Exhibit 10.1
CARDIODYNAMICS INTERNATIONAL CORPORATION
PURCHASE AGREEMENT
with
GE MARQUETTE MEDICAL SYSTEMS, INC.
(a Wisconsin corporation)
(hereinafter referred to as "Buyer")
This Agreement is entered into as of August 25, 1999, by and between
Buyer and CardioDynamics International Corporation ("CardioDynamics"), a
California Corporation, for the purchase of Products in accordance with the
terms and conditions set forth below:
1. ORDERS, DELIVERY SCHEDULES AND PRICES.
1.1 Orders. Buyer hereby orders and agrees to purchase from
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CardioDynamics, and CardioDynamics agrees to sell and deliver to Buyer, during
the Agreement Period, the products specified in Schedule A (the "Products") at
the price specified in Schedule B. Buyer's commitment to purchase Products from
CardioDynamics consists only of any release by Buyer of a Purchase Order (as
defined below). Purchase orders released by Buyer for Products ("Purchase
Orders") may consist of hard copies of Buyer's purchase order set forth in
Exhibit I or other written communications from Buyer which state specific
delivery requirements. Purchase Orders released by Buyer shall identify the
delivery date or dates and identify the quantities to be released for delivery
within the lead times specified in Schedule B. REGARDLESS OF FORM, EVERY
PURCHASE ORDER IS DEEMED TO INCLUDE THE TERMS AND CONDITIONS HEREIN AND BUYER'S
STANDARD TERMS AND CONDITIONS SET FORTH IN EXHIBIT I. Unless otherwise agreed
in writing by the parties, prior to the first anniversary hereof, Buyer shall
not be responsible or in any way liable to CardioDynamics or any third party
with respect to any material commitments or production arrangements in excess of
the amounts or in advance of the times necessary to meet Buyer's delivery
schedules set forth in its released Purchase Orders. Seller may not reject any
Purchase Order of Buyer unless Buyer is in material breach and has received
notice of such breach.
1.2 Initial Purchase Order. Coincident with the execution of this
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Agreement, Buyer has submitted to CardioDynamics, a purchase order dated as of
the date hereof, committing to purchase twenty (20) units of the XXXX.xxx
Hemodynamic Monitor (Model BZ 4110 X-xxx ("X" denotes English or Symbol Front
Panel, "xxx" denotes voltage and language requirement for back panel)) and one
additional patient cable and case of sensors (50 patient applications) per unit,
for shipment on or before
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August 27, 1999 and an additional twenty (20) XxxX.xxx Hemodynamic Monitor
(Model BZ 4110) with one additional patient cable and one case (50 patient
applications) per unit on or before November 15, 1999, at the price specified in
Schedule B, setting out the terms of delivery and other terms, which purchase
order has been accepted by CardioDynamics. Buyer will receive the maximum
distributor discount for CardioDynamics' Products, which, at the commencement of
this agreement, shall be no less than thirty-eight percent (38%) off of List
Price on the XxxX.xxx Hemodynamic Monitoring Systems and twenty-five (25%) off
of List Price for all CardioDynamics' disposable items, as shown on Schedule B
hereto. Scheduling of the Product delivery will be as provided in Section 1.3.
1.3 Delivery Schedule. The Products purchased under this Agreement
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shall be delivered to Buyer in accordance with the terms set forth in Buyer's
written sales releases. Sales releases must:
A. Request by product number the type and quantity of the
Products to be delivered in any specified month; and
B. With the exception of the initial purchase order of 20 units
to be shipped on or before August 27, 1999, be received by CardioDynamics at
least sixty (60) days prior to the requested date of delivery. CardioDynamics
will make every reasonable attempt to accommodate the delivery needs of the
Buyer.
In the event that Buyer incurs a penalty because of late delivery of
Products to the end user, and the late delivery is attributable to the fault of
CardioDynamics, CardioDynamics shall reimburse Buyer for the amount of such
penalty, it being agreed that time is of the essence. The penalty shall not
exceed the late delivery penalty which Buyer would incur by reason of late
delivery to the end user attributable to the fault of Buyer and the total amount
of the penalty will not exceed the price of the Product ordered. The foregoing
shall be in addition to all remedies available to Buyer.
1.4 Reschedule. The delivery schedule confirmed by CardioDynamics in
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compliance with Section 1.3 shall be binding upon both parties except that Buyer
may, upon written notice, reschedule delivery at least equal to the lead-time
for such Product as specified in Schedule B. Said reschedule must defer the
delivery of the Products to a reschedule date no later than October 15th of the
current year. No other changes, including changes to the mix or configuration of
the Products, may be made without CardioDynamics' prior written consent.
1.5 Prices. (a) The prices for the Products ordered and delivered
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under this Agreement are set forth in Schedule B (the "Prices"). Buyer and
CardioDynamics agree to review the Prices after the Products have been
distributed by Buyer for a period of six (6) months and every six (6) months
thereafter; provided, however, that in no event shall any increase in Prices for
a particular Product be greater than the percent increase in CardioDynamics'
cost of goods for such Product.
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(b) CardioDynamics represents to Buyer that the Prices for the
Products are as low as the prices at which CardioDynamics is currently selling
(or currently intending to sell) items similar to the Products in the same or
similar quantities with similar terms and conditions. If during the term of
this Agreement CardioDynamics reduces the price of such similar items,
CardioDynamics shall: (i) promptly notify Buyer in writing of such reduction;
and (ii) apply an equivalent reduction in the Price to all Products ordered by
Buyer that have not been previously shipped and invoiced at the time of such
reduction. The Prices shall thereafter be adjusted to reflect such reduction
for the balance of the term hereof or until the Prices are further reduced
pursuant to this Agreement.
1.6 Forecasts. Buyer shall submit a six (6) month rolling forecast
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to CardioDynamics to cover the Products, by product model and month. Such
forecasts are agreed by the parties to be for planning purposes and, as such,
are not binding upon either party.
1.7 Software/Firmware. The Price includes a perpetual, paid-up,
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worldwide, irrevocable license to Buyer and its customers or users of Buyer's
products containing Products to use, in the operation, maintenance and repair of
the Products, any software and/or firmware supplied by CardioDynamics to Buyer.
2. CO-MARKETING AGREEMENT.
CardioDynamics agrees that during the Agreement Period it will not directly
or indirectly sell, market, or distribute any Products (including any product
functionally similar to a Product) to any party in the territory described on
Schedule C hereto (the "Territory"), other than to Buyer and the parties set
forth on Schedule D hereto in accordance with this Agreement.
3. OTHER OBLIGATIONS OF CARDIODYNAMICS.
3.1 Accessories. During the Agreement Period, CardioDynamics agrees
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to sell to Buyer such accessories as Buyer may order from CardioDynamics'
current International Distributor Price List (designated as Schedule B in this
Agreement) during the Agreement Period at the prices specified in Schedule B.
Such orders must be placed at least sixty (60) days in advance of any delivery
date specified in such order.
3.2 Spares and Services. During the Agreement Period, and for seven
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(7) years thereafter, CardioDynamics agrees to sell to Buyer such spares,
maintenance tools, and maintenance manuals as Buyer may firmly order at the
prices and on the terms and conditions prevailing on the date of order or as
specified in a separate Service Agreement, which will supercede any service
obligations within this Agreement.
3.3 Discontinuance of Spare Parts. Notwithstanding any other
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provision of this Agreement, during the Agreement Period, and for seven (7)
years thereafter, CardioDynamics shall give Buyer one hundred eighty (180) days
written
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notice of any proposed discontinuance of specialized parts for any Product and
shall supply to Buyer at the then prevailing purchase prices such number of said
specialized parts as may be ordered by Buyer during that one hundred eighty
(180) day period. If prior to the end of such one hundred eighty (180) day
period, Buyer provides CardioDynamics with a forecast for orders for said
specialized parts during the succeeding one hundred eighty (180) day period,
CardioDynamics agrees to supply such parts to Buyer at prevailing prices if
Buyer agrees to purchase all parts and/or materials ordered by CardioDynamics to
meet such forecast. CardioDynamics will, upon request by Buyer, exercise its
reasonable efforts to assist Buyer in making arrangements with vendors for the
continuing supply to Buyer of such specialized parts or in developing
alternative sources of supply for such items. As used herein, the term
"specialized part" refers to any part or component in the prevailing list of
available spares which is not reasonably available in comparable quality from
CardioDynamics or another supplier.
3.4 Regulatory Compliance. CardioDynamics shall be responsible for
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identifying and obtaining, at it sole cost and expense, all regulatory approvals
which are required for the development, manufacture or sale of the Products in
the Territory. If CardioDynamics determines that it is not in its reasonable
best interest to obtain all regulatory approvals required in some portions of
the Territory, CardioDynamics shall promptly provide written notice of such
determination to Buyer. Within thirty (30) days receipt of such written notice,
Buyer may notify CardioDynamics of its intent to obtain such needed regulatory
approval. CardioDynamics shall provide a written response within fifteen (15)
days receipt of such notice indicating whether it approves of or reasonably
objects to Buyer's intent as stated in such notice and the reasons therefor;
provided that CardioDynamics' failure to respond to such notice within such
fifteen (15) day period shall be deemed an approval of such intent by
CardioDynamics. Following the later of such approval and the acquisition of all
necessary regulatory approvals (costs of such approval to be borne by Buyer),
Buyer shall have the sole and exclusive right to market, promote and sell
Products in such portion of the Territory. If Buyer fails to provide such
written notice within such thirty (30) day period or if CardioDynamics sends a
written notice of reasonable objection within such fifteen (15) day period, such
portion shall be excluded from the Territory and CardioDynamics shall not
market, promote, or sell Products in such portion of the Territory.
CardioDynamics will reasonably cooperate with Buyer by providing at no charge to
Buyer any data in its possession that is reasonably required to obtain the
regulatory approvals, including but not limited to CE Marking and clinical
testing material submitted by CardioDynamics for the Products.
3.5 Medical Device Laws. CardioDynamics warrants that the Products
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and their manufacture will comply with all applicable medical device laws and
regulations, including, without limitation, good manufacturing practices.
3.6 Fair Labor Standards Act. CardioDynamics warrants, and will
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certify, that the Products were produced in compliance with the Fair Labor
Standards Act of 1933 as amended, and any other laws or regulations dealing with
the wages, hours of
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working, conditions or employees engaged in the production of the articles
furnished under each of the purchase orders.
3.7 Environmental Safety. CardioDynamics warrants that each chemical
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substance listed or contained in the Products complies with applicable federal,
state and local environmental health and safety laws, including, without
limitation, the Toxic Substances Control Act, Occupational Safety and Health
Act, and Federal Hazardous Substances Act as amended.
3.8 Product Safety. CardioDynamics warrants that the Products comply
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with any applicable sections of the Federal Food, Drug and Cosmetic Act, Federal
Consumer Product Safety Act, and Federal Communications Act as amended and any
other applicable product safety law.
3.9 Training. During the Agreement Period, CardioDynamics will
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provide training courses at in accordance with agreed Training plan.
A. Sales and Marketing. CardioDynamics will train the sales
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and marketing employees of Buyer in the use and operation of the Products set
forth in Schedule A. Such training shall be conducted once each year during the
Agreement Period at a mutually agreeable time and at such facility as Buyer may
reasonably specify.
B. Service. The parties agree to negotiate in good faith a
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definitive written agreement with respect to service and service training (the
"Service Agreement").
C. Quality Assurance. CardioDynamics shall train Buyer at a
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mutually agreeable time during the Agreement Period at CardioDynamic's offices
in San Diego, California in the procedures used by CardioDynamics to perform
quality assurance inspections of the Products.
D. Expenses. The training by CardioDynamics described in
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Sections 3.10A, 3.10B and 3.10C above will be provided without further charge by
CardioDynamics. At Buyer's option, CardioDynamics will make the training
described in Sections 3.10A, 3.10B and 3.10C available at other locations
reasonably acceptable to CardioDynamics, and CardioDynamics shall provide such
additional training as Buyer may reasonably request from time to time. All costs
and expenses incurred by Buyer employees in connection with their travel to or
attendance at such training (including but not limited to expenses for
transportation, lodging, and meals) shall be borne solely by Buyer.
3.10 Documentation. CardioDynamics agrees to provide Buyer with the
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mutually agreeable Product documentation. CardioDynamics will provide
operator's manuals in English, German, French or Dutch language (as applicable
to the language of the Product to be delivered).
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3.11 Technical Support. CardioDynamics agrees to provide Buyer with
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technical support necessary to support the goals of this Agreement.
3.12 Import/Export. CardioDynamics shall comply with all applicable
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U.S. import and export laws during the term of this Agreement.
3.13 Right of Exclusivity. The parties intend to enter into good faith
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negotiations with respect to a definitive written agreement pursuant to which,
among other things, Buyer shall distribute CardioDynamics's products in North
America (the "American Distribution Agreement"). CardioDynamics agrees that
neither it nor its affiliates or representatives will: (i) sell or transfer
their respective companies, any significant interest in their respective
companies or any significant assets of their respective companies to any third
party, or enter into any agreement to do the same; or (ii) make any offer to
any third party, or commence or entertain discussions with, or provide material
non-public information to any third party (other than with respect to the
ongoing activities of CardioDynamics's current distributors in North America)
regarding the distribution of its products in North America. CardioDynamics
further agrees to promptly inform Buyer of any proposal or other writing
CardioDynamics may receive relating to any of the foregoing. In order to
provide a reasonable period for the parties to complete the negotiation of the
American Distribution Agreement, this Section will automatically terminate on
September 30, 1999.
4. OBLIGATIONS OF BUYER.
4.1 Buyer Approval Process. Buyer agrees to invest the necessary
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resources to achieve internal product approval through normal Buyer development
process.
4.2 Europe/Middle East/Africa Distribution Team. Buyer agrees to sell
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the Products exclusively through Buyer's European/Middle Eastern/African
distribution team in the Territory. Buyer agrees that it will not sell the
Products, either directly, through one of Buyer's partners, or indirectly, by
selling to a party which Buyer knows, or should reasonably have known, has
intent to resell any of the Products outside the Territory. CardioDynamics
agrees that it will not private label the XXXX.xxx Monitor to patient
physiological manufacturers for sale in the Territory during the Agreement
Period.
4.3 Purchaser Information. During the Agreement Period, Buyer agrees
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to provide CardioDynamics with such information as CardioDynamics shall
reasonably request about each purchaser of the Product from Buyer. Such
information shall include, without limitation, the name and address of the
purchaser, and the amounts and serial numbers of the Products purchased by such
purchaser.
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4.4 Train Customers. Buyer agrees to train and support any and all
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customers who purchase the XXXX.xxx Monitor. Details of the CardioDynamics
customer training and support programs are attached hereto as Schedule G.
4.5 Resources Dedicated. Buyer agrees to invest an amount pursuant
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to this Agreement determined according to its reasonable selling needs, in a
manner including, without limitation, demonstration units, internal resource
investment of product management, and sales/service training. In addition,
Buyer and CardioDynamics agree to establish a separate promotion budget for
Buyer to promote the Products in the Territory by means including, without
limitation, press releases, advertisements, sell sheets, Buyer's web site and
trade shows.
4.6. Import/Export. Notwithstanding anything to the contrary herein,
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Buyer shall comply with all applicable U.S. import and export laws during the
term of this Agreement.
5. TERMS AND CONDITIONS.
5.1 Shipment. Delivery shall be within sixty (60) days of placement
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of a materially complete Purchase Order, except as otherwise stated in this
Agreement. Shipment of the first 20 units and accessories shall be on or before
August 27, 1999, and on or before November 15, 1999, for the second 20 units and
accessories.
5.2 Acceptance. Prior to delivery of each Product ordered by Buyer
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pursuant to this Agreement, CardioDynamics will perform its standard factory
acceptance test applicable to such Product and, where applicable, will record in
writing that the Product ordered has satisfied the requirements of the test.
Records of such tests shall remain available for review by Buyer for a period of
six (6) months or such longer period as is required by applicable law. Product
will be deemed accepted by Buyer if not rejected by written notice and returned
to CardioDynamics in accordance with the warranty return procedure (Section
5.6) within forty-five (45) days from date of shipment to Buyer. Otherwise
Buyer has no right of return.
5.3 Payment. Terms of payment will be net sixty (60) days from the
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date of receipt of invoice and payment shall be made in U.S. dollars by wire
transfer, check or other instrument reasonably acceptable to CardioDynamics.
5.4 Taxes, Insurance, and Shipping. Following delivery to the FOB
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point (CardioDynamics shipping dock), Buyer shall bear all applicable charges,
including, without limitation, freight, shipping, customs charges and expenses,
special packaging or handling costs, insurance premiums. Buyer shall also bear
all applicable taxes incident to the sale of the Products hereunder (including
without limitation federal, state, municipal and other government taxes, such as
sales, value added, use and similar taxes, but excluding among other things any
taxes related to wages).
5.5 Design Modifications. CardioDynamics reserves the right to make
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design modifications to the Products at any time without incurring any
obligations to
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retrofit the Products delivered to Buyer prior to the effective date of any such
modification. As a result, the Products bearing the same model number may
differ; however, all Products bearing the same model number in like
configuration delivered pursuant to this Agreement will be interchangeable with
respect to form, fit and function. CardioDynamics shall give Buyer sixty (60)
days advanced written notice of any modifications affecting form, fit or
function.
5.6 Warranty. CardioDynamics warrants to Buyer for periods set forth
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in Schedule E that the Products delivered by CardioDynamics to Buyer pursuant to
this Agreement shall be free from defects in material and workmanship.
CardioDynamics' obligation under this warranty is limited to replacing or
repairing, at its option, at its designated site, any Products (except
expendable parts thereof) that within the warranty period are returned to
CardioDynamics in the original shipping carton (or a replacement shipping carton
provided by CardioDynamics at CardioDynamics' expense) under a Material Return
Authorization (MRA) number issued by CardioDynamics and that are found by
CardioDynamics to be defective in proper usage. CardioDynamics warrants that (a)
the Products will (i) conform materially to all specifications, drawings, plans,
instructions, samples or other descriptions furnished by Buyer, (ii) be fit and
sufficient for the purpose(s) for which they were manufactured and sold, (iii)
be new and merchantable, (iv) be of good material and workmanship and free from
defects, whether latent or otherwise and (v) be free from any claim of any
nature by any third person. CardioDynamics warrants that neither the
performance nor the functionality of any Product delivered to Buyer will be
affected in any material way by the advent of the year 2000 or otherwise by the
use of any date information. CardioDynamics warrants that any service
CardioDynamics provides will be performed in a competent manner and be fit for
any purpose for which CardioDynamics knows or has reason to know Buyer or
Buyer's customers intend to use such service.
Except as set forth in this Section 5.6 and in Sections 3.6, 3.7, 3.8
and 3.9, CardioDynamics makes no other warranties of any kind whatever, whether
express or implied, and all implied warranties of merchantability and fitness
for a particular purpose which exceed the scope of the foregoing warranties are
hereby disclaimed by CardioDynamics and excluded from this Agreement.
5.7 Limitation of Liability. Any provision herein to the contrary
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notwithstanding, in no event shall either party be liable for indirect,
incidental or consequential damages. Except for the provisions of Article 9
below, in no event shall the liability of CardioDynamics arising in connection
with any Product sold hereunder (whether such liability arises from a claim
based on agreement, warranty, tort or otherwise) exceed the amount paid by Buyer
to CardioDynamics for such Product.
5.8 Assignment. Neither party may assign its rights under this
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Agreement in whole or in part by operation of law or otherwise without the prior
express written consent of the other party except to an affiliate of such party,
and any attempted assignment of any rights, duties or obligations hereunder
without such consent shall be void.
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5.9 Force Majeure. If the performance of this Agreement or of any
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obligation hereunder (except payment of monies due) is prevented, restricted or
interfered with by reason of fire or other casualty or accident; strikes or
labor disputes; inability to procure raw material, power or supplies;
hurricanes, earthquakes, floods, or other Acts of God; war or other violence;
any law, order, proclamation, regulation, ordinance, demand or requirement of
any governmental agency or intergovernmental body; or any other act or condition
whatsoever beyond the reasonable control of the parties hereto, the party so
affected, upon giving notice to the other party, shall be excused from such
performance during and to the extent of such prevention, restrictions or
interference.
5.10 Recall. In the event Buyer or any of its distributors should be
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required or should voluntarily decide to initiate a recall, product withdrawal,
or field correction of any products because products do not conform to the
warranty set forth hereinabove or because of any negligent or intentionally
wrongful act of CardioDynamics or its representatives, Buyer shall notify
CardioDynamics and provide a copy of its proposal, including the recall letter,
for CardioDynamics' approval prior to initiation of such action. In carrying out
such a recall, CardioDynamics shall lead in the investigation to determine the
cause and extent of the problem.
5.10.1 In the event that CardioDynamics independently believes
that a recall, product withdrawal, or field correction for products may be
necessary or appropriate, CardioDynamics shall notify Buyer through Buyer's
designee to be named, of CardioDynamics' belief, and the parties shall fully
cooperate with each other concerning the necessity and nature of such action.
5.10.2 All regulatory authority contacts, as applicable, and
coordination of any recall or field correction activities be handled by
CardioDynamics , with Buyer's assistance, whether or not such action was
initially requested by CardioDynamics.
5.10.3 In the event that any product is recalled as a result of
(1) the supply by CardioDynamics of product that does not conform to the
warranty set forth hereinabove including, without limitation, the specifications
or (2) the negligent or intentionally wrongful act of CardioDynamics or its
representatives, then CardioDynamics shall bear the following costs and expenses
of such recall: reasonable expenses related to communications and meetings with
all required regulatory agencies, reasonable expenses of replacement stock, the
reasonable cost of notifying customers and the reasonable costs associated with
shipment of recalled product from customers and shipment of an equal amount of
replacement product to those same customers. To the extent that the reason for
any recall of products hereunder is in part the responsibility of CardioDynamics
and in part the responsibility of Buyer then the expenses shall be allocated in
an equitable manner between the parties.
5.11 Product Complaints. CardioDynamics will be responsible for the
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support and upkeep of this product unless specified in a separate Service
Agreement. However, if this product needs engineering evaluation, CardioDynamics
will evaluate at no charge and supply a written report summarizing the
evaluation within fourteen (14)
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days of product complaint receipt. Furthermore, it will be the responsibility of
CardioDynamics to resolve product-related complaints. All complaints submitted
through Buyer will be transferred in a timely manner to CardioDynamics for
investigation and resolution, with correspondence of this copied to Buyer for
customer complaint tracking.
5.12 Standard Terms and Conditions. A copy of Buyer's Standard Terms
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and Conditions are attached hereto as Exhibit I. In the event of any conflict
between the provisions of this Agreement and the Exhibit I, the provisions of
this Agreement shall be controlling.
6. CONFIDENTIALITY.
6.1 Each of the parties shall at all times during and subsequent to
the Agreement Period keep and cause to be kept confidential, any confidential
information received by it from the other party. Such confidential information
received from the other party shall not be disclosed in any manner to any third
party; provided, however, the parties may disclose any confidential information
contemplated hereunder to third parties as necessary to have the Products
designed, manufactured, modified, improved, serviced or repaired; confidential
information shall be disclosed by the receiving party only to those employees or
third party contractors who need to know the same; such employees and third
parties to whom such Confidential information is disclosed shall be advised of
the confidential nature of such information and shall maintain the same in
confidence as the confidential information of the other party.
6.2 Confidential information shall consist of all confidential
information maintained in secrecy or confidence by the disclosing party as a
valuable trade secret or business information; all confidential information
disclosed shall be marked "confidential" by the disclosing party if in writing
prior to disclosure.
6.3 Confidential information shall not include: (a) any information
which is generally available to the public through no breach of this Agreement;
(b) any information which is lawfully received from a third party having rights
to disclose the same to the receiving party and which third party is free from
similar non-disclosure obligations as are set forth herein; (c) any information
which is independently developed by the receiving party; (d) any information
which is already known to the receiving party or its subsidiaries or affiliates,
or in their possession prior to disclosure by the other party. The parties
further agree that the party asserting as a defense that confidential
information was obtained in a manner set forth in clause (a), (b), (c) or (d)
above shall bear the burden of proof in establishing such defense by a
preponderance of the evidence.
7. NON-COMPETITION.
7.1 In order to induce CardioDynamics to enter into the transactions
contemplated hereby, and in consideration thereof, Buyer agrees that it shall
not, directly or indirectly, engage, whether as principal, agent, investor,
distributor, representative, partner, stockholder, consultant or otherwise, in
any activity or business venture, anywhere in the Territory, which involves (a)
during the term of this Agreement, the
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development, manufacture, distribution or sale of non-invasive cardiac output
measurement devices using the Thoracic Bio-impedance method or (b) for a period
of one (1) year following expiration or termination of the Agreement Period, the
distribution or sale of noninvasive cardiac output measurement devices using the
Thoracic Bio-impedance method.
7.2 Buyer agrees with CardioDynamics that if, in any proceeding, a
court or other authority shall refuse to enforce any covenant herein set forth
because such covenant covers too extensive a geographic area or too long a
period of time, such covenant shall be deemed appropriately amended and modified
in keeping with the intention of the parties to the maximum extent permitted by
law.
8. INJUNCTIVE RELIEF.
In the event of a breach or threatened breach by Buyer of any of the
provisions of Section 7 of this Agreement, or by any party of Section 4.2 or
Section 6 of this Agreement, such party hereby consents and agrees that the
other party shall be entitled to an injunction or similar equitable relief from
any court of competent jurisdiction restraining such party from committing or
continuing any such breach or threatened breach or granting specific performance
of any act required to be performed by such party under any of such provisions,
without the necessity of showing any actual damage or that money damages would
not afford an adequate remedy and without the necessity of posting any bond or
other security. Nothing herein shall be construed as prohibiting any party from
pursuing any other remedies at law or in equity which it may have.
9. INDEMNITY.
9.1 CardioDynamics shall indemnify and hold Buyer harmless from and
against all loss, damage, or expense (including reasonable attorneys' fees)
arising out of any claim or suit for infringement of a patent, copyright or
trade secret brought against Buyer, based on use of the Products purchased under
this Agreement provided that (1) Buyer gives CardioDynamics prompt written
notice of such claim (provided, however, that any delay or failure to notify
CardioDynamics of any claim shall not relieve CardioDynamics of its
indemnification obligations under this Section 9.1 except to the extent that the
defense of such action is materially prejudiced or materially adversely affected
by such delay or failure to notify) (2) CardioDynamics maintains the right to
sole control of the defense and all negotiations for settlement of such claim or
suit and (3) Buyer agrees to cooperate with CardioDynamics in the defense and/or
settlement thereof (provided, however, that any failure to cooperate with
CardioDynamics shall not relieve CardioDynamics of its indemnification
obligations under this Section 9.1 except to the extent that the defense of such
action is materially prejudiced or materially adversely affected by such failure
to cooperate). In the event of any claim as described above which has been
finally adjudicated in favor of a third party, CardioDynamics will have the
option, at its own expense, either to procure for Buyer the right to continue
using said product or replace with a non-infringing product or modify same so it
becomes non-
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infringing, subject to reasonable approval of such replacement part or
modification by Buyer.
9.2 CardioDynamics shall indemnify, defend and hold Buyer harmless
from and against all loss, damage or expense (including reasonable attorneys'
fees) caused by a defect in the design or manufacture of any of the Products
purchased under this Agreement provided that Buyer gives CardioDynamics prompt
written notice of such claim or suit (provided, however, that any delay or
failure to notify CardioDynamics of any claim shall not relieve CardioDynamics
of its indemnification obligations under this Section 9.2 except to the extent
that the defense of such action is materially prejudiced or materially adversely
affected by such delay or failure to notify), the right to maintain sole control
of the defense and all negotiations for settlement of such claim or suit, and
cooperates with CardioDynamics in the defense and/or settlement thereof.
9.3 The foregoing covenants of indemnity by each party made to the
other shall survive the expiration or termination of the Agreement Period.
10. TERM AND TERMINATION.
10.1 Term. The term of this Agreement shall commence on the date
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hereof and shall continue until terminated in accordance with the provisions
hereof (such period being the "Agreement Period"). Either party may terminate
this Agreement for cause immediately by giving written notice to the other party
in the event any of the following occurs:
A. except as otherwise provided in this Section 10.1 or in Section
10.2 below, the other party has materially breached this Agreement and failed to
cure such breach within sixty (60) days following delivery of written notice of
such breach;
B. the other party files for bankruptcy or similar debt relief or a
petition for its bankruptcy or similar creditors' actions is filed against it
and is not withdrawn within sixty (60) days;
C. the other party ceases to do business, or otherwise terminates
its business operations, provided that the parties acknowledge and agree that
the sale of all or substantially all of Buyer's assets to any of its affiliates
shall not be deemed a cessation of its business or termination of its business
operations
D. the other shall fail to secure or renew any license,
registration, permit, authorization or approval necessary for the conduct of its
business in the manner contemplated by this Agreement or if any such license,
registration, permit, authorization or approval is revoked or suspended and
failed to cure failure, revocation, or suspension within sixty (60) days
following written notice;.
E. that Buyer fails to pay any sums due hereunder within thirty (30)
days of the due date; or
13
F. that Buyer fails to order a minimum number of mutually agreed
upon demonstration units for each country in the Territory (in no case will this
be less than one demonstration unit per country) to be delivered prior to
November 15, 1999. In the event Buyer fails to order the minimum number of the
mutually agreed upon demonstration units for any country in the Territory,
CardioDynamics may remove the specific country or countries from the Territory
listed in Schedule C and may, at its discretion, award exclusive distribution
rights to another company in the specified country or countries.
G. that the parties fail to execute a mutually acceptable Service
Agreement by October 31, 1999.
H. that the parties fail to agree upon the Minimum Yearly Volume
Commitment on that date that is 30 days prior to the anniversary date of this
Agreement (see Schedule F).
10.2 Minimum Quarterly Amount. Notwithstanding any other provision
------------------------
contained herein, in the event that prior to any of the dates set forth in
Schedule F (each such date referred to herein as the "Quarterly Date"), Buyer
shall not have forwarded orders to CardioDynamics for the Products for the
minimum amount set forth in Schedule F (the "Minimum Quarterly Amount"),
CardioDynamics shall have the right to terminate this Agreement upon thirty (30)
days' prior written notice to Buyer delivered within sixty (60) days following
such Quarterly targets referenced in Schedule F.
Notwithstanding any other provision contained herein, if, after
November 24, 2000 (such date being the "Assessment Date"), (a) Buyer fails for
two consecutive quarters to forward orders for Products to CardioDynamics for
the minimum amounts applicable to the quarterly periods set forth in Schedule F
(the "Minimum Quarterly Amounts") or (b) on any annual anniversary hereof Buyer
has failed to achieve the then applicable Minimum Yearly Amounts, then, within
sixty (60) days following such two consecutive quarter period or anniversary
period, as the case may be, CardioDynamics may terminate this Agreement on
thirty (30) days prior written notice to Buyer, provided that, in the event of
notice of termination pursuant to clause (a) hereof, as of the date of such
written notice Buyer has failed to achieve the then applicable Minimum Yearly
Amounts. In addition, if, as of November 15, 2000, Buyer has failed to forward
orders to CardioDynamics for the Minimum Quarterly Amounts for the quarter then
ending , then CardioDynamics may, prior to November 25, 2000, terminate this
Agreement on written notice to Buyer.
10.3 Renewal. Following the third anniversary hereof, either party may
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terminate this Agreement on ninety (90) days prior written notice.
10.4 Other Remedies. Termination under this Article 10 shall not
--------------
limit the terminating party's rights and remedies otherwise available in law or
in equity, including, but not limited to, the right to recover damages. Buyer
may terminate any open Purchase Order in whole or in part at any time upon
written notice to CardioDynamics. If such cancellation occurs, the parties shall
negotiate a settlement of reasonable costs
14
incurred by CardioDynamics with respect to such terminated Purchase Order (e.g.,
purchased materials and labor costs incurred prior to receipt of the notice of
termination). Notwithstanding the foregoing, Buyer's maximum liability with
respect to the terminated Purchase Order in no event shall exceed the amount of
such Purchase Order. Buyer may terminate any open Purchase Order without
liability if Seller is in breach of this Agreement or if Seller's performance is
delayed for a cause beyond its reasonable control.
11. MISCELLANEOUS.
11.1 CardioDynamics and Buyer agree they will not attempt or engage
in any acts to impair, defeat or reduce the rights of either party.
11.2 All rights, duties and obligations of the parties with respect
to this Agreement shall be settled and determined according to the substantive
and procedural laws of Wisconsin.
11.3 Any dispute, controversy or claim arising under this Agreement
(a "Dispute") which does not exceed $100,000 shall be submitted for resolution
by binding arbitration pursuant to the Rules of the American Arbitration
Association ("AAA") as in effect at the time of the arbitration in Milwaukee,
Wisconsin, it being agreed that the AAA is designated as the neutral
organization for purposes of the AAA rules and that the costs of the arbitration
shall be shared equally by the parties. The parties agree that the decision of
such arbitrator or arbitrators shall be final and shall be enforceable in any
court of competent jurisdiction.
11.4 All notices, demands, or consents required or permitted to be
given hereunder shall be given and deemed to be received if addressed and
delivered as follows:
All notices shall be delivered personally, by facsimile, by recognized
overnight courier, or by certified mail, return receipt requested, addressed as
follows:
If to CardioDynamics:
CardioDynamics Intl. Corporation
0000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telecopier No.: (000) 000-0000
If to Buyer:
GE Xxxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxxxx 0,
X-00000 Xxxxxxxx, Xxxxxxx
Attention: Managing Director
15
Telecopier No.: x00 000 0000 000
with copies to:
GE Marquette Medical Systems, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
GE Marquette Medical Systems, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Vice President of Marketing
Telecopier No.: (000) 000-0000
11.5 This Agreement and the rights hereunder shall not be assignable
or transferable except as specifically provided elsewhere herein; it shall inure
to the benefit of and bind the permitted successors and assigns of the parties
hereto; provided, however, that Buyer may assign, sub-contract or delegate all
or any portion hereof to any of its affiliates.
11.6 This Agreement, together with each of the Exhibits and schedules
hereto, constitutes the entire agreement of the parties and all other prior
agreements, understandings or arrangements oral, written or otherwise, with
respect to the subject matter hereof, are superseded hereby.
11.7 To the extent that any provision of this Agreement or portion
hereof shall be determined by a legislature or court to be, in whole or in part,
invalid or unenforceable, such provision or portion thereof shall be deemed to
be inoperable and surplusage and to the extent this Agreement is not so
determined to be invalid and unenforceable, it shall remain in full force and
effect and binding upon the parties hereto.
11.8 No amendment hereunder shall be effective unless in writing
signed by the parties hereto and no waiver hereunder shall be effective unless
in writing signed by the party to be so charged.
11.9 No failure to exercise, no delay in exercising, and no single or
partial exercise on the part of Buyer or CardioDynamics of any right, remedy or
power hereunder, shall operate as a waiver thereof or preclude Buyer or
CardioDynamics from exercising any other right, remedy or power hereunder.
11.10 The representations, warranties, obligations and indemnities of
CardioDynamics and Buyer shall survive the termination of this Agreement to the
extent required for their full observance and performance.
16
11.11 CardioDynamics and Buyer waive the right of jury trial in any
action or proceeding brought in any court by either party, or its assigns,
arising out of the subject matter of this Agreement.
11.12 (a) The Buyer shall not use CardioDynamics' name or any other
trademark or trade name used or claimed by CardioDynamics (all of which names or
marks shall hereinafter be referred to as the "Marks") in connection with any
business conducted by the Buyer other than dealing with the Products.
CardioDynamics hereby grants to the Buyer a royalty free non-exclusive license
to use the Marks, but only with respect to the sales of the Products. Buyer
shall include and shall not alter, obscure or remove any trademark or trade name
used or claimed by CardioDynamics, or any markings, colors or other insignia
which are contained on or in or affixed to Product at the time of shipment.
CardioDynamics must approve, in advance in writing, any advertising or
promotional literature or announcement to the press by Buyer regarding its
relationship with CardioDynamics or otherwise utilizing CardioDynamics' name or
trademarks in advance in writing.
(b) CardioDynamics shall not use Buyer's name for commercial or
marketing purposes or any other trademark or trade name used or claimed by Buyer
or any of Buyer's affiliates without the prior written consent of Buyer.11.13
Buyer agrees to use its commercially reasonable efforts to market, distribute
and support (including training and other support) the Products on a continuing
basis and to comply with good business practices and all laws and regulations
relevant to this Agreement.
11.14 Buyer agrees to keep CardioDynamics informed as to any problems
encountered with the Products and any resolutions arrived at for those problems.
Buyer will also timely notify CardioDynamics of any infringement of any of the
Marks.
11.15 The captions in this Agreement are for convenience only and
shall not define or limit any of the terms hereof.
* * *
17
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, effective as of the date first above written.
CARDIODYNAMICS INTL. CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------------
Title: Chief Executive Officer
------------------------------------
GE MARQUETTE MEDICAL SYSTEMS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
-------------------------------------
Title: Chief Executive Officer
------------------------------------
SCHEDULE A
Products
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XXXX.XXX Non-Invasive Cardiac Output Monitor, Model Nos. BZ-4110,
BZ-4110 S, BZ-4100, XX-0000 X, XX-0000, XX-0000 X, XX-0000, and BZ-4000 S.
All of the accessories and parts listed on Schedule B.
SCHEDULE B
See Attached Spreadsheet "CardioDynamics Distributor Price List"
All items on the Price List have a sixty (60) day lead time.
SCHEDULE C
Territory
---------
Europe, Middle East and Africa, except the following countries:
Austria, Czech Republic, Hungary, Slovakia, Slovenia, Poland, Denmark, Greece,
Ireland, United Kingdom, Italy, Norway, Spain, Sweden, Switzerland,
Liechtenstein, Israel, South Africa, Namibia, Zambia, Zimbabwe, Mozambique, and
the Mascarene Islands.
------------------
SCHEDULE D
Buyer's Partners
----------------
[to be provided]
------------------
SCHEDULE E
Warranty Periods
----------------
See Attached Z-Care Service Policy Document, which applies to initial end-user
only.
------------------
SCHEDULE F
Annual Minimum Volume Commitment
Review Date Minimum 12 Month Amount
----------- -----------------------
Anniversary of the date of Within thirty (30) days prior to the
this Agreement anniversary of the date of this
Agreement*, the parties shall agree on
the Minimum Yearly Amount for the
following year of the Agreement Period,
using a formula to project sales of the
XXXX.xxx Hemodynamic Monitor for the
following year of this Agreement based on
the rate of growth in aggregate European
sales by Buyer during the last six (6)
months of the previous year of this
Agreement. In no event shall the Minimum
Yearly Amount be less than the Buyer's
share of CardioDynamics' annual business
objectives. (The "annual business
objectives" means the average of the
annual business objectives of
CardioDynamics as determined by third-
party market analysts.)
*If the Buyer believes it has enough information to make a minimum
Yearly Amount commitment prior to thirty (30) days before the
anniversary hereof, Buyer will use its reasonable best efforts to do
so.
Delivery dates and percentages of the Minimum Yearly Amount will be:
November 15: at least 15% of the Minimum Yearly Amount;
-----------
February 15: at least 20% of the Minimum Yearly Amount (or a
-----------
cumulative of 35% of the Minimum Yearly Amount)
May 15: at least 25% of the Minimum Yearly Amount (or a cumulative of
------
60% of the Minimum Yearly Amount)
August 15: at least 40% of the Minimum Yearly Amount (or a cumulative
---------
of 100% of the Minimum Yearly Amount)
SCHEDULE G
Customer Training and Support
-----------------------------
CardioDynamics will provide appropriate training so that Buyer and Buyer's
representatives can effectively promote, sell, inservice, and train end users on
the proper operation of the XxxX.xxx and accessories. The training sessions will
be conducted at mutually agreed upon sites, on mutually agreed upon dates. The
training will include: International Sales Training Manuals (English language
only manuals are provided by CardioDynamics) for Buyer's designated
representatives, Sales/Inservice Video Training Films (English language only),
class room instruction sessions, and when possible, in hospital
training/demonstrations.
------------
SCHEDULE H
Product Service
---------------
Details and prices of Technical Service Training and spare parts will be
provided in a separate Service Agreement, which will supercede all Service
commitments in this Agreement
------------
