code, Vista (in any
capacity, including debtor-in-possession) and its successors and assigns
(including, without limitation, a Bankruptcy Code trustee) shall either perform
all of the obligations provided in this Agreement to be performed by Vista or
provide to EES all such intellectual property (including all embodiments
thereof) held by Vista and such successors and assigns, as EES may elect in a
written request, immediately upon such request. If a Bankruptcy Code case is
commenced by or against Vista, this Agreement is rejected as provided in the
Bankruptcy Code and EES elects to retain its rights hereunder as provided in the
Bankruptcy Code, then Vista (in any capacity, including debtor-in-possession)
and its successors and assigns (including, without limitation, a Bankruptcy Code
trustee) shall provide to EES all such intellectual property (including all
embodiments thereof) held by Vista and such successors and assigns immediately
upon EES's written request therefor. All rights, powers and remedies of EES
provided herein are in addition to and not in substitution for any and all other
rights, powers and remedies now or hereafter existing at law or in equity
(including, without limitation, the Bankruptcy Code) in the event of any such
commencement of a bankruptcy proceeding by or against Vista. EES, in addition to
the rights, powers and remedies expressly provided herein, shall be entitled to
exercise all other such rights and powers and resort to all other such remedies
as may now or hereafter exist at law or in equity (including the Bankruptcy
Code) in such event.
11.11 FORCE MAJEURE EVENTS. If either party is prevented from performing any
of its obligations hereunder due to any cause which is beyond its reasonable
control, including: fire, explosion, flood, or other acts of God; acts,
regulations, or laws of any government; war or civil commotion; strike, lock-out
or labor disturbances; or failure of public utilities or common carriers (a
"FORCE MAJEURE EVENT"), such party shall not be liable for breach of this
Agreement
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with respect to such non-performance to the extent any such non-performance is
due to a Force Majeure Event. Such non-performance will be excused as long as
such event shall be continuing, provided that such party gives immediate written
notice to the other party of the Force Majeure Event. Each party experiencing
the Force Majeure Event shall exercise reasonable efforts to eliminate the Force
Majeure Event and to resume performance of its affected obligations as soon as
practicable.
11.12 EXPENSES. Each party shall pay all of its own fees and expenses
(including all legal, accounting and other advisory fees) incurred in
connection with the negotiation and execution of this Agreement and the
arrangements contemplated hereby.
11.13 HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning and
interpretation of this Agreement.
11.14 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
shall be deemed to constitute the same Agreement.
[signature page follows]
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The parties agree to the terms of this EXCLUSIVE SUPPLY AND PROMOTION AGREEMENT,
as indicated by the signatures of their respective corporate officers, duly
authorized as of the Effective Date.
ETHICON ENDO-SURGERY, INC. VISTA MEDICAL TECHNOLOGIES, INC.
By: /s/ XXXXX XXXXXXX By: /s/ XXXX XXXX, PRESIDENT & CEO
----------------- ------------------------------
Print Name and Title: Print Name and Title:
Xxxxx Xxxxxxx
President
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EXHIBIT A - PRODUCT LIST
NON-ESI ACCREDITED FIELD ACTIVITY NEEDS ASSESSMENT FORM
NON-STERILE PRODUCT
PRODUCT REQUESTS MUST BE FILLED OUT COMPLETELY, ACCURATELY, LEGIBLY, AND
RECEIVED 30 DAYS PRIOR TO EVENT.
Coordinator's Name: Date of Lab:
------------------- ------------------
Coordinator's Phone #: Cost Center:
---------------- ------------------
Product Quantity Product Quantity Product Quantity
Code (Single Unit) Code (Single Unit) Code (Single Unit)
------- ------------- ------- ------------- ------- -------------
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SUTURE PRODUCT CODES
Product Quantity Product Quantity Product Quantity
Code (Box) Code (Box) Code (Box)
------- -------- ------- -------- ------- --------
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If PRODUCT ordered is not available, are substitutions acceptable?
Yes / / No / /
FAX THIS FORM TO REGISTRATION 513-337-2000 OR E-MAIL xxxxxxxxxx@xxxxx.xxx.xxx
NOTE: ALL ORDERS MUST BE APPROVED BY IACUC COMPLIANCE PRIOR TO SHIPPING. ONCE
COURSE IS APPROVED, FORM WILL BE FORWARDED FOR PROCESSING.
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EXHIBIT B - CLINIC AND PHYSICIAN INFORMATION
CLINICS MEDICAL DIRECTORS UNDER CONTRACT
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EXHIBIT C-- PRESS RELEASE
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[LOGO] 0000 Xxxxxxx Xxxxxxx, Xxxxx X
THE FINANCIAL RELATIONS XXXXX Xxxxxxxx, XX 00000
BSMG WORLDWIDE (000) 000-0000
NASDAQ: VMTI
-------------------------------------------------------------------------------
FOR FURTHER INFORMATION:
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD/BSMG WORLDWIDE
Xxxx X. Xxxx Xxxxx Xxxxxx
President Investor and Media Contact
(000) 000-0000 (000) 000-0000
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FOR IMMEDIATE RELEASE
JUNE 25, 2001 DRAFT
VISTA MEDICAL AND ETHICON ENDO-SURGERY
FORM STRATEGIC ALLIANCE TO ADVANCE
ADOPTION OF MINIMALLY INVASIVE WEIGHT REDUCTION SURGERY
CARLSBAD, CA, JUNE 25, 2001 - Vista Medical Technologies, Inc. (NASDAQ: VMTI),
and Ethicon Endo-Surgery today announced that they have formed a strategic
alliance primarily in support of the Vista Medical Laparoscopic Bariatric
Surgery (LBS) Program and Vista's activities and services related to developing
the surgical weight reduction market. This alliance affirms the focus of both
companies on sponsoring the highest quality surgical training, in conjunction
with associated products and programs, as keys to addressing the needs of
physicians and patients in minimally invasive bariatric surgery.
The alliance agreement also provides that the companies will evaluate other
complex minimally invasive surgical procedures which may benefit from the type
of combined training and technology involved in the LBS Program and will assess
opportunities to co-develop products incorporating Vista's proprietary
visualization technology. Specific terms of the agreement, including financial
terms, were not disclosed.
Xxxx X. Xxxx, President and CEO of Vista Medical, said, "this strategic alliance
strengthens and extends the collaboration which Vista and Ethicon Endo-Surgery
established last year. It reflects recognition of the potential represented by
the option of minimally invasive gastric bypass surgery as a proven solution for
morbid obesity and its co-morbidities. It also emphasizes our joint commitment
to offer the highest level of training, products and services to this rapidly
evolving market. The financial, product and marketing support provided by
Ethicon Endo-Surgery reinforces Vista's ability to develop and deliver
comprehensive programs to service accelerated growth of the market."
-MORE-
Xxxxx Xxxxxxx, President of Ethicon Endo-Surgery, Inc. said, "We are excited
about our continued relationship with Vista Medical and the opportunity to
further develop this important treatment for morbid obesity."
VISTA MEDICAL TECHNOLOGIES, INC.
Vista Medical Technologies, Inc. develops, manufactures and markets products
that provide information to doctors performing minimally invasive general
surgical, cardiac surgical and other selected microsurgical procedures. The
Company also develops and manages training and support programs which enhance
the adoption of procedures incorporating use of our visualization technology,
including the Laparoscopic Bariatric Surgery Program whereby we are working to
establish a national network of centers performing minimally invasive gastric
bypass surgery, to assist weight reduction in the morbidly obese. The Company's
products combine a head mounted display with video cameras to provide surgeons
with critical visual information during these microsurgical procedures, combined
with the ability to view additional information in a voice-controlled,
picture-in-picture format, to facilitate real-time decision making during
surgery. The Company also manufactures compact, high-resolution endoscopic
cameras for original equipment manufacturer customers and strategic partners.
Vista Medical Technologies is traded on the NASDAQ SmallCap Market under the
stock symbol VMTI. The Company's Internet Website is xxx.xxxxxxx.xxx. For more
information on Vista Medical Technologies, Inc. via facsimile at no cost, call
0-000-XXX-XXXX and dial code VMTI.
FORWARD LOOKING STATEMENTS
This news release may contain forward-looking statements concerning the business
and products of the Company. Actual results may differ materially depending on a
number of risk factors, including, but not limited to the following: the
Company's ability to raise additional capital to fund its operations and execute
its business plan, development, manufacturing, shipment, global economic and
distribution risks and customer acceptance. Other risks inherent in the business
of the Company are described in Securities and Exchange Commission filings,
including the Annual Report on Form 10-K for the year ended December 31, 2000,
and the Company's most recent quarterly report on Form 10-Q. The Company
undertakes no obligation to revise or update any forward-looking statements to
reflect events or circumstances after the date of this release.
# # #
