EXHIBIT 10.1(a)
AGREEMENT
AGREEMENT, dated as of May 7, 1998, by and between ALARIS Medical Systems,
Inc., a Delaware corporation ("Alaris"), having an address at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and Caesarea Medical Electronics Limited, a private
limited company organized under the Israeli Companies Ordinance ("Caesarea"),
having an address at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, Caesarea has developed certain volumetric infusion pump
technology, including the NIKI Technology (as hereinafter defined) and desires
to transfer the same to Alaris on the terms set forth herein; and
WHEREAS, Caesarea transferred technology to Clintec Nutrition Company
("Clintec") pursuant to the terms of an Agreement on the Transfer of
Intellectual Property dated July 14, 1996 (the "Transfer Agreement"), by and
between Caesarea and Clintec, as amended by letter agreement dated November 6,
1997, between Caesarea and Nestle Clinical Nutrition ("Nestle"), as
successor-in-interest to Clintec; and
WHEREAS, pursuant to the Transfer Agreement, Clintec granted to Caesarea
an exclusive, royalty-free license for unrestricted parenteral use of specified
technology (the "License") for a period of 20 years from July 14, 1996; and
WHEREAS, Caesarea desires to transfer the License to Alaris and, in
connection therewith, Alaris, Caesarea and Nestec, S.A., as
successor-in-interest to Nestle, have entered into a letter agreement dated as
of May 6, 1998 in the form of Exhibit A hereto.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. DEFINITIONS. Capitalized terms used in this Agreement and not
otherwise defined shall have the meanings set forth below:
"ACT" means The Food, Drug and Cosmetic Act (21 U.S.C. Sections 310 ET.
SEQ.), as amended from time to time, and the regulations promulgated thereunder.
"BANKRUPTCY" means, with respect to Caesarea: (A) that Caesarea shall
have: (i) made an assignment for the benefit of creditors; (ii) filed a
voluntary petition in bankruptcy; (iii) been adjudicated bankrupt or insolvent,
or had entered against it an order for relief, in any bankruptcy or insolvency
proceeding; (iv) filed a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation; (v) filed
an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against it in any proceeding set forth in (iv)
above; (vi) sought, consented to, or acquiesced in the appointment of a
trustee, receiver, or liquidator of all or any
substantial part of its properties; or: (B) if: (i) 120 days after the
commencement of any proceeding against it seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, the proceeding has not been dismissed; or (ii)
within 90 days after the appointment, without Caesarea's consent or
acquiescence, of a trustee, receiver, or liquidator of it or all or any
substantial part of its properties, the appointment is not vacated or stayed,
or within 90 days after the expiration of any such stay, the appointment is not
vacated.
"BUSINESS DAY" means any weekday on which commercial banks in both New
York, New York and Caesarea, Israel are not required or authorized by law to
close.
"DIRECT COST" shall mean and be calculated in the manner specified on
Schedule 1(a) hereto.
"DOCUMENTS" shall mean all of the documents, plans, drawings,
documentation, marketing materials and service materials related to the NIKI
Technology, including, without limitation, those listed on Schedule 1(b) hereto.
"EU" means the European Union.
"EXISTING DISTRIBUTION AGREEMENTS" means the distribution, license or
transfer agreements listed on Schedule 1(c) hereto.
"EXISTING RIGHTS" means the patents, patent applications, trademarks,
trade names and other Intellectual Property listed on Schedule 1(d) hereto.
"FDA" means the United States Food and Drug Administration, or any
successor agency.
"FIELD" means the field of parenteral infusion through the use of a
volumetric infusion pump and all complementary, related and associated
activities.
"F.O.B." means Free on Board, as such term is defined in the International
Chamber of Commerce publication "International Incoterms 1990."
"GOOD MANUFACTURING PRACTICES" means: (A) the applicable current quality
system (good manufacturing practice) regulations promulgated from time to time
by (i) the FDA in accordance with the Act and (ii) to the extent applicable,
European regulatory agencies; and (B) directives of the International Standards
Organization, all for subcontractors.
"IMPROVEMENT" means any enhancement or modification of the NIKI
Technology, the NIKI Pump or the I.V. Valve that permits the NIKI Technology or
products based thereon, the NIKI Pump, or the I.V. Valve, as the case may be,
to perform its function in a better or more useful way.
"INTELLECTUAL PROPERTY" means all intellectual property, including, but
not limited to, inventions, all patent and patent applications and all
divisions, continuations, continuations-in-part, re-examinations and reissues
of any of the foregoing, copyrights, trademarks, trade names, copyright
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applications, trade secrets, know-how, formulas, compositions of matter,
software, algorithms, designs, manufacturing technology and other intellectual
property and rights (including, without limitation, any intellectual property
rights related thereto), including any foreign counterparts to any of the above.
"I.V. VALVE" means the device described on Schedule 1(e) hereto.
"MANUFACTURING ASSEMBLY KITS" means a complete set of all of the items
forth on Schedule 1(f), which constitute all of the components necessary to
assemble a ▇▇▇▇▇ ▇ ▇▇▇▇ Pump.
"MANUFACTURING DOCUMENTATION PACKAGE" means the items set forth on
Schedule 1(g) Part 1 (Phase I NIKI Pump); Part 2 (Phase 2 NIKI Pump) and Part 3
(Phase 3 NIKI Pump) hereto.
"MILESTONE" means a Phase 1 Milestone, a Phase 2 Milestone or a Phase 3
Milestone, as the case may be.
"NIKI PUMP" means a volumetric infusion pump incorporating some or all of
the NIKI Technology including, without limitation, the Phase 1 NIKI Pump; the
Phase 2 NIKI Pump; and the Phase 3 NIKI Pump, including any Improvements to the
NIKI Pump.
"NIKI TECHNOLOGY" means: (A) all Intellectual Property included or
utilized in, by or with respect to, the following inventions: (i) the
Peristaltic Pump; (ii) the I.V. Valve; (iii) the Pump System with Error
Detection; (iv) the System and Method; (B) the Existing Rights; and (C) any
other Intellectual Property having any application in the Field at any time
licensed to, owned, developed, created or reduced to practice by or on behalf
of Caesarea, its employees or officers; provided, however, that NIKI Technology
shall not include Intellectual Property transferred in accordance with the
Transfer Agreement except to the extent that such Intellectual Property forms
part of the technology subject to the License. The parties acknowledge and
agree that any valve, other than the I.V. Valve, and any syringe pump at any
time licensed to, owned, developed, created or reduced to practice by or on
behalf of Caesarea, its employees or officers, shall not be deemed part of the
NIKI Technology.
"PERISTALTIC PUMP" means the device described in Schedule 1(h) hereto.
"PERSON" means any individual, corporation, association, partnership,
limited liability company, joint venture, trust or other entity or organization.
"PHASE 1 MILESTONES" means all of the sequential steps specified in
Sections 6(a)(i) through 6(a) (iv) hereof.
"PHASE 1 NIKI PUMP" means the NIKI Pump having the specifications set
forth on Schedule 1(i) Part 1 hereto.
"PHASE 2 MILESTONES" means all of the sequential steps specified in
Sections 6(b)(i) through 6(b) (iii) hereof.
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"PHASE 2 NIKI PUMP" means the NIKI Pump having the specifications set
forth on Schedule 1(i) Part 2 hereto.
"PHASE 3 MILESTONES" means all of the sequential steps specified in
Sections 6(c)(i) through 6(c) (iii) hereof.
"PHASE 3 NIKI PUMP" means the NIKI Pump having the specifications set
forth on Schedule 1(i) Part 3 hereto.
"PUMP SYSTEM WITH ERROR DETECTION" means the device described on Schedule
1(j) hereto.
SPECIFIED LOCATION" means such location or locations as may, from time to
time, be specified by Alaris by notice to Caesarea as the location or locations
at which Alaris intends to take receipt of any NIKI Pump, Manufacturing
Assembly Kit or any other device, good, document or product to be delivered by
Caesarea hereunder.
"SYSTEM AND METHOD" means the systems and methods described on Schedule
1(k) hereto.
"TEST DISPOSABLES" shall mean the disposables listed in Part 1 of Schedule
1(i) as the same are hereafter delivered by Alaris to Caesarea.
"US" means the United States of America.
2. SALE. Caesarea hereby sells, assigns, transfers, conveys and
delivers (the "Sale") to Alaris, its successors, assigns and sublicensees, on
an exclusive, worldwide, royalty free basis, all of Caesarea's right, title and
interest in and to the License and the NIKI Technology, including, without
limitation, all rights, powers and privileges to: (i) conduct research and
development with respect to the NIKI Technology; and (ii) make, have made, use,
lease, sell, offer to sell and import the NIKI Pump, the I.V. Valve and any and
all other products, goods or devices incorporating the NIKI Technology. Alaris
is not assuming any of Caesarea's obligations under the Transfer Agreement.
3. IMPROVEMENTS.
(a) In addition to the Sale (and not in limitation thereof), Caesarea and
Swi Barak hereby grant (and shall cause each of their respective affiliates,
employees and officers to grant) to Alaris, during the period commencing on the
date hereof and ending on the seventh anniversary of the date of first
commercial sale by Alaris of a NIKI Pump, the exclusive, worldwide right and
royalty-free license to use and exploit any Improvements made by or on behalf
of Caesarea, its affiliates or any of their respective employees and officers,
or in which any such person has any direct or indirect ownership, interest,
right or participation, for any purpose, including, without limitation, the
right to make, have made, use lease, sell, offer to sell and import any product
incorporating any Improvements.
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(b) Caesarea acknowledges and agrees that Alaris shall have the right to
make or have made Improvements and that any Improvements made by or on behalf
of Alaris shall be the sole and exclusive property of Alaris. Caesarea shall
cooperate fully with Alaris in effecting any patent and/or copyright coverage
with respect to the Improvements made by or on behalf of Alaris.
(c) Except as otherwise provided in Section 6 hereto, the parties
acknowledge and agree that nothing contained herein shall obligate Caesarea to
make any Improvements.
4. SALE OF ASSETS. Caesarea hereby sells, assigns, transfers, conveys
and delivers to Alaris, and Alaris hereby purchases from Caesarea, all of
Caesarea's right, title and interest in and to the assets listed on Schedule 4
hereto, which constitute all of the assets used by Caesarea and necessary to
manufacture the NIKI Pump (the "Assets"), and the Documents. Caesarea shall
retain the Assets which shall be used by Caesarea solely to manufacture the
Manufacturing Assembly Kits for delivery to Alaris; provided, however, that
unless the parties otherwise agree in writing, the Assets shall be delivered to
Alaris no later than October 31, 1998.
5. PURCHASE PRICE. Alaris shall pay to Caesarea, and Caesarea shall
accept from Alaris, the sum of one million ($1,000,000) dollars (the "Purchase
Price"), to be paid as follows:
(a) $120,000 of the Purchase Price (the "Advance") has been previously
paid by Alaris to Caesarea as an option payment and shall not be refundable to
Alaris under any circumstances; and
(b) $880,000 shall be paid upon execution of this Agreement.
In addition, upon execution of this Agreement, Caesarea shall establish a
standby letter of credit (the "LOC"), in the form of Exhibit B hereto, in the
amount of $380,000 for the benefit of Alaris. The LOC shall be maintained by
Caesarea until completion of the Phase 1 Milestones in accordance with the
provisions of Section 6(a) hereof. In the event Alaris terminates this
Agreement in accordance with the provisions of Section 6(a) hereof, Alaris
shall be entitled to draw down the full amount of the LOC.
6. ADDITIONAL PAYMENTS. In addition to the Purchase Price, Alaris shall
pay to Caesarea the amounts set forth in subsections (a), (b) and (c) below
(the "Additional Payments") with respect to the development and release of the
▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ Pump and the Phase 3 NIKI Pump. The
parties acknowledge and agree that the failure to achieve any of the ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Milestones or Phase 3 Milestones shall not be considered a
breach of this Agreement and the sole remedy of Alaris with respect to any such
failure shall be as specified in this Section 6.
(a) PHASE 1 NIKI PUMP. Upon completion of each of the Phase 1 Milestones
set forth below, Alaris will make the following payments (the "Phase 1
Payments") to Caesarea:
(i) $500,000 shall be paid to Caesarea upon Acceptance (as
hereinafter defined) by Alaris of the final design (the "First
Final Design") of the Phase 1 NIKI Pump and receipt by Alaris
at the Specified Location, on or before July ▇,
▇
▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ Pumps meeting the requirements of the
First Final Design (the "Initial Phase 1 Pumps");
(ii) $250,000 shall be paid to Caesarea upon receipt by Alaris at the
Specified Location, on or before July 1, 1998, and Acceptance by
Alaris of a complete Manufacturing Documentation Package for the
Phase 1 NIKI Pump;
(iii) $750,000 shall be paid to Caesarea upon receipt by Alaris at the
Specified Location, on or before September 15, 1998, and
Acceptance by Alaris, on or before October 1, 1998, of, at the
option of ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ Pumps meeting all of
the specifications set forth on Schedule 1(i) Part 1 hereto
(including when used with the Test Disposables) and which meet
the requirements of the First Final Design (the "Final Phase 1
Pumps") or 500 Manufacturing Assembly Kits sufficient to permit
Alaris to manufacture the ▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇; provided,
that prior to delivery of the Final Phase 1 Pumps or
Manufacturing Assembly Kits, Alaris shall have first Accepted
the First Final Design, the Initial Phase 1 Pumps and the
Manufacturing Documentation Package on or prior to August 15,
1998; and
(iv) $500,000 shall be paid to Caesarea upon receipt by Alaris at the
Specified Location, on or before October 15, 1998, and
Acceptance by Alaris, on or before November 15, 1998, of 500
Manufacturing Assembly Kits sufficient to permit Alaris to
manufacture an additional 500 Final Phase 1 NIKI Pumps.
In the event that Caesarea fails to meet any of the Phase 1 Milestones set
forth in subparagraphs (a)(i) through (a)(iv) above by the applicable dates,
Alaris may require Caesarea to refund to Alaris the Purchase Price (less an
amount equal to two times the Advance and any amounts paid to Alaris under the
LOC) and all Phase 1 Payments made to Caesarea by Alaris hereunder and Alaris
shall be under no further obligation to make any payments to Caesarea under
this Agreement. In such event, this Agreement shall terminate and (i) Alaris
shall return to Caesarea (a) all right, title and interest in and to the
License, the NIKI Technology and the Assets and (b) all Documents, physical
property and Intellectual Property previously delivered by Caesarea to Alaris.
In addition, (i) Alaris shall not be liable to Caesarea for any loss of profits
or prospective profits or any other losses or damages of any kind sustained or
arising out of such termination and Caesarea hereby irrevocably waives any such
rights to the fullest extent permitted under the laws of the State of Israel
and further agrees that it shall not bring any action or proceeding of any
nature whatsoever in any court, before any tribunal, or under any arbitration
proceeding, seeking or claiming any such damage or loss; and (ii) Caesarea
shall not be liable to Alaris for any loss of profits or prospective profits or
any other losses or damages of any kind sustained or arising out of such
termination and Alaris hereby irrevocably waives any such rights to the fullest
extent permitted under the laws of the State of Israel and further agrees that
it shall not bring any action or proceeding of any nature whatsoever in any
court, before any tribunal, or under any arbitration proceeding, seeking or
claiming any such damage or loss.
(b) PHASE 2 NIKI PUMP. Upon completion of each of the Phase 2 Milestones
set forth below, Alaris will make the following payments (the "Phase 2
Payments") to Caesarea:
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(i) $250,000 shall be paid to Caesarea upon Acceptance by Alaris of
the final design (the "Second Final Design") of the Phase 2 NIKI
Pump, and receipt by Alaris at the Specified Location, on or
before December 31, 1998, and Acceptance by Alaris, on or before
February 15, 1999, of 20 ▇▇▇▇▇ ▇ ▇▇▇▇ Pumps meeting the
requirements of the Second Final Design;
(ii) $500,000 shall be paid to Caesarea upon receipt by Alaris at the
Specified Location, on or before December 31, 1998, and
Acceptance by Alaris, on or before February 15, 1999, of 20
Manufacturing Assembly Kits and a complete Manufacturing
Documentation Package for the ▇▇▇▇▇ ▇ ▇▇▇▇ Pump sufficient to
permit Alaris to manufacture the ▇▇▇▇▇ ▇ ▇▇▇▇ Pump; and
(iii) $250,000 shall be paid to Caesarea upon CE approval of the Phase
2 NIKI Pump, which approval shall be obtained by Alaris (at its
sole cost and expense).
(c) PHASE 3 NIKI PUMP. Upon completion of each of the Phase 3 Milestones
set forth below, Alaris will make the following payments (the "Phase 3
Payments") to Caesarea:
(i) $250,000 shall be paid to Caesarea upon Acceptance by Alaris of
the final design (the "Third Final Design") of the Phase 3 NIKI
Pump, and receipt by Alaris at the Specified Location, on or
before March 1, 1999, and Acceptance by Alaris, on or before
▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ Pumps meeting the
requirements of the Third Final Design;
(ii) $500,000 shall be paid to Caesarea upon receipt by Alaris at the
Specified Location, on or before March 1, 1999, and Acceptance
by Alaris, on or before April 15, 1999, of 20 Manufacturing
Assembly Kits and a complete Manufacturing Documentation Package
for the ▇▇▇▇▇ ▇ ▇▇▇▇ Pump sufficient to permit Alaris to
manufacture the ▇▇▇▇▇ ▇ ▇▇▇▇ Pump; and
(iii) $250,000 shall be paid to Caesarea upon FDA 510(k) approval of
the Phase 3 NIKI Pump.
(d) Other than as set forth in subsection (a) above, this Agreement may
not be terminated due to the failure of Caesarea to meet any ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇ Milestone or Phase 3 Milestone. Notwithstanding the failure of
Caesarea to meet any of such Milestones and provided that this Agreement is not
terminated as provided in Section 6(a) above, Alaris shall make Additional
Payments to Caesarea as follows:
(i) in the event the Phase 1 NIKI Pump is sold by Alaris on a
commercial basis in any country other than the US or any country
located in the EU, Alaris shall pay to Caesarea an amount equal
to the aggregate amount of the Phase 1 Payments less an amount
equal to any Phase 1 Payments previously made to Caesarea.
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(ii) in the event the Phase 2 NIKI Pump is sold by Alaris on a
commercial basis in any country located in the EU, Alaris shall
pay to Caesarea an amount equal to the aggregate amount of the
Phase 2 Payments less an amount equal to the sum of (i) any
Phase 2 Payments previously made to Caesarea and (ii) all direct
costs and expenses incurred by Alaris to develop the Phase 2
NIKI Pump.
(iii) in the event the Phase 3 NIKI Pump is sold by Alaris on a
commercial basis in the US, Alaris shall pay to Caesarea an
amount equal to the aggregate amount of the Phase 3 Payments
less an amount equal to the sum of (i) any Phase 3 Payments
previously made to Caesarea and (ii) all direct costs and
expenses incurred by Alaris to develop the Phase 3 NIKI Pump.
7. ACCEPTANCE CERTIFICATE. "Acceptance" by Alaris of any matter,
device, design, document, kit or product specified in Section 6 hereof as
requiring the Acceptance of Alaris shall mean and be evidenced only by a
written certificate (an "Acceptance Certificate") delivered by Alaris to
Caesarea, on or before the date specified for Acceptance, specifying that the
matter, device, design, document, kit or product has been delivered by Caesarea
to Alaris, and that the matter, device, design, document, kit or product has
been completed and presented in a form and manner which is satisfactory to
Alaris. In the event that the matter, device, design, document, kit or product
has been completed and presented in a form and manner which is not satisfactory
to Alaris, Alaris shall deliver a written certificate (a "Rejection
Certificate") to Caesarea, on or before the date specified for Acceptance,
containing a general description of the relevant items which require correction
for an Acceptance by Alaris to take place. Caesarea shall be granted an
extension of 30 days from the date of receipt of such Rejection Certificate
(the "Correction Period") to correct the items which are required for an
Acceptance by Alaris to take place (the "Correction Items") and Alaris shall
(at the sole cost and expense of Caesarea), upon the reasonable request of
Caesarea, meet or engage in communications with Caesarea in order to assist
Caesarea in understanding the reason that Alaris has delivered the Rejection
Certificate. If the Correction Items are corrected within the Correction
Period in a manner satisfactory to Alaris, Alaris shall deliver an Acceptance
Certificate to Caesarea. In such event, Acceptance will be deemed to have
taken place within the time period specified in Section 6 and any additional
payment which is conditioned upon such Acceptance shall be made. If the
Correction Items are not corrected in a manner satisfactory to Alaris within
the Correction Period, the applicable additional payment shall not be made.
8. PURCHASE OF NIKI PUMPS. In addition to the Additional Payments, for
each NIKI Pump delivered to Alaris pursuant to and in accordance with Section 6
hereof, Alaris shall pay to Caesarea the sum of three hundred fifty ($350)
dollars within 30 days from the later of (i) receipt by Alaris of Caesarea's
invoice issued upon shipment of the NIKI Pumps or (ii) delivery of the NIKI
Pumps to the Specified Location.
9. MANNER OF DELIVERY. All NIKI Pumps, Manufacturing Assembly Kits,
Assets and all other devices, goods, documents and products to be delivered by
Caesarea under this Agreement shall be delivered by Caesarea to Alaris F.O.B.,
Israel. NIKI Pumps and Manufacturing Assembly Kits are supplied by Caesarea as
a sub-contractor of Alaris.
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10. PUMP PAYMENT.
(a) In consideration of the Sale and the other undertakings of Caesarea
hereunder, Alaris shall pay to Caesarea, in accordance with the provisions of
subsection (b) below, $25.00 (the "Payment Amount") for each NIKI Pump which is
manufactured and sold by Alaris or by any third party under agreement with or
with the consent of Alaris, other than any sale by or to Caesarea, during the
period commencing on the date of first commercial sale by Alaris of a NIKI Pump
and ending on the seventh anniversary of said date (the "Payment Period"). For
purposes of this Agreement, the assembly of a NIKI Pump using a Manufacturing
Assembly Kit shall be considered the manufacture of a NIKI Pump. The parties
acknowledge and agree that Caesarea shall only be entitled to payment of the
Payment Amount upon the first commercial sale of a NIKI Pump.
(b) Within 45 days after the end of each calendar quarter during the
Payment Period, Alaris shall pay to Caesarea an amount equal to the number of
NIKI Pumps in respect of which the Pump Payment is required to be made pursuant
to subsection (a) above (less the number of NIKI Pumps returned or recalled
during the quarter or any prior quarter in accordance with the provisions of
subparagraph (c) below) multiplied by the Payment Amount. All payments shall
be accompanied by a statement, certified by an officer of Alaris, setting forth
the number of NIKI Pumps sold, returned and recalled during the quarter. In
the event any NIKI Pump which had previously been returned or recalled is
redelivered to the customer or end-user returning same, such redelivery shall
be deemed a sale of such NIKI Pump (for which a Pump Payment shall be required
to be made) in the quarter in which such NIKI Pump is redelivered.
(c) In the event that the number of NIKI Pumps returned or recalled
during any quarter exceeds the number of NIKI Pumps in respect of which the
Pump Payment is required to be made during such quarter pursuant to subsection
(a) above (the "Excess Amount"), the number of NIKI Pumps in respect of which
the Pump Payment is required to be made pursuant to subsection (a) above during
the immediately succeeding quarter shall be reduced (in addition to any
reduction based upon the number of NIKI Pumps returned or recalled during such
quarter pursuant to subsection (b) above) by the Excess Amount.
11. PURCHASE OF MANUFACTURING ASSEMBLY KITS.
(a) Upon the terms and subject to the conditions herein contained,
Caesarea agrees to manufacture and sell to Alaris and Alaris may purchase from
Caesarea, Manufacturing Assembly Kits for the NIKI Pump.
(b) For each Manufacturing Assembly Kit purchased by Alaris, Alaris
agrees to pay Caesarea a price equal to Caesarea's Direct Costs plus ten (10%)
percent, which shall not exceed an aggregate of $170 for each ▇▇▇▇▇ ▇ ▇▇▇▇ Pump
during the period commencing on the date hereof and ending on the first
anniversary of the date of completion of the Phase 1 Milestones. Payment for
the Manufacturing Assembly Kits purchased from Caesarea shall be made within 30
days from the later of (i) receipt of Caesarea's invoice issued upon shipment
of the Manufacturing Assembly Kits or (ii) delivery of the Manufacturing
Assembly Kits to the Specified Location.
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(c) On the first Business Day of each month following completion of the
Phase 1 Milestones (each, a "Specified Date"), Alaris shall provide Caesarea
with a forecast of its requirements of Manufacturing Assembly Kits covering the
next 180 days deliveries at a minimum and indicating the requested delivery
dates and Specified Location for delivery. On the first Business Day following
a Specified Date, the immediately following 90 days of the forecast shall be
considered a firm and binding order for the number of Manufacturing Assembly
Kits specified therein and any forecasts covering more than 90 days from such
Specified Date (the "Extended Forecast Period") shall be considered non-binding
and subject to change, modification and cancellation by Alaris; provided,
however, that the number of Manufacturing Assembly Kits specified for delivery
during the Extended Forecast Period in any forecast delivered by Alaris to
Caesarea may not, without the consent of Caesarea, which consent shall not be
unreasonably withheld, be increased by more than 50% from the number of
Manufacturing Assembly Kits specified for delivery during the Extended Forecast
Period in the immediately preceding forecast delivered by Alaris to Caesarea.
At the request of Caesarea, or at the option of Alaris, Alaris will provide
non-binding forecasts covering a period from six (6) months to twelve (12)
months from a Specified Date.
(d) If Caesarea determines that it will be unable to timely deliver
Manufacturing Assembly Kits in accordance with Alaris' orders issued in
accordance with the provisions of Section 11(c) hereof, then Caesarea shall
give Alaris prompt notice thereof and shall indicate the anticipated length of
the delay. If the delay will exceed 15 days from the date specified by Alaris
for delivery, Alaris shall have the right at any time prior to delivery to
cancel its order for such Manufacturing Assembly Kits; provided, however, that
if the delay in delivery is a result of force majeure (as set forth in Section
28(o) hereof) Alaris shall only have the right to cancel such order if the
delay will exceed 30 days from the date specified by Alaris for delivery.
12. ENGAGEMENT OF SUBCONTRACTORS. Caesarea may sub-contract the
manufacture of NIKI Pumps and Manufacturing Assembly Kits only with the prior
written consent of Alaris, which consent shall not be unreasonably withheld;
provided, however, that the subcontracting by Caesarea of the NIKI Pumps and
Manufacturing Assembly Kits shall not relieve Caesarea of any of its
obligations hereunder and Caesarea shall remain responsible for all NIKI Pumps
and Manufacturing Assembly Kits subcontracted as if Caesarea had manufactured
the NIKI Pumps and Manufacturing Assembly Kits itself. The parties acknowledge
and agree that in the event Caesarea elects to sub-contract the manufacture of
the NIKI Pumps and/or Manufacturing Assembly Kits, Alaris shall have the right
to require that any sub-contractor selected by Caesarea submit to a Good
Manufacturing Practice audit by Alaris. If any such sub-contractor does not
meet (i) all applicable regulatory requirements relating to the manufacturing
of the NIKI Pumps or Manufacturing Assembly Kits, as the case may be, including
Good Manufacturing Practices and other requirements of the FDA and applicable
US and EU regulatory agencies, including, without limitation, the European
Medical Device Directives and EN 46001 or EN 46002, as applicable, and (ii) any
additional requirements which Alaris may reasonably require of its own
subcontractors, Alaris may withhold its consent to the engagement of such
subcontractor.
10
13. MOLDS AND TOOLS. Caesarea hereby grants to Alaris the right and
option to purchase from Caesarea the molds and tooling utilized by Caesarea to
manufacture the NIKI Pump at a purchase price equal to Caesarea's direct costs
for such molds and tooling, excluding Caesarea's engineering costs related
thereto, all of which costs are set forth on Schedule 13 hereto. In the event
Alaris purchases such molds and tooling, Caesarea shall no longer be obligated
to supply Manufacturing Assembly Kits to Alaris pursuant to Section 11 hereof;
provided, however, that if there are any outstanding orders for Manufacturing
Assembly Kits, Caesarea shall have the option to fulfill such orders prior to
delivery to Alaris of the molds and tooling.
14. TECHNICAL ASSISTANCE. Upon execution of this Agreement, Caesarea
shall deliver to Alaris all technical information and written manifestations of
Intellectual Property with respect to the NIKI Technology. Caesarea shall
provide Alaris, at Caesarea's expense, with such technical assistance as may be
reasonably necessary to inform Alaris fully about the NIKI Technology. In
addition, Caesarea shall, at Caesarea's sole cost and expense, (i) provide to
Alaris, upon reasonable request from Alaris from time to time, progress reports
and updates regarding the status of development of the ▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇ ▇▇▇▇ Pump, and the Phase 3 NIKI Pump, (ii) provide to Alaris, upon
reasonable request from Alaris from time to time, such development,
manufacturing and other resources and efforts as shall be reasonably necessary
or appropriate to ensure the satisfaction of the Phase 1 Milestones, the Phase
2 Milestones and the Phase 3 Milestones and (iii) upon reasonable notice by
Alaris and at reasonable times, but not more often than 60 days per year (the
"Annual Assistance Days"), make all appropriate technical, production,
engineering and marketing personnel available to Alaris, in order to permit
Alaris to establish its own manufacturing capability for the NIKI Pump, the
I.V. Valve and the I.V. administration sets to be used by Alaris with the NIKI
Pump; provided, however, that reasonable direct out-of-pocket expenses, if any,
incurred by Caesarea in providing such assistance to Alaris outside of Israel
shall be borne by Alaris. In the event Alaris requests Caesarea to provide
assistance in excess of the number of Annual Assistance Days, Alaris shall be
responsible for payment of all reasonable direct out-of-pocket expenses, if
any, incurred by Caesarea in providing such additional assistance.
15. REGULATORY RESPONSIBILITY.
(a) Alaris shall comply with all FDA and EU labeling requirements with
respect to the NIKI Pump.
(b) Caesarea shall (i) be responsible for complying with all applicable
regulatory requirements relating to the manufacturing and design activities of
Caesarea contemplated herein, including Good Manufacturing Practices and other
requirements of the FDA and applicable US and EU regulatory agencies,
including, without limitation, the European Medical Device Directives and EN
46001 or EN 46002, as applicable; and (ii) use its best efforts to obtain, at
its sole cost and expense, the CE ▇▇▇▇ for the ▇▇▇▇▇ ▇ ▇▇▇▇ Pump on or prior to
September 1, 1998. In addition to the foregoing, Caesarea shall (i) submit to
Good Manufacturing Practices audits by Alaris upon reasonable notice and (ii)
provide Alaris with a written failure analysis and corrective action plan
relating to all complaints regarding Caesarea or the NIKI Pump within 30
Business Days of receiving documentation or samples.
11
(c) Alaris shall be responsible for obtaining, at its sole cost and
expense, all other regulatory authorizations, approvals, permits and licenses
(collectively, "Approvals") necessary to sell and distribute the NIKI Pump in
the US, the EU and any other country in which it desires to sell the NIKI Pump,
including, without limitation, FDA approval. Caesarea agrees that to the
extent it currently has obtained or made any of such Approvals, it will assign
them to Alaris at no cost to Alaris and cooperate with Alaris to permit Alaris
to complete such assignment or otherwise obtain or complete such Approvals.
(d) Alaris and Caesarea shall each notify the other in writing within one
Business Day of their respective knowledge of a death involving the NIKI Pump
and within three Business Days of their respective knowledge of the occurrence
of any safety alert, significant customer complaint or any other event which
would require the filing of a Medical Device Report.
(e) Alaris and Caesarea shall each keep the other fully informed with
respect to any information, inquiry or correspondence from any government
agency or authority (a "Governmental Inquiry") relating to the investigation or
review of the compliance of the NIKI Pump with applicable legal, health or
safety requirements. Alaris and Caesarea shall each notify the other of its
receipt of any Governmental Inquiry within three Business Days following the
date of such receipt.
16. QUALITY CONTROL. Caesarea shall comply with all applicable quality
control standards and procedures of Alaris and those required by all applicable
regulatory authorities. Upon reasonable prior notice, Caesarea shall permit
Alaris to review periodically Caesarea's production and quality control
procedures and records and to visit Caesarea's facilities, at reasonable times
with a representative of Caesarea present, in order to assure satisfaction of
the requirements of this Section 16.
17. PRODUCT WARRANTY. Caesarea warrants to Alaris that for a period
commencing on the date of delivery to Alaris and ending on the eighteen (18)
month anniversary of the date of first shipment to the end-user or customer
(the "Warranty Period"), each NIKI Pump and each Manufacturing Assembly Kit
will: (i) conform to the specifications set forth on Parts 1, 2 and 3 of
Schedule 1(h) hereto and to the First, Second and Third Final Design, as
applicable; (ii) be free from manufacturing defects; (iii) not be "adulterated"
or "misbranded" as such terms are defined in the Act; and (iv) be in
merchantable condition and fit and safe for its intended use. Subject to the
provisions of Section 27 hereof, Caesarea's sole obligation under this product
warranty shall be, at the option of Alaris, either to repair or replace, at
Caesarea's sole cost and expense, or, if repair or replacement is not feasible
or is not made by Caesarea, to refund the purchase price of, any NIKI Pump or
Manufacturing Assembly Kit returned within the Warranty Period that Alaris
reasonably determines fails to meet any of the conditions of (i), (ii), (iii)
or (iv) above. This warranty shall not apply to any NIKI Pump or Manufacturing
Assembly Kit that has been damaged by accident or has been misused, abused,
altered or repaired by anyone other than Caesarea or its representatives. In
the case of a standard part supplied to Caesarea by a subcontractor engaged by
Caesarea and approved by Alaris pursuant to the provisions of Section 12
hereof, Caesarea shall grant to Alaris the benefit of any product warranty
provided to Caesarea by such subcontractor and Caesarea will not bear any
further liability to Alaris for such part under this Section 17; provided, that
Alaris shall
12
have first approved in writing the terms of the sub-contractor's product
warranty for such part prior to the use thereof by Caesarea.
18. SALES AND MARKETING. Caesarea acknowledges and agrees that Alaris
will have the right to exploit the License, the NIKI Technology and the Assets
and market and sell any product incorporating all or any portion of the same,
upon such terms and in such manner as Alaris, in its sole and absolute
discretion, shall determine; provided, that Alaris shall not promote the sale
in the enteral market of any products utilizing the NIKI Technology.
19. PRODUCT RECALL. In the event Alaris believes, in its sole and
absolute discretion, that the NIKI Pump, the I.V. Value or any other product or
device violates any provision of applicable law, should be recalled due to
health or safety considerations or should otherwise be subject to alert or
other appropriate treatment, Alaris shall have the sole authority to control
all such actions and to determine the necessity for implementing any corrective
action and the means of implementing the same. Caesarea shall cooperate fully
with Alaris in effecting any recall or any other type of corrective action,
including, without limitation, communications to or with any purchasers,
customers or other users of such product or device.
20. INSURANCE. Alaris and Caesarea each agree to obtain and keep in
force, for a period of ten (10) years from the date hereof, from an insurance
carrier satisfactory to the other party, product liability insurance in an
amount of not less than $1,000,000. Each such insurance policy shall: (a) be
endorsed to provide for written notification by the insurer to each of Alaris
and Caesarea not less than 30 days prior to modification, expiration or
cancellation thereof; (b) permit the other party to make payments to effect the
continuation of such insurance coverage upon notice of cancellation due to
nonpayment of premiums thereon; and (c) name the other party as an additional
insured. A certificate of insurance evidencing compliance with this paragraph
and referencing this Agreement shall be furnished to the other party on the
date hereof.
21. REPRESENTATIONS AND WARRANTIES OF ALARIS. Alaris hereby represents
and warrants to Caesarea that:
(a) It is duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power and authority to own
or hold under lease the assets and properties which it owns or holds under
lease and to enter into this Agreement and perform its obligations hereunder.
(b) The execution and delivery of this Agreement by it, the performance
by it of its obligations hereunder and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action. When executed and delivered by it this Agreement shall
constitute its valid and legally binding agreement enforceable against it in
accordance with the terms hereof, except as may be limited by bankruptcy,
insolvency or other laws affecting generally the enforceability of creditors'
rights and by limitations of the availability of equitable remedies.
13
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein will violate any provision
of the certificate of incorporation or by-laws of Alaris or any law, rule
regulations, writ, judgment, injunction, decree, determination, award, or other
order of any court, government or governmental agency or instrumentality,
domestic or foreign, binding upon Alaris, or conflict with or result in any
breach of or event of termination under any of the terms of, or constitute a
default under or result in the termination of or the creation or imposition of
any mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature pursuant to, the terms of any contract or agreement
to which Alaris is a party or by which Alaris or any of its assets and
properties is bound.
22. REPRESENTATIONS AND WARRANTIES OF CAESAREA. Caesarea hereby
represents and warrants to Alaris that:
(a) It is duly organized, validly existing and in good standing under the
laws of the State of Israel and has full corporate power and authority to own
or hold under lease the assets and properties which it owns or holds under
lease and to enter into this Agreement and perform its obligations hereunder.
(b) The execution and delivery of this Agreement by it, the performance
by it of its obligations hereunder and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action. When executed and delivered by it, this Agreement shall
constitute its valid and legally binding agreement enforceable in accordance
with the terms hereof, except as may be limited by bankruptcy, insolvency or
other laws affecting generally the enforceability of creditors' rights and by
limitations on the availability of equitable remedies.
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein will violate any provision
of the certificate of incorporation or by-laws of Caesarea or any law, rule,
regulation, writ, judgment, injunction, decree, determination, award, or other
order of any court, government or governmental agency or instrumentality,
domestic or foreign, binding upon Caesarea, or conflict with or result in any
breach of or event of termination under any of the terms of, or constitute a
default under or result in the termination of or the creation or imposition of
any mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature pursuant to, the terms of any contract or agreement
to which Caesarea is a party or by which Caesarea or any of its assets and
properties is bound.
(d) Except as set forth on Schedule 22(d) hereof and the Transfer
Agreement, Caesarea owns all right, title and interest in the Assets, the
Documents, the NIKI Technology and all Improvements for all purposes, in each
case on an unrestricted basis, free and clear of all liens, claims,
restrictions, limitations and encumbrances.
(e) There are no claims, disputes, actions, suits or proceedings,
including, without limitation, suits for patent infringement, pending or, to
the knowledge of Caesarea, threatened against or affecting the NIKI Technology,
or the use thereof by Caesarea or Alaris. To the knowledge of Caesarea, after
reasonable inquiry, neither the NIKI Technology, nor the use thereof
14
by Alaris under this Agreement, does or will infringe or conflict with any
patents, patent applications, know-how, processes, trade secrets, techniques,
procedures or other proprietary property rights or Intellectual Property, of or
held by, any Person.
(f) The Assets are all of the tangible assets used by Caesarea and
necessary to manufacture the NIKI Pump in its present form.
(g) Except for the Existing Distribution Agreements, Caesarea is not a
party to any distribution, license or transfer agreement with respect to the
NIKI Technology.
23. NON-COMPETITION.
(a) Caesarea agrees that for a period of seven (7) years following the
date hereof, neither Caesarea, Swi Barak, nor any affiliate of either of them
will (and Caesarea and Swi Barak agree not to and to cause all such Persons not
to), directly or indirectly, either for itself or himself, or any other person,
firm, partnership, corporation or other business venture, own, manage, operate,
control, or participate in, permit its or his name, as the case may be, to be
used by, consult with, be employed by, render services for or otherwise assist
in any manner, any Person that is engaged in the research, acquisition,
manufacture, promotion, sale or marketing of a volumetric infusion pump or
technology related thereto having its primary application in the Field, other
than for the purpose of performing the obligations of Caesarea under this
Agreement. The parties acknowledge and agree that the development by Caesarea,
Swi Barak, or any affiliate of either of them, of a valve, other than the I.V.
Valve, or a syringe pump shall not be deemed a violation of this Section 23.
(b) The parties hereto acknowledge that it is impossible to measure in
money the damages that will accrue to Alaris in the event of the breach of any
of the covenants in (a) above and, if Alaris shall institute any action or
proceeding to enforce those covenants, Caesarea and Swi Barak hereby waive and
agree not to assert the claim or defense that Alaris has an adequate remedy at
law or for damages. The foregoing shall not prejudice Alaris' right to seek
money damages from Caesarea or Swi Barak with respect to any such breach.
(c) If the provisions of Section 23(a) are determined by any court of
competent jurisdiction to be unenforceable by reason of its extending for too
long a period of time or over too large a geographic area or by reason of its
being too extensive in any other respect or for any other reason it will be
interpreted to extend only over the longest period of time for which it may be
enforceable and/or over the largest geographical area as to which it may be
enforceable and/or to the maximum extent in all other aspects as to which it
may be enforceable, all as determined by such court and in such court.
24. TERMINATION OF EXISTING DISTRIBUTION AGREEMENTS. Caesarea shall, as
promptly as practicable after execution of this Agreement, but in any event not
later than November 30, 1998, terminate, in a manner reasonably satisfactory to
Alaris, the Existing Distribution Agreements, other than its Existing
Distribution Agreement with its Israeli distributor. Upon the request of
Alaris at any time after December 31, 1998, Caesarea and Alaris shall cooperate
in dealing with Caesarea's Israeli distributor and shall endeavor to reach an
agreement, upon terms and conditions mutually
15
agreeable to Alaris and Caesarea, on the termination or renegotiation of the
Existing Distribution Agreement with Caesarea's Israeli distributor. All costs
associated with the termination or renegotiation of Caesarea's Existing
Distribution Agreement shall be borne exclusively by Caesarea, and Alaris shall
cooperate fully with Caesarea in effecting any such termination or
renegotiation. In the event Caesarea fails to terminate or, in the case of
Caesarea's Israeli distributor terminate or renegotiate to Alaris'
satisfaction, the Existing Distribution Agreements, as provided for in this
Section 24, Alaris shall only pay to Caesarea one-half of the Additional
Payments until such time as Caesarea terminates or renegotiates to Alaris'
satisfaction, as the case may be, the Existing Distribution Agreements. Upon
termination, or renegotiation to Alaris' satisfaction, of such Existing
Distribution Agreements, Alaris shall pay to Caesarea any Additional Payments
required to have been made and not so made due to the failure of Caesarea to
terminate or renegotiate such Existing Distribution Agreements.
25. BANKRUPTCY OF CAESAREA. In the event of the Bankruptcy of Caesarea,
or the impairment or interruption of Caesarea's business, Alaris shall be under
no further obligation to make payments to Caesarea under this Agreement other
than the payments provided for in Sections 6(d) and 10 hereof.
26. DISTRIBUTION AGREEMENT. Following the date hereof Caesarea and
Alaris shall enter into negotiations for a distribution agreement generally
upon the terms set forth on Schedule 26 hereto and otherwise upon terms and
conditions mutually agreeable to Alaris and Caesarea.
27. INDEMNIFICATION.
(a) Caesarea shall indemnify, defend and hold harmless Alaris, its
directors, officers, employees, agents, and their respective legal
representatives, successors and assigns (individually, an "Indemnified Party")
from and against any and all direct or consequential damages, costs, expenses,
losses, claims, demands, liabilities and/or obligations, including, without
limitation, reasonable counsel fees (collectively, "Losses"), incurred by an
Indemnified Party arising out of, resulting from or based upon: (i) any
negligence or wilful misconduct of Caesarea or its affiliates; (ii) any product
liability, warranty or other claims resulting from the sale, lease, license or
use of the NIKI Pump to the extent caused by any defect in the design of the
NIKI Pump, any defect in the manufacture of the NIKI Pump or Manufacturing
Assembly Kits manufactured by or on behalf of Caesarea or any other defect,
nonconformity or deficiency attributable to any action or activity by or on
behalf of Caesarea; and (iii) any action or claim that the NIKI Technology or
the use thereof infringes upon the rights, power or privileges of any Person,
including, without limitation, any such claim brought against Alaris or any
other Person as a result of the exercise of its rights under this Agreement.
(b) Notwithstanding the provisions of subparagraph (a) above, Caesarea
shall not be liable to indemnify an Indemnified Party for any Losses incurred
by such Indemnified Party if such Losses arise out of, result from or are based
upon the sale or use of the NIKI Technology or the NIKI Pump where the NIKI
Technology or the NIKI Pump, as the case may be, has been modified by any
Person other than Caesarea and such Losses arise out of or result from such
modification.
16
(c) If the facts giving rise to any such indemnification pursuant to this
Section 27 shall involve any actual claim or demand by any third party against
an Indemnified Party (a "Third Party Claim"), Caesarea shall be entitled to
written notice of and entitled (without prejudice to the right of any
Indemnified Party to participate at its own cost and expense through counsel of
its own choosing) to defend such Third Party Claim at its expense and through
counsel of its own choosing (which counsel shall be reasonably satisfactory to
the Indemnified Party); if it gives written notice (a "Defense Notice") of its
intention to do so no later than the 15th day following receipt of such written
notice; PROVIDED, HOWEVER, that if the defendants in any action shall include
both Caesarea and an Indemnified Party and the Indemnified Party shall have
been advised by its counsel that the counsel selected by Caesarea has a
conflict of interest because of the availability of different or additional
defenses to the Indemnified Party, the Indemnified Party shall have the right
to select separate counsel to participate in the defense of such action on its
behalf, at the expense of Caesarea. The failure of an Indemnified Party so to
notify Caesarea shall not relieve Caesarea of any liability which it may have
to any Indemnified Party except to the extent to which such liability may have
been mitigated as a result of the timely receipt of such notice. The
Indemnified Party shall cooperate fully in the defense of such Third Party
Claim and shall make available to Caesarea pertinent information under its
control relating thereto, but shall be entitled to be reimbursed, as provided
in this Section 27, for all out-of-pocket costs and expenses payable to third
parties incurred by it in connection therewith, including, without limitation,
reasonable fees and disbursements of counsel. If Caesarea assumes the defense
of any Third Party Claim, it will not, without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld, settle or
compromise any Third Party Claim, or permit a default or consent to the entry
of a judgement in respect thereof.
(d) If Caesarea elects to defend a Third Party Claim, an Indemnified
Party shall have the right, notwithstanding the provisions of Section 27(a)
hereof, to control, at its own cost and expense, the defense of any Third
Party Claim with respect to such Indemnified Party and such costs and expenses
shall not constitute Losses.
(e) Caesarea shall reimburse an Indemnified Party for all Losses incurred
by the Indemnified Party within 30 days of the Indemnified Party's demand
therefor. In the event Caesarea fails to reimburse the Indemnified Party
within such 30 day period, Caesarea shall pay to the Indemnified Party interest
on such unpaid Losses, at the rate of nine (9%) per annum, from the date the
Indemnified Party incurred such Loss through the date of payment by Caesarea.
(f) In the event an Indemnified Party elects to defend a Third Party
Claim, or if Alaris elects to initiate proceedings to enforce its rights in or
with respect to the NIKI Technology, including, without limitation, as a result
of any infringement thereof, Caesarea shall cooperate fully in the defense or
prosecution thereof, as the case may be, including, without limitation, making
available to Alaris or the Indemnified Party, as the case may be, all pertinent
technical and other information under its control relating thereto and making
appropriate employees officers of Caesarea available as witnesses for Alaris or
the Indemnified Party. Alaris or the Indemnified Party, as the case may be,
shall reimburse Caesarea for all out-of-pocket costs incurred by it in
connection therewith except to the extent the same constitutes Losses subject
to indemnity hereunder.
17
(g) Under no circumstances shall the total liability of Caesarea for any
Losses arising out of, resulting from or based upon any claim under Section
27(a)(iii) hereof exceed sixty (60%) percent of the aggregate amount of all
payments received by Caesarea hereunder (excluding amounts received by Caesarea
under Sections 8 and 11 hereof) and under the distribution agreement referred
to in Section 26.
28 GENERAL.
(a) CHOICE OF LAW. This Agreement and all purchase orders issued
hereunder shall be governed and interpreted, and all rights and obligations of
the parties hereunder shall be governed and determined in accordance with the
laws of the State of Israel, without regard to its conflict of laws rules. The
courts of Jerusalem, Israel shall have exclusive jurisdiction concerning any
dispute relating to or arising out of this Agreement and Alaris and Caesarea
hereby submit to the exclusive jurisdiction of such courts. In connection with
any litigation hereunder, no party shall be required to deposit any security
for costs, and each party hereby irrevocably waives any right that it might
otherwise have to require declarations (or exhibits thereto) to be translated
from English into Hebrew.
(b) NOTICES. All notices, requests, demands, waivers, consents,
approvals or other communications to any party hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally to such
party or sent to such party by telegram or telex or by international overnight
courier, as follows:
18
If to Alaris:
Alaris Medical Systems, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇, Vice President and General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Butowsky ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Adv.
Telephone: ▇▇▇-▇-▇▇▇-▇▇▇▇
Facsimile: 972-3-696-4770
If to Caesarea:
Caesarea Medical Electronics Limited
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇-▇▇▇-▇▇▇
Facsimile: 972-6-326-125
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Law ▇▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇, Adv.
Telephone: ▇▇▇-▇-▇▇▇-▇▇▇▇
Facsimile: 972-2-561-8847
19
or such other address as the addressee may have specified in notice duly given
to the sender as provided herein. All notices and communications given
hereunder shall be deemed received upon (i) actual receipt thereof by the
addressee, (ii) actual delivery thereof to the appropriate address, or (iii) in
the case of a facsimile transmission, upon transmission thereof by the sender
and the issuance by the transmitting machine of a confirmation slip confirming
that the number of pages constituting the notice have been transmitted without
error. In the case of notices sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee by international
overnight courier service. However, such mailing shall in no way alter the
time at which the notice sent by facsimile transmission is deemed received
(c) ENGLISH LANGUAGE. If this Agreement is translated into any language,
the English language version shall govern in the event of any conflict or
question of construction or interpretation.
(d) SEVERABILITY. In the event that any provision of this Agreement
shall be found in any jurisdiction to be in violation of public policy or
illegal or unenforceable in law or equity, such finding shall in no event
invalidate any other provision of this Agreement in that jurisdiction, and this
Agreement shall be deemed amended to the minimum extent required to comply with
the law of such jurisdiction.
(e) ENTIRE AGREEMENT. This Agreement and the other documents referred to
herein state the entire agreement reached between the parties hereto with
respect to the transactions contemplated hereby and may not be amended or
modified except by written instrument duly executed by the parties hereto. Any
and all previous agreements and understandings between the parties regarding
the subject matter hereof, whether written or oral, including, without
limitation, the Term Sheet dated March 11, 1998, between Alaris and Caesarea,
are superseded by this Agreement.
(f) NO WAIVER. The failure of either party hereto to enforce at any time
or for any period of time, any provision of this Agreement shall not be
construed as a waiver of such provision or of the right of such party
thereafter to enforce each and every provision.
(g) ASSIGNMENT, BINDING EFFECT. Caesarea shall not assign this Agreement
nor any of its rights or obligations hereunder without the prior written
consent of Alaris, which consent shall not be withheld unreasonably and any
such attempted assignment without such consent shall be void. This Agreement
and the rights herein granted shall be binding upon and shall inure to the
benefit of Alaris and its successors, assigns and transferees.
(h) INDEPENDENT CONTRACTOR. Each party shall act as the independent
contractor of the other party. Neither party shall be the legal agent of the
other for any purpose whatsoever and therefore has no right or authority to
make or underwrite any promise, warranty or representation, to execute any
contract or otherwise to assume any obligation or responsibility in the name of
or in behalf of the other party, except to the extent hereafter specifically
authorized in writing by the other party. None of the parties hereto shall be
bound by or liable to any third persons for any act or for any obligation or
debt incurred by the other toward such third party, except to the extent
hereafter specifically agreed to in writing by the party so to be bound.
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(i) HEADINGS. All section headings contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agreement.
(j) NUMBER AND GENDER. The definitions in this Agreement shall apply
equally to both the singular and plural form of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter form. The words "include," "includes," and "including"
shall be deemed to be followed by the phrase "without limitation."
(k) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when executed and delivered shall be deemed to be
an original and all of which counterparts, when taken together, shall
constitute one and the same instrument.
(l) FURTHER ASSURANCES. The parties and Swi Barak shall, from time to
time, execute all such documents and do all such things as any of the other
parties hereto may reasonably require for perfecting the transactions intended
to be effected under or pursuant to this Agreement.
(m) SALES AND TRANSFER TAXES. Except as otherwise provided in Section 9
hereof, all taxes, levies, impositions, deductions, charges, withholdings,
premiums, custom duties and other governmental fees, like assessments or
charges of any kind whatsoever including, without limitation, all transfer,
documentary, sales, ad valorem, value added, use and other such taxes, any
penalties, interest and additions to tax, imposed as a result of the
transactions contemplated hereunder (including, without limitation, the Sale,
the sale of the Assets, the payments provided in Sections 5, 6 and 10, and the
purchases pursuant to Sections 8, 11 and 13) shall be borne by Caesarea (but
excluding any taxes imposed on the net income of Alaris). Caesarea and Alaris
shall cooperate in the timely making of all filings, returns, reports and forms
as may be required in connection therewith.
(n) OFFSET. Alaris shall have the right to offset against any amount
otherwise payable by Alaris to Caesarea hereunder, any and all amounts payable
by Caesarea to Alaris hereunder. Caesarea shall have the right to offset
against any amount otherwise payable by Caesarea to Alaris hereunder, any and
all amounts payable by Alaris to Caesarea hereunder.
(o) FORCE MAJEURE. In no event will either party be liable for any
delays or failure to perform hereunder when the same are caused, directly or
indirectly by, or in any way arise as a result of, fire, floods, civil or
military unrest, terrorist activities, acts of god, war, governmental
interference, legal restrictions applicable in any relevant jurisdiction,
embargoes, shortages of raw materials (including components, assembled parts,
etc.) or labor, strikes (whether or not authorized by law). Any party
experiencing such an event shall advise the other promptly, explaining the
nature of the event and the anticipated duration.
(p) CONFLICTING COMMERCIAL FORMS. The terms and conditions of this
Agreement shall supersede and control over any conflicting or additional terms
or conditions of any purchase orders,
21
acknowledgments, invoices or other commercial forms exchanged between the
parties concerning the subject matter hereof.
(q) PAYMENTS. All payments required to be made hereunder shall be in
United States Dollars.
(r) LIMITATION OF LIABILITY. Caesarea shall not be liable to Alaris for
any special, indirect or consequential damages arising out of this Agreement,
its performance or termination.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written
ALARIS MEDICAL SYSTEMS, INC.
By:
-----------------------------
Name:
Title:
CAESAREA MEDICAL ELECTRONICS LIMITED
By:
-----------------------------
Name: Swi Barak
Title: General Manager
ACCEPTED AND AGREED TO
(solely with respect to Sections
3(a), 23 and 28(l) hereof)
--------------------------------
SWI BARAK
22
LIST OF SCHEDULE AND EXHIBITS
EXHIBIT DESCRIPTION
------- -----------
A. Agreement with Nestec, S.A.
B. Form of Standby Letter of Credit
SCHEDULE DESCRIPTION
-------- -----------
1(a) Calculation of Direct Costs
1(b) Documents related to NIKI Technology
1(c) Existing Distribution Agreements
1(d) Existing Intellectual Property
1(e) Description of I.V. Valve
1(f) Manufacturing Assembly Kit specifications for ▇▇▇▇▇ ▇ ▇▇▇▇ Pump
1(g) Part 1 Manufacturing Documentation Package - Phase 1 NIKI Pump
1(g) Part 2 Manufacturing Documentation Package - Phase 2 NIKI Pump
1(g) Part 3 Manufacturing Documentation Package - Phase 3 NIKI Pump
1(h) Description of Peristaltic Pump
1(i) Part 1 Specifications for Phase 1 NIKI Pump
1(i) Part 2 Specifications for Phase 2 NIKI Pump
1(i) Part 3 Specifications for ▇▇▇▇▇ ▇ ▇▇▇▇ Pump
1(j) Description of Pump System with Error Detection
1(k) Description of System and Method
4 List of Assets
13 Engineering Costs
22 Rights to Intellectual Property
26 Terms of Distribution Agreements
23
