exhibit_101.htm


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Exhibit
10.1

    


    CONFIDENTIAL

    


    DISTRIBUTION
AGREEMENT

    


    This
Distribution Agreement ("Agreement") is made as of this 30th day of September,
2009, by and between: MICRUS
ENDOVASCULAR CORPORATION, a corporation
organized under the laws of Delaware, having its principal place of business at
821 Fox Lane, San Jose, California ("Micrus") and IDS (Hong Kong) Ltd.  company organized under
the laws of Hong Kong and having a principal place of business
at   14/F Li Fung Center, 2 On Ping Street, Siu Lek Yuan,
Shatin, Hong Kong (“Distributor”)

    


    WHEREAS, Micrus has developed
and/or commercialized Products (as hereinafter defined) to be used in the Field
(as hereinafter defined), and may develop other products for use in the Field;
and

    


    WHEREAS, Distributor has
substantial experience in marketing medical products and desires to distribute
the Products, as hereinafter defined, in the territories of  Hong Kong
and China; and

     

    WHEREAS, Micrus is willing to
use Distributor as its exclusive distributor of the Products for use in the
Field, in the territory of Hong Kong and China  subject
to the terms and conditions of this Agreement.

    


    NOW
THEREFORE, in consideration of the premises and the mutual covenants herein
recited, and other good and valuable considerations, the receipt of which is
acknowledged, it is agreed as follows:

    


    ARTICLE
I - DEFINITIONS

    


    As used
in this Agreement, the following terms, whether used in the singular or plural,
shall have the meanings indicated:

    


    
      	
               
      

            	
              1.1   "Effective
      Date" shall mean the date of this Agreement first written
      above.

            


    

    


    1.2   "Field"
shall mean the field of interventional neuroradiology, or such field(s) as to
which the parties may agree in writing.

    


    1.3 
"Marketing
Authorizations" shall mean all authorizations, licenses, approvals, and
registrations to import, market and distribute the Products in the Territory
pursuant to the terms of this Agreement, as may be required by an appropriate
governmental agency in the Territory, except any CE Mark, which such mark shall
be obtained and maintained by Micrus.

    


    1.4   "Product(s)" shall mean the Micrus
products which are listed on Exhibit
A hereto (either at the Effective Date or thereafter by mutual agreement
of the parties), solely as used in the Field and as delivered to Distributor
from time to time by Micrus under this Agreement.

    


    1.5   “Territory”
shall mean the geographic territory(ies) of Hong Kong and China .

    


    ARTICLE
II - APPOINTMENT OF DISTRIBUTOR

    


    2.1           Appointment
of Distributor.  Subject to the terms and conditions of this
Agreement (including, without limitation, Article 6), Micrus hereby appoints
Distributor as Micrus’ exclusive distributor of the Products within the
Territory.  Distributor agrees that it shall not sell, advertise,
distribute or otherwise transfer or assist in the transfer of any product that
competes with any Product.  Distributor may distribute the Products
only as packaged by Micrus.  It is understood, however, that if
Distributor believes that any such packaging would not be in conformity with
requirements of relevant authorities in the Territory, Distributor will
immediately bring this to Micrus' attention.  Distributor shall not
sell, advertise, distribute, or otherwise transfer or assist in the transfer of
any Product outside the Territory or to persons or entities located outside the
Territory.  Micrus reserves the right to grant similar distribution
rights in the Products to third parties for distribution and sale outside of the
Territory; provided, however, such third
parties shall be similarly required to agree not to sell, advertise, distribute,
or otherwise transfer or assist in the transfer of the Products

     


    
      
        
          


          ***Certain confidential information
contained in this document, marked by brackets, has been omitted and filed with
the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

        

         


      

      
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    in the
Territory or to persons or entities located in the Territory during the term of
this Agreement.  Distributor may appoint sub-distributors of the
Products, provided that (a) prior to each such appointment, Distributor shall
have conducted a reasonable background check with respect to the subdistributor
and shall have reasonably determined that the subdistributor and its owners,
managers and employees have not been charged with or convicted of any
misconducts or criminal activity, have a good reputation,  have
adequate skills and experience to sell and support products for
neurointerventional procedures, and do not have a family or business
relationship with any hospital or government official or employee that could
result in any such official or employee receiving a financial benefit from sales
of Products by such subagent; (b) Distributor shall have entered a binding
written agreement with each such subdistributor containing provisions reasonably
calculated to ensure compliance with Distributor’s obligations hereunder,
including without limitation the provisions of Section 5.5 hereof, and expressly
prohibiting the appointment by the subdistributor of any subdistributors or
subagents; (c) Distributor shall provide written notice to Micrus in the English
language identifying each subdistributor appointed hereunder, including the
name, address, phone number and authorized representative(s) of such
subdistributor.   Any such appointment shall not relieve
Distributor of its obligations hereunder, and Distributor shall be responsible
to Micrus for any act or omission of a subdistributor that would, if committed
by Distributor, constitute a breach of this Agreement.

     

    2.2      Relationship
of Parties.  The relationship of Micrus and Distributor
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; or
(ii) allow Distributor to create or assume any obligation on behalf of Micrus
for any purpose whatsoever.  All financial obligations associated with
Distributor business are the sole responsibility of Distributor.  All
sales and other agreements between Distributor and its customers are
Distributor's exclusive responsibility and shall impose no duty or obligation
upon Micrus and shall not have the effect of lessening any of Distributor's
obligations under this Agreement.

     

    2.3      Marketing
Authorizations.

     

    2.3.1      
    Micrus
Obligations.  Micrus shall deliver to Distributor all
scientific, clinical, toxicological, and manufacturing data in the possession of
Micrus, to the extent necessary for Distributor to obtain all required Marketing
Authorizations within the Territory, provided Distributor maintains all such
data as confidential pursuant to Article VII.  At its own expenses,
Micrus shall be responsible for product registration in the
Territory.

     

    2.3.2           Distributor
Obligations. At its own expense, Distributor shall use its best efforts
to obtain and maintain all necessary Marketing Authorizations within the
Territory, except for the product registration.  Specifically,
Distributor agrees that it will undertake to manage, at Distributor's expense,
all animal trials and human clinical trials required to obtain the Marketing
Authorizations.  These approvals will be obtained in the name of
Micrus,  with Distributor as agent of Micrus for the purpose of such
Marketing Authorizations.  Upon termination of this Agreement,
Distributor agrees to transfer all of its rights, title and interest, if any, in
and to such approvals to Micrus, or any third party as may be designated in
writing by Micrus.  Distributor shall provide Micrus with written
monthly progress reports of its efforts to obtain Marketing
Authorizations.  Distributor agrees not to sell or distribute any
Product in any geographic region within the Territory until such time as all
Marketing Authorizations in such geographic region have duly been obtained, and
to act at all times in a manner consistent with such Marketing
Authorizations.

     

    2.3.3           Distributor
Qualifications. Distributor warrants that it has, and complies with all
requirements of, all necessary licenses, approvals and/or qualifications as
required under the applicable laws of the Territory, regulations and rules to
enter into this Agreement and to distribute the Products in the
Territory.  Any discontinuance of such licenses, approvals, or
qualifications, or of Distributor's compliance with such requirements, shall be
deemed a material breach of this Agreement.

     

    2.4      Trademarks

     

    2.4.1           License.  Micrus
hereby grants to Distributor the non-transferable, non-assignable,
non-sublicensable right and license to use the trademarks, service marks, and
trade names that Micrus may adopt from time to time in connection with Products
sold hereunder (the "Trademarks") solely on or in connection with Distributor's
promotion, sale and distribution of the Products within the Territory as
authorized under this Agreement for the term of this
Agreement.  Distributor shall have the right to indicate to the public
that it is an authorized distributor of the Product.  Distributor
shall not alter or remove any Trademark applied to the
Product.  Nothing herein shall grant to Distributor any right, title
or interest in the Trademarks.  All use of the Trademarks, and
goodwill associated therewith, shall inure to the benefit of
Micrus.  At no time during or after the term of this Agreement shall
Distributor challenge or assist others to challenge the Trademarks or the
registration thereof or attempt to register any trademarks, marks or trade names
confusingly similar to those of Micrus.

     


    
      
        
          


          


           

        

         


      

      
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    2.4.2           Approval
of Representations.  Distributor shall respect the Trademarks
and follow the instructions of Micrus as to all usage of the Trademarks,
including, without, limitation, complying with Micrus' quality control
requirements and submitting samples of Distributor's use of the Trademarks to
Micrus for approval.  If any of the Trademarks are to be used in
conjunction with any other mark on or in relation to the Product, then the
Trademark shall be presented equally legibly, equally prominently, and of the
same or greater size than the other mark(s) but nevertheless separated from the
other trademark so that each appears to be a mark in its own right, distinct
from the other mark(s).

     

    2.5           Provision
of Data.
Distributor agrees to provide Micrus promptly with all clinical and technical
information and data with respect to the Products which it develops during the
term of this Agreement. Distributor further agrees to communicate promptly to
Micrus any and all modifications, design changes or improvements to the Products
suggested by any of Distributor's customers, distributors, employees or agents.
Distributor further agrees that Micrus shall have, and is hereby assigned, any
and all right, title and interest in and to any such suggested modifications,
design changes or improvements to the Products without the payment of any
additional consideration therefore either to Distributor or its customers,
distributors, employees or agents. Distributor will also promptly notify Micrus
of any infringement of any of the Trademarks, patent or other proprietary rights
relating to the Products of which Distributor becomes aware.

     

    2.6           Protection
Of Legends.  Distributor shall not remove, overprint or deface
any notice of confidentiality, patent numbers, patent pending notice, copyright,
trademark, logo, legend or other notices of ownership or confidentiality from
any originals or copies of any materials, goods or products it obtains from
Micrus.

    


    2.7           Reverse
Engineering.  Distributor shall not, by itself or through its
agents or a third party, reverse-engineer, de-compile, or disassemble any device
or technology disclosed to it under this Agreement.

    


    ARTICLE
III  - PURCHASE OF PRODUCT

    


    3.1  Terms and
Conditions. All purchases of
Products by Distributor from Micrus during the term of this Agreement shall be
subject to the terms and conditions of this Agreement.

    


    3.2  Prices.

    


    3.2.1
Subject to this Section 3.2, Micrus will sell Products to Distributor at the
preferential prices shown in Exhibit
A ("Purchase Price") until [***] after the Effective
Date.  Thereafter, Micrus may at any time change the prices for
Products upon 120 days’ advance written notice to Distributor, and such prices
shall supersede the prices set forth in Exhibit
A (or any prior notice of pricing) and shall become part of this
Agreement. The differences between the Purchase Price and Distributor's selling
price to its customers shall be Distributor's sole remuneration for sale of the
Product. Distributor shall have sole discretion to establish the resale price of
the Product to third parties subject only to any regulatory or governmental
limitations.

    


    3.2.2 The
Purchase Price can be revised [***] in writing through consultation between
Micrus and Distributor on [***], and at such other times as the parties may
agree in writing. Such revisions shall apply to all orders for the affected
Product received after the effective date of revision. Price increases shall not
affect unfulfilled purchase orders accepted by Micrus in writing prior to the
effective date of the price increase.

    


    3.2.3 All
prices are C.I.P. Hong Kong and China.

    


    3.3   Taxes.
The Purchase Price will be net of any Distributor federal, state or local taxes
that may be applicable to the Product. When Micrus has the legal obligation to
collect such taxes, the appropriate amount shall be added to Distributor's
invoice and paid by Distributor, unless Distributor provides Micrus with a valid
tax exemption certificate authorized by the appropriate taxing
authority.

    


    3.4   Order and
Acceptance.  All orders for
Products submitted by Distributor shall be initiated by written purchase orders
sent to Micrus via a fax, e-mail, or a method set forth in Section 11.5 and
requesting a delivery date during the term of this Agreement.  To
facilitate Micrus' production scheduling, Distributor shall submit purchase
orders to Micrus at least ninety (90) days prior to the first day of the
requested month of delivery. No order shall be binding upon Micrus until
accepted by Micrus in writing, and Micrus shall have no liability to Distributor
with respect to purchase orders that are not so accepted. Micrus shall
either:  (i) notify Distributor, in writing (via any of the means
referenced above), of the acceptance or rejection of an order (or any portion
thereof) and of the assigned delivery date for accepted orders with ten (10)
days of receipt of the purchase order; or (ii) send Products pursuant to such
accepted

     


    
      
        
                                 

          
            ***
Confidential Treatment Requested


          

        

         


      

      
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    order.  No
partial fulfillment of an order shall constitute a commitment to fulfill the
entire order, absent the written acceptance of such entire
order.  Micrus shall use its commercially reasonable efforts to
deliver Products at the time specified in its written acceptance of
Distributor's purchase orders. Micrus reserves the right, by
giving  90 days’ advance written notice to Distributor, to discontinue
the manufacture, supply or sale of any Product, to make changes in materials or
design, or to add improvements to any Product.

     

    3.5   Terms of
Purchase Orders. Distributor's purchase orders submitted to Micrus from
time to time with respect to Products to be purchased hereunder shall be
governed by the terms of this Agreement, and nothing contained in any such
purchase order shall in any way modify such terms of purchase or add any
additional terms or conditions.

    


    3.6   Payment.
..  Micrus shall submit an invoice to Distributor upon each shipment of
Products ordered by Distributor. The invoice shall set forth the Purchase Price
for the Products  in a given shipment plus any taxes or other
applicable costs initially paid by Micrus but to be borne by Distributor.
Payment shall be made by Distributor by wire transfer.  For the
initial order hereunder to be placed upon approval of the products by the SFDA,
terms will be fifty percent (50%) of the aggregate purchase price for such order
up front, with the balance payable within  120) days of the
invoice.  Thereafter, payment terms shall be the full invoiced amount
to be paid by Distributor to Micrus within  (90) days of the date of
the invoice. Any invoiced amount not received within  (90) days of the
date of invoice shall be subject to a service charge of half percent (0.5%) per
month, or if lower, the maximum interest rate allowed by law. Distributor shall
pay all of Micrus' costs and expenses (including reasonable attorney's fees) to
enforce and preserve Micrus' rights under this Subsection 3.6.  Micrus
shall not be obliged to ship Products hereunder at any time when the outstanding
balance for Products ordered by Distributor is equal to or more than [***], or
to ship Products that will (when shipped) result in an outstanding balance of
[***] or more.  In addition, if at any time an outstanding invoice for
Products shipped to Distributor becomes unpaid and outstanding for greater than
(30) days, at Micrus' option, Micrus may require that Distributor effect payment
by means of an irrevocable letter of credit drawn on a California bank approved
by Micrus; the letter of credit shall be upon terms acceptable by Micrus, shall
allow for partial shipment, and shall be in an amount equal to Distributor's
purchase price for the Products plus all applicable taxes and other charges to
be borne by Distributor. All exchange, interest, banking collection and other
charges shall be at Distributor's expense.   Micrus may modify
the credit limit amount or the maximum days to payment set forth in this Section
3.6 as mutually agreed by the two parties in good faith.   In
addition, Micrus agrees to review these terms with Distributor on the first
anniversary of the Effective Date.

    


    3.7     Monthly
Reports. Within ten (10) days after the end of each calendar month,
Distributor shall provide Micrus with a written sales breakdown, including
without limitation, the amount and type of Product, and names of end users of
the Products sold in each country of the Territory during the period, as well as
a nonbinding forecast (by country) for the subsequent three-month
period

    


    ARTICLE
IV - SUPPLY OF PRODUCT

    


    4.1     Terms of
Distributor Requirements. Subject to the terms and conditions of this
Agreement (including, without limitation, Section 3.4), Micrus agrees to sell
and Distributor agrees to purchase from Micrus Distributor's entire requirements
of products of the type provided by Micrus under this Agreement, solely for
distribution and/or sale in the Territory. Micrus shall use commercially
reasonable efforts to manufacture the Products and, subject to Section 3.4,
supply them to Distributor in quantities sufficient to satisfy Distributor's
needs in accordance with the provisions of this Article IV, provided Distributor
submits to Micrus purchase estimates pursuant to Section 4.2.

    


    4.2     Purchase
Estimates. Distributor shall submit to Micrus, beginning ninety (90) days
before the first anticipated order of Products and within the first ten (10)
days after the beginning of each calendar quarter thereafter, a non-binding good
faith estimate of the amount of Products to be required and purchased by
Distributor for both the next three months and the next twelve-month
periods.

    


    4.3     Inspection
and Dispute Resolution Relating to Satisfaction of Product
Specifications. The following provisions relate to inspection and
resolution of disputes:

    


    4.3.1
Rejection
of Product. Distributor shall inspect all Products promptly upon receipt
thereof and may reject any Products pursuant to this Section 4.3.1 that fails to
meet the specifications set forth in Micrus' current product specifications for
the Product. Any Product not properly rejected within thirty (30) days of
receipt of that Product at Distributor's facility after customs clearance for
import (the "Rejection Period") shall be deemed accepted. To reject a Product,
Distributor shall within the Rejection Period, (i) notify Micrus in writing of
its rejection and the reason for the rejection, and (ii) return, at its expense,
the rejected Product to Micrus (the "Returned Product") in the same condition in
which it was delivered to Distributor. All claims made by Distributor after its
inspection of the Products shall be handled on a case-by-case basis during which
time Micrus shall have the right to first inspect any Products


    
      
        
           

          *** Confidential Treatment
Requested


        

         


      

      
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    involved
before being required to take any action with respect thereto. Micrus shall make
its investigation within thirty (30) days of receipt of notice of a claim from
Distributor. Micrus shall, at its expense, replace Products it determines to be
defective and ship such replacement Products freight prepaid and reimburse
Distributor the Duty, VAT and any other direct expenses associated with the
returned Products. In no event shall Micrus be liable under this Agreement for
any failure of any Product to meet the specifications due to modification or
improper use, storage or shipment of the Product by Distributor or anyone
receiving the Product from or on behalf of Distributor.

    


    4.3.2
Resolution
of Disputes Relating to Product Specifications. If the parties hereto
fail to agree as to whether a delivered quantity of Product meets its agreed
specifications, then the parties shall cooperate to have the Product in dispute
analyzed by a jointly selected qualified independent testing
laboratory.

    


    4.3.3
Return of
Product After Rejection Period. After the Rejection Period, Micrus'
limited warranty as stated in Section 8.1 hereof shall be applied. If Micrus
tests and inspects the Returned Product and determines that such Returned
Product (i) has been physically damaged by Distributor or anyone receiving the
product from or on behalf of Distributor, (ii) has been modified or improperly
used, stored or shipped by Distributor or anyone receiving the Product from or
on behalf of Distributor, or (iii) performs according to Micrus' written
specifications, no credit will be given to Distributor. If upon such test and
inspections such Returned Product (a) has not been physically damaged, (b) has
not been modified or improperly used, stored or shipped by Distributor or anyone
receiving the Product from or on behalf of Distributor, and (c) does not perform
to Micrus' written specification, these Returned Products will be replaced at no
cost to Distributor. In all cases of physical damage or modification to, or
improper use, storage or shipment of, Returned Product, no credit will be given
to Distributor.

    


    4.4   Title.
Title and risk of loss pass to Distributor  when Micrus delivers the
Product to its carrier at Micrus facility  . Micrus shall pay freight
and shipping insurance, and Distributor shall be solely responsible for the
payment of all other costs, expenses, fees, duties, imports, and charges of
whatever kind or nature arising from the shipment, delivery, and importation of
Products into the Territory. Distributor shall solely be responsible for taking
all actions necessary to obtain clearance to import Products into the Territory
and Distributor warrants that it will comply in all respects with any
restrictions set forth in the import and/or export license for every Product
purchased hereunder.

    


    4.5   Reporting.
Distributor agrees to report to Micrus any information from any source,
including, without limitation, employees, distributors, agents, customers, user
facilities, individuals, or medical or scientific literature, whether published
or unpublished, that reasonably suggests that there is a problem with the
Product or a probability that the Product or a similar product has caused or
contributed to a death, serious illness or serious injury, including but not
limited to, severe or permanent disability, stroke, or brain damage as promptly
as possible but within five (5) days of receipt of information of such event.
Distributor agrees not to disclose any such information referred to herein to
any third party without the prior written consent of Micrus.

    


    4.5.1
Serious illness means an event that is life threatening, results in permanent
impairment of a body function or permanent damage to the body structure, or
necessitates immediate medical or surgical intervention to preclude permanent
impairment of a body function or permanent damage to a body
structure.

    


    4.5.2 Serious injury means an event
that is life threatening, results in permanent impairment of a body function or
permanent damage to a body structure, or necessitates medical or surgical
intervention to preclude permanent impairment of a body function or permanent
damage to a body structure.

    


    4.6   Monitoring.
Each of the parties hereto shall monitor all relevant journals and media
communications for information on factors materially affecting the use or
efficacy of the Products and shall promptly inform the other party of such
information. The informing party may provide in writing its evaluation of such
information. Either party shall promptly inform the other if it has actual
knowledge of any measures which are necessary to eliminate or minimize any risk
associated with the use of the Products or a specific production lot of the
Product.

    


    ARTICLE
V - ADDITIONAL OBLIGATIONS OF DISTRIBUTOR

    


    5.1   Marketing
Obligations. Distributor agrees to use its best efforts to successfully
promote and distribute the Product, at its own expense, in the
Territory  using diligent and vigorous efforts to maximize sales and
market penetration at the earliest date. Such efforts shall include, but are not
limited to, preparing promotional materials, advertising the Products in trade
publications within the Territory, participating in appropriate trade shows
within the Territory, and directly soliciting orders from customers within
the


    
      
        
           

          


        

         


      

      
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    Territory
for the Product. Subject to Micrus' approval and obligations under Article VIII
hereof, Distributor shall also be responsible for all quality control, lot
release for Distributor's requirements, promotional activities, marketing and
selling efforts, distribution and technical services. All promotional materials
developed by Distributor shall be submitted to Micrus for approval before such
materials are distributed by Distributor. Micrus shall promptly review such
materials, and if no written response is provided by Micrus within thirty (30)
days after receipt of such material, then the material will be deemed to have
been approved by Micrus.

    


    5.2   Finances
and Personnel. Distributor shall: (i) employ on its own behalf an
appropriate number of specialized, trained, and qualified sales personnel whose
main function shall be the promotion and sale of the Products in the Territory;
and (ii) maintain a suitable organization for the promotion and sale of the
Products in the Territory pursuant to Distributor's obligations
hereunder.  The foregoing obligations of Distributor shall be at
Distributor’s sole cost, expense and risk, provided that Micrus agrees to
provided limited financial support as described in Exhibit
B or as otherwise agreed to in writing by the parties from time to
time.

    


    5.3    Customer
and Sales Reporting. Distributor shall, at its own expense and consistent
with the sales policies of Micrus:

    


    5.3.1
place the Products in Distributor's catalogues as soon as possible and feature
the Products in any applicable trade show within the Territory that it
attends;

    


    5.3.2
provide adequate contact with existing and potential customers within the
Territory on a regular basis, consistent with good business
practice;

    


    5.3.3
assist Micrus in assessing customer requirements for the Product, including
modifications and improvements thereto, in terms of quality, design, functional
capability, and other features; and

    


    5.3.4
submit market research information, as reasonably requested by Micrus regarding
competition and changes in the market within the Territory.

    


    5.4   Marketing
Plans. Distributor shall submit to Micrus for its approval a Product
launch plan for the Products in the Territory on or before the obtaining of
product registration certificate and on or before  February 1 of each
year thereafter, an annual marketing and sales plan for the Product, Each of
these plans shall include specific marketing sales strategies, tactics and
goals, market research analysis, promotion budgets, and sales
projections.

    


    5.5   Compliance
with Laws. Distributor shall market and distribute the Products in the
Territory in compliance with all applicable laws and regulations and good
commercial practice and for uses and applications approved by Micrus in writing
for the Product.  Distributor shall comply with all laws, rules and
regulations as applicable to the marketing, distribution and sale of the
Products in the Territory or any part of it.   Distributor
further agrees to comply with the U.S. Foreign Corrupt Practices Act of 1977, as
amended (the “FCPA”) and all applicable export laws, restrictions and
regulations of any U.S. or foreign agency or authority and not to export or
re-export or allow the export or re-export of the Products or any related
technology or information in violation of any such laws, restrictions or
regulations.  A copy of the FCPA is attached to this
Agreement as Exhibit
C.

    


    Distributor hereby declares that it has
read and understood the provisions of the FCPA and, on that basis, it further
represents and covenants that neither it nor any of its employees or agents have
taken or will take any action to cause Distributor to be in violation of the
FCPA.  Distributor further declares that it understands that employees
(including physicians and administrators) of non-profit, public or state-owned
medical care facilities who have discretionary spending, requisition or
disbursement authority, or who supervise employees with such authority, or who
use or prescribe medical products, are likely to fall within the FCPA’s
definition of “foreign official,” and should be considered “foreign officials”
for purposes of compliance with the FCPA and this Article of the
Agreement.

    


    Specifically, Distributor hereby
certifies that it has not paid, nor offered or agreed to pay, nor has caused to
be paid, or offered or agreed to be paid, directly or indirectly, in respect of
this Agreement, any  fees, commissions or political contributions to
any  “foreign official” anywhere for the purpose of influencing such
official’s act or decision to provide business to Distributor or to
Micrus.  Distributor further certifies that it will not, directly or
indirectly, in connection with this Agreement and the business resulting there
from, offer, pay, promise to pay, or authorize the giving of money or anything
of value to any public or governmental employee or official, to any political
party or official thereof or to any candidate for political office, or to any
other person or entity if it is likely that all or a portion of such money or
thing of value will be offered, given or promised, directly or indirectly, to
any “foreign official,”


    
      
        
           

          


        

         


      

      
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     to
any political party or official thereof, or to any candidate to political
office, for the purpose of:  (a) influencing any act or decision of
such official, political party, party official, or candidate in his or its
official capacity, including a decision to fail to perform his or its official
functions; or (b) inducing such official, political party, party official or
candidate to use his or its influence with the government or instrumentality
thereof to affect or influence any act or decision of such government or
instrumentality, in order to assist Micrus or Distributor in obtaining or
retaining business for or with, or directing business to any third
party.  Distributor further certifies that it will not, directly or
indirectly, in connection with this Agreement and the business resulting there
from, offer, pay, promise to pay, or authorize the giving of money or anything
of value to any person, while knowing or being aware of a high probability that
all or a portion of such money or thing of value will be offered, given, or
promised, directly or indirectly, to any “foreign official,” to any foreign
political party or official thereof, or to any candidate for foreign political
office, for the purpose of:   (a) influencing any act or decision
of such official, political party, party official, or candidate in his or its
official capacity, including a decision to fail to perform his or its official
functions; or (b) inducing such official, political party, party official or
candidate to use his or its influence with the government or instrumentality
thereof to affect or influence any act or decision of such government or
instrumentality, in order to assist Micrus or Distributor in obtaining or
retaining business for or with, or directing business to any third
party.

    


    Distributor agrees that it shall make
its books and records available to Micrus for inspection upon Micrus’ request so
that Micrus can ensure that Distributor has devised and maintained a system of
internal accounting controls sufficient to provide reasonable assurances, upon
request from Micrus, that (a) Distributor’s accounts accurately and fairly
reflect, in reasonable detail, Distributor’s transactions and dispositions of
cash; (b) all transactions are executed with general or specific authorization
from]; (c) transactions are recorded as necessary to maintain accountability for
assets; (d) access to assets is permitted only in accordance
with  general or specific authorization of
Distributor’s  Managing Director for Healthcare; and (e) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.   Distributor will also comply with any request to
review its books and records with respect to one or more specific transactions
about which Micrus may inquire in its reasonable discretion, and to cooperate
with any review of such transaction(s), and will provide such other documents
and information (including, without limitation, information relating to
subdistributors) reasonably requested by Micrus to ensure compliance by
Distributor of its obligations under this Agreement and with the provisions of
applicable law.

    


    Distributor also agrees that it will
require that all of its officers, employees and contractors (if any are
specifically approved by Micrus in writing pursuant to Section 2.1 of this
Agreement), who do or will assist, directly or indirectly, Distributor in the
promotion and sale of the Products pursuant to this Agreement, complete initial
training to ensure that they understand and agree to comply with the provisions
of the FCPA and this Section 5.5 as well as a code of ethical business conduct
satisfactory to Micrus in its sole discretion.  Distributor will
further require that all officers, employees and distributors will complete
further training to ensure compliance with the FCPA and this Section 5.5 no less
frequently than on an annual basis.  Distributor will, on request,
provide Micrus with signed certifications from all officers, employees and
contractors, confirming that each such officer, employee and contractor has
completed the required training and is in compliance with the FCPA, this Section
5.5, and the applicable code of conduct.  Further, Distributor will
provide Micrus, at least ten (10) business days in advance of such training,
with copies of the training materials to be delivered to Distributor’s officers,
employees and contractors for Micrus’ review and
approval.  Distributor also agrees to record, by audio- and/or video-
means, each training session delivered to its officers, employees and
contractors, to maintain such recordings for a period of not less than three (3)
years, and to provide such recordings to Micrus upon request.

    


    Distributor further agrees that if
subsequent developments cause the certifications and information reported herein
to be no longer accurate or complete, Distributor will immediately so advise
Micrus.  Distributor further agrees that its violation of any part of
this Section 5.5, including any refusal to make its books and records available
for Micrus’s inspection, or any actual suspected violation of law or of the
applicable code of conduct, will be a material breach of this Agreement and
cause for immediate termination, without further liability or obligation on the
part of Micrus notwithstanding anything to the contrary provided in this
Agreement.

    


    Distributor shall obtain and bear all
expenses relating to any necessary licenses and/or exemptions with respect to
the export from the United States of the Products to any location in compliance
with all applicable laws and regulations.

    


    5.6  
Traceability. Distributor agrees to maintain access to records allowing
Micrus the ability to determine all customers who were shipped specific product
lots. Product Identification and traceability requirements are defined in ISO
9001 : 1994 (E) requirement 4.8 as : “...the supplier shall maintain documented
procedures for identifying the product from production, delivery and
installation.” Traceability in ISO 8402 Vocabulary is defined as : “ability to
trace the distribution and location of the product after
delivery”.


    
      
        
           

          


        

         


      

      
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    ARTICLE
VI - FAILURE TO MEET MINIMUM

    REQUIREMENTS

    


    In the
event that in any given year, the total Product orders and payments by
Distributor under Section 3.6 do not, in the aggregate, equal or exceed: the
minimum annual purchase requirements in the amounts set forth in Exhibit B
hereto ("Minimum Purchase Requirements"), then Micrus may, at its sole
discretion, either: (a) convert the grant of the distribution rights pursuant to
Section 2.1 hereof to a non-exclusive basis; or (b) terminate this Agreement
upon (120) days prior written notice to Distributor. If Micrus elects to convert
the grant of distribution rights to a non-exclusive basis, such election shall
be made by delivery of written notice by Micrus to Distributor and shall take
effect on the date set forth in the notice, and Micrus will in that event retain
the right thereafter to terminate this Agreement if at any time Distributor
again fails to equal or exceed the Minimum Purchase Requirements.

    


    ARTICLE
VII - CONFIDENTIAL INFORMATION

    


    The
parties hereto agree that each shall keep completely confidential and shall not
publish or otherwise divulge or use for its own benefit or for the benefit of
any third party any information of a proprietary nature furnished to it (the
"Receiving Party") by the other party (the "Disclosing Party") for a period of
five (5) years after the termination of this Agreement without the prior written
approval of the Disclosing Party in each instance, except to the extent that it
is necessary to divulge such information for the obtaining of governmental
approval for the marketing of the Products and the Receiving Party discloses
only the minimum of information necessary in connection therewith and takes
reasonable steps to maintain the confidentiality of such information. Nothing in
this Article VII shall prevent disclosure or use of information: (i) already
known to the Receiving Party prior to its receipt of such information from the
Disclosing Party; (ii) which was known to the public at the time of disclosure,
or subsequently becomes so known through no act or omission of the Receiving
Party; (iii) which is properly acquired by the Receiving Party from a third
party having the right to convey such information; or (iv) that is required to
be disclosed by law or regulation or in connection with any financing,
acquisition, merger or sale, provided the Receiving Party provides the
Disclosing Party with advance notice of such disclosure and takes reasonable
steps to protect the confidentiality of such information. Information of a
proprietary nature shall include, but not be limited to, information concerning
a party's products, proposed products, marketing plans, methods of manufacture,
customers or any other information or materials in whatever form not generally
known to the public. Subject to the foregoing, this specific terms of this
Agreement (including all financial terms) shall be kept confidential, however,
the parties may refer generally to this Agreement and the parties' relationship
arising therefrom.

    


    ARTICLE
VIII - WARRANTY; LIMITATION OF LIABILITY

    


    8.1   Warranty.
Micrus represents and warrants to Distributor that all Products manufactured and
delivered to Distributor pursuant to this Agreement shall meet Micrus'
specifications for such Products at the time of delivery by Micrus to
Distributor for the shelf life of the Product as specified on the Product
labeling; provided, however, that such Product: (i) has been shipped in
accordance with Micrus' shipping instructions and stored in accordance with the
instructions on the labeling and the packaging for such Product; (ii) is used in
the application for which it was intended; and (iii) has not been modified
without Micrus' prior written consent. Distributor shall handle and be solely
responsible for all warranty returns from its direct and indirect customers.
MICRUS' SOLE AND EXCLUSIVE
LIABILITY UNDER THE WARRANTY SET FORTH IN THIS SECTION 8.1 SHALL BE LIMITED TO A
REPLACEMENT TO DISTRIBUTOR OF THE DEFECTIVE UNIT OF THE PRODUCT WITH A PRODUCT
UNIT SUBSTANTIALLY EQUIVALENT TO THE UNIT ORIGINALLY SHIPPED BY MICRUS TO
DISTRIBUTOR, OR IF THAT IS IMPRACTICABLE, THE REFUND BY MICRUS TO DISTRIBUTOR OF
ALL AMOUNTS PAID TO MICRUS FOR SUCH DEFECTIVE UNIT.

    


    8.2       No Other
Warranty. EXCEPT FOR THE
EXPRESS WARRANTY SET FORTH IN SECTION 8.1 HEREIN, THE PRODUCT IS PROVIDED "AS
IS," AND MICRUS GRANTS NO OTHER WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR
OTHERWISE, REGARDING ANY PRODUCT, ITS FITNESS FOR ANY PARTICULAR PURPOSE, ITS
QUALITY, ITS MERCHANTABILITY, OR OTHERWISE.

    


    8.3       Limitation
of Liability: NOTWITHSTANDING ANYTHING ELSE IN THIS
AGREEMENT OR OTHERWISE, IN NO EVENT SHALL MICRUS BE LIABLE TO DISTRIBUTOR OR ANY
OTHER PERSON OR ENTITY WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT
UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE
THEORY FOR (A) THE COST OF PROCUREMENT OF SUBSTITUTE
GOODS,


    
      
        
           

          


        

         


      

      
        8

        
          

        

      

      
         


      

    


    (B)
ANY SPECIAL, CONSEQUENTIAL, PUNITIVE. INDIRECT OR INCIDENTAL DAMAGES OR (C) LOST
PROFITS OR LOST BUSINESS; EVEN IF THE REMEDIES PROVIDED FOR IN THIS AGREEMENT
FAIL OF THEIR ESSENTIAL PURPOSE AND EVEN IF EITHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL
RELIEVE MICRUS FROM ANY PRODUCT LIABILITY CLAIM, AS SET FORTH IN ARTICLE IX
HERETO.

    


    8.4   Ownership.
Distributor acknowledges and agrees that as between Distributor and Micrus,
Micrus owns all right, title and interest in and to all clinical, technical,
product, sales, marketing, and customer information and data with respect to the
Products (including, without limitation, any and all modifications, design
changes or improvements relating thereto), and all industrial and intellectual
property rights of any kind in relation to the Products (including, without
limitation, any and all modifications, design changes or improvements relating
thereto) or any of the foregoing, including, without limitation, the right to
patents, registered or other designs, trademarks, trade names, inventions,
copyright, know-how and any other confidential information. Nothing contained in
this Agreement shall be effective to give Distributor any rights of ownership in
or to any of the foregoing. To the extent Distributor owns any rights, title or
interest in or to the foregoing, Distributor hereby assigns all of such rights
to Micrus. The provision of Product technical information to Distributor under
this Agreement is for the sole purpose of obtaining approval from the regulatory
authorities in the Territory for the Products and is subject to the
confidentiality obligations set forth in Article VII. The use by Distributor of
any of these property rights is authorized only for the purposes herein set
forth, and upon termination of this Agreement for any reason such authorization
shall cease.

    


    8.5   Sale
Conveys No Right to Manufacture or Copy. The Products are offered for
sale and is sold by Micrus subject in every case to the condition that such sale
does not convey any license, expressly or by implication, to manufacture,
duplicate or otherwise copy or reproduce any Product or any portion thereof.
Distributor shall take appropriate steps with its customers and distributors, if
any, as Micrus may request, to inform them of and assure compliance with the
restrictions contained in this Section 8.5.

    


    ARTICLE
IX - INDEMNIFICATION

    


    9.1   Indemnification
by Micrus. Micrus agrees to and hereby does indemnify and hold
Distributor harmless from and against all claims, damages, losses, costs and
expenses, including reasonable attorneys' fees, which Distributor may incur by
reason of any Product sold or furnished by Micrus which result in injury,
illness, or death of any person, to the extent that such claims arise out of or
result from either the negligence or willful misconduct of Micrus in: (i)
product design; or (ii) manufacturing; or (iii) breach of any representations or
warranties by Micrus hereunder, except if such claims arise from the negligence
or willful misconduct of Distributor, any modification of the Product other than
by Micrus or any breach by Distributor of any of its obligations,
representations or warranties under this Agreement. Micrus shall have sole
control of any such action or settlement negotiations, and Micrus agrees to pay,
subject to the limitations hereinafter set forth, any final judgment entered
against Distributor or its customer on such issue in any such suit or
proceedings indemnified hereunder by Micrus. Distributor agrees to notify Micrus
promptly in writing of such claim, suit or proceeding and gives Micrus authority
to proceed as contemplated herein, and, at Micrus' expense, give Micrus proper
and full information and assistance to settle and/or defend any such claim, suit
or proceeding. If the Product, or any part thereof, is the subject of any claim,
suit or proceeding for infringement of any third party patents or trademark in
the United States or in the Territory, or if the sale or use of the Product, or
any part thereof, is, as a result thereof, enjoined, then Micrus shall, at its
option and expense: (a) procure for Distributor and its customers the right
under such patent, or trademark to sell or use, as appropriate, the Product or
such part thereof; or (b) replace the Product, or part thereof, with other
suitable Product or parts; or (c) suitably modify the Product, or part thereof,
or (d) if the use of the Product, or part thereof, is prevented by injunction,
remove the Product or part thereof, and refund the aggregate payments paid
therefore by Distributor, less a reasonable sum for the use and damage; provided
that such claim, suit or proceeding is not based on a modification of the
Product by Distributor or anyone other than Micrus, or a combination of the
Product with any product other than those provided by Micrus for use with the
Product.

    


    9.2   Indemnification
by Distributor. Distributor hereby agrees to and hereby does indemnify
and hold Micrus harmless from and against all claims, damages, losses, costs and
expenses, including reasonable attorneys' fees, which Micrus may incur to the
extent that such claims arise out or result from; (i) the unlawful sale or other
distribution of Products by Distributor, including any improper sales by
Distributor to customers who are located outside the Territory; (ii) the
negligent or willful misconduct of Distributor in the distribution, labeling or
packaging of the Product; (iii) Distributor's recommended use of Products in
violation of this Agreement; (iv) modification of the Product by Distributor,
(v) combination of the Product with any product other than those provided by
Micrus for use with the Product, or (vi) breach of any representation, warranty,
or obligation by Distributor hereunder, except for such claims which arise out
of or result from the negligence, or willful misconduct of Micrus. Distributor
shall have sole control of any such action or settlement negotiations, and
Distributor agrees to pay, subject to the limitations hereinafter set forth, any
final judgment entered


    
      
        
          
             

          

          


        

         


      

      
        9

        
          

        

      

      
         


      

    


    against
Micrus or its customer on such issue in any such suit or proceedings defended by
Distributor. Micrus agrees to notify Distributor promptly in writing of such
claim, suit or proceeding and gives Distributor authority to proceed as
contemplated herein, and, at Distributor's expense, give Distributor proper and
full information and assistance to settle and/or defend any such claim, suit or
proceeding.

    


    9.3   Contribution.
In the event the negligence of Distributor and Micrus contribute to any loss,
cost, damages, claim or expense relating to Product supplied and/or distributed
or sold hereunder, then Distributor and Micrus shall be responsible for that
portion of the loss, cost, damages, claim or expense to which its negligence
contributed.

    


    ARTICLE
X - TERM AND TERMINATION

    


    10.1  Term.
This Agreement shall commence on the Effective Date and shall continue in force
until the fifth anniversary of the Reimbursement Date (as defined in Exhibit B),
unless terminated earlier pursuant to the provisions of this Article X or or
Article VI above.

     

    10.2  Failure
to Make Payment. Micrus may terminate this Agreement at any time upon
Distributor's failure to make payments due to Micrus pursuant to this Agreement
and the continuation of such failure for more than thirty (30) days after
delivery of written notice to Distributor of such failure.

    


    10.3
 Failure
to Commercialize or Obtain Marketing Authorizations. Micrus may terminate
this Agreement at any time upon Distributor's failure to use diligent efforts to
move ahead with its obligations to market, sell and distribute Products under
Section 5.1 or meet the Minimum Purchase Requirement and upon the continuation
of such failure for more than ninety (90) days after delivery of written notice
to Distributor of such failure, except where such failure of Distributor is a
result of the failure of Micrus to meet its obligations as defined in this
Agreement or due to circumstances beyond the reasonable control of Distributor
pursuant to Section 11.7 hereof.

    


    10.4  Patent.
Copyright. Trademark or FCPA or Code of Conduct Violations; Background
Check.  Micrus may
terminate this Agreement at any time without notice upon Distributor's violation
of Article VII or of Sections 5.5, 8.4, or 8.5 hereof.  In addition to
the foregoing, Distributor acknowledges that Micrus may undertake a background
check through TRACE International.  Distributor agrees to cooperate
with such background check and to provide any requested information to Micrus
and/or TRACE International.  In addition, Distributor acknowledges and
agrees that if the results of such background check (or any other information
received by Micrus) reveal any record of dishonest or criminal behavior or
financial irregularity or impropriety on the part of Distributor or any of its
affiliates, owners or personnel, Micrus shall have the right to immediately
terminate the Distribution Agreement unless the identified problem(s) is/are (if
capable of remedy) promptly remedied to Micrus’ satisfaction.  Micrus
shall have sole discretion to determine whether such problem(s) are capable of
remedy or have been remedied to Micrus’ satisfaction.  Micrus agrees
to provide notice of any problem(s) within 10 business days after receiving the
background check results, and failure to provide such notice shall be deemed
acceptance by Micrus of the results of the background check.

    


    10.5  Material
Breach.  Except as set
forth in Section 10.2 hereof or elsewhere in this Agreement, either party may
terminate this Agreement upon ninety (90) days prior written notice in the event
of the other party’s breach of any other material provision of this Agreement,
if such default or breach is not remedied within ninety (90) days from the date
of such notice, except where such
default or breach is due to circumstances beyond the reasonable control of the
other party pursuant to Section 11.7 hereof, or as otherwise specified in
this Article X.

    


    10.6  Bankruptcy.
If, during the term of this Agreement, either party makes an assignment, of this
Agreement or generally, for the benefit of creditors, or becomes insolvent or
seeks protection under any bankruptcy, receivership, trust deed, creditor's
arrangement or composition, or if any comparable proceeding is instituted
against the other party and is not dismissed within ninety (90) days of such
institution, then the other party may terminate this Agreement immediately upon
delivery of written notice thereof.

    


    10.7  Control
Event. In the event that Distributor sells all or substantially all of
its business or assets to which this Agreement relates to a non-affiliate, or
has more than fifty percent (50%) of its equity securities purchased by a single
purchaser who is a

    non-affiliate
in one transaction (a "Control Event") (whether by sale, acquisition, merger,
operation of law or otherwise), then Micrus may terminate this Agreement with
thirty (30) days prior written notice at any time after the occurrence of the
Control Event. In the event that Micrus sells all or substantially all of its
business or assets to which this Agreement relates to a non-affiliate, or has
more


    
      
        
          


          


        

         


      

      
        10

        
          

        

      

      
         


      

    


    than
fifty percent (50%) of its equity securities purchased by a purchaser who is a
non-affiliate in one transaction, then Micrus may terminate this Agreement at
any time, provided Micrus pays Distributor a termination fee of fifteen (15%) of
the Minimum Purchase Requirement for the year in which termination will be
effective. For purposes of this section, a non-affiliate is not a parent,
subsidiary or a subsidiary of a common parent or a successor.

    


    10.8  Waiver.
Any failure to terminate shall not be construed as a waiver by the aggrieved
party of its right to terminate for future defaults or breaches.

    


    10.9  Effects
of Termination.

    


    10.9.1
Return of
Property. Upon termination of this Agreement for any reason, each party
shall upon the request of the other party return all books, records, documents,
data, samples, parts, materials, and proprietary information which it shall have
received from the other party pursuant to this Agreement and which it shall
still have in its possession or control; provided, however, that a single copy
may be retained solely for legal archival purposes by each party, subject to the
confidentiality provisions of Article VII.

     

    10.9.2
Accrued
Payments. Termination of this Agreement by either party shall not
prejudice the right of either party to recover any payments for Products shipped
under this Agreement, and shall not prejudice any cause of action or claim of
either party accruing under this Agreement.

    


    10.9.3
Marketing
and Distribution Rights. Upon termination of this Agreement,
Distributor's rights to market, distribute, sell and otherwise transfer the
Product, and all other rights under this Agreement, shall immediately cease. The
parties shall undertake to negotiate in good faith a mutually acceptable
agreement to satisfy any contractual obligations of Distributor to supply the
Products to third parties, and Micrus shall supply all necessary inventory under
such agreements. Except as needed to satisfy any contractual obligations
existing as of the effective date of termination and as approved by Micrus in
writing, Distributor shall return all inventory in its possession or control to
Micrus in the same condition in which it was provided by Micrus within sixty
(60) days after termination.

    


    10.9.4
Marketing
Authorizations. Upon termination of this Agreement, Distributor shall
promptly assign or otherwise transfer to Micrus or its designees all of
Distributor's rights, title and interest in and to the Marketing Authorizations
and/or pending applications for the Product; provided, however, if such
termination does not result from a breach of this Agreement by Distributor,
Micrus shall reimburse Distributor for its costs incurred in obtaining such
Marketing Authorizations.

    


    10.9.5
Trademark.
Upon termination of this Agreement, the license to use the Trademarks granted in
Section 2.4 shall also terminate and all right, title and interest in such
Trademarks shall belong to Micrus.  Upon termination of this
Agreement, Distributor shall return or destroy all materials containing Micrus'
trademark, service mark, trade name and/or logo, including but not limited to
promotion materials, brochures, labels, packaging and/or samples.

     

    10.9.6
Pending
Orders. Upon termination of this Agreement, Micrus shall have the right,
at its option, to continue or terminate any order pending as of the effective
date of termination.

    


    10.9.7
No
Liability for Termination. Neither party will incur any liability
whatsoever for any damages, loss or expenses of any kind suffered or incurred by
the other party (or for any compensation to the other party) arising from or
incident to any termination of this Agreement pursuant to such party's right of
termination under this Agreement, whether or not such party is aware of any such
damages, loss or expenses.

    


    10.10
Termination
Not Sole Remedy. Termination is not the sole remedy under this Agreement
and, whether or not termination is effected, all other remedies will remain
available

     

    ARTICLE
XI - GENERAL PROVISIONS

    


    11.1  Governing
Law. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of California and the United States of America, as
though all parties were resident of, and the contract was performed solely in,
California without reference to conflicts of laws rules thereof and without
regard to the United Nations Convention on Contracts for the International Sale
of Goods. Except as set forth in Section 11.2, the sole jurisdiction and venue
for actions relating to the subject matter of this


    
      
        
          
             

          

          


        

         


      

      
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    Agreement
shall be the California state and U.S. federal courts having jurisdiction in
Santa Clara County, California, and the parties hereby consent to the
jurisdiction of such courts.

    


    11.2  Arbitration.
Except for actions seeking injunctive relief, all disputes, controversies, or
differences which may arise between the parties hereto, out of, in relation to,
or in connection with this Agreement or the breach thereof, shall be finally
settled by binding arbitration in San Francisco, California, U.S.A., in
accordance with the Commercial Arbitration rules of the American Arbitration
Association then in effect by one (1) arbitrator appointed in accordance with
such Rules, by which each party hereto agrees to be bound.  The
arbitration shall be conducted in the English language. The parties further
agree to exclude any right of application or appeal to any courts and that the
arbitration award shall be final and binding on the parties, provided judgment
upon an award rendered shall be entered in any court having jurisdiction, or
application shall be made to such court for judicial acceptance of the award and
an order of enforcement, as the case may be.

    


    11.3  Entire
Agreement. This Agreement represents the entire Agreement and
understanding of the parties hereto with respect to the marketing and
distribution of the Products and the subject matter of this Agreement, and
supersedes all previous agreements and understandings related thereto, and may
only be amended or modified in writing signed by an authorized representative of
the parties hereto.

    


    11.4  Assignment.
Distributor may not assign, transfer or otherwise dispose of any of its rights
or obligations pursuant to this Agreement without the prior written consent of
Micrus except that the assignee is the affiliate of Distributor. Such consent
shall not be unreasonably withheld.  Micrus may assign this Agreement
to any affiliate or acquirer of Micrus.  In the absence of such an
assignment, any performance by a Micrus affiliate of an obligation of Micrus
hereunder shall, as between the parties, be deemed to have been rendered by
Micrus, and any notice to Distributor given by a Micrus affiliate hereunder
shall be deemed as between the parties to have been given by
Micrus.  This Agreement shall be binding on, inure to the benefit of,
and be enforceable by the parties, their respective heirs, successors and valid
assigns.

    


    11.5  Notice.
All notices under this Agreement shall be in writing and shall be deemed given
on the date of delivery if sent by commercial courier (return receipt or
confirmation of delivery required and costs prepaid), electronic mail (provided
receipt is acknowledged by the recipient) or by personal delivery to the party
to receive such notices or other communications called for in this Agreement at
the following addresses (or at such other address for a party as shall be
specified by such party by like notice):

    


    If to
MICRUS:

    


    
      	 
      	
              MICRUS
      ENDOVASCULAR CORPORATION

            
	 
      	
               821
      Fox Lane

            
	 
      	
              San
      Jose, California 95131

            
	 
      	
              Attention:
      President

            


    

    


    


    If to
DISTRIBUTOR:

    


    
      	 
      	
               IDS
      (Hong Kong) Ltd.

            
	 
      	
               14/F
      Li Fung Plaza, 2 On Ping Street,

            
	 
      	
               Siu
      Lek Yuan, Shatin, Hong Kong

            
	 
      	
              Attention:  
      Cho Wong, Managing Director, Healthcare HK &
  China

            


    

    


    11.6  Limitation
on Liability.  Except for breaches of Article VII, in no event
shall either party be liable to the other for incidental or consequential
damages, even if such party shall have been advised of the possibility of the
same.  This limitation will not reduce either party's obligations with
respect to damages that may be suffered by third parties and as to which an
indemnification obligation applies under Article IX.

     

    11.7  Force
Majeure.  Except for the obligation to make payments under this
Agreement, each of the parties hereto shall be excused from the performance of
its obligations hereunder in the event such performance is prevented by force
majeure, and such excuse shall continue for thirty (30) days after the
termination of such force majeure.  For the purposes of this
Agreement, force majeure is defined to include causes beyond the control of the
parties hereto, including without limitation, acts of God, acts,

     


    
      
        
          


          
            
 

          

        

         


      

      
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    resolutions
or laws of any government, war, war-like conditions, civil commotion,
destruction of production facilities or materials by fire, earthquake or storm,
labor disturbances, epidemic and failure of public utilities or common
carriers.

     

    11.8   
Publicity.  Neither
party shall make any press release or other similar public disclosure or
announcement concerning this Agreement, without the prior written consent of the
non-disclosing party, which consent shall not be unreasonably withheld, except
as otherwise required by law.  Consent will be deemed granted if no
response is received from the non-Disclosing Party within fifteen (15) days of
its confirmed written request for approval from the Disclosing
Party.  Notwithstanding the foregoing, in the event such disclosure or
public announcement is required to be made on a more immediate basis in order to
comply with applicable laws, then approval will be deemed granted if no response
is received from the non-disclosing party within the timeframes required by law;
provided, however, that the
Disclosing Party provides the non-disclosing party with notice of the legally
required timeframe for approval of the disclosure at the time of providing a
copy of the proposed disclosure or announcement.

     

    11.9   
Survival
of Rights.  All rights to payments and the provisions of
Articles I (Definitions), VII (Confidential Information), VIII (Warranty;
Limitation of Liability), IX (Indemnification), and XI (General Provisions), as
well as Sections 2.2 (Relationship of Parties), 4.5 (Reporting), 10.8 (No
Waiver), 10.9 (Effects of Termination) and 10.10 (Termination Not Sole Remedy)
shall survive the expiration or termination of this Agreement.

     

    11.10  Legal
Expenses.  The prevailing party in any legal action brought by
one party against the other and arising out of this Agreement shall be entitled,
in addition to any other rights and remedies it may have, to reimbursement for
its expenses, including arbitration costs and reasonable attorney's
fees.

    


    11.11  Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be an original and all of which shall constitute but one and the same
document.

    


    


    11.12   Headings.  Headings and
captions are for convenience only and are not to be used in the interpretation
of this Agreement.

    


    11.13   Severability.  If
any provision of this Agreement is held to be illegal or unenforceable, that
provision shall be limited or eliminated to the minimum extent necessary so that
this Agreement shall otherwise remain in full force and effect.

     

    11.14 Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instruments.  This Agreement may be executed by facsimile with
original signatures promptly following by a method set forth in Section
11.5.

     

    
      
        
          
             

          

          


        

         


      

      
        13

        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

    


    
      	 
      	
              MICRUS
      ENDOVASCULAR CORPORATION

            
	 
      	 
      
	 
      	
                    BY:    /s/
      John T. Kilcoyne   

            
	 
      	
              NAME: 
      John T. Kilcoyne

            
	 
      	
              TITLE:  
      Chief Executive Officer

            
	 
      	 
      
	 
      	 
      
	 
      	
               IDS
      (Hong Kong) Ltd.

            
	 
      	
                   
      BY:            /s/
      Cho Wong     

            
	 
      	
              NAME:   Cho
      Wong

            
	 
      	
              TITLE:   
      Managing Director, Healthcare HK &
China

            


    

    



    
      
        
          
             

          

          


        

         


      

      
        14

        
          

        

      

      
         


      

    


    EXHIBIT
A

    


    PURCHASE
PRICE

    


    As
specified in Section 3.2.1 of the Amended and Restated Distribution Agreement,
the unit pricing of the product sold to Distributor is given in the following
schedule. Each unit with be packaged sterile in an individual container and
shipped to Distributor in a multi-pack shipping box.  All prices below
are in U.S. Dollars ($)  and C.I.P. Hong Kong and China.

    


    


    
      	
              ACCESSORIES

            	 
      	 
      	 
      	 
      
	
              DCB

            	
              Detachment
      Box

            	 
      	
              [***]

            
	 
      	 
      	 
      	 
      	 
      
	
              CCB

            	
              Connecting
      Cables

            	 
      	
              [***]

            
	 
      	 
      	 
      	 
      	 
      
	
              COILS

            	 
      	 
      	 
      	 
      
	
              CRC

            	
              Cerecyte
      - Cashmere

            	 
      	
              [***]

            
	
              CSP

            	
              Cerecyte
      - Spherical

            	 
      	
              [***]

            
	
              CHE

            	
              Cerecyte
      - Helipaq

            	 
      	
              [***]

            
	
              CFS

            	
              Cerecyte
      - Ultipaq

            	 
      	
              [***]

            
	 
      	 
      	 
      	 
      	 
      
	
              PC4
      10

            	
              Presidio
      10 - Cerecyte

            	
              [***]

            
	
              SRC

            	
              Platinum
      - Cashmere

            	 
      	
              [***]

            
	
              SPH

            	
              Platinum
      - Spherical

            	 
      	
              [***]

            
	
              HEL

            	
              Platinum
      - Helipaq

            	 
      	
              [***]

            
	
              FSR

            	
              Platinum
      - Ultipaq

            	 
      	
              [***]

            
	 
      	
              Total
      Coils

            	 
      	 
      
	
              STENT

            	 
      	 
      	 
      	 
      
	
              360-XXXX

            	
              Stent
      - VITESSE

            	 
      	
              [***]

            
	 
      	 
      	 
      	 
      	 
      
	
              ACCESS DEVICES

            	 
      	 
      	 
      	 
      
	
              MST

            	
              Microcatheter
      - Courier / Straight

            	
              [***]

            
	
              MPS

            	
              Microcatheter
      - Courier / Pre Shape

            	
              [***]

            
	
              WST

            	
              Guidewire
      - Watusi

            	 
      	
              [***]

            
	 
      	
              Total
      Access Devices

            	 
      


    

    



    
      
        
          
             

          

          *** Confidential Treatment
Requested


        

         


      

      
        15

        
          

        

      

      
         


      

    



    EXHIBIT
B

    


    MINIMUM
PURCHASE REQUIREMENTS AND SUPPORT FROM MICRUS

     
 

    The
following schedule sets forth Distributor's Minimum Purchase Requirements as
specified in ARTICLE VI of the Distribution Agreement. These minimums represent
the cost of Products paid for by Distributor to Micrus during each year of the
Agreement.  All amounts are in US Dollars.

    


    


    
      TERRITORY                                           SFDA
Approval               Year
1*                     Year
2                        Year
3                        Year
4              
  Year 5

    

    


    Hong
Kong &
China                                           [***]                      [***]*                      [***]                          [***]                         [***]                  
     [***]

    


    


    


    Upon SFDA
Approval of any Products, Distributor to order a minimum of [***]

    Year 1* =
The twelve-month period commencing on the date when Product is in the National
Reimbursement List of Interventional Medical Devices issued by Minister of
Health of People’s Republic of China (the “Reimbursement Date”) and ending on
the first anniversary of the Reimbursement Date..  If the time
elapsing between SFDA Approval and the Reimbursement Date is less than 12
months, the Minimum Purchase Requirement for Year 1 will be reduced by an amount
equal to  the product of (a) twelve minus the number of full months
elapsing between the SFDA Approval Date and the Reimbursement Date and (b)
[***].

    Year 2 =
The twelve month period commencing on the expiration of Year 1.

    Year 3 =
The twelve month period commencing on the expiration of Year 2

    Year 4 =
The twelve month period commencing on the expiration of Year 3

    Year 5 =
The twelve month period commencing on the expiration of  Year
4

     

    In
connection with the performance by Distributor of its Minimum Purchase
Requirement, Micrus agrees to provide limited marketing support to Distributor,
with details to be set forth in a separate marketing support agreement between
the parties.

    


    


    


    
      


      
        *** Confidential
Treatment Requested


      

    


    
      
         


      

      
        16

        
          

        

      

      
         


      

    


    EXHIBIT
C

    


     

    Anti-Bribery
and Books & Records Provisions of

     

    The
Foreign Corrupt Practices Act

     

    Current through Pub. L. 105-366
(November 10, 1998)


     

    UNITED
STATES CODE

     

    TITLE
15. COMMERCE AND TRADE

     

    CHAPTER
2B--SECURITIES EXCHANGES

     

     

    §
78m. Periodical and other reports

     

     

    (a)
Reports by issuer of security; contents

     

     

    Every
issuer of a security registered pursuant to section 78l of this title shall file
with the Commission, in accordance with such rules and regulations as the
Commission may prescribe as necessary or appropriate for the proper protection
of investors and to insure fair dealing in the security--

     

     

    (1) such
information and documents (and such copies thereof) as the Commission shall
require to keep reasonably current the information and documents required to be
included in or filed with an application or registration statement filed
pursuant to section 78l of this title, except that the Commission may not
require the filing of any material contract wholly executed before July 1,
1962.

     

     

    (2) such
annual reports (and such copies thereof), certified if required by the rules and
regulations of the Commission by independent public accountants, and such
quarterly reports (and such copies thereof), as the Commission may
prescribe.

     

     

    Every
issuer of a security registered on a national securities exchange shall also
file a duplicate original of such information, documents, and reports with the
exchange.

     

     

    (b)
Form of report; books, records, and internal accounting; directives

     

     

    * *
*

     

    (2) Every
issuer which has a class of securities registered pursuant to section 78l of
this title and every issuer which is required to file reports pursuant to
section 78o(d) of this title shall--

     

     

    (A) make
and keep books, records, and accounts, which, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the
issuer; and

     

     

    (B)
devise and maintain a system of internal accounting controls sufficient to
provide reasonable assurances that--

     

     

    (i)
transactions are executed in accordance with management's general or specific
authorization;

     

     

    (ii)
transactions are recorded as necessary (I) to permit preparation of financial
statements in conformity with generally accepted accounting principles or any
other criteria applicable to such statements, and (II) to maintain
accountability for assets;

     

     

    (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and

     

    
      
        
          


           

           

        

         


      

      
        17

        
          

        

      

      
         


      

    


     

    (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

     

    
      	
              (3)

            	
              (A)
      With respect to matters concerning the national security of the United
      States, no duty or liability under paragraph (2) of this subsection shall
      be imposed upon any person acting in cooperation with the head of any
      Federal department or agency responsible for such matters if such act in
      cooperation with such head of a department or agency was done upon the
      specific, written directive of the head of such department or agency
      pursuant to Presidential authority to issue such directives. Each
      directive issued under this paragraph shall set forth the specific facts
      and circumstances with respect to which the provisions of this paragraph
      are to be invoked. Each such directive shall, unless renewed in writing,
      expire one year after the date of issuance.

            
	 
      	
              (B)
      Each head of a Federal department or agency of the United States who
      issues such a directive pursuant to this paragraph shall maintain a
      complete file of all such directives and shall, on October 1 of each year,
      transmit a summary of matters covered by such directives in force at any
      time during the previous year to the Permanent Select Committee on
      Intelligence of the House of Representatives and the Select Committee on
      Intelligence of the Senate.

            


    

     

    (4) No
criminal liability shall be imposed for failing to comply with the requirements
of paragraph (2) of this subsection except as provided in paragraph (5) of this
subsection.

     

     

    (5) No
person shall knowingly circumvent or knowingly fail to implement a system of
internal accounting controls or knowingly falsify any book, record, or account
described in paragraph (2).

     

     

    (6) Where
an issuer which has a class of securities registered pursuant to section 78l of
this title or an issuer which is required to file reports pursuant to section
78o(d) of this title holds 50 per centum or less of the voting power with
respect to a domestic or foreign firm, the provisions of paragraph (2) require
only that the issuer proceed in good faith to use its influence, to the extent
reasonable under the issuer's circumstances, to cause such domestic or foreign
firm to devise and maintain a system of internal accounting controls consistent
with paragraph (2). Such circumstances include the relative degree of the
issuer's ownership of the domestic or foreign firm and the laws and practices
governing the business operations of the country in which such firm is located.
An issuer which demonstrates good faith efforts to use such influence shall be
conclusively presumed to have complied with the requirements of paragraph
(2).

     

     

    (7) For
the purpose of paragraph (2) of this subsection, the terms "reasonable
assurances" and "reasonable detail" mean such level of detail and degree of
assurance as would satisfy prudent officials in the conduct of their own
affairs.

     

     

    * *
*

     

     

    <§ 78dd-1 [Section 30A of the Securities & Exchange Act of
1934].

     

     

    Prohibited
foreign trade practices by issuers

     

     

    (a)
Prohibition

     

     

    It shall
be unlawful for any issuer which has a class of securities registered pursuant
to section 78l of this title or which is required to file reports under section
78o(d) of this title, or for any officer, director, employee, or agent of such
issuer or any stockholder thereof acting on behalf of such issuer, to make use
of the mails or any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay, or authorization of the
payment of any money, or offer, gift, promise to give, or authorization of the
giving of anything of value to--

     

     

    (1) any
foreign official for purposes of--

     

     

    (A) (i)
influencing any act or decision of such foreign official in his official
capacity, (ii) inducing such foreign official to do or omit to do any act in
violation of the lawful duty of such official, or (iii) securing any improper
advantage; or

     

     

    (B)
inducing such foreign official to use his influence with a foreign government or
instrumentality thereof to affect or influence any act or decision of such
government or instrumentality,

     


    
      
        
          
 

           

        

         


      

      
        18

        
          

        

      

      
         


      

    


    in order
to assist such issuer in obtaining or retaining business for or with, or
directing business to, any person;

     

     

    (2) any
foreign political party or official thereof or any candidate for foreign
political office for purposes of--

     

     

    (A) (i)
influencing any act or decision of such party, official, or candidate in its or
his official capacity, (ii) inducing such party, official, or candidate to do or
omit to do an act in violation of the lawful duty of such party, official, or
candidate, or (iii) securing any improper advantage; or

     

     

    (B)
inducing such party, official, or candidate to use its or his influence with a
foreign government or instrumentality thereof to affect or influence any act or
decision of such government or instrumentality.

     

     

    in order
to assist such issuer in obtaining or retaining business for or with, or
directing business to, any person; or

     

     

    (3) any
person, while knowing that all or a portion of such money or thing of value will
be offered, given, or promised, directly or indirectly, to any foreign official,
to any foreign political party or official thereof, or to any candidate for
foreign political office, for purposes of--

     

     

    (A) (i)
influencing any act or decision of such foreign official, political party, party
official, or candidate in his or its official capacity, (ii) inducing such
foreign official, political party, party official, or candidate to do or omit to
do any act in violation of the lawful duty of such foreign official, political
party, party official, or candidate, or (iii) securing any improper advantage;
or

     

     

    (B)
inducing such foreign official, political party, party official, or candidate to
use his or its influence with a foreign government or instrumentality thereof to
affect or influence any act or decision of such government or
instrumentality,

     

     

    in order
to assist such issuer in obtaining or retaining business for or with, or
directing business to, any person.

     

     

    (b)
Exception for routine governmental action

     

     

    Subsections
(a) and (g) of this section shall not apply to any facilitating or expediting
payment to a foreign official, political party, or party official the purpose of
which is to expedite or to secure the performance of a routine governmental
action by a foreign official, political party, or party official.

     

     

    (c)
Affirmative defenses

     

     

    It shall
be an affirmative defense to actions under subsection (a) or (g) of this section
that--

     

     

    (1) the
payment, gift, offer, or promise of anything of value that was made, was lawful
under the written laws and regulations of the foreign official’s, political
party’s, party official’s, or candidate’s country; or

     

     

    (2) the
payment, gift, offer, or promise of anything of value that was made, was a
reasonable and bona fide expenditure, such as travel and lodging expenses,
incurred by or on behalf of a foreign official, party, party official, or
candidate and was directly related to--

     

     

    (A) the
promotion, demonstration, or explanation of products or services;
or

     

     

    (B) the
execution or performance of a contract with a foreign government or agency
thereof.

     

     

    (d) Guidelines by Attorney
General

     

     

    Not later
than one year after August 23, 1988, the Attorney General, after consultation
with the Commission, the Secretary of Commerce, the United States Trade
Representative, the Secretary of State, and the Secretary of the Treasury, and
after obtaining the views of all interested persons through public notice and
comment procedures, shall determine to what extent compliance with
this

     

    
      
        
          
             

          

          


        

         


      

      
        19

        
          

        

      

      
         


      

    


     

    section
would be enhanced and the business community would be assisted by further
clarification of the preceding provisions of this section and may, based on such
determination and to the extent necessary and appropriate, issue--

     

     

    (1)
guidelines describing specific types of conduct, associated with common types of
export sales arrangements and business contracts, which for purposes of the
Department of Justice’s present enforcement policy, the Attorney General
determines would be in conformance with the preceding provisions of this
section; and

     

     

    (2)
general precautionary procedures which issuers may use on a voluntary basis to
conform their conduct to the Department of Justice’s present enforcement policy
regarding the preceding provisions of this section.

     

     

    The
Attorney General shall issue the guidelines and procedures referred to in the
preceding sentence in accordance with the provisions of subchapter II of chapter
5 of Title 5 and those guidelines and procedures shall be subject to the
provisions of chapter 7 of that title.

     

     

    (e)
Opinions of Attorney General

     

     

    (1) The
Attorney General, after consultation with appropriate departments and agencies
of the United States and after obtaining the views of all interested persons
through public notice and comment procedures, shall establish a procedure to
provide responses to specific inquiries by issuers concerning conformance of
their conduct with the Department of Justice’s present enforcement policy
regarding the preceding provisions of this section. The Attorney General shall,
within 30 days after receiving such a request, issue an opinion in response to
that request. The opinion shall state whether or not certain specified
prospective conduct would, for purposes of the Department of Justice’s present
enforcement policy, violate the preceding provisions of this section. Additional
requests for opinions may be filed with the Attorney General regarding other
specified prospective conduct that is beyond the scope of conduct specified in
previous requests. In any action brought under the applicable provisions of this
section, there shall be a rebuttable presumption that conduct, which is
specified in a request by an issuer and for which the Attorney General has
issued an opinion that such conduct is in conformity with the Department of
Justice’s present enforcement policy, is in compliance with the preceding
provisions of this section. Such a presumption may be rebutted by a
preponderance of the evidence. In considering the presumption for purposes of
this paragraph, a court shall weight all relevant factors, including but not
limited to whether the information submitted to the Attorney General was
accurate and complete and whether it was within the scope of the conduct
specified in any request received by the Attorney General. The Attorney General
shall establish the procedure required by this paragraph in accordance with the
provisions of subchapter II of chapter 5 of Title 5 and that procedure shall be
subject to the provisions of chapter 7 of that title.

     

     

    (2) Any
document or other material which is provided to, received by, or prepared in the
Department of Justice or any other department or agency of the United States in
connection with a request by an issuer under the procedure established under
paragraph (1), shall be exempt from disclosure under section 552 of Title 5 and
shall not, except with the consent of the issuer, be made publicly available,
regardless of whether the Attorney General responds to such a request or the
issuer withdraws such request before receiving a response.

     

     

    (3) Any
issuer who has made a request to the Attorney General under paragraph (1) may
withdraw such request prior to the time the Attorney General issues an opinion
in response to such request. Any request so withdrawn shall have no force or
effect.

     

     

    (4) The
Attorney General shall, to the maximum extent practicable, provide timely
guidance concerning the Department of Justice’s present enforcement policy with
respect to the preceding provisions of this section to potential exporters and
small businesses that are unable to obtain specialized counsel on issues
pertaining to such provisions. Such guidance shall be limited to responses to
requests under paragraph (1) concerning conformity of specified prospective
conduct with the Department of Justice’s present enforcement policy regarding
the preceding provisions of this section and general explanations of compliance
responsibilities and of potential liabilities under the preceding provisions of
this section.

     


    
      
        
          
             

          

          


        

         


      

      
        20

        
          

        

      

      
         


      

    


     

    (f)
Definitions

     

     

    For
purposes of this section:

     

    
      	
              (1)

            	
              A)
      The term “foreign official” means any officer or employee of a foreign
      government or any department, agency, or instrumentality thereof, or of a
      public international organization, or any person acting in an official
      capacity for or on behalf of any such government or department, agency, or
      instrumentality, or for or on behalf of any such public international
      organization.

            
	 
      	
              (B)
      For purposes of subparagraph (A), the term “public international
      organization” means--

            


    

    


    
      	 
      	 
      	
              (i)

            	
              an
      organization that is designated by Executive Order pursuant to section 1
      of the International Organizations Immunities Act (22 U.S.C. § 288);
      or

            
	 
      	 
      	
              (ii)

            	
              any
      other international organization that is designated by the President by
      Executive order for the purposes of this section, effective as of the date
      of publication of such order in the Federal
  Register.

            


    

    


    
      	
              (2)

            	
              (A)
      A person’s state of mind is “knowing” with respect to conduct, a
      circumstance, or a result if--

            


    

    


    
      	 
      	 
      	
              (i)

            	
              such
      person is aware that such person is engaging in such conduct, that such
      circumstance exists, or that such result is substantially certain to
      occur; or

            
	 
      	 
      	
              (ii)

            	
              such
      person has a firm belief that such circumstance exists or that such result
      is substantially certain to occur.

            


    

     

    (B) When
knowledge of the existence of a particular circumstance is required for an
offense, such knowledge is established if a person is aware of a high
probability of the existence of such circumstance, unless the person actually
believes that such circumstance does not exist.

     

    
      	
              (3)

            	
              (A)
      The term “routine governmental action” means only an action which is
      ordinarily and commonly performed by a foreign official
    in--

            


    

     

    (i)
obtaining permits, licenses, or other official documents to qualify a person to
do business in a foreign country;

     

     

    (ii)
processing governmental papers, such as visas and work orders;

     

     

    (iii)
providing police protection, mail pick-up and delivery, or scheduling
inspections associated with contract performance or inspections related to
transit of goods across country;

     

     

    (iv)
providing phone service, power and water supply, loading and unloading cargo, or
protecting perishable products or commodities from deterioration;
or

     

     

    (v)
actions of a similar nature.

     

     

    (B) The
term “routine governmental action” does not include any decision by a foreign
official whether, or on what terms, to award new business to or to continue
business with a particular party, or any action taken by a foreign official
involved in the decision-making process to encourage a decision to award new
business to or continue business with a particular party.

     

     

    
      	
               
      

            	
              (g)       Alternative
      Jurisdiction

            


    

     

     

    (1) It
shall also be unlawful for any issuer organized under the laws of the United
States, or a State, territory, possession, or commonwealth of the United States
or a political subdivision thereof and which has a class of securities
registered pursuant to section 12 of this title or which is required to file
reports under section 15(d) of this title, or for any United States person that
is an officer, director, employee, or agent of such issuer or a stockholder
thereof acting on behalf of such issuer, to corruptly do any act outside the
United States in furtherance of an offer, payment, promise to pay, or
authorization of the payment of any money, or offer, gift, promise to give, or
authorization of the giving of anything of value to any of the persons or
entities set forth in paragraphs (1), (2), and (3) of this subsection (a) of
this section for the purposes set forth therein, irrespective of whether such
issuer or such officer, director, employee, agent, or stockholder makes use of
the mails or any means or instrumentality of interstate commerce in furtherance
of such offer, gift, payment, promise, or authorization.

     


    
      
        
           

          


        

         


      

      
        21

        
          

        

      

      
         


      

    

     

    (2) As
used in this subsection, the term “United States person” means a national of the
United States (as defined in section 101 of the Immigration and Nationality Act
(8 U.S.C. § 1101)) or any corporation, partnership, association, joint-stock
company, business trust, unincorporated organization, or sole proprietorship
organized under the laws of the United States or any State, territory,
possession, or commonwealth of the United States, or any political subdivision
thereof.

     

     

    § 78dd-2. Prohibited foreign trade practices by domestic
concerns

     

     

    (a)
Prohibition

     

     

    It shall
be unlawful for any domestic concern, other than an issuer which is subject to
section 78dd-1 of this title, or for any officer, director, employee, or agent
of such domestic concern or any stockholder thereof acting on behalf of such
domestic concern, to make use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay, or authorization of the payment of any money, or offer, gift, promise to
give, or authorization of the giving of anything of value to--

     

     

    (1) any
foreign official for purposes of--

     

     

    (A) (i)
influencing any act or decision of such foreign official in his official
capacity, (ii) inducing such foreign official to do or omit to do any act in
violation of the lawful duty of such official, or (iii) securing any improper
advantage; or

     

     

    (B)
inducing such foreign official to use his influence with a foreign government or
instrumentality thereof to affect or influence any act or decision of such
government or instrumentality,

     

     

    in order
to assist such domestic concern in obtaining or retaining business for or with,
or directing business to, any person;

     

     

    (2) any
foreign political party or official thereof or any candidate for foreign
political office for purposes of--

     

     

    (A) (i)
influencing any act or decision of such party, official, or candidate in its or
his official capacity, (ii) inducing such party, official, or candidate to do or
omit to do an act in violation of the lawful duty of such party, official, or
candidate, or (iii) securing any improper advantage; or

     

     

    (B)
inducing such party, official, or candidate to use its or his influence with a
foreign government or instrumentality thereof to affect or influence any act or
decision of such government or instrumentality,

     

     

    in order
to assist such domestic concern in obtaining or retaining business for or with,
or directing business to, any person;

     

     

    (3) any
person, while knowing that all or a portion of such money or thing of value will
be offered, given, or promised, directly or indirectly, to any foreign official,
to any foreign political party or official thereof, or to any candidate for
foreign political office, for purposes of--

     

     

    (A) (i)
influencing any act or decision of such foreign official, political party, party
official, or candidate in his or its official capacity, (ii) inducing such
foreign official, political party, party official, or candidate to do or omit to
do any act in violation of the lawful duty of such foreign official, political
party, party official, or candidate, or (iii) securing any improper advantage;
or

     

     

    (B)
inducing such foreign official, political party, party official, or candidate to
use his or its influence with a foreign government or instrumentality thereof to
affect or influence any act or decision of such government or
instrumentality,

     

    in order
to assist such domestic concern in obtaining or retaining business for or with,
or directing business to, any person.

     

     

    (b)
Exception for routine governmental action

     

     

    Subsections
(a) and (i) of this section shall not apply to any facilitating or expediting
payment to a foreign official, political party, or party official the purpose of
which is to expedite or to secure the performance of a routine governmental
action by a foreign official, political party, or party official.

     

    
      
        
           

        

      

      
        22

        
          

        

      

      
         


      

    


     

    (c)
Affirmative defenses

     

     

    It shall
be an affirmative defense to actions under subsection (a) or (i) of this section
that--

     

     

    (1) the
payment, gift, offer, or promise of anything of value that was made, was lawful
under the written laws and regulations of the foreign official’s, political
party’s, party official’s, or candidate’s country; or

     

     

    (2) the
payment, gift, offer, or promise of anything of value that was made, was a
reasonable and bona fide expenditure, such as travel and lodging expenses,
incurred by or on behalf of a foreign official, party, party official, or
candidate and was directly related to--

     

     

    (A) the
promotion, demonstration, or explanation of products or services;
or

     

     

    (B) the
execution or performance of a contract with a foreign government or agency
thereof.

     

     

    (d)
Injunctive relief

     

     

    (1) When
it appears to the Attorney General that any domestic concern to which this
section applies, or officer, director, employee, agent, or stockholder thereof,
is engaged, or about to engage, in any act or practice constituting a violation
of subsection (a) or (i) of this section, the Attorney General may, in his
discretion, bring a civil action in an appropriate district court of the United
States to enjoin such act or practice, and upon a proper showing, a permanent
injunction or a temporary restraining order shall be granted without
bond.

     

     

    (2) For
the purpose of any civil investigation which, in the opinion of the Attorney
General, is necessary and proper to enforce this section, the Attorney General
or his designee are empowered to administer oaths and affirmations, subpoena
witnesses, take evidence, and require the production of any books, papers, or
other documents which the Attorney General deems relevant or material to such
investigation. The attendance of witnesses and the production of documentary
evidence may be required from any place in the United States, or any territory,
possession, or commonwealth of the United States, at any designated place of
hearing.

     

     

    (3) In
case of contumacy by, or refusal to obey a subpoena issued to, any person, the
Attorney General may invoke the aid of any court of the United States within the
jurisdiction of which such investigation or proceeding is carried on, or where
such person resides or carries on business, in requiring the attendance and
testimony of witnesses and the production of books, papers, or other documents.
Any such court may issue an order requiring such person to appear before the
Attorney General or his designee, there to produce records, if so ordered, or to
give testimony touching the matter under investigation. Any failure to obey such
order of the court may be punished by such court as a contempt
thereof.

     

     

    All
process in any such case may be served in the judicial district in which such
person resides or may be found. The Attorney General may make such rules
relating to civil investigations as may be necessary or appropriate to implement
the provisions of this subsection.

     

     

    (e)
Guidelines by Attorney General

     

     

    Not later
than 6 months after August 23, 1988, the Attorney General, after consultation
with the Securities and Exchange Commission, the Secretary of Commerce, the
United States Trade Representative, the Secretary of State, and the Secretary of
the Treasury, and after obtaining the views of all interested persons through
public notice and comment procedures, shall determine to what extent compliance
with this section would be enhanced and the business community would be assisted
by further clarification of the preceding provisions of this section and may,
based on such determination and to the extent necessary and appropriate,
issue--

     

     

    (1)
guidelines describing specific types of conduct, associated with common types of
export sales arrangements and business contracts, which for purposes of the
Department of Justice’s present enforcement policy, the Attorney General
determines would be in conformance with the preceding provisions of this
section; and

     

     

    (2)
general precautionary procedures which domestic concerns may use on a voluntary
basis to conform their conduct to the Department of Justice’s present
enforcement policy regarding the preceding provisions of this
section.

     


    
      
        
          
             

          

          


        

         


      

      
        23

        
          

        

      

      
         


      

    


     

    The
Attorney General shall issue the guidelines and procedures referred to in the
preceding sentence in accordance with the provisions of subchapter II of chapter
5 of Title 5 and those guidelines and procedures shall be subject to the
provisions of chapter 7 of that title.

     

     

    (f)
Opinions of Attorney General

     

     

    (1) The
Attorney General, after consultation with appropriate departments and agencies
of the United States and after obtaining the views of all interested persons
through public notice and comment procedures, shall establish a procedure to
provide responses to specific inquiries by domestic concerns concerning
conformance of their conduct with the Department of Justice’s present
enforcement policy regarding the preceding provisions of this section. The
Attorney General shall, within 30 days after receiving such a request, issue an
opinion in response to that request. The opinion shall state whether or not
certain specified prospective conduct would, for purposes of the Department of
Justice’s present enforcement policy, violate the preceding provisions of this
section. Additional requests for opinions may be filed with the Attorney General
regarding other specified prospective conduct that is beyond the scope of
conduct specified in previous requests. In any action brought under the
applicable provisions of this section, there shall be a rebuttable presumption
that conduct, which is specified in a request by a domestic concern and for
which the Attorney General has issued an opinion that such conduct is in
conformity with the Department of Justice’s present enforcement policy, is in
compliance with the preceding provisions of this section. Such a presumption may
be rebutted by a preponderance of the evidence. In considering the presumption
for purposes of this paragraph, a court shall weigh all relevant factors,
including but not limited to whether the information submitted to the Attorney
General was accurate and complete and whether it was within the scope of the
conduct specified in any request received by the Attorney General. The Attorney
General shall establish the procedure required by this paragraph in accordance
with the provisions of subchapter II of chapter 5 of Title 5 and that procedure
shall be subject to the provisions of chapter 7 of that title.

     

     

    (2) Any
document or other material which is provided to, received by, or prepared in the
Department of Justice or any other department or agency of the United States in
connection with a request by a domestic concern under the procedure established
under paragraph (1), shall be exempt from disclosure under section 552 of Title
5 and shall not, except with the consent of the domestic concern, by made
publicly available, regardless of whether the Attorney General response to such
a request or the domestic concern withdraws such request before receiving a
response.

     

     

    (3) Any
domestic concern who has made a request to the Attorney General under paragraph
(1) may withdraw such request prior to the time the Attorney General issues an
opinion in response to such request. Any request so withdrawn shall have no
force or effect.

     

     

    (4) The
Attorney General shall, to the maximum extent practicable, provide timely
guidance concerning the Department of Justice’s present enforcement policy with
respect to the preceding provisions of this section to potential exporters and
small businesses that are unable to obtain specialized counsel on issues
pertaining to such provisions. Such guidance shall be limited to responses to
requests under paragraph (1) concerning conformity of specified prospective
conduct with the Department of Justice’s present enforcement policy regarding
the preceding provisions of this section and general explanations of compliance
responsibilities and of potential liabilities under the preceding provisions of
this section.

     

     

    (g)
Penalties

     

    
      	
              (1)

            	
              (A)
      Any domestic concern that is not a natural person and that violates
      subsection (a) or (i) of this section shall be fined not more than
      $2,000,000.

              (B)
      Any domestic concern that is not a natural person and that violates
      subsection (a) or (i) of this section shall be subject to a civil penalty
      of not more than $10,000 imposed in an action brought by the Attorney
      General.

            
	
              (2)

            	
              (A)
      Any natural person that is an officer, director, employee, or agent of a
      domestic concern, or stockholder acting on behalf of such domestic
      concern, who willfully violates subsection (a) or (i) of this section
      shall be fined not more than $100,000 or imprisoned not more than 5 years,
      or both.

              (B)
      Any natural person that is an officer, director, employee, or agent of a
      domestic concern, or stockholder acting on behalf of such domestic
      concern, who violates subsection (a) or (i) of this section shall be
      subject to a civil penalty of not more than $10,000 imposed in an action
      brought by the Attorney General.

            
	
              (3)

            	
              Whenever
      a fine is imposed under paragraph (2) upon any officer, director,
      employee, agent, or stockholder of a domestic concern, such fine may not
      be paid, directly or indirectly, by such domestic
  concern.

            


    

     

     

     

    
      
        
           

           

           

        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (h)
Definitions

     

     

    For
purposes of this section:

     

    
      	
              (1)

            	
              The
      term "domestic concern" means--

            


    

     

    (A) any
individual who is a citizen, national, or resident of the United States;
and

     

     

    (B) any
corporation, partnership, association, joint-stock company, business trust,
unincorporated organization, or sole proprietorship which has its principal
place of business in the United States, or which is organized under the laws of
a State of the United States or a territory, possession, or commonwealth of the
United States.

     

    
      	
              (2)

            	
              (A)
      The term “foreign official” means any officer or employee of a foreign
      government or any department, agency, or instrumentality thereof, or of a
      public international organization, or any person acting in an official
      capacity for or on behalf of any such government or department, agency, or
      instrumentality, or for or on behalf of any such public international
      organization.

              (B)
      For purposes of subparagraph (A), the term "public international
      organization" means --

            


    

     

    (i) an
organization that has been designated by Executive order pursuant to Section 1
of the International Organizations Immunities Act (22 U.S.C. § 288);
or

     

     

    (ii)any
other international organization that is designated by the President by
Executive order for the purposes of this section, effective as of the date of
publication of such order in the Federal Register.

     

    
      	
              (3)

            	
              (A)
      A person's state of mind is "knowing" with respect to conduct, a
      circumstance, or a result if--

            


    

     

    (i) such
person is aware that such person is engaging in such conduct, that such
circumstance exists, or that such result is substantially certain to occur;
or

     

     

    (ii) such
person has a firm belief that such circumstance exists or that such result is
substantially certain to occur.

     

     

    (B) When
knowledge of the existence of a particular circumstance is required for an
offense, such knowledge is established if a person is aware of a high
probability of the existence of such circumstance, unless the person actually
believes that such circumstance does not exist.

     

    
      	
              (4)

            	
               (A)
      The term "routine governmental action" means only an action which is
      ordinarily and commonly performed by a foreign official
    in--

            


    

     

    (i)
obtaining permits, licenses, or other official documents to qualify a person to
do business in a foreign country;

     

     

    (ii)
processing governmental papers, such as visas and work orders;

     

     

    (iii)
providing police protection, mail pick-up and delivery, or scheduling
inspections associated with contract performance or inspections related to
transit of goods across country;

     

     

    (iv)
providing phone service, power and water supply, loading and unloading cargo, or
protecting perishable products or commodities from deterioration;
or

     

     

    (v)
actions of a similar nature.

     

     

    (B) The
term "routine governmental action" does not include any decision by a foreign
official whether, or on what terms, to award new business to or to continue
business with a particular party, or any action taken by a foreign official
involved in the decision-making process to encourage a decision to award new
business to or continue business with a particular party.

     


    
      
        
          
             

          

          


        

         


      

      
        25

        
          

        

      

      
         


      

    


     

    (5) The
term "interstate commerce" means trade, commerce, transportation, or
communication among the several States, or between any foreign country and any
State or between any State and any place or ship outside thereof, and such term
includes the intrastate use of--

     

     

    (A) a
telephone or other interstate means of communication, or

     

     

    (B) any
other interstate instrumentality.

     

     

    (i)
Alternative Jurisdiction

     

    
      	
              (1)

            	
              It
      shall also be unlawful for any United States person to corruptly do any
      act outside the United States in furtherance of an offer, payment, promise
      to pay, or authorization of the payment of any money, or offer, gift,
      promise to give, or authorization of the giving of anything of value to
      any of the persons or entities set forth in paragraphs (1), (2), and (3)
      of subsection (a), for the purposes set forth therein, irrespective of
      whether such United States person makes use of the mails or any means or
      instrumentality of interstate commerce in furtherance of such offer, gift,
      payment, promise, or authorization.

            
	
              (2)

            	
              As
      used in this subsection, a "United States person" means a national of the
      United States (as defined in section 101 of the Immigration and
      Nationality Act (8 U.S.C. § 1101)) or any corporation, partnership,
      association, joint-stock company, business trust, unincorporated
      organization, or sole proprietorship organized under the laws of the
      United States or any State, territory, possession, or commonwealth of the
      United States, or any political subdivision
  thereof.

            


    

     

    § 78dd-3. Prohibited foreign trade practices by persons other than
issuers or domestic concerns

     

     

    (a)
Prohibition

     

     

    It shall
be unlawful for any person other than an issuer that is subject to section 30A
of the Securities Exchange Act of 1934 or a domestic concern, as defined in
section 104 of this Act), or for any officer, director, employee, or agent of
such person or any stockholder thereof acting on behalf of such person, while in
the territory of the United States, corruptly to make use of the mails or any
means or instrumentality of interstate commerce or to do any other act in
furtherance of an offer, payment, promise to pay, or authorization of the
payment of any money, or offer, gift, promise to give, or authorization of the
giving of anything of value to--

     

     

    (1) any
foreign official for purposes of--

     

     

    (A) (i)
influencing any act or decision of such foreign official in his official
capacity, (ii) inducing such foreign official to do or omit to do any act in
violation of the lawful duty of such official, or (iii) securing any improper
advantage; or

     

     

    (B)
inducing such foreign official to use his influence with a foreign government or
instrumentality thereof to affect or influence any act or decision of such
government or instrumentality,

     

     

    in order
to assist such person in obtaining or retaining business for or with, or
directing business to, any person;

     

     

    (2) any
foreign political party or official thereof or any candidate for foreign
political office for purposes of--

     

     

    (A) (i)
influencing any act or decision of such party, official, or candidate in its or
his official capacity, (ii) inducing such party, official, or candidate to do or
omit to do an act in violation of the lawful duty of such party, official, or
candidate, or (iii) securing any improper advantage; or

     

     

    (B)
inducing such party, official, or candidate to use its or his influence with a
foreign government or instrumentality thereof to affect or influence any act or
decision of such government or instrumentality.

     

     

    in order
to assist such person in obtaining or retaining business for or with, or
directing business to, any person; or

     


    
      
        
          
             

          

          


        

         


      

      
        26

        
          

        

      

      
         


      

    


     

    (3) any
person, while knowing that all or a portion of such money or thing of value will
be offered, given, or promised, directly or indirectly, to any foreign official,
to any foreign political party or official thereof, or to any candidate for
foreign political office, for purposes of--

     

     

    (A) (i)
influencing any act or decision of such foreign official, political party, party
official, or candidate in his or its official capacity, (ii) inducing such
foreign official, political party, party official, or candidate to do or omit to
do any act in violation of the lawful duty of such foreign official, political
party, party official, or candidate, or (iii) securing any improper advantage;
or

     

     

    (B)
inducing such foreign official, political party, party official, or candidate to
use his or its influence with a foreign government or instrumentality thereof to
affect or influence any act or decision of such government or
instrumentality,

     

     

    in order
to assist such person in obtaining or retaining business for or with, or
directing business to, any person.

     

     

    (b)
Exception for routine governmental action

     

     

    Subsection
(a) of this section shall not apply to any facilitating or expediting payment to
a foreign official, political party, or party official the purpose of which is
to expedite or to secure the performance of a routine governmental action by a
foreign official, political party, or party official.

     

     

    (c)
Affirmative defenses

     

     

    It shall
be an affirmative defense to actions under subsection (a) of this section
that--

     

     

    (1) the
payment, gift, offer, or promise of anything of value that was made, was lawful
under the written laws and regulations of the foreign official's, political
party's, party official's, or candidate's country; or

     

     

    (2) the
payment, gift, offer, or promise of anything of value that was made, was a
reasonable and bona fide expenditure, such as travel and lodging expenses,
incurred by or on behalf of a foreign official, party, party official, or
candidate and was directly related to--

     

     

    (A) the
promotion, demonstration, or explanation of products or services;
or

     

     

    (B) the
execution or performance of a contract with a foreign government or agency
thereof.

     

     

    (d)
Injunctive relief

     

     

    (1) When
it appears to the Attorney General that any person to which this section
applies, or officer, director, employee, agent, or stockholder thereof, is
engaged, or about to engage, in any act or practice constituting a violation of
subsection (a) of this section, the Attorney General may, in his discretion,
bring a civil action in an appropriate district court of the United States to
enjoin such act or practice, and upon a proper showing, a permanent injunction
or a temporary restraining order shall be granted without bond.

     

     

    (2) For
the purpose of any civil investigation which, in the opinion of the Attorney
General, is necessary and proper to enforce this section, the Attorney General
or his designee are empowered to administer oaths and affirmations, subpoena
witnesses, take evidence, and require the production of any books, papers, or
other documents which the Attorney General deems relevant or material to such
investigation. The attendance of witnesses and the production of documentary
evidence may be required from any place in the United States, or any territory,
possession, or commonwealth of the United States, at any designated place of
hearing.

     

     

    (3) In
case of contumacy by, or refusal to obey a subpoena issued to, any person, the
Attorney General may invoke the aid of any court of the United States within the
jurisdiction of which such investigation or proceeding is carried on, or where
such person resides or carries on business, in requiring the attendance and
testimony of witnesses and the production of books, papers, or other documents.
Any such court may issue an order requiring such person to appear before the
Attorney General or his designee, there to produce records, if so ordered, or to
give testimony touching the matter under investigation. Any failure to obey such
order of the court may be

     


    
      
        
          
             

          

          


        

         


      

      
        27

        
          

        

      

      
         


      

    


     

    punished
by such court as a contempt thereof.

     

     

    (4) All
process in any such case may be served in the judicial district in which such
person resides or may be found. The Attorney General may make such rules
relating to civil investigations as may be necessary or appropriate to implement
the provisions of this subsection.

     

     

    (e)
Penalties

     

    
      	
              (1)

            	
              (A)
      Any juridical person that violates subsection (a) of this section shall be
      fined not more than $2,000,000.

              (B)
      Any juridical person that violates subsection (a) of this section shall be
      subject to a civil penalty of not more than $10,000 imposed in an action
      brought by the Attorney General.

               

            
	
              (2) 

            	
              (A)
      Any natural person who willfully violates subsection (a) of this section
      shall be fined not more than $100,000 or imprisoned not more than 5 years,
      or both.

              (B)
      Any natural person who violates subsection (a) of this section shall be
      subject to a civil penalty of not more than $10,000 imposed in an action
      brought by the Attorney General.

            
	
              (3)

            	
              Whenever
      a fine is imposed under paragraph (2) upon any officer, director,
      employee, agent, or stockholder of a person, such fine may not be paid,
      directly or indirectly, by such
person.

            


    

     

    (f)
Definitions

     

     

    For
purposes of this section:

     

    
      	
              (1)

            	
              The
      term “person,” when referring to an offender, means any natural person
      other than a. national of the United States (as defined in 8 U.S.C. §
      1101) or any corporation, partnership, association, joint-stock company,
      business trust, unincorporated organization, or sole proprietorship
      organized under the law of a foreign nation or a political subdivision
      thereof

            
	
              (2)

            	
              (A)
      The term “foreign official” means any officer or employee of a foreign
      government or any department, agency, or instrumentality thereof, or of a
      public international organization, or any person acting in an official
      capacity for or on behalf of any such government or department, agency, or
      instrumentality, or for or on behalf of any such public international
      organization.

              For
      purposes of subparagraph (A), the term "public international organization"
      means --

            


    

    


    
      	 
      	 
      	
              (i)

            	
              an
      organization that has been designated by Executive Order pursuant to
      Section 1 of the International Organizations Immunities Act (22 U.S.C. §
      288); or

               

            
	 
      	 
      	
              (ii)

            	
              any
      other international organization that is designated by the President by
      Executive order for the purposes of this section, effective as of the date
      of publication of such order in the Federal
  Register.

            


    

    


    
      	
              (3)

            	
              (A)
      A person’s state of mind is "knowing" with respect to conduct, a
      circumstance, or a result if --

            


    

    


    
      	 
      	 
      	
              (i)

            	
              such
      person is aware that such person is engaging in such conduct, that such
      circumstance exists, or that such result is substantially certain to
      occur; or

            
	 
      	 
      	
              (ii)

            	
              such
      person has a firm belief that such circumstance exists or that such result
      is substantially certain to occur.

            


    

     

    (B) When
knowledge of the existence of a particular circumstance is required for an
offense, such knowledge is established if a person is aware of a high
probability of the existence of such circumstance, unless the person actually
believes that such circumstance does not exist.

     

    
      	
              (4)

            	
               (A)
      The term "routine governmental action" means only an action which is
      ordinarily and commonly performed by a foreign official
    in--

            


    

    


    
      	 
      	 
      	
              (i)

            	
              obtaining
      permits, licenses, or other official documents to qualify a person to do
      business in a foreign country;

               

            
	 
      	 
      	
              (ii)

            	
              processing
      governmental papers, such as visas and work orders;

               

            
	 
      	 
      	
              (iii)

            	
              providing
      police protection, mail pick-up and delivery, or scheduling inspections
      associated with contract performance or inspections related to transit of
      goods across country;

               

            
	 
      	 
      	
              (iv) 

            	
              providing
      phone service, power and water supply, loading and unloading cargo, or
      protecting perishable products or commodities from deterioration;
      or

            
	 
      	 
      	
              (v)

            	
              actions
      of a similar nature.

            


    

     

    (B) The
term “routine governmental action” does not include any decision by a foreign
official whether, or on what terms, to award new business to or to continue
business with a particular party, or any action taken by a foreign official
involved in the decision-making process to encourage a decision to award new
business to or continue business with a particular party.

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (5) The
term “interstate commerce” means trade, commerce, transportation, or
communication among the several States, or between any foreign country and any
State or between any State and any place or ship outside thereof, and such term
includes the intrastate use of —

     

     

    (A) a
telephone or other interstate means of communication, or

     

     

    (B) any
other interstate instrumentality.

     

     

    § 78ff. Penalties

     

     

    (a)
Willful violations; false and misleading statements

     

     

    Any
person who willfully violates any provision of this chapter (other than section
78dd-1 of this title), or any rule or regulation thereunder the violation of
which is made unlawful or the observance of which is required under the terms of
this chapter, or any person who willfully and knowingly makes, or causes to be
made, any statement in any application, report, or document required to be filed
under this chapter or any rule or regulation thereunder or any undertaking
contained in a registration statement as provided in subsection (d) of section
78o of this title, or
by any self-regulatory organization in connection with an application for
membership or participation therein or to become associated with a member
thereof, which statement was false or misleading with respect to any material
fact, shall upon conviction be fined not more than $5,000,000, or imprisoned not
more than 20 years, or both, except that when such person is a person other than
a natural person, a fine not exceeding $25,000,000 may be imposed; but no person
shall be subject to imprisonment under this section for the violation of any
rule or regulation if he proves that he had no knowledge of such rule or
regulation.

     

     

    (b)
Failure to file information, documents, or reports

     

     

    Any
issuer which fails to file information, documents, or reports required to be
filed under subsection (d) of section 78o of this title or any rule
or regulation thereunder shall forfeit to the United States the sum of $100 for
each and every day such failure to file shall continue. Such forfeiture, which
shall be in lieu of any criminal penalty for such failure to file which might be
deemed to arise under subsection (a) of this section, shall be payable into the
Treasury of the United States and shall be recoverable in a civil suit in the
name of the United States.

     

     

    (c)
Violations by issuers, officers, directors, stockholders, employees, or agents
of issuers


    


    
      	
              (1)

            	
              (A)
      Any issuer that violates subsection (a) or (g) of section 30A of this
      title [15 U.S.C. § 78dd-1] shall be fined not more than
      $2,000,000.

              (B)
      Any issuer that violates subsection (a) or (g) of section 30A of this
      title [15 U.S.C. § 78dd-1] shall be subject to a civil penalty of not more
      than $10,000 imposed in an action brought by the
    Commission.

            
	
              (2)

            	
              (A)
      Any officer, director, employee, or agent of an issuer, or stockholder
      acting on behalf of such issuer, who willfully violates subsection (a) or
      (g) of section 30A of this title [15 U.S.C. § 78dd-1] shall be fined not
      more than $100,000, or imprisoned not more than 5 years, or
      both.

              (B)
      Any officer, director, employee, or agent of an issuer, or stockholder
      acting on behalf of such issuer, who violates subsection (a) or (g) of
      section 30A of this title [15 U.S.C. § 78dd-1] shall be subject to a civil
      penalty of not more than $10,000 imposed in an action brought by the
      Commission.

            


    

     

    (3)
Whenever a fine is imposed under paragraph (2) upon any officer, director,
employee, agent, or stockholder of an issuer, such fine may not be paid,
directly or indirectly, by such issuer.

 

    
      
      

      


    


    
      
         


      

      
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