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EXHIBIT 10.10
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DISTRIBUTION AGREEMENT
Dated as of December 31, 1997
Among
XXXXXX, INC.,
LINVATEC CORPORATION
AND
CONMED CORPORATION
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TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.1. Definitions......................................................1
SECTION 1.2. Interpretation and Schedules.....................................3
ARTICLE II
Appointment as Exclusive Distributor
SECTION 2.1. Appointment of Xxxxxx as Exclusive Distributor...................4
SECTION 2.2. Transfer Price...................................................4
SECTION 2.3. Repurchase of Inventory..........................................4
SECTION 2.4. Handling of Inventory............................................4
SECTION 2.5. Performance Standards............................................5
SECTION 2.6. Renewal of the Term..............................................5
ARTICLE III
Other Services from Xxxxxx
SECTION 3.1. Marketing........................................................6
SECTION 3.2. Product Literature; Exhibits, Trade Shows, Etc.; Videotapes......6
SECTION 3.3. Supply of Products...............................................6
SECTION 3.4. Product Pricing..................................................7
SECTION 3.5. Regulatory.......................................................7
SECTION 3.6. Repairs..........................................................7
SECTION 3.7. Purchase of Demonstration Equipment..............................7
ARTICLE IV
Other Linvatec Obligations
SECTION 4.1. Warranties and Return............................................8
SECTION 4.2. Information; Technical and Regulatory Support....................8
SECTION 4.3. Insurance........................................................8
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ARTICLE V
Miscellaneous
SECTION 5.1. Intellectual Property............................................9
SECTION 5.2. Further Assurances...............................................9
SECTION 5.3. Indemnity........................................................9
SECTION 5.4. Confidentiality.................................................10
SECTION 5.5. Exclusive Appointment...........................................11
SECTION 5.6. Amendments......................................................12
SECTION 5.7. Notices.........................................................12
SECTION 5.8. Counterparts....................................................13
SECTION 5.9. Entire Agreement................................................13
SECTION 5.10. Severability...................................................13
SECTION 5.11. Governing Law..................................................13
SECTION 5.12. Assignment.....................................................13
SECTION 5.13. Term and Termination...........................................13
SECTION 5.14. Performance of Xxxxxx Obligations..............................15
SECTION 5.15. Force Majeure..................................................15
SECTION 5.16. Limitation of Liability........................................15
SECTION 5.17. Arbitration....................................................16
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DISTRIBUTION AGREEMENT, dated as of December 31, 1997
(the "Agreement"), among LINVATEC CORPORATION, a Florida
corporation ("Linvatec"), XXXXXX, INC., a Delaware corporation
("Zimmer") and CONMED CORPORATION, a New York corporation
("Buyer").
WHEREAS the Xxxxxxx-Xxxxx Squibb Company ("Seller") and Buyer have
entered into a Stock and Asset Purchase Agreement dated as of November 26, 1997,
as amended by the Amendment dated as of December 31, 1997 (the "Stock Purchase
Agreement");
WHEREAS, Xxxxxx and Linvatec have entered into a Transition and
Distribution Services Agreement dated as of the date hereof (the "Transition and
Distribution Services Agreement") to provide for certain sales and distribution
of Linvatec's products that are not covered by this Agreement and certain
transition services;
WHEREAS it is a condition to the consummation of the transactions
contemplated by the Stock Purchase Agreement that the parties execute and
deliver this Agreement;
WHEREAS Linvatec wishes during the applicable term of this Agreement
(a) to appoint Xxxxxx as the exclusive distributor of Linvatec's Hall(R)
Surgical branded large bone product lines in the U.S. and certain other Markets,
(b) to appoint Xxxxxx as the exclusive distributor in Japan and the CEE Markets
of all products manufactured by or for Linvatec and (c) to have certain other
services performed by Xxxxxx for Linvatec in connection with such distributions;
and
WHEREAS Xxxxxx wishes to accept such appointment and perform such
services through its worldwide distribution network.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions. (a) Capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Stock Purchase
Agreement:
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"Affiliate" means, with respect to any specified person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person; and for the purposes of this
definition, "control" when used with respect to any specified person means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Arthroscopy Products" means all products manufactured by or for
Linvatec at any time during the applicable Term other than the Hall(R) Surgical
branded products manufactured by or for Linvatec at any time during the
applicable Term.
"CEE Markets" means the countries and territories set forth on
Schedule 1(a).
"Direct Markets" means the countries or territories set forth on
Schedule 1(b).
"Distributors" means the Persons with which Xxxxxx has entered into
a distribution agreement with respect to the Products in the Markets at any time
during the applicable Term.
"Global Marketing Services" means, with respect to any Product in
any Market, market research, competitive analysis, product training, new product
development and development of opinion leaders.
"Large Bone Products" means all Hall(R) Surgical branded large bone
product lines, including revision instrumentation, adaptors and couplers and
vacuum hoses manufactured by or for Linvatec at any time during the applicable
Term but not including any large bone products being manufactured by Linvatec on
behalf of Xxxxxx under the Manufacturing Agreement dated the date hereof between
Linvatec and Xxxxxx (e.g., acetabular reamers) or any other large bone products
that may be manufactured by Linvatec on behalf of Xxxxxx on an original
equipment manufacturer (OEM) basis from time to time.
"Linvatec Products" means all products manufactured by or for
Linvatec at any time during the applicable Term.
"Local Marketing Services" means, with respect to any Market,
customer service, sales support, support of individual local surgeons,
participation or sponsorship of medical society or other medical organization
meetings and participation in medical symposia, workshops, exhibits and trade
shows, in each case consistent with Xxxxxx'x
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past practice in such Market. Such services include providing the administrative
and logistical support necessary for sponsorship or participation in such
meetings, exhibits and such similar events.
"Markets" means the United States, Japan and the countries in the
CEE Markets and Direct Markets.
"Person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, governmental entity or other
entity.
"Products" means (i) with respect to the United States and Direct
Markets, Large Bone Products and (ii) with respect to Japan and CEE Markets,
Linvatec Products.
"Product Category" means (i) with respect to the United States and
Direct Markets, the Large Bone Products category and (ii) with respect to Japan
and the CEE Markets, the Large Bone Products, the Small Bone/Specialty Products
and the Arthroscopy Products categories.
"Small Bone/Specialty Products" means all Hall(R) Surgical branded
small bone and specialty product lines manufactured by or for Linvatec at any
time during the applicable Term.
"Term" means (a) with respect to (i) Large Bone Products in the
U.S., Japan and CEE Markets and (ii) Small Bone/Specialty Products and
Arthroscopy Products in Japan and the CEE Markets, the period from and including
the date hereof to and including the date three years from the date hereof,
unless terminated prior to such time pursuant to the terms set forth in Section
5.13; and (b) with respect to Large Bone Products in the Direct Markets, the
period from and including the date hereof to and including the date two years
from the date hereof, unless terminated prior to such time pursuant to the terms
set forth in Section 5.13.
(b) The following terms have the meanings set forth in the Sections
listed below:
Term Section
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Agreement Preamble
Buyer Preamble
Confidential Linvatec Information 5.4(b)
Confidential Xxxxxx Information 5.4(a)
Force Majeure Event 5.15
indemnified party 5.3(b)
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Linvatec Preamble
New Transfer Prices 2.6
Performance Standards 2.5
Product Literature 3.2(a)
Renewal Term 2.6
Seller Preamble
Statement 3.1(b)
Stock Purchase Agreement Preamble
Third Party Claim 5.3(b)
Transition and Distribution
Services Agreement Preamble
Xxxxxx Preamble
SECTION 1.2. Interpretation and Schedules. (a) The headings
contained in this Agreement, in any Schedule hereto and in the table of contents
to this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. All references to the term
"including" shall be deemed to be followed by "without limitation".
(b) All Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized term used in any Schedule but not otherwise defined
therein, shall have the meaning as defined in this Agreement.
ARTICLE II
Appointment as Exclusive Distributor
SECTION 2.1. Appointment of Xxxxxx as Exclusive Distributor. (a)
Linvatec hereby appoints Xxxxxx, and Xxxxxx hereby accepts the appointment, as
Linvatec's exclusive distributor during the applicable Term of (i) the Large
Bone Products in the Markets and (ii) the Small Bone/Specialty Products and the
Arthroscopy Products in Japan and the CEE Markets.
(b) It is acknowledged and agreed that Xxxxxx shall perform its
obligations as exclusive distributor pursuant to Section 2.1(a) in its sole
discretion through a direct sales force, Distributors or a combination of a
direct sales force and Distributors.
SECTION 2.2. Transfer Price. (a) During the applicable Term,
Linvatec agrees to sell the Products to Xxxxxx for sale in the applicable
Markets, and Xxxxxx
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agrees to buy the Products from Linvatec for Xxxxxx'x own account, at the
transfer prices set forth on Schedule 2.2(a).
(b) Xxxxxx shall pay Linvatec the full amount of the transfer prices
applicable to each shipment of Products ordered by Xxxxxx (other than the
Non-U.S. Inventory) within 45 calendar days after receipt of the invoice.
Payment of the transfer prices for the Non-U.S. Inventory being distributed
under this Agreement shall be made pursuant to Section 2.2(b) of the Transition
and Distribution Services Agreement. All payments of transfers prices by Xxxxxx
to Linvatec shall be in U.S. dollars.
SECTION 2.3. Repurchase of Inventory. Upon expiration or termination
of the Term with respect to any Product Category in any Market, Linvatec shall
repurchase Xxxxxx'x inventory of Products in such Product Category in such
Market within 60 calendar days of such expiration or termination at the transfer
prices applicable to such inventory, net of reserves for obsolete and
slow-moving goods (as determined in accordance with Xxxxxx'x accounting
policies), plus freight charges and expenses (and with respect to Markets other
than the United States, duty and customs charges and expenses). Delivery of such
inventory returned to Linvatec shall be F.O.B. the storage location of such
inventory. In the event Linvatec defaults in its obligations to repurchase
Xxxxxx'x inventory of Products, without prejudice to any of Xxxxxx'x other
remedies, Xxxxxx shall be entitled to sell such inventory in any manner it deems
appropriate. In any case, after expiration or termination of the applicable
Term, Xxxxxx shall be entitled to sell any Products for which it has accepted
firm orders, consistent with past practice.
SECTION 2.4. Handling of Inventory. Xxxxxx shall not, and shall
cause the Distributors not to, alter or tamper with any labels, descriptive
marks, packing, promotional materials, bottles or containers in which or with
which the Products are supplied, or make any modification of the Products except
as required for compliance with local law or otherwise consistent with past
practice. Xxxxxx shall permit Linvatec at reasonable times to enter any one of
the warehouses at which the Products are stored for purposes of inspection,
sampling or testing of the Products.
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SECTION 2.5. Performance Standards. In the event that Xxxxxx does
not maintain aggregate sales for the Large Bone Products in the U.S. and
Linvatec Products in Japan in the amounts indicated next to each of the years as
set forth in the chart below (the "Performance Standards"), Linvatec shall have
the right to terminate pursuant to Section 5.13(f); provided that a failure to
meet the performance standards set forth in the chart below resulting from
reasons beyond the control of Xxxxxx shall not be deemed a breach of the
Performance Standards:
United States Japan(1)
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Year Aggregate Xxxxxx Year Aggregate Xxxxxx
Sales of Products Sales of Products
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1998 Same as sales in 1998 6% increase in
1997 based on the sales over the sales
Statement for 1997 in 1997 stated in
the Statement for
1997
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1999 10% increase in 1999 6% increase in
sales over the sales sales over the sales
in 1997 stated in in 1998 stated in
the Statement for the Statement for
1997 1998
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SECTION 2.6. Renewal of the Term. (a) With respect to all the
Markets except the Direct Markets, at any time one year before the end of the
applicable Term, Xxxxxx and Linvatec shall negotiate in good faith the renewal
term (the "Renewal Term") for this Agreement and any modifications to the
transfer prices (the "New Transfer Prices") set forth in this Agreement. If the
parties hereto do not reach agreement on the Renewal Term and the New Transfer
Prices on or prior to the date one year before the end of the applicable Term,
this Agreement shall automatically expire upon the end of the applicable Term.
(b) With respect to the Direct Markets, at any time six months
before the end of the applicable Term, Xxxxxx and Linvatec shall negotiate in
good faith the Renewal Term and any modifications to the New Transfer Prices. If
the parties hereto do not reach agreement on the Renewal Term and the New
Transfer Prices on or prior to the date six months before the end of the
applicable Term, this Agreement shall automatically expire upon the end of the
applicable Term.
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(1) Aggregate sales of Products calculated based on sales to customers by
Xxxxxx in Yen.
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ARTICLE III
Other Services from Xxxxxx
SECTION 3.1. Marketing. (a) It is acknowledged and agreed that in
the Markets other than the United States, Linvatec shall provide all Global
Marketing Services, and Xxxxxx shall provide all Local Marketing Services.
Linvatec shall cooperate with Xxxxxx in connection with the Local Marketing
Services, in each case consistent with past practice. It is acknowledged and
agreed that in the U.S., Linvatec shall provide for (i) all Global Marketing
Services and (ii) on a national level, participation or sponsorship of medical
society or other medical organization meetings and participation in medical
symposia, workshops, exhibits and trade shows, in each case consistent with past
practice. Xxxxxx shall provide Local Marketing Services, except the services
referred to in Section 3.1(a)(ii), consistent with past practice. Each party
shall bear its own costs and expenses in providing such services.
(b) Xxxxxx shall provide to Linvatec within 90 calendar days of June
30 and December 31 each calendar year a semi-annual statement (a "Statement") of
its Product sales for the Markets during the previous six months. In addition,
Xxxxxx shall provide Linvatec with a Statement for the twelve month period
ending December 31, 1997. Furthermore, Xxxxxx shall consult with Linvatec
periodically as reasonably requested by Linvatec regarding activities of
third-party competition and such other facts and data relating to the
distribution of Products hereunder as may reasonably be requested by Linvatec,
provided that such consultation does not unreasonably disrupt the normal
operations of Xxxxxx.
SECTION 3.2. Product Literature; Exhibits, Trade Shows, Etc.;
Videotapes. (a) Product Literature. With respect to the Products, Linvatec shall
from time to time furnish to Xxxxxx, at Linvatec's expense, in reasonable
quantities, literature, catalogs and technical brochures in English
(collectively, "Product Literature") for the Markets. Xxxxxx shall arrange
reprinting of local language literature, catalogs and technical brochures, as
necessary, as well as provide local language translation services, as necessary,
in each case at its own expense. Linvatec shall cooperate with Xxxxxx with
respect to such reprinting or translation efforts. Xxxxxx shall provide Product
Literature distribution services for the Products in the Markets.
(b) Exhibits, Trade Shows, Etc. Linvatec shall cooperate with Xxxxxx
to provide necessary personnel for the exhibits, trade shows, meetings and other
activities in
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connection with Xxxxxx'x Local Marketing Services, as well as the technical
information and other services reasonably requested by Xxxxxx.
(c) Videotapes. Linvatec will provide English language videotapes
with respect to Products or the Linvatec business to Xxxxxx, consistent with
past practice. Linvatec shall cooperate with Xxxxxx in providing local language
translation of such videotapes, at Xxxxxx'x expense, as Xxxxxx deems necessary
or desirable.
SECTION 3.3. Supply of Products. Linvatec agrees to supply Xxxxxx
and the Distributors, as applicable, Products consistent with past practices;
provided that with respect to Products delivered to the warehouses of Xxxxxx,
Linvatec shall be responsible for delivery of the Products F.O.B. the source
plant of the Products. Xxxxxx shall pay all costs and expenses associated with
such delivery, including shipping, freight, insurance, transfer taxes, duty and
customs expenses. Title and risk of loss to the Products shall pass to Xxxxxx
upon delivery to Xxxxxx at the source plant of the Products.
SECTION 3.4. Product Pricing. Xxxxxx shall determine prices for
Products in the Markets in its sole discretion.
SECTION 3.5. Regulatory. Xxxxxx and Linvatec shall cooperate (a) to
maintain and obtain any necessary registrations of the Products with local
health or other regulatory authorities of the Markets other than the U.S. that
may be required under applicable law in such Markets and (b) to comply with all
other regulatory requirements in the such Markets, in each case consistent with
past practice. Linvatec shall be responsible for all Product registration and
regulatory compliance in the United States, CE marking in Europe, local language
labeling in all the Markets and such other compliance matters as are consistent
with past practice.
SECTION 3.6. Repairs. (a) In the United States, Linvatec shall make
available repair services for Linvatec Products. In Japan, Xxxxxx will make
available repair services to all customers at prices that it shall determine in
its sole discretion from time to time; provided that Linvatec will continue to
make available repair services outside the United States in certain Markets
consistent with past practice and further provided that Linvatec shall make
repairs for Linvatec Products to the extent Linvatec establishes repair
facilities in the Markets other than the United States and Japan, in each case
at prices that it shall determine in its sole discretion from time to time.
During the applicable Term, Linvatec shall sell to Xxxxxx repair replacement
parts for Products for use in Xxxxxx'x repair services in Markets outside the
United States at the transfer prices set forth on Schedule 2.2(a) applicable to
such Product in such Market at the time such repair replacement parts are
bought. Linvatec shall be responsible for delivery of such parts F.O.B. the
source plant of such parts. Xxxxxx shall pay all costs and expenses
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associated with such delivery, including shipping, freight, insurance, transfer
taxes, duty and customs expenses. Title and risk of loss to the repair and
replacement parts for the Products shall pass to Xxxxxx upon delivery to Xxxxxx
at the source plant of such repair or replacement parts.
(b) During the applicable Term and for six months thereafter, in the
event Linvatec discontinues the manufacture of any of the Products, Linvatec
shall continue, for a period of time after such discontinuance, consistent with
past practice, to make available to Xxxxxx repair services and replacement parts
for such discontinued Products on the terms set forth in Section 3.6(a), to the
extent reasonably anticipated by Linvatec to be necessary to service such
discontinued Products previously supplied by Linvatec pursuant to the terms of
this Agreement.
SECTION 3.7. Purchase of Demonstration Equipment. Linvatec shall
sell to Xxxxxx or the Distributors at standard cost demonstration equipment for
Products from time to time during the applicable Term as reasonably ordered by
Xxxxxx or the Distributors, consistent with past practice.
ARTICLE IV
Other Linvatec Obligations
SECTION 4.1. Warranties and Return. (a) Linvatec shall warrant the
Products in accordance with Linvatec's standard worldwide warranty in effect
from time to time; provided, however, that Linvatec shall not change the terms
of the Product warranties in effect at the date hereof with respect to Products
sold in any Market if such change would render Xxxxxx unable to sell Products in
such Market in accordance with applicable law or regulation or commercial
custom. Xxxxxx will deliver to Linvatec not later than the last day of each
month a statement setting forth the types and quantities of Products sold by it
in each Market during the preceding month and showing the serial numbers of the
Products, if any, and all other information required in order to permit
Linvatec's warranty to be honored.
(b) Linvatec shall accept all returns of defective Products that are
returned in a reasonable amount of time and credit Xxxxxx for such returns.
Xxxxxx shall pay all costs and expenses associated with such return, including
shipping, freight, insurance, transfer taxes, duty and customs expenses.
Linvatec shall promptly reimburse Xxxxxx for any such costs or expenses incurred
by Xxxxxx within 45 calendar days of receiving an invoice therefor. Title and
risk of loss to such returned defective Products shall pass to Xxxxxx upon
delivery to Linvatec at the location from which such defective Products are
shipped.
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(c) Xxxxxx shall not have any reimbursement obligation for Products
(whether sold before, on or after the date hereof) which are returned pursuant
to a Product warranty or guarantee. If a Product returned pursuant to a Product
warranty or guarantee results in a credit against an accounts receivable
maintained by Xxxxxx with respect to a Product sold by Xxxxxx prior to the date
hereof, Linvatec shall reimburse Xxxxxx for the price paid by Xxxxxx to Linvatec
for such Product.
(d) During the applicable Term, in the event Products sold by Xxxxxx
are returned by a customer directly to Linvatec, Linvatec shall notify Xxxxxx of
such return within 5 calendar days. After the applicable Term, Xxxxxx shall
continue to be responsible for all refunds or the costs of any exchange of
Products sold by it prior to the date hereof that are not covered by a warranty
or guarantee of Linvatec or otherwise expressly required to be paid by Linvatec
under this Agreement.
SECTION 4.2. Information; Technical and Regulatory Support. Linvatec
shall make available on a timely basis to Xxxxxx all information that Xxxxxx
reasonably requests to perform Xxxxxx'x obligations hereunder. Linvatec shall
provide to Xxxxxx, at Linvatec's expense, such regulatory and technical
assistance as Xxxxxx may reasonably request for the promotion, sale and
servicing of the Products.
SECTION 4.3. Insurance. Linvatec shall at all times from the date
hereof to the last to end of the Terms maintain, at no cost to Xxxxxx, annual
product liability insurance covering all Products supplied by Linvatec pursuant
to the terms of this Agreement with aggregate annual coverage of at least
$25,000,000 (which policy shall name Xxxxxx as an additional insured and shall
cover all claims incurred or arising out of or relating to events that occurred
during the period from the date hereof to the last to end of the Terms).
ARTICLE V
Miscellaneous
SECTION 5.1. Intellectual Property. During the applicable Term,
Linvatec hereby grants to Xxxxxx a nonexclusive license to use the Intellectual
Property to the extent necessary to satisfy its obligations under this
Agreement.
SECTION 5.2. Further Assurances. The parties agree to execute and
deliver all such documents and instruments and shall take all such further other
actions as may be reasonably necessary or desirable to consummate the
transactions contemplated hereby.
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SECTION 5.3. Indemnity. (a) Product Liability. Linvatec shall
indemnify Xxxxxx, its Affiliates (including Seller) and each of their respective
officers, directors, employees, stockholders, agents and representatives against
and hold them harmless from any loss, liability, claim, damage or expense
(including reasonable legal fees and expenses) suffered or incurred by any such
indemnified party for any Third party claims arising from or in connection with
the design, manufacture or use of the Products sold by Xxxxxx during the
applicable Term, including claims for injury or death to any person or damage to
property, except to the extent that such claims and expenses result from the
gross negligence of Xxxxxx.
(b) Procedures Relating to Indemnification for Third Party Claims.
In order for a party (the "indemnified party") to be entitled to any
indemnification provided for under Section 5.3(a) in respect of, arising out of
or involving a claim or demand made by any person against the indemnified party
(a "Third Party Claim"), such indemnified party must notify the indemnifying
party in writing, and in reasonable detail, of the Third Party Claim within 30
calendar days after receipt by such indemnified party of written notice of the
Third Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure (except that the indemnifying party shall not be liable for any expenses
incurred during the period in which the indemnified party failed to give such
notice). Thereafter, the indemnified party shall deliver to the indemnifying
party, promptly after the indemnified party's receipt thereof, copies of all
notices and documents (including court papers) received by the indemnified party
relating to the Third Party Claim.
If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses and acknowledges its obligation to indemnify the indemnified
party therefor, to assume the defense thereof with counsel selected by the
indemnifying party; provided that such counsel is not reasonably objected to by
the indemnified party. Should the indemnifying party so elect to assume the
defense of a Third Party Claim, the indemnifying party shall not be liable to
the indemnified party for legal fees and expenses subsequently incurred by the
indemnified party for separate counsel in connection with the defense thereof.
If the indemnifying party assumes such defense, the indemnified party shall have
the right to participate in the defense thereof and to employ counsel (not
reasonably objected to by the indemnifying party), at its own expense, separate
from the counsel employed by the indemnifying party, it being understood that
the indemnifying party shall control such defense. The indemnifying party shall
be liable for the fees and expenses of counsel employed by the indemnified party
for any period during which the indemnifying party has failed to assume the
defense thereof (other than during the period prior to the time the indemnified
party shall have given notice of the Third Party Claim as provided above).
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If the indemnifying party so elects to assume the defense of any
Third Party Claim, all of the indemnified parties shall cooperate with the
indemnifying party in the defense or prosecution thereof, subject to the other
party's confidentiality obligations under this Agreement. Such cooperation shall
include the retention and (upon the indemnifying party's request) the provision
to the indemnifying party of records and information which are reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Whether or not the indemnifying party shall have
assumed the defense of a Third Party Claim, the indemnified party shall not
admit any liability with respect to, or settle, compromise or discharge, such
Third Party Claim without the indemnifying party's prior written consent (which
consent shall not be unreasonably withheld).
SECTION 5.4. Confidentiality. (a) Linvatec and Buyer agree that each
of them shall keep confidential and not disclose to any third party, except as
it is necessary in carrying out the purpose of this Agreement, during the period
from the date hereof and to the last to end of the Terms and for three years
thereafter the terms of this Agreement or any information of a proprietary
nature relating to the business or operations of Xxxxxx or its Affiliates,
including technology, specifications, product information, data, inventions,
processes, know-how, trade secrets and information disclosed pursuant hereto
(together, "Confidential Xxxxxx Information") furnished to Buyer or Linvatec by
Xxxxxx in connection with this Agreement, except Confidential Xxxxxx Information
that:
(i) at the time of disclosure is in the public domain or publicly
known or available (other than as a result of a disclosure directly or
indirectly by Linvatec or Buyer or any of their Affiliates in violation of
the terms of any confidentiality agreement involving Linvatec or Buyer or
any of their Affiliates on the one hand and Xxxxxx or any of its
Affiliates on the other hand);
(ii) was available to Linvatec or Buyer on a non-confidential basis
from a third party; provided that the Confidential Xxxxxx Information was
not obtained by such third party from Linvatec or Buyer or their
Affiliates; or
(iii) Linvatec or Buyer derives independently of such furnishment of
Confidential Xxxxxx Information.
In the event that Linvatec or Buyer become legally compelled (by
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or similar process or otherwise) to disclose any of the Confidential
Xxxxxx Information, Linvatec or Buyer shall provide the counsel of Xxxxxx with
prompt written notice of such requirement so that Xxxxxx may seek a protective
order or other appropriate remedy
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and/or waive compliance with the terms of this agreement. In the event that such
protective order or other remedy is not obtained, or that Xxxxxx waives
compliance with the provisions hereof, Linvatec or Buyer agrees to furnish only
that portion of the Confidential Xxxxxx Information which Linvatec or Buyer is
advised by opinion of counsel is legally required and to exercise best efforts
to obtain assurance that confidential treatment will be accorded such
Confidential Xxxxxx Information.
(b) Xxxxxx agrees that it shall keep confidential and not
disclose to any third party, except as it is necessary in carrying out the
purpose of this Agreement, during the period from the date hereof and to the
last to end of the Terms and for three years thereafter the terms of this
Agreement or any information of a proprietary nature relating to Linvatec's
business or operations, including technology, specifications, product
information, data, inventions, processes, know-how, trade secrets and
information disclosed pursuant hereto (together, "Confidential Linvatec
Information") furnished to Xxxxxx by Linvatec in connection with this Agreement,
except Confidential Linvatec Information that:
(i) at the time of disclosure is in the public domain or
publicly known or available (other than as a result of a disclosure
directly or indirectly by Xxxxxx or any of its Affiliates in violation
of the terms of any confidentiality agreement involving Linvatec or
Buyer or any of their Affiliates on the one hand and Xxxxxx or any of
its Affiliates on the other hand);
(ii) was available to Xxxxxx on a non-confidential basis from
a third party; provided that the Confidential Linvatec Information was
not obtained by such third party from Xxxxxx or its Affiliates; or
(iii) Xxxxxx derives independently of such furnishment of
Confidential Linvatec Information.
In the event that Xxxxxx becomes legally compelled (by
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or similar process or otherwise) to disclose any of the Confidential
Linvatec Information, Xxxxxx shall provide the counsel of Linvatec with prompt
written notice of such requirement so that Linvatec may seek a protective order
or other appropriate remedy and/or waive compliance with the terms of this
agreement. In the event that such protective order or other remedy is not
obtained, or that Linvatec waives compliance with the provisions hereof, Xxxxxx
agrees to furnish only that portion of the Confidential Linvatec Information
which Xxxxxx is advised by opinion of counsel is legally required and to
exercise best efforts to obtain assurance that confidential treatment will be
accorded such Confidential Linvatec Information.
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SECTION 5.5. Exclusive Appointment. During the applicable
Term, in the relevant Markets, Linvatec shall not appoint any distributor or
agent (or similar entity) other than Xxxxxx or supply Products to any Person
other than Xxxxxx or the Distributors whether for use or resale.
SECTION 5.6. Amendments. No amendment to this Agreement shall
be effective unless it shall be in writing and signed by the party against whom
enforcement is sought.
SECTION 5.7. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally or sent by prepaid telex, cable or telecopy, or sent, postage
prepaid, by registered, certified or express mail (return receipt requested) or
reputable overnight courier service and shall be deemed given when so delivered
by hand, telexed, cabled or telecopied, or if mailed, 3 calendar days after
mailing (one business day in the case of express mail or overnight courier
service) to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(i) if to Linvatec,
Linvatec Corporation
00000 Xxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Attention: President
with a copy to:
CONMED Corporation
000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Attention: General Counsel
(ii) if to Buyer,
CONMED Corporation
000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Attention: General Counsel
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(iii) if to Zimmer,
Zimmer, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
with a copy to:
Xxxxxxx-Xxxxx Squibb Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
and a copy to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxxx, Esq.
SECTION 5.8. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties.
Counterparts may be delivered by facsimile.
SECTION 5.9. Entire Agreement. This Agreement, together with
the Stock Purchase Agreement, contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings. Nothing in this Agreement
shall be deemed to amend, modify or in any way affect the Stock Purchase
Agreement.
SECTION 5.10. Severability. If any provision of this Agreement
(or any portion thereof) or the application of any such provision (or any
portion thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstances.
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SECTION 5.11. Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such state.
SECTION 5.12. Assignment. Neither party may assign its rights
or obligations under this Agreement to any party without the prior written
consent of the other party; provided, however, that either party may assign its
rights or obligations under this Agreement to a wholly owned subsidiary or an
Affiliate of such party.
SECTION 5.13. Term and Termination. (a) This Agreement may be
terminated (i) by either Xxxxxx or Linvatec (A) upon the commencement by any
party of an involuntary proceeding or the filing by any party of an involuntary
petition seeking (1) liquidation, reorganization or other relief in respect of
such party or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (2) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for such party for a
substantial part of their assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered, (B) if such other party shall
(1) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(2) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in the preceding clause
(A), (3) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for such party for a
substantial part of its assets, (4) file an answer admitting the material
allegations of a petition filed against it in any such proceedings, (5) make a
general assignment for the benefit of creditors or (6) take any action for the
purpose of effecting any of the foregoing; or (ii) by either Xxxxxx or Linvatec
if the other party (or by Xxxxxx if Buyer) is in material breach of any
provision of this Agreement (the failure by Xxxxxx to satisfy the performance
standards set forth in Section 2.5 in the relevant Market required for any year
being deemed by the parties hereto a material breach of this Agreement by Xxxxxx
unless Linvatec is in material breach of this Agreement at such time); provided,
however, that in the case of clause (i), the Agreement shall automatically
terminate upon the occurrence of any event specified therein and in the case of
clause (ii) (A) the party seeking to terminate this Agreement shall notify such
other party in writing of such breach (a "Notice of Breach"), (B) such other
party shall have 30 days from the receipt of such Notice of Breach to commence
remedying such breach and (C) if such party does not commence remedying such
breach within such 30 days or if, at the end of such 30 day period, it is not
reasonably likely that such breach is capable of being cured within 60 days
thereafter, the party seeking to terminate this Agreement may terminate this
Agreement with respect to any Product Category (and not with respect to a
Product) or any Market (and not with respect to any
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subdivision thereof) with respect to which the other party is in breach at any
time thereafter by giving such other party, (1) in the case of the Large Bone
Products category in the United States and Large Bone Products, Small
Bone/Specialty Products and Arthroscopy Products categories in the CEE Markets
and Japan, three months written notice of such termination and (2) in the case
of the Large Bone Products category in the Direct Markets, three months written
notice of such termination, in each case unless such breach shall have been
cured prior to the receipt of such written notice by such other party; and
provided, further, however, that in the case of clause (ii), if Xxxxxx is only
in material breach under Section 2.5 as described in the parenthetical in clause
(ii) with respect to either the United States or Japan but not both, Linvatec
may only terminate this Agreement with respect to distribution in the United
States or Japan, whichever it is in breach with respect to.
(b) Shortly before and a reasonable time after the expiration
or termination of the Term with respect to any Market, Xxxxxx shall cooperate
with Linvatec in connection with the transfer of the distribution function from
Xxxxxx to Linvatec or to such entities as Linvatec shall designate in the
Markets, including transferring (i) all artwork and sales literature used
exclusively in connection with the sale of the Products in such terminated or
expired Market, (ii) the applicable customer lists in Xxxxxx'x possession that
relate solely to the sale of Products in the Markets and (iii) the necessary
licenses, permits and registrations, to Linvatec or an entity designated by
Linvatec; provided, however, that Xxxxxx will not be obligated to assign all or
any part of the distributor agreements with Xxxxxx'x distributors in the U.S.
and Canada.
(c) Upon the end of the Term in any Market, Linvatec shall
purchase all demonstration Products in such Market then owned by Xxxxxx at the
net book value (determined in accordance with Xxxxxx'x accounting policies) of
such Products.
(d) Except as otherwise set forth above, the rights and
obligations pursuant to Articles II and III shall terminate and expire on the
last day of the applicable Term except for those rights and obligations which
refer to periods thereafter.
SECTION 5.14. Performance of Xxxxxx Obligations. Linvatec
acknowledges and agrees that Xxxxxx may perform its obligations under this
Agreement through one or more of its subsidiaries, Distributors and Affiliates.
SECTION 5.15. Force Majeure. In case performance of any terms
or provisions hereof shall be delayed or prevented, in whole or in part, because
of or related to compliance with any law, decree, request or order of any
governmental agency or authority, either local, state, federal or foreign, or
because of riots, war, public disturbance, strike, lockout, fire, explosion,
storm, flood, acts of God, accidents of navigation, breakdown or failure of
transportation or of transportation, manufacturing,
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distribution, storage or processing facilities, or for any other reason which is
not within the control of the party whose performance is interfered with and
which by the exercise of reasonable diligence such party is unable to prevent
(each, a "Force Majeure Event"), the party so suffering may at its option
suspend deliveries or receipts or discontinue performance of services during the
period such cause continues, and no liability shall attach against either party
on account thereof. If a Force Majeure Event occurs, Linvatec may apportion its
available supply of Products among its customers on an equitable basis without
incurring liability for failure to perform this Agreement. No party shall be
excused from performance if such party fails to use reasonable diligence to
remedy the situation and remove the cause and effect of the Force Majeure Event
in an adequate manner and with reasonable dispatch; provided, however, that
nothing contained herein shall require the settlement of strikes or labor
controversies by acceding to the demands of the opposing party or parties.
Notwithstanding the foregoing, Xxxxxx shall not be relieved of the obligation to
pay for Products title to which have passed to Xxxxxx.
SECTION 5.16. Limitation of Liability. None of the parties
hereto (or its Affiliates) or its respective directors, officers, employees or
agents shall be liable to the other for indirect, consequential or punitive
damages in connection with the performance of this Agreement, even if it has
been advised of the possibility of such damages, and each party hereby waives
any claim for such damages, including any claim for property damage or lost
profits, whether arising in contract, tort or otherwise.
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SECTION 5.17. Arbitration. Any dispute between the parties
hereto shall be subject to binding arbitration under the Commercial Arbitration
Rules of the American Arbitration Association in a mutually agreeable, neutral
location.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first written above.
CONMED CORPORATION
(a signatory only with respect to Section 5.4),
by /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President -- Legal Affairs
LINVATEC CORPORATION,
by /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
XXXXXX, INC.,
by /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
