This
Distributor Agreement (“Agreement”) is made as of
September 20, 2002 between Sutura, Inc.
(“Supplier”) a California corporation, having its
principal place of business at 17080 Newhope Street, Fountain
Valley, CA 92708 and Getz Bros. & Co., Inc.
(“Distributor”) a Delaware corporation, located at 225
West Washington Street, Suite 1900, Chicago, IL
60606.
In
consideration of the mutual promises contained herein, Supplier and
Distributor agree as follows:
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1.
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Definitions:
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(a) “Products”
means those products listed in Exhibit A attached hereto, as
that Exhibit may be amended to include any and all new products
manufactured or distributed by Supplier within the field of
vascular closure and also to exclude those products as may be
discontinued by Supplier.
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(b) “Territory”
means Australia, New Zealand, China, Hong Kong, Taiwan, Korea,
Singapore, Malaysia, Philippines, Thailand, India, Indonesia, Sri
Lanka, Pakistan, Vietnam, Cambodia, Laos, Bangladesh and
Myanmar.
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2.
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Appointment and Authority of
Distributor:
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(a) Appointment:
Subject to the terms and conditions of this Agreement, Supplier
hereby appoints Distributor, and Distributor accepts that
appointment, as Supplier’s exclusive distributor of the
Products in the Territory.
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(b) Independent
Contractors: Distributor and Supplier are independent
contractors and are engaged in the operation of their own
businesses. Neither party is to be considered the agent of the
other party for any purpose whatsoever, and neither party has any
authority to enter into any contracts or assume any obligations for
the other party or make any warranties or representations on behalf
or the other party unless agreed to in writing by the other
party.
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3.
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Obligations of
Distributor:
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(a) Registration and
Marketing of Products: Distributor agrees, at its expense, to
use its best efforts to investigate, obtain government approval
for, promote, and distribute the Products, in the Territory as soon
as feasible after the date of this Agreement, using generally the
same channels and methods, exercising the same diligence and
adhering to the same standards which it employs for other medical
application products sold by Distributor, as well as any of
Distributor’s own products.
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(b)
Minimum Performance Levels: Distributor agrees to
purchase the number of units of Products per calendar year during
the term of this Agreement that is set forth on Exhibit C;
provided, however, that such minimum performance levels shall be
appropriately adjusted by Supplier and Distributor if: (i) one
or more events of force majeure affect Distributor’s ability
to meet such levels; (ii) Supplier is unable or refuses to
sell Products to Distributor when Distributor orders them;
(iii) Products are deleted from this Agreement,
(iv) Product registrations are delayed or denied by local
governing agencies through no fault of Distributor, (v) Supplier is
unable or refuses to supply reasonable data or information to
comply with local governing agencies, (vi) approval for
Product reimbursement is delayed or denied by local governing
agencies, or (vii) Product reimbursement levels established by
government regulatory authorities in the Territory do not allow
Distributor to realize a minimum gross profit (defined as revenues
from sales of Products less Product costs, as well as taxes and
shipping expenses incurred in connection therewith) of forty
(40) percent based on existing Supplier pricing. After the
years listed in Exhibit C, Distributor and Supplier shall
agree on the minimum performance level for each country for each
calendar year. If Distributor and Supplier do not agree on
acceptable minimum performance levels for any given year or country
in the Territory prior to the commencement of such year, Supplier
shall have the right to terminate Distributor’s distribution
rights hereunder for any country where the parties do not agree to
minimum performance levels; provided, however, the percentage
increase in minimum performance levels for any year or country in
the Territory will not be greater than seven (7) percent over
the previous year’s minimum performance level unless mutually
agreed upon. All other rights, terms and conditions in the
Agreement for the remaining parts of the Territory would survive
the termination of any country.
(c)
Reports: Distributor agrees to submit regular reports
to Supplier on a quarterly basis (unless otherwise agreed)
accurately describing sales of the Products by Distributor for the
previous period (including prices, unit sales, and other
information as may be reasonably requested by Supplier from time to
time).
(d)
Product Complaints. Distributor agrees to report to
Supplier all available information concerning any product
complaints that it is aware of. This information will be reported
in order to assist Supplier in monitoring the quality and safety of
its Products, and to allow Supplier to meet its reporting
obligations under the United States Medical Device Reporting
regulations (21 CFR 803,24) and Medical Device Vigilance
Guidelines. Information concerning product complaints may be
reported to the Supplier in either verbally or in writing. A
“product complaint’ is any written or oral expression
of dissatisfaction as to the identity, quality, durability,
reliability, safety, effectiveness, or performance of a Product.
Product complaints associated with a death or serious injury, or a
malfunction that could reasonably be expected to result in a death
or serious injury if the malfunction recurs, will be reported to
Supplier immediately upon Distributor’s knowledge of that
information.
(e)
Prohibited Sales: Distributor agrees not to sell, and
agrees to use reasonable efforts to ensure that Distributor’s
subdistributors, agents and customers do not sell or use, any of
the Products outside the Territory.
(f)
Product Presentation: Distributor agrees to present
the Products fairly to potential customers, not to disparage the
Products, any Product trademarks or Supplier and to do all things
reasonable to promote the reputation of the Products and the value
of any Product trademarks.
(g)
Advance Payment: Distributor agrees to provide
Supplier with an advanced payment of two hundred fifty thousand
dollars ($250,000) fully creditable against Distributor’s
future purchases of Products.
(h)
Non-Compete: Distributor agrees not to license, manufacture,
sell, or distribute any product, which competes with
Supplier’s Products. Notwithstanding, Distributor reserves
the right to distribute percutaneous closer devices manufactured by
Perclose, Inc. (an Abbott Laboratories company) in the Territory
until Distributor sells any remaining inventory, provided however,
Distributor sells any remaining inventory within ninety (90) days
from the first date of this Agreement.
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4.
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Obligations of
Supplier:
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(a) Requirements of
Distributor: Supplier agrees to supply Distributor’s
requirements for the Products in the Territory consistent with
Distributor’s non-binding forecasts of its expected
requirements for the Products. If Supplier believes it will not be
able to satisfy Distributor’s requirements for the Products,
it must promptly notify Distributor, specifying the reasons for and
duration of the expected delay and its duration at the time Product
order is placed.
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(b) Registration and
Marketing Support: To assist Distributor in registering and
marketing the Products in the Territory, Supplier agrees
to:
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(i) Provide Distributor with materials
necessary to obtain health registrations. Supplier will supply to
Distributor the required quantity of samples, at a price equal to
Supplier’s cost of goods, to obtain registration
approval.
(ii) Provide Distributor with information
on marketing and promotional plans of Supplier for the Products as
well as copies of marketing advertising, sales, technical training
manuals, and available audiovisual teaching and marketing aides and
promotional literature concerning the Products.
(iii) Provide Distributor with certain
certificates of analysis concerning the Products purchased by
Distributor, certificates of free sale, trademark authorizations
and any other documents which Distributor may require for
registration purposes.
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5.
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Trademark License:
Supplier grants to
Distributor the right and license to use Supplier’s
trademarks and any trademark registrations which Supplier obtains
and designates for the Products in the Territory, but only in
connection with sales of the Products purchased from Supplier in
the Territory. This trademark license shall continue in effect for
each jurisdiction in the Territory only while Distributor retains
its distribution rights in each jurisdiction. Distributor agrees
not to remove or obscure any Product label affixed by
Supplier.
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6.
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Terms and Conditions of
Sale:
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(a) Terms of Orders:
All purchases of the Products by Distributor from Supplier during
the term of this Agreement will be subject to the terms and
conditions of this Agreement.
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(b) Packaging: All
quantities of the Products purchased from Supplier by Distributor
will be in the form of labeled, standard unit packages and in a
form and formulation consistent with the Products sold by Supplier
for use in the United States, unless otherwise agreed by Supplier
and Distributor in writing.
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(c) Price and Payment:
The prices for the Products to Distributor are set forth in
Exhibit A attached hereto. The prices are valid for a minimum
period of twelve (12) months, unless mutually agreed otherwise
in writing. Ninety (90) days advance written notification is
required for price increases by Supplier.
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(d) Resale Price:
Distributor may resell Products at any price that Distributor in
its sole discretion determines.
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(e) Expenses: All
expenses for importation, promotion, sales and distribution, as
well as Distributor’s administrative and overhead expenses,
will be borne solely by Distributor.
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(f) Credit: Distributor
assumes all credit and other risks involved in its sales under this
Agreement. All collection expenses on sales made by Distributor
will be at Distributor’s expenses.
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(g) Payment
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