CERTAIN INFORMATION HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2.
EXHIBIT 10.12
AGREEMENT
This Agreement made effective the lst day of August, 2000 (hereinafter
called the "Effective Date"), by and between: CNS, INC., of 0000 Xxxxxxx Xxxx,
Xxxx Xxxxxxx, Xxxxxxxxx 00000 X.X.X. (hereinafter called "CNS") and HERUSU, Co.,
Ltd., of 000 Xxxxxxxxxxx, Xxxxxx- xxxxx, Xxxxx-xxx, Xxxxx, Xxxxx 289-1537
(hereinafter called "HERUSU").
WITNESSETH:
WHEREAS, CNS intends to market and distribute the Products (hereinafter
defined) in the Territory (hereinafter defined) and wishes to export Bulk
Products (hereinafter defined) to HERUSU for repackaging and supply to the CNS
distributor in the Territory (hereinafter referred to as "EISAI");
WHEREAS, HERUSU has the necessary facilities to repackage the Products
and is willing to import, repackage and sell the same to EISAI for marketing and
distribution in the Territory under terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. DEFINITIONS
(a) "Bulk Products" shall mean the bulk strips manufactured by CNS and ready
for repackaging.
(b) "Other Materials" shall mean packaging, labeling and other materials to
be used in the repackaging of the Products.
(c) "Party" means CNS or HERUSU, as the case may be, and "Parties" means
both CNS and HERUSU.
(d) "Products" shall mean tan and clear BREATHE RIGHT(R) nasal strips and
other products as may be agreed between the Parties from time to time in
writing, in finished form, appropriately packaged and labeled for the
Territory; provided, that (a) CNS may elect not to offer all of its
products to HERUSU; (b) CNS may unilaterally delete from the list of
Products at any time, upon one hundred and eighty (180) days' notice to
HERUSU,
those products which CNS no longer offers generally to distributors in
the same form or with the same specifications; CNS may delete any
Product from the list of Products at any time, for any reason, upon one
hundred twenty (120) days' notice thereof to HERUSU, with the agreement
of HERUSU or if CNS offers a comparable replacement for the Product to
be deleted from the list.
(e) "Quality Agreement" shall mean the Agreement separately agreed to by the
parties which contains the Specifications (hereinafter defined),
handling instruction, special precautions and other information relating
to the Repackaging (hereinafter defined) of the Products. CNS and HERUSU
may, during the term of this Agreement, modify or supplement the Quality
Agreement by mutual agreement of the parties. The Parties (hereinafter
defined) acknowledge that the Quality Agreement shall be executed by
CNS, HERUSU and EISAI.
(f) "Repackaging" shall mean the act of repackaging and labeling the Bulk
Products appropriately for sale to EISAI, in compliance with the Quality
Agreement and local laws, regulations, and market requirements.
(g) "Specifications" shall mean specifications, descriptions of the Products
and Bulk Products, instructions, quality control and other information
relating to the Products as defined by CNS.
(h) "Territory" shall mean all areas and territories of Japan.
(i) "Trademarks" shall mean any trademark and/or trade name to be used in
the manufacture, repackaging, use and sale of the Products as listed in
Schedule 2 hereof.
(f) "Year" shall mean the period from August 1, 2000, to March 31, 2001 for
the first Year of this Agreement. Thereafter, Years of this Agreement
shall mean the twelve (12) month periods commencing on April 1 and
ending on the following March 31.
2. PURCHASE AND SUPPLY OF PRODUCTS
(a) HERUSU shall purchase all its requirements for the Bulk Products from
CNS. CNS shall exclusively supply the Bulk Products to HERUSU in the
Territory. HERUSU shall perform Repackaging of the Bulk Products and
sell the finished Products exclusively to EISAI in the Territory.
(b) CNS undertakes to supply HERUSU with such quantities of Bulk Products as
may be agreed upon by the parties to be necessary and desirable to meet
fully and promptly all demands from customers in the Territory as may be
informed to HERUSU by the EISAI from time to time.
2
(c) Subject to the provisions of 2(b) above, HERUSU shall provide to CNS a
good faith written estimate of its requirements of the Bulk Products for
one (1) year, divided into monthly calendar periods two (2) months prior
to the commencement of such year. Further, HERUSU shall provide monthly
to CNS a three (3) months good faith written estimate of its
requirement. If any of HERUSU's purchase orders issued in accordance
with Section 4(a) for delivery in any month call for more than one
hundred and twenty five percent (125%) of HERUSU's most recent three (3)
months written estimate for that particular calendar month, CNS shall
not be obligated, but shall use its reasonable endeavors to meet such
order in full provided that CNS may extend the shipping date for such
exceeding order by such reasonable period of time as is necessary in the
circumstances.
(d) HERUSU shall promptly obtain customs clearances and other documentation
for the importation of the Bulk Products.
3. SPECIFICATIONS AND OTHER INFORMATION
(a) CNS and HERUSU shall enter into the Quality Agreement separately from
and after their execution of this Agreement.
(b) The Quality Agreement shall include, but not be limited to, the
following items:
(i) Standards applicable to the Products, printing, lot coding,
inventory method, repackaging methods and procedures, storage
conditions, and other matters necessary for the proper
Repackaging of the Products.
(ii) Matters requiring attention at the time of receiving, storing and
shipping the Bulk Products and/or the Products, transport
conditions and other matters essential to the Repackaging
environment.
(iii) Matters necessary for quality control including, but not limited
to, methods of selecting samples for inspection upon delivery of
the Products and methods for assessing results of inspections.
(c) In the event that it is necessary to amend the Specifications, the
parties shall discuss and agree on such amendments as appropriate and
signify in writing their acceptance of such amendments, in compliance
with Section 21 below.
(d) HERUSU shall not, without the prior written consent of CNS, make any
alterations or modifications in the Specifications of the Products or
the methods or procedures of Repackaging.
4. PURCHASE ORDERS
3
(a) HERUSU shall place a written order for its requirement of the Bulk
Products not later than forty five (45) days prior to the required date
of delivery to HERUSU ("Purchase Order"). The Purchase Order shall
indicate the quantity, expected date of delivery, point of delivery and
other terms and conditions for such particular order. CNS shall, upon
receipt of HERUSU's Purchase Order, promptly issue a confirmation and
acceptance of such Purchase Order. No order submitted by HERUSU shall be
binding upon CNS unless confirmed and accepted by CNS. Confirmation and
acceptance shall not be unreasonably withheld by CNS. All confirmed
orders may not be canceled without the prior written consent of CNS.
(b) HERUSU shall work closely with EISAI in the Territory and shall always
order Bulk Products sufficiently in advance that the time permitted for
CNS's delivery under this Agreement allows HERUSU to meet the lead time
requirement for the transaction between HERUSU and EISAI.
(c) The terms and conditions of this Agreement shall prevail and control
over any conflicting terms and conditions used in the Purchase Order.
5. DELIVERY AND SHIPMENT
(a) Delivery terms for the Bulk Products include CNS's export standard
packing. Ownership and risk of loss of or damage to the Bulk Products
shall transfer from CNS to HERUSU upon landing of the Bulk Products in
Japan, before entering Customs.
(b) CNS shall send a sample of the Bulk Product manufactured prior to
shipment to HERUSU for HERUSU's inspection, and HERUSU shall inspect it
within seven (7) business days after the receipt of such sample. If in
HERUSUs inspection the sample of the Bulk Products to be shipped is
found to be defective or not conforming to the Specifications, HERUSU
shall immediately notify CNS and send to CNS such defective sample for
CNS's verification. CNS may thereupon either demonstrate to HERUSU that
the Bulk Product is acceptable or designate a different lot of Bulk
Products for shipment to HERUSU and send a sample of such different lot
to HERUSU, thereby re-commencing the process described in this
paragraph, including seven (7) business days limit for inspection by
CNS. CNS shall not ship the bulk Product to HERUSU until the sample from
the lot designated for shipment to HERUSU is confirmed acceptable by
HERUSU. HERUSU shall not unreasonably withhold, condition, or delay its
confirmation. Absence of HERUSU's rejection within any seven (7)
business days time limit provided in this Section shall be deemed
confirmation of HERUSU's acceptance of the relevant shipment of Bulk
Products, and such Bulk Products shall not be subject to further
inspection prior to shipment. In the event that the Bulk Product is
found to be defective, CNS and HERUSU shall discuss and agree on new
delivery date.
(c) Upon the arrival of each shipment of Bulk Products at the point of
delivery in Japan, and
4
no later than seven (7) business days after such arrival, HERUSU or its
designee shall examine and inspect such shipment of the Bulk Products
for damage, defect or shortage. In the event that, upon HERUSU's timely
inspection, the Bulk Product supplied is found to be defective or does
not conform to Specifications, CNS agrees to replace such shipment
within forty-five (45) days, at CNS's cost. However, CNS shall be
entitled to verify such claimed defect or non-conformity of the
delivered Bulk Products prior to replacement. Defective or
non-conforming Bulk Products shall either be returned to CNS or disposed
of locally upon prior agreement between the parties.
6. REPACKAGING OF PRODUCTS
(a) HERUSU shall Repackage the Bulk Products in accordance with the Quality
Agreement and shall observe all Japanese laws and regulations pertinent
to such Repackaging. However, prior to the commencement of the first
Repackaging under this Agreement, and prior to the first Repackaging
after any change in the Repackaging process, HERUSU shall submit to CNS
the proposed package design of the Products for approval, consistent
with CNS's specifications, and shall thereafter submit to CNS by fax or
otherwise a legible copy of the test printed approved design as rendered
on the package by HERUSU's printer for CNS' approval prior to use. CNS
shall not unreasonably withhold any approval provided for in this
section.
(b) HERUSU shall be responsible for procuring all repackaging and labeling
materials to be used in the Repackaging of the Bulk Products. Prior to
the first usage and procurement of such repackaging and labeling
materials, and prior to the first usage and procurement of any
repackaging and labeling materials different from those approved before
by CNS, HERUSU shall submit to CNS the list of suppliers of such
repackaging and labeling materials for approval (which approval shall
not be unreasonably withheld). HERUSU shall ensure by contract or other
arrangement that CNS has the right to audit or inspect such suppliers
upon reasonable notice.
7. PRICE AND PAYMENTS
(a) The price of the Bulk Products shall be as listed in the attached
Schedule 1. From the Year 2001, such price(s) shall be fixed for a
period of one (1) Year or as otherwise stated in Schedule 1. Generally,
such price(s) shall be reviewed in good faith by the end of January each
year during the term of this Agreement. However, if neither party gives
written notice to the other to review such price(s) or to change such
price(s), the previously agreed upon price(s) shall continue in effect
for another one (1) year period. Provided, however, that upon mutual
consultations and agreement of the parties, such price(s) may be changed
at any time in consideration of changes in market and economic
conditions and such other factors affecting the business of the parties.
If the parties do not agree on pricing changes by the end of January in
any Year, or at the latest on the day before the beginning of the
following Year, the prices then in effect shall continue in
5
effect for such following Year. The parties may then elect to make
other, compensating adjustment for such Year as may be permitted by the
terms of this Agreement
(b) All payments due under this Agreement are payable to CNS in U.S.
Dollars. Unless otherwise specified in this Agreement, all required
payments shall be due within ninety (90) days after issuance of the xxxx
of lading, provided that the invoice has been received within a
reasonable time thereafter, and shall be sent by telegraphic transfer to
a designated bank account of CNS.
(c) All freight, insurance, forwarding and handling charges, customs duties,
taxes, storage fees, and all other charges applicable to the Bulk
Products and/or the Products and all samples shall be the responsibility
of HERUSU. To the extent that the Parties consider practical, HERUSU
will pay actual freight and insurance charges directly. If for any
reason CNS should prepay reasonable freight and insurance charges,
HERUSU shall reimburse CNS for such charges immediately upon receipt of
an invoice for such charges, supported by evidence of payment by CNS.
8. DEVIATIONS AND CHANGE CONTROL
(a) If CNS desires to make any change in the raw materials (including change
of supplier or manufacturer of raw materials), manufacturing process, or
manufacturing facilities of the Products and/or the Bulk Products, CNS
shall notify HERUSU ninety (90) days prior to apply such change into
manufacturing of the Products to be delivered to HERUSU under this
Agreement
(b) If CNS notices, or has any reason to suspect, any abnormality in the
quality of the Products during manufacture or while in storage, CNS
shall immediately notify HERUSU to that effect so that the parties can
agree upon appropriate procedures and/or remedies.
9. CLAIMS
(a) In the event that HERUSU has any claim to be made with respect to the
quantity, condition, loss or damage of the strips (hereinafter referred
to as "Deficiency"), HERUSU shall notify CNS of any such claim within 7
days from the date HERUSU detects such deficiency and shall furnish CNS
with a copy of HERUSU's written inspection report made upon arrival of
the shipment in question and a description of any such defect or
non-conformity. No such claim may be asserted by HERUSU later than six
(6) months after delivery of the Products in question, "delivery" being
agreed by the parties to occur upon transfer of title of the Products
pursuant to this Agreement.
(b) No Bulk Products claimed to be defective may be returned to CNS or
scrapped by HERUSU without the prior written consent of CNS. CNS shall
bear the reasonable actual out-of-pocket costs of HERUSU for destruction
of Bulk Products following CNS's approval.
6
10. HANDLING OF CONSUMER CLAIM
(a) The procedure for handling claims by consumer relating to the defective
Products shall be separately agreed to by the Parties in the Quality
Agreement.
(b) In the case of a claim by a consumer alleging personal injury, damage or
loss caused by the Products, HERUSU shall advise CNS immediately of such
claim, ascertaining all relevant and necessary facts to permit CNS to
conduct a prompt investigation. CNS shall initially advise HERUSU of its
position on such claim within seven (7) days after the receipt of
HERUSUs notice of claim and shall furnish to HERUSU a detailed report on
such claim within a reasonable time thereafter, considering the pendency
of the claim.
11. HANDLING OF PRODUCT RETURNS
CNS and HERUSU agree to share the cost of all product returns received
from EISAI in the Territory (hereinafter referred to as "Product Returns"). CNS
shall bear the cost of Bulk Strips and HERUSU shall bear the rest of the cost of
the Products returned by EISAI provided that the limit of CNS's liability in any
Year under this provision shall be the supply of replacement Bulk Product for
returned Products not suitable for resale, to a maximum of [* * *] of the gross
number of Products sold by CNS to HERUSU during such year; provided further,
however, that the cost of Product returns caused by a defect or non-conformity
shall be borne by the party hereto that is responsible for such defect or
non-conformity. "Not suitable for resale" means that the 10-strip box of the
Products has been opened or damaged by the customer or retailers.
12. INDEMNIFICATION
(a) Subject to provisions of Section 11(c) below, CNS shall indemnify and
hold HERUSU harmless from and against any losses, obligations,
liabilities, costs and expenses, including legal and other fees, due to
any claim of a third party arising from any defect in the Bulk Products,
or from any act or omission or negligence of CNS or its employees and
agents, in connection with its obligations under this Agreement.
(b) Subject to provisions of Section 11(c) below, HERUSU shall indemnify and
hold CNS harmless from and against any liability, claims, losses, legal
and other fees, costs or expenses, including legal and other fees, due
to any claim of a third party arising from any defect in the repackaging
of the Products or any acts or omission or negligence of HERUSU or its
employees and agents in connection with its obligations under this
Agreement.
(c) To qualify for indemnification with respect to any claim as provided in
Section 11(a) or
7
11(b) above, the Party seeking indemnification (the "Requesting Party")
must (a) give the other Party (the "Indemnifying Party") prompt notice
of the claim with regard to which indemnification is being sought (the
"Claim"); (b) allow the Indemnifying Party, upon reasonable notice to
the Requesting Party and at the Indemnifying Party's option, to conduct
or participate in the defense, negotiation, and settlement of the Claim,
at the expense of the Indemnifying Party; (c) render all reasonable
assistance to the Indemnifying Party in the defense, negotiation, or
settlement, of the Claim; and (d) refrain from settling or compromising
the Claim or the position or defense of the Indemnifying Party without
prior written consent of the Indemnifying Party, which consent the
Indemnifying Party shall not unreasonably deny or delay. The parties
agree that any portion of the losses, obligations, liabilities, costs
and expenses referred to in Section 11(a) or 11(b) above that is
attributable to a willful or negligent act or failure to act, on the
part of the Requesting Party or any of its employees or agents is
excluded from the indemnification provided herein.
13. LEGAL RELATIONSHIP
For purposes of this Agreement, the parties herein are separate and
independent contractors. Nothing herein contained shall be construed or
deemed to create a principal- agent relationship or any form of
partnership or joint venture. Neither party has and shall not hold
itself as having any right, power, or authority to create any contract
or obligation in the name of or binding upon the other party unless such
contract or obligation is created with the prior written consent of the
other party.
14. REGISTRATION, LICENSES AND INFORMATION
(a) HERUSU shall be responsible for obtaining registration/ license for the
importation of the Bulk Products and Products into Japan and for the
sale of the Products, and provision of the Products to retailers and
consumers, in Japan. However, CNS shall assist HERUSU with the English
language versions of all relevant documentation necessary for such
registration/ license of the Products within Japan.
(b) Upon termination of this Agreement, HERUSU shall immediately, upon CNS's
request, transfer any or all such registrations or licenses to CNS or a
party designated by CNS for a reasonable actual out-of-pocket cost of
transfer. CNS shall reimburse such cost incurred by HERUSU within 30
days after the receipt of the invoice sent by HERUSU.
(c) CNS shall appoint a member of its staff whom HERUSU can immediately
contact for information and customer service as required.
15. TRADEMARKS
(a) CNS grants HERUSU the right to use Trademarks free of charge to
repackage and sell the
8
Products in the Territory pursuant to this Agreement.
(b) HERUSU recognizes the validity and ownership by CNS of the Trademarks.
Therefore, HERUSU shall not, during the term of this Agreement or
thereafter, represent that it is the owner of any Trademark pertaining
to the Products nor shall it assert any right or interest in such
Trademark or of any joint trademarks of the Trademark anywhere in the
world. HERUSU shall not do or cause to be done any act or thing which
may impair the validity or ownership by CNS of the Trademark at any time
during and after the term of this Agreement.
(c) The Trademarks shall be used by HERUSU only with respect to the
repackaging and sale of the Products to EISAI in the Territory and in
strict conformity with the Specifications and instructions of CNS.
(d) CNS shall, to the best of its ability, protect the Trademark and shall
at its own expense prosecute infringers of such Trademark. CNS's
decision as to whether or not such action shall be taken shall be
accepted by HERUSU as final. HERUSU shall immediately bring to the
attention of CNS any improper or wrongful use in the Territory of CNS's
patents, trademarks, emblems, designs, models or other similar
industrial or commercial monopoly rights. Upon CNS's request and
expense, HERUSU shall assist CNS in taking all steps to defend the
rights of CNS with respect to the trademarks. In such a case, CNS shall
reimburse HERUSU its reasonable, actual, out-of-pocket expenses for such
assistance. However, HERUSU agrees not to initiate on its own motion or
in its own name any protective action or legal proceedings with respect
to the Trademarks or the Products without the prior written
authorization of CNS. Also, HERUSU shall act with care in its use of the
Trademarks so as not to compromise, reduce, or injure CNS's rights in
the Trademarks.
16. CONFIDENTIALITY
(a) CNS and HERUSU acknowledges that all information transmitted by one
party to the other under this Agreement, including but not limited to,
information relating to research, development, manufacturing, testing,
purchasing, accounting and marketing, are confidential (the
"Confidential Information"). The parties undertake to hold such
Confidential Information confidential and shall not disclose such
information to third parties unless otherwise agreed to in writing by
the parties to disclose such information. However, such obligation of
confidentiality and non-disclosure shall not apply to information that.
(i) is or becomes publicly available through no fault of the party
receiving the information;
(ii) is disclosed to the party receiving the information by a third
party entitled to disclose it;
9
(iii) is already known to the party receiving the information as is
shown by prior written documentation; or
(iv) is developed independently by the party receiving the
information as is proven by proper evidence.
(b) The parties hereto undertakes to hold the Confidential Information in
confidence and shall use the same degree of care as if they are
protecting their own information. The party receiving the Confidential
Information shall use such information only for purposes of exercising
its rights and fulfilling its obligations under this Agreement. Further,
the parties agree not to use the other party's Confidential Information
for their own benefit or for the benefit of any third party.
(c) The parties hereto covenant and agree that they will limit the
disclosure of such Confidential Information only to their employees to
whom such disclosure is necessary and appropriate to permit the party
receiving the information to exercise its rights and carry out its
obligations under this Agreement. Notwithstanding the foregoing, each
party shall be free to disclose Confidential Information to: (i) an
appropriate governmental agency properly requiring such disclosure or in
order to comply with applicable law, and (ii) to its Affiliates and
consultants who are bound by the same conditions of confidentiality as
are undertaken by each party herein.
The obligations herein contained shall survive the termination of this
Agreement and shall continue for five (5) years after termination
hereof.
17. WARRANTIES
(a) CNS warrants that all Bulk Products shipped to HERUSU under this
Agreement have been manufactured in accordance with applicable laws and
regulations and are free from defects in materials and workmanship and
conform to the Specifications and quality control tests pertinent to
such Bulk Products. CNS further warrants that all documentation
(including records maintenance) relating to manufacturing and testing of
the Bulk Products was made in accordance with relevant laws, regulations
and the Specifications. THE FOREGOING ARE ALL OF CNS'S WARRANTIES. CNS
DOES NOT WARRANT THAT THE BULK PRODUCTS OR THE PRODUCTS ARE
MERCHANTABLE: NOR DOES CNS WARRANT THAT THE BULK PRODUCTS OR THE
PRODUCTS ARE FIT FOR ANY PARTICULAR PURPOSE.
(b) CNS'S LIABILITY WITH RESPECT TO ITS WARRANTIES FOR THE BULK PRODUCTS AND
THE PRODUCTS IS LIMITED IN THE AGGREGATE TO THE PAYMENTS OF SALES PRICES
CNS HAS RECEIVED UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS
PRIOR TO THE EVENT (OR FIRST EVENT, IF MORE THAN ONE EVENT IS ALLEGED)
GIVING RISE TO THE WARRANTY CLAIM. THE LIMITATION EXPRESSED IN THIS
PARAGRAPH
10
DOES NOT APPLY TO INDEMNIFICATION BY CNS UNDER SECTION 11.
(c) EXCEPT AS EXPLICITLY PROVIDED IN THIS AGREEMENT, CNS SHALL NOT BE
RESPONSIBLE FOR ANY LOSS, DAMAGE, EXPENSES, CLAIMS, COSTS OR ANY ACTION
WHATSOEVER ARISING FROM THE SUPPLY OR SALE OF THE PRODUCTS BY HERUSU.
HERUSU SHALL NOT MAKE ANY REPRESENTATION TO THIS EFFECT WHATSOEVER ON
CNS'S BEHALF. IN NO EVENT SHALL CNS BE LIABLE FOR ANY INCIDENTAL,
SPECIAL, OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH THIS AGREEMENT, THE
BULK PRODUCTS, OR THE PRODUCTS.
18. INSPECTIONS
(a) CNS or its authorized representative shall have the right to inspect
HERUSU's records and facilities relating to the Repackaging of the
Products, and HERUSU shall ensure that CNS has the right to inspect the
related records and facilities of HERUSU's subsidiaries and suppliers
used in connection with the Products, the Repackaging, or the Bulk
Products, and CNS shall conduct such inspection(s) in the presence of a
HERUSU representative during normal business hours. Such inspection(s)
shall be notified in writing to obtain an approval in advance, upon
reasonable notice (such approval not to be unreasonably withheld,
conditioned, or delayed). If, upon inspection, CNS finds that any
Products Repackaged by HERUSU or that any Repackaging process does not
conform to relevant laws, regulations or the standard rules and agreed
specifications on Quality Agreement, CNS shall notify HERUSU in writing
of such findings. HERUSU undertakes to correct such defect within thirty
(30) days upon receipt of notice from CNS.
(b) HERUSU or its authorized representative shall have the right to inspect
CNS's records and facilities relating to the Bulk Products. HERUSU shall
conduct such inspection(s) in the presence of a CNS representative
during normal business hours. Such inspections shall be notified in
writing to obtain an approval in advance, upon reasonable notice (such
approval not to be unreasonably withheld, conditioned, or delayed). If,
upon inspection, HERUSU finds that any Bulk Products or that any
manufacturing process does not conform to relevant laws, regulations or
the standard rules and agreed specifications on Quality Agreement,
HERUSU shall notify CNS in writing of such findings. CNS undertakes to
correct such defect within thirty (30) days upon receipt of notice from
HERUSU.
19. TERM AND TERMINATION
This Agreement shall become effective on the date first above written
and shall continue in full force and effect from August 1, 2000 to March
31, 2003, renewing automatically thereafter for consecutive two-year
periods unless either party gives notice to the other at least one
hundred eighty (180) days prior to the end of the then current term,
indicating
11
such party's intent not to renew. However, in the event that one party
defaults in or breaches any of its obligations under this Agreement or
any provisions thereof, the other party shall have the right to
terminate this Agreement upon thirty (30) days written notice to the
party in default, provided that such default is not remedied within such
thirty (30) days. Furthermore, either party may terminate this
Agreement, immediately without notice, if one party becomes insolvent or
is adjudicated by a voluntary or involuntary bankruptcy or a
receivership of its assets or properties, and CNS may terminate this
Agreement upon notice to HERUSU in the event that the Distribution
Agreement between CNS and EISAI is terminated.
20. NON-ASSIGNABILITY
HERUSU shall not assign, transfer, sub-license or encumber any of its
rights and obligations under this Agreement without the prior written
consent of CNS. Notwithstanding this provision, HERUSU may assign or
delegate some or all of its rights and obligations under this Agreement
to any of its affiliates or subsidiaries, provided that HERUSU shall
remain primarily responsible for the performance of such obligations and
subject to an acceptable Agreement between the parties hereto. This
Agreement shall be binding and inure to the benefit of the successors
and assigns of CNS.
20. NOTICES
To be effective, all notices and statements to be given hereunder shall
be in writing and shall be sent at the respective addresses of the
parties as set forth below unless notification of a change of address is
given in writing pursuant to this notice provision:
If to CNS:
CNS, Inc.
0000 Xxxxxxx Xxxx
Xxxx Xxxxxxx XX 00000
XXX
Attention: Xx. Xxxxx Xxxxxxx, President
If to HERUSU:
HERUSU Co., Ltd. Chiba Xxxxxxx
000 Xxxxxxxxxxx, Xxxxxx-xxxxx, Xxxxx-xxx
Xxxxx, Xxxxx 289-1537
Xxxxxx Xxxxxxxxx
Director, Manufacturing Department
All notices given pursuant to this Section 21 shall be deemed effective
upon receipt or rejection by the Party to be charged with notice.
12
22. ENTIRE AGREEMENT
This Agreement comprises the entire agreement of the parties hereto and
supersedes all prior provisions, negotiations, agreements and
conunitments with respect thereto and shall not be released, discharged,
changed or modified in any manner except by instruments signed by the
duly authorized officers or representatives of each of the parties
hereto.
23. SEVERABILITY
If any provision of this Agreement is determined to be illegal, invalid
or otherwise unenforceable, then to the extent necessary to make such
provision and/or this Agreement legal, valid or otherwise enforceable,
such provision shall be limited, construed or severed and deleted from
this Agreement, and the remaining portion of such provision and the
remaining other provisions hereof shall survive, remain in full force
and effect and continue to be binding, and shall be interpreted to give
effect to the intention of the parties insofar as that is possible.
24. FORCE MAJEURE
Except for the obligation of HERUSU to make payment when due, neither
party shall be liable to the other for its failure to perform any of its
obligations under this Agreement for so long and to the extent that such
failure is due to causes beyond its reasonable control such as but not
limited to prohibition in exportation or importation, refusal to issue
export or import license, Acts of God, war, blockade, revolution,
insurrection, strike, lockout, civil commotion, riot, plague or other
epidemics, destruction of the Products by fire or flood or any other
cause beyond the reasonable control of either party. However, the
failure of either party to perform its obligations under this Agreement
due to the foregoing reasons or events shall be limited and/or suspended
only for a long as such reasons or events are existing. The performance
of either party's obligations shall resume as soon as these reasons or
events have been resolved or has ended; provided that for such reasons
or events which are remediable or preventable, the failure to perform
shall be excused only for as long as it is proven that the party so
affected has exerted an efforts to remedy or prevent such reasons or
events from occurring.
25. ARBITRATION
(a) Any disputes, controversies, difficulties or differences which may arise
out of or in relation to this Agreement shall be settled amicably
between the parties. However, in case of the failure to settle amicably
such disputes, controversies, difficulties or differences, the parties
hereto agree to settlement through arbitration in accordance with the
International Arbitration Rules of the American Arbitration Association
("AAA"). The arbitration shall be conducted by three (3) arbitrators.
CNS shall appoint one of such
13
arbitrators and EISAI shall appoint one of such arbitrators. Another
arbitrator shall be chosen jointly by the parties or, if they fail to
agree within thirty (30) days after notice by one of the parties of
initiation of the arbitration, then such arbitrator shall be appointed
by the AAA in accordance with said Rules.
(b) The place of arbitration shall be Minneapolis, Minnesota, USA.
(c) The language of the arbitration shall be English. Documents in other
languages shall be permitted as exhibits but mutually acceptable English
translations shall be provided by the offering Party.
(d) The award may grant any relief appropriate under the applicable law,
including without Station declaratory relief and/or specific
performance. However, the Parties agree that notwithstanding the
applicable law, the arbitral tribunal shall not be empowered to award
punitive damages against either Party.
(e) Judgment on the award may be entered in any court having jurisdiction
over the award or any of the Parties or their assets.
26. COMPLIANCE WITH LAW: GOVERNING LAW
HERUSU shall comply with all applicable statutes, regulations,
ordinances and other laws. This Agreement shall be governed by and
interpreted in accordance with the Laws of the State of Minnesota,
without regard to the rules of any jurisdiction with respect to
conflicts of law.
27. HEADINGS
The titles, captions and headings used in this Agreement are for
convenience only and must not be used in any way to interpret, construe
or otherwise determine the meanings of any of the provisions or terms
thereof.
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives.
CNS, Inc. HERUSU Co., Ltd.
/s/ Xxxxx Xxxxxxx /s/ Tadanari Hiraku
---------------------------------- ------------------------------------
Name: Xxxxx Xxxxxxx Name: Tadanari Hiraku
Title: President and COO Title: President
CNS, Inc. HERUSU CO., LTD.
Date: November 13, 2000 Date: November 10, 2000
15
SCHEDULE 1
TO
AGREEMENT
BETWEEN
HERUSU CO., LTD., AND CNS, INC.
BULK PRODUCTS:
Initially, tan and clear Breathe Right(R) nasal strips.
Thereafter, additional products, as the Parties may agree upon in
writing.
PRICES:
For tan and clear Breathe Right(R) nasal strips, HERUSU shall pay the following
prices, which reflect the parties' recognition of the advertising investment in
the Market by CNS. The parties also recognize that CNS's advertising investment
will vary substantially from Year to Year and is not proportional to any change
in prices for the Bulk Products:
For the first three months from the date of the first order.
--------------------------------------------------------------------------------
Exchange Rate Price per Strip
--------------------------------------------------------------------------------
[* * *] [* * *]
--------------------------------------------------------------------------------
[* * *] [* * *]
--------------------------------------------------------------------------------
[* * *] [* * *]
--------------------------------------------------------------------------------
From the fourth month until August 1, 2001
--------------------------------------------------------------------------------
Exchange Rate Price per Strip
--------------------------------------------------------------------------------
[* * *] [* * *]
--------------------------------------------------------------------------------
[* * *] [* * *]
--------------------------------------------------------------------------------
[* * *] [* * *]
--------------------------------------------------------------------------------
*The exchange rate used for calculation shall be the Mitsubishi Bank (Tokyo) TTS
rate on the order date by HERUSU.
16
Before March 31, 2001, CNS and HERUSU shall review and agree on the price for
the period from August 1, 2001 to March 31, 2002.
CNS shall supply free samples of Products in quantities agreed with
EISAI. HERUSU shall pay only the transportation, taxes, insurance, import
duties, and other such costs for shipment and importation of such free samples
into Japan.
CNS shall supply in reasonable quantities agreed with EISAI Bulk
Products for EISAI to provide to customers and potential customers as boxed
samples, including two strip boxes of Products to be sold to customers such as
airlines or rail road companies which will purchase such Products not for resale
but for their customer service. The price to be paid by HERUSU for Bulk Products
intended for and limited to such resale is reduced to a standard US [* * *] per
strip, and HERUSU shall pay all other costs and charges related to such sales,
as provided above.
17
SCHEDULE 2
TO
AGREEMENT
BETWEEN
HERUSU CO., LTD., AND CNS, INC.
Trademarks:
Breathe Right(R) and other trademarks, according to notice provided to
HERUSU from time to time by CNS either adding or subtracting trademarks from the
list of active trademarks subject to the provisions of this Agreement.
18
