Exhibit 10.1
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of May 1, 2001, between EP MedSystems Inc., a
New Jersey corporation (the "EPMD"), and Xxxxxxx Imaging, Inc., a Colorado
corporation ("Supplier").
RECITALS:
A. Supplier is in the business of manufacturing, installing and servicing
fluoroscopy machines.
B. EPMD is in the business of marketing specialty cardiology products into
the cardiac electrophysiology market.
C. Supplier and EPMD desire to enter a supply agreement with an exclusive
and non exclusive arrangement for both parties, for the supply of product as
specified in Exhibit A (the "Product").
NOW, THEREFORE, in consideration of the terms and provisions of this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Supplier and EPMD agree as follows:
1. SUPPLY OF PRODUCTS
1.1 Supply of Product. During the Term of this agreement (as defined
in Section 6.1), Supplier will supply EPMD with all of the product
required by EPMD. EPMD will maintain ownership either through purchase or
lease arrangement, one biplane system at all times during this agreement.
1.2 Forecasts. EPMD shall provide Supplier on a quarterly basis a
rolling annual forecast by quarter of its requirements for Products, due
by the first day of the first month of each quarter. The forecasts contain
EPMD's best estimate of requirements for the Products. Products will be
ordered by EPMD by the issuance of separately written purchase orders.
Purchase orders will designate the desired quantities of the Products,
delivery dates and destinations, and will be submitted at least 90 days
prior to the shipment date specified. All sales of Products by Supplier to
EPMD are subject to the provisions of this Agreement and are not subject
to the terms and conditions contained in any purchase order of EPMD or
confirmation of supplier, except insofar as a purchase order or
confirmation establishes the quantity and shipment date for each order of
Products involved.
1.3 Product Discontinuance; Changes; Delays.
(a) Product Discontinuance. If, during the term of this
Agreement, Supplier determines that it will cease production of any
of the
Products, Supplier will provide to EPMD at least three months prior
written notice of such discontinuance and will attempt to offer EPMD
a replacement therefor from its then existing product line (if there
is one, as a successor to the Product). Supplier is under no
obligation to produce Products beyond the term of this Agreement. If
the replacement is unacceptable to EPMD, then EPMD shall be relieved
of any obligation to buy such discontinued or replacement Products
under this Agreement after the date as of which Supplier ceases
production of such products. Notwithstanding the foregoing, the
parties acknowledge that Supplier's replacement of any Product with
an upgrade, next-generation, successor, or similar modification of
such Product shall not be considered a product discontinuance
hereunder.
(b) Changes. The final specifications for materials,
components, packaging, labeling, finished product and manufacturing
controls and other requirements (the "Specifications") for each of
the Products will be agreed upon in writing by Supplier and EPMD.
Supplier shall not make changes in the Specifications, testing
methods, manufacturing processes or equipment used to manufacture
the Products, including without limitation any changes in the
quality, method of manufacture, or materials used in the assembly,
manufacture and supply of the Products, without EPMD's prior written
consent, which consent shall not be unreasonably withheld.
1.4 Installation. Sales shall be, net 30 day, 75% FOB origin 25% due
after installation at EPMD's customer's facility. Full installation and
all such costs, including shipping costs, shall be borne by Supplier.
1.5 Modification of Purchase Orders. No accepted purchase order
shall be modified or canceled without the prior written consent of both
parties.
1.6 Inspection of Installed Product by EPMD. EPMD shall have the
right to inspect installed Products within 30 days after their
installation or EPMD shall promptly notify and Supplier of any
nonconforming Product. EPMD shall provide Supplier with a written
description of any nonconformance to specifications. Supplier shall verify
the nonconformance and shall credit the invoice for the nonconforming
Product and promptly act to comply with its warranty,
1.7 Exclusions. Supplier shall not be required to supply Products:
(a) to the extent and only during the period that the failure
to supply the Products arises from or is incident to unforeseen
causes beyond its control not resulting from Supplier's fault or
negligence, including but not limited to acts of a public enemy,
government, or God (a "force majeure"); or
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(b) if a claim of patent infringement is made against Supplier
or EPMD on the Products; or
(c) if EPMD initiates a United States Food and Drug
Administration ("FDA") regulatory action, such as a recall or field
action, related to the use of the Products, or if Supplier becomes
aware of information that reasonable scientists would believe to
call into question the safety of the use of Products.
1.8 Records and Recall. Supplier and EPMD shall each maintain
complete and accurate inventory and sale records for all Products in
sufficient detail to enable Supplier to conduct an effective recall of
Products if Supplier determines that such a recall is required or
otherwise necessary or appropriate. In the event of a recall of any of the
Products, EPMD will cooperate with and assist Supplier in effecting such
recall.
1.9 Exhibit C contains additional supply convenants hereby agreed to
in an effort to confirm the supply to regulatory and quality standards.
1.10 Sales & Marketing Support. Supplier will provide to EPMD all
pertinent information regarding the products listed in Exhibit A. This
would include any sales/marketing literature, specification sheets, user
guides or similar information that could be of value to EPMD's sales
process. Supplier will turn over to EPMD sales leads which it may have
from time to time.
1.11 National Accounts. Supplier and EPMD will cooperate for the
purpose of adding either Suppliers or EPMD's products to current or future
national buying group contracts.
1.12 Product Training. Supplier will provide technical and sales
training to EPMD personnel either at Suppliers location or at a mutually
agreed upon site. Basic troubleshooting will be included in this training.
EPMD shall compensate supplier for expenses and a reasonable hourly rate
for such services.
2. PRICING AND PAYMENT
2.1 Pricing. Supplier shall sell to EPMD the Products at the prices
set forth on Exhibit A. Prior to any automatic renewal the prices will be
subject to change and subject to mutual agreement. Supplier will notify
EPMD at least 90 days in advance of any such price changes.
2.2 Payment. Supplier shall invoice EPMD pursuant to section 1.4.
All such invoices shall be due and payable in full within 30 days after
invoice date. In the event that any invoice is not paid in full by EPMD
within a 60-day period, finance charges will be assessed on the
outstanding amount at the rate of one percent (1%) per month (12 percent
per year).
3. USE OF PRODUCTS
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3.1 Labeling; Use. EPMD warrants and represents that it shall label,
promote and sell the Products only as advised by Supplier. Such labeling
shall be consistent, when applicable and to the extent feasible, with the
intended use of the product. EPMD shall monitor its customers' use, and
the sales of Products by its sales representatives and distributors, in a
reasonable manner to ensure that Products purchased by it hereunder are
used as labeled and in a safe manner and only for the field of cardiology.
In no event will EPMD knowingly permit use of the Products other than for
the treatment of cardiology disorders or in any manner not approved by the
appropriate regulatory agency, including the FDA.
3.2 Regulatory Approvals. Supplier, subject to the approval of EPMD,
shall be responsible for all submissions to appropriate regulatory
agencies for obtaining regulatory approval for use of the Products sold by
it hereunder. This includes, and is not limited to, the initial submission
of the specification and uses of the Product to the appropriate regulatory
agency and required reporting for any problems or concerns with the
Products.
3.3 Product Safety. EPMD and Supplier shall have shared
responsibility for the safety and efficacy of the Products for their
intended use. EPMD and Supplier represents that they will have in place
sufficient systems to assure that its products will be safe in the use for
which they are intended. Each party shall have the right to audit the
quality procedures of the other party at reasonable times within normal
business hours of the other party in order to assure that its products are
being manufactured in a system of sufficient quality to assure safety.
4. WARRANTY
4.1 Warranty. Supplier warrants the Products sold by it hereunder in
accordance with the standard Limited Warranty supplied with each of the
Products, as set forth on Exhibit B. As the Products sold by Supplier
hereunder may change from time to time, the corresponding warranties may
change, but Supplier shall at all times supply to EPMD a warranty for each
of the Products that is not less than the warranties given to Supplier's
other customers for similar Products. In addition to the warranties set
forth on Exhibit B, Supplier represents and warrants to EPMD that all
Products sold and delivered to EPMD under this Agreement will be
manufactured in accordance with FDA Good Manufacturing Practices and
Supplier's ISO-9001 certifications, and that continually during the term
of this Agreement no Products delivered by Supplier to EPMD shall be
adulterated or misbranded at the time of delivery within the meaning of
the U.S. Food, Drug and Cosmetic Act and regulations thereunder.
4.2 Remedies. EPMD's remedy and Supplier's obligation and liability
under these warranties shall include the correction of any such defect in
the Products or, at Supplier's option, the provision of replacement
Products to EPMD at Supplier's expense during the specified warranty
period. SUPPLIER SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL,
INCIDENTIAL,
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PUNITIVE OR CONSEQUENTIAL DAMAGES WHETHER BASED ON CONTRACT OR TORT, OR
OTHER LEGAL THEORY ARISING OUT OF THE SALE, INSTALLATION, SERVICE OR USE
OF THE PRODUCT. THE SUPPLIER NEITHER ASSUMES NOR AUTHORIZES ANY OTHER
PERSON TO ASSUME FOR IT ANY OTHER LIABILITY IN CONNECTION WITH THE SALE,
INSTALLATION, SERVICE OR USE OF ITS PRODUCTS.
5. INDEMNIFICATION
5.1 EPMD Indemnification. EPMD shall indemnify, demand and hold
harmless Supplier and its affiliates, directors, officers, employees, and
agents and their respective successors, heirs, and assigns against any
liability, damage, loss or expense imposed upon Supplier in connection
with any claims, suits, actions, demands, or judgments arising out of, but
only to the proportional extent caused by, negligence or fault by EPMD or
any violation of laws or regulations by EPMD in connection with the
transactions contemplated hereby.
5.2 Supplier Indemnification. Supplier shall indemnify, defend and
hold harmless EPMD and its affiliates, directors, officers, employees, and
agents and their respective successors, heirs, and assigns against any
liability, damage, loss or expense imposed upon EPMD in conjunction with
any claims, suits, actions, demands, or judgments arising out of, but only
to the proportional extent caused by, negligence or fault by Supplier or
any violation of laws or regulations by Supplier in connection with the
transactions contemplated hereby.
5.3 Intellectual Property Protection. Supplier represents and
warrants that it has obtained all necessary intellectual property
protection to use and sell the Products under this supply agreement.
Supplier shall indemnify, defend and hold harmless Supplier against any
claims, damages, suits or judgments related to patent infringement arising
out of the use or sale of Products.
5.4 Insurance. Supplier shall maintain product liability insurance
to cover its product liability arising as a result of the sale of Product
to EPMD's customers, with coverage of not less than $5,000,000 per
occurrence. Upon request, Supplier shall provide evidence of such
insurance to EPMD.
6. TERM AND TERMINATION
6.1 Term. The term of this Agreement shall begin upon the execution
of this agreement. The Term shall continue for a (1) year period, but
subject to automatic renewal of the Nonexclusive Term for successive
one-year periods unless either party terminates this Agreement by notice
in writing to the other at least 60 days prior to the end of the initial
Nonexclusive Term or any such one-year renewal thereof.
6.2 Default. Either party may terminate this Agreement by giving the
other party at least 30 days' written notice if the other party has
materially
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defaulted under this Agreement and fails to cure such material default
within 30 days after notice of the default.
6.3 Termination. Notwithstanding the provisions of Sections 6.1 and
6.2 above, this Agreement may be terminated by either party at any time by
giving notice in writing to the other party, if (1) the other party
becomes insolvent, makes an assignment for the benefit of creditors, goes
into liquidation or receivership or otherwise loses legal control of its
business; or (ii) the Products become the subject of any (a) material
safety alert, (b) material advisory or recall by Supplier or by any
regulatory agency, or (c) material civil legal action (e.g., class action)
regarding product liability that is not dismissed within 60 days and with
respect to which it is reasonably probable that a material amount of
damages and/or remedial action will be required with respect to the
Products.
7. MISCELLANEOUS
7.1 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their permitted successors
and assigns. Without the prior written consent of the other party neither
party, may assign this Agreement or its rights hereunder; provided,
however, that, without such consent, either party may assign this
Agreement to an Affiliate of that party or to a business organization that
shall succeed to the business and assets of that party.
7.2 Notices. All notices required or permitted hereby to be sent by
one party to the other shall be in writing and sent by reputable express
delivery service or by certified mail.
7.3 Entire Agreement. If the terms and provisions of any purchase
order or any other communication from a party respecting this Agreement
are in conflict, this Agreement shall be deemed controlling. This
Agreement may not be changed or modified except by an instrument in
writing executed by both parties stating that it is an amendment hereto.
7.4 No Joint Venture. Nothing contained in this Agreement shall be
deemed to create a joint venture, partnership, agency, or similar endeavor
between the parties hereto. Each party shall act solely as an independent
contractor, and neither party shall have any power or authority to
directly or indirectly bind or act on behalf of the other.
7.5 Arbitration. Any dispute arising out of or relating to this
Agreement, including the formation, interpretation or alleged breach
hereof, shall be submitted, at the initiative of either party, to
arbitration in Denver Colorado before a single arbitrator in accordance
with the Rules of the American Arbitration Association. The results of
such arbitration proceedings shall be binding upon the parties hereto, and
judgment may entered upon the arbitration award in any court having
jurisdiction thereof. Notwithstanding the foregoing,
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either party may seek interim injunctive relief from any court of
competent jurisdiction.
7.6 Governing Law. The formation, legality, validity, enforceability
and interpretation of this Agreement shall be governed by the laws of the
State of CO, USA without giving effect to the principles of conflict of
laws; provided, however, that nothing in CO, USA procedural law shall be
deemed to alter or affect the applicability of the Federal Arbitration Act
as governing arbitration of disputes as provided in Section 7.5, and
provided, further, that no CO, USA laws or rules of arbitration shall be
applicable.
7.7 Right of First Refusal. During the term of this Agreement, EPMD
shall have a right of first refusal surrounding the sale of the Bloom
Stimulator product line by Supplier. Should Supplier have a bonafide third
party offer to purchase such product Supplier shall notify EPMD and EPMD
shall have 30 days to respond and match such offer in substantially
similar terms. This right shall expire if no response is made within the
30 day period.
ACCORDINGLY, the parties have duly executed this Agreement as of the day
and year first above written.
XXXXXXX IMAGING
By: s/ Xxxxx Xxxxxxx
Its:
EP MEDSYSTEMS, INC.
By: s/ Xxxxx X. Xxxxxxx
Its: President
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EXHIBIT A
LIST OF PRODUCTS AND PRICES
Exclusive Products
EPX - Single Plane [confidential treatment requested]
EPX2 - Bi Plane
Non Exclusive Products
Bloom 4-channel stimulator
Current Model
Any other Xxxxxxx XX Products including tables and options at
[confidential treatment requested] off list.
Payment Terms for the Bloom shall be separate and distinct from the
fluoroscopy products.
Bloom terms are FOB shipping point, 30 days net from shipment date.
Service Agreements
Any extended service agreement sold by EPMD will be split evenly in
dollars between the Supplier and EPMD.
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EXHIBIT B
XXXXXXX IMAGING PRODUCT WARRANTY
Xxxxxxx Imaging Corporation (the "Company")
Contract for Sale of Goods - Terms and Conditions
Warranties - Parts manufactured by the Company are warranted to be free of
defects in material and workmanship for specified periods. Components not
manufactured by the Company generally carry warranties provided by their
manufacturer, which may differ from those offered by the Company. Unless there
is evidence of misuse, abuse, or unauthorized alteration or repair, as
determined by the Company in its sole discretion, if a failure occurs within the
warranty period, the Company will repair or replace, at its option, the
defective item without cost, provided that prompt written notice is given within
the warranty period. The Company's obligation is limited to repair or
replacement and may, where appropriate, be conditioned on parts being returned
under applicable return procedures. The Company reserves the right to use
refurbished or reconditioned parts, to accomplish warranty repairs. This
warranty does not apply to perishable and consumable materials and is effective
only with respect to the original purchase and only where installation and/or
service has been performed by the Company or an authorized dealer.
Responsibility for damage during installation is limited to Company-provided
installation services.
THIS WARRANTY IS STRICTLY LIMITED TO THE TERMS HEREIN. NO OTHER EXPRESS
WARRANTIES OR REMEDIES SHALL BE BINDING ON THE COMPANY. THE COMPANY SHALL NOT BE
LIABLE FOR CONSEQUENTIAL DAMAGES UNDER ANY WARRANTIES, EXPRESS OR IMPLIED. NO
OTHER WARRANTY IS EXPRESSED OR IMPLIED. THE COMPANY EXPRESSLY DISCLAIMS THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
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EXHIBIT C
Intentionally left blank at time of signing.
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EXHIBIT D
Throughout the course of this agreement, both parties agree to maintain a
Product Manager dedicated to the EP Systems business. These individuals will
interface and represent the focal point for all sales, service and
customer-related issues.
s/ Xxxxx Xxxxxxx
Xxxxxxx Imaging, Inc.
s/ Xxxxx X. Xxxxxxx
EP MedSystems, Inc.
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