EXHIBIT 10.29
SALES REPRESENTATIVE AGREEMENT
THIS AGREEMENT is made as of November 16, 2001 ("Effective Date"), by
and between Micro Therapeutics, Incorporated, a Delaware corporation with its
principal place of business at 2 Goodyear, Irvine California ("MTI") and
Vertomed International, Incorporated, a Delaware corporation with its principal
place of business at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
("Vertomed").
WHEREAS, MTI develops, manufactures and markets minimally invasive
devices for the treatment of neuro and peripheral vascular diseases;
WHEREAS, Vertomed provides international sales, marketing and
distribution services to third parties;
WHEREAS, MTI wishes to appoint Vertomed as its exclusive sales
representative for the marketing and promotion of the Products in the Direct
Territory and to provide certain services on MTI's behalf on the terms set out
in this agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS.
a. "Dedicated Employees" shall have the meaning set forth in Section
3(c).
b. "Marketing Plan" shall refer to each marketing plan for the Product
developed pursuant to Section 2(b) hereof.
c. "Products" shall mean all of MTI's current and future products,
including all the neuro and peripheral vascular devices; the current
products are listed on Exhibit A as amended from time to time by the
parties.
d. "Promotional Materials" shall have the meaning set forth in Section
3(d).
e. "Services" shall mean the inventory management, accounting,
invoicing, collection and administrative services that Vertomed shall
provide for MTI under this Agreement.
f. "Direct Territory" shall mean the countries set forth in Exhibit B as
may be amended from time to time by mutual agreement of the parties.
g. "Distributor Territory" shall mean the countries set forth in Exhibit
B as may be amended from time to time by mutual agreement of the
parties.
2. APPOINTMENT.
a. General. Subject to this Agreement, MTI hereby appoints Vertomed, and
Vertomed hereby accepts its appointment as MTI's exclusive sales
representative to promote, market and solicit orders for the Products
in the Direct Territory. Vertomed will establish distributors to
promote, market and solicit orders for the Products in the
Distributor Territory in accordance with the terms and conditions of
this Agreement.
b Review Committee. MTI and Vertomed will form a Review Committee
composed of representatives of each party, including, the President
of Vertomed International, the President of MTI and high-level
marketing executives of each party. The Review Committee will meet
from time to time as determined by the participants, but no less then
two times during each year during the term of this Agreement to
resolve in good faith outstanding strategy and tactical issues that
arise during the Term,
and to review all aspects of marketing the Products. Prior to the
commencement of each year, the Review Committee will prepare and agree
upon a marketing plan for such year (the "Marketing Plan"). A
representative of MTI will serve as Chairperson of the Review Committee.
3. VERTOMED'S OBLIGATIONS.
a. General. Vertomed will use commercially reasonable efforts to (i)
promote, market and obtain orders for the Products within the Direct Territory;
(ii) manage distribution of the Products within the Distributor Territory and
(iii) perform the Services in a good and workmanlike manner. Vertomed may
subcontract the performance of any of its obligations under this Agreement to
any of its wholly owned subsidiaries. Vertomed may place consignment inventory
in such commercially reasonable locations within the Direct Territory, pursuant
to guidelines established by the Review Committee.
b. Minimum Sales Requirements. The Review Committee will establish
minimum sales requirements for Vertomed on an aggregate basis for the entire
Direct Territory and Distributor Territory, on a two-year rolling basis
("Minimum Sales"). The Minimum Sales for the initial period ending December 31,
2002, will be 70% of the agreed upon sales forecast approved by the Review
Committee. Thereafter it will be 70% of the agreed upon sales forecast approved
by the Review Committee for the applicable calendar year.
c. Direct Sales.
(i) Facilities and Staff. Vertomed will acquire and maintain the
facilities and staff that the parties deem appropriate to effectively
market the Products throughout the Direct Territory. On a
country-by-country basis, and only for those countries where Vertomed
has established a Vertomed entity, MTI will determine, in its
discretion, whether Vertomed will provide employees dedicated to market
only the Products (the "Dedicated Employees") or employees who will
dedicate a specified percentage of their working hours to marketing the
Products ("Fractional Employees"). MTI will participate in and have veto
power with respect to hiring the Dedicated Employees. Vertomed will
determine, in its sole discretion, the locations within the Direct
Territory in which it will (i) locate Dedicated Employees and Fractional
Employees, and (ii) establish and maintain Vertomed corporate entities.
In making such determinations, Vertomed will consider the advice and
recommendations of MTI. Vertomed will provide six months' notice to MTI
of its intent to conduct direct selling activities within any country
located in the Distributor Territory. Vertomed may, in its sole
discretion, terminate any distributor in such country, provided that
such termination will not cause MTI to have any termination liability.
In the event Vertomed is unable to terminate such distributor without
causing termination liability to MTI, MTI may either (i) terminate its
distributor in such country and add such country to the Direct Territory
or (ii) maintain its distributor in such country. In the event MTI
determines to maintain a distributor in such country, Vertomed will
continue to manage such distributor in accordance with this Agreement.
(ii) Marketing and Promotional Activities. Vertomed will market the
Products within the Direct Territory according to the then current
Marketing Plan. Vertomed will keep MTI informed about upcoming trade
shows and similar events within the Direct Territory and will
participate in such events at MTI's request.
(iii) Promotional Materials. Vertomed will use the brochures and
other sales and promotional literature describing the Products that MTI
periodically approves or provides to Vertomed (the "Promotional
Materials"). With MTI's approval, Vertomed may translate or adapt the
Promotional Materials for use within the Direct Territory. Vertomed
hereby assigns to MTI the copyrights that Vertomed may acquire or
possess in translations and adaptations of the Promotional Materials.
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(iv) Market-Based Performance Standards. Vertomed agrees to meet the
performance standards established by the Review Committee for each
market within the Direct Territory.
(v) Forecasts. Vertomed will provide monthly production forecasts of
sales for the Direct Territory to MTI for demand planning, on a rolling
twelve-month basis. Vertomed also will provide monthly to MTI a
twelve-month rolling financial forecast for the Direct Territory. These
forecasts do not alter the agreed upon minimum sales requirements.
(vi) Prices. Vertomed will quote to customers the prices and terms
for the Products, in the appropriate local currency, based upon the
pricing levels and discount levels mutually agreed upon by the parties
to this Agreement on a country-by-country basis. Vertomed will not quote
prices below these pricing levels without prior written approval from
MTI.
(vii) Receivables. Vertomed will use commercially reasonable efforts
to collect the amounts that customers owe to MTI (the "Receivables")
based upon accounts receivable and collection goals mutually agreed upon
by the parties on a country-by-country basis. Vertomed will have no
right in the Receivables except as contemplated in Section 6 below.
Vertomed will inform MTI of any Receivables that remain uncollected and
become past due and use commercially reasonable efforts to pursue the
collection of such past due Receivables in accordance with MTI's
instructions. Any costs incurred by Vertomed for such collections will
be part of G&A expenses and, therefore, a factor in determining the
Fixed Fee.
(viii) Remittances. Vertomed will remit the collected Receivables to
MTI on the 15th day of the month following the month of receipt of such
payments from customers, less any applicable VAT or other such charges
that Vertomed may pay or be required to pay on MTI's behalf. Vertomed
will make all such remittances by wire transfer to the bank account
that MTI may periodically designate. MTI will bear all bank transfer
charges. If Vertomed collects any Receivable for which taxes have been
withheld by a customer, Vertomed will use its commercially reasonable
efforts to cause such customer to furnish to MTI the documents
evidencing the payment of such taxes that are acceptable to the local
taxing authority.
(ix) Records and Reports. Vertomed will keep accurate records of its
activities under this Agreement, including a record of (i) each order
received and accepted; (ii) each invoice issued to and payment received
from a customer; (iii) a current account of all Receivables due and
outstanding; and (iv) each payment made to MTI. Within 15 days of the
end of each one-month period of this Agreement, Vertomed will provide
MTI with a report showing the orders obtained for the Products,
invoices issued to and payments received from customers, and payments
remitted to MTI.
(x) Regulatory Oversight; Compliance with Laws. Vertomed will apply
for and obtain, on behalf of MTI, all registrations, approvals and
licenses that may be required to sell the Products in the Direct
Territory. Vertomed will comply with all applicable local laws and
regulations, including the United States FCPA and any applicable
employment laws.
(xi) Product Recalls. In the event of a recall ordered or requested
by any government agency, a court or by either party of any Product
within the Direct Territory, Vertomed and MTI will discuss actions that
will be taken with respect to customers and government authorities in
implementing such recall, including in locating and retrieving recalled
Products from customers. The parties will agree on such actions prior to
implementation of any Product recall. In the event the parties cannot
agree on such actions, MTI will be solely responsible for the
implementation of such Product recall. Any such recall of Products
within the Direct Territory, whether required or voluntary, will be at
MTI's cost and expense. MTI will defend and indemnify Vertomed against
any loss, damage, liability or expense (including attorneys' fees),
other than loss of income from recalled Products, that Vertomed may
suffer or incur as a result of or relating to any recall of the
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Products or any events leading to the recall of the Products. In the
event of a Product Recall, the parties to this Agreement agree to a
proportionate reduction in the Minimum Sales Requirement for the
applicable period.
(xii) Product Complaints. Vertomed will promptly provide notice to
MTI of the occurrence of any of the following within the Direct
Territory: (a) receipt of any Product quality claims or complaints or
other written legal claims or complaints, (b) receipt of any medical
claims, complaints or problems, or (c) receipt of any written
communication from any applicable regulatory agency pertaining to the
Products.
d. Distributor Management.
(i) Appointment of Distributors. Subject to MTI's fulfillment of its
obligations under Section 4(a) of this Agreement, Vertomed will (a)
assume management of those existing distributors of MTI which the Review
Committee has determined will not be immediately terminated and (b)
appoint local distributors to market and promote the Products in the
countries within the Distributor Territory not served by an existing
distributor of MTI determined by the Review Committee. MTI will
participate in and have veto power with respect to the selection of such
distributors.
(ii) Marketing and Promotional Activities. Vertomed will require its
distributors to market the Products within the Distributor Territory
according to the then current Marketing Plan. Vertomed will keep MTI
informed about upcoming trade shows and similar events within the
Distributor Territory and will cause its distributors to participate in
such events at MTI's request.
(iii) Promotional Materials. Vertomed will provide to distributors
the brochures and other sales and promotional literature describing the
Products that MTI periodically approves or provides to Vertomed (the
"Promotional Materials"). With MTI's approval, Vertomed or its
distributor may translate or adapt the Promotional Materials for use
within the Distributor Territory. Vertomed will attach the copyright and
other proprietary notices to such translations and adaptations that MTI
reasonably requests. Vertomed hereby assigns, and shall cause the
distributors it manages to assign, to MTI the copyrights that Vertomed
may acquire or possess in translations and adaptations of the
Promotional Materials.
(iv) Market-Based Performance Standards. Vertomed agrees to require
its distributors to meet the performance standards established by the
Review Committee for each market within the Distributor Territory.
(v) Forecasts. Vertomed will obtain from its distributors monthly
forecasts for demand planning, and will provide such forecasts to MTI,
on a rolling twelve-month basis. Vertomed also will provide to MTI
monthly a twelve-month rolling financial forecast for the Distributor
Territory. These forecasts do not alter the agreed upon minimum sales
requirements.
(vi) Prices. Vertomed will quote to distributors the prices and terms
for the Products, in the appropriate local currency, based upon the
pricing levels and discount levels mutually agreed upon by the parties
to this Agreement on a country-by-country basis. Vertomed will not quote
prices below these pricing levels without prior written approval from
MTI.
(vii) Receivables. Vertomed will use commercially reasonable efforts to
collect the amounts that distributors owe to MTI (the "Distributor
Receivables") based upon accounts receivable and collection goals
mutually agreed upon by the parties on a country-by-country basis.
Vertomed will have no right in the Distributor Receivables except as
contemplated in Section 6 below. Vertomed will inform MTI of any
Distributor Receivables that remain uncollected and become past due and
use commercially reasonable efforts to pursue the collection of such
past due Distributor Receivables in accordance with MTI's instructions.
Any costs incurred by
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Vertomed for such collections will be part of G&A expenses and,
therefore, a factor in determining the Fixed Fee.
(viii) Remittances. Vertomed will remit each collected Distributor
Receivable to MTI on the 15th day of the month following the month of
receipt of such payments from distributors, less any applicable VAT or
other such charges that Vertomed may pay or be required to pay on MTI's
behalf, and less the Distributor Management Fee defined in Section 6.b.
below. Vertomed will make all such remittances by wire transfer to the
bank account that MTI may periodically designate. MTI will bear all bank
transfer charges. If Vertomed collects any Distributor Receivable for
which taxes have been withheld by a distributor, Vertomed will use its
commercially reasonable efforts to cause such distributor to furnish to
MTI the documents evidencing the payment of such taxes that are
acceptable to the local taxing authority.
(ix) Records and Reports. Vertomed will keep a record of (i) each
order received and accepted from a distributor; (ii) each invoice issued
to and payment received from a distributor; (iii) a current account of
all Distributor Receivables due and outstanding; and (iv) each payment
of Distributor Receivables made to MTI. Within 15 days of the end of
each one-month period of this Agreement, Vertomed will provide MTI with
a report showing the distributor orders obtained for the Products,
invoices issued to and payments received from distributors, and payments
of Distributor Receivables remitted to MTI.
(x) Product Recalls. In the event of a recall ordered or requested by
any government agency, a court or by either party of any Product within
the Distributor Territory, Vertomed and MTI will discuss actions that
will be taken with respect to distributors, customers and government
authorities in implementing such recall, including in locating and
retrieving recalled Products from customers. The parties will agree on
such actions prior to implementation of any Product recall. In the event
the parties cannot agree on such actions, MTI will be solely responsible
for the implementation of such Product recall. Any such recall of
Products within the Distributor Territory, whether required or
voluntary, will be at MTI's cost and expense. MTI will defend and
indemnify Vertomed against any loss, damage, liability or expense
(including attorneys' fees), other than loss of income from recalled
Products, that Vertomed may suffer or incur as a result of or relating
to any recall of the Products or any events leading to the recall of the
Products. In the event of a Product Recall, the parties to this
Agreement agree to a proportionate reduction in the Minimum Sales
Requirement for the applicable period.
(xi) Product Complaints. Vertomed will promptly provide notice to MTI
of the occurrence of any of the following within the Distributor
Territory: (a) receipt of any Product quality claims or complaints or
other written legal claims or complaints, (b) receipt of any medical
claims, complaints or problems, or (c) receipt of any written
communication from any applicable regulatory agency pertaining to the
Products.
(xii) Vertomed agrees that at such time that Vertomed assumes the
management of an existing MTI distributor, it will not take any action
that will cause MTI to be in breach of its agreement with such
distributor.
4. MTI'S OBLIGATIONS.
a. Distribution Management Phase-In. MTI will disclose to Vertomed all
distribution agreements between MTI and distributors within the Distributor
Territory as of November 1, 2001. Prior to February 1, 2002, the Review
Committee will establish a staffing plan and strategy for distribution of the
Products in the Distributor Territory. Upon the mutual agreement of such
staffing plan and strategy, MTI will use its best efforts to transition to
Vertomed the day-to-day management within the Distributor
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Territory. MTI will be solely responsible for any and all costs related to any
termination of its distributors and any transition to Vertomed.
b. Promotional Materials. MTI will provide Vertomed with the quantity
and quality of Promotional Materials in English as the parties deem reasonably
sufficient for Vertomed and its distributors to promote, solicit and obtain
orders for the Products within the Direct Territory and Distributor Territory in
accordance with the Marketing Plan.
c. Marketing Support. MTI will provide marketing support necessary for
Vertomed to effectively market the Products within the Direct Territory and to
manage the distribution of the Products within the Distributor Territory,
including without limitation, marketing studies, marketing communications and
attendance at trade shows.
d. Training. MTI will provide, with the participation of Vertomed, each
Vertomed Employee with the training necessary, on an ongoing basis, for Vertomed
to market the Products within the Direct Territory. MTI will bear all travel and
out-of-pocket expenses that the Dedicated Employees and Fractional Employees may
incur in attending the training sessions. MTI will provide, with the
participation of Vertomed, each distributor with the training necessary on an
ongoing basis, as determined by Vertomed and MTI, for such distributors to
market the Products within the Distributor Territory.
e. Product Changes. Except in the case of a Product recall or other
emergency, MTI will provide Vertomed three months' notice of changes in Products
or packaging, or advertising, sales or Promotional Materials relating to the
Products or any significant development planned and improvements that may affect
the marketing of the Products.
f. Support. MTI will provide Vertomed, in the form and when reasonably
required by Vertomed, access to MTI's technical and marketing and sales
personnel for advice, consultation and assistance in marketing, negotiation of
sales of, and providing support for the Products within the Direct Territory and
the Distributor Territory. MTI may provide such support by telephone or other
forms of communication or by on-site visits by Dedicated Employees, Fractional
Employees or MTI, as the parties deem appropriate. MTI will provide executive
sales support as agreed to by the parties from time to time.
g. Leads. MTI may generate and will refer to Vertomed all leads for
potential customers of the Products within the Direct Territory and the
Distributor Territory. To refer a lead, MTI will complete a Lead Referral form,
to be established by the Review Committee, and remit it to Vertomed. Vertomed
will follow-up on such leads according to the Marketing Plan.
h. Sales Strategy. Through the Review Committee, MTI will participate in
sales strategy sessions with Vertomed International management.
i. Regulatory Oversight; Compliance with Laws. MTI will provide Vertomed
with all information, data, materials and product samples as may be necessary to
obtain the registrations, approvals or licenses that may be required to sell in
the Direct Territory. MTI will be solely responsible for all FDA/CE ▇▇▇▇
regulatory matters and all other regulatory matters (other than those required
to import and sell the Products within the Direct Territory or Distributor
Territory) including, securing any and all regulatory approvals, performing all
clinical trials, and applying to register the MTI trademarks, patents or other
intellectual property within the Direct Territory or the Distributor Territory.
j. Product Complaints. MTI will promptly provide notice to Vertomed of
the occurrence of any of the following: (a) receipt of any Product quality
claims or complaints or other written legal claims or complaints, (b) receipt of
any medical claims, complaints or problems, or (c) receipt of any written
communication from any applicable regulatory agency pertaining to the Products.
5. ORDERS AND DELIVERY.
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a. Orders. Vertomed will receive all orders for the Products from
customers in the Direct Territory and distributors in the Distributor Territory.
If MTI receives any orders from the Direct Territory or the Distributor
Territory, MTI will direct such orders to Vertomed.
b. Order Processing and Acceptance. MTI hereby delegates to Vertomed
full and binding authority to accept or reject any order for the Products.
Vertomed shall establish guidelines for order acceptance sufficient that orders
falling within commercially reasonable parameters set by Vertomed are accepted
in the United States without delay. Vertomed affiliates shall direct orders to
Vertomed for acceptance. Vertomed will provide MTI with summaries of each order
received which will include (i) the identity and location of the customer and/or
distributor, (ii) the type and quantity of the Products ordered and (iii) the
requested shipment date.
c. Shipment. Vertomed will establish a shipment schedule for each order
accepted. Vertomed will arrange for shipment of the Products in accordance with
this schedule, subject to delays beyond Vertomed's control. Vertomed will select
the method of shipment for each order and obtain all licenses required to export
the Products from the United States, if applicable. MTI will provide sufficient
inventory to meet anticipated orders to each warehouse location, as Vertomed
shall direct.
6. CONSIDERATION.
a. Employee Expenses. MTI will pay to Vertomed all expenses relating to
the hiring and employing of the Dedicated Employees and a pro rata share of the
expenses relating to the hiring and employing of Fractional Employees, including
without limitation, employee salaries, directly allocable employee benefits
costs, all incremental recruiting and hiring costs and any severance or
termination indemnities that may be due in the event of termination of
employment plus 5% of such expenses (the "Employee Expenses"). At such time that
MTI's net end-customer sales (net of returns, reserves for returns and
allowances for bad debts) on sales of Products reaches a breakeven level with
MTI's actual manufacturing costs plus Employee Expenses, the Employee Expenses
will be revised prospectively to an amount equal to actual expenses relating to
Dedicated Employees, a pro rata share of actual expenses relating to Fractional
Employees plus 10% of the net end-customer sales of the Products. This breakeven
level will be established by the Review Committee at the beginning of each
budget period and will not be reconciled at year end. At the conclusion of each
fiscal year, the parties will reconcile the expenses portion of Employee
Expenses according to a timetable the parties agree upon, which timetable shall
allow at a minimum 10 business days to Vertomed for reconciliation. In the event
a material change in the business occurs prior to the conclusion of a fiscal
year, the parties will reconcile expenses and fees at such time.
b. Distributor Management Fee. MTI will pay to Vertomed a fee in the
amount of 10% of revenues from sales of Products to distributors in the
Distributor Territory (the "Distributor Management Fee"). The Distributor
Management Fee will be withheld by Vertomed from collected Receivables prior to
payment to MTI. This method of payment of the Distributor Management Fee does
not in any way alter the ownership of the Receivables by MTI.
c. Fixed Fee. In addition to the Employee Expenses and Distributor
Management Fee, MTI will pay to Vertomed for the Services to be performed by
Vertomed a fixed fee, which shall be a budgeted pro-rata share of Vertomed's
general and administrative expenses, which pro-rata share shall be calculated as
MTI net end-customer sales in the Direct Territory as a percentage of total net
end-customer sales from all products Vertomed represents in the Direct
Territory, with the estimates of the MTI net end-customer sales to be determined
annually by the Review Committee in good faith (the "Fixed Fee"). This fee is
not reconciled at year end.
d. Timing of Payments. The Review Committee will prepare a budget to be
mutually agreed upon by the parties for the Employee Expenses and the general
and administrative expenses. MTI
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acknowledges that all benefits and terms of employment for the Dedicated
Employees and Fractional Employees will be determined by Vertomed in its sole
discretion. MTI will pay to Vertomed the Employee Expenses monthly, 30 days in
advance according to the budget. On a quarterly basis, Vertomed will reconcile
actual expenses and budgeted expenses and will issue a credit to MTI for any
overpayment made in the previous quarter. In the event that actual expenses
during any quarter are greater than budgeted expenses, MTI will pay Vertomed the
amount of underpayment within 30 days of receipt of written notice thereof. MTI
will pay to Vertomed the Fixed Fee monthly, 30 days in advance. The Distributor
Management Fee will be withheld by Vertomed prior to payment of collected
Receivables to MTI as set out in 4.d.(viii) above.
7. CONFIDENTIALITY.
a. Information. Each party acknowledges that it may disclose certain
confidential information (the "Information") to the other party. If either party
discloses such Information to the other, the receiving party will (i) use at
least the same degree of care to maintain the secrecy of such Information as the
receiving party uses to maintain the secrecy of its own confidential information
and (ii) use the Information only to accomplish the purposes of this Agreement.
The disclosing party will ▇▇▇▇ as "confidential" all tangible items supplied to
the receiving party that contain Information of the disclosing party. Within 20
days of any oral disclosures of Information, the disclosing party will provide
the receiving party with a writing memorializing the Information disclosed and
the date of disclosure. The placement of copyright notices on such items will
not constitute publication or otherwise impair their confidential nature.
b. Disclosure. Neither party will disclose the Information of the
disclosing party to any person except those of the receiving party's employees
or agents that require access to accomplish the purposes of this Agreement and
have been made aware of the confidentiality obligations herein. If the receiving
party learns of an actual or potential unauthorized use or disclosure of the
disclosing party's Information, the receiving party will promptly notify the
disclosing party and, at the disclosing party's request, provide the disclosing
party with reasonable assistance to recover its Information and to prevent
subsequent unauthorized uses or disclosures of such Information. Each party
acknowledges that (i) the unauthorized use or disclosure of any Information of
the disclosing party will cause irreparable damage for which it will not have an
adequate remedy at law and (ii) the disclosing party will be entitled to
injunctive and other equitable relief in such cases.
c. Limitations. Neither party will have any confidentiality obligation
with respect to the confidential information of the disclosing party that (i)
the receiving party independently knew or develops without using the Information
of the disclosing party, (ii) the receiving party lawfully obtains from another
person under no obligation of confidentiality or (iii) is or becomes publicly
available other than as a result of an act or omission of the receiving party or
any of its employees or agents.
8. OWNERSHIP.
All patents, copyrights, trademarks, trade secrets, regulatory approvals
and other proprietary rights in or related to the Products are and will remain
the exclusive property of MTI or its licensors, whether or not specifically
recognized or perfected under applicable law. During the term of this Agreement,
Vertomed may use MTI's trademarks to promote the Products, provided that prior
to publishing or disseminating any advertising or promotional material bearing
MTI's trademarks, Vertomed will deliver a sample of such materials to MTI for
prior approval.
9. REPRESENTATIONS AND WARRANTIES.
a. Existence and Authority. Each party represents and warrants that it
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to execute, deliver and perform this Agreement. The execution of this
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Agreement and the performance thereof have been duly authorized by all necessary
corporate action on its part and do not conflict with the terms or conditions of
any agreement to which such party is subject.
b. Products. MTI represents and warrants that the Products will (i)
conform to the written product specifications and (ii) comply with the
requirements of any applicable law or regulation.
c. Intellectual Property. MTI represents and warrants that it has all
necessary ownership rights to market, sell and distribute the Products in the
Direct Territory and the Distributor Territory, and that the manufacture, sale
and use of the Products and any distribution of the Promotional Materials will
not infringe any patents, copyrights, trademarks or other intellectual or
proprietary rights of any third parties.
d. Disclaimer. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, ALL
WARRANTIES, CONDITIONS AND REPRESENTATIONS WITH RESPECT TO THE PRODUCTS OR THE
PROMOTIONAL MATERIALS, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR
ORAL OR WRITTEN STATEMENT BY THE PARTIES OR OTHERWISE (INCLUDING, BUT NOT
LIMITED TO ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
TITLE AND NON-INFRINGEMENT) ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED.
10. LIMITATION OF LIABILITY.
UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST
PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS OF THE OTHER
PARTY OR ITS CUSTOMERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF
GOODWILL, USE OF MONEY OR USE OF THE PRODUCTS, INTERRUPTION OF STOPPAGE OF WORK
OR IMPAIRMENT OF OTHER ASSETS), ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR
IMPLIED WARRANTY, BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT
LIABILITY IN TORT OR OTHERWISE.
11. AUDIT.
During the term of this Agreement and for one year after its expiration
or termination, MTI or its accountants may, upon 30 days' prior notice to
Vertomed, audit the accounting records of Vertomed during the normal working
hours to verify Vertomed's compliance with the obligations under this Agreement;
provided, however, that MTI will not be entitled to conduct such audit more that
once per year.
12. INDEMNITY.
Except for liabilities caused by acts of Vertomed which are outside the
scope of its authority under this Agreement or which are performed with gross
negligence, MTI will indemnify, defend and hold harmless Vertomed from and
against any and all liabilities, losses, suits, claims, damages and expenses
(including attorneys' fees and costs) based on claims arising out of or relating
to (i) the manufacture, use, distribution, promotion or sale of the Products or
(ii) the infringement by Vertomed of any patent, copyright, trademark or other
intellectual property rights of any third parties with respect to the Products
or Promotional Materials. Vertomed will (i) notify MTI promptly of any such
actual or potential claim; (ii) allow MTI to control the defense of the claim;
(iii) cooperate in the defense of such claim and (iv) not settle such claim
without MTI's consent.
13. TERM AND TERMINATION.
a. Term. This Agreement will become effective on the Effective Date and
continue in effect for five years thereafter, unless earlier terminated pursuant
to paragraph 13(b). This Agreement will
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automatically renew for subsequent 2 year periods unless either party provides
the other party written notice 180 days prior to the expiration of the initial
term or any renewal term of its intention not to renew.
b. Termination for Cause. Either party may terminate this Agreement,
without judicial or administrative notice or resolution, immediately upon notice
to the other party, if:
(i) the other party or any of its employees breaches any material
obligation under this Agreement and such party fails to cure the breach
within thirty days after receipt of written notice thereof. Failure by
MTI to deliver Products in accordance with the schedule set forth in the
forecast for more than three months during any one year period will be
considered breach of a material obligation;
(ii) either party ceases to conduct business in the normal course, is
declared insolvent, undergoes any procedure for the suspension of
payment, makes a general assignment for the benefit of creditors or a
petition for bankruptcy, reorganization, dissolution or liquidation is
filed by or against it; or
(iii) the direct or indirect ownership or control of the other party
changes as follows: MTI may only exercise its right of termination under
this Section in the event that Warburg Pincus (together with its
affiliates) ceases to own or control at least 20% of Vertomed. Vertomed
may only exercise it's right of termination under this Section if a
third party gains control of MTI from, or subsequent to, Warburg Pincus
(together with its affiliates). Control of MTI will be deemed to have
changed to a third party if that party acquires control over more shares
of MTI than Warburg Pincus controls at that point in time. For purposes
of this Section, an initial public offering of a party will not be
considered to create a right of termination under this Agreement.
c. Termination for Failure to Meet Minimum Sales. MTI may terminate this
Agreement, upon written notice to Vertomed within 30 days following the
conclusion of a fiscal year in the event Vertomed fails to meet the Minimum
Sales for the Direct Territory, unless, within [10] days of receipt of such
termination notice, Vertomed provides written notice to MTI of its intent to
cure. If such notice is provided, the Agreement will not terminate if, within
180 days, Vertomed cures such failure for that fiscal year and becomes current
with respect to sales in the then-current year.
d. Termination for MTI Change of Control. In the event of a change of
control of MTI, MTI may terminate this Agreement, upon 90 days' written notice
to Vertomed within 30 days of such change of control of MTI.
e. Consequences of Termination. Upon expiration or termination of this
Agreement for any reason the parties will comply with the following termination
obligations:
(i) MTI will pay all due and outstanding amounts, as well as any
amount that has not become due, the due date of which will be
automatically accelerated to the date of expiration or termination of
this Agreement.
(ii) Vertomed will, at MTI's option, destroy or deliver to MTI or its
designees all Promotional Materials within Vertomed's possession or
control.
(iii) In the event that MTI terminates this Agreement, MTI will pay
Vertomed any and all expenses that Vertomed may incur as a direct result
of such termination, including without limitation, expenses relating to
employee termination and closure of offices. In the event that MTI
terminates this Agreement pursuant to Section 13(d), MTI will also pay
to Vertomed, as liquidated damages and not as a penalty, the sum of one
million U.S. dollars.
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(iv) In the event that MTI terminates this Agreement pursuant to
Section 13(b), (c) or (d), MTI may, at its discretion and at its sole
cost and expense, solicit and employ the Dedicated Employees. MTI will
not solicit or employ any Fractional Employees without the prior written
consent of Vertomed.
f. Survival. The provisions of Sections [3(c)(viii), 3(c)(ix),
3(d)(viii), 3(d)(ix), 6-8, 10, 11, 12, 13(e), 14-22] will survive the expiration
or termination of this Agreement.
14. INSURANCE.
MTI will maintain product liability insurance in an amount sufficient to
cover complete cost of product liability, regulatory and intellectual property
liability with an insurance company rated at least A+3 by Best's rating guide.
Vertomed will be named as an additional insured on such insurance policies.
Vertomed will maintain insurance in an amount sufficient to cover any Vertomed
warehousing facilities and to cover wrongful acts by Vertomed in the
distribution, sale and promotion of the Products.
15. U.S. EXPORT RESTRICTIONS.
Vertomed acknowledges that the Products and related information,
documents and materials may be subject to export controls under U.S. Export
Administration Regulations. Vertomed will (i) comply with all legal requirements
established under these controls, (ii) cooperate with MTI in any official or
unofficial audit or inspection that relates to these controls and (iii) not
export, re-export, divert or transfer any such item or direct products thereof
to any country to which such transfer is prohibited by such export controls,
unless Vertomed has obtained the prior written authorization of MTI and the U.S.
Department of Commerce.
16. FORCE MAJEURE.
Neither party will be liable for any failure or delay in performing an
obligation under this Agreement that is due to causes beyond its reasonable
control, such as natural catastrophes, governmental acts or omissions, laws or
regulations, labor strikes or difficulties or transportation stoppages. These
causes will not excuse either party from paying amounts due to the other through
any available lawful means acceptable to the other party.
17. NOTICES.
Any notice required or permitted under this Agreement shall be in
writing and either mailed by nationally recognized overnight courier, registered
or certified mail, return receipt requested, or by express delivery service to
the other party. All notices shall be sent to the attention of the Chief
Executive Officer of such other party at the address set forth in the first
paragraph of this Agreement or at such other addresses or to such other persons
as such party may previously have designated by written notice. Notice will be
deemed to have been given upon receipt.
18. ASSIGNMENT.
Except as otherwise provided, neither party may assign, delegate,
subcontract or otherwise transfer this Agreement or any of its rights or
obligations without the other party's prior approval, which approval will not be
unreasonably withheld. Either party may assign this Agreement or any of its
rights or obligations, upon notice to the other party, to (i) a related company
or to an unrelated party pursuant to a sale, merger or other consolidation, or
(ii) a subsidiary provided that the assigning party execute a guarantee covering
the subsidiary's obligations after such assignment.
19. WAIVER, AMENDMENT, MODIFICATION.
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Except as otherwise provided, any waiver, amendment or other
modification of this Agreement will not be effective unless in writing and
signed by the party against whom enforcement is sought.
20. SEVERABILITY.
If any provision of this Agreement is held to be unenforceable, in whole
or in part, such holding will not affect the validity of the other provisions.
21. GOVERNING LAW.
This Agreement will be governed by and interpreted in accordance with
the laws of the State of Minnesota, excluding its conflict of laws principles.
Any claim arising out of or relating to this Agreement or the existence,
validity, breach or termination thereof, whether during or after its term, will
be brought in, and the parties hereby consent to the jurisdiction of, the state
or federal courts sitting in Minneapolis, Minnesota.
22. ENTIRE AGREEMENT.
This Agreement and its Exhibits constitute the complete and entire
statement of all terms, conditions and representations of the agreement between
MTI and Vertomed with respect to its subject matter and supersedes all prior
writings or understandings.
IN WITNESS WHEREOF, MTI and Vertomed cause this Agreement to be executed
by their duly authorized representatives identified below.
Micro Therapeutics, Inc. Vertomed, Inc.
("MTI") ("Vertomed")
By: /s/ ▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------- ------------------------------
Name: ▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------ ------------------------------
Title: Chief Executive Officer Title: Director
------------------------ ------------------------------
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EXHIBIT A
PRODUCTS
ONYX(R)
GUIDEWIRES
Mirages(TM) -008" Hydrophilic Guidewire
SilverSpeed(R) Hydrophilic Guidewire
X-pedition(TM) Hydrophilic Guidewire
X-celerator(TM) Hydrophilic Exchange Guidewire
ACCESSORIES
Cadence Precision Injector
1 ▇▇ ▇▇▇▇ Lock Injection Syringe
BALLOONS
HydroGlide(TM) Occlusion Balloon System
HyperForm(TM) Occlusion Balloon System
Equinox(R) Occlusion Balloon System
Equinox(R) occlusion Balloon Catheter
MICRO CATHETERS
FlowRider(R) PLUS Flow Directed Micro Catheter
UltraFlow(TM) HPC Flow Directed Micro Catheter
Rebar(R) -10 Reinforced Micro Catheter
Rebar(R) -14 Reinforced Micro Catheter
Rebar(R) -18 Reinforced Micro Catheter
Rebar(R) -027 Reinforced Micro Catheter
PERIPHERAL BLOOD CLOT THERAPY PRODUCTS
VALVED INFUSION CATHETERS
Truline(TM) Valved Infusion Catheter
Focused(TM) Valved Infusion Catheter
▇▇▇▇▇-▇▇▇▇▇▇▇▇(R) Valved Infusion Catheter
PERIPHERAL MICRO CATHETERS
MicroMewi(TM) Sidehole Infusion Catheter
Micro Patency(TM) Endhole Infusion Catheters
SIDEHOLE INFUSION CATHETERS
Mewi-5(TM) Sidehole Infusion Catheter
MECHANICAL THROMBOLYSIS
▇▇▇▇▇▇▇▇▇ Over-The-Wire Brush(TM)
ACCESSORIES
Introducer Sheaths
Pulse-Spray Accessory Pack
INFUSION WIRES
ProStream(R) Sidehole Infusion Wire
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EXHIBIT B
DIRECT TERRITORY
Japan
Albania
Andorra
Austria
Belarus
Belgium
Bosnia-Herzegovina
Bulgaria
Croatia
Czech Republic
Denmark
England
Estonia
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
Latvia
Liechtenstein
Lithuania
Luxembourg
Macedonia
Moldova
Monaco
Netherlands
Norway
Poland
Portugal
Romania
Russia
San Marino
Slovakia
Slovenia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vatican City
Yugoslavia
DISTRIBUTOR TERRITORY
All countries outside of the United States and Canada and not included in the
Direct Territory above.
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