DISTRIBUTION AGREEMENT
Between:
CARDIOPULMONARY CORP., a Delaware corporation, having its principal
corporate office at 200 Cascade Boulevard, Milford, Connecticut 06460, USA,
hereinafter called "CPC", duly represented by James Biondi, Chief Executive
Officer,
and
KONTRON INSTRUMENTS LTD., a British company having its registered corporate
office at Blackmoor Lane, Croxley Business Park, Watford WD1 8XQ, Hertfordshire,
UK, hereinafter called "KONTRON INSTRUMENTS", duly represented by Leslie Smith,
Chairman.
Witnesseth:
Whereas CPC develops, manufactures and sells, intensive care ventilators,
accessories and consumables;
Whereas Kontron Instruments and its sister companies within Kontron
Instruments Group manufacture, sell and service medical and bioanalytical
instruments and also sell and service medical equipment manufactured by third
parties;
Whereas both CPC and Kontron Instruments agree that Kontron Instruments
shall sell and service products as exclusive distributor to CPC in the Territory
(as hereinafter defined) in the field of intensive care ventilation;
Whereas both parties desire to specify the rights and obligations of each
party in this Agreement;
Now therefore, the parties mutually agree as follows:
1. DEFINITIONS
1.1 As used in this Agreement, the terms below shall have the meaning
as specified in the following:
"PRODUCTS": the intensive care ventilators specified in ANNEX A
hereto, together with associated consumables, disposables and
spare parts.
"TERRITORY": [ ** ]
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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"TRANSFER PRICES": the prices of products charged by CPC to
Kontron Instruments as detailed in ANNEX B hereto, net of the
discount as detailed in ANNEX C hereto.
"ECU": European Currency Unit.
"EXCHANGE RATE": the rate of exchange between in ECU and the
US dollar published daily on the International Herald Tribune in
the Cross-Rates table on its first Business page.
"KONTRON INSTRUMENTS GROUP": the companies listed on ANNEX D
hereto or any of them, as the context requires; provided, however,
that Kontron Instruments shall be responsible to CPC for all
obligations of the Kontron Instruments Group under this
Agreement.
2. APPOINTMENT AND AUTHORITY OF KONTRON INSTRUMENTS
2.1 Subject to the terms and conditions stated herein, including
without limitation the provisions of Paragraph 8.1 hereof, CPC
appoints Kontron Instruments as CPC's exclusive distributor for
the Products in the Territory. Kontron Instruments shall have a
right to purchase products from CPC and to resell them, repair and
generally service them in the Territory; provided, however, that
Kontron Instruments shall not alter Products without prior written
consent from CPC, and then only according to written instructions
from CPC.
2.2 The products shall be marked and sold within the Territory with
both Kontron Instruments' and CPC's brand names in a manner to be
agreed from time to time by the parties to this Agreement.
2.3 CPC and Kontron Instruments may agree in writing to extend this
Agreement, in total or in part, to cover products sold by CPC in
addition to those listed on ANNEX A. It is the present intention
of CPC to consider Kontron Instruments when selecting a
distributor in the Territory for such future CPC products within
Kontron Instruments' fields of expertise.
2.4 Except as otherwise provided in Section 7.3 of this Agreement,
Kontron Instruments does not become an agent of CPC by virtue of
this Agreement, but rather shall purchase and sell in its own name
and for its own account, and is not entitled to act, and shall not
act, in the name of CPC or to obligate CPC in any form towards any
third party.
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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2.5 Kontron Instruments shall safeguard the interests of CPC with the
due diligence of a responsible businessman and keep CPC informed
as to its activities.
2.6 Kontron Instruments may appoint local distributors for the sale of
CPC products in the Territory but shall notify CPC promptly of
such appointments and shall terminate any such appointment which
CPC believes in good faith is prejudicial to the interests of CPC.
2.7 Kontron Instruments shall not solicit offers for Products from
customers outside the Territory; provided, however, that Kontron
Instruments may solicit offers for Products with the prior consent
of CPC on a case-by-case basis except in locations in which CPC
has granted exclusive rights to a third party.
2.8 CPC may, by written notice to Kontron Instruments during the month
of January 1997 and each January thereafter, terminate the rights
of Kontron Instruments hereunder in any country within Territory,
except for [ ** ], in which CPC reasonably believes there has been
insufficient progress in establishing distribution channels for
the Products.
3. PROMOTION OF PRODUCTS
3.1 Kontron Instruments shall diligently promote CPC's Products in
each country in the Territory. The details of such promotion
activities shall be coordinated with CPC, but the cost of these
activities shall be borne exclusively by Kontron Instruments,
unless specifically agreed otherwise.
3.2 Kontron Instruments shall inform CPC in advance as to its intended
participation in trade and exhibition programmes. CPC personnel
will endeavor to attend major meetings and events at its expense.
3.3 Kontron Instruments shall inform CPC of the market and competitive
situation in the Territory at least once every quarter, and shall
provide such information as may be required of CPC by the United
States Food and Drug Administration for post-market surveillance.
In addition, Kontron Instruments will use reasonable efforts to
provide names and addresses of customers, date of sale, serial
number and a contact person for each unit sold. CPC shall provide
Kontron Instruments such information as may be reasonably required
by regulatory authorities in the Territory.
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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3.4 Kontron Instruments shall expend an amount equalling at least US
$1,000,000 for promotion, advertisement and selling of the
Products. Of this amount, Kontron Instruments shall spend at least
US $[ ** ] during 1995, at least US $[ ** ] during the twelve
months following the date regulatory approvals have been obtained
in [ ** ] and at least US $[ ** ] during the twelve months
following the date regulatory approvals have been received in
[ ** ] and the with respect to the [ ** ]. Kontron Instruments may
credit toward these minimums the costs of regulatory approvals;
recruitment, salaries and benefits of incremental personnel;
qualification and appointment of local distributors and
independent agents; sales and technical training; reasonable
commissions for independent agents in [ ** ] and [ ** ];
brochures, exhibitions and point-of-sale promotional materials;
market research and translations; and clinical and user preference
trials.
4. ORDER FORECAST AND DELIVERIES
4.1 Kontron Instruments shall provide CPC with a six-month rolling
forecast of order volume and requested shipping dates, to be
updated every month.
4.2 CPC shall use all reasonable efforts to ship Products within
forty-five (45) days from receipt of purchase orders, subject to
Paragraphs 4.3 and 4.4 below.
4.3 CPC shall inform Kontron Instruments, within three business days
of receiving the monthly orders and shipment forecasts, of its
ability to respect forecast shipment requirements. If delivery
conditions change, CPC shall inform Kontron Instruments as soon as
feasible.
4.4 Any requests by Kontron Instruments for shipment above 120% of the
quantity forecast by Kontron Instruments three months earlier will
be shipped on a best available date basis.
4.5 All Products shipped by CPC shall conform to CPC's specifications
therefor, and CPC shall make all reasonable efforts to conform to
relevant governmental technical, quality and regulatory standards
specified from time to time by Kontron Instruments. CPC shall
notify Kontron Instruments prior to making material changes in
Product specifications.
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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5. SALES AND SERVICE SUPPORT
5.1 CPC shall furnish Kontron Instruments with operating and service
manuals for Products in the English language at CPC's cost.
Kontron Instruments may translate, at its own expense, such
materials and literature into appropriate languages for use in the
Territory. Kontron Instruments shall furnish CPC, at no charge,
with reasonable quantities of such translations.
5.2 CPC shall furnish Kontron Instruments, at no charge, with
reasonable quantities of photographic artwork, videos and
technical text in English that CPC has produced in the course of
its business.
5.3 CPC shall make available in the USA sales, application and service
training courses to selected personnel of the Kontron Instruments
Group free of charge. Travel and living expenses for Kontron
Instruments employees or agents attending such courses shall be
borne by Kontron Instruments.
5.4 CPC staff will travel to Europe to support Kontron Instruments'
efforts to obtain important reference sites during the first
eighteen months of this Agreement, according to a programme to be
agreed Kontron Instruments and CPC. All expenses related to such
visits by CPC staff will be borne by CPC.
6. WARRANTY AND SERVICE
6.1 For a period of eighteen months from date of shipment -- the
"WARRANTY PERIOD" -- CPC warrants that the products delivered to
Kontron Instruments:
(a) conform to their specifications in effect at the time of
confirmation of the purchase order,
(b) are free from defects in design, material and workmanship
under normal use and service, and
(c) if used as directed in the Instructions for Use and product
specifications are fit for the specific purposes set forth in
the Instructions for Use and product specifications, but CPC
makes no such warranties for use for any other purpose.
6.2 Kontron Instruments will provide CPC a bi-monthly summary of
service calls in a form mutually acceptable to CPC and Kontron
Instruments. Any claim by Kontron Instruments that a Product
contains defective materials shall be made in writing to CPC
within the Warranty Period.
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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6.3 CPC shall supply replacement parts free of charge upon return by
Kontron Instruments under the terms of the Warranty set forth in
Paragraph 6.1. Material transport charges shall be borne by the
shipping party and duties and taxes shall be borne by the
receiving party. Kontron Instruments shall supply labor for
warranty repair (at either the hospital or a Kontron Instruments
site in Europe) free of charge; provided, however, that CPC will
reimburse members of the Kontron Instruments Group promptly for
50% of such labor costs during the twelve months following the
first sale by Kontron Instruments under this Agreement, up to a
maximum of 5% of CPC's revenues under this Agreement during that
period.
6.4 Products or parts thereof supplied within the scope of Paragraph
6.3 are warranted for the remainder of the original Warranty
Period for the replaced Product, or for a period of 90 days from
installment of the replacing Product, whichever is longer.
6.5 THE WARRANTIES SET FORTH ABOVE RELATING TO
PRODUCTS ARE IN LIEU OF ALL OTHER WARRANTIES
EXPRESSED OR IMPLIED.
6.6 Kontron Instruments shall provide maintenance service, including
warranty service for Products in the Territory. Such service shall
be performed in accordance with CPC's service guidelines, as
amended from time to time.
6.7 CPC shall keep the Kontron Instruments Group indemnified and
harmless against any liability or damages caused by any claim of a
third party relating to the manufacture of a Product furnished to
Kontron Instruments by CPC which did not meet the specifications
in effect at the time of confirmation of the purchase order, or
from the negligence or other wrongdoing of CPC or any employee or
agent of CPC (other than the Kontron Instruments Group). The
Kontron Instruments Group shall keep CPC indemnified and harmless
against any liability or damages caused by packaging by the
Kontron Instruments Group, registration, distribution, promotion
of the Products for use outside their specifications or against
their specific warnings, precautions or contraindications, use of
the Products outside specifications or against specific warnings,
precautions or contraindications by the Kontron Instruments Group,
or from the negligence, failure to comply with instructions
regarding use of the Product, or other wrongdoing of the Kontron
Instruments Group or any employee or agent of the Kontron
Instruments Group. In the event that other damages
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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which arise out of transactions related to this Agreement are
alleged against either CPC or the Kontron Instruments Group or
both, then CPC and Kontron Instruments shall cooperate to defend
against and defeat such allegations, but if such damages should be
found and allowed against either CPC or the Kontron Instruments
Group or both, then CPC and the Kontron Instruments Group shall
indemnify each other against the same, such that the parties shall
bear the damages and the costs of defence equally.
7. OTHER OBLIGATIONS OF DISTRIBUTOR
7.1 The Kontron Instruments Group shall observe the rules of fair
competition.
7.2 The Kontron Instruments Group shall maintain, at its own expense,
an inventory of CPC's consumables, accessories and spare parts,
purchased directly from CPC, sufficient to provide satisfactory
service to customers.
7.3 Kontron Instruments or other members of the Kontron Instruments
Group shall act as CPC's agent to obtain, with CPC's assistance
but at Kontron Instruments' expense, all manner of registrations,
clearances and approvals required for CPC's Products in each
country in the Territory. Except as mutually agreed, such
registrations, clearances and approvals shall be in the name of
CPC. If engineering or software changes are required to obtain
such approvals in the Territory, CPC shall make all reasonable
efforts to implement them promptly; provided, however, that CPC
shall not be required to expend more than $[ ** ] in total for all
such changes. Import licenses and/or distribution licenses, if
required, shall be obtained by Kontron Instruments at its own
expense and with assistance from CPC if necessary. Kontron
Instruments shall provide CPC a detailed report of all direct
expenses incurred by Kontron Instruments in obtaining such
clearances, approvals and licenses in each jurisdiction.
7.4 The Kontron Instruments Group shall maintain knowledgeable
personnel and develop the use of the Product in the Territory.
Such personnel shall promote the Products in accordance with their
specifications and shall not promote the Product against its
warnings, precautions or contraindications.
7.5 The Kontron Instruments Group shall maintain records to the
training, service and Product that customers have received to the
end that customers may readily be notified of pertinent
information
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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or that it may be established that the customers were
appropriately trained in the safe and effective use of the
Product.
7.6 The Kontron Instruments Group shall not manufacture or distribute
competing products in the Territory during the term of this
Agreement. Kontron shall be free to distribute products specified
as non-competing products in ANNEX A.
8. PRICES AND PAYMENT TERMS
8.1 CPC shall charge Kontron Instruments the Transfer Prices listed in
ANNEX B hereto for CPC's current Venturi products. Transfer prices
and purchase schedules for future products listed on ANNEX A,
including Venturi IIcs and Venturi IIas products, and prices after
1997 for the current products, shall be negotiated by the CPC and
Kontron Instruments in good faith. If the parties are unable to
reach agreement on the transfer price of any such products,
Cardiopulmonary Corp. may offer such products to third parties on
terms substantially the same as the best offer which Kontron
Instruments rejected.
8.2 Kontron Instruments shall be responsible for all freight and
insurance for Products from the time of delivery thereof in a
common carrier at the manufacturing site for shipment to Kontron
Instruments.
8.3 Kontron Instruments shall bear all import and excise duties and
Value Added Tax, if any is due, in the Territory.
8.4 Kontron Instruments shall bear all other costs related to selling,
servicing and distributing the Product, unless otherwise specified
in this Agreement or in written modification thereof.
8.5 CPC invoices to Kontron Instruments shall be due within thirty
(30) days from date of shipment during the first eighteen months
of this agreement and within sixty (60) days from date of shipment
thereafter. The payment terms specified in this paragraph 8.5
shall be deemed material terms of this Agreement.
8.6 Title to Products and risk of loss thereof shall pass to Kontron
Instruments at the time of the delivery by CPC to a common carrier
for shipment to Kontron Instruments.
8.7 Kontron Instruments shall align delivery and warranty terms to its
customers with those obtained from CPC.
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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8.8 CPC and Kontron Instruments agree to negotiate in good faith with
respect to price adjustments if the exchange rate of the US dollar
to the ECU varies by more than 7.5% from that in effect on the
date a price is agreed.
9. TERMS OF AGREEMENT AND TERMINATION PROCEDURE
9.1 This Distribution Agreement enters into effect upon the execution
by both parties and shall be valid until terminated according to
the procedures outlined below.
9.2 Ordinary termination shall require thirty-six (36) months' written
notice by either party.
9.3 Exceptional termination shall be allowed in the following
circumstances only:
(a) Upon twenty-four (24) month's notice by either party given
during any month of January, if Kontron Instruments and CPC
have failed to agree by the end of the prior year on a
purchase schedule for the upcoming three years to update the
purchase schedule set forth on ANNEX B hereto.
(b) Upon six month's notice by either party given during any month
of January beginning in January 1996, if Kontron Instruments
has failed to order from CPC in the previous year at least the
minimum amount of Products set forth in the mutually agreed
schedule for the prior year, contained in ANNEX B hereto and
its future updates, except where such failure is due to CPC's
inability to deliver Products.
(c) automatically and without notice in case of dissolution or
liquidation of CPC or of Kontron Instruments.
(d) immediately upon notice by CPC if Kontron Instruments, other
than for reasons of force majeure set forth in Paragraph 13.5
hereof, shall fail to make any payment due CPC under this
Agreement for a period of 60 days following the date such
payment is due; provided, however, that the provisions of this
paragraph 9.3(d) shall not apply to obligations Kontron
Instruments has disputed in good faith, and that CPC shall be
required to provide ten (10) business days' notice prior to
termination under this paragraph 9.3(d).
(e) Upon six month's notice by either party in case a competitor
of either party acquires direct or indirect control of the
other party, in which case the right to exceptional
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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termination can be exercised only by the party not being so
acquired.
10. MUTUAL OBLIGATIONS AT TERMINATION
10.1 The termination of this Agreement shall not release either party
from any liability or obligation which existed as of the date of
notice of such termination.
10.2 If the Agreement is terminated, Kontron Instruments shall return
to CPC, within thirty (30) days from the date of effective
termination, all written materials, designs, drawings, formulae or
other technical information regarding Products. Kontron
Instruments shall not make or retain copies of such materials or
of any confidential information provided to it by CPC. CPC shall
continue to supply such information as may be required by
regulatory bodies within the Territory.
10.3 Upon termination, CPC shall be obligated to repurchase from the
Kontron Instruments Group and the Kontron Instruments Group shall
be obligated to resell to CPC all demonstration units and spare
parts inventories in Kontron Instruments' stock, within thirty
(30) days from the date of effective termination, to be paid for
within ninety (90) days of CPC's receipt of the same, and at a
price determined as follows:
a) 100% of the Transfer Price paid by the Kontron Instruments
Group to CPC for unused spare parts.
b) the value on the books of the Kontron Instruments Group,
depreciated by twenty percent (20%) per each full year or
portion thereof since purchase by the Kontron Instruments
Group for those systems which have been used in
demonstrations or clinical trials. Such systems must be in
good operating condition, Kontron Instruments' property,
and be delivered to CPC within thirty (30) days of
termination of this agreement.
c) otherwise as mutually agreed by the parties.
10.4 Upon ordinary termination initiated by CPC pursuant to Paragraph
9.2 of this Agreement or extraordinary termination pursuant to
Paragraph 9.3(c), (d) or (e) as a result of events affecting CPC,
CPC shall assume all reasonable supply obligations of the Kontron
Instruments Group to customers in the Territory to whom Products
have been delivered or are to be delivered under orders already
accepted by CPC, including but not limited to
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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pricing and servicing commitments. Upon any other extraordinary
termination pursuant to Paragraph 9.3 or upon ordinary termination
initiated by Kontron Instruments, CPC shall be at liberty to
assume or not assume some, none or all of Kontron Instruments'
foregoing obligations, CPC having to decide within sixty (60) days
of termination.
10.5 Upon ordinary termination pursuant to Paragraph 9.2, but only if
such is initiated by CPC, or extraordinary termination pursuant to
Paragraph 9.3(c), (d) or (e) as a result of events affecting CPC,
and for a twelve month period thereafter, CPC shall refrain from
hiring people who are employed directly or indirectly as "agenti
mono-mandatari", at that time, or in the previous twelve months by
the Kontron Instruments Group, unless specifically exempted in
writing from this requirement by Kontron Instruments.
10.6 Upon termination, the Kontron Instruments Group shall transfer to
CPC, and CPC shall reimburse the Kontron Instruments Group within
180 days for the reasonable direct costs that were sustained by
the Kontron Instruments Group in obtaining, the registrations,
clearances or approvals, as well as the import/distribution
licenses obtained as described in Paragraph 7.3, up to a maximum
of $[ ** ].
11. CONFIDENTIALITY AND BUSINESS SECRETS
11.1 Neither CPC nor the Kontron Instruments Group shall disclose to
any third party, even after termination of this Agreement, any
business or company secrets, manufacturing and control procedures,
drawings, specifications, software and any other information that
is confidential or of substantial value to the other party and
which CPC and the Kontron Instruments Group came to know by virtue
of their relationship described in this Agreement.
11.2 The confidentiality obligation described in Paragraph 11.1 shall
not extend to information which:
a) was validly in possession of either party prior to the initial
negotiations for the relationship described in this
Agreement;
b) is or becomes a part of the public domain or of the public
knowledge through no fault of either party;
c) is obtained by either party to this Agreement from any third
party, provided this third party has the right to disclose and
has not imposed any obligation of confidentiality;
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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d) is independently developed by either party and where such
independent development can be documented;
e) is, as a common practice or in the course of normal business,
disclosed by either party; or
f) is required to be disclosed under the terms of a valid and
effective subpoena or order issued by a court of competent
jurisdiction or by a governmental body.
11.3 Neither CPC nor the Kontron Instruments Group shall assert any
rights, even after termination of this Agreement, to any
intellectual property of the other party.
11.4 The provisions of this Section 11 shall survive the expiration or
termination of this Agreement.
12. TRADEMARKS AND PATENTS
12.1 The Kontron Instruments Group shall be obligated at all times to
observe the trademark and intellectual property rights of CPC and
not to register for itself or any third party similar or
conflicting trademarks or otherwise assert rights to any
intellectual property of CPC during or after the expiry of this
Agreement.
12.2 The Kontron Instruments Group shall use the trademarks of CPC, and
may also use its own trademarks, for the promotion and sale of
Products during the term of this Agreement. The Kontron
Instruments Group shall discontinue the use of CPC marks promptly
upon the termination of this Agreement.
12.3 The Kontron Instruments Group shall inform CPC as soon as any
suspected infringement of a CPC patent by a third party occurs in
the Territory or a patent lawsuit is brought against the Kontron
Instruments Group for infringement of patents related to the
Products. CPC may prosecute, but shall defend, as the case may be,
these infringements, at its own expense and the Kontron
Instruments Group shall assist CPC in all manner possible in such
proceedings.
13. CHOICE OF LAW, ARBITRATION AND FORCE MAJEURE
13.1 This Agreement, including the arbitration clause, shall be
interpreted and construed in accordance with the internal laws of
England, it being expressly understood that International
conventions on the sale of goods shall not apply.
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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13.2 Any difference or disputes arising from this Agreement or from
agreements regarding its performance shall be settled by an
amicable effort on the part of both parties to the Agreement by
their respective Chief Executive Officers or their delegates. An
attempt to arrive at a settlement shall be deemed to have failed
as soon as one of the parties to this agreement notifies the other
party in writing.
13.3 If an attempt to settlement has failed, the disputes shall be
finally settled in English language under the Rules of the London
Court of International Arbitration by three arbitrators appointed
in accordance with the Rules, the place of arbitration being
London.
13.4 The arbitral award shall be substantiated in writing. The arbitral
tribunal shall decide on the matter of costs of the arbitration.
13.5 Neither party shall be liable for failure to perform obligations
under this Agreement if the failure results from force majeure,
such as fire, explosion, acts of warfare, or hostilities of any
nature, accident, refusal of license, or other governmental act
(including regulatory approvals and export/import licenses),
industrial dispute, or anything manifestly beyond the parties'
control.
14. MISCELLANEOUS
14.1 No modification, alternation, addition, or change in the terms of
this Agreement shall be binding on either party hereto unless in
writing and signed by the duly authorized representatives of each
party. This applies also to the waiver of written form.
14.2 Kontron Instruments may assign its rights under this Agreement to
any member of the Kontron Instruments Group which is at least
fifty (50%) percent owned by Kontron Instruments NV or Kontron
Instruments Holding BV; provided, however, that notwithstanding
any such assignment Kontron Instruments shall remain liable to CPC
for its obligations under this Agreement. Kontron Instruments may
not otherwise assign or extend this Agreement without the prior
written consent of CPC, which may be withheld for any reason or
for no reason.
14.3 Any failure of either party to enforce, at any time or for any
period of time, any of the provisions under this Agreement shall
not be construed as a waiver of the right of the party to enforce
such provisions.
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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14.4 Any notice to be given by either party to this Agreement shall be
made by registered mail, telefax, or teletext and, if addressed to
CPC at the principal office listed above, to the attention of the
CEO and, if addressed to Kontron Instruments, to its registered
office listed above, to the attention of the Chairman. Either
party may change the designated address or recipient upon proper
notice of the same to the other party.
14.5 In case one or more of the provisions of this Agreement is or
becomes legally invalid or unenforceable in any country within the
Territory, such provision shall be ineffective without
invalidating the remaining provisions hereof, provided that the
parties shall through mutual negotiations attempt to agree upon a
new provision which, by being legal in all segments, shall follow
the intent of the original provisions as closely as possible.
14.6 This Agreement supersedes any discussions preceding this
Agreement, and incorporates the parties' whole understanding and
undertakings.
15. COMPLETION
In witness whereof, the parties hereto, intending to be legally bound, have
executed this Agreement to be effective as of this 17th day of March, 1995.
CARDIOPULMONARY CORP. KONTRON INSTRUMENTS LTD.
by: by:
/s/ JAMES BIONDI /s/ LESLIE SMITH
- -------------------------------- -----------------------------
James Biondi Leslie Smith
Chief Executive Officer Chairman
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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ANNEX A
PRODUCTS COVERED BY THE AGREEMENT
1. CPC Venturi
2. CPC Venturi IIcs
3. CPC Venturi IIas
4. Any upgrades of or new developments included in the products listed
above. For purposes of this Agreement, such upgrades and new
developments shall include any Cardiopulmonary Corp. intensive care
ventilation product with flow and pressure delivery characteristics
substantially equivalent to those included in the current CPC Venturi
ventilators.
NON-COMPETING PRODUCTS
The following products currently distributed by Kontron Instruments shall not be
considered competing products for the purposes of paragraph 7.6 of this
Agreement:
Hamilton and Seachrist ventilators with a unit selling price of less than
$20,000, excluding taxes.
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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ANNEX B
TRANSFER PRICES AND PURCHASE SCHEDULES FOR CURRENT VENTURI PRODUCTS
1995: [ ** ] Venturi Units ([ ** ] units for resale plus [ ** ]
demonstration units and [ ** ] clinical trial units)
$[ ** ] per unit
1996: [ ** ] Venturi Units
$[ ** ] per unit
1997: [ ** ] Venturi Units
$[ ** ] unit
Schedules for future years shall be negotiated by the parties in good faith. For
1998 and 1999, CPC may not require an increase of more than [ ** ]% per year
from the unit sales numbers set forth above; for 2000 and subsequent years the
sales numbers shall not decrease from those in the prior year.
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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ANNEX C
VARIATIONS TO TRANSFER PRICES
Sales demo units: [ ** ]% discount on current transfer price
Clinical trial units: [ ** ]% discount on current transfer price
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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ANNEX D
MEMBERS OF THE KONTRON INSTRUMENTS GROUP
Kontron Instruments Ltd.
Kontron Instruments S.A. (incorporated in France)
Kontron Instruments S.A. (incorporated in Spain)
Kontron Instruments SpA
Kontron Instruments AG
Kontron Instruments GmbH
Kontron Instruments F.L.A.
Kontur S.A.
[ ** ] indicates confidential portions omitted and filed separately with the
Commission.
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