MANUFACTURING AGREEMENT
THIS MANUFACTURING AGREEMENT ("Agreement"), dated as of April 14th,
1997, by and between Arrhythmia Research Technology, Inc., a Delaware
corporation having an office and place of business at 0000 Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000 ("ART") and Astro-Med, Inc., a Rhode Island
Corporation having an office and place of business at Xxxxx-Xxx Xxxxxxxxxx
Xxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxx 00000 ("Astro-Med").
W I T N E S S E T H
WHEREAS, ART and Astro-Med have entered into an Asset Purchase
Agreement, dated as of the date hereof (the "Asset Purchase Agreement")
providing for the purchase of certain assets by ART from Astro-Med; and
WHEREAS, in connection with such purchase of assets, ART desires that
Astro-Med manufacture certain products for ART, on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. TERM AND TERMINATION. The term of this Agreement ("Term") shall
begin on the date hereof and shall continue until the close of business on
the third anniversary of the date hereof; provided, however, that ART on
sixty (60) days' prior written notice to Astro-Med, may terminate this
Agreement on the date of the first anniversary of this Agreement; and
provided further, that if at any time either party:
(a) shall be in breach of any material covenant, agreement, term,
provision or condition of this Agreement and shall not remedy such breach
within twenty days from its receipt of written notice from the other party
of such breach;
(b) shall be unable to materially perform any of its obligations
under this Agreement by reason of any cause beyond its reasonable control
pursuant to the Force Majeure provisions of Section 7 hereof for a
continuous period exceeding thirty (30) days; or
(c) shall file a voluntary or suffer the filing of an involuntary
petition in bankruptcy court seeking relief under any federal, state or
other statute or regulation, or have a trustee, receiver or liquidator
appointed for all or any substantial part of its assets, which remains
undismissed, unvacated or unstayed, as the case may be, for an aggregate of
sixty (60) days.
The other party shall have the right, at its sole election, in addition and
without prejudice to its other legal and equitable remedies, to terminate this
Agreement with immediate effect upon written notice to the other party.
Termination shall not relieve either party of any obligation to make payments
properly arising out of the performance by the other party of its obligations
under this Agreement.
In addition, if Astro-Med shall be unable to materially perform any of its
obligations under this Agreement by reason of any cause beyond its reasonable
control pursuant to the Force Majeure
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provisions of Section 7 hereof for a continuous period exceeding thirty (30)
days, ART shall have the right, at sole election, in addition and without
prejudice to its other legal and equitable remedies, to terminate this
Agreement with immediate effect upon written notice to Astr-Med. Termination
shall not relieve ART of any obligation to make payments properly arising out
of the performance by Astro-Med of its obligations under this Agreement.
The date on which this Agreement shall be terminated in accordance with the
provisions hereof shall hereinafter be referred to as the "Termination Date."
2. MANUFACTURING ARRANGEMENTS.
2.1 MANUFACTURE, SALE AND PURCHASE. During the Term of this
Agreement, Astro-Med shall manufacture and sell to ART and ART shall purchase
from Astro-Med the products ("Products") described in Exhibit A attached hereto
in such quantities, at such prices and under such terms as are set forth or
described herein.
2.2.2 Notwithstanding the provisions of Section 2.2, in the event
any revisions to the existing rules and regulations promulgated by the Food
and Drug Administration applicable to the manufacture and sale of the
Products, would, in Astro-Med's reasonable judgment, affect Astro-Med's cost
to manufacture and sell the products, the prices payable by ART for the
Products as set forth in Section 2.2 shall no longer apply. In such event,
the parties shall agree to appropriate revised pricing for the Products and
failing the mutual agreement of the parties on such matters, this Agreement
shall be immediately terminated.
2.2 PRICE. The prices payable by ART for the Products are set forth
on Exhibit B attached hereto. The Products will be prepared for shipment and
shipped to ART by Astro-Med, at Astro-Med's sole expense. However, if ART shall
direct Astro-Med to ship any such Products to the end-user of same, ART or said
end-user shall bear all costs associated with said shipment.
2.3 QUANTITIES. Astro-Med agrees to manufacture and sell to ART and
ART agrees to purchase from Astro-Med ART's requirements for the Products.
2.4 SPECIFICATIONS. All Products sold an purchased under this
Agreement shall meet and comply with the written specifications
("Specifications") therefor currently in effect and made available to ART by
Astro-Med. Astro-Med shall maintain accurate records and data for any quality
testing done by or for Astro-Med of any Products purchased by ART hereunder and
shall make such records and test data available to ART upon reasonable request.
ART shall have the right to conduct its own independent testing of such Products
at ART's expense. Any changes to the Specifications shall require the prior
written agreement of both Astro-Med and ART.
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2.5 TITLE AND RISK OF LOSS. Title to and risk of loss of Products
sold and purchased hereunder shall pass to ART from Astro-Med at the point of
shipment at Astro-Med's place of business in West Warwick, Rhode Island.
2.6 PAYMENT TERMS. Except to the extent that other payment terms are
set forth in written purchase orders covering the Products issued by ART and
accepted by Astro-Med hereunder, Astro-Med shall invoice ART for Products
shipped by Astro-Med under this Agreement upon shipment, and payment of the same
shall be made by ART on or before the sixtieth day following the date of each
invoice.
2.7 CHANGES IN SPECIFICATIONS. The parties will mutually establish
and periodically review improvement objectives for the Products. If the parties
mutually agree to changes in the Specifications for the Products, they also
shall mutually agree to price modifications (increases or decreases, whichever
the case may be) to the affected Products. At ART's request, Astro-Med will
substantiate conformance of the affected Products to the revised Specifications
therefor.
2.8 LEGAL COMPLIANCE. Astro-Med will comply with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings and charges thereunder) in connection with the manufacture and
sale of the Products.
2.10 CERTAIN IMPROVEMENTS. Astro-Med has completed on or before
the date hereof the following improvements to the Products on behalf of ART:
(a) in order to incorporate the thermal dilution method of
valve calculations or shunt, Astro-Med has identified for
ART equipment to be purchased which will modify the
Products to include a cardiac output computer.
(b) Astro-Med has modified the Products in order to
eliminate the system failure created by activation of the
electrosurgical cautery instrument; and
(c) Astro-Med has identified for ART equipment to be
purchased which will modify the date storage component
of the Products.
3. INVENTORIES, NON-EXCLUSIVE LICENSE AND WORKING CAPITAL.
3.1 INVENTORIES. Contemporaneously with the execution and
delivery of this Agreement, ART is purchasing from Astro-Med all of
Astro-Med's Inventories, as that term is
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defined in the Asset Purchase Agreement, which Inventories have been
preliminarily valued, subject to adjustment, in accordance with generally
accepted accounting principles applied on a basis consistent with prior
periods. In accordance with the terms and subject to the conditions set
forth herein and as an accommodation to Astro-Med, ART agrees that Astro-Med
may retain possession of the Inventories and use and consume the Inventories
in the manufacture of the Products sold and purchased hereunder. In
consideration of the foregoing, Astro-Med agrees that:
(a) it will regularly restock, at its sole cost and expense, all
Inventories used and consumed in the manufacture of the Products sold
and purchased hereunder with component materials identical to those
included in the Inventories or, if such component materials shall no
longer be available, with component materials substantially similar
thereto (the Inventories, together with all component materials
restocked by Astro-Med following the use and consumption of the
Inventories in the Manufacture of the Products sold and purchased
hereunder, are referred to hereinafter collectively as the "Product
Materials");
(b) within the first two business days following the close of
each month during the Term (and on the last business day immediately
preceding the termination of this Agreement, should such day not be
the last business day of such a month), Astro-Med will conduct (and
allow representatives of ART to observe) a physical inventory of the
Product Materials then held by Astro-Med, wherever located and whether
in transit or otherwise, and will report in writing (the "Product
Materials Report") to ART, within five (5) business days of conducting
said inventory and in such detail as ART shall reasonably require,
information relating to the quantity and the value ("Inventory
Value"), which Inventory Value shall be determined in accordance with
the Valuation Principles, of such Product Materials; and
(c) if the sum of the (i) the Inventory value of the Product
Materials, as set forth in a Product Materials Report furnished to ART
pursuant to Section 3.1(b), above, plus (ii) the aggregate purchase
price ("Aggregate Purchase Price") reflected on all valid purchase
orders issued by Astro-Med to and accepted third-party vendors for
replacement Inventories then pending (copies of which purchase orders,
with evidence of acknowledgment thereof, shall accompany the
corresponding Product Materials Report), should at any time be less
than the value of the Inventories as of the Closing, as that term is
defined in the Asset Purchase Agreement, as finally determined in
accordance with the provisions of Section _____ thereof ("Final
Value") by an amount of $5,000 or more (the "Valuation Shortfall"),
ART may:
(i) treat such an occurrence as a breach of a material
covenant of this Agreement and, subject to compliance with the
notice and right to cure provisions set for in Section 1(a)
above, terminate this Agreement; or
(ii) apply the Valuation Shortfall against any unpaid
invoice issued by Astro-Med and payable by ART hereunder;
provided, however, that should ART elect to apply the Valuation
Shortfall in the manner described in this clause (ii), upon
Astro-Med's restocking of the Product Materials such that the
same have an Inventory Value, as set forth in a Product Materials
Report furnished to ART pursuant to Section 3.1(b) above, no less
than the Final Value, Astro-Med shall be entitled to receive from
ART, upon ten (10) days' written demand, the amount of any such
Valuation Shortfall so applied.
In determining whether there shall be a Valuation Shortfall, ART may require
Astro-Med to demonstrate its ability to pay the Aggregate Purchase Price as the
same becomes due, and if Astro-Med shall at any time be unable to demonstrate
such ability, the portion of the Aggregate Purchase Price that Astro-Med shall
be unable to pay as the same becomes due shall be excluded from the computation
of the Valuation Shortfall.
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(d) within ten (10) days following the Termination Date, Astro-Med, at
its sole cost and expense and without any consideration payable by ART
therefor, shall deliver or cause to be delivered to ART all Product Materials
then held by Astro-Med, which Product Materials shall have an Inventory
Value, as set forth in the final Product Materials Report furnished to ART
pursuant to Section 3.1(b), above, no less than the Final Value; provided,
however, that should the Product Materials so delivered to ART have an
Inventory Value less than the Final Value, any such deficiency shall be paid
by Astro-Med to ART, by wire transfer of immediately available funds, within
ten (10) days of the termination of this Agreement; and
(e) Astro-Med agrees that it will neither sell, transfer, assign, pledge,
hypothecate, encumber or otherwise dispose of any of the Product Materials
except as provided herein, nor represent the Product Materials as the property
of any person other than ART. Astro-Med further agrees that it will execute
and deliver to ART such Financing Statements on Form UCC-1 or such other
instruments as ART shall reasonably require evidencing ART's ownership of the
Product Materials.
3.2 NON-EXCLUSIVE LICENSE. Astro-Med and ART acknowledge and
agree that ART has purchased from Astro-Med all of the Intellectual Property
Rights, as that term is defined in the Asset Purchase Agreement, used in or
associated with the manufacture, marketing and sale of the Products and,
consequently, absent the permission of ART, Astro-Med would not be permitted
to manufacture, market or sell the Products. ART hereby grants to Astro-Med
a non-exclusive license, which license shall terminate upon the termination
ofd this Agreement to manufacture, market and sell the Products in accordance
with and for the limited purposes set forth in this Agreement and to fulfill
Astro-Med's existing warranty obligations to customers as specified in
Exhibit C hereto. In consideration of such license, Astro-Med agrees that it
will not manufacture the Products (or any products capable of performing
functions similar to those of the Products) for, or sell any Products (or any
Products capable to performing functions similar to those of the Products) to
, any person other than ART (or other than any person designated in writing
from time to time by ART); provided, however, that Astro-Med shall not be
prohibited from manufacturing for, or selling products capable of performing
functions similar to those of the Products, to any one after the termination
of this Agreement, so long as such products do not infringe the intellectual
property rights of ART.
Each party hereto acknowledges that a remedy at law for any breach or
attempted breach of this Section 3.2 will be inadequate, agrees that the
other party hereto shall be entitled to specific performance and injunctive
and other equitable relief in case of any such breach or attempted breach.
3.3 WORKING CAPITAL. In the event ART shall, by written purchase
order, request Astro-Med to manufacture any Products in quantities that would
require an increase in the value of the Product Materials in excess of the Final
Value of the Inventories held by Astro-Med at the Closing, Astro-Med's
acceptance of any such purchase order may be made conditional upon the
requirement that ART prepay, in part or full, the purchase price for any such
Products.
4. EQUIPMENT LEASE ARRANGEMENTS.
4.1 EQUIPMENT LEASE. In accordance with the terms and subject to
the conditions set forth herein, ART hereby leases to Astro-Med and Astro-Med
hereby leases from ART the equipment described on Exhibit D hereto
("Equipment"). Astro-Med agrees to pay ART during the Term, without any
set-off or deduction whatsoever, lease rentals in the amount of $10.00 ("Base
Rental") per month, and all such other sums of money as shall become due
hereunder. Except as otherwise provided, the Base Rental shall be due and
payable in advance in twelve equal installments on the first day of each
calendar month during the Lease Term, and Astro-Med hereby agrees to pay such
Base Rental at ART's address provided herein monthly in advance without
demand.
4.2 REPAIRS; USE; ALTERATIONS. Astro-Med, at its own cost and
expense, shall keep the Equipment in good repair and shall not alter the
Equipment without ART's prior written consent.
4.3 SURRENDER. Unless this Agreement is extended to a later date
under any other term or provision hereof, on the Termination Date, Astro-Med, at
its expense, shall return the Equipment by delivering it in the same condition
as when delivered to Astro-Med,
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reasonable wear and tear excepted, to such place or on board such carrier,
packed for shipping, as ART may specify.
4.4 LOSS OR DAMAGE. Astro-Med shall bear the entire risk of loss,
theft, destruction or damage of Equipment or any item thereof (herein "Loss
or Damage"), from any cause whatsoever. No Loss or Damage shall relieve
Astro-Med of any obligation under this Agreement. In the event of Loss or
Damage, Astro-Med, at its option, shall (a) place the same in good condition
and repair, or (b) replace the same with like equipment in good condition and
repair with clear title thereto in ART.
4.5 TAXES; LIENS. As directed by ART, Astro-Med shall pay all
charges and taxes (local, state and federal) that may now or hereafter be
imposed or levied upon the sale, purchase, ownership, leasing, possession or
use of the Equipment, excluding, however, all taxes on or measured by ART's
net income. Astro-Med shall keep the Equipment free and clear of, and shall
discharge, at its sole expense, any and all levies, liens and encumbrances
that may be imposed thereon as a result of Astro-Med's possession or use of
the same.
4.6 ART'S PAYMENT. If Astro-Med fails to pay said charges and
taxes, or to discharge said levies, liens and encumbrances, ART shall have
the right, but not the obligation, to pay such charges and taxes, or to
effect such discharge. In any such event, Astro-Med shall promptly repay to
ART the cost thereof.
4.7 ASSIGNMENT; OWNERSHIP; PERSONAL PROPERTY. Without ART's prior
written consent, Astro-Med shall not (a) assign, transfer, pledge,
hypothecate or otherwise dispose of the Equipment, or any interest therein,
or (b) sublet or lend the Equipment or permit it to be used by anyone other
than Astro-Med or Astro-Med's employees. The Equipment is and shall at all
times remain the property of ART, and Astro-Med shall have no right, title or
interest therein or thereto except as expressly set forth in this Agreement.
The Equipment is, and shall at all times be and remain, personal property
notwithstanding that the Equipment or any part thereof may now be, or
hereafter become, in any manner affixed or attached to real property or any
improvements thereon. The parties hereto agree that, for Federal income tax
purposes, ART shall be treated as the owner of the Equipment and Astro-Med
shall be treated as the lessee thereof. Astro-Med agrees that it will execute
and deliver to ART such Financing Statements on Form UCC-1 or such other
instruments as ART shall reasonably require evidencing ART's ownership of the
Equipment.
5. REPRESENTATIONS AND WARRANTIES.
5.1 TITLE TO PRODUCTS. Astro-Med hereby represents and warrants to
ART that title to the Products to be sold and conveyed to ART hereunder shall be
good, clear and marketable, subject to no liens, security interests or other
encumbrances of any kind, except for a purchase money security interest in
favor of Astro-Med as permitted by applicable law to secure payment to Astro-Med
of the purchase price for such Products.
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5.2 STATUTORY COMPLIANCE OF PRODUCTS. Astro-Med hereby represents
and warrants to ART that the Products will comply with all pertinent
provisions of the Federal Food, Drug and Cosmetic Act (as amended from time
to time), and with all rules and regulations promulgated by the Food and Drug
Administration applicable to the manufacture and sale by Astro-Med to ART of
the Products, in all material respects.
5.3 REPAIR AND REPLACEMENT. Astro-Med hereby represents and
warrants that the Products will be manufactured in accordance with the
applicable Specifications and that the Products will, when delivered, be free
of defects in workmanship or material. If any failure to conform to this
warranty becomes apparent within twelve months after delivery, Astro-Med
shall, upon prompt written notice and compliance by ART with such
instructions as it shall give with respect to the return of the defective
Product or parts, correct such non-conformity by replacing the defective
Product or parts or refunding the purchase price paid by ART therefor.
6. INDEMNIFICATION.
6.1 INDEMNIFICATION BY ASTRO-MED. Astro-Med hereby agrees to
indemnify, save and hold harmless ART and its direct and indirect
subsidiaries and its and their successors and permitted assigns and all of
their respective officers, directors, stockholders, agents, attorneys,
representatives and employees (collectively, the "ART Indemnified Parties")
from and against any and all damages, liabilities, losses, assessments,
charges or costs (including attorneys' fees and court costs) (collectively,
the "Damages") arising from, out of or in any manner connected with (a) the
breach of, or the failure to perform or satisfy any of, the representations,
warranties, covenants or agreements made by Astro-Med in or under this
Agreement, and (b) any liability to any party directly or indirectly from the
operations carried on by or on behalf of Astro-Med in connection with the
manufacturing and sale of the Products, including, without limitation, any
liability to any party arising from or relating to any theory of product
liability covering the manufacturing, sale, introduction into commerce or use
of the Products which fail to comply with the Specifications prior to the
time risk of loss has passed to ART, except to the extent, in each case, that
such Damages are subject to section 6.2 hereinbelow.
6.2 INDEMNIFICATION BY ART. ART hereby agrees to indemnify, save
and hold harmless Astro-Med and its successors and all of their respective
permitted assigns and their officers, directors, stockholders, agents,
attorneys, representatives and employees (collectively, the "Astro-Med
Indemnified Parties") from and against any Damages arising from, out of or in
any manner connected with (a) the breach of, or the failure to perform or
satisfy any of, the representations, warranties, covenants, or agreements
made by ART in or under this Agreement, or (b) any liability to any party
whether incurred under statute or contract or in tort arising from or
relating to any theory of product liability covering the manufacture, sale,
introduction into commerce or use of the Products that comply with the
Specifications on and after the time the risk of loss has passed to ART,
except and to the extent, in each case , that such Damages are also subject
to Section 6.1, above.
6.3 CLAIMS; THIRD PARTY ACTIONS. ART and Astro-Med each agree
that promptly after any of its officers becomes aware of the discovery of
facts giving rise to a claim by it for indemnification hereunder ("Claim"),
such party will provide notice thereof in writing to the other party. The
failure of either party to so notify the other party of a Claim shall relieve
the other party from any liability in respect of such Claim to the extent
such other party is prejudiced by the failure to receive timely notice. For
purposes of
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this Section 6.3, receipt by a party of notice of any demand, assertion,
claim, action, or proceeding (judicial, administrative or otherwise) by or
from any person or entity (other than the other party to this Agreement) or
governmental authority ("Third Party Action") which may give rise to a Claim
on behalf of such party shall constitute the discovery of facts giving rise
to a Claim by it and shall require prompt notice of the receipt of such
matter as provided in the first sentence of this Section 6.3. Any notice
pursuant to this Section 6.3 shall set forth all information respecting the
Claim and the Third Party Action, if any, as such party shall then have and
shall contain a statement to the effect that the party giving the notice is
making a Claim pursuant to and formal demand for indemnification under this
Section 6.
6.4 INDEMNIFYING PARTY; INDEMNIFIED PARTY. For purposes of this
Section 6, the term "Indemnifying Party" as to a particular Claim or Third
Party Action shall mean the party having or which is held to have an
obligation to indemnify the other party with respect to such Claim or Third
Party Action pursuant to this Section 6, and the term "Indemnified Party" as
to a particular Claim or Third Party Action shall mean the party having or
which is held to have the right to be indemnified with respect to such Claim
or Third Party Action by the other party pursuant to this Section 6.
6.5 DEFENSE OF THIRD PARTY CLAIMS. Except as otherwise expressly
provided herein, Indemnifying Party shall be entitled at its cost and expense
to contest and defend by all appropriate legal proceedings in connection with
any Third Party Action with respect to which it is called upon to indemnify
Indemnified Party under the provisions of this Agreement; provided, however,
that with respect to any Claim arising from the assertion of any Third Party
Action, notice of the intention so to contest shall be delivered by
Indemnifying Party to Indemnified Party within twenty (20) days from the date
of receipt by Indemnifying Party of notice from Indemnified of the assertion
of the Third Party Action. Any such contest with respect to a Third Party
Action may be conducted in the name and on behalf of Indemnifying Party or
the Indemnified Party, as appropriate. Except as otherwise expressly
provided herein, such contest shall be conducted by attorneys employed by
Indemnifying Party, but Indemnified Party shall have the right to participate
in such proceedings and to be represented by attorneys of its own choosing at
its cost and expense. If after notice as provided for herein, Indemnifying
Party does not elect to contest any Third Party Action as provided in this
Section 6.5, Indemnifying Party shall be bound by the result obtained with
respect thereto by Indemnified Party and the Indemnified Party may (but shall
have no obligation to) contest any such Third Party Action or settle or admit
liability with respect thereto, all for the account of Indemnifying Party.
At any time after the commencement of defense of any such Third Party Action,
Indemnifying Party may request Indemnified Party to agree in writing to the
abandonment of such contest or the payment or compromise by Indemnifying
Party of the asserted Third Party Action whereupon such action shall be taken
unless Indemnified Party so determines that the contest should be continued,
and so notifies Indemnifying Party in writing within fifteen (15) days of
such request from Indemnifying Party. In the event that Indemnified Party
determines that the contest should be continued, Indemnifying Party shall be
liable with respect to such Third Party Action only to the extent of the
lesser of (i) the amount which the third party taking the Third Party Action
had agreed to accept in payment or compromise as of the time Indemnifying
Party made its request therefor to
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Indemnified Party, or (ii) such amount for which Indemnifying Party may be
liable with respect to such Claim by reason of the provisions hereof.
6.6 COOPERATION. If requested by Indemnifying Party, Indemnified
Party agrees to cooperate with Indemnifying Party and its counsel in
contesting any Third Party Action which Indemnifying Party elects to contest
or, if appropriate, in making any counterclaim against the third party taking
the Third Party Action, or any cross-complaint against any other person or
entity not a party hereto, but Indemnifying Party will reimburse Indemnified
Party for any expenses incurred by it in so cooperating. Indemnifying Party
agrees to cooperate with Indemnified Party with respect to any request by the
latter to maintain its relationship with a person or entity taking Third
Party Action; provided, however, that Indemnifying Party shall not be obliged
to take or forego any action if to do so would in Indemnifying Party's sole
judgment prejudice its interests. Indemnified Party agrees to afford
Indemnifying Party and its counsel the opportunity to be present at, and to
participate in, conferences with all persons or entities, including
governmental authorities, taking Third Party Action against Indemnified Party
or conferences with representatives of or counsel for such persons or
entities.
6.7 PAYMENT OF DAMAGES. Indemnifying Party shall pay to
Indemnified Party, upon demand, the amount of any Damages to which
Indemnified Party may become entitled by reason of the provisions of this
Section 6.
7. FORCE MAJEURE.
7.1 FAILURE OR DELAY IN PERFORMANCE. Neither Astro-Med on one
hand, nor ART on the other, shall be liable to the other party for failure or
delay in performance to the extent that performance hereunder is prevented by
Force Majeure, which is herein defined to include but not be limited to war
(whether declared or undeclared), fire, flood, lightning, earthquake, storm,
or any act of God; strikes, lockouts, or other labor difficulties; civil
disturbances, riot, or sabotage; accidents, explosions, breakages, freezing
or partial or entire failure of machines, equipment, pipelines, or other
property; any official order, directive or industry-wide request or
suggestion by any governmental authority or instrumentality thereof which, in
the reasonable judgment of the party affected, makes it necessary to cease or
reduce production; any disruption or breakdown of labor; any inability to
secure necessary fuel, power, equipment, transportation, or raw materials,
including inability to secure such items by reason of allocations promulgated
by authorized governmental agencies; or any other contingency, whether
similar or dissimilar to the foregoing, beyond the reasonable control of the
affected party which prevents performance hereunder.
7.2 SUSPENSION OF PERFORMANCE. Performance under this Agreement
shall be suspended during the period of such Force Majeure to the extent
permitted thereby; provided, however, that the settlement of strikes,
lockouts, industrial disputes, or disturbances shall be entirely within the
discretion of the party so settling to accede to the demands of any opposing
party.
7.3 NO EXTENSION; RESUMPTION OF PERFORMANCE. No curtailment,
suspension or acceptance of performance pursuant to this Section 7 shall
operate to extend the Term of or, except as provided in Section 1(b), above,
to terminate this Agreement. Performance under this
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Agreement shall resume to the extent made possible by the end of amelioration
of the Force Majeure event.
7.4 NOTICE OF FORCE MAJEURE EVENT. Upon the occurrence of any event
of Force Majeure, the party claiming Force Majeure shall notify the other party
promptly in writing of such event and, to the extent possible, inform the other
party of the expected duration of the Force Majeure event and the performance to
be affected by the suspension or curtailment.
8. INSURANCE. Throughout the term of this Agreement, Astro-Med, at its
sole cost and expense, shall maintain:
(a) workers' compensation and employer's liability insurance
required by law on the employees of Astro-Med and all of its
subsidiaries, if any, engaged in performing services under this
Agreement;
(b) general and public liability insurance, together with
products liability insurance, for the benefit of and payable to ART as
its interest may appear, against loss or damage on account of
liability which may be imposed against Astro-Med or ART, or both of
them, in connection with the sale by ART of the Products or the use by
Astro-Med of the Equipment, having a face value of not less than one
million dollars ($1,000,000); and
(c) property insurance against the loss or theft of or damage to
the Equipment, for the full replacement value thereof, with loss
payable to ART as its interest may appear.
Such policies shall (i) be effected with one or more insurers reasonably
acceptable to ART, (ii) contain a provision that they may not be canceled
without at least 30 days' prior notice to ART, (iii) cover, in perpetuity,
any covered claims which may at any time be brought so long as they occurred
in connection with the sale of the Products or the use of the Equipment and
were made at any time during the period when such insurance was in effect,
and (iv) shall have such other terms and conditions, deductible limits,
coverages, exclusions and the like which are reasonable acceptable to ART.
Astro-Med has, contemporaneously with the execution of this Agreement,
delivered to ART a true and complete copy of the policies of insurance
currently maintained by it as well as a binder for such insurance showing
that it is in full force and effect and shall, from time to time, furnish ART
with all changes to the terms of said policies of insurance which Astro-Med
desires to effect. In the event Astro-Med shall fail to maintain the
insurance coverages specified in this Section 8, ART shall have the right,
but not the obligation, to obtain such insurance coverages. In any such
event, Astro-Med shall promptly repay to ART the cost thereof.
9. CONFIDENTIALITY. Except as otherwise required under applicable law
or the Asset Purchase Agreement, Astro-Med and ART agree to maintain as
confidential and not to disclose to any third party or use in any manner
adverse to the other party any and all information provided by one party to
the other or otherwise obtained by one party from the other party in the
performance of this Agreement.
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10. MISCELLANEOUS.
10.1 NOTICE. Any notice required or permitted to be given under
this Agreement shall be in writing, and shall be deemed sufficiently given
when delivered in person or transmitted by telex, or when actually received
when sent by certified, registered or express mail, postage prepaid, to the
addresses given below or sent by telecopy to the telecopier numbers set forth
below.
Astro-Med: Astro-Med, Inc.
Astro-Med Industrial Park
West Warwick, Rhode Island
ATTN: Xxxxxxx Xxxxxxx, President
ART: Arrhythmia Research Technology, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
ATTN: X. X. Xxxxxxx, President and CEO
Either party hereto may change its address for the purpose of notice
hereunder by giving written notice of such change of address to the other
party in the manner specified herein. To the extent any notice provision in
any other agreement, instrument or document required to be executed or
contemplated herein contains a notice provision that is different from the
notice provision contained in this Section 10.1 with respect to matters
arising under such other agreement, instrument or document, the notice
provision in such other agreement, instrument or document shall control.
10.2 AUDITS. ART shall have the right to cause the books, records and
accounts that shall be maintained by Astro-Med in connection with the
quantity and value of its Product Materials to be audited by a mutually
acceptable independent public accounting firm for purposes of verifying or
confirming the accuracy of any information set forth in any Product Materials
Report furnished to ART hereunder. Any such audits shall be conducted during
normal business hours and at the sole expense of ART.
10.3 CONTROLLING LAW AND JURISDICTION. THE VALIDITY, INTERPRETATION
AND PERFORMANCE OF THIS AGREEMENT AND ANY DISPUTE CONNECTED HEREWITH SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
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10.4 ENTIRE AGREEMENT. The parties intend that the terms of this
Agreement shall constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior negotiations,
undertakings, representations and agreements of the parties hereto.
10.5 AMENDMENT AND WAIVERS. This Agreement may not be amended
except upon the written consent of the parties hereto. By an instrument in
writing, either party may waive compliance by the other party with any term
or provision of this Agreement that the other party was or is obligated to
comply with or perform; provided, however, that such waiver shall not operate
s a waiver of, or estoppel with respect to, any other or subsequent failure.
No failure to exercise and no delay in exercising any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any partial exercise
of any right, remedy or power hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy or power provided
herein or by law or in equity.
10.6 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
10.7 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall constitute one and the same instrument.
10.8 FURTHER ASSURANCES. Subject to the terms and conditions
hereof, each party agrees to use its best efforts to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement as
expeditiously as practicable, including, without limitation, the performance
of such further acts or the execution and delivery of any additional
instruments or documents as any party may reasonably request in order to
carry out the purposes of this Agreement and the transactions contemplated
hereby.
10.9 ASSIGNMENT. No party shall assign this Agreement in whole
or in part without the prior written consent of the other party, which
consent shall not be unreasonably withheld. Any assignment made or attempted
in violation of this Section 10.9 shall be void and of no effect. Subject to
the foregoing, this Agreement shall be binding on ART and Astro-Med and their
respective legal representatives, successors and permitted assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ASTRO-MED, INC.
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Xxxxxxx Xxxxxxx, President
ARRHYTHMIA RESEARCH TECHNOLOGY, INC.
By: /s/ X. X. Xxxxxxx
-------------------------------
X. X. Xxxxxxx, President and CEO
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EXHIBIT A
PRODUCTS
K3 Level I and Level II Systems
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EXHIBIT B
PRICING
$19,819.59 for the K3 Level I System and $20,819.59 for the K3 Level II
System, subject to adjustment per Section 3.1 of this Agreement. The
foregoing pricing is exclusive of the costs associated with obtaining and
integrating the hemodynamic analysis package which ART will be licensing from
Softheart, Inc.
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EXHIBIT C
EXISTING ASTRO-MED CUSTOMERS UNDER WARRANTY
1. Pomona Valley Hospital, Pomona, California
2. McMinnville Hospital, McMinnville, Oregon
3. Veterans Administration Hospital, Albuquerque, New Mexico
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EXHIBIT D
EQUIPMENT
The "Equipment" purchased from Astor-Med by ART pursuant to the Asset
Purchase Agreement.
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