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EXHIBIT 10.27
DISTRIBUTION AGREEMENT
This Distribution Agreement is made this 15th day of December, 1998,
by and between
EndoSonics Europe B.V., Xx Xxxxx Xxxxxxxxxx 00, 0000 XX Xxxxxxxx, Xxx
Xxxxxxxxxxx ("EndoSonics"), a wholly owned subsidiary of EndoSonics Corporation,
0000 Xxxxxxx Xxxx, Xxxxxx Xxxxxxx, XX 00000, XXX,
and
JOMED X.X., Xxxxxxxxxxxxxx 0000, X.X. Xxx 00000, 0000 XX Xxxxxxxxx, Xxx
Xxxxxxxxxxx, and any of its wholly owned subsidiaries ("Distributor").
In consideration of the mutual promises and covenants contained herein, the
parties agree as follows:
1. DEFINITIONS
The following terms when used in their capitalized form shall have the
following meanings:
1.1. "Agreement" shall mean this Distribution Agreement, as amended,
modified, or supplemented from time to time.
1.2. "Catheters" shall mean any of the catheters as defined in Exhibit A.
1.3. "Confidential Information" shall have the meaning provided in Section 0
hereof.
1.4. "GMP" shall mean the good manufacturing practices for medical devices
set forth by any act, statute, or regulation of any kind governing the
products in the Territory.
1.5. "Minimum Purchase Commitment" shall have the meaning provided in Section
0 hereof.
1.6. "Products" shall mean those EndoSonics products listed in Exhibit A
attached hereto.
1.7. "Renewal term" shall have the meaning provided in Section 0 hereof.
1.8. "System" shall mean any of the systems or system options as defined in
Exhibit A.
1.9. "Term" shall have the meaning provided in Section 0 hereof.
1.10. "Territory" shall mean those countries listed in Exhibit B hereof.
1.11. "Trademarks" shall mean each trademark, trade name, service marks, the
name "EndoSonics" or any derivation thereof, brand names, signs, symbols
or slogans now or hereafter used by EndoSonics in connection with the
Products.
1.12. "Wires" shall mean any of the wires as defined in Exhibit A.
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2. APPOINTMENT; RELATIONSHIP OF PARTIES
2.1. Appointment
EndoSonics hereby appoints Distributor as its distributor of the
Products in the Territory, subject to the rights as stipulated in
Exhibit B hereto. Distributor's rights shall be exclusive for the first
12 months of this Agreement, and shall be non-exclusive thereafter,
provided however, that the exclusive period may be extended in certain
geographic areas for another 12 months upon the mutual written consent
of the parties. Distributor shall not distribute or otherwise promote
the Products in any way outside the Territory, without the prior written
authorization of EndoSonics.
During the Term and each Renewal Term, if any, Distributor shall not
sell or commercially promote products that compete with Products, nor
shall Distributor represent, or provide either directly or indirectly
marketing services to, any manufacturer or distributor in the Territory,
that relate to such competing products.
2.2. Exclusive Account Protection
Irrespective of Distributor's appointment under the foregoing Section 0,
Distributor shall retain exclusive rights to sell Catheters or Wires,
whichever applies, to each end-customer account in which Distributor,
during the Term, has placed a System other than on the basis of an
outright capital equipment sale, and to which it retains legal title.
This exclusive right shall be for the shorter of a period of three (3)
years following the installation of said System or the duration of the
implicit or explicit financing program agreed to between Distributor and
end-customer, the terms of which shall be disclosed to EndoSonics upon
Distributor's claim of exclusive rights under this section.
2.3. Relationship of Parties
The relationship of Distributor to EndoSonics hereunder shall be solely
that of an independent contractor. Distributor and EndoSonics each
acknowledge and agree that neither Distributor nor EndoSonics is an
employee, employer, agent, partner, or joint venturer of the other.
Neither Distributor nor EndoSonics shall have or hold itself as having
the right or authority to assume or create any obligation or
responsibility, whether express or implied, on behalf of or in the name
of the other, except with the express written authority of the other.
3. TERM - TERMINATION
3.1. Term
The term ("Term") of this Agreement shall commence the date hereof, and,
unless terminated sooner pursuant to the provisions of Sections 0, shall
terminate two (2) years from the date hereof; provided, however, that
this Agreement may be extended for successive one-year periods (each
such period, a "Renewal Term") upon the mutual written consent of the
parties.
3.2. Termination of Agreement
This Agreement shall terminate upon the happening of any of the
following events:
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(a) either party's failure to cure the breach of any material term,
covenant, or condition of this Agreement within 30 days after the
breaching party receives notice of such breach;
(b) immediately upon written notice to one party upon the change in
the structure or organization of the other party including,
without limitation, the acquisition or merger of the other party;
(c) immediately upon either parties' cessation to function as a going
concern; or
(d) immediately upon either parties' dissolution, liquidation,
insolvency, bankruptcy, assignment for the benefit of creditors
or admission in writing of its inability to pay its debts as they
mature.
3.3. Obligations upon Termination or Expiration
On termination or expiration of this Agreement by either party for any
reason:
(a) All rights granted by EndoSonics to Distributor shall cease
immediately, except that EndoSonics, at its sole discretion, may
permit Distributor to sell any Products for which it has paid
full list price for a period of three (3) months following such
termination or expiration, for the sole purpose of depleting its
inventory of Products. If Distributor has not sold its remaining
inventory of Products at the end of said three-month period,
EndoSonics, at its sole discretion, may extend such three month
period for an additional three months. If EndoSonics refuses to
extend such three month period, EndoSonics shall purchase all of
Distributor's remaining inventory of Products at fair market
value, provided that none of the remaining inventory being
purchased by EndoSonics shall have been used, removed from its
original packaging or carry an expired sterilization date;
(b) Provided that the Agreement is not terminated as a result of
Distributor's breach, EndoSonics shall fulfill any unexecuted
orders placed by the Distributor prior to such termination or
expiration subject to advance payment, and provided that
Distributor shows official written documentation of pending
orders from its customers;
(c) Distributor shall promptly pay all outstanding invoices, if any,
for Products shipped by EndoSonics prior to such termination or
expiration;
(d) Distributor shall forthwith return to EndoSonics or otherwise
dispose of as EndoSonics may direct, all promotional literature,
manuals, catalogues, instruction sheets, diagrams and other typed
or printed matter relating to the Products or to the business of
EndoSonics and all copies thereof in the possession or under the
control of the Distributor;
(e) Distributor shall not claim, nor have the right to claim any
compensation or indemnity whatsoever for surrendering the
representation of the Products, the customers or the goodwill it
has acquired for the Products or for any other or similar reason,
regardless of which party terminates the Agreement or for what
reasons.
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4. SALES OF PRODUCTS TO DISTRIBUTOR
4.1. Price
Prices to Distributor for Products shall be those set forth in the price
list attached in Exhibit A. EndoSonics shall provide at least 60 days
prior written notice of changes in said price list. Price changes shall
not affect unfulfilled purchase orders accepted by EndoSonics prior to
the effective date of such changes.
4.2. Orders
All orders for Products by Distributor shall be initiated by a written
purchase order sent to EndoSonics and requesting a delivery date,
provided, however, that an order may initially be placed orally. No
order shall be binding upon EndoSonics until accepted by EndoSonics in
writing, and EndoSonics shall have no liability to Distributor with
respect to purchase orders that are not accepted. EndoSonics shall use
commercially reasonable efforts to deliver Products at the times
specified in its written acceptance of Distributor's purchase orders.
4.3. Shipments
(a) Systems: All EndoSonics systems delivered pursuant to the terms
of this Agreement shall be suitably packed for air freight
shipment in EndoSonics' standard shipping crates, marked for
shipment to Distributor's address set forth above, and delivered
to Distributor or its carrier agent ex-works Rancho Cordova,
California, USA.
(b) Catheters and Wires: All Catheters and Wires delivered pursuant
to the terms of this Agreement shall be suitably packed for
airfreight shipment in EndoSonics standard shipping boxes, marked
for shipment at Distributor's address set forth above, and
delivered to Distributor or its carrier agent ex-works Rijswijk,
The Netherlands.
(c) Partial shipments: Unless specifically disallowed by Distributor,
EndoSonics may make deliveries of shipments in installments. Such
partial shipments shall be billed upon shipment by EndoSonics.
(d) Choice of carrier: Unless otherwise instructed in writing by
Distributor, EndoSonics shall select the carrier. All freight,
insurance, and other shipping expenses, as well as any special
packing expense, shall be paid by Distributor. Distributor shall
also bear all applicable taxes, duties, and similar charges that
may be assessed against the Products after delivery to
Distributor or its carrier ex works Rancho Xxxxxxx, USA or
Rijswijk, The Netherlands, whichever applies.
4.4. Payment Terms
EndoSonics shall submit an invoice to Distributor upon shipment of all
Products ordered by Distributor. The invoice shall cover Distributor's
Purchase Price for the Products plus any freight, value-added, sales or
other taxes, duties and other applicable costs initially paid by
EndoSonics but to be borne by Distributor. Payment shall be made by wire
transfer, check or other instrument approved by EndoSonics, within 60
days net, 30 days -1% discount, from the date of receipt of each
invoice. No part of any amount payable to EndoSonics hereunder may be
reduced due to any counterclaim, set-off, adjustment or other right
which Distributor might have against EndoSonics, any other party or
otherwise.
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EndoSonics, at its sole discretion, reserves the right to limit the
amount of credit it may extend to Distributor, to require full or
partial payment in advance, or to revoke any credit previously extended,
if, in EndoSonics' judgment, Distributor's financial condition does not
warrant proceeding on the terms specified.
4.5. Payment Currency
All payments to be made by either party hereunder shall be made in
United States Dollars, or such other currency as the parties may agree
upon. In the event another currency is so agreed upon, then the amount
to be paid shall be calculated using the New York foreign exchange
selling rate for that other currency for the business day preceding the
invoice date as published in the Wall Street Journal.
4.6. Rejection of Products
Distributor shall inspect all Products promptly within 10 days of
receipt. Distributor shall reject any Products in which the integrity of
product sterility has been violated. Upon product rejection or product
failure, Distributor shall notify EndoSonics and request a Returned
Goods Authorization ("RGA") number. Only upon receipt of an RGA number,
Distributor shall return to EndoSonics the rejected or failed Products,
freight prepaid, in its original shipping carton with the RGA number
displayed on the outside of the carton. Upon receipt of failed Products,
EndoSonics will test such Products for failure analysis. If specific
failure is observed, EndoSonics will, at its expense, replace failed
Products with the same or similar Products of equal value.
4.7. Product modifications/obsolescence
EndoSonics reserves the right to change its Products and/or its
specifications or to discontinue the manufacture of one or more of the
Products, without payment or compensation to Distributor, provided that
at least sixty (60) days written notice is given to Distributor in case
of a Product and/or specification change, and at least one hundred
twenty (120) days written notice is given to Distributor in case of a
Product discontinuation. EndoSonics agrees to supply sufficient
quantities of spare parts of any discontinued product to cover customer
orders and/or tenders applied for by Distributor prior to the notice of
a discontinued product.
5. PURCHASE COMMITMENTS
5.1. Aggregate Minimum Purchase Commitment
During the first 12 months of the Term, Distributor shall purchase a
minimum amount of Products (the "Minimum Purchase Commitment") as
stipulated in Exhibit C. Distributor's failure to meet the aggregate
Minimum Purchase Commitment shall constitute a material breach and basis
for termination of this Agreement under Section 0, unless the sale of
Products in one or more geographic areas of the Territory is restricted
by regulatory authority having jurisdiction over Products, or EndoSonics
is unable to deliver Products by agreed upon delivery dates, in which
event Distributor shall be proportionally excused from the Minimum
Purchase Commitment.
Upon execution of this Agreement, Distributor shall place a
non-cancelable purchase order for Products with the delivery dates as
stipulated in Exhibit C. Such non-cancelable purchase order shall be
binding on Distributor except to the extent that the sale of the
Products is restricted by regulatory authority having jurisdiction over
the
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products. EndoSonics shall extend special pricing and payment terms with
regard to said non-cancelable purchase order.
For the purposes of this provision, a "purchase" of Products within the
time periods set forth in Exhibit C shall mean EndoSonics' shipment of
such Products on or before the last day of each of such time periods.
5.2. Purchase Commitment by Geographic Territory
During the first 12 months of the Term, Distributor shall purchase a
minimum amount of Products for each of the geographic areas as
stipulated in the individual schedules included under Exhibit C. If
during the first 12 months of the Term Distributor fails to meet at
least 75% of said minimum purchase amount (as measured by the total
sales amount in US Dollars) in any of the geographic areas, the parties
shall jointly decide on corrective actions to be undertaken in each such
area, and shall agree on a reasonable minimum commitment for the ensuing
6 months. If Distributor fails to meet said agreed upon 6-month minimum
commitment, the distribution rights in the affected geographic area
shall be cancelled effective immediately, and the Minimum Purchase
Commitment shall be proportionally reduced.
6. ADDITIONAL OBLIGATIONS OF DISTRIBUTOR
6.1. Promotion of the Products
In addition to meeting the Minimum Purchase Commitment, Distributor
shall use its best efforts to promote the sale of the Products within
the Territory, to develop a market for the Products and to enhance the
Company's image in the marketplace as a provider of quality medical
devices. Distributor's obligations shall include, but not be limited to,
preparing promotional materials in appropriate languages for the
Territory, advertising the Products in trade publications within the
Territory, participating in and featuring the Products at appropriate
trade shows, and directly soliciting orders from customers for the
Product.
6.2. Market Analysis
Upon execution of this Agreement and within 30 days prior to the
beginning of each calendar year thereafter, Distributor shall provide
EndoSonics with an analysis of market changes and trends, competition
and an assessment of customer requirements for the Products, and
Distributor and EndoSonics shall mutually agree in writing on the sales
promotion activities and performance criteria to be met by Distributor
for the year.
6.3. Finances and Personnel
Distributor shall devote sufficient financial resources, technically
qualified sales representatives and clinical personnel to market and
sell the Products, in accordance with its obligations hereunder.
Additionally, distributor shall provide adequate training to physicians
and nursing staff to assist them in the proper use of the Products.
Distributor shall provide adequate contact with existing and potential
customers within the Territory on a regular basis, consistent with good
business practice.
6.4. Forecasts
Upon execution of this Agreement, and within the first week of every
quarter
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thereafter, Distributor shall provide EndoSonics with a 6-month rolling
forecast, showing prospective orders by Product model and intended
submittal date. The rolling forecast shall be updated quarterly by
Distributor.
6.5. Meetings
Distributor shall periodically make arrangements for EndoSonics'
representatives to conduct sales meetings with Distributor's sales force
in the Territory. EndoSonics and Distributor shall mutually agree on the
date, time and location of such meetings.
6.6. Inventory
Distributor shall, at its own expense, maintain sufficient inventory of
the Products, including inventory for demonstration purposes to fulfill
its commitments under this Agreement.
6.7. Representations
Distributor shall not make any false or misleading representations to
customers or others regarding EndoSonics or the Products. Distributor
shall not make any representations, warranties or guarantees with
respect to the specifications, features or capabilities of the Products
that are not consistent with EndoSonics' documentation accompanying the
Products or EndoSonics' literature describing the Products, including
the limited warranty and disclaimers.
6.8. Import and Export Requirements
Distributor shall, at its own expense, pay for all import and export
licenses and permits, pay customs charges and duty fees, and take all
other actions required to accomplish the export and import of the
Products purchased by Distributor.
Distributor acknowledges that EndoSonics is subject to regulation by
agencies of the US and other governments, including the US Department of
Commerce, which prohibit export or diversion of certain technical
products to certain countries. Distributor agrees to comply with all
export laws and restrictions and regulations of the US Department of
Commerce or other United States or foreign agency or authority, and not
to export, or allow the export or re-export of, any Proprietary
Information or Products or any direct product thereof in violation of
any such restrictions, laws or regulations.
7. ADDITIONAL OBLIGATIONS OF ENDOSONICS
7.1. Product and Marketing Materials
EndoSonics, at its expense, shall promptly provide Distributor with
reasonable amounts of printed commercial and technical data and
information and other publications which EndoSonics may have available
from time to time.
7.2. Territorial Inquiries
EndoSonics shall refer to Distributor all customer leads and any
correspondence or inquiries related to selling, marketing, or servicing
of Products in the Territory which EndoSonics may receive while this
Agreement is in effect. Similarly, Distributor shall promptly refer to
EndoSonics any such customer leads, correspondence or inquiries outside
the Territory.
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7.3. Distributor and Customer Support
EndoSonics shall provide a reasonable level of product application and
technical support to Distributor. EndoSonics may, at its own discretion
and expense, choose to send a representative to visit customers and
prospects in the Distributor's Territory, and Distributor agrees to
allow access and give support to perform such tasks, provided that such
visits are coordinated with Distributor. Any product application support
provided by EndoSonics such as application specialist's visits to
Distributor's Territory will not be invoiced to the Distributor unless
specifically requested by Distributor.
8. SERVICE AND MAINTENANCE, WARRANTY AND INSTALLATION
8.1. Systems Warranty and Service and Maintenance Agreements
EndoSonics shall make available to purchasers of the Systems its
standard warranty as stipulated in Exhibit D. Such warranty for the
first year after delivery shall be included in the purchase price of the
Systems. EndoSonics shall make an annual extended service and
maintenance agreement available, substantially in the form set forth in
Exhibit E, exclusively through Distributor in the Territory as from the
first year after delivery of the Systems. Distributor shall purchase
such annual service and maintenance agreement for each of the Systems to
which it retains title in the Territory at a cost set forth in Exhibit
A.
8.2. Systems Service and Maintenance
EndoSonics shall be solely responsible within the Territory for the
service, repair and maintenance of all Systems, including dispatching
calls and providing Distributor reports from time to time. Upon
termination of this Agreement for any reason whatsoever, EndoSonics
shall take such steps as are necessary to guarantee on-going service,
repair and maintenance of the systems installed through Distributor to
end customers. Distributor or the end-customers of Distributor shall
bear the cost of all service, repairs and maintenance performed that is
not covered under warranty or an annual service and maintenance
agreement.
8.3. Catheter and Wire Warranty
EndoSonics shall provide Product warranty for its Catheters and Wires as
stipulated in Exhibit D.
8.4. Systems Installation
EndoSonics shall support Distributor with the installation of the
Systems at the location of the end-user. Such installation shall include
the training of customers with respect to the Products sold. Distributor
shall be responsible for all reasonable travel expenses and related
disbursements incurred by EndoSonics in connection with said
installations.
9. MAINTENANCE OF RECORDS/PRODUCT RECALLS
9.1. Maintenance of Records
Distributor and EndoSonics shall, in compliance with applicable law,
including GMP's, maintain accurate records regarding the Products
including, without limitation, records
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of direct sales of Products to third parties, lot numbers, serial
numbers, and other manufacturing documentation necessary to ensure
traceability of Products. The parties shall retain these records
pursuant to the GMP's and applicable law.
9.2. Product Recalls
In the event of any recall of Products, either voluntary or otherwise,
Distributor shall cooperate with and assist EndoSonics in locating and
retrieving such recalled Products, as requested by EndoSonics and at
EndoSonics' expense.
10. COMPLAINTS AND RETURNS/REGULATORY REPORTING/ADVERSE IMPACT
10.1. Complaints and Returns
Distributor shall, as soon as reasonably practicable, notify, document
and forward to EndoSonics all customer complaints and any Products
returned in connection therewith. EndoSonics shall respond to
Distributor within ten business days of receipt of a complaint and
Distributor shall report EndoSonics' findings to customers, if
applicable. EndoSonics shall work diligently to resolve all customer
complaints.
10.2. Regulatory Reporting and Analysis of returned Products
EndoSonics shall file, or cause to be filed, all reports required of a
manufacturer pursuant to the applicable medical device reporting
regulations. EndoSonics, as the manufacturer of the Products, shall
perform all failure analysis on the Product within 30 days of receipt of
each failed Product and shall file all reports required with the
applicable regulatory agency. EndoSonics shall further cooperate with
and assist Distributor in submitting all reports that Distributor may be
required to file. Distributor shall promptly provide EndoSonics with
copies of all such reports.
10.3. Adverse Impact on the Products
Each party shall notify the other party's Regulatory Affairs and Quality
Assurance Officer or other designee as soon as reasonably practicable of
all actions or anticipated actions by any regulatory authority, that
could adversely affect the manufacture, marketing, distribution or sale
of the Product. Each party shall promptly provide copies to the other
party of all reports, citations, violations, warnings and deficiencies
received by such party in connection with the Products.
11. GOVERNMENT APPROVALS/REGISTRATION SUPPORT
11.1. Government Approvals
Distributor shall obtain all required government approvals or
registrations, if any, prior to the sale of any Product in the
Territory. All approvals and registrations shall be obtained under
EndoSonics' name, and EndoSonics and Distributor shall equally share in
the cost involved. In case of necessary adaptation or modification of
Products due to local requirements, the parties will assist each other
and will agree upon whether to conduct such adaptations or modifications
at EndoSonics' or Distributor's facilities.
Upon termination of this Agreement for any reason, Distributor shall
take all necessary steps to transfer any government approvals for
Products to EndoSonics or EndoSonics' nominee (or if such transfer is
not permitted, to cooperate in the cancellation of
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Distributor's government approvals and the re-issuance thereof to
EndoSonics or EndoSonics' nominee). Distributor shall promptly return to
EndoSonics all data and information relating to Product and make no
further use thereof.
11.2. Registration Support
EndoSonics shall assist Distributor in registering the Products in the
Territory by providing Distributor with:
(a) materials in EndoSonics' possession necessary to obtain health
registrations and marketing approvals, licenses and permits;
(b) certificates of analysis, export and compliance;
(c) trademark authorizations; and
(d) such other information as Distributor shall reasonably request
from time to time.
12. TRADEMARKS AND PROTECTION OF PROPRIETARY RIGHTS
12.1. Registration of Trademarks
EndoSonics shall, at its expense, use reasonable efforts to protect and
maintain all registrations, filings and issuance of its Trademarks in
full force and effect.
12.2. Title
The proprietary rights of EndoSonics in and to Trademarks and any items
related thereto are protected by the law of copyright, trademark, trade
secrets and unfair competition. Distributor shall have no proprietary
interest whatsoever in the Trademarks.
12.3. Notification of Infringement
Distributor shall promptly notify EndoSonics of any infringement, of
which Distributor has knowledge, of the proprietary rights of EndoSonics
in and to the Products or the Trademarks in the Territory and shall
cooperate with EndoSonics in any action by EndoSonics to investigate or
remedy any such infringement. All costs and expenses of investigating
and remedying any such infringement shall be borne by EndoSonics.
12.4. Use of Trademarks
EndoSonics hereby grants to Distributor a non-exclusive license to use
the Trademarks for the purpose of identifying and marketing the Products
in the Territory. Any use of the Trademarks will be in accordance with
such instructions as EndoSonics may give Distributor from time to time.
Distributor shall not grant any sub-licenses to use the Trademarks to
any Person, agent or other party without the prior written consent of
EndoSonics in each instance.
Upon the expiration or termination of this Agreement, the non-exclusive
license granted hereunder to Distributor shall expire and Distributor
shall immediately cease using the Trademarks.
12.5. Quality Control
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In order to comply with EndoSonics quality control standards,
Distributor shall (a) use the Trademarks in compliance with all relevant
laws and regulations in the Territory; (b) accord EndoSonics, after
previous written request, the right to inspect all marketing and
promotional materials in Distributor's possession containing the
Trademarks in order to confirm that Distributor's use of such Trademarks
is in compliance with this Agreement; and (c) not modify any of the
Trademarks in any way and not use any of the Trademarks on any goods or
services other than the Products or in connection therewith. In the
event EndoSonics has a good faith and substantial reason to believe that
Distributor is not complying with this provision, EndoSonics may, within
30 days of a written notification to Distributor stating and justifying
the reasons, suspend Distributor's right to use the Trademarks until
such time as Distributor gives EndoSonics adequate assurances that it
has taken corrective measures and that it will thereafter comply with
this provision.
12.6. Limitation of Distributor's Rights and Software License
Distributor shall have no access to or rights in the source codes of any
software included in the Products. Distributor shall have no right to
copy, modify or re-manufacture any Product or part thereof and shall
comply with the confidentiality obligations under Section 0.
For each System sold, EndoSonics licenses Distributor and its end
customer with a one-time paid in full perpetual license to use the
EndoSonics software and related updates and releases on the specific
System sold.
13. INDEMNIFICATION
13.1. Indemnification by Distributor
Except with respect to any of the following that arises from gross
negligence or willful misconduct of EndoSonics or its agents and subject
to Section 0 Distributor shall indemnify, defend and hold harmless
EndoSonics, its directors, officers, employees, representatives and
agents from and against any and all claims, suits, losses, damages,
costs, fees and expenses (including reasonable attorney's fees), and
other liabilities asserted by parties, both governmental and
non-governmental, resulting from or arising out of (a) any
misrepresentation of Distributor contained herein or breach of any
warranty made by Distributor; (b) any breach, violation or
non-performance of any covenant, condition or agreement in this
Agreement by Distributor; and (c) the material inaccuracy of any
representation or warranty of the Products made by Distributor.
13.2. Indemnification by EndoSonics
Except with respect to any of the following that arises from the gross
negligence or willful misconduct of Distributor or its agents and
subject to Section 0, EndoSonics shall indemnify, defend and hold
harmless Distributor, its directors, officers, employees,
representatives and agents from and against any and all claims, suits,
losses,damages, costs, fees and expenses (including reasonable
attorneys' fees), and other liabilities asserted by third parties, both
governmental and nongovernmental, resulting from or arising out of (a)
any misrepresentation of EndoSonics contained herein or breach of any
warranty or guaranty made by EndoSonics, (b) any breach, violation or
nonperformance of any covenant, condition or agreement in this Agreement
by EndoSonics, (c) the design of the Products, (d) any injury to any
property or person arising in connection with the design, manufacture,
use or application of the Products, (e) any infringement or alleged
infringement of the
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Products on any product, device, method, process, trade name, trademark
or patent, and (f) any and all taxes, fees, fines, penalties,
assessments, charges, expenses or other governmental levies assessed on
the Products which are not attributable to Distributor's acts or
omissions.
13.3. Limitations to Indemnity
The indemnities of Sections 0 and 0 shall not apply (a) if the
indemnified party fails to give the indemnifying party prompt notice of
any claim it receives and such failure materially prejudices the
indemnifying party, or (b) unless the indemnifying party is given the
opportunity to approve any settlement. Furthermore, the indemnifying
party shall not be liable for attorneys' fees or expenses of litigation
of the indemnified party unless the indemnified party gives the
indemnifying party the opportunity to assume control of the defense or
settlement. In addition, if the indemnifying party assumes such control,
it shall only be responsible for the legal fees and litigation expenses
of the attorneys it designates to assume control of the litigation. In
no event shall the indemnifying party assume control of the defense of
the indemnified party without the consent of the indemnified party
(which consent shall be given or not at its sole discretion).
14. CONFIDENTIALITY
Distributor acknowledges that by reason of its relationship to
EndoSonics hereunder it will have access to confidential or proprietary
information ("Confidential Information"). Confidential Information shall
include all technology, inventions, designs, processes, formulas,
computer software, specifications, customer lists, product development
plans, forecasts, and all other business, technical and financial
information provided to Distributor. Distributor agrees that it will not
use in any way for its own account or the account of any third party,
nor disclose to any third party, any Confidential Information revealed
to it by EndoSonics. Distributor shall take every reasonable precaution
to protect the confidentiality of such information.
Upon request by Distributor, EndoSonics shall advise whether or not it
considers any particular information or materials to be confidential.
Distributor shall not publish any technical description of the Products
beyond the description published by EndoSonics (except to translate that
description into appropriate languages for the Territory). In the event
of termination of this Agreement, there shall be no use or disclosure by
Distributor of Confidential Information of EndoSonics, and Distributor
shall not manufacture or have manufactured any devices, components or
assemblies utilizing any of EndoSonics' Confidential Information.
The duty of confidentiality set forth herein shall not apply to
information that:
(a) is, at the time of disclosure, in the public domain;
(b) after disclosure, enters the public domain except where such
entry is a direct result of a breach of this Agreement;
(c) prior to disclosure, was already known to the party receiving
such information, as evidenced by its written records;
13
(d) subsequent to disclosure, is obtained from a third party in
possession of such information and not under a contractual or
fiduciary obligation to keep such information in confidence;
(e) is filed with any governmental or any regulatory authority and
available to the public; or
(f) is disclosed pursuant to any judicial or governmental requirement
or order.
Distributor's duty of confidentiality set forth above shall be limited
to the Term, each Renewal Term, if any, and 2 years from the expiration
thereof.
15. MISCELLANEOUS
15.1. Notices
All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing, shall be deemed to
have been duly given when delivered in person, or when sent by telex or
telecopy or other facsimile transmission (with the receipt confirmed),
or on the third business day after posting thereof by registered or
certified mail, return receipt requested, prepaid and addressed as
follows (or such other address as the parties may designate by written
notice in the manner of aforesaid):
If to Distributor:
Company: JOMED International AB
Address: Drottninggatan 94
City: S-25221 Helsingborg
Country: Sweden
Attention: Mr. Tor Xxxxxx
Position: President
Telephone: +46-42-490.6000
Facsimile: +46-42-490.6001
If to EndoSonics:
EndoSonics Europe B.V.
X.X. Xxx 0000
0000 XX Xxxxxxxx
Xxx Xxxxxxxxxxx
Attention: Dr. J.P.C. de Weerd
Managing Director
Telephone: +31-70-307.3929
Facsimile: +31-70-307.3922
15.2. Governing Law and Jurisdiction This Agreement shall be governed by and
construed in all respects in accordance with the laws of the Netherlands
and fall under the jurisdiction of the place of office of EndoSonics.
15.3. Entire Agreement
This Agreement sets forth the entire understanding of the parties with
respect to the
14
subject matter hereof. This Agreement supersedes all prior
representations, agreements and understandings among the parties with
respect to such subject matter.
15.4. Amendments
No changes or amendments or alterations to this Agreement shall be
effective unless in writing and signed by all parties hereto.
15.5. Remedies Cumulative
The rights, powers and remedies set forth herein are cumulative and
shall be in addition to any and all other rights, powers and remedies
provided by law. The exercise of any right or remedy hereunder shall not
in any way constitute a cure under this Agreement, or prejudice either
party in the exercise of any of its rights under this Agreement or law.
15.6. Non-Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party.
15.7. Force Majeure
Non-performance of either party shall be excused (except for payment of
moneys and confidentiality) to the extent that performance is rendered
impossible by strike, fire, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to
perform is beyond the reasonable control of and is not caused by the
negligence of the non-performing party.
15.8. Legal Expenses
The prevailing party in any legal action brought by one party against
the other arising out of this Agreement shall be entitled, in addition
to any other rights and remedies it may have, to reimbursement for its
expenses, including court costs and reasonable attorney's fees.
15.9. Survival of Certain Terms
The provisions of Sections 0, 0, 0, 0,0, 0, and 0 shall survive the
termination of this Agreement for any reason. All other rights and
obligations of the parties shall cease upon termination of this
Agreement.
15.10. Waiver
No waiver of any default in the performance of any of the duties or
obligations arising out of this Agreement shall be valid unless in
writing and signed by the waiving party. Waiver of any one default shall
not constitute or be construed as creating waiver of any other default
or defaults. No course of dealing between the parties shall operate as a
waiver or preclude the exercise of any rights or remedies under this
Agreement. Failure on the part of either party to object to any act or
failure to act of the other party, or declare the other party in
default, regardless of the extent of such default, shall not constitute
a waiver by the party of its rights hereunder.
15.11. Severability If any provision of this Agreement shall be held to be
unenforceable in whole or in part, then the invalidity of such provision
shall not be held to invalidate any other provision herein and all other
provisions shall remain in full force and effect.
15.12. Counterparts
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall
constitute one and the same Agreement.
15
IN WITNESS WHEREOF, this Agreement has been executed by both parties as of the
date first written above.
EndoSonics Europe B.V. Distributor
Signature: Signature:
----------------------- ------------------------
Name: Dr. J.P.C. de Weerd Name: Xx. X. Xxxxxx
Title: Managing Director Title: President
Date: Date:
----------------------- ------------------------
16
EXHIBIT A
ENDOSONICS/CARDIOMETRICS PRODUCTS AND PRICES
ENDOSONICS SYSTEMS, SYSTEM OPTIONS AND ACCESSORIES:
PART NUMBER DESCRIPTION PRICE (US$)
----------- ----------- -----------
[ * ] [ * ] [ * ]
PRICE
SPECIAL PRICING CONDITIONS: DESCRIPTION (US$)
----------- -----
[ * ] [ * ] [ * ]
ENDOSONICS CATHETERS:
PART NUMBER DESCRIPTION PRICE (US$)
----------- ----------- -----------
[ * ] [ * ] [ * ]
------------------
[*] CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
17
ENDOSONICS/CARDIOMETRICS PRODUCTS AND PRICES (continued)
CARDIOMETRICS SYSTEMS AND ACCESSORIES:
PART NUMBER DESCRIPTION PRICE (US$)
----------- ----------- -----------
[ * ] [ * ] [ * ]
CARDIOMETRICS FLOWIRE(R) DOPPLER GUIDE WIRES:
PART NUMBER DESCRIPTION PRICE (US$)
----------- ----------- -----------
[ * ] [ * ] [ * ]
CARDIOMETRICS WAVEWIRE(TM) PRESSURE GUIDE WIRES:
PART NUMBER DESCRIPTION PRICE (US$)
----------- ----------- -----------
[ * ] [ * ] [ * ]
[*] CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
18
ENDOSONICS/CARDIOMETRICS PRODUCTS AND PRICES (continued)
USAGE DISCOUNTS AVAILABLE
0.014" FLOWIRE(R) / WAVEWIRE(TM):
------------------------------------- 0.018" FLOWIRE(R):
FLOWIRE(R)/ --------------------------
WAVEWIRE(TM) # OF FLOWIRE(R)
# OF BOXES PRICE EACH BOXES PRICE EACH
---------- ------------ ----- ----------
1-3 [ * ] 1-3 [ * ]
4-6 [ * ] 4-6 [ * ]
7-9 [ * ] 7-9 [ * ]
10+ [ * ] 10+ [ * ]
SMARTWIRE(R) DOPPLER GUIDE WIRES
UNIT PRICE EXTENDED
PART NUMBER DESCRIPTION (US$) PRICE* (US$)
----------- ----------- ---------- ------------
1450J 0.014 OD SmartWire(R) "J" Tip [ * ] [ * ]
*NOTE: EXTENDED PRICE REPRESENTS FIVE (5) WIRES PER BOX
All Products sales are ex-works Rijswijk, The Netherlands, except the Oracle(R)
In-Vision(TM) Imaging System, FloMap(R) I and II Systems, SmartMap(R) System and
WaveMap(R) System which are ex-works Rancho Cordova, California, USA.
[*] CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
19
EXHIBIT B
DISTRIBUTION RIGHTS BY TERRITORY
Territory Distribution Rights
--------- -------------------
United Kingdom Full product line (includes EndoSonics and
Cardiometrics products)
East Block, excluding Poland, Czech Full product line (includes EndoSonics and
Republic, Slovakia, Bosnia and Croatia Cardiometrics products)
Scandinavia (Sweden, Norway, Denmark, Full product line (includes EndoSonics and
Finland) Cardiometrics products)
Baltic States (Estonia, Latvia, Lithuania) Full product line (includes EndoSonics and
Cardiometrics products)
Middle East (Lebanon, Syria, Jordan, Saudi Full product line (includes EndoSonics and
Arabia, Kuwait, Qatar, Bahrain, United Cardiometrics products)
Arab Emirates, Oman, Egypt)
France EndoSonics products only
Italy EndoSonics products only
Turkey EndoSonics products only
Israel EndoSonics products only
20
EXHIBIT C
MINIMUM PURCHASE COMMITMENT AND INITIAL PURCHASE ORDER
The following schedules ("1999 EndoSonics Plan" by country) set forth the
minimum purchases of Products by Distributor required over the first 12 months
of this Agreement for all geographic areas within the Territory. Purchases may
be made by Distributor in advance of the time period specified to count towards
future periods. System purchases include system placements by Distributor in
connection with the distribution of the "JOSONICS Flex System", as stipulated in
the IVUS Guided Stent Delivery System Development, Supply and Distribution
Agreement of even date.
Non-cancelable purchase order:
The following schedule specifies the non cancelable purchase order which
Distributor shall place at the time of signing the Agreement. The quantity of
Products on this purchase order shall count towards the Minimum Purchase
Commitment as specified above.
Delivery date: Prior to December 29, 1998.
EndoSonics Products Cardiometrics Products
------------------------ ---------------------------------------
(Mega PV Flo Wave Flo Wave
Territory Five-64(TM) Sonics(R) 0.018" FloMap Map II Map Wire Wire
---------------------- ----------- --------- ------ ------- ------ ----- ---- ----
United Kingdom [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
East Bloc [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
France [ * ] [ * ] [ * ]
Italy [ * ] [ * ] [ * ]
Turkey [ * ] [ * ]
Israel [ * ]
Middle East [ * ]
Scandinavia [ * ]
[ * ] CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
21
EXHIBIT D
WARRANTY
1. SYSTEMS LIMITED WARRANTY
NOTICE: EndoSonics reserves the right to make changes in its products in
order to improve design or performance.
Subject to the conditions and limitations on liability stated herein,
EndoSonics warrants that Systems as so delivered shall materially
conform to EndoSonics' then current specifications for Systems, for a
period of one year from the date of delivery. ANY LIABILITY OF
ENDOSONICS WITH RESPECT TO THE SYSTEM OR THE PERFORMANCE THEREOF UNDER
ANY WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY WILL BE
LIMITED EXCLUSIVELY TO SYSTEM REPAIR, REPLACEMENT OR, IF REPLACEMENT IS
INADEQUATE AS A REMEDY OR, IN ENDOSONICS' OPINION IMPRACTICAL, TO REFUND
THE PRICE PAID FOR THE SYSTEM. EXCEPT FOR THE FOREGOING, THE SYSTEM IS
PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF FITNESS, MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. FURTHER,
ENDOSONICS DOES NOT WARRANT, GUARANTEE, OR MAKE ANY REPRESENTATIONS
REGARDING THE USE, OR THE RESULTS OF THE USE, OF THE SYSTEM OR WRITTEN
MATERIALS IN TERMS OF CORRECTNESS, ACCURACY, RELIABILITY, OR OTHERWISE.
Distributor understands that EndoSonics is not responsible for and will
have no liability for any items or any services provided by any persons
other than EndoSonics' authorized personnel. EndoSonics shall have no
liability for delays or failures beyond its reasonable control.
The happening of any one or more of the following events will void the
warranty:
1 - Defects due to negligence, alteration, modification,
installation or repair by anyone other than EndoSonics
authorized personnel, or a representative of Distributor
authorized by EndoSonics to repair the material.
2 - Abuse or misuse by end customer.
3 - Attempted or actual dismantling, disassembling, service or
repair in a procedure not specifically authorized by EndoSonics.
4 - Operating the System in a manner that is not in conformance
with purchase specifications and specifications contained in the
Operator's manual, and/or supplements.
5 - Maintenance of the System which is not in accordance with
procedures in the Operator's manual, and/or supplements.
6 - Repair, alteration or modification of the System in any way
other than by EndoSonics' authorized personnel, or without
EndoSonics' authorization.
If claims under this warranty become necessary, and the System or
components of the System are to be returned, Distributor shall contact
EndoSonics for instructions and issuance of a Returned Materials
Authorization number. The System or components
22
will not be accepted for warranty purposes unless the return has been
authorized by EndoSonics.
System parts or components repaired or replaced under warranty bear the
same warranty expiration date as the original equipment. Consumable
parts (including, but not limited to rechargeable batteries, etc.) are
warranted only against defects in materials and workmanship. System
parts purchased outside the original warranty period are warranted for a
period of 90 days, subject to all of the restrictions contained in this
Limited Warranty. Use of unauthorized replacement parts may void the
warranty. In all cases, EndoSonics will be the sole judge as to what
constitutes warrantable damage.
2. CATHETERS AND WIRES LIMITED WARRANTY
Subject to the conditions and limitations on liability stated herein,
EndoSonics warrants that catheters and wires, as so delivered, shall
materially conform to EndoSonics' then current specifications for these
catheters or wires upon receipt. ANY LIABILITY OF ENDOSONICS, WITH
RESPECT TO CATHETERS OR WIRES OR THE PERFORMANCE THEREOF UNDER ANY
WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY, WILL BE LIMITED
EXCLUSIVELY TO CATHETER OR WIRE REPLACEMENT OR, IF REPLACEMENT IS
INADEQUATE AS A REMEDY OR, IN ENDOSONICS' OPINION IMPRACTICAL, TO REFUND
THE PRICE PAID FOR THE CATHETER OR WIRE. EXCEPT FOR THE FOREGOING,
CATHETERS AND WIRES ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
FITNESS, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT. FURTHER, ENDOSONICS DOES NOT WARRANT, GUARANTEE, OR
MAKE ANY REPRESENTATIONS REGARDING THE USE, OR THE RESULTS OF THE USE,
OF CATHETERS OR WIRES OR WRITTEN MATERIALS IN TERMS OF CORRECTNESS,
ACCURACY, RELIABILITY, OR OTHERWISE.
Distributor understands that EndoSonics is not responsible for and will
have no liability for any items or any services provided by any persons
other than EndoSonics' authorized personnel. EndoSonics shall have no
liability for delays or failures beyond its reasonable control.
Additionally, this warranty does not apply if:
1. A catheter or wire is used in a manner other than described by
EndoSonics in the Directions for Use supplied with the catheter or
wire.
2. A catheter or wire is used in a manner that is not in conformance
with purchase specifications or specifications contained in the
Directions for Use.
3. A catheter or wire is re-used or re-sterilized.
4. A catheter or wire carries an expired sterilization date.
5. A catheter or wire is repaired, altered or modified in any way by
personnel other than EndoSonics authorized personnel, or without
EndoSonics' authorization.
All catheters and wires shall be inspected for obvious damage upon
arrival. If catheters or wires have been damaged in transit, EndoSonics
must be notified within 72 hours.
If claims under this warranty become necessary, contact EndoSonics for
instructions and issuance of a Returned Goods Authorization number, if a
catheter or wire is to be
23
returned. Catheters or wires will not be accepted for warranty purposes
unless the return has been authorized by EndoSonics.
IN NO EVENT SHALL ENDOSONICS BE LIABLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES DUE TO ANY CAUSE WHATSOEVER. No suit or action
shall be brought against EndoSonics more than one year after the related
cause of action has occurred.
THE FOREGOING CONSTITUTES ENDOSONICS' SOLE LIABILITY AND DISTRIBUTOR'S
SOLE REMEDY WITH RESPECT TO PRODUCTS SOLD BY ENDOSONICS.
24
EXHIBIT E
ENDOSONICS EXTENDED MAINTENANCE AGREEMENT
This Extended Maintenance Agreement is made and entered into this ________th day
of __________, 1998, by and between EndoSonics Europe B.V., Xx Xxxxx Xxxxxxxxxx
00, 0000 XX Xxxxxxxx, Xxx Xxxxxxxxxxx (hereinafter referred to as "EndoSonics")
and _________________________ (hereinafter referred to as "Customer").
The Extended Maintenance Agreement covers the following:
Equipment:
-----------------------------------------
Serial no.:
-----------------------------------------
Period: , 1998 to , 1999
-------------- -----------
CONDITIONS OF EXTENDED MAINTENANCE AGREEMENT
1. CALL WINDOW
8:30 A.M. to 5:00 P.M. (Central European Time) Monday through Friday
excluding holidays.
2. RESPONSE TIME
48 Hour Response Time during specified call window.
3. PAYMENT SCHEDULE
Annually in advance.
4. TERM
The Extended Maintenance Agreement shall be effective when signed by
both parties. The initial term is twelve (12) months from the
commencement date, unless modified on the face of the contract document.
5. AUTOMATIC RENEWAL
At the end of each term, the Extended Maintenance Agreement shall be
automatically renewed for twelve (12) months, unless terminated by
either of the parties at least two (2) months prior to the expiry date.
6. ELIGIBILITY FOR SERVICE
The Extended Maintenance Agreement shall only be valid as long as the
equipment covered by it is properly installed, and is serviced by
EndoSonics authorized personnel only. EndoSonics site environmental
conditions must be met at all times.
7. SERVICE RESPONSIBILITIES OF ENDOSONICS
7.1. EndoSonics shall maintain the equipment in good condition and
furnish service for calls received within the call window.
Specifically, EndoSonics shall:
25
A. Provide scheduled planned maintenance and safety check
one (1) time per year. Planned maintenance is to be
scheduled two weeks in advance within the call window;
excluding holidays.
B. Provide response to requests for remedial service within
the call window. Requests for service outside these
hours will be provided on a best effort basis at an
additional charge.
C. Provide all expenses incurred by EndoSonics Technical
Representative including airfare, lodging, and travel
time fees.
D. Provide original parts or parts of at least equal
quality.
E. Provide all applicable safety and reliability
modifications at no charge.
F. Provide all applicable software updates at no charge.
7.2. EndoSonics shall, at no additional cost to the customer, provide
replacement equipment on loan, should EndoSonics fail to service
or repair customer's equipment within a reasonable time period.
7.3. Parts not covered under this Agreement are:
Supplies, Video Cassettes and Consumables.
8. RESPONSIBILITIES OF CUSTOMER
Customer shall notify EndoSonics immediately of equipment malfunction
and allow EndoSonics full unrestricted access to all equipment and areas
in which the equipment is commonly operated.
9. CHARGES
9.1. The charge for Extended Maintenance during the initial term of
this Agreement is US$ .
9.2 Payments of service charges are due forty-five (45) days from
the date of the invoice.
9.3. All service calls received outside the call window are subject
to a four (4) hour minimum charge and any additional hours
necessary to complete the repair are based upon the overtime
rates prevailing at the time.
EndoSonics' overtime rates are:
(a) one and one half (1.5) times the normal hourly rate
after 5:00 P.M. and before 8:00 A.M. Monday through
Friday and all day Saturday.
(b) two (2) times the normal hourly rate on Sundays and
scheduled holidays.
9.4. Charges are exclusive of, and Customer is responsible for, all
sales, use, and like taxes where applicable.
10. The provisions of the Agreement shall be interpreted under the laws of
The Netherlands.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
AGREED TO AND ACCEPTED
Customer EndoSonics Europe B.V.
Name: Name: Dr. J.P.C. de Weerd
Title: Title: Managing Director
Signature: Signature:
