C O N F I D E N T I A L
SUPPLY AGREEMENT BETWEEN
PHILIPS MEDICAL SYSTEMS NEDERLAND B.V.
(PHILIPS)
AND
INTERMAGNETICS GENERAL CORPORATION
(INTERMAGNETICS)
REGARDING
A FAMILY OF ACTIVE SHIELDED
SUPERCONDUCTING MRI MAGNETS
Content: Page:
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1 Scope 2
2 Definitions 2
3 Products 2
4 Change Control 3
5 Prices 3
6 Purchase Orders 3
7 Forecast and Ordering Procedures 4
8 Production 4
9 Delivery 5
10 Warranty 6
11 Service 9
12 Branding, Trademarks and Tradenames 9
13 Term and Termination 10
14 Purchase Orders placed prior to termination effectivity 10
15 Prevailing Agreement 10
16 Surviving Terms 10
17 List of Schedules 11
18 Effectiveness 11
Schedules
---------
A [CONFIDENTIAL TREATMENT REQUESTED]
B Branding instructions
C [CONFIDENTIAL TREATMENT REQUESTED]
D [CONFIDENTIAL TREATMENT REQUESTED]
E Change request form
F Configuration management
G [CONFIDENTIAL TREATMENT REQUESTED]
H Accounting data and procedures
I Forwarding instructions
J Customs instructions
K [CONFIDENTIAL TREATMENT REQUESTED]
i
This SUPPLY AGREEMENT is
between
PHILIPS MEDICAL SYSTEMS NEDERLAND B.V., of Best, The Netherlands (hereinafter
referred to as "PHILIPS") on the one part
and
INTERMAGNETICS GENERAL CORPORATION acting through its Magnet Business Group of
Latham, New York, the United States of America (hereinafter referred to as
"INTERMAGNETICS") on the other part.
WHEREAS:
o PHILIPS and INTERMAGNETICS entered into an Umbrella Agreement dated 29
April, 1999 setting forth the terms and conditions applicable to their
relationship; and
o under the Umbrella Agreement, the parties may enter into a Supply Agreement
for the supply of certain magnet systems from INTERMAGNETICS to PHILIPS; and
o the Parties now desire to enter into a Supply Agreement to cover the supply
of existing and future products from INTERMAGNETICS to PHILIPS;
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. Scope
This Supply Agreement is an integral part of the Parties' UMBRELLA AGREEMENT
dated 29 April, 1999. Except as expressly stated otherwise herein, all terms and
conditions of the Umbrella Agreement, including definitions, are incorporated as
if fully set forth in this Supply Agreement. This Supply Agreement will
encompass the supply of Products that meet Specifications contained in Schedule
A and shall take effect on 1 January 2000 (the Effective Date).
2. Definitions
Product(s) In addition to the definition of Product in the
Umbrella Agreement, Product shall mean, in this
Supply Agreement, the products which are specified
in Schedule A. Products may be added or deleted to
Schedule A by mutual agreement of the Parties in
writing.
Spare Parts shall mean replaceable Parts of the Products
classified by INTERMAGNETICS as spare parts
Specification shall mean the requirements for the Products as set
forth in Schedule A.
Supply Agreement: shall mean this document and all the Schedules that
are presently attached thereto and all Appendixes
and amendments that will be attached thereto
provided they are signed and/or initialed by the
individuals authorized to bind the Parties.
Tools shall mean components supplied by INTERMAGNETICS
specifically for the purpose of installation or
service of the Product(s)
3. Product(s)
3.1. INTERMAGNETICS shall only supply Product(s) which have successfully
passed the agreed upon tests to ensure meeting the Specification and
which have been subject to the issuance by PHILIPS of a NORD.
Page: 2
3.2. INTERMAGNETICS shall be under no obligation to accept orders for any
Product until a NORD has been issued for that type of Product. PHILIPS
shall be under no obligation to accept deliveries until a NORD has been
issued.
4. Change Control
4.1. INTERMAGNETICS shall inform PHILIPS in writing by means of the standard
form for change request as laid out in Schedule E to this Supply
Agreement of any and all changes affecting form, fit or function to the
Product(s) and/or Spare Parts that result from its continuing
engineering activities as they occur. Any changes proposed by
INTERMAGNETICS such as change in design, material, manufacturing
process and other aspects which affect form, fit or function and/or the
Specification(s) will be subject to the prior written consent of
PHILIPS. The objective of Parties is to conclude the authorization,
cancellation or rejection of any change request within sixty (60) days
from its initiation.
4.2. In the event PHILIPS desires a change in the Product(s) and/or Spare
Parts, the provision of Article 4.1 hereof shall apply mutatis
mutandis.
5. Prices
5.1. INTERMAGNETICS shall supply the Product(s) and Spare Parts to PHILIPS
at prices which are set forth in Schedule C to this Supply Agreement.
5.2. [CONFIDENTIAL TREATMENT REQUESTED]
5.3. [CONFIDENTIAL TREATMENT REQUESTED]
6. Purchase Orders
6.1. Product(s) and/or Spare Part(s) shall be ordered by PHILIPS through the
written or electronic release of a Purchase Order which shall be
subject to and governed by this Supply Agreement.
6.2. Each Purchase Order shall at least specify the type of Product(s)
and/or Spare Part(s), the quantity(ies), the price(s) and the requested
delivery date(s).
6.3. Purchase Order(s) may include additional terms relating to the
purchase, shipment and other conditions if previously agreed upon
between PHILIPS and INTERMAGNETICS.
Page: 3
6.4. Purchase Order(s) so placed by PHILIPS shall be acknowledged by
INTERMAGNETICS within five (5) working days after receipt provided that
such Purchase Order(s) comply with the requirements of Schedule D.
7. Forecast and Ordering Procedures
7.1 Parties have agreed to the forecast and order lead time provisions as
specified in Schedule D to this Supply Agreement.
8. Production
8.1. Subject to the confidentiality provisions of the Umbrella Agreement
between Parties, PHILIPS' technical, purchasing, quality, logistic and
service experts are entitled to visit INTERMAGNETICS' factory in order
to assess all relevant aspects of the progress of the manufacture of
the Products, such as without limitation with respect to
Specifications, quality, serviceability and delivery times, provided
that in accordance with INTERMAGNETICS' confidentiality needs, PHILIPS'
experts will not have access to certain, to be agreed upon in advance,
aspects of the manufacturing process. PHILIPS' experts are entitled to
make suggestions and proposals, but same shall be binding and valid on
INTERMAGNETICS and PHILIPS only if confirmed in a document signed by
authorized representatives of all relevant parties.
8.2. Each Product shall be tested by INTERMAGNETICS prior to delivery. The
tests shall enable INTERMAGNETICS to verify that the Products comply
with the Specifications. Test requirements and procedures have been
defined in the Specifications. No later than seven (7) working days
prior to the start of the test, INTERMAGNETICS shall inform PHILIPS
thereof in writing and PHILIPS is entitled to be represented at these
tests. Notwithstanding PHILIPS being so represented, Article 9.7 will
remain applicable. Upon satisfactory completion of the tests a copy of
the test results per Product authorized by INTERMAGNETICS' responsible
quality officer shall be transmitted to PHILIPS with a request to
authorize delivery thereof. PHILIPS will react to this request within
five (5) working days following receipt of the information. If PHILIPS
does not respond within said five working days the Product shall be
deemed to be accepted by PHILIPS and INTERMAGNETICS shall be entitled
to deliver the Product and forward the relevant invoice to PHILIPS. In
case the Product appears not to comply with the Specifications PHILIPS
shall be entitled to reject the Product in which case INTERMAGNETICS
shall repair or replace the Product.
9. Delivery
Page: 4
9.1. Unless specifically otherwise agreed in writing the Product(s) and
Spare Part(s) shall be delivered in accordance with the terms of the
pertaining Purchase Order and this Article 9.
9.2. [CONFIDENTIAL TREATMENT REQUESTED]
9.3. [CONFIDENTIAL TREATMENT REQUESTED]
9.4. [CONFIDENTIAL TREATMENT REQUESTED]
9.5. [CONFIDENTIAL TREATMENT REQUESTED]
9.6 [CONFIDENTIAL TREATMENT REQUESTED]
9.7. Upon receipt, PHILIPS is entitled to retest (incoming inspection) at
PHILIPS location the Product(s) and Spare Part(s) in accordance with
the agreed upon tests, set forth in Schedule A to this Supply
Agreement. In the event a Product does not comply with the agreed
Specifications and acceptance test requirements, or subsequent
change(s) agreed upon in accordance with Article 4 PHILIPS is entitled
to reject the pertaining Product(s) and it shall inform INTERMAGNETICS
thereof in writing with an indication of the deficiencies as they
appear to PHILIPS. Subject to the provisions of Article 10,
INTERMAGNETICS shall, at its option, either repair or replace the
Product(s) and Spare Part(s) rejected by PHILIPS within a reasonable
time taking into account PHILIPS' interests but at the latest within 90
(ninety) days after PHILIPS' notice of rejection. All costs related to
such repair or replacement shall be borne by INTERMAGNETICS unless
caused by damage incurred under PHILIPS ownership.
10. Warranty
10.1. [CONFIDENTIAL TREATMENT REQUESTED]
10.2. [CONFIDENTIAL TREATMENT REQUESTED]
10.3. [CONFIDENTIAL TREATMENT REQUESTED]
10.4. [CONFIDENTIAL TREATMENT REQUESTED]
10.5. [CONFIDENTIAL TREATMENT REQUESTED]
10.6. [CONFIDENTIAL TREATMENT REQUESTED]
10.7. [CONFIDENTIAL TREATMENT REQUESTED]
Page: 5
10.8. [CONFIDENTIAL TREATMENT REQUESTED]
10.9. [CONFIDENTIAL TREATMENT REQUESTED]
11. Service
11.1. INTERMAGNETICS undertakes that it will have available Spare Part(s),
make the same available to PHILIPS at PHILIPS' request at prices as set
forth in Schedule C to this Supply Agreement and will continue to
enhance software, if applicable, for the Products during a period of
seven (7) years after the last dispatch of Products by INTERMAGNETICS.
11.2. INTERMAGNETICS may, at its discretion, substitute functionally
equivalent Spare Parts, subject to informing PHILIPS previously in
writing and making available free of charge a number of such equivalent
Spare Parts for PHILIPS to test and provided PHILIPS approves these
Spare Parts in writing. After completion of such tests, PHILIPS will
either purchase or return such Spare Parts to INTERMAGNETICS.
11.3. Together with each Product, INTERMAGNETICS will supply to PHILIPS one
copy of the necessary updated operating and technical/maintenance
manual, both for hardware and software in the English language and will
forward same separately to PHILIPS' attention to the address PHILIPS
will specify per case.
11.4. Other Service aspects are as set forth in Schedule G to this Supply
Agreement.
12. Branding Trademarks and Trade Names
12.1. The Products and packing supplied under this Supply Agreement will be
branded with PHILIPS' and INTERMAGNETICS' trademarks and trade names in
accordance with each Party's instructions as set forth in Schedule B to
this Supply Agreement. INTERMAGNETICS recognizes PHILIPS' rights in and
to PHILIPS' trademarks and trade names. In this respect it is
understood that PHILIPS may require a separate letter of acknowledgment
from INTERMAGNETICS of PHILIPS' rights in and to the said trademarks
and trade names.
12.2. The arrangements of Article 12.1 are not to be understood as a
restriction of INTERMAGNETICS' rights and title in the design and
programming applied in the Products.
Page: 6
13. Term and Termination
13.1 Term of Supply Agreement
The Term as defined in the Umbrella Agreement applies to this Supply
Agreement.
13.2 Termination by mutual agreement
The Parties may, by mutual agreement, decide to discontinue the supply
of certain Products supplied under this Supply Agreement with a minimum
of twenty four (24) months advance written notice.
13.3 Termination for breach
The provision for termination for breach from the Umbrella Agreement
shall apply as if fully set forth herein, provided, however, that as an
additional remedy for breach, the non-breaching Party may terminate the
supply of a particular Product or Product(s) under this Supply
Agreement (rather than the entire Supply Agreement) by notice in
writing.
14. Purchase Orders placed prior to termination effectivity
In the event of termination of a particular Product pursuant to Article
13.2 of this Supply Agreement, PHILIPS shall be entitled until the
actual date the supply of the affected Product(s) terminates, to place
Purchase Orders for the affected Product(s) in accordance with the
terms and conditions of this Supply Agreement and INTERMAGNETICS agrees
to honor such Purchase Orders, provided always that the delivery times
for such Purchase Orders do not exceed the prevailing lead time and
comply with Article 6 and Schedule D.
After the notice of termination coming into effect, PHILIPS shall not
be entitled to change, modify or cancel any Purchase order placed by it
for any reason other than INTERMAGNETICS' inability to honor such
Purchase Order nor to place any additional Purchase Orders.
15. Prevailing Agreement
If there is any conflict between any provision of this Supply Agreement
with any provision of a Schedule to this Supply Agreement or a Purchase
Order the provisions of this Agreement shall prevail.
16. Surviving Terms
In the event of termination of this Supply Agreement, the provisions of
Articles 10, 11 and 15 shall survive.
Page: 7
17. List of Schedules to this Supply Agreement
A [CONFIDENTIAL TREATMENT REQUESTED]
B Branding instructions
C [CONFIDENTIAL TREATMENT REQUESTED]
D [CONFIDENTIAL TREATMENT REQUESTED]
E Change request form
F Configuration management
G [CONFIDENTIAL TREATMENT REQUESTED]
H Accounting data and procedures
I Forwarding instructions
J Customs instructions
K [CONFIDENTIAL TREATMENT REQUESTED]
18. Effectiveness
This Supply Agreement becomes binding when signed by duly authorized
officers of each party and will come into effect on 1 January 2000.
Page: 8
IN WITNESS WHEREOF the parties have caused this Agreement to be signed by their
authorized representatives:
INTERMAGNETICS GENERAL PHILIPS MEDICAL SYSTEMS
CORPORATION NEDERLAND B.V.
Signature /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Signature /s/ Ir. C.F. Knoet
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Ir. C.F. Knoet
President and Director PMC MR/CT/EVM
Chief Operating Officer
Date: 30 April 1999 Date: 28 April 1999
INTERMAGNETICS GENERAL PHILIPS MEDICAL SYSTEMS
CORPORATION NEDERLAND B.V.
Signature: /s/ ▇▇▇ ▇▇▇▇▇▇▇ Signature: /s/ ▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇
VP and General Manager Director
Magnet Business Group PMG Magnetic Resonance
Date: 30 April 1999 Date: 29 April 1999
INTERMAGNETICS GENERAL PHILIPS MEDICAL SYSTEMS
CORPORATION NEDERLAND B.V.
Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ Signature: /s/ ▇▇▇▇ van der Plas
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ van der Plas,
Marketing Manager Purchasing Manager
Magnet Business Group PMG Magnetic Resonance
Date: 30 April 1999 Date: 29 April 1999
Page: 9
UMBRELLA AGREEMENT BETWEEN
PHILIPS MEDICAL SYSTEMS NEDERLAND B.V.
AND
INTERMAGNETICS GENERAL CORPORATION
REGARDING
A FAMILY OF ACTIVE SHIELDED
SUPERCONDUCTING MAGNET SYSTEMS FOR MRI SYSTEMS
Content: Page:
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1 Scope 2
2 Definitions 2
3 Quality System 5
4 Environmental 5
5 [CONFIDENTIAL TREATMENT REQUESTED] Consultation 8
6 [CONFIDENTIAL TREATMENT REQUESTED] 10
7 (reserved) 12
8 [CONFIDENTIAL TREATMENT REQUESTED] 12
9 Continuity of Supply 13
10 Intellectual Property Rights 14
11 IPR Licenses 17
12 Ownership of Information and licenses 18
13 Confidentiality 19
14 Product Liability 20
15 Patent Indemnity 22
16 Duration and Termination 23
17 Surviving Terms ▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇ Miscellaneous 25
Schedules
---------
A Environmental
B [CONFIDENTIAL TREATMENT REQUESTED]
C Contingency Plans
D [CONFIDENTIAL TREATMENT REQUESTED]
E Applicable regulatory codes
i
Underlying Agreements
---------------------
[CONFIDENTIAL TREATMENT REQUESTED]
Supply Agreement
ii
This Agreement is made this 29 April, 1999, (hereinafter the Effective Date) by
and between:
PHILIPS MEDICAL SYSTEMS NEDERLAND B.V., of Best, The Netherlands ("PHILIPS") on
the one part
and
INTERMAGNETICS GENERAL CORPORATION of Latham, New York, the United States of
America ("INTERMAGNETICS") on the other part
WHEREAS:
o PHILIPS is engaged amongst others, in the development, design, engineering,
manufacture and marketing of magnetic resonance imaging systems (MRI
systems); and
o INTERMAGNETICS is engaged, amongst others, in the development, design,
engineering, manufacture and marketing of magnet systems (Magnet systems)
and certain components for use in MRI systems; and
o INTERMAGNETICS manufactures and supplies certain actively shielded
superconducting Magnet systems and associated components to PHILIPS under
the terms and conditions of an Amended and Restated Supply Agreement dated
November 6, 1998; and
o Parties intend to enter into a termination of the Amended and Restated
Supply Agreement effective December 31, 1999; and
o [CONFIDENTIAL TREATMENT REQUESTED];
NOW, THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:
Page: 1
Article 1
Scope
This Agreement sets forth the principles for a mutually beneficial relationship
governing all agreements between Parties as of the Effective Date except the
Amended and Restated Supply Agreement dated November 6, 1998 and the Termination
Agreement dated April 29, 1999. This Agreement applies only to the business
relationship between PHILIPS and INTERMAGNETICS' Magnet Business Group.
Article 2
Definitions
The below mentioned terms shall have the following meaning in this Agreement:
Agreement shall mean this document and all underlying
agreements, the Schedules and amendments
thereto.
Associated Companies shall mean any and all companies, firms and
persons with respect to which now or hereafter
Koninklijke PHILIPS Electronics N.V. or
INTERMAGNETICS respectively directly or
indirectly holds 50 % or more of the nominal
value of the issued share capital or has 50 % or
more of the voting power at general meetings or
has the power to appoint a majority of the
directors or otherwise directs the activities of
such company, firm or person but any such
company, firm or person shall be deemed an
Associated Company only as long as such control
exists.
Background Information such Information (other than Foreground
Information) which at the date hereof is or
during the continuance of the activities set out
in this Agreement comes into the ownership or
control of a Party and which such Party is free
to disclose without the consent of or need to
account to any third party.
Background Intellectual such Intellectual Property (not being Foreground
Property Rights (Background Intellectual Property Rights) which at the date
IPRs) hereof are or during the continuance of the
activities set out in this Agreement come into
the ownership or control of a Party and which
such Party is free to disclose without the
consent of or need to account to any third
party.
Contract Manager shall have the meaning set forth in Article 5.7.
Page: 2
[CONFIDENTIAL
TREATMENT REQUESTED]
[CONFIDENTIAL
TREATMENT REQUESTED]
First Articles Shall mean an initial delivery of a Product
intended to be used for type approval tests for
compliance with the Specifications, leading to
NORD of the Product.
Foreground Information such Information (other than Background
Information) as is generated solely by either
Party or both Parties hereto from the activities
set out in this Agreement.
Foreground Intellectual such Intellectual Property as is generated
Property Rights (Foreground solely by either Party or both Parties hereto
IPRs) from the activities set out in this Agreement.
Information shall mean valuable technical information,
software, industrial secrets, trade secrets,
descriptions of manufacturing processes,
technical information inherent in Prototypes or
First Articles, know-how, product
specifications, or other proprietary information
used by either Party in carrying on its
business, which are not considered IPRs as
defined above.
Intellectual Property (IPR) shall mean inventions, whether patented or not
including the conception or reduction to
practice of an invention, patents, ▇▇▇▇▇
patents, utility models, design patents, (both
registered and unregistered), copyrights,
industrial designs, trade secrets and any other
form of intellectual property right protection
afforded by law to inventions, designs or
technical information, and applications
therefor.
INTERMAGNETICS Shall mean Intermagnetics General Corporation.
Magnet system Shall mean magnet windings, cryostat, cryogenic
refrigerator and electronic monitor for MRI
systems.
[CONFIDENTIAL TREATMENT REQUESTED]
MRI system Shall mean a magnetic resonance imaging system
for medical imaging including components such as
gradient, radio frequency, spectrometer;
processing, physiology, patient handling and
user interface sub-systems, but for purposes of
this Agreement, shall not include Magnet
systems.
Page: 3
[CONFIDENTIAL TREATMENT REQUESTED]
Party(ies) Shall mean PHILIPS and/or INTERMAGNETICS and,
for purposes of Articles 10, 11 and 12 their/its
Associated Companies.
PHILIPS Shall mean Philips Medical Systems Nederland
B.V.
Product(s) Shall mean those products PHILIPS shall
[CONFIDENTIAL TREATMENT REQUESTED] purchase from
time to time from INTERMAGNETICS pursuant to the
terms of, and as more fully described in
[CONFIDENTIAL TREATMENT REQUESTED] Supply
Agreement(s).
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
Purchase Order Shall mean a written or electronic purchase
order issued to INTERMAGNETICS by PHILIPS.
[CONFIDENTIAL TREATMENT REQUESTED]
Spare Part(s) Shall mean replaceable part(s) of the Products
classified by the Parties in [CONFIDENTIAL
TREATMENT REQUESTED] Supply Agreements as field
replaceable units (FRU).
Specifications shall mean the requirements for a Product in
[CONFIDENTIAL TREATMENT REQUESTED]Supply
Agreement(s).
Substantially Similar shall be defined in a Schedule to [CONFIDENTIAL
Product(s) TREATMENT REQUESTED] Supply Agreement, for
defining the scope of any exclusivity.
Page: 4
Supply Agreement shall mean an agreement to govern supply and
service of Products and Spare Parts.
Term Duration of this Agreement as set forth in
Article 16.1.
Article 3
Quality System
3.1 INTERMAGNETICS shall establish, document and maintain an effective
quality system to ensure and demonstrate that all processes, in
particular the development, design, engineering and manufacture of
Products, are in conformance with the specified requirements and
standards contained in the Specifications.
3.2 INTERMAGNETICS will use its best efforts to ensure that its quality
system will continue to meet the requirements of ISO 9001.
3.3 INTERMAGNETICS shall verify by means of planned and periodic audits,
conformance to the requirements and standards of the quality system.
The results of these audits will be documented and will be available
for review by PHILIPS upon request.
3.4 INTERMAGNETICS agrees that audits with respect to the quality system
may be performed at INTERMAGNETICS' facilities by certain qualified
employees of PHILIPS, governmental bodies and official test houses to
the extent necessary for compliance to the requirements and standards.
Article 4
Environmental
4.1 INTERMAGNETICS represents and warrants that on the Effective Date, the
Products, Service Parts and packaging, do not contain banned substances
as specified in the PHILIPS list of banned substances set forth in
Schedule A, except for substances for which dispensation has been
requested by INTERMAGNETICS on the form of Part C of Schedule A to this
Agreement, and are in compliance with additional legislation, as
mentioned in Part B of Schedule A to this Agreement. For future
deliveries, INTERMAGNETICS is responsible for the implementation of
effective controls to assure continuous compliance with the above
requirements. In case INTERMAGNETICS cannot meet above requirements,
PHILIPS' approval is required prior to delivery, using the "Request for
Dispensation", Part C of Schedule A to this Agreement.
Page: 5
4.2 INTERMAGNETICS represents that on the Effective Date the Products,
Service Parts and packaging, are not manufactured with the ozone
depleting substances as specified in 40 CFR Part 82. If INTERMAGNETICS
cannot meet above requirements, PHILIPS' approval is required prior to
delivery, using the "Request for Dispensation", Part C of Schedule A to
this Agreement. INTERMAGNETICS must label such Products in compliance
with PHILIPS' written instructions.
4.3 INTERMAGNETICS will inform PHILIPS, from the Effective Date onwards, of
the presence of relevant substances in the Products, Service Parts and
packaging, as specified in PHILIPS list of relevant substances (Part D
of Schedule A to this Agreement).INTERMAGNETICS is responsible for the
implementation of effective controls on the use of these substances.
INTERMAGNETICS will inform PHILIPS on the use of these relevant
substances, using the "Declaration of Relevant Substances", Part D of
Schedule A to this Agreement.
4.4 INTERMAGNETICS will actively search for possibilities to replace banned
and relevant substances, including those for which a waiver has been
granted, which substances are specified in the PHILIPS list of banned
and relevant substances, Part B and Part D of Schedule A to this
Agreement.
4.5 INTERMAGNETICS shall comply with all applicable environmental E.U.,
U.S. Federal or International environmental laws, rules, regulations,
ordinances, covenants, standards and the like, and PHILIPS'
implementation thereof (collectively "Environmental Regulations")
concerning the Products, Service Parts and packaging as well as all
applicable US Federal and State environmental laws for plant
operations, enabling PHILIPS to distribute on a world-wide basis
Products, Service Parts and packaging as of the Effective Date.
Environmental Regulations can also include issues such as labeling
(e.g. in connection with the US Clean Air Act or US Department of
Transportation regulations), information requirements, and take-back
regulations relating to Products, Service Parts and packaging.
4.6 INTERMAGNETICS' obligation to take back Products, Spare Parts and
packaging as a result of one or more Environmental Regulations shall be
limited to those cases in which the reason for such return is based
solely on the failure of INTERMAGNETICS' Products, Spare Parts and
packaging to meet the requirements of such Environmental Regulation(s)
in effect at the time they were delivered, unless agreed otherwise.
4.7 In the event any new Environmental Regulation will be promulgated after
the Effective Date of this Agreement, the Parties will negotiate to
establish within a reasonable period of time equitable terms to prevent
or remedy any non-compliance by INTERMAGNETICS of this Article 4 as a
consequence of such promulgation to include such new Environmental
Regulation in the obligations of INTERMAGNETICS under this Article 4.
Page: 6
4.8 INTERMAGNETICS will use its best efforts to ensure that Products,
Service Parts and packaging are designed and manufactured in such a way
that these can be recycled or recovered at the end of their life cycle
without special precautions and that no hazardous residues will remain.
4.9 INTERMAGNETICS shall provide PHILIPS with the following information:
(a) prior to acceptance of the Products, Service Parts and
packaging, all Material Safety Data Sheets, in accordance with
the ISO 11014-1 Standard or 91/155/EC Directive for
components, materials and substances which during all phases
of the Product life-cycle, except relating to the
manufacturing as such, may be hazardous for human health;
(b) upon request, and at PHILIPS' expense, all necessary
information for disassembling and recycling of the Products,
Service Parts and packaging;
(c) an "Environmental Declaration for Products", Part A of
Schedule A to this Agreement, to confirm that the delivered
Products comply with all Environmental Requirements set forth
in this Agreement;
(d) prior to first delivery of a Product, a "Request for
Dispensation", Part C of Schedule A to this Agreement, if the
Product is not in compliance with the in Part B of Schedule A
to this Agreement;
(e) prior to first delivery of a Product a "Declaration of
Relevant Substances", Part D of Schedule A to this Agreement,
if one of the substances as specified in Part D is present in
the Product;
(f) prior to acceptance of the Product, all labeling information
as required by the Environmental Regulations.
4.10 INTERMAGNETICS shall control the environmental aspects of the design
and manufacturing through an adequate and effective environmental
management system complying with ISO 14001, including certification by
an accredited certification body. In case said system has not yet been
implemented or said certification has not yet been awarded prior to the
Effective Date of this Agreement, then INTERMAGNETICS shall use its
best efforts to achieve the requirements of this Article 4.10 by
September 1999.
4.11 INTERMAGNETICS undertakes on a best efforts basis to participate in
PHILIPS' environmental programs, such as:
(a) Reduction and elimination of Environmental banned and relevant
substances in Products.
(b) Reduction of Packaging weight.
(c) ECO-design.
(d) Re-usability of Products. (Design for recycling, less waste
by End of Life.)
INTERMAGNETICS will apply (within reasonable limits) the results of
such environmental programs in its implementation of this Agreement.
Page: 7
4.12 PHILIPS shall have the right to audit the implementation and adherence
to this Article 4, to assure continuous compliance with Environmental
Regulations.
Article 5
[CONFIDENTIAL TREATMENT REQUESTED] Consultation
5.1 Meetings
During the Term, senior representatives of the Parties shall meet
(either in person, video conference or by telephone) on a regular basis
as their relationship requires, but in any case not less than once
every calendar quarter, to confer on and review [CONFIDENTIAL TREATMENT
REQUESTED] issues including, but not limited to:
5.1.1 [CONFIDENTIAL TREATMENT REQUESTED]
5.1.2 [CONFIDENTIAL TREATMENT REQUESTED]
5.1.3 Continuity of supply
The Parties shall review the items covered in Article 9
(contingency plans, impending strike, regulatory compliance)
of this Agreement when deemed appropriate by either one of the
Parties.
5.1.4 Information/Data
The Parties will also discuss any other information, data,
etc. required to be provided from time to time under the terms
of this Agreement.
5.2 [CONFIDENTIAL TREATMENT REQUESTED]
5.3 [CONFIDENTIAL TREATMENT REQUESTED]
5.4 [CONFIDENTIAL TREATMENT REQUESTED]
5.5 Other Products
From time to time the Parties may explore the expansion of their
business relationship to include products other than Magnet systems.
5.6 Changes in Management
As they are foreseen and/or occur, the Parties shall discuss major
changes to their management and staffing critical to the mutual success
of their business relationship with the objective of preventing
disruptions to Product supply and/or the relationship of the Parties.
Page: 8
5.7 Contract Managers
PHILIPS and INTERMAGNETICS shall appoint a Contract Manager in their
respective organizations who shall be responsible for the organization
and implementation of strategic consultation and review meetings and
who shall be responsible for the implementation of all business and
supply related issues, including delegation of work within each
organization. The respective Contract Managers also shall meet (either
in person or by telephone) at least every 2 weeks to discuss day-to-day
business operations and keep minutes of the subject(s) discussed. The
Parties respective Contract Managers will be appointed by the
management of the Parties.
Article 6
[CONFIDENTIAL TREATMENT REQUESTED]
Article 7
(Reserved)
Article 8
[CONFIDENTIAL TREATMENT REQUESTED]
Article 9
Continuity of Supply
9.1 Contingency plans
To ensure continuity of purchase and supply, each Party shall prepare
contingency plans for the following events:
(a) A catastrophe, e.g., fire or explosion, which interferes with
the Party continuing its manufacturing operation;
(b) Major disruption of a critical process in a Party's
manufacturing operation;
(c) Major disruption in the Party's supply chain;
(d) Major disruption of transportation.
9.2 [CONFIDENTIAL TREATMENT REQUESTED]
Page: 9
9.3 Regulatory Compliance
Each Party will inform the other, through the Parties' strategic
consultations, of the status of its compliance with all significant
applicable governmental regulations that could interfere with
continuity of supply (e.g., Food and Drug Administration, Occupational
Safety and Health Administration, Environmental Protection Agency,
etc.).
Article 10
Intellectual Property Rights
10.1 Each Party shall retain exclusive ownership of its Background IPRs.
10.2 Foreground IPRs based on work performed solely by one or more
employee(s) of a Party under this Agreement shall be solely owned by
that Party.
10.3 In the event that during the term of this Agreement an invention is
made jointly (as defined under U.S. or E.U. patent law) by one or more
employees of INTERMAGNETICS and/or its Associated Companies and one or
more employees of Philips and/or its Associated Companies, the
invention shall be jointly owned by the Parties and each joint owner
shall have an equal, undivided interest in and to such joint invention,
as well as in and to Foreground IPRs thereon in all countries, subject
to the terms and conditions set forth below.
10.3.1 In case of joint inventions, each Party concerned shall
promptly inform in writing the other Party whose employee is
or employees are involved in such joint invention.
10.3.2 For non-patented joint Foreground IPRs, control and use of
such joint Foreground IPRs shall be as follows:
(a) Control over the potential filing of a patent application
is construed as follows:
o all joint Foreground IPRs regarding MRI systems will be
controlled solely by Philips;
o all joint Foreground IPRs regarding the interface
between the Magnet system and the MRI System will be
subject to Article 10.5 below;
o all joint Foreground IPRs regarding Magnet systems will
be controlled solely by INTERMAGNETICS.
(b) Subject to Articles 11.2, 11.3, 11.4 and 11.5:
o PHILIPS will retain control over the use of non-patented
joint Foreground IPRs regarding MRI systems.
o INTERMAGNETICS will retain control over the use of
non-patented joint Foreground IPRs regarding Magnet
systems.
Page: 10
10.4 The Party controlling the patent application process as described above
in Article 10.3.2 may decide at its sole discretion if it will prepare,
file and prosecute a patent application for joint Foreground IPRs under
its control, upon prior written approval of the other Party, which
approval will not be unreasonably withheld. The Parties will confer in
a timely manner regarding the patent application and countries in which
to file such application. All out of pocket costs related to
applications for joint Foreground IPRs shall be shared equally between
the Parties. The same applies for the maintenance fees and other costs
- but not including litigation - for such joint Foreground IPRs on
patents granted. If, however, the non-controlling Party is not
interested in filing an application for the joint Foreground IPRs, the
controlling Party may file or have filed such application at its own
expense and shall be the sole owner of any resulting Foreground IPRs
subject to a free, fully paid-up, non-exclusive, unrestricted license
for the lifetime of the Foreground IPRs concerned for the own use of
the non-controlling Party but the rights of third parties under already
existing licenses and agreements shall not be prejudiced. The
non-filing Party shall assign all other rights in such joint invention
to the filing Party at no charge.
10.4.1 The controlling Party shall be designated to maintain
applications for joint Foreground IPRs. The other Party shall
at its own cost furnish the filing Party with all documents,
or other assistance, that may be necessary for the filing and
prosecution of each such application.
10.4.2 If a patent is allowed for any joint Foreground IPRs, each
Party shall have the right to exercise its ownership of such
joint Foreground IPRs, including the non-assignable right to
grant non-exclusive licenses, under the Foreground IPRs on
such a joint invention without the consent of and without
accounting to the other owner, so long as the owner granting
such license fulfills its obligation, if any, to pay its
proportionate share of the costs related to such Foreground
IPRs on a joint invention.
10.5 Foreground IPRs on a joint invention regarding the interface between
the Magnet system and the MRI system will be treated as follows
("Interface Foreground IPRs"):
10.5.1 The filing of applications for Interface Foreground IPRs shall
be subject to mutual agreement between the Parties. The
Parties will agree within a reasonable period of time after
notification provided under Article 10.3.1, on an appropriate
course of action for filing such applications, including which
Party is to be designated with the preparation, filing and
prosecution of such applications and in which countries of the
world to file such applications for Interface Foreground IPRs.
All out of pocket costs related to applications for Interface
Foreground IPRs or IPRs resulting from such applications shall
be shared equally between the Parties. One of the Parties
shall be designated to file or have filed, prosecute and
maintain applications for Interface Foreground IPRs and any
IPRs resulting therefrom on joint inventions. The other Party
shall at its own cost furnish the filing Party with all
documents, or other assistance, that may be necessary for the
filing and prosecution of each such application.
Page: 11
10.5.2 If, however, one Party is not interested in filing an
application for Interface Foreground IPRs on a joint
invention, the other Party may file or have filed such
application at its own expense and shall be the sole owner of
any resulting Interface Foreground IPRs subject to a free,
fully paid-up, non-exclusive, unrestricted license for the
lifetime of the Interface Foreground IPRs concerned for the
own use of the Party who was not interested in filing such
application. The non-filing Party shall assign its rights in
such joint invention to the filing Party.
10.6 In the event that one of the joint owners of Foreground IPRs or a Party
filing an application for Foreground IPRs on a joint invention wants to
stop the payment of its share of the maintenance fees or other costs in
any particular country, the other owner may take over the payment of
such share. The Party discontinuing to pay its proportionate share for
one or more countries shall forthwith relinquish to the other Party
which continues such payments, its title to and interest in such
jointly owned Foreground IPRs for the countries concerned, subject,
however, to the retention of a free, fully paid-up, non-exclusive,
non-assignable and unrestricted license under the Foreground IPRs in
the countries concerned in favor of the relinquishing Party for the own
use of the relinquishing Party. However, the relinquishing owner shall
no longer have the right to grant licenses thereunder to third parties,
but the rights of third parties under already existing licenses and
agreements shall not be prejudiced. The rights of the relinquishing
Party in other (i.e., continued) countries shall not be affected.
10.7 A joint owner shall have the right to bring an action for infringement
of a jointly-owned Foreground IPR only with the consent of the other
owner. This consent may only be withheld if such action would be
prejudicial to the other owner's commercial interests as can be
demonstrated to the reasonable satisfaction of the joint owner
interested to bring such infringement action.
Article 11
IPR Licenses
11.1 Each Party hereby grants the other Party, subject to prior commitments,
a free, non-exclusive license, without the right to grant sublicenses,
under its Background IPRs and/or Foreground IPRs to the extent such IPR
is required by the other Party solely for performing the [CONFIDENTIAL
TREATMENT REQUESTED] Agreement.
11.2 Philips shall cause Koninklijke Philips Electronics N.V. to grant
hereby to INTERMAGNETICS a world-wide, irrevocable, fully paid up,
non-exclusive license, without the right to grant sublicenses, under
Philips' Foreground IPRs to make, have made - according to
INTERMAGNETICS' design -, use, sell, service, and practice any method
of Products and Substantially Similar Products taking into account the
exclusivity arrangement in Article 6 above.
Page: 12
11.3 INTERMAGNETICS hereby grants to Philips and to Philips' Associated
Companies a world-wide, irrevocable, fully paid up, non-exclusive
license, without the right to grant sublicenses, under INTERMAGNETICS'
Foreground IPRs to use, sell, lease, service, practice any method or
otherwise dispose of Products taking into account the exclusivity
arrangement in Article 6 above.
11.4 If INTERMAGNETICS willfully and with the intent to force termination of
this Agreement, fails to perform a material obligation hereunder
resulting in termination by PHILIPS pursuant Article 15.2(a), then the
license provided in Article 11.3 above, shall include the right, under
INTERMAGNETICS' Foreground IPRs to make, or have made by a third party,
the Products or natural commercial successors of the Products resulting
from the normal evolution of the design (but not to include material
reconfiguration that would result in the development of new products).
11.5 The licenses granted under Articles 11.2, 11.3 and 11.4 shall be for
the lifetime of the Foreground IPRs concerned.
11.6 Philips is prepared to cause Koninklijke Philips Electronics N.V. to
grant to INTERMAGNETICS at its request, subject to prior commitments, a
non-exclusive license under its Background IPRs against reasonable
terms and conditions to be agreed upon, provided that such license,
which shall be limited to the field of Products and Substantially
Similar Products, is demonstrated to the reasonable satisfaction of
Philips to be technically indispensable for INTERMAGNETICS in order to
operate under the licenses granted by Philips under Article 11.2
hereof.
11.7 INTERMAGNETICS is prepared to grant to Philips at its request, subject
to prior commitments, a non-exclusive license under its Background IPRs
against reasonable terms and conditions to be agreed upon, provided
that such license, which shall be limited to the field of Products, is
demonstrated to the reasonable satisfaction of INTERMAGNETICS to be
technically indispensable for Philips in order to operate under the
licenses granted by INTERMAGNETICS under Article 11.3, and Article 11.4
hereof but only if such Article becomes applicable.
11.8 The licenses granted by PHILIPS to INTERMAGNETICS under the Parties'
Amended and Restated Supply Agreement (dated November 13, 1998) shall
remain in full force and effect and are not intended in any way to be
limited by the terms and conditions of this Agreement.
11.9 Except for the licenses granted under this Agreement, PHILIPS shall
have no rights to, or ownership of, the specific design of the
Prototype and/or First Articles or the Product(s) or INTERMAGNETICS'
engineering or production technologies, to the extent such design
and/or technologies are proprietary to INTERMAGNETICS.
Page: 13
Article 12
Ownership of Information and Licenses
12.1 Each Party shall retain exclusive ownership of its Background
Information and the Foreground Information solely developed by one or
more employee(s) of that Party.
12.2 In the event that during the term of this Agreement and as a result of
and in the course of [CONFIDENTIAL TREATMENT REQUESTED] any Foreground
Information is jointly developed by one or more employees of Philips
and/or its Associated Companies and one or more employees of
Intermagnetics and/or its Associated Companies and the contributions of
both Parties are undividable, then both Parties will jointly own such
jointly developed Foreground Information and each joint owner shall
have an equal, undivided interest in and to such jointly developed
Foreground Information.
12.3 Each joint owner in accordance with Article 12.2, shall have the
non-assignable, non-exclusive and unrestricted right, including the
right to grant sublicenses to third parties, to use jointly developed
Foreground Information without the consent of and without accounting to
the other owner for the duration and within the scope of this Agreement
only. In case only one of the Parties upon termination of this
Agreement wishes to use such jointly owned Foreground Information the
Parties shall treat as Confidential Information the other Party's
interest or lack thereof in such jointly owned Foreground Information
until such other Party's interest or lack thereof , in such jointly
owned Foreground Information is, or otherwise becomes, generally known
or available through no act or disclosure of the other Party or its
personnel.
12.4 Each Party hereby grants the other Party, subject to prior commitments,
a free, non-exclusive license, without the right to grant sublicenses,
under its Background Information and/or Foreground Information to the
extent such Information is required by the other Party solely for
performing the work allocated to it under [CONFIDENTIAL TREATMENT
REQUESTED Agreement.
12.5 Philips shall cause Koninklijke Philips Electronics N.V. hereby to
grant to INTERMAGNETICS and its Associated Companies a world-wide,
fully paid up, perpetual and non-exclusive license, without the right
to grant sublicenses, to use its Foreground Information to make, have
made, use, sell or otherwise dispose of Products or Substantially
Similar Products.
12.6 INTERMAGNETICS and its Associated Companies hereby grant Philips and
its Associated Companies a world-wide, fully paid up, perpetual and
non-exclusive license, without the right to grant sublicenses, to use
its Foreground Information to use, sell, lease, service or otherwise
dispose of Products.
Page: 14
12.7 Philips and its Associated Companies are prepared to grant and to cause
Koninklijke Philips Electronics N.V. to grant to INTERMAGNETICS and its
Associated Companies at their request, subject to prior commitments, a
non-exclusive license under its Background Information against
reasonable terms and conditions to be agreed upon, provided that such
license, which shall be limited to the field of Products and
Substantially Similar Products, is demonstrated to the reasonable
satisfaction of Philips to be technically indispensable for
INTERMAGNETICS in order to exercise the licenses granted by Philips to
INTERMAGNETICS under Article 12.5.
12.8 INTERMAGNETICS and its Associated Companies are prepared to grant to
Philips and its Associated Companies at their request, subject to prior
commitments, a non-exclusive license under its Background Information
against reasonable terms and conditions to be agreed upon, provided
that such license, which shall be limited to the field of Products, is
demonstrated to the reasonable satisfaction of INTERMAGNETICS to be
technically indispensable for Philips in order to exercise the licenses
granted by INTERMAGNETICS to Philips under Article 12.6.
Article 13
Confidentiality
13.1 Confidential Information
All specifications, including the Specifications, drawings, industrial
designs, samples, marketing plans, software and all other information
disclosed in writing by either Party to the other and being marked as
"Confidential", "Proprietary" or similar indications or disclosed
visually or orally and confirmed in writing within 14 days after such
oral or visual disclosure, as well as the contents of this Agreement,
[CONFIDENTIAL TREATMENT REQUESTED] and any Supply Agreement, including
Purchase Orders placed pursuant to those agreements ("Confidential
Information"), shall be kept in strictest confidence by the receiving
Party, shall remain the disclosing Party's property, may be divulged
only to such of the receiving Party's personnel as has need to know and
as has undertaken to keep Confidential Information secret, and shall be
returned to the disclosing Party upon its request. Confidential
Information shall not be reproduced, disclosed or used by the receiving
Party except to the extent required for due performance of this
Agreement and the receiving Party shall protect Confidential
Information from further disclosure by itself and by its personnel in
the same manner as it would do with regard to its own Confidential
Information. Exceptions are allowed only after prior mutual agreement
or where required by law.
Page: 15
13.2 Duration
The Parties' obligations under this Article 13 shall continue for a
period of five (5) years after termination of this Agreement.
13.3 Exceptions
This Article 13 shall not apply to Confidential Information that the
receiving Party can demonstrate:
(a) is or becomes generally known or available through no act or
disclosure of the receiving Party or its personnel; or
(b) was available to the receiving Party prior to disclosure or
has been furnished to it by a third party entitled to disclose
same without restrictions as to disclosure or use or by the
other Party; or
(c) was, subsequent to disclosure, independently developed by the
receiving Party without use of Confidential Information; or
(d) is required to be disclosed under applicable law.
13.4 Confidential disclosure agreements with third parties
Neither Party shall enter into a confidential disclosure agreement with
a third party which would prohibit strategic consultation between
Parties as provided for in Article 5.2 and 5.3.
Article 14
Product Liability
14.1 In no event will INTERMAGNETICS' Product liability be greater for any
Prototype and/or First Article than for any Product purchased by
PHILIPS.
14.2 INTERMAGNETICS shall indemnify PHILIPS and all PHILIPS' Associated
Companies and assume the defense of, any and all claims for bodily
injury and/or death arising solely as a direct result of (i) design or
manufacturing defects in the Products, (ii) failure by INTERMAGNETICS
to provide PHILIPS with reasonable warnings with respect to known risks
(or risks which should have been known to INTERMAGNETICS) of bodily
injury or harm caused by the Product, except risks relating to magnetic
fields in general, or (iii) installation performed by INTERMAGNETICS of
Products sold to PHILIPS. If PHILIPS has actual notice that such a
claim shall be or has been made against it involving INTERMAGNETICS,
PHILIPS shall immediately inform INTERMAGNETICS in writing and allow
INTERMAGNETICS and its insurers the opportunity to conduct the defense
of such claim including possible negotiations for settlement. PHILIPS
shall cooperate fully with INTERMAGNETICS and its insurers in the
disposition of any such matters whenever reasonably requested to do so.
The obligations of INTERMAGNETICS to indemnify and defend shall not
extend to claims solely attributable to the negligence or intentional
malfeasance of PHILIPS or PHILIPS' Associated Companies, their agents,
distributors and/or their customers or other users of the MRI systems
nor to any claims attributable solely to or arising out of actions
solely by them which are outside the scope of or inconsistent with
INTERMAGNETICS' operating instructions and/or technical/maintenance
manuals.
Page: 16
14.3 PHILIPS shall indemnify INTERMAGNETICS against, and assume the defense
of, any and all product liability and other third party claims for
bodily injury and/or death arising or attributable (i) solely to the
use of those parts of the Products sold or provided free of charge by
PHILIPS to INTERMAGNETICS for incorporation in the Products, (ii) to
the effect of magnetic fields (iii) solely to the negligence or
intentional malfeasance of PHILIPS or PHILIPS' Associated Companies,
their agents or distributors or (iv) solely to parts of the MRI system
other than the Products supplied by INTERMAGNETICS. If INTERMAGNETICS
has actual notice that such a claim shall be or has been made against
INTERMAGNETICS involving PHILIPS, INTERMAGNETICS shall immediately
inform PHILIPS in writing and allow PHILIPS and its insurers the
opportunity to conduct the defense of such claim, including possible
negotiations for settlement. INTERMAGNETICS shall cooperate fully with
PHILIPS and its insurers in the disposition of any such matters,
whenever reasonably requested to do so. To this end, INTERMAGNETICS
shall keep records of all relevant design and test documentation which
INTERMAGNETICS normally keeps in order to defend product liability
claims at least thirteen years after delivery of each Product and on
request provide PHILIPS' insurers with copies thereof under relevant
confidentiality obligations, solely for the purpose of defending such
third party claims. The obligation of PHILIPS to indemnify and defend
shall not extend to claims attributable solely to the negligence or
intentional malfeasance of INTERMAGNETICS or INTERMAGNETICS' vendors or
agents.
14.4 Each Party shall maintain such insurance as it may deem necessary to
cover its Product liability, and upon the other Parties' request shall
produce for inspection these insurance policies and premium payment
receipts.
Article 15
Patent Indemnity
15.1 INTERMAGNETICS shall fully indemnify to the limit of the total invoice
value of any allegedly infringing Products, PHILIPS, PHILIPS'
Associated Companies, their distributors, agents and/or customers,
against all reasonable fines, losses, damages, costs and expenses
including attorney fees, arising from any valid claim brought by a
third party claiming that a Product (or any part thereof) infringes on
the third party's patent rights or other industrial or intellectual
property right; provided PHILIPS gives INTERMAGNETICS full authority,
at the option of INTERMAGNETICS, either to settle or to defend such
claim, suit or proceeding and - at INTERMAGNETICS' request and expense
- full cooperation, assistance and information as needed by
INTERMAGNETICS to address the claim. PHILIPS shall promptly notify
INTERMAGNETICS in writing of any allegation of infringement and shall
not make any admission without INTERMAGNETICS' prior consent. If the
use of any Product or Spare Part is enjoined, INTERMAGNETICS shall, at
its own expense and at its option, either procure for PHILIPS, the
PHILIPS' Associated Companies and their customers the right to continue
using Product and/or Spare Part, or replace same with a non-infringing
Product or Spare Part or modify it so that it becomes non-infringing,
always without substantially affecting the Product or Spare Part's
compatibility with PHILIPS' MRI system device in conjunction with which
it is to be used and without substantially affecting conformance to the
Specifications. INTERMAGNETICS' indemnification does not cover any
claim in respect of any patent or patent application of PHILIPS or
others of which PHILIPS or PHILIPS' Associated Companies is presently
aware that is to be used in Products to be supplied by INTERMAGNETICS
to PHILIPS under this Agreement and which it does not bring to
INTERMAGNETICS' attention before execution of this Agreement.
Page: 17
15.2 If and to the extent that the infringement is the result of (a) parts
supplied by PHILIPS, or (b) modifications or enhancements of Products
or Parts as specifically designed by PHILIPS or specifically requested
by PHILIPS to be implemented in the Products or Parts, INTERMAGNETICS
shall not be liable under this Article 15. INTERMAGNETICS shall not be
required to meet any design requests by PHILIPS if INTERMAGNETICS
advises PHILIPS that it would infringe patents of a third party in
order to meet such requests. INTERMAGNETICS' indemnification does not
extend to any suit based upon any infringement or alleged infringement
of any industrial or intellectual property rights on the basis of
combining, incorporating and/or inserting Products furnished by
INTERMAGNETICS into MRI systems if the infringement would be avoided by
the use of the Products alone. PHILIPS shall similarly indemnify
INTERMAGNETICS to the limit of the total invoice value of the allegedly
infringing Products for suits and proceedings and all reasonable
damages and costs awarded, including attorneys fees, with respect to
all these occurrences covered by this paragraph.
15.3 PHILIPS shall indemnify INTERMAGNETICS, to the limit of the total
invoice value of the Products, for alleged infringement of:
(a) OMT active shielded magnet patent US4587504 and its
corresponding patents/applications in any country;
(b) Siemens B-zero field compensation patent EP0299325 and its
corresponding patents/applications in any country; and
(c) any patent of any third party which cannot be avoided if
PHILIPS' active shielded magnet patent EP0138270 and/or its
corresponding patents/applications in any country are used.
PHILIPS' indemnification to INTERMAGNETICS for suits and proceedings
shall cover all reasonable damages, expenses and costs, including
attorney fees as provided above with respect to such Products using
such patents and supplied to PHILIPS.
Page: 18
15.4 The foregoing states the entire liability of INTERMAGNETICS and PHILIPS
respectively for infringement of the said rights by Products or any
Spare Parts.
Article 16
Duration and Termination
16.1 Term
The initial term of this Agreement shall commence on the Effective Date
through and up to 31 December 2005. Starting Calendar year 2001, at the
end of each calendar year of this Agreement, the term shall be extended
automatically for an additional twelve (12) month period, unless either
Party provides a written notice to the other of its intent to terminate
at the end of the then applicable term.
16.2 Termination
In addition to termination in accordance with Article 18, this
Agreement may be terminated as follows:
(a) If a Party is in material breach of this Agreement, the
non-breaching Party is entitled to give written notice to the
breaching Party. The notice must specify the breach and
provide a reasonable opportunity to remedy the breach to the
reasonable satisfaction of the non-breaching Party as quickly
as commercially reasonable but in any event no longer than six
(6) months.
If the breaching Party fails to remedy the breach, the
non-breaching Party is entitled to take any action open to it
under this Agreement and in law, including immediate
termination of this Agreement by notice in writing; provided,
however, that (i) neither Party shall be liable to the other
for any special or consequential damages at any time, and (ii)
any action is subject to the arbitration procedure set forth
in Article 19.8. In addition, if INTERMAGNETICS' breach is the
result of its repeated failure to supply Products on a
prolonged basis, the Parties will negotiate for a second
source of supply.
(b) Either Party may terminate this Agreement immediately by
written notice to the other Party in the event the latter
Party becomes insolvent, files or is the subject of a
bankruptcy action which is not dismissed within sixty (60)
days, has a receiver appointed, or makes an assignment for the
benefit of creditors.
Page: 19
(c) PHILIPS may terminate this Agreement upon two (2) years
written notice to INTERMAGNETICS if more than 50% of the
voting shares of INTERMAGNETICS are acquired by, or more than
a majority of INTERMAGNETICS' directors have been nominated
by, a principal competitor of PHILIPS in MR imaging.
(d) INTERMAGNETICS may terminate this Agreement upon two (2) years
written notice to PHILIPS if PHILIPS or its Associated
Companies acquire control over, or become controlled by, an
entity engaged in the manufacture of superconductive magnets
for MR imaging systems.
16.3 Effect of Termination
Any notice of termination given under this Agreement shall be deemed to
be a notice of termination under any [CONFIDENTIAL TREATMENT REQUESTED]
Supply Agreement. Termination of an individual [CONFIDENTIAL TREATMENT
REQUESTED] and/or Supply Agreement will not affect the Term of this
Agreement, any (other) Supply Agreement or any (other) [CONFIDENTIAL
TREATMENT REQUESTED] entered into by the Parties, unless such
termination constitutes a material breach under the terms of this
Agreement.
Article 17
Surviving Terms
17.1 In the event of termination of this Agreement, the provisions of
Articles 2, 4.6 , 10, 11, 12, 13, 14, 15, 17, 19.1, 19.5, 19.7, 19.8,
19.9, 19.10, 19.11, 19.12 of this Agreement shall survive.
17.2 Upon termination of this Agreement neither Party shall be liable to the
other Party except if otherwise stated in this Agreement.
Article 18
Force Majeure
18.1 Effect of Force Majeure
If either Party is prevented from or delayed in the performance of this
Agreement due to the occurrence of force majeure either Party shall be
entitled to suspend performance of its obligation for the duration of
the prevention or delay caused by such force majeure, without being
responsible for any damages resulting therefrom to the other Party.
18.2 Force Majeure Exceeding Three Months
If the period of prevention or delay caused by force majeure exceeds
three consecutive months, then either Party shall be entitled to
terminate this Agreement upon thirty (30) days written notice without
being liable for any damages whatsoever towards the other Party. This
does not affect however commitments which remain applicable upon
termination of this Agreement as stated elsewhere in this Agreement.
Page: 20
18.3 Information and Action by Affected Party
The Party affected by force majeure shall inform the other Party
promptly in writing specifying the force majeure as well as its
expected duration. The Party so affected shall take all reasonable
steps to limit the period of prevention or delay as much as possible.
18.4 Definition
The expression "force majeure" shall mean and include a happening or
event beyond a Party's reasonable control in consequence of which it
cannot execute or cannot reasonably be required to execute its
obligations. Such circumstances include but are not restricted to: acts
of God, war, civil war, insurrection, flood, strikes, epidemics,
governmental regulations, freight embargoes, non-availability of any
permits, licenses and/or authorizations required unless such
non-availability is attributable to the Party claiming the force
majeure. [CONFIDENTIAL TREATMENT REQUESTED]
Article 19
Miscellaneous
19.1 Entire Agreement
It is understood and agreed that this Agreement and the attached
Schedules contain the entire understanding between the Parties relating
to the subject matter and that any representation, promise, or
condition not contained in this Agreement shall not be binding on
either Party, unless otherwise agreed and confirmed in writing;
provided, however, that this Agreement shall not in any way affect or
supersede the Parties' obligations under the Amended and Restated
Supply Agreement dated November 6, 1998 and the Termination Agreement
dated April 29, 1999.
19.2 Non-applicability of Standard Terms and Conditions
The terms and conditions contained in this Agreement and the attached
Schedules shall take precedence over any standard terms and conditions
which appear on any documents previously or subsequently issued by
PHILIPS or INTERMAGNETICS under or with reference to this Agreement
inclusive of any Purchase Order or any documents incorporated by
reference, unless such document is signed by both Parties and
explicitly states that it is a modification of this Agreement.
19.3 Assignment
This Agreement shall be binding on the Parties hereto and their
successors and assigns, provided, however, that this Agreement may not
be assigned, transferred or hypothecated by either Party, in whole or
in part, directly or indirectly, without the prior written consent of
the other Party and provided further that either Party is entitled to
assign its rights (but not its obligations) under this Agreement in
part or in whole to any of its Associated Companies without the other
Party's consent.
Page: 21
19.4 Waiver
No failure by either Party to insist upon strict compliance by the
other Party with any of the terms, provisions or conditions of this
Agreement in any instance shall be construed as a waiver or
relinquishment by either Party of the other Party's rights to insist
upon strict compliance in the future.
19.5 Notices
Notices, consents, approvals and other communications from one Party to
the other pursuant to this Agreement shall be deemed to have been
sufficiently given if sent by registered airmail, or, by telefax or
telex confirmed the same day by registered airmail, and addressed as
specified below, or, addressed in such other manner as previously
notified in writing by the addressee. All communications shall be
deemed to have arrived, in the case of a communication by registered
airmail only as of the 6th (sixth) day following posting, and, in the
case of a communication by telefax or telex confirmed by registered
airmail, as of the business day following the day the telefax or telex
is dispatched.
Communications to PHILIPS shall be addressed as follows:
(by mail) : PHILIPS Medical Systems Nederland B.V.
f.a.o. General Counsel PMS
Veenpluis 6
P.O. Box 10000
5680 DA Best
The Netherlands
(by telefax) : ▇▇▇-▇▇-▇▇▇▇▇▇▇
with a copy to Purchasing Department MR
Communications to INTERMAGNETICS shall be addressed as follows to:
(by mail) : V.P. and General Manager, Magnet Business Group
Intermagnetics General Corporation
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇.▇.▇.
(by telefax) : + ▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to Intermagnetics' Finance Department
Page: 22
19.6 Modification of Agreement
This Agreement may not be modified or amended except by a writing
signed by the authorized representatives of the Parties which shall be
attached to this Agreement.
19.7 Consent
Whenever under this Agreement a Party's consent, permission, agreement,
acceptance, satisfaction or approval is required, it shall not be
unreasonably or arbitrarily withheld or delayed.
19.8 Applicable Law and Settlement of Disputes
This Agreement shall be governed by, and the rights of the Parties
shall be determined under, the laws of the State of New York, not
including New York rules of conflicts of laws or private international
law that may refer to the law of another jurisdiction as the applicable
governing law.
The Parties agree to endeavor to identify in advance issues that could
generate controversies or disputes, in order to permit their early
resolution by friendly negotiations, and to use their best efforts to
negotiate in good faith, for a period of sixty (60) days or such other
period as shall be mutually agreed upon by them, to resolve all such
controversies or disputes in an amicable manner. All disputes arising
out of or in connection with the interpretation or execution of this
Agreement during its life or thereafter shall be finally settled by
arbitration in New York City, New York, USA, accordingly to the Rules
of Conciliation and Arbitration of the International Chamber of
Commerce by three (3) arbitrators in accordance with the Rules. The
language of the arbitration shall be English. The award of the Court of
Arbitration shall be final and binding and may be enforced in any court
of competent jurisdiction.
19.9 Headings
Headings in this Agreement are included for convenience of reference
only and shall not constitute a part of this Agreement for any other
purpose.
19.10 Publicity
Neither INTERMAGNETICS nor PHILIPS shall, without the prior written
consent of the other Party, (a) make any news release or public
announcement, relating to this Agreement or its subject matter, nor (b)
in any manner advertise or publish the fact that Parties entered into
this Agreement except as required by law.
19.11 Trademarks
PHILIPS herewith grants INTERMAGNETICS the right to use the following
trademarks: (a) the word ▇▇▇▇ "Philips" and Philips' Shield Emblem and
(b) such other trademark(s) as may be designated at any time by Philips
on the Products during the Term, if INTERMAGNETICS strictly adheres to
the instructions of PHILIPS laid down in a Schedule to a Supply
Agreement. INTERMAGNETICS acknowledges all rights of PHILIPS in and to
the said trademarks and further agrees that the design, development,
manufacture and supply of Product(s), Spare Part(s), and packing, if
any, bearing such trademarks shall not be construed as a grant of any
rights in such trademarks or as the use of such trademarks, either on
or relating to INTERMAGNETICS' products, in INTERMAGNETICS' sales
literature or other publications, or otherwise, by or for the benefit
of INTERMAGNETICS without PHILIPS' prior written consent.
Page: 23
19.12 Severability
If any of the provisions of this Agreement are held to be void or
unenforceable by or as a result of a determination of an arbitrator or
judicial authority having competent jurisdiction, the decision of which
is binding upon the Parties with respect to one or more of the
countries to which this Agreement applies, the Parties agree that such
determination shall not result in the nullity or unenforceability of
the remaining portions of this Agreement in such country(ies). The
Parties further agree to replace such void or unenforceable provisions
of this Agreement with respect such country(ies) by valid and
enforceable provisions which will achieve, to the extent possible, the
economic, business and other purposes of the void or unenforceable
provisions. The provisions so determined to be void or unenforceable
shall, however, remain in full force and effect with respect to all
other countries to which this Agreement applies.
IN WITNESS WHEREOF the parties have caused this Agreement to be signed by their
authorized representatives:
INTERMAGNETICS GENERAL PHILIPS MEDICAL SYSTEMS
CORPORATION NEDERLAND B.V.
Signature /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Signature /s/ Ir. C.F. Knoet
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Ir. C.F. Knoet
President and Director PMC MR/CT/EVM
Chief Operating Officer
Date: 30 April 1999 Date: 28 April 1999
INTERMAGNETICS GENERAL PHILIPS MEDICAL SYSTEMS
CORPORATION NEDERLAND B.V.
Signature: /s/ ▇▇▇ ▇▇▇▇▇▇▇ Signature: /s/ ▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇
VP and General Manager Director
Magnet Business Group PMG Magnetic Resonance
Page: 24
Date: 30 April 1999 Date: 29 April 1999
INTERMAGNETICS GENERAL PHILIPS MEDICAL SYSTEMS
CORPORATION NEDERLAND B.V.
Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ Signature: /s/ ▇▇▇▇ van der Plas
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ van der Plas,
Marketing Manager Purchasing Manager
Magnet Business Group PMG Magnetic Resonance
Date: 30 April 1999 Date: 29 April 1999
Page: 25