Document:

exv10w8

 

Exhibit 10.8

EXHIBIT A

PATENT LICENSE AGREEMENT

     THIS
PATENT LICENSE AGREEMENT (“Agreement”) is entered into and effective
this
                    
day of
                    ,
1999, by and between Sutura, Inc., & Delaware
corporation having a place of business at 17080 Newhope Street, Fountain Valley, California 92708
(“LICENSOR.”) and Sterilis, Inc., a California corporation also having a place of business at
17080 Newhope Street, Fountain Valley, California 92708
(“LICENSEE”).

RECITALS

        A. LICENSOR is the owner of certain Licensed Patents (defined below) relating to suturing
devices,

        B. LICENSEE desires to obtain an exclusive, worldwide license to manufacture and sell Such
devices in LICENSEE’s Field of Use (as defined below), and
LICENSOR is willing to grant such a
license to LICENSEE.

        NOW,
THEREFORE, in consideration of the promises, mutual promises and
covenants contained herein,
the parties agree as follows:

			
	I.	 	DEFINITIONS

        For
purposes of this Agreement, the following terms shall have the meanings set forth below:

        A. “Licensed
Patents” shall mean the patents and patent applications listed in Exhibit A,
including all divisions, continuations and continuation-in-part
thereof, all patent applications
claiming priority therefrom, and all patents\ which may be granted thereon, all rights of
priority, and all reissues, re-examinations, and extensions thereof.

        B. “LICENSEE’s Field of Use” shall mean the obstetrical and/or gynecological field or
market.

        C. “Licensed
Products” shall mean [illegible] devices covered by one or more claims of the
Licensed Patents.

			
	II.	 	GRANT OF RIGHTS

        A. LICENSOR hereby grants to LICENSEE, and LICENSEE accepts an exclusive, worldwide License
under the licensed Patents to (a) make, have made, and import Licensed Products, and (b) use and
sell (or otherwise dispose of) Licenced Products solely within LICENSEE’s Field of Use.

        B. LICENSEE shall have the right to sublicense any of the rights provided to LICENSEE by the
terms of the Agreement.

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	III.	 	PAYMENT

        As monotary consideration for the license granted herein, LICENSEE shall pay to LICENSOR a
nonrefundable license fee of Two Hundred Fifty Thousand Dollars (3250,000) upon execution of this
Agreement.

			
	IV.	 	OWNERSHIP

        A. LICENSEE acknowledges that LICENSOR is the sole owner of the Licensed Patents, and
LICENSEE agrees that it does not obtain any interest in the licensed Patents except for the rights
granted herein.

        B. LICENSEE agrees not to take any action challenging or opposing, on any grounds
whatsoever, the ownership by LICENSOR of the Licensed Patents, or LICENSOR’s Intellectual property
rights therein. Furthermore, LICENSEE agrees not to contest the validity or enforceability, or
assist to request any third party to contest the validity or enforceability of any of the licensed
Patents, to the extent and in jurisdictions where permitted by law, in any judicial, governmental,
or quasi-governmental suit or proceeding; and not to request reexamination, or assist or request
any third party to request reexamination of any of the Licensed Patents, to the
extent and in jurisdictions where permitted by law.

			
	V.	 	TERM

        Unless
sooner canceled or terminated as provided herein, the license granted
herein shall terminate
on the expiration date of the last expiring of the Licensed Patents.

			
	VI.	 	TERMINATION

        A. If
any breach or default in respect of any of the terms of this Agreement by either of the
parties hereto shall occur, the other of said parties shall have the right to provide
written notice specifying in detail the nature of the breach or default and if said alleged breach
or default has, in fact, occurred and is not cured within sixty (60) days from the date of mailing
of the written notice [illegible] the other of said parties shall have the right to terminate this Agreement
upon giving an additional fifteen (15) days notice to the defaulting party of its intent to
terminate, and this Agreement shall terminate at the end of such
notice.

        B. For
purposes of this Agreement, an event of default shall occur If (1) LICENSEE or
LICENSOR fails to perform any of their respective obligations
hereunder, or (2) LICENSEE becomes
insolvent, or in financial difficulty, or the business of LICENSEE is placed in the hands of
a receiver or trustee, or an assignment is made for the benefit of creditors of LICENSEE, if
permitted by law.

        C. Certain provisions of this Agreement necessary to carry out the intent of the parties,
including, without limitation, Sections IV, VII, IX, XII, and XIII shall survive the termination or
expiration of this Agreement.

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	VII.	 	DUTIES UPON TERMINATION

        Upon any termination of this Agreement, LICENSEE shall: (1) Immediately cease manufacturing and
selling all Licensed Products; and (2) make no further use of any of LICENSOR’s rights conferred in
LICENSEE by this Agreement.

			
	VIII.	 	PATENT MARKING

        LICENSES
shall mark each Licensed Product that is made, used, sold or imported pursuant to the
provisions herein with a patent notice in compliance with the applicable salutary requirements.

			
	IX.	 	WARRANTIES

        LICENSOR makes no representation, guarantee or warranty that any patent claim that is being
licensed, or that be licensed, hereunder is valid. In addition nothing in this Agreement shall be
construed as a warranty or representation that anything made, used, sold or otherwise disposed of
under any license granted in this Agreement is or will be free from infringement of patents of
third parties.

			
	X.	 	ENFORCEMENT OF RIGHTS

        A. LICENSEE shall have the right, but not the obligation, to instigate any lawsuit, at its
own expense, to enforce the Licensed Patents in LICENSEE’s field of Use.

        B. LICENSOR shall have the right, but not the obligation, to instigate any lawsuit, at its
own expense, to enforce the Licensed Patents outside LICENSEE’s Field of Use.

        C. Each party agrees to cooperate with and assist the other party, at the other party’s
expense, in enforcing, protecting, and defending the Licensed Patents, to the extent reasonably
necessary, including but not limited to, being joined as a necessary or desirable party to any
legal proceedings.

			
	XI	 	PROSECUTION AND MAINTENANCE

        The entire patent process relating to procurement and maintenance of Licensed Patents, including
without limitation, prosecution of patents applications and maintenance, reexamination, reissue sad
extension of patents, shall be in the sole control and at the sole discretion of LICENSOR, and
LICENSOR shall have no obligation to take any action, such as but net limited to, responding to
patent Office Actions or paying maintenance fees or annuities, to keep the Licensed Patents pending
or in force.

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XII. INDEMNIFICATION

     LICENSEE hereby agrees to indemnify, defend, and hold LICENSOR harmless from and against any and
all china, liability, loss, costs, damage or expense (including attorney’ fees and costs) arising
from or in any matter connected with: (i) the infringement or alleged infringement of any third
party rights resulting from the manufacture or sale of Licensed Products; or (ii) the operation of
LICENSEE’s business as it relates to this Agreement.

XIII. GENERAL PROVISIONS

     A. The parties hereby agree that this Agreement merely constitutes a licensing agreement, and
that no agency, joint venture or partnership is created thereby, and that neither party
shall incur obligations in the name of the other party without said other party’s prior written
consent.

     B. This Agreement shall be governed and construed in accordance with the laws of the State
of California, and the parties agree that it is executed and delivered in that state. In the event
that any legal action becomes necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled, in addition to its court costs, to such reasonable attorneys’
fees, expert witness fees and legal expenses as may be fixed by a court of competent jurisdiction.

     C. LICENSEE acknowledges that there will be no adequate remedy at law for its failure to
comply with the terms herewith. Accordingly, in the event LICENSEE fails to comply with the terms
of this Agreement, LICENSEE acknowledges and agrees that LICENSOR shall have the right to have any
breach or default of this Agreement remedied by equitable relief by way of a temporary restraining
order, preliminary injunction, permanent injunction, and such other alternative relief as may be
appropriate without the necessary of LICENSOR posting any bond or proving any damaged.

     D. Any notice, request, demand, statement or other writing required or permitted by this
Agreement shall he deemed sufficiently given to or made upon the parties hereto when personally
received, delivered by first class certified or registered mail, postage prepaid, or delivered by
overnight express courier to the addresses set forth on the first page of this Agreement or such other
address of which the parties receive written notice.

     E. No failure or delay on the part of either party hereto in insisting upon or enforcing or
resorting to any of in power, rights, remedies, or option hereunder, and no partial or single
exercise thereof, shall continue & waiver of any such, powers, right, remedies or options, unless
such waiver be in writing, signed by the party to be charged.

     F. If any provision of this Agreement should be held to be void or unenforceable, in whole
or in part, the court or tribunal so holding chill reform the provision to make it enforceable
while maintaining the spirit and goal of the provision, and if the court or tribunal finds it
cannot so reform that provision such provision or part thereof shall be treated as severable,
leaving valid the
remainder of this Agreement.

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     G. This Agreement constitutes the entire understanding and agreement of the parties, and there are
no representation, warranties, promises, or undertakings other than those contained herein. As to
the subject matter hereof this Agreement supersedes and cancels all previous agreements between the
parties hereto. No course of conduct or dealing between the parties shall act as a modification or
waiver of any provision of this Agreement and no waiver or modification of any of the terms or
provisions of this Agreement shall be valid, unless contained in a single written document signed
by both parties.

     H. This Agreement may be assigned by either party without the consent of the other party.

     I. This Agreement shall be binding upon the parties hereto and their respective subsidiaries,
affiliates, heirs, legal representatives, successors and assigns.

     J. The headings in this Agreement are intended for convenience only, and shall not be used to
interpret the
meaning of this Agreement or to determine the rights of the parties.

     K. Each party shall perform any further acts and sign and deliver any further documents that are
reasonable necessary to effectuate the provisions of the spirit of this Agreement.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties have caused this instrument to be executed effective as of the day
and year first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[ILLEGIBLE], INC,
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	By:
	 	/s/ Anthony A. Nobels	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Anthony A. Nobels
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Printed Name
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	CEO/PRES
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Title
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	STERILIS, INC.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	By:
	 	/s/ Egbert Ratering	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	EGBERT RATERING
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Printed Name
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	EXECUTIVE VICE PRESIDENT
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Title

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EXHIBIT A

Licenced Patent

U.S. Patent Applications:

	 	 	 	 	 
	Serial Number	 	Filing Date	 	Title
	 
	 	 	 	 
	60/002,769

	 	August 24, 1995
	 	SUTURING DEVICE AND METHOD
	 
	 	 	 	 
	09/231,177

	 	January 14, 1999
	 	SUTURING DEVICE FOR SEALING

 ARTERY
FOLLOWING ANGIOGRAM
	 
	 	 	 	 
	60/134,141

	 	May 14, 1999
	 	KNOT PUSHER

U.S. Patents:

	 	 	 	 	 
	Patent Number	 	Issue Date	 	Title
	 
	 	 	 	 
	5,860,990

	 	January 19, 1999
	 	METHOD AND APPARATUS FOR SUTURING
	 
	 	 	 	 
	5,820,631

	 	October 13, 1998
	 	DEVICE AND METHOD FOR SUTURING 

TISSUE
ADJACENT TO A BLOOD VESSEL

Foreign Patent Applications:

	 	 	 	 	 	 	 
	Country	 	Serial Number	 	Filing Date	 	Title
	 
	 	 	 	 	 	 
	PCT

	 	PCT/US99/03904
	 	February 23, 1999
	 	SUTURING DEVICE FOR

SEALING AN OPENING IN A

BLOOD VESSEL OR OTHER

BIOLOGICAL STRUCTURE
	 
	 	 	 	 	 	 
	Europe

	 	99301495.0
	 	March 1, 1999
	 	SUTURING DEVICE FOR
SEALING AN OPENING IN A
BLOOD VESSEL OR OTHER
BIOLOGICAL STRUCTURE
	 
	 	 	 	 	 	 
	Japan

	 	62080/1999
	 	March 9, 1999
	 	SUTURING DEVICE FOR
SEALING AW OPENING IN A
BLOOD VESSEL OR OTHER
BIOLOGICAL STRUCTURE

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Exhibit
10.9

Option and Distribution Agreement

This Option and Distribution Agreement (“Agreement”) is made as of September 20, 2002 between
Sutura, Inc. (“Supplier”) a California corporation, having its principal place of business at
17080 Newhope Street, Fountain Valley, CA 92708 and Getz Bros. & Co., Inc. (“Distributor”) a
Delaware corporation, located at 225 West Washington Street, Suite 1900, Chicago, IL 60606.

In consideration of the mutual promises contained herein, Supplier and Distributor agree as
follows:

	1.	 	Definitions:

(a) “Products” means those products listed in Exhibit A attached hereto, as that
Exhibit may be amended to include any and all new products manufactured or distributed by
Supplier within the field of vascular closure and also to exclude those products as may be
discontinued by Supplier.

(b) “Territory” means Japan.

(c) “Promissory Note” means the Convertible Promissory Note dated September 20, 2002
between the parties and attached hereto as Exhibit B.

	1A. Distribution Option	 	 

(a) Distribution Option: Distributor shall have an exclusive option to enter into an
exclusive distribution agreement with Supplier for the Products in Japan. The terms of the
distribution agreement for Japan shall be as set forth in this Agreement. Distributor’s
right to exercise such option shall expire at 11:59 p.m., Chicago time, on March 31, 2004.
The term of such distribution agreement shall commence thirty (30) days after the date on
which Distributor gives notice to Supplier that it is exercising its option. The prices
at which Distributor buys Products from Supplier hereunder shall be as agreed between the
parties subject to the provisions hereof and provided that such pricing shall be such
that Distributor can earn a minimum gross profit (as defined in Section 3(b) below) of at
least forty (40) percent of the existing reimbursement price published periodically by the
Japanese Ministry of Health, Labor and Welfare (herein “MHLW”).

(b) Convertible Note: Upon execution of this Agreement Distributor shall pay to Supplier
one million dollars ($1,000,000) in exchange for the Promissory Note. Upon exercise of the
Distribution Option provided in subsection (a) above, the Promissory Note shall be
converted into an advance payment (“Advanced Payment”) for Products fully creditable
against Distributor’s future purchases of Products. In the event Distributor elects not
to exercise the Distribution Option, Supplier agrees to repay Distributor as provided in
the Promissory Note.

 

 

	2.	 	Appointment and Authority of Distributor:

(a) Appointment: Subject to the terms and conditions of this Agreement, upon
Distributor’s exercise of its option under Section 1A above, Supplier hereby appoints
Distributor, and Distributor accepts that appointment, as Supplier’s exclusive distributor
of the Products in the Territory.

(b) Independent Contractors: Distributor and Supplier are independent contractors
and are engaged in the operation of their own businesses. Neither party is to be considered
the agent of the other party for any purpose whatsoever, and neither party has any
authority to enter into any contracts or assume any obligations for the other party or make
any warranties or representations on behalf or the other party unless agreed to in writing
by the other party.

	3.	 	Obligations of Distributor:

(a) Registration and Marketing of Products: Distributor agrees, at its expense, to
use its best efforts to investigate, obtain government approval for, promote, and
distribute the Products, in the Territory upon execution of this Agreement, using generally
the same channels and methods, exercising the same diligence and adhering to the same
standards which it employs for other medical application products sold by Distributor, as
well as any of Distributor’s own products. In addition, Distributor agrees to pursue
regulatory approval and reimbursement for Supplier’s Products in the Territory in
accordance with the local laws and regulations, provided that Supplier provides the
required data and information to comply with the MHLW.

(b) Minimum Performance Levels: Distributor agrees to purchase the number of units of
Products per calendar year during the term of this Agreement (beginning with the first date
of promoted sales of Products by Distributor in the Territory) as agreed between the
parties; provided, however, that such minimum performance levels shall be appropriately
adjusted by Supplier and Distributor if: (i) one or more events of force majeure affect
Distributor’s ability to meet such, levels; (ii) Supplier is unable or refuses to sell
Products to Distributor when Distributor orders them; (iii) Products are deleted
from this Agreement, (iv) Product registrations are delayed or denied by local governing
agencies through no fault of Distributor, (v) Supplier is unable or refuses to supply
reasonable data or information to comply with local governing agencies, (vi) approval for
Product reimbursement is delayed or denied by local governing agencies, or (vii) Product
reimbursement levels established by government regulatory authorities in the Territory do
not allow Distributor to realize a minimum gross profit (defined as revenues from sales of
Products less Product costs, as well as taxes and shipping expenses incurred in connection
therewith) of

 

 

forty (40) percent based on existing Supplier pricing. If Distributor and Supplier do not
agree on acceptable minimum performance levels for any given year prior to the commencement
of such year, Supplier shall have the right to terminate the Agreement; provided, however,
the percentage increase in minimum performance levels for any year will not be greater than
seven (7) percent over the previous year’s minimum performance level unless mutually agreed
upon.

(c) Reports: Distributor agrees to submit regular reports to Supplier on a quarterly basis
(unless otherwise agreed) accurately describing sales of the Products by Distributor for the
previous period (including prices, unit sales, and other information as may be reasonably
requested by Supplier from time to time).

(d) Product
Complaints: Distributor agrees to report to Supplier all available information
concerning any product complaints that it is aware of. This information will be
reported in order to assist Supplier in monitoring the quality and safety of its Products,
and to allow Supplier to meet its reporting obligations under the United States Medical
Device Reporting regulations (21 CFR 803.24) and Medical Device Vigilance Guidelines.
Information concerning product complaints may be reported to the Supplier in either
verbally or in writing. A “product complaint’ is any written or oral expression of
dissatisfaction as to the identity, quality, durability, reliability, safety, effectiveness,
or performance of a Product. Product complaints associated with a death or serious injury,
or a malfunction that could reasonably be expected to result in a death or serious injury if
the malfunction recurs, will be reported to Supplier immediately upon Distributor’s
knowledge of that information.

(e) Prohibited Sales: Distributor agrees not to sell, and agrees to use reasonable
efforts to ensure that Distributor’s subdistributors, agents and customers do not
sell or use, any of the Products outside the Territory.

(f) Product Presentation: Distributor agrees to present the Products fairly to potential
customers, not to disparage the Products, any Product trademarks or Supplier and to do all
things reasonable to promote the reputation of the Products and the value of any Product
trademarks.

(g) Non-Compete: Upon Distributor’s exercise of its option under Section 1A above,
Distributor agrees not to license, manufacture, sell, or distribute any product, which
competes with Supplier’s Products. Notwithstanding, Distributor reserves the right to
distribute percutaneous closer devices manufactured by Perclose, Inc.
(an Abbott
Laboratories company) in the Territory until Distributor sells any remaining inventory,
provided however, Distributor sells any remaining inventory within ninety (90) days from the
date set forth in Section 1A above.

	4.	 	Obligations of Supplier:

 

 

(a) Requirements of Distributor: Supplier agrees to supply Distributor’s
requirements for the Products in the Territory consistent with Distributor’s non-binding
forecasts of its expected requirements for the Products. If Supplier believes it will not
be able to satisfy Distributor’s requirements for the Products, it must promptly notify
Distributor, specifying the reasons for and duration of the expected delay and its duration
at the time Product order is placed.

(b) Registration and Marketing Support: To assist Distributor in registering and marketing
the Products in the Territory, Supplier agrees to:

(i) Provide Distributor with materials necessary to obtain health registrations.
Supplier will supply to Distributor the required quantity of samples, at a price
equal to Supplier’s cost of goods, to obtain registration approval.

(ii) Provide Distributor with information on marketing and promotional plans of
Supplier for the Products as well as copies of marketing advertising, sales,
technical training manuals, and available audiovisual teaching and marketing aides
and promotional literature concerning the Products.

(iii) Provide Distributor with certain certificates of analysis concerning the
Products purchased by Distributor, certificates of free sale, trademark
authorizations and any other documents which Distributor may require for
registration purposes.

	5.	 	Trademark Licenser: Supplier grants to Distributor the right and license to use Supplier’s
trademarks and any trademark registrations which Supplier obtains and designates for the
Products in the Territory, but only in connection with sales of the Products purchased from
Supplier in the Territory. This trademark license shall continue in effect for each
jurisdiction in the Territory only while Distributor retains its distribution rights in each
jurisdiction. Distributor agrees not to remove or obscure any Product label affixed by
Supplier.

	6.	 	Terms and Conditions of Sale:

(a) Terms of Orders: All purchases of the Products by Distributor from Supplier during
the term of this Agreement will be subject to the terms and conditions of this Agreement.

(b) Packaging: All quantities of the Products purchased from Supplier by Distributor will
be in the form of labeled, standard unit packages and in a form and formulation consistent
with the Products sold by Supplier for use in the United States, unless otherwise agreed by
Supplier and Distributor in writing.

 

 

(c) Price and Payment: The prices for the Products to Distributor are set forth in Exhibit
A attached hereto. The prices are valid for a minimum period of twelve (12) months, unless
mutually agreed otherwise in writing. Ninety (90) days advance written notification is
required for price increases by Supplier.

(d) Resale Price: Distributor may resell Products at any price that Distributor in its sole
discretion determines.

(e) Expenses: All expenses for importation, promotion, sales and distribution, as well as
Distributor’s administrative and overhead expenses, will be borne solely by Distributor.

(f) Credit: Distributor assumes all credit and other risks involved in its sales under
this Agreement. All collection expenses on sales made by Distributor will be at
Distributor’s expenses.

(g) Payment Terms: Basic payment terms are net sixty (60) days.

	7.	 	Product Warranty; Insurance: Supplier warrants that all Products: (a) will conform with all
specifications and descriptions thereof provided by Supplier, (b) will be free of defects in
material, workmanship, and design, (c) will be of merchantable quality, suitable for the
purposes for which they are intended to be used, and (d) will comply with all applicable laws
and regulations. Supplier will have the right to exchange or accept existing inventory if
Products do not meet requirements (a) to (d). All warranties shall survive any inspection,
delivery, acceptance, or payment. Supplier will provide, when requested by Distributor,
certification that to the best of its knowledge it is in compliance with U.S. laws, statutes,
rules, regulations, and relevant orders relating to the manufacture, use, distribution, and
sale of each Product. Distributor will use its best efforts to afford the Supplier the
reasonable opportunity to inspect the allegedly defective Product at the location of its use
or storage. Distributor will, or will cause, upon request and in accordance with Supplier’s
instruction, return of any defective Product to Supplier at Supplier’s cost. Any replacement
of Products may be made by substitution upon mutual agreement.

Supplier shall maintain in full force, and shall continue to maintain in full force for
the term of this Agreement and five years thereafter, public and products liability
insurance, naming Distributor as an additional insured, against bodily injury, death or
property damage in any way arising out of the design, manufacture, sale, distribution, or
use of any Product in an amount of not less than US$5,000,000 per occurrence and annually
in the aggregate. Said liability insurance shall:

	 	(a)	 	be written by an insurance company licensed to do business in
the Territory, reasonably satisfactory to Distributor;

 

 

	 	(b)	 	include (i) products liability coverage insuring all of the Products
covered by this Agreement, as amended, and (ii) contractual liability coverage
insuring the indemnification provisions of this Agreement;
	 
	 	(c)	 	include a duty to defend and cover legal and defense costs as
well as indemnity costs;
	 
	 	(d)	 	include a separation of interests or cross liability clause
such that the policy will respond on behalf of Distributor as if a separate
policy had been issued, except for the policy limits;
	 
	 	(e)	 	include the Territory within the territory covered by the
insurance policy.

Supplier shall furnish Distributor with a copy of the insurance policy or a Certificate of
Insurance evidencing such insurance upon request of Distributor, provided that Supplier
shall provide such policy or such certificate upon execution of this Agreement and at
least annually thereafter. Said policy, or said certificate shall provide that the
insurance evidenced thereby, shall not be canceled, terminated or materially reduced in
coverage without at least thirty days prior written notice to Distributor. Failure to
maintain the required insurance shall constitute a material breach of this Agreement.

	8.	 	Indemnification:

(a) Supplier agrees to indemnify Distributor and defend its employees, agents,
representatives, and subdistributors harmless from and against, and to assume all costs
and expenses (including attorney’s fees) for;

(i) claims or suits for bodily injury, including death, or property damage
arising out of the design, manufacture, sale, distribution, resale, or use
of any Product;

(ii) any product recalls or replacements, whether required or recommended
by any government or other authority or organization or otherwise deemed
appropriate by Supplier and Distributor; or

(iii) any product liability claims arising from the Product Warranty
provided by Supplier in Section 7,

except if such injury, damage, cost, or expense is caused by the sole negligence of
Distributor.

 

 

(b) Supplier agrees to further indemnify, defend, and hold Distributor, and its employees,
agents, representatives, and subdistributors, harmless from and against, and shall assume
all costs and expenses (including attorney’s fees) for any claim that any Product infringes
or violates any patent, copyright, trademark, trade name, trade secret, or other
intellectual property right.

(c) Supplier and Distributor each agree to indemnify and hold the other harmless from and
against any and all claims made by any person or entity arising out of the processing,
marketing, distribution, and sale of the Products, where and to the extent damages are
alleged to have been caused by the fault of the indemnifying party or its employees or
agents.

	9.	 	Confidential Information: Each party agrees to keep confidential and not to 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 by the other party without the prior
written approval of the disclosing party, except as required by law or court order or as
necessary for the marketing of the Products. The confidential information includes (but is not
limited to) information concerning Products, proposed products, marketing plans, methods of
manufacture, customers and any other information or materials in whatever form. This
obligation does not extend to information which: (i) is already known by recipient at the time
of its disclosure to recipient; (ii) is publicly available or later becomes publicly available
through no fault of the recipient; or (iii) is disclosed to recipient by a third party having
no similar confidentiality obligation. This obligation shall terminate two years after
termination of this Agreement.
	 
	10.	 	Term and Termination:

(a) Term and Renewal: The initial term of Distributor’s distribution rights hereunder
shall commence on the date set forth in Section 1A above and will continue in force until
five (5) years after the first date of promoted sales of the Products by Distributor in the
Territory. The parties will be required to give notice to the other of its intention to
terminate this Agreement at least six (6) months prior to the expiration of the initial
term hereof or of any renewal term.

(b) Termination of Agreement: Either party may at its option, terminate this Agreement at
any time by giving to the other party not less than sixty (60) days prior written notice,
as applicable, if: (i) the other party at any time commits a material breach of any of its
obligations hereunder and fails to correct any breach during such 60-day notice period;
(ii) Distributor is unable to secure regulatory approval by the MHLW for the Products
within eighteen months of the first date of this Agreement or; iii) there is a “change of
control” (defined herein as a change in the beneficial ownership of fifty (50) percent of
the voting capital stock) of Supplier or Distributor or any of its majority owned
subsidiaries or affiliates. This agreement also may be terminated by either party if the
other party becomes

 

 

insolvent, makes or seeks to make an arrangement with or an assignment for the benefit of
creditors, or if proceedings in voluntary or involuntary bankruptcy are instituted by, on
behalf of or against such other party, or if a receiver or trustee of the other party’s
property is appointed.

(c) Termination of Agreement for Noncompliance with Minimum Performance Levels: If the Distributor fails to purchase the required minimum number of units of
Products during any calendar year during the term of this Agreement, Supplier may, if
Distributor fails to cure such failure within six (6) months after receipt of notice thereof
from Supplier, terminate this Agreement upon terms and conditions to be agreed upon between
the parties.

(d) Effect of Termination of Agreement: Upon termination or expiration of the Agreement,
Distributor agrees to promptly assign or otherwise transfer to Supplier or its designees all
of Distributor’s rights, title and interest to registrations, regulatory approvals, licenses
and/or pending applications for Supplier’s Products in Japan. Once Distributor has
exercised its option under Section 1A hereunder, upon termination of this Agreement Supplier
may elect to (i) buy back all inventory on hand within sixty (60) days at Distributor’s
“fully loaded cost” (defined as total cost incurred to import, register and warehouse the
Products, plus product promotion expenses) to Distributor or (ii) allow the Distributor, and
Distributor shall be authorized, to continue to sell the remaining inventory; provided, that
in no event shall Distributor be required to continue to sell or distribute Products
after the termination of the Agreement. In addition, Distributor agrees to deliver
to Supplier or destroy, upon request, all Product materials supplied by Supplier and all
Product marketing materials of any kind. Distributor agrees to promptly assign or otherwise
transfer to Supplier or its designees all of Distributor’s rights, title and interest to
registrations, regulatory approvals, licenses and/or pending applications for Supplier’s
Products. If Distributor has not exercised the option in Section 1A above, Supplier
agrees to repay Distributor as provided in the Promissory Note. If Distributor has exercised
the option in Section 1A above, Supplier agrees to repay any remaining balance of the
Advanced Payment. The obligations of Supplier and Distributor pursuant to Sections 7
(Product Warranties), 8 (Indemnification), 9 (Confidential Information), 10 (Term and
Termination) and 11 (General Provisions) of this Agreement will survive any termination of
this Agreement. Nothing herein will limit any remedies which a party may have for the
other’s default, except as expressly provided herein, Neither party shall be liable to the
other for any damage in connection with that party’s termination of this Agreement by
notice.

	11.	 	General Provisions:

(a) Governing Law: This Agreement is to be governed by and interpreted in accordance
with the laws of the State of California, without regard to its rules on conflicts of
laws.

 

 

(b) Jurisdiction and Venue: Each party submits to the exclusive jurisdiction of any state or
federal court located in Cook County, Illinois, U.S.A., over any suit, action or proceeding
(“Action”) arising out of or relating to this Agreement or the relationship between the parties.
Each party waives any objection to the venue of any Action brought in such court and any claim that
the Action has been brought in an inconvenient forum. Each party agrees that a final judgment in
any Action brought in such court shall be conclusive and binding upon it and may be enforced in
any other courts to whose jurisdiction it may be subject.

(c) Dispute Resolution: The parties agree to use their best efforts to resolve any claim or dispute
arising out of this Agreement through negotiation or, upon failure of such negotiations, through
such alternative dispute resolution (“ADR”) techniques as they may deem appropriate. However,
nothing shall prohibit either party from terminating its participation in ADR if it believes the
dispute is not suitable for ADR, or if ADR does not produce results satisfactory to it. If any
claim or dispute is not resolved by negotiation or ADR, either party may, upon giving the other
party at least fifteen (15) days prior written notice, initiate litigation to resolve the dispute.

(d) Entire Agreement: This Agreement and subsequent agreements for the Territory represent the
entire agreement and understanding of Supplier and Distributor with respect to distribution of the
Products, supersedes all previous agreements and understandings related thereto and may only be
amended or modified in writing signed by authorized representatives of Distributor and Supplier.

(e) Assignment:

(i) Neither Supplier nor Distributor may assign any of its rights or obligations
pursuant to this Agreement without the prior written consent of the other party, except to
a successor to substantially all of the business of either party by merger, sale of
assets, or other form of reorganization and except that Distributor shall have the right
to assign all or part of this Agreement and the Promissory Note to Getz Bros. Co., Ltd.,
in which case Distributor shall be released from any obligations hereunder with respect to
that part or parts of this Agreement and/or the Promissory Note which has been so
assigned.

(ii) Distributor may resell the Products to, and appoint as its subdistributor(s) within
the Territory, any majority owned subsidiaries or affiliates of Distributor’s corporate
parent. The appointment of any subdistributor is conditioned upon:

 

 

(A) Subdistributor expressly acknowledging that its Subdistributor
Agreement with Distributor is subject to and subordinate in all respects to
the terms and conditions of this Agreement, and the Subdistributor further
acknowledging that it is familiar with and will comply with all applicable terms
of this Agreement: and

(B) Distributor remaining directly responsible to Supplier for the due performance
of all obligations imposed on Distributor by this Agreement, including payment for
all purchases of Product;

(iii) Supplier agrees to accept orders for shipment of Products into the
Territory only from Distributor or any Subdistributor.

(f) Notices: All notices under this Agreement must be in writing and will be deemed given if sent
by facsimile, telex, telecopier, or telegram (except for legal process in each case), certified or
registered mail or commercial courier (return receipt or confirmation or delivery requested), or
by personal delivery to the party to receive the notice or other communications called for by this
Agreement at the following addresses (or at another address for a party as specified by a party by
like notice);

	 	 	 
	Supplier	 	Distributor
	Sutura, Inc.

	 	Getz Bros. & Co., Inc.
	17080 Newhope St.

	 	225 W. Washington St., Suite 1900
	Fountain Valley, CA 92708

	 	Chicago, IL 60606
	Attn: President & CEO

	 	Attn. President, Medical Group

(g) Non-Hire: Without the prior written consent of the other party, neither party shall, during
the term of this Agreement or for twelve months thereafter, either directly or indirectly, hire or
otherwise engage, or cause, aid or assist any other person or entity (including its subsidiaries,
parents or other affiliates) to hire or otherwise engage, any current or former employee of other
party for a period of twelve months after the termination of such individual’s employment
relationship with the other party. This provision shall survive the termination of this Agreement.

(h) Force Majeure: Each of the parties hereto will be excused from its performance of its
obligations hereunder if the performance is prevented by force majeure, and that excuse will
continue so long as the condition constituting that force majeure continues plus thirty days after
the termination of the condition. For the purposes of this Agreement, “force majeure” is defined to
include causes beyond the control of Distributor of Supplier, including without limitation acts of
God, acts, regulations or laws of any government, war, civil commotion,

 

 

destruction of production facilities or materials by fire, earthquake or storm, labor disturbances,
or medical epidemics.

	 	 	 	 	 	 	 	 	 
	SUTURA, INC.

	 	 
	 	GETZ BROS. & CO., INC.

	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	(printed name)	 	 	 	(printed name)
	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 	 	 

 

 

EXHIBIT A

Products are defined as vascular closure products including but not limited to all and any new
products developed within the field of vascular closure during the course of the exclusive
distribution agreement. The initial Products are:

	 	 	 
	Product	 	Unit Price (USS)
	SuperStitch 6F

	 	To be agreed upon by the parties subject to Section 1A above.
	SuperStitch 8F

	 	To be agreed upon by the parties subject to Section 1A above.
	KnotPusher 6F

	 	To be agreed upon by the parties subject to Section 1A above.

	KnotPusher 8F

	 	To be agreed upon by the parties subject to Section 1A above.
	KwiKnot Tying Device

	 	To be agreed upon by the parties subject to Section 1A above.

 

 

EXHIBIT B

Attach Convertible Promissory Note

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