Document:

Exhibit 10.15

 

MERCANTILE NATIONAL BANK

DEFERRED COMPENSATION PLAN

 

This
Deferred Compensation Plan (the “Plan”)
of Mercantile National Bank, a national banking institution organized and
existing under the laws of the United States (the “Bank”) documents a deferred compensation plan approved by the
Board by resolution dated October 30, 2000 (the “Effective Date”).

The
purpose of this Plan is to provide specified benefits to a select group of
management or highly compensated employees who contribute materially to the
continued growth, development and future business success of the Bank.  This Plan shall be unfunded for tax purposes
and for purposes of Title I of the Employee Retirement Income Security Act of
1974 (“ERISA”), as amended from
time to time.

Article 1

Definitions

Whenever
used in this Plan, the following words and phrases shall have the meanings
specified:

1.1           “Beneficiary” means each designated person, or the
estate of a deceased Participant, entitled to benefits, if any, upon the death
of a Participant determined pursuant to Article 7.

1.2           “Board” means the Board of Directors of the
Bank as from time to time constituted.

1.3           “Beneficiary Designation Form” means the form established from time to
time by the Plan Administrator that a Participant completes, signs and returns
to the Plan Administrator to designate one or more beneficiaries.

1.4           “Code” means the Internal Revenue Code of
1986, as amended.

1.5           “Compensation” means the salary and bonus that would
be paid to a Participant during a Plan Year by Bank, the parent of Bank and an
affiliate of Bank, absent deferrals, less FICA taxes associated with such
salary and bonus.

1.6           “Deferral Account” means the Bank’s accounting of a
Participant’s accumulated Deferrals, plus accretions to such accumulated
Deferrals.

1.7           “Deferrals” means the amount of a Participant’s
Compensation which the Participant elects to defer according to this Plan.

1.8           “Election Form” means the form established from time to
time by the Plan Administrator that a Participant completes, signs and returns
to the Plan Administrator to make an election under the Plan.

 

1.9           “Distribution Date” means the date which is 90 days after a
Participant’s Termination of Employment.

1.10         “Participant” shall mean any employee (i) who is
selected to participate in the Plan, (ii) who elects to participate in the
Plan, (iii) who signs a Participation Agreement, an Election Form and a
Beneficiary Designation Form, (iv) whose signed Participation Agreement,
Election Form and Beneficiary Designation Form are accepted by the Plan
Administrator, (v) who commences participation in the Plan, and
(vi) whose Participation Agreement has not terminated.

1.11         “Participation Agreement” shall mean a written agreement, as may
be amended from time to time, which is entered into by and between the Bank and
a Participant.  Each Participation
Agreement executed by a Participant and the Bank shall provide for the entire
benefit to which such Participant is entitled under the Plan; should there be
more than one Participation Agreement, the Participation Agreement bearing the
latest date of acceptance by the Bank shall supersede all previous
Participation Agreements in their entirety and shall govern such entitlement.

1.12         “Plan Administrator” means the plan administrator described
in Article 9.

1.13         “Plan Year” means a calendar year except that the
initial Plan Year shall commence on the Effective Date of this Plan.

1.14         “Termination of Employment” means that the Participant ceases to be
employed by the Bank for any reason, voluntary or involuntary, other than by
reason of a leave of absence approved by the Bank.

Article 2

Selection, Enrollment and Eligibility

2.1           Selection
by Plan Administrator.  Participation
in the Plan shall be limited to a select group of management and highly
compensated employees of the Bank, as determined by the Plan Administrator in
its sole discretion.  From that group,
the Plan Administrator shall select, in its sole discretion, employees to
participate in the Plan.

2.2           Enrollment
Requirements.  As a condition to
participation, each selected employee shall complete, execute and return to the
Plan Administrator a Participation Agreement, an Election Form and a
Beneficiary Designation Form, all within thirty (30) days after the employee is
notified by the Plan Administrator of his or her selection to participate in
the Plan.  In addition, the Plan
Administrator shall establish from time to time such other enrollment
requirements as it determines in its sole discretion are necessary.

2.3           Eligibility;
Commencement of Participation. 
Provided an employee selected to participate in the Plan has met all
enrollment requirements set forth in this Plan and required by the Plan
Administrator, including returning all required documents to the Plan Administrator
within the specified time period, that employee shall commence participation in
the Plan on the first day of the month following the month in which the
employee completes all enrollment requirements (the “Participation Date”).  If an employee fails to meet all such
requirements within the period required, in accordance with Section 2.2,
that employee shall not be eligible to participate in the Plan until the first
day of the Plan Year following the delivery to and acceptance by the Plan
Administrator of the required documents.

 

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2.4           Termination
of Participation and/or Deferrals. 
If the Plan Administrator determines in good faith that a Participant no
longer qualifies as a member of a select group of management or highly
compensated employees, as membership in such group is determined in accordance
with Sections 201(2), 301(a)(3) and 40l(a)(l) of ERISA, the Plan
Administrator shall have the right, in its sole discretion, to
(i) terminate any deferral election the Participant has made for the
remainder of the Plan Year in which the Participant’s membership status
changes, (ii) prevent the Participant from making future deferral
elections and/or (iii) immediately distribute the Participant’s then vested
Deferral Account and terminate the Participant’s participation in the Plan.

Article 3

Deferral Election

3.1           Initial
Election.  A Participant shall make
an initial deferral election under this Plan by delivering to the Plan
Administrator a signed Participation Agreement, Election Form and Beneficiary
Designation Form within thirty (30) days after being notified by the Plan
Administrator of selection for participation in the Plan.  The Election Form shall set forth the amount
of Compensation to be deferred and shall be effective to defer only
Compensation earned as of the calendar month commencing after the date the
Election Form is received by the Plan Administrator.

3.2           Election
Changes

3.2.1        Generally.  The Participant may modify the amount of
Compensation to be deferred annually by filing a new Election Form with the
Plan Administrator at any time within a period of thirty (30) days prior to the
first day of the Plan Year in which the Compensation is to be deferred.

3.2.2        Unforeseeable
Financial Emergency.  If an unforeseeable
financial emergency arising from the death of a family member, divorce,
sickness, injury, catastrophe or similar event outside the control of the
Participant occurs (“Unforeseeable Financial
Emergency”), the Participant, by written request to the Plan
Administrator, may reduce future deferrals under this Agreement.

Article 4

Deferral Account

4.1           Establishing
and Crediting.  The Bank shall
establish a Deferral Account on its books for the Participant and shall credit
to the Deferral Account the following amounts:

4.1.1        Deferrals.  The Compensation deferred by the Participant
as of the time the Compensation would have otherwise been paid to the
Participant.

 

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4.1.2        Accretions.  At the end of each calendar month and
immediately prior to the payment of any benefits, accretions shall be credited
to the Deferral Account at a rate equal to the Wall Street Journal Prime
Rate plus one and one half percent (1.5%), from time-to-time in effect,
compounded monthly; provided, however, that the monthly compounded rate shall
not be less than five percent (5%) per annum nor more than nine percent (9%)
per annum.

4.2           Statement
of Accounts.  The Plan Administrator
shall provide to the Participant, within ninety (90) days after the end of each
Plan Year, a statement setting forth the Deferral Account balance.

4.3           Accounting
Device Only.  The Deferral Account is
solely a device for measuring amounts to be paid under this Plan.  The Deferral Account is not a trust fund of
any kind.  The Participant is a general
unsecured creditor of the Bank for the payment of benefits when due.  The benefits represent the mere Bank promise
to pay such benefits.  The Participant’s
rights are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by the
Participant’s creditors.

Article 5

Benefits During Lifetime

5.1           Benefit.  Upon a Participant’s Termination of
Employment, the Bank shall commence the payment to the Participant on the
Distribution Date of the benefit described under this Article 5.

5.2           Amount
of Benefit.  The amount of the
Participant’s Deferral Account as of the date of Termination of Employment
(after which no further Deferrals are permissible) plus accretions to the
Distribution Date.

5.3           Payment
of Benefit.  The Benefit shall be
paid in a lump sum or in monthly installments for up to a period of five years,
as elected by the Participant on the Election Form, and during the installment
period accretions shall continue to be credited to the balance of the Deferral
Account as reduced by the Benefit payments. 
Monthly installments during a calendar year shall be approximately
equal, with adjustments to be made at the beginning of each calendar year based
on the Deferral Account balance as of that time; and in the last year of the
installment period, the final installment shall be such as to pay the entire
remaining balance.

5.4           Hardship
Distribution.  If the Participant
experiences an Unforeseeable Financial Emergency, the Participant may petition
the Plan Administrator to suspend Deferrals of Compensation required to be made
by such Participant, to the extent deemed necessary by the Plan Administrator
to satisfy the Unforeseeable Financial Emergency.  If suspension of Deferrals is not sufficient
to satisfy the Participant’s Unforeseeable Financial Emergency, or if

(i)            reimbursement or compensation by insurance or otherwise;
or

(ii)           liquidation of Participant’s assets (to the extent the
liquidation would not itself cause severe financial hardship)

 

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cannot
satisfy the Participant’s Unforeseeable Financial Emergency, then the
Participant may further petition the Plan Administrator to receive a partial or
full payout of the Participant’s Deferral Account.  The Participant shall only receive a payment
to the extent it is deemed necessary by the Plan Administrator to satisfy the
Participant’s Unforeseeable Financial Emergency, plus an amount necessary to
pay taxes reasonably anticipated as a result of the payment and in no event
will such amount exceed the balance of the Deferral Account.

If
the Plan Administrator, in its sole discretion, approves a Participant’s
petition for suspension, the Participant’s deferrals under this Plan shall be
suspended as of the date of such approval. 
If the Plan Administrator, in its sole discretion, approves a
Participant’s petition for suspension and payout, the Participant’s deferrals
under this Plan shall be suspended as of the date of such approval and the
Participant shall receive a payout from the Plan within sixty (60) days of the
date of such approval.

Article 6

Death of Participant

6.1           Death
During Active Service.  If the
Participant dies while in the employment of the Bank, the Bank shall pay to the
Beneficiary one hundred percent (100%) of the Deferral Account balance as of
the date of the Participant’s death in a lump sum within thirty (30) days
following the Participant’s death.

6.2           Death
During Payment of a Benefit.  If the
Participant dies after any benefit payments have commenced under this Plan but
before receiving all such payments, the Bank shall pay to the Beneficiary the
remaining Deferral Account balance as of the date of the Participant’s death in
a lump sum within thirty (30) days following the Participant’s death.

6.3           Death
After Termination of Employment But Before Benefit Payments Commence.  If the Participant is entitled to benefit
payments under this Plan, but dies prior to the commencement of said benefit payments,
the Bank shall pay to the Beneficiary the Deferral Account balance as of the
date of the Participant’s death in a lump sum within thirty (30) days following
the Participant’s death.

Article 7

Beneficiaries

7.1           Beneficiary.  Each Participant shall have the right, at any
time, to designate a Beneficiary(ies) to receive any benefits payable under the
Plan to a beneficiary upon the death of a Participant.  The Beneficiary designated under this Plan
may be the same as or different from the Beneficiary designation under any
other plan of the Bank in which the Participant participates.

7.2           Beneficiary
Designation:  Change: Spousal Consent.  A Participant shall designate a Beneficiary
by completing and signing the Beneficiary Designation Form, and delivering it
to the Plan Administrator or its designated agent.  If the Participant names someone other than
his or her spouse as a Beneficiary, a spousal consent, in the form designated
by the Plan Administrator, must be signed by that Participant’s spouse and returned
to the Plan Administrator.  The
Participant’s beneficiary designation shall be deemed automatically revoked

 

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if the
beneficiary predeceases the Participant or if the Participant names a spouse as
beneficiary and the marriage is subsequently dissolved.  A Participant shall have the right to change
a Beneficiary by completing, signing and otherwise complying with the terms of
the Beneficiary Designation Form and the Plan Administrator’s rules and procedures,
as in effect from time to time.  Upon the
acceptance by the Plan Administrator of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be cancelled.  The Plan Administrator shall be entitled to
rely on the last Beneficiary Designation Form filed by the Participant and
accepted by the Plan Administrator prior to the Participant’s death.

7.3           Acknowledgment.  No designation or change in designation of a
Beneficiary shall be effective until received, accepted and acknowledged in
writing by the Plan Administrator or its designated agent.

7.4           No
Beneficiary Designation.  If the
Participant dies without a valid beneficiary designation, or if all designated
Beneficiaries predecease the Participant, then the Participant’s spouse shall
be the designated Beneficiary.  If the
Participant has no surviving spouse, the benefits shall be made to the personal
representative of the Participant’s estate.

7.5           Facility
of Payment.  If the Plan
Administrator determines in its discretion that a benefit is to be paid to a
minor, to a person declared incompetent, or to a person incapable of handling
the disposition of that person’s property, the Plan Administrator may direct
payment of such benefit to the guardian, legal representative or person having
the care or custody of such minor, incompetent person or incapable person.  The Plan Administrator may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit.  Any payment
of a benefit shall be a payment for the account of the Participant and the
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under the Plan for such payment amount.

Article 8

General Limitations

8.1           Termination
for Cause.  Notwithstanding any
provision of this Plan to the contrary, the Bank shall not pay any benefit
under this Plan that is in excess of the Participant’s Deferrals (i.e.,
accretions previously credited to the Participant’s Deferral Account will be
eliminated) if the Board terminates the Participant’s employment for:

(a)           Gross negligence or gross neglect of duties to the Bank;

(b)           Commission of a felony or of a gross misdemeanor involving
moral turpitude in connection with the Participant’s employment with the Bank;

(c)           Fraud, disloyalty, dishonesty or willful violation of any
law or significant Bank policy committed in connection with the Participant’s
employment and resulting in an adverse effect on the Bank; or

(d)           The Participant’s becoming subject to a final removal or
prohibition order issued by an appropriate federal banking agency pursuant to
Section 8(e) of the Federal Deposit Insurance Act (“FDIA”).

 

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Article 9

Administration Of Plan

9.1           Plan
Administrator Duties.  This Plan
shall be administered by a Plan Administrator which shall consist of the Board,
or such Plan Administrator or person(s) as the Board shall appoint.  Members of the Plan Administrator may be
Participants under this Plan.  The Plan
Administrator shall also have the discretion and authority to (i) make,
amend, interpret and enforce all appropriate rules and regulations for the
administration of this Plan and (ii) decide or resolve any and all
questions including interpretations of this Plan, as may arise in connection
with the Plan.

9.2           Agents.  In the administration of this Plan, the Plan
Administrator may employ agents and delegate to them such administrative duties
as it sees fit, (including acting through a duly appointed representative), and
may from time to time consult with counsel who may be counsel to the Bank.

9.3           Binding
Effect of Decisions.  The decision or
action of the Plan Administrator with respect to any question arising out of or
in connection with the administration, interpretation and application of the
Plan and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the Plan.

9.4           Indemnity
of Plan Administrator.  The Bank
shall indemnify and hold harmless the members of the Plan Administrator against
any and all claims, losses, damages, expenses or liabilities arising from any
action or failure to act with respect to this Plan, except in the case of
willful misconduct by the Plan Administrator or any of its members.

9.5           Bank
Information.  To enable the Plan
Administrator to perform its functions, the Bank shall supply full and timely
information to the Plan Administrator on all matters relating to the
Compensation of its Participants, the date and circumstances of their
Termination of Employment or death, and such other pertinent information as the
Plan Administrator may reasonably require.

Article 10

Claims and Review Procedures

10.1         Claims
Procedure.  A Participant or
Beneficiary (“claimant”) who has not received benefits under the Plan that he
or she believes should be paid shall make a claim for such benefits as follows:

10.1.1      Initiation
- Written Claim.  The claimant
initiates a claim by submitting to the Plan Administrator a written claim for
the benefits.

10.1.2      Timing
of Plan Administrator Response.  The
Plan Administrator shall respond to such claimant within 90 days after
receiving the claim.  If the Plan
Administrator determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response period by
an additional 90 days by notifying the claimant in writing, prior to the end of
the initial 90-day period, that an additional period -is required.  The

 

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notice
of extension must set forth the special circumstances and the date by which the
Plan Administrator expects to render its decision.

10.1.3      Notice
of Decision.  If the Plan
Administrator denies part or all of the claim, the Plan Administrator shall
notify the claimant in writing of such denial. 
The Plan Administrator shall write the notification in a manner
calculated to be understood by the claimant. 
The notification shall set forth:

(a)           The specific reasons for the denial,

(b)           A reference to the specific provisions of the Plan on
which the denial is based,

(c)           A description of any additional information or material
necessary for the claimant to perfect the claim and an explanation of why it is
needed,

(d)           An explanation of the Plan’s review procedures and the
time limits applicable to such procedures, and

(e)           A statement of the claimant’s right to bring a civil
action under ERISA Section 502(a) following an adverse benefit
determination on review.

10.2         Review
Procedure.  If the Plan Administrator
denies part or all of the claim, the claimant shall have the opportunity for a
full and fair review by the Board of the denial, as follows:

10.2.1      Initiation
- Written Request.  To initiate the
review, the claimant, within 60 days after receiving the Plan Administrator’s
notice of denial, must file with the Plan Administrator a written request for
review.

10.2.2      Additional
Submissions - Information Access. 
The claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim.  The Plan Administrator shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

10.2.3      Considerations
on Review.  In considering the
review, the Board shall take into account all materials and information the
claimant submits relating to the claim, without regard to whether such information
was submitted or considered in the initial benefit determination.

10.2.4      Timing
of Bank Response.  The Board shall
respond in writing to such claimant within 60 days after receiving the request
for review.  If the Board determines that
special circumstances require additional time for processing the claim, the
Board can extend the response period by an additional 60 days by notifying the
claimant in writing, prior to the end of the initial 60-day period, that an
additional period is required.  The notice
of extension must set forth the special circumstances and the date by which the
Board expects to render its decision.

 

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10.2.5      Notice
of Decision.  The Board shall notify
the claimant in writing of its decision on review.  The Bank shall write the notification in a
manner calculated to be understood by the claimant.  The notification shall set forth:

(a)           The specific reasons for the denial,

(b)           A reference to the specific provisions of the Plan on which
the denial is based,

(c)           A statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant (as defined in applicable ERISA
regulations) to the claimant’s claim for benefits, and

(d)           A statement of the claimant’s right to bring a civil
action under ERISA Section 502(a).

Article 11

Amendments and Termination

11.1         Termination.  The Bank reserves the right to terminate the
Plan at any time with respect to any or all of its Participants, by action of
its Board.  Upon the termination of the
Plan, the Participation Agreements of the affected Participants shall terminate
and their Deferral Account balances shall be paid to the affected Participants
in a lump sum within thirty (30) days following such Plan termination.  The termination of the Plan shall not
adversely affect any Participant or Beneficiary who has become entitled to the
payment of any benefits under the Plan as of the date of termination; provided
however, that the Bank shall have the right to accelerate applicable
installment payments without a premium or prepayment penalty by paying the
Deferral Account balance in a lump sum within thirty (30) days following such
termination.

11.2         Amendment.  The Bank may, at any time, amend or modify
the Plan in whole or in part by the action of its Board; provided, however,
that: (i) no amendment or modification shall be effective to decrease or
restrict the value of a Participant’s Deferral Account balance in existence at
the time the amendment or modification is made and (ii) no amendment or
modification of this Section 11.2 of the Plan shall be effective.  The amendment or modification of the Plan
shall not affect any Participant or Beneficiary who has become entitled to the
payment of benefits under the Plan as of the date of the amendment or
modification; provided,.  however, that
the Bank shall have the right to accelerate applicable installment payments by
paying the Deferral Account balance in a lump sum within thirty (30) days
following such amendment.

11.3         Participation
Agreement.  Despite the provisions of
Sections 11.1 and 11.2 above, if a Participant’s Participation Agreement
contains benefits or limitations that are not in this Plan document, the Bank
may only amend or terminate such provisions with the consent of the
Participant.

 

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Article 12

Miscellaneous

12.1         Binding
Effect.  This Plan shall bind the
Participant and the Bank and their beneficiaries, survivors, executors,
administrators and transferees.

12.2         No
Guarantee of Employment.  This Plan
is not a contract for employment.  It
does not give the Participant the right to remain an employee of the Bank, nor
does it interfere with the Bank’s right to discharge the Participant.  It also does not require the Participant to
remain an employee nor interfere with the Participant’s right to terminate
employment at any time.

12.3         Non-Transferability.  Benefits under this Plan cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

12.4         Tax
Withholding.  The Bank shall withhold
any taxes that are required to be withheld from the benefits provided under
this Plan.

12.5         Applicable
Law.  The Plan and all rights
hereunder shall be governed by the internal laws of the State of California,
except to the extent preempted by the laws of the United States of America.

12.6         Unfunded
Arrangement.  The Participant and the
Beneficiary are general unsecured creditors of the Bank for the payment of
benefits under this Plan.  The benefits
represent the mere promise by the Bank to pay such benefits.  The rights to benefits are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors.  Any insurance on the Participant’s life is a
general asset of the Bank to which the Participant and the Beneficiary have no
preferred or secured claim.

12.7         Reorganization.  The Bank shall not merge or consolidate into
or with another Bank, or reorganize, or sell substantially all of its assets to
another Bank, firm, or person unless such succeeding or continuing Bank, firm,
or person agrees to assume and discharge the obligations of the Bank under this
Plan or the Bank terminates the Plan and makes lump sum payments of the
Participants’ Deferral Account balances.

12.8         Entire
Agreement.  This Plan and the
Participant’s Participation Agreement constitute the entire agreement between
the Bank and the Participant as to the subject matter hereof.  No rights are granted to the Participant by
virtue of (i) this Plan other than those specifically set forth herein; or
(ii) the Participation Agreement other than those specifically set forth therein.

12.9         Interpretation.  Wherever the fulfillment of the intent and
purpose of this Plan requires, and the context will permit, the use of the
masculine gender includes the feminine and use of the singular includes the
plural

12.10       Alternative
Action.  In the event it shall become
impossible for the Bank or the Plan Administrator to perform any act required
by this Plan, the Bank or Plan Administrator may

 

10

 

in its
discretion perform such alternative act as most nearly carries out the intent
and purpose of this Plan and is in the best interests of the Bank.

12.11       Headings.  Article and section headings are for
convenient reference only and shall not control or affect the meaning or
construction of any of its provisions.

12.12       Validity.  In case any provision of this Plan shall be
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal and invalid provision has never been inserted herein.

12.13       Notice.  Any notice or filing required or permitted to
be given to the Plan Administrator under this Plan shall be sufficient if in
writing and hand-delivered, or sent by registered or certified mail, to the
address below:

 

	
  Senior Vice President

  Human Resources Department

  National Mercantile
  Bancorp

  1880 Century Park East,
  Suite 800

  Los Angeles, CA 90067

  

 

Such
notice shall be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark or the receipt for registration
or certification.

Any
notice or filing required or permitted to be given to a Participant under this
Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to
the last known address of the Participant.

IN WITNESS WHEREOF, the Bank has executed this Plan
document as of October 30, 2000.

	
  Bank:

  
	
   

  
	
  MERCANTILE
  NATIONAL BANK

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  Acknowledged:

  
	
   

  
	
  NATIONAL
  MERCANTILE BANCORP

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  
				

 

 

11

 

 

THIS
PARTICIPATION AGREEMENT (this “Agreement”) is entered into as
of            20      between
Mercantile National Bank a national bank organized and operating under the laws
of the United States (the “Bank”),
and                                   (“Participant”).

Recital

A.            Participant is a management or
highly compensated employee of the Bank, and the Bank desires to have the
continued services of Participant.

B.            The Bank has adopted, effective
October 30, 2000, the Mercantile National Bank Deferred Compensation Plan (the
“Plan”), as may be amended from time to time, and Participant has been selected
to participate in the Plan.

C.            Participant desires to participate
in the Plan.

Agreement

NOW
THEREFORE, it is mutually agreed that:

1.             Definitions.  Unless otherwise provided in this Agreement,
the capitalized terms in this Agreement shall have the same meaning as they
have in the instrument establishing the Plan (the “Plan Document”).

2.             Integrated
Agreement: Parties Bound.  The Plan
Document, a copy of which has been made available to Participant, is hereby
incorporated into and made a part of this Agreement as though set forth in full
in this Agreement.  The parties to this
Agreement agree to, and shall be bound by, and have the benefit of, each and
every provision of the Plan as set forth in the Plan Document.  This Agreement and the Plan Document,
collectively, shall be considered one complete contract between the parties.

3.             Acknowledgment.  Participant hereby acknowledges that
Participant has read and understands this Agreement and the Plan Document.

4.             Conditions
to Participation.  As a condition to
participation in the Plan, Participant must complete, sign, date and return to
the Plan Administrator an original copy of this Agreement, an Election Form and
a Beneficiary Designation Form, and any other documentation as may in the
future be required by the Plan Administrator.

5.             Successors
and Assigns.  This Agreement shall
inure to the benefit of, and be binding upon the Bank, its successors and
assigns, and Participant.

 

6.             Governing
Law.  This Agreement shall be
governed by and construed under the internal laws of the State of California,
as in effect at the time of the execution of this Agreement.

IN
WITNESS WHEREOF, Participant has signed and the Bank has accepted this
Participation Agreement as of the date first written above.

 

	
  PARTICIPANT:

  	
   

  	
   

  
	
   

   

   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Signature of Participant

  
	
   

  	
   

  	
   

   

   

  
	
   

  	
   

  	
  Type or Print Name

  

 

	
   

  	
   

  	
   

  
	
  AGREED AND ACCEPTED BY THE
  BANK

   

  PLAN ADMINISTRATOR:

  	
   

  	
   

  
	
   

   

   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  
	
   

  	
   

  	
  Signature of Plan
  Administrator or Member Thereof

  
	
   

  	
   

  	
   

   

   

  
	
   

  	
   

  	
  Type or Print Name

  

 

 

2Exhbit
4.37

 

SUPPLY
AND DISTRIBUTION AGREEMENT

 

THIS
AGREEMENT MADE AND ENTERED INTO in the City of Montreal, Province of Quebec, as of
the 25 day of October, 1995.

 

	
  BY AND BETWEEN:

  	
   

  	
  FROSST RADIOPHARMACEUTICALS/FROSST PRODUITS
  PHARMACO-RADIOACTIFS, a division of MERCK FROSST CANADA INC.,

  
	
   

  	
   

  	
  a
  company organized and existing under the laws of the Province of Ontario,
  having its principal place of business at 16711 Trans-Canada Highway West
  Kirkland, Quebec H9H 3L1

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter
  referred to as “MFCI”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  PARTY OF THE FIRST PART

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  SYNCOR INTERNATIONAL
  CORPORATION, a company organized and existing under the
  laws of the State of Delaware, having its principal place of business at
  20001 Prairie Street, Chatsworth, California U.S.A. 91311

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter referred
  to as “Syncor”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  PARTY OF THE SECOND PART

  

 

WITNESSETH:

 

WHEREAS MFCI
and/or certain of its Associates manufacture, process, finish, market,
distribute, package and/or label, or cause to be manufactured, processed,
finished, marketed, distributed, packaged and labelled pharmaceutical and
radiopharmaceutical products including, without limitation, the Products;

 

WHEREAS
Syncor owns and operates a chain of nuclear pharmacies in the Territory and
prepares and sells radiopharmaceuticals and nuclear medicine products and
services including unit doses prepared from the Products; and

 

WHEREAS
Syncor desires to sell and distribute, under the MFCI label, or unit doses for
hospitals, the Products in the Territory and MFCI is prepared to grant Syncor
such rights, the whole subject to the terms and conditions hereinafter set
forth;

 

 

NOW, THEREFORE, THIS AGREEMENT WITNESSES THAT IN
CONSIDERATION OF THE RESPECTIVE COVENANTS AND AGREEMENTS OF THE PARTIES
HEREINAFTER CONTAINED AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT
AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED BY EACH PARTY, THE PARTIES
HEREBY COVENANT AND AGREE AS FOLLOWS:

 

	
  ARTICLE 1

  	
  DEFINITIONS

  

 

1.01                                                                           Wherever used in tins Agreement, unless there
is something in the subject matter or context inconsistent therewith, the
following words and terms shall have the respective meanings ascribed to them
as follows:

 

(a)                                                                                  “Agreement”, “this Agreement”, “these
presents”, “herein”, “hereby”, “hereunder”, and similar expressions refer collectively to this Supply and Distribution
Agreement and the accompanying Schedules;

 

(b)                                                                                 “Approved Assignee” shall have the meaning ascribed to such term
in Section 3.06 hereof;

 

(c)                                                                                  “Associate” means any person who or which does not deal
with MFCI or Syncor, as the case may be, or is deemed not to deal with MFCI or
Syncor, as the case may be, at “arm’s length” as that expression is construed
and interpreted under the Income Tax Act (Canada);

 

(d)                                                                                 “Effective Date” means the 9 day of June, 1995;

 

(e)                                                                                  “Intellectual Property” means all inventions, patents, patent
applications and issued patents, designs, design applications and design
registrations, trade marks, trade mark applications, trade mark registrations,
trade names (whether registered or unregistered) copyright, copyright
applications and registrations, processes, know-how, technology, formulae,
customer lists, trade secrets, proprietary information and all other rights and
intellectual property owned, held or used by MFCI and/or its Associates with respect
to any and all of the Products;

 

(f)                                                                                    “Syncor PDI” ***

 

2

 

(g)                                                                                 “Products” means the radiopharmaceutical products known
as Frosstimage® DTPA + and MDP +, as same are processed,
manufactured, formulated, and/or distributed by MFCI as at the Effective Date,
for sale and distribution as radiopharmaceutical products and “Product” shall mean any one such product;

 

(h)                                                                                 “Product Price” means MFCI’s price to Syncor for the
applicable Product (net of any and all taxes, customs duties, excises, costs
and charges relating to transportation, freight, handling and insurance as calculated
in accordance with Section 5.03 hereof and Schedule “B” annexed
hereto; and

 

(i)                                                                                     “Territoty” means the United States of America, its
territories and possessions.

 

 

	
  ARTICLE 2

  	
  INTERPRETATION

  

 

2.01                                                                           The division of this Agreement into Articles
and Sections and the insertion of headings are for the convenience of reference
only and shall not affect the construction or interpretation of this Agreement.

 

2.02                                                                           Words importing the singular number only
shall include the plural and vice versa, words importing the masculine gender
shall include the feminine and neuter genders and vice versa, and words
importing persons shall include individuals, partnerships, associations, trusts,
unincorporated organizations and corporations.

 

2.03                                                                           This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
there are no other written or verbal agreements or representations with respect
to the subject matter hereof.

 

2.04                                                                           Every provision of this Agreement is intended
to be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remaining terms and conditions hereof.

 

2.05                                                                           This Agreement shall be binding upon and
inure to the benefit of the respective heirs, executors, administrators and
other legal representatives and, to the extent permitted hereunder, the respective
successors and assigns of the parties.

 

2.06                                                                           This Agreement replaces and supersedes any
prior agreement pertaining to the subject matter hereof.

 

2.07                                                                           All amounts referred to in this Agreement
shall be in the lawful money of the United States of America unless stated
otherwise.

 

2.08                                                                           All Schedules annexed hereto are incorporated
herein fully by this reference.

 

® Trademark of
Merck & Co., Inc.,
Merck Frostt Canada Inc.,
licensed user

 

3

 

	
  ARTICLE 3

  	
  APPOINTMENT OF SYNCOR

  

 

3.01                                                                           Subject to the terms and conditions set forth
herein, MFCI hereby appoints Syncor as a non-exclusive distributor of the
Products within the Territory with the right and authority to sell and/or
distribute the Products, solely under MFCI’s brand name or unit doses to
hospitals in the Territory. Nothing herein contained shall be deemed to
restrict or otherwise impair or impede the right and/or ability of MFCI and/or
its Associates, whether directly or through one or more Associates or one or
more third parties, in the Territory or elsewhere in the world, to manufacture,
process, finish, market, distribute, package, label, appoint additional persons
as distributors of any of the Products, sub-contract any such rights to, or
otherwise enter into any arrangement whatsoever with, any person with respect
to any of the Products and/or otherwise deal in or with any of the Products.

 

3.02                                                                           Syncor agrees to use its best efforts to
conduct adequate sales activities in the Territory in order to expand the sales
of the Products therein. Syncor shall keep MFCI advised of
general market and economic developments that may affect the sale of the
Products in the Territory.

 

3.03                                                                           For greater certainty, but
without limiting the generality of anything herein otherwise contained, it is
expressly understood and agreed that Syncor shall not sell and/or distribute
any of the Products outside of the Territory or knowingly sell and/or
distribute any of the Products to any person(s) for resale and/or distribution
outside the Territory.

 

Syncor shall use its best efforts to refer to MFCI all inquiries
received by it in connection with the sale and/or distribution of the Products
outside the Territory.

 

3.04                                                                           Save as otherwise expressly permitted
hereunder, no packaging, marketing, labelling, promotion, advertising and
distribution materials or programs shall use or refer to MFCI’s trade names,
trade marks, brand names or to the words “Merck”, “Frosst”, “Sharp” or “Dohme” or any acronyms and/or combinations thereof without the
prior written consent of MFCI. Nothing herein shall confer upon Syncor or any
Approved Assignee any proprietary interest, without limitation, in the
trademarks, tradenames, patents, licenses or registrations of MFCI.

 

3.05                                                                           Syncor shall not, without the prior written
consent of MFCI, which consent shall not be subject to any
statutory provision or limitations whatsoever and may be withheld arbitrarily
at MFCI’s sole discretion:

 

(i)                                                                                     sell,
transfer or assign any of the rights and authority granted Syncor pursuant to Section 3.01
hereof to any person including, without limitation, any Associate; and/or

 

4

 

(ii)                                                                                  sub-contract or otherwise enter into any
other arrangement whatsoever with any person including, without limitation, any
Associate, with respect to any of the rights and authority granted Syncor
pursuant to Section 3.01 hereof.

 

3.06                                                                           For the purposes of this Agreement, any
person including, without limitation, any Associate, to whom Syncor has, upon
obtaining MFCI’s prior written consent as set out in Section 3.05 hereof
sold, transferred, assigned, sub-contracted or otherwise made any other arrangement
with respect to any of the rights and authority granted to it pursuant to Section 3.01,
shall be referred to as an “Approved Assignee”.
The initial Approved Assignee list is set forth as Schedule “D” annexed
hereto.

 

3.07                                                                           As a pre-condition to the sale, transfer or
assignment to, and the sub-contracting or other arrangement with, an Approved
Assignee, the parties agree that, without limitation, all such persons shall
intervene into this Agreement so as to bind themselves on a solidary basis,
both among themselves and with Syncor, to the fulfilment of all obligations, undertakings,
commitments and covenants of Syncor hereunder and to furthermore confirm their
acceptance of, and their agreement to be bound by, all the terms and conditions
of this Agreement.

 

	
  ARTICLE 4

  	
  TERM
  OF AGREEMENT

  

 

4.01                                                                           The term of this Agreement shall commence on
the Effective Date and shall terminate on the fifth (5th) anniversary thereof
unless terminated earlier pursuant to the provisions herein contained.

 

4.02                                                                           The term of the Agreement shall be
automatically extended for successive additional periods of two (2) years,
unless either party hereto shall have notified the other in writing at least
one year (1) prior to the expiration of the initial term, or any extended term
of the Agreement, as the case may be, of its intention to terminate the
Agreement.

 

4.03                                                                          Notwithstanding any term or other provision
herein to the contrary, MFCI shall have the right to terminate this Agreement
with respect to any Affected Product(s) (as hereinafter defined), without
payment of any penalty, indemnity, damages or costs whatsoever to Syncor and/or
any Approved Assignee, at any time and without any prior notice, in the event
MFCI ceases manufacturing and/or processing any of the Products by reasons of
any law, statute, ordinance, ruling or judgment of any governmental authority,
or of any court, tribunal, administrative, or regulatory board or agency,
domestic or foreign, (such governmental authority, court, tribunal,
administrative or regulatory board or agency, domestic or foreign, is
hereinafter sometimes referred to collectively as “Competent
Authority”), if, in the reasonable opinion of MFCI, such law,
statute, ordinance, ruling or judgment restricts and/or impairs MFCI’s ability to
manufacture, process, sell, market, distribute, package, label

 

5

 

or otherwise deal in or with any of the Products (any such Product
being herein referred to as an “Affected
Product”);

 

4.04                                                                           In the event that this Agreement is
terminated pursuant to Section 15.01(i), 15.01(ii), 15.01(iv) or 15.02,
Syncor agrees and undertakes that it shall, in the Territory, immediately cease
to sell and/or distribute the Products, whether manufactured by MFCI or any Associate, and this without
prejudice to any other of MFCI’s or such Associate’s rights and/or recourses
whether at law or pursuant to this Agreement.

 

4.05                                                                           Upon the termination of this Agreement by the
efflux of time or for any other reason whatsoever including, without
limitation, any default of MFCI hereunder, Syncor shall, at its sole cost and
expense, immediately surrender, cancel and rescind or cause to be surrendered,
cancelled and rescinded all government registrations and/or authorizations relating
to the Products which Syncor may have obtained pursuant to this Agreement (it
being understood, however, that in the event MFCI terminates this Agreement
pursuant to Section 4.03 hereof, Syncor’s obligations under this Section 4.05
shall extend only to an Affected Product(s). 
In addition, Syncor shall voluntarily file with the appropriate
Competent Authority all documents that may be required in connection with such
surrender, cancellation or rescission, and if requested by MFCI, Syncor shall
cooperate with MFCI in effecting the cancellation of any identification of
Syncor with any governmental records or approvals applicable to the Products.

 

	
  ARTICLE 5

  	
  SALE OF PRODUCT TO SYNCOR

  

 

5.01                                                                           During the term of this Agreement, MFCI shall
sell to Syncor, or otherwise arrange for one or more of its Associates to sell
to Syncor, the Products in such form, shape, size and colour and in such standard
case or carton quantities as is offered by MFCI.  MFCI agrees to deliver to Syncor the Products
packaged in accordance with laws and regulations relating to the shipping and
handling of the Products.

 

5.02                                                                           All orders for the Products shall be subject
to acceptance by MFCI or its supplying Associates, and all sales shall be
subject to the terms and conditions of sale established in this Agreement.
Except as otherwise agreed to in writing by the parties, the terms and
conditions of sale shall be as set forth in Schedule “A” annexed hereto. No provisions on
Syncor’s purchase order forms which may impose different conditions upon MFCI
or any Associates of MFCI shall be of any force or effect unless expressly
agreed to in writing by MFCI or its supplying Associate(s).

 

5.03                                                                           Notwithstanding anything to the contrary
herein otherwise contained, the price charged Syncor by MFCI for the Products
shall be the applicable Product Price set forth in Schedule “B” annexed
hereto.

 

The parties agree that, for the first year of the term of this
Agreement, the applicable Product Price for Products sold by MFCI to Syncor
during such first year shall

 

6

 

remain as set forth in Schedule “B” annexed hereto. However, for
each subsequent year of the term of this Agreement, including any renewal or
extension thereof, the Product Price for each of the Products shall be
increased annually by a percentage equal to ***

 

For greater certainty, the following example will serve to illustrate
the principle set out above:

 

(a)                                  ***

 

***

 

5.04                                                                           Payment by Syncor for the Products purchased
by it pursuant to this Agreement shall be in United States dollars upon the
terms set forth in Schedule “A” hereinabove referred to.

 

5.05                                                                           Notwithstanding anything to the contrary
herein otherwise contained, title to and risk of loss of any Products purchased
by Syncor pursuant to this Agreement shall pass to Syncor ***.

 

5.06                                                                           Subject to Section 11.03 hereof and
provided that, from the date of delivery by MFCI of the Product(s) in question
to the common carrier designated by MFCI for the purpose of shipping same to
Syncor’s Toledo, Ohio warehouse, the Frosstimage® DTPA, No. 4 200
and 4 201 and MDP No. 4 198 and 4 199 have a minimum expiry date of twelve and
ten months, respectively, the sale of Products to Syncor by MFCI shall be
final.

 

® Trademark of
Merck & Co., Inc.,
Merck Frosst Canada Inc.,
licensed user

 

7

 

In the event any Frosstimage® DTPA No. 4 200 and 4 201 or
MDP no. 4 198 and 4 199 are delivered by MFCI to Syncor with shorter expiry
dates than the applicable ones mentioned in the preceding paragraph, MFCI
agrees that, within thirty (30) days of a written request from Syncor following
the expiration of the applicable date, it will replace all unsold units of the
applicable Product at no additional cost to Syncor.

 

5.7                                                                                 Syncor shall ensure that sufficient stocks of
the Products are carried by it to satisfy the demand for each Product in the
Territory.

 

5.8                                                                                 In order to assist MFCI in planning its
production requirements of Products, Syncor shall, submit to MFCI firm purchase
orders for, as well as estimates of, its requirements of Products in accordance
with the following:

 

(i)                                     As soon as practicable following the
execution of this Agreement, Syncor will issue firm purchase orders for its
requirement of Products for *** referred to as an “Applicable
Period”) immediately following the Effective Date and an estimate of
its requirement of Products for each of the *** with a statement of the dates
on which delivery of the Products is required. This initial estimate of
requirements of Products, as well as all other estimates thereafter shall be
updated *** and within a timely manner so as to ensure that estimated requirements
for each Applicable Period are provided in advance during the term of this
Agreement; and

 

(ii)                                  Syncor further agrees that not less than ***
prior to the beginning of the second and each succeeding Applicable Period
thereafter following the Effective Date of this Agreement, firm purchase orders
for its requirement of Products for the Applicable Period shall be furnished to
MFCI.

 

5.09                                                                           The parties agree that *** Notwithstanding
the foregoing, the parties acknowledge and confirm that the provisions of this Section 5.09
shall not apply ***

 

In the event ***

 

	
  ***

  	
   

  	
   

  

 

®
Trademark of
Merck & Co., Inc.,
Merck Frosst Canada Inc.,
licensed user

 

8

 

 

	
  ***

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  ARTICLE 6

  	
  PRODUCT IMPROVEMENTS

  

 

6.01                                                                           Syncor and all Associates shall within a
reasonable time disclose to MFCI, and to no other person, any and all
improvements, methods, patents, formulae and processes discovered, conceived or
developed by it, either alone or jointly, or in common with others, either
during the present Agreement or within a period of two (2) years from its
termination which relate, in any way, to any of the Products. Syncor and all
Associates shall, without any further compensation whatsoever, give MFCI the
right of first refusal to obtain right, title and interest to any and all such
improvements, methods, patents, formulae and processes. In the event MFCI
shall, at its sole discretion, choose to exercise such right, Syncor and all
Associates shall assign, transfer and set over to MFCI its entire right, title
and interest in and to any and all such improvements, methods, patents,
formulae and processes, domestic and foreign and will sign any and all
documents and undertake any and all other steps relating thereto, which MFCI may
consider necessary to vest or protect such title, the whole without any further
compensation whatsoever.

 

	
  ARTICLE 7

  	
  COMPLIANCE WITH
  REQUIREMENTS 

  OF COMPETENT AUTHORITIES

  

 

7.01                                                                           Syncor shall, at its sole cost and expense,
take all necessary steps to comply with the requirements of all Competent
Authority relating to the sale and distribution of the Products in the
Territory.

 

7.02                                                                           In order to enable Syncor to exercise its
rights under the Agreement and to comply with the requirements of all Competent
Authority, MFCI and/or its Associates will, upon receiving a written request
from Syncor, furnish to all Competent Authority all formulae, specifications,
particulars, analyses, reports and literature (referred to collectively as the “Documents”)
in its possession or under its control, that are required by the said Competent
Authority in connection with statutory requirements relating to the sale and
distribution of the

 

9

 

Products
in the Territory. The parties shall take all reasonable steps to maintain the
confidentiality of the Documents.

 

	
  ARTICLE 8

  	
  INTELLECTUAL PROPERTY

  

 

8.01                                                                           Syncor acknowledges the validity of the
Intellectual Property relating to each of the Products and that MFCI and/or its
Associates possess the proprietary rights to, or is(are) the licensee(s) of,
the Intellectual Property relating to each of the Products in Canada, the
Territory and elsewhere in the world and that the said Intellectual Property is
and shall remain the sole property of MFCI, and/or its Associates and/or
its(their) licensor(s), as the case may be. Syncor shall not use the
Intellectual Property in any manner whatsoever calculated to represent that
Syncor is the owner or licensee thereof. This Agreement does not constitute a
grant to Syncor of any property right or interest in all or any part of the
Intellectual Property. Syncor expressly agrees not to contest before any
Competent Authority, the validity of the title of MFCI or its Associates or its
(their) licensors, as the case may be, to the Intellectual Property in any
country, whether or not registered.

 

	
  ARTICLE 9

  	
  COVENANTS OF MFCI

  

 

9.01                                                                           MFCI shall, through the term of this
Agreement carry and keep in force product liability insurance (through self
insurance or a combination of self insurance and commercially placed insurance
coverage) in such form, amount and effect so as to fulfil its obligations
hereunder to Syncor’s reasonable satisfaction.

 

	
  ARTICLE 10

  	
  COVENANTS OF SYNCOR

  

 

10.01                                                                     Syncor shall, through the term of this
Agreement carry and keep in force product liability insurance (through self
insurance or a combination of self insurance and commercially placed insurance
coverage) in such form, amount and effect so as to fulfil their obligations
hereunder to MFCI’s reasonable satisfaction.

 

10.02                                                                     Syncor
shall not do anything in connection with the sale and/or distribution of the
Products which would adversely affect the reputation and goodwill of MFCI and
its Associates or adversely affect the high quality standards and reputation of
any of the Products including, without limitation, the misbranding,
adulteration of the Products and/or non-compliance with any Competent
Authority.

 

10.03                                                                     During the term of this Agreement and
following its termination whether by the efflux of time, cancellation or
otherwise, each party shall report to the other, immediately upon receipt, any
information concerning any side-effect, injury, toxicity or sensitivity
reaction, or any other unexpected incidence and the severity thereof, associated
with any of the Products whether or not determined to be attributable to any
such Product.

 

10

 

Syncor shall furthermore notify MFCI immediately of any information
which it receives regarding any threatened or pending action by any Competent
Authority which may affect the safety or efficacy claims of the Products or the
continued marketing of same. Upon receipt of any such information divulged
pursuant to this Section 10.03, MFCI shall consult with Syncor in an
effort to arrive at a mutually acceptable procedure for taking appropriate
action; provided, however, that nothing contained herein shall be construed as
restricting MFCI’s right to make a timely report of such matter to any
Competent Authority, or to take any further action that MFCI deems appropriate
or required by applicable law or regulation.

 

10.04                                                                     In addition to the obligations set out in Section 12.01
hereof, Syncor shall promptly attend to all inquiries received concerning the
use or administration of the Products and shall furthermore advise MFCI of
same. Syncor also agrees to keep accurate sales records in sufficient detail to
enable a rapid Product Recall (as hereinafter defined) if necessary.

 

	
  ARTICLE 11

  	
  WARRANTY AND INDEMNIFICATION

  

 

11.01                                                                     Each party warrants and represents to the
other that it has the full right and authority to enter into this Agreement,
and that it is not aware of any impediment that would inhibit its ability to
perform its obligations under this Agreement.

 

11.02                                                                     MFCI warrants that the Products to be
supplied to Syncor under this Agreement will, at the time of delivery, conform
to the standards and specifications of MFCI and the Food and Drug
Administration, Division of Medical Imaging as set forth in Schedule “C”
hereto; MFCI makes no other warranty of any kind with respect to the Products, either
express or implied.

 

11.03                                                                     Claims concerning any failure to meet the
standards or specifications of MFCI on account of quality, loss or damage to
any of the Products shall be made by Syncor in writing within twenty-one (21)
days following Syncor’s receipt of the applicable Products. The Products shall
not be returned to MFCI or to its Associates without prior written permission,
it being further understood that in such circumstances, MFCI shall have the
option of advising Syncor to destroy such Product(s) on spot. The liability of
MFCI or any of its Associates for any Products proved not to meet said
standards and specifications shall be limited to a replacement with a new
Product meeting the required standards and specifications. Such replacement
shall constitute MFCI’s sole and exclusive liability for such claims.

 

11.04                                                                     MFCI shall not be responsible for any damages
or losses suffered by Syncor and/or any Approved Assignee or other Associate
arising out of the storage, handling, distribution, sale or use of the Products
by any of them, except for those claims which are occasioned by the wilful or
negligent acts of MFCI, its agents, servants and employees.

 

Notwithstanding the foregoing, MFCI shall indemnify Syncor and hold it
harmless from any and all claims, lawsuits and liability, including liability
for death or personal

 

11

 

injury,
costs, losses, or expenses, including reasonable attorneys’ fees, which stem
from any Products that were damaged or defective at the time of delivery to
Syncor unless such liability is attributable, to the negligent, reckless or
intentional malfeasance of Syncor, any of its Approved Assignees or other Associates,
and/or of any of their respective officers, agents or employees MFCI shall
confer with Syncor prior to settlement of any claims relating to the subject
matter of this Agreement or against MFCI for which MFCI shall provide a defence
and indemnity to Syncor.

 

11.05                                                                     Syncor shall defend and indemnify MFCI and
its Associates and hold each of them harmless against all damages, costs,
claims, expenses, proceedings and demands suffered by each of them hereunder,
including reasonable attorneys’ fees, whether in respect of death, personal
injury or otherwise, which arise out of the storage, handling, distribution,
sale, or the use or administration of the Products by Syncor, any Approved
Assignee and/or any other Associate, or which arise out of damage to property
or injury to or death of persons occasioned by or in connection with any wilful
or negligent acts of Syncor, any Approved Assignee and/or any other Associate,
its officers, agents and employees. Syncor shall confer with MFCI prior to
settlement of any claims relating to the subject matter of this Agreement
against Syncor or for which Syncor shall provide a defence and indemnity to
MFCI.

 

	
  ARTICLE 12

  	
  COMPLAINTS AND PRODUCT RECALLS

  

 

12.01                                                                     All complaints relating, directly or
indirectly, to the sale or actual distribution of Products shall be the
responsibility of Syncor, which undertakes to diligently handle such complaints.
When Syncor becomes aware of such complaints, it shall notify MFCI of said complaints
and MFCI shall render reasonable assistance to Syncor in connection therewith.

 

12.02                                                                     MFCI shall have the right at any time to
recall a Product (a “Product Recall”)
by promptly giving notice to Syncor by telephone (to be immediately confirmed
in writing, telex or telecopier) and Syncor shall upon receipt of such notice,
immediately cease and desist from further distributing the Product(s) in the
Territory and will undertake to dispose of such Product(s) in accordance with
MFCI’s instructions.

 

12.03                                                                     In the event of any Product Recall, MFCI
shall save harmless and indemnify Syncor from and against any and all
liability, damages, costs and expenses (including reasonable attorneys’ fees)
which Syncor may suffer or incur as a result of such Product Recall, except to
the extent that such Product Recall is attributable to a wilful act or omission
by Syncor and/or any of its Associates. Any products recalled shall be disposed
in accordance with MFCI’s instructions.

 

12.04                                                                     In the event of a Product Recall, any minimum
quantity provisions in this Agreement for the recalled Products shall not
apply.

 

12

 

	
  ARTICLE 13

  	
  FORCE MAJEURE

  

 

13.01                                                                     No party shall be liable for failure to
perform or delay in performing any obligations under this Agreement, except the
obligation to make payments when due, if such failure or delay is due to force
majeure, including, but not limited to, war, embargo, riot, insurrection,
sabotage or other civil unrest; fire, explosion, flood or other natural
disaster; accident or breakdown of machinery; availability of fuel, labour,
containers or transportation facilities; strike or other labour disturbances;
government restraints; or any other cause beyond the control of the affected
party; provided, however, that the party so failing to perform shall
(a) as soon as possible, inform the other party of the occurrence of the
circumstances preventing or delaying the performance of its obligations; and
(b) exert its best efforts to eliminate, cure or overcome any of such causes
and to resume performance of its covenants with all possible speed.

 

	
  ARTICLE 14

  	
  CONFIDENTIALITY

  

 

14.01                                                                     All confidential information which is
received by MFCI or Syncor from the other party during the term of this
Agreement shall be maintained in strict confidence by the receiving party. All
confidential information whether generated by MFCI or Syncor shall be disclosed
only to employees and consultants of MFCI and/or Syncor who have been
instructed to treat such information in strict confidence and on a “need to
know” basis. This information shall be protected from disclosure to third
parties with at least the same degree of care used by such employees when
dealing with their employer’s confidential information. Such information shall
furthermore not be disclosed to any other person, firm, or agency, governmental
or private, or used for purposes other than set forth herein, without the prior
written consent of the disclosing party except to the extent that the
information:

 

	
  i)

  	
   

  	
  is
  known at the time of its receipt by the receiving party and is documented in its written
  records, or

  
	
   

  	
   

  	
   

  
	
  ii)

  	
   

  	
  is
  properly in the public domain, or

  
	
   

  	
   

  	
   

  
	
  iii)

  	
   

  	
  is
  subsequently disclosed to the receiving party by a third party who may
  lawfully do so, or

  
	
   

  	
   

  	
   

  
	
  iv)

  	
   

  	
  is
  independently developed by the receiving party, or

  
	
   

  	
   

  	
   

  
	
  v)

  	
   

  	
  is
  required to be disclosed to governmental agencies.

  

 

14.02                                                                     Upon termination of this Agreement and upon
the request of the disclosing party, the receiving party shall return all such
information and copies thereof in its possession, except that the receiving
party may keep one copy of such information in its Law Department confidential
files solely for archival purposes. Such archival copy will be deemed to be the

 

13

 

property
of the disclosing party and will not be copied or distributed in any manner
without the express prior written permission of the disclosing party.

 

	
  ARTICLE 15

  	
  EVENTS OF DEFAULT

  

 

15.01                                                                     In the event:

 

(i)                                     Syncor fails to pay any money due by it hereunder, as and when same becomes due and
payable, and such default is not cured within thirty (30) days of receipt by it
of written notification from MFCI setting forth the details of the default, or

 

(ii)                                  Syncor becomes bankrupt or insolvent or takes
the benefit of any act now or hereafter in force for bankrupt or insolvent
debtors or files a proposal or takes any action or proceeding before any court
or governmental body of competent jurisdiction for dissolution, winding-up or
liquidation or for the liquidation of its assets, or

 

(iii)                               MFCI becomes bankrupt or insolvent or takes
the benefit of any act now or hereafter in force for bankrupt or insolvent
debtors or files a proposal or takes any action or proceeding before any court
or governmental body of competent jurisdiction for dissolution, winding-up or
liquidation or for the liquidation of its assets, or

 

(iv)                              Syncor shall not observe, perform or keep any
of the other covenants, agreements, provisions, stipulations and conditions
herein contained to be kept, observed or performed by it and such default is
not remedied within thirty (30) days (or within such longer period as may be
reasonably necessary in the circumstances to diligently remedy the default) of
receipt by it of written notification from MFCI setting forth the details of
the default in question, or

 

(v)                                 MFCI shall not observe, perform or keep any
of the covenants, agreements, provisions, stipulations and conditions herein
contained to be kept, observed or performed by it and such default is not
remedied within thirty (30) days (or within such longer period as may be
reasonably necessary in the circumstances to diligently remedy the default) of
receipt by it of written notification from Syncor setting forth the details of
the default in question,

 

then
the party not in default hereunder, in addition to any other rights or remedies
it has pursuant to this Agreement or by law, shall have the immediate right to
cancel and terminate this Agreement upon giving to the other party notice of
termination.

 

14

 

15.02                                                                     This Agreement may also be cancelled upon
thirty (30) days prior written notice by one party upon a change of fifty
percent (50%) of the direct or indirect ownership and control of the shares of
the other party (the “Affected Party”).
This provision is only intended to apply to changes involving unrelated third
parties. The Affected Party shall provide prompt written notice of any such
change to the other party.

 

	
  ARTICLE 16

  	
  NOTICE PROVISIONS

  

 

16.01                                                                     Any notices required or permitted to be given
hereunder shall be in writing and shall be effectively given if delivered
personally, sent by prepaid courier service or certified mail, return receipt
requested, or sent by telecopier, telex or other similar means of electronic
communication (confirmed on the same or following day by prepaid mail)
addressed as follows:

 

(a)                                  in the case of MFCI to:

 

Merck Frosst Canada Inc.

16711 Trans-Canada Highway West

Kirkland, Quebec

H9H 3L1

Attention:  Director,
Radiopharmaceutical Division

Telecopier No.: 514-428-2646

 

(b)                                 in the case of Syncor to:

 

Syncor International Corporation

20001 Prairie Street

Chatsworth, California

U.S.A. 91311

Attention:    Mr. Haig Bagerdjian. General Counsel

Telecopier No.: 818-717-4606

 

any
notice so given shall be deemed conclusively to have been given and received
when so personally delivered or sent by telecopier or telex or on the second
day following the sending thereof by private courier and on the sixth day
following the sending thereof by prepaid mail, certified, return receipt
requested. If the day on which any notice is deemed to have been received is
not a business day, then the notice shall be deemed to have been received on
the business day next following such day.

 

Any party hereto may change any particulars of its address for notice
by notice to the other party in the manner aforesaid.

 

15

 

	
  ARTICLE 17

  	
  MISCELLANEOUS

  

 

17.01                                                                     Nothing in this Agreement shall be construed
to create a joint venture, principal-agent or employer-employee relationship, and
nothing herein shall be deemed to authorize either party to act for, represent
or bind the other party.

 

17.02                                                                     Except as expressly permitted
herein, Syncor shall not sell, transfer or assign any of its rights, titles and
interests in and under this Agreement to, or sub-contract or otherwise make any
other arrangement regarding such rights, titles and interests with, any person
including, without limitation, an Associate. MFCI may freely sell, transfer,
assign, sub-contract and/or make any other arrangement regarding its rights,
titles and interests in and under this Agreement.

 

17.03                                                                     The preamble hereto shall form part hereof as
if recited at length herein.

 

17.04                                                                     Neither Syncor nor MFCI shall issue any press
release or make any other public disclosure regarding the existence of this
Agreement or the subject matter thereof without the prior consent of the other
party as to the form, effect and substance of the said release and/or disclosure.

 

17.05                                                                     This Agreement shall be interpreted by and
construed in accordance with the domestic law of the Province of Quebec and the
laws of Canada applicable therein.

 

17.06                                                                     Any disputes which arise between the parties
under this Agreement, and which cannot be resolved by their respective staffs,
shall be referred to the President of MFCI and the Chief Operating Officer of
Syncor, who shall meet and make a good faith effort to resolve the matter. In
the event that the parties fail to resolve such dispute or claim pursuant to
this Section, then such dispute or claim shall be determined by arbitration.
Such arbitration shall be conducted in accordance with the Quebec Code of Civil
Procedure. The costs of arbitration shall be divided equally between the
parties unless determined otherwise by the arbitrators.

 

Notwithstanding anything herein contained to the contrary, it is
understood that the arbitrators shall be precluded from including punitive
damages in any arbitration award.

 

17.07                                                                     No failure of any party hereto to pursue any
remedy resulting from a breach of this Agreement by the other party shall be
construed as a waiver of any breach of any term, obligation or condition herein
contained or of any subsequent breach of the same or any other term, obligation
or condition herein contained.

 

17.08                                                                     The parties hereto agree to execute such
further papers, agreements, documents, instruments and the like as may be
necessary or desirable from time to time in order to effect the purposes of
this Agreement and to carry out its provisions.

 

17.09                                                                     The parties declare that they have required
that this Agreement and any documents relating thereto be drawn up in the
English language.

 

16

 

Les parties aux présentes déclarent qu’elles ont exigé que cette
entente et tous les documents y afférant soient rédigés en langue anglaise.

 

17.10                                                                     The parties acknowledge that each of the
terms hereof was negotiated in good
faith and not imposed by one on the other, understood and, for good and
valuable consideration, agreed to by each of them and that the present
Agreement does not constitute an adhesion contract for either of them but
rather a contract by mutual agreement.

 

17.11                                                                     This Agreement may be executed in any number
of counterparts, each of which when executed and delivered is an original but
all of which taken together constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto by their duly authorized
representatives have executed this Agreement as of the day and at the place
first hereinabove set forth.

 

 

	
  SYNCOR INTERNATIONAL

  CORPORATION

  	
  MERCK FROSST CANADA INC

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Robert G. Funari

  	
   

  	
  /s/ Paul G. Howes

  	
   

  
	
  Name
  

  	
   

  	
  Name
  

  	
   

  
	
    Robert G. Funari

  	
   

  	
    Paul G. Howes

  	
   

  
	
  Signature

  	
   

  	
  Signature

  	
   

  
	
    Executive
  VP and Chief Executive Officer

  	
   

  	
    President, Merck Frosst Canada, Inc.

  	
   

  
	
  Title

  	
   

  	
  Title

  	
   

  
	
    October 25,1995

  	
   

  	
    November 28,1995

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  

 

17

 

SCHEDULE “A”

 

Terms
and conditions of sales of the Products by MFCI to Syncor.

 

•                              ***

 

 

SCHEDULE “B”

 

•                              Product Frosstimage® DTPA+
#900-288

 

•                              Product Frosstimage® MDP+ #900-301

 

	
  Packaged in five (5)-vial kit

  	
  –

  	
  ***

  
	
   

  	
   

  	
   

  
	
  Packaged in thirty (30)-vial kit

  	
  –

  	
  ***

  

 

 

SCHEDULE “C”

 

Product Specifications

 

***

 

 

SCHEDULE “D”

 

Approved Assignees

 

***

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