CO-DISIRIBUTION AGREEMENT
This CO-DISTRIBUTION AGREEMENT, effective as of 6-26-98, by and between
PHARMACIA & UPJOHN COMPANY, a corporation organized and existing under the laws
of the state of Delaware, with offices at 0000 Xxxxxxx Xxxx, Xxxxxxxxx, XX,
00000, ("P&U"), and NATIONAL HEALTHCARE MANUFACTURING CORPORATION, a corporation
organized and existing under the laws of Manitoba, with offices at 000 Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx, XX XXXXXX ("NHMC"), and PARADIGM MEDICAL INDUSTRIES, INC., a
corporation organized and existing under the laws of the state of Delaware, with
offices at 0000 Xxxx 0000 Xxxxx, Xxxxx X, Xxxx Xxxx Xxxx, XX 00000,
("PARADIGM").
WHEREAS, PARADIGM manufactures, markets, sells, and distributes Precisionist
30,00OTm phacoemulsification equipment ("Phaco Machine"), and
WHEREAS, P&U manufactures, markets, sells, and distributes Ceeon intraocular
lenses ("IOLs") and Healon lenses ("Viscoelastics"), and Cat Packs (CeeOn and
Healon combined); and
WHEREAS, NHMC manufactures custom procedural packs; and
WHEREAS, P&U , PARADIGM and NI-IMC wish to enter into a Co-Distribution
Agreement for the distribution of a package to physicians including IOL'S,
viscoelastics, custom procedural packs, and phaco kits , in conjunction with the
sale of a Phaco Machine.
NOW, THEREFORE, the Parties hereby agree as follows:
Section 1. Definitions
1.1 "Alliance" refers to the combined group of companies: P&U, NHMC and
PARADIGM supplying their respective products and or services to target
customers in the ophthahnic surgical supply market The trade name
utilized by the Alliance shall be PARADIGM Pharmacia & Upjohn Alliance
C'PPUI..
1.2 "Alliance Management Team" shall mean a group composed of a
representative from each of the three Alliance companies. Such Alliance
Management Team shall meet quarterly to develop a Business & Marketing
Plan and to manage Alliance activities. PARADIGM's representative shall
be charged with taking of minutes at each such meeting.
1.3 "Package" shall mean the products purchased by PARADIGM hereunder
including IOL's viscoelastics, custom procedural packs and phaco kits,
in conjunction with the sale of a Phaco Machine for sale to customers
on a per procedure basis.
1.4 "Consignment Inventory" shall mean the beginning inventory of IOL's
provided by P&U.
Section 2. Structure
The cooperation between the Parties as set forth in this Agreement will not
constitute nor be construed as constituting a partnership or a relationship of
agent and principal. No Party shall, under any circumstances act as or represent
itself to be a partner, agent or a representative of the other. No Party shall
have any responsibility for the firing, compensation, or employee benefits of
any Party's employees. No employee or representative of any Party shall have any
authority to bind or obligate the other Parties to this Agreement for any sum or
in any manner whatsoever, or to create or impose a contractual or other
liability on any other Party without said Party's authorized written approval.
For all purposes, and notwithstanding any other provision of this Agreement to
the contrary, the legal relationship of the Parties under this Agreement shall
be that of independent contractors.
Section 3. P&U Obligations
3.1 P&U will sell its IOLs and Viscoelastics directly to PARADIGM.
3.2 P&U will offer discount prices to PARADIGM based on the volume of
lenses ordered per Exhibit B attached hereto, and will note the
discount or the price, net discount on the product invoice. In the
event P&U has an obligation to provide this information to its
customers it shall so notify PARADIGM.
3.3 P&U will not be directly involved with the marketing or pricing of the
Package other than to ship directly the IOLs and Viscoelastics to
purchasers of the Packages and to assist PARADIGM in identifying
potential customers for the Package or selected components thereof, for
follow-up by PARADIGM's sales representatives.
3.4 P&U's role in this Agreement shall be confined to assisting in
distribution of the Package and providing limited marketing assistance
in the form of potential customer identification
3.5 P&U will set up a compliance program to review all correspondence and
sales documentation relating to this Agreement.
Section 4. PARADIGM's Obligations
4.1 PARADIGM shall secure and maintain all Regulatory Files and other
requirements necessary for marketing and selling the Package in
accordance with @ Agreement. PARADIGM shall promptly notify P&Us
Regulatory Affairs Department upon being contacted by the FDA or any
governmental agency for any regulatory purpose pertaining to the
Package as it affects this Agreement.
4.2 PARADIGM represents and warrants that the Package, its labels and
labeling as well as all sales, advertising, promotional and mailing
materials shall conform to the FDA approved labeling and will comply
with all applicable laws and regulations. Further PARADIGM will be
responsible for complying with any requirements under the anti-kickback
statute and regulations thereunder, and related health care fraud
statutes.
4.3 PARADIGM shall, at its sole discretion, develop and prosecute all
regulatory filings, labeling requirements, regulatory reporting duties,
price approvals for reimbursement purposes, and post-marketing
regulatory obligations.
4.4 Except as otherwise provided in this Agreement, PARADIGM shall retain
exclusive authority and responsibility for handling any disputes and
law suits with any regulatory agency, as well as with patients and
customers, and other third parties regarding advertising and promotion
provided by PARADIGM and other activity for which PARADIGM is
responsible hereunder.
4.5 Except for the setup and auditing of the Consignment Inventory,
PARADIGM shall be solely responsible for supplying components of the
Package and for the pricing of the Package and will sell the IOL's and
Viscoelastics to physicians as part of the Package, which may include
Viscoelastics, custom procedural packs and phaco kits.
4.6 PARADIGM will supply the Package to physicians as part of the Pack
Usage Agreement in the form set forth in Attachment "A", for purchasers
of PARADIGM's Phaco Machines.
4.7 PARADIGM or its Agent shall be solely responsible for billing of
customers, collecting payments from customers, and for all relations
with customers concerning the Package unless otherwise required by law
or regulation. Further, PARADIGM will include on its customer invoices
that it is charging for the IOL's as part of the Package for hospitals.
4.8 PARADIGM agrees not to distribute any promotional materials regarding
P&U's Products without P&U's prior written consent and approval.
4.9 PARADIGM shall promptly notify P&U and NHMC of changes in or affecting
the Package or its terms and conditions of sales.
4.10 PARADIGM will pay P&U and NHMC within sixty (60) days of shipment of
Products to its Alliance customers.
4.11 PARADIGM will supply IOL model, serial number and label on each
reorder.
Section 5 NHMC Obligations
5.1 NHMC will sell its standard and custom procedure trays directly to
PARADIGM.
5.2 NHMC will provide quotes within three (3) to five (5) business days of
request.
5.3 NHMC will provide prototypes within two (2) to three (3) weeks from
request.
5.4 NHMC will maintain on hand inventory of "Standard trays" for immediate
delivery.
5.5 NHMC will produce and ship custom packs within sixty to ninety (60-90)
days of order.
5.6 NHMC will return at its expense any damaged or defective product caused
by them.
5.7 NHMC will provide no-charge prototypes on qualified opportunities.
5.8 NHMC will provide Alliance management and sales representative
training.
Section 6. Accounting Reports
PARADIGM and its Agent agree to keep true and accurate records. P&U and NHMC by
and through its authorized representatives shall have the right upon reasonable
notice, to conduct audits of all of the relevant books and records of PARADIGM
or its Agent which are directly related to the promotion and sale of the
Package.
Section 7. Adverse Reactions
7.1 PARADIGM shall be responsible for filing with the FDA any Package
related accident or incident reports which it receives directly from
third parties or from P&U and NHMC..
7.2 Product Recall
7.2.1 In the event that one of the Parties determines that an event,
incident, or circumstance has occurred which may result in the
need for a "recall" or "market withdrawal", as such terms are
defined in a 21 CFR 7.3, of any components of the Package,
such Party shall advise the others and the Parties shall
consult with respect thereto.
7.2.2 PARADIGM will be responsible for activities associated with
any recall or withdrawal from the market at PARADIGM's expense
for communication and notification. Each Party will be
responsible for expenses related to their Product.
Section 8. Warranties and Indemnification
8.1 Indemnification by PARADIGM. PARADIGM shall defend, indemnify and hold
harmless P&U and NHMC and their successors and assigns, Affiliates, and
the officers, directors, employees, and agents thereof, from and
against any and all third party suits, actions, causes of actions,
demands, losses, liabilities, money judgments, damages, fines,
penalties, assessments, costs, and expenses including reasonable
attorney's fees (for the purpose of this paragraph, collectively
Claims) which (i) arise out of PARADIGM's breach of this Agreement
including any representation or warranty made hereunder; or (ii) result
from the negligent acts or willful malfeasance of PARADIGM or
PARADIGM's employees or agents, in connection with the sale,
distribution, promotion, advertising, administration, or use of the
Package (including those relating to product liability and those
relating to infringement of patents, trademarks, copyrights, investor's
certificates or other intellectual or intangible property rights); or
(iii) result from use of promotional materials.
8.2 Indemnification by P&U P&U shall defend, indemnify and hold harmless
PARADIGM and NHMC their successors and assigns, Affiliates and
officers, directors, employees, and agents thereof, from and against
any and all third party suits, actions, causes of actions, demands,
losses, liabilities, money judgments, damages, fines, penalties,
assessments, costs, and expenses including reasonable attorney's fees
(for the purpose of this paragraph, collectively Claims) which (i)
arise out of P&U's breach of this Agreement including any
representation or Warranty made hereunder, or (ii) result from the
negligent acts or willful malfeasance of P&U.
8.3 Indemnification by NHMC NHMC shall defend, indemnify and hold harmless
PARADIGM and P&U their successors and assigns, Affiliates and officers,
directors, employees, and agents thereof, from and against any and all
third party suits, actions, causes of actions, demands, losses,
liabilities, money judgments, damages, fines, penalties, assessments,
costs, and expenses including reasonable attorney's fees (for the
purpose of this paragraph, collectively Claims) which (i) arise out of
NHMC's breach of this Agreement including any representation or
Warranty made hereunder, or (ii) result from the negligent acts or
willful malfeasance of NHMC.
8.4 Notice and Defense of Claims In the event that any indemnified Party
receives notice of, or is aware of, a claim, commencement of any suit,
action of proceeding, or the imposition of any penalty or assessment
(for purposes of this paragraph, collectively "Claims") in respect of
which indemnity may be sought hereunder, and the indemnified Party
intends to seek indemnity hereunder, the indemnified Party shall
promptly provide the indemnifying Party with notice of such Claims. The
failure by any indemnified Party to notify the indemnifying Party of
such Claims shall not relieve the indemnifying Party of responsibility
under this Section 8 except to the extent such failure adversely
prejudices the ability of the indemnifying Party to defend such Claims.
The indemnifying Party shall have the right at its option and its own
expense, to be represented by counsel of its own choice and to defend
against, negotiate, settle, or otherwise deal with any such Claims,
provided that the indemnifying Party shall not enter into any
settlement or compromise of any such Claims which could lead to
liability or create any financial or other obligation on the part of
the indemnified Party without the indemnified Party's prior written
consent. The indemnified Party may participate in the defense of any
Claims with counsel of its own choice and at its own expense. The
Parties agree to cooperate fully with each other in connection with the
defense, negotiation of settlement of any such Claims. In the event
that the indemnifying Party does not undertake the defense, compromise
or settlement of Claims, the indemnified Party shall have the right to
control the defense or settlement of such Claims with counsel of its
choosing provided, however, the indemnified Party shall not settle or
compromise any such Claims without the indemnifying Party's prior
written consent which consent shall not be unreasonably withheld.
Section 9. Confidentiality
All confidential information transmitted in contemplation of and while this
Agreement is in effect by and of the Parties to another Party shall be
identified with reference to this Agreement and the receiving Party shall, while
this Agreement is in effect and for a period of three (3) years after the
expiration or termination of this Agreement, make no use of such confidential
information except to advance the purposes of this Agreement in accordance with
the terms hereof, and shall use the same efforts to keep secret and prevent the
disclosure of such confidential information to Parties, other than its agents,
officers, employees, and representatives authorized to receive such confidential
information and bound by use and disclosure restrictions similar to those
provided herein, as it would use with respect to is own confidential and
proprietary information. Confidential information shall remain the sole and
absolute property of the disclosing Party, subject to the rights and licenses
granted herein. The above restrictions on the use and disclosure of confidential
information shall not apply to any confidential information which:
(a)is already lawfully known to the recipient at the time of disclosure
as documented by recipient; or
(b)is or becomes generally available to the public other than through
any act or omission of the recipient in breach of this Agreement; or
(c) is acquired by the recipient from a third Party having the lawful
right to disclose same; or
(d) is required by law to be disclosed; or
(e)is required to be disclosed in order to exercise rights granted or
retained p t to this Agreement, provided that any such disclosure will
be subject to use and disclosure restrictions similar to those provided
herein.
The term confidential information shall include any information that is, by its
nature, information that would give an entity in the business of the disclosing
Party a competitive advantage over another such entity not in possession of such
information.
In the event this Agreement is terminated for any reason by any of the Parties
as provided herein, the receiving Party agrees to return to the other, and
thereafter refrain from using, all confidential information given to it by
another Party; provided, however, one written copy may be retained by the
recipient solely for archival purposes to determine its legal obligations under
this Agreement All provisions of this Section 9 shall survive the expiration or
termination of this Agreement.
Section 10. Tradedress, Advertising, and Promotion
10.1 The Package will bear the Trademark and the trade dress of each
companies respective Products unless otherwise agreed to in writing by
the Parties.
10.2 P&U and NHMC may use the Trademark and the name PARADIGM and its logo
solely to the extent required to fulfill its obligations under this
Agreement and as agreed to by PARADIGM. PARADIGM and NHMC and their
Affiliates may use the name Pharmacia & Upjohn Company and its logo
solely to the extent required to fulfill their obligations under this
Agreement and as agreed to by P&U. All Parties and their agents shall
immediately cease all use of the others name and logo upon expiration
or termination of this Agreement.
10.3 All advertising and public relation activities associated with the sale
of the Package, must be reviewed and pre-approved by P&U, PARADIGM and
NHMC prior to its use.
Section 11. Term-Termination
11.1 This Agreement shall be effective as of the Agreement effective date,
and, unless sooner terminated pursuant to provisions herein, shall
expire automatically on the date of December 31, 2000. Beginning ninety
(90) days prior to the expiration date, and each year thereafter, the
Parties shall discuss renewing the Agreement for additional one (1)
year periods or terminating the Agreement if so determined by the
Parties.
11.2 The Agreement and any agreements executed pursuant hereto may be
terminated by any Party before the expiration of the time period set
forth in Section 11.1 in the event of a substantial breach by either of
the Parties of its obligations under this Agreement or any agreements
executed pursuant hereto, if such breach is not remedied within sixty
(60) days from date on which the non-breaching Party gives notice to
the breaching Party of its breach.
11.3 Each Party hereto shall have the right to terminate the Agreement
without cause at any time during the Agreement with ninety (90) days
prior written notice to the non-terminating Parties.
11.4 Termination of this Agreement for whatever reason, shall not affect any
rights or obligations which may have accrued to the Parties prior to
the effective date of termination. Termination of the Agreement shall
be without prejudice to (a) any remedies which the Parties may then or
thereafter have hereunder or at law or in equity, and (b) that Party's
right to obtain performance of any obligations which expressly survive
termination of the Agreement.
Section 12. Patent and Trademark Infrini!ement
Each Party shall advise the other Parties promptly upon its becoming aware of
any infringement by a party of Patent Rights or Trademarks respectively covering
or identifying the product components of the Package. PARADIGK at its sole
discretion, shall take such legal action as is required to restrain or otherwise
prevent such infringement. P&U shall cooperate fully with and as requested by
PARADIGK at PARADIGM's expense, in PARADIGNTs attempt to restrain such
infringement. P&U may be represented by counsel of its own selection at its own
expense in any suit or proceeding brought by PARADIGM to restrain such
infringement
Suits brought by third parties alleging patent or trademark infringements shall
be governed by the provisions of Section 8.3 above.
Section 13. Miscellaneous
13.1 Notice Any notice required or permitted hereunder shall be in writing
and shall be sufficiently given when personally delivered,
telecommunicated, with receipt confirmed, delivered by overnight
courier or mailed prepaid first class registered or certified mail and
addressed to the party for whom it is intended at its record address,
and such notice shall be effective upon receipt if delivered
personally, telecommunicated, or by overnight courier, or shall be
effective five (5) days after it is deposited in the mail, if mailed.
The record addresses and facsimile number of the parties are set forth
below:
If to P&U: Pharmacia & Upjohn Company
Market Region North America
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Vice President, Chief Legal Counsel
Facsimile No.: 000-000-0000
If to PARADIGM: PARADIGM Medical Industries, Inc.
0000 Xxxx 0000 Xxxxx, Xxxxx X
Xxxx Xxxx Xxxx, XX 00000
Attn: Vice President Operations and C.O.O.
Facsimile No.: (000) 000-0000
If to NHMC: National Healthcare Manufacturing Corporation
000 Xxxxxxxxx Xxxxxxxx
Xxxxxxxx, XX, XXXXXX X0X 0X0
Attn: Vice President Sales and Marketing
Facsimile No.: (000) 000-0000
Any Party, at any time, may change its previous record address or
facsimile number by giving written notice of the substitution to the
other Parties as herein provided.
13.2 Force Majeure The performance by any one of the Parties of any covenant
or obligation on its part to be performed under this Agreement shall be
excused by floods, riots, fire, war, acts, injunctions, or restraints
of government (whether or not now threatened), or any cause preventing
such performance whether similar or dissimilar to the foregoing beyond
the reasonable control of the party bound by such covenant or
obligation ("force majeure").
13.3 Assignment This Agreement shall not be assigned by any of the Parties
without the written consent of the other Parties.
13.4 Modification No modification or amendment hereof shall be valid or
binding upon the Parties hereto unless made in writing and duly
executed on behalf of all of the Parties.
13.5 Waivers Failure of a Party to insist upon the strict performance of any
provision hereof or to exercise any right or remedy shall not be deemed
a waiver of any right or remedy with respect to any existing or
subsequent breach or default.
13.6 Governing Law and Venue This Agreement shall be construed and the legal
relations between the Parties hereto determined in accordance with the
laws of the State of Michigan.
13.7 Public Disclosure No Party shall issue a press release or in any other
way announce to the public the contents of this Agreement and the
negotiations preceding it without prior written consent of the other
Parties.
13.8 Headings The clause headings are placed herein merely as a matter of
convenience and shall not affect the construction or interpretation of
any of its provisions.
13.9 Partial Invalidity In case any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision of this Agreement
but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision or provisions would result in such a material
change as to cause completion of the actions contemplated herein to be
impossible and provided that the performance required by this Agreement
with such clause deleted remains substantially consistent with the
intent of the Parties.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers or representatives.
PHARMACIA & UPJOHN COMPANY PARADIGM MEDICAL INDUSTREES, INC.
By: Xxxx X. Xxxxx By: Xxxxxxx Xxxxxxx
Title: National Sales Director Title: Chief Operating Officer
Date: 6/26/98 Date: 6/26/98
NATIONAL HEALTHCARE MANUFACTURING CORPORATION
By: X. X. Xxxxxxxxx
Title: Vice President Sales and Marketing
Date:
