EXHIBIT 10.5
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Amendment #2 to
Exclusive Distributor Agreement
of May 30, 1996
1. The term is hereby extended for one year until March 31, 1999
2. During this one-year extension the Minimum is [**] units and the Target is
[**] units. FD shall purchase [**] units in the first quarter ( ending June 30,
1998) and [**] units each quarter thereafter. FD may replace its nine demo units
at the Demo price (same as the Target price with Alternans) and these units will
count toward the Minimum.
3. The prices are [**]:
4. Each quarter the prices will be adjusted so that CHI and FD split the
amount of exchange rate variation. The Adjusted Price will be determined from
the above Contract prices by the following formula:
Adjusted Price=Contract price x square root of (128/RATE)
Where RATE is the Yen to dollar exchange rate on the last day of the
previous quarter.
5. Both parties agree to use best efforts to complete a Marketing Plan within
60 days of signing this Amendment.
6. CHI agrees to supply a person or persons to FD for demonstration of the CH
2000 for a total of two weeks during the month of July . CHI will pay salary
plus airfare to and from Japan; FD will pay travel and living expenses within
Japan.
7. CHI agrees to use its best efforts to complete the software and product
changes requested by FD and described on Attachment I.
8. The Product Descriptions for the CH 2000 Systems is hereby changed to that
in the Price List in Attachment II. The Alternans Option is now called the
Alternans Hardware Option and does not include a license to the Alternans
Software. This license is conferred for a single use upon payment of a separate
USE FEE. This USE FEE is included in the purchase price of a set of High
Resolution Electrodes.
9. FD hereby agrees to the terms of the License Agreement in Attachment III
which includes the Purchaser Agreement in Attachment A. FD agrees that its
purchases of products from CHI are subject to the terms of the License
Agreement, that it may only resell CHI products to others subject to the terms
of the License Agreement, that it may only sell CHI products to those who agree
to be bound by the Purchaser Agreement, and that it will not sell multi-segment
electrodes for use on CHI systems except for those manufactured by or under
license from CHI unless it has paid to CHI in advance the USE FEE called for
under the License Agreement.
FD further agrees that it is responsible for making its customers aware of
the terms of the Product Descriptions and terms of the License Agreement and
wishes to do so in a manner consistent with Japanese law and business practices.
Therefore:
(a) Starting within sixty (60) days of signing this Amendment, FD agrees to
use the Product Description language in Attachment II (or other language
mutually agreed in writing by CHI and FD) in new quotations for the CH 2000 with
Alternans hardware Option are made aware of and accept the terms of the
Purchaser Agreement.
(b) Within approximately one hundred and twenty days (120) of the signing
of this agreement, CHI will add the Purchaser Agreement language to the labeling
of the Hi-Resolution Electrodes pouch and to the Alternans Hardware Option box.
Within sixty (60) days of CHI supplying the pouches with the Purchaser Agreement
language, FD will ensure that customers who subsequently purchase CH 2000 with
Alternans Hardware Option are made aware of and accept the terms of the
Purchaser Agreement.
FD acknowledges that its responsibilities in this paragraph 9 survive
termination of the Exclusive Distributor Agreement.
10. This Amendment constitutes a valid Purchase Order (no ________) from FD to
CHI for the Minimum quantity of Stress only CH 2000 systems to be shipped
quarterly from CHI to FD on or about the first week of the last month of each
quarter. FD agrees to supply amendments to this Purchase Order prior to the 15th
of the first month of each quarter for changes in quantities and mix for
shipments during the quarter.
11. During the course of this agreement both companies agree to start to
discuss mutual technical collaboration for future products.
CAMBRIDGE HEART FUKUDA DENSHI
Signed: /s/ ▇. ▇. ▇▇▇▇▇▇ Signed: /s/ Takeyasn Yawamen
------------------------ ---------------------
▇.▇. ▇▇▇▇▇▇ Director
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: Takeyasn Yawamen
--------------------------- -------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Takeyasn Yawamen
President & CEO
Date: July 2, 1998 Date: June 29, 1998
------------ -------------
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Attachment I:
Product and Software Changes
[**]
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Attachment II:
Fukuda Denshi Price List
[**]
Attachment III:
License Agreement
CH-2000 Cardiac Diagnostic System with T-Wave Alternans Hardware ("the System")
CH-2000 Cardiac Diagnostic System Alternans Software ("the Software")
This is a legal agreement between Fukuda Denshi ("FD") and Cambridge Heart, Inc.
("CHI").
CHI owns technology, including patents and copyrights, related to the
detection and analysis of alternans ("the CHI technology"). FD ACKNOWLEDGES AND
AGREES THAT PURCHASE OF THE SYSTEM BY FD DOES NOT PROVIDE RIGHTS IN ANY OF THE
CHI TECHNOLOGY.
Grant of License. CHI grants to FD the right to use one copy of the Software and
------------------
any upgrades or new versions thereof on each system provided by CHI in Japan.
This license is contingent upon payment in advance by FD of a USE FEE for each
use of the Software to perform a single alternans test on a single patient.
payment of the USE FEE provides a limited, single-use license of the CHI
technology, including CHI's copyright in the Software and the technology
described in CHI's U.S. Patent No. 5,713,367, to perform a single alternans
test. The USE FEE is deemed to be paid in full for a particular alternans test
if Hi-Resolution Electrodes manufactured by CHI are purchased and used with the
alternans test, and also may be paid directly to CHI at the address provided
below. THE LICENSE WILL TERMINATE IMMEDIATELY UPON USE OF THE SOFTWARE TO
PERFORM AN ALTERNANS TEST WITHOUT PAYMENT IN ADVANCE OF THE USE FEE FOR THAT
TEST. FD acknowledges that the performance of an alternans test without payment
of the USE FEE constitutes a violation of CHI's rights.
Ownership: Copyright. FD owns the physical media on which the Software is
---------------------
originally or subsequently recorded, but CHI retains title and ownership of the
Software recorded on the original media and all subsequent copies of the
Software. This license is not a sale of the original Software or any copy
thereof. The Software and the accompanying documentation are protected by United
States patent and copyright laws and by international treaty provisions, and may
contain trade secret and proprietary information. FD agrees to treat the
Software like any other patented and copyrighted material. Subject to these
restrictions, FD may either (a) make one copy of the Software soley for backup
purposes in support of FD's permitted use of the Software, or (b) transfer the
Software to a single hard disk, provided FD keeps the original of the Software
soley for backup purposes. (Some versions of the Software may include mechanisms
to limit or inhibit copying.) Any patent. copyright or other notices must be
reproduced on the backup copy of the Software. FD may not copy the documentation
accompanying the Software.
Right to Sublicense. CHI grants FD the right to see the System and to sublicense
--------------------
the Software to a purchaser of the system, provided that the purchaser agrees to
be bound by terms and conditions contained in the Purchaser Agreement in
Attachment A or other such Purchaser Agreement approved by CHI. CHI does not
▇▇▇▇▇ ▇▇ the right to sublicense the Software without requiring payment of the
USE FEE for each use as set forth above.
Other Restrictions. FD may not rent or lease the Software, and, except as set
-------------------
forth above under the right to sublicense, may not transfer any rights under
this Agreement. Any unapproved transfer of possession of the Software in whole
or in part to another party shall automatically terminate this license. EXCEPT
AS SET FORTH ABOVE UNDER RIGHT TO SUBLICENSE, FD MAY NOT DISTRIBUTE COPIES OF
SOFTWARE OR ACCOMPANYING DOCUMENTATION TO OTHERS. FD MAY NOT MODIFY, ADAPT,
TRANSLATE, REVERSE ENGINEER, DECOMPILE, DISASSEMBLE, OR CREATE DERIVATIVE WORKS
BASED ON SOFTWARE OR DOCUMENTATION.
General. FD may not sublicense, assign or transfer the license of the Software
--------
except as expressly provided in the Agreement. Any attempt otherwise to
sublicense, assign or transfer any of the rights, duties, or obligations
thereunder is void. No amendment to or modification of this Agreement shall be
binding unless in writing and signed by a duly authorized representative of CHI.
This Agreement is governed by the internal laws of the Commonwealth of
Massachusetts, U.S.A., without the conflict of laws principles thereof and, to
the extent not inconsistent with those laws, by the United Nations Convention on
the International Sale of Goods. FD may contact CHI with any questions
concerning this Agreement, or for nay other reason, including payment of the USE
FEE, by writing to: CAMBRIDGE HEART, INC., ▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
FD further agrees that this Agreement is the complete and exclusive statement of
the agreement with respect to the subject matter of this Agreement, and that
this Agreement supersedes any proposal or prior agreement, oral or written, and
any other communications relating to the subject matter of this Agreement.
Attachment A
PURCHASER AGREEMENT:
CH-2000 CARDIAC DIAGNOSTIC SYSTEM
HI-RESOLUTION ELECTRODES
AND ASSOCIATED SOFTWARE
Opening of this package, constitutes acceptance by the purchaser of the terms,
hereafter delineated.
TERMS OF THE AGREEMENT:
PRODUCT: CH-2000 CardiacDiagnostic System with Alternans Hardware Option (The
System), Hi-Resolution Electrodes and CH 2000 Cardiac Diagnostic System
Alternans Software.
The software and the accompanying documentation are protected by copyright laws
and by international treaty provisions, and may contain trade secrets and other
proprietary material.
RIGHTS OF PURCHASER: The purchaser acknowledges and agrees that the purchase of
the product identified above does not provide rights, other than the right to
use the system, to any technologies or proprietary materials used by or embodied
in the system.
PURCHASER RIGHT: Fukuda Denshi grants the purchaser the right to use one copy of
the Software, including upgrades or new versions, on a single computer provided
by Fukuda Denshi. This right is contingent upon the payment, in advance, by the
purchaser of a USE FEE for twenty (20) single uses. For use over this limit,
additional use fees must be paid, in advance. USE FEE is deemed to be paid for
each use if Hi-Resolution Electrodes manufactured by Cambridge Heart are
purchased and used. NO RIGHT IS GIVEN FOR USE WITHOUT PAYMENT OF AN APPROPRIATE
USE FEE.
The right to use the product is limited to Japan. The purchaser agrees that the
product shall not be utilized outside of Japan.
OWNERSHIP: Fukuda Denshi is the licensee of the Alternans Hardware Option and
the Alternans Software, both of which are owned and copyrighted by Cambridge
Heart, Inc., ▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
