EXHIBIT 10.5
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Amendment #2 to
Exclusive Distributor Agreement
of May 30, 1996
1. The term is hereby extended for one year until March 31, 1999
2. During this one-year extension the Minimum is [**] units and the Target is [**] units. FD shall purchase [**] units in the first quarter ( ending June 30, 1998) and [**] units each quarter thereafter. FD may replace its nine demo units at the Demo price (same as the Target price with Alternans) and these units will count toward the Minimum.
3. The prices are [**]:
4. Each quarter the prices will be adjusted so that CHI and FD split the amount of exchange rate variation. The Adjusted Price will be determined from the above Contract prices by the following formula:
Adjusted Price=Contract price x square root of (128/RATE)
Where RATE is the Yen to dollar exchange rate on the last day of the
previous quarter.
5. Both parties agree to use best efforts to complete a Marketing Plan within 60 days of signing this Amendment.
6. CHI agrees to supply a person or persons to FD for demonstration of the CH 2000 for a total of two weeks during the month of July . CHI will pay salary plus airfare to and from Japan; FD will pay travel and living expenses within Japan.
7. CHI agrees to use its best efforts to complete the software and product changes requested by FD and described on Attachment I.
8. The Product Descriptions for the CH 2000 Systems is hereby changed to that in the Price List in Attachment II. The Alternans Option is now called the Alternans Hardware Option and does not include a license to the Alternans Software. This license is conferred for a single use upon payment of a separate USE FEE. This USE FEE is included in the purchase price of a set of High Resolution Electrodes.
9. FD hereby agrees to the terms of the License Agreement in Attachment III which includes the Purchaser Agreement in Attachment A. FD agrees that its purchases of products from CHI are subject to the terms of the License Agreement, that it may only resell CHI products to others subject to the terms of the License Agreement, that it may only sell CHI products to those who agree to be bound by the Purchaser Agreement, and that it will not sell multi-segment electrodes for use on CHI systems except for those manufactured by or under license from CHI unless it has paid to CHI in advance the USE FEE called for under the License Agreement.
FD further agrees that it is responsible for making its customers aware of the terms of the Product Descriptions and terms of the License Agreement and wishes to do so in a manner consistent with Japanese law and business practices. Therefore:
(a) Starting within sixty (60) days of signing this Amendment, FD agrees to use the Product Description language in Attachment II (or other language mutually agreed in writing by CHI and FD) in new quotations for the CH 2000 with Alternans hardware Option are made aware of and accept the terms of the Purchaser Agreement.
(b) Within approximately one hundred and twenty days (120) of the signing of this agreement, CHI will add the Purchaser Agreement language to the labeling of the Hi-Resolution Electrodes pouch and to the Alternans Hardware Option box. Within sixty (60) days of CHI supplying the pouches with the Purchaser Agreement language, FD will ensure that customers who subsequently purchase CH 2000 with Alternans Hardware Option are made aware of and accept the terms of the Purchaser Agreement.
FD acknowledges that its responsibilities in this paragraph 9 survive termination of the Exclusive Distributor Agreement.
10. This Amendment constitutes a valid Purchase Order (no ________) from FD to CHI for the Minimum quantity of Stress only CH 2000 systems to be shipped quarterly from CHI to FD on or about the first week of the last month of each quarter. FD agrees to supply amendments to this Purchase Order prior to the 15th of the first month of each quarter for changes in quantities and mix for shipments during the quarter.
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