MODIFICATION AND TERMINATION AGREEMENT
AND MUTUAL RELEASE
This Agreement is made as of November 12, 1996 by and among General
Surgical Innovations, Inc., a California corporation ("GSI"), and United States
Surgical Corporation, a Delaware corporation ("USSC").
WHEREAS, GSI and USSC have entered into a certain Distributorship Agreement
dated as of March 9, 1994, as amended (the "Distributorship Agreement"); and
WHEREAS, GSI and USSC wish to modify and terminate the Distributorship
Agreement and agree to a mutual release as set forth below.
The parties agree that as of the date of this Agreement set forth above
(the "Effective Date"):
1.1 MODIFICATION AND TERMINATION. Subject to the provisions set forth
below, GSI and USSC hereby agree to terminate the Distributorship Agreement.
Upon execution of this Agreement, USSC shall not be obligated to purchase, and
GSI shall not be obligated to supply, any products, including, but not limited
to, the products set forth on EXHIBIT A hereto. The parties further agree to
amend Section 11.3 of the Distributorship Agreement such that USSC shall have
the right (to the extent permitted under applicable laws and regulations) to
sell its existing inventory of products purchased from GSI until December 31,
1997.
1.2 This Agreement will be effective on the date it is executed by both
parties (the "Termination Date"). Within [********] days after the Termination
Date, USSC shall pay in full the amount set forth in the EXHIBIT B and
thereafter shall no longer owe any amounts to GSI. USSC shall have no right to
[**********] under the Distributorship Agreement after the Termination Date.
2.0 ACKNOWLEDGMENT OF INTELLECTUAL PROPERTY RIGHTS . Each party
acknowledges that it has no rights, claims or interests in the other party's
intellectual property rights except as set forth in the Distributorship
Agreement.
3.0 MUTUAL RELEASE. Except for warranty and indemnity obligations of the
parties (as set forth in Articles 4.4 and 7 of the Distributorship Agreement,
respectively), GSI and USSC, on behalf of itself, each of its past and present
affiliates, representatives, successors, assigns and transferees does hereby
release, discharge and acquit forever such other party and such party's
affiliates, successors, assigns and transferees from any and all demands, claims
or other liabilities (or potential demands, claims or liabilities) of every kind
and character whatsoever, arising in connection with any rights, obligations,
duties or interests arising under the Distributorship Agreement occurring on or
prior to the date of this Agreement, whether known or unknown, suspected or
unsuspected and each expressly waives the benefits of Section 1542 of the
California Civil Code which provides that:
[***] CONFIDENTIAL TREATMENT REQUESTED
"A GENERAL RELEASE DOES NOT EXTEND THE RELEASE TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Each of GSI and USSC understands and acknowledges the significance and
consequences of such specific waiver of Section 1542, and hereby assumes full
responsibilities for any injuries, damages or losses that each may incur as a
result of such waiver.
4.0 SURVIVAL OF CERTAIN TERMS. USSC and GSI acknowledge and agree that
the following provisions survive the termination of the Distributorship
Agreement: Sections 2.1(e), 3.7, 3.8, 4.4, the last two sentences of 5.2, 5.3,
5.4, 5.5, 6.1, 6.4, 6.5, 6.6, 6.7, 6.8, 6.12, 7.1, 8.2, 8.3, 10.1, 10.2, 10.3,
11.3 (to the extent the six (6) month period has been extended to December 31,
1997 in Section 1.1 above), 13.1, 13.2, 13.3, 14.1, 14.2, 14.3, 14.4, 14.5,
14.6, 14.7, 14.8.
5.0 CLARIFICATION OF ARTICLE 11.2. USSC and GSI acknowledge and agree
that the Distribution Agreement is being terminated by mutual agreement and not
pursuant to Sections 11.2(e) or 11.2(f) and therefore the parties agree that the
restriction on USSC contained in the last unnumbered paragraph of Article 11.2
does not apply.
IN WITNESS WHEREOF, the undersigned GSI and USSC have duly executed this
Agreement as of the date first set forth above.
GENERAL SURGICAL INNOVATIONS, INC. UNITED STATES SURGICAL
CORPORATION
By:_______________________________ By:___________________________
Its:______________________________ Its:__________________________
[***] CONFIDENTIAL TREATMENT REQUESTED
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EXHIBIT A
(CANCELED USSC FINANCIAL OBLIGATIONS)
QUANTITY $
-------- -
October 1996 Spacemaker II [*****] [*******]
November 1996 Spacemaker II [*****] [*******]
December 1996 Spacemaker II [*****] [*******]
January 1997 Spacemaker II [*****] [*******]
February 1997 Spacemaker II [*****] [*******]
March 1997 Spacemaker II [*****] [*******]
Unfulfilled Obligations prior to October 1, 1996
QUANTITY $
-------- -
Spacemaket World 1500 [*****] [*******]
Unacknowledged September 1996 Shipments:
QUANTITY $
-------- -
September 27, 1996 Spacemaker II 2,114 232,540
September 27, 1996 Spacemaker World 900 36 23,328
September 30, 1996 Spacemaker I 900 500 61,250
[***] CONFIDENTIAL TREATMENT REQUESTED
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EXHIBIT B
(USSC FINANCIAL OBLIGATIONS)
[*************************]
INVOICE NO. $
----------- -
[****] [**********]
[****] [**********]
[****] [**********]
[****] [**********]
[****] [**********]
[****] [**********]
[****] [**********]
[****] [**********]
[****] [**********]
[****] [**********]
[****] [**********]
[****] [**********]
[****] [**********]
----------
[**********]
[***] CONFIDENTIAL TREATMENT REQUESTED
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