Document:

exv10w1

 

Exhibit 10.1

EXCLUSIVE DISTRIBUTION AGREEMENT

     EXCLUSIVE DISTRIBUTION AGREEMENT made as of the 21th day of November, 2006, (the “Agreement”)
by and between Uroplasty, Inc., a corporation duly organized and existing under the laws of the
State of Minnesota, USA, with its principal office at 2718 Summer Street NE Minneapolis, MN55413
United States (“Uroplasty”), and SI.EM Sistemi Elettromedicali, a corporation duly organized and
existing under the laws of Italy, with its principal office at F. Soave 11, 20135 Milan, Italy
(“SI.EM”) (each, a “Party” and collectively, the “Parties”).

     WHEREAS, Uroplasty manufactures and markets a family of products used in the urology,
urogynecology, gynecology, and colon and rectal, otolaryngology and plastic surgery markets;

     WHEREAS, SI.EM has developed for manufacture and sale incontinence assessment devices under
the trademarks EASYCONT P/Q and EASYTIP Q-TIP;

     WHEREAS, Uroplasty desires to act as the exclusive distributor of SI.EM’s products set forth
on Exhibit A attached hereto (the “Products”) in the countries indicated in Exhibit
B (the “Initial Territory”) and in any other countries for which Uroplasty exercises it option
or first refusal right pursuant to Section 2 (the “Additional Territories”), with the exception of
the territory of the Republic of Italy, or which the Parties otherwise agree upon and which the
Parties will indicate in Exhibit C, and SI.EM desires and is willing to grant such rights
to Uroplasty, on the terms and conditions contained herein.

     1. EXCLUSIVE DISTRIBUTION

     (a) Grant of Exclusive Distributorship. Subject to the terms and conditions set forth
in this Agreement, SI.EM hereby appoints Uroplasty as its sole and exclusive distributor of the
Products in the Initial Territory and the Additional Territories (if and when applicable), and
grants to Uroplasty the right and privilege to use, market, distribute, promote and sell the
Products in the Initial Territory, or the Additional Territories (if and when applicable), and
Uroplasty hereby accepts such appointment and grant on the terms and conditions stated herein.

     (b) Sub-distribution and sub-license. Subject to the terms and conditions set forth in
this Agreement, Uroplasty has the absolute right in its sole discretion and under its own
responsibility to grant one or more sub-distributorships or sublicenses to third parties for any or
all of the rights granted to it by SI.EM under this Agreement. Uroplasty shall forthwith inform
SI.EM in writing of the granting of said sub-distributorships or sublicenses to third parties by
notifying their relevant data (i.e. name, place, area of distribution, etc.). Uroplasty agrees to
grant no greater rights to the sub-distributorships and/or sublicenses than granted to Uroplasty
hereunder and to require the sub-distributorships and sublicenses to promptly notify Uroplasty of
any event or circumstances which may materially and adversely affect SI.EM’s rights with respect to
the Products consistently with the protection provided for by this Agreement. The Parties
furthermore agree that any of the above sub-distributorships and/or sublicenses shall be considered
terminated at the date of termination of this Agreement for whatever reason or cause.

     (c) No-Competition.

Initials:

1

 

     (i) SI.EM agrees, for the entire term of this Agreement, not to enter into any arrangement or
agreement with any other party other than Uroplasty for the use, marketing, distribution,
promotion or sale of the Products, or any product which competes with the Products, in the Initial
Territory or the Additional Territories (if and when applicable), or cause or assist in any way in
the use, marketing, distribution, promotion or sale of the Products, or any product which competes
with the Products, in the Initial Territory, or the Additional Territories (if and when
applicable),

     (ii) Uroplasty agrees, for the entire term of this Agreement, not to enter into any
arrangement or agreement with any other party other than SI.EM for the use, marketing,
distribution, promotion or sale of any product which competes with the Products, in the Initial
Territory or the Additional Territories (if and when applicable), or cause or assist in any way in
the use, marketing, distribution, promotion or sale of any product which competes with the
Products, in the Initial Territory, or the Additional Territories (if and when applicable),

     (d) Regulatory Approvals. SI.EM at all times guarantees to obtain and maintain the
Regulatory Approvals in the Initial Territory and the Additional Territories (if and when
applicable). Uroplasty agrees to provide to SI.EM any knowledge Uroplasty may posses related to
the Regulatory Approvals but is in no way responsible for obtaining and maintaining such approvals
all of which shall be the sole and exclusive obligation of SI.EM as the manufacturer of the
Products. The term “Regulatory Approvals” means any and all mandatory regulatory approvals required
for the lawful sale, distribution, use and marketing of the Products in any relevant country of
either the Initial Territory or the Additional Territories including but not limited to those
approvals identified so far and listed on Exhibit D and any other clinical testing/trial
requirements, pre-market clearance, labeling and promotional materials approval, marking , product
licenses or other approval.

     (e) Quality System Standards and Product Specific Certifications. SI.EM at all times
guarantees to obtain and maintain all Quality System Standards and Product Specific Certifications
for the manufacture, sale, distribution, use and marketing of the Products in the Initial Territory
and the Additional Territories (if and when applicable). Uroplasty agrees to provide to SI.EM any
knowledge Uroplasty may posses related to the Quality System Standards and Product Certifications
but is in no way responsible for obtaining and maintaining these all of which shall be the sole and
exclusive obligation of SI.EM as the manufacturer of the Products. The term “Quality System
Standards and Product Specific Certifications” mean any and all applicable quality system standards
(i.e., ISO 13485, FDA Quality System Regulations 21 CFR 820, etc.) and product specific
certifications (Underwriter Laboratory, IEC 60601 certifications, etc.) required for the lawful
manufacture, sale, distribution, use and marketing of the Products in any relevant country of
either the Initial Territory or the Additional Territories including but not limited to those
identified so far and listed on Exhibit E.

     (f) Conditions to Uroplasty Obligations. Uroplasty’s obligation to initiate marketing
and distribution of the Products in the Initial Territory shall be contingent on the prior
satisfaction of all of the following conditions, and with respect to any Additional Territories,
upon prior satisfaction of items (ii) and (iii) below):

Initials:

2

 

          (i) Medical Community Endorsement. Professor Linda Cardozo, King’s College London in
the United Kingdom, Professor Heinz Koelbl, Johannes-Gutenberg University Mainz in Germany,
Professor Walter Artibani, Clinica Urologica Padua University in Italy and Dr. Stefano Salvatore,
Clinica Ginecologica Università dell’Insubria, Varese in Italy, have provided by December
31st, 2006 an international endorsement (the “Endorsement” i.e., which means the
surgeons listed above will recommend that the reproducible diagnostic Q-TIP test provided by the
Products will be recognized as an accepted method that documents the degree of hypermobility on
patients with stress urinary incontinence) of the Products satisfactory in scope to Uroplasty
following the conclusion of non-regulatory, pre-market clinical studies of the Products currently
conducted by them (the “Clinical Studies”). Uroplasty shall have the sole discretion to require
that any or all of them, or none of them, provide such Endorsement prior to Uroplasty initiating
marketing and distribution of the Products. SI.EM will be responsible for funding and providing
all of the Products necessary to undertake and conduct the Clinical Studies including any and all
insurance costs. Notwithstanding the foregoing, the Parties will share equally in the costs of the
ethics committees fees necessary to conduct the Clinical Studies by Professors Cardozo, King’s
College London in the United Kingdom and Professor Heinz Koelbel, Johannes-Gutenberg University
Mainz in Germany and SI.EM will bear 100% of the costs of the ethics committee fees necessary to
conduct the Clinical Studies by Dr. Stefano Salvatore, Clinica Ginecologica Università
dell’Insubria, Varese in Italy.

In case the Endorsements is not released to Uroplasty ‘s satisfaction in line with internationally
accepted scientific standards by December 31st, 2006, this Agreement shall terminate,
unless (a) Uroplasty expressly waives in writing this condition precedent within thirty (30) days
of December 31, 2006, or (b) the parties mutually agree to extend such deadline.

          (ii) Regulatory Approvals. All Regulatory Approvals and Quality System Standards and
Product Specific Certifications have been obtained by SI.EM for the sale and marketing of the
Products in the Initial Territory and, subject to the agreement referred to under clause 2 (a)
hereof following the good faith assessment and discussion of the relevant burdens, costs and
expenses of each party entering the Additional Territories including Regulatory Approvals, any
Additional Territories. To fulfill this condition, SI.EM shall submit to Uroplasty documentation
and other evidence of the relevant Regulatory Approvals and the Quality Systems Standards and
Product Specific Certifications for a country of the Initial Territory or any Additional
Territories as Uroplasty may request. Uroplasty shall determine in good faith whether such
submissions are satisfactory for it to begin to market the Products in the respective country of
the Initial Territory or Additional Territories at issue.

          (iii) Insurance. SI.EM has performed its obligations under Section 8(c) of this
Agreement.

     (g) Manufacturer Approved User Materials. SI.EM will create and develop at its expense
manufacturer approved user guides, user manuals, instructional materials, and specification and
technical materials for the use of Products by the intended end users in accordance with applicable
regulatory laws, rules and regulations including in different languages as required to
commercialize the Products in the Initial Territory and any Additional Territories (if and when
applicable). SI.EM will ensure that the labeling for each product will comply with the laws and
regulations for each of the territories where Uroplasty will distribute products as better
specified in clause 1 (d) hereof. The product labeling requirements include but

Initials:

3

 

are not limited to the native language requirements for each country in the European Union and
the Country of Origin requirements of the United States of America.

     (h)  Promotional Materials. Uroplasty will create and develop at its expense
promotional, marketing, and advertising materials for the Products in accordance with applicable
regulatory laws, rules and regulations in different languages as required to commercialize the
Products in the Initial Territory and any Additional Territories (if and when applicable). It is
understood that Uroplasty may use, adapt, translate and distribute any materials and literature
that SI.EM makes available with respect to the Products as Uroplasty deems appropriate in its
discretion upon written approval by SI.EM of such materials, an original copy of which Uroplasty
undertakes to transmit, before distribution, to SI.EM in the English language, as well as in any
other language before its distribution. To the above extent, SI.EM shall provide Uroplasty with a
suitable quantity of user guides, user manuals, instructional materials, and specification and
technical materials for the Products in the appropriate language in compliance with the applicable
laws, rules and regulations of the countries of the Initial Territory where Uroplasty intends to
commercialize the Products and any Additional Territories.

     (i) As the device manufacturer, SI.EM will make all required reports to Health Authorities of
deaths, serious injuries, and malfunctions associated with the Products as required by applicable
laws and regulations (including but not limited to Article 10 of the European Medical Device
Directives 93/42/EEC) in the Initial Territory and any Additional Territories where the Products
are sold by Uroplasty. To the above purpose, Uroplasty will forthwith notify SI.EM of any and all
said events and will also cooperate with SI.EM. in ascertaining the applicable legal requirements.

     (j) Subject to the provisions of this Agreement, in the event SI.EM changes technical
specifications of the Products, SI.EM is solely responsible for obtaining prior regulatory
clearance, with respect to Regulatory Approvals and Quality System Standards and Product Specific
Certifications, for the new specifications in compliance with the laws and regulations of the
Initial Territory and any Additional Territories where Uroplasty will distribute the Products.

     2. DISTRIBUTION IN THE ADDITIONAL TERRITORIES

     (a) Grant of Option. SI.EM hereby grants Uroplasty an option at anytime during the
term of this Agreement, to obtain the authorization and rights to act as the exclusive distributor
of the Products in one or more countries not comprising the Initial Territory (the “Additional
Territories”) (the “Option”). Uroplasty shall exercise such Option from time to time with respect
to one or more countries by providing written notice in accordance with Section 13(b) of this
Agreement (the “Option Notice”). The Option Notice shall contain a forecast by country of
projected sales of Products and proposed Minimum Purchase Quantities for the countries in which the
Option is being exercised for a one year period commencing sixty (60) days from the date of the
Option Notice. Such sales forecasts and quantities shall be consistent with the forecasts and
Minimum Purchase Quantities of comparable countries in which Uroplasty is then distributing
Products taking into account the local market conditions. Upon receipt of the Option Notice, the
parties shall for thirty (30) days in good faith assess and discuss the relevant burdens, costs and
expenses of each party entering the Additional Territories including Regulatory Approvals, Quality
Systems Standards and Product Specific Certifications, patent and trademarks, insurance
requirements and other obligations of the Parties as set forth in this

Initials:

4

 

Agreement, in view of Uroplasty’s forecast of projected sales for such Additional Territories.
Upon written agreement of the applicable Minimum Purchase Quantities for such Additional
Territories, and allocation of relative costs and burdens of the Parties’ various obligations if
different than as set forth herein, Uroplasty shall be the exclusive distributor of the Products in
the additional countries contained in the Option Notice on the same terms and conditions contained
in this Agreement (except as may be specifically modified by the parties written agreement).
Following the initial forecast period in an Option Notice, Minimum Purchase Quantities for
countries comprising the Additional Territories shall be determined in same manner as Minimum
Purchase Quantities for the Initial Territory in accordance with Section 6(b)(i). Notwithstanding
the above, SI.EM maintains and reserves the exclusive right and privilege to use, market,
distribute, promote and sell, directly or indirectly, the Products in the territory of the Republic
of Italy.

     (b) Right of First Refusal. At all times during the term of this Agreement, SI.EM
shall not grant to any third party any type of distribution rights to the Products in any country
without first offering Uroplasty a right of first refusal to distribute the Products in such
country or countries on the same terms and conditions as offered to such third party (the “First
Refusal Right”). Prior to entering into such arrangement, SI.EM shall provide to Uroplasty written
notice of the terms of the proposed arrangement including the identity of the third party, the
country or countries of distribution, a forecast by country of projected sales of Products,
proposed minimum purchase quantities for such countries, SI.EM’s and the proposed parties’ various
obligations of distribution (regulatory approvals, certifications, patents, trademarks etc.), the
financial terms and conditions, and other relevant terms of the arrangement (the “First Refusal
Notice”). Uroplasty shall have thirty (30) days from receipt of the First Refusal Notice to
exercise its First Refusal Right by giving written notice to SI.EM within such thirty day time
period. If Uroplasty exercises its First Refusal Right, Uroplasty shall be the exclusive
distributor of the Products in such additional countries contained in the First Refusal Right on
the same terms and conditions contained in this Agreement (except as may be specifically modified
by the terms of the First Refusal Notice or as agreed by the parties). If Uroplasty does not
exercise its First Refusal Right, SI.EM shall be free to grant such distribution rights within
three (3) months of the date of the First Refusal Notice provided such distribution is on the same
terms and conditions set forth in the original notice to Uroplasty and on terms no more favorable
terms than the terms contained therein.

     (c) Other Terms and Conditions. All of the terms and conditions contained elsewhere
in this Agreement including the Parties’ rights and obligation shall apply to the distribution of
Products in the Additional Territories unless otherwise set forth in a separate writing executed by
both Parties.

     3. UROPLASTY OBLIGATIONS AS EXCLUSIVE DISTRIBUTOR

     (a) Subject to the terms of this Agreement, Uroplasty will use its best reasonable efforts to
promote, market and sell the Products in the Initial Territory and the Additional Territories on
such terms as Uroplasty shall determine in its sole discretion, including appointing sub
distributors in and throughout the Initial Territory and the Additional Territories in accordance
with the terms and provisions of this Agreement it being understood and agreed that Uroplasty shall
have sole control over the manner and means of performing under this

Initials:

5

 

Agreement, provided that the Minimum Purchase Quantities set forth in Section 6(b) are achieved.

     (b) Uroplasty will pay or cause its customers and/or sub-distributors and/or agent to pay any
taxes, fees, duties, licenses, tariffs and levies related to the import of the Products from
SI.EM’s facility in Italy to the country specified in Uroplasty’s purchase order and will determine
as between it and its customers who shall pay any import tax related to the import of the Products
into any other country of the Initial Territory and/or the Additional Territories.

     (c) Uroplasty will supply SI.EM with (i) Uroplasty’s knowledge (to the extent it has
knowledge) also relevant to the necessary accomplishments and formalities to comply with local laws
and regulations concerning Regulatory Approvals and Quality System Standards and Product Specific
Certifications (for which, however, SI.EM. will retain ultimate sole and exclusive responsibility),
adverse event experience in the Initial Territory and any Additional Territories, and (ii)
assistance as SI.EM may reasonably request to investigate and resolve Products complaints and/or
adverse events.

     (d) Uroplasty will perform its other obligations under this Agreement in accordance with this
Agreement’s terms.

     4. SI.EM OBLIGATIONS AS SUPPLIER OF PRODUCTS

     (a) With respect to training, SI.EM will:

          (i) (Training Uroplasty Personnel). Provide Uroplasty at no additional charge, with two
separate two-day training sessions (for a total of four days) in Milan, Italy to train Uroplasty’s
sales and marketing personnel on the Products including product knowledge, use and sales and
marketing training. Such training shall be provided at such time or times as shall be mutually
agreed by the Parties but shall occur no later than ten (10) days prior to Uroplasty commencing to
market the Product in the Initial Territory and/or in the Additional Territories. Uroplasty shall
be responsible for the cost of transportation, lodging and meals for its personnel during these
training seminars.

          (ii) (Training Uroplasty Customers). SI.EM will provide Uroplasty at no additional charge,
with two separate two-day training conferences (for a total of four days) at the offices of
Uroplasty BV. in the Netherlands to train Uroplasty’s customers, surgeons and sub-distributors on
the Products including product knowledge, use, and sales and marketing training. Such training
conferences shall be provided at such time or times as shall be mutually agreed by the Parties.
SI.EM shall be responsible for the cost of transportation, lodging and meals for its personnel who
conduct these training seminars.

          (iii) (Surgeon Workshops). No more than once per fiscal quarter, SI.EM will attend at no
additional charge at the dates, times and places chosen by Uroplasty, a Uroplasty sponsored surgeon
workshop with at least seven surgeons and provide up to eight (8) hours in one day of training at
these workshops. SI.EM shall be responsible for the cost of transportation, lodging and meals for
its personnel who attend and conduct these workshops in the European Union area. The Parties
undertake to share the costs and expenses of SI.EM connected to any surgeon workshops taking place
outside the European Union area.

Initials:

6

 

     (b) SI.EM attended the IUGA conference in Athens in September 6-9, 2006 and participated at
Uroplasty’s exhibit booth. SI.EM at its expense for providing sufficient samples of the Products
and sufficient number of personnel to demonstrate the Products over the course of the conference.
SI.EM sustained the cost of transportation, lodging and meals for its personnel who attended this
conference. Uroplasty sustained the cost for the exhibit booth.

     (c) Subject to the provisions of Sections 1(d), 1(e), 1(j), 2(a), SI.EM will manufacture or
have manufactured for it the Products according to all regulatory laws, rules and regulations of
the Initial Territory and the Additional Territories in which the Products will be distributed and
maintaining the necessary quality system and product certifications .

     (d) Subject to the provision of Section 1(g), SI.EM will prepare packaging and labeling for
the Products (i) using trademarks, images and artwork as agreed between the Parties and (ii) which
meet applicable regulatory laws, rules and regulations of the Initial Territory and the Additional
Territories in which the Products will be distributed. Prior to the use by SI.EM of any packaging
and labeling, the same shall be mutually agreed between the Parties.

     (e) SI.EM will provide Uroplasty and its sub distributors with telephonic sales support and
assistance during normal working Italian hours at no charge.

     (f) SI.EM will use its best efforts to assist Uroplasty in the marketing of the Products by
sharing free of charge all of SI.EM’s current and future marketing materials inherent to the
Products, including but not limited to Products photographs and graphics, trademark logos and
designs, brochures and website designs and information, technical information, instruction manuals,
and other information that will assist Uroplasty with the Products marketing and promotion.

     (g) SI.EM will provide Uroplasty with reasonable quantities of acceptable Products
demonstration samples (disposable samples) for use with personnel, customers, and at trade shows.

     (h) SI.EM will perform its other obligations under this Agreement in accordance with this
Agreement’s terms.

     5. TRADEMARKS AND PATENTS

     (a) SI.EM Trademarks. SI.EM declares that it is not the owner of any registered
trademarks in any country, it being the legitimate owner of the de facto non registered trademark
“SI.EM”. With specific and sole regard to the Products, SI.EM hereby grants, for the duration of
this Agreement, Uroplasty a royalty-free, exclusive right and license to use any trademark, name or
logo which SI.EM now or hereafter uses to identify the Products including “SI.EM” (solely to
identify SI.EM as the manufacturer of the Products if desired) and “EASYCONT P/Q” and “EASYTIP
Q-TIP” (all such trademark shall be referred to herein as the “SI.EM Trademarks”) solely for the
purpose of performing Uroplasty’s duties and obligations under this Agreement. Uroplasty shall
also have the right to represent that it is the authorized exclusive distributor of SI.EM for the
Products in the Initial Territory and the Additional Territories. SI.EM is responsible for
obtaining and maintaining trademark applications and registrations for the SI.EM Trademarks

Initials:

7

 

in the countries of the Territories wherein the Products are to be distributed, further to a
thorough assessment of the relevant burdens and/or costs and expenses, which shall be recognized as
reasonable by both Parties, also in consideration of the provision by Uroplasty of a forecast of
sales for the following year which Uroplasty shall provide SI.EM with.

     (b) Uroplasty Trademarks. Notwithstanding the foregoing, SI.EM hereby grants Uroplasty
the right and option to use, market, promote, sell and distribute the Products in the Initial
Territory and in the Additional Territories as contemplated hereunder bearing a new trademark, name
or logo chosen by Uroplasty in its sole discretion (the “Uroplasty Trademarks”). The Uroplasty
Trademarks shall be owned exclusively by Uroplasty. Uroplasty is responsible at its discretion for
obtaining and maintaining trademark applications and registrations for the Uroplasty Trademarks in
the countries of the Initial Territory and the Additional Territories wherein the Products are to
be distributed. SI.EM shall not use or register, or authorize any third party to use or register in
any territory, the Uroplasty Trademarks. Uroplasty reserves its rights to use and claim ownership
of the Uroplasty Trademarks throughout the world. Vice versa

     (c) Other Trademark Agreements. Both Parties acknowledge and agree that all goodwill
created or otherwise associated with the marketing and use of their own trademarks by them or the
other Party will accrue directly to the benefit of the owner of such trademarks and will be the
sole and exclusive property of that Party. Upon the cessation or termination of this Agreement for
whatever reason, each Party agrees not to use the trademarks of the other Party without the other
Party’s prior written consent.

     (d) Obligations regarding Patents. SI.EM has filed patent applications covering the
Products in the countries set forth on Exhibit F. With respect to additional countries,
the parties shall first assess and discuss the relevant burdens, costs and expenses of prosecuting
such additional patents in view of Uroplasty’s forecast of projected sales for such countries for a
one year period which shall be provided to SI.EM. If the parties determine in good faith that the
projected sales justify the costs and expenses, SIEM will file and prosecute at its own expense
patent applications for the Products in such other countries. SI.EM shall maintain at its expense
any patents that hereafter issue (the “Patents”). SI.EM shall have the option, at its sole
discretion and expense, to file and prosecute other applications in countries not requested by
Uroplasty. SI.EM shall have final authority over all decisions concerning filing and prosecution
of Patent Applications and the maintenance of Patents. However, SI.EM shall keep Uroplasty upon
request informed of its filing, prosecution and maintenance activities and shall give Uroplasty the
opportunity to comment on major decisions concerning such activities.

     6. SALE AND DELIVERY OF PRODUCTS

     (a) Purchase Orders. All Products purchased by Uroplasty hereunder shall be purchased
from SI.EM. All purchase orders for the Products placed by Uroplasty with SI.EM shall be subject to
the provisions of this Agreement, and any provision of any such order that is inconsistent with
this Agreement or that may seek to impose any additional obligations upon any of the Parties shall
be null and void. Each order shall be in the form of a written purchase order and shall be
transmitted to SI.EM by facsimile or such other written method as has been agreed by the Parties.
Each such purchase order shall identify the Products to be purchased, the quantities thereof, the
price and the delivery dates therefore.

Initials:

8

 

(b) Minimum Purchase Quantities.

          (i) Initial Period. Uroplasty agrees and commits to purchase the Products from SI.EM
at least in the minimum aggregate purchase quantities (the “Minimum Purchase Quantities”) and
during the time periods specified in Exhibit G hereto. Uroplasty’s obligation to purchase
the Minimum Purchase Quantities shall begin in the first full month following receipt of the
Endorsement or Uroplasty’s written waiver of the receipt of such Endorsement under Section 1(f)(i).

          (ii) Subsequent Period. Within sixty (60) days prior to the end of every calendar
year commencing with the calendar year ending December 31, 2007, the parties shall agree in writing
upon the Minimum Purchase Quantities for the Initial Territory and any Additional Territories for
the up coming calendar year. The parties shall use good faith and shall take into account the
applicable countries and local market conditions. Any successive written agreement between the
Parties regarding the Minimum Purchase Quantities shall be regarded as an amendment of Exhibit
G.

          (iii) Aggregate Quantities. Minimum Purchase Quantities shall, for the first two
years following the Endorsement or waiver thereof pursuant to Section 1(f)(i), be determined in the
aggregate and not on a country by country basis. Thereafter, SI.EM and Uroplasty shall mutually
agreed upon the Minimum Purchase Quantities in each country in the Initial Territory and Additional
Territories (if applicable). Such Minimum Purchase Quantities shall be established by the parties
in good faith and shall take into account the applicable countries, local market conditions, market
share for the Products and shall be based upon prior sales of the Products by Uroplasty in each
country plus a reasonable assessment of projected growth in each country.

          (iv) Success Rates — First Two Annual Periods. If within the end of the initial
period set forth on Exhibit G and the first successive annual period thereafter, Uroplasty
fails (y) to attain 80% (eighty percent) of the then applicable Minimum Purchase Quantities in
force for such period, then Uroplasty shall lose its exclusivity rights with respect to those
countries for which no sales occurred (provided SIEM has met its obligations under Section 1(f)
hereof with respect to such country); or (z) to attain 60% (sixty percent) of the then applicable
Minimum Purchase Quantities in force for such period, then SI.EM shall have the option within
ninety (90) days from the end of such annual term either to continue this Agreement with Uroplasty
on a non-exclusive basis for the entire Initial Territory and Additional Territories, or to
terminate this Agreement in writing. Failure to timely terminate this Agreement continues this
Agreement on a non-exclusive basis with no Minimum Purchase Quantities requirements until the end
of the then annual period.

          (v) Success Rates — Third Annual Period and Thereafter. If within the end of the
third annual period and for each successive annual period thereafter, Uroplasty fails (a) to attain
80% (eighty percent) of the then applicable Minimum Purchase Quantities in force for such period in
any country, then Uroplasty shall lose its exclusivity rights with respect to such country, and (b)
to attain 60% (sixty percent) of the then applicable Minimum Purchase Quantities in force for such
period, then SI.EM shall have the option within ninety (90) days from the end of such annual term
either to continue this Agreement with Uroplasty on a non-

Initials:

9

 

exclusive basis for the entire Initial Territory and Additional Territories, or to terminate this
Agreement in writing. Failure to timely terminate this Agreement continues this Agreement on a
non-exclusive basis with no Minimum Purchase Quantities requirements until the end of the then
annual period.

          (vi) Additional Territories. Upon the addition of any Additional Territories, the
Parties agree to reconsider and re-determine the then applicable Minimum Purchase Quantities using
good faith to reflect the additional country or countries taking into consideration local market
conditions.

          (vii) Initial Purchase Order. Notwithstanding the foregoing, Uroplasty agrees and
commits to purchase, by submission of a purchase order within thirty (30) days of the execution of
this Agreement, a minimum of two (2) units of the EASY CONT P/Q Product and ten (10) units of the
Disposable Urodynamic Kit Product.

          (viii) Quarterly Reports. On or prior to the beginning of each calendar quarter,
Uroplasty shall provide to SI.EM a quarterly report containing the following: (y) a forecast
estimate of Product purchases for the up-coming quarterly period for the Initial Territory and any
Additional Territories, and (z) the sales results for the quarter then ended indicating the
quantities and types of Products sold, their serial number and the country where they have been
sold as well as the name and address of the purchaser (if known to Uroplasty and which shall be
confidential information of Uroplasty subject to Section 12). Uroplasty’s obligation hereunder
shall begin for the calendar quarter following receipt of the Endorsement.

     (c) Shipment and delivery. All Products ordered by Uroplasty shall be shipped to
Uroplasty BV located in the Netherlands, unless otherwise specifically stated in a purchase order.
Notwithstanding the above, all Products will be delivered ex works at SI.EM’s facility in Italy, at
Via F. Soave, 11 20135 Milano, or at any other facility and/or warehouses communicated by SI.EM.
Uroplasty or its customers or its sub-distributors shall be responsible for any and all costs and
expenses for shipment and insurance. SI.EM shall in principle accept to supply all the Products
ordered, subject to their and their components availability, and provided payment of the Products
is adequately guaranteed according to Section 7 (c). The term of delivery shall not be less than 60
(sixty) days after the receipt of each order by SI.EM. The term of delivery is subject to the
timely self supply of the components of the Product by SI.EM, which shall notify Uroplasty of any
foreseeable delays. In case of any force majeure event, SI.EM may suspend the performance of its
delivery obligations for the entire duration of such event and shall notify Uroplasty accordingly.
Partial deliveries are permitted as far as reasonable for Uroplasty. Whenever a single order
exceeds the quantity of 50 Products, Uroplasty shall notify said orders at least 90 (ninety) days
in advance, in order to permit SI.EM to adequately self-supply.

     (d) Defective Products. Within fourteen (14) days following actual receipt of a
shipment of the Products, Uroplasty (or its designated agent) shall inspect the Products and shall
notify SI.EM of any defects of the Products. In the event of such notification, SI.EM shall make
appropriate arrangements consistent with the international practice in the specific market to
promptly replace any such defective Products at SI.EM’s sole cost and expense or, failing such
prompt replacement at Uroplasty’s election, SI.EM shall credit to Uroplasty’s account the purchase
price and any taxes, fees, duties, licenses, tariffs and levies paid by Uroplasty on the defective
Products.

Initials:

10

 

     (e) Orders Received by SI.EM.

          (i) If SI.EM receives any order or inquiry concerning the sales of the Products in any country
not comprising the Initial Territory or any Additional Territories, with the sole exception of the
Republic of Italy, SI.EM shall promptly notify Uroplasty of such inquiry or order together with the
name and address of the person making the order or inquiry as well as any other relevant details
regarding such order or inquiry that Uroplasty shall reasonably request. Upon receipt of such
notification, Uroplasty shall have the first right for a period of fifteen (15) days to notify
SI.EM in writing that Uroplasty elects to include the country wherefrom the order originates as
part of the Additional Territories, by notifying SI.EM of its intention and by providing at the
same time a forecast of sales quantities and Minimum Purchase Quantities acceptable to SI.EM for
the same year in that country. If SI.EM does not receive Uroplasty’s written election within such
fifteen (15) days, SI.EM shall have the right to fulfill such order on its sole term and at its
sole risk and liability and Uroplasty shall have no liability, obligation or risk with respect to
such order or Products all of which shall fall outside of the terms of this Agreement.

          (ii) If SI.EM receives any order or inquiry concerning the sales of the Products in any
country which comprises the Initial Territory or the Additional Territories, SI.EM agrees to
promptly notify Uroplasty of such inquiry or order together with the name and address of the person
making the order or inquiry as well as any other relevant details regarding such order or inquiry
that Uroplasty shall reasonably request. Uroplasty shall be responsible for fulfilling such order.

     7. PRICES AND TERMS OF PAYMENT

     (a) Products Prices. The prices to be paid by Uroplasty to SI.EM for the Products
purchased hereunder initially shall be as set forth on Exhibit H and do not include
applicable taxes. SI.EM may change at its own discretion and from time to time the Products Prices
and increases shall be effective upon ninety (90) days written notice to Uroplasty and decreases
will be effective immediately upon written notice to Uroplasty. Notwithstanding the foregoing,
SI.EM may not increase Products Prices by more than five (5%) in any twelve month period, unless
exceptional circumstances occur which can be documented and which justify a price increase. It is
anticipated that Uroplasty will work with SI.EM in an effort to reduce the cost of producing the
Products. SI.EM agrees to pass through to Uroplasty, or provide Uroplasty with an immediate
credit against purchases of Products, any manufacturing or distribution cost savings achieved from
these efforts. or otherwise achieved by SI.EM.

     (b) Uroplasty shall pay or have paid by its customers all taxes, fees, duties, licenses,
tariffs and levies imposed upon the sale of the Products (other than SI.EM’s income taxes).

Initials:

11

 

     (c) Uroplasty shall pay for each delivery of Products (which are conforming) within sixty (60)
days after delivery of the Products. In any event the above credit-purchase shall not exceed a
maximum balance of Euro 150.000,00, unless the payment is immediately performed in cash or is
guaranteed by a first demand bank guarantee.

     8. PRODUCT WARRANTY AND REPAIR SERVICES

     (a) Product Warranty. SI.EM represents and warrants to Uroplasty and Uroplasty’s
customers that the Products supplied hereunder shall be (a) delivered with good title thereto and
free from any security interest or any other lien, claim or encumbrance, and (b) warranted in
accordance with the warranty terms set forth on Exhibit I attached hereto (the “Product
Warranty”). The Products shall be packaged by SI.EM with a copy of the Product Warranty enclosed.

     (b) Repair Services. All repair and replacement services with respect to the Products
supplied hereunder shall be performed by SI.EM on the terms contained herein. The Parties convene
to, in consideration of the expected increase of sales in the Initial Territory and the Additional
Territories, with particular regard to the North American market, to evaluate the possibility of
assigning the repair and replacement services to independent customer services centers jointly
chosen by the Parties.

          (i) Warranty Services. SI.EM shall during the warranty period set forth in the
Product Warranty, at its option, and without charge for parts or labor to Uroplasty or Uroplasty’s
customer, either repair, replace or exchange any non-conforming Product or part thereof so that it
conforms to the Product Warranty. To obtain warranty service, customers shall be required to ship
the non-conforming Product at their cost (including reshipment costs) to SI.EM at its address set
forth in the Product Warranty. SI.EM agrees that it shall within the minimum technically needed
term from the receipt of a non-conforming Product, perform its warranty obligations and return the
serviced Product to customers at the customers’ cost.

          (ii) Post-Warranty Service. SI.EM shall following the warranty period set forth in
the Product Warranty, provide post-warranty repair, replacement and exchange services with respect
to the Products. SI.EM shall have the right to charge customers for any parts and/or labor provided
and/or shipment costs.

          (iii) Service Warranty. SI.EM warrants to Uroplasty and shall warrant directly to each
customer that any repair and replacement services provided by it with respect to the Products shall
be performed in a professional manner and consistent with generally accepted industry standards.

          (iv) Uroplasty’s Role. All inquiries received by Uroplasty for warranty and
post-warranty services with respect to the Products shall be promptly referred to SI.EM and handled
by SI.EM in accordance with this Section 8.

     (c) Product Liability. SI.EM shall at its own expense maintain satisfactory insurance
against third party claims in the minimum amount of $2 million dollars of primary and umbrella
coverage from an insurance company reasonably satisfactory to Uroplasty covering all Products sold
by SI.EM to Uroplasty. Such insurance policy shall name Uroplasty, its affiliates and

Initials:

12

 

subsidiaries including Uroplasty BV., and the respective officers, directors, employees and agents
of each of the foregoing as additional insured’s and shall evidence the insurer’s agreement that
such insurance shall not be amended, canceled, terminated or permitted to lapse without thirty (30)
days prior written notice to Uroplasty. SI.EM shall cause such policies to be in effect within
fifteen (15) following receipt of the Endorsement or Uroplasty’s written waiver of the receipt of
such Endorsement under Section 1(f)(i), and will furnish Uroplasty with a certificate of insurance,
in each case, prior to the commencement of any sale, distribution of the Products in the Initial
Territory and the Additional Territories. SI.EM shall also furnish Uroplasty with a certificate of
insurance upon each anniversary of the date of this Agreement evidencing that such policy has not
been altered with respect to Uroplasty, its affiliates and subsidiaries in any way not permitted to
lapse for any reason and evidencing the payment of premium of each such policy.

     9. SI.EM’S REPRESENTATIONS AND WARRANTIES

     (a) SI.EM represents and warrants to Uroplasty that (i) it is the full and exclusive owner of
all right, title and interest in and to the Products, (ii) it has the sole and exclusive right to
grant the rights under this Agreement to Uroplasty, (iii) none of the Products sold by Uroplasty
hereunder, the Patent Applications, the Patents or the SI.EM Trademarks will infringe any patent,
copyright, trade secret or other proprietary right of any third party, and (iv) the making of this
Agreement does not violate any agreement, right, or other obligation existing between SI.EM and any
other person, firm, corporation or entity.

     10. TERM AND TERMINATION

     (a) The initial term of this Agreement shall be five years from the date of execution of this
Agreement. Uroplasty may renew this Agreement for successive five-year terms upon written notice
to SI.EM given not later than six months prior to the end of the initial or any successive term.
Despite the foregoing, this Agreement may terminate early as follows:

	 	(i)	 	by mutual written agreement of the Parties;
	 
	 	(ii)	 	by either Party upon written notice to the other of a material
breach of this Agreement, but only if the other Party does not cure the breach
within sixty (60) days after receipt of such written notice; or
	 
	 	(iii)	 	by SI.EM in the event of failure of the Minimum Purchase
Quantities, as set forth in Sections 6(b)(iv) and (v) but only if SI.EM timely
asserts termination in accordance therewith), otherwise termination may be made
only under (i) or (ii) above.

     (b) Upon any termination of this Agreement, the terminating party shall be entitled to decide
at its discretion, within thirty (30) days after the date of termination, whether SI.EM shall buy
back at book value all the Products in Uroplasty remaining inventory or Uroplasty shall be
permitted to dispose of them in the normal course of business. All other remedies apply.

Initials:

13

 

     11. INDEMNITY

     (a) By SI.EM. SI.EM shall indemnify, protect, defend, and hold Uroplasty, its
parents, subsidiaries, affiliates, sub-distributors, sub-licensees, the respective officers,
directors, shareholders, agents, and employees of all of the foregoing, and any purchaser of the
Products from any of the foregoing, harmless from and against any and all costs, claims, suits,
losses, damages, liabilities, and expenses (including reasonable attorney’s fees) arising out of or
resulting from:

          (i) any death or injury to person or property as a result of the proper use of the Products;

          (ii) product, design and manufacturing defects in the Products whenever occurring or occurred;

          (iii) the breach by SI.EM of any representation, warranty, covenant or obligation contained in
this Agreement;

          (iv) the distribution, use or exploitation of the SI.EM Trademarks, the inventions,
processes, methodologies or inventions claimed in any of the Patent Applications or Patents, or
other intellectual property of SI.EM as permitted under this Agreement; and

          (v) the marketing, manufacture, distribution or use of the Products, and the activities of
SI.EM related thereto, prior to the date of this Agreement or outside the Initial Territory and the
Additional Territories after the date of this Agreement.

     (b) By Uroplasty. Uroplasty shall indemnify, protect, defend, and hold SI.EM, its
parents, subsidiaries, and affiliates, and the respective officers, directors, shareholders,
agents, and employees of all of the foregoing, harmless from and against any and all costs, claims,
suits, losses, damages, liabilities, and expenses (including reasonable attorney’s fees) arising
out of or resulting from:

          (i) the advertising, marketing and distribution and sale of the Products by Uroplasty,
subject to the provisions of Sections 1(g), 1(h) and 1(j);

          (ii) the breach by Uroplasty of any representation, warranty, covenant or obligation contained
in this Agreement; or

          (iii) the use of the Uroplasty Trademarks as permitted under this Agreement.

     (c) Right to Control Defense. The indemnifying Party shall have the option to settle
or to undertake and conduct the defense of any such claim or suit against an indemnified Party.
The indemnified Party through counsel of their choice and at their own expense may participate in
any such claim or suit but in such event the indemnifying Party shall have sole and exclusive
control over such defense and the indemnified Party’s decisions shall govern and control. The
indemnified Party expressly covenants that no compromise or settlement or any suit or claim or

Initials:

14

 

any preliminary negotiations with respect to any compromise or settlement shall be made or entered
into without the prior written approval of the indemnifying Party.

     12. CONFIDENTIALITY

     (a) Each Party agrees to keep confidential all proprietary and confidential information
(written and oral) concerning the other’s business, financial, operational and acquisition plans
and projections including the terms of this Agreement. Each agrees to use this information only to
further this Agreement. Neither Party will disclose any of this information to any person, firm or
entity, except on a need-to-know basis to its respective employees, agents, attorneys and advisors
who agree to maintain the confidentiality of this information.

     (b) SI.EM agrees that neither it nor its officers, directors, employees or agents, or any of
their affiliates, will, directly or indirectly, purchase or sell (whether in a short sale
transaction or otherwise) any of Uroplasty’s Common Stock (or options, warrants or other rights to
purchase or acquire Uroplasty Common Stock) from this date until the day following the date
Uroplasty issues a press release, which will be previously agreed upon between the Parties,
announcing the terms and conditions of this Agreement. In no event will SI.EM or any of its
officers, directors, employees or agents, or any of their affiliates, purchase or sell any of
Uroplasty’s securities while in possession of material, non-public information related to
Uroplasty.

     (c) A Party is not responsible to keep confidential any information that (i) is or becomes
public other than as a result of acts by or through such Party, (ii) it can demonstrate is already
known by such Party at the time of the other’s disclosure, (iii) it independently obtains from a
third Party having no duty of confidentiality to the other, (iv) it independently develops without
using confidential information from the other or (v) it must disclose pursuant to applicable laws
or court order. SI.EM acknowledges that Uroplasty will disclose regulatory and other data of SI.EM
to the FDA and other applicable regulatory authorities in the Initial Territory and the Additional
Territories in connection with any regulatory filings made therein and that Uroplasty may file a
copy of this Agreement with the U.S. Securities and Exchange Commission as part of Uroplasty’s
periodic filings.

     13. GOVERNING LAW AND NOTICE PROVISIONS

     (a) Governing Law and Jurisdiction; Arbitration.

     (i) Governing Law. This Agreement (and any dispute, controversy, proceedings or
claim of whatever nature arising out of or in any way relating to this Agreement or its
formation) is construed in accordance with and shall be governed by the laws of Italy.

     (ii) Arbitration. Any dispute arising out of or relating to this Agreement,
any claim or controversy concerning a breach of this Agreement or the making of this
Agreement, shall be finally and conclusively resolved by arbitration. Judgment upon any
arbitration award may be entered in and enforced by any court having jurisdiction. The
arbitration proceedings shall be conducted in accordance with the provisions contained
herein and the rules of the Italian Arbitration Code (or the equivalent thereof) (to the
extent such rules are not inconsistent with this Agreement). All arbitration proceedings

Initials:

15

 

shall be conducted in Milan. There shall be three arbitrators. Each Party shall select one
arbitrator and the two arbitrators shall select a third arbitrator. The award of the
arbitrators shall be final. The arbitrator shall issue a written statement of the award or
decision and shall be required to issue a detailed opinion or explain the basis for such
award or decision unless waived by the Parties in writing. The arbitrator shall have the
authority to award any remedy or relief that could be granted by a court of competent
jurisdiction, including, without limitation, injunctions and other equitable remedies such
as rescission and specific performance, and may impose sanctions for abuse of the
arbitration process. The arbitrators shall determine who shall bear the cost of the
arbitration and are specifically empowered with the authority to award costs including
reasonable attorneys’ fees to the prevailing Party.

(iii) Equitable Relief May be Brought in Court of Law. Notwithstanding anything
contained in this Section 13(a) to the contrary, either Party may seek injunctive or other
equitable relief in a court of law.

     (b) Notices. All notices and other communications required under this Agreement,
including any change of address or addressee and any materials requiring approval) shall be in
writing and shall be sent to the Parties at the address specified below. Such notices and other
communications may be sent by facsimile or by international overnight courier. Notices and
communications sent by facsimile shall be deemed received on the date that is set forth on the
confirmation of receipt obtained by the sender. Notices or other communications sent by
international overnight courier shall be deemed conclusively to have been given five (5) days after
mailing.

     If to Uroplasty:

Uroplasty, Inc.

5420 Feltl Road

Minnetonka, Minnesota, USA 55343

Attn: Chief Financial Officer

Facsimile No.: (952) 426-6199

     With a copy to:

Messerli & Kramer P.A.

150 S Fifth Street, Suite 1800

Minneapolis, Minnesota 55402

Attn: Jeffrey Robbins

Facsimile No.: (612) 672-3777

     If to SI.EM:

F. Soave 11

20135 Milan, Italy

Attn: Vanni Ogliani, Augusto Curatolo

Facsimile No.: + 39 0258304668

Initials:

16

 

     With a copy to:

Studio Legale Rinaldi e Associati

Via Conservatorio, 15- 20122 Milano

Attn: Avv. Piercarlo Fresta

Facsimile No.: +39 02 76006944

     14. MISCELLANEOUS

     (a) Assignment. This Agreement is binding upon, and will inure to the benefit of, the
Parties hereof and their respective permitted successors and assigns. Uroplasty may assign this
Agreement to any person, firm or entity that acquires all or substantially all of Uroplasty’s
assets or acquires Uroplasty by stock acquisition or merger.

     (b) No Amendment or Waiver. No provision of this Agreement will be deemed waived,
amended or modified unless made in writing and signed by both Parties. No waiver of rights shall
constitute a subsequent waiver of any rights whatsoever.

     (c) Entire Agreement. This Agreement contains the entire understanding of the Parties
with respect to the subject matter hereof and shall supersede all proposals and prior agreements
and understandings, oral or written, and any other communications between the Parties regarding
this subject matter.

     (d) Severability. If any provision of this Agreement is determined by a court of
competent jurisdiction or arbitration tribunal to be in violation of any applicable law or
otherwise unenforceable or invalid, such provision will be deemed null and void to such extent as
it will be determined to be illegal, unenforceable or invalid under such law, but this Agreement
will otherwise remain in full force and effect.

     (e) Relationship of Parties. Uroplasty and SI.EM are not partners, venturers,
representatives, agents or employees of each other. Neither Party has the authority to act for,
represent or bind the other Party in any manner. Neither Party shall be responsible for the debts
or liabilities of the other Party unless agreed to in a separate written instrument and no Party
shall succeed to the debts or liabilities of the other solely by virtue of this Agreement

[signature page follows intentionally]

 Initials:

17

 

IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures.

	 	 	 	 	 	 	 	 	 	 	 
	UROPLASTY, INC.

	 	 	 	SI.EM SISTEMI ELETTROMEDICALI	 	 

	 	 	 	 	 	 	 	 	 	 	 
	By

	 	 	 	 	 	By	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Its

	 	 	 	 	 	Its	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

Initials:

18EX-4.1

 

Exhibit 4.1

[FORM OF REGISTERED 6.500 % SENIOR SECURED NOTES DUE 2007, 7.875 % SENIOR SECURED NOTES DUE 2009,
6.500 % SENIOR SECURED NOTES DUE 2010, 7.250 % SENIOR SECURED NOTES DUE 2012 AND 7.300 % SENIOR
SECURED NOTES DUE 2015]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENTS ARE MADE TO
CEDE & CO. OR TO SUCH ANY OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

REYNOLDS AMERICAN INC.

[6.500 % Senior Secured Notes due 2007]

[7.875 % Senior Secured Notes due 2009]

[6.500 % Senior Secured Notes due 2010]

[7.250 % Senior Secured Notes due 2012]

[7.300 % Senior Secured Notes due 2015]

	 	 	 
	Certificate No. _________

	 	$____________
	 

	 	CUSIP No. _____________________

     Reynolds American Inc., a North Carolina corporation (the “Company,” which term includes any
successor corporation under the Indenture hereinafter referred to), for value received, promises to
pay to Cede & Co., or its registered assigns, the principal sum
of ______________________________
($____________) on [2007 Notes: June 1, 2007][2009 Notes: May 15, 2009][2010 Notes: July 15,
2010][2012 Notes: June 1, 2012][2015 Notes: July 15, 2015].

	 	 	 
	Interest Payment Dates:

	 	[2007 and 2012 Notes: June 1 and December 1]

[2009 Notes: May 15 and November 15]

[2010 and 2015 Notes: January 15 and July 15]

, commencing                     .
	 
	 	 
	Record Dates:

	 	[2007 and 2012 Notes: May 15 and November 15]

[2009 Notes: May 1 and November 1]

[2010 and 2015 Notes: January 1 and July 1].

 

 

     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall have the same effect for all purposes as if set forth at
this place.

     Unless the certificate of authentication hereof has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

2

 

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal.

	 	 	 	 	 
	Dated:                , 200_
	 	 	 	 
	 
	 	 	 	 
	 

	 	REYNOLDS AMERICAN INC.,

as Issuer
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 

     Each of the undersigned hereby acknowledges its obligation as a Guarantor under the
Indenture.

	 	 	 	 	 
	SANTA FE NATURAL TOBACCO COMPANY, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	LANE, LIMITED, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 

[2007][2009][2010][2012][2015] Note Signature Page

 

 

	 	 	 	 	 
	R.J. REYNOLDS TOBACCO HOLDINGS, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	R. J. REYNOLDS GLOBAL PRODUCTS, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	RJR PACKAGING, LLC, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	R. J. REYNOLDS TOBACCO COMPANY, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	RJR ACQUISITION CORP., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 

[2007][2009][2010][2012][2015] Note Signature Page

 

 

	 	 	 	 	 
	R. J. REYNOLDS TOBACCO CO., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	FHS, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	GMB, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	CONWOOD HOLDINGS, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	CONWOOD COMPANY, LLC, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 

[2007][2009][2010][2012][2015] Note Signature Page

 

 

	 	 	 	 	 
	CONWOOD SALES CO., LLC, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	ROSSWIL LLC, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	SCOTT TOBACCO LLC, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 

[2007][2009][2010][2012][2015] Note Signature Page

 

 

(Trustee’s Certificate of Authentication)

     This is one of the Notes of the series designated herein referred to in the within-mentioned
Indenture.

	 	 	 	 	 
	Dated:                , 200_
	 
	 	 	 	 
	THE BANK OF NEW YORK TRUST COMPANY, N.A.,

as Trustee
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 	 	Name:

Title:

[2007][2009][2010][2012][2015] Note Signature Page

 

 

[REVERSE OF EXCHANGE NOTE]

[6.500% Senior Secured Notes due 2007]

[7.875% Senior Secured Notes due 2009]

[6.500% Senior Secured Notes due 2010]

[7.250% Senior Secured Notes due 2012]

[7.300% Senior Secured Notes due 2015]

     References herein
to the “Notes” mean the [6.500% Senior Secured Notes due 2007][7.875%
Senior Secured Notes due 2009][6.500% Senior Secured Notes due 2010][7.250% Senior Secured Notes
due 2012][7.300% Senior Secured Notes due 2015]. Other capitalized terms used herein shall have
the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

     1. Interest. Reynolds
American Inc., a North Carolina corporation (the “Company”),
promises to pay interest on the principal amount of this Note at [6.500%][7.875%][7.250%][7.300%]
per annum from the date provided below until maturity and shall pay the additional interest, if
any, payable pursuant to the Registration Rights Agreement, dated as of June 20, 2006, between the
Company and each of the parties named on the signature pages thereof (“Additional Interest”). The
Company shall pay interest and Additional Interest, if any, semi-annually on [2007 and 2012 Notes:
June 1 and December 1][2009 Notes: May 15 and November 15][2010 and 2015 Notes: January 15 and July
15] of each year, or if any such day is not a Business Day, on the next succeeding Business Day
(each an “Interest Payment Date”). The first Interest Payment Date shall be
          , 200_.
This Note has been issued in exchange for
$         in aggregate principal amount of the
[6.500% Senior Secured Notes due 2007][7.875% Senior Secured Notes due 2009][6.500% Senior
Secured Notes due 2010][7.250% Senior Secured Notes due 2012][7.300% Senior Secured Notes due
2015] issued by the Company which have not been registered under the Securities Act of 1933, as
amended (the “Initial RAI Notes”), and $        in aggregate principal amount of the [6.500% Notes
due 2007][7.875% Notes due 2009][6.500% Secured Notes due 2010][7.250% Notes due 2012][7.300%
Secured Notes due 2015] issued by R.J. Reynolds Tobacco Holdings, Inc., a Delaware corporation (the
“RJR Notes,” and collectively with the Initial RAI Notes, the “Initial Notes”). Interest on the
Notes shall accrue from: the most recent date on which interest has been paid on the Initial Notes;
or, if no interest has been paid on the Initial Notes, from the most recent date on which interest
has been paid on the RJR Notes; or, if no interest has been paid on the RJR Notes, from the date of
issuance of the RJR Notes; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding
Interest Payment Date. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.

     2. Method of Payment. The Company shall pay interest on the Notes (except defaulted
interest) and Additional Interest, if any, to the Persons who are registered Holders of Notes at
the close of business on the [2007 and 2012 Notes: May 15 and November 15][2009 Notes: May 1 and
November 1][2010 and 2015 Notes: January 1 and July 1] immediately preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.13 of the Indenture with respect to defaulted interest. The
Notes shall be payable as to principal, premium and

1

 

Additional Interest, if any, and interest at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the option of the
Company, payment of interest and Additional Interest may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment by wire transfer of
immediately available funds shall be required with respect to principal of and interest, premium
and Additional Interest on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in
such coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts.

     3. Paying Agent and Registrar. Initially, The Bank of New York Trust Company, N.A.,
the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.

     4. Indenture. The Company issued the Notes under an Indenture dated as of May 31,
2006, as supplemented, among the Company, as issuer, certain direct and indirect subsidiaries of
the Company, as guarantors, and The Bank of New York Trust Company, N.A., as trustee (the
“Indenture”). The terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended. The Notes are subject
to all such terms, and Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be controlling.

     5. Optional Redemption. The Company may redeem all or a part of the Notes from time
to time in accordance with Article 5 of the Indenture at a redemption price equal to the greater of
(a) 100% of the principal amount of the Notes and (b) the sum of the present values of the
remaining scheduled payments of principal and interest on the Notes, discounted to the redemption
date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the
applicable Treasury Rate plus [2007 Notes: 25][2009 Notes: 37.5][2010 and 2015 Notes: 50][2012
Notes: 30] basis points plus with respect to each of the Notes, accrued and unpaid interest,
including Additional Interest, if any, on the principal amount being redeemed to the date of
redemption.

     “Treasury
Rate” means, with respect to any redemption date, (1) the yield, under the heading
which represents the average for the immediate preceding week, appearing in the most recently
published statistical release designated “H.15(519)” or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption
“Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue
(if no maturity is within three months before or after the Remaining Life, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue will be determined
and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line
basis, rounding to the nearest month) or (2) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Price for such

2

 

redemption date. The Treasury Rate will be calculated on the third business day preceding the
redemption date.

     “Comparable
Treasury Issue” means the U.S. Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining
term (“Remaining Life”) of the
notes to be redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such notes.

     “Independent
Investment Banker” means any of Lehman Brothers Securities Inc., J.P. Morgan
Securities Inc. or Citigroup Global Markets Inc. or, if all such firms are unwilling or unable to
select the Comparable Treasury Issue, an independent investment banking institution of national
standing appointed by the trustee after consultation with the Company.

     “Comparable
Treasury Price” means (1) the average of five Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such quotations.

     “Reference
Treasury Dealer” means (1) Lehman Brothers Securities Inc., J.P. Morgan
Securities Inc. and Citigroup Global Markets Inc. and their respective successors; provided,
however, that if either of the foregoing shall cease to be a primary U.S. Government securities
dealer in New York City (a “Primary Treasury Dealer”), the Company will substitute for such firm
another Primary Treasury Dealer and (2) any other Primary Treasury Dealer selected by the
Independent Investment Banker after consultation with the Company.

     “Reference
Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Independent Investment Banker, of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.

     6. No Sinking Fund. The Company shall not be required to make sinking fund payments
with respect to the Notes.

     7. Notice of Redemption. Notice of redemption shall be mailed at least 30 days but
not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at
its registered address. Notes in denominations equal to or larger than $2,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.

     8. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons in minimum denominations of $2,000 and integral multiples of $1,000. The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate

3

 

endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for the unredeemed
portion of any Note being redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during
the period between a record date and the corresponding Interest Payment Date.

     9. Persons Deemed Owners. The registered Holder of a Note may be treated as its
owner for all purposes.

     10. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture
or the Notes may be amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Securities at the time outstanding of all series affected by
such amendment or supplement, voting as a single class, and any existing Default or compliance with
any provision of the Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time outstanding of all series
affected by such Default, voting as a single class. Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes any property or assets; to evidence the succession
of another corporation to the Company, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of the Company; to add to the
covenants of the Company such further covenants, restrictions, conditions or provisions as its
Board of Directors and the Trustee shall consider to be for the protection or benefit of the
Holders of the Notes, and to make the occurrence, or the occurrence and continuance, of a Default
in any such additional covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies provided in the Indenture as
therein set forth; provided, that in respect of any such additional covenant, restriction,
condition or provision such amendment or supplement may provide for a particular period of grace
after Default (which period may be shorter or longer than that allowed in the case of other
Defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit
the remedies available to the Trustee upon such an Event of Default or may limit the right of the
Holders of a majority in aggregate principal amount of the Notes to waive such an Event of Default;
to cure any ambiguity or to correct or supplement any provision contained in the Indenture or in
any indenture supplemental thereto which may be defective or inconsistent with any other provision
contained in the Indenture or in any indenture supplemental thereto; or to make such other
provisions in regard to matters or questions arising under the Indenture or under any indenture
supplemental thereto as the Board of Directors may deem necessary or desirable and which shall not
adversely affect the interests of the Holders of the Notes in any material respect; to evidence and
provide for the acceptance of appointment under the Indenture by a successor trustee with respect
to the Notes and to add to or change any of the provisions of the Indenture as shall be necessary
to provide for or facilitate the administration of the trusts thereunder by more than one trustee;
to comply with the requirements of the Trust Indenture Act of 1939, as amended; and to add
additional Guarantors with respect to the Notes.

     11. Defaults and Remedies. Any of the following events constitutes an “Event of
Default” under the Indenture: (a) default in the payment of any installment of interest upon

4

 

Securities of any series as and when the same shall become due and payable, and continuance of such
default for a period of 30 days; or (b) default in the payment of all or any part of the principal
on Securities of any series as and when the same shall become due and payable either at maturity,
upon any redemption, by declaration or otherwise; or (c) default in the payment of any sinking fund
installment as and when the same shall become due and payable by the terms of Securities of any
series; or (d) default in the performance, or breach, of any covenant or agreement of the Company
or the Guarantors in respect of Securities of any series (other than a covenant or agreement in
respect of such Securities a default in whose performance or whose breach is elsewhere in this
Section specifically dealt with), and continuance of such default or breach for a period of 90 days
after there has been given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the outstanding Securities of all series affected
thereby, a written notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a “Notice of Default” hereunder; or (e) a court having jurisdiction in
the premises shall enter a decree or order for relief in respect of the Company or the Guarantors
in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Company or for any substantial part of its property or
ordering the winding up or liquidation of its affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (f) the Company or any Restricted
Subsidiary shall commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the
Company or for any substantial part of its property, or make any general assignment for the benefit
of creditors; or (g) any Guarantee ceases to be in full force and effect (except as contemplated by
the terms of the Indenture), or any Guarantee is declared in a judicial proceeding to be null and
void, or any Guarantor denies or disaffirms in writing its obligations under the terms of the
Indenture or its Guarantee; or (h) at any time as such security is required by the terms of the
Indenture, any Security Document shall cease to be in full force and effect or shall cease to give
the Collateral Agent the liens or any of the material rights, powers and privileges purported to be
created thereby in favor of the Collateral Agent and such default shall continue unremedied for a
period of at least 30 days after written notice to the Company by the Collateral Agent; or (i) any
other Event of Default provided in the supplemental indenture or Board Resolution under which
Securities of any series are issued or in this Note.

     If an Event of Default described in clauses (a), (b), (c), (d) or (i) above (if the Event of
Default under clause (d) or (i) is with respect to less than all series of Securities then
outstanding) occurs and is continuing, then, and in each and every such case, except for any series
of Securities the principal of which shall have already become due and payable, either the Trustee
or the Holders of not less than 25% in aggregate principal amount of the Securities of each such
affected series then outstanding under the Indenture (voting as a single class) by notice in
writing to the Company (and to the Trustee if given by Securityholders), may declare the entire
principal of all Securities of all such affected series, and the interest accrued thereon, if any,
to be due and payable immediately, and upon any such declaration the same shall become immediately
due and payable. If an Event of Default described in clause (d) or (i) (if the Event of Default
under clauses (d) or (i), as the case may be, is with respect to all series of Securities then
outstanding), (e), (f) or (g) occurs and is continuing, then and in each and every such case,

5

 

unless the principal of all the Securities shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities
then outstanding hereunder (treated as one class), by notice in writing to the Company (and to the
Trustee if given by Securityholders), may declare the entire principal of all the Securities then
outstanding and interest accrued thereon, if any, to be due and payable immediately, and upon any
such declaration the same shall become immediately due and payable.

     12. Trustee Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the
Trustee.

     13. No Recourse Against Others. No director, officer, employee, incorporator or
shareholder of the Company or the Trustee, as such, shall have any liability for any obligations of
the Company or the Trustee, respectively, under the Notes or the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such a waiver is against
public policy.

     14. Authentication. This Note shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.

     15. Guarantees. This Note will be entitled to the benefits of certain Guarantees
made for the benefit of the Holders. Subject to the terms of the Indenture, each Guarantor of the
Indenture fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally, to each Holder of the Notes and the Trustee the full and punctual
payment when due, whether at maturity, by acceleration, by redemption, by repurchase, or otherwise,
of the principal of, premium, if any, and interest on the Notes and all other obligations of the
Company under the Indenture, as provided in the Indenture. Reference is made to the Indenture for
a statement of the respective rights, limitations of rights, duties and obligations thereunder of
the Guarantors, the Trustee and the Holders.

     16. Abbreviations. Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (=Uniform Gifts to Minors Act).

     17. CUSIP and ISIN Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused CUSIP or ISIN
numbers or both numbers to be printed on the Notes and the Trustee may use CUSIP or ISIN numbers or
both numbers in notices to the Holders of the Notes as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as contained in any
notice to the Holders of the Notes and reliance may be placed only on the other identification
numbers placed thereon.

6

 

     18. Governing Law. This Note shall be governed by and construed in accordance with
the laws of the State of New York.

     The Company shall furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to:

Reynolds American Inc.

401 North Main Street

Winston-Salem, North Carolina 27101-3818

Facsimile: 336-741-2998

Attention: Treasurer

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]