Exhibit 10.13
CONFIDENTIAL TREATMENT
Heritage Worldwide, Inc. has requested that
the marked portions of this document be accorded
confidential treatment pursuant to Rule 24b-2
promulgated under the Securities Exchange Act
AMENDED AND RESTATED NON-EXCLUSIVE DISTRIBUTION AGREEMENT
This AMENDED AND RESTATED NON-EXCLUSIVE DISTRIBUTION AGREEMENT
(the"Agreement" is made as of the 30th day of March 2004, by and between Poly
Implants Protheses, S.A., a French corporation ("Supplier") and III Acquisition
Corp., a Delaware corporation and/or its wholly owned subsidiaries
("Distributor").
RECITALS
WHEREAS the Supplier is the manufacturer of smooth and textured breast
implant products (the "Breast Implants") which Supplier desires to have
distributed throughout North America, including the United States of America and
Canada, and any territories of the United States of America and Canada (the
"Territory");
WHEREAS the Distributor desires to distribute the Breast Implants,
along with any other products manufactured or sold by the Supplier
(collectively, the "Products") in the Territory on a non-exclusive basis;
WHEREAS Supplier and Distributor have previously entered into a
Non-Exclusive Distribution Agreement dated as of October 27, 1999 (the "Original
Agreement") in which Supplier granted Distributor the non-exclusive right to
distribute the Products in the Territory; and
WHEREAS Supplier and Distributor desire in this Agreement to amend and
restate the Original Agreement in its entirety to set forth in full the
agreements and understandings of the parties with respect to the distribution of
the Products in the Territory and certain related matters, including the filing,
prosecution and ownership of the Pre-Market Approval ("PMA") application
currently in preparation for Supplier's pre-filled saline Breast Implant
products, which the parties anticipate will be submitted to the United States
Department of Health and Human Resources, Food and Drug Administration (the
"FDA") no later than 2005.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth below, the parties hereto agree as follows:
1. Distribution Rights. Supplier hereby grants to Distributor a
non-exclusive right and license to distribute the Products for sale throughout
the Territory during the term of this Agreement. Supplier agrees that if the
other non-exclusive distributor of the products, PIP/USA, Inc., breaches its
agreement with Supplier or PIP/USA, Inc.'s agreement is cancelled or terminated
for any reason, Supplier will not execute any other non-exclusive distribution
agreement with any other party and this Agreement shall become exclusive with
respect to distribution of the Products in the Territory. Distributor has only
distribution rights under this Agreement. At no time while this Agreement is in
effect will Distributor, directly or indirectly (through other companies,
agents, subsidiaries or otherwise), manufacture equivalent breast implants that
conform with the PMA contemplated in this Agreement. At no time while this
Agreement is in effect will Supplier, directly or indirectly (through other
customers, agents, subsidiaries or otherwise), with the exception of the
non-exclusive distribution agreement already in place between Supplier and
PIP/USA, Inc.:
(a) sell the Products in the Territory; or
(b) sell the Products to any person or entity with reasonable basis to
believe that such person or entity, or someone acting on their behalf, will
resell the Products into the Territory; or
(c) appoint or license any other person or entity as a distributor or
representative of the Products without specifically prohibiting such person or
entity, in writing, from selling or reselling the Products into the Territory;
or
(d) sell any components and/or parts for the Products that may be used
in manufacturing the Products for any person or entity in the Territory other
than the Distributor.
2. Terms and Renewal. This Agreement and the rights granted Distributor
hereunder shall be for an initial term of ten (10) years, beginning on the date
first written above. Thereafter, the Distributor shall have the option of
renewing this Agreement on the same terms and conditions for three (3)
additional five (5) year terms, provided Distributor is not in default of any
provisions of this Agreement at the date of renewal, which renewal shall be
automatic unless the Distributor notifies Supplier of Distributor's intent not
to renew at least sixty (60) days prior to the renewal date.
3. Orders and Shipping.
(a) Order Placement and Allocation. Distributor shall place all orders
for the Products with Supplier in writing on a weekly basis (the "Purchase
Orders"). Supplier shall use commercially reasonable efforts to ship the
Products on the Purchase Orders to Distributor within thirty (30) days of the
date of the Purchase Order. Distributor shall provide to Supplier monthly an
estimate of Products to be required for the following three months. In the event
an order (prorated from a weekly basis to a monthly basis) is in excess of 20%
above the budgeted order amount, then Supplier shall not be required to fulfill
such excess above 20% within such 30-day period but shall use commercially
reasonable efforts to ship the excess Products as soon as practicable.
(b) Title and Risk of Loss. All Products shall be shipped C.I.F. to the
Distributor at such location designated by Distributor or such other location as
Distributor may notify Supplier of from time to time. Supplier shall pay all
costs associated with shipping the Products to Distributor, including, without
limitation, freight costs, license fees and taxes. Distributor shall pay any
applicable customs duties and United States freight handling charges.
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(c) Incorrect or Erroneous Shipment. In the event the Products shipped
to Distributor do not conform to the Purchase Order, Supplier shall correct any
such errors at no cost to Distributor within ten (10) days written notice by
Distributor of such error.
(d) Late Shipments. In the event that Supplier has not shipped Products
under the Purchase Order within forty five (45) days of the date of the Purchase
Order (a. "Late Shipment"), Supplier agrees to allow Distributor to take a
discount equal to ten percent (10%) per month (prorated for parts of months)
that the Product in such Purchase Order remains unshipped.
(e) Minimum Purchases. The minimum number of Breast Implant units to be
purchased by Distributor from Supplier in each calendar year of this Agreement
following Clearance (as defined in Section 4(c) below) shall, unless otherwise
agreed by the parties in writing, be the figure set forth opposite each year of
this Agreement set forth below, with Year 1 being the year in which Clearance
occurs and with the amounts in Year 1 being prorated based on the number of days
in such year following the date of Clearance:
[****]*
In the event silicone filled Breast Implants shall hereafter be
approved or cleared for marketing in the United States, the amounts set forth
above for each year of this Agreement (or part thereof on a prorated basis)
shall be reduced to a number equal to [****]* of the number for such year set
forth above (or such actual lesser percentage amount as shall equal the actual
percentage of the total United States Breast Implant market captured by saline
filled Breast Implants).
4. Pricing and Payment Terms.
(a) Price. Distributor shall pay [****]* per saline Breast Implant
unit. In the event of unforseen market forces, including predatory pricing by
competitors and/or substantial increases in raw material costs, the parties
shall engage in good faith efforts to renegotiate the price of the saline Breast
Implants. Any agreed price increase will only be effective after a ninety (90)
day written notice by Supplier to Distributor. The price and terms for any
Products other than the saline Breast Implants shall be as mutually agreed upon
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* Confidential Treatment has been requested for the marked portion.
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by the parties hereto. Subject to the terms of this Agreement, Distributor shall
pay a minimum price of [****]* per saline Breast Implant unit. If the weighted
average of the net sales price of saline Breast Implant Products sold by
Distributor exceeds [****]* per saline Breast Implant unit during any calendar
quarter (the amount of such excess, the "Excess Amount'), then Distributor shall
pay within 45 days of the end of such quarter to Supplier as additional purchase
price for each unit sold during such quarter an amount equal to [****]*. The
foregoing calculation shall be made by Distributor after the end of each
calendar quarter beginning with the first full calendar quarter commencing after
Clearance (as defined in Section 4(c) below). Example:
[****]*
(b) Terms for Payment. Distributor agrees to pay invoices as shipped
and billed by Supplier within Forty Five (45) days after delivery, less any
discounts for Late Shipments as described in Section 3(d) above. If Distributor
fails to make payment under this Section 4(b) within the time specified,
Supplier may during the time such payments remain unpaid cease making shipments
to Distributor under Section 3.
(c) Additional Payment Agreements. Following the date an amount equal
to
the Offset Amount (as calculated under Section 4(d) below) has been
accrued under this Section 4(c), Distributor agrees to pay to Supplier the
following sums to the extent the cumulative sums calculated hereunder exceed the
Offset Amount, such payments to be calculated and paid on a calendar quarterly
basis within 45 days of the end of each quarter (the first such period ending at
the end of the first complete calendar quarter following the date of Clearance
(as defined below), with Distributor preparing an annual reconciliation (to
account for product returns, replacements, discounts, etc.) and any adjustments
not implemented in prior quarters being implemented in the fourth quarter
payment. Commencing with FDA approval of the PMA and clearance (including
customs and labeling clearance) to market the pre-filled saline Breast Implant
Products in the United States (the date of such clearance, "Clearance"),
Distributor shall pay to Supplier for Product purchased and accepted for sale in
the United States an amount equal to the following percentages [****]*
The years set forth above will commence with the first sale of Product
following Clearance and the first year will be the first consecutive 12-month
period beginning with the month in which Clearance occurs. Distributor shall
retain any amount otherwise payable under this Section 4(c) that equals the
Offset Amount.
(d) Offset Amount. Notwithstanding anything to the contrary contained
in Section 4(c), Distributor shall not be obligated to pay to Supplier any sums
calculated under Section 4(c) above until such time that the cumulative amounts
calculated under Section 4(c) exceed [****]* (the "Offset Amount"). After such
time, Distributor shall have no obligation to Supplier with respect to the
Offset Amount and its sole obligation under Section 4(c) will be to pay the
future amounts in excess of the Offset Amount as calculated under Section 4(c).
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* Confidential Treatment has been requested for the marked portion.
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(e) Product Warranty Claims/Promissory Note. As of February 29, 2004,
Supplier had certain obligations to patients and doctors in respect of claims
related to products sold by PIP/USA, Inc., PIP/America, Inc. and Distributor
("Existing Claims"). Distributor will undertake to administer and pay up to
[****]*of such Existing Claim amounts, with Distributor consulting with Supplier
prior to paying any such Existing Claim amounts. If Distributor determines in
its sole discretion that payment of any Existing Claim amount is necessary or
advisable to (1) prosecute or maintain the PMA, (2) settle any presently
existing litigation or any related or similar case, (3) avoid any adverse
regulatory action, or (4) continue to market Products in the Territory, then
Distributor may without consent of Supplier pay any such Existing Claim amount.
If with respect to any Existing Claim amount Distributor does not make the
determination set forth in the immediately preceding sentence, then Distributor
will consult with Supplier in the administration of such Existing Claim. Unless
Supplier (i) engages counsel reasonably acceptable to Distributor to consult on
such Existing Claim administration and (ii) separately indemnifies Distributor
from and against any loss, claim or liability related to such Existing Claim in
a manner reasonably acceptable to Distributor, Distributor may pay such Existing
Claim amount. If Supplier engages counsel and provides the indemnity as set
forth in the immediately preceding sentence in respect of an Existing Claim
covered by such sentence, then Distributor will not pay the respective Existing
Claim amount without Supplier's consent, which consent will not unreasonably be
withheld. In consideration of the foregoing undertaking by Distributor, Supplier
will issue to Distributor a revolving promissory note (the "Note") in the
initial nominal principal amount of [****]*. The principal amount payable under
the Note shall be increased by any additional amounts paid by Distributor on
Supplier's, PIP/USA, Inc.'s or PIP/America, Inc.'s behalf with respect to
products sold by Supplier, PIP/USA, Inc., PIP/America, Inc. or Distributor in
the Territory that are not in respect of Existing Claims.
(f) Limitations on Obligations in the Event of No Clearance. In the
event the FDA does not approve the PMA and grant marketing clearance to
Distributor for the pre-filled saline Breast Implant as a result of the action
or inaction of Supplier, including Supplier's failure to meet FDA GMP
requirements or provide adequate pre-clinical data and other information, then
the amount owed under Section 4(e) above shall equal [****]*, plus the principal
amount of the Note, and such amount shall be immediately due and payable. In the
event the FDA does not approve the PMA and grant marketing clearance to
Distributor for the pre-filled saline Breast Implant as a result of the action
or inaction of Distributor, but excluding Supplier's failure to provide any
necessary modules, information, assistance or access, then the amount owed under
the Note referred to in Section 4(e) above shall be immediately due and payable.
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* Confidential Treatment has been requested for the marked portion.
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(g) Right to Inspect. From time to time during the term of this
Agreement, Supplier and its representatives shall have the right to inspect and
make copies of the books and records of Distributor relating to sales of
Products for the purpose of confirming Distributor's compliance with the terms
of this Agreement. Such inspection may occur not more frequently than once in
any three consecutive month period and shall be during ordinary business hours
at Distributor's place of business upon not less than three business days
advance notice. Supplier shall bear all of the costs of such inspection unless
it is determined that Distributor has underpaid Supplier by an amount equal to
[****]*or more of the amounts paid during the period covered by the inspection,
in which case Distributor shall reimburse Supplier for all of such costs.
5. Marketing Assistance. Supplier will provide Distributor with
marketing assistance as requested by Distributor at no cost to Distributor,
including but not limited to, provision of samples, "sizers" and up-to-date
brochures for the Products in languages appropriate to the Territory. Symposia
costs from the date hereof shall be the responsibility of the Distributor. Any
other promotional materials, promotional assistance and related issues shall be
determined by the mutual, written agreement of the parties.
6. The Products.
(a) Definition. As used in this Agreement, the terms "Products"
includes not only the products of the Supplier in existence as of the date
hereof or licensed to Supplier by any third party, but any and all products of
the Supplier in existence or licensed to Supplier by any third party at any time
while this Agreement is in effect, including all upgrades, changes, amendments,
improvements and modifications thereto, as well as, any parts and components
necessary for the repair and replacement thereof.
(b) Packaging. Supplier shall adequately label, package and deliver the
Products in accordance with all applicable regulations, including applicable
regulations in the Territory, using references to and trademarks of the
Supplier, and Supplier shall bear all costs associated with packaging of the
Products except that Distributor shall bear all costs associated with printing
of labels and package inserts for the Products to be sold in the Territory.
(c) Defective Products. Supplier shall accept the return of any
Products that Distributor's Quality Assurance and/or Regulatory departments find
unacceptable ("Rejected Products") and upon return of such Rejected Products,
shall provide Distributor with new Products at no cost.
(d) Replacement Program. Supplier agrees to credit Distributor as
follows for payments made to and replacement product sent to surgeons (the
"Replacement Product") under a product warranty program. The Supplier agrees to
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* Confidential Treatment has been requested for the marked portion.
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the following reimbursement to the Distributor for saline Breast Implants:
[****]*
(e) Replacement Procedure. Supplier agrees that Distributor, in its
sole discretion, may send Replacement Product and payments to surgeons to cover
re-implantation (the "Re-Implantation Fees") and, upon written notice by
Distributor describing the original product, the Replacement Product and the
Re-Implantation Fees, Supplier agrees to credit the Distributor for [****]*.
(f) Representations, Warranties and Covenants. Supplier represents,
warrants and covenants that:
(i) Supplier has the right, title and interest in and to the
distribution of the Products necessary to enter into and perform its obligations
to Distributor hereunder; and
(ii) The Products operate and perform as intended; and
(iii) Supplier has complied with all applicable laws and regulations
with respect to the Products, including, without limitation, FDA approval and
compliance; and
(iv) Subject to Sections 7 and 8 below, during the term of this
Agreement Supplier will be solely responsible for, and have a continuing
obligation to obtain and maintain, all necessary non-Territory government and
regulatory approvals and compliance with respect to the Products; including ISO
certification, and all necessary GMP certification relating to the Territory;
and
(v) Supplier will be responsible for funding for all of its non-PMA
application costs, including (A) Supplier's United States litigation and
settlement costs (including indemnity responsibilities), (B) United States
warranty and deflation costs and (C) other product liability claims arising from
Supplier's Breast Implants sold in the United States; and
(vi) Supplier will immediately pay all accrued sums presently owed Xxxx
Xxxxx and terminate the current contract with Xxxx Xxxxx and release him from
any conflict of interest in working with Distributor through delivering to Xx.
Xxxxx any letter reasonably requested by him; and
(vii) Supplier will immediately pay all accrued sums presently owed
Xxxx & Xxxx LLP and terminate its relationship with Xxxx X. Xxxxxx, Esq. and
Xxxx & Xxxx LLP and release Xx. Xxxxxx and Xxxx & Xxxx LLP from any conflict of
interest in working with Distributor through delivering to Xxxx & Xxxx LLP any
letter reasonably requested by Xxxx & Xxxx LLP; and
(viii) Except as provided in Section 7 below with respect to the PMA
and future PMA-related (and other Territory regulatory approval) costs, Supplier
will remain responsible for its operations and related financial obligations,
including PIP/USA, Inc. deflation costs and indemnification costs and its other
obligations under this Agreement.
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* Confidential Treatment has been requested for the marked portion.
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(g) Indemnification- Supplier agrees to hold Distributor harmless and
indemnify, reimburse and defend Distributor, upon request, at Supplier's cost,
with mutually acceptable counsel, from any proceeding related to any claim
asserted against Distributor or its customers with respect to the Products
(including without limitation, Product liability claims) or with respect to any
previous agreements that the Supplier may have had with any other party
regarding the distribution in the Territory of the Products or which otherwise
arises out of Supplier's relationship with Distributor (including without
limitation any action arising out of the failure of Supplier to comply with any
government or regulatory requirements) and shall pay Distributor for all amounts
owed by Distributor to third persons and expenses incurred by Distributor in
connection with any such claim or suit.
7. Regulatory Responsibilities.
(a) From and after the date hereof, Distributor shall assume (subject
to Section 6(f) and Section 7(b)) at Distributor's expense all
responsibilities for the PMA application and program, and for other
similar Territory regulatory approvals, for the pre-filled saline
Breast Implant. Additionally, Distributor shall assume general
management responsibilities for the explant investigation program.
(b) Supplier agrees to conduct at its expense any additional or revised
pre-clinical testing required for the PMA application. Supplier will be
responsible for mechanical or other testing to be performed at
Supplier's location and all manufacturing, process and production
record, report and compliance preparation and maintenance. Supplier
agrees immediately after the date hereof to provide access to
Distributor to all records (including all past PMA-related records and
all past and fixture manufacturing, process and production records),
data, information, reports, clinical programs and consultants requested
by Distributor to complete the PMA submission and subsequent FDA
requests and to provide at its own expense all additional assistance
requested by Distributor in connection with the PMA application, other
regulatory applications in the Territory and future management and
maintenance of marketing clearances in the Territory. Supplier shall
notify Distributor immediately should Supplier become aware of any
defect or condition which may render any of the Products in violation
of the United States Food Drug and Cosmetic Act, FDA regulations, other
Territory regulations or which in any way alters the specification and
quality of the Products.
(c) For the purpose of maximizing the likelihood of FDA GMP approval
and clearance, Supplier agrees to allow an inspector of Distributor's
selection to inspect Supplier's facilities, processes, operations and
records prior to the FDA's GMP inspection of Supplier's facilities.
Supplier further agrees promptly to implement the recommendations the
inspector reasonably makes as necessary or appropriate for the purpose
of obtaining FDA GMP approval and clearance. In addition, Supplier
agrees to permit one or more representatives of Distributor or other
experts to participate directly in cooperation with Supplier in the
preparation of PMA application modules.
(d) All Territory regulatory approvals (including the PMA application)
shall be applied for, issued and registered in Distributor's name.
Commencing immediately, the ownership of the PMA application (and
related applications and PMA application work in process) for
Supplier's pre-filled saline breast implant will be transferred to
Distributor. For avoidance of doubt, Distributor will own in its own
name the PMA and related marketing clearance once issued.
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8. Quality Assurance Responsibilities. Supplier agrees that, in order
to expedite the acceptance of Products by Distributor's Quality
Assurance and/or Regulatory departments, that Distributor will, at
Supplier's expense, implement Quality Assurance and/or Regulatory
programs and/or personnel into the Supplier's manufacturing facilities.
Supplier grants Distributor the right to conduct Quality Assurance
and/or Regulatory audits (based on Distributor's Quality Assurance
standards, which at all times shall incorporate applicable FDA and GMP
requirements) using Distributor's personnel, Supplier's personnel
and/or independent consultants on a quarterly basis or more frequent
spot basis. Supplier agrees that Supplier will cure any curable
deficiencies within ten (10) days of written notice by Distributor of
any such Quality Assurance and/or Regulatory audits and commence curing
all other curable deficiencies that are curable but not reasonably
subject of cure within 10 days. Supplier agrees to credit Distributor's
account in the amount of [****]* that any deficiencies remain uncured
following the ten (10) day written notice period described above.
Similarly, following Clearance Distributor agrees to credit Supplier's
account in the amount of [****]* that any deficiencies imposed by the
FDA on Distributor and relating to Distributor's obligations under this
Agreement remain uncured following the 10-day period commencing on the
later of the date of Distributor's receipt of notice thereof from the
FDA or the date imposed by the FDA for cure or compliance.
9. Distributor's Representations and Warranties.
(a) Product Warranties of Supplier. Distributor acknowledges that
Supplier has the exclusive right to determine the product guarantees
and warranties to be provided on each of its products, with the
exception of the Replacement Program and other specific and implied
warranties contained herein.
(b) Conduct of Distributor and its Representatives. Distributor agrees
not to make any commitments either orally or in writing with respect to
Supplier or on Supplier's behalf unless such commitment is specifically
authorized hereunder or Supplier specifically authorizes Distributor in
writing make such commitment. Distributor agrees not to make any
representations outside the agreed Territory specified in this
Agreement or subsequently agreed to in writing by the parties hereto.
Any leads or contacts outside the Territory generated through the
efforts of the Distributor will be promptly forwarded to the Supplier.
Distributor further agrees to conduct all representations in a positive
and professional manner.
(c) Regulatory Approvals. Subject to Sections 6(f), 7 and 8 above, from
and after the date hereof, during the term of this Agreement
Distributor will be solely responsible for, and have a continuing
obligation to obtain and maintain, all necessary Territory government
and regulatory approvals and compliance with respect to the Products,
including prosecution of the PMA application for pre-filled saline
implants, related clinical studies, and reporting and monitoring of
implant recipients. Subject to Sections 6(f), 7 and 8 above,
Distributor will pay all future costs of prosecuting the PMA
application with the FDA.
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(d) Costs. Distributor will be responsible for its own non-indemnified
litigation costs, its distributor warranty obligations and its other
obligations under this Agreement.
10. Operational Commitments. Distributor agrees to the following:
(a) Rotation of Stock. Distributor shall rotate its stock of saline
breast implants on a first-in/first-out basis of shelf life based on
the time of receipt from Supplier. For any given size, the oldest
saline breast implants in Distributor's stock will be dispatched first
and the most recently received saline breast implants in any size will
be sold last.
(b) Controlled Conditions of Saline Breast Implant Storage. Distributor
agrees to store the Products within a restricted access storage area
that is secure, clean (with a documented regular cleaning program in
force), infestation fee, temperature controlled and organized according
to established Quality Assurance and/or Regulatory requirements.
(c) Maintenance of Quarantine Area. Distributor shall maintain a
clearly segregated and marked out quarantine area which is labeled as
such and which is maintained with Distributor's Quality Assurance
and/or Regulatory policies, including a quarantine log book.
(d) Complaint Procedure. All complaints shall be handled by
Distributor's established complaint procedure and the details of each
complaint shall be forwarded by fax to Supplier on a regular basis.
(e) Returned Products. All returned Products shall be handled by
Distributor's established return procedure and the details of each
return shall be documented.
(f) Implant Tracking and Product Recalls. All Products sold by
Distributor shall have Lot Number and Serial Number records as
established by Distributor's Regulatory and/or Quality Assurance
departments and Distributor shall maintain these records so that each
and every Product, up to and including when the Product is used or
implanted, can be tracked in accordance with the USFDA tracking
requirements then in effect.
(g) Medical Device Reports ("MDRs"). Any adverse effect reported by a
patient, whether critical or chronic, which may be associated with a
potential Product malfunction shall be immediately reported by
Distributor according to the FDA MDR requirements then in effect.
(h) Monitoring Implant Clinical Studies. From and after the date
hereof, Supplier will provide non-financial cooperation to Distributor
in the clinical studies of Supplier's saline breast implants, including
providing non-financial cooperation to Distributor in collecting
information and documentation from participating surgeons and
communicating any problems with the clinical studies to Distributor.
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(i) Product Warranty Procedure. Distributor agrees to return to the
Supplier (after suitable liquid sterilization), in compliance with FDA
requirements not later than the first Tuesday of the month following
each calendar month, all breast implants returned to Distributor in
such month that are subject to a warranty claim. Each returned implant
will be accompanied by (i) the related Medical Device Registration Form
and (ii) the related Explant Data Form. If provided to Distributor by
the physician, Distributor will also supply to Supplier on the later of
the date set forth in the previous sentence or within three business
days of receipt thereof (1) the related Implantation Operative Report,
(2) the related Pre-Explantation Operative Report, and (3) in the case
of implant deflation, related photos.
11. Notification of Material or Process Change. Supplier shall notify
Distributor prior to implementing any changes in the manufacture,
assembly, labeling of the Product or the processes used to produce the
Product (the "Change Notification"). No such change will be made by
Supplier without first obtaining the approval of Distributor's Quality
Assurance manager in writing. Supplier agrees to give Distributor one
full and complete set of Supplier's Standard Operating Procedures
("SOPs") and Manufacturing Procedures and to provide Distributor with
any and all revisions, corrections and/or additions to the SOPs and
Manufacturing Procedures as implemented at Supplier's facilities.
12. Product Documentation. Supplier agrees to forward to Distributor
with each shipment of Product all documentation generated during the
production of the Product including, but not limited to:
(a) all raw material testing records;
(b) all manufacturing records;
(c) all sterilization reports; and
(d) all final Product testing reports.
Supplier agrees that any discrepancies shall be cured at Supplier's
expense.
13. Patents and Trademarks.
(a) Patents. Supplier shall notify Distributor promptly of any United
States and foreign patents which may now or hereafter be pending covering any of
the Product. Supplier shall diligently prosecute any applications for United
States and foreign patents which may now or hereafter be pending covering any of
the Products and, on issuance of any such patent, prosecute each infringer
thereof. Supplier shall defend, indemnify and hold harmless Distributor from and
against any liability arising out of a claim of patent infringement made with
respect to any of the Products. Supplier agrees to repurchase from Distributor,
at a price equivalent to the full purchase price paid by Distributor, any
quantity of Products in Distributor's inventory which Products Distributor
reasonably believes it should not or cannot sell, based upon an opinion of
counsel that future sales of such Product by Distributor may result in patent
infringement, or because of a decision, whether interlocutory or final, rendered
in any patent infringement action. Supplier hereby grants to Distributor a
royalty free perpetual license to all such patents. This license will survive
during the term of this Agreement.
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(b) Trademarks and Trade Names. Distributor recognizes. that Supplier
is the owner of the trademarks and trade names which are used in the promotion
and sale of the Products and that Distributor has no right or interest in such
trademarks and trade names. Supplier hereby grants Distributor the royalty free
right to use Supplier's trademarks on the Products during the term of this
Agreement, it being understood that Distributor shall discontinue the use of
such trademarks upon the termination of this Agreement and disclaims any rights
in the trademarks other than the said license.
14. Product Liability Insurance. If Supplier obtains product liability
insurance for the Products, such insurance shall contain either a vendor's
endorsement or contractual liability coverage referencing the indemnification
provisions contained herein on all Products. Upon issuance of any such product
liability insurance, Supplier shall immediately furnish to Distributor a
certificate of insurance issued by the carrier evidencing the foregoing
endorsements, coverages and limits and such insurance shall not be cancelable by
Supplier without at least fifteen (15) days prior written notice to Distributor.
15. Default; Termination. Subject to the provisions of Section 17
below, either party shall have the right to terminate this Agreement upon
written notice if the other party hereto:
(a) commits or suffers any act of bankruptcy or insolvency; or
(b) shall fail to perform or fulfill, at any time and in the manner
herein provided, any obligation or condition required to be performed or
fulfilled by such party hereunder, and if such party fails to remedy any such
failure within sixty (60) days after notice thereof from the non-defaulting
party.
The non-defaulting party shall have the right to terminate this
Agreement by giving written notice of termination to the defaulting party at any
time within ninety (90) days after the 60-day default period set forth in clause
(b) above. Termination under this Section 15 shall not be deemed an election,
but shall be in addition to other rights and remedies available to the
non-defaulting party.
On the termination of this Agreement, for whatever reason, Supplier
shall continue to honor Distributor's orders for Products up to the effective
date of termination and, other than in connection with expiration of the term of
this Agreement, for a period of sixty (60) days thereafter and Distributor shall
pay for such Products all on the terms and conditions of this Agreement. Upon
effectiveness of termination, Distributor shall have the option of returning all
Products then in inventory to Supplier for full credit or continue to sell the
Products for a period of no more than One Hundred and Twenty (120) days after
termination, at the end of which period Distributor may then return all unsold
Products in inventory for full credit.
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16. Confidentiality. The parties acknowledge and agree that, pursuant
to this Agreement, valuable information of a confidential nature may be
disclosed by one or more parties to another; that such information shall be
retained by either party in confidence; and that the transmittal of such
information by any party to the another party is upon the expressed condition
that the information is to be used solely for the purpose of effectuating this
Agreement. No party shall, either during the term of this Agreement or after its
termination, use, publish or disclose or cause anyone else to use, publish or
disclose the terms and conditions hereunder, any marketing information supplied
by another party or any other information considered by either party hereto to
be confidential, proprietary or a trade secret. Notwithstanding anything in the
foregoing, the above restrictions on disclosure and use shall not apply to any
information which a party can show by written evidence was known to it at the
time of receipt from the other party or which may subsequently be obtained from
sources other than the other party who are not bound by a confidentiality
agreement with either party.
17. Contingencies. Except with respect to obtaining or maintaining GMP
compliance and with respect to failure to maintain compliance with the Quality
Assurance programs in accordance with Section 8 above,
(a) neither Supplier or Distributor shall be liable for its failure to
perform hereunder (except for obligations to make payments hereunder) if
performance is made impossible due to any occurrence beyond its reasonable
control, including, but not limited to, acts of God, fires, floods, wars,
sabotage, accidents, equipment failure, labor disputes or shortages, government
laws, ordinances, rules, regulations, standards or decrees, whether valid or
invalid (including but not limited to, priorities, requisitions, allocations and
price adjustment restrictions), inability to obtain raw materials, equipment or
transportation, and any other similar occurrence, and
(b) neither Supplier nor Distributor shall be liable for its failure to
perform hereunder if Supplier or Distributor ceases or suspends the operation of
all facilities where Distributor is selling or Supplier is producing the
Products deliverable hereunder, because said facilities, the operation thereof,
and/or the product therefrom fails to comply with any governmental law,
regulation, ordinance, standard, order or decree relating to health, safety or
environmental matters.
Notwithstanding anything to the contrary contained herein, the failure
to cure a condition set forth in this Section 17 within the times specified in
Section 15 shall be grounds for termination of this Agreement as provided in
Section 15.
If either party reasonably believes it is impossible to take corrective
action to remedy any occurrence under clause (a) above or to achieve or maintain
compliance under clause (b) above, such party may suspend or terminate this
Agreement upon written notice to the other party in accordance with Section 15.
The party who fails to perform as a result of any occurrence described in clause
(a) or(b) above shall notify the other party of any such occurrence, setting
forth the full particulars in connection therewith, and shall promptly notify
the other party of the cessation of such occurrence. In no event shall either
party be required by this Section 17 to settle strikes, lockouts or other labor
difficulties contrary to its best interest.
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18. Dispute Resolution. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in the State of Delaware, before a single arbitrator in accordance
with the rules of the American Arbitration Association then in effect. Judgment
maybe entered on the arbitrator's award in any court having jurisdiction. This
Agreement and the parties' performance under it shall be construed in accordance
with the laws of the State of Delaware.
19. Miscellaneous.
(a) Assignment. Except as expressly provided herein, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party; provided, however, that
the rights and obligations of Distributor or MediCor hereunder may be assigned
to any entity controlled by MediCor; provided that such entity assumes all
rights and obligations of Distributor or MediCor, as applicable, hereunder and
Distributor remains liable for all of its obligations hereunder incurred prior
to the effective date of such assignment.
(b) Waiver. Failure of either party to exercise or enforce any right
under this Agreement upon one occasion shall not waive the right to exercise or
enforce the same on another occasion. The waiver by either party of one or more
terms, conditions or defaults of this Agreement shall not constitute a waiver of
the remaining terms and conditions or of any future defaults of this Agreement.
(c) Governing Law. The validity, interpretation and performance of this
Agreement shall be controlled by and construed under the laws of the State of
Delaware.
(d) Headings. The headings appearing in this Agreement are inserted
only as a matter of convenience and in no way define, limit, construe or
describe the scope or extent of such section or in any way affect such
paragraph.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute a single instrument
and agreement.
(f) Notices. Any notices under this Agreement shall be in writing
addressed to the Chief Executive Officer of such party at the address set forth
on the signature page hereof, or such other addresses as a party may notify the
other party in writing) and shall be delivered by certified mail, return receipt
requested or by an overnight delivery service of international standing.
(g) Acknowledgment The parties, and each of them, represent and warrant
that, in entering into this Agreement; they have read this Agreement, they have
had this Agreement explained by counsel of their choice, they are aware of the
contents and legal effect of this Agreement and they are acting on the advice of
counsel of their choice.
(h) Expenses. Each party shall bear his or its own expenses, including
attorneys' fees, incurred by it, in connection with the negotiation, execution,
delivery and performance of this Agreement.
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(i) Severability. In the event that any provision of this Agreement
shall be held invalid, such provision shall not affect the validity of the
remainder of this Agreement, and the remainder of this Agreement shall be
construed as if the invalid provision or provisions had not been included.
(j) Entire Agreement. The parties acknowledge that no representation,
promise or inducement has been made other than as set forth in this Agreement,
and that they are not entering into this Agreement in reliance upon any
representation, promise or inducement not set forth herein. This Agreement
supersedes all prior negotiations, understandings and agreements (including the
Original Agreement which it amends and restates in its entirety) of any kind,
written or oral, with respect to the subject matter hereof and contains all of
the terms and provisions of agreement between the parties hereto with respect to
the subject matter hereof; provided, however, that nothing in this Agreement
shall supersede rights or obligations of the parties under the Original
Agreement with respect to events occurring prior to the date hereof, except that
Distributor's claims under the Original Agreement for reimbursement for
PMA-related clinical study costs under the Original Agreement shall be canceled
hereby in consideration of the transfer to Distributor of the PMA and
Distributor's claims under the Original Agreement in respect of product
replacement costs and legal expenses accrued through February 29, 2004 shall be
canceled hereby.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have executed this Agreement the day and year first above
written.
"Supplier" "Distributor"
Poly Implants Protheses, S.A. III Acquisition Corp.
By: /s/ Xxxx Xxxxxx Mas By: /s/ Xxxxxx X. XxXxxx
------------------------------- ------------------------
Title: President Title: Chairman
---------------------------- ---------------------
Address: 000 Xxxxxx xx Xxxxxxxxx Address:4560 S. Decatur Blvd
83514 La Seyne Sur Mer France Xxxxx 000
Xxx Xxxxx, XX 00000
Phone: x00 (00) 00-00-00-00 Phone: x0 (000) 000-0000
Fax: x00 (00) 00-00-00-00 Fax: x0 (000) 000-0000
Signed under the condition that the Promissory Note will conform to the
paragraph 4 (e)
