[CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT
HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION]
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
between
HESKA CORPORATION,
Distributor
and
i-STAT CORPORATION,
Manufacturer
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
PARTIES
This Amended and Restated Distribution Agreement (it, together with any
Schedules and Exhibits, the "Agreement"), between i-STAT Corporation, a
Delaware corporation having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ U.S.A. ("Manufacturer"), and Heska
Corporation, a Delaware corporation having its principal place of business at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.▇.▇. ("Distributor").
RECITALS
Distributor desires to market and distribute Manufacturer's Products to
the animal health care market and Manufacturer desires to grant Distributor
such marketing and distribution rights, all on the terms and conditions of this
Agreement.
Manufacturer and Distributor previously executed and delivered that
certain Distribution Agreement dated as of February 9, 1998 (the "Prior
Agreement"), which Prior Agreement is hereby amended and restated in its
entirety by this Agreement.
TERMS OF AGREEMENT
1. APPOINTMENT AND TERRITORY Subject to the terms and conditions of
this Agreement, Manufacturer hereby appoints Distributor as its exclusive
distributor worldwide except for Japan and New Zealand, as its non-exclusive
distributor in Japan and, commencing July 1, 1999 through the end of the Term,
as its exclusive distributor in New Zealand (the "Territory"), to distribute,
market and sell the Products to Customers in the Territory, and Distributor
accepts such appointment. "Products" means only the articles listed on
Schedule 1.1, including the i-STAT analyzers (the "Analyzers") and cartridges
(the "Cartridges") listed thereon. Manufacturer agrees that, subject only to
the prior fights of ▇▇▇▇▇▇ Laboratories ("Abbott") under that certain Funded
Research and Development and License Agreement dated as of August 3, 1998, as
the same may be amended from time to time, between Manufacturer and Abbott,
prior to offering any other or new products to any other person for resale in
the animal health care market, it will first offer Distributor the opportunity
to negotiate to have such products included as a Product hereunder on such
terms and conditions as are mutually acceptable to the parties. "Customer"
means any animal healthcare organization or animal healthcare individual that
purchases Products, excluding individuals operating within human healthcare
institutions. Manufacturer reserves the right, upon reasonable notice to
Distributor, to modify any of the Products and their specifications and to
discontinue sales of any Product. Recognizing the end use of the Products in
healthcare, Distributor shall not solicit or sell any Products to Customers or
other third parties which Distributor has reason to believe will redistribute
or otherwise direct them for use to classes of customers not contained within
the Customer class described above, and shall otherwise take all reasonable
necessary actions to prevent sales of Products to classes of customers known by
Distributor to be not contained within the Customer class described above.
Upon request by Manufacturer, if and to the extent Distributor sells Products
to customers outside the Customer class in violation of the above restrictions,
Distributor will remit to Manufacturer an amount equal to the difference
between (i) the amount of Net Sales collected by Distributor from sales of such
Products and (ii) the Purchase Price paid to Manufacturer for such Products.
Distributor represents that it is competent under the laws of the Territory to
enter into this Agreement and to act hereunder.
2. TERMS AND CONDITIONS.
2.1.PRICES. Manufacturer shall sell the Products to Distributor at
the prices set forth on Schedule 1.1. Manufacturer has the right to modify
prices as described on Schedule 1.1.
2.2.PAYMENT TERMS AND CONDITIONS. Prices quoted by Manufacturer,
unless otherwise stated, shall be paid in U.S. Dollars and are freight on board
(FOB) at Manufacturer's facility in East Windsor, New Jersey, U.S.A. Legal
title, control of, right of possession and risk of loss of Products shall pass
to Distributor upon shipment FOB. Distributor shall pay for each order within
the terms stated in Schedule 1.1 by check or wire transfer through a bank
designated by Manufacturer which shall cover, at Distributor's charge, the
price of Products in such order. Distributor shall pay all expenses associated
with the cost of export packing, carriage to the port of shipment, refrigerated
freight to the port of destination, customs clearance, warehousing and
insurance, including war risk insurance, if applicable, and other costs and
expenses occurring after the Products are made available to Distributor.
Distributor shall ensure that Products are shipped, stored and handled in
accordance with the specifications Manufacturer shall from time to time
provide. Manufacturer reserves the right at any time to take legal proceedings
to recover overdue payments by Distributor.
2.3.PLACEMENT OF ORDERS. Distributor shall place all orders with
Manufacturer at Manufacturer's principal office. Manufacturer shall promptly,
and in any event within five (5) business days, notify Distributor of any
Purchase Orders (or parts of Purchaser Orders) accepted, rejected, or delayed,
and the reason for any such rejection or delay. No Purchase Order shall be
binding upon Manufacturer until accepted by Manufacturer. Purchase Orders not
rejected within five (5) business days shall be deemed accepted. Distributor
may not modify any Purchase Orders after acceptance by Manufacturer of such
Purchase Order without Manufacturer's prior consent. All Purchase Orders
should be placed 45 days prior to the requested shipping date from
Manufacturer. Products shipped in connection with Purchase Orders placed less
than 45 days prior to required shipment of product from Manufacturer may not
have optimum dating.
2.4.SUBMISSION OF FORECASTS. Distributor shall furnish Manufacturer
with a non-binding forecast for the following quarter 45 days in advance of
that quarter.
3. RESPONSIBILITIES OF MANUFACTURER.
3.1. CATALOGS, BULLETINS. Manufacturer shall, without charge,
furnish to Distributor reasonable quantities of technical data and technical
bulletins adequate to describe the Products in the English language, and in
other languages to the extent already available. Distributor may, at its own
cost, provide a translation of the documents into the local language.
3.2. TRAINING. Manufacturer shall provide follow-up training, as
mutually agreed by the parties, at Distributor's facility. In connection with
such follow-up training, Manufacturer shall pay for its employees' salaries and
their travel and travel-related expenses, including meals, lodging and other
living expenses. For training situations not covered by the above, both Parties
agree to discuss how to equitably share the travel and related expenses.
3.3. INTERFACE TRAINING. Manufacturer shall assist Distributor with
ASTM interface training, as to how to interface between a Central Data Station
at the Customer's site and other computer workstations of the Customer.
3.4. PRODUCT SUPPLY. To the extent Manufacturer is unable to supply
adequate quantities of Products to fill Distributor's Purchase Orders submitted
from time to time, and provided that such Purchase Orders are not for
quantities of Products materially exceeding Distributor's ordinary requirements
or forecasted needs, the minimum sales Targets and Milestones set forth in
Section 4.2 hereof shall be adjusted accordingly by the parties.
4. RESPONSIBILITIES OF DISTRIBUTOR.
4.1. SALES EFFORTS; MARKETING SUPPORT. (a) Distributor shall devote
commercially reasonable efforts to the promotion, sale and servicing of the
Products to Customers in the Territory. Distributor shall, at its expense,
take such commercially reasonable actions as it deems necessary to promote the
Products, which may include: (i) including the Products in its appropriate
catalogs, promotional mailings and like publications; (ii) developing,
preparing and placing advertising concerning the Products in appropriate media
or through direct mail; (iii) exhibiting the Products at appropriate trade
shows and informing Manufacturer at least 30 days in advance of trade shows;
(iv) conducting appropriate market research as it deems necessary or desirable;
and (v) rendering other services customarily rendered by a distributor of
veterinary medical products. Manufacturer shall have the right to prior review
and to approve (or not approve) any and all copy, layout or other advertising,
promotional or other distributed material involving the Products. Failure to
object to any materials within fifteen (15) business days of sending shall be
deemed approval. Distributor shall discuss strategy and Product positioning
with Manufacturer and shall use commercially reasonable efforts to market and
position the Products in accordance with the recommendations of Manufacturer.
(b) In furtherance of the above, for each calendar year during the
Term, Distributor shall use commercially reasonable efforts to make or commit
to make Marketing Expenditures (as defined below) in connection with its
promotion of the Products, which should be approximately five percent (5%) of
Net Sales (as defined below) of Analyzers for the preceding calendar year. As
used herein, "Marketing Expenditures" shall include, without limitation,
amounts spent or committed to be spent (whether internally or externally) on
promotion of the Products (or any of them) (i) in catalogs, brochures,
pamphlets, product information sheets and other mailings and publications, (ii)
in broad or targeted advertising (including the development, preparation and
cost of placing advertisements), (iii) at trade shows or other formal or
informal industry or customer gatherings, (iv) by other accepted means employed
by Distributor or the industry in general, but excluding salaries or
commissions paid to Distributor's employees. Notwithstanding the foregoing, in
the event, Distributor fails to make the Marketing Expenditures set forth above
in any year during the Term, but reaches the total sales Milestones for such
year set forth in Section 4.2 below, such failure shall not constitute a breach
of this Agreement or otherwise entitle Manufacturer to exercise any rights or
remedies under this Agreement or otherwise. "Net Sales" for purposes of this
Agreement shall mean, with respect to any Products (or any of them specifically
designated for any purpose in this Agreement) sold by Distributor, its
affiliates and sales agents or distributors, the invoiced sales price of such
Products billed to independent Customers who are not affiliates of Distributor,
less (a) credits, allowances, discounts and rebates to, and chargebaeks from
the account of, such Customers for damaged, rejected, outdated or returned
product returned in accordance with Distributor's or Manufacturer's policies;
(b) freight and insurance costs incurred in transporting such Products to such
Customers; (c) quantity, trade and cash discounts and other price reductions
allowed; (d) discounts, fees and commissions payable to third party sales
agents or distributors (but not Distributor's employees) with respect to orders
or sales of such Products; (e) sales, use, value-added and other direct taxes
incurred; and (f) customs, duties, tariffs surcharges and other governmental
charges incurred in connection with the exportation or importation of such
Products. For purposes of Distributor's obligation to meet its Marketing
Expenditures goal set forth above, Net Sales shall be measured by reference to
sales of Analyzers only.
4.2. SALES TARGETS AND MILESTONES. The tables below set forth sales
targets ("Targets") and sales milestones ("Milestones") for Purchase Orders
submitted by Distributor. The parties acknowledge that it is their goal that
Distributor will take delivery of or schedule delivery within 30 days of the
end of the periods referenced below of the number of Analyzers and the number
of Cartridges set forth below under the caption "Milestones," in the aggregate,
for sales by Distributor in each of North America and the remainder of the
Territory outside of North America during the periods referenced, and
Distributor shall use reasonable commercial efforts to achieve such Milestones.
For purposes of determining achievement of Milestones, monthly total Purchase
Orders for each of the last three months of the year cannot exceed [ *** ]% of
the monthly average for Purchase Orders for the previous six months.
(numbers shown represent units of products ordered)
TARGETS 1999 2000 2001
-------------------- ------- ------- -------
US
-------------
Analyzers [ *** ] [ *** ] [ *** ]
Cartridges [ *** ] [ *** ] [ *** ]
International
-------------
Analyzers [ *** ] [ *** ] [ *** ]
Cartridges [ *** ] [ *** ] [ *** ]
Target Totals
-------------
Analyzers [ *** ] [ *** ] [ *** ]
Cartridges [ *** ] [ *** ] [ *** ]
MILESTONES 2000 2001
-------------------- ------- -------
US
--------------
Analyzers [ *** ] [ *** ]
Cartridges [ *** ] [ *** ]
International
--------------
Analyzers [ *** ] [ *** ]
Cartridges [ *** ] [ *** ]
Milestone Totals
----------------
Analyzers [ *** ] [ *** ]
Cartridges [ *** ] [ *** ]
*** Confidential Treatment Requested
The parties further agree that (i) the above Targets for all years
shown are intended to be goals and not minimum purchase obligations and any
failure to achieve such Targets shall in no event constitute or give rise to a
breach of this Agreement by Distributor or the exercise of any remedy by
Manufacturer; (ii) in the event Distributor fails to reach the above Milestones
in 2000 for either the United States or the rest of the Territory, but
nonetheless achieves the total Milestone in 2000, Distributor will be deemed to
have reached the Milestone 2000 for each of the United States and the rest of
the Territory; and (iii) in the event Distributor fails to reach the Milestones
in 2000 for either the United States or the rest of the Territory, or both, and
also fails to achieve the total Milestone in 2000, Manufacturer will have the
option, exercisable by delivery of written notice to Distributor, to convert
the distribution rights of Distributor under this Agreement, effective not
sooner than January 1, 2001, from exclusive to non- exclusive during 2001 in
the portion of the Territory in which Distributor has failed to achieve its
2000 Milestones, with Distributor's exclusive distribution rights remaining
unaffected in the portion of the Territory where Distributor has achieved its
Milestones in 2000. In the event Manufacturer exercises its rights set forth
in (iii) above, Distributor's obligation to make Marketing Expenditures
pursuant to Section 4.1 above shall terminate and be deemed waived by
Manufacturer.
4.3. MODIFIED AND NEW PRODUCTS. Distributor shall timely provide
comprehensive information to its Customers with respect to newly available
Products, discontinuance of Products and changes in existing Products,
including, but not limited to, performance specification changes and required
software upgrades in Analyzers (which may or may not be coupled to specific
lots of Cartridges). Distributor shall use commercially reasonable efforts to
ensure that each Customer in the Territory makes any such performance
specification changes and software upgrades in a timely manner.
4.4. COMPETITIVE PRODUCTS. In ftutherance of its duties, and in
recognition of the unique healthcare and related responsibilities in connection
with the distribution of the Products, during the Term, Distributor shall not
anywhere in the Territory market or sell any hand held device performing blood
gas or electrolyte tests currently performed by the Analyzer. For purposes of
this Section 4.4, the term "Analyzer" will be amended by the parties from time
to time to include other categories (such as future tests) added as Products to
this Agreement. Distributor shall exclusively use Manufacturer's control
products unless Manufacturer gives prior written approval for substitution.
4.5. COMPETENCE OF PERSONNEL. Distributor shall have an adequate
number of technically competent personnel for sales and after-sales service of
the Products. The number of sales personnel will depend on the market size and
the market penetration over time.
4.6. MARKETING OF THE PRODUCTS IN THE TERRITORY. Distributor shall
be informed of Manufacturer's suggested resale prices but shall retain full
discretion to set resale prices of the Products.
4.7. TRAINING OF CUSTOMERS. Distributor shall, prior to shipment,
provide to each Customer Product storage and use instructions, and shall
provide its Customers with adequate training and support within the first two
months after delivery to a Customer of the first batch of Products.
Distributor shall use commercially reasonable efforts to ensure that all
introductory training is made available to the Customer within the first week
after receipt of Analyzers and Cartridges. Full use will be made of training
material and technical information supplied by Manufacturer.
4.8. PRODUCT WARRANTY. Distributor shall provide to Customers
Manufacturer's standard written limited warranty for all Products. Distributor
shall not alter or expand such warranty. During the term of this Agreement,
Distributor shall be responsible for providing technical support to Customers
at its expense and shall assist them without charge in obtaining warranty
service from Manufacturer. In addition, at the written request of
Manufacturer, Distributor shall perform certain warranty repairs during the
standard warranty period which shall be billed to and paid by Manufacturer at
mutually agreed upon labor rates.
4.9. COMPUTER INTERFACING. At a Customer's request, during the
Termof this Agreement, Distributor shall perform all computer interfacing
activities between Central Data Stations ("CDS") and other computer
workstations for each of its Customers based upon the ASTM interface provided
on the CDS.
4.10. INVENTORY. Distributor shall maintain inventory of the
Products sufficient to satisfy the reasonably projected needs of its Customers
in light of order and shipping lead times.
4.11. REGULATORY COMPLIANCE. Distributor shall advise
Manufacturer promptly of all Rovemment regulations outside the United States
affecting the importation, use, sale, record maintenance and disposal of the
Products and shall be responsible for compliance therewith. Without limiting
the foregoing, Distributor shall obtain from competent govemmental authorities
such import permits, licenses, exemptions from customs duties and governmental
approvals and consents required in connection with the execution and
performance of this Agreement. All governmental permits, registrations,
licenses, exemptions and consents specifically relating to i- STAT products,
shall be sought in the name of and shall, at the end of the Term, be the
exclusive property of Manufacturer. Distributor shall comply with all
applicable United States of America and Territory laws, rules and regulations
and shall not engage in any activity that is illegal under, or would cause
Manufacturer to be in violation of, any law, decree, rule or regulation in the
Territory or in the United States of America.
4.12.BOOKS AND RECORDS. Distributor shall maintain books and records
in keeping with standard industry practice regarding the performance of its
obligations hereunder and shall retain such records during the Term and for
three years thereafter.
4.13.PROPRIETARY INFORMATION AND TRADE SECRETS. Neither Party shall
use for any purpose, other than as contemplated by this Agreement, or divulge
to any third party, any trade secrets, processes, techniques, designs, know how
or other confidential information provided to such Party by the other.
Notwithstanding anything to the contrary provided herein, these confidentiality
provisions shall not apply to any information: (a) which is independently
developed by the receiving Party or its affiliated company or lawfully received
free of restriction from another source having the right to so furnish such
information; (b) after it has become generally available to the public without
breach of this Agreement by the receiving Party or its affiliated company; (c)
which at the time of disclosure to the receiving Party was known to such Party
or its affiliated company free of restriction; or (d) which the receiving Party
is required to disclose pursuant to law, regulations, or an order of a court of
competent jurisdiction, provided that the disclosing Party shall have been
afforded a reasonable opportunity to limit such disclosure.
4.14.NOTICE OF INFRINGEMENT ACTIVITIES. Distributor shall notify
Manufacturer of any actual or suspected infringement or misappropriation of any
of Manufacturer's patents, copyrights (including its computer software),
proprietary information or trade and service marks and at Manufacturer's
expense shall fully cooperate with and assist Manufacturer in any legal action
that Manufacturer elects to bring to prevent or redress such violations of its
rights.
4.15.CATALOG AND PRODUCT LABELS. Distributor may affix its label on
catalogs and Products being distributed by Distributor in the Territory during
the Term, provided that Manufacturer shall have been provided with a catalog
and a photograph of each Product with Distributor's label affixed in the same
manner in which the Products will be distributed. If Manufacturer shall
reasonably object to the manner in which such label is affixed, Distributor
shall promptly cease any such use and change its use to comply with the
Manufacturers requirements.
▇.▇▇.▇▇▇▇▇▇ OF PRACTICES. Periodically, and at least quarterly,
Manufacturer and Distributor shall review Distributor's marketing and selling
strategy, training of Customers, inventory, computer interfacing activities and
other practices with a view toward maximizing Customer use of and satisfaction
with the Products.
5. RIGHTS TO PROPERTY OF MANUFACTURER.
5.1. MARKS. Manufacturer hereby authorizes Distributor to use, on a
nonexclusive basis for the Term, without cost to Distributor other than payment
for the Products, the trademark "i- STAT" and any other trademarks, service
marks or trade names used by Manufacturer to identify the Products (the
"Marks"), solely for Distributor's distribution of Products and related
performance under this Agreement. The Marks and the goodwill associated with
the Marks are the exclusive property of Manufacturer. Distributor shall not
(a) use the Marks as part of any composite ▇▇▇▇ including any elements not
approved in advance in writing by Manufacturer, (b) challenge the validity or
enforceability of the Marks or (c) acquire any proprietary rights in the Marks
by reason of any activities under this Agreement or otherwise. All uses of the
Marks by Distributor and any additional goodwill created thereby shall inure to
the exclusive benefit of Manufacturer. Manufacturer shall, at all times during
the Term on reasonable notice, have the right to inspect the materials and
services on or in connection with which the Marks are used in order to assure
Manufacturer that Manufacturer's quality standards relating to the Products and
Distributor's servicing and other ▇▇▇▇-pertinent provisions of this Agreement
are being observed. If Manufacturer shall at any time reasonably object to any
use to which the Marks are put, Distributor shall promptly cease any such use.
5.2. LICENSE TO USE COMPUTER SOFTWARE. All software, on whatever
media and in whatever form, which Manufacturer shall deliver to Distributor
(the "Software") is and shall remain the property of Manufacturer and its
suppliers and licensors thereof and shall only be used in accordance with the
terms of this Agreement. Upon the sale of any central data station software
package during the Term, Distributor shall collect and pay to Manufacturer the
first year's fee for the use of such software as set forth in Schedule 1.1.
Manufacturer shall thereafter invoice Customers directly for any further
license or maintenance fees. Software contains copyrighted and proprietary
trade secrets of Manufacturer (and its suppliers and licensors), and
Distributor shall keep the Software in confidence. Distributor shall not copy,
use or disassemble the Software unless agreed by Manufacturer. Distributor
shall have the right to reproduce Software only for (a) one backup/archival
copy and (b) installation on and use with equipment designated by Manufacturer
as suitable therefor and for use solely with the Products distributed by
Distributor. Distributor shall reproduce the copyright and other proprietary
notices of Manufacturer and third parties present in the Software delivered to
Distributor. Distributor's license to use and distribute the Software shall
terminate on the earlier of (a) the end of the Term; (b) discontinuance of use
of the designated equipment for the Software; (c) discontinuance of payment of
periodic license and maintenance fees, if any; and (d) breach of any of the
above given terms. All copies of Software with respect to which the license
hereunder is terminated shall be returned to Manufacturer within 30 days after
such termination. Distributor shall deliver to each end user a copy of
Manufacturer's written software license.
6. CORRUPT PRACTICES. Distributor shall not use any compensation
hereunder as payment to any governmental official or employee of any country in
the Territory for the purpose of influencing such person's decisions or actions
regarding the Products.
7. DURATION AND TERMINATION.
7.1. TERM OF AGREEMENT. The initial term of this Agreement (the
"Initial Term") shall commence effective February 9, 1999 after signed and
delivered by both parties, and shall expire (if not automatically renewed as
provided herein) on December 31, 2001. (As provided in Section 4.2, however,
Distributor's rights in the third year of this Agreement may be made
non-exclusive if the Milestones are not achieved). Thereafter, this Agreement
shall renew automatically for additional renewal terms (each an "Additional
Tenn") of twelve (12) months each, unless either party gives at least nine (9)
months prior written notice to the other before the expiration of the Initial
Term or any Additional Tenn that it does not wish to renew this Agreement
beyond such Initial Term or such Additional Tenn; provided, however, that if
Manufacturer fails to provide notice of termination within such nine month
period, and Distributor fails to reach the Milestones for 2001 or any
subsequent year of the Agreement (as adjusted pursuant to this Agreement),
Manufacturer may elect to convert Distributor's distribution rights hereunder
from exclusive to non-exclusive for the following year Milestones for years
after 2001 shall be determined at the beginning of the preceding year,
commencing at the beginning of 2001 for 2002 Milestones). (The Initial Tenn
and each Additional Termshall be collectively referred to herein as the
"Term").
7.2. IMMEDIATE TERMINATION. Either party may terminate this
Agreement immediately upon the occurrence of any one or more of the events
contemplated in this Section 7.2.
7.2.1. Material breach or default of this Agreement by the other
party and failure to cure such default within 30 days after the other party
has given written notice of such breach or default.
7.2.2. On the 30th day following written notice by one party to
the other of such party's election to terminate this Agreement as a result of
the bankruptcy or insolvency of the other party or the appointment of a
receiver or trustee for assets of the other party.
7.2.3. On the 30th day following written notice by Manufacturer
to Distributor of Distributor's unauthorized assignment or transfer of this
Agreement.
7.3. ACTIONS UPON TERMINATION. Upon the termination of this
Agreement, the parties shall:
7.3.1. Immediately cease the use of any confidential,
proprietary or secret information of the other party and, in the case of
Distributor, of the Marks except as permitted in Section 7.3.2; and
7.3.2. unless this Agreement is terminated by Manufacturer for
Distributor's breach or bankruptcy, and, subject to Manufacturer's rights under
Section 7.3.3 below, (i) Manufacturer shall honor all accepted purchase orders
providing for delivery within 30 days of the date of termination and for which
Distributor pays in full prior to shipment, and (ii) Distributor may sell on a
nonexclusive basis but otherwise on the terms set forth in this Agreement
(except that its license to the Trademarks is also nonexclusive) its remaining
inventory of Products for a period of up to ninety (90) days following the date
of termination;
7.3.3. Manufacturer shall have the right (but not the
obligation) on notice to Distributor given within ten days after termination to
purchase from Distributor all or any portion of the Products in its inventory
at the time of such expiration or termination for credit against outstanding
invoices, or for cash refund to the extent there are no invoices then
outstanding. Any credit or refund due Distributor for such Product shall be
equal to the purchase price of the Product, less any discounts or credits
previously received; and
7.3.4. Distributor shall return to Manufacturer all promotional
and sales training materials provided to Distributor by Manufacturer.
7.3.5. Assign to Manufacturer and deliver to Manufacturer any
import permits, health resignations, licenses, exemptions from customs duties
and governmental consents of any nature specifically relating to i-STAT
products, which Distributor may have or retain directly or indirectly in
connection with the Products imported, sold and/or distributed under this
Agreement, which it has not yet assigned or waived, or which have not yet been
delivered prior to termination.
7.4.CONTINUING OBLIGATIONS. Following any termination of this
Agreement Distributor shall (a) cooperate in referring Customers to
Manufacturer or to such other persons as Manufacturer may direct for continuing
purchase of Products and related services; (b) transfer to Manufacturer or its
nominees all outstanding maintenance contracts; and (c) provide Manufacturer
with lists of each Customer who purchased product through Distributor,
including records of all Software updates performed. The parties agree that
following termination of this Agreement for any reason Distributor shall have
no further obligations to Customers with respect to software updates and
maintenance or technical support. The parties further agree that nothing in
this Agreement shall be construed as preventing Distributor from soliciting
Customers for other products following the termination of this Agreement.
8. INDEMNIFICATION; WARRANTY; LIMITATION OF LIABILITY.
8.1.INDEMNIFICATION. Manufacturer and Distributor shall each at all
times indemnify and hold the other party and their respective affiliates,
stockholders, directors, officers, employees and agents harmless from and
against all liabilities, losses, claims, damages and expenses, including
reasonable attorneys' fees and disbursements, arising out of or in connection
with the breach of any covenant, agreement, warranty or representation made by
it herein. In the event of any third party action, the other party shall have
the right to participate in the defense, at its own expense, with counsel of
its own choosing. Distributor shall indemnify Manufacturer against all claims,
losses, damages, liabilities and expenses, including reasonable attorneys' fees
and disbursements, incurred by Manufacturer arising with respect to the sale,
distribution or use of a Product to the extent caused by any action or omission
of Distributor or its stockholders, directors, officers, employees or agents.
8.2.WARRANTY. Manufacturer agrees to extend to Distributor and to
Distributor's Customers standard product warranties, as modified from time to
time, the current version of which is attached as Schedule 8.2. EXCEPT FOR THE
WARRANTY PROVIDED FOR IN'SCHEDULE 8.2, MANUFACTURER MAKES NO REPRESENTATIONS OR
WARRANTIES OF ANY KIND AND THE WARRANTIES OF MANUFACTURER ARE IN LIEU OF ALL
OTHER WARRANTIES, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OF NONINFRINGEMENT OF
ANY THIRD PARTY PATENTS, COPYRIGHTS OR MARKS. EXCEPT FOR THE WARRANTY PROVIDED
FOR IN SCHEDULE 8.2, MANUFACTURER MAKES NO WARRANTY OF ANY KIND TO CUSTOMERS OF
DISTRIBUTOR HEREUNDER.
8.3. LIMITATION OF LIABILITY. UNDER NO CIRCUMSTANCES SHALL A PARTY
BE RESPONSIBLE TO THE OTHER PARTY FOR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE SALE, DELIVERY,
NONDELIVERY, SERVICING, USE, MAINTENANCE, SUPPORT, CONDITION OR POSSESSION OF
PRODUCTS, OR FOR ANY OTHER CLAIM AGAINST A PARTY BY ANY OTHER PERSON OR ENTITY
RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON BREACH OF WARRANTY,
CONTRACT, TORT OR OTHER LEGAL THEORY.
9. MISCELLANEOUS.
▇.▇.▇▇ IMPLIED WAIVERS. A failure by one of the parties to assert
its rights for or upon any breach of this Agreement shall not be deemed to be a
waiver of such rights, nor shall such waiver be implied from the acceptance of
any payment.
9.2.FORCE MAJEURE. Neither party shall be liable to the other party
or in default hereunder by reason of any delay or omission caused by epidemic '
fire, labor disputes, governmental law or regulations, executive or court
order, Act of God or public enemy, war, civil commotion, earthquake, flood,
accident or explosion.
9.3.NOTICES. All notices given pursuant to this Agreement shall be
in writing in the English language and shall be deemed effective on the day
they are received by certified air mail or confirmed facsimile addressed to the
other party at the address or facsimile number stated below.
If to the Distributor:
Heska Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn: President
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number:(▇▇▇) ▇▇▇-▇▇▇▇
If to the Manufacturer:
i-STAT Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Vice-President, International Sales and Marketing and
Corporate Development
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
9.4.GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAWS OF
CONFLICTS) OF THE STATE OF NEW JERSEY, USA.
9.5. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, including the
schedules, constitutes the entire understanding of the parties with respect to
the subject matter hereof and supersedes all prior or contemporaneous writings
or discussions. Except asotherwise expressly provided, no agreement varying or
extending the terms of this Agreement shall be binding on either party unless
covered by an addendum signed by an authorized representative of each party.
9.6. ASSIGNABILITY. Distributor may not assign any of its rights or
obligations hereunder, whether voluntarily or by operation of law, without the
prior written consent of Manufacturer, which shall not be unreasonably
withheld; provided, however, that no consent shall be required for the
assignment of this Agreement to any corporation controlled by Heska Corporation
which has, as one of its principal lines of business, the sale of diagnostic
equipment for the veterinary market Manufacturer may assign this Agreement to
any person to whom Manufacturer has sold or transferred the assets of the
business relating to the Products.
9.7. SURVIVAL. Sections 2.1, 2.2, 4.13, 5.2, 7 and 8 shall survive
the Term.
9.8. RELATIONSHIP OF THE PARTIES. Nothing in this Agreement or any
other document or agreement between the Parties shall constitute or be deemed
to constitute a partnership or joint venture between the Parties. The
relationship between Manufacturer and Distributor shall be that of seller and
buyer. No officer, agent or employee of one party shall under any
circumstances be considered the agent, employee or representative of the other
party. Neither party shall have the right to enter into any contracts or
binding commitments in the name of or on behalf of the other party in any
respect whatsoever.
EXECUTION
The parties have duly executed this Agreement through their duly authorized
representatives. This Agreement is effective as of February 9, 1999, after
signed and delivered by both parties.
i-STAT CORPORATION
Date: February 24, 1999 By: /S/
----------------------------
Place of Execution: Name ▇▇▇▇ ▇▇▇▇▇▇▇
East Windsor, New Jersey, Title: Vice President
U.S.A. International Sales and
Marketing and
Corporate Development
HESKA CORPORATION
Date: February 19, 1999 By: /S/
----------------------------
Place of Execution: Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Fort ▇▇▇▇▇▇▇, Colorado, U.S.A. Title: Executive Vice President
SCHEDULE 1.1
PRICE LIST FOR HESKA CORPORATION
Distributor shall pay to Manufacturer the prices set forth below for purchases
of Cartridges and Analyzers, subject to adjustment from time to time as
specified below.
Payment Terms: Net 30 days FOB, East Windsor, New Jersey.
CARTRIDGE
PRODUCTS NO DESCRIPTION PRICE/TEST QTY/BOX PRICE/BOX
----------- ----------- ---------- ------- ---------
220300 EG7+ [ *** ] [ *** ] [ *** ]
220200 EG6+ [ *** ] [ *** ] [ *** ]
220100 G3+ [ *** ] [ *** ] [ *** ]
125000-02 EC8+ [ *** ] [ *** ] [ *** ]
121000-02 6+ [ *** ] [ *** ] [ *** ]
123000-02 EC6+ [ *** ] [ *** ] [ *** ]
121500-02 EC4+ [ *** ] [ *** ] [ *** ]
120100-02 G [ *** ] [ *** ] [ *** ]
*** Confidential Treatment Requested
Cartridge Price Adjustments. The parties acknowledge and agree that the above
prices for Cartridges are intended to provide Distributor with a gross profit
of approximately fifty percent (50%). In the event Distributor in good ▇▇▇▇▇
▇▇▇▇▇ it beneficial to offer to certain, specified Customers any volume
purchase or similar price discounts on volume or other strategic sales of
Cartridges, or in the event competitive products or competitive pressure
prevailing in the industry result in Distributor lowering prices on Products in
order to maintain or increase its market or competitive position with respect
to the Products, Manufacture agrees that it will negotiate in good faith with
Distributor a reduction of the prices on Cartridges so that Distributor and
Manufacturer share equally any such discount or price reductions to the extent
of sales of such discounted Cartridges. (By way of example, in the event
Distributor offers a volume or other discount to a Customer of $0.20 on the
price of EG7+ Cartridges (ex-Distributor), the transfer price to Distributor of
such Cartridges would be reduced by $0.10, or to $4.50 per Cartridge). As used
herein, the term "gross profit" shall have the meaning determined in accordance
with United States generally accepted accounting principles and Distributor's
customary practices commensurate therewith, applied on a consistent basis
during the periods in question.
ANALYZER
PRODUCT NO. DESCRIPTION PRICE
------------- ------------------------ -------------
210000 Thermal Controlled PCA [ *** ]
111700 HP Portable Printer [ *** ]
111501 Portable Printer Paper [ *** ]
111502 HP Portable Printer AC Adapter [ *** ]
112100 Printer Cradle w/o IR Link [ *** ]
ANALYZER
PRODUCT NO. DESCRIPTION PRICE
------------- ------------------------ -------------
111002 9 Volt Lithium Batteries [ *** ]
131000 Aqueous Controls ▇▇▇▇▇ ▇ [ *** ]
131500 Aqueous Controls ▇▇▇▇▇ ▇ [ *** ]
132000 Aqueous Controls ▇▇▇▇▇ ▇ [ *** ]
135681 Calibration Verification Set [ *** ]
114000 Capillary Tubes 65 uL [ *** ]
112200 IR Link With Cradle [ *** ]
111900 Seiko Printer with IR Link [ *** ]
142000 Comprehensive Service Plan - [ *** ]
Analyzer
142000 Comprehensive Service Plan - CDS [ *** ]
PRODUCT NO. DESCRIPTION PRICE
------------- ------------------------ -------------
010382-02 Cable, IR Link, 5 feet [ *** ]
CDS Configuration
115002 CDS Hardware (CPU) [ *** ]
012124-01 CDS Monitor [ *** ]
010514 Cable, Printer [ *** ]
111800 Printer, CDS [ *** ]
013040-01 CDS Software [ *** ]
Total CDS Configuration [ *** ]
Software Download Kit
112200 IR Link [ *** ]
112250 Power Adaptor [ *** ]
010382-02 Cable, IR, 5 ft [ *** ]
012127-01 Adaptor, Keyboard, AT, IBM [ *** ]
012128-01 Adaptor, Keyboard, IBM, AT [ *** ]
517000 Total Software Download Kit [ *** ]
011786-01 Paper, Printer, Seiko (2) [ *** ]
*** Confidential Treatment Requested
Annual Price Adjustment-Analyzers. In the event of an increase in
Manufacturing Costs (as defined below) to Manufacturer resulting in an
increase, individually or in the aggregate, of total finished cost of goods of
any series 200 Analyzer in 2000 or 2001 for at least ninety (90) days, the
Purchase Price to Distributor for each such Analyzer may be adjusted upwards by
Manufacturer for contract year 2000 or 2001, as applicable (but only once in
each such contract year) by not more than an aggregate percentage increase in
the Purchase Price for such Analyzer of ten percent (10%). Manufacturer will
notify Distributor of such price adjustments at least 60 days priorto such
price adjustment and will furnish Distributor a revised Schedule 1.1 to this
Agreement. Upon Distributor's request, Manufacturer will finmish supporting
documentation therefor and permit Distributor to verify the accuracy of the
Manufacturing Costs and any increases thereof passed through to Distributor
hereunder Such adjustments may not be applied to previously-issued invoices.
For purposes of this Schedule 1.1, "Manufacturing Cost" shall mean direct
material and labor cost incurred by Manufacturer to manufacture Analyzers, or
alternatively, the bona fide invoice cost to Manufacturer for Analyzers
manufactured for Manufacturer by an unaffiliated third party manufacturer.
Other Hardware and Software Price Adjustments (excluding Cartridges). In the
event of a change in the cost of manufacturing or acquiring other hardware
components, the Purchase Price to Distributor may be adjusted upwards or
downwards by Manufacturer in proportion to the percentage change in the cost of
manufacture or acquisition.
Dating:
Four months of Cartridge shelf life is guaranteed for any Purchase order issued
45 days in advance of ship date. Cartridges will not be shipped to Distributor
with less than 4 months shelf life unless Distributor is notified in advance
and agrees to a shorter shelf life.
SCHEDULE 8.2
WARRANTY
Subject to Distributor's and Distributor's Customers' shipping, storing and
handling the Products in accordance with Manufacturer's (or the maker's)
specifications and instructions, Manufacturer warrants the Products (excluding
consumable supplies) to be free from defects in materials or workmanship for
one year from the original date of purchase subject to these terms and
conditions. Returns will not be accepted without prior written authorization
from Manufacturer and Products must show no evidence of improper shipping,
storing or handling or operation, including unauthorized repairs and/or damage
caused by batteries.
At its option, Manufacturer may repair or replace defective Products covered by
this warranty. MANUFACTURER EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER
EXPRESS, IMPLIED, OR STATUTORY, INCLUDING THE WARRANTY OF MERCHANTABILITY AND
FITNESS OF USE. In no event shall Manufacturer be liable for consequential
damages arising out of the use of its Products.