Assignment and Distribution Agreement - RheoLogix LLC, Apheresis Technologies Inc. and CytaLogic Corp.
ASSIGNMENT AND DISTRIBUTION AGREEMENT
THIS ASSIGNMENT AND DISTRIBUTORSHIP AGREEMENT (the "Agreement") is entered
into as of March 22, 2000, by and among RheoLogix, L.L.C., a Delaware limited
liability company ("RheoLogix"), Apheresis Technologies, Inc., a Florida
corporation ("ATI") ("RheoLogix and ATI are sometimes collectively referred to
as the "Assignor") and CytaLogix Corporation, a Delaware corporation
("Assignee").
RECITALS
A. Assignor is the holder, owner and possessor of certain rights,
technologies, devices, know-how, proprietary information, clinical data,
intellectual property, and other unique and valuable assets, tangible and
intangible, which are useful in providing extracorporeal blood
separation/filtering procedures, including, without limitation, rights under the
Asahi Distributorship Agreement (as defined herein) and certain rights granted
by the Unites States Food and Drug Administration and the United States Patent
Office (the foregoing and any and all anticipated an unanticipated future rights
of Assignor relating to the Foregoing are, collectively, the "Proprietary Rights
and Technologies").
B. Contemporaneously with the assignment of the Assigned rights and
Technologies (as defined herein) hereunder, Assignor will assign certain of the
Proprietary Rights and Technologies similar to the Assigned Rights and
Technologies to certain of its affiliates, including, without limitation, (i)
OccuLogix Corporation, a Florida corporation ("OccuLogix"); (ii) VascuLogix
Corporation, a Delaware corporation ("VascuLogix"); and (iii) NephroLogix
Corporation, a Delaware corporation ("NephroLogix"); provided that, Assignor may
assign rights similar to the Assigned Rights and Technologies to other
companies, entities, and individuals.
C. Assignor desires to assign, and Assignee desires to accept, in
accordance with and pursuant to the terms herein, the Assigned Rights and
Technologies.
COVENANTS
In consideration of the mutual covenants and promises hereinafter set
forth, and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. ASSIGNMENT. Assignor hereby assigns to Assignee, its successors and assigns,
and Assignee, its successors and assigns, hereby accepts, an exclusive right to
use, sell, market, develop or distribute the Assigned Rights and Technologies
specifically for use within the Market (as defined herein).
1.1 ASSIGNED RIGHTS AND TECHNOLOGIES. Whenever used herein, "Assigned
Rights and Technologies" shall mean the Proprietary Rights and Technologies, and
any and all anticipated and unanticipated future rights, including, without
limitation, certain rights granted by the United States Food and Drug
Administration, Assignor may acquire, purchase, procure,
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develop, receive, accept or otherwise obtain in connection with the Proprietary
Rights and Technologies.
1.2 MARKET. Whenever used herein, "Market" shall mean any and all
treatment and/or research relating to the Disease (as defined herein) performed
and/or conducted in the Territory (as defined herein).
1.3 DISEASE. Whenever used herein, "Disease" shall mean any and all
cell-mediated chronic inflammatory diseases, specifically, without limitation,
Ulcerative Colitis, Crohn's Disease, Rheumatoid Arthritis and Multiple
Sclerosis.
1.4 TERRITORY. Whenever used herein, "Territory" shall mean and any and
all present and future territories held, owned or possessed by Assignor relating
to the Assigned Rights and Technologies (currently the United States, Canada,
and Mexico).
2. LIMITATION OF CERTAIN OF THE ASSIGNED RIGHTS AND TECHNOLOGIES. In addition to
the limitations upon the commercial application, scope an utility of the
Assigned rights and Technologies contained herein, Assignee acknowledges and
understands that certain of the Assigned Rights and Technologies are now and may
continue to be effectively limited in their commercial application, scope and
utility by certain agreements, licenses and other obligations, including,
without limitation, (i) the limitations upon the use, sale, marketing,
development and distribution of the Device (as defined herein) contained in that
certain 1997 Distributorship Agreement, by and between Asahi Medical Co., Ltd.,
a corporation organized and existing under the laws of Japan ("Asahi") and ATI,
dated February 1, 1997, as amended by that certain Amendment to 1997
Distributorship Agreement and Plasmaflo Agreement, by and between Asahi and ATI,
dated January 1, 1999, as amended (collectively, the "Asahi Distributorship
Agreement"), and (ii) any and all other instruments, assignments, documents
and/or agreements pursuant to which Assignor obtains the right to distribute
some or all of the Assigned rights and Technologies.
3. MARKET. Assignee acknowledges, accepts and understands that Assignor,
contemporaneously herewith will, and in the future may, assign rights in the
Proprietary rights and Technologies for use outside of the Market to third
parties or other assignees, including, without limitation, OccuLogix,
VascuLogix, and NephroLogix, which are similar to the rights in the Assigned
Rights and Technologies assigned hereunder (provided that Assignor shall not
assign rights in the Proprietary Rights and Technologies for use within the
Market which are similar to the rights in the Assignor Rights and Technologies
assigned hereunder). Assignee agrees that it will not, directly or indirectly,
whether through or by one of its affiliates or otherwise, use, sell, market,
develop or distribute the Assigned Rights and Technologies outside of the
Market. In the event a dispute arises among Assignee and any or all of
OccuLogix, VascuLogix and NephroLogix as to the ownership and/or commercial
application of the Proprietary Rights and Technologies, including, without
limitation, the scope of a specific Market, Disease, or Territory (as such terms
are defined in the individual assignments from Assignor to each of Assignee,
OccuLogix, VascuLogix and NephroLogix), then Assignor shall act as the sole
arbiter and shall provide an equitable determination of the ownership and/or
commercial application of the Proprietary Rights and Technologies among the
parties. Assignee
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hereby agrees to be bound by such determination(s) made by Assignor and to fully
comply with the terms of such determination(s).
4. RIGHT OF ASSIGNEE TO ASSIGN THE ASSIGNED RIGHTS AND TECHNOLOGIES. Assignee
shall have the right to assign any or all of its right and interest in the
Assigned Rights and Technologies to third parties or its affiliates, provided,
that, the terms and provisions of any such assignment shall (i) be substantially
similar to, and no less favorable to Assignor than, the terms and provisions of
this Agreement, including, without limitation, the restrictions on the use,
sale, marketing, development and distribution of the Assigned Rights and
Technologies and (ii) not conflict with the Asahi Distributorship Agreement.
5. AGREEMENT TO SUPPLY CERTAIN OF THE ASSIGNED RIGHTS AND TECHNOLOGIES.
5.1 EXCLUSIVE DISTRIBUTORSHIP. As a part of the assignment of the Assigned
Rights and Technologies hereunder, ATI shall grant to Assignee (i) the exclusive
right to use, sell, market, develop or distribute the products set forth in
Exhibit A attached hereto for use within the Market ("Product I") and (ii) the
non-exclusive right to use, sell, market, develop or distribute the products set
forth on Exhibit B attached hereto for use within the Market ("Product II")
(Product I and Product II are collectively, the "Device"), and Assignee (y)
agrees to give Assignor the first opportunity to fill any orders for the Device
pursuant to his Agreement, and (z) subject to Section 5.6.2, agrees not to
purchase, use, sell, market, develop or distribute any apheresis devices or
similar devices other than the Device, without the prior written consent of
Assignor.
5.2 SALE OF DEVICE AT COST; PAYMENT TERMS.
5.2.1 ATI shall sell the Device to Assignee at Cost. Whenever used
herein, "Cost" shall mean the aggregate price paid by ATI for the Device,
including all transfer costs, shipping, import duties, royalties and the
price paid to Asahi for the Device, less any discounts or allowances.
5.2.2 Unless otherwise agreed in writing by Assignor and Assignee,
upon Assignee's receipt of ATI's acceptance of an order by Assignee,
Assignee (i) shall open an irrevocable letter of credit ("L/C") within
thirty (30) days after bill of lading date in favor of ATI for the Cost of
such order or (ii) shall make the advanced payment for the Cost of such
order by money transfer in favor of ATI to ATI's designated account. Any
bank charges related to the opening or amendment of the L/C or advanced
payment shall be borne by Assignee.
5.3 SCHEDULE OF ORDERS FOR THE DEVICE. For the purpose of sales planning
by ATI, Assignee shall submit to ATI, in writing, before the tenth (10th) day of
each calendar quarter, a report of Assignee's sales and inventory of the Device,
including the level of inventory of the Device by article. Assignee also shall
submit to ATI, upon request from time to time, information in its possession
with respect to competitors' state of marketing and general market information,
relevant economic, political and business conditions in the Territory, and texts
and summaries of governmental statutes, rules and regulations established or
revised from time to time, affecting the marketing or sale of the Device in the
Territory.
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5.4 MONTHLY FORECASTS. Assignee shall submit to ATI a monthly rolling
order forecast before the fifteenth (15th) day of each calendar month for the
six (6) calendar month period immediately following such calendar month. The
rolling order forecasts for the first two (2) months of each such six (6) month
period shall be deemed a firm order for the Device, and each monthly forecast
shall be consistent with previous forecasts with respect to such firm orders.
5.5 ACCEPTANCE OF ORDERS. Assignee's order shall be deemed accepted when
it is acknowledged and accepted by ATI in writing which shall include, without
limitation, transmission via facsimile or email. Assignee may not cancel any
order after it is accepted by ATI without the written consent of ATI.
5.6 BEST EFFORTS FOR DELIVERY; DELAY IN DELIVERY; APPORTIONMENT.
5.6.1 ATI shall use its best efforts to deliver the Device in
accordance with the delivery schedules set forth in the accepted orders.
ATI shall promptly notify Assignee if it anticipates any potential delay.
5.6.2 If Assignee has given Assignor reasonable time to fill an
order of the Device and if ATI, in the reasonable judgment of Assignee,
has not or will not be able to completely or partially fill orders
accepted by ATI in accordance with Section 5.5, then (i) Assignee, at its
discretion and upon the giving of written notice to Assignor, may agree to
accept a delayed or partial shipment of the Device or (ii) Assignee, at
its discretion and upon the giving of written notice to Assignor, may fill
all or a portion of its unfilled order for the Device directly from Asahi
and/or any other distributor. Notwithstanding the foregoing, the rights of
Assignee provided for in this Section 5.6.2 shall not relieve Assignee of
its obligation to give Assignor the first opportunity to fill any
subsequent orders for the Device.
5.6.3 In the event that Assignee, after first attempting to fill an
order of the Device with Assignor, fills all or a portion of an order of
the Device directly from Asahi and/or another distributor in accordance
with Section 5.6.2, then, upon written notice from Assignee of Assignee's
intention to seek other distributors to fill all or a portion of its
order, Assignor shall immediately refund to Assignee any and all portions
of an advanced payment for which Assignee has not or will not receive
Devices. The portion of such order relating to Devices for which Assignee
will seek delivery from a distributor other than Assignor will be deemed
canceled in all respects and neither Assignor nor Assignee shall have any
further obligation relating to such canceled portion of the order, other
than Assignor's obligation to immediately refund to Assignee any advance
payment by Assignee.
5.6.4 In the event that ATI is unable to fill all of the orders
placed at a specific time by each of Assignee, OccuLogix, VascuLogix and
NephroLogix (for purposes of this Section 5.6.4, collectively, the
"Orderers"), then ATI agrees to equitably and reasonably apportion its
Devices on-hand among the Orderers; provided, that, any or all of the
Orders may seek to fill the unfilled portion of its order through Asahi
directly or any other distributor in accordance with Section 5.6.2
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5.7 TERMS OF DELIVERY. The delivery of the Device shall be at the office
of Assignee or such other place as reasonably requested by Assignee. ATI shall
have the sole responsibility for the delivery of the Device to such destination.
Assignee, in accordance with Section 5.2.1, shall be responsible for all
expenses in connection with the delivery and shipment of the Device, including,
without limitation, all expenses incurred in the storage, cartage and
transportation of the Device, as well as all insurance, fees, charges, taxes
(whether sales, use, value added or other), and governmental charges or levies
and all other charges or levies relating to the delivery of the Device, whether
the same are levied upon Assignor or Assignee.
5.8 RISK OF LOSS AND TITLE. The title to and risk of loss of the Device
shall pass from ATI to Assignee at the time when the purchased Device have been
delivered to Assignee, to another person acting on Assignee's behalf or to such
other place as reasonably requested by Assignee. All risks of loss in connection
with the Device thereafter shall rest upon Assignee, including, without
limitation, all risks incurred in the storage, cartage and transportation of the
Device. ATI shall not be deemed in anyway responsible for obtaining freight
and/or insurance, and shall not in any way be liable for the transportation,
cartage, insurance or other aspects of the storage or shipment of the Device,
after passage of title thereto to Assignee as set forth above.
5.9 WARRANTY.
5.9.1 If any Device is in a damaged condition upon its delivery to
Assignee, or the amount delivered is less than that provided for in the
order accepted by ATI, Assignee shall advise ATI in writing of any such
circumstance within six (6) months of delivery of such Device and shall
fully describe the nature of the shortage or damage. ATI shall replace
such damaged Device and/or remedy such shortages, without additional
charge; provided, that, ATI is given the notice referred to above and the
opportunity promptly to inspect the claimed damaged or incompletely
delivered Device, and provided further that ATI is reasonably satisfied
that such damage and/or shortage was not caused by mishandling or misuse
by the parties other than ATI after title passed to Assignee. In the event
that Assignee fails to notify ATI or allow such inspection as described
above, Assignee shall be deemed to have waived all damage and shortage
claims against ATI for said Device.
5.9.2 Assignor warrants that the Device has been manufactured and
distributed in compliance with the United States Food and Drug
Administration "good manufacturing practices." Other than the foregoing
warranty, Assignor makes no warranty as to the manufacture or distribution
of the Device. The Device shall be subject only to the applicable warranty
provided by the manufacturer and Assignor will have no responsibility
therefor; and provided further that all warranties described above in this
Section 5.9.2 shall be ineffective, and Assignor shall have no
responsibility whatsoever, in the event any Device has been subjected to
misuse, mishandling, misapplication, neglect, contamination, accident,
improper repair, damage by circumstances beyond Assignor's reasonable
control or unauthorized modification by Assignee or its immediate
customers, including, without limitation, any damage, contamination,
defects or malfunctions resulting from (a) the opening of the packaging of
the Device to combine the bloodline to be procured by Assignee and to be
used for the Device, (b) the repackaging of the Device with the bloodline
for delivery to customers, or (c) the failure
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to adhere to instructions for use and other documentation included in
shipments of the Device. The responsibility of Assignor under all
warranties is limited solely to the repair or replacement of the Device,
as the case may be, pursuant to the foregoing warranties. All warranty
claims are subject to verification by Assignor.
5.9.3 THE WARRANTIES SET FORTH ABOVE ARE EXCLUSIVE AND IN LIEU OF,
AND ASSIGNOR EXPRESSLY DISCLAIMS, ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABLITY OR
FITNESS FOR A PARTICULAR USE OR PURPOSE AND THOSE ARISING BY STATUTE OR
OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR USE OF TRADE. ASSIGNOR
SHALL NOT HAVE ANY LIABILITY TO ASSIGNEE, ITS CUSTOMERS, END-USERS OR ANY
OTHER PARTY OR ANY AMOUNTS IN EXCESS OF THE ORDER PRICE OF THE DEVICE NOR
FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT
LIMITATION, LOST PROFITS OR PROSPECTIVE PROFITS OR ANY OTHER COMMERCIAL OR
ECONOMIC LOSS OF ANY KIND OR NATURE OF ASSIGNEE OR ANY THIRD PERSON, EVEN
IF ASSIGNOR HAS BEEN ADVISED OF THE POSSIBILITY OF THE SAME, ARISING OUT
OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE DEVICE.
5.9.4 Assignee shall not represent, in relation to the Device
purchased hereunder, to its customers any warranties of any nature
whatsoever other than those given by Assignor or required by applicable
law.
5.10 TRADEMARK AND OTHER RIGHTS.
5.10.1 Assignee shall use the trademark(s) designated by Asahi
(hereinafter referred to as "Trademark"), including, without limitation,
"Plasmaflo," "Hemosorba" and "Rheofilter," as instructed by Assignor in
distributing the Device purchased hereunder and shall not use any other
trademarks in connection with such distribution without prior written
consent of Assignor. Assignee acknowledges that Asahi is the owner of all
right, title and interest in and to the Trademark in the Territory in any
form or embodiment thereof and is the owner of the goodwill attached or
which shall become attached to the Trademark in connection with the
business and goods in relation to which the same has been, is or shall be
used. Sales by Assignee shall be deemed to have been made by Asahi for
purposes of trademark registration and all uses of the Trademark by
Assignee shall inure to the benefit of Asahi. Assignee shall not, at any
time, do or suffer to be done any act or thing which may in any way
adversely affect any rights of Asahi in and to the Trademark or any
registration thereof or which, directly or indirectly, may reduce the
value of the Trademark or detract from its reputation. At Assignor's
request, Assignee shall execute any documents, including registered user
agreements, reasonably required by Assignor to confirm Asahi's ownership
of all rights in and to the Trademark in the Territory and to confirm the
respective rights of Assignor and Assignee under this Agreement. Assignee
shall not alter, obliterate, deface or remove any mark, marking, serial
number or other symbol carried on the Device or on the packaging in which
the Device are enclosed without the consent of Assignor. In the event that
Asahi desires to
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change any such mark, marking, serial number of other symbol, Assignee
will cooperate with Assignor in such manner as may be agreed upon by the
parties. Assignee never shall challenge Asahi's ownership of or the
validity of the Trademark or any application for registration there, or
any trademark registrations thereof, or any rights of Asahi's therein.
5.10.2 During the term of this Agreement and thereafter, Assignee
shall not apply for or acquire the registration of the Trademark, not
shall Assignee contest Asahi's right in or disturb Asahi's use of the
trademark or goodwill. Should Assignee have the Trademark registered in
its name or name of any other person, Assignor shall have the right to
have the registration canceled or transferred to Asahi.
5.10.3 In the event that Assignee learns of any infringement or
imitation of the Trademark or of any use by any person of any trademark
similar to the trademark, it promptly shall notify Assignor thereof. If
requested to do so by Assignor, Assignee shall cooperate with Assignor in
the protection of Asahi's rights in and to the Trademark. Assignee shall
have no right to take any action with respect to the Trademark without
Assignor's prior written approval.
5.10.4 Upon the termination of this Agreement for any reason
whatsoever and after Assignee has had a reasonable and sufficient time to
liquidate its inventory of the Device, Assignee shall, except as Assignor
may specifically authorize in writing, immediately cease and desist from
carrying on any and all use of any trademarks, trade names, words or
symbols of any nature indicating, explicitly or implicitly, that it is an
authorized distributor or dealer of Assignor's and/or Asahi's products or
other Assignor and/or Asahi goods and services.
5.10.5 Any patent, design, copyright and other intellectual property
rights embodied in the Device shall be the sole property of Assignor or
the third party designated by Assignor, and Assignee shall not, either
directly or indirectly, contest nor assist others in contesting the
validity of such intellectual property rights. Assignor shall be entitled
to terminate this Agreement forthwith on notice to Assignee if Assignee
should violate said obligation. Assignee shall not acquire any right in
the device by execution of this Agreement or performance hereunder or
otherwise and shall not use any of them after termination of this
Agreement resulting from expiration of its term or any other cause
whatsoever.
5.10.6 Nothing in this Agreement shall be construed as a warranty or
representation that the Device of the use thereof will be free from
infringement of any patent or other intellectual property rights of any
third party. Assignor shall not be under any obligation to defend, or to
participate in the defense of, Assignee against any claim or suit alleging
such infringement; provided, however, that Assignor shall, at Assignee's
costs, cooperate and assist Assignee in the defense of any such claim or
suit.
5.11 INDEMNIFICATION AND PRODUCT LIABILITY INSURANCE.
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5.11.1 Assignee shall defend and indemnify Assignor against, and
hold Assignor harmless from, any loss, cost, liability or expense
(including court costs and reasonable fees of attorneys and other
professionals) arising or alleged to arise out of the conduct of Assignee
in connection with Assignee's use, distribution, promotion, technical and
in-service training, and sale of the Assigned Rights and Technologies;
provided, however, that (i) Assignee shall have sole control of such
defense; and (ii) Assignor shall provide notice promptly to Assignee of
any actual or threatened claim of which Assignor becomes aware.
5.11.2 Assignor shall defend and indemnify Assignee against, and
hold Assignee harmless from, any loss, cost, liability or expense
(including court costs and reasonable fees of attorneys and other
professionals) arising or alleged to arise out of the conduct of Assignor
in connection with the distribution of the Assigned rights and
Technologies; provided, however, that (i) Assignor shall have sole control
of such defense, and (ii) Assignee shall provide notice promptly to
Assignor of any actual or threatened claim of which Assignee becomes
aware.
5.11.3 Each party shall be responsible for maintaining reasonable
product liability insurance coverage with respect to the Assigned Rights
and Technologies in the Territory at all times during the term of this
Agreement and thereafter until the time when both parties agree upon. Such
insurance policy shall be written for the benefit of both Assignee and
Assignor. Assignee shall deliver a certificate of such insurance to
Assignor promptly upon issuance of said insurance policy.
5.12 DISTRIBUTION OF OTHER ASSIGNED RIGHTS AND TECHNOLOGIES. Assignor
agrees to enter into distributorship agreements with Assignee or Assignee's
affiliate for the distribution by Assignor to Assignee of any of the Assigned
Right and Technologies, other than the Device (the distribution of which is
provided for herein), for which Assignor holds or owns or will hold or own
distribution and/or marketing rights. Such distributorship agreements shall
provide for the distribution by Assignor of the subject Assigned Rights and
Technologies on terms that are substantially similar to those terms upon which
Assignor receives the subject Assigned rights and Technologies; provided, that,
if commercially viable, such distributorship agreements shall contain terms and
provisions substantially similar to the terms and provisions contained in
Section 5.6 hereof.
5.13 USE OF THE DEVICE. Assignee hereby agrees to use the Device only for
lawful purposes and uses in accordance with any and all local, state or federal
laws, rules or regulations, including, without limitation, rules and regulations
relating to "good manufacturing practices" promulgated by the United States Food
and Drug Administration.
6. ROYALTY.
6.1 PAYMENT OF ROYALTY. In consideration of the assignment of the Assigned
Rights and Technologies to the Assignee, Assignee agrees to pay to Assignor a
royalty in an amount equal to five percent (5%) of the Gross Revenues (as
defined herein) (collectively, the "Royalty"). Whenever used herein, "Gross
Revenues" shall mean all revenues of Assignee and an Affiliate of Assignee (as
defined herein) derived from, attributable to, or earned with the use,
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sale, marketing, development or distribution of the Assigned Rights and
Technologies, including, without limitation, the sale, lease, assignment, or
license of the Assigned Rights and Technologies, less (i) all sales and use
taxes relating to the foregoing; (ii) all paid reserves for returns related to
the foregoing; (iii) all customer rebates related to the foregoing; (iv) all
warranty reserves related to the foregoing; and (v) all charges for freight and
shipping relating to the foregoing.
When used in this Section 6, "Affiliate of Assignee" shall mean any
individual, sole proprietorship, partnership, joint venture, limited liability
company, trust, unincorporated organization, association, corporation,
institution, entity or party which, directly or indirectly, controls, is
controlled by, or which is under common control with Assignee. Assignee or an
Affiliate of Assignee shall be deemed to be "controlled by" the other if one of
them possesses, directly or indirectly, the power (a) to vote 10% or more of the
securities or interests (on a fully diluted basis) having ordinary voting power
for the election of directors or managers of the other or (b) to direct or cause
the direction of the management policies of the other, whether by contract or
otherwise. Notwithstanding the foregoing, a sales and marketing partner of
Assignee which would otherwise be deemed to be an Affiliate of Assignee shall
not be deemed to be an Affiliate of Assignee, if assignor in its sole
discretion, so consents.
6.2 DELIVERY OF PAYMENT AND STATEMENTS. Within forty-five (45) days after
the end of each fiscal quarter of Assignee, Assignee shall deliver to Assignor
(i) quarterly financial statements clearly showing the Gross Revenues and (ii)
the payment of the Royalty. Assignee agrees to keep complete and correct books,
accounts and records to facilitate computation of the Royalty.
6.3 RIGHT TO AUDIT; OVERPAYMENT; UNDERPAYMENT. For the purpose of
verifying the amount of Royalty due, Assignor shall have the right to audit (the
"Audit"), at its expense, the books of Assignee once per calendar year upon the
giving of reasonable notice to Assignee. In the even that the amount of the
aggregate quarterly payments of the Royalty for the time period contemplated by
the Audit are more than the correct amount of the payments of the royalty for
such time period, then the amount overpaid shall be credited to future sales of
the Device. In the event that he amount of the aggregate quarterly payments of
the royalty for the time period contemplated by the Audit are more than five
percent (5%) less than the correct amount of the payments of the Royalty for
such time period, then, in addition to paying to Assignor the amount of the
Royalty previously underpaid, Assignee shall reimburse Assignor for any and all
costs and expenses associated with or related to the Audit.
7. INTELLECTUAL PROPERTY. Assignor accepts, understands and acknowledges that,
for the term of this Agreement, Assignee shall be the owner and holder of, among
other things, any and all intellectual property, including, without limitation,
all present and future rights to market the Assigned Rights and Technologies
within the Market granted by the United States Food and Drug Administration, and
that Assignee shall have the sole right to, among other things, conduct clinical
trials and market the Assigned Rights and Technologies within the Market.
8. FORCE MAJEURE. Except for the prepayment by Assignor pursuant to Section 5.2
of advance payments of Assignee, neither party hereto shall be liable to the
other in any manner for failure or delay in fulfillment of all or part of this
Agreement, or any individual contract, which
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is directly or indirectly owing to any causes or circumstances beyond that
party's control, including, but not limited to, failure of Asahi to supply the
Device to Assignor, acts of God, governmental orders or restriction, war,
war-like conditions, hostilities, sanctions, mobilization, blockade, embargo,
detention, revolution, riot, looting, strike, lockout, plague or other
epidemics, fire, earthquake, explosion, flood, and shortage of raw materials.
9. TERM. This Agreement shall come into effect as of the date first above
written and shall continue in perpetuity until terminated pursuant to Section
10.
10. TERMINATION.
10.1 EVENTS OF TERMINATION.
10.1.1 Assignor may terminate this Agreement and any individual
contract for the Device hereunder if upon written notice from Assignor to
Assignee that Assignee is in material default of the terms and provisions
of the Agreement, Assignee fails to cure such material default within 90
days after receipt of such notice.
10.1.2 Assignee acknowledges that the assignment of the rights in
the Assigned Rights and Technologies to Assignee hereunder shall
immediately terminate when, and to the extent, Assignor's rights to such
Assigned rights and Technologies are terminated.
10.2 EFFECT OF TERMINATION. Termination of this Agreement and/or any
individual contracts for the Device hereunder pursuant to the preceding Section
shall be without prejudice and shall be additional to any right of Assignor
under this Agreement, such individual contracts for the Device, law, statute or
otherwise. Upon termination of this Agreement and/or such individual contracts
for the Device, all payments to be made under this Agreement, including, without
limitation, the payment of the Royalty and/or such individual contracts in
connection with the sale of the Device hereunder shall become immediately due
and payable.
11. MISCELLANEOUS.
11.1 GOVERNING LAW; FORUM. This Agreement shall be governed by the laws of
the State of Florida. Each party agrees that any suit, action or proceeding
brought by such party in connection with or arising from this Agreement shall be
brought solely in any state or federal court located in Florida, and each party
consents to the jurisdiction and venue of each such court. Each party agrees
that a final judgment in any action or proceeding so brought shall be conclusive
and may be enforced by suit on the judgment or in any other manner provided by
law or equity.
11.2 EFFECT OF WAIVER. The waiver, express or implied, by either of the
parties hereto of any right hereunder or of any failure to perform or breach
hereof by the other party hereto shall not constitute or be deemed as a waiver
of any other right hereunder or of any other failure to perform or breach hereof
by the other party, whether or a similar or dissimilar nature.
11.3 ENTIRE AGREEMENT. This Agreement and its Exhibits contain the entire
agreement of the parties with respect to the subject matter herein contained and
supersedes any prior Agreements or understandings between the parties.
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11.4 DISPUTE RESOLUTION. Except as provided in Section 3, all disputes,
controversies or differences which may arise between the parties, out of or in
relation to or in connection with this Agreement, or for the breach thereof,
shall be settled by mutual consultation between the parties hereto in good faith
as promptly as possible, but failing an amicable settlement, shall be finally
settled by arbitration to be held in the State of Florida.
11.5 NOTICES. Unless otherwise provided in this Agreement, all notices to
be given hereunder shall be in writing and sent by facsimile transmission,
overnight courier or registered airmail to the respective addresses of the
parties stated above or to such other addresses as may be indicated in writing
by the parties hereto by notice pursuant to this Section. If either party has
changed its address, a written notice thereof shall be given to the other party
pursuant to this Section.
11.6 RELATIONSHIP OF THE PARTIES. Nothing in this Agreement shall be
construed or interpreted to provide that Assignee shall or may act as the agent
or legal representative of Assignor for any purpose whatsoever. Assignee is not
granted any right or authority to assume or to create any obligation or
responsibility, expressed or implied, on behalf of, or in the name of, Assignor
or to bind Assignor in any manner whatsoever. Notwithstanding the common
ownership of the equity holders of Assignor, Assignee, OccuLogix, VascuLogix and
NephroLogix, the parties hereto shall remain separate entities.
11.7 RESPONSIBILITY FOR COSTS INCURRED HEREUNDER. Assignee shall be solely
responsible for all expenses and costs incurred in performing its duties
hereunder, including, without limitation, all of its own operating and sales
promotion expenses.
11.8 CONDUCT OF ASSIGNEE. the business conducted by Assignee in connection
with the sale, use, marketing, development and distribution of the Assigned
Rights and Technologies shall at all times be conducted and maintained so as not
to detract from, interfere with or adversely reflect upon the goodwill and
reputation of Assignor, the Trademark and/or trade names and Assigned Rights and
Technologies.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Distributorship Agreement to be executed by their respective duly authorized
representative as of the day and year first above written.
ASSIGNOR:
RheoLogix, L.L.C., a Delaware limited
liability company
By: /s/ Ray Gonzalez
---------------------------------
Its: President & CEO
Apheresis Technologies, Inc.,
a Florida corporation
By: /s/ John Cornish
---------------------------------
Its: President & CEO
ASSIGNEE:
CytaLogix Corporation, a Delaware
corporation
By: /s/ Rick Davis
---------------------------------
Its: President & CEO
<PAGE>
EXHIBIT A
PRODUCT I
First filter: Plasmaflo OP-05W(L)
Second filter: Rheofilter AR-2000
Product I means the set of the above first filter and second filter which are
used together.
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EXHIBIT B
PRODUCT II
Plasmaflo AP-05H(L)
Hemosorba CH-350