<PAGE>
EXHIBIT 10.1
(CRYOCATH LOGO)
CONFIDENTIAL
AGENT AGREEMENT
THIS AGENT AGREEMENT (the "Agreement") is
made as of November 9th , 2004 (the
"Effective Date")
<TABLE>
<S>
<C>
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").
</TABLE>
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 16
<PAGE>
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 16
<PAGE>
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
ATS MEDICAL - Agreement dated November 9th,
2004
page 3 of 16
<PAGE>
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
ATS MEDICAL - Agreement dated November 9th,
2004
page 4 of 16
<PAGE>
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,
fitn
