Exhibit 10.27
Portions of this Exhibit were omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such
portions are marked by a series of asterisks.
EXECUTION COPY
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (this "Agreement") is made and entered into
this 24th day of April 2003, by and between Medtech Holdings, Inc., a Delaware
corporation with principal offices at 00 Xxxxx Xxxxxxxx, Xxxxxxxxx, Xxx Xxxx
00000 ("Distributor"), and OraSure Technologies, Inc., a Delaware corporation
with principal offices at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx
00000-0000 ("OSUR").
BACKGROUND
OSUR has exclusive rights to develop, manufacture, market, sell and
distribute the Product (as defined below) for the treatment of ordinary warts
and plantar warts by means of a refrigerant. OSUR desires to grant to
Distributor the right to market, sell and distribute the Product under the
Distributor Trademarks (as defined below) on an exclusive basis in certain
markets within certain geographic territories, and Distributor desires to accept
such rights, all in accordance with the terms and subject to the conditions
contained in this Agreement
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
promises and covenants contained in this Agreement, OSUR and Distributor,
intending to be legally bound, hereby agree as follows:
1. DEFINITIONS.
1.1 "Affiliate" means, when used with reference to either Distributor
or OSUR, any person or entity directly or indirectly controlling, controlled by
or under common control with Distributor or OSUR, as the case may be. For
purposes of this Agreement, "control" (including with correlative meanings
"controlling," "controlled by" or "under common control with") means: (a) the
direct or indirect ownership, in the aggregate, of at least 50% of the
outstanding voting securities of an entity; (b ) the right to receive directly
or indirectly, in the aggregate, at least 50% of the profits or earnings of an
entity; or (c) the right or power, directly or indirectly; to direct or Cause
the direction of the policy decisions of an entity, whether by ownership of
voting securities, contract or otherwise.
1.2 "Assembly Contractor" means Koninklijke Utermohlen N.V., or any
successor or assignee thereof or other contractor designated by OSUR to assemble
the Product purchased hereunder.
1.3 "Business Day" means any day other than a Saturday, Sunday or day
on which the Federal Reserve Bank of Philadelphia is closed.
1.4 "Contract Year" means, with respect to the first Contract Year, the
period beginning on the Effective Date and ending on December 31, 2003 and, with
respect to
each subsequent Contract Year, the calendar year beginning on the date
immediately following the end of the preceding Contract Year.
1.5 "Distributor Fiscal Year" means each successive period of twelve
(12) months beginning on each April 1 during the Term (as defined in Section
11.1 hereof).
1.6 "Effective Date" means the date first written above.
1.7 "FDA" means the United States Food and Drug Administration, or any
successor thereto.
1.8 "OTC Market" means the over-the-counter or consumer market within
the Territory for selling Product through retail outlets in the Territory for
ultimate purchase and home use by consumers in the Territory without the
assistance or intervention of, or any prescription from a medical professional
or health care practitioner.
1.9 "Product" means the patented cryosurgical removal system that (i)
is developed, assembled, manufactured, marketed and sold by OSUR or its
Affiliates or designees pursuant to this Agreement, together with all
modifications and improvements that may be made by OSUR to such product from
time to time, for the purpose of treating ordinary warts and plantar warts, and
(ii) meets the Specifications.
1.10 "Quarterly Period" means each successive period of three (3) months
in a Contract Year with the first such three (3) month period beginning on the
first day of a calendar year.
1.11 "Specifications" means the Product specifications set forth in
Exhibit 1.11 to this Agreement, as such specifications may be modified or
amended pursuant to Section 8.4 of this Agreement.
1.12 "Territory" means the United States and Canada, and their
respective territories and possessions.
1.13 "Unit" means a single unit of Product as described in the
Specifications.
2. APPOINTMENT.
2.1 DISTRIBUTION RIGHTS. In accordance with the terms and subject to
the conditions contained in this Agreement, OSUR hereby grants to Distributor,
on an exclusive basis during the Term (as defined in Section 11.1 hereof), the
right to market, promote, sell and distribute the Product solely in the OTC
Market in the Territory, and Distributor hereby accepts such rights.
2.2 RESERVATION OF RIGHTS. Distributor acknowledges and agrees that
nothing in this Agreement shall preclude OSUR from importing, marketing,
manufacturing, promoting, using, selling or distributing the Products outside
the Territory, or outside of the OTC Market in the Territory, either directly or
indirectly through one or more distributors, sub-distributors or agents for any
purpose.
2
2.3 SUBDISTRIBUTORS. In exercising its rights hereunder. Distributor
may engage subdistributors or agents as provided in this Section 2.3.
Distributor shall enter a written agreement with each sub-distributor or agent,
requiring the sub-distributor or agent to comply with Distributor's obligations
under this Agreement with respect to distribution of the Product in the OTC
Market in the Territory. Upon request, Distributor shall provide a copy of the
sub-distributor or agent agreement to OSUR. Distributor's use of
sub-distributors or agents does not relieve Distributor of any obligations under
this Agreement.
2.4 RIGHT OF FIRST NEGOTIATION. The parties acknowledge that there may
be opportunities to distribute the Product in the OTC Market in countries
outside the Territory. If during the Term, either party identifies such an
opportunity with respect to a country outside the Territory, and OSUR elects to
distribute the Product in the OTC Market in such country, and is not precluded
or limited (by contract or otherwise )in granting distribution rights to
Distributor to the Product in the OTC Market in such country, OSUR will notify
Distributor of its desire to distribute the Product in the OTC Market in such
country (the "Product Notice") and may (at its option) provide Distributor a
form of distribution agreement or summary of terms, which will state (among
other items) the price, term, minimum purchase requirements, and other principal
terms under which OSUR is willing to grant Distributor rights to the Product in
the OTC Market in such country. For a period of thirty (30) days following the
date of the Product Notice, the parties shall negotiate in good faith regarding
the terms and conditions of a distribution agreement with respect thereto. If,
following such 30-day period, the parties have not executed and delivered a
mutually acceptable form of distribution agreement, then (i) Distributor's right
of first negotiation with respect to all countries outside the Territory under
this Section 2.4 shall terminate and (ii) OSUR shall be free to offer the right
to distribute the Product in the OTC Market in any country outside the
Territory. Schedule 2.4 herein is a complete and accurate list (as of the date
of this Agreement) of all countries outside the Territory where OSUR's
Histofreezer(R) wart removal system is sold or where agreement has been reached
by OSUR with a third party to distribute such product.
2.5 INDEPENDENT CONTRACTOR. Distributor is, and at all times shall be,
an independent contractor. Nothing contained in this Agreement shall he
construed as constituting Distributor as an agent, partner, joint venturer or
employee of OSUR, or cause OSUR to be liable for any of the debts or obligations
of Distributor; nor shall Distributor have the right or authority to act for or
incur any liability or obligation of any kind, express or implied, in the name
of or on behalf of OSUR or its Affiliates.
3. OBLIGATIONS.
3.1 BY DISTRIBUTOR.
3.1.1 LEVEL OF EFFORT. Distributor shall use commercially
reasonable efforts to market, promote, sell and distribute the Product in the
OTC Market. In connection therewith, Distributor shall maintain, at its own
expense, an adequately trained staff to enable Distributor to fulfill its
obligations under this Agreement.
3
3.1.2 RESTRICTIONS. During the Term, Distributor shall not,
directly or indirectly, import, promote, market, use, sell or otherwise
distribute or provide (or arrange any promotion, marketing, use, sale,
distribution or provision of) the Product (a) in any country or territory
outside of the Territory (unless Distributor has acquired additional
distribution rights to such countries or territories from OSUR) or (b) in any
market other than the OTC Market. Distributor shall notify OSUR of any sale or
order of Product or other occurrence that violates this Section 3.1.2 promptly
upon learning thereof.
3.1.3 SALES LEADS OUTSIDE OF THE TERRITORY OR OTC MARKET.
Distributor shall refer to OSUR all sales leads that come to its attention with
respect to the use of the Product outside of the Territory or OTC Market and, as
soon as reasonably possible, inform OSUR of the identity of such sales lead.
3.1.4 PRODUCT LABELING; SUPPORTING MATERIALS; TRAINING.
Distributor shall ensure that all Product purchased hereunder is distributed
into the OTC Market only with the labeling, inserts and instructions approved in
writing by OSUR. Distributor shall produce and use sufficient quantities of
promotional materials, including sales aids, brochures, product briefs,
advertisements and similar materials relating to the Product (including
references and descriptions on its website) for purposes of promoting,
marketing, selling and distributing the Product in the OTC Market; provided that
all such materials (in print, electronic or any other type of media) shall be
subject to the written approval of OSUR prior to their use (which approval shall
not be unreasonably withheld or delayed). In addition, Distributor shall provide
appropriate customer support to maintain and xxxxxx customer satisfaction.
3.1.5 COMPLIANCE WITH LAWS. Distributor shall comply with all
applicable treaties, laws, rules and regulations in connection with its
promotion, marketing, use, sale or distribution of the Product in the OTC
Market, its supply of the Distributor Components (as defined below) and its
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, Distributor shall comply with all applicable FDA or
other regulatory approvals, clearances or registrations obtained by OSUR for the
sale or distribution of the Product in the OTC Market.
3.1.6 COMPETITION. During the Term, Distributor and its
Affiliates shall not, directly or indirectly, (a) import, market, manufacture,
use, promote, sell, distribute or purchase any cryosurgical wart or lesion
removal product that directly competes with the Product (a "Competing Product")
or (b) engage in, provide services for or acquire or hold an interest in any
company, entity or business (as owner, stockholder, partner, co-venturer,
director, officer, employee, consultant or otherwise) that imports,
manufactures, markets, promotes, sells or distributes a Competing Product.
Notwithstanding the foregoing, nothing contained herein shall be deemed to
prevent or preclude an entity not party to this Agreement from acquiring an
equity ownership interest in Distributor (the "Acquiring Party") under
circumstances where such Acquiring Party becomes an Affiliate of Distributor and
has a business, existing prior to such acquisition, under which it imports,
markets, manufactures, uses, promotes, sells or distributes a Competing Product.
In the event of such an acquisition by an Acquiring Party, OSUR shall have the
4
right to terminate this Agreement upon not less than twelve (12) months prior
written notice to Distributor. If any provision of this Section 3.1.6 shall be
held unenforceable because of scope, duration or area of its applicability, it
shall be deemed modified to the extent necessary to make it enforceable, while
preserving its intent.
3.1.7 MARKETING PLAN. Distributor shall develop a written
annual plan for the marketing and sale of the Product in the OTC Market and
Territory. Distributor shall deliver such plan to OSUR within thirty (30) days
after the date of this Agreement. In addition, Distributor shall provide OSUR
with a written update of its marketing and sales plan at least sixty (60) days
in advance of the commencement of each Distributor Fiscal Year during the Term,
beginning with the Distributor Fiscal Year that begins on April 1, 2004.
3.2 BY OSUR.
3.2.1 REGULATORY APPROVALS: COMPLIANCE WITH LAWS. The parties
acknowledge that OSUR has obtained FDA clearance to manufacture, market, sell,
use and distribute the Product in the OTC Market in the United States, but has
not yet sought any required regulatory approval, clearance or registration in
Canada. OSUR shall have no obligation to sell or supply Product to Distributor
for sale or distribution in Canada, and Distributor shall have no right to
distribute Product in Canada, until OSUR obtains any required regulatory
approvals, clearances or registration for the import, distribution and sale of
the Product in the OTC Market in Canada. OSUR shall use commercially reasonable
efforts to obtain such required regulatory approvals, clearances and
registrations for the Product in Canada, but there is no assurance,
representation or warranty that OSUR will be successful in such efforts and its
failure to obtain any such regulatory approval, clearance or registration in
Canada shall not constitute a breach of this Agreement. OSUR shall use
commercially reasonable efforts to maintain all approvals, clearances or
registrations of the FDA and, to the extent obtained, any regulatory authority
in Canada, for the manufacturing, marketing, sale, use or distribution of the
Product in the OTC Market in the Territory. All such approvals, clearances and
registrations shall be maintained in the name of OSUR. Distributor shall, at
OSUR's expense, cooperate and provide reasonable assistance and technical
support in obtaining and maintaining all such approvals, clearances and
registrations; OSUR shall comply with all applicable treaties, laws, rules and
regulations within the Territory, including the Quality System Regulations
promulgated by the FDA, in connection with its provision of the Product to
Distributor and its performance of its obligations under this Agreement.
3.2.2 TRAINING. OSUR shall provide reasonable technical
support and training to Distributor in the use and performance of the Product,
which training shall be at times and places and for durations mutually agreed to
by the parties.
3.3 TECHNICAL SUPPORT. OSUR shall provide and maintain, at its own
expense, adequate support services and a staff properly trained in all aspects
of the Product to provide the Distributor with such levels of technical support
throughout the Term that are commercially reasonable in light of the then
current and reasonably anticipated sales volumes of the Product in the OTC
Market.
5
4. SUPPLY; ORDERING AND DELIVERY.
4.1 REQUIREMENTS. In accordance with the terms and subject to the
conditions contained in this Agreement, OSUR shall assemble and sell to
Distributor, and Distributor shall purchase from OSUR, all of Distributor's
requirements for the Product to be marketed, sold, used or distributed in the
OTC Market in the Territory. OSUR's obligation to assemble and supply Product to
Distributor shall be subject to Distributor's compliance with its obligation to
supply Distributor Components as set forth in Section 4.2 below.
4.2 SUPPLY OF DISTRIBUTOR COMPONENTS. Distributor shall supply, at its
sole cost, the following components and deliver such components to the Assembly
Contractor, for use in packaging and assembling Products purchased hereunder
(the "Distributor Components"):
(i) Boxes for each Unit of Product with labeling approved by
OSUR;
(ii) Package inserts or instructions in form approved by OSUR;
(iii) Shipping case (standard corrugated);
(iv) Shipping case label in form approved by OSUR;
(v) Security detection devices (Checkpoint or SensorMatic); and
(vi) Transparent tamper resistant labels for box lids (if
required).
Distributor shall ensure that all Distributor Components are manufactured,
stored and supplied in accordance with the Specifications and all applicable
treaties, laws, rules and regulations within the Territory. Distributor shall
supply Distributor Components with sufficient lead-times and in sufficient
quantities as directed by OSUR to permit the packaging and assembly of Product
purchased hereunder and delivery to Distributor in accordance with Distributor's
Purchase Orders (as defined in Section 4.6).
4.3 TERMS AND CONDITIONS. The terms and conditions of this Agreement
shall control all sales of Product by OSUR to Distributor. No different or
additional terms and conditions on any purchase order, acknowledgment or other
transmittal, whether a standard business form or otherwise, utilized by
Distributor or OSUR in connection with the sale by OSUR of Product to
Distributor shall be construed or deemed to be an amendment of or supplement to
this Agreement or otherwise binding on either Distributor or OSUR.
6
4.4 PRICES.
4.4.1 PRODUCT PRICE.
(a) Subject to Sections 4.4.2 and 4.4.5, below,
Distributor shall pay OSUR $*** for each Unit purchased hereunder (the "Price"),
which Price was calculated pursuant to the following formula:
Price Calculation
(Per Unit)
***
(b) The Parties acknowledge that the Total Assembly
Contractor Costs for Product to be distributed in Canada ("Canadian Product")
may be different than as set forth above because of different or additional
labeling requirements in Canada. OSUR shall use commercially reasonable efforts
to minimize any increase in such costs for Canadian Product. In the event the
Total Assembly Contractor Costs for Canadian Product are different than as set
forth above, the Price for such Canadian Product shall be determined by
incorporating such different costs in the foregoing formula and the Price, as
recalculated, shall be the Price for Canadian Product. Nothing in this Section
4.4.l(b) shall affect the Price payable for Product to be distributed in the
United States. Canadian Product purchased at a different Price determined in
accordance with this Section 4.4.1 (b) shall only be distributed by Distributor
in Canada and all other Product purchased hereunder shall be distributed solely
in the United States.
4.4.2 PRICE INCREASES. The applicable Price payable by
Distributor for Product may be increased, at OSUR's option, at the beginning of
the third Contract Year and each Contract Year thereafter during the Term, to an
amount equal to the applicable Price then in effect, plus the cumulative
percentage increase in the Index (as defined below) during the most recently
completed 12-month period prior to delivery of the applicable Price Increase
Notice (as defined below) for which the Index data (preliminary or final) is
available. By December 1 of each Contract Year, OSUR will give Distributor
notice of any increase in the Price (the "Price Increase Notice") for Product to
be purchased during the following Contract Year. For purposes of this Agreement,
"Index" shall mean the Consumer Price Index of the Bureau of Labor Statistics of
the U.S. Department of Labor for Urban Wage Earners and Clerical Workers (Base
Year 1982 - 84=100) for All Urban Areas. In the event that the compilation
and/or publication of the Index shall be transferred to any other governmental
department, bureau, or agency, or shall be discontinued, then the index most
nearly the same as the Index shall be used.
4.4.3 TAXES; FREIGHT. Prices for Product are EX WORKS
(Incoterms 2000) the Assembly Contractor's facilities and are exclusive of all
sales, use, ad valorem and other similar taxes, customs, duties and other
similar imports, fees and governmental charges, and freight, shipping and
insurance charges. Any such charges shall be the sole responsibility of
distributor.
7
4.4.4 ADVERTISING PARTICIPATION. Distributor agrees to
promote, market and advertise the Product in the OTC Market in the Territory and
OSUR has agreed to participate in such activities. The text of all promotional,
marketing and advertising materials, programs and messages shall be subject to
review and approval by OSUR, which approval shall not be unreasonably withheld
or delayed. ***
4.4.5 PRICE ADJUSTMENT DUE TO COST CHANGE. Immediately
following the execution of this Agreement, OSUR agrees to employ commercially
reasonable efforts to effect reduction in Total Assembly Contractor Costs
reflecting the additional volume associated with Distributor's requirements
hereunder. *** A Price adjustment hereunder shall take effect immediately after
notice thereof is provided by OSUR to Distributor. This Section 4.4.5 shall be
applied separately to the Total Assembly Contractor Costs and related Price for
Canadian Product (as defined in Section 4.4.1 (b)) and the Total Assembly
Contractor Costs and related Price for Product to be distributed into the United
States.
4.5 INITIAL STOCKING ORDER. Distributor shall place an initial stocking
order for and purchase at least 250,00O Units during the first Contract Year.
Distributor shall effect such purchase through the delivery of a Purchase Order
(as defined below) immediately following the execution of this Agreement. The
parties shall use Commercially reasonable efforts to complete delivery of
150,000 of such Units on or prior to June 30, 2003 and shipment of the remaining
100,000 units on or prior to September 30, 2003. Distributor shall pay for such
Units in accordance with Section 6.1 hereof. Units purchased by Distributor
under this Section 4.5 shall be applied towards Distributor's minimum purchase
commitment for 2003 under Section 6.2.
4.6 PURCHASES OF PRODUCT. Distributor shall order Product by issuing
binding purchase orders (each, a "Purchase Order") to OSUR pursuant to the terms
of this Agreement. Each Purchase Order shall be Subject to Section 4.3 and shall
state the quantity of Product to be purchased, delivery date(s), routing
instructions, destination(s) and continuation of the applicable price hereunder.
OSUR shall indicate its acceptance or rejection of a Purchase Order within five
(5) Business Days after receipt; provided that OSUR may reject a Purchase Order,
in whole or in part, only if: (a) the Purchase Order fails to comply with the
terms and conditions of this Agreement; (b) the delivery date is less than one
hundred twenty (120) days from the date of OSUR's receipt of the Purchase Order
(except for the initial stocking order under Section 4.5); or (c) the volume
under the Purchase Order and all other accepted Purchase Orders covering the
same period exceeds the volume in Distributor's then current forecast (delivered
pursuant to Section 4.7) for such period by more than 50%. If requested by
Distributor following Distributor's receipt of OSUR's rejection notice under
clause (c) above, OSUR will use commercially reasonable efforts to deliver the
excess volume of Product specified in the rejected Purchase Order, but OSUR's
failure to so deliver the excess volume shall not be a breach of this Agreement.
OSUR's sole obligation in filling any accepted Purchase Orders shall be to use
commercially reasonable efforts to fill Distributor's orders for Product. In no
event shall OSUR be liable to any third party for OSUR's failure to deliver
Product to Distributor by any delivery due date set forth in any Purchase Order.
Each Purchase Order shall be for a minimum of 50,000 Units.
8
4.7 FORECASTS. Within thirty (30) days after the Effective Date,
Distributor shall provide to OSUR a written forecast of Distributor's
anticipated monthly requirements for Product during the 2003 calendar year.
Thereafter, no later than sixty (60) days before the beginning of each Quarterly
Period during the Term, Distributor shall provide OSUR with an additional,
written forecast of Distributor's anticipated monthly requirements for the
Product during the subsequent twelve (12) month period. Each forecast required
to be delivered by Distributor under this Section 4.7 shall be nonbinding except
for the first three (3) months of such forecast, which shall constitute a
binding commitment to purchase by Distributor.
4.8 SHIPMENT. OSUR shall ship Products EX WORKS (Incoterms 2000) the
Assembly Contractor's facilities. All risk of loss, damage, spoilage, improper
storage, mishandling and negligence for all Product shall pass to Distributor at
the time of delivery to the shipper at the Assembly Contractor's facilities.
Distributor shall maintain insurance covering the replacement value of such
Product prior to payment of the Price therefor and shall name OSUR as an
additional insured and loss payee in respect of such Product. If Distributor
requests non-standard packaging, OSUR shall use reasonable efforts to
accommodate that request, provided that Distributor provides all required
packaging, OSUR shall ensure that all Products are suitably packed for shipment
in OSUR standard containers. OSUR shall provide to Distributor, not less than
three (3) Business Days in advance of each shipment, all necessary information
relating to such shipment, including without limitation, the number of Units,
cases, pallets and lot numbers.
4.9 RECORDS. Distributor shall maintain accurate and complete records
of each sale of the Product, including without limitation, the name and address
of the purchaser, the date of purchase, quantity, type and batch numbers of
Product sold in each country, total volume of Product sold in the Territory, and
information regarding other products that compete with any of the Products in
the Territory known to Distributor. Distributor shall maintain such records for
at least three years from the date of sale, or such longer period as reasonably
requested by OSUR. In addition to the foregoing, Distributor shall comply with
all record-keeping requirements imposed by the FDA or other regulatory or
governmental authorities in the Territory. Upon request, Distributor shall
provide OSUR with copies of any records required to be maintained under this
Section 4.9, including such records as may he necessary for OSUR to comply with
all regulatory approvals related to the import, marketing, sale, use or
distribution of the Products in the Territory and any other requirements of the
FDA or other regulatory authority.
5. INTELLECTUAL PROPERTY.
5.1 BRANDING AND PACKAGING. Product labeling, packaging and package
inserts shall be in the form approved by the FDA or other regulatory authorities
in the Territory, and shall use the Compound W trademark and trade dress of
Distributor ("Distributor Trademarks"), in accordance with this Section 5.1. The
parties shall cooperate in the design of the package labeling, packaging and
inserts for Product, and the final Product labeling, packaging and inserts shall
be subject to written approval by both parties, which shall not be unreasonably
withheld or delayed. Distributor shall be
9
responsible for supplying adequate quantities of all packaging, labeling and
package inserts in accordance with Section 4.2. Distributor hereby consents to
OSUR's use of the Distributor Trademarks on labeling, package inserts and
packaging used to assemble and ship the Product
5.2 PROMOTIONAL MATERIALS. OSUR hereby consents to the use by
Distributor of the OraSure(R) trademark and tradename (the "OSUR Trademark") on
promotional materials solely for the purpose of promoting, marketing and selling
the Product in the OTC Market in the Territory. No promotional materials bearing
the OSUR Trademark may he used without OSUR's prior written approval.
5.3 NO OTHER RIGHTS; ALLOCATION OF GOODWILL. Except for the rights
herein, neither party shall acquire any right, title, or interest in any
trademark, trade name, logo or trade dress, copyright, patent, or any other
intellectual property rights of the other party by reason of this Agreement.
Distributor acknowledges and agrees that all use of any of the OSUR Trademark
and all of the goodwill associated therewith shall inure solely to OSUR's
benefit. OSUR acknowledges and agrees that all use of any of the Distributor
Trademarks and all of the goodwill associated therewith shall inure solely to
Distributor's benefit
5.4 EFFECT OF TERMINATION. Upon termination of this Agreement, both
parties shall immediately cease all use of the other party's trademarks, trade
names, logos and trade dress, except such use as is necessary to complete the
manufacturing, assembly and sale of Product under open Purchase Orders at the
time of termination, to complete the manufacturing and assembly of Product with
OSUR's remaining inventory of components therefore and to sell off such party's
Product inventory, as permitted under Section 11.3.4.
6. PAYMENT TERMS; MINIMUM PURCHASE COMMITMENTS.
6.1 PAYMENT TERMS. Distributor shall pay OSUR all amounts due under
this Agreement no later than sixty (60) days from the date of an invoice from
OSUR for such amounts based on actual (not prospective) shipment. Overdue
amounts shall bear interest at a rate of one percent (1%)per month or such lower
rate required by law, until paid. Distributor shall not have any right to set
off or withhold any amounts due OSUR hereunder arising out of, or based upon,
any counter-claim, breach of contract, tort or other action against OSUR.
6.2 MINIMUM PURCHASE COMMITMENTS. Distributor agrees to purchase at
least 250,000 Units of Product under this Agreement during each Contract Year.
To the extent Distributor purchases more than 250,000 Units in any Contract
Year, such excess shall not be counted towards meeting Distributor's minimum
purchase commitment in any subsequent Contract Year.
6.3 FAILURE TO MEET COMMITMENTS. In the event Distributor fails to meet
the applicable minimum purchase commitment set forth in Section 6.2 by the end
of any Contract Year, OSUR shall have the right to convert the distribution
rights granted to
10
Distributor hereunder to nonexclusive rights, pursuant to Section 11.2.3. If
Distributor fails to purchase at least 150,000 Units of Product in any Contract
Year, OSUR shall have the right to terminate this Agreement, pursuant to Section
11.2.3.
7. WARRANTIES.
7.1 LIMITED PRODUCT WARRANTIES. OSUR warrants to Distributor that: (a)
the Product, when shipped, will conform to the specifications as set forth in
the Specifications; (b) the Product shall be free from defects in materials and
workmanship for a period equal to the stated shelf life for such Product (the
"Warranty Period"); (c) the Product, when shipped, shall not be "adulterated" or
"misbranded" as those terms are defined by or pursuant to the Federal Food,
Drug, and Cosmetic Act, as amended; and (d) the Product, when shipped, will have
been manufactured and otherwise handled in compliance with the Quality System
Regulations then in effect, as promulgated by FDA.
7.2 OSUR DISCLAIMER. THE EXPRESS LIMITED WARRANTIES FOR THE PRODUCT SET
FORTH IN SECTION 7.1 OF THIS AGREEMENT AND THE ADDITIONAL REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTION 8.1.2 OF THIS AGREEMENT ARE IN LIEU OF ALL OTHER
REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESSED OR IMPLIED. OSUR HEREBY
DISCLAIMS ANY AND ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND,
EXPRESSED OR IMPLIED, WHETHER ARISING FROM A COURSE OF DEALING OR USAGE OF
TRADE, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.
7.3 DISTRIBUTOR'S WARRANTY REMEDIES. During the Warranty Period, OSUR
shall replace, at OSUR's expense, or at Distributor's option, refund or credit
the purchase price of, any Product that does not comply with the limited
warranty set forth in Section 7.1 of this Agreement. OSUR's obligation to
replace defective Products or provide a creditor refund pursuant to this Section
7.3 shall not apply to any Products that have been subjected to misuse,
mishandling, storage in a manner inconsistent with labeling, neglect,
modification or unusual physical or chemical stress after delivery to
Distributor or where any defect results from the Distributor Components. This
Section 7.3 states Distributor's sole and exclusive remedy for failure of any
Product to comply with the limited warranties set forth in Sections 7.1.
8. REPRESENTATIONS AND ADDITIONAL WARRANTIES; INDEMNIFICATION.
8.1 REPRESENTATIONS AND ADDITIONAL WARRANTIES.
8.1.1 BY DISTRIBUTOR. Distributor represents and warrants to
OSUR as follows: (a) Distributor has full corporate power and authority to enter
into and carry out its obligations under this Agreement; (b) the execution,
delivery and performance of this Agreement will not conflict with, are not
inconsistent with and will not result in any breach of any terms, conditions or
provisions of, or constitute (with due notice or lapse of
11
time, or both) a default under any agreement, contract, document or instrument
to which Distributor is a party or by which it is otherwise bound; (c) this
Agreement has been duly executed and delivered by Distributor and constitutes
the legal, valid and binding obligation of Distributor, enforceable against
Distributor in accordance with its terms; and (d) no authorization, consent,
approval or similar action of or by any third party is required for or in
connection with Distributor's authorization, execution, delivery or performance
of this Agreement; and (e) the use of the Distributor Trademarks will not
constitute an infringement or dilution of a third party's trademark rights in
the Territory.
8.1.2 BY OSUR. OSUR represents and warrants to Distributor as
follows: (a) OSUR has full corporate power and authority to enter into and carry
out its obligations under this Agreement; (b) the execution, delivery and
performance of this Agreement will not conflict with, are not inconsistent with
and will not result in any breach of any terms, conditions or provisions of, or
constitute (with due notice or lapse of time, or both) a default under any
agreement, contract, document or instrument to which OSUR is a party or by which
it is otherwise bound; (c) this Agreement has been duly executed and delivered
by OSUR and constitutes the legal, valid and binding obligation of OSUR,
enforceable against OSUR in accordance with its terms; (d) the manufacture, sale
and use of the Product will not infringe upon, or constitute a misappropriation
of, any third party's intellectual property rights; (e) no authorization,
consent, approval or similar action of or by any third party is required for or
in connection with OSUR's authorization, execution, delivery or performance of
this Agreement; and (f) the use of the OSUR Trademark will not constitute an
infringement or dilution of a third party's trademark rights in the Territory.
8.2 INDEMNIFICATION.
8.2.1 BY DISTRIBUTOR. Distributor shall indemnify, defend and
hold harmless OSUR, its Affiliates, and the respective directors, officers,
employees, agents and representatives of each of the foregoing, from and against
any and all claims, suits and proceedings by a person or entity (other than a
party to this Agreement or such party's Affiliates) (individually and
collectively, "Claims"), and any and all losses, obligations, damages,
deficiencies, costs, penalties, liabilities, assessments, judgments, amounts
paid in settlement, fines, and expenses (including court costs and reasonable
fees and expenses of attorneys) in respect of any Claims (individually and
collectively, "Losses"): (a) arising out of the negligence or willful misconduct
of Distributor or its Affiliates, employees, agents or any other person for
whose actions Distributor is legally liable; (b) for bodily injury, personal
injury, death, property damage or other injury caused by or arising out of or in
connection with the use, handling or storage of any Product by a consumer or
other end-user in a manner inconsistent with the applicable package insert or
labeling for such Product (including without limitation for any indication or
intended use not explicitly described or claimed in the applicable Product
insert) or any misuse, mishandling or improper storage of any Product by
Distributor, any subdistributor or agent of Distributor; (c) arising out of or
in connection with any promotional material, advertisement or claim made by
Distributor or any subdistributor or agent of Distributor or product labeling,
insert or packaging; which is not approved in writing in advance by OSUR; (d)
arising out of or in connection with a material breach
12
by Distributor of any of its obligations under this Agreement including any
representations or warranties set forth in Section 8.1.1, or the acts or
omissions of any distributor, subdistributor or agent of Distributor or any
person or entity claiming to be acting pursuant to authority from Distributor;
(e) the failure to manufacture or supply any Distributor Component in accordance
with applicable law, the Specifications or as otherwise required under this
Agreement; or (f) arising out of any claim that any of the Distributor
Trademarks constitutes an infringement or dilution of a third party's trademark
rights in the Territory; PROVIDED, HOWEVER, that Distributor shall have no
liability to OSUR for any Claims or Losses to the extent that such Claims or
Losses result from or arise out of: (i) the negligence or willful misconduct of
OSUR or its Affiliates, employees, agents or any person for whose actions OSUR
is legally liable; (ii) a material breach by OSUR of any of its obligations
under this Agreement or its representations or warranties set forth in Section
8.1.2; or (iii) any occurrence for which OSUR has liability to Distributor
pursuant to Section 8.2.2.
8.2.2 BY OSUR. OSUR shall indemnify, defend and hold harmless
Distributor, its Affiliates, and the respective directors, officers, employees,
agents and representatives of each of the foregoing, from and against any and
all Claims and Losses: (a) for bodily injury, personal injury, death, property
damage or other injury caused by the defective design or manufacture of the
Product (excluding the manufacture but not the design of the Distributor
Components) or the inadequacy, inaccuracy and insufficiency of any product
labeling approved in writing by OSUR prior to its use, including but not limited
to "CAUTION" and "WARNING" labeling; (b) arising out of the negligence or
willful misconduct of OSUR or its Affiliates, employees, agents or any other
person for whose actions OSUR is legally liable; (c ) arising out of or in
connection with a material breach by OSUR of any of its obligations under this
Agreement including any representations or warranties set forth in Section
8.1.2; (d) arising out of any claim that the OSUR Trademark constitutes an
infringement or dilution or a third party's trademark rights in the Territory;
or (e) arising out of a claim that any of the manufacture, marketing, import,
sale or use of the Product infringes upon any lawful patent rights; provided,
however, that OSUR shall have no liability to Distributor for any Claims or
Losses to the extent that such Claims or Losses result from or arise out of: (i)
the negligence or willful misconduct of Distributor or its Affiliates,
subdistributors, employees, agents or any person for whose actions Distributor
is legally liable; (ii) a material breach by Distributor of any of its
obligations under this Agreement including any representations or warranties set
forth in Section 8.1.1; or (iii) any occurrence for which Distributor has
liability to OSUR pursuant to Section 8.2.1. In addition, OSUR shall have no
liability to Distributor with respect to any Claims or Losses in connection with
Product labeling under clause (a), above, if such labeling is not actually
distributed with the Product or Distributor fails to comply with its obligations
hereunder with respect to Product packaging, labeling, inserts, instructions and
promotional materials, including Sections 3.1.4 and 4.2.
8.2.3 INDEMNIFICATION PROCEDURES. Each party shall provide
prompt notice to the other of any actual or threatened Loss or Claim of which
the other becomes aware; provided, that the failure to provide prompt notice
shall only be a bar to recovering Losses or Claims to the extent that a party
was prejudiced by such failure. In,
13
the event of any such actual or threatened Loss or Claim, each party shall
provide the other information and assistance as the other shall reasonably
request for purposes of defense, and each party shall receive from the other all
necessary and reasonable cooperation in such defense including, but not limited
to, the services of employees of the other party who are familiar with the
transactions or occurrences out of which any such Loss or Claim may have arisen.
It shall be a condition to indemnification that the indemnifying party be
allowed to control the response to and any settlement or defense of any Claim,
or the portion of any Claim, as to which indemnification is sought at the
indemnifying party's sole expense and with counsel of its own choosing. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of a Claim, the indemnifying party will not be liable to the
indemnified party for expenses incurred by the indemnified party in connection
with such Claim under this Agreement, other than the indemnified party's
reasonable costs of investigation or participation in such Claim, and except as
provided below. The indemnified party shall have the right to employ its own
counsel in any such Claim, but the fees and expenses of such counsel incurred
after notice from the indemnifying party of its assumption of the defense of
such Claim shall be at the expense of the indemnified party, unless (i) the
employment of counsel by the indemnified party has been authorized by the
indemnifying party, (ii) the indemnified party shall have reasonably concluded
that there may be a conflict of interest between the indemnifying party and the
indemnified party in the conduct of the defense of such Claim, or (iii) the
indemnifying party shall not in fact have employed counsel to assume the defense
of such Claim, in each of which cases the fees and expenses of the indemnified
party's counsel shall be paid by the indemnifying party. Neither party shall
have the right to settle any Claim or agree to the entry of any judgment or
other relief without the prior consent of the other party, which consent shall
not be withheld unreasonably; provided that the indemnifying party may settle
any Claim or agree to the entering of any judgment or relief if such settlement,
judgment or relief includes .a complete release of the indemnified party from
the Claims at issue.
8.3 ADDITIONAL RIGHTS FOR CLAIMS OF INFRINGEMENT. Without limitation to
any of the rights and obligations of OSUR' and Distributor under Section .8.2 of
this Agreement, if a third party asserts or threatens any Claim asserting: (a)
that any of the manufacture, marketing, sale, use or distribution of the Product
infringes upon, or constitutes a misappropriation of. such third party's
intellectual property rights in the Territory, then OSUR may, at its option (i)
procure for Distributor a license to continue selling the Product, (ii) modify
such items. to make them non-infringing, or (iii) if neither of the foregoing is
commercially practicable, terminate this Agreement with respect to sale of the
infringing item in the jurisdiction in which infringement is asserted.
8.4 CHANGE IN DESIGN. OSUR may, with the written consent of the
Distributor (not to be unreasonably withheld), improve or modify any feature of
the Product or change in any manner the technical specifications, features,
design or performance of the Product. OSUR will use its reasonable efforts to
inform the Distributor at least sixty (60) days in advance of any such changes.
OSUR will not be obliged to make any change or upgrade in any Product shipped to
the Distributor prior to the official introduction of any such change or
upgrade. In the event of any change to the Product hereunder, the Specifications
shall be amended to reflect such change and, as so amended, shall
14
thereafter be deemed to be the Specifications for the Product under this
Agreement. OSUR shall be responsible for obtaining all FDA or other regulatory
approvals, clearances or registrations required in the OTC Market in the
Territory as a result of any change to the Product. Distributor shall have the
right to submit suggested design changes and improvements to OSUR. from time to
time. OSUR shall consider such improvement suggestions in good faith.
8.5 INSURANCE. Distributor represents, warrants, and covenants that
during the Term it shall maintain general liability insurance, including
contractual liability coverage of all of Distributor's obligations under this
Agreement, and products liability/completed operations coverage with a minimum
aggregate limit of $10 million and a minimum limit per occurrence of $5 million.
Such insurance shall be evidenced by one or more certificates of insurance
delivered to OSUR on an annual basis, naming OSUR as an additional insured and
loss payee, and providing that OSUR shall receive at least thirty (30) days'
prior written notice of cancellation or material change of any of the policies
underlying such coverage. Any failure by Distributor to maintain the insurance
coverage required by this Section 8.5 shall be a material breach of this
Agreement.
9. RECALL; COMPLAINTS; REGULATORY COMPLIANCE.
9.1 RECALL. Each party shall immediately notify the other in writing
should it become aware of any defect or condition that may render any Product in
violation of any applicable requirement of law or regulation in the Territory or
that may constitute a deviation from the Warranties made by OSUR in Section 7.1.
Upon the determination of OSUR to recall the affected Product, OSUR and
Distributor shall carry out any recall or replacement in full compliance with
applicable laws and regulations and in the manner directed by OSUR in as
expeditious a manner as possible and in such a way as to cause the least
disruption and to preserve customer goodwill and the reputation of OSUR and
Distributor. OSUR shall reimburse Distributor in full for all reasonable, direct
costs of the recall or replacement of a Product, but only if the recall or
replacement results from a defect in the manufacture, packaging, or labeling of
the Product or from any OSUR breach of warranty, and not from any action taken
or omitted by Distributor, its Affiliates or entities or persons directly
controlled by Distributor or for which it is legally responsible. The direct
costs for which OSUR shall reimburse Distributor shall be limited to direct and
out-of-pocket costs, such as mailing and printing costs, freight, supervised
destruction and other amounts paid or credited to third parties. OSUR shall have
no liability to Distributor (or others) for indirect costs of the recall or
replacement, such as lost profits, employee time, or overhead.
9.2 CONSUMER COMMUNICATIONS AND COMPLAINTS.
9.2.1 COMMUNICATIONS. Distributor shall receive, collect,
classify and organize routine communications from consumers, which do not
require reporting to FDA From time to time, but not less frequently than
annually or when reasonably requested by OSUR, Distributor will provide OSUR
with a summary report of such communications.
15
9.2.2 COMPLAINTS. Distributor shall notify OSUR promptly of
the receipt of any complaints including any non-serious adverse events or
reactions, improper performance or other performance related communications
related to the Product and shall forward all such complaints, reports, adverse
events and reactions to OSUR along with all related information available to
Distributor, as soon as practicable and in no event later than ten (10) Business
Days after receipt by Distributor; provided that Distributor shall notify OSUR
of any deaths or serious adverse events or reactions within two (2) Business
Days after receipt by Distributor. OSUR shall have primary responsibility for
investigating and responding to all such complaints, adverse events and
reactions and reporting, to the extent required, to FDA. Distributor shall have
primary responsibility for investigating and responding to consumers and the
trade. Distributor and OSUR shall cooperate as necessary and useful, to
investigate and respond to all complaints of any nature. OSUR shall share its
investigations and conclusions with Distributor within 10 Business Days after
receipt of a potentially reportable complaint by OSUR. Information or data (if
any) bearing on safety or performance of the Product in a material respect
arising from sales outside the OTC Market or Territory by OSUR or any licensee
or other party authorized by OSUR shall he summarized and provided to the
Distributor as reasonably required by the mutual interests of the parties, but
not less frequently than annually.
9.3 REGULATORY COMPLIANCE. OSUR shall assume all responsibility for
compliance with all regulatory requirements in the Territory for the handling of
recalls and customer complaints, and adverse events and incidents, including,
without limitation, required periodic device listing reports, the preparation of
an Annual Review of Product Quality and adverse reaction reporting, to the
extent required. OSUR and Distributor agree to cooperate and coordinate the
logistics of any recall or field correction with due attention to requirements
of the trade, public relations considerations and regulatory requirements.
10. CONFIDENTIALITY AND NON-USE OF INFORMATION.
10.1 CONFIDENTIAL INFORMATION.
10.1.1 DEFINITION OF "CONFIDENTIAL INFORMATION". As used in
this Agreement, the term "Confidential Information" shall, subject to Section
10.2 of this Agreement, mean all technical (including, without limitation,
Product specifications, design, components, compositions and formulations),
financial (including, without limitation, any information obtained under Section
4.9 of this Agreement), commercial (including, without limitation, customer
lists and identities) or other information of Distributor (or any of
Distributor's Affiliates) or OSUR (or any of OSUR's Affiliates), as applicable,
irrespective of the form of communication and whether or not disclosed prior to
or after the Effective Date, other than information that was generally known or
otherwise generally available to the public or the industry before disclosure to
the other party, or information that becomes generally known to the public or
the industry after such disclosure through no wrongful act or omission of the
receiving party. Failure to xxxx or otherwise identify any information as
confidential or proprietary shall not adversely affect its status as
"Confidential Information."
16
10.1.2 OBLIGATIONS OF CONFIDENTIALITY AND NON-USE.
(a) During the term and at all times thereafter,
neither Distributor nor OSUR shall disclose any of the other party's
Confidential Information. The foregoing shall not prohibit disclosures: (i) made
to such party's employees, agents or advisors who have a "need to know" the
other party's Confidential Information to the extent necessary to perform such
party's duties and obligations, or to enforce such party's rights, under this
Agreement; or (ii) compelled to be made by any requirement of law or pursuant to
any legal or investigative proceeding before any court, or governmental or
regulatory authority, agency or commission so long as the party so compelled to
make disclosure of Confidential Information pertaining to the other party
provides prior written notice to such other party and uses its commercially
reasonable efforts to cooperate with such other party to obtain a protective
order or other similar determination with respect to such Confidential
Information.
(b) During the Term and at all times thereafter,
Distributor and OSUR shall not use any of the other party's Confidential
Information for its own direct or indirect benefit, or the direct or indirect
benefit of any third party, except that each of Distributor and OSUR may use the
other party's Confidential Information to the extent necessary to perform its
duties and obligations, or to enforce such party's rights, under this Agreement.
(c) Each of Distributor and OSUR shall (i) take
reasonable steps, whether by instruction, agreement, or otherwise, to cause its
employees, agents and advisors who may have access to Confidential Information
of the other party, to comply with its obligations under this Section 10 and
(ii) shall be liable for the breach of this Section 10 by any of its employees,
agents or advisors who may have access to Confidential Information of the other
party.
10.2 EXCEPTIONS. Confidential Information shall not include information
that: (a) is available from governmental agencies under the United States
Freedom of Information Act; (b) a party can prove on the basis of the written
record, was known by the receiving party at time of disclosure; (c) the
receiving party can prove on the basis of the written record to have been
independently developed for the receiving party after the time of disclosure by
employees or third parties who have not had access to corresponding Confidential
Information; or (d) was received by the receiving party, without restriction,
from a third party not under any obligation to the other party not to disclose
it and otherwise not in violation of the other party's rights.
10.3 REMEDIES. Any breach of the restrictions contained in this Section
10 by either Distributor or OSUR is a material breach of this Agreement, which
may cause irreparable harm to the other party entitling such other party to
injunctive relief in addition to all other legal remedies.
10.4 PRESS RELEASE. The parties acknowledge that it is their intention
to issue a press release concerning the execution of this Agreement. The parties
shall cooperate in
17
the preparation of such a release, which shall be subject to approval (not to be
unreasonably withheld or delayed) of both parties.
11. TERM AND TERMINATION.
11.1 TERM. The term of this Agreement shall begin on the Effective Date
and end on the last day of the fifth Contract Year or on such earlier date as
this Agreement may be terminated pursuant to Section 11.2 of this Agreement (the
"Initial Term"). Thereafter, this Agreement shall automatically be renewed for
successive periods of one (1) year each (each, a "Renewal Term," and together
with the Initial Term, the "Term") so long as Distributor has met its minimum
purchase commitment under Section 6.2 for each Contract Year.
11.2 TERMINATION.
11.2.1 BY REASON OF MATERIAL BREACH. This Agreement may be
terminated by either Distributor or OSUR upon notice if the other party
materially breaches any term or condition of this Agreement (other than a breach
covered by Section 11.2.2) and fails to remedy the breach within thirty (30)
days after being given notice thereof.
11.2.2 BY REASON OF FAILURE TO PAY AMOUNTS OWING. Either OSUR
or Distributor shall have the right to terminate this Agreement if the other
party shall have failed to pay timely any amounts due under this Agreement which
nonpayment has not been cured within thirty (30) days of receipt of notice
thereof.
11.2.3 FAILURE TO MEET MINIMUM PURCHASE COMMITMENTS. If
Distributor fails to order, accept delivery and pay for the volume of Products
identified in Section 6.2 as the minimum purchase commitment for any Contract
Year, then OSUR shall have the right at any time to convert Distributor's rights
hereunder to non-exclusive rights by giving Distributor written notice of such
action at least thirty (30) days prior to the effective date of such action. If
Distributor fails to order, accept delivery and pay for at least 150,000 Units
of the Products in any Contract Year, then OSUR shall have the right to then
terminate this Agreement by giving Distributor written notice of such action at
least thirty (30) days prior to the effective date of such action.
11.2.4 BY REASON OF BANKRUPTCY OR SIMILAR PROCEEDINGS. This
Agreement may be terminated in its entirety by either party upon notice if the
other party: (a) becomes the subject of any voluntary or involuntary proceeding
under the U.S. Bankruptcy Code or state insolvency proceeding and such
proceeding is not terminated within sixty (60) days of its commencement; or (b)
ceases to be actively engaged in business.
11.2.5 BY REASON OF INSURANCE CHANGES. If (i) OSUR experiences
a material increase in the cost of obtaining or maintaining liability insurance
coverage as a direct consequence of losses related to the sale or distribution
of Product into the OTC Market and Distributor does not agree to an increase in
the Price to reimburse OSUR for such increased costs, then OSUR shall have the
right to terminate this Agreement upon
18
not less than one hundred eighty (180) days written notice to Distributor, or
(ii) OSUR is no longer able to obtain or maintain liability insurance coverage
as a result of this Agreement or the sale or distribution of Product into the
OTC Market, then OSUR shall have the right to terminate this Agreement
immediately upon written notice to Distributor.
11.3 EFFECT OF TERMINATION.
11.3.1 SUBSISTING OBLIGATIONS. Termination or expiration of
this Agreement shall not relieve the parties of any obligation arising prior to
the effective date of such termination or expiration and shall not constitute a
waiver of any right of the parties under this Agreement as a result of breach or
default.
11.3.2 REMEDIES UPON BREACH. If this Agreement is validly
terminated by either Distributor or OSUR pursuant to Section 11.2 of this
Agreement, then subject to the limitations set forth in Sections 7.2, 7.3 and
12.5 of this Agreement, any and all rights and remedies available to the
non-breaching party, whether under this Agreement, at law or in equity shall be
preserved and survive the termination of this Agreement.
11.3.3 RETURN OF CONFIDENTIAL INFORMATION. Upon expiration of
this Agreement or its termination by either party, each party, as the other may
direct, shall destroy or return to the other promptly all tangible materials
provided to it by the other that embody the other's Confidential Information and
shall erase or delete all such Confidential Information embodied in any
magnetic, optical or similar medium or stored or maintained on any information
storage or retrieval device, and shall provide an officer's certificate
regarding such destruction, return, erasure or deletion. Notwithstanding the
foregoing, and subject to the provisions set forth in Section 10 of this
Agreement, each party's outside legal counsel may retain one (l) copy of such
materials for archival purposes.
11.3.4 INVENTORY. Following expiration of this Agreement or
its termination by either party, (i) Distributor may continue selling any
inventory of Product remaining in its possession for a period of six (6) months
after such expiration or termination and (ii) OSUR may complete, or cause the
Assembly Contractor to complete, assembly of Product with its or the Assembly
Contractor's remaining inventory of components and Distributor shall purchase
such Product and any other finished Product inventory held by OSUR or the
Assembly Contractor at the Price set forth therein and, at OSUR's request, all
remaining components not then assembled into Product remaining in OSUR's or the
Assembly Contractor's inventory at OSUR's cost therefor and Distributor may sell
such Product and components without limitation as to time.
11.3.5 SURVIVAL. The following Sections shall survive
expiration or termination of this Agreement for any reason: Section 1, 2.3 (last
sentence only), 4.3, 4.4.1, 4.4.3, 4.8, 4.9, 5.3, 5.4, 0, 0 ,0, 00, 11.3, and
12.
19
12. GENERAL PROVISIONS.
12.1 CURRENCY. All amounts payable under this Agreement shall be paid in
U.S. dollars, unless otherwise agreed in writing.
12.2 GOVERNING LAW. This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the Commonwealth of
Pennsylvania, without reference to conflict of laws principles of any
jurisdiction.
12.3 FORCE MAJEURE. Notwithstanding anything to the contrary set forth
herein, neither party shall be liable in damages, nor shall either party have
the right to terminate this Agreement for any delay or default in performing any
obligation hereunder, if such delay or default is caused by conditions beyond
the control of the relevant party, including but not limited to, acts of God,
governmental restrictions or regulations, wars or insurrections, strikes, fire,
floods, work stoppages, lack of materials, and unforeseen occurrences or other
occurrences beyond the control of the affected party; provided, however, that
the party so affected shall employ such reasonable actions to avoid or to remove
such cause of non-performance, and shall continue performance under this
Agreement with the utmost dispatch whenever the relevant cause is abated; and
further provided that if either party is unable to fulfill any relevant
obligation under this Agreement due to any such cause, and this situation
continues for a period of ninety (90) days, then the other party hereto shall
have the right to terminate this Agreement by written notice.
12.4 ASSIGNMENT. This Agreement may not be assigned or otherwise
transferred, nor may any right or obligation under this Agreement be assigned or
transferred, by either of Distributor or OSUR to a third party without the prior
written consent of the other party, which consent shall not be unreasonably
withheld; provided, that either of Distributor or OSUR may transfer or assign
its rights and obligations under this Agreement without consent to a successor
to all or substantially all of its business or assets, whether by sale, merger,
operation of law or otherwise or to the successor by purchase or otherwise of
such party's line of business to which this Agreement relates.
12.5 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES ARISING IN ANYWAY OUT OF
THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, INCLUDING,
WITHOUT LIMITATION, PUNITIVE DAMAGES, LOST PROFITS AND THE COST OF REPLACEMENT
PRODUCT OR GOODS. THIS LIMITATION WILL APPLY EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. NOTHING IN THIS SECTION 12.5 SHALL
PRECLUDE THE INCLUSION OF SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES
INCURRED BY ANY PARTY ENTITLED TO INDEMNIFICATION UNDER SECTION 8.2 OF THIS
AGREEMENT IN CONNECTION WITH ANY THIRD PARTY CLAIM, SUIT OR ACTION AGAINST SUCH
PARTY WITHIN THE AMOUNT OF LOSSES INCURRED AS A RESULT OF SUCH THIRD PARTY CLAIM
OR ACTION.
20
12.6 NO THIRD PARTY BENEFICIARIES. Distributor and OSUR intend that only
Distributor and OSUR will benefit from, and are entitled to enforce the
provisions of, this Agreement. No third party beneficiary is intended under this
Agreement.
12.7 MODIFICATIONS; WAIVER. No modification to this Agreement shall be
effective unless such modification is in a writing, which is signed by a duly
authorized representative of each of Distributor and OSUR. No waiver of any
rights or breach or default under this Agreement shall be effective unless
assented to in writing by the party to be charged with such waiver. The waiver
of any breach or default shall not constitute a waiver or any other right
hereunder or any subsequent breach or default.
12.8 NOTICES. Any required notices under this Agreement shall be given
in writing at the address of each party set forth above, or to such other
address as either party may substitute by written notice to the other in the
manner contemplated in this Section 12.8, and shall be deemed given (a) when
personally delivered; (b) if sent by recognized overnight courier service, on
the next business day after deposit with such courier, properly addressed and
fee prepaid; (c) if sent by U.S. certified mail, return receipt requested, on
the fourth (4th) Business Day after deposit in the U.S. mail, properly addressed
and postage prepaid; or (d) if sent by facsimile, upon and after the receipt of
a machine-generated written confirmation report corresponding to the notice
given evidencing the proper facsimile number of the receiving party, provided a
copy of such notice is also sent by regular first-class U.S. mail. All notices
shall be sent to the attention of the recipient's president.
12.9 DESCRIPTIVE HEADINGS. The headings of the several sections of this
Agreement are intended for convenience of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.
12.10 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without such provision; provided that this severability provision shall not be
effective if it materially changes the economic benefit of this Agreement to
either Distributor or OSUR.
12.11 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which together shall
constitute one and the same instrument. A facsimile transmission of a signed
original shall have the same effect as delivery of the signed original.
12.12 EXPENSES. Except as otherwise expressly set forth in this
Agreement, Distributor and OSUR shall bear their own respective expenses
incident to the preparation, negotiation, execution and delivery of this
Agreement and to the performance of their respective obligations under this
Agreement.
12.13 ALTERNATE DISPUTE RESOLUTION.
12.13.1 AGREEMENT TO UTILIZE ALTERNATE DISPUTE RESOLUTION.
Except for matters which relate to the enforcement of Section 10 of this
Agreement, which
21
matters shall not be required to be submitted to mediation or arbitration, any
controversy or claim between Distributor and OSUR arising out of or relating to
this Agreement, or any breach of this Agreement, including without limitation,
any claim that this Agreement, or any part thereof, is invalid, illegal or
otherwise voidable or void, shall be submitted to neutral third party dispute
resolution in the form of mediation before a mutually selected and agreed upon
mediator who shall be neutral and experienced in the type of business
contemplated herein. Should the parties be unable to agree on a mediator or
should mediation fail, the parties shall then submit the dispute to arbitration
before and in accordance with the then current commercial arbitration rules of
the American Arbitration Association. Judgment upon an arbitration award may be
entered in any court having competent jurisdiction and shall be binding, final
and non-appealable. No punitive or exemplary damages shall be awarded against
either Distributor or OSUR. This Section 12.13.1 shall be deemed to be
self-executing, and in the event either party fails to appear at any properly
noticed arbitration proceeding, an award may be entered against such party
notwithstanding said failure to appear. Such arbitration shall take place in a
neutral location as the parties may mutually agree. Each party shall bear its
own costs incurred in connection with the mediation or arbitration proceeding.
12.13.2 RIGHT TO SEEK INJUNCTIVE RELIEF PRESERVED. Nothing in
the Agreement shall be construed as limiting or precluding either party from
bringing any action in any court of competent jurisdiction for injunctive or
other extraordinary relief as such party deems necessary or appropriate to
compel the other party to comply with its obligations under Section 10 of this
Agreement.
12.13.3 ENTIRE AGREEMENT. This Agreement constitutes the entire
and exclusive agreement and understanding between Distributor and OSUR with
respect to the subject matter of this Agreement, and supersedes and cancels all
previous negotiations, agreements, and commitments, whether oral or in writing,
in respect to the subject matter of this Agreement.
[The remainder of this page left blank]
22
IN WITNESS WHEREOF, the undersigned duly authorized officers of OSUR and
Distributor, respectively, hereby execute this Agreement on the date first above
written on behalf of OSUR and Distributor, respectively.
ORASURE TECHNOLOGIES, INC.
By: /s/ XXXX XXXXXXXX
----------------------------------
Print Name: Xxxx Xxxxxxxx
--------------------------
Title: President and CEO
-------------------------------
MEDTECH HOLDINGS, INC.
By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Print Name: Xxxxx X. Xxxxxxxx
--------------------------
Title: CFO
-------------------------------
Exhibit 1.11
PRODUCT SPECIFICATIONS
Document Attached
PRODUCT SPECIFICATIONS
1 "Unit" of Product shall consist of:
Supplied by OSUR:
- 1 110ml aluminum canister filled with 80ml of Cryogenic gas mixture,
printed in 4 colors (drawing enclosed).
Artwork and labeling provided by Distributor, to be approved by OSUR.
- 12 5-mm foam applicators packaged in a transparent zip lock bag (drawing
enclosed)
Supplied by Distributor:
- 1 white virgin sulphate cardboard box (18 points} printed in 4 colors.
Artwork and labeling to be approved by OSUR.
- 1 instructions for use leaflet printed in 4 colors.
Content to be approved by OSUR.
- 1 shipping case (corrugated carton)
- 1 shipping case label.
Artwork and content to be approved by OSUR.
- 2 transparent tamper evidence labels for the lids of the box (if
required)
- 1 anti theft detector
[Drawing of product omitted]
Exhibit 2.4
Countries outside the United States where the Histofreezer(R) wart removal
system is sold:
Belgium
The Netherlands
Finland
Sweden
Norway
Denmark
Iceland
Germany
Austria
Switzerland
France
Spain
Portugal
Italy
Turkey
UK
Ireland
Greece
Romania
Slovenia
Cyprus
South Africa
Australia
Hong Kong
Singapore
South Korea
China
Israel
Mexico
Brazil
