DISTRIBUTION AGREEMENT
THIS AGREEMENT, effective as of October 18, 1996, between
CARDIOVASCULAR DIAGNOSTICS, INC., a corporation organized and existing under the
laws of North Carolina, with its principal offices located at 0000 Xxxxxxxxx
Xxxxx, Xxxxxxx, Xxxxx Xxxxxxxx ("CVDI"), and DADE INTERNATIONAL INC., a Delaware
corporation having its principal place of business in Deerfield, Illinois
("Dade").
W I T N E S S E T H:
WHEREAS, CVDI, among other things, is engaged in the manufacture of
certain hemostasis diagnostic products; and;
WHEREAS, Dade has experience and capability in the marketing and
distribution of hemostasis diagnostic products and desires to distribute such
products;
NOW, THEREFORE, the parties agree as follows:
1. Definitions.
The following capitalized terms shall have the meanings set
forth below:
1.1 "Act" means the Food, Drug and Cosmetic Act (21 U.S.C. xx.xx.
301 et seq.) and the regulations promulgated thereunder
and all foreign equivalents thereof.
1.2 "Affiliate" means any person or entity which, directly or
indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, a
party. "Control" means the direct or indirect, legal or
beneficial, (a) ownership of more than 50% of the
outstanding voting rights of such person or entity or (b)
the power or ability to direct the management or policies
of such person or entity. Notwithstanding the previous
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
two sentences, Xxxx Capital shall not be an "Affiliate"
of Dade for purposes of this Agreement.
1.3 "CVDI Cards" means all present and future CVDI aPTT and CVDI
PT cards. CVDI Cards shall not include Alliance Cards or Dade
Alliance Cards as defined in Sections 1.4 and 1.5,
respectively.
1.4 "Alliance Cards" means all present and future CVDI/Dade
labeled aPTT and PT cards which are calibrated to Dade aPTT
and PT reagents. Alliance cards shall include those Cards
specified on pages 1-4 of Schedule 4.2.
1.5 "Dade Alliance Cards" means all present and future
CVDI/Dade labeled aPTT and PT cards containing reagents
or raw materials supplied by Dade to CVDI. Dade Alliance
Cards shall include those Cards specified on pages 5-8 of
Schedule 4.2. Dade Alliance Cards includes Dade [ ]
Alliance Cards.
1.6 "FDA" means the United States Food and Drug
Administration or any successor agency, and all foreign
equivalents thereof.
1.7 "Good Manufacturing Practices" or "GMP" means the applicable
current good manufacturing practices promulgated from time to
time by the FDA in accordance with the Act, and all foreign
equivalents thereof.
1.8 "Instruments" means CVDI's manual, compact, single test,
portable analyzer, the TAS (thrombolytic assessment
system), which provides point of patient care evaluations
of hemostasis. Instruments sold by Dade hereunder shall
bear a Dade label for all Instruments sold subsequent to
an initial interim period, approximately 120 days after
CVDI receives the necessary approved artwork from Dade.
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
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1.9 "New Products" means improvements and enhancements of
Products, but shall not include increased card dating,
Alliance Cards, Specialty Cards, Dade Alliance Cards, CVDI
Cards, nor Instruments.
1.10 "Non-Dade Account" means hospitals located in the Territory
not using Dade reagents in its central laboratory at the time
of the sale at issue to such hospital. Once the hospital
begins to use Dade reagents in its central laboratory it
becomes a "Dade Account".
1.11 "Products" means all products described on Schedule 1.11.
"Products" includes Instruments, CVDI Cards, Alliance Cards,
Dade Alliance Cards, and cards, if any, mutually specified by
CVDI and Dade pursuant to the provisions of Section 4.2
relating to specialty cards ("Specialty
Cards").
1.12 "Specialty Products" means any cards sold by CVDI except
for CVDI Cards, Alliance Cards, Dade Alliance Cards, and
Specialty Cards.
1.13 "Territory" means the countries listed on Schedule 1.13.
1.14 "Integrated Health Network" and "IHN" mean a system of
two or more hospitals and, possibly, physician group
practices, regional reference laboratories, and/or point of
care diagnostic testing facilities.
1.15 "Dade [ ] Alliance Cards" means Dade Alliance Cards
containing [ ], whether raw material or reagent.
1.16 "Controls" means Products as manufactured for CVDI which are
used with the Instrument for quality control purposes.
"Controls" does not include controls set forth on Schedule
5.6(e) to be sold to CVDI by Dade.
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
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2. Distribution of Product.
2.1 Exclusive Rights.
(a) Grant. Subject to the limitations contained
herein, CVDI hereby grants to Dade, its Affiliates,
and distributors the sole and exclusive right to
sell, market, promote, distribute, and otherwise
transfer, dispose, provide and place ("sell") the
CVDI Cards, the Alliance Cards, Dade Alliance
Cards, and the Specialty Card in the Territory.
CVDI shall not, directly or indirectly, through
technology licensing or otherwise, grant any third
party any right to sell PT or aPTT products (except
for Instruments) embodying PT or aPTT technology
owned or licensed by CVDI in the Territory during
the period of this Agreement which is exclusive.
CVDI hereby grants to Dade, its Affiliates, and
distributors the non-exclusive right to sell,
market, promote, distribute, and otherwise
transfer, dispose, provide and place ("sell")
Instruments in the Territory during the term of
this Agreement.
(b) Exceptions. The rights granted in paragraph (a)
above shall be subject to the following exceptions:
(i) During the period of exclusivity, CVDI may
solicit orders (subject to Dade's acceptance,
and Dade will accept orders of Cards unless any
such order contains terms or conditions
inconsistent with orders placed by similarly
situated customers) for CVDI Cards, Alliance
Cards, the Dade Alliance Cards, and the
Specialty Cards from a Non-Dade Account. In the
event that CVDI solicits such an order from a
Dade Account, such order shall be
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treated in all respects under this Agreement
during the period of exclusivity and during
the period of non-exclusivity, subject to
Section 11.2(a), as though sold by Dade.
CVDI shall not be limited in any manner with
respect to sales of its other products or
with regard to sales of any of its PT and
aPTT products to customers in the Territory
until such customers become Dade Accounts.
All orders shall be handled in accordance
with Sections 5.7 and 7.4(e).
(ii) Notwithstanding any other provision or
implication of this Agreement, none of the
terms of this Agreement shall apply to
customers identified on Schedule 2.1(b)(ii)
who have Instruments leased prior to the
Effective Date of this Agreement during the
initial period of the lease.
(iii) With regard to existing CVDI customers
identified on Schedule 2.1(b)(iii) who are
using Dade reagents in their central
laboratories as of the Effective Date of this
Agreement, CVDI and Dade shall contact such
customer and request them to purchase future
CVDI Cards, Alliance Cards, Specialty Cards
and Dade Alliance Cards from Dade. In the
event such customer declines to do so, during
the period of exclusivity, they shall be
treated as Dade Accounts pursuant to Section
2.1(b)(i) hereof except that Dade shall remit
to CVDI the proceeds of such sales within
thirty (30) days after receipt by Dade.
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2.2 Exclusivity. During the term of this Agreement, neither
Dade, nor any of its Affiliates, nor CVDI, nor any of its
Affiliates, shall sell in the Territory any whole blood
or plasma, point of care PT or aPTT tests except under
the terms of this Agreement. Point of Care PT or aPTT
tests shall not be defined for purposes of this Agreement
to include PT or aPTT self tests (where the patient
performs the test on himself or herself) used outside the
hospital, institutional, or physician office markets.
Neither Dade nor any of its Affiliates or distributors
shall distribute Products outside the Territory.
2.3 Requirements. Dade and its Affiliates shall purchase,
and CVDI shall supply, subject to the limitations of
Section 5.7, all of Dade's and it's Affiliates'
requirements of Products, including, CVDI Cards, Alliance
Cards, Specialty Cards, and Dade Alliance Cards and
Instruments for resale within the Territory. During the
term of this Agreement, and for a period ending the later
of five (5) years from the effective date hereof or three
(3) years subsequent to termination hereof, neither Dade
nor any of its Affiliates shall manufacture any cards or
Instruments (using technology based upon iron oxide
particles in combination with reagents in the presence of
magnetic fields) or purchase any cards or Instruments
(using technology based upon iron oxide particles in
combination with reagents in the presence of magnetic
fields) from a supplier other than CVDI.
2.4 Performance Requirements. Dade shall use reasonable
efforts, as determined in Dade's sole discretion, to
promote the sale of the Products. CVDI shall use
reasonable efforts, as determined in CVDI's sole
discretion, to promote the sale of the Products. Dade
and CVDI contemplate that the promotional efforts may
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include preparing promotional materials to be used in the
Territory by Dade, participating in appropriate trade shows,
advertising in trade publications applicable to the Territory
and directly soliciting orders from customers within the
Territory by the appropriate Dade sales force as determined in
Dade's sole discretion. Dade shall be responsible for training
customers with respect to Products sold. Dade will use
reasonable selling efforts to convert all Dade Accounts and
non-Dade Accounts to the use of Alliance Cards and Dade
Alliance Cards in such accounts which Dade determines are
targets for hemostasis point of care systems. CVDI and Dade
shall comply with the Act and other applicable, legal, health
and safety requirements, laws and regulations in all of their
marketing and sales activities. Neither CVDI nor Dade shall
promote the Products for any uses not approved for Products by
applicable regulatory agencies.
2.5 Terms and Conditions. All orders for Products shall be
initiated by written purchase orders. No order shall be
binding unless consistent with this Agreement.
Acceptance by CVDI of Dade's purchase order is expressly
limited to and conditioned upon, and only upon, Dade's
acceptance of the terms and conditions set forth in this
Agreement, which may not be changed or waived except in
a writing signed by the parties. Dade's purchase orders
submitted to CVDI shall be governed by the terms of this
Agreement and CVDI's published Standard Terms and
Conditions of Sale as in effect at the time of such
purchase; provided, however, that in the event of a
conflict between the terms of this Agreement and CVDI's
Standard Terms and Conditions of Sale, this Agreement
shall control and any additional, inconsistent or
different terms and conditions contained in any purchase
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order, acknowledgment, confirmation, acceptance, invoice, or
other documents supplied by Dade or CVDI are hereby expressly
rejected. A copy of CVDI's Standard Terms and Conditions of
Sale is attached hereto as Schedule 2.5. CVDI shall not
arbitrarily change its Standard Terms and Conditions. CVDI
shall limit its changes to correcting typographical errors,
conforming the terms and conditions to applicable law, and
changes to make the Standard Terms and Conditions consistent
with terms and conditions offered in the marketplace for
comparable products. CVDI shall advise Dade in writing at
least thirty (30) days in advance of any proposed changes
(other than minor non-material corrections) to the Standard
Terms and Conditions. The parties shall discuss and attempt to
reach agreement concerning the proposed changes which Dade
indicates affect Dade or its ability to market or sell the
Products. Dade and CVDI agree that such orders and documents
may include provisions which identify Products, quantities of
Products, shipping dates, delivery information and prices and
billing information in a manner not inconsistent with this
Agreement and such provisions shall be binding on the parties.
2.6 Rejection. Dade and its distributors shall notify CVDI
of obvious damage relating to the manufacturing or
packaging of the Products (other than damage solely
associated with the shipping of the Products) within
forty-five (45) days of their respective receipt of the
Products. Any such Product not rejected for obvious
damage within forty-five (45) days after receipt by Dade
or its distributors (the "Rejection Period") shall be
deemed accepted. A rejection by Dade shall mean that
CVDI has received within the Rejection Period written
notice of such rejection stating with particularity the
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reason therefor. CVDI shall as promptly as possible replace
any rejected Products at no cost to Dade or its distributors.
After the Rejection Period, Dade may not return any such
obviously damaged Products for any reason without CVDI's prior
written consent.
2.7 Expansion of Territory. CVDI will promptly advise Dade
in writing of opportunities for extension of Dade's
distribution rights into any country in which CVDI
desires to expand or any country where existing rights
lapse or are subject to competitive bid where Dade has a
distribution network in place. CVDI agrees not to enter
into any contract for distribution rights in such other
country until the earlier of the receipt of a proposal
from Dade regarding such country or the expiration of the
ninety (90) day period following Dade's receipt of
written notification pursuant to this sub-section. In-
considering the award of any expansion territory, the
parties hereto agree to consider the relationship of CVDI
and Dade and Dade's performance hereunder as a criteria
in making any such award. Nothing in this subsection
shall limit the rights of CVDI to solicit, review or
negotiate with any party at any time with respect to
areas outside the Territory as the same may exist from
time to time.
3. Marketing and Support Activities.
3.1 Marketing Meetings: Reports. The parties shall meet at
least semi-annually to discuss market plans, product
improvement suggestions and other information concerning
the marketing and development of the Products. Dade
shall provide information available to it about the
Products and their ability to compete with other
diagnostic products for related uses and to meet customer
needs. Dade shall provide CVDI general information
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regarding sales of the Products such as broad pricing trends
by geographic region as well as sales information indicating
sales by country or geographic region, where available to
Dade.
3.2 Promotional Material. CVDI will furnish Dade with copies
of promotional literature and advertisements it prepares
for the Product. Dade shall not copy or utilize any
promotional material prepared by it without obtaining the
prior written approval thereof from CVDI. CVDI's
approval shall not be unreasonably withheld or delayed.
Dade shall submit by courier camera ready copy for the
labels and package inserts to CVDI for approval. CVDI
shall respond within fourteen (14) days of receipt. If
no written objection is received from CVDI within
fourteen (14) days after the courier package is received
by CVDI, Dade will contact CVDI to obtain CVDI's approval
for the copy as submitted, or as modified in accordance
with CVDI's instructions. CVDI and Dade shall comply
with all requirements of the Act, local laws, regulations
and other laws in their advertising and other promotional
activities.
3.3 Packaging, Labeling. CVDI shall manufacture, label and
package the Products in final form for distribution by
Dade. Dade shall provide camera ready copy for the
labels containing Dade trade dress. In addition to all
applicable legal requirements, the labels shall comply
with the requirements set forth in Section 3.4 below,
shall display "CVDI" and shall identify CVDI as the
manufacturer of the Products. Dade shall not repackage
or label any Products and shall not alter any Products or
any package or label used in connection with any Products
except as specifically authorized by CVDI. In the event
that CVDI shall authorize or require repackaging or
re-labeling, Dade shall comply in all respects with the
instructions of CVDI, at the expense of CVDI.
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3.4. Trademarks and Trade Names. CVDI hereby grants Dade, the
nontransferable right to use in the Territory the
trademarks and tradenames listed on Schedule 3.4, and any
other trademarks owned by CVDI which it may designate in
writing for use by Dade (the "Trademarks"), in connection
with the marketing and sale of the Products for the
duration of the Agreement. Dade's distributors and
Affiliates shall be entitled to the use of such
Trademarks, subject to the terms and conditions of this
Agreement, so long as such use is authorized only in
connection with distribution of Products hereunder and
subject to terms and conditions substantially similar to
those contained in this Agreement. The Product shall be
marketed and sold only under the Trademarks, the name
"CVDI" as required under Section 3.3 and such other marks
as Dade may use for its other hemostasis products. Dade
acknowledges that it has and will obtain no proprietary
interest in the Trademarks and agrees not to use the same
as part of its corporate or business name. Dade's, its
distributors' and Affiliates', right to the use of any
Trademark or other property of CVDI shall terminate
immediately upon termination of this Agreement; provided,
however, such right shall be extended for the period of
time specified in Section 11.5, at the end of which all
such rights shall terminate. Dade shall use the
Trademarks only in the manner prescribed by CVDI. Dade
hereby grants CVDI the nontransferable right to use in
the Territory the trademarks and tradenames listed on
Schedule 3.4, and any other trademarks owned by Dade
which it may designate in writing for use by CVDI (the
"Dade Trademarks"), in connection with the marketing and
sale of the Products. During the period of exclusivity,
the Products shall be marketed and sold only under the
Trademarks, the Dade Trademarks, and such other marks as
CVDI may use for its other hemostasis products. During
any period of non-exclusivity, the Products sold to Dade
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shall be sold only under the Trademarks and the Dade
Trademarks and such other marks as CVDI may use for its other
hemostasis products. CVDI acknowledges that it has and will
obtain no proprietary interest in the Dade Trademarks and
agrees not to use the same as part of its corporate or
business name. CVDI's right to the use of any Dade Trademark
or other property of Dade shall terminate immediately upon
termination of this Agreement and CVDI shall, upon conversion
of this Agreement to a non-exclusive distributorship, cease
soliciting orders for Cards bearing the Dade Trademark as more
fully set forth in Section 11.2. CVDI shall use the Dade
Trademarks only in the manner prescribed by Dade. The Products
are offered for sale and sold by Dade and CVDI subject in
every case to the condition that such sale does not convey any
licenses, express or implied, to manufacture, duplicate or
otherwise copy or reproduce any Product. In the event of
termination of this Agreement, neither party shall manufacture
or have manufactured any devices, cards, components or
assemblies utilizing any information belonging solely to the
other party.
3.5 Marketing Assistance/Training. CVDI agrees to provide
technical training, and technical assistance to Dade
personnel at periodic intervals, with the frequency and
content to be determined by mutual agreement. The
training and technical assistance provided to Dade shall
be no less than that provided to CVDI employees and sales
force, and shall be updated from time to time with at
least the frequency such updates are provided to CVDI
employees and sales force. Each party to this Agreement
shall be responsible for its own expenses in connection
with any such training and assistance.
3.6 Support. CVDI agrees, upon request from Dade, to use
reasonable efforts to sell and promote Specialty Products to
identified customers of Dade where such request is
commercially feasible in the sole discretion of CVDI.
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From time to time, CVDI may request Dade's assistance in
offering for sale CVDI's Specialty Products to individual
operating room customers of CVDI and, to customers of CVDI
distributors of Specialty Products in the Territory. CVDI
presently intends to have no more than two (2) distributors,
excluding Dade, for Specialty Products in the Territory. In
the event that CVDI seeks an additional distributor of
Specialty Products, CVDI will promptly advise Dade in writing
of the opportunity for Dade to distribute Specialty Products.
CVDI agrees not to enter into any contract for such
distribution rights until the earlier of the receipt of a
proposal from Dade regarding such distributorship or the
expiration of the thirty (30) day period following Dade's
receipt of written notification pursuant to this subsection.
In considering the award of such distribution, CVDI agrees to
consider Dade's performance hereunder as a criteria in making
such award. In Dade's sole discretion and upon terms mutually
agreeable to Dade and to CVDI, Dade will, upon request of
CVDI, offer for sale CVDI's Specialty Products to such
operating room customers. Dade shall receive a [ ] ([ ]%)
percent commission on any such sale, payable within thirty
(30) days after CVDI or such partner/distributor receives
payment. In Dade's sole discretion, and upon terms mutually
agreeable to Dade and CVDI, Dade will, upon request of CVDI,
offer for sale CVDI's Specialty Products to Integrated Health
Networks. The commission Dade shall receive shall be on terms
to be mutually agreed upon by the parties. Unless otherwise
agreed by the parties, Dade's commission shall be paid within
thirty (30) days after CVDI receives payment. CVDI will advise
Dade on a monthly basis of the number of Specialty Products
sold by CVDI in accordance with this Section.
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
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3.7 Service. Except as otherwise provided in this Section,
CVDI agrees to provide service and maintenance for
Instruments sold by Dade for its standard fees, as they
exist from time to time, and in accordance with its then
applicable standard service agreement. CVDI shall offer
service contracts for Instruments to customers to provide
maintenance and services in accordance with its standard
contract. CVDI shall provide Dade with its service
contract price list and, at its option, Dade shall be
entitled to sell such contracts on behalf of CVDI. Dade
shall xxxx for the service contracts which it sells and
payment by Dade to CVDI shall be within thirty (30) days
after Dade receives payment for such service/maintenance
contract. Service and maintenance shall be provided by
CVDI or an independent third party service company. To
the extent that CVDI intends to contract with a third
party for service and maintenance of the Products, CVDI
will promptly advise Dade in writing of the opportunity
for Dade to perform such service and maintenance. CVDI
agrees not to enter into any contract with a third party
for service and maintenance of the Products until the
earlier of the receipt of a proposal from Dade regarding
such service/maintenance or the expiration of the thirty
(30) day period following Dade's receipt of a written
notification pursuant to this subsection. In considering
the award of such service/maintenance opportunity, CVDI
agrees to consider Dade's performance hereunder as a
criteria in making such award.
3.8 Product Warranty. Neither party nor its subdistributors shall
make any representation or warranty about the Products,
whether in writing or orally, except as is contained in
written materials delivered to Dade by CVDI expressly for use
in promoting the sale of the Product or as may otherwise be
agreed to by CVDI in writing.
4. Product Development.
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4.1. Development by CVDI. CVDI plans to develop improvements
and enhancements of the Products and other products,
including increasing the dating of the CVDI Cards,
Alliance Cards and Dade Alliance Cards consistent with
the provisions of Exhibit 6.4. CVDI shall consult with
Dade from time to time about improvements which may be
desired by Dade and end users without obligation to CVDI.
Dade may, in its sole discretion, provide product
suggestions, information about integration with its
hemostasis instruments, results of focus sessions and
other expectations of end users, and access to technology
available to it which may be useful to CVDI.
4.2 Certain Payments by Dade. CVDI agrees to perform certain
research and development projects during the term of this
Agreement, as more fully set forth on Schedule 4.2
hereof. CVDI will use its best efforts to develop a 25
card sample pack. CVDI will use its best efforts to
extend the minimum card dating of PT cards in accordance
with the specifications set forth on Exhibit 6.4. There
shall be no charge to Dade for such research and
development projects. CVDI further agrees to use its
best efforts to perform three research and development
projects, if funded in part by Dade, during the term of
this Agreement, as more fully set forth on Schedule 4.2
hereof. These three projects are: the calibration of
CVDI Cards to Dade PT and aPTT reagents, adding Dade's
[ ] (either reagent or raw material) and new PTT
(either reagent or raw material) to CVDI Cards and the
development of an additional Specialty Card. Timelines
and milestones for the first two (2) projects are set
forth on Schedule 4.2.
On January 6, 1997, Dade shall pay CVDI the sum of
$[ ] for use by CVDI in the Alliance Cards
project. Upon compliance in all material respects with
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
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Schedule 4.2, if submission to the FDA is required, and CVDI
submits all documents necessary for FDA clearance, Dade shall
pay CVDI an additional $[ ] and a final payment for the
Alliance Cards project of an additional $[ ] upon first
shipment of the Alliance Cards in the United States; if no
submission to the FDA is required, Dade shall pay CVDI and
additional $[ ] upon first shipment of the Alliance Cards in
the United States.
In Dade's sole discretion, Dade may fund the Dade
Alliance Cards project. At a date agreed to by Dade,
immediately prior to the initiation of the Dade
Alliance Cards project, Dade shall pay CVDI the sum of
$[ ] for use by CVDI in the Dade Alliance Cards
project. Upon compliance in all material respects with
Schedule 4.2, if submission to the FDA is required,
and CVDI submits all documents necessary for FDA
clearance, Dade shall pay CVDI an additional $[ ] and
a final payment for the Dade Alliance Cards project of
an additional $[ ] upon first shipment of the Dade
Alliance Cards in the United States; if no submission
to the FDA is required, Dade shall pay CVDI an
additional $[ ] upon first shipment of the Dade
Alliance Cards in the United States.
In Dade's sole discretion, Dade may fund a Specialty
Cards project. At a date agreed to by Dade,
immediately prior to the initiation of the Specialty
Card project, and upon the selection of the Specialty
Card project, including agreement as to the milestones
to be achieved, Dade shall pay CVDI the sum of $[ ]
for use by CVDI in the Specialty Card project. Upon
satisfactory compliance in all material respects with
such milestones, if submission to the FDA is required,
and CVDI submits all documents necessary for FDA
clearance, Dade shall pay
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
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CVDI an additional $[ ] and a final payment for the Specialty
Card project of an additional $[ ] upon first shipment of the
Specialty Card resulting from the Specialty Cards project in
the United States; if no submission to the FDA is required,
Dade shall pay CVDI and additional $[ ] upon first shipment of
the Specialty Cards resulting from the Specialty Cards project
in the United States.
In no event shall Dade's payments to CVDI pursuant to
this Section 4.2 exceed US$[ ] without Dade's prior
written consent. Notwithstanding any provision in this
Agreement to the contrary, upon termination of this
Agreement or upon conversion by CVDI of this Agreement
to a non-exclusive distributorship by Dade, Dade's
obligations to make further payments pursuant to this
Section 4.2 shall cease.
4.3 Rights to Products and New Products. CVDI shall own all
right, title, and interest in and to the know-how and
technology relating to the Products and New Products;
provided, however, the parties shall mutually agree upon
ownership of the components of the Dade Alliance Cards
and the Specialty Card at the time such project is
designated (i.e., at the time which the specifications
for the project is finalized). Notwithstanding anything
to the contrary contained in this Agreement, all ideas
and technology contributed under this Agreement solely by
Dade shall remain the sole and exclusive property of Dade
and all ideas and technology contributed under this
Agreement solely by CVDI shall remain the sole and
exclusive property of CVDI.
5. Regulatory Compliance.
5.1 Registrations.
(a) CVDI shall use commercially reasonable efforts to
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
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obtain and maintain regulatory approvals and requirements for
it to sell the Products and New Products in the Territory.
CVDI agrees to cooperate with Dade in any regulatory process
to permit Dade to participate in such process where feasible.
CVDI shall have sole discretion as to the commercial
reasonableness of any acts required on its part to maintain
any regulatory approval or requirement.
(b) CVDI shall promptly provide to Dade copies of all required
Product notifications and registrations to regulatory
agencies (including device listing reports) including
copies of all letters received from the FDA.
5.2 Reporting Obligations. Dade shall maintain, or cause to
be maintained, all complaint files and other records
required to be maintained by the FDA and other regulatory
agencies with respect to Products purchased by Dade and
its Affiliates from CVDI. CVDI shall promptly provide to
Dade copies of all complaints received with respect to
the Products sold to Dade as well as responses sent, if
any. Dade shall promptly provide CVDI with copies of any
complaints relating to the Products received by Dade.
Except to the extent Dade is otherwise required by law,
CVDI shall submit to the FDA all reports of complaints,
malfunctions, failures or deterioration in the
characteristics or performance or instructions for use or
inadequacy in labeling which may have led or lead to
death or serious injury and all other information about
the Products required to be submitted to any regulatory
agency, including the reports required under 21 CFR Parts
803 and 804 applicable to the Products.
5.3 Manufacturing. CVDI shall use its best efforts to comply with
all applicable GMP requirements, including all national
technical and quality standards applicable to the Products
which are incorporated into GMP. From time-to-time, with
reasonable prior notice to CVDI, Dade
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may inspect CVDI facilities and upon reasonable request,
review CVDI's methods used to audit its subcontractors for GMP
compliance. CVDI shall have sole discretion as to the
commercial reasonableness of any acts required on its part
with respect to GMP compliance, provided, however, CVDI shall
notify Dade of any citations from discussions with a
regulatory body where such discussions and citations relate to
a material aspect of GMP compliance.
5.4 Samples. CVDI shall retain samples of each lot of the
Products for time periods which are in accordance with
GMP.
5.5 Product Recalls and Field Corrective Actions. In the
event (i) any government authority issues a directive or
order that a Product be recalled, (ii) a court of
competent jurisdiction orders such a recall or (iii) Dade
and CVDI determine that a Product should be recalled or
that a Field Corrective Action should occur, the parties
shall take all appropriate corrective actions. If CVDI
and Dade cannot agree as to whether or not a Product
should be recalled or that a Field Corrective Action
should occur, the parties will select a mutually agreed
upon third party to assist them in the decision process.
The parties shall share equally all costs and expenses
associated with such third party involvement. If, after
consultation with such third party, CVDI and Dade cannot
agree as to whether or not a Product should be recalled
or that a Field Corrective Action should occur, and Dade
obtains an opinion of counsel that the Product should be
recalled or some Field Corrective Action should occur,
Dade shall so notify CVDI and shall be entitled to
initiate the appropriate corrective action. Dade or its
Affiliates will provide notice to customers of the recall
of the Product. Upon determination of the party
responsible for the recall or Field Corrective Action,
such party shall be responsible for the cost of notifying
19
end users and for determining the corrective actions to be
taken and the costs associated with such actions. CVDI and
Dade shall fully cooperate with one another and provide all
reasonable assistance in conducting any recall or Field
Corrective Action under this Paragraph. Dade shall maintain
records of all sales of the Products sufficient to carry out a
recall with respect to Products purchased under the Agreement.
5.6 General Obligations of CVDI and Dade.
(a) Except as otherwise expressly provided in the
Agreement, CVDI shall manufacture, test, package, and
label the Products. Dade shall, during the period of
exclusivity, price, invoice and have shipped in the
Territory all CVDI Cards, Alliance Cards, Specialty
Cards and all Dade Alliance Cards, including those
for which CVDI has solicited orders (subject to
Dade's acceptance, and Dade will accept orders of
Cards unless any such order contains terms or
conditions inconsistent with orders placed with
similarly situated customers) from Non-Dade Accounts.
CVDI shall price, invoice and have shipped all
Specialty Products and, during any period of
non-exclusivity, CVDI shall price, invoice, and have
shipped in the Territory all CVDI Cards, Specialty
Cards and Cards not bearing the Dade Trademark which
it sells. During the period of non-exclusivity, Dade
shall price, invoice, and have shipped in the
Territory all CVDI Cards, Alliance Cards, Specialty
Cards and all Dade Alliance Cards which Dade sells.
Dade shall price, invoice and have shipped all
Instruments which it sells. CVDI shall price, invoice
and have shipped all other Instruments. With regard
to orders of CVDI Cards, Alliance Cards, Dade
Alliance Cards, and Specialty Cards to Non-Dade
Accounts solicited by CVDI and priced, invoiced and
shipped by Dade
20
(subject to the terms of Section 11.2 and Dade's
acceptance, and Dade will accept orders of Cards
unless any such order contains terms or conditions
inconsistent with orders placed with similarly
situated customers), during the period of
exclusivity, Dade shall be entitled to retain [ ]
percent ([ ]%) of the difference between the actual
net sales price of such cards by Dade and the net
cost to Dade applicable at the time of such sale. For
purposes of this Agreement, the term "net sales
price" shall mean Dade's invoiced price to the
customer, less related freight, shipping and handling
charges and costs, and the term "net cost" shall mean
the price per card payable by Dade to CVDI, plus
freight, shipping and handling charges paid or
incurred by Dade. Dade shall pay CVDI the [ ]% within
thirty (30) days of payment by the customer to Dade.
Notwithstanding anything to the contrary in this
Section, Dade shall retain 100% of the profits from
the sale of Products in the Territory by Dade.
(b) CVDI shall manufacture, test, package, label and
release and Dade shall maintain, store and ship the
Products in accordance with all applicable GMP
requirements.
(c) Each party shall promptly notify the other party
of, and shall provide the other party with
copies of, any correspondence and other
documentation received or prepared in connection
with any of the following events: (1) receipt of
any material correspondence from the FDA in
connection with the manufacture, sale or use of
the Products; (2) any recall of the Products;
(3) the withdrawal of the Products from the
market; (4) any regulatory
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
21
comments relating to the manufacture of the
Products requiring a response or action by either
party.
(d) CVDI shall maintain all manufacturing and
analytical records, all records of shipments of the
Products from CVDI, and all validation data
relating to the Products for the time periods
required by applicable laws and regulations. CVDI
shall make such data available to the FDA upon
request of the FDA, such request being made either
directly to Dade or to CVDI, or otherwise as
required by applicable law.
(e) Dade Reagents. During the term of this Agreement,
Dade shall sell its reagents and products and its
Sysmex equipment and products to CVDI in accordance
with the terms, conditions and pricing schedule set
forth on Schedule 5.6(e). Prices for such reagents
may be adjusted annually in an amount not to exceed
the increase in the Producer Price Index for the
immediately prior calendar year, such adjustment to
begin not earlier than January 1, 1998. Prices for
such Sysmex equipment may be adjusted annually in
amounts not to exceed the Producer Price Index, but
in no event, shall such price be less than the
actual landed price to Dade. Dade shall sell
certain raw materials to CVDI in accordance with
terms, conditions, and pricing to be negotiated
separately.
5.7 Orders.
(a) Forecasts. Beginning with the execution hereof,
Dade shall provide monthly, by the fifteenth day of
each month, its estimated forecast of its and its
Affiliates requirements for the Cards for each of
the six (6) months following the end of the month
in which such forecast is submitted (each a
"Forecast"). All Forecasts under this Agreement
22
and updates thereof for any period will constitute a
firm obligation of Dade to purchase the quantities of
Cards indicated only for the first three months of
such Forecast.
(b) Purchase orders. In January, February and March,
1997, Dade will order CVDI, Alliance, Dade Alliance
Cards, and/or Specialty Cards ("Cards") on a level
basis each month, with a firm order obligation of
at least [ ] such Cards per month during such
period; provided, however, that such firm order
obligation shall be reduced on a card for card
basis by the amount of Specialty Products sold by
Dade, pursuant to the provisions of Section 3.6
above, beginning ninety (90) days from the date of
the first sale of such Specialty Products.
(c) Delivery. CVDI shall use its best efforts to
supply the Products ordered by Dade and by its
Affiliates and shall supply Products in accordance
with the delivery schedule and in the quantities
specified by Dade provided; however, CVDI shall not
be obligated to deliver Cards to the extent that
orders for such Cards exceed 125% of the quantities
stated in the portion of any forecast which
contains the firm obligation of Dade to purchase
Cards. CVDI shipments of Products shall be
delivered FOB freight collect CVDI's distribution
site, Raleigh, North Carolina, to Dade's carrier at
which time title, ownership and risk of loss and
damage shall pass to Dade. CVDI shall deliver
Products, properly packed for distribution
(including, but not limited to refrigerated
distribution), to the carrier selected by Dade at
its distribution site. All freight and insurance
expenses, as well as any special handling or
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SEC.
23
special packing expenses requested by Dade, shall be
paid by Dade. (Packing for refrigerated distribution
is not a special packing expense.) Dade shall bear
any and all applicable taxes, duties and similar
charges that may be assessed against the Products
after delivery to the carrier at CVDI's distribution
site. CVDI shall include shipping documents with
Products in accordance with Dade's or its Affiliates
reasonable requests.
5.8 Packaging. All Alliance Card, Dade Alliance Card and
Specialty Card labels and labeling produced by CVDI,
including in terms of packaging layout, design and color,
shall be consistent with artwork supplied or approved by
Dade. CVDI shall provide all necessary labels and
package inserts for all CVDI Cards, Specialty Cards,
Alliance Cards, and Dade Alliance Cards as well as for
the shipping container, which labels and package inserts
shall comply with applicable FDA requirements. Dade shall
not use any other labels or package inserts for any of
such cards.
5.9 Taxes; Duties. The actual amount of sales, use, excise,
value-added and similar taxes levied upon or applicable
to the transfer of Product to Dade or its Affiliates are
payable by Dade and its Affiliates. Dade and its
Affiliates shall pay all duties, tariffs, surcharges and
other customs and other governmental fees levied in
connection with the export of the Cards outside of the
United States but within the Territory.
6. Product Warranty.
6.1 Standard Limited Warranty. CVDI warrants that the CVDI
Cards, the Alliance Cards, the Dade Alliance Cards, the
Specialty Cards, and the Specialty Products and Controls
shall, at the time of shipment, (a) comply with the
requirements of the Act, if applicable, and shall until
their expiration date conform to the labeling and package
inserts approved by CVDI; (b) will not be products that
24
are adulterated or misbranded within the meaning of the Act;
(c) shall have been manufactured, packaged, stored and shipped
in conformity with applicable GMP requirements; and (d) will
not be products that may not be introduced into interstate
commerce pursuant to applicable federal or state law. CVDI
warrants that all Instruments and Products (other than Cards
and Controls), shall, until the earlier of twenty-four (24)
months from shipment by CVDI or twelve (12) months after the
date of installation with the customer: (a) comply with the
requirements of the Act, if applicable, and shall conform to
the labeling and package inserts approved by CVDI; (b) will
not be products that are adulterated or misbranded within the
meaning of the Act; (c) shall have been manufactured,
packaged, stored and shipped in conformity with applicable GMP
requirements; and (d) will not be products that may not be
introduced into interstate commerce pursuant to applicable
federal or state law.
This limited warranty is contingent upon proper use of
a Product in the application for which such Product
was intended and does not cover Products that were
modified without CVDI's written approval, that have
expired, or that were improperly stored or handled. As
of the date of the execution of this Agreement, CVDI
has no knowledge that any of the Products, or the sale
or use of any of the Products for their intended
purposes infringe any intellectual property of any
third party.
6.2 No Other Warranty. EXCEPT FOR THE EXPRESS LIMITED
WARRANTIES SET FORTH IN SECTION 6.1 ABOVE, CVDI GRANTS
NO WARRANTIES FOR THE PRODUCTS, EXPRESS OR IMPLIED,
EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR
OTHERWISE, AND CVDI SPECIFICALLY DISCLAIMS ANY IMPLIED
WARRANTY OF QUALITY, WARRANTY OF MERCHANTABILITY,
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR
WARRANTY OF NON-INFRINGEMENT.
25
6.3 Remedy and Limitation of Liability. EXCEPT AS OTHERWISE
PROVIDED HEREIN, CVDI'S LIABILITY AND DADE AND ITS
AFFILIATES, ITS DISTRIBUTORS AND ITS CUSTOMERS SOLE
REMEDY UNDER THE LIMITED WARRANTY UNDER SECTION 6 HEREOF
WITH RESPECT TO ANY PRODUCTS SHALL BE LIMITED AS FOLLOWS:
(1) IN THE EVENT OF PRODUCT RECALLED OR NOT IN COMPLIANCE
WITH THE WARRANTIES SET FORTH IN THIS AGREEMENT DUE TO
THE FAULT OF CVDI, CVDI SHALL, AT THE REQUEST OF DADE,
REFUND DADE'S COST OR THE REPLACEMENT OF SUCH PRODUCT AT
NO COST TO DADE, ITS DISTRIBUTORS OR CUSTOMERS; (2) IN
ALL OTHER CIRCUMSTANCES, A REFUND OF DADE'S COST OF THE
CARDS OR REPAIR OR REPLACEMENT, IN ALL EVENTS WHETHER
UNDER (1) OR (2), AT CVDI'S SOLE DISCRETION. EXCEPT AS
OTHERWISE PROVIDED HEREIN, IN NO EVENT SHALL CVDI BE
LIABLE FOR THE COST OF PROCUREMENT OF SUBSTITUTE PRODUCT
OR FOR ANY-SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES
FOR BREACH OF WARRANTY OR OTHERWISE. CVDI SHALL BEAR THE
EXPENSE OF FREIGHT FOR ALL RETURNED GOODS.
6.4 Card Dating. CVDI will use best efforts to deliver all
CVDI Cards, Alliance Cards, Dade Alliance Cards, and
Specialty Cards within three (3) months of the date of
manufacture. Except as otherwise provided in Exhibit
6.4, CVDI will use best efforts to deliver all CVDI PT
Cards with a minimum card dating of nine (9) months from
the date of receipt by Dade. CVDI will use best efforts
to deliver all CVDI aPTT Cards within a minimum card
dating of twenty-one (21) months from date of receipt by
Dade. CVDI will use best efforts to deliver all Alliance
Cards and Dade Alliance Cards with minimum card dating
the same as for the corresponding CVDI PT and aPTT Cards.
CVDI will use best efforts to extend the dating of CVDI
PT Cards, Alliance PT Cards and Dade Alliance PT Cards in
accordance with the time schedule set forth in Exhibit
6.4 hereto.
6.5 Remedy for "Short-Dated" Cards. To the extent that CVDI
delivers any CVDI Cards, Dade Alliance Cards, and
26
Alliance Cards with less than twenty-one (21) months dating at
the time of such delivery, CVDI agrees to replace at the
request of Dade all such Cards at the time of their expiration
at CVDI's variable cost, not to exceed US $[ ] per card FOB
CVDI's distribution site. CVDI agrees to adjust such variable
cost to reflect actual reductions in its costs of
manufacturing cards as CVDI's production volume increases. All
cards delivered to Dade with less than the three (3) month
dating from the date of manufacture or less than nine (9)
months from the date of receipt by Dade shall be returned to
CVDI at CVDI's cost or destroyed by Dade at CVDI's discretion
and expense and shall be replaced by CVDI at no cost to Dade
at the time of expiration. Supply of replacement CVDI Cards,
Alliance Cards, Dade Alliance Cards, Specialty Cards, and
Instruments shall not count toward Dade's minimum purchase
requirements.
6.6 Assertion of Claims. In any case where Dade expects to
make a claim against CVDI with respect to nonconforming
Product, Dade shall retain the Product for the lesser of
thirty (30) days or receipt of written authorization and
instructions of CVDI either to dispose of the Product or
to return the Product to CVDI. Dade will provide CVDI
proof of destruction of cards when requested by CVDI.
7. Payments for Product.
7.1 Purchase Price. Except as provided otherwise herein,
Dade or an Affiliate of Dade shall pay CVDI a purchase
price per CVDI Card, Alliance Card, and Dade Alliance
Card (the "Card Purchase Price") of US$[ ]. Except as
otherwise provided herein, Dade or an Affiliate of Dade
shall pay CVDI a purchase price per Instrument (the
"Instrument Purchase Price") of US$[ ]. The
parties shall negotiate in good faith the purchase price
of the Specialty Card. Schedule 1.11 sets forth the
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SEC.
27
initial prices at which CVDI will sell to Dade Products other
than Instruments and Cards. Such prices are subject to
adjustment from time to time but prices shall not be increased
to exceed the increase in the Producer Price Index for the
immediately prior calendar year, such an adjustment to begin
not earlier than January 1, 1998.
7.2 Dade Commitment. Dade agrees to purchase from CVDI a
minimum of [ ] in the aggregate of CVDI Cards,
Alliance Cards, Specialty Cards, or Dade Alliance Cards
("Cards"), invoiced by CVDI to Dade at a rate of not less
than [ ] Cards per month during January, February
and March, 1997; provided however, that such firm order
obligation shall be reduced by the amount of Specialty
Products sold by Dade, pursuant to the provisions of
Section 3.6 above, beginning ninety (90) days from the
date of the first sale of such Specialty Products. Dade
agrees to purchase from CVDI a minimum of [
( )] Instruments by December 31, 1997; provided, however,
that Dade shall be entitled to a credit against the minimum
Instrument purchase obligation for each Instrument sold by
CVDI and its distributors in the Territory during 1997 where
such Instrument is placed with a customer for any use outside
of the customer's operating room facilities. CVDI shall report
to Dade on a monthly basis the number of all such Instrument
sales. During 1997, if Dade's firm forecast for any month
after March is less than [ ] Cards for reasons other than
those set forth in Section 11.4(a) (i) (ii) or (iii), the
parties shall discuss the reasons for such forecast and
possible actions the parties can take to increase Dade's sales
of the CVDI Cards, Alliance Cards, Specialty Cards or Dade
Alliance Cards. If, at the end of ninety (90) days from the
end of the last month in which Dade ordered [ ] Cards, Dade's
firm forecasts are still less
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
28
than [ ] Cards per month, then CVDI has the option,
upon written notice to Dade of: (a) converting this
Agreement to a non-exclusive distributorship agreement;
or (b) terminating this Agreement.
7.3 Adjustments to the Purchase Price. The Card Purchase
Price shall be increased to US$[ ] beginning in the
month following a month in which Dade orders less than
[ ] Cards per month. The Card Purchase Price shall
be US$[ ] for all orders of [ ] or more Cards per
month except that the Card Purchase Price shall be
adjusted as set forth above or below for the periods
during which such milestones are achieved; provided
however, that the Card Purchase Price shall revert to the
highest applicable price to the extent that any minimum
milestone is not maintained at the required levels stated
below:
(a) Volume Milestones.
(i) Subject to section 7.3(a)(ii), at any time when:
(a) Dade purchases from CVDI, for any
consecutive three (3) month period [ ] or
more in each such month of CVDI Cards, Alliance
Cards, Dade Alliance Cards and/or Specialty
Cards in the aggregate, and (b) CVDI sells to
all its customers and distributors, including
Dade, in that same consecutive three (3) month
period, [ ] or more in each such month
of CVDI Cards, Alliance Cards and/or Dade
Alliance Cards in the aggregate, and (c) for the
next consecutive three (3) month period, Dade's
monthly order of Cards remain at [ ] or
more and CVDI's monthly orders of Cards remain
at [ ] or more, then the Card Purchase
Price to Dade will be reduced to US$[ ] for
all purchases
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
29
subsequent to such date and continuing
thereafter for the period in which such
sales levels are maintained.
(ii) At any time, when: (a) for any consecutive
three (3) month period, Dade purchases from
CVDI, [ ] or more in each such month
of CVDI Cards, Alliance Cards, Dade Alliance
Cards and/or Specialty Cards in the
aggregate, and (b) CVDI sells to all of its
customers and distributors, including Dade,
in that same consecutive three (3) month
period [ ] or more in each such month
of CVDI Cards, Alliance Cards and/or Dade
Alliance Cards in the aggregate, and (c) for
the next consecutive three (3) month period
Dade's monthly orders of Cards remain at [ ]
or more and CVDI's monthly orders of Cards
remain at [ ] or more then the Card
Purchase Price to Dade will be reduced to
US$[ ] for all purchases subsequent to
such date and continuing thereafter for the
period in which such sales levels are
maintained.
(b) Samples, etc. Upon Dade's request, during each
calendar year in which this Agreement is in effect,
CVDI shall supply (i) an estimated [ ] CVDI
Cards, Alliance Cards, Dade Alliance Cards, and
Specialty Cards (in the aggregate) for integration
(compatibility) with instrumentation purposes,
training purposes, regulatory approval purposes,
and (ii) an estimated [ ] CVDI Cards, Alliance
Cards, Specialty Cards, and Dade Alliance Cards (in
the aggregate) as samples for demonstration
purposes. The price for sample cards shall be
US$[ ] per card FOB CVDI. Such cards will be
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
30
supplied in a sample pack containing twenty-five (25)
cards. The price for all other cards provided
pursuant to this Section shall be US$[ ] per card FOB
CVDI. CVDI agrees to adjust the price to Dade to
reflect the actual reductions in its costs of
manufacturing as CVDI's production volume increases.
7.4 Minimum Sales to Maintain Exclusivity. Subject to the
provisions of Sections 7.2 and 13.7:
(a) CVDI shall be entitled to revoke the grant of
exclusivity to Dade in the event that:
(1) Dade does not either sell to end users in the
United States or Canada, or ship to distributors
in other countries in the Territory, a total of
[ ] CVDI Cards, Alliance Cards, Specialty
Cards, and/or Dade Alliance Cards by December 31,
1997; and
(2) Dade sells to end users in the United States or
Canada, or ships to distributors in other
countries in the Territory, less than [ ] CVDI
Cards, Alliance Cards, Specialty Cards, and/or
Dade Alliance Cards in the three-month period
ending December 31, 1997.
(b) After December 31, 1997, CVDI shall be entitled to
revoke Dade's grant of exclusivity and shall be
entitled to designate competing distributors in the
Territory in the event that Dade fails to meet its
annual or semi annual minimum sales of CVDI Cards,
Alliance Cards, Specialty Cards, and/or Dade
Alliance Cards to end users in the United States or
Canada, or ship to distributors in other countries
in the Territory, calculated at the end of each six
months calendar period or calendar year, as
applicable, and determined by reference to sales
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
31
levels as follows:
1998 1999 2000 2001
---- ---- ---- ----
Annual Minimum Sales
of Cards to End Users [ ]
Semi Annual Sales
of Cards to End Users [ ]
(c) CVDI shall be entitled to terminate this Agreement and to
enter into alternative exclusive distribution agreements
in the Territory in the event that Dade fails to meet the
following semi annual minimum sales of CVDI Cards,
Alliance Cards, Specialty Cards, and or Dade Alliance
Cards to end users in the United States or Canada, or
ship to distributors in other countries in the Territory,
calculated at the end of each six month calendar period
for the applicable calendar year:
1998 1999 2000 2001
---- ---- ---- ----
Semi Annual Termination
Level of Sales of Cards
to End Users
[ ]
(d) Notwithstanding anything to the contrary in this
Agreement, the grant of exclusivity by CVDI to Dade for
each country in the Territory other than the United
States and Canada may be revoked for that specific
country by CVDI at any time upon one hundred twenty (120)
days written notice where Dade fails to maintain a
distribution network or other sales presence in such
country, and such failure persists beyond such one
hundred twenty (120) day period.
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
32
(e) In all instances, during the period of exclusivity, fifty
(50%) percent of all orders solicited by CVDI and
accepted and shipped by Dade in the Territory other than
by Dade of CVDI Cards, Alliance Cards, Specialty Cards,
and Dade Alliance Cards will be counted on a card for
card basis toward Dade's minimum sales requirements in
the month in which such orders were sold (but only until
such account is converted to a Dade Account). In all
instances, one hundred percent (100%) of all sales by
Dade in the Territory of CVDI Cards, Alliance Cards, Dade
Alliance Cards, Specialty Cards, and Specialty Products
shall be counted on a card for card basis toward Dade's
minimum sales requirements in the month in which such
orders were sold.
7.5 Payment. All CVDI invoices shall be paid net 30 days
from date of invoice in US Dollars; provided, however,
that if a customer will only accept a single lot of
material over an extended period of time, payment for
such CVDI invoices shall be paid net sixty (60) days from
date of CVDI's invoice in US dollars. Dade shall provide
CVDI with documentation of such arrangements. Any
invoiced amounts not paid when due shall be subject to a
service charge at the lower of the rate of one and
one-half (1.5%) percent per month or the maximum rate
permitted by law. If Dade fails to make any payment to
CVDI when due, CVDI shall give Dade written notice of
such non-payment and Dade shall have ten (10) days from
the receipt of such notice to make the payment. CVDI may
upon thirty (30) days written notice to Dade without
affecting any other rights under this Agreement,
33
terminate this Agreement, cancel or delay shipments hereunder,
or terminate the grant of exclusivity to Dade for non-payment
by Dade after such ten (10) day period; provided however, that
CVDI shall not be entitled to terminate this Agreement; cancel
or delay shipments hereunder, or terminate the grant of
exclusivity to Dade unless Dade is more than sixty (60) days
late in payment more than three (3) times during any twelve
(12) month period, for all periods ending on or prior to
December 31, 1997, and two (2) times in any twelve (12) month
period for all periods thereafter, and further provided,
however, CVDI shall not be entitled to terminate this
Agreement with respect to any invoice which is being contested
by Dade in good faith.
8. Confidentiality.
8.1 "Proprietary Information" means: all financial
information, marketing information, sales information,
customer information, raw materials, know-how, drawings,
compositions, manufacturing and other specifications,
analytical procedures, flow sheets, reports, market
studies, preclinical and clinical test results, FDA and
other regulatory submissions, software and other medical,
research, technical, and marketing information disclosed,
directly or indirectly, by either party or any of its
Affiliates to the other party, retroactively to April 1,
1996, in writing, marked "Confidential", "Proprietary" or
the like, or, if transmitted orally or by observation of
equipment or other material, confirmed by a writing so
marked within sixty (60) days of its disclosure, or which
by its nature is information normally intended to be held
34
in confidence, unless the same: (a) is or becomes public
knowledge through no fault of the receiving party; (b) is
legally in the possession of the receiving party prior to
receipt from the disclosing party; (c) is subsequently and
lawfully received from a third party without its breach of any
nondisclosure obligation; or (d) is independently developed by
employees of the receiving party who have had no access to the
Proprietary Information of the disclosing party.
Notwithstanding the immediately preceding sentence, CVDI
agrees that all new materials and other information which Dade
provided to CVDI prior to October 15, 1996, shall be treated
as Proprietary Information.
8.2 Non-Disclosure. During the duration of this Agreement
and for a period of five (5) years thereafter, neither
party shall disclose to third parties, or use for its
benefit, in whole or in part, any Proprietary Information
received from other party, except to the extent required
to comply with the Act or other laws. Each party shall
take all reasonable steps to minimize the risk of
disclosure of Proprietary Information, including, without
limitation:
(a) ensuring that only its employees whose duties
require them to possess such information have
access thereto; and
(b) exercising at least the same degree of care that it
uses for its own Proprietary Information.
8.3 Duties Upon Termination. Except as otherwise permitted
under this Agreement, upon request by the disclosing
party after expiration or termination of this Agreement,
35
the other party shall either return all of such disclosing
party's Proprietary Information (including data, memoranda,
drawings and other writings and tapes and all copies thereof)
received or prepared by it or destroy the same, and in any
event shall make no further use of such Proprietary
Information provided, however, that counsel for the receiving
party may keep one copy of the Proprietary Information for
purposes of ascertaining the receiving party's obligations
pursuant to this Section 8.
8.4 Use of Proprietary Information. During the duration of this
Agreement and for a period of five (5) years thereafter,
neither party shall use the other party's Proprietary
Information for any purposes, except to perform its
obligations hereunder.
8.5 Injunctive Relief. Each party acknowledges that the
other party would not have an adequate remedy at law for
breach of any of the covenants contained in this Section
8 and hereby consents to the enforcement of same by the
other party by means of temporary or permanent injunction
issued by any court having jurisdiction thereof and
further agrees that the other party shall be entitled to
assert any claim it may have for damages resulting from
the breach of such covenants in addition to seeking
injunctive or other relief.
9. Indemnification.
9.1 Indemnification by CVDI. Subject to Dade's compliance
with its obligations set forth in Section 9.3 below, CVDI
shall indemnify, defend and hold Dade, its Affiliates,
subdistributors, their directors, officers, employees and
36
agents harmless from and against any and all losses, damages,
liabilities, claims, demands, judgments, settlements, costs
and expenses (including, without limitation, reasonable
attorneys' fees and other costs of defense) (collectively
"Losses") attributable to, or arising out of a breach by CVDI
of any of CVDI's warranties, representations, covenants or
obligations hereunder or any claim, lawsuit or other action by
a third party for, breach of contract, personal injury or
property damage to the extent caused by a breach by CVDI of
this Agreement, or out of or connected with the use or sale of
the Product to the extent directly caused by CVDI's fault,
negligence or breach of any of its obligations hereunder
concerning the use or sale of the Product.
9.2 Indemnification by Dade. Subject to Dade's compliance
with its obligations set forth in Section 9.3 below, Dade
shall indemnify, defend and hold CVDI and its Affiliates,
their shareholders, directors, officers, employees and
agents harmless from and against any and all Losses
attributable to, or arising out of a breach by Dade of
any of Dade's warranties, representations, covenants or
obligations hereunder, or any claim, lawsuit or other
action by a third party for, breach of contract, personal
injury or property damage to the extent caused by a
breach by Dade or any of its Affiliates of this
Agreement, or out of or connected with the use or sale of
the Product to the extent directly caused by Dade's
fault, negligence or breach of any its obligations
hereunder concerning the use or sale of the Product.
37
9.3 Notice and Assistance. A party (the "indemnitee") which
intends to claim indemnification under this Section 9
shall promptly notify the other party (the "indemnitor")
in writing of any action, claim or other matter in
respect of which the indemnitee or any of its employees
or agents intend to claim such indemnification. The
indemnitee shall permit, and shall cause its employees
and agents to permit, the indemnitor, at its discretion,
to settle any such action, claim or other matter and
agrees to the complete control of such defense or
settlement by the indemnitor; provided, however, that
such settlement does not adversely affect the
indemnitee's rights hereunder or impose any obligations
on the indemnitee in addition to those set forth herein
in order for it to exercise such rights. No such action,
claim or other matter shall be settled without the prior
written consent of the indemnitor and the indemnitor
shall not be responsible for any legal fees or other
costs incurred other than as provided herein. At the
expense of the indemnitor, the indemnitee shall render
the indemnitor all assistance reasonably necessary in
defending against such claim, suit, or action. The
indemnitee party shall have the right at its expense, to
retain separate counsel to act in an advisory capacity in
connection with any matter involving a claim for
indemnity and the indemnitor will cooperate with such
counsel.
38
10. Patents.
10.1 Ownership. Except as provided herein with respect to
trademarks, Dade acknowledges that it does not have, nor
does it hereby acquire, any right, title and interest in
and to any patents, patent applications, trademarks or
other proprietary rights of CVDI owned by CVDI at the
time of the execution of this Agreement. Except as
provided herein with respect to trademarks, CVDI
acknowledges that it does not have, nor does it hereby
acquire, any right, title and interest in and to any
patents, patent applications, trademarks or other
proprietary rights of Dade owned by Dade at the time of
the execution of this Agreement.
10.2 Patent Infringement.
(a) Defense. Dade agrees that CVDI has the right to
defend or at CVDI's option to settle, and CVDI
agrees at CVDI's expense, to defend or at CVDI's
option to settle, each claim, suit or proceeding
brought against Dade or Dade's customers arising
out of or related to an allegation of infringement
of any United States patent, copyright, or
trademark or misappropriation of trade secrets by
the sale of Products sold hereunder or the use
thereof, subject to the limitations hereinafter set
forth. CVDI shall have sole control of any such
action or settlement negotiations, and CVDI agrees
to pay, subject to the limitations hereinafter set
forth, any final judgment (including all pre-
judgment and post-judgment interest) entered
against Dade or Dade's customers on such issue in
39
any such suit or proceeding defended by CVDI. Dade
agrees that CVDI at CVDI's sole option, shall be
relieved of the foregoing obligations unless Dade
shall notify CVDI promptly in writing of such claim,
suit or preceding and give CVDI authority to proceed
as contemplated herein, and at CVDI's expense,
cooperates with CVDI to settle and/or defend any such
claim, suit or proceeding. CVDI shall not be liable
for any costs or expenses incurred without CVDI's
written authorization.
(b) Limitation. Notwithstanding the provisions of
subsection 10.2(a) above, CVDI assumes no liability
for (i) infringements covering completed Products
or any composition, assembly, combination method or
process in which any of the Products may be used
but not covering Products when used alone;
provided, however, that such limitation shall not
apply where the sale or use of the Product (whether
or not in any composition, assembly, combination,
method or process) is a sale for a use or a use
intended or approved by CVDI; (ii) infringements
involving any marking or branding not applied by
CVDI or applied at the request of Dade; or (iii)
infringements involving the modification or
servicing of the Products, or any part thereof
unless such modification or servicing was performed
by CVDI or in accordance with CVDI's written
instructions or approved by CVDI.
(c) THE FOREGOING PROVISIONS OF THIS SECTION 10.2 STATE
THE ENTIRE LIABILITY AND OBLIGATION OF CVDI AND THE
40
EXCLUSIVE REMEDY OF DADE, ITS AFFILIATES,
DISTRIBUTORS AND CUSTOMERS WITH RESPECT TO ANY
ALLEGED INFRINGEMENT OF PATENTS, COPYRIGHTS,
TRADEMARKS, OR OTHER INTELLECTUAL PROPERTY RIGHTS BY
THE PRODUCTS OR ANY PART THEREOF.
(d) Patent Enforcement. If Dade believes that a third
party is reasonably likely infringing CVDI's patent
rights in the Territory, Dade shall promptly notify
CVDI of that fact and shall provide to CVDI
reasonable evidence of any such claim based upon
materials available to Dade. Upon receipt of
evidence satisfactory to CVDI of infringement, in
CVDI's sole discretion CVDI shall then have the
sole right to take action against such infringing
third party. If CVDI fails to take commercially
reasonable action within two (2)months to stop such
infringement, and such infringement, if allowed to
continue, would have a substantial effect on Dade's
sales of the Product, Dade shall then be entitled
to take commercially reasonable action to stop such
infringement, including the filing of suit;
provided, that Dade shall not have such right so
long as CVDI is then diligently taking action
against at least one infringing third party in at
least one country in the Territory. For purposes
of this Section 10.2(b), "commercially reasonable
action" requires at a minimum advising the
infringing party to cease and desist its
infringement. For purposes of this Section
10.2(b), "substantial effect on Dade's sales of the
41
Product" means a third party offering for sale the
Product or an equivalent of the Product. For purposes
of this Section 10.2(b), "diligently taking action"
means that CVDI has filed at least one patent
infringement lawsuit against at least one infringer
in at least one country. Any recovery of damages or
settlement amounts from any court actions or out of
court actions shall be divided as follows: one
hundred percent to cover costs of the parties until
expenses are reimbursed in full and thereafter
seventy five percent to CVDI and twenty-five percent
to Dade. CVDI shall have the right to settle any such
action. Dade shall have the right to renegotiate its
minimum performance obligations under Sections 7.2
and 7.4 to the extent they may be affected by such
third party sales of the Product(s) in the Territory.
(e) Cooperation. If either party takes action against
a third party pursuant to this Section 10.2, or if
a third party claims the manufacture, use or sale
of Product in the Territory infringes its patent or
other proprietary rights, the other party agrees to
provide reasonable assistance by supplying
information within its control which may assist the
party taking the enforcement action or defending
such claim.
10.3 Distribution Rights. CVDI hereby grants to Dade the
right to act as its authorized distributor in the
Territory to sell the Existing Products for the term of
this Agreement. During the term of this Agreement CVDI
42
shall not bring any claim or action against Dade or any of its
Affiliates for the infringement or misappropriation of any
intellectual property owned or licensed to CVDI based upon the
use or sale by Dade or any of its Affiliates of Products
pursuant to the terms and conditions of this Agreement.
11. Term; Termination; Conversion to Non-Exclusive.
11.1 Term. The initial term of this Agreement shall be from
the Effective Date until December 31, 2001, unless terminated
earlier under the provisions of this Agreement. This Agreement
shall renew automatically for one year periods unless at least
one hundred eighty (180) days prior to year end, either party
provides to the other written notice of its intent to
terminate.
11.2 Conversion to Non-Exclusive. CVDI shall have the right
to convert the exclusivity of Dade's rights to sell the
Products and to use the Trademarks to a non-exclusive
distribution agreement at any time the minimum sales to
end users, as set forth in Section 7.4, are not met.
Such right shall be exercised upon at least sixty (60)
days' prior written notice. Upon exercise of such
conversion right:
(a) CVDI will not sell Alliance Cards, including cards
calibrated to Dade reagents, or Dade Alliance Cards,
except to Dade; provided, however, that if CVDI
exercises such conversion right in 1997, CVDI shall
not be limited as to any sales of cards calibrated to
Dade reagents; provided, however, CVDI may not sell
Cards bearing Dade marks except to Dade;
43
(b) CVDI will use best efforts to honor and
fulfill card unit requirements contained in
existing customer agreements of Dade; and
(c) CVDI will not sell Specialty Cards using or including
that which the parties agree is Dade's proprietary
technology in accordance with Section 4.3 or Dade
Alliance Cards except to Dade;
(d) CVDI will be free to negotiate distribution
agreements in the Territory; and
(e) Dade's obligations to make further payments
pursuant to Section 4.2 hereof shall cease.
In the event of such conversion, CVDI and Dade shall negotiate
annual volumes of Cards and the price for the same on a year
to year basis; provided, however, that price levels shall not
exceed the pricing structure included in this Agreement to the
extent that Dade's sales volume meets any of the volume
discounts described in Section 7.3, adjusted by the Producer
Price Index as it may change from time to time and, provided,
however, that the minimum volumes shall be less than those
required to maintain exclusivity. CVDI shall be entitled to
terminate this Agreement in event that the negotiated minimum
volumes shall be less than those stated in Section 7.4(c).
Dade agrees to submit an annual sales volume plan to CVDI.
Beginning thirty (30) days subsequent to such conversion, Dade
shall provide quarterly its Forecast of requirements for the
Cards for each of the six (6) months following the end of the
quarter in which such forecast is submitted. The monthly sales
quantities shown in the Forecast for the first
44
three (3) months shall be considered a firm purchase
order.
11.3 Termination for Cause -- Either Party. Without prejudice
to any other rights it may have hereunder or at law or in
equity, either party may terminate this Agreement
immediately by written notice to the other party upon the
occurrence of any of the following:
(a) the other party becomes insolvent, an order for
relief is entered against the other party under any
bankruptcy or insolvency laws or laws of similar
import;
(b) the other party makes an assignment for the benefit
of its creditors or a receiver or custodian is
appointed for it or its business is placed under
attachment, garnishment or other process involving a
significant portion of its business;
(c) after sixty (60) days' written notice from the
terminating party without cure by the other party of
any material breach of this Agreement by the other
party not involving minimum sales or payments;
(d) the failure by Dade to make any payment due under
this Agreement consistent with the terms contained
in Section 7.3;
(e) the failure by Dade to maintain sales to end users
as set forth in sub-section 7.4(c); or
(f) after sixty (60) days written notice from CVDI,
without cure by Dade, in the event of the sale of
products by a distributor appointed by Dade in the
45
United States which are competitive with the
Products.
11.4 Special Termination Circumstances.
(a) In the event that CVDI cannot meet (i) its delivery
of Product obligations consistent with the
provisions of Section 5.7(c); (ii) the delivery of
the Alliance Card or the Dade Alliance Card in
accordance with the terms of Exhibit 4.2; or (iii)
the delivery of Cards with dating as set forth in
Exhibit 6.4, then in any such event, Dade's
obligations to purchase under Section 5.7(b),
Dade's minimum sales required under Section 7.4 and
Dade's obligation to fund research and development
under Section 4.2 shall be waived for the period of
non-performance by CVDI. If at the end of the
ninety (90) day period following such event, CVDI
has not cured deficiencies in all obligations in
which it is in default, then: (x) for each
following month in which CVDI remains in default,
Dade shall have three months in which to achieve
the minimum sales necessary to prevent termination
of this Agreement by CVDI pursuant to Section 7.4,
and if Dade fails to meet the minimums stated in
Section 7.4(c) within such timeframe, CVDI shall be
entitled to terminate this Agreement; or (y) Dade
shall have the right upon ninety (90) days advance
written notice to terminate this Agreement;
provided, however, that if CVDI has cured
deficiencies in all obligations in which it is in
default during such ninety (90) day period, all
46
obligations of Dade under Sections 5.7(b), 7.4 and
4.2 shall be reinstated for the full balance of any
such obligations beginning ninety (90) days
subsequent to any such cure.
(b) In the event that Dade does not fulfill its
obligations under Section 7.4 and CVDI elects to
change the Agreement to a non-exclusive basis, Dade
shall have the right upon ninety (90) days advance
written notice to terminate this Agreement.
11.5 Rights and Duties Upon Termination.
(a) Termination of this Agreement, for whatever reason,
shall not affect any rights or obligations accrued by
either party prior to the effective date of
termination, including under any purchase order for
Products placed prior to the effective date of
termination.
(b) Except as provided otherwise in this Section 11.5,
upon termination of the Agreement, CVDI shall use
reasonable efforts to continue to sell and supply
Products to Dade and its Affiliates in such
quantities as ordered but in quantities no greater
than reasonably appropriate in connection with:
(a) fulfilling contractual commitments to customers
of Dade, its Affiliates and its subdistributors for
a period not to exceed thirty-six (36) months; and
(b) for use with Instruments leased, provided or
placed with customers until such Instruments have
been fully amortized or depreciated for a period
not to exceed thirty-six (36) months. Prices for
Products shall remain at the level of the
47
immediately prior year adjusted solely for
increases/decreases in material, labor, and
reasonable overhead. Upon termination of this
Agreement, and to the extent permitted under
applicable law, in each and every case for a price
paid by CVDI equal to the cost and expense incurred
by Dade and its Affiliates to obtain such approvals
and registrations, Dade, upon CVDI's request, shall
assign to CVDI (or such other entities designated by
CVDI) all product approvals, registrations and
regulatory approvals to sell Products in each country
in the Territory; or, if assignment of any such
registration or approval is not permissible under
applicable law, where requested by CVDI, Dade shall
grant CVDI (or its designee) a right of reference to
such registrations and approvals. Dade shall
otherwise use reasonable efforts to enable CVDI to
import and sell the Products in such countries.
(c) At Dade's discretion, Dade may continue to sell
Instruments or return them, unsold by Dade, to
CVDI. If Dade returns the unsold Instruments to
CVDI, and for all unsold Instruments purchased by
Dade pursuant to Section 7.2, CVDI agrees to
repurchase from Dade all such Instruments at the
price which Dade purchased such Instruments less a
twenty percent (20%) restocking fee.
(d) Upon termination of this Agreement by Dade, CVDI will
not sell cards bearing Dade marks except to Dade.
48
(e) Upon termination of this Agreement, CVDI will not
sell, except to Dade, the Specialty Card using or
including that which the parties agree is Dade's
proprietary technology in accordance with Section 4.3
nor Dade Alliance Cards.
(f) Sections of this Agreement shall survive any
termination of this Agreement which relate to
confidentiality and indemnification, or otherwise
which by their nature cannot be accomplished or
fulfilled prior to termination or which relate to
obligations of the parties accrued prior to
termination.
11.6 Termination--Refund of R&D Funds. If this Agreement is
terminated prior to October 15, 1997, as a result of the
failure by CVDI to deliver the Alliance Card in
accordance with the terms of Schedule 4.2 or the Dade
Alliance [ ] Card (if Dade has funded the Dade
Alliance [ ] Card project) in accordance with the
terms of Schedule 4.2, or the failure by CVDI to deliver
to Forecast as set forth in Section 5.7(c), CVDI shall
refund to Dade all research and development funds paid by
Dade associated with such research and development
projects.
11.7 Non-Competition. Dade shall not, during the term of this
Agreement, manufacture, sell, distribute or cause to be
distributed a competing point of care hemostasis product.
12. Arbitration.
Except for terminations pursuant to Section 11.3 above, all disputes,
controversies and differences which may arise between the parties out
of, in relation to or in connection
[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.
49
with this Agreement, or for the breach thereof, or any claim based on
or arising from any alleged wrongful conduct or omission related to
this Agreement, may upon mutual agreement of the parties, be determined
by arbitration. The arbitration shall be conducted in accordance with
the Rules of the American Arbitration Association ("AAA"),
Supplementary Procedures for Large Complex Disputes, in effect as of
the commencement of the arbitration, as modified by the provisions of
this paragraph. The arbitration shall be held in Raleigh, North
Carolina. Whenever a party desires to request arbitration proceedings,
such party shall first cause its chief executive officer or other
designated and authorized officer to contact the other party; which
shall cause its chief executive officer or other designated and
authorized officer to make good faith efforts to resolve any such
dispute prior to arbitration or litigation.
No provision of this section shall limit the right of either
party to this Agreement to obtain provisional or ancillary
remedies from a court of competent jurisdiction before, after
or during the pendency of any arbitration if injunctive relief
from the court is necessary to prevent serious and irreparable
injury to one party or the other. The parties acknowledge that
for purposes of this Agreement (1) preliminary injunctions,
appointments of receivers, attachments, temporary protective
orders and writs of possession constitute "provisional
remedies," and (2) judicial actions to enforce a decision
reached pursuant to this section constitute "ancillary
remedies."
50
13. Miscellaneous.
13.1 Choice of Law. This Agreement and all purchase orders issued
hereunder shall be governed and interpreted, and all rights
and obligations of the parties shall be determined, in
accordance with the laws of the State of North Carolina,
without regard to its conflict of laws rules.
13.2 Notices. All notices, approvals or other communications
required 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 facsimile
transmission (confirmed in writing by other permitted
means), air courier or by certified mail, postage
prepaid, to the following addresses:
To Dade:
Dade International Inc.
X.X. Xxx 000
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attn: President
Fax (000) 000-0000
and with a copy to:
Dade International Inc.
X.X. Xxx 000
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attn: General Counsel
Fax (000) 000-0000
To CVDI:
Cardiovascular Diagnostics, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: President
Fax: (000) 000-0000
51
and with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Wyrick, Robbins, Xxxxx & Xxxxxx, LLP
0000 Xxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Fax (000) 000-0000
or to such other address as the addressee may have specified
in notice duly given to the sender as provided herein. Such
notice, request, demand, waiver, consent, approval or other
communications will be deemed to have been given as of the
date so delivered, transmitted by facsimile or fifteen (15)
days after so mailed.
13.3 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.
13.4 Entire Agreement. This Agreement states the entire agreement
between the parties hereto about the transactions contemplated
hereby and may not be amended or modified except by written
instrument duly executed by the parties hereto.
13.5 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.
52
13.6 Assignment, Binding Effect. Neither party shall assign
this Agreement nor any of their respective rights or
obligations hereunder without the prior written consent
of the other party, except that either party may assign
this Agreement to any of its Affiliates or to any person
to which substantially all of the assets comprising its
hemostasis products business are transferred by operation
of law or otherwise, including, but without limitation,
by merger or transfer of stock. Any other attempted
assignment without such consent shall be void. Any
assignee or transferee of this Agreement and/or the
rights or obligations hereunder shall expressly assume in
writing all obligations of the assignor/transferor
pursuant to this Agreement. In performing this
Agreement, Dade may, upon sixty (60) days advance written
notice, delegate to its Affiliates or Allegiance its
obligations hereunder. Dade shall remain primarily
liable to CVDI despite such delegation.
13.7 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
specifically authorized in writing by the other party.
Neither 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,
53
except to the extent specifically agreed to in writing by
the party so to be bound.
13.8 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.
13.9 Counterparts. This Agreement may be executed in any
number of counterparts and any party hereto may execute
any such counterpart, each of which when executed and
delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but
one and the same instrument. It shall not be necessary
in making proof of this Agreement or any counterpart
hereof to account for any of the other counterpart.
13.10 Force Majeure. Neither party shall be deemed to be in
default for failure or delay in performance to the extent
of causes which are reasonably unforeseeable or, if
foreseeable, reasonably unremediable in spite of diligent
efforts to effect a reasonable remedy, and which are
caused by act or omission of any governmental authority
or of the other party, compliance with new governmental
regulations, insurrection, riot, embargo, delays or
shortages in transportation or inability to obtain
necessary materials, and Acts of God or Nature.
13.11 Insurance. CVDI and Dade shall at all times maintain
insurance, including product liability insurance, in the
amount of $5,000,000.00. Each party shall, at the
request of the other party, provide such evidence of such
insurance as requested, including a certificate of
54
insurance. Such insurance shall not be canceled without at
least thirty (30) days prior written notice to Dade.
13.12 Books and Records. CVDI and Dade shall, during the term
of this Agreement and for three (3) years thereafter,
make and keep full and accurate books and records showing
the quantities of Products sold in sufficient detail to
determine applicable pricing pursuant to Section 7.3, the
maintenance of exclusivity pursuant to Section 7.4, and
applicable Card, commission, and Instrument credits
pursuant to Sections 3.6, 5.6, 5.7, and 7.2. Each party
shall be permitted to designate an independent third
party such as a nationally recognized "Big Six"
accounting firm to inspect the applicable books and
records of the other party from time to time, during
regular business hours to the extent necessary to verify
applicable pricing and credits. The designated party
shall report its findings to the requesting party. Each
party agrees to treat as Proprietary Information all
information learned in the course of any such
55
inspection hereunder, except when it is necessary for the
party to reveal such information in order to enforce its
rights under this Agreement. Notwithstanding anything to the
contrary contained herein, the party to be inspected may waive
at any time the requirement contained in this section relating
to the use of an independent third party.
13.13 Press Releases; Publicity. Neither party shall publicly
disclose or announce any term of this Agreement;
provided, however, that a party may issue a press release
disclosing the existence of this Agreement and other
terms only upon prior written agreement of the other
party, further provided, that each party shall at all
times be entitled to make disclosures required by
applicable securities laws.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
as of the day and year first above written.
CARDIOVASCULAR
DIAGNOSTICS, INC. DADE INTERNATIONAL INC.
By____________________________ By:__________________________
As its As its
56
