EXHIBIT 10.15
FORM OF DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT
between
SYMPHONIX DEVICES, INC.
and
________________________
Dated ________
This distribution agreement (this "Agreement") is entered into by and between
Symphonix Devices, Inc., ("Symphonix") with a place of business at 2331 Zanker
Road, San Jose, CA 95131, U.S.A., and ______________ ("Distributor") with a
place of business at _______________.
Whereas
Distributor desires to purchase from Symphonix for resale in the Territory
certain Products (as defined below) and Symphonix is willing to sell said
Products to Distributor upon the terms and conditions hereinafter set forth;
The Products to be sold under this Agreement require surgical implantation
following which the patient will require audiological fitting and assistance;
The Products are considered to be Active Implantable Medical Devices within
the European Union and are subject to regulation by relevant governmental or
quasi-governmental authorities in the Territory;
Symphonix and Distributor desire to fully comply with all laws, standards,
regulations, and other guidelines applicable to the marketing and sale of the
Products, including but not limited to the Active Implantable Medical Devices
Directive, ISO 9001 and ISO 9002, EN 46001; and
In view of the fact that Symphonix has a regulatory obligation to ensure the
traceability of its products and in view of the fact that patients benefit from
such traceability particularly in case of a defect Symphonix and Distributor
recognize the need for a system of traceability for Products sold in the
territory.
Now therefore, in considerations of the foregoing premises and the mutual
covenants contained herein, the parties hereby agree as follows:
1. DEFINITIONS
"DOA" or Dead on Arrival means that Products do not conform to user
specifications and applies to Products sold for the period of the first fourteen
(14) days following invoice date to end user.
"Distributor's Purchase Price" The Distributor's Purchase Price shall be the
price at which Symphonix sells the Products to Distributor under this Agreement
as set forth on Exhibit A hereto, which Exhibit A may be amended by Symphonix
from time to time.
"Effective Date" The Effective Date of this Agreement shall be the date set
forth in the first paragraph of this Agreement.
"EW" or "Ex Works" shall have the meaning set forth in INCOTERMS 1990.
"List Price" The List Price shall be the price suggested by Symphonix for
reference purposes for the Products in the Territory as set forth on Exhibit A
hereto, which Exhibit A may be amended by Symphonix from time to time.
"Products" The products listed in Exhibit A hereto, which Exhibit A may be
amended by Symphonix from time to time.
"Promotional Materials" Promotional Materials shall include all printed, video,
audio and similar materials, labeling, labels and packaging materials used in
the marketing, sale and distribution of the Products.
"Quality System Requirements" Quality System Requirements includes those
standard operating procedures ("SOP's") and other policies and procedures issued
from time to time by Symphonix to enable compliance by Symphonix and Distributor
with Regulatory Requirements, the Symphonix Quality System and with good
business practices.
"Regulatory Requirements" Regulatory Requirements include those laws,
regulations, standards, guidelines that are applicable or become applicable
during the Term of this Agreement to the distribution of the Products in the
Territory as set forth on Exhibit D, which exhibit may be changed from time to
time during the Term.
"Quotas" The minimum volume of purchases by Distributor, expressed in units
and/or currency amounts, established by Symphonix for specified periods during
the Term as set forth on Exhibit C.
"Term", "Initial Term" and "Renewal Term" The Term shall be the period of time
during which the Agreement is in force. The Initial Term shall be the period of
time commencing with execution of this Agreement and terminating as specified in
this Agreement. A Renewal Term shall be any subsequent Term arising out of an
agreed extension of this Agreement beyond the Initial Term.
"Territory" The geographic area set forth on Exhibit B hereto.
"Trademarks" shall mean the Symphonix logos, trademarks, artwork and/or
tradenames designated by Symphonix from time to time during the Term.
2. DISTRIBUTOR, PRODUCTS AND TERRITORY
2.1. Symphonix grants Distributor the right to be its exclusive distributor
for the Products in the Territory during the Term. Symphonix agrees that it
shall not during the Term appoint another distributor for the Products in the
Territory.
2.2. Neither Distributor nor any of its affiliates shall promote the
Products, seek customers, or establish any branch or maintain any distribution
depot for the Products outside the Territory.
2.3. Symphonix shall have the right to change the specifications of, or
discontinue, any Products; and shall inform the Distributor of any such change
with at least sixty (60) days prior notice in writing, unless, in the opinion of
Symphonix, the circumstances require a more rapid change.
2.4 During the Term of this Agreement, Distributor shall not represent, act
for, distribute and/or sell middle ear implant systems or related equipment of
any manufacturer other than Symphonix without the prior written consent of
Symphonix, and shall not manufacture or distribute products which Symphonix
reasonably believes to be competitive with the Products, or in conflict with the
proper representation of the Products in the Territory.
2.5 Except for the rights expressly granted to Distributor herein, neither
this Agreement, nor sale of Products to Distributor hereunder shall convey any
license or right, under any patent, copyright, trademark, trade secret or any
other intellectual property right with respect to Products.
3. TERM, EXTENSION AND TERMINATION
3.1. The Initial Term of this Agreement shall commence on the Effective Date
and continue until the second anniversary thereof unless sooner terminated as
provided herein.
3.2 This Agreement may be renewed by mutual agreement of the parties.
Neither party shall be obligated to agree to a renewal of this Agreement beyond
the end of the Initial Term or any Renewal Term.
3.3 This Agreement shall automatically terminate upon adjudication of the
Distributor's bankruptcy.
3.4 Either party shall be entitled to terminate this agreement at the end
of the Initial Term or at the end of any Renewal Term, with written notice
delivered not less than ninety (90) days before the end of such Initial Term or
Renewal Term. If the parties have not agreed on any Renewal Term, but tacitly
renewed this Agreement after the expiry of the Initial Term or any Renewal Term
this Agreement can be terminated by either party by giving not less than ninety
(90) days notice at any time.
3.5 This Agreement will terminated upon a breach by either party of any
material term or condition of this Agreement which such party fails to cure
within thirty (30) days after written notice thereof. If such breach (excluding
any failure to pay money) will take more than thirty (30) days to cure and the
party in breach has promptly begun reasonable substantial corrective action and
has diligently continued said action within thirty (30) days after written
notice of the breach, termination will not be effective until ninety (90) days
after written notice of the breach.
3.6 This Agreement may be terminated by one party, upon written notice to
the other, in the event any reorganization, or insolvency proceeding is
initiated against the other party and is not dismissed within thirty (30) days
of the onset of such event, or if such proceeding is initiated by the other
party, or if a receiver is appointed for the other party, or if any substantial
part of the business assets of the other party are the subject of an attachment,
sequestration or other related judicial proceeding.
3.7 Upon expiration or termination of this Agreement in accordance with its
terms (i) the rights granted to Distributor pursuant to this Agreement will
automatically terminate and Symphonix shall have the right to immediately
appoint a new distributor for the Products in the Territory, (ii) Distributor
will cease using all Trademarks and shall have no continuing rights in the
Trademarks, and (iii) Distributor will pay immediately to Symphonix all due and
outstanding amounts under this Agreement. Upon expiration or termination of
this Agreement for any reason whatsoever, Symphonix shall have no further
obligation to Distributor other than those set forth in this Article 3.
Symphonix shall not be liable to Distributor for, and Distributor hereby
expressly waives all rights to, compensation or damages of any kind, resulting
from such termination (including, without limitation, special, consequential or
indirect loss or any loss of prospective profits or any damages occasioned by
loss of goodwill) whether on account of the loss by Distributor of present or
prospective profits, commissions, anticipated orders, expenditures, investments,
or commitments made in connection with this Agreement, or in anticipation of the
continuation of this Agreement, or goodwill created, or on account of any other
reason whatsoever.
3.8 Upon any termination of this Agreement, the Distributor shall provide
Symphonix with reasonably detailed information regarding its activity during the
Term and any Renewal Term to ensure business continuity and sufficient to enable
Symphonix to trace all Products supplied by the Distributor.
3.9 In the event of termination of this Agreement by Symphonix for any
reason, Symphonix shall repurchase and Distributor shall resell all of the
Distributor's unsold inventory (except inventory subject to Customer orders
prior to the date of termination notice) whereas in case of termination of this
Agreement by Distributor for any reason, Symphonix shall have the right to
repurchase and Distributor shall resell all of the Distributors unsold inventory
(except inventory subject to Customer orders prior to the date of termination
notice); provided, however, that the Products were received by Distributor less
than nine months prior to the date of notice of termination and that the
Products are in "as supplied" condition and that Distributor has fulfilled all
its obligations to Symphonix. The repurchase amount paid to the Distributor
shall be the Distributor's cost into Distributor's warehouse in the Territory.
Payment for such inventory will be made upon receipt by Symphonix, or its
designee, of such inventory.
3.10 The provisions of Articles 11, 13, 14, 17, 21 and 22 and Sections 3.7,
3.8, 3.9, 9.3 and 9.4 will survive the termination of this Agreement for any
reason.
4. PAYMENT AND CREDIT TERMS
4.1 Distributor will duly obtain any government licences or approvals
required in connection with payment under this Agreement. Acceptance and
endorsement by Symphonix of any check, draft or other instrument from
Distributor for less than the full amount Symphonix claims to be due and payable
shall not be deemed to be an admission of payment in full notwithstanding any
conditions to the contrary which are noted thereon.
4.2 {payment terms, with reversion to letter of credit if payments not
acceptable}All payments to Symphonix hereunder shall be made sixty (60) days net
invoice in United States Dollars by wire transfer only to an account as directed
in writing by Symphonix. Distributor will bear all transfer charges. In the
event of any late payment, Distributor shall pay interest (which shall accrue
daily) on all overdue amounts of ten percent (10%) per annum or the highest
lawful rate, whichever is less, applicable after as well as before any
judgement. Notwithstanding any provisions for later payments contained herein,
if Distributor does not make payments when due or if Distributor's aggregate
obligation exceeds the credit limit, if any, established by Symphonix, then
Symphonix may require payment in advance by letter of credit in respect of
future shipments. Distributor shall have no right of set-off without
Symphonix's prior written consent.
OR
4.2 {Letter of credit terms} All payments to Symphonix hereunder shall be
made in United States Dollars by means of an irrevocable letter of credit drawn
on a major bank approved by Symphonix, which irrevocable letter of credit shall
be established by Distributor in favour of Symphonix prior to the requested
shipment date of any order. The letter of credit shall be upon terms acceptable
to Symphonix, shall allow for partial shipments, and shall be in an amount equal
to Distributor's Purchase Price for the Products plus all applicable taxes,
shipping charges, and other charges to be borne by Distributor. All exchange,
interest, banking, collection, and other charges shall be at Distributor's
expense. Distributor shall have no right of set-off without Symphonix's prior
written consent.
5. ORDERS AND PRICES
5.1. All orders must be in writing and be received by Symphonix by mail,
courier or facsimile. Orders must indicate the Products ordered by part number,
quantities, required delivery dates, delivery location and any other
requirements. All orders will be governed solely by the provisions of this
Agreement.
5.2 Any orders for Products may be rejected by Symphonix on reasonable
grounds, and no order placed by Distributor shall be deemed accepted unless and
until formal written acceptance signed by a duly authorized official of
Symphonix has been dispatched to Distributor. Unless explicitly stated in
writing Symphonix does not agree to any general purchase conditions of the
Distributor. The same applies with respect to any provision that contradicts
this Agreement.
5.3 Distributor shall place its firm orders for the Products approximately
monthly but always at least one (1) month ahead of their required date of
shipment from Symphonix. Distributor shall meet during all relevant periods,
the Quotas as specified in Exhibit C.
5.4 Distributor agrees to schedule its orders such as to maintain in stock
an inventory of Products equivalent to not less than six weeks anticipated
sales, or in such other amount as the parties agree is necessary to properly
service customers.
5.5. Symphonix may refuse to accept any order for Products or refuse to
deliver any order that has been previously accepted if the Distributor is in
arrears with any payment due to Symphonix or in the reasonable opinion of
Symphonix is or will be unable to pay its debts as they fall due or if Symphonix
shall otherwise reasonably believe that such action is necessary.
5.6. Symphonix shall not be liable for loss of trade or profit which
Distributor may incur as a result of prevention of, or delay in, delivery.
Symphonix shall endeavor to inform the Distributor of any appreciable expected
delay of which it becomes aware.
5.7. Symphonix shall notify Distributor of its List Prices for the Products
at least annually. Symphonix shall sell Products to Distributor at the
Distributor's Purchase Price indicated on Exhibit A, which shall be calculated
at an agreed upon discount from List Price. All shipments are EX WORKS.
Distributor's sole remuneration hereunder shall be the difference between the
Price paid by Distributor to Symphonix and the amount received by Distributor
from customers. Symphonix may increase prices at any time upon sixty (60) days
notice. Such change will apply to purchase orders accepted by Symphonix after
the effective date of such change. If at the time of notice to the Distributor
of an intended price increase, there are existing tenders or sales offers made
by the Distributor which have quoted current prices, and which cannot be covered
from Distributor's existing inventory or orders, the Parties will negotiate a
mutually agreeable solution.
5.8 All freight, crating, insurance, handling, forwarding agent's fees,
taxes and storage, and all other charges shall be borne by Distributor. Any
present or future sales, revenue, excise, use or other taxes, import or export
duties, fees, or other charges of any nature, imposed by any public authority
(national, state, local or other) applicable to the Products, its manufacture or
sale, are in addition to the purchase price and shall be paid by Distributor.
In the event Symphonix agrees to reconfigure or change Products, delay delivery,
or cancel a purchase order at Distributor's request, Symphonix may impose
reasonable reconfiguration, change, delay or restocking charges in accordance
with Symphonix's prices and standard practices.
6. SHIPMENT, ACCEPTANCE, RISK OF LOSS AND PASSAGE OF TITLE
6.1 Shipment is EW Symphonix. Symphonix shall make commercially
reasonable efforts to ship by the requested shipment date. Time is not of the
essence. Symphonix will have no liability for special or consequential damages
or otherwise or for any penalty for delay for Product not shipped when
originally indicated. Distributor shall pay expedited shipment costs for any
expedited shipping requested by Distributor. Partial shipments are allowed with
Distributor's consent. Carriers used for shipment are not agents of Symphonix.
Products will be suitably packed in Symphonix's standard containers, or in
special packaging
requested by Distributor at Distributor's expense. Symphonix may ship Products
up to five (5) days in advance of the requested shipment date without
Distributor's consent.
6.2 Distributor shall carefully inspect all Products upon receipt. Unless
Distributor notifies Symphonix promptly (and in no event greater than thirty
(30) days after receipt) of any damage to Products, all Products received by
Distributor shall be deemed accepted.
6.3 Risk of loss or damage shall pass to Distributor EW Symphonix.
6.4 Title to Products (excluding any Software, title to which does not
transfer to Distributor or end user) shall pass to Distributor at the time of
shipment.
6.5 Distributor shall obtain the appropriate licenses or permits required
to import Products into the Territory. To the extent permitted by law, all such
licenses and permits shall specify Symphonix as the approved entity for
importation. Symphonix shall have the exclusive rights to all such licenses or
permits if this Agreement is terminated for any reason. Notwithstanding the
above, Distributor shall pay all customs and excise taxes and duties in
connection with the importation of the Products into the Territory.
7. BUSINESS FORECASTING AND REPORTING
7.1. Every six months during the Term of this Agreement, Distributor shall
provide to Symphonix:
(i) Sales Report. A monthly record showing the quantity of each
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type of Product sold as well as the period-end inventory position on hand for
each type of Product. Such records shall be kept at Distributor's principal
place of business for at least three (3) years following the end of the calendar
quarter to which they pertain.
(ii) Forecast. A forecast of the quantity of Products Distributor
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expects to purchase each month during the following twelve (12) months.
(iii) Business Report. A report detailing (a) significant business,
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market or competitive issues that have arisen during the preceding six months or
are expected to impact future periods, and (b) Distributor's activities in
promoting the Products during the preceding six months and plans for promoting
the Products in the following twelve months.
7.2 If, prior to the time of the next required six months forecast, the
Distributor becomes aware of any significant change in the outlook for sales,
Distributor shall promptly advise Symphonix of the general nature of such
change.
8. DISTRIBUTION PRACTICES AND STANDARDS
8.1. Distributor shall use its best efforts to develop the market for the
Products in the Territory, and to increase the sales of the Products in the
Territory to the extent practicable and by all usual means, including but not
limited to, advertising of the Products, market research, personal solicitation
by employees of Distributor of customers and prospective customers throughout
the Territory, demonstration of the Products and distribution of technical
literature, catalogues, brochures and advertising materials. Promotional
activities will be directed at both the medical community, including surgeons,
audiologists, hospitals and clinics, and individual consumers.
Distributor will make no false or misleading representations with regard to
Symphonix or the Products and will not (i) employ or co-operate in the
publication or employment of any misleading or deceptive advertising with regard
to the Products, (ii) make representations, warranties or guarantees to its end-
users or to the trade with respect to the Products other than those which are
consistent with the then-current end-user documentation or Symphonix Product
brochures or (iii) enter into any contract or engage in any practice in conflict
with its obligations hereunder. Neither party shall make any public statements
or announcements in respect of this Agreement, the contents hereof or their
relationship without the express written permission of the other.
8.2 Expenses and costs incident to the performance by Distributor of the
marketing and sales activities undertaken by it shall be borne by Distributor.
8.3. Distributor shall not without the prior written approval of Symphonix
engage in any promotional activity outside the Territory.
8.4. Distributor agrees to use the Promotional Materials and Trademarks
approved by the Symphonix Regulatory Affairs department, and shall not use any
other materials logos or marks in connection with promotion and sales of the
Products. Symphonix shall make available limited quantities of its Promotional
Materials, or artwork used in the preparation thereof, at no charge. Additional
quantities may be provided at a mutually agreed upon cost. Distributor may
develop its own Promotional Materials, but will submit all such Promotional
Materials to Symphonix Regulatory Affairs department for approval.
8.5 Symphonix shall refer to Distributor all inquiries, orders and other
requests emanating from the Territory and relating to Products for delivery in
the Territory.
8.6 Distributor shall ensure that all of its employees, agents and the
like who are engaged in marketing and sales activities under this Agreement are
adequately trained with respect to the Products. Distributor shall make
available such customer training and service as Symphonix may from time to time
reasonably require.
8.7. Symphonix agrees to provide Distributor with technical and clinical
support services as follows:
(a) Symphonix shall periodically sponsor training programs for sales
and marketing personnel either at its European headquarters location or at
another central location. Symphonix shall pay for the costs of presenting such
training except that Distributor shall pay the travel and related expenses of
Distributor's employees attending the training.
(b) Symphonix marketing personnel shall visit Distributor in the
Territory at reasonable intervals to assist in the promotion of the Products in
the Territory. Symphonix shall pay the travel and related expenses of its
employees providing this support.
(c) Symphonix shall, subject to reasonable notice with regard to
scheduling, arrange for one of its marketing personnel to attend, along with one
of Distributor's sales personnel, certain initial surgeries and audiological
fittings involving the Products in the Territory. Thereafter, Distributor's
personnel will be obligated to provide such support for customers.
8.8 Distributor shall be responsible for compliance with all Regulatory
Requirements, Symphonix Quality System requirements, as well as with the
provisions of any specific regulatory approval or conditions pertaining to the
Products as may be notified to Distributor by Symphonix from time to time, and
to provide all reasonable assistance to Symphonix to enable Symphonix and
Distributor to comply with applicable Regulatory
Requirements.
8.9 Distributor agrees to make available its facilities, records and
personnel for periodic inspection by Symphonix personnel for purposes of audit
and review procedures to exclusively assure compliance with Symphonix Quality
System Requirements as well as Regulatory Requirements.
9. REGULATORY COMPLIANCE
9.1 The Distributor is to obtain from Customers, an undertaking to abide
by the patient selection criteria as are advised by Symphonix in writing from
time to time.
9.2 Until advised by Symphonix to the contrary the Distributor is to
obtain agreement from each member of the medical community to whom it sells
Products to give Symphonix access to the clinical records for each patient for
the purpose of supplying data that may be required by regulatory authorities in
the Territory and internationally.
9.3 The Distributor agrees that if it receives a complaint regarding a
Product it shall refer the complaint within two working days to Symphonix, using
the Symphonix Problem Report Form. If a complaint requires follow up actions to
be taken, the Distributor will provide all required information to Symphonix
within one working day.
9.4 Pursuant to the United States Federal Drug Administration's ("FDA")
Medical Device Reporting Regulations, Symphonix may be required to report to the
FDA information that reasonably suggests that a Product may have caused or
contributed to the death or serious injury or has malfunctioned and that the
device would be likely to cause or contribute to a death or serious injury if
the malfunction were to recur. Distributor agrees to supply to Symphonix any
such information within forty-eight (48) hours after becoming aware of such
information so that each can comply with governmental reporting requirements.
In the event that a Product is recalled, Distributor shall cooperate with and
assist Symphonix in locating, and retrieving if necessary, recalled Product from
Distributor's customers.
10. TRACEABILITY
10.1 Distributor shall maintain a system of traceability of the Products
such as to enable compliance with the Regulatory Requirements and the Quality
System Requirements. In particular, Distributor shall maintain the following
consignee information (the "Consignee Information")in respect of each Product
sold:
(1) Symphonix part number
(2) date of receipt of Product from Symphonix
(3) serial numbers / expiration date
(4) invoice number under which the unit was shipped to Distributor's
customer
(5) date of shipment of unit from Distributor's warehouse
(6) name and address of Distributor's consignee (this shall at a
minmum be to the level of the hospital or clinic)
10.2 Distributor shall use its best efforts to encourage surgeons who buy
the Products from Distributor to complete and submit the surgeon registration
card included with each Product. In addition, Distributor shall use its best
efforts to encourage surgeons who buy the Products from Distributor to encourage
their patients to complete and submit the patient registration card included
with each Product.
11. LIMITED WARRANTY AND DISCLAIMER
11.1 Symphonix warrants to Distributor that the Products will on the date
of shipment be free from defects in materials and workmanship, and will under
normal use, conform in material respects to the then-current user documentation
and for a period of three years for the implanted portion of such product and
for a period of one year for its external portion. This limited warranty will
not apply to any Product which has been (i) modified without Symphonix's written
authorisation, (ii) not used or maintained in compliance with Symphonix's
instructions, (iii) subjected to misuse, improper maintenance, unusual stress or
accident, (iv) damaged by deviation from applicable environmental specifications
or vandalism, burglary and/or theft, or (v) used or sold after the "Use Before"
date specified by Symphonix. This limited warranty extends only to Distributor
and not to any end user or customer of Distributor. The provisions of this
Section 11.1 shall not affect the statutory rights of any end-user.
11.2 Symphonix's entire liability and Distributor's exclusive remedy for
DOA Products will be, at Symphonix's option, and subject to Symphonix's
confirmation of the defect, to (i) remedy any defect within a reasonable time,
or (ii) replace the defective Products. The foregoing remedies are available
only in connection with DOA Products notified to Symphonix within fourteen (14)
days of receipt of Product by Distributor or end user or in case of hidden
defects upon fourteen (14) days of the discovery of such defect and may be
performed on an exchange basis, whereby Distributor must properly return the
defective Product to Symphonix. To properly return defective Products,
Distributor must promptly notify Symphonix in writing of the defect and request
a Returned Goods Authorization ("RGA") number. Only RGA numbers provided by
Symphonix will be accepted. Distributor must return the defective Products in
the original package to Symphonix, freight prepaid and properly insured with the
RGA number displayed on the outside of the carton. Symphonix may refuse to
accept any returned Product that does not bear an RGA number on the outside of
the carton. If Symphonix confirms the defect, Symphonix will pay the shipping
charges to return the Products back to Distributor; otherwise, Distributor will
pay all shipping charges.
11.3 THE LIMITED WARRANTY IN SECTION 11.1 ABOVE IS THE ONLY WARRANTY MADE
BY SYMPHONIX AND THE REMEDIES IN SECTIONS 11.1 AND 11.2 ABOVE ARE THE ONLY
REMEDIES OF DISTRIBUTOR WITH RESPECT TO THE PRODUCTS. SYMPHONIX SPECIFICALLY
DISCLAIMS ALL OTHER WARRANTIES INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY, SATISFACTORY QUALITY (EXCEPT AS SPECIFIED HEREIN)
AND FITNESS FOR A PARTICULAR PURPOSE. NOTWITHSTANDING ANY FAILURE OF THE
ESSENTIAL PURPOSE OF ANY REMEDY, SYMPHONIX'S LIABILITY FOR BREACH OF WARRANTY
WILL BE LIMITED TO A REFUND OF DISTRIBUTOR'S PURCHASE PRICE FOR THE DEFECTIVE
PRODUCTS. SYMPHONIX DOES NOT WARRANT THAT OPERATION OF PRODUCTS WILL BE
UNINTERRUPTED OR ERROR FREE. THE PROVISIONS OF THIS SECTION 11.3 SHALL NOT
AFFECT THE STATUTORY RIGHTS OF ANY END-USER.
11.4 Distributor shall make no representations to third parties regarding
the performance or functional capabilities or characteristics of the Products
beyond those stated in Symphonix's then-current printed literature and
brochures. Distributor shall not offer extended warranties except as mutually
agreed with Symphonix. Distributor shall indemnify and hold Symphonix harmless
from and against any claims, losses, costs, damages or liabilities which result
from Distributor's failure to comply with the provisions of this Section 11.4 or
which are based on warranties provided by Distributor to its customers with
respect to the Products.
11.5 Distributor must ensure that procedures for ordering of Product and
shipment of stock precludes having expired Product in stock. Expired Product
must not be sold and is not returnable except for resterilization,
at the cost, including freight, of the Distributor. Symphonix may by notice in
writing require the Distributor to return any expired Product to Symphonix for
re-sterilization which shall be performed at the cost including freight of the
Distributor.
12. INTELLECTUAL PROPERTY INDEMNITY
Symphonix will defend, at its expense, any action brought against Distributor to
the extent that it is based on a claim that a Product (excluding Software), when
used in accordance with this Agreement, infringes a patent, trademark or
copyright in the Territory. Symphonix will pay any costs, settlements and
damages finally awarded provided that Distributor (i) promptly notifies
Symphonix in writing of any claim, (ii) gives Symphonix sole control of the
defense and settlement, and (iii) provides all reasonable assistance in
connection therewith. Symphonix agrees to keep Distributor advised of the
status of any claim. If any Product is finally adjudged to so infringe, or in
Symphonix's opinion such a claim is likely to succeed, Symphonix will, at its
option (i) procure for Distributor the right to continue using the Product, (ii)
modify or replace the Product so there are no infringements, or (iii) refund the
price paid upon return of the Product. Symphonix will have no liability
regarding, and Distributor shall hold Symphonix harmless from and against any
claim arising out of (i) compliance with Distributor's designs, specifications
or instructions, (ii) use of the Product in combination with non-Symphonix
software, data or equipment, if the infringement was caused by such use in
combination, (iii) any modification or marking of the Product not specifically
authorised in writing by Symphonix or in accordance with the provisions hereof,
or (iv) third party software, whether or not supplied by Symphonix. The
foregoing states the entire liability of Symphonix and the exclusive remedy for
Distributor relating to infringement or claims of infringement of any patent,
trademark, copyright, mask work right, trade secret or other proprietary right
by the Product.
13. LIMITATION OF LIABILITY
To the maximum extent permitted by law and taking into account the terms and
conditions of this Agreement, Symphonix's liability under this Agreement will in
no event in any single event or in the aggregate exceed the price received by
Symphonix from Distributor under this Agreement except for damages to property
which shall be limited to $150,000. In no event will Symphonix be liable for
special, incidental, indirect, consequential or exemplary damages including
without limitation lost profits or anticipated savings however caused and on any
theory of liability, whether in an action for contract, strict liability or
tort, arising in any way out of this Agreement or the termination thereof, even
if Symphonix has been advised of the possibility of such damage and
notwithstanding any failure of essential purpose of any remedy. Distributor
agrees that it has accepted the terms and conditions of this Agreement in the
knowledge that Symphonix's liability is limited and that the prices payable have
been, and will be throughout the term, calculated accordingly. Distributor
agrees to make its own insurance arrangements should it desire to further limit
its exposure to risk. Distributor will use all reasonable endeavours to
mitigate any losses or damages. Symphonix shall have no obligation and
Distributor shall hold Symphonix harmless from loss caused by Distributor's
negligence or breach of this Agreement.
14. GENERAL INDEMNITY
Distributor will indemnify and hold Symphonix harmless from and against any and
all losses, damages, claims, liabilities, costs and expenses (including
reasonable attorneys' fees) resulting from (i) any breach by Distributor of this
Agreement or any duty or obligation hereunder, (ii) any claims raised by
Distributor's subsidiaries, affiliates, agents, employees or customers in
connection with or arising out of the subject matter or terms of this Agreement
or the supply or use of the Products, or (iii) any claims that may be made by
reason of any act or omission of Distributor or any of its subsidiaries,
affiliates, agents, or employees. In addition, Distributor will
indemnify Symphonix for any and all losses which result from Distributor's
unethical practices. Distributor shall promptly report details of any
infringement of Symphonix's proprietary rights which comes to Distributor's
attention and cooperate with Symphonix in pursuing any remedies available to
Symphonix or Distributor.
15. SOFTWARE LICENSE
15.1 Symphonix may provide certain software in connection with its
Products. The terms and conditions provided by Symphonix's licensor of any such
software shall govern the use of that software.
15.2 The Software and any related documentation are protected under
copyright, trade secret laws and international treaties, and contain proprietary
information of Symphonix and/or its licensors. Distributor shall abide by the
terms of any proprietary notices or markings, and shall use the documentation
and the Software only to comply with its obligations under this Agreement, and
shall not disclose to others or reproduce the Software, unless specifically
authorised in writing by Symphonix. Distributor shall be liable for all loss or
damage to Symphonix from any failure to so abide or from any unauthorised
disclosure of the documentation or Software to any other party. Distributor
shall not disassemble, decompile, reverse engineer, or perform competitive
analysis on the Software, provided however, in jurisdictions where statutes
permit, Distributor or end-users may incidentally decompile the Software only if
it is essential to do so in order to achieve interoperability with other
software and provided that no information obtained therefrom is used without
Symphonix's written consent or used to create any software substantially similar
to the expression of the Software nor used in any manner restricted by
copyright. Symphonix and its suppliers, as applicable, retain all title and
ownership of the Software and documentation, including any revisions.
Distributor's right to distribute shall also extend to any revisions to the
Software as are supplied by Symphonix. The provisions of this Article 15 shall
not affect the statutory rights of any end-users.
16. TRADEMARKS
16.1 Distributor may use the Trademarks in connection with marketing and
sale of the Products, subject to this Article 16 and any guidelines specified by
Symphonix from time to time, and shall not use the Trademarks in any other
manner without the express written consent of Symphonix. All advertising and
other material utilising any Trademarks shall include such statements or other
identifying references as may be requested by Symphonix.
16.2 Distributor recognises the right, title, and interest of Symphonix in
and to all the Trademarks and agrees not to engage in any activities or commit
any acts, directly or indirectly, which may contest, dispute, or otherwise
impair such right, title, or interest. Distributor acquires no right, title or
interest in or to Trademarks whether by virtue of this Agreement or through any
use by Distributor of the Trademarks. The parties agree that any and all uses
of such Trademarks by shall inure at all times to the benefit of Symphonix.
Distributor agrees to execute any manner of documentation required by Symphonix
to register Distributor as a registered user of the Trademarks.
16.3 Distributor shall not utilise in connection with any of the Products,
including the promotion, distribution, and sale of any of the Products, any
trademark other than the Trademarks without obtaining the prior written
authorisation of such use from Symphonix.
16.4 If any trademarks, trade names or service marks of Distributor are
used by Distributor in combination with the Trademarks in such manner as to be
distinctive, such distinctive features and associated goodwill thereof shall
become the property of and inure to the benefit of Symphonix, and Distributor
shall,
without any payment or other consideration, execute such documents as are
necessary to assign all rights thereto to Symphonix.
17. CONFIDENTIAL INFORMATION
17.1 Distributor will not use for its own benefit (except as authorised in
this Agreement) or disclose or make available to any third party any Symphonix
Confidential Information provided to Distributor or any information derived from
such Confidential Information to any person or entity except to those of
Distributor's employees who are under obligation to maintain the confidentiality
of such party confidential information and for whom access is necessary in order
to perform their jobs in accordance with the purposes of this Agreement. This
obligation does not apply to information (i) known by Distributor prior to its
receipt from Symphonix and not subject to restrictions on disclosure, (ii)
rightfully received by Distributor from a third party with the right to disclose
such Confidential Information without restriction on disclosure, or (iii)
publicly available without restriction other than as a result of any act or
omission of Distributor. These restrictions will continue for a period of three
(3) years after the expiration or termination of this Agreement.
17.2 Distributor acknowledges that any unauthorised use or disclosure of
the Products or Symphonix's Confidential Information may cause irreparable
damage to Symphonix and make available equitable relief in addition to any
remedy at law. Distributor will promptly notify Symphonix in writing of any
such unauthorised use or disclosure that may come to Distributor's attention
and, at Distributor's sole expense, Distributor will take all steps requested by
Symphonix that are reasonably necessary to recover the Products and/or
Symphonix's Confidential Information and to prevent subsequent unauthorised use
or dissemination. If Distributor fails to take these steps in a timely and
adequate manner in accordance with Symphonix's request, Symphonix may take them
independently or on Distributor's behalf and at Distributor's expense. Nothing
in this Section will be understood to limit any remedies that Symphonix may have
against Distributor for the unauthorised use or disclosure of the Products or
Symphonix's Confidential Information, including actions for seizure and
injunctive relief. The parties stipulate that unauthorised use or disclosure by
Distributor hereunder shall constitute just cause for termination of this
Agreement.
18. INSURANCE
18.1. Symphonix shall maintain, during the Term of this Agreement product
liability insurance in relation to the Products, in amounts and on terms that it
considers reasonable, to the extent such insurance is available on commercially
reasonable terms. Such insurance shall cover such claims and amounts as
Symphonix considers appropriate which might be made against Symphonix and/or
Distributor as a result of any defect in manufacture.
18.2. Distributor shall maintain during the Term of this Agreement proper
and adequate liability insurance in relation to his activities in sales,
marketing, distribution, repair and maintenance if these are carried out by him
and shall procure evidence thereof to Symphonix upon request. Such insurance
shall cover such claims and amounts as Symphonix may consider appropriate.
19. ASSIGNMENT
19.1. Symphonix may assign or otherwise transfer this Agreement at any
time under any
circumstances without Distributor's consent, as long as said assignment and/or
transfer etc., does not in any way infringe the Distributor's right to sell
Symphonix Products in the Territory according to the terms stated in this
Agreement.
19.2. Distributor will not assign this Agreement nor any right, licence or
obligation hereunder without the prior written consent of Symphonix. Any
assignment in the violation of this provision shall be void. Distributor's use
of any agents in connection with any obligations it undertakes pursuant to this
Agreement shall not relieve Distributor of said obligations, nor imply
Symphonix's consent to such use of such agents.
20. COMMUNICATIONS; NOTICES
All notices, reports and other communications hereunder or in connection
herewith (other than orders for the Products) shall be deemed effective two days
after dispatch by a recognized overnight courier or on the date sent via
facsimile to the respective address set forth below or at such other addresses
as the parties may designate in writing form time to time in accordance with the
provisions of this Article 20.
For Symphonix For Distributor
------------- ---------------
Symphonix Devices, Inc. ______________________
2331 Zanker Road ______________________
San Jose, CA 95131, USA ______________________
with a copy to:
Symphonix Devices, AG
Schaferweg 20
CH 4057, Basel, Switzerland
21. DISPUTE RESOLUTION AND ARBITRATION
The parties agree that they will attempt to settle any claim or controversy
arising out of this Agreement through consultation and negotiation in good
faith. Any dispute which the parties cannot resolve between themselves within
forty-five (45) days after the date of the initial demand by either party for
such resolution will be submitted for final and binding determination to the
exclusion of the ordinary courts held in Zurich Switzerland under the then-
current International Arbitration Rules of the Zurich Chamber of Commerce by
three (3) arbitrators appointed in accordance with such Rules. The parties
agree that they will not request, and the arbitrator shall have no authority to
award, punitive or exemplary damages against any party. The costs of any
arbitration, including administrative fees and fees of the arbitrator, shall be
shared equally by the parties. The decision of the arbitral tribunal shall be
final, and the parties waive all challenge of the award in accordance with Art.
192 Private International Law Statute.
22. MISCELLANEOUS
22.1 This Agreement will be governed by Swiss law, without reference to
and excluding its conflict of laws rules. This Agreement will not be governed
by the United Nations Convention on Contracts for the International Sales of
Goods.
22.2 No modification to this Agreement, nor any waiver of any rights,
will be effective unless consented to in writing by both parties. Waiver of any
breach or default will not constitute a waiver of any other
right or any subsequent breach or default.
22.3 In addition to the compliance with all laws, rules and regulations
required elsewhere in this Agreement, Distributor covenants and represents that
it has not made, authorised, offered or promised to make or give any money or
anything of value to any government official, political officer, or to any
person, while knowing or having reason to know that all or a portion of such
money or thing of value will be offered, given or promised, directly or
indirectly, to any of the foregoing, for purposes of inducing the foregoing to
use his or its influence with a government or instrumentality thereof to affect
or influence any act of decision of such government or instrumentality.
22.4 Either party's performance of any part of this Agreement will be
excused to the extent that such performance is hindered, delayed or otherwise
made impractical by: (1) the acts or omissions of the other party; (2) fires,
floods, riots, strikes, epidemics, acts of terrorism, labour disputes, freight
embargoes, transportation delays, shortage of labour, inability to secure fuel,
material, supplies, equipment or power at commercially reasonable prices, acts
of God or of the public enemy or acts of any federal, state or local government;
or (3) any other cause (whether similar or dissimilar to those listed) beyond
the reasonable control of the party whose performance is affected. The parties
agree to notify each other of any such event, the extent of the delay, and will
make a reasonable, good faith effort to resume performance as soon as
practicable.
22.5 If any provision of this Agreement is ruled unenforceable, it will be
enforced to the extent permissible, the parties will negotiate a substitute
valid provision which most nearly effects the parties' intent and the remainder
of this Agreement will remain in effect; provided, however, that if any
provision determined to be unenforceable is an essential term of this Agreement,
and the parties cannot reasonably agree on a substitute provision, Symphonix may
terminate this Agreement, effective immediately, upon giving written notice to
Distributor.
22.6 This Agreement constitutes the entire and exclusive agreement between
the parties with respect to this subject matter. All previous discussions and
agreements with respect to this subject matter are superseded by this Agreement.
22.7 The headings and titles used in this Agreement are for convenience
only and are not part of this Agreement and shall not be referred to in
interpreting and construing terms and conditions hereof.
22.8 Notwithstanding any translation of this Agreement into a foreign
language, the English language shall be the controlling language of this
Agreement.
22.9 All exhibits referred to in and attached to this Agreement are a
part of this Agreement and are incorporated herein by reference.
22.10 The relationship of the parties established by this Agreement is that
of independent contractors, and nothing contained in this Agreement shall be
construed to (i) give either party the power to direct or control the day-to-day
activities of the other, (ii) constitute the parties as partners, joint
venturers, co-owners or otherwise as participates in a joint or common
undertaking or (iii) allow a party to create or assume any obligation on behalf
of the other party for any purpose whatsoever.
22.11 All deliveries made by Symphonix under this Agreement shall be
subject to the terms of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives, as of the date first above written.
Symphonix Devices, Inc.
("Symphonix") ("Distributor")
Signed: _____________________ Signed: ______________________
Title:_______________________ Title:_________________________
EXHIBIT A PRODUCTS
EXHIBIT B TERRITORY
EXHIBIT C QUOTES
EXHIBIT D REGULATORY REQUIREMENTS