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Exhibit (e)(3)
MASTER DISTRIBUTION AGREEMENT
This Master Distribution Agreement is made this 13th day of December, 1999,
by and between
EndoSonics Europe B.V., De Bruyn Kopsstraat 15, 2288 EC Rijswijk, The
Netherlands ("EndoSonics"), a wholly owned subsidiary of EndoSonics Corporation,
2870 Kilgore Road, Rancho Cordova, CA 95670, USA,
and
JOMED N.V., Stravinskylaan 2001, P.O. Box 75640, 1070 AP Amsterdam, The
Netherlands, acting for and on behalf of its wholly owned subsidiaries
("Distributor").
In consideration of the mutual promises and covenants contained herein, the
parties agree as follows:
1. DEFINITIONS
The following terms when used in their capitalized form shall have the
following meanings:
1.1. "Agreement" shall mean this Master Distribution Agreement, as amended,
modified, or supplemented from time to time.
1.2. "Catheters" shall mean any of the catheters as defined in Exhibit A.
1.3. "Confidential Information" shall have the meaning provided in Section 14
hereof.
1.4. "GMP" shall mean the good manufacturing practices for medical devices
set forth by any act, statute, or regulation of any kind governing the
products in the Territory.
1.5. "Minimum Purchase Commitment" shall have the meaning provided in Section
5 hereof.
1.6. "Products" shall mean those EndoSonics products listed in Exhibit A
attached hereto.
1.7. "Renewal term" shall have the meaning provided in Section 3.1 hereof.
1.8. "System" shall mean any of the systems or system options as defined in
Exhibit A.
1.9. "Term" shall have the meaning provided in Section 3.1 hereof.
1.10. "Territory" shall mean those countries listed in Exhibit B hereof.
1.11. "Trademarks" shall mean each trademark, trade name, service marks, the
name "EndoSonics" or any derivation thereof, brand names, signs, symbols
or slogans now or hereafter used by EndoSonics in connection with the
Products.
1.12. "Wires" shall mean any of the wires as defined in Exhibit A.
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2. APPOINTMENT; RELATIONSHIP OF PARTIES
2.1. Appointment
EndoSonics hereby appoints Distributor as its exclusive distributor of
the Products in the Territory, subject to the terms of this Agreement.
Distributor shall not distribute or otherwise promote the Products in
any way outside the Territory, without the prior written authorization
of EndoSonics.
During the Term and each Renewal Term, if any, EndoSonics shall not
appoint any other distributor for the sale, distribution or marketing of
Products in the Territory.
During the Term and each Renewal Term, if any, Distributor shall not
sell or commercially promote products, incorporating intravascular
ultrasound and/or physiological assessment technology, that compete with
Products, nor shall Distributor represent, or provide either directly or
indirectly marketing services to, any manufacturer or distributor in the
Territory, that relate to such competing products.
2.2. Exclusive Account Protection
Following expiration or termination, other than by reason of a
Distributor default, of this Agreement, Distributor shall retain
exclusive rights to sell Catheters or Wires, whichever applies, to each
end-customer account in which Distributor, during the Term, has placed a
System other than on the basis of an outright capital equipment sale,
and to which it retains legal title. This exclusive right shall be for
the shorter of a period of three (3) years following the installation of
said System or the duration of the implicit or explicit financing
program agreed to between Distributor and end-customer, the terms of
which shall be disclosed to EndoSonics upon Distributor's claim of
exclusive rights under this section.
2.3. Relationship of Parties
The relationship of Distributor to EndoSonics hereunder shall be solely
that of an independent contractor. Distributor and EndoSonics each
acknowledge and agree that neither Distributor nor EndoSonics is an
employee, employer, agent, partner, or joint venturer of the other.
Neither Distributor nor EndoSonics shall have or hold itself as having
the right or authority to assume or create any obligation or
responsibility, whether express or implied, on behalf of or in the name
of the other, except with the express written authority of the other.
3. TERM - TERMINATION
3.1. Term
The term ("Term") of this Agreement shall commence the date hereof, and,
unless terminated sooner pursuant to the provisions of Sections 3.3,
shall terminate two (2) years from the date hereof; provided, however,
that the parties shall meet in January 2001 to negotiate in good faith
an extension of this Agreement for one year beyond the Term, if
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Distributor has met its obligations under this Agreement for the
preceding year. Following the Term, this Agreement may be extended for
successive one-year periods (each such period, a "Renewal Term") upon
the mutual written consent of the parties.
3.2. Termination of Distribution Rights by Geographic Area
It is understood and agreed between the parties that the distribution
rights under this Agreement are granted to Distributor on a geographic
area by area basis. At EndoSonics' option, the distribution rights in
any geographic area within the Territory shall terminate upon
Distributor's failure to meet the Minimum Purchase Commitment in said
area subject to the provisions of Section 5. Upon such termination,
Exhibit B of this Agreement shall be amended accordingly, and all rights
granted by EndoSonics to Distributor within this geographic area shall
cease immediately.
3.3. Termination of Entire Agreement
This Agreement shall terminate in its entirety upon the happening of any
of the following events:
(a) either party's failure to cure the breach of any material term,
covenant, or condition of this Agreement within 30 days after the
breaching party receives notice of such breach;
(b) immediately upon written notice to one party upon the change in
the structure or organization of the other party including,
without limitation, the acquisition or merger of the other party;
(c) immediately upon either parties' cessation to function as a going
concern; or
(d) immediately upon either parties' dissolution, liquidation,
insolvency, bankruptcy, assignment for the benefit of creditors
or admission in writing of its inability to pay its debts as they
mature.
3.4. Obligations upon Termination or Expiration
On termination or expiration of this Agreement by either party for any
reason:
(a) All rights granted by EndoSonics to Distributor shall cease
immediately, except that EndoSonics, at its sole discretion, may
permit Distributor to sell any Products for which it has paid
full list price for a period of three (3) months following such
termination or expiration, for the sole purpose of depleting its
inventory of Products. If Distributor has not sold its remaining
inventory of Products at the end of said three-month period,
EndoSonics, at its sole discretion, may extend such three month
period for an additional three months. If EndoSonics refuses to
extend such three month period, EndoSonics shall purchase all of
Distributor's remaining inventory of Products at fair market
value, provided that none of the remaining inventory being
purchased by EndoSonics shall have been used, removed from its
original packaging or carry an expired sterilization date;
(b) Provided that the Agreement is not terminated as a result of
Distributor's breach, EndoSonics shall fulfill any unexecuted
orders placed by the Distributor prior to such
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termination or expiration subject to advance payment, and
provided that Distributor shows official written documentation of
pending orders from its customers;
(c) Distributor shall promptly pay all outstanding invoices, if any,
for Products shipped by EndoSonics prior to such termination or
expiration;
(d) Distributor shall forthwith return to EndoSonics or otherwise
dispose of as EndoSonics may direct, all promotional literature,
manuals, catalogues, instruction sheets, diagrams and other typed
or printed matter relating to the Products or to the business of
EndoSonics and all copies thereof in the possession or under the
control of the Distributor;
(e) Distributor shall not claim, nor have the right to claim any
compensation or indemnity whatsoever for surrendering the
representation of the Products, the customers or the goodwill it
has acquired for the Products or for any other or similar reason,
regardless of which party terminates the Agreement or for what
reasons.
4. SALES OF PRODUCTS TO DISTRIBUTOR
4.1. Price
Prices to Distributor for Products shall be those set forth in the price
list attached in Exhibit A. EndoSonics shall provide at least 60 days
prior written notice of changes in said price list. Price changes shall
not affect unfulfilled purchase orders accepted by EndoSonics prior to
the effective date of such changes.
4.2. Purchase Orders
Purchase orders for Products by Distributor shall be placed with
EndoSonics on a monthly basis, on or before the 10th of the month in
which Product shipment is requested. Purchase orders shall include a
specification of unit quantities by Product model, broken down by
geographic area as defined in Exhibit B hereof. Purchase order
quantities for any month shall conform to forecast as specified in
Section 6.4.
All orders for Products by Distributor shall be initiated by a written
purchase order sent to EndoSonics and requesting a delivery date,
provided, however, that an order may initially be placed orally. No
order shall be binding upon EndoSonics until accepted by EndoSonics in
writing, and EndoSonics shall have no liability to Distributor with
respect to purchase orders that are not accepted. EndoSonics shall use
commercially reasonable efforts to deliver Products at the times
specified in its written acceptance of Distributor's purchase orders.
4.3. Shipments
(a) Systems: All EndoSonics systems delivered pursuant to the terms
of this Agreement shall be suitably packed for air freight
shipment in EndoSonics' standard shipping crates, marked for
shipment to Distributor's distribution center, and delivered to
Distributor or its carrier agent ex-works Rancho Cordova,
California, USA.
(b) Catheters and Wires: All Catheters and Wires delivered pursuant
to the terms of this Agreement shall be suitably packed for
airfreight shipment in EndoSonics standard shipping boxes, marked
for shipment to Distributor's distribution center set forth
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above, and delivered to Distributor or its carrier agent ex-works
Rijswijk, The Netherlands.
(c) Partial shipments: Unless specifically disallowed by Distributor,
EndoSonics may make deliveries of shipments in installments. Such
partial shipments shall be billed upon shipment by EndoSonics.
(d) Choice of carrier: Unless otherwise instructed in writing by
Distributor, EndoSonics shall select the carrier. All freight,
insurance, and other shipping expenses, as well as any special
packing expense, shall be paid by Distributor. Distributor shall
also bear all applicable taxes, duties, and similar charges that
may be assessed against the Products after delivery to
Distributor or its carrier ex works Rancho Cordova, USA or
Rijswijk, The Netherlands, whichever applies.
4.4. Payment Terms
EndoSonics shall submit an invoice to Distributor upon shipment of all
Products ordered by Distributor. The invoice shall cover Distributor's
Purchase Price for the Products plus any freight, value-added, sales or
other taxes, duties and other applicable costs initially paid by
EndoSonics but to be borne by Distributor. Payment shall be made by wire
transfer, check or other instrument approved by EndoSonics, within 60
days net, 30 days -1% discount, from the date of each invoice. No part
of any amount payable to EndoSonics hereunder may be reduced due to any
counterclaim, set-off, adjustment or other right which Distributor might
have against EndoSonics, any other party or otherwise.
EndoSonics, at its sole discretion, reserves the right to limit the
amount of credit it may extend to Distributor, to require full or
partial payment in advance, or to revoke any credit previously extended,
if, in EndoSonics' judgment, Distributor's financial condition does not
warrant proceeding on the terms specified.
4.5. Payment Currency
All payments to be made by either party hereunder shall be made in
United States Dollars, or such other currency as the parties may agree
upon. In the event another currency is so agreed upon, then the amount
to be paid shall be calculated using the New York foreign exchange
selling rate for that other currency for the business day preceding the
invoice date as published in the Wall Street Journal.
4.6. Rejection of Products
Distributor shall inspect all Products promptly within 20 days of
receipt. Distributor shall reject any Products in which the integrity of
product sterility has been violated. Upon product rejection or product
failure, Distributor shall notify EndoSonics and request a Returned
Goods Authorization ("RGA") number. Only upon receipt of an RGA number,
Distributor shall return to EndoSonics the rejected or failed Products,
freight prepaid, in its original shipping carton with the RGA number
displayed on the outside of the carton. Upon receipt of failed Products,
EndoSonics will test such Products for failure analysis. If specific
failure is observed, EndoSonics will, at its expense, replace failed
Products with the same or substantially the same Products of equal
value.
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4.7. Product modifications/obsolescence
EndoSonics reserves the right to change its Products and/or its
specifications or to discontinue the manufacture of one or more of the
Products, without payment or compensation to Distributor, provided that
at least sixty (60) days written notice for Catheters and Wires, and at
least one hundred twenty (120) days written notice for Systems, is given
to Distributor in case of a Product and/or specification change, and at
least one hundred twenty (120) days written notice for Catheters and
Wires, and at least one hundred eighty (180) days written notice for
Systems, is given to Distributor in case of a Product discontinuation.
EndoSonics agrees to supply sufficient quantities of spare parts of any
discontinued product to cover customer orders and/or tenders applied for
by Distributor prior to the notice of a discontinued product.
5. MINIMUM PURCHASE COMMITMENT
During the Term, Distributor shall purchase an annual minimum amount,
with reasonable Quarterly allocation, of Products (the "Minimum Purchase
Commitment") for each of the geographic areas as stipulated in the
individual schedules included under Exhibit C. If Distributor fails to
meet the Minimum Purchase Commitment in any of the geographic areas, the
parties shall jointly decide on corrective actions to be undertaken in
each such area, and shall agree on a reasonable Minimum Purchase
Commitment for the ensuing 6 months. If Distributor fails to meet said
agreed upon 6-month Minimum Purchase Commitment, this shall constitute a
material breach and basis for termination of distribution rights under
Section 3.2, unless the sale of Products in such geographic area of the
Territory is restricted by regulatory authority having jurisdiction over
Products, or EndoSonics is unable to deliver Products by agreed upon
delivery dates.
For the purposes of this provision, a "purchase" of Products within the
time period set forth in Exhibit C shall mean EndoSonics' shipment of
such Products on or before the last day of each of such time periods.
6. ADDITIONAL OBLIGATIONS OF DISTRIBUTOR
6.1. Promotion of the Products
In addition to meeting the Minimum Purchase Commitment, Distributor
shall use its best efforts to promote the sale of the Products within
the Territory, to develop a market for the Products and to enhance the
Company's image in the marketplace as a provider of quality medical
devices. Distributor's obligations shall include, but not be limited to,
preparing promotional materials in appropriate languages for the
Territory, advertising the Products in trade publications within the
Territory, participating in and featuring the Products at appropriate
trade shows, and directly soliciting orders from customers for the
Product.
6.2. Market Analysis
Upon execution of this Agreement and within 30 days prior to the
beginning of each calendar year thereafter, Distributor shall provide
EndoSonics with an analysis of market changes and trends, competition
and an assessment of customer requirements for the Products, and
Distributor and EndoSonics shall mutually agree in writing on the sales
promotion activities and performance criteria to be met by Distributor
for the year.
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6.3. Finances and Personnel
Distributor shall devote sufficient financial resources, technically
qualified sales representatives and clinical personnel to market and
sell the Products, in accordance with its obligations hereunder.
Additionally, distributor shall provide adequate training to physicians
and nursing staff to assist them in the proper use of the Products.
Distributor shall provide adequate contact with existing and potential
customers within the Territory on a regular basis, consistent with good
business practice.
6.4. Forecasts
Upon execution of this Agreement, and prior to the 15th of each month
thereafter, Distributor shall provide EndoSonics with a 6-month rolling
forecast in written or electronic form, showing prospective orders by
Product and intended submittal date for each geographic area in the
Territory. The rolling forecast shall be updated monthly by Distributor.
All forecasts shall be good faith estimates of Distributors'
requirements; provided, however, that Distributor shall be obligated to
purchase 100% (on a unit basis) of the Product quantity specified for
the initial month of each such forecast. In addition, the initial month
of Distributors' subsequent, monthly updated, rolling forecast shall not
deviate by more than 25% of the previous forecast for that same month.
6.5. Product Disposition by Distributor
Distributor shall provide EndoSonics with a monthly specification of all
Product shipments to its subsidiaries, agents, or representatives,
broken down by geographic area as defined in Exhibit B hereof, to enable
EndoSonics to track Distributor's performance by geographic area under
this Agreement. Said specifications shall be provided, in written or
electronic form, on or before the 15th of each month, showing Product
shipments for the immediately preceding month.
6.6. Meetings
Distributor shall periodically make arrangements for EndoSonics'
representatives to conduct sales meetings with Distributor's sales force
in the Territory. EndoSonics and Distributor shall mutually agree on the
date, time and location of such meetings.
6.7. Inventory
Distributor shall, at its own expense, maintain sufficient inventory of
the Products, including inventory for demonstration purposes to fulfill
its commitments under this Agreement.
6.8. Representations
Distributor shall not make any false or misleading representations to
customers or others regarding EndoSonics or the Products. Distributor
shall not make any representations, warranties or guarantees with
respect to the specifications, features or capabilities of the Products
that are not consistent with EndoSonics' documentation accompanying the
Products or EndoSonics' literature describing the Products, including
the limited warranty and disclaimers.
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6.9. Import and Export Requirements
Distributor shall, at its own expense, pay for all import and export
licenses and permits, pay customs charges and duty fees, and take all
other actions required to accomplish the export and import of the
Products purchased by Distributor.
Distributor acknowledges that EndoSonics is subject to regulation by
agencies of the US and other governments, including the US Department of
Commerce, which prohibit export or diversion of certain technical
products to certain countries. Distributor agrees to comply with all
export laws and restrictions and regulations of the US Department of
Commerce or other United States or foreign agency or authority, and not
to export, or allow the export or re-export of, any Proprietary
Information or Products or any direct product thereof in violation of
any such restrictions, laws or regulations.
7. ADDITIONAL OBLIGATIONS OF ENDOSONICS
7.1. Product and Marketing Materials
EndoSonics, at its expense, shall promptly provide Distributor with
reasonable amounts of printed commercial and technical data and
information and other publications which EndoSonics may have available
from time to time.
7.2. Territorial Inquiries
EndoSonics shall refer to Distributor all customer leads and any
correspondence or inquiries related to selling, marketing, or servicing
of Products in the Territory which EndoSonics may receive while this
Agreement is in effect. Similarly, Distributor shall promptly refer to
EndoSonics any such customer leads, correspondence or inquiries outside
the Territory.
7.3. Distributor and Customer Support
EndoSonics shall provide a reasonable level of product application and
technical support to Distributor. EndoSonics may, at its own discretion
and expense, choose to send a representative to visit customers and
prospects in the Distributor's Territory, and Distributor agrees to
allow access and give support to perform such tasks, provided that such
visits are coordinated with Distributor. Any product application support
provided by EndoSonics such as application specialist's visits to
Distributor's Territory will not be invoiced to the Distributor unless
specifically requested by Distributor.
8. SERVICE AND MAINTENANCE, WARRANTY AND INSTALLATION
8.1. Systems Warranty and Service and Maintenance Agreements
EndoSonics shall make available to purchasers of the Systems its
standard warranty as stipulated in Exhibit D. Such warranty for the
first year after delivery shall be included in the purchase price of the
Systems. EndoSonics shall make an annual extended service and
maintenance agreement available, substantially in the form set forth in
Exhibit E, exclusively through Distributor in the Territory as from the
first year after delivery of the Systems. Distributor shall purchase
such annual service and maintenance agreement for each of the Systems to
which it retains title in the Territory at a cost set forth in Exhibit
A.
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8.2. Systems Service and Maintenance
EndoSonics shall be solely responsible within the Territory for the
service, repair and maintenance of all Systems, including dispatching
calls and providing Distributor reports from time to time. Upon
termination of this Agreement for any reason whatsoever, EndoSonics
shall take such steps as are necessary to guarantee on-going service,
repair and maintenance of the systems installed through Distributor to
end customers. Distributor or the end-customers of Distributor shall
bear the cost of all service, repairs and maintenance performed that is
not covered under warranty or an annual service and maintenance
agreement.
8.3. Catheter and Wire Warranty
EndoSonics shall provide Product warranty for its Catheters and Wires as
stipulated in Exhibit D.
8.4. Systems Installation
EndoSonics shall support Distributor with the installation of the
Systems at the location of the end-user. Such installation shall include
the training of customers with respect to the Products sold. Distributor
shall be responsible for all reasonable travel expenses and related
disbursements incurred by EndoSonics in connection with said
installations.
9. MAINTENANCE OF RECORDS/PRODUCT RECALLS
9.1. Maintenance of Records
Distributor and EndoSonics shall, in compliance with applicable law,
including GMP's, maintain accurate records regarding the Products
including, without limitation, records of direct sales of Products to
third parties, lot numbers, serial numbers, and other manufacturing
documentation necessary to ensure traceability of Products. The parties
shall retain these records pursuant to the GMP's and applicable law.
9.2. Product Recalls
In the event of any recall of Products, either voluntary or otherwise,
Distributor shall cooperate with and assist EndoSonics in locating and
retrieving such recalled Products, as requested by EndoSonics and at
EndoSonics' expense.
10. COMPLAINTS AND RETURNS/REGULATORY REPORTING/ADVERSE IMPACT
10.1. Complaints and Returns
Distributor shall, as soon as reasonably practicable, notify, document
and forward to EndoSonics all customer complaints and any Products
returned in connection therewith. EndoSonics shall respond to
Distributor within ten business days of receipt of a complaint and
Distributor shall report EndoSonics' findings to customers, if
applicable. EndoSonics shall work diligently to resolve all customer
complaints.
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10.2. Regulatory Reporting and Analysis of returned Products
EndoSonics shall file, or cause to be filed, all reports required of a
manufacturer pursuant to the applicable medical device reporting
regulations. EndoSonics, as the manufacturer of the Products, shall
perform all failure analysis on the Product within 30 days of receipt of
each failed Product and shall file all reports required with the
applicable regulatory agency. EndoSonics shall further cooperate with
and assist Distributor in submitting all reports that Distributor may be
required to file. Distributor shall promptly provide EndoSonics with
copies of all such reports.
10.3. Adverse Impact on the Products
Each party shall notify the other party's Regulatory Affairs and Quality
Assurance Officer or other designee as soon as reasonably practicable of
all actions or anticipated actions by any regulatory authority, that
could adversely affect the manufacture, marketing, distribution or sale
of the Product. Each party shall promptly provide copies to the other
party of all reports, citations, violations, warnings and deficiencies
received by such party in connection with the Products.
11. GOVERNMENT APPROVALS/REGISTRATION SUPPORT
11.1. Government Approvals
Distributor shall obtain all required government approvals or
registrations, if any, prior to the sale of any Product in the
Territory. All approvals and registrations shall be obtained under
EndoSonics' name, and EndoSonics and Distributor shall equally share in
the cost involved. In case of necessary adaptation or modification of
Products due to local requirements, the parties will assist each other
and will agree upon whether to conduct such adaptations or modifications
at EndoSonics' or Distributor's facilities.
Upon termination of this Agreement for any reason, Distributor shall
take all necessary steps to transfer any government approvals for
Products to EndoSonics or EndoSonics' nominee (or if such transfer is
not permitted, to cooperate in the cancellation of Distributor's
government approvals and the re-issuance thereof to EndoSonics or
EndoSonics' nominee). Distributor shall promptly return to EndoSonics
all data and information relating to Product and make no further use
thereof.
11.2. Registration Support
EndoSonics shall assist Distributor in registering the Products in the
Territory by providing Distributor with:
(a) materials in EndoSonics' possession necessary to obtain health
registrations and marketing approvals, licenses and permits;
(b) certificates of analysis, export and compliance;
(c) trademark authorizations; and
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(d) such other information as Distributor shall reasonably request
from time to time.
12. TRADEMARKS AND PROTECTION OF PROPRIETARY RIGHTS
12.1. Registration of Trademarks
EndoSonics shall, at its expense, use reasonable efforts to protect and
maintain all registrations, filings and issuance of its Trademarks in
full force and effect.
12.2. Title
The proprietary rights of EndoSonics in and to Trademarks and any items
related thereto are protected by the law of copyright, trademark, trade
secrets and unfair competition. Distributor shall have no proprietary
interest whatsoever in the Trademarks.
12.3. Notification of Infringement
Distributor shall promptly notify EndoSonics of any infringement, of
which Distributor has knowledge, of the proprietary rights of EndoSonics
in and to the Products or the Trademarks in the Territory and shall
cooperate with EndoSonics in any action by EndoSonics to investigate or
remedy any such infringement. All costs and expenses of investigating
and remedying any such infringement shall be borne by EndoSonics.
12.4. Use of Trademarks
EndoSonics hereby grants to Distributor a non-exclusive license to use
the Trademarks for the purpose of identifying and marketing the Products
in the Territory. Any use of the Trademarks will be in accordance with
such instructions as EndoSonics may give Distributor from time to time.
Except for its affiliated companies, subdistributors and agents,
Distributor shall not grant any sub-licenses to use the Trademarks to
any Person, agent or other party without the prior written consent of
EndoSonics in each instance.
Upon the expiration or termination of this Agreement, the non-exclusive
license granted hereunder to Distributor shall expire and Distributor
shall immediately cease using the Trademarks.
12.5. Quality Control
In order to comply with EndoSonics quality control standards,
Distributor shall (a) use the Trademarks in compliance with all relevant
laws and regulations in the Territory; (b) accord EndoSonics, after
previous written request, the right to inspect all marketing and
promotional materials in Distributor's possession containing the
Trademarks in order to confirm that Distributor's use of such Trademarks
is in compliance with this Agreement; and (c) not modify any of the
Trademarks in any way and not use any of the Trademarks on any goods or
services other than the Products or in connection therewith. In the
event EndoSonics has a good faith and substantial reason to believe that
Distributor is not complying with this provision, EndoSonics may, within
30 days of a written notification to Distributor stating and justifying
the reasons, suspend Distributor's right to use the Trademarks until
such time as Distributor gives EndoSonics adequate assurances that it
has taken corrective measures and that it will thereafter comply with
this provision.
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12.6. Limitation of Distributor's Rights and Software License
Distributor shall have no access to or rights in the source codes of any
software included in the Products. Distributor shall have no right to
copy, modify or re-manufacture any Product or part thereof and shall
comply with the confidentiality obligations under Section 14.
For each System sold, EndoSonics licenses Distributor and its end
customer with a one-time paid in full perpetual license to use the
EndoSonics software and related updates and releases on the specific
System sold.
13. INDEMNIFICATION
13.1. Indemnification by Distributor
Except with respect to any of the following that arises from gross
negligence or willful misconduct of EndoSonics or its agents and subject
to Section 13.3 Distributor shall indemnify, defend and hold harmless
EndoSonics, its directors, officers, employees, representatives and
agents from and against any and all claims, suits, losses, damages,
costs, fees and expenses (including reasonable attorney's fees), and
other liabilities asserted by parties, both governmental and
non-governmental, resulting from or arising out of (a) any
misrepresentation of Distributor contained herein or breach of any
warranty made by Distributor; (b) any breach, violation or
non-performance of any covenant, condition or agreement in this
Agreement by Distributor; and (c) the material inaccuracy of any
representation or warranty of the Products made by Distributor.
13.2. Indemnification by EndoSonics
Except with respect to any of the following that arises from the gross
negligence or willful misconduct of Distributor or its agents and
subject to Section 13.3, EndoSonics shall indemnify, defend and hold
harmless Distributor, its directors, officers, employees,
representatives and agents from and against any and all claims, suits,
losses, damages, costs, fees and expenses (including reasonable
attorneys' fees), and other liabilities asserted by third parties, both
governmental and nongovernmental, resulting from or arising out of (a)
any misrepresentation of EndoSonics contained herein or breach of any
warranty or guaranty made by EndoSonics, (b) any breach, violation or
nonperformance of any covenant, condition or agreement in this Agreement
by EndoSonics, (c) the design of the Products, (d) any injury to any
property or person arising in connection with the design, manufacture,
use or application of the Products, (e) any infringement or alleged
infringement of the Products on any product, device, method, process,
trade name, trademark or patent, and (f) any and all taxes, fees, fines,
penalties, assessments, charges, expenses or other governmental levies
assessed on the Products which are not attributable to Distributor's
acts or omissions.
13.3. Limitations to Indemnity
The indemnities of Sections 13.1 and 13.2 shall not apply (a) if the
indemnified party fails to give the indemnifying party prompt notice of
any claim it receives and such failure materially prejudices the
indemnifying party, or (b) unless the indemnifying party is given the
opportunity to approve any settlement. Furthermore, the indemnifying
party shall not be liable for attorneys' fees or expenses of litigation
of the indemnified party unless the indemnified party gives the
indemnifying party the opportunity to assume control of
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<PAGE> 13
the defense or settlement. In addition, if the indemnifying party
assumes such control, it shall only be responsible for the legal fees
and litigation expenses of the attorneys it designates to assume control
of the litigation. In no event shall the indemnifying party assume
control of the defense of the indemnified party without the consent of
the indemnified party (which consent shall be given or not at its sole
discretion).
14. CONFIDENTIALITY
Distributor acknowledges that by reason of its relationship to
EndoSonics hereunder it will have access to confidential or proprietary
information ("Confidential Information"). Confidential Information shall
include all technology, inventions, designs, processes, formulas,
computer software, specifications, customer lists, product development
plans, forecasts, and all other business, technical and financial
information provided to Distributor. Distributor agrees that it will not
use in any way for its own account or the account of any third party,
nor disclose to any third party, any Confidential Information revealed
to it by EndoSonics. Distributor shall take every reasonable precaution
to protect the confidentiality of such information.
Upon request by Distributor, EndoSonics shall advise whether or not it
considers any particular information or materials to be confidential.
Distributor shall not publish any technical description of the Products
beyond the description published by EndoSonics (except to translate that
description into appropriate languages for the Territory). In the event
of termination of this Agreement, there shall be no use or disclosure by
Distributor of Confidential Information of EndoSonics, and Distributor
shall not manufacture or have manufactured any devices, components or
assemblies utilizing any of EndoSonics' Confidential Information.
The duty of confidentiality set forth herein shall not apply to
information that:
(a) is, at the time of disclosure, in the public domain;
(b) after disclosure, enters the public domain except where such
entry is a direct result of a breach of this Agreement;
(c) prior to disclosure, was already known to the party receiving
such information, as evidenced by its written records;
(d) subsequent to disclosure, is obtained from a third party in
possession of such information and not under a contractual or
fiduciary obligation to keep such information in confidence;
(e) is filed with any governmental or any regulatory authority and
available to the public; or
(f) is disclosed pursuant to any judicial or governmental requirement
or order.
Distributor's duty of confidentiality set forth above shall be limited
to the Term, each Renewal Term, if any, and 2 years from the expiration
thereof.
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<PAGE> 14
15. MISCELLANEOUS
15.1. Notices
All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing, shall be deemed to
have been duly given when delivered in person, or when sent by telex or
telecopy or other facsimile transmission (with the receipt confirmed),
or on the third business day after posting thereof by registered or
certified mail, return receipt requested, prepaid and addressed as
follows (or such other address as the parties may designate by written
notice in the manner of aforesaid):
If to Distributor:
Company: JOMED International AB
Address: Drottninggatan 94
City: S-25221 Helsingborg
Country: Sweden
Attention: Mr. Tor Peters
Position: President
Telephone: +46-42-490.6000
Facsimile: +46-42-490.6001
If to EndoSonics:
EndoSonics Europe B.V.
P.O. Box 1178
2280 CD Rijswijk
The Netherlands
Attention: Mr. Leo H. Vogelzang
Director
Telephone: +31-70-307.3929
Facsimile: +31-70-307.3922
With a copy to:
EndoSonics Corporation
2870 Kilgore Road
Rancho Cordova, CA 95670
USA
Attention: Mr. Gary Wilson
Vice President Worldwide Sales & Marketing
Telephone: +1-916-861.0105
Facsimile: +1-916-631.9546
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<PAGE> 15
15.2. Governing Law and Jurisdiction
This Agreement shall be governed by and construed in all respects in
accordance with the laws of the Netherlands and fall under the
jurisdiction of the place of office of EndoSonics.
15.3. Entire Agreement
This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof. This Agreement supersedes all
prior representations, agreements and understandings among the parties
with respect to such subject matter.
15.4. Amendments
No changes or amendments or alterations to this Agreement shall be
effective unless in writing and signed by all parties hereto.
15.5. Remedies Cumulative
The rights, powers and remedies set forth herein are cumulative and
shall be in addition to any and all other rights, powers and remedies
provided by law. The exercise of any right or remedy hereunder shall not
in any way constitute a cure under this Agreement, or prejudice either
party in the exercise of any of its rights under this Agreement or law.
15.6. Non-Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party.
15.7. Force Majeure
Non-performance of either party shall be excused (except for payment of
moneys and confidentiality) to the extent that performance is rendered
impossible by strike, fire, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to
perform is beyond the reasonable control of and is not caused by the
negligence of the non-performing party.
15.8. Legal Expenses
The prevailing party in any legal action brought by one party against
the other arising out of this Agreement shall be entitled, in addition
to any other rights and remedies it may have, to reimbursement for its
expenses, including court costs and reasonable attorney's fees.
15.9. Survival of Certain Terms
The provisions of Sections 3.4, 8.2, 8.3, 9,10.2, 10.3, and 14 shall
survive the termination of this Agreement for any reason. All other
rights and obligations of the parties shall cease upon termination of
this Agreement.
15.10. Waiver
No waiver of any default in the performance of any of the duties or
obligations arising out of this Agreement shall be valid unless in
writing and signed by the waiving party. Waiver of any one default shall
not constitute or be construed as creating waiver of any other default
or defaults. No course of dealing between the parties shall operate as a
waiver or preclude the exercise of any rights or remedies under this
Agreement.
Failure on the part of either party to object to any act or failure to
act of the other party, or declare the other party in default,
regardless of the extent of such default, shall not constitute a waiver
by the party of its rights hereunder.
15.11. Severability
If any provision of this Agreement shall be held to be unenforceable in
whole or in part, then
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<PAGE> 16
the invalidity of such provision shall not be held to invalidate any
other provision herein and all other provisions shall remain in full
force and effect.
15.12. Counterparts
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by both parties as of the
date first written above.
EndoSonics Europe B.V. Distributor
Signature: Signature:
------------------------- -------------------------
Name: Mr. L.H. Vogelzang Name: Mr. T. Peters
Title: Director Title: President
Date: Date:
------------------------- -------------------------
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<PAGE> 17
EXHIBIT A
ENDOSONICS/CARDIOMETRICS PRODUCTS AND PRICES
ENDOSONICS SYSTEMS, SYSTEM OPTIONS AND ACCESSORIES:
[ * ]
ENDOSONICS CATHETERS:
[ * ]
[ * ] Confidential Treatment Requested. Confidential portion has been filed
separately with the Securities and Exchange Commission.
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<PAGE> 18
ENDOSONICS/CARDIOMETRICS PRODUCTS AND PRICES (continued)
CARDIOMETRICS SYSTEMS AND ACCESSORIES:
[ * ]
CARDIOMETRICS FLOWIRE(R) DOPPLER GUIDE WIRES:
[ * ]
CARDIOMETRICS WAVEWIRE(TM) PRESSURE GUIDE WIRES:
[ * ]
USAGE DISCOUNTS AVAILABLE
[ * ]
All Products sales are ex-works Rijswijk, The Netherlands, except the Oracle(R)
In-Vision(TM) Imaging System, FloMap(R) I and II Systems, and WaveMap(R) System
which are ex-works Rancho Cordova, California, USA.
[ * ] Confidential Treatment Requested. Confidential portion has been filed
separately with the Securities and Exchange Commission.
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<PAGE> 19
EXHIBIT B
DISTRIBUTION RIGHTS BY GEOGRAPHIC AREA
Territory
- Baltic States (Estonia, Latvia, Lithuania)
- East Block, excluding Poland, Czech Republic, Slovakia, Bosnia and Croatia
- Israel
- Italy
- Middle East (Lebanon, Northern Africa, Syria, Jordan, Saudi Arabia, Kuwait,
Qatar, Bahrain, United Arab Emirates, Oman, Egypt)
- Nordic (Sweden, Norway, Denmark, Finland, Iceland)
- Russia
- South Africa
- Switzerland
- Turkey
- United Kingdom
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<PAGE> 20
EXHIBIT C
MINIMUM PURCHASE COMMITMENT
[ * ]
[ * ] Confidential Treatment Requested. Confidential portion has been filed
separately with the Securities and Exchange Commission.
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<PAGE> 21
EXHIBIT D
WARRANTY
1. SYSTEMS LIMITED WARRANTY
NOTICE: EndoSonics reserves the right to make changes in its products in
order to improve design or performance.
Subject to the conditions and limitations on liability stated herein,
EndoSonics warrants that Systems as so delivered shall materially
conform to EndoSonics' then current specifications for Systems, for a
period of one year from the date of delivery. ANY LIABILITY OF
ENDOSONICS WITH RESPECT TO THE SYSTEM OR THE PERFORMANCE THEREOF UNDER
ANY WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY WILL BE
LIMITED EXCLUSIVELY TO SYSTEM REPAIR, REPLACEMENT OR, IF REPLACEMENT IS
INADEQUATE AS A REMEDY OR, IN ENDOSONICS' OPINION IMPRACTICAL, TO REFUND
THE PRICE PAID FOR THE SYSTEM. EXCEPT FOR THE FOREGOING, THE SYSTEM IS
PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF FITNESS, MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. FURTHER,
ENDOSONICS DOES NOT WARRANT, GUARANTEE, OR MAKE ANY REPRESENTATIONS
REGARDING THE USE, OR THE RESULTS OF THE USE, OF THE SYSTEM OR WRITTEN
MATERIALS IN TERMS OF CORRECTNESS, ACCURACY, RELIABILITY, OR OTHERWISE.
Distributor understands that EndoSonics is not responsible for and will
have no liability for any items or any services provided by any persons
other than EndoSonics' authorized personnel. EndoSonics shall have no
liability for delays or failures beyond its reasonable control.
The happening of any one or more of the following events will void the
warranty:
1 - Defects due to negligence, alteration, modification, installation
or repair by anyone other than EndoSonics authorized personnel, or a
representative of Distributor authorized by EndoSonics to repair the
material.
2 - Abuse or misuse by end customer.
3 - Attempted or actual dismantling, disassembling, service or repair
in a procedure not specifically authorized by EndoSonics.
4 - Operating the System in a manner that is not in conformance with
purchase specifications and specifications contained in the
Operator's manual, and/or supplements.
5 - Maintenance of the System which is not in accordance with
procedures in the Operator's manual, and/or supplements.
6 - Repair, alteration or modification of the System in any way other
than by EndoSonics` authorized personnel, or without EndoSonics'
authorization.
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<PAGE> 22
If claims under this warranty become necessary, and the System or
components of the System are to be returned, Distributor shall contact
EndoSonics for instructions and issuance of a Returned Materials
Authorization number. The System or components will not be accepted for
warranty purposes unless the return has been authorized by EndoSonics.
System parts or components repaired or replaced under warranty bear the
same warranty expiration date as the original equipment. Consumable
parts (including, but not limited to rechargeable batteries, etc.) are
warranted only against defects in materials and workmanship. System
parts purchased outside the original warranty period are warranted for a
period of 90 days, subject to all of the restrictions contained in this
Limited Warranty. Use of unauthorized replacement parts may void the
warranty. In all cases, EndoSonics will be the sole judge as to what
constitutes warrantable damage.
2. CATHETERS AND WIRES LIMITED WARRANTY
Subject to the conditions and limitations on liability stated herein,
EndoSonics warrants that catheters and wires, as so delivered, shall
materially conform to EndoSonics' then current specifications for these
catheters or wires upon receipt. ANY LIABILITY OF ENDOSONICS, WITH
RESPECT TO CATHETERS OR WIRES OR THE PERFORMANCE THEREOF UNDER ANY
WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY, WILL BE LIMITED
EXCLUSIVELY TO CATHETER OR WIRE REPLACEMENT OR, IF REPLACEMENT IS
INADEQUATE AS A REMEDY OR, IN ENDOSONICS' OPINION IMPRACTICAL, TO REFUND
THE PRICE PAID FOR THE CATHETER OR WIRE. EXCEPT FOR THE FOREGOING,
CATHETERS AND WIRES ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
FITNESS, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT. FURTHER, ENDOSONICS DOES NOT WARRANT, GUARANTEE, OR
MAKE ANY REPRESENTATIONS REGARDING THE USE, OR THE RESULTS OF THE USE,
OF CATHETERS OR WIRES OR WRITTEN MATERIALS IN TERMS OF CORRECTNESS,
ACCURACY, RELIABILITY, OR OTHERWISE.
Distributor understands that EndoSonics is not responsible for and will
have no liability for any items or any services provided by any persons
other than EndoSonics' authorized personnel. EndoSonics shall have no
liability for delays or failures beyond its reasonable control.
Additionally, this warranty does not apply if:
1. A catheter or wire is used in a manner other than described by
EndoSonics in the Directions for Use supplied with the catheter or
wire.
2. A catheter or wire is used in a manner that is not in conformance
with purchase specifications or specifications contained in the
Directions for Use.
3. A catheter or wire is re-used or re-sterilized.
4. A catheter or wire carries an expired sterilization date.
5. A catheter or wire is repaired, altered or modified in any way by
personnel other than EndoSonics authorized personnel, or without
EndoSonics' authorization.
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<PAGE> 23
All catheters and wires shall be inspected for obvious damage upon
arrival. If catheters or wires have been damaged in transit, EndoSonics
must be notified within 72 hours.
If claims under this warranty become necessary, contact EndoSonics for
instructions and issuance of a Returned Goods Authorization number, if a
catheter or wire is to be returned. Catheters or wires will not be
accepted for warranty purposes unless the return has been authorized by
EndoSonics.
IN NO EVENT SHALL ENDOSONICS BE LIABLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES DUE TO ANY CAUSE WHATSOEVER. No suit or action
shall be brought against EndoSonics more than one year after the related
cause of action has occurred.
THE FOREGOING CONSTITUTES ENDOSONICS' SOLE LIABILITY AND DISTRIBUTOR'S
SOLE REMEDY WITH RESPECT TO PRODUCTS SOLD BY ENDOSONICS.
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<PAGE> 24
EXHIBIT E
ENDOSONICS EXTENDED MAINTENANCE AGREEMENT
This Extended Maintenance Agreement is made and entered into this ___________th
day of _________________, 1999, by and between EndoSonics Europe B.V., De Bruyn
Kopsstraat 15, 2288 EC Rijswijk, The Netherlands (hereinafter referred to as
"EndoSonics") and ______________________________ (hereinafter referred to as
"Customer").
The Extended Maintenance Agreement covers the following:
Equipment: ______________________________
Serial no.: ______________________________
Period: ______________, 1999 to ___________, 2000
CONDITIONS OF EXTENDED MAINTENANCE AGREEMENT
1. CALL WINDOW
8:30 A.M. to 5:00 P.M. (Central European Time) Monday through Friday
excluding holidays.
2. RESPONSE TIME
48 Hour Response Time during specified call window.
3. PAYMENT SCHEDULE
Annually in advance.
4. TERM
The Extended Maintenance Agreement shall be effective when signed by
both parties. The initial term is twelve (12) months from the
commencement date, unless modified on the face of the contract document.
5. AUTOMATIC RENEWAL
At the end of each term, the Extended Maintenance Agreement shall be
automatically renewed for twelve (12) months, unless terminated by
either of the parties at least two (2) months prior to the expiry date.
6. ELIGIBILITY FOR SERVICE
The Extended Maintenance Agreement shall only be valid as long as the
equipment covered by it is properly installed, and is serviced by
EndoSonics authorized personnel only. EndoSonics site environmental
conditions must be met at all times.
7. SERVICE RESPONSIBILITIES OF ENDOSONICS
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<PAGE> 25
7.1. EndoSonics shall maintain the equipment in good condition and
furnish service for calls received within the call window.
Specifically, EndoSonics shall:
A. Provide scheduled planned maintenance and safety check one
(1) time per year. Planned maintenance is to be scheduled
two weeks in advance within the call window; excluding
holidays.
B. Provide response to requests for remedial service within
the call window. Requests for service outside these hours
will be provided on a best effort basis at an additional
charge.
C. Provide all expenses incurred by EndoSonics Technical
Representative including airfare, lodging, and travel time
fees.
D. Provide original parts or parts of at least equal quality.
E. Provide all applicable safety and reliability
modifications at no charge.
F. Provide all applicable software updates at no charge.
7.2. EndoSonics shall, at no additional cost to the customer, provide
replacement equipment on loan, should EndoSonics fail to service
or repair customer's equipment within a reasonable time period.
7.3. Parts not covered under this Agreement are:
Supplies, Video Cassettes and Consumables.
8. RESPONSIBILITIES OF CUSTOMER
Customer shall notify EndoSonics immediately of equipment malfunction
and allow EndoSonics full unrestricted access to all equipment and areas
in which the equipment is commonly operated.
9. CHARGES
9.1. The charge for Extended Maintenance during the initial term of
this Agreement is US$_____________.
9.2 Payments of service charges are due forty-five (45) days from the
date of the invoice.
9.3. All service calls received outside the call window are subject to
a four (4) hour minimum charge and any additional hours necessary
to complete the repair are based upon the overtime rates
prevailing at the time. EndoSonics' overtime rates are:
(a) one and one half (1.5) times the normal hourly rate after
5:00 P.M. and before 8:00 A.M. Monday through Friday and
all day Saturday.
(b) two (2) times the normal hourly rate on Sundays and
scheduled holidays.
9.4. Charges are exclusive of, and Customer is responsible for, all
sales, use, and like taxes where applicable.
10. The provisions of the Agreement shall be interpreted under the laws of
The Netherlands.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
AGREED TO AND ACCEPTED
Customer EndoSonics Europe B.V.
Name: Name: F. van den Broek
Title: Title: Service Manager
Signature: Signature:
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