EXHIBIT 10.1
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement") is effective as of April 6, 1998,
and is by and between:
(a) ATL Ultrasound, Inc., a corporation of the State of Washington doing
business as Advanced Technology Laboratories, having a place of business at
▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("ATL"), and
(b) Handheld Ultrasound Systems, Inc., a corporation of the State of
Washington, having a place of business at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("HUS").
WHEREAS, HUS is a wholly-owned subsidiary of ATL, engaged in the business of
developing, manufacturing, marketing, selling, and maintaining highly portable
hand carried ultrasonic imaging devices.
WHEREAS, the Board of Directors of ATL has determined that it is appropriate and
desirable to separate HUS from ATL by distributing all of the issued and
outstanding shares of HUS common stock, $.01 par value per share (the "HUS
Common Stock"), to the holders of ATL common stock, $.01 par value per share
(the "ATL Common Stock").
WHEREAS, ATL and HUS desire to establish the principal corporate transactions
required to effect the distribution, certain other agreements governing matters
relating to the distribution, and the relationship between ATL and HUS following
the distribution.
NOW, THEREFORE, in consideration of the terms and conditions in this Agreement,
the parties agree as follows:
I. DEFINITIONS
1.0. Definitions. As used in this Agreement, the following terms shall have the
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following meanings which shall be applicable equally to both the singular and
the plural forms of the terms defined:
(a) "Affiliate" with respect to any specified person, shall mean a person
that, directly or indirectly, controls, is controlled by, or is under common
control with the specified person; however, for the purposes of this Agreement,
HUS and ATL shall not be deemed to be Affiliates of one another.
(b) "Agent" shall mean the First Chicago Trust Company of New York, the
distribution agent appointed by the parties to distribute the HUS Common Stock
in connection with the Distribution.
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(c) "Distribution" shall mean the distribution as a dividend of HUS Common
Stock to the holders of ATL Common Stock as provided in this Agreement.
(d) "Distribution Date" shall mean the effective date of the Distribution
as determined by the Board of Directors of ATL, which is contemplated to be
April 6, 1998.
(e) "Record Date" shall mean the record date for the Distribution as
determined by the Board of Directors of ATL, which is contemplated to be April
3, 1998.
(f) "Related Agreements" shall mean any and all agreements entered into by
and between ATL and HUS pursuant to this Agreement or in connection with the
Distribution, and shall include the Employee Benefits Agreement, each and every
Service Agreement, the Technology Transfer and License Agreement, and the OEM
Supply Agreement.
(g) "HUS Business" shall mean the business of developing, manufacturing,
marketing, selling, and maintaining highly portable hand carried ultrasonic
imaging devices, and any other business or operation conducted by HUS or any
Affiliate of HUS at any time on or after the Distribution Date.
(h) "HUS Employee" shall mean any employee of ATL who is assigned by ATL to
the HUS Business on the day immediately prior to the Distribution Date
including, but not limited to, those who are on leave of absence, or any
disability leave as of the Distribution Date.
II. PRE-DISTRIBUTION TRANSACTIONS
2.0. HUS Actions. Prior to the Distribution Date, HUS shall take all necessary
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corporate actions to undertake the transactions contemplated in this Agreement
or in any Related Agreement, including the authorization of a sufficient number
of shares of HUS Common Stock necessary to effect the Distribution, and to
effect any adjustments to outstanding options to acquire ATL Common Stock to
reflect the Distribution.
2.1. ATL Actions. In its capacity as the sole shareholder of HUS, and prior to
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the Distribution Date, ATL shall cooperate with HUS to approve or ratify any
corporate actions that are necessary or desirable to be taken by HUS to
accomplish the transactions contemplated by this Agreement or any Related
Agreement in a manner consistent with their terms, including the election or
appointment of directors and officers of HUS to serve in such capacities
following the Distribution Date, and the approval of the HUS stock-based
compensation or other plans, agreements, and other arrangements.
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2.2. Securities Law Actions. Prior to the Distribution Date:
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(a) ATL and HUS will prepare and file with the Securities and Exchange
Commission (the "Commission") the General Form For Registration of Securities on
Form 10, including the Information Statement (collectively, the "Form 10"),
setting forth disclosures concerning HUS, the Distribution, and any other
appropriate matters. In addition, ATL and HUS will prepare and file with the
Commission any other forms or other documents, if any, required for the
registration of the shares of HUS Common Stock pursuant to the HUS stock-based
compensation plans. ATL and HUS shall use reasonable efforts to cause the Form
10 and any other forms to become effective as soon as practicable after filing.
ATL shall mail the Information Statement to holders of ATL Common Stock as of
the Record Date.
(b) HUS will prepare and file, and will use its best efforts to have
approved an application for listing of the HUS Common Stock on the National
Association of Securities Dealers Automated Quotation ("Nasdaq") National Market
System.
2.3. Capital Contribution. On the Distribution Date, ATL will contribute to the
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capital of HUS all of the cumulative net advances made by ATL to HUS prior to
the Distribution Date. In addition, ATL will contribute to the capital of HUS
(a) the amount of Fifteen Million Dollars in cash on the Distribution Date, and
(b) the amount of Fifteen Million Dollars in cash on January 15, 1999.
2.4. Transfer of Assets. As at the Distribution Date, ATL will transfer,
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assign, and convey to HUS all of ATL's right, title, and interest to the HUS
property and equipment which is identified and recorded in the fixed asset
ledger of ATL as of the Distribution Date. HUS will be responsible for the
purchase of any other assets including, but not limited to, any assets required
by HUS to establish a production or manufacturing capability for the HUS
Business.
Following the Distribution Date and if required by HUS, the parties shall
execute any additional documentation necessary to vest in HUS the title to the
assets transferred to HUS in connection with the Distribution.
2.5. DISCLAIMER. SONOVIS UNDERSTANDS AND AGREES THAT ATL IS NOT IN THIS
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AGREEMENT OR IN ANY RELATED AGREEMENT MAKING ANY REPRESENTATION OR WARRANTY OF
ANY KIND WITH RESPECT TO THE SUFFICIENCY OR THE ADEQUACY OF THE CAPITAL
CONTRIBUTION MADE TO SONOVIS, OR THE SUFFICIENCY OR THE ADEQUACY OF THE ASSETS
TRANSFERRED TO SONOVIS, INCLUDING THEIR SUFFICIENCY OR ADEQUACY FOR THE
OPERATION OF SONOVIS FOLLOWING THE DISTRIBUTION DATE, OR THE NEED FOR SONOVIS TO
OBTAIN ADDITIONAL CAPITAL OR ADDITIONAL ASSETS FOLLOWING THE DISTRIBUTION DATE.
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THE PROPERTY AND EQUIPMENT SHALL BE TRANSFERRED, ASSIGNED, AND CONVEYED TO
SONOVIS "AS-IS" WITHOUT ANY WARRANTIES OF ANY KIND INCLUDING, BUT NOT LIMITED
TO, THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
III. THE DISTRIBUTION AND RELATED TRANSACTIONS
3.0. ATL Board Action. The Board of Directors of ATL in their sole discretion
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shall establish the Record Date, the Distribution Date, and any procedures
necessary or appropriate to effect the Distribution; however, the Distribution
shall not occur prior to the time that the following conditions have been
satisfied or waived by the Board of Directors of ATL:
(a) any approvals and consents necessary to consummate the Distribution
will have been obtained, and will be in full force and effect;
(b) no order, injunction, or decree issued by any court or agency of
competent jurisdiction, or other legal restraint or prohibition preventing the
consummation of the Distribution will be in effect, and no other event will have
occurred or failed to occur that prevents the consummation of the Distribution;
(c) the Form 10 and any other applicable forms submitted to the Commission
in connection with the Distribution will have been declared effective by the
Commission; and,
(d) no other events or developments shall have occurred subsequent to the
date of this Agreement that, in the reasonable judgment of ATL's Board of
Directors, would result in the Distribution having a material adverse effect on
ATL or its shareholders.
The satisfaction of the conditions in this Section will not create any
obligation on the part of ATL, or on the part of any other person to effect or
to seek to effect the Distribution, or in any way limit ATL's right to terminate
this Agreement or the Distribution.
3.1. The Distribution. On or prior to the Distribution Date, ATL will deliver
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to the Agent, for the benefit of the holders of record of ATL Common Stock at
the close of business on the Record Date, stock certificate(s) representing in
the aggregate (and rounded down to the nearest whole share) the number of shares
of HUS Common Stock representing one share of HUS Common Stock for every three
shares of ATL Common Stock outstanding on the Record Date.
ATL shall instruct the Agent to distribute (in book entry form, and as promptly
as practicable following the Distribution Date) to the holders of record of ATL
Common Stock at the close of business on the Record Date, one share of HUS
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Common Stock for every three shares of ATL Common Stock, and cash in lieu of
fractional shares of HUS Common Stock in the amount as determined by the
provisions in Section 3.2. All of the shares of HUS Common Stock issued in the
Distribution will be fully paid, nonassessable, and free of preemptive rights.
3.2. Fractional Shares. No certificates or scrip representing fractional shares
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of HUS Common Stock will be issued as a part of the Distribution. Each holder
of ATL Common Stock who would otherwise be entitled to receive a fractional
share of HUS Common Stock pursuant to the Distribution will receive cash for the
fractional share. ATL shall instruct the Agent (a) to determine the number of
whole shares and fractional shares of HUS Common Stock allocable to each holder
of ATL Common Stock at the close of business on the Record Date; (b) to
aggregate all such fractional shares into whole shares; (c) to sell the whole
shares obtained in the open market at then-prevailing prices on behalf of ATL
shareholders who would otherwise be entitled to receive fractional share
interests; and (d) to distribute to each ATL shareholder the shareholder's
ratable share of the net proceeds of the sales.
No certificates or scrip representing fractional shares of either ATL Common
Stock or HUS Common Stock, and no cash in lieu of fractional shares of either
ATL Common Stock or HUS Common Stock will be distributed in connection with any
adjustments to any options to acquire ATL Common Stock to reflect the
Distribution. Fractional shares, if any, shall be rounded down to the nearest
whole share.
3.3. Service Agreements. On or prior to the Distribution Date, the parties
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shall execute multiple Service Agreements (each in form and content shown in
Attachment A) under which ATL will provide to HUS certain services described in
the Service Agreements for limited periods of time following the Distribution
Date. Separate Service Agreements will be executed by the parties for each
group of services required by HUS, which may include financial services, human
resource services, engineering services, information services, facilities
services, regulatory services, and such other services as agreed by the parties.
All services shall be provided by ATL in accordance with the terms in the
respective Service Agreements.
3.4. Technology Transfer and License Agreement. On or prior to the Distribution
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Date, the parties shall execute the Technology Transfer and License Agreement
shown in Attachment B.
3.5. Employee Benefit Agreement. On or prior to the Distribution Date, the
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parties shall execute the Employee Benefits Agreement shown in Attachment C.
3.6. OEM Supply Agreement. On or prior to the Distribution Date, the parties
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shall execute the OEM Supply Agreement shown in Attachment D.
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3.7. Further Assurances. Following the Distribution Date, if any further
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actions are necessary or desirable to carry out the purposes of this Agreement,
the parties shall take all such actions, including the execution of any
documents necessary to consummate the transactions contemplated by this
Agreement.
IV. POST-DISTRIBUTION MATTERS
4.0. Qualification as Tax-Free Distribution. After the Distribution Date,
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neither ATL nor HUS will take or allow any of their respective Affiliates to
take any action which could reasonably be expected to prevent the Distribution
from qualifying as a tax-free distribution within the meaning of Section 355 of
the Internal Revenue Code of 1986, as amended (the "Code").
After the Distribution Date, HUS will not and will not allow any Affiliate of
HUS to take any action or enter into any transaction which could reasonably be
expected to materially adversely impact the anticipated tax consequences to ATL
of any transaction contemplated by this Agreement; however, nothing in this
Section shall prohibit HUS from taking any action, or entering into any
transaction in the ordinary course of business in connection with the settlement
of any audit issue, or in connection with the filing of any tax return.
After the Distribution Date, ATL will not and will not allow any Affiliate of
ATL to take any action or enter into any transaction which could reasonably be
expected to materially adversely impact the anticipated tax consequences to HUS
of any transaction contemplated by this Agreement; however, nothing in this
Section shall prohibit ATL from taking any action, or entering into any
transaction in the ordinary course of business in connection with the settlement
of any audit issue, or in connection with the filing of any tax return.
Each party represents to the other party that it has no present intention to do
or to take any action prohibited by the provisions of this Section.
4.1. Remedy. If the Distribution does not qualify as a tax-free distribution
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under Section 355 of the Code through no action or inaction on the part of
either of the parties, ATL will bear eighty-five percent of any subsequent
corporate level tax, and HUS will bear fifteen percent of any subsequent
corporate level tax. In the event the Distribution does not qualify under
Section 355 of the Code as a result of the actions of ATL or HUS, the
responsible party will bear all of the subsequent corporate level tax.
4.2. ONR Contract. The collaborative and development agreement among the United
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States Office of Naval Research, ATL, the University of Washington, and two
other companies dated May, 1996 (the "ONR Agreement"), will not be transferred
or otherwise assigned to HUS in connection with the Distribution. Following the
Distribution, HUS will provide to ATL (at no cost to ATL) the engineering and
other services required by ATL to perform its obligations under
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the ONR Agreement. The services shall be provided by HUS to ATL until ATL has
completely performed its obligations under the ONR Agreement. During the term of
the ONR Agreement, HUS shall take no action or inaction, either directly or
indirectly, which would cause ATL to be in breach of or default under any term
or condition in the ONR Agreement. Any payments received by ATL under the ONR
Agreement in connection with the performance of its obligations under the ONR
Agreement following the Distribution Date shall be transferred by ATL to HUS.
V. INDEMNIFICATION
5.0. Indemnification by ATL. ATL will indemnify, defend, and hold harmless HUS,
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its Affiliates, and each of their respective directors, officers, employees, and
agents from and against any and all claims, actions, damages, liabilities,
costs, and expenses (including, but not limited to, reasonable attorneys' fees
and legal costs) arising out of or in connection with (a) the business or
operations of ATL or its Affiliates, including the HUS Business which arose
prior to the Distribution Date; (b) any claim that the information included by
ATL in the Form 10 (including the Information Statement), or in any other form
or document submitted by ATL in connection with the Distribution is false or
misleading, or omits to state any material fact in order to make the information
not false or misleading; and, (c) any breach of this Agreement by ATL or its
Affiliates.
5.1. Indemnification by HUS. HUS will indemnify, defend, and hold harmless ATL,
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its Affiliates, and each of their respective directors, officers, employees, and
agents from and against any and all claims, actions, damages, liabilities,
costs, and expenses (including, but not limited to, reasonable attorneys' fees
and legal costs) arising out of or in connection with (a) the HUS Business and
its operation on or after the Distribution Date; (b) any claim that any
statement or other communication made or delivered by HUS in connection with
promoting or otherwise describing the transactions contemplated in this
Agreement or in any Related Agreement whether made prior to or subsequent to the
Distribution Date is false or misleading, or omits to state any material fact in
order to make the statement or communication not false or misleading with
respect to the information contained within the Form 10 (including the
Information Statement) or within any document filed by ATL in connection with
the Distribution; and, (c) any breach of this Agreement by HUS or its
Affiliates.
5.2. Insurance Proceeds. The amount that any indemnifying party is or may be
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required to pay to any indemnitee under this Agreement shall be reduced by any
insurance proceeds and other amounts actually recovered by the indemnitee in
reduction of the applicable loss. If an indemnitee receives an indemnity
payment in connection with an applicable loss, and subsequently receives
insurance proceeds or other amounts in respect of the applicable loss, the
indemnitee will pay to the indemnifying party the amount of the insurance
proceeds or other amounts actually received.
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5.3. Procedure for Indemnification. If an indemnitee receives notice of any
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claim, or the commencement of a claim by a person who is not a party to this
Agreement (a "Third Party Claim") with respect to which an indemnifying party
may be obligated to provide indemnification under this Agreement, the indemnitee
shall give the indemnifying party notice promptly upon becoming aware of the
Third Party Claim. The failure to give notice shall not relieve the
indemnifying party of its obligations except to the extent that the indemnifying
party is prejudiced by the failure to give the notice. The notice shall
describe the Third Party Claim in reasonable detail, including the amount
(estimated if necessary) of the loss that has been or may be sustained by the
indemnitee.
The indemnifying party shall defend or compromise the Third Party Claim at its
expense and by counsel of its choice. Within thirty days following the receipt
of the notice, the indemnifying party shall notify the indemnitee whether the
indemnifying party will assume responsibility for defending the Third Party
Claim; however, an indemnifying party may elect not to assume responsibility for
defending a Third Party Claim only in the event of a good faith dispute that the
claim was appropriately tendered under the indemnification provisions of this
Agreement. After giving notice of its election to assume the defense of a Third
Party Claim, the indemnifying party shall not be liable for any legal or other
costs and expenses subsequently incurred by the indemnitee in connection with
the defense.
If an indemnifying party elects to defend or compromise any Third Party Claim,
the indemnitee shall cooperate with the indemnifying party in all reasonable
respects in connection the defense or compromise, and shall not admit any
liability with respect to the Third Party Claim, or settle, compromise, or
discharge the Third Party Claim without the indemnifying party's prior written
consent.
Following the payment by an indemnifying party to any indemnitee in connection
with any Third Party Claim, the indemnifying party shall be subrogated to and
shall stand in the place of the indemnitee with respect to any rights or claims
the indemnitee may have in connection with the Third Party Claim, or against the
person asserting the Third Party Claim.
5.4. Survival of Indemnities. The obligations of the parties under this Article
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shall terminate three years after the Distribution Date, except with respect to
claims for which one party has provided notice to the other prior to the end of
the three year period.
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VI. ACCESS TO INFORMATION AND CONFIDENTIALITY
6.0. Access to Information. From and after the Distribution Date, and subject
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to the provisions in this Agreement, ATL shall afford to HUS, and to its
authorized representatives reasonable access and duplicating rights (with
copying costs to be borne by HUS) during normal business hours to all books,
records, and documents of ATL relating to the HUS Business, or relating to the
HUS Employees.
After the Distribution Date, HUS shall afford to ATL, and to its authorized
representatives reasonable access and duplicating rights (with copying costs to
be borne by ATL) during normal business hours to all books, records, and
documents of HUS relating to the HUS Business prior to the Distribution Date.
6.1. Confidentiality. Any information disclosed by one party to the other party
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in connection with the performance of this Agreement, and any other information
designated in writing by the disclosing party as confidential (collectively, the
"Confidential Information") shall be received and maintained confidential by the
receiving party using the same standard of care that the receiving party uses to
protect its own confidential information, but not less than reasonable care.
The Confidential Information may be used by the receiving party only to perform
its obligations under this Agreement or under a Related Agreement, and shall not
be disclosed to a third party without the prior written consent of the
disclosing party. The disclosure of Confidential Information shall be
restricted only to the minimum number of employees of each party requiring
access to the Confidential Information to perform this Agreement.
The provisions of this Section shall not apply to Confidential Information which
is: (a) already known to the receiving party without an obligation of
confidentiality (it being understood that information of either party in the
possession of the other party prior to the Effective Date shall not be covered
by this exception); (b) publicly known or becomes publicly known through no
unauthorized act of the receiving party; (c) rightfully received by the
receiving party from a third party; (d) disclosed to a third party by the
disclosing party without similar restrictions; (e) approved for disclosure by
the disclosing party; or (f) required to be disclosed pursuant to a requirement
of a governmental agency or by law as long as the receiving party provides to
the disclosing party notice of the requirement prior to any disclosure.
Upon the termination of this Agreement for any reason, each party shall return
to the other party all Confidential Information of the other party, and cease
any further use of the Confidential Information.
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VII. DISPUTE RESOLUTION
7.0. Negotiation and Binding Arbitration. Any dispute, controversy, or claim
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(collectively, a "Dispute") between the parties arising out of this Agreement or
relating to the subject matter of this Agreement shall be settled using the
following procedures as the sole means to resolve the Dispute.
A party seeking to resolve the Dispute shall give written notice to the other
party briefly describing the nature of the Dispute. A meeting will be held
between the parties within ten days after the receipt of the notice. The
meeting will be attended by individuals with decision making authority regarding
the Dispute.
If the parties have not resolved the Dispute to the mutual satisfaction of the
parties within thirty days following the initiation of the meeting, the parties
shall submit the Dispute to binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association by a sole
arbitrator selected by the parties. The arbitration will be held in Bothell,
Washington. Judgment upon the award rendered by the arbitrator may be entered
by any court having jurisdiction. The cost of the arbitrator will be shared
equally by the parties. At the conclusion of the arbitration, the arbitrator
shall indicate a prevailing party. The prevailing party shall be entitled to
recover its attorney's fees and other costs in connection with the arbitration.
To the extent this Agreement limits the remedies of any party, the arbitrator
shall not have the authority to grant any remedy to any party in excess of the
limitations.
VIII. MISCELLANEOUS
8.0. Entire Agreement. This Agreement including the attachments and the
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agreements and other documents referred to in this Agreement constitutes the
full, complete, and entire understanding and agreement by and between the
parties with respect to the subject matter in this Agreement, and supersedes all
previous negotiations, commitments, and writings with respect to the subject
matter of this Agreement.
8.1. Expenses. Except as otherwise set forth in this Agreement or a Related
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Agreement, ATL shall be responsible for the expenses of the transactions
contemplated in this Agreement which arose prior to the Distribution Date.
Except as otherwise provided in this Agreement or a Related Agreement, each of
the parties shall be responsible for its own expenses in connection with the
transactions contemplated in this Agreement which arise after the Distribution
Date. Prior to the Distribution Date, all expenses of HUS shall be approved in
advance by ATL.
8.2. Governing Law. This Agreement shall be governed by, construed, and
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enforced in accordance with the laws of the State of Washington.
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8.3. Notices. All notices, requests, demands, and other communications under
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this Agreement shall be in writing, and shall be deemed to have been duly given
(a) on the date of service if served personally on the party to whom notice is
given; (b) on the day of transmission if sent by facsimile transmission to the
facsimile number given below; (c) on the business day after delivery to an
overnight courier service, or the express mail service maintained by the United
States Postal Service; or (d) on the third day after mailing if mailed to the
party to whom notice is to be given, by registered or certified mail, postage
prepaid, properly addressed, and return-receipt requested to the party as
follows:
If to ATL:
Advanced Technology Laboratories
▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: _________________
Facsimile No. (425) 487-____
with copy to:
Advanced Technology Laboratories
▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Vice President, General Counsel
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to HUS:
Handheld Ultrasound Systems, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Facsimile No. (425) ___-____
Any party may change its address by giving the other party notice of its new
address in the manner set forth above.
8.4. Modification of Agreement. No modification, amendment, or waiver of any
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provision of this Agreement shall be effective unless the same shall be in
writing and signed by each of the parties. The modification, amendment, or
waiver shall be effective only in the specific instance and for the purpose for
which it is given.
8.5. Termination. This Agreement may be terminated and the Distribution
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abandoned at any time prior to the Distribution Date by and at the sole
discretion of ATL without the approval of HUS. In the event of the termination,
neither party shall have any liability of any kind to the other party.
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8.6. Successors and Assigns. This Agreement shall be binding upon and inure to
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the benefit of the parties and their respective successors and permitted
assigns. This Agreement, and any of the rights, interests, or obligations under
this Agreement shall not be assigned by either party without the prior written
consent of the other party which consent shall not be withheld unreasonably.
8.7. No Third Party Beneficiaries. This Agreement is solely for the benefit of
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the parties, and is not intended to confer any rights or remedies upon any other
person.
8.8. Titles and Headings. The Section and Article headings in this Agreement
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are inserted for convenience of reference only, and are not intended to
constitute a part of or to affect the meaning or interpretation of this
Agreement.
8.9. Attachments. The attachments to this Agreement shall be construed with and
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as an integral part of this Agreement to the same extent as if they had been set
forth in full in this Agreement.
8.10. Severability. In case any one or more of the provisions contained in
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this Agreement should be invalid, illegal, or unenforceable, the enforceability
of the remaining provisions shall not in any way be affected or impaired. It is
the intention of the parties that they would have executed the remaining terms,
provisions, covenants, and restrictions without including any invalid, void, or
unenforceable provisions. In the event that any term, provision, covenant, or
restriction is held to be invalid, void, or unenforceable, the parties agree to
use their best efforts to find and employ an alternate means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant, or restriction.
8.11. No Waiver. The failure by either party at any time to enforce any of the
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terms or conditions of this Agreement shall not constitute or be construed as a
waiver of the terms and conditions. Each party expressly reserves the right to
enforce the terms and conditions of this Agreement at any time.
8.12. Survival. All covenants and agreements of the parties contained in this
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Agreement will survive the Distribution Date.
8.13. Counterparts. This Agreement may be executed in one or more counterparts
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each of which shall be considered one and the same agreement, and shall become a
binding agreement when one or more counterparts have been signed by each party
and delivered to the other party.
8.14. Force Majeure. No party shall be liable to the other party for any
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failure to perform any obligation under this Agreement where such failure is due
to causes beyond the reasonable control of the party. Such causes include, but
are not limited to acts of war, government export controls, other governmental
acts,
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industrial dispute, lock-out, accident, fire, explosion, transport delays, acts
of a third party, or loss or damage to any equipment. Each party shall use its
best efforts to comply with its respective obligations under this Agreement
despite the intervention or occurrence of any such cause, and to resume
compliance with those obligations as soon as any such cause ceases to affect the
performance of its obligations under this Agreement.
8.15. No Hire Covenant. During the twelve month period following the
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Distribution Date, ATL shall not offer employment to any then current employee
of HUS, or any person who was an employee of HUS within a six month period
immediately prior to ATL's proposed offer of employment without the prior
written consent of the parties. In order to provide a mechanism to establish
the consent contemplated by the provisions of the previous sentence, the parties
shall establish a three person committee to review instances where ATL desires
to employ either current or past employees of HUS during the twelve month period
following the Distribution Date. The committee shall consist of the Chief
Executive Officer of ATL, the Vice President of Human Resources of HUS (or such
other HUS officer), and the Chief Executive Officer of HUS. Consent shall be
deemed given by the majority vote of the committee members.
During the twelve month period following the Distribution Date, HUS shall not
offer employment to any then current employee of ATL, or any person who was an
employee of ATL within a six month period immediately prior to HUS' proposed
offer of employment without the prior written consent of the parties. In order
to provide a mechanism to establish the consent contemplated by the provisions
of previous sentence, the parties shall establish a three person committee to
review instances where HUS desires to employ either then current or past
employees of ATL within the twelve month period following the Distribution Date.
The committee shall consist of the Chief Executive Officer of ATL, the Vice
President of Human Resources of ATL, and the Chief Executive Officer of HUS.
Consent shall be deemed given by the majority vote of the committee members.
ATL Ultrasound, Inc. Handheld Ultrasound Systems, Inc.
By: _________________________ By: _____________________________
Title: ______________________ Title: __________________________
Date: _______________________ Date: ___________________________
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ATTACHMENT A
Form of Service Agreement
(see following pages)
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ATTACHMENT B
Technology Transfer and License Agreement
(see following pages)
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ATTACHMENT C
Employee Benefits Agreement
(see following pages)
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ATTACHMENT D
OEM Supply Agreement
(see following pages)
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