EXHIBIT-10.4
CONFIDENTIAL
THIS AGREEMENT is made the Eleventh day of February 2004
BETWEEN :
(1) LONGPORT INCORPORATED, a corporation incorporated under the laws of
Delaware and having its principal place of business at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ("LONGPORT"); and
(2) US MEDICAL SYSTEMS INC, a corporation incorporated under the laws of
Nevada and having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("USMS").
WHEREAS :
(A) Longport develops, supplies and supports B-scan ultrasound scanning
equipment (the "EQUIPMENT") and software (the "SOFTWARE") detailed in
Schedule 1 (together, the "SCANNER" which expression extends to any
versions, derivatives, parts, aspects and ingredients thereof from time
to time as specifically outlined in Schedule 1) which has been designed
for the purpose of imaging the human skin and underlying few
centimeters soft tissue, detecting the onset of certain conditions that
impact this region and allowing the monitoring of the rate and extent
of change to skin tissue induced by treatments or through natural
processes.
(B) Longport wishes to appoint USMS as a distributor of the Scanner and
USMS agrees to accept such appointment on the terms set out in this
Agreement, which, for the avoidance of doubt, shall include the Terms
and Conditions attached hereto.
IT IS HEREBY AGREED as follows :
1. DEFINITIONS
1.1 In this Agreement the following expressions shall have the following
meanings:
"APPLICATION TRAINING" means clinical training on the use of the
scanner, such training will only be provided to individuals who have
previously successfully completed "System
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Training". Fees over and above Longport's agreed selling price will
under normal circumstances be charged for this "Application Training"
(see Schedule 3);
"BUSINESS DAY" means any day (not being a Saturday or Sunday) on which
banks are open for business in the United States of America;
"THE EFFECTIVE DATE" means five business days after signature of this
Agreement;
"EXCLUSIVE DISTRIBUTOR" means sole distributor in the "Wound Care
Market" excepting that both parties acknowledge and agree that Longport
has certain relationships and obligations to distributors and agents in
the "Wound Care Market" and that the rights and interests of these
distributors and agents shall not be impacted or restricted by the
appointment of USMS. A list of these providers in the "Wound Care
Market" is included as Schedule 4;
"LONGPORT GROUP" means together Longport and every holding company or
subsidiary of Longport;
"ORDER" means any order for the Scanner placed with Longport by USMS
from time to time in accordance with this Agreement;
"PARTIES" means the parties to this Agreement namely, Longport and
USMS;
"PMC NETWORK" - A healthcare network that provides healthcare services
primarily through union based healthcare programs that is administered
by Practice Management Corporation.
"RESTRICTED INFORMATION" has the meaning attributed to it in Condition
21 of the Terms and Conditions;
"SUB-AGENT" shall mean a subsidiary sales or distribution agent
appointed by USMS;
"SYSTEM TRAINING" shall mean instruction on the general use of the
scanner hardware and software.
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"TERMS AND CONDITIONS" has the meaning attributed to them in
Schedule 2;
"THE TERRITORY" means the United States of America;
"USMS GROUP" means together USMS and every holding company or
subsidiary of USMS; and
"WOUND CARE MARKET" means nursing homes, assisted care living
facilities, rehabilitation centers and operating wound care centers.
1.2 Any reference in this Agreement to any statute or statutory provision
shall be construed as including a reference to that statute or
statutory provision as from time to time amended modified extended or
re-enacted whether before or after the date of this Agreement and to
all statutory instruments orders and regulations for the time being
made pursuant to it or deriving validity from it and so far as may be
applicable any past statutory provisions as from time to time amended
modified extended or re-enacted which such provision has directly or
indirectly replaced.
1.3 Except so far as the context otherwise requires words denoting the
singular shall include the plural and vice versa and words denoting any
one gender shall include all genders and words denoting persons shall
include bodies corporate, unincorporated, associations, partnerships
and individuals.
1.4 Unless otherwise stated definitions of the parties included in the
statement of parties in Clause 1 of this Agreement and any definitions
included in any particular Clauses, or Schedules also apply in the
remainder of this Agreement.
1.5 Headings to Clauses are included for ease of reference only and shall
have no effect on the interpretation or construction of this Agreement.
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2. APPOINTMENT
2.1 Subject to the terms of this Agreement, Longport hereby appoints USMS
as a non-exclusive distributor into all applicable medical markets for
the "Scanner" across the Territory and USMS hereby accepts such
appointment. Further, Longport shall appoint USMS as the "Exclusive
Distributor" of the scanner in the "Wound Care Market", upon terms
defined within this Agreement, within 90 days of the effective date,
subject to the conditions defined in Clauses 2.2 and assuming USMS is
not in breach of any obligation of this Agreement at the time this
appointment is to be made.
2.2 To be granted the status of "Exclusive Distributor" in the "wound care
market" Longport shall first receive from USMS a payment of $525,000
solely for this right. The date this payment is made and the "Exclusive
Distributor" status obtained shall be mutually agreed between Longport
and USMS, but both shall occur within 90 days of the Effective date.
2.3 To maintain its status as "Exclusive Distributor" in the wound care
market USMS shall:
(a) Purchase not less than 25 units per month during the first year of the
Agreement until a total of not less than 300 (this shall include the 9
units recently purchased by USMS) are purchased.
(b) Purchase not less than 50 units per month during the second year of the
Agreement until a total of not less than 600 are purchased. If the
total number of units purchased in year 1 exceeds 300 then this
"surplus" shall be carried forward as a "credit" against the purchasing
requirement in Year 2.
(c) Purchase not less than 1,000 units during the third year of the
Agreement and not less than 80 units in any one-month during the third
year until 1,000 units are purchased. If the total number of units
purchased in year 1 and 2 combined exceeds 900 then this "surplus"
shall be carried forward as a "credit" against the purchasing
requirement in Year 3.
2.4 USMS shall also be appointed sole distributor to the "PMC Network" upon
payment of the fee described in Clause 2.2 and USMS shall maintain that
status for the duration of this Agreement while it meets the purchasing
schedule described in 2.3 and is not in material breach of any other
obligation defined in this Agreement.
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2.5 For the avoidance of doubt, Longport shall be entitled at any time or
from time to time to sell the Scanner direct to customers in the
Territory, excepting that Longport shall not directly sell scanners
knowingly into the "wound care market" once USMS becomes the "Exclusive
Distributor" and USMS continues to abide by its obligations to retain
this status, for a period of three years excepting under circumstances
where Longport has outstanding commitments, as listed in Schedule 4.
While the "Exclusive Distribution" rights are retained Longport shall
forward to USMS all new Wound Care Market leads received directly from
the market place.
If USMS is unable or unwilling to supply any prospective end user in
the "Wound Care Market" within the Territory in a timely manner USMS
will so inform Longport. Similarly, if any prospective customer advises
Longport that USMS is unwilling to supply them Longport shall advise
USMS of this. Under any of these circumstances USMS and Longport shall
negotiate on how the potential customer should be serviced, such
negotiations shall be concluded within a 15 business day period.
2.6 Longport shall be entitled to appoint new non-exclusive distributors
within the territory excepting that Longport shall not appoint new
distributors into the "Wound Care Market" once USMS becomes the
"Exclusive Distributor" and USMS continues to abide by all its
obligations.
2.7 Longport shall make available to USMS the first units manufactured
every month to the schedule shown in Clause 2 or to higher volumes when
so ordered according to Clause 4. This duty of Longport shall however
cease if USMS is in material breach of any of its obligations,
including but not limited to Clause 2.3.
2.8 For the duration of this Agreement the USMS Group shall obtain the
Scanner only from Longport, excepting for in the situation where
Longport is unable to meet the production needs of USMS as described in
Clause 6.4.
2.9 USMS shall not, during this Agreement, except upon the default of
Longport as defined in Clause 6.4, without the prior written consent of
Longport, be involved directly or indirectly whether on its own account
or for or through any other person, including its sub-agents, in
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the manufacture, sale, distribution, promotion or marketing in the
Territory of any ultrasound based product which (a) competes or (b) is
capable of competing with the Scanner.
2.10 For the duration of this Agreement, USMS shall not seek customers for
the Scanner outside the Territory and will not establish or maintain
any branch or distribution depot for the Scanner outside the Territory.
2.11 In addition, the appointment of USMS is subject to the Terms and
Conditions.
3. UNDERTAKINGS AND OBLIGATIONS
3.1 The USMS Group undertakes to Longport :
(a) not to register or assert any rights to :
(i) any trade ▇▇▇▇, patent, registered design, internet
domain name or other intellectual property rights
owned from time to time by any member of the Longport
Group;
(ii) the design of the Scanner or any invention contained
therein;
(b) not to be involved in any activity for the duration of this
Agreement which may bring the intellectual property rights or
other rights of Longport or Longport the entity into question
or disrepute;
(c) bring to the attention of Longport any improper or wrongful
use of the Scanner or any possible infringement of Longport's
intellectual property rights, or any faults or defects in the
Scanner which have become known to USMS;
(d) shall comply fully with the requirements of all relevant
regulatory bodies and shall ensure that it does not take any
action or make any representation which may impede Longport in
obtaining or continuing subsistence of any such approval; and
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(e) to attend the initial training courses on the use of the
Scanner, and any further training courses required in the
event that Longport produces an update, enhancement or
modification to the Scanner.
3.2 USMS and its Sub-Agent shall not:
(a) use the terms "exclusive", "sole" or any similar meaning term
in marketing and sales activities or materials to undermine
the activities of other distributors and agents Longport has
in the "Wound Care Market";
(b) through any means state or imply that the "Exclusive
Distribution" rights described in this Agreement extend beyond
the "Wound Care Market";
(c) through any means state or imply that USMS has the "Exclusive
Distribution" rights in the "Wound Care Market" prior to the
obligations under Clause 2.2 having been met or in
circumstances where it has failed to continue to meet its
obligations, including but not limited to those described in
Clause 2.3.
The restrictions listed above shall not prevent USMS from
announcing its status as the "Exclusive Distributor" in the
"Wound Care Market" after such status has been established.
3.3 The USMS Group and Longport Group undertake to each other during the
continuance of this Agreement as well as after its termination to
maintain the confidentiality obligations contained in Condition 21 of
Schedule 2.
3.4 For the duration of this Agreement USMS and Longport agree not to issue
press releases or other announcements that mentions the other party or
its interests without first seeking the written authorization, and
whenever possible the agreement of the other party. Neither party
should unnecessarily delay announcements by the other party and should
give good reason why they have requested editorial changes, including
when appropriate reference to this Agreement. Whenever a significant
event occurs involving Longport and USMS, both parties shall
co-ordinate the issuance of appropriate press releases in a timely
manner.
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4. RESTRICTIVE COVENANTS
4.1 The USMS Group hereby warrants and undertakes in favor of Longport :
(a) not for a period of 36 months after the date of termination of
this Agreement howsoever arising to be directly or indirectly
(whether as a shareholder, partner, consultant, employee,
agent or principal or in any other capacity) engaged concerned
or interested in any business or company carrying on within
the Territory the business of the manufacture, distribution or
sale of any ultrasound device which is capable of competing
with the Scanner, except that USMS may be beneficially
interested in the securities in any company carrying on within
the Territory such a business if such securities are listed on
a recognized Stock Exchange and the USMS Group together with
any associate neither holds nor is beneficially interested in
more than a total of five per cent of all the securities in
that company;
(b) not at any time after the termination of this Agreement to use
or hold itself out as using any of the corporate or trading
names of Longport or any colorable imitation or derivative
thereof;
(c) not for a period of 12 months after the termination of this
Agreement to directly or through any other person to employ or
seek to entice away from the employment of Longport any person
who was at any time during the twelve months prior to the
termination of this Agreement employed by Longport; and
(d) not at any time after the Termination of this Agreement to
represent it or permit it to be held out as being in any way
connected with or interested in the business of Longport.
4.2 The parties to this Agreement agree that the restrictions set out in
Clause 4.1 are separate and severable undertakings and are reasonable
in the circumstances and necessary for the protection of the legitimate
interests of Longport and the goodwill of USMS. If, however, any part
of Clause 4.1 is found to be invalid or unenforceable for any reason
then the remainder of Clause 4.1 shall continue in full force and
effect.
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5. DURATION
5.1 Subject to Clause 12 below, this Agreement shall commence on the
Effective Date and shall continue for an initial period expiring on the
third anniversary after the Effective Date ("the Initial Term").
5.2 Six months before the conclusion of the "the Initial Term" subject to
Clause 12 below both parties agree to formally review this Agreement
and its implementation in light of the two and a half years of
experience gained and to prepare a revised Agreement for a second three
year period ("the Second Term"). Although the terms of this revised
Agreement are to be decided at the time it is prepared it shall include
the provision for a continuation of USMS "Exclusive Distribution"
rights in the "Wound Care Market" and non-exclusive marketing rights in
all other applicable medical fields for the Scanner in the Territory.
If the parties have not signed an Agreement covering the "Second Term"
by the end of "the Initial Term" then both parties agree to immediately
refer the matter to the binding arbitration of the AAA as described in
Clause 9.3, excepting that all arbitration costs shall be divided
equally between Longport and USMS under these circumstances. During the
arbitration process the terms of this Agreement shall continue.
6. SUPPLY
6.1 Subject to Clause 7.6 below and Condition 14 (Force Majeure) of the
Terms and Conditions, Longport shall use all reasonable endeavors to
supply the Scanner to USMS in accordance with each Order placed by
USMS.
6.2 Longport shall be entitled at any time or from time to time to make
such modifications to the specification of the Scanner as it may in its
sole discretion think fit. Whenever possible Longport will review any
change in specification with USMS before they are implemented.
6.3 USMS shall in respect of each Order for the Scanner to be supplied
hereunder be responsible for :
(a) ensuring the accuracy of the Order;
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(b) providing Longport with any information which is reasonably
necessary in order to enable Longport to fulfill the Order;
6.4 Upon receipt and confirmation of each Order Longport shall, as soon as
is reasonably practicable, inform USMS of Longport's estimated delivery
date for the order. Longport shall use all reasonable endeavors to meet
the delivery date, normally four months after receipt of order, but
time of delivery shall not be of the essence and accordingly Longport
shall have no liability to USMS if, notwithstanding such endeavors,
there is any delay in delivery. Longport shall however advise USMS of
any expected delivery delays at the earliest practical opportunity.
However, if Longport has been unable to deliver products ordered in
accordance with this Agreement 120 days after the due date for that
order has passed then USMS shall have the right to have the Scanner
manufactured by their own sources and Longport shall provide all
necessary licenses required for this production. This manufacturing
right shall only cover Scanners that USMS requires for their
distribution needs as described in this Agreement.
In circumstances where Longport is found to have defaulted as described
in the above paragraph arbitration should be sought as described in
Clause 10.3 to determine how the deposit outstanding, initially
$500,000, is repaid and if this repayment should be made in cash or in
components already in the production pipeline or some combination of
the two.
6.5 Longport shall be exclusively responsible for the first 12 months of
this Agreement for the training and support of end user customers
contracted to USMS or any of USMS's sub-agents and USMS shall not seek
such customer support from any other party. If after the first 12
months of this Agreement has concluded USMS or one of its sub-agents
wishes to train and support their customers directly they shall be
entitled so to do, provided they give 6 months notice to Longport.
If USMS or any of your sub-agents wish to undertake the training and
support responsibility they shall submit to Longport for approval all
training and support documentation and procedures. All such programs
and documentation shall be subject to approval by Longport and Longport
will on an on-going basis be exclusively responsibly
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for accrediting all Scanner related training and support programs and
the personnel involved.
Longport will have the right not to accredit any program or person, and
neither USMS nor its sub-agents shall use any non-accredited program or
person in any training or support capacity with regard to the Scanner.
Fees will be charged for these accreditation services by Longport.
If during the first 18 months of this Agreement any end-user customer
of USMS requiring multiple Scanners, greater than 20, wishes to develop
and use an in-house training program Longport and USMS shall work with
that customer to develop an appropriate training program. Longport
shall charge for its input into this program development.
Details of Longport's standard end user support provision are presented
in a Schedule 3 of this Agreement
6.6 The terms of this Agreement, which includes the Schedules attached
hereto, shall apply to the exclusion of any other terms and conditions
including any implied by trade, custom, practice or course of dealing.
Purported provisions to the contrary are excluded.
7. PAYMENTS
7.1 On signature of this Agreement USMS shall provide Longport with an
initial order for 100 scanners and within 5 business days of signature
of this Agreement Longport shall receive from USMS a deposit of
$500,000 by wire transfer on these first 100 scanners. Longport shall
immediately notify USMS of the receipt of this transfer.
7.2 This Agreement shall not be considered consummated until the payment
described in 7.1 is received by Longport. If Longport does not receive
the payment described in Clause 7.1 within 5 business days of signature
of this Agreement, this Agreement will automatically be null and void.
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7.3 Between the time of signature of this Agreement and the day that the
deposit of the $500,000 is received by Longport, no press release or
announcement shall be made by either part in regard to this Agreement.
Further, if any party believes that the other party, any company,
sub-agent or any individual associated with that party has directly or
indirectly gained or tried to gain any benefit from the existence of
this Agreement before it has been announced to the public at large this
Agreement can be made null and void, subject to Clause 9.3. During this
five-day period both parties shall develop a joint press release to be
issued the day the payment is received by Longport.
7.4 USMS shall place firm orders for units four months in advance of the
required delivery. At the time each order is placed a 20% deposit shall
be placed. USMS shall take physical delivery of all products ordered
within the month delivery is due and pay the outstanding purchase price
within fifteen business days of delivery. For the avoidance of doubt a
second order shall be placed by USMS with Longport not less than 30
days after the first shipment is made.
7.5 The initial purchase price for the scanner shall be $22,000 per unit.
This price shall include "System Training" and "Customer Support" as
defined, but exclude any applicable taxes and duties. Additional costs
associated with specific "Application Training" and support as well as
component costs are defined in Schedule 3 of this Agreement. Provided
USMS abides with all terms of this Agreement Longport shall not offer
the same package provision (Scanner plus training plus user support as
described in this document) at a lesser cost as to that being charged
to USMS (at that time) to any other customer in the Territory for the
duration of this Agreement.
7.6 Longport has the right to change the purchase price for the scanner
given 60 days notice, but will provide a written explanation as to why
any price change has been made. Such price changes will be applied
across the board to all customers of that device or service provision,
including pro rata to any direct customers Longport may have. If USMS
believe that any price change made is not justified then they will have
the right to seek an arbitration ruling as outlined in Clause 9.3.
7.7 For the duration of this Agreement, Longport shall pay to USMS 1% of
its Scanner sale receipts from the US "Wound Care Market" that arise
from either direct sales made by
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Longport or those undertaken to other third party agents or
distributors. (Other third party agents or distributors exclude USMS
and all of its sub-agents.) This obligation shall start from the date
USMS gains its "exclusivity" into in the US "Wound Care Market". These
payments are subject to USMS continuing to meet all its obligations
under this Agreement, including but not limited to the purchasing
schedule presented in Clause 5.4 the payment obligations presented in
Clause 7.3 and progressing the CPT work program, as described in Clause
8.6, in a timely manner using all reasonable efforts.
Longport shall pay to USMS all fees due under this clause 7.7 on a
quarterly basis within 15 days of publication of its quarterly
accounts, for the fourth quarter of each year the payment shall be made
within 15 days of publication of Longport's annual accounts. However,
for the first 12 months that this clause comes into force Longport
shall report to USMS the money owed on a quarterly basis as described
above, but shall not pay any fees due until the end of the fourth full
quarter that the above clause has come into effect when all the
accumulated fees shall be paid, subject to USMS continuing to meet all
its obligations.
For the avoidance of doubt, once USMS gains and while it retains
"Exclusivity" in the "Wound Care Market":
- Longport shall forward solely to USMS all new enquiries it
receives from end user potential customers from the "Wound
Care Market" and shall not knowingly directly supply customers
in the "Wound Care Market" in the Territory, other than those
listed in Schedule 4;
- Longport shall not appoint any new distributors over and above
those listed in Schedule 4 to service the "Wound Care Market"
within the Territory;
- The customer groupings listed in Schedule 4 represent groups
that Longport in conjunction with one of the listed "Wound
Care Market" agents or distributors are already progressing
and
- The "Wound Care Market" agents and distributors listed in
Schedule 4 are not prevented from finding or supplying
Scanners to new customers beyond those listed in
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Schedule 4 in the US "Wound Care Market" and Longport is free
to supply these agents or distributors.
7.8 At the end of each 12 month period of this Agreement, subject to USMS
meeting all its obligations including, but not limited to the
purchasing schedule presented in Clause 5.4 and the payment obligations
presented in Clause 7.3. Longport shall issue to USMS shares of its
common (restricted) stock as laid out below:
- If USMS purchases total 90% or greater of Longport's Scanner
sale revenue, 5% of its issued stock
- If USMS purchases total 75 to 89 % of Longport's Scanner sale
revenue, 4% of its issued stock
- If USMS purchases total 60 to 74 % of Longport's Scanner sale
revenue, 2.5% of its issued stock
- If USMS purchases total 50 to 59% % of Longport's Scanner sale
revenue, 1% of its issued stock
- If USMS purchases total less than 50% of Longport's Scanner
sale revenue, 0% of its issued stock
8. MARKETING
8.1 USMS shall use its best endeavors to promote the sale of the Scanner
throughout the Territory.
8.2 USMS shall be entitled to resell the Scanner to its customers at such
prices as it may determine.
8.3 USMS shall respond promptly to all enquiries from prospective
customers.
8.4 In connection with the promotion and marketing of the Scanner USMS :
(a) shall not misrepresent Longport and shall make clear in all
dealings with customers and prospective customers that it is
acting as distributor of the Scanner and not as Longport's
agent, and shall use all reasonable endeavors to protect the
good name and reputation of Longport throughout the Territory;
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(b) shall comply with all legal requirements from time to time in
force relating to the storage and sale of the Scanner;
(c) inform Longport in writing of its selling price current from
time to time;
(d) provide Longport on a quarterly basis (or on such other basis
as agreed from time to time) with a report, in such form as
Longport may reasonably require, of sales of the Scanner which
it has made in the preceding 3 months and containing such
other information as Longport may reasonably require;
(e) from time to time consult with Longport's representatives for
the purpose of assessing the market in the Territory and
permit them to
(i) inspect any premises or documents used by USMS in
connection with the sale of the Scanner; or
(ii) accompany USMS on visits to customers or potential
customers, subject to the agreement of the customer;
(f) at the request of Longport provide to it copies of such sales
catalogues, sales brochures and sales manuals as relate to the
Scanner;
(g) use in relation to the Scanner only such advertising
promotional and selling materials as are approved in advance
in writing by Longport;
(h) maintain an active and suitably trained sales force;
8.5 In connection with the promotion and marketing of the Scanner, Longport
shall :
(a) provide USMS with literature in English in relation to the
Scanner. The cost of this literature shall be borne by
Longport if requested in reasonable quantities and in
Longport's standard format, but at USMS's expense if
literature is requested in
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quantities greater than thought reasonable by Longport or if
requested in a USMS specified format;
(b) support USMS by means of comprehensive website coverage, which
shall include the contact details of USMS and links to any
appropriate USMS website(s);
(c) provide USMS with access to a global network of research
activities, including opportunities for USMS to participate in
local activities; and
(d) provide USMS with general marketing, clinical and technical
support and insights into development activities and new
products.
8.6 USMS commits to fund a study during the course of the Agreement,
starting in the first year, with the aim of establishing CPT codes for
the use of the LDS in early stage pressure ulcer prevention and other
applications currently not covered by codes. USMS shall use all
reasonable efforts to progress this work and shall report to and
consulate with Longport on a frequent basis, not less than every two
months, on the progress made and issues outstanding. Longport shall be
free to circulate the reports provided to other companies listed in
Schedule 4 who are also progressing work in this area, subject to those
companies agreeing to prepare and share similar reports with USMS.
9. WARRANTIES
9.1 Longport warrants and undertakes in favor of USMS that :
(a) Longport is the owner with full title guarantee of each
Scanner sold or offered for sale to USMS pursuant to this
Agreement;
(b) all Scanners delivered hereunder shall be of satisfactory
quality and fit for the purpose for which they are stated by
Longport to be designed;
(c) Longport's Scanner technology has FDA marketing clearance (FDA
Ref K990238);
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(d) Scanners supplied will be UL kite marked and UL listed under
the appropriate medical device category; and
(e) the Scanner manufacture will be undertaken by an FDA
registered company.
9.2 USMS warrants in favor of Longport that it has all necessary power and
authority to enter into this Agreement and to perform the obligations
set out herein and that this Agreement has been properly authorized and
constitutes binding obligations on it.
9.3 In the event of any breach of Longport's warranty in Clause 11.1
(whether by reason of defective materials, production faults or
otherwise) Longport's liability shall be limited to replacement of the
Scanner in question.
9.4 Notwithstanding anything to the contrary in this Agreement, Longport
shall not, except in respect of death or personal injury caused by
Longport's negligence, be liable to USMS by reason of any
representation or implied warranty, condition or other term or any duty
at common law, or under the express terms of this Agreement for any
consequential loss or damage (whether for loss of profit or otherwise
and whether occasioned by the negligence of Longport or its employees
or agents or otherwise) arising out of or in connection with any act or
omission of Longport to the manufacture or supply of the Scanner, its
resale by USMS or its use by any customer.
9.5 Longport shall provide product liability insurance with reputable
insurance companies in the amount of at least $5 million per claim or
series of connected claims.
10. TERMINATION
10.1 Longport shall be entitled without prejudice to its other rights, to
terminate this Agreement by notice in writing to USMS in the event
that :
(a) USMS commits any breach of its obligations hereunder and fails
to remedy such breach within fifteen (15) Business Days of
receipt of notice from Longport requiring the remedy thereof.
However, under circumstances where USMS is unable to order or
purchase units to the schedule laid out in Clause 2.3, for
reasons other than Longport being unable to fulfill its
obligations, USMS's status as the
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"Exclusive Distributor" in "Wound Care Market" shall cease.
USMS shall however have a 60-day period to cure this
deficiency or default. If USMS is unable to cure the
deficiency or default it can at its request retain the right
to continue as a non-exclusive distributor subject to it
abiding with all other obligations of the Distribution
Agreement and being able to on an on-going basis to the
satisfaction of Longport demonstrate that it is implementing a
competent written business plan and has established viable
distribution channels.
(b) USMS makes any arrangement with its creditors or an order is
made or a resolution is passed for the winding-up of USMS
(other than solely for the purpose of amalgamation or
reconstruction) or a receiver, administrator or administrative
receiver or other officially appointed officer or manager is
appointed to the whole or any part of its assets or
undertaking or circumstances arise which entitle the Court or
a creditor to appoint a receiver or manager or administrator
or administrative receiver or other official officer or
manager or which entitle the Court to make a winding-up order
or if USMS takes or suffers any similar or analogous action in
consequence of debt; or
(c) USMS is found to have made any material misrepresentation
concerning the Scanner or Longport.
(d) USMS shall be responsible for the actions of all its
sub-agents, and all sub-agents shall be obliged to sign
Agreements with USMS that protect the interests of Longport.
If any sub-agent is found or believed to be damaging the
interests of Longport or Longport the entity then Longport can
insist that USMS or that sub-agent correct the damaging action
or potential damaging action within fifteen business days of
receiving written notice from Longport. If such corrective
action does not occur to Longport's satisfaction then USMS
shall terminate its agreement with that sub-agent immediately,
failure to do so will be considered a breach of this
Agreement.
10.2 Where Longport has terminated this Agreement in accordance with Clause
10.1 USMS shall have no claim or action against Longport in respect of
an Order or part of an Order so
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cancelled and, with regard to any uncancelled part of an Order, a right
only to receive that proportion of the price which the completed part
of an Order bears to the uncompleted part.
10.3 If a dispute arises out of or in connection with this Agreement either
party may by written notice require the other party to resolve the
dispute by negotiation in good faith. Where such a notice is given,
each party shall use their best endeavors to resolve the dispute. In
the event that such a dispute is not resolved within 15 business days
after the said notice was given, the aggrieved party shall immediately
refer the matter to the American Arbitration Association ("AAA") to
resolve the dispute through a binding arbitration. Such arbitration
shall be conduced in the State of New Jersey. The aggrieved party shall
pay all direct AAA costs incurred prior to the arbitration hearing, but
the AAA shall have the right to rule on how these and all other costs
directly incurred in the arbitration process are finally proportioned.
This Agreement shall be governed by and construed in accordance with
Delaware law.
11. CONSEQUENCES OF TERMINATION
11.1 Upon termination of this Agreement :
(a) Longport shall be entitled, but not obliged, to repurchase
from USMS all or part of any order of the Scanner then held by
USMS for a price equal to the lower of cost or net realizable
value provided that :
(i) Longport shall be responsible for arranging and for
the cost of, transport and insurance; and
(ii) USMS may sell the Scanner for which it has accepted
orders from customers prior to the date of
termination or in respect of which Longport does not,
by written notice given to USMS within 10 Business
Days after the date of termination exercise its right
of repurchase and for those purposes and to that
extent the provisions of this Agreement shall
continue in full force and effect;
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(b) USMS shall, at its own expense, within 30 Business Days send
to Longport any advertising, promotional or sales material
relating to the Scanner (and all copies thereof) then in the
possession of USMS;
(c) outstanding unpaid invoices rendered by Longport in respect to
the Scanner shall become immediately payable by USMS and
invoices in respect to the Scanner ordered prior to
termination but for which an invoice has not been submitted
shall be payable immediately upon submission of an invoice;
(d) USMS shall cease to promote, market or advertise the Scanner
or to make any use of the Restricted Information (as defined
in Condition 21 of the Terms and Conditions) other than for
the purpose of selling all or part of any consignment of the
Scanner in respect of which Longport does not exercise its
right of repurchase;
(e) USMS shall have no claim against Longport for compensation for
loss of distribution rights, loss of goodwill or any similar
loss; and
(f) subject as otherwise provided herein and to any rights or
obligations which have accrued prior to termination neither
party shall have any further obligation to the other under
this Agreement.
11.2 Termination of this Agreement shall be without prejudice to any right
or remedy which either Longport or USMS may have against the other in
respect of the breach concerned or any other breach.
11.3 Termination of this Agreement shall be without prejudice to any
obligations expressed to continue to apply notwithstanding any such
termination.
12. INDEMNITY
Both parties shall forthwith on demand indemnify and keep each other
indemnified from and against any and all actions, claims, demands,
costs, liabilities, losses, damages or expenses (including loss of
profit, legal expenses and consequential loss and damage) :
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(a) sustained by either party or for which each member may be
liable as a result of the failure of the other party to
perform its obligations hereunder;
(b) sustained by Longport or for which Longport may be liable as a
result of any action taken by USMS in relation to the Scanner
prior to resale of the Scanner including any modification or
alteration to the Scanner;
(c) in respect of any breach of either parties obligations of
confidentiality pursuant to Clause 3.3 or Condition 21 of
Schedule 2; and
(d) in respect of any default, act, omission or other breach of
this Agreement or negligence of Longport or USMS or their
respective employees or agents (including sub-agents).
13. SEVERANCE
If at any time any one or more of the provisions of this Agreement or
any part thereof is held by any Court or other competent authority to
be void or otherwise unenforceable for any reason under applicable law,
such provision shall be deemed omitted herefrom and the validity and/or
enforceability of the remaining provisions of this Agreement shall not
in any way be affected or impaired thereby.
14. ENTIRE AGREEMENT
This Agreement together contains the entire agreement between the
parties with respect to the supply of the Scanner by Longport to USMS
and supersedes all previous agreements and understandings between the
parties with respect thereto. This Agreement shall prevail over any
terms or conditions of sale of USMS and may not be modified except by
an instrument in writing signed by the duly authorized representatives
of the parties.
15. PARTNERSHIP
Nothing in this Agreement shall be deemed to constitute an agency or
partnership relationship between the parties.
16. ASSIGNMENT
This Agreement is personal to the parties to the Agreement and save as
set out below neither of the Parties may assign its rights and
obligations under this Agreement whether in
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whole or in part without the prior written consent of the other save
that Longport may (without the need for such prior written consent)
assign its rights and obligations to any other company within the
Longport Group, and USMS may assign within the USMS Group.
17. NOTICES
Any notice or consent required or permitted to be given hereunder shall
be validly given if delivered personally or sent by recorded delivered
US Mail to the registered office of the party concerned appearing in
the definitions on the first page of this letter or by facsimile
transmission to the facsimile number given below (or such other address
as may be notified by one party to the other in accordance with this
paragraph) :
LONGPORT INCORPORATED Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
marked for the attention of ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇
US MEDICAL SYSTEMS INC Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
marked for the attention of ▇▇▇▇▇ ▇▇▇▇▇
Any such notice shall be deemed to have been given when it was
personally delivered or served or, if sent by US Mail, seventy-two
hours after it was posted (and proof of due posting shall be sufficient
evidence of delivery) or if sent by facsimile transmission, at the time
when the transmission was sent provided that it is sent during normal
office hours on a business day.
IN WITNESS whereof the parties have executed this Agreement the day and year
first before written
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SCHEDULE 1
THE SCANNER
(as at the Effective Date)
shall consist of the following (a):
A. The Equipment
I. EPISCAN-I-100 High Resolution Ultrasound Scanner
Consisting of: Proprietary Ultrasound / 200 MHz ADC PCI Board
15.1 XVG TFT Screen
Read / Write CD Drive
Floppy Disk Drive
Hard Disk Drive
Integrated 10 / 100 network card
IR Communications
Wipeable Keyboard
II. 20 MHz-Center Frequency Probe
15mm scan length
Integrated scan control
Scan Rate ~1 frame per second
B. The Software
I. Operating System Windows XP or similar
II. Longport's Proprietary Software V3.00 Dec 2002 or subsequent
updates
-----------------
(a) Specification may change without notice
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SCHEDULE 2
TERMS AND CONDITIONS
1. DEFINITIONS
"CONDITIONS" means these terms and conditions and "Condition" shall be
construed accordingly;
"AGREEMENT" means the agreement between Longport and USMS for the sale
and purchase of the Scanner and these Conditions;
"PRICE" means the price set by Longport for the Scanner from time to
time, exclusive of sales tax, and any charges for special packaging of
the Scanner but inclusive of any charges made under the terms of
freight set out in Condition 5 of these Terms and Conditions.
2. MAKING THE AGREEMENT
These Conditions shall apply to and form part of the Agreement between
Longport and USMS for the distribution of the Scanner. No terms and/or
conditions, which Longport or USMS may seek to impose shall apply or
have effect, unless agreed in writing by both parties.
3. QUOTATIONS AND ACCEPTANCE OF ORDERS
Any price quotation made by Longport and notified to USMS shall remain
open for a period of 120 Business Days and an agreement will only be
established when Longport has accepted USMS's order in writing.
4. SALES LITERATURE
The specification of the Scanner shall be as set out in Longport's
sales literature, which Longport reserves the right to update from time
to time in accordance with any update, enhancement or modification made
to the Scanner. While Longport takes every precaution in the
preparation of its literature these documents are for USMS's general
guidance and information only and shall not give rise to any warranty,
representation or liability on the part of Longport.
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5. PRICE
5.1 CALCULATION OF PRICE
The Price is calculated on a free carrier basis (as set out in ICC
Incoterms 2000) and includes the cost of packaging, carriage and
insurance to the time at which any Scanner is delivered to the carrier
for carriage to USMS but excludes all costs thereafter.
5.2 CHANGE IN RATES OF INSURANCE AND TRANSIT CHARGES
The Price is based on current rates of insurance and other transit
charges and for the normal route for carriage. Any increase in these
charges or variation in such route shall entitle Longport to increase
the Price for the Scanner by a corresponding sum.
5.3 DELAY OR FAILURE IN MAKING PAYMENT
If USMS fails to pay the price for any Scanner within 15 Business Days
after the date of the relevant invoice, Longport shall be entitled
(without prejudice to any other right or remedy it may have) to :
(a) cancel or suspend any further delivery to USMS under any
Order; and
(b) charge USMS interest on the price at the rate of 4 per cent.
per annum above US base rate in force from time to time from
the date the payment became due until actual payment in full
is made. Any interest so accrued shall be separately invoiced
by Longport and paid by USMS with 15 business days after the
date of the relevant invoice, non-payment of any such invoice
shall be treated in the same manner as a Scanner related
invoice.
5.4 All payments shall be made by USMS in US Dollars to such bank account
as Longport may from time to time notify in writing to USMS.
6. DELIVERY
6.1 PLACE OF DELIVERY
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Longport agrees to deliver or arrange delivery of the Scanner to the
carrier or other third party nominated by USMS at the place of delivery
set out in this Agreement or, if not so nominated or set out, such
person or place notified to Longport by USMS and in such manner as
Longport decides is appropriate in the circumstances. USMS agrees to
pay all costs and comply with all requirements relating to the Scanner
after such time. Longport shall not be responsible or liable in any way
for the costs of any carriage after such delivery or for non-delivery
or delay in such carriage, any loss of or damage to the Scanner during
such carriage or the act or omission (negligent or otherwise) of the
carrier or other third party in connection with any such carriage.
6.2 TIME OF DELIVERY
Delivery shall take place when the Scanner is delivered to the carrier
or other third party nominated by USMS as set out in Condition 6.1.
Longport shall use its reasonable endeavors to meet any estimated or
requested dates for delivery but shall not be liable in any way for any
failure to meet any such date. The time of delivery shall not be of the
essence of this Agreement, subject to Clause 6.4 of the Agreement.
6.3 DELIVERY OF SCANNER NOT ACCEPTED
In the event of the carrier or other third party nominated by USMS as
set out in Condition 6.1 not accepting delivery of the Scanner,
Longport shall be free to store the Scanner at the risk and expense of
USMS and/or to re-sell without prejudice to Longport's rights and
remedies against USMS.
7. TITLE AND RISK
7.1 TITLE IN SCANNER
Legal and beneficial title in the Scanner shall remain in Longport
until the Scanner is received and accepted by USMS, one of its
subagents or end user customers, whoever shipment or delivery is made
to. If payment for that Scanner is not received in 15 days of the
delivery date Longport shall automatically recover the sum involved
from the outstanding deposit and shall cease all future deliveries
until the sum due is paid in full.
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7.2 RISK IN SCANNER Risk in the Scanner shall pass to USMS at the time of
delivery of the goods to the carrier of other third party nominated by
USMS.
8. PRODUCT WARRANTY
The Scanner, excepting the probe, will be supplied with a one-year
limited warranty provided by Longport. If during that period the
Scanner develops a fault the unit so affected will be repaired or
replaced, at Longport's discretion, free of charge. This provision does
not include Scanners that have been incorrectly used or otherwise
damaged by the user or other party. The probe will be provided with a
three month limited warranty under the same terms.
Units requiring repair under warranty shall be returned to a Longport's
facility. End users shall advise Longport of any fault by phone,
e-mail, fax or through Longport's WEB site and if the reported problem
cannot be corrected by simple remedial actions (e.g. confirming
connecting power cords have not come loose, power is being provided
from the wall socket, system software is being used and interpreted
correctly etc), which will be undertaken in conjunction with phone and
or e-mail communications, the unit or component will be collected by
Longport or an agent of Longport for repair or replacement. If the unit
cannot be repaired or replaced within four business days Longport will
provide a loan system, unit the original unit is either repaired or
permanently replaced.
No unit shall be returned to Longport without the end-user first
obtaining a return reference from Longport. If a unit is returned
without the end user first obtaining a return reference Longport shall
automatically level an administration charge as defined in Schedule 3.
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If a unit is returned to Longport and is found to have no fault or one
that simple remedial action as illustrated above would have solved,
then Longport will have a right to charge a set fee administration as
defined in Schedule 3 plus obtain reimbursement for shipping fees
incurred.
9. PRODUCT UPDATES
Longport shall offer to USMS and or its subagents all appropriate
product updates. Where these updates are in the form of software
updates to the scanner program these shall be offered free of charge
for the twelve months following product purchase.
10. SELLER'S RESERVATION
If the Scanner arrives in such state, through damage in transit or
otherwise as would entitle USMS to reject the Scanner, Longport
reserves the right to repair or replace the Scanner.
11. EXCLUSIONS AND LIMITATIONS OF LIABILITY
11.1 NO LIABILITY FOR INDIRECT LOSS
Longport shall not in any circumstances be liable for any claim,
whether arising in agreement, tort or otherwise, for consequential,
economic, special or other indirect loss including without limitation
losses calculated by reference to profits, agreements, business,
goodwill, income, production or accruals and whether or not arising out
of any liability of USMS to any other party.
11.2 LIABILITY FOR DEATH AND PERSONAL INJURY
Notwithstanding anything to the contrary in this Agreement, nothing in
this Agreement shall exclude, restrict or limit Longport's liability
for death or personal injury resulting from Longport's negligence.
Longport shall provide product liability insurance with reputable
insurance companies in the amount of at least $5 million per claim or
series of connected claims.
11.3 ACCEPTANCE BY BUYER
USMS accepts that the limitations and exclusions set out in these
Conditions are reasonable having regard to all the circumstances
including, without limitation, the Price.
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11.4 CONDITION TO SURVIVE TERMINATION OF THIS AGREEMENT
This Condition 11 (Exclusions and Limitations of Liability) shall
survive the termination of this Agreement for whatever cause.
12. EXAMINATION AND CLAIMS
12.1 EXAMINATION OF SCANNER BY BUYER
USMS, its sub-agents or end user customers shall upon delivery as set
out in Condition 6.1 (Place of Delivery) examine the Scanner and shall
promptly notify Longport, and the carrier where relevant, of any damage
or defect reasonably apparent on reasonable examination of the Scanner.
Claims in respect of any loss of or damage to the Scanner in transit
shall be made within the period set out in Condition 17 (Loss or Damage
in Transit). Claims in respect of any other damage, defect or shortage
must be made within 10 Business Days following the time at which the
Scanner is delivered as set out in Condition 6.1 (Place of Delivery).
Notwithstanding the above, claims for defects pursuant to Condition 8
(Seller's Reservation) must be made within 10 Business Days after any
such defect is discovered.
12.2 BUYER TO NOTIFY SELLER IF SCANNER NOT DELIVERED
USMS or its sub-agents shall notify Longport if the Scanner is not
delivered within 72 hours of the expected date of delivery as notified
by Longport.
12.3 CLAIMS AND NOTIFICATIONS TO BE IN WRITING
All claims and notifications pursuant to this Condition 12 must be made
to Longport by USMS in writing within the relevant period set out
above, giving full details of any alleged loss, damage, defect,
shortage or delay. Longport shall not be obliged to consider any claim
not made in accordance with this Condition.
12.4 LONGPORT TO BE GIVEN OPPORTUNITY TO INSPECT SCANNER
In all cases where complaints of damage, defects or shortages are made,
USMS must afford Longport a reasonable opportunity to inspect the
Scanner before any use is made of it by USMS.
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12.5 NO RETURN OF SCANNER WITHOUT LONGPORT'S CONSENT
In no circumstances may the Scanner be returned to Longport by USMS
without the prior written consent of Longport. The administration
charge specified in Schedule 3 by Longport may be deducted from any
credit allowed by Longport, or paid to Longport by USMS upon demand,
where the Scanner is returned and no damage, defect, shortage on the
part of Longport is found.
13. DUTY OF CARE OF USMS
13.1 DISTRIBUTOR TO COMPLY WITH STATUTORY AND COMMON LAW DUTIES USMS and/or
its sub-agents shall be responsible for all health, safety and other
requirements in connection with the delivery, use or storage of the
Scanner and shall comply with all relevant statutory provisions or
other regulations relating to the Scanner for the period after risk in
the Scanner has passed to USMS pursuant to Condition 7.3 (Risk in
Scanner).
14. INSURANCE
USMS shall effect and maintain insurance of the Scanner at its own
expense at all times after risk in the Scanner shall have passed to
USMS until title in the Scanner shall have passed under Condition 7
(Title and Risk) to its full replacement value against all risks.
15. TRADE MARKS
USMS shall ensure that any trade marks of Longport or other words or
marks affixed to or used in relation to the Scanner are not
obliterated, obscured or omitted without Longport's prior written
consent. USMS shall not add, affix or use any additional words or marks
to or in relation to the Scanner without Longport's prior written
consent. USMS shall not process or alter the Scanner without Longport's
prior written consent to the continued use on or in relation to the
Scanner of any trade marks of Longport or any other words or marks
affixed to or used in relation to the Scanner.
16. FORCE MAJEURE
Longport and USMS shall not be liable for any loss, damage or otherwise
as a direct or indirect result of the failure to perform or delay in
performing any of its obligations nor shall there be a breach of the
Agreement as a result of the occurrence of any cause whatsoever beyond
its control, including without limitation acts of God, war,
hostilities, riot, terrorism, explosion, accident, flood, sabotage,
lack of adequate fuel, power, raw materials, containers, transportation
or labor, strike, lock-out or injunction (provided that
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Longport or USMS or USMS's sub-agents shall not be required to settle a
labor dispute against their own best judgment) compliance with Federal
and State laws, regulations or orders, breakage or failure of machinery
or apparatus, or any other cause, whether or not of the class or kind
enumerated, which affects performance of the Agreement arising from or
attributable to acts, events, non-happenings, omissions or accidents
beyond the reasonable control of the party affected.
17. SUB-CONTRACTORS
Longport shall be entitled to sub-contract the performance of the whole
or part of this Agreement without prior notice to or the consent of
USMS. In any contract of which these Conditions form the basis Longport
contracts for and on behalf of itself and its sub-contractors.
18. SPECIAL PACKING
An additional charge will be made to USMS for any special packaging
required or requested by USMS. USMS or its sub-agents shall retain all
scanner packaging for the purposes of returning the Scanner to
Longport, in accordance with the provisions of this Agreement.
19. LOSS OR DAMAGE IN TRANSIT
Longport shall repair or replace free of charge any Scanner lost or
damaged in transit or not delivered in accordance with this Agreement
provided that USMS shall give Longport written notice of any loss,
damage or non-delivery (together with full details of the loss, damage
or non-delivery) at least 2 Business Days prior to the latest date on
which notification of any such loss, damage or non-delivery must be
made to any carrier in accordance with that carrier's conditions of
carriage and, in any event, no later than 10 Business Days after the
time at which the Scanner is delivered as set out in Condition 6.1
(Place of Delivery) or is due to have been so delivered under this
Agreement.
20. SAFETY
USMS and its sub-agents shall comply fully with all user instructions
and safety recommendations issued by Longport in relation to the
Scanner and shall employ an adequate number of suitably qualified
personnel to operate the Scanner and Longport shall
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not be liable to USMS as a result of USMS failing fully to observe the
provisions of this Condition, save where death or personal injury
results from Longport's negligence.
21. CONFIDENTIAL INFORMATION
21.1 Except as provided by Conditions 21.2 and 21.3, USMS and Longport shall
at all times during the continuance of this Agreement and after its
termination :
(a) use their best endeavors to keep all Restricted Information
confidential and accordingly not to disclose any Restricted
Information to any other person; and
(b) not use any Restricted Information for any purpose other than
the performance of the obligations under this Agreement.
21.2 Any Restricted Information may be disclosed by USMS or Longport to :
(a) any customer or prospective customer of USMS;
(b) any governmental or other authority or regulatory body; or
(c) any employees of USMS or Longport or of any of the
aforementioned persons,
to such an extent only as is necessary for the purposes contemplated by
this Agreement or as is required by law and subject in each case to
USMS or Longport using their best endeavors to ensure that the person
in question keeps the same confidential and does not use the same
except for the purposes for which the disclosure is made.
21.3 Any Restricted Information may be used by the receiving party for any
purpose or disclosed by the receiving party to any other person, to the
extent only that it is at the date hereof, or hereafter becomes public
knowledge through no fault of the receiving party (provided that in
doing so the receiving party shall not disclose any Restricted
Information which is not in the public domain).
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21.4 For the purpose of this Condition 21, "Restricted Information" means
all information (whether written, oral or in electronic form) relating
to Longport or USMS and their businesses :
(a) delivered to the other party under this Agreement;
(b) otherwise in the possession or under the control of the
receiving party, and including without limitation any
drawings, designs, specifications relating to the Scanner
and/or any modification of the Scanner; and
(c) for the benefit of doubt the terms of this Agreement shall
also be considered restricted information.
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SCHEDULE 3
SUPPORT SERVICES AND PRICE SCHEDULE
Longport agrees to support USMS, its sub-agents and their end-user customers
with the following services.
1 INCLUSIVE SERVICES
The following support services shall be included in the purchase price as
defined in Clauses 7.5 and 7.6 of the Distribution Agreement.
"System training" to be undertaken as close as practical to the delivery date of
the Scanner. The "system training" shall either be undertaken at Longport
offices or those of the end user. Whereas the end users offices are within 175
miles radius of Longport's offices no additional charge for on-site training
shall be made.
System training will take one full working day (~5 hours). The training course
will provide tuition to a maximum of five individuals. (If end users wish more
than five people to attend this course an additional fee may be charged.)
Customer support for twelve months from the date of purchase. This "customer
support" shall take the form of direct telephone (1-800 number) and e-mail
support as well as WEB based capabilities. Additional visits to customer's
facilities shall be undertaken at Longport's discretion, it would however be
expected that a follow-up visit to every end user facility will normally be made
within two months of system training.
Customer Support shall only be provided via individuals who have attended and
passed the "system training" course.
Product warranty shall be as described in Clause 8 of the Terms and Conditions.
The scanner purchase price includes two additional software licenses allowing
the system user to view images on facility PCs or laptops. End users shall
however not distribute Longport's software to any third party.
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2 OPTIONAL ENHANCEMENTS TO SCANNER SERVICES AND ANCILLARY COMPONENTS
Longport will also provide enhanced product support packages and application
training courses for which additional fees may be charged.
THREE-YEAR WARRANTY AND CUSTOMER SUPPORT PACKAGE. This will extend the product
warranty to three years (excepting the probe) and include software up-dates and
customer support package for three years. COST $3,000 PER SYSTEM
EXTENDED THREE-YEAR WARRANTY ONLY. This will extend the product warranty to
three years (excepting the probe) COST $2,200 PER SYSTEM.
SOFTWARE UPDATES. $500 PER YEAR after the first year or $800 FOR TWO YEARS if
paid in advance.
PROBE EXCHANGE. The probe(s) will be supported beyond the warranty period
through an exchange system, where faulty probes will be returned to Longport and
exchanged for replacement units. (Longport shall ship the replacement probe
within two business days of receipt of the faulty unit and payment.) Each
replacement unit will be provided with a three-month warranty. COST $500 PER
EXCHANGE. (Price assumes probe has not been damaged by improper use or
handling.)
ADDITIONAL PROBES. Additional probe will be supplied at a cost of $4,000 PER
UNIT.
ANCILLARY EQUIPMENT.
Longport can supply the following ancillary equipment.
- Cart with medical grade UPS(b) $1,000 PER UNIT.
- Printers / digital cameras price on application
- Probe Membranes $25.00 per box of 100 (exclude shipping)
- Ultrasound coupling jell $36.00 per case of 12 bottles
(excluding shipping)
---------------------
(b) If USMS, one of its sub-agents or any end user wishes to supply their own
UPS to operate with the Scanner they must advise Longport of the unit they
intend to use and obtain written approval from Longport on the suitability of
that unit. Failure to do this could invalidate the Scanner warranty and negate
Longport's product liability responsibility.
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ADMINISTRATION FEE. The administration fee to be charged to users that return
goods without obtaining a return reference or return goods that are found not to
be at fault will be $50, this fee excludes any shipping costs incurred by
Longport.
CLINICAL APPLICATION TRAINING Longport is developing a series of clinical
training courses.
Initially a wound assessment and prevention package will be offered. This course
will undertaken at the user's premises or at Longport over two full days (time
includes system training). This training package will include consultation on
Scanner protocols for wound assessment / prevention outside of the training
course. The cost of the course will be $2,500 PER FACILITY (five people
attending course). If travel beyond a 175 mile radius of Longport's office(s) is
required additional charges to cover travel expenses incurred may be made. If
the course is undertaken within 50 miles of Longport's office the fee will be
reduced to $2,000.
(It is also possible to provide this course to a group of facilities, price on
application.)
Other clinical training courses will be added. Also, additional courses will be
run for staff members that joined subsequent to the system training or could not
attend for other reasons. These courses will be run at single venues every few
months.
DATA ARCHIVING AND THIRD PARTY IMAGE ASSESSMENT
Packages can be developed to address the needs of individual centers or groups
who require remote data archiving and or third party image assessment.
TRAINING AND SUPPORT ACCREDITATION PROGRAMS
Cost on application.
CONFIDENTIAL
36
CONFIDENTIAL
SCHEDULE 4
EXISTING WOUND CARE AGENTS AND DISTRIBUTORS IN THE USA THAT LONGPORT
HAS RELATIONSHIPS AND OBLIGATIONS TO
- ▇▇▇▇▇ & Nephew
- EHOB
- Advanced Vital Services
- JVD Inc
- Austin Medical
- ▇▇▇▇▇▇▇ Group & affiliated companies
- Universal Business Solutions
- Eden Barn Foundation & affiliated companies
- Roomberg Consultancy Group (RCG)
- ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
- ▇▇▇▇ ▇▇▇▇▇▇▇▇
- ▇▇▇▇ ▇▇▇▇▇
- ▇▇▇▇▇ / ▇▇▇▇▇▇▇▇▇ Families (Wisconsin only)
- ▇▇▇▇ ▇▇▇▇▇▇▇▇
- ▇▇▇▇▇ ▇▇▇▇
NURSING HOMES THAT LONGPORT AND/OR THE ABOVE ORGANIZATIONS ARE CURRENTLY WORKING
WITH
- Virtua Health Systems
- Genesis
- Allied Health Services
- Nursing Homes operated by Carmalite Sisters
- National Health Care (NHC)
- Fountain View / Skilled Healthcare
- Kindred Healthcare
CONFIDENTIAL
37
CONFIDENTIAL
SIGNED by
for and on behalf of
LONGPORT INCORPORATED /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------
Position: C.E.O.
in the presence of :
Witness :
Signature /s/ ▇▇▇▇ ▇▇▇▇
-------------------------------
Name ▇▇▇▇ ▇▇▇▇
Dated Feb. 11, 2004
SIGNED by
for and on behalf of
US MEDICAL SYSTEMS INCORPORATED /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Position: President
in the presence of :
Witness :
Signature /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated Feb. 11, 2004
CONFIDENTIAL
38
CONFIDENTIAL
DATED February 11th 2004
(1) LONGPORT INCORPORATED
(2) US MEDICAL SYSTEMS INCORPORATED
DISTRIBUTION AGREEMENT
CONFIDENTIAL