Distribution Agreement - Cardima Inc. and Cardiologic GmBH
DISTRIBUTION AGREEMENT
----------------------
This agreement is made as of 1 day of April, 1997 between CARDIMA, INC., a
------
California corporation having its principal place of business at 47266 Benicia
Street, Fremont, CA 94538 ("Cardima") and Cardiologic, GmbH, having its
principal place of business at Rotwandweg 5a, 82024 Taufkirchen, Germany
("Distributor").
In consideration of the mutual promises contained herein, Cardima and
Distributor agree as follows:
1. DEFINITION. As used in this Agreement:
(a) "Products" shall mean those products listed in Exhibit A attached
---------
hereto, as it may be amended.
(b) "Standard Terms of Condition of Sale" means Cardima's terms and
conditions of sale of its products generally as modified by Cardima from time to
time.
(c) "Territory" means Germany.
2. APPOINTMENT AND AUTHORITY OF DISTRIBUTOR.
(a) Appointment. Subject to the terms and conditions of this
-----------
Agreement, Cardima hereby appoints Distributor, and Distributor accepts such
appointment, as Cardima's exclusive distributor in the Territory.
(b) Independent Contractors. It is understood that both parties
-----------------------
hereto are independent contractors and are engaged in the operation of their own
businesses. Neither party hereto is to be considered the agent of the other
party for any purpose whatsoever, and neither party has any authority to enter
into any contracts or assume any obligations for the other party or make any
warranties or representations on behalf of the other party, except as provided
for in Section 3 below.
3. OBLIGATIONS OF DISTRIBUTOR.
(a) Registration and Marketing of Products. Distributor agrees to use
--------------------------------------
its best effort to investigate, obtain government approval for, promote and
distribute the Products, at its own expense, in the Territory as soon as it is
feasible after the date of this Agreement, using generally the same channels and
methods, exercising the same diligence and adhering to the same standards which
it employs with respect to the other medical application products sold by
Distributor, as well as Distributor's own products,
<PAGE>
if any. Unless prohibited by local law, all such registrations and approvals
obtained by Distributor shall be in the name of Cardima. In particular,
Distributor shall, at its own expense:
(i) Exercise due diligence to promptly obtain and maintain government
approvals to import, register and market the Products in each jurisdiction in
the Territory and to diligently proceed to secure and maintain, as may be
required from time to time, government importing, registration and marketing
approvals, import and export licenses, customs clearances and currency
authorizations and any permits necessary in each jurisdiction in the Territory.
Distributor shall keep Cardima generally informed of the regulatory requirements
in each jurisdiction in the Territory and shall submit to the government health
authorities in each jurisdiction in the Territory where the sale of the Products
is planned a complete application for registration and marketing approval of the
Products by the date set forth in any marketing plan requited by Cardima below.
Distributor shall file for regulatory approval by the date or dates set forth on
Exhibit B attached hereto. If Cardima so requests, Distributor shall notify
Cardima each time it submits an application for government approval for the
Products and shall, at Cardima's request, supply with copies of or access to
Distributor's filings and clinical data and shall keep Cardima fully informed of
the progress of each such application. Cardima and Distributor agree to disclose
promptly to the other all reports and any information which they have available
or which become available to them relating to any deleterious physiological
effects caused by or related to the Products. In the event that all necessary
registrations, licenses and permits required to sell and distribute the Products
in the Territory for clinical use (if applicable) are not obtained within nine
(9) months after the effective date of this Agreement, Manufacturer may, in its
sole discretion, terminate this Agreement upon written notice to Distributor.
(ii) Prior to thirty (30) days after signing this agreement, Distributor
must submit to Cardima a complete and accurate marketing plan, prepared by
Distributor in good faith, which shall be subject to approval by Cardima, for
the Products in each jurisdiction in the Territory as well as a financial
statement acceptable to Cardima. If and as requested by Cardima, such plan shall
be updated and delivered to Cardima annually and shall include, at minimum,
information on competitive products; proposed labeling (including label, package
insert, introductory folder and advertising); estimated sales volume;
anticipated quantities of the Products to be purchased from Cardima;
distribution and promotional plans; schedule for submission of applications for
government registration and marketing approval; and marketing approval. All
Product labels, package inserts and claims, which are prepared for or by
Distributor, shall meet all legal requirements of the jurisdiction in which the
products are marketed and shall be subject to Cardima's prior review and
approval.
(iii) Commence marketing of the Products throughout the Territory
immediately after receipt of government health registration approvals.
<PAGE>
Distributor shall be deemed to have commenced the marketing of the Products only
when it shall have offered the Products regularly for sale.
(iv) Use its best efforts to distribute and sell the products for use
only by qualified individuals, as appropriate in the Territory, in compliance
with local laws and regulations and good commercial practice and for uses and
applications reasonably approved by Cardima for the Products. Distributor shall
be subject to performance criteria applied to distributors of the Products
generally and as governed by market opportunity, as communicated by Cardima from
time to time after discussion and agreement with the Distributor.
(v) Purchase or cause to be purchased from Cardima all quantities of
the Products required by Distributor in order to meet demand by purchasers and
potential purchasers of the Products in the Territory. Distributor shall not
distribute nor market products competitive with the Products in the Territory
during the term of this Agreement without the prior written consent of Cardima.
If Cardima does not approve the request for distribution of competitive
products, the Distributor must withdraw the competitive products from its market
place or this agreement is subject to termination in thirty (30) days at
Cardima's discretion. Distributor shall not make any changes, alterations,
modifications or additions to the Products without prior written approval of
Cardima.
(b) Purchase Commitment. Distributor hereby agrees to purchase from
-------------------
Cardima during the first calendar quarter periods commencing April 1, 1997
("Purchase Commitment") the dollar value in Products set forth on the Purchase
Commitment, Exhibit C, for the next four calendar quarter periods. Throughout
the term of this Agreement, if (i) the parties cannot agree on Purchase
Commitments, or (ii) Distributor fails to purchase Distributor's Purchase
Commitment in any given calendar quarter and Distributor's Purchase Commitment
in the next calendar quarter plus the deficit in Distributor's Purchase
Commitment from the preceding calendar quarter, then, without prejudice to
Cardima's other rights under this Agreement (including the right to terminate
this Agreement upon written notice to Distributor), Cardima may appoint one or
more additional distributors for sale of the Products in the Territory. Products
returned to cardima shall not count towards the fulfillment of Distributor's
relevant Purchase Commitment. Within first five (5) days of every month,
Distributor shall provide Cardima with a ninety (90) day rolling forecast
showing prospective orders by Product and Distributor's anticipated Products
purchase order submission date. Such rolling forecasts shall be non-binding and
shall be used by Cardima for information purposes only.
(c) Reports. Distributor shall, at is expense, submit regular reports to
-------
Cardima on a monthly basis (unless otherwise agreed) accurately describing the
sales of the Products by Distributor for the previous month (including prices,
unit sales and other information as may be reasonably requested by Cardima from
time to time) and
<PAGE>
forecasted sales on a as requested basis for the upcoming year in the Territory.
The Distributor's price list to their customers must be submitted once a year to
Cardima. Such reports shall be in a form reasonably acceptable to Cardima, see
Exhibit D.
(d) Prohibited Sales. Distributor agrees not to sell, and agrees to use
----------------
reasonable efforts to ensure that Distributor's agents and customers do not sell
or use, any of the Products outside of the Territory.
(e) Product Presentation. Distributor agrees to present the Products
--------------------
fairly to potential customers, not to disparage the Products, any Product
trademarks or Cardima in any way and to do all things reasonable to promote the
reputation of the Products and the value of any Product trademarks.
(f) Marketing Plan. Distributor agrees to provide Cardima with its
--------------
formal marketing plan intended for the marketing of the Products for the
duration of the contract. This marketing plan must be submitted at the time the
contract is signed and in a form reasonably acceptable to Cardima.
(g) Financial Statements. Distributor agrees to provide Cardima with an
--------------------
up to date financial statement at the time the contract is signed and in a form
reasonably acceptable to Cardima.
(h) Finances and Personnel. Distributor shall maintain a networth and
----------------------
working capital sufficient, in Cardima's reasonable judgment, to allow
Distributor to perform fully and faithfully Distributors obligations under this
Agreement. Distributor shall devote sufficient financial resources and
technically qualified sales and training personnel to the Products to fulfill
Distributor's responsibilities under this Agreement. Distributor shall maintain
a sales force of at least two sales people who will be completely dedicated to
electrophysiology. Distributor shall, at Distributor's own expense, maintain a
sufficient inventory of the products at all times during the term of this
Agreement as necessary in order to meet the requirements of any customer or
potential customer within the Territory.
(i) Pre-clinical and Clinical Trials. Distributor shall assist and
--------------------------------
support Cardima in organizing and conducting pre-clinical and clinical trials
required to obtain registrations, licenses and permits required to comply with
the laws and regulations of the Territory for sale and distribution of the
Products; provided, however, that no activities in connection with organizing
and conducting such trials shall be initiated by Distributor without Cardima's
prior written approval.
(j) Sales Force Involvement. Cardima shall have the right to review,
-----------------------
advise and direct the activities of Cardiologic's electrophysiology sales force
as they relate to the sales of Cardima products. The distributors sales force
will be directed to
<PAGE>
communicate openly and to coordinate their activities with Cardima's sales
management team.
4. Obligations of Cardima.
(a) Requirements by Distributor. Cardima shall supply Distributor's
---------------------------
requirements for the Products in the Territory, but subject to Distributor's
commitments to other Products purchasers and, consistent with Distributor's
forecasts of its expected requirements for the Products (as described in Section
3 above). If Cardima believes it will not be able to satisfy Distributor's
requirements for the Products, it shall promptly notify Distributor, specifying
the reasons for the expected delay and its duration. Notwithstanding the
foregoing, Cardima shall have no obligation to supply Products to Distributor
during any period for which Distributor's payments to Cardima hereunder are
thirty (30) days or more past due.
(b) Registration and Marketing Support. To assist Distributor in
----------------------------------
registering and marketing the Products in the Territory, Cardima shall:
(i) Provide Distributor with materials necessary to obtain
health registrations, to the extent practicable.
(ii) Provide Distributor with information on marketing and
promotional plans of Cardima for the Products as well as copies of marketing,
advertising, sales and promotional literature concerning the Products produced
by or for Cardima, if any.
(iii) Provide Distributor with certain certificates of analysis
concerning the Products purchased by Distributor, certificates of free sale,
trademark authorizations and any other documents which Distributor may require
for registration purposes, at Distributor's request and expense, if available.
5. TRADEMARKS AND TRADE NAMES.
(a) Use. During the term of this Agreement, Distributor shall have
---
the right to indicate to the public that Distributor is an authorized
distributor of Cardima's Products and to advertise within the Territory such
Products under the trademarks, marks, and trade names that Cardima may adopt
from time to time ("Cardima's Trademarks"). Distributor shall not alter or
remove any Cardima's Trademark applied to the Products at the factory. Except as
set forth in this Section 11, nothing contained in this Agreement shall grant to
Distributor any right, title or interest in Cardima's trademarks. At no time
during or after the term of this Agreement shall Distributor challenge or assist
others to challenge Cardima's Trademarks or the registration thereof
<PAGE>
or attempt to register any trademarks, marks or trade names confusingly similar
to those of the Cardima.
(b) Approval of Representations. All representations of Cardima's
---------------------------
Trademarks that Distributor intends to use shall first be submitted to Cardima
for approval which shall not be unreasonably withheld, of design, color, and
other details or shall be exact copies of those used by Cardima. If any of
Cardima's Trademarks are to be used in conjunction with another trademark on or
in relation to the Products, then Cardima's mark shall be presented equally
legibly, equally prominent, and of greater size than the other but nevertheless
separated from the other so that each appears to be a mark in its own right,
distinct from the other mark.
6. TERMS AND CONDITIONS OF SALE.
(a) Terms of Orders. All purchases of the Products by Distributor from
---------------
Cardima during the term of this Agreement shall be subject to the terms and
conditions of this Agreement and to Cardima's published Standard Terms and
Conditions of Sale as in effect at the time of such purchase, provided that in
the event of any conflict between the terms of this Agreement and the Standard
Terms and Conditions of Sale of Cardima then in effect, this Agreement shall be
controlling. Distributor's purchase order forms shall be deemed to have no terms
and conditions. Distributor disclaims any such terms and conditions and such
disclaimer shall be deemed to be a continuing disclaimer throughout the term of
this agreement. Without limiting the foregoing, all purchase orders submitted
by Distributor to Cardima shall be subject to acceptance by Cardima at its
offices in Fremont, California.
(b) Packaging. All quantities of the Products purchased from Cardima by
---------
Distributor shall be in the form of labeled, standard unit packages and in a
form and formulation consistent with the Products sold by Cardima for use in the
United States, unless otherwise agreed by Cardima and Distributor in writing,
which agreement by Cardima and Distributor will not be unreasonably withheld.
Cost of normal packaging of the Product for shipment to Distributor shall be
paid by Cardima; however, the cost of special packaging agreed by Cardima shall
be paid by Distributor.
(c) Order and Acceptance. All orders for Products submitted by
--------------------
Distributor shall be initiated by written purchase orders sent to Cardima and
requesting a delivery date during the term of this Agreement; provided however,
that an order may initially be place orally or by facsimile. A written
confirmation purchase order is to be received by Cardima within five (5) days
after an oral order is placed. No order shall be binding upon Cardima until
accepted by Cardima in writing, and Cardima shall have no liability to
Distributor with respect to purchase orders are not accepted. No partial
shipment of an order shall constitute the acceptance of the entire order, absent
the written acceptance of such entire order. Cardima shall use its own
reasonable best
<PAGE>
efforts to deliver Products at the times specified either in Cardima's quotation
or in Cardima's written acceptance of Distributor's purchase orders.
Notwithstanding the foregoing, Cardima shall have no obligation to supply
Products to Distributor during any period for which Distributor's payments to
Cardima hereunder are thirty (30) days or more past due.
(d) Shipping. All products delivered pursuant to the terms of this
--------
Agreement shall be suitably packed for air freight shipment in Cardima's
standard shipping cartons, marked for shipment at Cardima's manufacturing plant
to Distributor's address set forth above, and delivered to Distributor or
Distributor's carrier agent F.O.B. Cardima's Distribution Site, at which time
title to such Products and risk of loss shall pass to Distributor. All shipments
of Products shall include a Certificate of Sterilization for each lot. Cardima
shall deliver Products to the carrier selected by Distributor. In the event that
Distributor does not provide written notice of such carrier, Cardima shall
select the carrier. All freight, insurance, and other shipping expenses, as well
as any special packing expense, shall be paid by Distributor. Distributor shall
also bear all applicable taxes, duties, and similar charges that may be assessed
against the Products after delivery to the carrier at Cardima's Distribution
Site. Cardima's Distribution Site shall initially be its Fremont, California
facility and may be changed upon written notice from Cardima to Distributor.
(e) Price and Payment. Cardima shall sell Products to Distributor at prices
-----------------
communicated in writing by Cardima to its Product distributors generally from
time to time, including communication in the form of "newsletter". All costs of
transportation and insurance of the Products from Cardima's place of manufacture
to points of destination shall be the responsibility of, and borne by,
Distributor. All taxes, fees, duties and other charges with respect to the sale
by Cardima to Distributor of the Products shall be paid by Distributor or
reimbursed by Distributor to Cardima. All payments due Cardima pursuant to this
Agreement shall be paid, by any reasonable method specified by Cardima in
writing from time to time, within sixty (60) days after the date of shipment of
the Products to Distributor and in any case shall be made in US $. If
Distributor fails to make any payment to Cardima when due, Cardima may, without
affecting its rights under this Agreement, cancel or delay any future shipments
of the Products to Distributor. Any amount not paid when due shall be subject to
an interest charge of the lesser of (i) one and one-half percent (1 1/2%) per
month, computed on the unpaid daily balance and (ii) the maximum rate permitted
by law. All payments to Cardima pursuant to this Agreement shall be made in
United States currency in immediately available funds.
(f) Amendments to Schedule A. Cardima may, at its discretion, amend
------------------------
Schedule A hereto, by adding or subtracting Products due to new Product
introduction or Product deletion, upon sixty (60) days prior written notice to
Distributor in the form of a dated substituted Schedule A.
<PAGE>
(g) Property Rights. Distributor agrees that Cardima owns all right,
---------------
title, and interest in the product lines that include the Products and in all of
Cardima's patents, trademarks, trade names, inventions, copyrights, know-how,
and trade secrets relating to the design, manufacture, operation or service of
the Products. The use by Distributor of any of these property rights is
authorized only for the purposes herein set forth, and upon termination of this
Agreement for any reason such authorization shall cease. The Products are
offered for sale and are sold by Cardima subject in every case on the condition
that such sale does not convey any license, expressly or by implication, to
manufacture, duplicate or otherwise copy or reproduce any of the Products.
Distributor shall not make any changes, alterations, modifications or additions
to the Products without prior written approval of Cardima.
7. PRODUCT WARRANTY.
Cardima warrants that the Products sold to Distributor will at all
times comply with the requirements of and regulations adopted pursuant to the
US. Federal Food, Drug, and Cosmetic Act. Cardima will provide, when requested
by Distributor, certification that to the best of its knowledge it is in
compliance with U.S. laws, statutes, rules, regulations and relevant orders
relating to the manufacture, use, distribution and sale of the Product.
CARDIMA'S SOLE OBLIGATION UNDER THE FOREGOING WARRANTY SHALL BE, AT CARDIMA'S
SOLE ELECTION, TO EITHER REPLACE THE RELEVANT PRODUCT OR REFUND DISTRIBUTOR'S
PURCHASE PRICE FOR SUCH PRODUCT. IN NO EVENT SHALL CARDIMA BE LIABLE FOR THE
COST OF PROCUREMENT OF SUBSTITUTE GOODS BY THE CUSTOMER OR FOR ANY SPECIAL,
CONSEQUENTIAL, OR INCIDENTAL DAMAGES FOR BREACH OF WARRANTY. Such obligation
shall be subject to Cardima being granted the reasonable opportunity to inspect
the allegedly defective Product at the location of its use or storage and, upon
request in accordance with Cardima's instruction, return of the Product to
Cardima at Cardima's cost. Any such replacement of Products may be made by
substitution of any similar product. NOTWITHSTANDING THE FOREGOING, CARDIMA
SHALL HAVE NO WARRANTY OR OTHER OBLIGATION WITH RESPECT TO ANY PRODUCT SOLD
HEREUNDER IF SUCH PRODUCT HAS EXPIRED CONSISTENT WITH LABELS OR OTHER
PUBLICATIONS BY CARDIMA OR HAS NOT BEEN USED, HANDLED OR STORED IN ACCORDANCE
WITH INDUSTRY PRACTICE AND GUIDELINES WHICH MAY BE COMMUNICATED BY CARDIMA.
EXCEPT AS EXPRESSLY PROVIDED ABOVE, CARDIMA GRANTS NO OTHER WARRANTIES OR
CONDITIONS, EXPRESS OR IMPLIED, BY STATUTE, THIS AGREEMENT OR ANY COMMUNICATION
BY CARDIMA, REGARDING THE PRODUCT, THEIR FITNESS FOR ANY PARTICULAR PURPOSE,
THEIR QUALITY, THEIR MERCHANTABILITY OR OTHERWISE.
<PAGE>
8. CONFIDENTIALITY.
Distributor acknowledges that by reason of Distributor's relationship
to Cardima hereunder, Distributor will have access to certain information and
materials concerning Cardima's business plans, customers, technology, and
products that are confidential and of substantial value to Cardima, which value
would be impaired if such information were disclosed to third parties.
Distributor agrees that Distributor will not use in any way for Distributor's
own account or the account of any third party, nor disclose to any third party,
any such confidential information revealed to Distributor by Cardima.
Distributor shall take every reasonable precaution to protect the
confidentiality of such information. Upon request by Distributor, Cardima shall
advise whether or not Cardima considers any particular information to be
confidential. Distributor shall not publish any technical description of the
Products beyond the description published by Cardima (except to translate that
description into appropriate languages for the Territory). In the event of
termination of this Agreement, there shall be no use or disclosure by
Distributor of any confidential information of Cardima, and Distributor shall
not manufacture or have manufactured any compositions, devices, components or
assemblies utilizing any of Cardima's confidential information.
9. LIMITATION OF LIABILITY.
CARDIMA'S LIABILITY ARISING OUT OF THIS AGREEMENT AND/OR SALE OF THE
PRODUCTS SHALL BE LIMITED TO THE AMOUNT PAID BY THE CUSTOMER FOR THE PRODUCTS.
IN NO EVENT SHALL CARDIMA BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS
BY ANYONE. IN NO EVENT SHALL CARDIMA BE LIABLE TO DISTRIBUTOR OR ANY OTHER
ENTITY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES, HOWEVER
CAUSED, ON ANY THEORY OF LIABILITY, WHETHER OR NOT CARDIMA HAS BEEN ADVISED ON
THE POSSIBILITY OF SUCH DAMAGE.
<PAGE>
10. PATENT INDEMNITY.
(a) Indemnification. Distributor agrees that Cardima has the right
---------------
to defend, or at Cardima's option to settle, and Cardima agrees, at Cardima's
own expense, to defend or at Cardima's option to settle any claim, suit or
proceeding brought against Distributor or Distributor's customers on the issue
of infringement of any United States of America patent by the Products sold
hereunder or the use thereof, subject to the limitations hereinafter set forth.
Cardima shall have sole control of any such action or settlement negotiations,
and Cardima agrees to pay, subject to the limitations herein after set forth,
any final judgment entered against Distributor or Distributor's customer on such
issue in any such suit or proceeding defended by Cardima. Distributor agrees
that Cardima at Cardima's sole option shall be relieved of the foregoing
obligations unless Distributor or Distributor's customer notifies Cardima
promptly in writing of such claim, suit or proceeding and gives Cardima
authority to proceed as contemplated herein, and, at Cardima's expense, gives
Cardima proper and full information and assistance to settle and/or defend any
such claim, suit or proceeding. Cardima shall not be liable for any costs or
expenses incurred without Cardima's prior written authorization.
(b) Limitation. Notwithstanding the provisions of Subsection 10(a)
----------
above, Cardima assumes no liability for (i) infringements covering completed
equipment or any composition, assembly, circuit, combination, method or process
in which any of the Products may be used but not covering the Products when used
alone or (ii) infringements involving the modification or servicing of the
products, or any part thereof, unless such modification or servicing was done by
Cardima.
(c) Entire Liability. THE FOREGOING PROVISIONS OF THIS SECTION 10
----------------
STATE THE ENTIRE LIABILITY AND OBLIGATIONS OF CARDIMA AND THE EXCLUSIVE REMEDY
OF DISTRIBUTOR AND DISTRIBUTOR'S CUSTOMERS, WITH RESPECT TO ANY ALLEGED
INFRINGEMENTS OF PATENTS OR ANY PART THEREOF.
11. INDEMNIFICATION.
Cardima and Distributor each agree to indemnify and hold the other
party harmless from and against any and all claims made by any person or entity
arising out of the processing, marketing, distribution and sale of the Products,
where and to the extent such damages have been caused by the fault of such party
or its employees or agents. The indemnifying party shall have the right to
defend or, at its option, to settle such claims, and if it chooses exercise such
right, it shall have control over any such claim or settlement negotiations. The
indemnifying party shall be relieved of the foregoing obligations unless the
indemnified party gives prompt notice in writing of any such claim, suit or
proceeding and, at the indemnifying party's expense, gives the
<PAGE>
indemnifying party proper and full information and assistance to settle and/or
defend any such claims, suit or proceeding.
12. TERM AND TERMINATION.
(a) Term and Renewal. This agreement shall commence on the date first
----------------
set forth above and shall continue in force for the fixed term ending on
December 31, 1999, unless terminated earlier under the provisions of this
Section. At the end of the fixed term, this Agreement may be renewable for an
additional two (2) year period in accordance with the terms and conditions
agreed to by Cardima in writing not less than thirty (30) days in advance. The
parties shall be required to give notice to the other of its intention to
terminate this Agreement at least sixty (60) days prior to the expiration of the
fixed term hereof or of any renewal period.
(b) Termination. Either party may at its option, terminate this
-----------
Agreement by giving to the other not less than thirty (30) days prior written
notice in the event that the other party shall at any time commit a material
breach of any of its obligations hereunder and shall fail to correct any such
breach during the period of such notice. This Agreement shall terminate
automatically without further notice or action by either party if the other
party shall become insolvent, shall make or seek to make an arrangement with or
an assignment for the benefit of creditors, or if proceedings in voluntary or
involuntary bankruptcy shall be instituted by, on behalf of or against such
other party, or if a receiver or trustee of such other party's property shall be
appointed. This Agreement shall also terminate immediately upon written notice
if Distributor cannot provide evidence of its credit worthiness reasonably
satisfactory to Cardima upon Cardima's written request.
(c) Termination for Noncompliance with Purchase Commitment. In the event
------------------------------------------------------
that Distributor fails to meet the purchase commitment levels set forth in
Exhibit C by the end of the first year, then this Agreement shall terminate
automatically at such time without notice unless Cardima, at its sole
discretion, notifies Distributor in writing that this Agreement shall continue
in full force and effect notwithstanding Distributor's noncompliance with such
performance levels. Following the first year, if Distributor fails to meet the
purchase commitment levels set forth in Exhibit C for two (2) consecutive
quarters, as shown by Distributor's reports submitted in accordance with Section
3 (c) herein, then this Agreement shall terminate automatically at such time
without notice unless Cardima, at its sole discretion, notifies Distributor in
writing that this Agreement shall continue in full force and effect
notwithstanding Distributor's noncompliance with such performance levels.
(d) Effect of Termination. Distributor shall terminate all Product
---------------------
distribution activities in the Territory immediately upon any termination of
this Agreement. In addition, Distributor shall deliver to Cardima or destroy,
upon request,
<PAGE>
all Product materials supplied by Cardima and all Product descriptive and
marketing materials of any kind. The obligations of Cardima and Distributor
pursuant to Sections 8 (Confidentiality), 9 (Limitation on Liability), and 13
(General Provisions) of this Agreement shall survive any termination of this
Agreement. Nothing herein shall limit any remedies which a party may have for
the other's default, except as expressly provided herein. Neither party shall be
liable to the other for any damage in connection with such party's termination
of this Agreement by notice, in accordance with this Section. Distributor will
be permitted to return to Cardima all re-saleable goods and be reimbursed the
original purchase price plus freight and import duties (landed cost) of the
returned goods.
(e) Notwithstanding the above termination clauses 12(b), (c), and (d),
there will always be a granted period of thirty (30) days in which the
Distributor has the opportunity and possibility to rectify the cited cause of
termination. Any definitive termination will be served to the Distributor in
writing in the manner prescribed by 13(e) after discussion between the parties.
13. GENERAL PROVISIONS
(a) Governing Law. This Agreement shall be governed by and interpreted in
-------------
accordance with the internal laws of the State of California, United States of
America.
(b) Jurisdiction and Venue. The Federal and State courts within the
----------------------
state of California shall have exclusive jurisdiction and venue over any dispute
arising out of this Agreement, and Distributor hereby consents to the
jurisdiction of such courts. Notwithstanding the foregoing, the parties agree
to submit any dispute hereunder to binding arbitration under the rules and
auspices of the International Chamber of Commerce, to be held in San Jose,
California, before a single arbitrator; provided, that the parties may, without
limiting the authority of the arbitrator, seek injunctive relief from any court
having jurisdiction thereof, as above.
(c) Entire Agreement. This Agreement represents the entire agreement and
----------------
understanding of Cardima and Distributor with respect to distribution of the
Products, supersedes all previous agreements and understandings related thereto
and may only be amended or modified in writing signed by authorized
representatives of Distributor and Cardima.
(d) Assignment. Distributor shall not assign any of its rights or
----------
obligations pursuant to this Agreement without the prior written consent of
Cardima.
(e) Notices. All notices under this Agreement shall be in writing and
-------
shall be deemed given if sent by telex, telecopier or telegram (except for legal
process in
<PAGE>
each such case), certified or registered mail or commercial courier (return
receipt or confirmation of delivery requested), or by personal delivery to the
party to receive such notices or other communications called for by this
Agreement at the following addresses (or at such other address for a party as
shall be specified by such party by like notice):
CARDIMA:
--------
Cardima, Inc.
47266 Benicia Street
Fremont, CA 94538
Attention: Mr. David Smith
DISTRIBUTOR:
------------
Cardiologic GmbH
Rotwandweg 5a
82024 Taufkirchen
Germany ("Distributor").
Attention: Mr. Frank Groenewegen
(g) Limitation of Damage. In no event shall either party be liable
--------------------
to the other for incidental or consequential damages, even if such party shall
have been advised of the possibility of the same.
(h) Force Majeure. Each of the parties hereto shall be excused from
-------------
performance of its obligations by force major, and such excuse shall continue so
long as the condition constituting such force majeure continues plus thirty days
after the termination of such condition. For the purposes of this Agreement,
"force majeure" is defined to include causes beyond the control of Distributor
or Cardima, including without limitation acts of God, acts, regulations or laws
of any government, war, civil commotion, destruction of production facilities or
materials by fire, earthquake or storm, labor disturbances, epidemic and failure
of public utilities or common carriers.
(i) Legal Expense. The prevailing party in any legal action brought
-------------
by one party against the other and arising out of this Agreement shall be
entitled, in addition to any other rights and remedies that such prevailing
party may have, to reimbursement for expenses incurred by such prevailing party,
including court costs and reasonable attorney's fees.
<PAGE>
(j) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(k) Partial Invalidity. If any provision of this Agreement is held to be
------------------
invalid, then the remaining provisions shall nevertheless remain in full force
and effect. The parties agree to renegotiate in good faith any term held
invalid and to be bound by the mutually agreed substitute provision.
(l) Waiver. The failure of either party to enforce at any time the
------
provisions of this Agreement shall in no way be constituted to be a present or
future waiver of such provisions, and shall not in any way affect the right of
either party to enforce each and every such provision thereafter.
By: /s/ CARDIMA, INC. /s/ CARDIOLOGIC GmbH
-------------------------- --------------------------
<PAGE>
Exhibit-A
---------
STANDARD PRODUCTS AND DESCRIPTIONS
<TABLE>
<CAPTION>
Part Number Description
----------- -----------
<S> <C>
01 . 04 1003 Pathfinder . 4 Non-Paired, 9-9-9, 150cm
01 . 04 1007 Pathfinder . 4 2 Pairs, 2-6-2, 150cm
01 . 08 1003 Pathfinder . 8 Non-Paired, 9-9-9, 150cm
01 . 08 1007 Pathfinder . 8 4 Pairs, 2-6-2, 150cm
01 . 16 1003 Pathfinder . 16 8 Pairs, 2-6-2, 150cm
01 . 04 3001 Pathfinder .020" . 4 Non-Paired, 2-2-2, 140cm
01 . 04 3002 Pathfinder .020" . 4 2 Pairs, 2-6-2, 140cm
01 . 04 3003 Pathfinder .020" . 4 Non-Paired, 2-2-2, 175cm
01 . 04 3004 Pathfinder .020" . 4 2 Pairs, 2-6-2, 175cm
01 . 08 2001 Pathfinder 3mm . 8 Non-Paired, 2-2-2, 150cm
02 . 04 1001 Tracer . 4 Non-Paired, 5-5-5, 145cm
02 . 04 1002 Tracer . 4 2 Pairs, 2-5-2, 145cm
02 . 08 1001 Tracer . 8 Non-Paired, 5-5-5, 145cm
02 . 08 1002 Tracer . 8 4 Pairs, 2-5-2, 145cm
02 . 16 1002 Tracer . 16 8 Pairs, 2-5-2, 145cm
05 . 00 1001 TheraStream 2mm OD, 135cm
08 . 00 1000 ForeRunner, Damato type, 90cm, 6F OD
08 . 00 1001 ForeRunner, Damato type, 65m, 6F OD
08 . 00 1005 ForeRunner, Hockey type, 90cm, 6F OD
08 . 00 1006 ForeRunner, Hockey type, 65cm, 6F OD
08 . 00 1010 ForeRunner, Josephson type, 90cm, 6F OD
08 . 00 1011 ForeRunner, Josephson type, 65cm, 6F OD
08 . 00 1015 ForeRunner, Multipurpose type, 90cm, 6F OD
08 . 00 1016 ForeRunner, Multipurpose type, 65cm, 6F OD
10 . 16 1001 Connecting Cable, 16 pin, 100cm
236710 Dasher-10 Steerable Guidewire, 195cm, 0.011in
</TABLE>
<PAGE>
EXHIBIT B
---------
CATHETERS
------------------------------------------------------------------------------
Name Document # Submitted Cleared
------------------------------------------------------------------------------
Distributor to be notified at appropriate time.
<PAGE>
EXHIBIT-C
---------
<PAGE>
EXHIBIT D
---------
MONTHLY DISTRIBUTOR REPORT FORMAT
1. Market Overview and Analysis. Note trends by product family in Cardiac
Electrophysiology Markets.
2. Competitive Information. Provide any/all information on new products
entering the local markets.
3. Pathfinder and Tracer catheter use update. Supply Cardima with the number
of cases to date by institution and any relevant information.
4. Regulatory Issues. Provide a list of all Target products pending local
government approval and all those pending filing.
5. Product Complaints. Note any/all complaints felt to be of added
significance.
6. Changes in Distributor Organization (if applicable).
7. Articles and Publications. Provide Cardima with articles and translated
summaries of all newly-published articles related to the electrophysiology
and Inverventional Cardiology markets.
8. Upcoming Local Events.
9. Comments and Issues of Interest.
10. End-customer Sales by customer, by Product Number. A computer print-out
will suffice.