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EXHIBIT 10.1
(CRYOCATH LOGO) CONFIDENTIAL
AGENT AGREEMENT
THIS AGENT AGREEMENT (the "Agreement") is made as of November
9th , 2004 (the
"Effective Date")
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by and between CRYOCATH TECHNOLOGIES INC., a corporation
organized and
existing under the laws of Quebec, Canada, with its
principal
offices at 16771 CHEMIN STE-MARIE, KIRKLAND (QUEBEC) CANADA
H9H
5H3 (hereinafter referred to as "Manufacturer" or
"CryoCath").
and ATS MEDICAL, INC. a company organized and existing under
the
laws of Minnesota with its principal offices at 3905
ANNAPOLIS
LANE, SUITE 105, MINNEAPOLIS, MN 55447 U.S.A. (hereinafter
referred to as "Agent").
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In consideration of the mutual promises contained herein and for
other good and
valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS
As used in this Agreement, the terms set forth in this Article 1
shall have the
following meanings:
1.1 Products. Products shall mean those Surgical Cardiovascular
products
listed in Exhibit A attached hereto, as amended from time to
time by the
Manufacturer.
1.2 Territory. Territory shall mean All US Hospitals except for
list of
accounts in the United States set forth in Exhibit B.
1.3 Contract Quarter. Contract Quarter shall mean a period of
three
consecutive calendar months beginning on January 1, April 1,
July 1, or
October 1.
1.4 Sales Commitment. Sales Commitment shall have the meaning
set forth in
Section 3.2.
1.5 Standard Terms and Conditions of Sale. Standard Terms and
Conditions of
Sale shall mean Manufacturer's terms and conditions of sale for
its
products, as modified by Manufacturer from time to time.
1.51 Net Sales: Net Sales means, in respect of a specified
Calendar Quarter or
Calendar Year, the total gross amounts and other cash and
non-cash
consideration invoiced or otherwise charged by CryoCath in
respect of all
units of all Products including service contracts sold to ATS's
accounts
whether shipped, sold, transferred or otherwise distributed by
or on behalf
of CryoCath during such Calendar Quarter or Calendar Year, less
(to the
extent not already taken into account and to the extent the
following
exclusions would be deducted from net sales using the
methodology used by
CryoCath, and approved by its independent auditors, in
calculating net
sales in connection with CryoCath's preparation of the
** The appearance of a double asterisk denotes confidential
information that
has been omitted from the exhibit and filed separately,
accompanied by a
confidential treatment request, with the Securities and Exchange
Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of
1934.
CONFIDENTIAL Agent Agreement
ATS MEDICAL - Agreement dated November 9th, 2004 page 1 of
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CryoCath Financial Statements) (a) normal and customary trade,
cash and
quantity discounts, allowances and credits granted or allowed,
including
(without limitation) free goods and free use of consoles; (b)
credits or
allowances actually granted for returns or rejection of such
Products and
retroactive price reductions; (c) sales taxes, duties or other
taxes with
respect to such sales (including duties or other governmental
charges
levied on, absorbed or otherwise imposed on the sale of Product
including,
without limitation, value-added taxes or similar taxes or
other
governmental charges otherwise measured by the billing amount,
when
included in billing but excluding income or other taxes with
respect to
gross receipts) actually collected by CryoCath; (d) charge back
payments
and rebates granted to managed healthcare organizations or to
national,
provincial, state and local governments, their agencies, and
purchasers and
reimbursers or to trade customers, including but not limited
to,
wholesalers and chain buying groups; and (e) rebates (or
equivalents
thereof) granted to or charged by national, provincial, state or
local
governmental authorities.
1.6.1 Trademarks. Trademarks shall mean those trademarks and
trade names,
whether registered in the Territory or not, labeling, trade
dress,
packaging and devices which are owned by, licensed or assigned
to
Manufacturer or which it otherwise has a right to use and which
are applied
to or used with the Products by Manufacturer.
ARTICLE 2. APPOINTMENT: EXCLUSIVITY; COMPETING PRODUCTS; PRICES;
COMMISSIONS
2.1 Appointment. Subject to the terms of this Agreement,
Manufacturer appoints
Agent as its exclusive Agent for the Products in the Territory
in
accordance with the terms of this Agreement and Agent accepts
this
appointment. Such appointment does not constitute a grant of any
rights or
interests other than the rights specifically granted to the
Agent hereunder
and does not constitute a license or sub-license of the
Products. If the
Agent fails to meet the Sales Commitment, Agent's appointment
will at
Manufacturer's option automatically become non-exclusive for the
remaining
term of this Agreement notwithstanding the Manufacturers right
to cancel
the agreement subject to a 30-day cure period, as set forth
under Section
3.2.
2.2 Exclusivity. Subject to Agent's compliance with the terms of
this
Agreement, Manufacturer shall sell the Products for delivery in
the
Territory only through Agent.
2.3 Promotion and Sale of Products only within Territory. Agent
shall promote
and sell the Products to customers only for use or consumption
within the
Territory.
2.4 Competing Products. Manufacturer or Agent shall neither
distribute nor
market products competitive with the Products during the Term as
defined in
Section 16.1 and any renewal of this Agreement without the prior
written
consent of either Party. It is understood that Manufacturer is
restricted
from selling Products in Agent's Territory during the term of
the
Agreement. If either Party does not approve the other Party's
request for
representation of competitive products, the other Party must
refuse to or
cease representing the competitive products. Agent shall not
make any
changes, alterations, modifications or additions to the Products
without
the prior written approval of CryoCath.
2.5 Prices. Agent shall sell Products to hospitals at prices
previously
communicated in writing by Manufacturer from time to time. The
prices to be
charged to Agent's accounts under this Agreement will be the
prices set out
in Exhibit A under "Price List". Any deviations from the Price
List must be
pre-approved by the Director of Marketing or VP Global Marketing
and US
Sales or an Officer of the Manufacturer in writing on an
account-by-
CONFIDENTIAL Agent Agreement
ATS MEDICAL - Agreement dated November 9th, 2004 page 2 of
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account basis. The Priceshare subject to change by the
Manufacturer once
per year upon (30) thirty-day written notice to the Agent.
Manufacturer
will respect all long-term price agreements with Agents accounts
if such
agreements were pre-approved by the Manufacturer.
2.6 Commissions. Manufacturer shall pay Agent a commission in
the Territory
during the Term of this Agreement ** of Net Sales to Agent's
accounts.
Sales to Agent's customers and the obligation to pay commissions
are
subject to Customer meeting CryoCath's standard D&B credit
rating.
Commissions are payable monthly to Agent 30 days following the
month to
which the commission applies .
ARTICLE 3. PROMOTION AND SALE OF PRODUCTS
3.1 Commercially Reasonable Efforts. Agent shall exercise its
commercially
reasonable efforts to promote and sell the Products for use only
by
qualified individuals as appropriate in the Territory, in
compliance with
local laws and regulations and good commercial practice and for
uses and
applications reasonably approved by Manufacturer for the
Products. Agent
shall only sell directly to end users of the Products and shall
not sell
indirectly or engage sub-agents or distributors without the
prior written
consent of Manufacturer. Agent shall be subject to performance
criteria
applied to agents of the Products in general, as communicated
by
Manufacturer from time to time, after discussion and agreement
with the
Agent.
3.2 Sales Commitment. In addition to the efforts described
herein, Agent
hereby agrees to the minimum sales commitments for CryoCath
Products during
the term of the Agreement ("Sales Commitment") set forth on
Exhibit C.
Agent must meet all the annual Sales Commitments at the end of
each
twelve-month term and must meet 40% of the first term's
commitment by the
end of the first 9 months of that first term and 40% of the
second term's
commitment by the end of the first nine months of the second
term
(hereafter referred to as the "Interim Term Targets"). It is
understood
that the twelve month period referred to with respect to the
interim and
annual sales commitments will commence as of January 1, 2005.
Throughout
the term of this Agreement, if Agent fails to meet any of Sales
Commitment
or meet the Interim Term Targets, Agent's appointment may at
CryoCath's
option, automatically become non-exclusive for the remaining
term of this
Agreement subject to a 30-day cure period, without prejudice to
CryoCath's
other rights under this Agreement (including the right to
terminate this
Agreement upon written notice to Agent) and CryoCath may appoint
one or
more additional agents for sale of the Products or solicit
orders for the
Products directly in the Territory for the remaining term of
this
Agreement. Products returned to CryoCath for reason other than
Product
defect shall not count towards the fulfillment of Agent's
relevant Sales
Commitment or Interim Targets .
3.3 Personnel. Manufacturer and Agent shall ensure all of its
sales
representatives are trained and engaged in the sale of
Manufacturer's
Products. Manufacturer will be responsible for holding a
training session
for Agent's representatives at Manufacturer's cost. Agent will
be
responsible for representative's travel and incidental training
costs In
addition, Agent and Manufacturer shall each employ a dedicated
co-promote
manager to ensure that both Parties are committed to meet their
duties
under this Agreement. Manufacturer will dedicate clinical
specialists to
support surgical clinical cases.
3.4 Inventories and Direct Shipment. Products will be shipped
from
Manufacturer's warehouse directly to customers who will be
billed directly
by Manufacturer.
CONFIDENTIAL Agent Agreement
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3.5 Promotional Materials. In promoting the Products in the
Territory, Agent
shall not use promotional materials contrary to the best
interest of the
Manufacturer. Manufacturer reserves the right to require prior
approval of
the promotional materials and advertising campaigns.
Manufacturer will
provide to Agent reasonable amounts of such promotional
materials that it
provides to its own representatives, at no cost to the
Agent.
3.6 Reports. The parties agree to meet quarterly for the purpose
of reviewing
the business and a three month rolling forecast.
3.7 Customer Complaints. Agent shall report to Manufacturer no
later than
within 48 hours of receipt all customer complaints of any nature
concerning
the Products and all notices of serious or adverse reaction
associated with
the use of the Products, and cooperate with Manufacturer in the
resolution
of such complaints. Agent shall maintain records of such
complaints for at
least three (3) years after their receipt and shall make such
records
available to Manufacturer for inspection and copying upon
Manufacturer's
request at any time during Agent's normal business hours.
3.8 Legal Compliance. Manufacturer and Agent shall comply with
all relevant
legislation governing the sale of the products.
3.9.1 Limited samples to be provided. The Manufacturer shall
supply the Agent
with ** at Manufacturer's fully absorbed cost and a reasonable
number of
surgical consoles not for human use **.
3.9.2 Conference and Marketing Booth. Agent agrees to attend the
following
conferences (ATS to attach list) each year for the promotion of
Products.
In addition, Agent agrees to dedicate 25% of its Marketing booth
sales
representative stations to CryoCath. CryoCath agrees to display
ATS's name
as Agent of its Products in its booth at such Surgical
conferences that it
attends and at which it has booth space.
ARTICLE 4. MANUFACTURER ASSISTANCE TO AGENT
To assist Agent in selling the Products in the Territory,
Manufacturer shall
provide Agent with information on marketing and promotional
plans with respect
to the Products as well as copies of marketing, advertising,
sales and
promotional literature concerning the Products produced by or
for CryoCath, if
any.
ARTICLE 5. ADDITION AND DELETION OF PRODUCTS FROM AGREEMENT
5.1 Addition of Products. From time to time new Products may be
added to those
covered by this Agreement by amendment of Exhibit A in
accordance with
Article 17.7. Article 18.7
5.2 Deletion of Products. Manufacturer may delete specific
Products, provided
such Products are replaced with next generation Products, from
coverage by
this Agreement upon (30) thirty-day written notice to Agent,
which notice
includes an amendment of the attached Exhibit A reflecting the
deletion. No
such deletion shall be deemed a termination or partial
termination of this
Agreement.
CONFIDENTIAL Agent Agreement
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ARTICLE 6. PROCEDURE FOR ORDER OF PRODUCTS BY AGENT
6.1 Manufacturer's address. Hospital shall mail or fax all
orders for the
Products to the following address:
CryoCath Technologies Inc.
16771 Chemin Ste-Marie
Kirkland, Quebec H9H 5H3
Canada
Attention: Customer Service
Fax: (514) 694-6279
Or to such other address or facsimile number as Manufacturer
shall from
time to time designate in writing.
ARTICLE 7. ADDITIONAL EXPRESS WARRANTIES AND DISCLAIMER
7.1 Warranty. Manufacturer will provide the following warranty
to customers:
that the Products shall materially conform to CryoCath's then
current
specifications, as amended from time to time, for such Products
for the
shelf life of such Products as set forth in the label of each
such Product.
Customer's exclusive remedy and CryoCath's sole liability for
breach of the
foregoing warranty shall be the remedy set forth in Section
8.2.
7.2 Defective Products. In the event that any Product fails to
conform to the
warranty set forth in Section 7.1, CryoCath's sole and exclusive
liability,
and customer's exclusive remedy shall be, at CryoCath's sole
election, to
replace the Product or credit customer's account for the
purchase price of
such Product; provided however, that: (a) customer promptly
notifies
CryoCath in writing during the Agent Warranty Period that such
Product
fails to conform to the warranty set forth in Section 7.1,
provides a
detailed explanation of any alleged nonconformity, and requests
a return
material authorization number; and (b) such Product is returned
within the
Warranty Period to CryoCath F.O.B. CryoCath's shipping location
in
Kirkland, Quebec, Canada, or as otherwise notified by CryoCath,
with the
return material authorization number affixed prominently to the
outside
packaging. If CryoCath verifies that such Product fails to
conform to the
warranty set forth in Section 7.1, CryoCath will replace the
Product or
credit customer's account for the purchase price of such
Product.
7.3 Disclaimer. To the full extent permitted under applicable
law, except for
the warranties provided in Sections 7.1 and 8.2, CryoCath
disclaims all
other warranties or conditions, express, implied, statutory or
otherwise,
regarding the products, including without limitation, warranties
of their
quality,
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