Exhibit
10.39
SALES
AND MARKETING SERVICES AGREEMENT
This
Sales and Marketing Services Agreement (the “
Agreement ”), dated effective as of
March ____, 2006 (the “ Effective Date
”), is entered into by and between SIGNALIFE, INC. , a
Delaware corporation, with a principal executive office is located
at 531 South Main Street, Suite 301, Greenville, South
Carolina 29601 (“ Signalife ”), and
RUBBERMAID INC. (d/b/a Rubbermaid Medical Solutions),
an Ohio corporation, with an office located at 8936 NorthPointe
Executive Drive, Huntersville, NC 28078 (“ RMS
”), with reference to the following facts:
RECITALS
WHEREAS
;
Signalife is a medical device company focused on researching,
developing and marketing medical devices which monitor and measure
physiological signals in order to detect diseases that impact an
individual’s health;
WHEREAS
;
Signalife has recently developed its principal core product, a
digital 12-lead Model 100 Patient Module (the “
Model 100 Module ”) based upon a production prototype
completed for Signalife in December 2004 by Battelle Memorial
Institute, Health and Life Sciences;
WHEREAS
, on
January 28, 2004, Signalife received FDA 510(k)
clearance under the FDA’s abbreviated 510(k) submission
format allowing Signalife to market the Model 100 Module as
part of an overall monitor system to be used with compatible
FDA-approved or cleared electrode/lead wire sets, and ECG analysis
software (referred to as the “ Ancillary Products
”);
WHEREAS
;
Signalife has since incorporated the Model 100 Module as the
principal component of an integrated patient heart monitor or
recording “system” that it will market under the name
“ Fidelity 100 Monitor ”, a visual
representation thereof of which appears on Appendix A which is
attached hereto and incorporated herein,
WHEREAS
;
the Fidelity 100 Monitor is an integrated single-station unit
comprised of, among other things, of the Model 100 Module, computer
hardware, a monitor, and proprietary ECG analysis software, which,
when used with electrode/lead wire sets, allows a patient’s
heart to be continuously monitored, collected and stored and the
results immediately analyzed by the physician such as, by way of
example and not limitation, use in hospitals, clinics, doctors
officers, exercise and sports medicine, surgeries, and
laboratories;
WHEREAS
;
the Fidelity 100 Monitor may be sold pursuant to the hereinabove
referenced FDA 510(k) clearance granted by the FDA, and the
Signalife has substantially completed product development of the
monitor, has entered into a product manufacturing agreement to
manufacture the monitor and has commenced manufacturing activities,
and has also commenced commercial marketing of the minor subject to
minor design changes that may be made in response to consumer
feedback;
WHEREAS
;
Signalife is also developing an ambulatory (holter) monitoring
system (the “ Holter Monitor ”), which will use
a battery-operated version of the Model 100 Module, a visual
representation thereof of which appears on Appendix A;
WHEREAS
;
the Holter Monitor is an integrated unit comprised of, among other
things , the Model 100 Module, a data storage chip, and bluetooth
technology, which may be used to monitor a patient’s heart
over a period of up to 48 hours in ambulatory settings while
the patient moves around, to store the data on the chip as it is
collected, and to then later download that data wirelessly at a
doctor’s office via the bluetooth technology for later
interpretation by the doctor using his ECG analysis hardware and
software;
-1-
Exhibit
10.39
WHEREAS
;
Signalife anticipates that it will commence commercial marketing of
the Holter Monitor in or about September 2006, and that the Holter
Monitor will use either the Model 100 Module or a smaller module
currently under development by Signalife;
WHEREAS
;
RMS is a global manufacturer and marketer of branded commercial and
consumer products; which desires to expand its business base into
the sales representation and marketing of medical devices,
including heart monitors;
WHEREAS
; it
has been proposed that RMS handle all sales and marketing functions
at its cost with respect to (i) the marketing and sale of the
Fidelity 100 Monitor for all applications such as, by way of
example and not limitation, use in hospitals, clinics,
doctors’ offices, exercise and sports medicine, surgeries,
and laboratories, and (ii) the marketing and sale of the Holter
Monitor once Signalife completes development of that product,
whether using the Model 100 Module or the smaller module under
development, thereby relieving Signalife of such obligations and
costs;
WHEREAS
;
the parties anticipate that RMS will commit resources toward
promotional activities as well as internal infrastructure and
personnel in providing sales and marketing services;
WHEREAS
; in
consideration for the provision of the aforesaid sales and
marketing services and the bearing of the aforesaid costs, it has
been proposed that Signalife (1) co-brand such products with
RMS’s trademarks, trade names, trade dress, logos and
designations, and (2) Signalife pay a percentage of its net product
sales to RMS in consideration of the provision of such services by
RMS and the payment of the costs associated with providing such
services by RMS; and
WHEREAS
;
the parties each desire to enter into a written agreement formally
documenting their relationship and setting forth their mutual
rights, duties and responsibilities.
NOW,
THEREFORE ; in
consideration of the mutual covenants and promises contained
herein, and for valuable consideration, the receipt and sufficiency
of which are hereby mutually acknowledged, the parties to this
Agreement (collectively “parties ” and
individually a “party ”), intending to be
legally bound, agree as follows:
AGREEMENT
1.
APPOINTMENT
AS SALES AND MARKETING SERVICE PROVIDER
(A)
Exclusive
Appointment
Subject
to the terms of this Agreement, Signalife appoints RMS, and RMS
accepts such appointment, as Signalife’s exclusive sales and
marketing service provider in connection with the marketing and
sale of the Signalife Products (as such term is defined below)
throughout the Territories (as such term is defined in
section 1(C) below). So long as RMS satisfies all
of its obligations under this Agreement, and unless RMS's status is
terminated pursuant to the terms of this Agreement, Signalife will
not engage any party other than RMS to provide sales and marketing
services for the Signalife Products in the Territories.
(B)
Definition
of Signalife Products
The
term “ Signalife Products ” means any of the
following (including their substantial equivalents): (i) the
Fidelity 100 Monitor, including any further improvements
thereto, as sold for any and all applications including, by
way of example and not limitation, use in hospitals, clinics,
doctors’ offices, exercise and sports medicine, surgeries,
and laboratories; (ii) the Holter Monitor once introduced, whether
based upon the Model 100 Module or the smaller module under
development, and (iii) any Ancillary Products owned or developed by
Signalife, including the EDB 15 connection device
coupled
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Exhibit
10.39
with
proprietary cables, electrodes and lead sets developed by Signalife
for use with the Fidelity 100 Monitor. The term Signalife
Products shall not be deemed to encompass any monitoring centers to
be established by Signalife that may operate in conjunction with
the Signalife Products. The parties contemplate certain
utility carts manufactured by RMS and/or its affiliates or
suppliers (the “RMS Carts”) to be sold by RMS to
Signalife to be utilized in the sale of some Fidelity 100 Monitors.
The parties agree to negotiate in good faith an agreement
relating to the sale of such RMS Carts to Signalife at a price
equal to 150% of RMS’ standard cost, with transportation to
Signalife’s distribution center to be paid by RMS.
_
(C)
Identification
Of Territories
RMS
shall have the right to act as Signalife’s exclusive sales
and marketing service provider with respect to the following
countries (collectively, the “ Territories ”):
(i) the United States; and (ii) any other country of the
world to which the parties in the future mutually agree in
writing—signed by all parties hereto—to extend this
Agreement in either a separate addendum to the Agreement or in the
Marketing Criteria. Signalife and RMS shall consult relative
to their strategy in introducing the Signalife Products in each of
the Territories, and incorporate any such understanding in the
Marketing Criteria. In the event that RMS declines to provide
any such services for markets other than the United States or the
parties otherwise fail to reach agreement as to incorporating such
countries as Territories, then Signalife shall be free to procure
other sales or marketing providers for such countries outside of
this Agreement, though Signalife may not utilize in such countries
any trademarks, trade names or other rights belonging to RMA and/or
its affiliates.
(D)
Exclusions
Although
it is anticipated and intended by the parties that RMS shall
provide and fund all sales and marketing activities for the
Signalife Products in the Territories, thereby enabling Signalife
to avoid these obligations and associated costs, this Agreement
shall nevertheless not prevent Signalife at its own cost from
selling or marketing the Signalife Products in the Territories,
provided, however , any such products sold shall be sold
subject to the co-branding requirements of section 4(C)
, and the proceeds of any such sales shall be deemed to have been
sold under this Agreement for the purpose of determining
RMS’s Sales and Marketing Fee pursuant to
section 5(A) .
2.
EXCLUSIVITY
FEE
In
consideration for entering into this Agreement and affording RMS
the exclusive right to provide exclusive sales and marketing
services during this the term of this Agreement, RMS shall pay the
sum of two million dollars ($2,000,000) (the “ Initial
Exclusivity Fee ”) to Signalife in goods funds via wire
transfer to an account designated by Signalife no later than the
end of the third business day following Signalife’s provision
of adequate proof (in RMS’s reasonable opinion) to RMS that
Signalife has fulfilled its obligations set forth in Section 9.
Thereafter, as a condition of renewing the term of this
Agreement for two additional periods, RMS shall pay Signalife: (a)
one million dollars ($1,000,000) for the first renewal fee (though,
if Signalife has not , prior to the first annual anniversary of the
Effective Date, shipped at last two hundred (200) units of Products
to customers under the terms of this Agreement, such amount shall
be reduced to five hundred thousand dollars ($500,000)); (b) one
million dollars ($1,000,000) for the second renewal (each an
“ Additional Exclusivity Fee ”), as provided in
section 22 . To the extent not timely paid,
interest shall accrue on the unpaid balance of the Initial
Exclusivity Fee or Additional Exclusivity Fee (collectively, the
“ Exclusivity Fee ”) at the rate of eight
percent (8.0%) per annum.
3.
OBLIGATIONS
(A)
Promotional
Efforts
(1)
RMS
will at its cost advertise and otherwise use commercially
reasonable efforts to vigorously promote the sale and marketing of
the Signalife Products in the Territories, commencing
with
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Exhibit
10.39
the
United States of America, including the preparation and
dissemination of advertising and other promotional literature and
materials. RMS shall keep Signalife management continuously
apprised of RMS’s pending and anticipated marketing efforts
and budgets under this Agreement. All advertising and
promotional literature and materials to be disseminated to third
parties shall be subject to prior approval in writing by Signalife.
(2)
During
the term of this Agreement, Signalife shall have co-exclusive right
to RMS's right, title and interest in all such advertising and
promotional materials and work product, including but not limited
to all related copyrights and moral rights (subject to
section 8 relating to trademarks, trade names, trade
dress, logos and designations); and (ii) after the termination of
this Agreement, such right, title and interest in all such
advertising and promotional materials and work product shall be
deemed assigned to Signalife (subject to section 8
relating to trademarks, trade names, trade dress, logos and
designations).
(B)
Sales
Force
RMS
shall at its cost organize and manage all sales activities of the
Signalife Products necessary to promote sales of the Signalife
Products in the Territories, including contacting targeted users of
the Signalife Products through appropriate contact methodologies
and media, and attending, and aggressively advertising and
promoting Signalife Products, including in trade shows, conventions
and exhibits. RMS will hire, train and maintain a sufficient
number of capable sales personnel and devote such portion of its
corporate infrastructure to effectively and aggressively promote
and effectuate sales of the Signalife Products in the United States
of America and such other territories as mutually agreed to from
time-to-time under the Marketing Criteria. Such personnel
shall have such knowledge and training necessary to: (i) inform
customers properly concerning the features and capabilities of the
Signalife Products and, if necessary, competitive products; (ii)
provide full sales service and basic technical support for the
Signalife Products; and (iii) otherwise carry out the obligations
and responsibilities of RMS under this Agreement. In
particular, RMS and its staff will be conversant with the technical
language conventional to the Signalife Products and similar medical
devices in general, and will develop sufficient knowledge of the
industry, of the Signalife Products and of products competitive
with the Signalife Products (including specifications, features and
benefits) so as to be able to explain in detail to its customers
the differences between the Signalife Products and competitive
products .
(C)
Meetings
RMS
will notify Signalife of RMS's sales meetings and provide Signalife
personnel adequate opportunity to attend such meetings and to
provide sales and promotion information regarding Signalife
Products in such meetings.
(D)
Training
and Exemplars
RMS
will send its sales, technical and management personnel for
training on the Signalife Products as mutually agreed to from
time-to-time under the Marketing Criteria. The training will be
provided free of charge at one of Signalife’s offices, the
amount of training time will be reasonable and appropriate in
Signalife's judgment, all such training will be in English, and RMS
will bear all travel and living expenses for such personnel sent to
Signalife for training. Signalife shall sell RMS at
Signalife’s standard cost exemplars of each Signalife Product
and any ancillary equipment necessary for RMS to effectively
demonstrate the performance of the Signalife Products during sales
and marketing presentations.
(E)
Sales
Support
RMS
will at its cost provide prompt pre-and post-sales service and
support for all the Signalife Products with the United States of
America and such other territories as mutually agreed to
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Exhibit
10.39
from
time-to-time under the Marketing Criteria. RMS will provide
necessary and useful assistance and consultation on the use of the
Signalife Products; timely respond to customers' general questions
concerning use of the Signalife Products; and assist customers in
the diagnosis and correction of general problems encountered in
using the Signalife Products to the extent practicable.
(F)
Technical
Support
Signalife
will at its cost provide prompt technical support, including
product repair and replacement, to both RMS’s sales team and
to customer to the extent RMS is unable to provide basic technical
support to customers.
(G)
Manufacturing,
Packaging And Quality Control
Signalife
will be solely responsible at its cost for the manufacture and
packaging of the Signalife Products, including operating and
service manuals, warranties, claims, disclaimers, and other
inserts, either through its own manufacturing facilities or through
third-party contract manufacturers. Signalife will also be
solely responsible at its cost for quality control.
Notwithstanding the foregoing, Signalife may request
RMS’s advice in connection with manufacturing, packing and
quality control procedures. Signalife shall use
commercially reasonable efforts to cause the Signalife Products to
be timely delivered upon receipt of a purchase order therefore.
(H)
RMS
Financial Condition
RMS
will maintain and employ in connection with its obligations under
this Agreement such working capital and net worth as may be
required to reasonably enable RMS to carry out and perform all of
RMS's obligations and responsibilities under this Agreement.
(I)
No
Competing Products
RMS
will not represent or market during the term of this Agreement any
products which compete, directly or indirectly, with the Signalife
Products.
(J)
RMS/Signalife
Covenants
(1)
RMS
and Signalife each will: (i) conduct business in a manner that
reflects favorably at all times on the Signalife Products and the
good name, good will and reputation of the other party;(ii) avoid
deceptive, misleading or unethical practices that are or might be
detrimental to the other party, the Signalife Products or the
public; (iii) make no false or misleading representations with
regard to Signalife, RMS or the Signalife Products; (iv) not
publish or employ, or cooperate in the publication or employment
of, any misleading or deceptive advertising material with regard to
the other party or the Signalife Products; and (v) make no
representations, warranties or guarantees to customers or to the
trade with respect to the specifications, features or capabilities
of the Signalife Products that are inconsistent with the
literature approved for distribution by Signalife or the
facts presented by Signalife.
(2)
Absent
Signalife’s prior approval, RMS shall not: (i) disassemble,
decompile, or reverse engineer any of the Signalife Products, (ii)
copy or otherwise reproduce any of the Signalife Products, in whole
or in part, or (iii) modify the Signalife Products in any
manner.
(K)
Compliance
with Law
RMS
and Signalife will each comply with all applicable international,
national, state, regional and local laws and regulations in
performing their respective duties hereunder and in any of their
dealings with respect to the Signalife Products.
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Exhibit
10.39
(L)
Compliance
with U.S. Export Laws
The
parties acknowledges that the Signalife Products including
documentation and other technical data, may be subject to export
controls imposed by the U.S. Export Administration Act of 1979, as
amended, and the regulations promulgated thereunder. The
parties agree that they will not export or reexport (directly or
indirectly) any of the Signalife Products or documentation or other
technical data therefor without complying with the Act and the
regulations thereunder.
(M)
Governmental
Approval
If
any approval with respect to this Agreement, or the notification or
registration thereof, will be required at any time during the term
of this Agreement, with respect to giving legal effect to this
Agreement in any Territory, or with respect to compliance with
exchange regulations or other requirements so as to assure the
right of remittance abroad of U.S. dollars, the parties will
immediately take whatever steps may be necessary in this respect,
and any charges incurred in connection therewith will be considered
a sales cost. The parties will keep each other currently
informed of its efforts in this connection. Signalife will be
under no obligation to ship Signalife Products until it has
received satisfactory evidence that such approval, notification or
registration is not required or that it has been
obtained.
(N)
Market
Conditions
RMS
will advise Signalife promptly concerning any market information
that comes to RMS's attention respecting Signalife, the Signalife
Products, Signalife's market position or the continued
competitiveness of the Signalife Products in the marketplace.
RMS will confer with Signalife from time to time at the
request of Signalife on matters relating to market conditions,
sales forecasting and product planning relating to the Signalife
Products.
4.
SALES
PRACTICES
(A)
Prices
and Terms
All
prices, fees, discounts, rebates and allowances for the Signalife
Products shall be jointly determined by the parties; provided,
however, final determination of all prices shall be made by
Signalife. Signalife shall not change prices and fees without
at least thirty (30) days prior written notice to RMS. All
other terms, including deposit, credit and final payment terms,
delivery terms, warranties, disclaimers, insurance, transfer of
title and risk of loss, shall be in accordance with
Signalife’s practices, subject to consultation with
RMS.
(B)
Invoicing
and Collections
All
purchase orders procured by RMS shall be made on purchase order
forms or invoices in the name of Signalife, subject to consultation
by the parties relating to the format of the purchase order form or
invoice. Notwithstanding the foregoing, for title, risk of
loss and financial accounting purposes, all sales shall be deemed
between the parties to have been made solely by Signalife, shall be
subject to final acceptance by Signalife, and all payments and
collections shall be made solely through Signalife. RMS shall
not accept any purchase orders without the prior approval of
Signalife.
(C)
Branding
Except
to the extent otherwise agreed to by the parties as part of the
Marketing Criteria, all Signalife Products to be sold under this
Agreement will be co-branded with comparable emphasis under the
Signalife and RMS trademarks, trade names, trade dress, logos and
designations, with priority of name to be determined.
-6-
Exhibit
10.39
(D)
Title
and Risk of Loss
Title
and all risk of loss of or damage to Signalife Products will remain
with Signalife until such time as title passes from Signalife to
the customers in accordance with Signalife’s standard terms.
In no event shall RMS ever take title or the risk of loss for
any Signalife Products.
5.
COMPENSATION
FOR SALES AND MARKETING SERVICES
(A)
Sales
and Marketing Fee
Except
as expressly provided herein or agreed to in writing by Signalife
and RMS, RMS will pay all costs and expenses incurred in the
performance of RMS's obligations under this Agreement, including
the cost of all personnel and infrastructure. As full
compensation for such services and the bearing of such costs and
expenses; Signalife shall pay to RMS in goods funds via wire
transfer to an account designated by RMS the following fees (the
“ Sales and Marketing Fee ”): With respect
to sales of Signalife Products, an amount equal to thirty-five
percent (35%) of Net Product Sales with respect to such
sales.
(B)
Definition
And Calculation Of Net Product Sales
(1)
The
term “ Net Product Sales ” shall be calculated
based upon the invoiced selling price of the applicable products
actually paid to and received by Signalife in the calculating
period, net of or excluding (i) the amount of any trade, quantity,
cash or other discounts or allowances or rebates actually allowed
or given with respect to such products, (ii) the amount of all
customs, duties, sales and/or purchase taxes attributable to the
sale and delivery of such products, (iii) the amount of all costs
and expenses (including insurance premiums) paid by Signalife
relating to the transportation and delivery of such products; (iv)
any allowances or credits given for the return of products; (v) any
other allowances, credit or other deductions given consistent with
the foregoing; and (vi) Signalife’s actual cost of any RMS
Carts which are sold with a Signalife Product.
(2)
In
the event the Signalife Products are sold in combination with other
Ancillary Products that are not Signalife Products, then the entire
sales price for the package shall nevertheless be used for purposes
of determining the Sales and Marketing Fee.
(3)
Insofar
as all revenues from the sale of the Signalife Products will be
recognized by Signalife for financial statement purposes as
previously stated in this Agreement, the determination of sales and
any applicable deductions or exclusions as provided above shall be
made by Signalife in good faith accordance with its ordinary
practice for preparation of its financial statements for audit and
public disclosure purposes and consistent with generally accepted
accounting principles.
(C)
Timing
Of Payment To RMS
The
Sales and Marketing Fee shall be calculated by Signalife on a
monthly basis with respect to all sales for which full payment has
been received by Signalife, and shall be paid by Signalife to RMS
no later than the last day of the calendar month which follows the
calendar month of collection, including with respect to months in
which payments are received by Signalife from customers following
termination of this Agreement. Payment of the Sales and
Marketing Fee shall be accompanied by a complete and accurate
written statement prepared by Signalife and verified by an officer
of Signalife setting forth in reasonable details the computation of
the fee, including permitted offsets and deductions. To the
extent not timely paid, interest shall accrue on unpaid Sales and
Marketing Fee at the rate of eight percent (8.0%) per
annum.
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Exhibit
10.39
6.
REPORTING,
RECORDS AND INSPECTIONS
(A)
Joint
Reporting System
The
parties will set up and maintain in accordance with the Marketing
Criteria a data collection and reporting system jointly accessible
by either party which accurately, completely and timely covers (i)
all leads and prospects, including names, addresses, and contact
information; (ii) all sales of Signalife Products under this
Agreement, including prices, quantities, product descriptions,
terms of sale, and customer names, addresses, and contact
information; (iii) information about all deliveries, including
dates of shipment, product identification and tracking information;
(iv) all collections and returns, including information about
defective products; and (v) all reports required under this
Agreement or otherwise required by the parties. RMS shall
provide at its expenses the resources to accomplish item (i) and
Signalife shall provide at its expense the resources to accomplish
items (ii) through (v).
(B)
Records;
Inspection
Each
party will maintain, for at least three (3) years after each sale
(including after termination of this Agreement), its records,
contracts and accounts relating to the marketing, sale and
distribution of the Signalife Products under this Agreement, and
will permit examination thereof by authorized representatives of
the other party (subject to the provisions set forth herein
relating to Confidential Information) at all reasonable times, and
to make copies of said records.
7.
JOINT
ADMINISTRATION COMMITTEE; MARKETING CRITERIA
Signalife
and RMS shall establish a committee, to be referred to as the Joint
Administration Committee, composed of at least two (2)
appointees from each party, which shall no later than sixty(60)
days following the date of this Agreement, and thereafter on an
annual basis coinciding with the annual anniversary dates of this
Agreement, (i) in good faith jointly administer this Agreement, and
(ii) formulate, evaluate and mutually agree upon criteria for the
sale and marketing of the Signalife Products, including pricing,
terms of sale, branding, targeted sales territories, advertising
and promotional policies, goals, and budgets; and reporting systems
(collectively, the “ Marketing Criteria
”).
8.
TRADEMARKS,
TRADE NAMES, LOGOS, DESIGNATIONS AND COPYRIGHTS
(A)
Use
During Agreement
During
the term of this Agreement and subject to the terms and conditions
specified herein, each party grants to the other a nonexclusive,
nontransferable, limited license to the other party’s
trademarks (except the only RMS trademark to which rights are
granted hereunder shall be the RUBBERMAID trademark), trade names,
trade dress, logos and designations as part of the Signalife
Products, packaging, operating manuals, warranties, disclaimers,
inserts, and advertising and promotional materials and literature;
provided, however, in all such cases the use such trademarks, trade
names, trade dress, logos and designations shall be in accordance
with the Marketing Criteria. Each party agrees not to use the
other party’s trademarks, trade names, logos or designations
in any manner other than specified in the immediately preceding
sentence, including in connection with any other products or
activities.
(B)
Copyright
and Trademark Notices
There
shall be included on each Signalife Product distributed under this
Agreement, and on all containers and storage media therefor, all
trademark, copyright and other notices of proprietary rights
required by each party under the Marketing Criteria. Each
party agrees not to alter, erase, deface or overprint any such
notice on anything provided by the other party. RMS shall
include all appropriate trademark notices of Signalife when
referring to any of the Signalife Products in advertising
and
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Exhibit
10.39
promotional
materials.
(C)
Non-Acquisition
of Proprietary Rights.
Neither
party has paid any consideration for the use of the trademarks,
trade names, logos, designations or copyrights of the other party,
and nothing contained in this Agreement will give either party any
right, title or interest in any of them. Each party
acknowledges that the other party owns and retains all proprietary
rights to their respective trademarks, trade names, logos,
designations, copyrights and other proprietary rights associated
with the foregoing, and agrees that they will not at any time
during or after this Agreement assert or claim any interest in or
do anything that may adversely affect the validity of any
trademark, trade name, logo, designation or copyright belonging to
such other party (including, without limitation, any act or
assistance to any act, which may infringe or lead to the
infringement of any of the other party’s proprietary
rights).
(D)
No
Continuing Rights
Upon
expiration or termination of this Agreement, each party will
immediately cease all display, advertising and use of the other
party’s trademarks, trade names, trade dress, logos and
designations (with the exception of product packing, operating
manuals, warranties, disclaimers and inserts relating to Signalife
Products shipped after the termination of this Agreement which are
deemed to be sold under this Agreement), and will not thereafter
use, advertise or display any trademark, trade name, trade dress,
logo or designation of the other party.
(E)
Obligation
to Protect
During
the term of this Agreement, each party agrees to use reasonable
efforts to protect the trademarks, trade names, trade dress, logos,
designations and similar proprietary rights of the other party, and
to cooperate at their expense in the other party’s efforts to
protect same. Each party agrees to promptly notify the other party
of any known or suspected breach of the other party’s
trademarks, trade names, logos, designations and similar
proprietary rights that comes to its attention during the term of
this Agreement.
9.
INSURANCE
(A)
Within
twenty (20) days after the Effective Date, each Party shall at its
own expense procure and maintain during the term of this Agreement
and for a period of at least one year thereafter an occurrence
based insurance policy/policies, including commercial general
liability insurance, adequate to cover its obligations hereunder
and which is/are consistent with normal business practices of
prudent companies similarly situated. In addition, prior to
RMS marketing any Signalife Product under this Agreement, Signalife
shall at its own expense procure and maintain during the term of
this Agreement and for a period of at least three years thereafter
an occurrence based products liability insurance policy relating to
such product in an amount adequate to cover its obligations
hereunder and which is consistent with normal business practices of
prudent companies similarly situated.
(B)
Although
the amount of coverage will be subject to the sole discretion of
each party as to the amount of coverage that is adequate given its
particular business circumstances, each party shall nevertheless
maintain the following minimum insurance coverage:
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Exhibit
10.39
|
Type of
Coverage
|
|
Amount for
Signalife
|
|
Amount for
RMS
|
|
Commercial
General Liability Insurance
|
|
$1,000,000
occurrence / $2,000,000 aggregate_
|
|
$1,000,000
occurrence / $2,000,000 aggregate
|
|
Product
Liability Insurance
|
|
$10,000,000
occurrence / $20,000,000 aggregate
|
|
N/A
|
|
Product
Recall
|
|
$5,000,000
occurrence / $10,000,000 aggregate
|
|
N/A
|
(C)
Each
party shall provide the other party with a certificate of
insurance. Each insurance policy required by and procured by a
party under this section shall name the other party and its
affiliated companies as additional insureds. Such insurance
shall not be construed to create a limit of the insuring party's
liability with respect to its indemnification or other obligations
under this Agreement. Insurance companies referenced herein
must be rated “A or better” by Best’s and must be
approved by RMS. No insurance coverage procured by Signalife
shall be subject to a deductible or self-insured retention of
greater than $250,000. Each party shall provide evidence of
such insurance by means of a certificate of insurance, which
identifies the other and its affiliates as additional insureds
within thirty (30) days of the Effective Date. Each party shall
provide the other party with written notice at least thirty (30)
days prior to the cancellation, non-renewal or a material change in
such insurance which materially adversely affects the rights of the
other party hereunder.
10.
NEW
PRODUCTS AND SERVICES
(A)
General
During
the term of this Agreement, RMS shall have the first right of
negotiation and first right of refusal as hereinbelow provided with
respect to every other product other than the Signalife Products,
as well as services to be provided in connection therewith (each a
“ New Product or Service ”) that Signalife may
seek to market, distribute or establish, including the
establishment of monitoring centers, lead and leadless event
recorders, a credit card device demonstrated in February 2006, an
intracardiac monitor system successfully tested at Cleveland Clinic
as announced by Signalife, and other products in development.
The following shall not apply to any New Product or Service
that Signalife may acquire that is tied into a marketing or
distribution arrangement upon acquisition.
(B)
First
Right Of Negotiation
No
later than one hundred twenty (120) days prior to such date as
Signalife intends to introduce any New Product or Service to
market, Signalife shall provide relevant product information
relating to the New Product or Service (exclusive of trade secrets
and proprietary information) to RMS for the purpose of ascertaining
whether it would be beneficial for Signalife to market or
distribute the New Product or Service through RMS and to enable RMS
to make a proposal regarding same should it choose to do so.
Signalife shall be under no obligation to accept any proposal
from RMS, although it shall evaluate any such proposal in good
faith. Signalife agrees that it shall not enter into
negotiations with any third party relative to the sales or
marketing of the New Product or Service until sixty (60) days after
such date as it provides the relevant product information to RMS.
Signalife further agrees that it shall keep RMS reasonably
apprised of each New Product or Service in development during the
term of this Agreement to ensure RMS the opportunity to prepare to
evaluate the sales and marketing opportunities in advance of the
formal presentation of the first right of negotiation.
-10-
Exhibit
10.39
(C)
First
Right Of Refusal
In
the event that Signalife enters into negotiations with a third
party pursuant to section 10(B) , and receives an offer
by such third party to sell, market or distribute or establish the
New Product Or Service on or before the expiration of the one
hundred twenty (120) day period described above, then Signalife
shall afford RMS a first right of refusal to match such offer,
which must be exercised by RMS no later than ten (10) days from the
tender thereof by Signalife.
11.
DISPUTE
RESOLUTION/MEDIATION
At
execution hereof, the parties hereto wish to pronounce their
intention to resolve all differences hereunder amicably, through
the process of communication and dispute resolution. At
execution, the parties shall each appoint two representatives
through which all disputes and potential disputes of any kind
hereunder shall be ferreted. Any dispute hereunder, or
potential dispute, with the exception of the payment by RMS of the
Exclusivity Fee, shall be solely and exclusively resolved by the
this dispute resolution team; provided, however, that the dispute
resolution team shall have no obligation to meet or to attempt to
resolve any dispute that has been before them for more than one
hundred twenty (120) days after which the parties teams shall meet
before a mutually selected mediator to make one last thirty (30)
day attempt to reach resolution on the dispute in question.
After the passage of one hundred twenty (120) days and thirty
(30) days period as set forth hereunder, the parties then—and
only then—may resort to their legal remedies. In the
event the dispute relates to the method of calculating the Sales
and Marketing Fee, such payment shall nevertheless be made when
required, although the parties shall thereafter negotiate the
dispute in good faith pursuant to the terms of this
section.
12.
TERM
OF AGREEMENT; TERMINATION
(A)
Initial
Term And Renewals
(1)
This
Agreement shall have an initial term commencing on the Effective
Date and ending on the first anniversary of the Initial Date.
(2)
Thereafter,
so long as this Agreement has not been terminated, RMS may in its
sole and absolute discretion renew this Agreement for up to two (2)
successive one-year p
