<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 12, 1997
REGISTRATION NO. 333-29573
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 2
TO
REGISTRATION STATEMENT ON FORM S-4
UNDER
THE SECURITIES ACT OF 1933
---------------
PREMIER LASER SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<S> <C> <C>
CALIFORNIA 3841 33-0476284
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
---------------
3 MORGAN, IRVINE, CALIFORNIA 92618
(714) 859-0656
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
COLETTE COZEAN, PH.D.
CHIEF EXECUTIVE OFFICER
PREMIER LASER SYSTEMS, INC.
3 MORGAN, IRVINE, CALIFORNIA 92618
(714) 859-0656
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT OF SERVICE)
---------------
COPIES TO:
THOMAS G. BROCKINGTON, ESQ.
SCOTT SANTAGATA, ESQ.
RUTAN & TUCKER
611 ANTON BOULEVARD, SUITE 1400
COSTA MESA, CALIFORNIA 92626
(714) 641-5100
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective and
all other conditions
to the merger described in the enclosed Prospectus and Proxy Statement have
been satisfied or waived.
---------------
If any of the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
TITLE OF EACH CLASS OF MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, no
par value(1)........... 1,500,000 shares Not Applicable $1,003,871.03(2) $ 304.20(2)
- -----------------------------------------------------------------------------------------
Options to Purchase
Class A Common Stock... 165,250 shares Not Applicable -- $ --
- -----------------------------------------------------------------------------------------
Class A Common Stock, no
par value(3)........... 165,250 shares Not Applicable -- $ --
- -----------------------------------------------------------------------------------------
Class A Common Stock, no
par value.............. 325,000 shares(4) $10.50(5) $3,412,500 $1,034.09(6)
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>
(1) Based upon the Registrant's estimate of the maximum number of shares that
may be issued in the merger described herein. Pursuant to the Merger,
shares of Class A Common Stock of the registrant ("Common Stock") will be
issued to (a) holders of convertible subordinated notes, preferred stock or
common stock of EyeSys Technologies, Inc. ("EyeSys") or (b) certain
creditors and claimants of EyeSys as payment for services or settlement of
claims.
(2) The registration fee was calculated in accordance with Rule 457(f)(2) under
the Securities Act of 1933, as amended, based on one-third of the sum of
(i) the aggregate par value of the stock to be cancelled in the merger
(assuming the exercise of all outstanding warrants and options to purchase
such stock) and (ii) the principal amount of the notes to be cancelled in
the merger. The amount shown was previously paid.
(3) Issuable upon exercise of Options to Purchase Class A Common Stock to be
granted as a result of the Merger to holders of options and, in certain
circumstances, holders of warrants to purchase EyeSys Common Stock and
employees of EyeSys entitled to bonuses.
(4) Shares of Class A Common Stock being registered for resale by Dominick and
Dominick Incorporated ("Dominick"). Consists of shares of Class A Common
Stock issuable upon the exercise of presently outstanding warrants which
were granted to Dominick in consideration for services rendered to Premier
in connection with the Merger.
(5) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c), as of August 5, 1997.
(6) This registration fee was previously paid.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The California General Corporations Laws provides that California
corporations may include provisions in their articles of incorporation
relieving directors of monetary liability for breach of their fiduciary duty
as directors, except for the liability of a director resulting from (i) any
transaction from which the director derives an improper personal benefit, (ii)
acts or omissions involving intentional misconduct or a knowing and culpable
violation of law, (iii) acts or omissions that a director believes to be
contrary to the best interests of the Registrant or its shareholders or that
involves the absence of good faith on the party of the director (iv) acts or
omissions constituting an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the Registrant or its shareholders, (v)
acts or omissions showing a reckless disregard for the director's duty to the
Registrant or its shareholders in circumstances in which the director was
aware or should have been aware, in the ordinary course of performing a
director's duties, of a risk of serious injury to the Registrant or its
shareholders, (vi) any improper transaction between a director and the
Registrant in which the director has a material financial interest, or (vii)
the making of an illegal distribution to shareholders or an illegal loan or
guaranty. The Registrant's Articles of Incorporation provide that the
Registrant's directors are not liable to the Registrant or its shareholders
for monetary damages for breach of their fiduciary duties to the fullest
extent permitted by California Law.
The inclusion of the above provision in the Articles of Incorporation may
have the effect of reducing the likelihood of derivative litigation against
directors and may discourage or deter shareholders or management from bringing
a lawsuit against directors for breach of their duty of care, even though such
an action, if successful, might otherwise have benefitted the Registrant and
its shareholders. At present, there is no litigation or proceeding pending
involving a director of the Registrant as to which indemnification is being
sought, nor is the Registrant aware of any threatened litigation that may
result in claims for indemnification by any director.
The Registrant's Articles of Incorporation provide that the Registrant is
authorized to indemnify its directors and officers to the fullest extent
permitted by California Law, including circumstances in which indemnification
is otherwise discretionary under California Law. The Registrant has entered
into indemnification agreements with certain of its directors and officers
that require the Registrant to indemnify such directors and officers to the
fullest extent permitted by law. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act, and is, therefore, unenforceable.
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.1 Agreement and Plan of Merger dated as of April 24, 1997 among Premier
Laser Systems, Inc., EyeSys Technologies, Inc. and Premier Acquisition
of Delaware, Inc. Previously filed as Exhibit A to the
Prospectus/Proxy Statement.
3.1 Amended and Restated Articles of Incorporation as filed with the
California Secretary of State on November 23, 1994. (incorporated
herein by this reference to Exhibit 4.8 to the Registrant's Quarterly
Report on Form 10-QSB for the Quarter ended December 31, 1994)
3.2 Bylaws of the Registrant, as amended. (incorporated herein by this
reference to Exhibit 3.3 to the Registrant's Registration Statement on
Form SB-2, Registration No. 33-83984)
4.1 Form of Common Stock Certificate. (incorporated herein by this
reference to Exhibit No. 4.4 to the Registrant's Registration
Statement on Form SB-2, Registration No. 33-83984)
4.2 Form of "Premier Option" (previously filed).
5.1 Amended and Restated Opinion of Rutan & Tucker regarding legality
(previously filed).
8.1 Opinion of Rutan & Tucker regarding tax matters (previously filed).
10.1 Letter Agreement and Patent License Agreement dated August 29, 1991
among the Registrant, Patlex Corporation and Gordon Gould.
(incorporated herein by this reference to Exhibit 10.1 to the
Registrant's Registration Statement on Form SB-2, Registration No. 33-
83984)
10.2 Assignment Agreement dated July 27, 1992 between the Registrant and
Michael Colvard, M.D. (incorporated herein by this reference to
Exhibit 10.2 to the Registrant's Registration Statement on Form SB-2,
Registration No. 33-83984)
10.3 Gold Catalyst Licensing Agreement dated April 16, 1992 between the
Registrant and Optical Engineering, Inc. (incorporated herein by this
reference to Exhibit 10.3 to the Registrant's Registration Statement
on Form SB-2, Registration No. 33-83984)
10.4 Assignment and Modification Agreement dated July 26, 1991 among the
Registrant, Pfizer Hospital Products Group and Medical Laser
Technologies Limited. (incorporated herein by this reference to
Exhibit 10.4 to the Registrant's Registration Statement on Form SB-2,
Registration No. 33-83984)
10.8 Letter Agreement dated October 13, 1987 between Pfizer Laser Systems,
Inc. and Duke University, together with Patent Assignment as filed in
the U.S. Patent and Trademark Office on October 23, 1993.
(incorporated herein by this reference to Exhibit 10.8 to the
Registrant's Registration Statement on Form SB-2, Registration No. 33-
83984)
+10.10 Lead Generation/Distribution Agreement dated March 17, 1994 between
the Registrant and Burkhart Dental Supply Company. (incorporated
herein by this reference to Exhibit 10.10 to the Registrant's
Registration Statement on Form SB-2, Registration No. 33-83984)
10.12 Form of International Distribution Agreement. (incorporated herein by
this reference to Exhibit 10.12 to the Registrant's Registration
Statement on Form SB-2, Registration No. 33-83984)
10.13 Letter of Intent between the Registrant and Richard Leaderman, D.D.S.,
together with related Patent Assignments as filed in the U.S. Patent
and Trademark Office on February 22, 1994. (incorporated herein by
this reference to Exhibit 10.13 to the Registrant's Registration
Statement on Form SB-2, Registration No. 33-83984)
+10.14 Exclusive Marketing Agreement dated July 26, 1994 between the
Registrant, Proclosure, Inc. and Nippon Shoji Kaisha, Ltd.
(incorporated herein by this reference to Exhibit 10.14 to the
Registrant's Registration Statement on Form SB-2, Registration No. 33-
83984)
10.15 Form of Indemnification Agreement. (incorporated herein by this
reference to Exhibit 10.23 to the Registrant's Registration Statement
on Form SB-2, Registration No. 33-83984)
10.16 Industrial Lease dated December 6, 1995 between the Registrant and
Irvine Company. (incorporated herein by this reference to Exhibit
10.22 to the Registrant's Annual Report on Form 10-KSB for the fiscal
year ended March 31, 1996)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.17 Use and Cost Sharing Agreement dated December 1, 1995 between the
Registrant and Biopsys Medical, Inc. (incorporated herein by this
reference to Exhibit 10.23 to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended March 31, 1996)
10.18 Purchase/Supply Agreement dated January 13, 1987 between Infrared
Fiber Systems, Inc. and Pfizer Hospital Products Group, Inc., as
amended. (incorporated herein by this reference to Exhibit 10.26 to
the Registrant's Registration Statement on Form SB-2, Registration No.
33-83984)
10.19 Letter of Intent dated October 19, 1995 between the Registrant and
International Biolaser Corporation, together with related Promissory
Note dated October 19, 1995 payable to Registrant in the original
principal amount of $125,000, and Security Agreement dated October 19,
1995 between the Registrant and International Biolaser Corporation.
(incorporated herein by this reference to Exhibit 10.24 to the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1996)
10.20 Share Exchange Agreement dated December 20, 1995 among the Registrant,
658994 Alberta Ltd., 658997 Alberta Ltd. and Mattan Corporation.
(incorporated herein by this reference to Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-QSB for the quarter ended
December 31, 1995)
10.21 Purchasing Agreement dated December 20, 1995 between the Registrant
and Mattan Corporation. (incorporated herein by this reference to
Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-QSB for
the quarter ended December 31, 1995)
10.22 Exclusive Licensing Agreement dated June 1, 1992 between the
Registrant and Quentin M. Murphy, D.D.S. (incorporated herein by this
reference to Exhibit 10.27 to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended March 31, 1996)
10.23 Broker Agreement dated March 13, 1996 among the Registrant, First
National Marketing Services, Inc. and William F. Sullivan.
(incorporated herein by this reference to Exhibit 10.29 to the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1996)
10.24 Form of Consulting Agreement. (incorporated herein by this reference
to Exhibit 10.30 to the Registrant's Annual Report on Form 10-KSB for
the fiscal year ended March 31, 1996)
10.25 Radiation Services Agreement dated January 10, 1994 between the
Registrant and SteriGenics International. (incorporated herein by this
reference to Exhibit 10.31 to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended March 31, 1996)
10.26 Form of Warrant Agreement (including forms of Class A and Class B
Warrant Certificates). (incorporated herein by this reference to
Exhibit 4.1 to the Registrant's Registration Statement on Form SB-2,
Registration No. 33-83984)
10.27 Form of Underwriter's Unit Purchase Option. (incorporated herein by
this reference to Exhibit 4.2 to the Registrant's Registration
Statement on Form SB-2, Registration No. 33-83984)
10.28 Form of Finders' Unit Purchase Option. (incorporated herein by this
reference to Exhibit4.3 to the Registrant's Registration Statement on
Form SB-2, Registration No. 33-83984)
10.29 1992 Stock Option Plan, together with form of Nonqualified Stock
Option Agreement and form of Incentive Stock Option Agreement.
(incorporated herein by this reference to Exhibit 4.5 to the
Registrant's Registration Statement on Form SB-2, Registration No. 33-
83984)
10.30 1995 Employee Stock Option Plan, together with form of Nonqualified
Stock Option Agreement and form of Incentive Stock Option Agreement.
(incorporated herein by this reference to Exhibit 10.34 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
March 31, 1996)
10.31 1996 Stock Option Plan. (incorporated herein by this reference to
Exhibit 10.36 to the Registrant's Annual Report on Form 10-KSB for the
fiscal year ended March 31, 1996)
10.32 Form of Nonstatutory Stock Option Agreement between the Registrant and
Colette Cozean (granting option to purchase 358,650 shares of
Registrant's Common Stock). (incorporated herein by this reference to
Exhibit 10.32 to the Registrant's Annual Report on Form 10-KSB for the
fiscal year ended March 31, 1996)
10.33 Form of Termination Agreement between the Registrant and certain of
the Registrant's Executive Officers. (incorporated herein by this
reference to Exhibit 10.33 to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended March 31, 1996)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.34 Joint Venture Agreement dated January 31, 1997 among the Registrant,
RSS, LLC and Data.Site, LLC. (incorporated herein by this reference to
Exhibit 10.39 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1997)
10.35 Operating Agreement of Data.Site, LLC dated January 31, 1997.
(incorporated herein by this reference to Exhibit 10.40 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997)
10.36 February 1996 Stock Option Plan. (incorporated herein by this
reference to Exhibit 10.35 to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended March 31, 1996)
10.37 Loan Agreement dated June 3, 1996 between the Registrant and Silicon
Valley Bank, together with Schedule to Loan Agreement dated June 3,
1996. (incorporated herein by this reference to Exhibit 10.36 to the
Registrant's Registration Statement on Form SB-2, Registration No.
333-04219)
10.38 Pledge Agreement dated June 3, 1996 between the Registrant and Silicon
Valley Bank. (incorporated herein by this reference to Exhibit 10.37
to the Registrant's Registration Statement on Form SB-2, Registration
No. 333-04219)
10.39 Warrant to Purchase Stock dated June 3, 1996 issued to Silicon Valley
Bank. (incorporated herein by this reference to Exhibit 10.38 to the
Registrant's Registration Statement on Form SB-2, Registration No.
333-04219)
10.40 Registration Rights Agreement dated June 3, 1996 between the
Registrant and Silicon Valley Bank. (incorporated herein by this
reference to Exhibit 10.39 to the Registrant's Registration Statement
on Form SB-2, Registration No. 333-04219)
10.41 Antidilution Agreement dated June 3, 1996 between the Registrant and
Silicon Valley Bank. (incorporated herein by this reference to Exhibit
10.40 to the Registrant's Registration Statement on Form SB-2,
Registration No. 333-04219)
10.42 Agreement dated August 12, 1996 between the Registrant and Circuit
Tree Medical, Inc. (incorporated herein by this reference to Exhibit
10.42 to the Registrant's Registration Statement on Form SB-2,
Registration No. 333-04219)
10.43 Amendment to Loan Agreement together with Schedule, dated February 13,
1997, between the Registrant and Silicon Valley Bank. (incorporated
herein by this reference to Exhibit 10.37 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended March 31, 1997)
10.44 Pledge Agreement dated February 13, 1997 between the Registrant and
Silicon Valley Bank. (incorporated herein by this reference to Exhibit
10.38 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended March 31, 1997)
10.45 Employee Bonus Stock Plan, together with form of Bonus Stock
Agreement. (incorporated herein by this reference to Exhibit 4.6 to
the Registrant's Registration Statement on Form SB-2, Registration
No. 33-83984)
21 List of Subsidiaries of Registrant. Incorporated herein by this
reference to Exhibit 21 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1997, as amended by Form 10-K/A
filed with the Commission on June 18, 1997.
23.1 Consent of Ernst & Young LLP (previously filed).
23.2 Consent of Price Waterhouse LLP (previously filed).
23.3 Consent of Coopers & Lybrand L.L.P. (previously filed).
23.4 Consent of Rutan & Tucker (included in the opinions previously filed
as Exhibits 5.1 and 5.2).
24 Power of Attorney (included on signature page).
*99.1 Agreement dated July 23, 1997 between Nidek Co., Ltd. and EyeSys
Technologies, Inc.
(filed herewith).
99.2 Exclusive Distribution Agreement dated June 1, 1995 between Nidek Co.,
Ltd. and EyeSys Technologies, Inc. (filed herewith).
*99.3 Exclusive Distribution Agreement dated June 2, 1997 between EyeSys
Technologies, Inc. and Marco Ophthalmic Inc. (filed herewith).
</TABLE>
- --------
* Confidential treatment has been requested for certain portions of this
Exhibit.
+ Confidential treatment was granted with respect to portions of this Exhibit.
II-4
<PAGE>
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement.
To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in this
Registration Statement;
To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona bide offering thereof.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant is the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities as that time shall be deemed to be the initial bona fide offering
thereof.
(d) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of this Registration Statement through
the date of responding to the request.
(e) The undersigned Registration hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
(f) The undersigned Registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered through use of a prospectus
which is part of this registration statement, by any person or
II-5
<PAGE>
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(g) The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (f) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used
in connection with an offering of securities subject to Rule 415, will be
filed as a part of an amendment to the registration statement and will not be
used until such amendment is effective, and that, for purposes of determining
any liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 24 hereof, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person thereof in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Pre-Effective Amendment to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Irvine, California on August 8, 1997.
PREMIER LASER SYSTEMS, INC.
/s/ Colette Cozean
By: _________________________________
Colette Cozean, Ph.D.
Chief Executive Officer and
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ Colette Cozean Chairman of the Board, August 8, 1997
____________________________________ President and Chief
Colette Cozean, Ph.D. Executive Officer (Principal
Executive Officer)
Director August , 1997
____________________________________
Patrick J. Day
* Director August 8, 1997
____________________________________
Grace Chin-Hsin Lin
* Director August 8, 1997
____________________________________
E. Donald Shapiro
* Director August 8, 1997
____________________________________
G. Lynn Powell, D.D.S.
* Vice President of Finance August 8, 1997
____________________________________ and Chief Financial Officer
Michael Hiebert (Principal Financial Officer
and Principal Accounting
Officer)
</TABLE>
/s/ Colette Cozean
*By:___________________________
Colette Cozean, Ph.D.,
Attorney in fact
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
2.1 Agreement and Plan of Merger dated as of April 24, 1997
among Premier Laser Systems, Inc., EyeSys Technologies,
Inc. and Premier Acquisition of Delaware, Inc.
Previously filed as Exhibit A to the Prospectus/Proxy
Statement.
3.1 Amended and Restated Articles of Incorporation as filed
with the California Secretary of State on November 23,
1994. (incorporated herein by this reference to Exhibit
4.8 to the Registrant's Quarterly Report on Form 10-QSB
for the Quarter ended December 31, 1994)
3.2 Bylaws of the Registrant, as amended. (incorporated
herein by this reference to Exhibit 3.3 to the
Registrant's Registration Statement on Form SB-2,
Registration No. 33-83984)
4.1 Form of Common Stock Certificate. (incorporated herein
by this reference to Exhibit No. 4.4 to the
Registrant's Registration Statement on Form SB-2,
Registration No. 33-83984)
4.2 Form of "Premier Option" (previously filed).
5.1 Amended and Restated Opinion of Rutan & Tucker
regarding legality (previously filed).
8.1 Opinion of Rutan & Tucker regarding tax matters
(previously filed).
10.1 Letter Agreement and Patent License Agreement dated
August 29, 1991 among the Registrant, Patlex
Corporation and Gordon Gould. (incorporated herein by
this reference to Exhibit 10.1 to the Registrant's
Registration Statement on Form SB-2, Registration No.
33-83984)
10.2 Assignment Agreement dated July 27, 1992 between the
Registrant and Michael Colvard, M.D. (incorporated
herein by this reference to Exhibit 10.2 to the
Registrant's Registration Statement on Form SB-2,
Registration No. 33-83984)
10.3 Gold Catalyst Licensing Agreement dated April 16, 1992
between the Registrant and Optical Engineering, Inc.
(incorporated herein by this reference to Exhibit 10.3
to the Registrant's Registration Statement on Form SB-
2, Registration No. 33-83984)
10.4 Assignment and Modification Agreement dated July 26,
1991 among the Registrant, Pfizer Hospital Products
Group and Medical Laser Technologies Limited.
(incorporated herein by this reference to Exhibit 10.4
to the Registrant's Registration Statement on Form SB-
2, Registration No. 33-83984)
10.8 Letter Agreement dated October 13, 1987 between Pfizer
Laser Systems, Inc. and Duke University, together with
Patent Assignment as filed in the U.S. Patent and
Trademark Office on October 23, 1993. (incorporated
herein by this reference to Exhibit 10.8 to the
Registrant's Registration Statement on Form SB-2,
Registration No. 33-83984)
+10.10 Lead Generation/Distribution Agreement dated March 17,
1994 between the Registrant and Burkhart Dental Supply
Company. (incorporated herein by this reference to
Exhibit 10.10 to the Registrant's Registration
Statement on Form SB-2, Registration No. 33-83984)
10.12 Form of International Distribution Agreement.
(incorporated herein by this reference to Exhibit 10.12
to the Registrant's Registration Statement on Form SB-
2, Registration No. 33-83984)
10.13 Letter of Intent between the Registrant and Richard
Leaderman, D.D.S., together with related Patent
Assignments as filed in the U.S. Patent and Trademark
Office on February 22, 1994. (incorporated herein by
this reference to Exhibit 10.13 to the Registrant's
Registration Statement on Form SB-2, Registration No.
33-83984)
+10.14 Exclusive Marketing Agreement dated July 26, 1994
between the Registrant, Proclosure, Inc. and Nippon
Shoji Kaisha, Ltd. (incorporated herein by this
reference to Exhibit 10.14 to the Registrant's
Registration Statement on Form SB-2, Registration No.
33-83984)
10.15 Form of Indemnification Agreement. (incorporated herein
by this reference to Exhibit 10.23 to the Registrant's
Registration Statement on Form SB-2, Registration No.
33-83984)
10.16 Industrial Lease dated December 6, 1995 between the
Registrant and Irvine Company. (incorporated herein by
this reference to Exhibit 10.22 to the Registrant's
Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1996)
</TABLE>
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SEQUENTIALLY
EXHIBIT NUMBERED
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10.17 Use and Cost Sharing Agreement dated December 1, 1995
between the Registrant and Biopsys Medical, Inc.
(incorporated herein by this reference to Exhibit 10.23
to the Registrant's Annual Report on Form 10-KSB for
the fiscal year ended March 31, 1996)
10.18 Purchase/Supply Agreement dated January 13, 1987
between Infrared Fiber Systems, Inc. and Pfizer
Hospital Products Group, Inc., as amended.
(incorporated herein by this reference to Exhibit 10.26
to the Registrant's Registration Statement on Form SB-
2, Registration No. 33-83984)
10.19 Letter of Intent dated October 19, 1995 between the
Registrant and International Biolaser Corporation,
together with related Promissory Note dated October 19,
1995 payable to Registrant in the original principal
amount of $125,000, and Security Agreement dated
October 19, 1995 between the Registrant and
International Biolaser Corporation. (incorporated
herein by this reference to Exhibit 10.24 to the
Registrant's Annual Report on Form 10-KSB for the
fiscal year ended March 31, 1996)
10.20 Share Exchange Agreement dated December 20, 1995 among
the Registrant, 658994 Alberta Ltd., 658997 Alberta
Ltd. and Mattan Corporation. (incorporated herein by
this reference to Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-QSB for the quarter ended
December 31, 1995)
10.21 Purchasing Agreement dated December 20, 1995 between
the Registrant and Mattan Corporation. (incorporated
herein by this reference to Exhibit 10.2 to the
Registrant's Quarterly Report on Form 10-QSB for the
quarter ended December 31, 1995)
10.22 Exclusive Licensing Agreement dated June 1, 1992
between the Registrant and Quentin M. Murphy, D.D.S.
(incorporated herein by this reference to Exhibit 10.27
to the Registrant's Annual Report on Form 10-KSB for
the fiscal year ended March 31, 1996)
10.23 Broker Agreement dated March 13, 1996 among the
Registrant, First National Marketing Services, Inc. and
William F. Sullivan. (incorporated herein by this
reference to Exhibit 10.29 to the Registrant's Annual
Report on Form 10-KSB for the fiscal year ended March
31, 1996)
10.24 Form of Consulting Agreement. (incorporated herein by
this reference to Exhibit 10.30 to the Registrant's
Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1996)
10.25 Radiation Services Agreement dated January 10, 1994
between the Registrant and SteriGenics International.
(incorporated herein by this reference to Exhibit 10.31
to the Registrant's Annual Report on Form 10-KSB for
the fiscal year ended March 31, 1996)
10.26 Form of Warrant Agreement (including forms of Class A
and Class B Warrant Certificates). (incorporated herein
by this reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form SB-2, Registration No.
33-83984)
10.27 Form of Underwriter's Unit Purchase Option.
(incorporated herein by this reference to Exhibit 4.2
to the Registrant's Registration Statement on Form SB-
2, Registration No. 33-83984)
10.28 Form of Finders' Unit Purchase Option. (incorporated
herein by this reference to Exhibit4.3 to the
Registrant's Registration Statement on Form SB-2,
Registration No. 33-83984)
10.29 1992 Stock Option Plan, together with form of
Nonqualified Stock Option Agreement and form of
Incentive Stock Option Agreement. (incorporated herein
by this reference to Exhibit 4.5 to the Registrant's
Registration Statement on Form SB-2, Registration No.
33-83984)
10.30 1995 Employee Stock Option Plan, together with form of
Nonqualified Stock Option Agreement and form of
Incentive Stock Option Agreement. (incorporated herein
by this reference to Exhibit 10.34 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
March 31, 1996)
10.31 1996 Stock Option Plan. (incorporated herein by this
reference to Exhibit 10.36 to the Registrant's Annual
Report on Form 10-KSB for the fiscal year ended March
31, 1996)
10.32 Form of Nonstatutory Stock Option Agreement between the
Registrant and Colette Cozean (granting option to
purchase 358,650 shares of Registrant's Common Stock).
(incorporated herein by this reference to Exhibit 10.32
to the Registrant's Annual Report on Form 10-KSB for
the fiscal year ended March 31, 1996)
10.33 Form of Termination Agreement between the Registrant
and certain of the Registrant's Executive Officers.
(incorporated herein by this reference to Exhibit 10.33
to the Registrant's Annual Report on Form 10-KSB for
the fiscal year ended March 31, 1996)
</TABLE>
<PAGE>
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EXHIBIT NUMBERED
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10.34 Joint Venture Agreement dated January 31, 1997 among
the Registrant, RSS, LLC and Data.Site, LLC.
(incorporated herein by this reference to Exhibit 10.39
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1997)
10.35 Operating Agreement of Data.Site, LLC dated January 31,
1997. (incorporated herein by this reference to Exhibit
10.40 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1997)
10.36 February 1996 Stock Option Plan. (incorporated herein
by this reference to Exhibit 10.35 to the Registrant's
Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1996)
10.37 Loan Agreement dated June 3, 1996 between the
Registrant and Silicon Valley Bank, together with
Schedule to Loan Agreement dated June 3, 1996.
(incorporated herein by this reference to Exhibit 10.36
to the Registrant's Registration Statement on Form SB-
2, Registration No. 333-04219)
10.38 Pledge Agreement dated June 3, 1996 between the
Registrant and Silicon Valley Bank. (incorporated
herein by this reference to Exhibit 10.37 to the
Registrant's Registration Statement on Form SB-2,
Registration No. 333-04219)
10.39 Warrant to Purchase Stock dated June 3, 1996 issued to
Silicon Valley Bank. (incorporated herein by this
reference to Exhibit 10.38 to the Registrant's
Registration Statement on Form SB-2, Registration No.
333-04219)
10.40 Registration Rights Agreement dated June 3, 1996
between the Registrant and Silicon Valley Bank.
(incorporated herein by this reference to Exhibit 10.39
to the Registrant's Registration Statement on Form SB-
2, Registration No. 333-04219)
10.41 Antidilution Agreement dated June 3, 1996 between the
Registrant and Silicon Valley Bank. (incorporated
herein by this reference to Exhibit 10.40 to the
Registrant's Registration Statement on Form SB-2,
Registration No. 333-04219)
10.42 Agreement dated August 12, 1996 between the Registrant
and Circuit Tree Medical, Inc. (incorporated herein by
this reference to Exhibit 10.42 to the Registrant's
Registration Statement on Form SB-2, Registration No.
333-04219)
10.43 Amendment to Loan Agreement together with Schedule,
dated February 13, 1997, between the Registrant and
Silicon Valley Bank. (incorporated herein by this
reference to Exhibit 10.37 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended March 31,
1997)
10.44 Pledge Agreement dated February 13, 1997 between the
Registrant and Silicon Valley Bank. (incorporated
herein by this reference to Exhibit 10.38 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended March 31, 1997)
10.45 Employee Bonus Stock Plan, together with form of Bonus
Stock Agreement. (incorporated herein by this reference
to Exhibit 4.6 to the Registrant's Registration
Statement on Form SB-2, Registration No. 33-83984)
21 List of Subsidiaries of Registrant. Incorporated herein
by this reference to Exhibit 21 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
March 31, 1997, as amended by Form 10-K/A filed with
the Commission on June 18, 1997.
23.1 Consent of Ernst & Young LLP (previously filed).
23.2 Consent of Price Waterhouse LLP (previously filed).
23.3 Consent of Coopers & Lybrand L.L.P. (previously filed).
23.4 Consent of Rutan & Tucker (included in the opinions
previously filed as Exhibits 5.1 and 5.2).
24 Power of Attorney (included on signature page).
*99.1 Agreement dated July 23, 1997 between Nidek Co., Ltd.
and EyeSys Technologies, Inc. (filed herewith).
99.2 Exclusive Distribution Agreement dated June 1, 1995
between Nidek Co., Ltd. and EyeSys Technologies, Inc.
(filed herewith).
*99.3 Exclusive Distribution Agreement dated June 2, 1997
between EyeSys Technologies, Inc. and Marco Ophthalmic
Inc. (filed herewith).
</TABLE>
- -------
* Confidential treatment has been requested for certain portions of this
Exhibit.
+ Confidential treatment was granted with respect to portions of this Exhibit.
<PAGE>
Certain portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by an * and [ ], have been
submitted to the Commission with the confidential treatment request.
EXHIBIT 99.1
AGREEMENT
This Agreement is made on July 23, 1997 by and between Nidek Co., Ltd.
(hereafter NIDEK) with its business address at 34-14 Maehama Hiroishicho
Gamagori, Aichi 443, Japan and EyeSys Technologies, Inc. (hereafter EYESYS) with
its business address at 2776 Bingle Road, Houston, Texas 77055, USA.
It is the goal of EYESYS and NIDEK to have a mutually profitable relationship
with each of the Agreements below. Therefore, if either party feels the other
is not acting in good faith to maintain these Agreements than upon appropriate
written notification, further negotiation will be anticipated to resolve terms
to mutual satisfaction. Each of the three Agreements (I, II, III) below is
independent from the others with defined terms specific only to their respective
projects.
I. SIMPLE CORNEAL TOPOGRAPHY OEM AGREEMENT
1) EYESYS will exclusively manufacture a simple tabletop corneal topography (CT)
unit under NIDEK'S name as an OEM agreement with NIDEK maintaining exclusive
worldwide distribution rights, including the U.S., for this product. This
product will exclusively use EYESYS software. If necessary to satisfy the
needs of a few specific customers for some custom enhancements, EYESYS will
develop optional accessory software at a reasonable cost in a timely manner
upon a reasonable request from NIDEK. However, under this circumstance, if
optional accessory software development cannot be mutually agreed upon, NIDEK
may have option to develop its own optional accessory software with final
approval of software quality from EYESYS. Additionally in this case, EYESYS
will disclose necessary information to NIDEK to interface NIDEK'S own
software with EYESYS software. The term of this Agreement will be for six
years after the date of first production delivery. As conditions to this
Agreement NIDEK and EYESYS agree to the following:
[*]
EYESYS will pay for freight, insurance, import duty and customs brokerage
charge for these parts from Japan to Houston in bulk orders. There will be
no charge for the parts themselves.
[*]
<PAGE>
[*]
Please refer to the enclosed diagram to envision the product concept.
[*]
- EYESYS agrees to adjusting above prices when there is more than a 10%
fluctuation in the Japanese Yen to U.S. dollar ratio up or down from date
of this Agreement (currently 112Y to $1). EYESYS and NIDEK will split the
additional cost over the 10% level equally due to these fluctuations up or
down.
[*]
- NIDEK will pre-order first 100 units by September 15, 1997. Payment
schedule for this first order with conditions completed will be:
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September 15, 1997 $100,000 Completion of product specification
October 25, 1997 $100,000 Delivery of prototype system to AAO
February, 1998 $270,000 Net 30 days after delivery of 100
units and received in accordance
with NIDEK'S incoming inspection
</TABLE>
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<PAGE>
[*]
7) Additional advanced software packages will be available only through EYESYS
distributors, since unit will have a parallel port to connect to a PC
allowing for full corneal topography software capability to customers.
8) The NIDEK label will be the only name on the external housing and hardware,
but when the unit is turned on both the NIDEK name and EYESYS name will
appear on the color LCD screen and both names will print with the printed
hardcopy outputs.
9) NIDEK will pay EYESYS a payment of $990,000 USD for an exclusive distribution
right for this simple corneal topography unit. The following payment
schedule is mandatory on date stated below unless condition is specified:
<TABLE>
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<S> <C> <C>
July 31, 1997 $100,000
October 25, 1997 $250,000 Upon completion of prototype
January 1, 1998 $250,000 Approval of production model by NIDEK
April 20, 1998 $390,000*
</TABLE>
* Payment will be reduced by a penalty of $40,000 for each month the start
of production delivery is delayed following February, 1998 provided such
delay is not attributed to NIDEK.
II. EXCLUSIVE DISTRIBUTION RIGHT FOR COMBINATION AR/CT
1) EYESYS will provide NIDEK with an exclusive distribution right for our
corneal topography design in a Combination Auto-Refractor/Corneal Topography
unit which NIDEK will manufacture and distribute worldwide, including the
U.S. NIDEK agrees to use exclusively EYESYS software for this product. Our
current non-exclusive Agreement dated June 1, 1995 will be considered amended
to include such mutually exclusive terms. The term of this Agreement will be
10 years under the condition that NIDEK will use its best effort in selling
this product over this time.
2) NIDEK will pay for EYESYS software in the Combination AR/CT unit as agreed to
in the LICENSE AGREEMENT dated June, 1, 1995.
3) NIDEK will pay EYESYS a $500,000 USD fee for exclusive distribution right of
this Combination AR/CT unit with payment schedule below:
July 31, 1997 $200,000
August 31, 1997 $300.000
-3-
<PAGE>
III. EXCLUSIVE DISTRIBUTION RIGHT FOR HANDHELD CT IN JAPAN AND FRANCE
1) EYESYS provides NIDEK with the exclusive right to sell its new Handheld
Corneal Topography product in Japan and in France. The term of this right
will be for 10 years under condition that NIDEK will use best efforts in
selling this product over this time.
2) NIDEK will pay EYESYS a $300,000 USD fee for this exclusive distribution
right with payment schedule below:
July 31, 1997 $200,000
August 31. 1997 $ 50,000
January 1, 1998 $ 50,000
3) EYESYS will begin delivery of the Handheld CT product to NIDEK by the end of
January, 1998. If EYESYS fails to deliver this product in January, 1998,
then EYESYS will credit NIDEK $12,000 for each month delivery is delayed.
This credit will be applied to NIDEK purchases of the Handheld CT units.
4) EYESYS will pay NIDEK a royalty of 1.5% of net sales of this Handheld CT unit
sold to all other distributors for the first $50,000,000 of sales resulting
in a total royalty amount of $750,000 USD. Royalty payments will be made at
the end of each quarter beginning with December 31, 1997.
GENERAL CONDITIONS
5) Renewals:
Upon completion of the term of each Agreement above between EYESYS and
NIDEK, each Agreement can be renewed taking into account the market
conditions at such time under the similar terms of each current Agreement
with no additional fee of distribution right anticipated.
6) Limitation:
EYESYS intends to provide its own corneal topography products in a manner
that minimizes market interference with the NIDEK products above. EYESYS
will discuss with NIDEK, and vice versa, any new plans to develop corneal
topography products to assure EYESYS' and NIDEK'S mutual approval in
reducing product interference. NIDEK will have sole right to select or
change distributors in all countries, including U.S., for products in
Agreements I and II.
7) Assignment:
If EYESYS is acquired or merges with another company, the surviving
company will assume all rights and obligations of these Agreements.
-4-
<PAGE>
8) Other:
Other conditions for each of the above Agreements (I,II, III) will be
subject to the following Articles from the EXCLUSIVE DISTRIBUTOR AGREEMENT
dated June 1, 1995 as specified below:
<TABLE>
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ARTICLE AGREEMENT
<S> <C>
Article 5 (Additional Obligations of NIDEK) I, II, III
Article 6 (Additional Obligations of EYESYS) I (6.2 & 6.3 only) III.
Article 9 (Warranty) I, III
Article 10 (Out of Warranty Repair and Service Support) I, III
Article 11 (Intellectual Property Infringement Indemnity) I, II (software only), III
Article 13 (Proprietary Rights) I, II, III
Article 14 (Trademarks) I, II, III
Article 15 (Limitation of Liability)* I, II, III
Article 16 (Compliance with Laws) I, II, III
Article 17 (Miscellaneous) I, II, III
</TABLE>
*Limitation of Liability Article for each respective Agreement (I, II, III)
will be limited to the amount of exclusive distribution right payment
received by EYESYS to the date of any such Liability not to exceed the limits
of $990,000, $500,000 and $300,000, respectively for each of the Agreements
I, II, and III.
In order to execute this Agreement and each of the included Agreements the
authorized representatives of both companies will sign and date below:
___________________________________ ______________________________________
Joe S. Wakil, MD Hideo Ozawa
Chairman, EyeSys Technologies, Inc. President, Nidek Co., Ltd.
___________________________________ ______________________________________
Date Date
-5-
<PAGE>
EXHIBIT 99.2
EXCLUSIVE DISTRIBUTOR AGREEMENT
This Exclusive Distributor Agreement ("Agreement") is made as of the 1st
---------
day of June, 1995 (Effective Date") by and between EyeSys Technologies, Inc., a
--------------
Delaware corporation having its principal place of business at 2776 Bingle Road,
Houston, Texas 77055 ("EyeSys") and Nidek Co., Ltd., a Japanese company having
------
its principal place of business at 34-14 Maehama, Hiroishi-cho, Gamagori,
Aichi 443 Japan (Nidek").
-----
WHEREAS, EyeSys manufactures corneal topography systems which combine
computer hardware and software for use by ophthalmologists in determining, among
other things, the contour and shape of a cornea;
WHEREAS, Nidek previously served as EyeSys's exclusive distributor for
EyeSys products in Japan during the period from October 29, 1992 through October
28, 1994 pursuant to that certain Exclusive Distributor Agreement dated as of
October 29, 1992 through October 29, 1992 by and between EyeSys and Nidek (the
"Old Distributor Agreement");
-------------------------
WHEREAS, the Old Distributor Agreement expired by its terms on October 28,
1994;
WHEREAS, Nidek wishes again to be appointed as EyeSys's exclusive
distributor for EyeSys products in Japan, and EyeSys is willing to grant such
appointment on the terms and conditions contained herein;
WHEREAS, Nidek manufacturers refractive laser medical device systems which
are utilized in eye surgery; and
WHEREAS, Nidek and EyeSys wish to enter into an agreement pursuant to which
Nidek may sell EyeSys systems in conjunction with sales of Nidek systems;
NOW, THEREFORE, 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:
1. DEFINITIONS
-----------
1.1 "Products" will mean the products listed in Exhibit A attached
-------- ---------
hereto, including any Software included therein or any field replaced spare
parts (Spare Parts") therefore.
-----------
1.2 "Software" will mean those Products which consist of computer
--------
software, and any computer software which is included in a Product, in object
code format, including accompanying documentation, and any upgrades,
enhancements and corrections made available to Nidek by EyeSys.
1.3 "Software Update" shall mean a new release of a software product that
---------------
is not a Software Upgrade, which includes bug fixes, error corrections and other
minor changes in features and
-------- ---------
<PAGE>
functionality and which EyeSys makes generally available to its end-user
customers as set forth under the definitions of Enhancement Release in EyeSys'
Hardware and Software Sales, Support and Obsolescence Policy, attached hereto as
Exhibit D.
1.4 "Software Upgrade" shall have the same meaning as an Upgrade Release
----------------
as defined in EyeSys' Hardware and Software Sales, Support and Obsolescence
Policy, attached hereto as Exhibit D.
1.5 "Territory" shall mean that geographic area identified in
---------
Exhibit B attached hereto.
- ---------
1.6 All references in this Agreement to the "sale" of or "selling"
Products, with respect to hardware, shall mean the sale of such hardware, and
with respect to Software, shall mean the granting of a nonexclusive license to
use such Software or copies of such Software shall mean the obtaining of a
nonexclusive license to use such Software.
2. APPOINTMENT
-----------
2.1 Appointment. Subject to the terms and conditions set forth herein,
-----------
EyeSys hereby appoints Nidek as EyeSys's exclusive distributor for the Products
in the Territory, and Nidek hereby accepts such appointment. As EyeSys'
exclusive distributor, Nidek shall have the right to obtain Products from EyeSys
and to market and distribute such Products to customers in the Territory.
2.2 Territorial Responsibility. Nidek shall use its best efforts and
--------------------------
pursue aggressive sales policies and procedures in order to realize the maximum
sales potential for the Products in the Territory. Nidek agrees that it will
not sell the Products, directly or indirectly, to customers located outside the
Territory without the written approval of EyeSys, which EyeSys may give or
withhold in its sole and absolute discretion. Except as provided for in Section
2.11 hereof, Nidek shall not advertise, market or promote the Products outside
the Territory without the prior written consent of EyeSys.
2.3 Software License. Subject to the terms and conditions of the License
----------------
Agreement concurrently entered into by the parties (as hereinafter defined),
EyeSys hereby grants Nidek a nonexclusive, nontransferable license to distribute
copies of the Software which are, or which are included with, Products as
purchased from EyeSys hereunder solely to end users in the Territory or as
provided in Section 2.11 hereof. Where the Software is included as a component
of a Product together with hardware provided by EyeSys, Nidek shall have no
right to distribute such Software separately from the EyeSys hardware, nor shall
it permit any third party to do so.
2.4 End User License. Distribution of Software shall be subject to the
----------------
standard end user license agreement ("End User Agreement") included with each
Software Product, a copy of which is attached hereto as Exhibit C, or such other
form as EyeSys may require from time to time. Nidek shall provide EyeSys on a
quarterly basis with a list of such customers and installation dates and shall
certify to EyeSys that all such customers have received an End User Agreement.
EyeSys agrees that
<PAGE>
it shall not contact any of the Software end users who are identified in such
customer lists provided to EyeSys by Nidek during the term of this Agreement.
Nidek shall have no authority to alter any terms of the End User License
Agreement without EyeSys's prior written authorization. failure to deliver such
customer lists or certify customer receipt of the End User Agreements shall
constitute a breach of this Agreement.
2.5 Subdistributors. Nidek may exercise its right to distribute the
---------------
Products through subdistributors, resellers, and other third party distributors
("Subdistributors") subject to each such Subdistributor executing a written
---------------
agreement containing, at a minimum, provisions at least as protective of EyeSys
as those set forth in this Agreement (a "Subdistributor Agreement"). Nidek will
------------------------
provide EyeSys with copies of Subdistributor Agreements upon request.
2.6 Enforcement. Nidek will use its best efforts to ensure that all
-----------
Subdistributors and all end users abide by the terms of the Subdistributor
Agreements and End User Agreements, as applicable, and, upon request by EyeSys,
will keep EyeSys apprised of its activities to enforce such provisions with
particular Subdistributors and/or end users. in addition, Nidek shall ensure
that EyeSys will have the right to enforce such agreements as a third party
beneficiary, and Nidek agrees that (i) EyeSys may join Nidek as a named
plaintiff in any suit brought by EyeSys against Subdistributors or end users and
(ii) Nidek will take such other actions, give such information and render such
aid, as may be necessary to allow EyeSys to bring and prosecute such suits.
2.7 Reserved Rights. Notwithstanding anything herein to the contrary,
---------------
EyeSys reserves the right to sell Products, directly or indirectly (i) to
customers within the Territory pursuant to an International Corporate Accounts
Program and (ii) to other customers within the Territory pursuant to original
equipment manufacturing arrangements or other similar "bundling or joint
development" arrangements with third parties where Products are to be sold in
connection with the sale of a medical device or medical equipment manufactured
by a third party or as a result of a joint venture project with a third party
("Excluded Sales"). Nidek shall only be entitled to receive a commission on any
--------------
such sales in the Territory in a manner to be determined by EyeSys in its sole
discretion.
2.8 Conflict of Interest.
--------------------
(a) Nidek represents and warrants to EyeSys that it has not developed
any Competing Products (as hereinafter defined), and during the term of this
Agreement it will not develop any Competing Products, other than as expressly
permitted pursuant to the terms and conditions of that certain Settlement
Agreement and Mutual Release dated as of the date hereof by and between EyeSys
and Nidek (the "Settlement Agreement") and that certain License Agreement dated
--------------------
as of the date hereof by and between EyeSys and Nidek (the "License Agreement").
-----------------
Nidek represents and warrants to EyeSys that it does not currently manufacture,
distribute, market, represent or promote, any corneal topography products or any
products which an objective observer familiar with the industry would identify
as a corneal topography product (a "Competing Product").
-----------------
(b) During the term of this Agreement, Nidek shall not develop,
manufacture, distribute, market, represent or promote any Competing Products
other than the combination Model (as that term is defined in the Settlement
Agreement); provided, however, that the development, manufacture
-3-
<PAGE>
distribution, marketing, representation or promotion by Nidek during the term of
this Agreement of a stand-alone corneal topography product solely for use in
conjunction with refractive surgical procedures (the "Refractive Surgery Model")
------------------------
shall not constitute a "Competing Product" for purposes of this Agreement.
(c) During the term of this Agreement, and in the event this Agreement (i)
is terminated by Eyesys due to breach by Nidek pursuant to Section 12.2 or (ii)
Nidek chooses not to renew this Agreement, and for an additional one year
thereafter, Nidek shall not develop or have developed any Competing Products
(other than the Combination Model and the Refractive Surgery Model).
(d) Nidek agrees that during the term of this Agreement, and in the event
this Agreement (i) is terminated by EyeSys due to breach by Nidek pursuant to
Section 12.2 or (ii) Nidek chooses not to renew this Agreement, and for an
additional one year thereafter, no personnel who have been engaged in the
representation of the Products for more than three (3) months will engage in the
development, distribution, marketing, representation or promotion of any
Competing Products (other than the Combination Model and the Refractive Surgery
Model) for any division, group, subsidiary or affiliate of Nidek.
(e) If Nidek breaches any of the covenants contained in this Section 2.8,
in addition to any other rights or remedies it may have, EyeSys has the right to
terminate this Agreement upon thirty (30) days' notice without further liability
to Nidek.
2.9 Labeling. All Products shall be labeled and in the livery of EyeSys's
--------
standard products.
2.10 Government Approvals. Nidek agrees to use its best efforts to
--------------------
promptly obtain and maintain government approvals to import, register and market
the Products in any country in which it wishes to sell the Products and to
proceed to secure and maintain, as may be required from time to time, government
importing, registration and marketing approvals. Unless prohibited by local law,
all such registrations and approvals shall be in the name of EyeSys. Nidek shall
keep EyeSys generally informed of the regulatory requirements and shall submit a
complete application for registration and marketing approval of the Products to
the government health authorities in any country in which it wishes to sell the
Products. If EyeSys so requests, Nidek shall notify EyeSys each time it submits
an application for government registration and marketing approval for the
Products and shall at EyeSys's request, supply EyeSys with copies of or access
to Nidek's filings and clinical data concerning the Products and shall keep
EyeSys fully informed of the progress of each such application. EyeSys and Nidek
agree to disclose promptly to the other all reports and any information which
they have available or which become available to them relating to any
deleterious physiological effects caused by or related to the Products. If
required by governmental regulation or law, EyeSys will deal directly with local
regulatory agencies or other governmental bodies from time to time to complete
the foregoing tasks.
2.11 Bundled Sales Outside Territory. Nidek shall have the right to sell
--------------------------------
the Products outside of the Territory solely when the Products are bundled with
the Nidek Excimer Laser ("Bundled Products") on a one for one basis. For
----------------
purposes of this Agreement, sales on a "one-for-one basis" shall mean sales of
one Product with each Nidek Excimer Laser.
-4-
<PAGE>
3. TERMS AND CONDITIONS FOR SUPPLY OF PRODUCTS
-------------------------------------------
3.1 Forecasts. During the term of this Agreement, Nidek will provide
---------
EyeSys with a six (6) month rolling forecast setting forth its estimated
requirements for shipment by month for Products and Spare Parts. Such forecasts
are for planning purposes only, and will not be binding on either party.
3.2 Orders. All purchases and sales between EyeSys and Nidek will be
------
initiated by Nidek's issuance of written purchase orders sent via airmail or
facsimile. Additionally, Nidek may initiate purchase orders verbally, provided
that it confirms such orders in writing within seven (7) days. Such orders will
state unit quantities, unit descriptions, requested delivery dates, and shipping
instructions. EyeSys will use reasonable efforts to notify Nidek of the
acceptance or rejection of a purchase order within fifteen (15) days of receipt
of the purchase order, however, no purchase order will be binding upon EyeSys
until accepted by EyeSys in writing. Partial shipment of an order will not
constitute acceptance of an entire order.
3.3 Lead Times. To facilitate EyeSys's production scheduling, Nidek will
----------
submit purchase orders to EyeSys in accordance with EyeSys's then current lead
times.
3.4 Shipping. All Products delivered pursuant to the terms of this
--------
Agreement will be suitably packed for shipment in EyeSys's standard containers,
marked for shipment to Nidek's address set forth above or to an address
specified in Nidek's purchase order, and delivered to a carrier or forwarding
agent chosen by Nidek. Should Nidek fail to designate a carrier, forwarding
agent or type of conveyance, EyeSys will make such designation in conformance
with its standard shipping practices. Shipment will be F.O.B. EyeSys's
manufacturing facility ("Delivery Point"), at which time risk of loss and title
--------------
pass to Nidek. All freight, insurance and other shipping expenses from the
Delivery Point, as well as any special packing expenses requested by Nidek, will
be borne by Nidek.
3.5 Deferral. Nidek may defer shipments of Products currently on order,
--------
in whole or in part, by giving EyeSys written notice at least fifteen (15) days
prior to the scheduled delivery date. Deferring shipment of any Products
ordered hereunder for more than fifteen (15) days beyond the originally
requested delivery date for such Products will be deemed a cancellation of the
original order, and subject to the provisions of Section 3.6 below.
3.6 Cancellation. At its option, Nidek may cancel purchase orders
------------
scheduled for shipment, subject to the following cancellation fees which are
dependent upon the number of days in advance of the scheduled shipment date that
Nidek notifies EyeSys of cancellation:
<TABLE>
<CAPTION>
Days before Ship Date Cancellation Fee
--------------------- ----------------
<S> <C>
More than 30 days 0%
30-16 days 15%
15 days or less 25%
</TABLE>
-5-
<PAGE>
In the event a Product previously rescheduled is subsequently canceled, the
notice period for computing cancellations will be based on when notice of
cancellation was given with respect to the originally scheduled delivery date.
3.7 Inspection and Acceptance. Nidek will inspect all Products for
-------------------------
obvious physical damage promptly upon receipt thereof and may reject any Product
that fails in any material way to meet the specifications for such Product
identified in EyeSys's product literature. Any Product not properly rejected
within twenty (20) days of receipt of that Product by Nidek (the "Rejection
---------
Period") will be deemed accepted. To reject a Product, Nidek will, within the
- ------
Rejection period, notify EyeSys in writing or by fax of its rejection and
request a Returned Material Authorization ("RMA") number. EyeSys will provide
---
the RMA number in writing or by fax to Nidek within fifteen (15) days of receipt
of the request. Within ten (10) days of receipt of the RMA number, Nidek will
return to EyeSys the rejected Product, freight prepaid, in its original shipping
carton with the RMA number displayed on the outside of the carton. EyeSys
reserves the right to refuse to accept any rejected Products that do not bear an
RMA number on the outside of the carton. As promptly as possible but no later
than thirty (30) working days after receipt by EyeSys of properly rejected
Products, EyeSys will, at its option and expense, either repair or replace the
Products and return such repaired or replaced Product to Nidek at EyeSys's
expense. Improperly rejected Products shall be returned to Nidek at Nidek's
expense.
4. PRICE AND PAYMENT
-----------------
4.1 Price. All prices are F.O.B. the Delivery Point. The purchase price
-----
("Purchase Price") to Nidek for hardware and software manufactured by EyeSys,
--------------
excluding accessories, will be equal to a forty percent (40%) discount of
EyeSys's price for such Products ("List Price"). EyeSys' current list prices
----------
and Nidek's cost for accessories are set forth in Exhibit A. The difference
---------
between Nidek's Purchase Price and Nidek's price to its customers shall be
Nidek's sole remuneration for distribution of the Products hereunder.
4.2 Purchase Requirement. Nidek agrees that it shall, during the term of
--------------------
this Agreement, purchase at least the number of units of Products set forth
below ("Purchase Commitment"):
-------------------
<TABLE>
<CAPTION>
Period Model III System 2000
- ------ --------- -----------
<C> <C> <S>
6/95 to 3/96 30 30 (20 in 12/95 for January 1996 delivery and 10 in
3/96 for April 1996 delivery)
4/96 to 3/97 0 60
Total 30 90
</TABLE>
In the event Nidek fails to meet its purchase commitments in any period, EyeSys
shall have the right, at its sole option, to terminate this Agreement.
4.3 Payment. EyeSys shall issue invoices to Nidek upon shipment of the
-------
Products to Nidek. Nidek shall pay such invoices within thirty (30) days of the
date of such invoice; provided that Nidek may delay payment on Products rejected
and returned to EyeSys pursuant to Section 3.7 above until
-6-
<PAGE>
such time as Nidek accepts the repaired or replaced Product. EyeSys reserves
the right to change credit terms provided herein when, in EyeSys's sole opinion,
the financial condition and past payment history of Nidek so warrant such a
change. Late payments will accrue interest at the rate of one and one-half
percent (1.5%) a month, or the highest interest rate allowable by law, whichever
is lower, and Nidek will pay all of EyeSys's costs and expenses (including
reasonable attorneys' fees) to enforce and preserve EyeSys's rights under this
Section 4.3. In addition, in the event that Nidek becomes delinquent in the
payment of any sum due hereunder, EyeSys will have the right to suspend
performance until such delinquency is corrected.
4.4 Price Changes. EyeSys has the right to decrease its List Price upon
-------------
fifteen (15) days advance written notice to Nidek and to increase its List Price
upon sixty (60) days advance written notice to Nidek. Price increases will
apply to all purchase orders received after the effective date of the revision.
Decreases to EyeSys's List Price will apply to all accepted but unshipped
orders.
4.5 Taxes. All amounts due hereunder are payable in full to EyeSys
-----
without deduction and are net of taxes (including any withholding tax) and
customs duties. In addition to such amounts, Nidek will pay sums equal to taxes
(including, without limitation, sales, withholding, value-added and similar
taxes) and customs duties paid or payable, however designated, levied, or based
on amounts payable to EyeSys hereunder or on an end user's use or possession of
the Product under or in accordance with the provisions of this Agreement, but
exclusive of United States federal, state, and local taxes based on EyeSys's net
income. In the event a single given Product (or its replacement) is subject to
the imposition of a second VAT tax payment upon its return to Nidek after being
properly returned to EyeSys for repair or replacement pursuant to Section 3.7
above or Section 9 below, EyeSys shall, upon presentation of documentary
evidence of the imposition and payment of such second tax, credit Nidek for the
amount of such second tax.
5. ADDITIONAL OBLIGATIONS OF NIDEK
-------------------------------
5.1 Promotion of the Products. Nidek shall, at its own expense, use its
-------------------------
best efforts to vigorously promote the distribution of the Products in order to
achieve maximum sales potential within the Territory. Such promotion shall
include but not be limited to:
(a) advertising the Products in trade publications, participating in
appropriate trade shows, and directly soliciting orders from customers for the
Products within the Territory.
(b) placing the Products in Nidek's catalogues as soon as possible and
feature the Products in any applicable trade show that it attends;
(c) providing adequate contact with existing and potential customers
within the Territory on a regular basis, consistent with good business practice:
and
(d) assisting EyeSys in assessing customer requirements for the Products,
including modifications and improvements thereto, in terms of quality, design,
functional capability, and other features.
-7-
<PAGE>
5.2 Reports. Nidek shall:
-------
(a) provide EyeSys with updated sales reports and inventory reports
(broken down by month) in a form reasonable acceptable to EyeSys detailing
Nidek's sales activities for Products within fifteen (15) days of the end of
each calendar quarter. Such reports shall include, at a minimum updated monthly
and six month rolling projection reports, win/loss reports, date sold, quantity
of each type of Products sold, serial number, and the buyers' names and
addresses, as well as the quarter-end inventory position on hand for each type
of Product.
(b) keep EyeSys advised of Nidek's marketing and sales promotion
activities relative to the Products, orally and through quarterly written
reports, which shall include, without limitation, information regarding:
(1) provision and training of sales personnel;
(2) provision and training of technical personnel;
(3) distribution activities in the Territory;
(4) advertising activities, including a copy of all published
advertisements and press releases;
(5) display of Products at appropriate trade shows and exhibitions;
(6) market and technical information concerning products similar to the
Products sold in the Territory.
(c) submit to EyeSys an analysis of all competition for the Products in
the Territory. In no event shall such analysis be required more than once per
calendar year unless there has been an unexpected material change in market
conditions, in which case Nidek shall use its reasonable effects to provide an
analysis in response to such change.
5.3 Finances and Personnel. Nidek shall maintain a net worth and working
----------------------
capital sufficient in EyeSys's reasonable judgment, to allow Nidek to perform
fully and faithfully its obligations under this Agreement. Nidek also
understands and acknowledges that the Products cannot be effectively marketed,
supported or maintained unless it hires, trains and supports sufficient sales
and technical staff to meet its obligations under this Agreement. Therefore,
Nidek shall devote sufficient financial resources and hire, train and maintain
sufficient technically qualified sales and support personnel in order to fulfill
its responsibilities to market, sell and support the Products under this
Agreement. Nidek shall equip its sales and support personnel with adequate
training, marketing and technical, sales and technical literature, including
such materials as may be made available by Eyesys.
5.4 Representations. Nidek shall limit its claims and representations
---------------
concerning the Products to those made by EyeSys in its published product
literature, and not made any claims or representations in excess of such claims
of EyeSys.
-8-
<PAGE>
5.5 Inventory Stocking. Nidek shall carry in stock carry in stock at its
------------------
facilities sufficient Product so as to enable Nidek to properly discharge its
obligations under this Agreement and to effectively demonstrate Products to
prospective customers.
5.6 Standard of Business Practices. Nidek shall establish and maintain,
------------------------------
and shall cause its Subdistributors, employees, consultants and agents to
establish and maintain a high standard of ethical business practices in
connection with its distribution of the Products in the Territory, including,
without limitation, full compliance with Section 16 below. Nidek shall at all
times conduct its efforts hereunder with the highest commercial standards and in
strict accordance with all applicable federal, state, local and other
governmental laws, rules, directives and regulations ("Laws"). Nidek shall not
knowingly solicit, nor shall EyeSys knowingly accept, any orders for Products
whose end use would be in violation of any Laws. The Nidek shall be responsible
for current and ongoing familiarity and compliance with all Laws applicable to
the importation, distribution, marketing, sale, operation, use or support of the
Products in the Territory and shall keep EyeSys informed on a timely basis as to
all such Laws relating to the Products, including any provisions relating to
packaging or health regulations.
5.7 Intellectual Property Rights Registrations. Nidek shall promptly
------------------------------------------
notify EyeSys in writing of, and shall assist EyeSys with any registrations or
filings required to obtain copyright, trademark or other intellectual property
rights protection, in EyeSys's name, for the Products in the Territory under
applicable law. EyeSys shall be responsible for all fees or expenses incurred in
connection with such intellectual property rights registrations or filings.
6. ADDITIONAL OBLIGATIONS OF EYESYS
--------------------------------
6.1 Marketing Materials. EyeSys shall provide Nidek with marketing and
-------------------
technical information concerning the Products. Upon the execution of this
Agreement, at EyeSys's expense, EyeSys shall provide Nidek with a reasonable
supply of its brochures, instructional materials, advertising literature, and
other data for the Products. A like quantity of said materials shall be
provided to Nidek, at EyeSys's expense, for any new Products over the term of
this Agreement. Additional quantities of said materials shall be available to
Nidek at EyeSys's cost. All such materials shall be in English unless
otherwise agreed in writing.
6.2 Response to Inquiries. EyeSys shall promptly respond to all inquiries
---------------------
from Nidek concerning matters pertaining to this Agreement.
6.3 Training. EyeSys shall provide Nidek with training for Nidek's sales,
--------
pre-sales, technical and support personnel at EyeSys's then current standard
rates. Unless otherwise agreed, the training will take place at EyeSys's
address set forth above or other EyeSys offices. Nidek shall pay all travel,
food, lodging and other expenses for its employees to attend such training.
-9-
<PAGE>
7. CUSTOMER SUPPORT OBLIGATIONS
----------------------------
7.1 Installation and In-Service Duties. Nidek shall be responsible for
----------------------------------
the installation of Products sold by Nidek and shall perform all in-service
duties related to such sales. This responsibility shall include, among other
things, the unpacking, assembly, minor servicing, adjustment and customer
instruction on the proper use of the Product. On a quarterly basis, Nidek shall
provide EyeSys with a list of customers and installation dates. In addition,
Nidek represents and warrants to EyeSys that its in-service check lists and
warranty cards will be substantially similar to the EyeSye in-service checklists
and warranty cards.
7.2 Customer Service/Support. Nidek shall be responsible for providing
------------------------
its customers with support and after-sales service for the Products at least
equivalent to that provided by EyeSys to its own customers; provided that in no
event shall the quality be less than the level necessary to meet customer
demands in the Territory. Nidek shall respond to all service calls in the
Territory for service and repair of the Products. The return and/or replacement
of any Product shall be governed by the terms and conditions of sale set forth
in this Agreement.
(a) After the initial warranty period Nidek shall not provide Software
Updates to Customers except pursuant to the terms of a software support
agreement (a "Nidek Software Support Agreement"), in form and substance
reasonably satisfactory to EyeSys. For each customer covered by a Nidek
Software Support Agreement, Nidek shall pay EyeSys a fee as set forth in Exhibit
A (the "EyeSys Support Fee"). EyeSys shall provide support to Nidek as set
------------------
forth in EyeSys' Hardware and Software Sales, Support and Obsolescence Policy
("Support Policy"), attached hereto as Exhibit D. No per copy EyeSys Support
Fee shall be due with regard to support provided during the initial warranty
period, currently one year, offered by EyeSys. The per copy EyeSys Support Fee
shall be adjusted, as appropriate, for acquisition by customer of additional
Products during the term of any Nidek Software Support Agreement, and a pro rata
share of any such adjustments shall be paid to EyeSys.
(b) Nidek shall maintain onsite staff support personnel sufficiently
knowledgeable with respect to the Products to answer questions regarding the
use, operation, service and repair of the Products. Nidek shall ensure that all
questions regarding the use, operation, service and repair of the Products
Marketed by Nidek are initially addressed and answered by Nidek.
(c) Nidek shall arrange with EyeSye, at Nidek's expense, for at least two
(2) qualified employee(s) of Nidek to attend EyeSys's training program in the
service and repair of Products. In the event of termination of the employment
of any such employee, Nidek shall notify EyeSys in writing of such termination,
and of the name of another qualified employee, who shall, at Nidek's expense,
attend and complete EyeSys's training program within ninety (90) days of the
date of such termination.
(d) Nidek shall ensure that all questions regarding the use or operation
of Products marketed by Nidek are initially addressed to and answered by Nidek.
Nidek will not represent to any third
-10-
<PAGE>
party that EyeSys is available to answer questions from any Subdistributor or
other customer directly. Any Subdistributor or customer service questions
resulting from Nidek's sales will be referred by EyeSys back to Nidek. However,
Nidek shall allow EyeSys or a third party of EyeSys's choice to perform
installation, support and maintenance obligations for customers in the Territory
without obligation to pay any fees to Nidek in the event Nidek fails to perform
any of such obligations to EyeSys's reasonable satisfaction. However, EyeSys
agrees to provide thirty (30) days notice to Nidek of EyeSys's dissatisfaction
with Nidek's performance of its obligations before EyeSys or EyeSys's third
party designee performs such obligations.
(e) EyeSys shall support Nidek's support and maintenance activities as
specified in Sections 9 and 10 below.
(f) Failure of Nidek to perform its obligations under this Section 7 shall
be deemed a breach of this Agreement.
7.3 Software Updates and Upgrades. During the initial warranty period,
-----------------------------
Nidek shall make Software Updates and Upgrades available to all End-Users.
After the expiration of the initial warranty period, Nidek shall make Software
Updates and Upgrades available only to End-Users (for which Nidek has previously
paid EyeSys an EyeSys Support Fee) through Nidek Software Support Agreements.
Nidek may provide Software Updates and Upgrades to End-Users not covered by a
Nidek Software Support Agreement (for which Nidek has previously paid EyeSys an
EyeSys Support Fee), but shall only make Software Updates and Upgrades available
to such End-Users as new Software products and additional Products.
7.4 Back-Up Support. During the term of this Agreement, EyeSys will
---------------
provide Nidek, without additional charge, reasonable back-up support concerning
technical aspects and use of the Products as reasonably necessary in order for
Nidek to provide support and service to its customers under the Nidek Software
Support Agreements. Such back-up support shall include the following:
(a) EyeSys shall provide back-up support to Nidek as set forth in EyeSys'
Support Policy.
(b) EyeSys shall make available to Nidek, the following types of training:
(1) sales training - this training shall include, but shall not be limited
to, identification of target markets, qualification of potential customers and
specific sales advice;
(2) product support training - this training shall prepare Nidek personnel
to support questions from Nidek's customers. It should contain all of the
information made available under customer training and includes specific
materials, such as the answers to the most frequent questions asked by
customers, directed to customer support, as well as, technical instruction in
the use and operation of the Product;
(3) technical service training - this training shall provide technical
instruction in the servicing and repair of the Products; and
-11-
<PAGE>
(4) During normal business hours, EyeSys will provide telephone
consultation to Nidek with respect to any customer questions which Nidek cannot
adequately answer. Nidek shall designate one (1) senior technical consultant,
mutually agreeable to both Nidek and EyeSys, to act as the single point of
contact.
7.5 Inspections. Nidek shall, upon reasonable notice, permit EyeSys
-----------
personnel to enter Nidek's facilities to conduct audits of Nidek's maintenance,
support and training activities. In the event that EyeSys determines that
Nidek's maintenance, support and training activities are not sufficient to meet
the requirements of this Section 7 and Nidek fails to remedy within thirty (30)
days after being given notice thereof, (i) EyeSys shall have the right to
appoint a third party to provide support to Product customers in the Territory,
(ii) revise the discount schedule provided for in the agreement and (iii) Nidek
shall do all things in its power to assist such third party in providing such
service, including without limitation providing EyeSys with a list of all
Product customers in the Territory.
7.6 Excluded Sales. Notwithstanding anything herein to the contrary,
--------------
Nidek shall not be obligated to perform any installation, maintenance or other
services for any Products sold in the Territory through to an Excluded Sale.
8. PRODUCT CHANGES
---------------
8.1 Additional Products. EyeSys may, from time to time, amend Exhibit A
-------------------
to add such other products as EyeSys, during the term of this Agreement, offers
for sale to its other distributors on terms and conditions announced by EyeSys.
8.2 Design Modifications. EyeSys will have the right to make any design
--------------------
modification to any of the Products at any time without incurring any obligation
to make such modification to any of the Products previously sold; provided,
however, that EyeSys will provide Nidek with sixty (60) days prior written
notice of any such modifications that materially affect form, fit or function.
8.3 Deletion of Products. EyeSys may delete any Product from Exhibit A
-------------------- ---------
effective sixty (60) days after written notice to Nidek of such deletion.
During such notice period, Nidek may continue to place orders for such deleted
Products, provided that the delivery dates requested by Nidek are within six (6)
months of the effective date of EyeSys's Product deletion.
9. WARRANTY
--------
9.1 Limited Warranty
----------------
(a) Hardware. EyeSys hereby warrants to Nidek that Products purchased
--------
hereunder will be free from defects in material and workmanship for a period of
the lesser of (i) fifteen (15 months from the date of receipt of such Product by
Nidek, (ii) twelve (12) months from the date of delivery by Nidek to such
customer, or, (iii) with respect to any repaired, reconditioned or replaced
Product,
-12-
<PAGE>
ninety (90) days from the date of shipment to Nidek or until the original
warranty for the Product expires, whichever period is longer. Nidek's sole and
exclusive remedy, and EyeSys's sole and exclusive liability, under this warranty
will be to repair or replace the defective Product or, where such cannot be
accomplished, EyeSys may, at its option, refund the purchase price paid
therefore.
(b) Software. EyeSys warrants that the media on which the Software is
--------
recorded will be free from defects in materials and workmanship under normal use
for a period of ninety (90) days from the date of shipment to Nidek of such
Software. Nidek's sole and exclusive remedy, and EyeSys's sole and exclusive
liability, under this warranty will be EyeSys's replacement of the media.
9.2 Customer Warranty. Nidek shall pass on to its customers EyeSys's
-----------------
standard limited warranty for the Products, including the limitations set forth
in the following paragraphs. Pursuant to such warranty, Nidek shall return any
alleged defective Product to EyeSys. Nidek shall have no authority to accept any
returned Products which it desires to return to EyeSys without prior
authorization from EyeSys as provided herein.
9.3 Exclusions. The express warranties set forth in Section 9.1 above
----------
will not apply to defects in a Product: (i) caused through no fault of EyeSys
during shipment to or from Nidek, (ii) caused by software other than the
Software, (iii) caused by the use or operation of Products in an application or
environment other than that intended or recommended by EyeSys, (iv) caused by
modifications or alterations made to the Products by any party other than
EyeSys, (v) caused by the unauthorized use of the Products by Nidek or any third
party, (vii) caused by failure of Nidek to comply with any of the return
procedures specified in this Agreement, or (viii) which are the result of the
Products being subjected to unusual physical or electrical stress.
9.4 Warranty Procedures. Nidek will send Products with defects covered by
-------------------
the foregoing warranty to the repair facility designated by EyeSys. Nidek will
request authorization from EyeSys prior to the return of each defective Product
for repair or replacement by EyeSys. Upon such request, EyeSys will provide
Nidek with a RMA tracer number to be prominently displayed on the shipping
container for the defective Product. Once EyeSys authorizes the return of any
defective Product, Nidek will ship such Product to the repair facility, within
ten (10) days, freight prepaid, in its original shipping container or in a
container of equivalent protective constitution. If such defective Product is
received by EyeSys during the applicable warranty period, EyeSys will, at its
sole option and expense, repair or replace such Product, employing at its
option, new or used Products, to make such repair or replacement, and will ship
the repaired or replaced Product to Nidek at EyeSys's expense. If a returned
Product is determined by EyeSys not to be covered by the warranty, at the
request of Nidek, EyeSys shall return such Product to Nidek at Nidek's expense.
The foregoing states the sole liability and obligation of EyeSys arising out of
this warranty.
9.5 Inspection and Testing Charge. In the event EyeSys's inspection and
-----------------------------
testing discloses that the returned Product is not defective within the terms of
this warranty or the product acceptance provisions set forth in Section 3.7
above, the Nidek will be subject to a Two Hundred and Fifty Dollar ($250.00)
testing charge per Product.
-13-
<PAGE>
9.6 Stored Data. Nidek will be responsible for saving or backing up data
-----------
contained in any Product returned to EyeSys for in warranty or out of warranty
repairs or service. EYESYS WILL HAVE NO RESPONSIBILITY FOR SUCH DATA AND WILL
HAVE NO LIABILITY ARISING OUT OF ANY DAMAGE TO OR LOSS OF SUCH DATA WHILE THE
PRODUCT IS IN EYESYS'S POSSESSION.
9.7 Spare Parts Procedures. Parts removed from Products and Spare Parts
----------------------
returned to EyeSys for repair or replacement will be treated as Products subject
to Sections 9.1 through 9.6 above. Parts removed from Products and Spare Parts
returned to EyeSys for repair or replacement must be accompanied by a removable
tag or label bearing the following information: (i) the model number and serial
number of the Product the defective part was removed from, if applicable, (ii)
identification of the part and (iii) the defect for which the part or Spare Part
is being returned.
9.8 Disclaimer. EXCEPT FOR THE ABOVE EXPRESS WARRANTIES SET FORTH IN
----------
SECTION 9.1 ABOVE, EYESYS MAKES AND NIDEK RECEIVES NO WARRANTIES OR CONDITIONS,
EXPRESS, IMPLIED, STATUTORY, OR IN ANY OTHER PROVISION OF THIS AGREEMENT OR
COMMUNICATION WITH NIDEK, AND EYESYS SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
10. OUT OF WARRANTY REPAIR AND SERVICE SUPPORT
------------------------------------------
10.1 Hardware. EyeSys agrees to make available to Nidek all necessary
--------
services at a repair facility designated by EyeSys to repair and recondition
Products sold pursuant to this Agreement until four (4) years following the
earlier of EyeSys discontinuing such Product or the termination of this
Agreement. The cost of repairing or reconditioning a Product will be subject to
EyeSys's standard out of warranty costs, terms and conditions in effect at the
time of shipment back to Nidek of repaired or reconditioned Products. All
Products returned for out of warranty repairs will be sent and delivered, F.O.B.
EyeSys's repair facility and Nidek will bear all shipping expenses to and from
such facility.
10.2 Spare Parts. EyeSys agrees to sell Spare Parts to Nidek during the
-----------
term of this Agreement and for a period of four (4) years thereafter. At any
time prior to the expiration of such four year period, EyeSys agrees to sell
Licensee such number of spares kits at EyeSys' costs plus 30% as Nidek may
reasonably request. Spare Parts will be ordered and delivered in the manner
described in Section 3.
10.3 Software. Nidek agrees that it will provide all first-line support
--------
to its end user customers. EyeSys agrees to provide reasonable back-up support
to assist Nidek in its support obligations.
-14-
<PAGE>
11. INTELLECTUAL PROPERTY INFRINGEMENT INDEMNITY
--------------------------------------------
11.1 Indemnity. EyeSys agrees to defend and hold Nidek harmless against
---------
any loss, liability or expense (including reasonable attorneys' fees) paid to
third parties arising from any action or claim brought or threatened against
Nidek alleging that the Products under normal use infringe any third party's
United States patent, copyright, trademark, trade secret or other intellectual
property right. EyeSys will be released from its obligations under this Section
9.1 unless Nidek provides EyeSys with (i) prompt written notice of such claim or
action, (ii) sole control and authority over the defense or settlement of such
claim or action and (iii) proper and full information and reasonable assistance
to defend and/or settle any such claim or action.
11.2 Remedy. In the event that any Product is held, or in Eyesys's sole
------
opinion, may be held to constitute such an infringement, Eyesys may, at its
option and expense, (i) obtain for Nidek the right to continue to use such
Product as intended, (ii) modify such Product so that it becomes non-infringing,
but without materially altering the functionality of the Product or (iii)
replace such Product with a functionality equivalent non-infringing Product.
11.3 Limitations. Notwithstanding the provisions of Section 9.1 above,
-----------
EyeSys assumes no liability for infringement claims arising from (i) combination
of Products with other products not provided by EyeSys, but not covering such
Products standing alone, (ii) the modification of such Products unless such
modification was made or authorized by EyeSys, where such infringement would not
have occurred but for such modifications, (iii) EyeSys's compliance with
specifications provided by Nidek, or (iv) any marking or branding placed on the
Products by, or at the request of, Nidek.
11.4 DISCLAIMER. THE FOREGOING STATES THE ENTIRE LIABILITY AND
----------
OBLIGATIONS OF EYESYS AND THE EXCLUSIVE REMEDY OF NIDEK, WITH RESPECT TO ANY
ALLEGED OR ACTUAL INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADE SECRETS, TRADEMARKS
OR OTHER INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS.
12. TERM AND TERMINATION
--------------------
12.1 Term. This Agreement will become effective as of the Effective Date
----
and will continue in force until March 31, 1997, unless earlier terminated
according to the terms of this Section 12. On or about December 31, 1996, the
parties may agree to (i) extend the terms of this Agreement for an additional
period to be determined at that time, (ii) to modify this Agreement to provide
for co-exclusive distribution or (iii) to terminate this Agreement.
12.2 Termination for Cause. This Agreement may be terminated by either
---------------------
party upon notice, if the other party (i) breaches any material term or
condition of this Agreement and fails to remedy the breach within sixty(60) days
after being given notice thereof; provided, however, that for any breach other
than the failure to pay money hereunder, if such breach cannot be cured within
such sixty (60) day period, but (x) the breach is capable of cure, (y) the
breaching party commences to effect a cure
-15-
<PAGE>
within such sixty (60) day period and (z) the breaching party diligently pursues
such cure, the breaching party will have so much time as is reasonably necessary
to cure such default, (ii) becomes the subject of any voluntary or involuntary
proceeding under the U.S. Bankruptcy Code or state insolvency proceeding and
such proceeding is not terminated within sixty (60) days of its commencement or
(iii) ceases to be actively engaged in business.
12.3 Effect of Termination or Expiration. In the event of a termination
-----------------------------------
or expiration of this Agreement, EyeSys will have the right to terminate all
outstanding purchase orders. Those purchase orders not terminated will remain
subject to the provisions of this Agreement. Termination or expiration of this
Agreement will not, however, release purchaser from making payments which it
owes to EyeSys under the terms of this Agreement.
12.4 No Liability For Expiration or Termination. Neither EyeSys nor Nidek
------------------------------------------
shall by reason of the expiration or termination of this Agreement, be liable to
the other for compensation, reimbursement or damages on account of any loss of
prospective profits or anticipated sales or on account of expenditures,
investments, leases, or commitments made in connection with this Agreement or
the anticipation of extended performance hereunder.
12.5 Survival Provisions. The provisions of Sections 2.6, 4, 9, 10, 11,
-------------------
12, 13, 15, 16 and 17 will survive the termination or expiration of this
Agreement for any reason.
13. PROPRIETARY RIGHTS
------------------
13.1 Confidential Information. The parties acknowledge that by reason of
------------------------
their relationship to each other hereunder each will have access to certain
information and materials concerning the other's business, plans, customers,
technology, and/or products that is confidential and of substantial value to
that party, which value would be impaired if such information were disclosed to
third parties ("Confidential Information"). Each party agrees that it will not
------------------------
use in any way for its own account, or the account of any third party. Each
party will take every reasonable precaution to protect the confidentiality of
such Confidential Information. Upon request by the receiving party, the
disclosing party will advise whether or not it considers any particular
information or materials to be Confidential Information. Nidek will not publish
any technical description of the Products beyond the description published by
EyeSys. The receiving party acknowledges that the disclosing party's
Confidential Information is unique property of extreme value of the disclosing
party, and that unauthorized use or disclose thereof would cause the other party
irreparable harm that could not be compensated by monetary damages. Accordingly,
each party agrees that the other will be entitled to injunctive and preliminary
relief to remedy any actual or threatened unauthorized use or disclose of such
party's Confidential Information.
13.2 Notices. All proprietary notices incorporated in, marked on, or
-------
fixed to the Products by EyeSys will not be removed or obliterated by Nidek.
-16-
<PAGE>
13.3 Ownership. Nidek agrees that EyeSys owns all right, title, and
---------
interest in the product lines that include the Products and in all of EyeSys's
patents, trademarks, trade names, inventions, copyrights, know-how, and trade
secrets relating to the design, manufacture, operation or service of the
Products. The use by Nidek of any of these property rights is authorized only
for the purposes herein set forth, and upon termination of this Agreement for
any reason such authorization shall cease.
13.4. No Right to Manufacture or Copy. The Products are sold and the
-------------------------------
Software is licensed by EyeSys subject, in every case, to the condition that
such sale and license does not convey any license, expressly or by implication,
to manufacture, duplicate, or otherwise copy or reproduce the Products or
Software, through reverse engineering or any other means (other than as
expressly permitted under the terms and conditions of the License Agreement).
Nidek agrees to take appropriate steps with its customers, as EyeSys may
request, to inform them of and assure their compliance with the restrictions
contained in this Section 13.4. Nidek agrees that it shall not, nor shall it
permit any third party to, decompile, reverse engineer, prepare derivative works
of or otherwise alter the source code or object code of the Software (other than
as expressly permitted under the terms and conditions of the License Agreement).
14. TRADEMARKS
----------
14.1 Use. During the term of this Agreement, Nidek shall have the right
---
to indicate to the public that it is an authorized distributor of EyeSys's
Software and to advertise (within the Territory) such Software under the
trademarks, marks, and trade names that EyeSys may adopt from time to time
("Trademarks"). Nidek shall not alter or remove any Trademarks applied at the
factory to the Software copies, packages, or other materials contained therein.
Nothing herein shall grant to Nidek any right, title or interest in the
Trademarks. At no time during or after the term of this Agreement shall Nidek
challenge or assist others to challenge the Trademarks or the registration
thereof or attempt to register any trademarks, marks or trade names confusingly
similar to the Trademarks.
14.2 Approval of Representations. All representations of the Trademarks
---------------------------
that Nidek intends to use shall first be submitted to EyeSys for approval (which
shall not be unreasonably withheld) of design, color, and other details or shall
be exact copies of those used by EyeSys. If any of the Trademarks are to be used
in conjunction with another trademark on or in relation to the Software, then
EyeSys's mark shall be presented equally legibly, equally prominently, and of
greater size than the other but nevertheless separated from the other so that
each appears to be a mark in its own right, distinct from the other mark.
15. LIMITATION OF LIABILITY
-----------------------
EYESYS'S LIABILITY UNDER THIS AGREEMENT WILL NOT EXCEED THE LESSER OF THE
AMOUNTS RECEIVED BY EYESYS FROM NIDEK UNDER THE AGREEMENT IN THE MOST RECENT
TWELVE (12) MONTH PERIOD OR $100,000. IN NO EVENT WILL EYESYS HAVE ANY LIABILITY
FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL
-17-
<PAGE>
DAMAGES INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS, LOSS OF DATA OR
COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, ARISING IN ANY WAY OUT OF
THIS AGREEMENT UNDER ANY CAUSE OF ACTION, WHETHER OR NOT EYESYS HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. THESE LIMITATIONS WILL APPLY
NOTWITHSTANDING THE FAILURE OR THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
16. COMPLIANCE WITH LAWS
--------------------
16.1 Import & Export Controls. Nidek understands that EyeSys is subject
------------------------
to regulation by agencies of the U.S. government, including the U.S. Department
of Commerce, which prohibit export or diversion of certain products and
technology to certain countries. Any and all obligations of EyeSys to provide
Products, as well as any technical assistance, will be subject in all respects
to such United States laws and regulations and will from time to time govern the
license and deliver of technology and products abroad by persons subject to the
jurisdiction of the United States, including the Export Administration Act of
1979, as amended, any successor legislation, and the Export Administration
Regulations issued by the Department of Commerce, International Trade
Administration, or Office of Export Licensing. Nidek warrants that it will
comply in all respects with the export and reexport restrictions set forth in
the export license (if necessary) for every Product shipped to Nidek. Nidek will
take all actions which may be reasonably necessary to assure that no end-user
contravenes such United States laws or regulations.
Without in any way limiting the provisions of this Agreement, Nidek agrees
that unless prior authorization is obtained from the Office of Export Licensing,
it will not export, reexport, or transship, directly or indirectly, to country
groups Q,S,W,Y or Z (as defined in the Export Administration Regulations), or
Afghanistan or the People's Republic of China (excluding Taiwan) any of the
technical data disclosed to Nidek or the direct product of such technical data
or otherwise contravene the Export Administration Regulations or other United
States laws and regulations in effect from time to time.
16.2 English Language. This Agreement was negotiated and executed in
----------------
English, and the original English language version will be controlling.
16.3 Government Approvals. Nidek represents and warrants that no consent
--------------------
or approval of any governmental authority is required in connection with the
valid execution and performance of this Agreement.
16.4 Currency Control. Nidek represents and warrants that no currency
----------------
control laws prevent the payment to EyeSys of any sums due under this Agreement.
-18-
<PAGE>
17. MISCELLANEOUS
-------------
17.1 Governing Law. The rights and obligations of the parties under this
-------------
Agreement will not be governed by the 1980 U.N. Convention on Contracts for the
International Sale of Goods; rather such rights and obligations will be governed
by and construed under the laws of the State of California, including is Uniform
Commerical Code, without reference to conflict of laws principles.
17.2 Arbitration. Any dispute or claim arising out of or in connection
-----------
with this Agreement will be finally settled by binding arbitration in San
Francisco, California under the Rules of Arbitration of the American Arbitration
Association by one arbitrator appointed in accordance with said rules. Judgment
on the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to
any court of competent jurisdiction for injunctive relief without breach of this
arbitration provision.
17.3 Indemnification by Nidek. Nidek agrees to indemnify EyeSys against
------------------------
any damages, costs (including attorney's fees and costs) or other liability
arising from claims by any other party resulting from Nidek's representation of
the Products in a manner inconsistent with EyeSys' Product descriptions and
warranties.
17.4 Entire Agreement; Enforcement of Rights. This Agreement, the
---------------------------------------
Settlement Agreement and the License Agreement set forth the entire agreement
and understanding of the parties relating to the subject matter herein and
therein and merge all prior discussion between them. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing signed by the party to be charged. The
failure by either party to enforce any rights hereunder will not be construed as
a waiver of any rights of such party.
17.5 Independent Contractors. The relationship of EyeSys and Nidek
-----------------------
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement will be construed (i) to give either party the power
to direct or control the day-to-day activities of the other or (ii) to
constitute the parties as partners, joint ventures, co-owners or otherwise as
participants in a joint or common undertaking. All sales and other agreements
between Nidek and its customers are Nidek's exclusive responsibility and will
not affect EyeSys's obligations under this Agreement. Nidek will be solely
responsible for, and will indemnify, defend and hold EyeSys harmless against all
claims, damages, and lawsuits arising from the acts and omissions of Nidek, its
employees, servants, agents or any of them.
17.6 Assignment. The rights and liabilities of the parties hereto will
----------
bind and inure to the benefit of their successors, executors or administrators;
provide, however, that Nidek may not assign or delegate this Agreement or any of
its licenses, rights or duties under this Agreement, whether by operation of law
or otherwise, without the prior written consent of EyeSys, except to a person or
entity into which it has merged or which has otherwise succeeded to all or
substantially all of its business and assets to which this Agreement pertains,
by merger, reorganization or otherwise, and which has assumed in writing or by
operations of law its obligations under this Agreement. Any attempted assignment
in violation of the provisions of this Section 17.6 will be void.
-19-
<PAGE>
17.7 Severability. In the event that any provision of this Agreement
------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement will continue in full force and effect
without said provision; provided that no such severability will be effective if
it materially changes the economic benefit of this Agreement to either EyeSys or
Nidek.
17.8 Notices. Any required notices hereunder will be given in writing at
-------
the address of each party set forth above, or to such other address as either
party may substitute by written notice to the other in the manner contemplated
herein, and will be deemed served when delivered or, if delivery is not
accomplished by reason or some fault of the addressee, when tendered.
17.9 Force Majeure. Neither party will be liable to the other for any
-------------
default (other than failure to pay money) hereunder if such default is caused by
an event beyond such party's control, including without limitation acts or
failures to act of the other party, strikes or labor disputes, component
shortages, unavailability of transportation, fires, governmental requirements,
floods, winds, earthquakes and other acts of God (a "Force Majeure Event"). In
the event of threatened or actual non-performance as a result of any of the
above causes, the non-performing party will exercise commercially reasonable
efforts to avoid and cure such non-performance.
17.10 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
17.11 Counterparts. this Agreement may be executed in two or more
------------
counterparts, each of which will be deemed an original and all of this together
will constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
NIDEK CO., LTD. EYESYS TECHNOLOGIES, INC.
By: /s/ H. Ozawa By: /s/ Frederick ??????
------------------------------ ----------------------------
Name: H. Ozawa Name: Frederick ?????
Title: President Title: President & CEO
-20-
<PAGE>
Certain portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by an * and [ ], have been
submitted to the Commission with the confidential treatment request.
EXHIBIT 99.3
EXCLUSIVE DISTRIBUTION AGREEMENT
AGREEMENT made this 2nd day of June, 1997 by and between EYESYS
TECHNOLOGIES, INC., a Delaware corporation with an office at 2776 Bingle Road,
Houston, Texas 77055 ("EyeSys"), and MARCO OPHTHALMIC INC., a Florida
corporation with an office at 11825 Central Parkway, Jacksonville, Florida 32224
("Distributor").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, EyeSys manufactures corneal topography systems which combine
computer hardware and software for use by eye care professionals such as
ophthalmologists in determining, among other things, the contour and shape of a
cornea;
WHEREAS, Distributor through its Marco Technologies division desires to be
appointed as the exclusive distributor of certain EyeSys products in the United
States, and EyeSys is willing to grant such appointment on the terms and
conditions contained herein.
NOW, THEREFORE, 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:
1. DEFINITIONS
-----------
1.1 "Products" shall mean the "System 2000" and "Handheld System" (as
--------
defined in Exhibit A attached hereto), including the hardware components
thereof, any Software included therein and any field replaceable spare parts
("Spare Parts") therefor. "Products" shall not include computers, computer
peripherals and computer furniture that EyeSys purchases from a third party and
provides to customers for their convenience as a "pass through" item.
1.2 "Software" will mean those Products which consist of EyeSys created
--------
computer software, and any EyeSys created computer software which is included in
a Product, in object code format, including accompanying documentation, and any
Software Updates, Software Upgrades, enhancements and corrections made available
to Distributor by EyeSys. "Software" shall not include third party software
included with the Product for the customer's convenience (e.g., DOS, Microsoft
Windows, etc.).
1.3 "Territory" shall mean the fifty states of the United States of
---------
America.
1.4 "Software Update" shall mean a new release of a Software Product which
---------------
is not a Software Upgrade, which includes bug fixes, error corrections and other
minor changes in features and functionality and which EyeSys makes generally
available to its
<PAGE>
end-user customers without additional license fees (other than routine
maintenance fees).
1.5 "Software Upgrade" shall mean a new version of a Software Product
----------------
which is not a Software Update, which contains substantial improvements in
features and/or functionality, and for which EyeSys generally charges an
additional fee, as determined by EyeSys.
1.6 All references in this Agreement to the "sale" of or "selling"
Products, with respect to hardware, shall mean the sale of such hardware, and
with respect to Software, shall mean the granting of a non-exclusive license to
-------
use such Software. All references in this Agreement to the "purchase" of
Software shall mean the obtaining of a non-exclusive license to use such
-------
Software.
2. APPOINTMENT
-----------
2.1 Appointment. Subject to the terms and conditions set forth herein
-----------
(including, without limitation, Sections 2.2, 2.6, 2.7, 3 and 13 hereof): (a)
EyeSys hereby appoints Distributor as EyeSys' exclusive distributor for the
Products in the Territory, and Distributor hereby accepts such appointment, and
(b) Distributor shall have the right to purchase Products from EyeSys and to
market and distribute such Products to customers in the Territory.
2.2 Certain Limitations on Exclusivity. EyeSys's appointment of
----------------------------------
Distributor as EyeSys' exclusive distributor for the Products in the Territory
will mean that EyeSys will not promote or market the Products directly to
customers in the Territory nor appoint any third party as EyeSys' sales
representative or distributor for the Products in the Territory, except that
EyeSys reserves the right to: (a) permit third parties, such as OEMs, to sell
Products within the Territory which have been bundled with (and become an
integral part of) other hardware or software products encompassing a technology
other than corneal topography (e.g., lasers) and which "bundled products" do not
perform a corneal topography exam independent of performance of another function
such as guiding a surgical laser; and (b) establish a corporate accounts
program, to be determined by EyeSys in its sole discretion, which enables EyeSys
to sell Products within the Territory to corporations or other entities,
including the Federal Government (collectively, "corporate accounts"), where (i)
the purchasing agent of the corporate account is not the end-user or the
corporate account is not a buying group for unaffiliated persons or entities;
and (ii) the corporate account issues a purchase order or enters into a purchase
agreement with EyeSys pursuant to which the corporate account makes a binding,
non-cancelable order to purchase five or more units of the System 2000, or 20 or
more units of the Handheld System, in any twelve-month period; provided,
--------
however, that if EyeSys requests and Distributor is willing to provide
- -------
installation, training and/or support services for a customer in the Territory
2
<PAGE>
who purchases Products through the above programs, EyeSys will provide
Distributor with reasonable compensation, commensurate with its responsibilities
(in addition to payment of any commission described below); provided, further,
-------- -------
that with respect to any units of either the System 2000 or the Handheld System
sold by EyeSys to any corporate account while the exclusive appointment of
Distributor hereunder with respect to such system is in effect, EyeSys shall pay
Distributor a commission with respect to the sale of such units (within thirty
days of EyeSys' receipt of payment therefor from the corporate account)
determined in accordance with the following:
[*]
2.3 Territorial Responsibility. Distributor shall use its best efforts
--------------------------
and pursue aggressive sales policies and procedures in order to realize the
maximum sales potential for the Products in the Territory. Distributor shall
not direct any advertisement or marketing or promotional efforts with respect
to the Products outside the Territory or establish a Product repair, maintenance
or storage facility outside the Territory without the prior written consent of
EyeSys.
2.4 Software Distribution License. Subject to the terms and conditions of
-----------------------------
this Agreement (including, without limitation, Section 17.6 hereof), EyeSys
hereby grants Distributor a non-exclusive license to distribute solely to
customers in the Territory copies of the Software which are, or which are
included within, Products as purchased from EyeSys hereunder. Where the
Software is included as a component of a Product together with hardware provided
by EyeSys, Distributor shall have no right to distribute such Software
separately from the EyeSys hardware, nor shall it permit any third party to do
so. In addition to the foregoing, Distributor agrees to pass on to each
customer all documentation and materials, including the shrinkwrap license
agreement, for any third party software included as part of a Product.
2.5 End-User Licenses. Distribution of Software shall be subject to the
-----------------
execution, by Distributor's end-user customer, of EyeSys' standard end-user
license agreement ("Software License Agreement") included with each Software
Product, a current copy of which is attached hereto as Exhibit B (or such other
form as EyeSys may from time to time require). Distributor shall, prior to
delivery of any Software to an end-user customer, require such end-user customer
to complete and sign the Software License Agreement
3
<PAGE>
included with such Software, and shall use its best efforts to return such
completed and signed copies to EyeSys within thirty (30) days following delivery
of the Software to the end-user customer. Distributor shall have no authority
to alter any terms of the Software License Agreement without EyeSys' prior
written authorization.
2.6 Conflict of Interest.
--------------------
(a) "Competing Products" shall mean any product which provides
substantial overlap of any of the functionality of any of the Products and which
a person with reasonable knowledge of topography could reasonably deem to be
competitive with any of the Products; provided, however, that "Competing
-------- -------
Products" shall not include products currently marketed, promoted or distributed
by Distributor, any upgrades thereto and any products manufactured or sold by
Nidek Company, Ltd. ("Nidek").
(b) The parties acknowledge that any efforts by Distributor to sell
Competing Products in the Territory would constitute a conflict of interest with
respect to Distributor's obligations to market the Products. Distributor shall
notify EyeSys prior to marketing, promoting or distributing any Competing
Products at least sixty (60) days prior to commencing such activity. Without
limiting anything herein, failure of Distributor to so notify EyeSys shall be
deemed to be a material breach of this Agreement by Distributor.
(c) In the event that Distributor is distributing any Competing
Products or EyeSys receives a notice from Distributor of its intention to
distribute any Competing Products, EyeSys shall have the right to terminate this
Agreement or the appointment of Distributor hereunder with respect to any or all
of the Products and/or modify its appointment of Distributor hereunder to a non-
exclusive basis with respect to any or all of the Products, upon thirty (30)
days notice thereof to Distributor without any liability to EyeSys; provided,
--------
however, that EyeSys may not exercise such right as a result of the distribution
- -------
by Distributor of any Competing Products with respect to which Distributor
provided EyeSys notice pursuant to the terms of Section 2.6(b) and with respect
to which EyeSys failed to object by notice to Distributor given within forty-
five (45) days after receipt of such notice from Distributor.
2.7 Relationship with Nidek. Notwithstanding anything in this Agreement
-----------------------
to the contrary, the parties acknowledge and agree that (i) Distributor shall be
permitted to distribute and sell any and all products manufactured by Nidek or
sold by Nidek, from time to time, and (ii) EyeSys shall be permitted to license
its Products and Software to Nidek for embodiment in Nidek products, which may
be distributed worldwide; provided, however, that while EyeSys may allow Nidek
-------- -------
to appoint distributors, EyeSys shall not permit Nidek
4
<PAGE>
to sublicense all or substantially all of its rights to EyeSys' Products and
Software.
3. TERM
----
3.1 General. Subject to the terms hereof (including, without limitation,
-------
Sections 2.6, 3.2 and 13.1), this Agreement shall become effective as of the
date hereof and continue until the later of (i) the expiration of the
appointment of Distributor hereunder as distributor of the System 2000 (as the
same may be extended by written agreement of the parties), and (ii) the
expiration of the appointment of Distributor hereunder as distributor of the
Handheld System (as the same may be extended by written agreement of the
parties).
3.2 System 2000 and Handheld System. The appointment of Distributor
-------------------------------
hereunder with respect to (i) the "System 2000" (as defined in Exhibit A hereto)
and the Products included therein shall commence on the date hereof and continue
through March 31, 1998 and (ii) the "Handheld System" (as defined in Exhibit A
hereto) and the Products included therein shall commence on the thirtieth (30th)
day following the Commercialization Date (as defined below) and continue for a
period of three years immediately following such thirtieth day (each of such
three years being a "Handheld System Year"), unless in either case earlier
terminated pursuant to the terms hereof or extended by written agreement of the
parties. As used in this Agreement, the "Commercialization Date" shall refer to
the date on which the first unit of the Handheld System suitable for commercial
sale is delivered to Distributor (provided that EyeSys can produce such unit in
commercially reasonable quantities and within commercially reasonable delivery
dates and has obtained requisite governmental and regulatory approvals with
respect thereto in compliance with Section 7.4), unless such unit is rejected by
Distributor by notice to EyeSys, given within twenty-five days thereafter,
because such unit does not conform in any material respect to the
specifications, or perform in any material respect any of the functions, of the
Handheld System set forth on Exhibit A hereto. EyeSys agrees to provide such
unit to Distributor promptly upon its availability.
4. SUPPLY OF PRODUCTS
------------------
4.1 Forecasts. Commencing in July 1997 and continuing throughout the
---------
remainder of the term of this Agreement, Distributor shall (i) provide EyeSys
with a three-month rolling forecast by the last Friday of each calendar month
which sets forth Distributor's estimated monthly requirements for shipment of
Products and (ii) comply with its payment obligations under Section 5.3 hereof
with respect to units of the System 2000 projected to be purchased by
Distributor in the third month of such forecast. Such forecasts
5
<PAGE>
are for planning purposes only, and the Product orders projected therein will
not be binding on either party.
4.2 Orders. All purchases and sales between EyeSys and Distributor will
------
be initiated by Distributor's issuance of written purchase orders sent via mail
or facsimile (other than Distributor's non-cancelable order for sixty units
pursuant to Section 5.1 hereof). Additionally, Distributor may initiate
purchase orders verbally, provided that it confirms such orders in writing
within seven (7) days. Such orders will state unit quantities, unit
descriptions, requested delivery dates, and shipping instructions. EyeSys
agrees to use its best efforts to fulfill all purchase orders for Products
submitted by Distributor pursuant to this Agreement; provided, however, if
-------- -------
EyeSys has so utilized its best efforts EyeSys shall be entitled to reject or
delay, in whole or in part, purchase orders from Distributor to the extent that
compliance with such purchase orders would exceed EyeSys' production capacity;
provided, further, to the extent that any such rejection or delay prevents
- -------- -------
Distributor from fulfilling its purchase requirements under Sections 4.7 or 5.1,
such purchase requirements shall be suspended. EyeSys will use reasonable
efforts to notify Distributor of the acceptance of a purchase order within
fifteen (15) days of receipt of the purchase order; however, no purchase order
will be binding upon EyeSys until accepted by EyeSys in writing, and no order
will be accepted unless it specifies a delivery date. Partial shipment of an
order will not constitute acceptance of an entire order.
4.3 Shipping. All Products delivered pursuant to the terms of this
--------
Agreement will be suitably packed for shipment in EyeSys' standard containers,
marked for shipment to Distributor's address set forth above or to an address
specified in Distributor's purchase order, and delivered to a carrier or
forwarding agent chosen by Distributor. Should Distributor fail to designate a
carrier, forwarding agent or type of conveyance, EyeSys will make such
designation in conformance with its standard shipping practices. Shipment will
be F.O.B. EyeSys' manufacturing facility ("Delivery Point"), at which time risk
of loss and title pass to Distributor. All freight, insurance and other
shipping expenses from the Delivery Point, as well as any special packing
expenses requested by Distributor, will be borne by Distributor.
4.4 Deferral. Distributor may defer shipments of Products currently on
--------
order, in whole or in part, by giving EyeSys written notice at least fifteen
(15) days prior to the scheduled delivery date. Deferring shipment of any
Products ordered hereunder for more than fifteen (15) days beyond the originally
requested delivery date for such Products will be deemed a cancellation of the
original order, and subject to the provisions of Section 4.5 below.
6
<PAGE>
4.5 Cancellation. At its option, Distributor may cancel purchase orders
------------
scheduled for shipment, subject to the following cancellation fees which are
dependent upon the number of days in advance of the scheduled shipment date that
Distributor notifies EyeSys of cancellation:
<TABLE>
<CAPTION>
Days before Ship Date Cancellation Fee
--------------------- ----------------
<S> <C>
More than 30 days 0%
30-16 days 15%
15 days or less 25%
</TABLE>
Notwithstanding anything to the contrary contained in this Section, no
cancellation fees shall be payable with respect to cancellation of any orders
for the sixty units of the System 2000 ordered by Distributor pursuant to
Section 5.1; provided, however, that any such cancellation by Distributor shall
-------- -------
not limit or affect Distributor's obligation to purchase sixty units of the
System 2000 pursuant to Section 5.1 hereof or impose any obligation upon EyeSys
to refund any portion of the Advance Payment made by Distributor pursuant to
such Section.
4.6 Inspection and Acceptance. Distributor will inspect all Products for
-------------------------
obvious physical damage promptly upon receipt thereof. Any Product not properly
rejected within twenty (20) days of receipt of that Product by Distributor (the
"Rejection Period") will be deemed accepted. To reject a Product, Distributor
will, within the Rejection period, notify EyeSys in writing or by fax of its
rejection and request a Returned Material Authorization ("RMA") number. EyeSys
will provide the RMA number in writing or by fax to Distributor within fifteen
(15) days of receipt of the request. Within ten (10) days of receipt of the RMA
number, Distributor will return to EyeSys the rejected Product, freight prepaid,
in its original shipping carton with the RMA number displayed on the outside of
the carton. EyeSys will reimburse Distributor for shipping charges for all
Products that were defective upon delivery by EyeSys to the Delivery Point.
EyeSys reserves the right to refuse to accept any rejected Products that do not
bear an RMA number on the outside of the carton. As promptly as possible but no
later than thirty (30) working days after receipt by EyeSys of properly rejected
Products, EyeSys will, at its option and expense, either repair or replace the
Products which it determines to be covered by its warranty to Distributor under
Section 10 and return such repaired or replaced Product to Distributor at
EyeSys' expense (which repair or replacement shall be Distributor's sole remedy
relating to such Products).
4.7 Net Purchase Requirement for Handheld System. Distributor agrees to
--------------------------------------------
use its best efforts to sell the Handheld System throughout the Territory during
the first six months of the first Handheld System Year. Prior to conclusion of
the seventh month of the first Handheld System Year, the parties agree to
negotiate in good faith a minimum number of unit purchases (net of returns and
7
<PAGE>
allowances) of the Handheld System required to be made by Distributor during the
last six months of the first Handheld System Year; provided, however, in the
-------- -------
event that the parties do not reach agreement thereon prior to the conclusion of
such seventh month, the minimum number for the last six months of the first
Handheld System Year shall be equal to 105% of the units purchased and sold or
leased by Distributor of the Handheld System during the first six months.
Within forty-five days after commencement of each of the second and third
Handheld System Years, the parties agree to negotiate in good faith an increase
in the minimum number of unit purchases (net of returns and allowances) of the
Handheld System required to be made by Distributor in that Handheld System Year;
provided, however, in the event that the parties do not reach an agreement by
- -------- -------
the end of such forty-five days, the minimum number for the such Handheld System
Year shall be deemed to be 105% of the of the unit purchases by Distributor for
the prior Handheld System Year. In the event that Distributor fails to meet its
purchase requirement hereunder for any Handheld System Year (or six-month period
in the case of the first Handheld System Year), EyeSys may modify the
appointment of Distributor hereunder with respect to the Handheld System and the
Products included therein from an exclusive basis to a non-exclusive basis by
notice to Distributor to such effect given within 90 days after the end of the
Handheld System Year, subject to Section 5.2.
5. PAYMENTS
--------
5.1 Advance Order Payment for System 2000.
-------------------------------------
[*]
(b) Simultaneously with the execution and delivery hereof by the
parties, EyeSys agrees to execute in favor of Distributor as the secured party a
UCC-1 financing statement and a security agreement in the form attached hereto
as Exhibit D (the "Security Agreement") which evidence a security interest of
Distributor in EyeSys' assets to secure repayment to Distributor of
8
<PAGE>
prepaid orders (including, without limitation, the Advance Payment) in the event
and to the extent that such prepaid orders are not delivered to Distributor when
and as required under this Agreement time being of the essence, which security
interest will be subordinate to the security interest held by Silicon Valley
Bank in the assets of EyeSys (and any other security interests disclosed on
Exhibit A to the Security Agreement or to the extent provided by applicable
law). A breach by EyeSys under the Security Agreement will at Distributor's
election constitute a breach under this Agreement.
(c) In the event that Distributor does not sell all such 60 units
prior to March 31, 1998, the parties agree that Distributor may return up to a
maximum of 10 of such unsold units (if undamaged) for a full refund of the
Purchase Price thereof; provided, however, that in the event that (i) the
-------- -------
Commercialization Date does not occur on or prior to March 31, 1998, (ii) the
appointment of Distributor hereunder with respect to the System 2000 is modified
by EyeSys to a non-exclusive basis, or pursuant to any right of modification or
termination afforded EyeSys under this Agreement such appointment is terminated
by EyeSys, on or prior to March 31, 1998 or (iii) this Agreement is terminated
by Distributor pursuant to Section 13.1 as a result of the uncured breach hereof
by EyeSys on or prior to March 31, 1998, Distributor may return all unsold units
(if undamaged) of the System 2000 purchased hereunder for a full refund of the
Purchase Price thereof.
5.2 Exclusive Distribution Fee for Handheld System. In consideration of
----------------------------------------------
the appointment by EyeSys of Distributor hereunder as exclusive distributor of
the Handheld System, Distributor shall pay EyeSys the following amounts
(collectively, the "Exclusive Distribution Fee") at the times indicated: (a)
$100,000 simultaneously with the execution and delivery of this Agreement; and
(b) an additional $100,000 on the date on which clinical validation (as defined
in the next sentence) of the Handheld System occurs (of which date EyeSys shall
promptly provide notice to Distributor). For purposes of the previous sentence,
"clinical validation" shall mean the satisfactory operation (as reasonably
determined by EyeSys) of the Handheld System in a clinical setting by an eye
care professional. In the event that EyeSys modifies the appointment of
Distributor hereunder from an exclusive to a non-exclusive basis with respect to
the Handheld System pursuant to this Agreement or terminates such appointment,
EyeSys shall be required to refund a pro rata portion of the Exclusive
Distribution Fee actually received by EyeSys calculated based upon the portion
of the three-year period described in Section 3.2 which has then elapsed. In
the event that the Commercialization Date shall not have occurred on or prior to
March 31, 1998, EyeSys shall repay to Distributor, on or before April 5, 1998,
the entire Exclusive Distribution Fee actually received by EyeSys.
9
<PAGE>
5.3 Payments with Forecasts. Through December 31, 1997, Distributor shall
-----------------------
make payment with each forecast submitted to EyeSys in accordance with Section
4.1 (or by the end of the month in which such forecast is due) of the Purchase
Price of the System 2000 units projected to be purchased in the third month of
such forecast. Such payments shall be applied towards purchases of such units
by Distributor in such third month and EyeSys shall reflect such payments
accordingly in invoices sent pursuant to Section 5.5 below.
[*]
5.5 Payment of Purchase Price. EyeSys shall issue invoices to Distributor
-------------------------
upon shipment of the Products to Distributor. Distributor shall pay such
invoices within thirty (30) days of the date of such invoice (except as
otherwise provided in Section 5.1(a)). EyeSys reserves the right to change
credit terms provided herein when, in EyeSys' sole opinion, the financial
condition and past payment history of Distributor so warrant such a change.
Late payments will accrue interest at the rate of one and one half percent
(1.5%) a month, or the highest interest rate allowable by law, whichever is
lower, and Distributor will pay all of EyeSys' costs and expenses (including
reasonable attorneys' fees) to enforce and preserve EyeSys' rights under this
Section 5.5. In addition, in the event that Distributor becomes delinquent in
the payment of any sum due hereunder, without limiting any other right or remedy
(including, without limitation, pursuant to Section 13.1 hereof), EyeSys shall
have the right to suspend performance until such delinquency is corrected. All
amounts due hereunder are payable in full to EyeSys without deduction and are
net of sales and use taxes.
10
<PAGE>
5.6 Adjustment of Purchase Prices.
-----------------------------
[*]
(c) EyeSys agrees not to raise the Purchase Price of the System 2000
prior to March 31, 1998 or of the Handheld System prior to the conclusion of the
first Handheld System Year. Notwithstanding anything in this Agreement to the
contrary, no price increase shall affect any prepaid orders.
11
<PAGE>
(d) EyeSys has the right to decrease its List Price for ancillary
components of and accessories for the System 2000 and Handheld System upon
fifteen (15) days advance written notice to Distributor, and to increase its
List Price upon sixty (60) days advance written notice to Distributor. Such
List Price decreases will apply to all accepted but unshipped orders and such
increases will apply to all purchase orders received after the effective date of
the revision.
6. CERTAIN OBLIGATIONS OF DISTRIBUTOR
----------------------------------
6.1 Promotion of the Products. Distributor shall, at its own expense, use
-------------------------
its best efforts to promote the distribution of the Products in order to achieve
maximum sales potential within the Territory. Such promotion (at Distributor's
expense, except as provided herein) shall include but not be limited to:
(a) advertising the Products in trade publications and participating
in trade shows as the parties mutually agree upon (it being acknowledged that
the parties agree to share evenly the costs of such advertising and trade
shows);
(b) directly soliciting orders from customers for the Products within
the Territory;
(c) utilizing and demonstrating the Products at appropriate seminars
presented by Distributor. Additionally, Distributor agrees that EyeSys'
Products and products embodying EyeSys' Software shall be the only corneal
topography systems taught, discussed and marketed at seminars sponsored by
Distributor;
(d) providing adequate contact with existing and potential customers
within the Territory on a regular basis, consistent with good business practice;
and
(e) assisting EyeSys in assessing customer requirements for the
Products, including modifications and improvements thereto, in terms of quality,
design, functional capability, and other features.
Distributor agrees not to use any advertisement (which contains any
representation or claim, with respect to any Product, not previously approved by
EyeSys hereunder) or issue any press release with respect to any of the Products
without the prior approval of EyeSys with respect thereto.
6.2 Reports. Distributor shall:
-------
(a) provide EyeSys with updated sales and inventory reports, in a form
reasonably acceptable to EyeSys detailing Distributor's sales activities for
Products, within thirty (30)
12
<PAGE>
days of the end of each calendar quarter. Such reports shall include, at a
minimum, date sold, quantity of each type of Products sold, serial number, and
the buyers' names and addresses;
(b) keep EyeSys advised of Distributor's marketing and sales promotion
activities relative to the Products, orally and through quarterly written
reports, which shall include, without limitation, information regarding:
(1) formal training of sales personnel;
(2) formal training of technical personnel; and
(3) trade shows participated in which featured the Products.
6.3 Personnel. Distributor shall equip its sales and support personnel
---------
with adequate training, marketing and technical, sales and technical literature
with respect to the Products, including such materials as may be made available
by EyeSys.
6.4 Representations. Distributor shall limit its claims and
---------------
representations concerning the Products to those made by EyeSys in its published
product literature, and not make any claims or representations in excess of such
claims of EyeSys.
6.5 Inventory Stocking. Distributor shall carry in stock sufficient
------------------
quantities of Products so as to enable Distributor to properly discharge its
obligations under this Agreement and to effectively demonstrate Products to
prospective customers, subject to EyeSys' timely compliance hereunder with
purchase orders made pursuant to Section 4.
6.6 Collection Responsibilities. Distributor shall be solely responsible
---------------------------
for all collection efforts with respect to the sales of Products made by
Distributor pursuant to the terms hereof and the failure of any customer to
timely pay Distributor for such Products shall not relieve Distributor of its
obligations to EyeSys hereunder.
6.7 Standard of Business Practices. Distributor shall establish and
------------------------------
maintain a high standard of ethical business practices in connection with its
distribution of the Products in the Territory. Distributor shall at all times
conduct its efforts hereunder with the highest commercial standards and in
strict accordance with all applicable federal, state, local and other
governmental laws, rules, directives and regulations ("Laws"). Distributor
shall not knowingly solicit, nor shall EyeSys knowingly accept, any orders for
Products whose end use would be in violation of any Laws.
13
<PAGE>
7. CERTAIN OBLIGATIONS OF EYESYS
-----------------------------
7.1 Marketing Materials. EyeSys shall provide Distributor with reasonable
-------------------
quantities of promotional materials currently used by EyeSys in the United
States (which Distributor may modify, upon the prior written approval of EyeSys,
at Distributor's expense).
7.2 Response to Inquiries. EyeSys shall use its best efforts to promptly
---------------------
respond to all inquiries from Distributor concerning matters pertaining to this
Agreement.
7.3 Regional Sales Managers. EyeSys shall use its best efforts to employ
-----------------------
three Regional Sales Managers in the United States through March 31, 1998 to
help train Distributor's sales and support personnel and offer general sales
support. Unless other wise agreed, the training will take place at EyeSys'
address set forth above, other EyeSys offices or any other site designated by
EyeSys. Distributor shall pay all travel, food, lodging and other expenses for
its personnel to attend such training.
7.4 Regulatory Filings. EyeSys shall be solely responsible for compliance
------------------
with all requirements imposed (with respect to the manufacture and sale of the
Products in the United States) by the Food and Drug Administration or other
governmental entity or regulatory body having jurisdiction (including, without
limitation, all 510k filings), except as otherwise required by applicable law.
To the knowledge of EyeSys, no filings by Distributor are required by the Food
and Drug Administration or other such governmental entity or regulatory body
with respect to the Products.
8. INSTALLATION, SERVICE AND SUPPORT
---------------------------------
8.1 Installation and In-Service Duties. Distributor shall be responsible
----------------------------------
for the installation of Products sold by Distributor and shall perform all in-
service duties related to such sales. This responsibility shall include, among
other things, the unpacking, assembly, minor servicing, adjustment and customer
instruction on the proper use of the Product. Distributor shall also return to
EyeSys the standard EyeSys warranty card and a completed in-service checklist
(as well as the Software License Agreement as provided in Section 2). Without
limiting anything herein, failure of Distributor to perform its obligations
under this Section 8 (other than the failure to return the Software License
within the time period prescribed in Section 2 or the warranty card or in-
service checklist pursuant to this Section) shall be deemed a material breach of
this Agreement by Distributor.
8.2 Customer Service/Support. Distributor shall use its best efforts to
------------------------
provide its customers with support and after-sales service for the Products
equivalent to that which EyeSys has provided to its own customers. Distributor
shall maintain on-site staff support personnel sufficiently knowledgeable with
respect to
14
<PAGE>
the Products to answer questions regarding the use, operation, service and
repair of the Products. Distributor shall ensure that all questions regarding
the use, operation, service, and repair of the Products marketed by Distributor
are initially addressed to and answered by Distributor. During normal business
hours, EyeSys will provide telephone consultation to Distributor with respect to
any customer questions which Distributor cannot adequately answer. Distributor
and EyeSys shall each designate one (1) technical representative, mutually
agreeable to both Distributor and EyeSys, to act as the single point of contact.
8.3 Repair Service on System 2000. EyeSys shall use its best efforts to
-----------------------------
provide (or cause to be provided) hardware and software warranty and non-
warranty repair for the System 2000. To fulfill such obligations, EyeSys shall
employ a sufficient number of Technical Support persons and field Product
Specialists and (through March 31, 1998) the hardware services of Digital
Equipment Corporation. Distributor acknowledges and agrees that EyeSys may sell
service contracts for the System 2000 to Distributor's customers; provided,
--------
however, that EyeSys shall pay Distributor a commission with respect to each
- -------
one-year service contract sold to Distributor's customers of the System 2000 of
$50 per hardware-only service contract, $50 per software-only service contract
and $75 per combined hardware/software service contract.
8.4 Repair Service on Handheld System. Warranty and non-warranty hardware
---------------------------------
and software repair for the Handheld System will be provided as follows:
(a) Distributor will respond to service requests from customers of the
Handheld System and where necessary arrange to make an on-site diagnostic
inspection of the subject Handheld System. If Distributor is unable to resolve
the problem with an adjustment or other simple field corrections, then
Distributor shall attempt to determine which components are defective and if so
successful remove the defective component(s). Distributor, in such event, shall
at Distributor's expense ship the defective component(s) to EyeSys. If,
however, Distributor is unable to isolate the defective component(s), then
Distributor shall ship the subject Handheld System to EyeSys at Distributor's
expense.
(b) Upon receipt by EyeSys of defective components and/or defective
Handheld Systems EyeSys shall, at its election, either replace the same with
functioning component(s) or a functioning Handheld System or effect necessary
repairs using best efforts to accomplish same as soon as possible. Upon
completion of the requisite repairs or accomplishing the replacements, EyeSys
shall ship the same either to Distributor or directly to the respective
customer, whichever Distributor shall elect. The cost of such shipment shall be
borne by EyeSys during applicable warranty periods, but by Distributor after
expiration of same. The cost to Distributor for repairs or replacement after
expiration of
15
<PAGE>
applicable warranty periods (and for non-warranty repairs) shall be as
determined by EyeSys, from time to time, upon reasonable notice to Distributor,
but in no event shall exceed reasonable charges for such services. The
performance of EyeSys' obligations under this subsection (b) shall be the only
expense borne by EyeSys under this Section 8.4.
(c) Distributor shall effect any required reinstallation of the
repaired or replaced components or Handheld Systems.
(d) Distributor shall arrange with EyeSys, at Distributor's expense,
for at least two (2) qualified employees of Distributor to attend EyeSys'
training program in the use and operation of the Products. One (1) qualified
employee of Distributor who has training in electronics or a computer related
field, or equivalent must attend EyeSys' training program in the service and
repair of the Handheld System. EyeSys shall provide Distributor with EyeSys'
diagnostic and service information with respect to the Handheld System for use
by Distributor only in the performance of its obligations under this Section
(and which information shall be deemed Confidential Information subject to the
terms of Section 14.1 hereof). Distributors expense does not include any
tuition or other fee imposed by EyeSys for conducting the training.
8.5 Advanced Training. Through March 31, 1998, EyeSys agrees to provide
-----------------
at its expense one day of advanced training to purchasers of the System 2000
System at a location and date (within four to eight weeks after initial
installation of the system) which are mutually acceptable to EyeSys and the
purchaser. Distributor shall provide at its expense advanced training to
purchasers of the Handheld System.
8.6 Advanced Equipment. Distributor may obtain the services of the EyeSys
------------------
field Product Specialists at a rate of $400 per day (plus expenses) for the
installation and training of Distributor's advanced diagnostic equipment sold to
customers of the Products.
8.7 Software Updates and Upgrades. EyeSys shall make available Software
-----------------------------
Updates to customers of the Products during the initial warranty period offered
by EyeSys. Software Upgrades shall not be made so available, but rather EyeSys
shall be entitled to sell Software Upgrades directly to Distributor's customers
as new Software Products (provided that EyeSys shall pay Distributor a
commission, within thirty days of EyeSys' receipt of payment from the customer,
equal to thirty percent of the EyeSys's list price of the Software Upgrade on
sales of the Software Upgrade to Distributor's customers which purchased the
Product to which the Software Upgrade relates). Distributor shall also be
entitled to purchase Software Upgrades from EyeSys at EyeSys' list price
therefor less a thirty percent discount and resell such Software Upgrades to its
customers.
16
<PAGE>
8.8 Inspections by EyeSys. Distributor shall, upon thirty days' notice,
---------------------
permit EyeSys personnel reasonable access to the Distributor's facilities to
conduct audits of Distributor's maintenance, support and training activities
relating to the Products. Any Confidential Information of Distributor obtained
by EyeSys pursuant thereto shall be subject to the provisions of Section 14.1
hereof.
8.9 Audits by Distributor; Late Payments. EyeSys shall, upon thirty days'
------------------------------------
notice, permit Distributor's accountant(s) reasonable access to the books and
records of EyeSys relating to the calculation, and payment by EyeSys, of
commissions to Distributor under Sections 2.2, 8.3 and 8.7 for purposes of
confirming the full payment by EyeSys of such commissions in the prior calendar
year. If (and only if) such audit reveals that EyeSys has failed to pay
Distributor at least 90% of the commissions payable to Distributor under this
Agreement in the prior calendar year, EyeSys shall reimburse Distributor for the
reasonable out-of-pocket fees and expenses of Distributor's accountant(s) paid
by Distributor in connection with such audit. Any Confidential Information of
EyeSys obtained by Distributor (including its accountants) pursuant thereto
shall be subject to the provisions of Section 14.1 hereof. Late payments by
EyeSys of commissions hereunder will accrue interest at the rate of one and one
half percent (1.5%) a month, or the highest interest rate allowable by law,
whichever is lower, and EyeSys will pay all of Distributor's costs and expenses
(including reasonable attorneys' fees) to enforce and preserve Distributor's
rights under this Section 8.9.
9. PRODUCT CHANGES
---------------
9.1 Additional Products. EyeSys may, from time to time, amend Exhibit A
-------------------
to add such other products as EyeSys, during the term of this Agreement, offers
for sale to its other distributors upon terms and conditions agreed upon by the
parties hereto.
9.2 Design Modifications. The making of a design modification by EyeSys
--------------------
to any of the Products shall not impose upon EyeSys an obligation to make such
modification to any of the Products previously sold. EyeSys shall not make any
material design changes to any of the Products while the exclusive appointment
of Distributor hereunder is in effect with respect to such Product, without the
prior written approval of Distributor.
9.3 Deletion of Products. EyeSys may delete any Product from Exhibit A,
--------------------
effective ninety (90) days after written notice to Distributor of such deletion,
provided that such deletion does not render the System 2000 or Handheld System
unmarketable while the exclusive appointment of Distributor hereunder with
respect to such system is in effect.
17
<PAGE>
10. WARRANTY
--------
10.1 Limited Warranty.
----------------
(a) Hardware. Subject to Sections 8.4 and 10.1(b), EyeSys hereby
--------
warrants to Distributor that Products purchased hereunder will be free from
defects in material and workmanship for a period of the lesser of (i) fifteen
(15) months from the date of receipt of such Product by Distributor, (ii) twelve
(12) months from the date of delivery by Distributor to a customer, or, (iii)
with respect to any repaired, reconditioned or replaced Product, ninety (90)
days from the date of shipment of repaired, reconditioned or replaced Product to
Distributor or until the original warranty for the Product expires, whichever
period is longer. Distributor's sole and exclusive remedy, and EyeSys' sole and
exclusive liability, under this warranty will be to repair or replace the
defective Product or, where such can not be accomplished, EyeSys may, at its
option, refund the purchase price paid therefor.
(b) Software. EyeSys warrants that the media on which the Software is
--------
recorded will be free from defects in materials and workmanship under normal use
for a period of ninety (90) days from the date of shipment to Distributor of
such Software. Distributor's sole and exclusive remedy, and EyeSys' sole and
exclusive liability, under this warranty will be EyeSys' replacement of the
media.
10.2 Customer Warranty. Distributor shall pass on to its customers EyeSys'
-----------------
current standard limited warranty for the Products (and, subject to the
reasonable approval by Distributor, any different warranty offered by EyeSys in
the future), including the limitations set forth in the following paragraphs.
Pursuant to such warranty Distributor shall return any alleged defective Product
to EyeSys, subject to Distributor's obligations under Section 8.4 hereof.
Distributor shall have no authority to accept any returned products which it
desires to return to EyeSys without prior authorization from EyeSys as provided
herein.
10.3 Exclusions. The express warranties set forth in Section 10.1 above
----------
will not apply to defects in a Product: (i) caused through no fault of EyeSys
during shipment to or from Distributor, (ii) caused by software other than the
Software, (iii) caused by the use or operation of Products in an application or
environment other than that intended or recommended by EyeSys, (iv) caused by
modifications or alterations made to the Products by any party other than EyeSys
(other than servicing and repair of the Products by Distributor in accordance
with its obligations under this Agreement), (v) caused by the unauthorized use
of the Products by Distributor or any third party, (vi) caused by failure of
Distributor to comply with any of the return procedures specified
18
<PAGE>
in this Agreement, or (vii) which are the result of the Products being subjected
to unusual physical or electrical stress.
10.4 Warranty Procedures. Distributor will send Products with defects
-------------------
covered by the foregoing warranty to the repair facility designated by EyeSys,
subject to Distributor's obligations under Section 8.4 hereof. Distributor will
request authorization from EyeSys prior to the return of each defective Product
for repair or replacement by EyeSys. Upon such request, EyeSys will provide Dis
tributor with a RMA tracer number to be prominently displayed on the shipping
container for the defective Product. Once EyeSys authorizes the return of any
defective Product, Distributor will ship such Product to the repair facility
within ten (10) days, freight prepaid, in its original shipping container or in
a container of equivalent protective constitution. If such defective Product
is received by EyeSys during the applicable warranty period, EyeSys will, at its
sole option and expense, repair or replace such Product, employing at its option
new or used Products to make such repair or replacement, and will ship the
repaired or replaced Product to Distributor at EyeSys' expense. If a returned
Product is determined by EyeSys not to be covered by the warranty, at the
request of Distributor, EyeSys shall return such Product to Distributor at
Distributor's expense. The foregoing states the sole liability and obligation
of EyeSys arising out of this warranty.
10.5 Stored Data. Distributor will be responsible for saving or backing up
-----------
data contained in any Product returned to EyeSys for in warranty or out of
warranty repairs or service. EYESYS WILL HAVE NO RESPONSIBILITY FOR SUCH DATA
AND WILL HAVE NO LIABILITY ARISING OUT OF ANY DAMAGE TO OR LOSS OF SUCH DATA
WHILE THE PRODUCT IS IN EYESYS' POSSESSION.
10.6 Spare Parts Procedures. Parts removed from Products and Spare Parts
----------------------
returned to EyeSys for repair or replacement will be treated as Products subject
to Sections 10.1 through 10.5 above. Parts removed from Products and Spare
Parts returned to EyeSys for repair or replacement must be accompanied by a
removable tag or label bearing the following information: (i) the model number
and serial number of the Product the defective part was removed from, if
applicable, (ii) identification of the part and (iii) the defect for which the
part or Spare Part is being returned. Subject to EyeSys' compliance with
Section 11.2, Distributor shall only use Spare Parts obtained from or approved
by EyeSys in the servicing of Products (and use such Spare Parts only for their
intended use).
10.7 Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS
----------
AGREEMENT ABOVE, EYESYS MAKES AND DISTRIBUTOR RECEIVES NO WARRANTIES OR
REPRESENTATIONS, EXPRESS, IMPLIED, STATUTORY, OR IN ANY OTHER PROVISION OF THIS
AGREEMENT OR COMMUNICATION WITH DISTRIBUTOR, AND EYESYS SPECIFICALLY DISCLAIMS
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
19
<PAGE>
11. OUT OF WARRANTY REPAIR
----------------------
11.1 Hardware. EyeSys agrees to make available to Distributor repair
--------
services at a repair facility designated by EyeSys to repair and recondition
hardware components of Products (other than the Handheld System) sold pursuant
to this Agreement for a period of four (4) years following the earlier of EyeSys
discontinuing such Product or the termination of appointment of Distributor
hereunder with respect to such Product. The cost of repairing or reconditioning
a Product will be subject to EyeSys' standard out of warranty costs, terms and
conditions in effect at the time of shipment back to Distributor of repaired or
reconditioned Products. All Products returned for out of warranty repairs will
be sent and delivered F.O.B. EyeSys' repair facility, and Distributor will bear
all shipping expenses to and from such facility.
11.2 Spare Parts. EyeSys agrees to sell to Distributor Spare Parts for
-----------
Products during the term of Distributor's appointment hereunder with respect to
such Products and for a period of four (4) years thereafter.
12. INTELLECTUAL PROPERTY INFRINGEMENT AND PRODUCTS LIABILITY INDEMNITY
-------------------------------------------------------------------
12.1 Indemnity. EyeSys agrees to defend and hold Distributor harmless
---------
against any loss, liability or expense (including reason able attorneys' fees)
paid to third parties arising from any action or claim brought or threatened
against Distributor alleging any manufacturer's or producer's liability relating
to the Products or that the Products, under normal use, infringe any third
party's United States patent, copyright, trademark, trade secret or other
intellectual property right. Distributor agrees to provide EyeSys with (i)
prompt written notice of such claim or action, (ii) sole control and authority
over the defense or settlement of such claim or action and (iii) proper and full
information and reasonable assistance to defend and/or settle any such claim or
action. During the term of this Agreement, EyeSys agrees to cause Distributor
to be named as an additional insured on EyeSys' products liability insurance.
Such insurance policy shall be in a minimum coverage amount of $10,000,000.00
per occurrence and have a maximum deductible of $5,000.00 per occurrence.
EyeSys shall provide Distributor with proof of such coverage (and the naming of
Distributor as an additional insured) within fourteen days after the date hereof
and thereafter at least thirty days prior to expiration.
12.2 Representation. Without limiting Section 12.1, EyeSys represents to
--------------
its best knowledge, that the Products are free of any rightful third party claim
of direct infringement by the Products.
12.3 Remedy. In the event that any Product is held, or in EyeSys' sole
------
opinion, may be held to constitute such an infringe-
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ment, EyeSys may, at its option and expense, (i) obtain for Distributor the
right to continue to use such Product as intended, (ii) modify such Product so
that it becomes non-infringing, but without materially altering the
functionality of the Product or (iii) replace such Product with a functionally
equivalent non-infringing Product. During any period which EyeSys is unable to
provide Distributor with any Product as a result of an infringement claim,
distributor's term as the exclusive distributor will be extended, and the
minimum purchase requirements hereunder with respect to such Product shall be
suspended and any prepaid purchase orders from Distributor with respect to such
Product shall be refunded to Distributor. If such suspension of delivery
continues for more than 6 consecutive months EyeSys will at the election of
Distributor be in default under this agreement.
12.4 Limitations. Notwithstanding the provisions of Section 12.1 above,
-----------
EyeSys assumes no liability for infringement or product liability claims arising
from (i) combination of Products with other products not provided by EyeSys
(unless intended by EyeSys for use with the Products), which claims do not cover
such Products standing alone, (ii) the modification of such Products unless such
modification was made or authorized by EyeSys, where such infringement would not
have occurred but for such modifications, (iii) EyeSys' compliance with
specifications provided by Distributor, or (iv) any marking or branding placed
on the Products by, or at the request of, Distributor.
12.5 DISCLAIMER. THE FOREGOING STATES THE ENTIRE LIABILITY AND OBLIGATIONS
----------
OF EYESYS AND THE EXCLUSIVE REMEDY OF DISTRIBUTOR, WITH RESPECT TO ANY ALLEGED
OR ACTUAL INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADE SECRETS, TRADEMARKS OR
OTHER INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS.
13. TERMINATION
-----------
13.1 Termination or Modification of Appointment. This Agreement may be
------------------------------------------
terminated by either party upon notice if (i) the other party materially
breaches this Agreement, subject to the provisions of Section 13.2 hereof; (ii)
the other party becomes the subject of any voluntary or involuntary proceeding
under the U.S. Bankruptcy Code or state insolvency proceeding and such
proceeding is not terminated within sixty (60) days of its commencement; or
(iii) the other party ceases to be actively engaged in business. Without
limiting any other right or remedy available to EyeSys, in the event that EyeSys
shall have the right to terminate this Agreement, EyeSys shall have the option
in lieu of exercising such right to modify the appointment of Distributor
hereunder from an exclusive to a non-exclusive basis with respect to any or all
of the Products or to terminate such appointment with respect to less than all
Products.
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13.2 Notice and Opportunity to Cure. No act or omission by any party
------------------------------
otherwise constituting a breach of this Agreement shall constitute a breach
hereof unless the other party gives notice of such act or omission in accordance
with Section 17.8 hereof, and if the party receiving such notice effects a cure
(i) of any monetary breach within ten days of such notice; or (ii) of any non-
monetary breach within thirty days of such notice (or if cure of such non-
monetary breach cannot reasonably be effected within such thirty days then
commences to effect such cure within such thirty days and continuously and
diligently prosecutes such cure until completion) then such act or omission
shall not be deemed a breach of this Agreement notwithstanding any provision to
the contrary.
13.3 Effect of Termination or Expiration. In the event of a termination or
-----------------------------------
expiration of this Agreement, EyeSys will have the right to terminate all
outstanding purchase orders. Those purchase orders not terminated will remain
subject to the provisions of this Agreement. Termination or expiration of this
Agreement will not, however, release Distributor from making payments which it
owes to EyeSys under the terms of this Agreement or relieve EyeSys of its
obligations to provide Spare Parts under Section 11.2. Upon the termination or
expiration of this Agreement, EyeSys will refund any prepaid purchase orders
made by Distributor and return a pro-rata portion of the Exclusive Distribution
Fee to the extent that all three Handheld System Years have not elapsed.
13.4 No Liability For Expiration or Termination. Neither EyeSys nor
------------------------------------------
Distributor shall, by reason of the expiration hereof or termination of this
Agreement pursuant to the terms hereof (except to the extent resulting from any
breach of this Agreement by such party continuing beyond any applicable grace
periods), be liable to the other for compensation, reimbursement or damages on
account of any loss of prospective profits or anticipated sales or on account of
expenditures, investments, leases, or commitments made in connection with this
Agreement or the anticipation of extended performance hereunder.
13.5 Repurchase of Inventory. In the event this Agreement is terminated or
-----------------------
expires, EyeSys or new distributors designated by EyeSys will, during the sixty
(60) day period following termination, purchase all Products in Distributor's
inventory (subject to Section 5.1) which were purchased by Distributor within
sixty (60) days prior to the notice of termination, so long as (i) the product
is still being sold by EyeSys (e.g. is not obsolete), (ii) the product is in
salable (e.g. new) condition, (iii) the purchase price will be the purchase
price Distributor paid, and (iv) Distributor pays shipping charges to return the
Products to EyeSys. Notwithstanding the foregoing, in the event that this
Agreement is terminated due to EyeSys' breach hereof, EyeSys shall be obligated
to repurchase all Products in Distributor's inventory upon the foregoing terms
(except that EyeSys shall also be obligated to pay such shipping charges and
22
<PAGE>
purchase obsolete Products). In the event this Agreement is terminated by
EyeSys due to breach by Distributor, Distributor will be assessed a fifteen (15)
percent restocking fee. All payments due to EyeSys will remain subject to the
provisions of Section 5.5 of this Agreement.
13.6 Non-Competition. In the event of the termination of this Agreement by
---------------
EyeSys as a result of a material breach of this Agreement by Distributor,
Distributor shall not, directly or indirectly, market, promote or distribute any
Competing Products (as such term is defined in Section 2.6) for a period of
eighteen (18) months immediately following the effective date of such
termination.
13.7 Survival Provisions. The provisions of Sections 4.5, 5, 10, 11, 12,
-------------------
13, 14, 15, 16 and 17 will survive the termination of this Agreement for any
reason.
14. PROPRIETARY RIGHTS
------------------
14.1 Confidential Information. The parties acknowledge that by reason of
------------------------
their relationship to each other hereunder each will have access to certain
information and materials concerning the other's business, plans, customers,
technology, and/or products that is confidential and of substantial value to
that party, which value would be impaired if such information were disclosed to
third parties ("Confidential Information"). Each party agrees that it will not
use in any way for its own account (other than in connection with support and
sales of the Products), or the account of any third party, nor disclose to any
third party (other than its accountants and attorneys who shall hold such
Confidential Information in confidence), any such Confidential Information
revealed to it by the other party. Each party will take every reasonable
precaution to protect the confidentiality of such Confidential Information.
Upon request by the receiving party, the disclosing party will advise whether or
not it considers any particular information or materials to be Confidential
Information. Distributor will not publish any technical description of the Prod
ucts beyond the description published by EyeSys. The receiving party
acknowledges that the disclosing party's Confidential Information is unique
property of extreme value of the disclosing party, and that unauthorized use or
disclosure thereof would cause the other party irreparable harm that could not
be compensated by monetary damages. Accordingly, each party agrees that the
other will be entitled to injunctive and preliminary relief to remedy any actual
or threatened unauthorized use or disclose of such party's Confidential
Information.
14.2 Notices. All proprietary notices incorporated in, marked on, or fixed
-------
to the Products by EyeSys will not be removed or obliterated by Distributor.
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<PAGE>
14.3 Ownership. Distributor agrees that EyeSys owns all right, title,
---------
and interest in the product lines that include the Products and in all of
EyeSys' patents, trademarks, trade names, inventions, copyrights, know-how, and
trade secrets relating to the design, manufacture, operation or service of the
Products. The use by Distributor of any of these property rights is authorized
only for the purposes herein set forth, and upon termination of this Agreement
for any reason such authorization shall cease.
14.4 No Right to Manufacture or Copy. The Products are sold and the
-------------------------------
Software is licensed by EyeSys subject, in every case, to the condition that
such sale and license does not convey any license, expressly or by implication,
to manufacture, duplicate, or otherwise copy or reproduce the Products or
Software, through reverse engineering or any other means. Distributor agrees to
take appropriate steps with its customers, as EyeSys may request, to inform them
of and assure their compliance with the restrictions contained in this Section
14.4. Distributor agrees that it shall not, nor shall it permit any third party
to, decompile, reverse engineer, prepare derivative works of or otherwise alter
the source code or object code of the Software.
15. TRADEMARKS
----------
15.1 Use. During the term of this Agreement, Distributor shall have the
---
right to indicate to the public that it is an authorized distributor of EyeSys'
Products and to advertise (within the Territory) such Products under the
trademarks and marks listed in Exhibit C attached hereto ("Trademarks").
Distributor shall not alter or remove any Trademarks applied at the factory to
the Products or other materials contained therein. Nothing herein shall grant
to Distributor any right (other than the limited license to use the Trademarks
in accordance with the first sentence of this Section), title or interest in the
Trademarks. At no time during or after the term of this Agreement shall
Distributor challenge or assist others to challenge the Trademarks or the
registration thereof or attempt to register any trademarks, marks or trade names
confusingly similar to the Trademarks.
15.2 Approval of Representations. All representations of the Trademarks
---------------------------
that Distributor intends to use shall first be submitted to EyeSys for approval
(which shall not be unreasonably withheld) of design, color, and other details
or shall be exact copies of those used by EyeSys. If any of the Trademarks are
to be used in conjunction with another trademark on or in relation to the Prod
ucts, then EyeSys' mark shall be presented equally legibly, equally prominently,
and of greater size than the other but nevertheless separated from the other so
that each appears to be a mark in its own right, distinct from the other mark.
The parties acknowledge and agree that the Handheld System, as sold to the end-
user customer, will bear both the name of EyeSys and Distributor.
24
<PAGE>
16. LIMITATION OF LIABILITY. WITHOUT LIMITING SECTIONS 12, 13 OR 17.13 HEREOF
-----------------------
OR THE RIGHT OF EYESYS TO MODIFY OR TERMINATE THE APPOINTMENT OF DISTRIBUTOR
PURSUANT TO SECTIONS 2.6 OR 4.7 HEREOF, AND EXCEPT WITH RESPECT TO ANY CLAIMS
ARISING FROM ITS WILLFUL MISCONDUCT, GROSS NEGLIGENCE OR FRAUD OR CLAIMS OF
THIRD PARTIES:
(A) EYESYS' LIABILITY UNDER THIS AGREEMENT WILL NOT EXCEED THE SUM OF (1)
THE REASONABLE FEES AND EXPENSES OF COUNSEL TO DISTRIBUTOR IN CONNECTION WITH
THE CLAIM UPON WHICH THE LIABILITY OF EYESYS IS BEING DETERMINED AND (2) THE
LESSER OF THE AMOUNTS RECEIVED BY EYESYS FROM DISTRIBUTOR UNDER THIS AGREEMENT
IN THE MOST RECENT TWELVE (12) MONTH PERIOD (INCLUDING ANY PREPAID PURCHASE
ORDERS AND FEES) AND $100,000; AND
(B) DISTRIBUTOR'S LIABILITY UNDER THIS AGREEMENT WILL NOT EXCEED THE TOTAL
OF (1) THE REASONABLE FEES AND EXPENSES OF COUNSEL TO EYESYS IN CONNECTION WITH
THE CLAIM UPON WHICH THE LIABILITY OF DISTRIBUTOR IS BEING DETERMINED, (2) THE
UNPAID PURCHASE PRICE OF ORDERS FOR PRODUCTS MADE BY DISTRIBUTOR AND (3)
$100,000.
IN NO EVENT WILL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY
SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES INCLUDING, WITHOUT LIMITATION,
DAMAGES FOR LOST PROFITS, LOSS OF DATA OR COSTS OF PROCUREMENT OF SUBSTITUTE
GOODS OR SERVICES, ARISING IN ANY WAY OUT OF THIS AGREEMENT UNDER ANY CAUSE OF
ACTION, WHETHER OR NOT THE FIRST PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES; PROVIDED, HOWEVER, EYESYS WILL BE LIABLE TO DISTRIBUTOR FOR
DISTRIBUTOR'S LOST PROFITS AND MARKETING EXPENSES UP TO THE LIMITS SPECIFIED
ABOVE UPON DEFAULT BY EYESYS UNDER THIS AGREEMENT. THESE LIMITATIONS WILL APPLY
NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
17. MISCELLANEOUS.
-------------
17.1 Governing Law. The rights and obligations of the parties under this
-------------
Agreement will be governed by and construed under the laws of the State of
Florida, including its Uniform Commercial Code, without reference to conflict of
laws principles.
17.2 Arbitration. Any dispute or claim arising out of or in connection
-----------
with this Agreement will be finally settled by binding arbitration in Houston,
Texas under the Commercial Arbitration Rules of the American Arbitration
Association by one arbitrator appointed in accordance with said rules. The
prevailing party (as determined by the arbitrator), if any, shall be entitled to
reimbursement from the other party for such of its costs and expenses (including
reasonable attorneys' fees) incurred in connection with such arbitration as the
arbitrator shall award. Judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Notwithstanding the
foregoing, the parties may apply to any court of competent
25
<PAGE>
jurisdiction for injunctive relief without breach of this arbitration provision.
17.3 Indemnification. Subject to Section 16 hereof:
---------------
(a) Distributor agrees to indemnify EyeSys against any and all claims,
damages, costs (including reasonable attorneys' fees and costs), expenses or
other liabilities arising from claims by any other party resulting from
Distributor's representation of the Products in a manner inconsistent with
EyeSys' Product descriptions and warranties or any other breach by Distributor
of this Agreement; and.
(a) EyeSys agrees to indemnify Distributor against any and all claims,
damages, costs (including reasonable attorneys' fees and costs), expenses or
other liabilities arising from any breach by EyeSys of this Agreement.
17.4 Entire Agreement; Enforcement of Rights. This Agreement sets forth
---------------------------------------
the entire agreement and understanding of the parties relating to the subject
matter hereof and merges all prior discussions between them with respect
thereto. No modification of or amendment to this Agreement, nor any waiver of
any rights under this Agreement, will be effective unless in writing signed by
the party to be charged. The failure by either party to enforce any rights
hereunder will not be construed as a waiver of any rights of such party.
17.5 Independent Contractors. The relationship of EyeSys and Distributor
-----------------------
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement will be construed (i) to give either party the power
to direct or control the day-to-day activities of the other or (ii) to
constitute the parties as partners, joint venturers, co-owners or otherwise as
participants in a joint or common undertaking. All sales and other agreements
between Distributor and its customers are Distributor's exclusive responsibility
and will not affect EyeSys' obligations under this Agreement. Distributor will
be solely responsible for, and will indemnify, defend and hold EyeSys harmless
against all claims, damages, costs (including attorney fees), expenses and other
liabilities arising from the acts and omissions of Distributor, its employees,
servants, agents or any of them.
17.6 Assignment. The rights and liabilities of the parties hereto will
----------
bind and inure to the benefit of their successors and assigns; provided,
--------
however, that neither party may assign or delegate this Agreement or any of its
- -------
licenses, rights or duties under this Agreement, whether by operation of law or
otherwise, without the prior written consent of the other party, except to a
person or entity into which it has merged or which has otherwise succeeded to
all or substantially all of its business and assets to which this Agreement
pertains, by merger, reorganization or other-
26
<PAGE>
wise, and which has assumed in writing or by operation of law its obligations
under this Agreement. Any attempted assignment in violation of the provisions
of this Section 17.6 will be void.
17.7 Severability. In the event that any provision of this Agreement
------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement will continue in full force and effect
without said provision; provided that no such severability will be effective if
it materially changes the economic benefit of this Agreement to either EyeSys or
Distributor.
17.8 Notices. Any required notices hereunder will be given in writing by
-------
certified mail (return receipt requested) to the address of each party set forth
above or by facsimile (with facsimile confirmation report generated) followed by
first class mail to the Distributor at (904) 642-9338 or EyeSys at (713) 465-
2418, or to such other address or facsimile number as either party may
substitute by written notice to the other in the manner contemplated herein, and
will be deemed served when delivered or, if delivery is not accomplished by
reason of some fault of the addressee (other than the failure of a facsimile
machine to function), when tendered. All such notices will be addressed to the
President of the recipient party and copies of notices to the Distributor shall
also be given in the same manner to Barry Ansbacher, Esq., Ansbacher & Schneider
P.A., 4215 Southpoint Blvd., Suite 100, Jacksonville, Florida 32216 (fax: 904-
296-2842).
17.9 Force Majeure. Neither party will be liable to the other for any
-------------
default (other than failure to pay money) hereunder if such default is caused by
an event beyond such party's control, including without limitation acts or
failures to act of the other party, strikes or labor disputes, component
shortages, unavailability of transportation, floods, fires, governmental
requirements and acts of God. In the event of threatened or actual non-
performance as a result of any of the above causes, the non-performing party
will exercise commercially reasonable efforts to avoid and cure such non-
performance.
17.10 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
17.11 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which will be deemed an original and all of which together
will constitute one instrument.
17.12 No Third Party Beneficiary. EyeSys and Distributor intend that only
--------------------------
EyeSys and Distributor will benefit from, and are entitled to enforce the
provisions of, this Agreement, and that no third party beneficiary is intended
under this Agreement.
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17.13 Attorney's Fees. Wherever provision is made in this Agreement for
---------------
award of attorney's fees, the same shall include attorney's and paralegal's fees
incurred (i) after default in anticipation of litigation or arbitration; (ii) in
mediation; (iii) in arbitration; (iv) in bankruptcy proceedings; (v) at trial;
(vi) on appeal; and (vii) in establishing entitlement to the amount of
attorney's fees.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EYESYS TECHNOLOGIES, INC. MARCO OPHTHALMIC INC.
By: /s/ Henry H. Kuehn By: /s/ Jeffrey H. Perrye
---------------------- ------------------------
Name: Henry H. Kuehn Name: Jeffrey H. Perrye
Title: President & CEO Title: Controller
28
