EXHIBIT 10.42
(CRYOCATH LOGO)
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement") is made as of November ▇▇▇ ,
▇▇▇▇, (▇▇▇ "Effective Date") by and between CRYOCATH TECHNOLOGIES INC., a
corporation organized and existing under the laws of Quebec, Canada, with its
principal offices at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇) ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(hereinafter referred to as "Manufacturer" or "CryoCath"), and ATS Medical,
Inc., a corporation organized and existing under the laws of Minnesota with its
principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S.A., (hereinafter referred to as "Distributor").
In consideration of the mutual promises contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS
As used in this Agreement, the terms set forth in this Article 1 shall have
the following meanings:
1.1 Products. Products shall mean those products listed in Exhibit A
attached hereto, as amended from time to time by the Manufacturer and
communicated in writing to Distributor.
1.2 Territory. Territory shall mean all countries except for USA,
Italy, , Australia, Sweden, Denmark, Finland, Luxemburg, Spain, Portugal,
Hungary, and the Czech Republic, Slovakia, Norway, Iceland, Mexico.
1.3 Contract Quarter. Contract Quarter shall mean a period of three
consecutive calendar months beginning on January 1, April 1, July 1, or
October 1.
1.4 Purchase Commitment shall have the meaning set forth in Section
3.2.
1.5 Standard Terms and Conditions of Sale. Standard Terms and
Conditions of Sale shall mean Manufacturer's terms and conditions of sale
for its products, as modified by Manufacturer from time to time and
communicated in writing to Distributor.
1.6 Trademarks. Trademarks shall mean those trademarks and trade
names, whether registered in the Territory or not, labeling, trade dress,
packaging and devices which are owned by, licensed or assigned to
Manufacturer or which it otherwise has aright to use and which are applied
to or used with the Products by Manufacturer
** The appearance of a double asterisk denotes confidential information that
has been omitted from the exhibit and filed separately, accompanied by a
confidential treatment request, with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934.
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ARTICLE 2. APPOINTMENT: EXCLUSIVITY; COMPETING PRODUCTS; PRICES
2.1 Appointment. Subject to the terms of this Agreement, Manufacturer
appoints Distributor as its exclusive distributor of the Products in the
Territory in accordance with the terms of this Agreement and Distributor
accepts this appointment. Such appointment does not constitute a grant of
any rights or interests other than the rights specifically granted to the
Distributor hereunder and does not constitute a license or sub-license of
the Products. If the Distributor fails to meet the Purchase Commitment,
Distributor's appointment will automatically become non-exclusive for the
remaining term of this Agreement, as set forth under Section 3.2.
2.2 Exclusivity. Subject to Distributor's compliance with the terms of
this Agreement, Manufacturer shall sell the Products for delivery in the
Territory only to Distributor.
2.3 Promotion and Sale of Products only within Territory. Distributor
shall promote and sell the Products to customers only for use or
consumption within the Territory.
2.4 Competing Products. Manufacturer or Distributor shall neither
distribute nor market products competitive with the Products during the
Term as defined in Section 17.1 and any renewal of this Agreement without
the prior written consent of either Party. It is understood that
Manufacturer is restricted from selling Products in Agent's Territory
during the term of the Agreement. If either Party does not approve the
other Party's request for representation of competitive products, the other
Party must refuse to or cease representing the competitive products.
Distributor shall not make any changes, alterations, modifications or
additions to the Products without the prior written approval of CryoCath.
2.5 Prices. Manufacturer shall sell Products to Distributor at prices
previously communicated in writing by Manufacturer to its Product
distributors generally from time to time. Subject to the Purchase
Commitment as described in Section 3.2, the prices to be charged to the
Distributor initially under this Agreement will be the prices set out in
Exhibit A under "Distributor Price". A price adjustment will be made by
Distributor with payment made to Distributor or deducted from payments owed
by Distributor on the 30th day following the preceding quarter to which it
applies. ** With respect to resale prices to be charged by Distributor to
customers, Distributor shall have the right to determine the price of the
Products within the Territory but will be guided by the prices listed for
the Products in Exhibit A. Notwithstanding the generality of the foregoing,
Distributor will not sell Products at prices below the Distributor Price in
Exhibit A, as amended from time to time, without prior written approval
from Manufacturer.
ARTICLE 3. PROMOTION AND SALE OF PRODUCTS
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3.1 Commercially Reasonable Efforts. Distributor shall exercise its
commercially reasonable efforts to promote and sell the Products for use
only by qualified individuals as appropriate in the Territory, in
compliance with local laws and regulations and good commercial practice and
for uses and applications reasonably approved by Manufacturer for the
Products. Distributor shall only sell directly to end users of the Products
and shall not sell indirectly or engage sub-distributors without the prior
written consent of Manufacturer. Distributor shall be subject to
performance criteria applied to distributors of the Products in general, as
communicated in writing by Manufacturer from time to time, after discussion
and agreement with the Distributor. Manufacturer shall use commercially
reasonable efforts to promptly obtain and maintain government approvals to
import, register and market the Products in each jurisdiction in the
Territory. The decision to obtain government approvals in each jurisdiction
in the Territory will be made jointly based on the economic viability for
both parties of marketing products in such jurisdictions. Such decisions
may require agreement to special adjustments referred to in Section 2.5
determined on a jurisdiction-by-jurisdiction basis. In the event that a
decision is made jointly not to pursue marketing of products in a given
jurisdiction under this agreement, then Manufacturer may at his option be
permitted to market products in such jurisdiction directly or indirectly
without the Distributor. Distributor will diligently secure and maintain,
as may be required from time to time, government importing, import and
export licenses, customs clearances and currency authorizations and any
other permits necessary in each jurisdiction in the Territory. Manufacturer
will diligently secure and maintain, as may be required from time to time,
government registration and marketing approvals in each jurisdiction in the
Territory and shall submit to the government health authorities in each
jurisdiction in the Territory where the sale of the Products is agreed to a
complete application for registration and marketing plan.
3.2 Purchase Commitment. In addition to the commercially reasonable
efforts commitment described herein, Distributor hereby agrees to purchase
from CryoCath ("Purchase Commitment") and for each renewal year term
thereafter, the dollar value in Products set forth on the Purchase
Commitment, Exhibit C. Distributor must meet the annual Purchase
Commitments at the end of each twelve-month term and must meet 40% of the
first term's commitment by the end of the first 9 months of that first term
and 40% of the second term's commitment by the end of the first nine months
of the second term (hereafter referred to as the "Interim Term Targets").
It is understood that the initial period referred to with respect to the
interim and annual purchase commitments will be for 15 months and will
commence as of January 1, 2005. Subsequent periods will be for twelve
months commencing on April 1, 2006 and April 1 each year thereafter.
CryoCath shall transfer to Distributor as of January 1, 2005 all its
existing customer accounts it has in the Territory identified in Section
1.2.. Distributor shall pay a one time compensation fee to CryoCath for the
transferred accounts on January 1, 2005 an amount equal to **
Throughout the term of this Agreement, if Distributor fails to purchase
Distributor's Purchase Commitment at any time or meet the Interim Term Targets,
Distributor's appointment may at CryoCath's option, be terminated or may
automatically become non-exclusive for the remaining
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term of this Agreement subject to a 30-day cure period, without prejudice to
CryoCath's other rights under this Agreement (including the right to terminate
this Agreement upon written notice to Distributor) and CryoCath may appoint one
or more additional agents or Distributors for sale of the Products or solicit
orders for the Products directly in the Territory for the remaining term of this
Agreement. Products returned to CryoCath for reason other than Product defect
shall not count towards the fulfillment of Distributor's relevant Purchase
Commitment. Purchase Commitments for the second twelve-month period are to be
negotiated mutually between the parties 6 months prior to the expiration of the
First Twelve Month Period such that ** Purchase Commitments will be adjusted as
new jurisdictions are added during the term of this agreement. Throughout the
term of this Agreement, if Distributor fails at any time to purchase
Distributor's Purchase Commitment or meet the Interim Term Targets,
Distributor's appointment may at CryoCath's option, automatically become
non-exclusive for the remaining term of this Agreement subject to a 30-day cure
period, without prejudice to CryoCath's other rights under this Agreement
(including the right to terminate this Agreement upon written notice to Agent)
and CryoCath may appoint one or more additional agents or Distributors for sale
of the Products or solicit orders for the Products directly in the Territory for
the remaining term of this Agreement. Products returned to CryoCath for reason
other than Product defect shall not count towards the fulfillment of
Distributor's relevant Purchase Commitment. The Purchase Commitment in year two
of the term of this Agreement will be established by Manufacturer in
consultation with Distributor after the third Contract Quarter and will be
confirmed in writing by the Manufacturer prior to the commencement of year 2 and
similarly for each renewal period thereafter.
3.3 Facilities. Subject to Article 16 hereof, Distributor shall
maintain, lease or contract with such offices, warehouses, and sales
facilities as are necessary to fulfill its duties under this Agreement.
3.4 Personnel. Distributor shall maintain such competent and qualified
sales and service personnel as are required to meet its duties under this
Agreement. Manufacturer agrees to train the individual responsible for
training Distributor's personnel in each major jurisdiction. In all cases,
such training will take place at Manufacturer's offices or at a place and
times agreed to by Manufacturer.
3.5 Inventories. Distributor shall, at Distributor's own expense,
maintain a sufficient inventory of the Products at all times during the
term of this Agreement as necessary to meet the requirements of any
customer or potential customer within the Territory. Without restricting
the generality of the foregoing, Distributor agrees to maintain inventory
levels at not less than ** of forecasted requirements.
3.6 Promotional Materials. In promoting the Products in the Territory,
Distributor shall not use promotional materials contrary to the best
interest of the Manufacturer. Manufacturer reserves the right to require
prior approval of the promotional materials and advertising campaigns.
Manufacturer will provide to Distributor reasonable amounts of such
promotional materials that it provides to its own representatives, at no
cost. Certain promo materials will be available at cost.
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3.7 Reports. Commencing on the first day of the second Contract
Quarter after the Effective Date, Distributor shall provide Manufacturer on
the fifteenth day of each Contract Quarter with a written report containing
information concerning the following:
(a) Distributor's sales volumes and prices in each country for
each of the Products for the preceding Contract Quarter;
(b) Distributor's promotional activities regarding the Products
for the preceding Contract Quarter;
(c) a summary of current market conditions for the Products,
including information concerning introductions, promotional activities
and sales levels of products competitive with the Products;
(d) forecasts of prospective purchase orders and anticipated
sales volumes for the Products during the succeeding two Contract
Quarters; and
(e) forecasted purchase order submission dates.
3.8 Warranties. Manufacturer's standard warranty of its Products shall
apply to the sale of the Products to Distributor as contained in
Manufacturer's terms and conditions of sale, as may from time to time be
modified by Manufacturer, and Distributor shall extend such warranty to its
customers. Manufacturer shall honor the claims of Distributor's customers
within the limits of the warranties offered by Manufacturer to Distributor.
Distributor shall offer no other warranties concerning the Products without
the prior written authorization of Manufacturer.
3.9 Customer Complaints. Distributor shall report to Manufacturer no
later than within 48 hours of receipt all customer complaints of any nature
concerning the Products and all notices of serious or adverse reaction
associated with the use of the Products, and cooperate with Manufacturer in
the resolution of such complaints. Distributor shall maintain records of
such complaints for at least two years after their receipt and shall make
such records available to Manufacturer for inspection and copying upon
Manufacturer's request at any time during Distributor's normal business
hours.
3.10 Assistance of Government Officials. Without Manufacturer's prior
written approval or as required by law, Distributor shall not hire, retain,
or make payment of any kind to government or regulatory officials of the
Government of the Territory or of any jurisdiction within the Territory, or
their relatives to assist Distributor in marketing the Products.
3.11 Storage Practices, etc. Distributor shall conform its sales,
storage and quality control practices to those written standards provided
by Manufacturer to Distributor from time to time.
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3.12 Sales Records. Distributor shall prepare accurate and orderly
business and accounting records concerning its inventories and sales of the
Products. Distributor shall maintain these records for a period of at least
two years after the Contract Quarters to which they apply. Distributor
shall provide Manufacturer with copies of such records within fifteen (15)
days of any written request by Manufacturer. Manufacturer may request, and
Distributor agrees to comply with such request, an audit of Distributor's
sales records for the purpose of verifying the accuracy of Manufacturer's
price charged to Distributor through out the life of the Agreement.
Manufacturer will be responsible for the cost of such audit provided that
Distributor's records reflect actual end user sales to within 98%. In the
event that the audit reveals accuracy of such records to be lower than 98%,
Distributor will bare the cost of such audit.
3.13 Shelf Life. Distributor shall maintain its inventory so as to
sell the Products only during their applicable shelf lives as communicated
to Distributor by Manufacturer from time to time. Manufacturer shall not be
obligated to compensate Distributor for Products that Distributor is unable
to sell within or after their shelf lives.
3.14 Inspections. During Distributor's normal business hours,
Distributor shall permit representatives of Manufacturer after reasonable
notice to inspect Distributor's facilities and inventory to ensure that
Distributor is meeting applicable quality control standards and otherwise
exercising its best efforts in storing, promoting, selling and delivering
the Products.
3.15 Samples. The Manufacturer shall supply the Distributor with ** at
Manufacturer's fully absorbed cost and a reasonable number of surgical
consoles not for human use at **.
Conference and Marketing Booth. Distributor agrees to attend the following
conferences (ATS to attach list) each year for the promotion of Products. In
addition, Agent agrees to dedicate 25% of its Marketing booth sales
representative stations to CryoCath. CryoCath agrees to display ATS's name as
Distributor of its Products in its booth at such Surgical conferences that it
attends and at which it has booth space.
ARTICLE 4. MANUFACTURER ASSISTANCE TO DISTRIBUTOR
To assist Distributor in registering and marketing the Products in the
Territory, Manufacturer shall:
(i) Provide Distributor with materials necessary to obtain health
registrations, to the extent practicable. Such documentation shall be
provided in English. Translation expense will be borne by the
Distributor.
(ii) Provide Distributor with information on marketing and promotional
plans with respect to the Products as well as copies of marketing,
advertising, sales and promotional literature concerning the Products
produced by or for CryoCath, if any. Such documentation shall be
provided in English. Translation expense will be borne by the
Distributor.
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(iii) Provide Distributor with certain certificates of analysis concerning
the Products purchased by Distributor, certificates of free sale,
trademark authorizations and any other documents which Distributor may
require for registration purposes, at Distributor's request and
expense, if available. Such documentation shall be provided in
English. Translation expense will be borne by the Distributor.
(iv) Provide Distributor with Field Service Manual, Field Service
Procedures and requisite forms required to service CryoCath Products,
as amended from time to time by CryoCath. Such documentation shall be
provided in English. Translation expense will be borne by the
Distributor.
(v) Distributor agrees subject to the terms identified in Section 17 of a
Termination or Early Termination of this agreement that Distributor
will transfer at Manufacturer's cost all registration and regulatory
files of Product's to Manufacturer.
ARTICLE 5. ADDITION AND DELETION OF PRODUCTS FROM AGREEMENT
5.1 Addition of Products. From time to time new Products may be added
to those covered by this Agreement by amendment of Exhibit A in accordance
with Article 18.7.
5.2 Deletion of Products. Manufacturer may delete specific Products,
provided such Products are replaced with next generation Products, from
coverage by this Agreement upon (30) thirty-day written notice to Agent,
which notice includes an amendment of the attached Exhibit A reflecting the
deletion. No such deletion shall be deemed a termination or partial
termination of this Agreement.
Manufacturer's address. Distributor shall mail or fax all orders for
the Products to the following address:
CryoCath Technologies Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attention: Customer Service
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
or to such other address or facsimile number as Manufacturer shall from
time to time designate in writing.
5.3 Information in Distributor's Orders. In connection with each order
of Products, Distributor shall provide Manufacturer with the following
information:
(a) purchase order number;
(b) billing address;
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(c) name, list number, and quantity of Products being ordered;
and
(d) preferred warehouse of delivery.
5.4 Precedence of Agreement over Purchase Orders. In the event of
conflict between the terms of this Agreement and the terms of any purchase
order form or other document submitted by Distributor to Manufacturer in
connection with any order for the Products, this Agreement shall control
unless the parties specifically otherwise agree in writing.
ARTICLE 6. TERMS AND CONDITIONS OF SALE AND DELIVERY OF PRODUCTS;
NON-CONFORMING AND NON-DELIVERED PRODUCTS
6.1 Acceptance of Orders. All orders for Products submitted by
Distributor shall be initiated by written purchase orders sent to CryoCath
and shall request a delivery date during the term of this Agreement;
provided however that an order may initially be placed orally or by
facsimile. A written or facsimile confirmation purchase order is to be
received by CryoCath within twenty-four (24) hours after an oral order is
placed. No order shall be binding upon CryoCath until accepted by CryoCath
in writing, and CryoCath shall have no liability to Distributor with
respect to purchase orders that are not accepted. No partial shipment of an
order shall constitute the acceptance of the entire order. CryoCath shall
use commercially reasonable efforts to deliver Products at the times
specified either in CryoCath's quotation or in CryoCath's written
acceptance of Distributor's purchase orders. CryoCath will send a facsimile
acceptance or non-acceptance of purchase orders within two business days.
6.2 Taxes, Stamp , Duties, Prices and Currency; Charges for Handling,
Shipping and Insurance. All sales of the Products to Distributor under this
Agreement shall be at Manufacturer's then- current prices, in U.S. dollars,
as reflected on Exhibit A. Manufacturer may change these prices and this
currency upon thirty (30) days' written notice to Distributor, which notice
includes an appropriate amendment to Exhibit A. In each invoice in respect
of any such sale, Manufacturer shall ▇▇▇▇ Distributor at currently
applicable prices, plus Manufacturer's customary handling charges including
taxes and Manufacturer's shipping and insurance expenses.
6.3 Method of Payment. Distributor shall pay for all Products ordered
under this Agreement by wire transfer of funds to Manufacturer's account as
specified in Manufacturer's shipping invoice for such Products. Payment
shall be made within thirty (60) days of Distributor's taking possession of
ordered Products. Arrears shall bear interest at the rate of 18% per annum,
or 1.5% per month.
6.4 Method of Delivery; Passage of Title; Risk of Loss. Manufacturer
shall deliver each order of Products hereunder by delivering to the carrier
identified by Distributor FOB at Manufacturer's plant, or such other
facility as utilized by
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Manufacturer. Distributor shall pay all freight, duty and taxes. Upon
Manufacturer's delivery of each order for Products, Manufacturer shall
promptly give Distributor notice of such delivery. Manufacturer may give
such notice by first-class mail or by confirmed facsimile to Distributor's
principal office. Risk of loss and title to such Products will pass to
Distributor upon Manufacturer delivering at the carrier as above mentioned.
6.5 Delay in Shipment. Manufacturer shall endeavor to ensure prompt
delivery to Distributor of all Products ordered by Distributor under this
Agreement but shall not be liable for loss or damage suffered by
Distributor as a result of any delay in shipment or delivery.
6.6 Non-Conforming and Undelivered Goods.
Procedure for notification regarding non-conforming and non-delivered
goods. If any shipment of Products intended by Manufacturer to be delivered
to Distributor in response to any order contains any non-conforming
Product, contains fewer than the number of units of Products ordered by
Distributor or is not delivered to Distributor on the date agreed upon by
the parties, Distributor shall notify Manufacturer by facsimile within
fifteen (15) days after that date, precisely specifying the non-conformity
or non-delivery in question. If Distributor fails to provide Manufacturer
on a timely basis with any notice required by this Article 6.6 with respect
to any shipment of Products ordered by Distributor, Distributor shall be
deemed to have acknowledged the timely delivery and conformity of all
Products covered by that order.
ARTICLE 7. ADDITIONAL EXPRESS WARRANTIES AND DISCLAIMER
7.1 Warranty. Manufacturer warrants to Distributor that the Products
purchased by Distributor shall materially conform to CryoCath's
then-current specifications for such Products for the shelf life of such
Products as set forth in the label of each such Product ("Distributor
Warranty Period"). Distributor's exclusive remedy and CryoCath's sole
liability for breach of the foregoing warranty shall be the remedy set
forth in Section 7.2.
7.2 Defective Products. In the event that any Product fails to conform
to the warranty set forth in Section 7.1, CryoCath's sole and exclusive
liability, and Distributor's exclusive remedy shall be, at CryoCath's sole
election, to replace the Product or credit Distributor's account for the
purchase price of such Product; provided, however, that: (a) Distributor
promptly notifies CryoCath in writing during the Distributor Warranty
Period that such Product fails to conform to the warranty set forth in
Section 7.1, provides a detailed explanation of any alleged nonconformity,
and requests a return material authorization number; and (b) such Product
is returned within the Warranty Period to CryoCath F.O.B. CryoCath's
shipping location in ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, or as otherwise notified by
CryoCath, with the return material authorization number affixed prominently
to the outside packaging. If CryoCath verifies that such Product fails to
conform to the warranty set forth in Section 7.1, CryoCath will replace the
Product or credit Distributor's account for the purchase price of such
Product.
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7.3 Disclaimer. TO THE FULL EXTENT PERMITTED UNDER APPLICABLE LAW,
EXCEPT FOR THE WARRANTIES PROVIDED IN SECTIONS 7.1 and 7.2, CRYOCATH
DISCLAIMS ALL OTHER WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY
OR OTHERWISE, REGARDING THE PRODUCTS, INCLUDING WITHOUT LIMITATION,
WARRANTIES OF THEIR QUALITY, FITNESS FOR ANY PURPOSE, OR MERCHANTABILITY.
ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ANY PERSON OR ENTITY,
INCLUDING EMPLOYEES OR REPRESENTATIVES OF CRYOCATH, THAT ARE INCONSISTENT
HEREWITH SHALL BE DISREGARDED AND SHALL NOT BE BINDING ON CRYOCATH.
7.4 Limitation of Liability. **
ARTICLE 8. TECHNICAL SERVICE, WARRANTY COVERAGE AND SERVICE CONTRACTS
8.1 Technical Service. Distributor certifies that they have the
technical capabilities and knowledge to provide optimal service on the
Manufacturer's Products. Technical Service is defined as the ability to
maintain and service critical and non-critical components, calibrate and
troubleshoot all electronic, mechanical and vacuum systems contained within
the CryoConsole.
8.2 Warranty Obligation to Customer. In addition to the specific
warranty described in Section 7.1, Manufacturer warrants that the products
sold shall be free from defects in material and workmanship for a period of
12 months from date of installation at customer's site (the "Customer
Warranty Period"). During the Customer Warranty Period, Manufacturer will
supply all parts used in servicing such products, excluding gas and
disposable products and accessories. Distributor shall provide all warranty
service to the end user free of charge while the unit is covered during the
Customer Warranty Period. Distributor will complete preventive maintenance
visits on the equipment during the Customer Warranty Period as required.
Distributor shall provide all non-warranty service at reasonable rates for
all Products in the Territory. Non-warranty service shall include,
electronic set-up and calibration as well as operational troubleshooting.
Distributor shall maintain properly equipped service departments and an
adequate inventory of spare parts sufficient to meet the needs of the
Territory. Distributor shall use only Manufacturer's authorized parts and
gases. Failure to do so completely voids all warranty obligations of
Manufacturer and shall be considered a material breach of this Agreement.
Manufacturer is not responsible for product failures due to power failures
or natural catastrophes of any kind.
8.3 Warranty Replacement Parts. Warranty parts shall be replaced free
of charge, provided validation by Manufacturer verifies that the failure
was due to defects in material and/or workmanship and that all parts are
properly returned to Manufacturer. The defective part(s) shall be replaced
from the Distributor's service department inventory prior to the defective
part(s) being returned to Manufacturer. The proper written documentation
describing the exact defect(s) of the Product must be included.
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Manufacturer's obligation is limited to the repair or replacement, at its
option, of any warranted Product that is returned.
8.4 Interchangeability. Due to the complexity and interchangeability
of the components, the use of new or like new parts may be used at the
discretion of the Manufacturer. All such parts shall be refurbished and
will meet Manufacturer's specifications and high quality standards in force
on the date of shipment.
8.5 Non-Warranty Replacement Parts. Non-warranty parts will be
provided on an exchange basis at Manufacturer's current Distributor List
Price attached as Exhibit A and as amended from time to time by the
Manufacturer. The Distributor shall pay shipping costs and all insurance,
taxes, fees, duties, and other charges incurred in connection with the
shipment of defective and replacement parts to and from Manufacturer's
facility.
8.6 Warranty Procedures. All Warranty claims hereunder must be made
in writing promptly after discovery of the defect and must be received by
Manufacturer's service department within the applicable warranty period.
Such claims shall state the nature and details of the claim, the date on
which the defect giving rise to the claim was first discovered, and the
product serial number and must be attached to the defective product.
Distributor shall request authorization from Manufacturer prior to the
return of each defective product for repair or replacement by Manufacturer.
Upon such request, Manufacturer shall provide the address of the facility
to which such product must be returned, together with a Return Material
Authorization (RMA) number to be prominently displayed on the shipping
container for the defective product. Manufacturer's obligation is limited
to the repair or replacement, at its option, of any warranted Product that
is returned to Manufacturer in Manufacturer's standard shipping container
or properly packed in accordance with Manufacturer's packing procedures,
freight prepaid, in which Manufacturer's examination shows the product to
have failed under normal use. Upon determination of product failure,
Manufacturer will reimburse Distributor for shipping costs related to the
return of the defective product to Manufacturer's facility. Manufacturer
may, at its sole option, employ new or used parts for Products to make such
repair or replacement. Any Products replaced under this warranty shall
become Manufacturer's property. Notwithstanding any contrary provisions of
this Agreement, Manufacturer shall be responsible for all shipping expenses
and bear risk of loss relating to the return shipment to Distributor of
repaired or replacement Products which were under warranty.
8.7 Service Contracts. Distributor shall have the exclusive right to
provide service for the Products in the Territory, however, Manufacturer
may at its option, provide service directly from time to time. Service
Contracts shall be substantially in the form attached as Exhibit D and
shall be sold in accordance with the pricing described in Exhibit A.
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ARTICLE 9. TRADEMARKS
9.1 Use of Manufacturer's Name. Distributor shall be entitled to
represent within the Territory in promotional materials and otherwise that
it is Manufacturer's exclusive distributor of the Products in the Territory
provided that Distributor remains in compliance with its obligations under
this Agreement.
9.2 Sale Only Under the Trademarks. Distributor shall promote and
sell the Products in the Territory only under the Trademarks and the
CryoCath name. Distributor will be permitted to apply a business card size
sticker with Distributor's name on CryoCath's promotional literature for
Surgical Products and on the side of the console's control unit on the
opposite side of the power supply placed in Distributor's Territory.
9.3 Use of Trademarks. Manufacturer and Distributor undertake not to
use the Trademarks in a manner that will impair the name or jeopardize the
goodwill or the reputation of the Products or either Party, and to use the
Trademarks in accordance with the standards and specifications of both
Parties.
9.4 Distributor Waiver. Both Parties shall not have, assert or
acquire any right, title or interest in or to any Trademark owned by the
other Party.
9.5 Distributor Acknowledgment of Validity. Distributor acknowledges
the validity of the Trademarks and shall not take any action that may
impair any right, title or interest of Manufacturer in any Trademark or
that may create any such right, title or interest adverse to Manufacturer.
9.6 Prohibition of Use of Trademarks on Other Products. Distributor
shall not use any Trademark except in connection with the Products.
9.7 Notice of Infringement of Trademarks. Distributor shall promptly
notify Manufacturer of any apparent infringement or threatened infringement
of any Trademark, and shall, upon request by Manufacturer and at
Manufacturer's expense, use its commercially reasonable efforts to assist
Manufacturer to restrain any such infringement or threatened infringement.
ARTICLE 10. PRODUCT RECALLS
In the event that Manufacturer, after consultation with Distributor,
deems it necessary to recall any Product because such Product fails to
comply with the warranties set forth in Section 8.1 hereof, or if any
governmental authority requests recall of any Product for any reason,
Distributor shall promptly effect such recall in accordance with its
standard procedures then in effect. Distributor shall keep CryoCath fully
informed as to the status of such recall. Distributor shall initiate no
communications regarding any such recall with the news media, customers,
governmental or regulatory authorities, except if and to the extent
required by applicable law, without the prior approval of CryoCath, which
approval will not be unreasonably withheld or delayed. All costs and
expenses associated with implementation of a recall shall be borne by: (a)
Manufacturer, if the recall results from fault attributable to
Manufacturer; or (b) Distributor, if the recall
12
results from fault attributable to Distributor; provided that each party
will provide, at its expense, any assistance reasonably requested by the
other party in connection with the implementation of any recall pursuant to
this Section.
ARTICLE 11. CLAIMS AGAINST MANUFACTURER AND DISTRIBUTOR; INDEMNIFICATION
AND INSURANCE
11.1 Product Liability Claims and Patent Infringement ;
Indemnification by Manufacturer. Manufacturer shall have full and
exclusive responsibility for the defense of any claim, lawsuit or other
action in which it is alleged that a Product supplied hereunder by
Manufacturer has caused injury to a third party or infringes on a third
party's patent, and shall hold Distributor harmless with respect to any
such claim, lawsuit or other action. Manufacturer shall indemnify
Distributor from and against any damages, costs or expenses, including
reasonable attorneys' fees, which are incurred by Distributor and which
arise from any such claim, lawsuit or other action, save when such claim,
lawsuit or action arises as a result of Distributor's mishandling or
mislabeling the Product, or when Distributor misrepresented the Product's
efficacy, safety or warranty, or when attributable to Distributor's acts,
negligence or omissions. However, none of the foregoing shall apply if the
claim or loss is due solely or in part to the act or omission of Agent.
11.2 Actions Against Distributor; Indemnification by Distributor.
Distributor shall have full and exclusive responsibility for the defense of
any claim, lawsuit or other action which is brought against Distributor and
in which it is alleged that Distributor has committed an act or made an
omission contrary to the terms of this Agreement or that any employee or
agent of Distributor has caused injury to a third party in carrying out or
failing to carry out any duty of Distributor under this Agreement, or as a
result of their acts, negligence or omissions. Distributor shall indemnify
Manufacturer for any damage, cost or expense, including reasonable
attorneys' fees, which is incurred by Manufacturer in connection with any
such claim, lawsuit or other action and in connection with any claim,
lawsuit or other action arising as a result of Distributor's mishandling or
mislabeling the Product or of Distributor misrepresenting the Product's
efficacy, safety or warranty, or of Distributor's acts, negligence or
omissions.
11.3 Insurance. Each of the parties shall obtain and maintain in
effect insurance coverage ** as to cover adequately the types of liability
occasioned by the indemnities described above as well as such other
insurable risks as may arise whenever either party sends its employees,
agents or subcontractors to the premises of the other party.
11.4 Survival. The obligations of the parties under sections 11 and
12 shall survive the expiration or the termination of this Agreement.
ARTICLE 12. CONFIDENTIALITY
Either Party acknowledges that by reason of their relationship hereunder, either
Party will have access to certain information and materials concerning the other
Party's business plans, customers, technology, and products that are
confidential and of substantial value to it, which
13
value would be impaired if such information were disclosed to third parties.
Either party agrees that both Parties will not use in any way for their own
account or the account of any third party, nor disclose to any third party, any
such confidential information revealed to the receiving Party by each other.
Both Parties shall take every reasonable precaution to protect the
confidentiality of such information. Upon request by either party, the
disclosing Party shall advise the receiving Party whether or not it considers
any particular information confidential. The Distributor shall not publish any
technical description of the Products beyond the description published by
CryoCath. In the event of termination of this Agreement, there shall be no use
or disclosure by either party of any confidential information of CryoCath or
Distributor, and Distributor shall not manufacture or have manufactured any
compositions, devices, components or assemblies utilizing any of CryoCath's
confidential information. Without the disclosing Party's prior consent,
receiving Party shall not directly or indirectly disclose any confidential or
proprietary information received pursuant to this Agreement, including but not
limited to such information specifically designated as confidential by the
disclosing Party. This duty shall not apply to:
(a) Information which is already known to receiving Party at the time of
its disclosure to the receiving Party;
(b) Information disclosed to receiving Party by a third party as a matter
of right; or
(c) Information, which becomes patented, published or otherwise part of
the public domain as a result of acts of the disclosing Party or a
third party obtaining such information as a matter of right.
The parties also agree to maintain the terms of this Agreement in strict
confidence.
ARTICLE 13. DISTRIBUTOR AUTHORIZATIONS
13.1 Distributor Warranty. Distributor warrants that it is legally
authorized to import the Products into the Territory and to distribute them
therein and that it will exercise its commercially reasonable efforts to
maintain these authorizations during the term of this Agreement. Upon
request by Manufacturer, Distributor shall provide Manufacturer with
evidence of these authorizations.
13.2 Disqualification. Distributor shall immediately notify
Manufacturer if it suffers the loss or impairment of any license, permit or
other authorization that it requires in order to import the Products into
the Territory or to distribute them therein.
13.3 Product Registrations. Manufacturer shall use its commercially
reasonable efforts to obtain and to maintain and, to the extent lawful, in
Manufacturer's name any product registrations, market authorizations,
licenses or other government approvals required from time to time for the
importation, distribution and sale of the Products in the Territory.
14
ARTICLE 14. COMPLIANCE WITH APPLICABLE LAW
Distributor shall comply with all laws, statutes, decrees, regulations and
policies which have the effect of law in the Territory, including but not
limited to anti-bribery laws, and which apply to its activities under this
Agreement.
ARTICLE 15. LEGAL RELATIONSHIP
No provision of this Agreement is intended by the parties or shall be
construed to establish Distributor as Manufacturer's officer, agent, employee,
or legal representative. Distributor has no authority under this Agreement to
assume any obligation on behalf of Manufacturer and shall not hold out to any
third party that it has authority to act on behalf of Manufacturer. In all of
its activities under this Agreement, except as specifically herein provided or
otherwise authorized by Manufacturer in advance and in writing, Distributor
shall be responsible for its own expenses and shall not incur expenses for
Manufacturer's account.
ARTICLE 16. ADEQUACY OF DISTRIBUTOR'S FACILITIES
Distributor acknowledges that Distributor's present office facilities,
warehousing facilities and personnel are adequate for the purpose of
distributing the Products in the Territory in compliance with this Agreement and
that no further investment in these facilities or in this personnel is required
to accomplish this purpose. Distributor agrees that once Distributor takes
possession of Products delivered by Manufacturer, Distributor shall separately
contract with such carriers and warehouses for the shipment and warehousing of
the Products from the time of Distributor's taking possession until
Distributor's sale of the Products to third-party customers.
ARTICLE 17. TERM AND TERMINATION
17.1 Term. This Agreement shall take effect on the Effective Date and
unless earlier terminated under the provisions of this Agreement, it shall
be effective for a two (2) year period following the Effective Date. It
shall be subject to automatic renewal for additional terms of one (1) year
each if the Purchase Commitment is met for the preceeding year or upon
express written agreement of the parties.
17.1.1 Early Termination. Manufacturer may terminate the Agreement at
any time for any reason. **
17.2 Termination for Breach, Insolvency. Either party may
immediately terminate this Agreement by written notice to the other party
upon the occurrence of any of the following events:
(a) if the other party materially breaches any of its duties
under this Agreement and fails to correct this breach within thirty
days after receiving written notice thereof;
(b) if the other party enters bankruptcy proceedings voluntarily
or involuntarily, assigns its assets for the benefit of creditors or
otherwise becomes or is threatened with becoming insolvent;
15
17.3 Distributor Disqualification. Manufacturer may terminate
Distributor's right to a Territory immediately and without any liability to
Distributor by providing written notice to Distributor if Distributor
becomes legally disqualified for any reason from importing or distributing
the Products in the Territory. or if Distributor loses any license or other
authorization that it is required to have under the laws of the Territory
for the importation, promotion or sale of the Products.
17.4 Consequences of Termination. In the event of a termination of
this Agreement under any provision of Articles 17.1 through 17.3:
(a) The term of this Agreement shall automatically terminate, but
this termination shall not relieve either party of any duty accrued
during that term or from any duty expressly provided in this Agreement
to survive that term.
(b) In the event that Distributor meets its annual Purchase
Commitments as defined in Section 3.2 or;
Distributor elects to Early Termination of the agreement as defined in
Sec 17.1.1,
**
It is understood that the twelve month notification period and
Compensation Fee would not apply in the event that the Agreement is
terminated because Distributor does not meet any of the purchase
minimums referred to in section 3.2.
(c) Both parties shall cease using and return to Manufacturer all
information designated by either Party as confidential and all sales,
advertising and promotional materials supplied to Distributor by
Manufacturer. Distributor shall provide a customer list of
Distributor's accounts which have purchased Product over the agreement
period . Both Parties shall for a period of five (5) years after
termination continue to hold in strict confidence all such
information.
(d) Manufacturer will repurchase from Distributor Distributor's
inventory of Products, such that such inventory may ** of Distributors
past sales in the Territory, that are in saleable condition and with
remaining shelf lives exceeding 9 months for the same price that
Distributor paid for this inventory. In the event that inventory is
not repurchased by Manufacture from Distributor, the Distributor will
be permitted to sell such inventory to end-users at the current agreed
upon prices in the Territory. In the event that this agreement is
terminated due to Distributor's failure to meet the annual Purchase
Commitments defined under this agreement then Manufacturer shall not
be obligated to re-purchase such inventory.
(e) Both Parties shall immediately cease using any of the
Trademarks.
(f) Upon request by Manufacturer, Distributor shall take all
necessary or appropriate actions to transfer to Manufacturer or its
designee any Product , permits, consents or other approvals by
government agencies obtained by
16
Distributor in order to import, distribute or sell the Products in the
Territory. The reasonable costs of such transfer shall be borne by
Manufacturer.
g) If payments under 17.4(b) are not being paid by Manufacturer
to Distributor, then manufacturer will repurchase all accounts from
Distributor that Distributor purchased from Manufacturer at the
beginning of this agreement. **
ARTICLE 18. GENERAL PROVISIONS
18.1 Notices. All notices under this Agreement shall be in writing
sent by courier, first-class mail or by confirmed facsimile, or otherwise
as provided by Section 19.2 hereof, and shall be addressed to the parties
at the addresses set forth below;
In the case of Manufacturer:
CRYOCATH TECHNOLOGIES INC.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attn: Vice-President, Sales and Marketing
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
In the case of Distributor:
ATS Medical
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Att. VP Business Development
Fax (▇▇▇)▇▇▇-▇▇▇▇
A party may change its address designated above by giving written
notice to the other party.
18.2 Notice Periods. All notice periods provided in this Agreement
shall be deemed to begin running (a) in the case of notice by letter sent
by first-class or registered mail, on the third day following the date of
posting; (b) in the case of notice by facsimile or other telegraphic
communication, on the date when the communication is sent and confirmed;
and (c) in the case of any other method of notice, on the date when the
notice is actually received.
18.3 Waiver of Rights. No failure or delay by either party in
exercising any right or remedy under this Agreement shall be construed as a
waiver of such right or remedy, nor shall any single or partial exercise of
any right or remedy preclude any further or other exercise of such right or
remedy. All rights and remedies under this Agreement are cumulative and
shall not be deemed exclusive of any other rights or remedies provided by
law.
17
18.4 Assignments. Distributor may not assign all or any part of its
rights or duties under this Agreement without the prior written consent of
the other party. Manufacturer may not assign all or any part of its rights
or duties under this Agreement without the prior written consent of the
other party except for in such cases as may be required for insurance,
taxation or financing.
18.5 Force Majeure. Neither party shall be liable for any failure to
perform provisions of this Agreement or supply the Products due to war,
whether declared or undeclared, acts of war or terrorism, embargo, strikes,
fires, explosions, flood, riot, lockout, injunction, interruption of
transportation, accidents, or other similar causes beyond its control.
18.6 Severability. If any provision of this Agreement is declared
invalid by any court of competent jurisdiction or by a government agency
having jurisdiction over the Agreement, this declaration shall not affect
the validity of any other provision and each other provision shall remain
in full force and effect.
18.7 Entire Agreement; Amendments. This Agreement, including the
attached Exhibits, contains the entire agreement of the parties with
respect to the subject matter hereof. This Agreement supersedes and cancels
all prior oral and written agreements between the parties with respect to
this subject matter. Except as otherwise provided herein, this Agreement
may be amended only by an agreement in writing signed by both parties.
18.8 Rights and Remedies. Nothing in this Agreement limits or
restricts the rights or remedies available to the parties under the
applicable law.
18.9 Governing Law; Forum. The law of the Province of Ontario and
Canada shall govern the interpretation and enforcement of this Agreement.
18.10 Headings. All section headings in this Agreement are for
convenience only and shall not in any way affect the meaning or
interpretation of the Agreement.
18.11 Language. This Agreement has been drafted in the English
language at the express request of the parties. Ce contrat a ete redige en
anglais a la demande expresse des parties.
18.12 Non Solicit. During the term of this Agreement and for a period
of 12 months thereafter, either Party will not, whether for itself or on
behalf of another, except if mutually agreed upon in writing, directly or
indirectly ecourage, solicit, entice, hire or cause any employees or
consultants of the other Party to leave their working relationship.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their authorized representatives as of the Effective Date written above.
18
CryoCath Technologies Inc. ATS Medical, Inc.
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Title: Title:
------------------------------ ---------------------------------
Date: Date:
------------------------------- -----------------------------------
19
EXHIBIT A - SURGICAL PRODUCTS AND PRICES
**
20
EXHIBIT B
REGULATORY REQUIREMENTS
21
EXHIBIT C
PURCHASE COMMITMENT
**
22
EXHIBIT D
SERVICE CONTRACT
23
Exhibit D
(CRYOCATH LOGO)
xxxxxxxxx
xxxxxxxxxxx
xxxxxxxxxxx
Dear xxxxxxxxxxx:
We would like to inform you that the warranty on your SurgiFrost(C) Surgical
CryoAblation System has expired (or will expire), as of (date).
We are pleased to offer your hospital the opportunity to purchase our service
contract for the SurgiFrost(C) Surgical CryoAblation System. The SERVICE
AGREEMENT is designed to keep your CryoAblation system in top operating
condition and at the leading edge of CryoTherapy technology. The price of our
service agreement is xxxxx E per year.
The SurgiFrost(C) Surgical CryoAblation System SERVICE AGREEMENT includes the
following:
12 HOUR, 5 DAY EMERGENCY PHONE SUPPORT
Our Technical Support Specialists are available to answer your questions on the
use of the SurgiFrost(C) Surgical CryoAblation System. Emergency Phone Support
is available throughout Europe from 7:00 a.m. to 7:00 pm (CET), five days a week
(European phone number when available).
DEPOT SERVICE/SWAP SYSTEM
If required, your SurgiFrost(C) Surgical CryoAblation System will be sent to our
home office for repairs and a replacement system will be provided.
If you wish to purchase this service agreement, please fill out the service
agreement form and fax to ▇▇-▇▇▇-▇▇▇-▇▇▇▇.
THIS OFFER IS VALID FOR 30 DAYS FROM THE ABOVE DATE. USER MISHANDLING WILL VOID
THE SERVICE AGREEMENT.
Do not hesitate to contact your Account Executive, ▇▇▇▇▇ ▇▇▇▇▇▇▇ at (514)
694-1212 ext. 393 or ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, European Sales Administrator, at 41 21
641 1652 for additional information.
Sincerely,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President European Sales
CryoCath Technologies Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
T ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ F ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇
Exhibit D
(CRYOCATH LOGO)
CRYOCATH TECHNOLOGIES INC. SERVICE AGREEMENT FOR SURGIFROST(R) SURGICAL
CRYOABLATION SYSTEM
Agreement to purchase the Cryocath Technologies Inc's Service contract for
_____ years at XXXX E per year effective as of _________________.
THE SERVICE AGREEMENT INCLUDES:
- 12 HOUR, 5 DAY EMERGENCY SUPPORT
- DEPOT SERVICE / SWAP SYSTEM
Date:
-------------------------------------------
Hospital:
--------------------------------------------------------
Account number: 00100000002bGCP
---------------------
Console Serial number: CSC-093
----------------
Contact Person: phone number:
------------------------------- ------------------
Signature: Title:
---------------------------------------- ---------------------
PO#
-----------------------
Please fill out form and fax to ▇▇-▇▇▇-▇▇▇-▇▇▇▇.
CryoCath Technologies Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
T ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ F ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇