Exhibit 10.4
EXCLUSIVE DISTRIBUTION AGREEMENT
BETWEEN
HEMASURE INC.
AND
COBE BCT, INC.
Exclusive Distribution Agreement dated as of August 14, 1998, between
HEMASURE INC., a corporation organized under the laws of Delaware ("HemaSure"),
and COBE BCT, Inc. a corporation organized under the laws of the State of
Colorado ("COBE").
RECITALS
A. HemaSure manufactures and distributes certain medical products and
supplies, together with parts necessary for repair and replacement and including
all devices now or hereafter manufactured or designed by HemaSure that filter
blood and its components. HemaSure's current Products are identified in the list
attached as Exhibit 1 (collectively, the "Products"), and such list may be
updated with mutual agreement from time to time to reflect additional Products
as described above (the "Product List").
B. The parties desire that COBE be the exclusive distributor, and that
HemaSure be the exclusive supplier to COBE, pursuant to this agreement (the
"Distribution Agreement"), for the Products throughout the world except for
China and the United States (the "Territory"), for a term commencing on August
14, 1998 (the "Commencement Date").
C. The parties also desire to have HemaSure supply to COBE certain
Products which will be incorporated into medical devices manufactured by COBE
for sale to Affiliates and to third parties (the "COBE Products").
In consideration of these premises and the mutual promises made herein
by the parties to each other, they agree as follows:
ARTICLE 1 - APPOINTMENT
1.1 HemaSure hereby appoints COBE as its exclusive distributor for the
Products with the right to appoint sub-distributors, in the Territory and for
the term of this Agreement, and COBE hereby accepts this appointment. In return,
COBE appoints HemaSure as its sole and exclusive supplier of the Products, for
the term of this Agreement, and HemaSure accepts this appointment.
1.2 All Products shall meet specifications supplied by COBE; provided,
however, that HemaSure, upon thirty (30) days prior written notice specifying
the nature of and
778877.1
reasons for such changes, shall have the right to make any changes in the
specifications of the Products to the extent necessary to satisfy regulatory
requirements or to avoid a material adverse affect on the quality or performance
of the Products.
1.3 If COBE requests additional Products from HemaSure, or additional
development with respect to a Product, the parties agree to negotiate in good
faith the terms of a development agreement (a "Development Agreement") for the
additional Products or development services. Product development shall be
conducted in accordance with mutually agreed upon plans setting forth the
estimated cost and expense, the proposed specifications for and uses of the
Products and the requirements for and timing of the design, performance, quality
and manufacturability validation, regulatory approval and manufacturing
requirements.
1.4 In connection with any development pursuant to a Development
Agreement, if COBE pays for the complete development of any additional Products
or portions thereof, any improvements to HemaSure's Owned Intellectual Property
resulting therefrom (the "Improvements") shall be COBE's Owned Intellectual
Property, but HemaSure shall have a perpetual, non-exclusive, world-wide,
royalty-free license under such Improvements and Intellectual Property outside
the field of devices that filter blood and its components. If HemaSure's Owned
Intellectual Property existing on the date of any such Development Agreement is
required to practice any such COBE's Owned Intellectual Property, COBE shall
have a perpetual non-exclusive, world-wide, royalty-free license under such
HemaSure Owned Intellectual Property for the term of this Agreement (as such
term may be extended), limited to the field of devices that filter blood and its
components. Additionally, after the term of this Agreement, the provisions of
Section 7.8 shall apply to any product sales by COBE utilizing such HemaSure
Owned Intellectual Property, and HemaSure shall be entitled to the 12% royalty
contemplated in Section 7.8. Notwithstanding the above, any final Development
Agreement may set forth terms and conditions which are different than those set
forth in this Section 1.4.
1.5 COBE's sole compensation under this Agreement shall be the profit
it may realize from the resale of the Products.
1.6 COBE shall not, without the written consent of HemaSure: (i) seek
customers or establish any branch or maintain any distribution depot for the
Products outside the Territory, or (ii) knowingly sell the Products to any
customer for use outside the Territory.
1.7 COBE shall be fully responsible for the acts and conduct of its
employees, agents, sub-agents and sub-distributors and shall indemnify and hold
HemaSure harmless from all claims, liabilities and damages arising out of any
negligence or misconduct of COBE or its employees, agents, sub-agents or
sub-distributors.
1.8 Neither COBE nor HemaSure shall disclose to any third party any
trade secrets of the other party or any Confidential Information concerning the
other party, its Products
-2-
778877.1
or its business. The terms of the Confidentiality Agreement between them are
attached as Exhibit 2 and incorporated herein by reference. When this Agreement
terminates, except as otherwise agreed, each party shall promptly return to the
other party all trade secret and Confidential Information of said other party
and shall not disclose or otherwise use such information for a period of three
years after the date of termination.
1.9 The following definitions shall apply to this Agreement:
(a) "Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
(b) "Intellectual Property" of COBE or HemaSure, as the case may be, means
(a) inventions, whether or not patentable, whether or not reduced to practice,
and whether or not yet made the subject of a pending patent application or
applications, (b) ideas and conceptions of potentially patentable subject
matter, including, without limitation, any patent disclosures, whether or not
reduced to practice and whether or not yet made the subject of a pending patent
application or applications, (c) national (including the United States) and
multinational statutory invention registrations, patents, patent registrations
and patent applications (including all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations) and all rights therein
provided by international treaties or conventions and all improvements to the
inventions disclosed in each such registration, patent or application, (d)
trademarks, service marks, trade dress, logos, trade names and corporate names,
whether or not registered, and all rights therein provided by international
treaties or conventions, (e) copyrights (registered or otherwise) and
registrations and applications for registration thereof, and all rights therein
provided by international treaties or conventions, (f) computer software,
including, without limitation, source code, operating systems and
specifications, data, data bases, files, documentation and other materials
related thereto, data and documentation, (g) trade secrets and confidential,
technical and business information (including ideas, formulas, compositions,
inventions, and conceptions of inventions whether patentable or unpatentable and
whether or not reduced to practice), (h) whether or not confidential, technology
(including know-how and show-how), manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, copyrightable works, financial,
marketing and business data, pricing and cost information, business and
marketing plans and customer and supplier lists and information, (i) copies and
tangible embodiments of all the foregoing, in whatever form or medium, (j) all
rights to obtain and rights to apply for patents, and to register trademarks and
copyrights, and (k) all rights to xxx or recover and retain damages and costs
and attorneys' fees for present and past infringement of any of the foregoing.
(c) "Licensed Intellectual Property" means all Intellectual Property
licensed or sublicensed to COBE or HemaSure, as the case may be, from a third
party.
-3-
778877.1
(d) "Owned Intellectual Property" means all Intellectual Property, other
than the Licensed Intellectual Property, in and to which COBE or HemaSure, as
the case may be, holds, or has a right to hold, any right, title or interest.
(e) "Person" means an individual, corporation, partnership, association,
trust, joint venture, unincorporated organization, other entity or group (as
defined in Section 13(d) of the Securities Exchange Act of 1934).
ARTICLE 2 - DUTIES OF COBE
During the term of this Distribution Agreement COBE will:
2.1 Use commercially reasonable efforts to market and sell the
Products and develop a profitable market for them in the Territory.
2.2 Maintain and utilize such personnel, organization and facilities
as will be competent and adequate to enable COBE to satisfy its obligations
under this Agreement.
2.3 At least thirty days before the end of each calendar quarter,
prepare and furnish to HemaSure a proposed annual purchase forecast by month for
the following four calendar quarters, specifying the quantities of the Products
which COBE forecasts will be purchased for delivery during each month of that
year; provided, however, that in no event may HemaSure be required to deliver
quantities of any Product during a month which exceed 110% of the maximum
deliveries of such Product to COBE during any earlier calendar month. All orders
for shipment of Products within 30 days from the order shall be deemed to be
firm and non-cancelable.
2.4 Purchase from HemaSure and at all times maintain the minimum
inventories of Products to provide adequate service and delivery to customers in
the Territory. COBE shall meet the minimum purchase requirement set forth in
Exhibit 3, attached hereto, as the same shall be amended from time to time. The
parties shall meet at least three months before the end of each calendar year
beginning in the year 2000 and negotiate in good faith the minimum purchase
requirements for the following calendar year, provided, that if they fail to
agree by the beginning of the year the aggregate minimum purchase requirements
for all Products during that year shall equal 110% of such aggregate minimum
requirements for the preceding year.
2.5 Advise HemaSure of inquiries which COBE or any affiliates receive
from potential customers for the Products outside the Territory and shall use
its commercially reasonable efforts to transfer to HemaSure all customers who
are reasonably likely to use the Products outside the Territory.
-4-
778877.1
2.6 Except as otherwise agreed by the parties in writing, obtain all
regulatory approvals, registrations, and listing of Products required (F.D.A.,
C.E., C.S.A., etc.) in the Territory to make and sell COBE Products, or certify
that such approvals and registrations have been obtained or are not required,
and comply with all applicable laws, standards, rules and regulations.
2.7 Not modify or alter the Products in any way without the prior
written approval of HemaSure.
2.8 Indemnify and hold harmless HemaSure and its Affiliates and
customers, and their officers, directors, agents and employees, from and against
losses, claims and damages (including reasonable fees and expenses of counsel)
("Losses") as they are incurred, but solely to the extent such Losses arise out
of or are related to any claim by a third party that any Product modifications
or specifications requested by COBE conflict with or infringe upon Intellectual
Property owned or licensed by the third party.
2.9 Indemnify and hold harmless HemaSure and its Affiliates and
customers, and their officers, directors, agents and employees, from and against
Losses as they are incurred, solely to the extent such Losses arise out of or
are related to any claim by a third party that any Product has caused personal
injury or other loss to the third party, and only to the extent such actual or
alleged personal injury or loss arises from a modification to such Product
requested in writing by COBE. COBE shall maintain product liability insurance
covering such risks, on terms and conditions reasonably acceptable to HemaSure,
naming HemaSure and its Affiliates as additional insureds.
2.10 In connection with the promotion and marketing of the Products,
(i) make clear in all dealing with customers that it is acting as a distributor
of the Products and not as an agent of HemaSure, (ii) comply with all material
legal requirements with respect to the storage and sale of the Products, (iii)
provide, at the reasonable request of HemaSure, copies of its price lists and
copies of promotional aids and literature, (iv) permit HemaSure's
representatives to visit during normal business hours, upon reasonable advance
notice, any premises of COBE used in connection with the sale of the Products,
(v) use only those advertising, promotional and other selling materials approved
by HemaSure (which approval shall not be unreasonably withheld).
2.11 Provide full traceability of the Products to its customers. COBE
agrees that at all times it will be able to know its customer for each
individual Product lot for all Products delivered by HemaSure to COBE.
2.12 COBE shall be responsible (when applicable) for obtaining any
necessary import licenses, or other requisite documents, with respect to the
importation of the Products into the Territory and their resale in the
Territory.
-5-
778877.1
2.13 Provide information to HemaSure on Product complaints received. A
complaint is considered to be any oral or written expression of dissatisfaction
with the identity, quality, durability, reliability, safety, effectiveness, or
performance of a product. Any complaint involving injury or death will be
reported immediately to HemaSure. COBE will be responsible for follow-up
communication with the customer.
2.14 COBE shall cause its warehouses and distribution networks to be
maintained and operated (i) in a manner that will protect the integrity and
quality of the Products, maintaining safety and efficacy at all times; (ii) to
ISO 9000 standards with respect to traceability and complaints, and (iii) to
conform to all national regulatory and other requirements.
2.15 HemaSure shall be COBE's exclusive supplier for any and all
devices and products substantially identical to the Products for sale in the
Territory or that have uses or intended uses substantially identical to the
Products, and COBE shall not purchase any such devices or devices for sale in
the Territory from any other party other than HemaSure and shall purchase all of
its requirements for such products and devices from HemaSure.
ARTICLE 3 - DUTIES OF HEMASURE
During the term of this Distribution Agreement, HemaSure will:
3.1 Manufacture the Products, or have them manufactured, at locations
outside the United States, unless COBE gives prior written consent to their
manufacture in the United States. HemaSure shall manufacture each Product in
sufficient quantities to permit timely delivery of the quantities of the Product
provided for in COBE's forecast.
3.2 Package and xxxx the Products under COBE's name, in such manner as
COBE may reasonably direct, provided that Products sold to an original equipment
manufacturer ("OEM") unaffiliated with COBE for incorporation into devices
manufactured by the OEM may be labeled with HemaSure's trademarks if COBE
consents.
3.3 Advise COBE of inquiries which HemaSure or its other distributors
receive from potential customers for the Products within the Territory and shall
use its commercially reasonable efforts to transfer to COBE all customers for
the Products who are located within the Territory.
3.4 Except as otherwise agreed by the parties, obtain all regulatory
approvals, registrations, and listing of Products required (F.D.A., C.E.,
C.S.A., etc.) to sell the Products in the Territory (other than for Products
incorporated into devices manufactured by COBE), or certify that such approvals
and registrations have been obtained or are not required, and comply with all
applicable laws, standards, rules and regulations.
-6-
778877.1
3.5 Perform any investigations required with respect to Product
complaints and similar events and take necessary corrective action, keeping COBE
informed of such investigations and corrective action. HemaSure will conduct any
field actions which may be necessary, including Product recalls, modifications
and upgrades, as determined by HemaSure in its reasonable discretion. Any
extraordinary costs of conducting a field action, such as replacement of Product
and return of Product, shall be borne by HemaSure.
3.6 Notify COBE at least 90 days in advance of any changes in the
Products.
3.7 Comply with the Good Manufacturing Practices (GMP) regulations of
the U.S.F.D.A. and similar requirements of other jurisdictions within the
Territory, making HemaSure's records and documents available and cooperating
with COBE should COBE audit HemaSure for compliance with regulatory
requirements.
3.8 Replace all defective Products at HemaSure's expense, including
all reasonable delivery, handling and related costs of the replacement.
3.9 Take such commercially reasonable actions as may be needed in
order to protect its rights in HemaSure's Owned Intellectual Property against
infringement, and to maintain its proprietary interest in its Owned Intellectual
Property in full force and effect.
3.10 Indemnify and hold harmless COBE and its Affiliates and
customers, and their officers, directors, agents and employees, from and against
Losses as they are incurred, arising out of or related to any claim by a third
party that any Product conflicts with or infringes upon Intellectual Property
owned or licensed by the third party.
3.11 Indemnify and hold harmless COBE and its Affiliates and
customers, and their officers, directors, agents and employees, from and against
Losses as they are incurred, arising out of or related to any claim by a third
party that any Product has caused personal injury or other loss to the third
party. HemaSure shall maintain product liability insurance covering such risks,
on terms and conditions reasonably acceptable to COBE, naming COBE and its
Affiliates as additional insureds.
3.12 Warrant the Products to COBE and its customers under its standard
product warranty as set forth in Exhibit 4 hereto.
3.13 The representations, warranties and indemnification given by
HemaSure herein are subject to the conditions that HemaSure shall not be under
liability in respect of any defect in the Products:
(i) to the extent such defect arises solely from any specification or
modifications supplied by COBE in writing, or
-7-
778877.1
(ii) to the extent such defect arises solely from willful misconduct,
gross negligence, failure to follow HemaSure's written
instruction, or alteration of the Products without HemaSure's
approval.
ARTICLE 4 - TRADEMARKS
4.1 COBE may use HemaSure's names and marks in advertising, or
marketing and information materials, on COBE's letterheads or at its place of
business, to indicate that the Product is manufactured for COBE by HemaSure (but
not that COBE is otherwise associated with HemaSure). COBE may not otherwise use
HemaSure's trademarks, trade names, or company name in connection with the
promotion or sale of any goods or services, except with HemaSure's prior written
approval. Upon termination of this Agreement for any reason, COBE will
immediately stop using HemaSure's trademarks and trade or company names and will
stop advertising or otherwise indicating that COBE is a distributor of the
Products. COBE hereby acknowledges that HemaSure has the sole rights to such
trade names, company names and trademarks.
4.2 COBE shall not:
(i) make any modifications to the Products or their packaging, except
on specific instructions from local, state or federal authorities
(any modifications for purposes of enhancing the product sales is
to be submitted to HemaSure for approval and said approval shall
not be unreasonably withheld);
(ii) alter, remove or tamper with any Trade Marks, number, or other
means of identification used on or in relation to the Products;
(iii)use any of the Trade Marks in any way which might prejudice their
distinctiveness or validity or the goodwill of HemaSure;
(iv) use in relation to the Products any trade marks other than the
Trade Marks without obtaining the prior written consent of
HemaSure; or
(v) use in the Territory any trade marks or trade names in any way
similar to any Trade Xxxx or trade names of HemaSure or which
would be likely to cause confusion to customers or potential
customers.
; provided that Section 4.2 (i), (ii) and (iv) shall not apply to COBE Products.
4.3 COBE shall, at the expense of HemaSure, take all such reasonable
steps as HemaSure may reasonably require to assist HemaSure in maintaining the
validity and
-8-
778877.1
enforceability of the Trade Marks of HemaSure during the term of this Agreement.
COBE shall at the request of HemaSure execute such registered user agreement or
licenses in respect of the use of the Trade Marks in the Territory as HemaSure
may reasonably require, provided that the provisions of any such agreement or
license are not more onerous or restrictive than the provisions of this
Agreement.
4.4 COBE shall promptly notify HemaSure in writing of any actual or
threatened (in writing) infringement in the Territory of any Trade Marks of
HemaSure which comes to COBE's actual notice and of any claim by any third party
so coming to its notice that the importation of the Products into the Territory,
or their sale therein, infringes any rights of any other person, and COBE shall
at the request and expense of HemaSure do all such reasonable things as may be
reasonably required to assist HemaSure in taking or resisting any proceedings in
relation to any such infringement or claim.
4.5 HemaSure may seek to register its trademarks, trade names and
company names in the Territory, and do whatever it deems desirable to prevent
their unauthorized use by others.
4.6 To the extent necessary to fulfill HemaSure's obligations under
paragraphs 3.2, HemaSure is hereby licensed by COBE to apply COBE's trademarks
and trade names to Products to be sold by COBE. COBE shall at all times have
control of the quality of goods bearing COBE's trademarks and trade names and
may reject any products not meeting COBE's quality requirements. Such quality
requirements shall be comparable to the quality requirements established by COBE
for goods manufactured by COBE. HemaSure may not otherwise use COBE's
trademarks, trade names, or company names in connection with the promotion of
sale of any goods or services, except with COBE's prior written approval. Upon
termination of this Agreement for any reason, HemaSure will immediately stop
using COBE's trademarks and trade or company names. HemaSure hereby acknowledges
that COBE has the sole rights to such trademarks and trade and company names.
4.7 COBE may seek to register its trademarks and trade and company
names for use in connection with its sale of the Products in the Territory, and
do whatever XXXX xxxxx desirable to prevent their use by others.
ARTICLE 5 - TERMS OF SALES
5.1 COBE shall pay the prices determined as specified in Exhibit 1 for
the Products. The prices set forth in Exhibit 1 will remain in effect until
December 31, 1999. Thereafter, HemaSure and COBE shall negotiate annually in
good faith to establish annual price changes to remain in effect for each annual
period following 1999. Unless otherwise agreed, prices for each Product shall
increase or decrease each year by a percentage equal to any
-9-
778877.1
percentage increase or decrease in the standard manufacturing cost for the
Product (as determined by HemaSure in accordance with generally accepted
accounting principles and HemaSure's historical accounting practices) during
HemaSure's preceding fiscal year, as more fully set forth in Exhibit 1, provided
that in no event shall such percentage change exceed the percentage change in
COBE's average selling price for the Product during the preceding fiscal year.
5.2 Unless otherwise agreed in writing, all prices for the Products
shall be F.O.B. HemaSure's factory, freight collect, and shall be inclusive of
all taxes, duties and other governmental charges assessed or assessable prior to
passage of title to COBE. Title to the Products and risk of loss shall pass to
COBE on delivery of the Products to the destination specified by COBE in its
purchase orders. Products shall be shipped against COBE purchase orders
specifying shipment dates, transportation requirements and quantities of
Products.
5.3 Unless otherwise agreed in writing, all payments for the Products
shall be made in U.S. dollars, payable within 30 days after delivery, by check
drawn on a U.S. bank.
5.4 The Products will be packaged for shipping in packaging labeled as
provided in paragraph 3.2, substantially comparable in all other respects to
HemaSure's standard packaging, which shall be appropriate for shipment by the
means/carrier specified by COBE in its purchase orders.
5.5 Other terms of sale shall be as agreed to by the parties.
ARTICLE 6 - TRAINING; MARKETING
6.1 To the extent deemed reasonably necessary by COBE and HemaSure,
HemaSure will provide COBE's service personnel with reasonable technical
training for the proper maintenance of the Products, at a mutually agreed upon
location and date. For this purpose, HemaSure will pay for the expenses of its
personnel and, unless the parties have agreed otherwise in advance, COBE shall
bear all expenses of its personnel associated with this training.
6.2 To the extent deemed reasonably necessary by COBE and HemaSure,
HemaSure will provide marketing and sales training and product information to
COBE's sales personnel at a mutually agreed upon location and date. For this
purpose, HemaSure will pay the expenses of its personnel and, unless the parties
have agreed otherwise in advance, COBE shall bear all expenses of its personnel
associated with the training.
6.3 At COBE's reasonable request HemaSure will make technical visits
and presentations to COBE customers, at such times and places as COBE may
reasonably request and subject to the availability of appropriate HemaSure
personnel. COBE will reimburse HemaSure for its reasonable out-of-pocket costs
for such visits and presentations, including per diem charges
-10-
778877.1
based on HemaSure's actual costs for the employees involved. HemaSure may also
initiate such visits and presentations with COBE's prior approval and at the
expense of HemaSure.
6.4 HemaSure shall supply COBE with standard product information in
the English language and such other English language advertising material, sales
literature and instructions as HemaSure and XXXX xxxx appropriate to assist COBE
in the promotion, sale and service of the Products in the Territory. Additional
quantities of such materials may be purchased by COBE at prices quoted by
HemaSure from time to time. Unless otherwise agreed, any other advertising and
promotional expenses shall be paid by COBE. COBE may modify, adapt or reproduce
any such information provided by HemaSure to the extent XXXX xxxxx appropriate
to fulfill its obligations under this Agreement, subject to the approval of
HemaSure, which will not be withheld unreasonably.
ARTICLE 7 - TERM OF AGREEMENT
7.1 This Agreement shall become effective as of the Commencement Date
and, unless earlier terminated in accordance with its provisions, shall remain
in effect for a period of five (5) years. At any time in the next to last year
of a term either party may give written notice to the other party of its intent
to terminate this Agreement at the end of the then-current term. If neither
party gives such notice to the other party, this Agreement shall be extended
automatically for an additional term of three (3) years.
7.2 Either party may terminate this Agreement for a material breach of
the Agreement by the other party, by notifying the other party in writing of
such breach and, except as otherwise provided in paragraphs 7.3, 7.4 and 7.5,
allowing sixty (60) days within which to cure the breach. If the breach is not
cured within the sixty (60) day period, the complaining party may terminate this
Agreement at any time thereafter by giving written notice of termination to the
defaulting party. Failure to exercise this right of termination in any instance
of breach shall not be a waiver of this right as to any subsequent breach.
7.3 This Agreement shall terminate automatically, upon written notice
by one party to the other party, without any further notice, summons or process
whatever, if one of the following circumstances occurs:
(a) An event of bankruptcy occurs with respect to the other
party; or
(b) Either party ceases to function as a going concern or ceases
to engage in the business or activities which are the subject of this Agreement.
7.4 COBE may, at its discretion, terminate this Agreement for cause
immediately upon written notice if:
-11-
778877.1
(a) HemaSure has failed to supply any Products in quantities
greater than 85% of the minimum amounts forecasted for two of any six
consecutive calendar quarters.
(b) HemaSure violates the provisions of Section 1.1.
7.5 Notwithstanding the foregoing, HemaSure's sole remedy in the event
COBE fails to meet the minimum purchase requirements of Exhibit 3 shall be the
remedies set forth in such Exhibit 3; provided, that COBE may cure any such
breach within the sixty (60) day notice period by ordering sufficient Products
to fulfill the minimum for the quarter during which the sixty (60) day period
ends.
7.6 Neither HemaSure nor COBE owns or shall be deemed to own any right
of property in this Agreement.
7.7 In the event of termination of this Agreement for any reason, the
provisions of paragraphs 1.4, 1.7, 2.8, 2.9, 3.8-3.12, 7.7, 7.8, 7.9, 7.10 and
10.5-10.8 shall nevertheless remain in effect.
7.8 If this Agreement expires by its terms, or is terminated for any
reason other than willful default by COBE, COBE shall have and is hereby granted
a non-exclusive, world-wide perpetual license of HemaSure's Owned Intellectual
Property (but only to the extent such Owned Intellectual Property exists and is
in effect as of the date of the termination) to make, have made, use and sell
devices for filtration of blood and its components, for a royalty, as to any
Product (but only in the Territory) and/or COBE Product (on a world-wide basis)
incorporating such HemaSure Owned Intellectual Property, equal to 12% of the
most recent net purchase price paid by COBE to HemaSure for that Product.
7.9 Notwithstanding Section 7.8, above, if termination or expiration
happens solely as a result of COBE's providing HemaSure notice of termination at
the end of the then-current term under Section 7.1 above, then the COBE license
provided for in Section 7.8 will be a limited time period license for all
Products (except those Products used as a component of COBE's own products,
which shall remain a perpetual license), so as to allow a commercially
reasonable market transition by COBE to other suppliers or distributors.
7.10 Within sixty days following the expiration or termination of this
Agreement, HemaSure shall repurchase from COBE at the original purchase price
any Products delivered to COBE in the sixty days prior to the expiration or
termination of this Agreement, which remain in COBE's inventory and which have
remaining shelf life and are in good re-sellable condition.
-12-
778877.1
ARTICLE 8 - ASSIGNMENT
8.1 This Agreement shall not be assignable by either party without the
prior written consent of the other party, except that COBE may assign the
Agreement to an Affiliate and, subject to the other party's rights of
termination in Article 7, either party may assign the Agreement as a part of the
sale of substantially all of its assets related to its blood filtration products
business.
ARTICLE 9 - LIMIT OF LIABILITY
9.1 The parties shall not be liable for any breach of this Agreement
resulting from any cause beyond their control including, without limitation,
acts of God, fire, flood, strike, lockout, factory shutdown, act of civil or
military authority, priority request, order of any government or any department
or agency thereof, insurrection, riot, war, embargo, or a party's inability to
obtain labor or materials from its usual sources. Any suspension of a party's
performance by reason of this Section shall be limited to the period during
which the cause of such suspension exists, but shall not affect or extend the
running of the term of this Agreement.
9.2 HemaSure shall maintain its current comprehensive general and
product liability insurance in effect for the term of this Agreement. The
insurance shall name COBE on the list of distributors subject to vendor's
coverage. HemaSure shall provide COBE proof of the continued maintenance of the
insurance annually.
9.3 COBE assumes all risk and liability for loss, damage or injury to
any person or property arising from repair, alteration, misuse, mishandling, or
negligence in storing or handling, of any Products by COBE, including its agents
and employees. COBE's product liability insurance shall cover risks of loss
caused by Products incorporated into devices manufactured by COBE, and HemaSure
shall be a named insured under its product liability policy.
ARTICLE 10 - MISCELLANEOUS
10.1 The parties shall comply with all governmental rules and
regulations in force within the Territory relating to this Agreement, including
without limitation any registration or approval required for the import and sale
of the Products, except where non-compliance would not have a Material Adverse
Effect on either party. HemaSure shall comply with all governmental rules and
regulations to the extent necessary for the performance of HemaSure's
obligations under this Agreement.
10.2 All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by telecopy or by
registered or certified mail (postage prepaid, return
-13-
778877.1
receipt requested) to the respective parties at the following addresses (or at
such other address for a Party as shall be specified by like notice):
(a) if to COBE:
COBE BCT, Inc.
0000 Xxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Telecopier: (000) 000-0000
with copies to:
Legal Department
COBE Laboratories, Inc.
0000 Xxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
and to:
Xxxxxx Xxxxxx, Esq.
Ireland, Xxxxxxxxx, Xxxxx & Xxxxxx, P.C.
0000 Xxxxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
(b) if to HemaSure:
HemaSure Inc.
000 Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopier: (000) 000-0000
with a copy to:
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, III
Telecopier: (000) 000-0000
-14-
778877.1
10.3 The failure of either party to exercise any rights hereunder
shall not be deemed to be a waiver of such right.
10.4 No modification or amendment to this Agreement shall be binding
unless in writing, duly executed by both parties. In the event of any
inconsistent term or condition of a purchase order, invoice or other document
utilized by the parties in connection with matters contemplated under this
Agreement, the terms and conditions of this Agreement shall be deemed to govern.
10.5 In the event that COBE initiates any action under either Section
10.6 or Section 10.7 of this Agreement, this Agreement shall be governed by and
construed under the laws of the State of New York, without reference to its
conflicts of laws provisions. In the event that HemaSure initiates any action
under either Section 10.6 or Section 10.7 of this Agreement, this Agreement
shall be governed by and construed under the laws of the State of Colorado,
without reference to its conflicts of laws provisions.
10.6 If a dispute arises from or relates to this Distribution
Agreement or the breach thereof, whether of law or fact, of any nature
whatsoever, and such dispute cannot be settled through direct discussions
between the parties, the parties agree to endeavor first to settle the dispute
in an amicable manner by mediation administered by the American Arbitration
Association under its Commercial Mediation Rules before resorting to litigation.
The parties agree that the mediator shall be a person who is, or has served as,
a senior vice president of a medical products company for at least five (5)
years. Mediation shall take place in the Denver, Colorado metropolitan area in
the event HemaSure initiates the action, or in New York, New York, in the event
COBE initiates the action. If the dispute cannot be resolved within 60 days of
the initiation thereof by either party, either party may initiate arbitration in
accordance with the provisions of Section 10.7 of this Agreement.
10.7 All disputes arising under this Agreement that cannot be amicably
resolved under Section 10.6, shall be settled by binding arbitration. If Cobe
initiates such arbitration, it shall take place in the New York, New York
metropolitan area, and if HemaSure initiates such arbitration, it shall take
place in the Denver, Colorado metropolitan area. In either case, judgment upon
the award rendered may be entered in any court having jurisdiction thereof.
(a) Any party requesting arbitration shall serve a written demand for
arbitration on the other party. The demand shall set forth in reasonable detail
a statement of the nature of the dispute, the amount involved and the remedies
sought. No later than twenty (20) calendar days after a demand for arbitration
is served, the parties shall jointly select and appoint a retired judge of the
Courts of the State of Colorado (for arbitration in Colorado) or New York (for
arbitration in New York) to act as the arbitrator. In the event that the parties
do not agree on the selection of an arbitrator, the party seeking arbitration
shall apply to the District Court for the City and County of Denver or the City
and County of New York, as applicable, for appointment of a retired judge to
serve as arbitrator.
-15-
778877.1
(b) No later than ten (10) calendar days after appointment of an
arbitrator, the parties shall jointly prepare and submit to the arbitrator a set
of rules for the arbitration. In the event that the parties cannot agree on the
rules for the arbitration, the arbitrator shall establish the rules. No later
than ten (10) calendar days after the arbitrator is appointed he shall arrange
for a hearing to commence on a mutually convenient date. The hearing shall
commence no later than one hundred twenty (120) calendar days after the
arbitrator is appointed and shall continue from day to day until completed.
(c) The arbitrator shall issue his or her award in writing no later
than twenty (20) calendar days after the conclusion of the hearing. The
arbitration award shall be final and binding regardless of whether any party
fails or refuses to participate in the arbitration. The arbitrator is empowered
to hear and determine all disputes between the parties hereto concerning the
subject matter of this Agreement, and the arbitrator may award money damages
(but specifically not punitive damages), injunctive relief, rescission,
restitution, costs, and attorneys' fees. The arbitrator shall not have the power
to amend this Agreement in any respect.
(d) In the event that any party serves a proper demand for arbitration
under this Agreement, all parties may pursue discovery in accordance with the
Rules of Civil Procedure of the State of Colorado or New York, as applicable,
the provisions of which are incorporated herein by reference, with the following
exceptions: (x) The parties hereto may conduct all discovery, including
depositions for discovery purposes, without leave of the arbitrator; and (y) all
discovery shall be completed no later than the commencement of the arbitration
hearing or one hundred twenty (120) calendar days after the date that a proper
demand for arbitration is served, whichever occurs earlier, unless upon a
showing of good cause the arbitrator extends or shortens that period.
10.8 If any provision of this Agreement is held by any Court, or other
authority having jurisdiction, to be invalid or unenforceable under the law
applicable thereto, the provision shall be deemed modified or deleted to the
extent necessary to result in compliance with such applicable legal provision
and this Agreement, as so modified or amended, shall continue in full force and
effect in all other respects.
10.9 Any waiver by either party of a breach of any provision of this
Agreement shall not be considered as a waiver of any subsequent breach of the
same or any other provision.
-16-
778877.1
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
COBE BCT, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------
Xxxxxx X. Xxxx, President
HEMASURE INC.
By:/s/ Xxxx X. XxXxxxx III
------------------------
Xxxx X. XxXxxxx III, President
-17-
778877.1
