EXHIBIT 10.26
CONTRACT MANUFACTURING AGREEMENT
CONTRACT # V062003
This Contract Manufacturing Agreement ("Agreement") is made and entered into as
of this __20___ day of __June________, 2003 ("Effective Date") between CONCEPTUS
INCORPORATED, having principal offices at 0000 Xxxxxx Xxxxxx, Xxx Xxxxxx, XX
00000 ("Customer"), and Venusa, Ltd, having principal offices at 00X Xxxxxxxxxxx
Xxxxx, Xx Xxxx, XX 00000.
RECITALS
Customer desires to have certain products of its design
manufactured by Manufacturer for sale to Customer. Manufacturer has the
capability of manufacturing such products and desires to do so for sale to
Customer.
AGREEMENT
In consideration of the foregoing, it is mutually agreed to by
and between the parties as follows:
1. DEFINITIONS.
(a) "Confidential Information" shall mean any proprietary
information, technical data, trade secrets or know-how, including, but not
limited to, research, product plans, products, services, customers, customer
lists, markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information disclosed by the disclosing
party directly or indirectly in writing, orally, or by drawings or inspection of
parts or equipment.
(b) "Controlled Environment Room" shall mean room that is used
to manufacture Products having a controlled environment to limit particulate and
microorganisms.
(c) "Incoming Inspection" shall mean measuring, examining, and
testing that gauge one or more characteristics of an incoming component and the
comparison of such component with specified requirements to determine conformity
to Specifications.
(d) "Intellectual Property" shall mean, as applicable: (i) all
rights held by Customer in the Products and in its Confidential Information,
including, but not limited to, patents, copyrights, authors' rights, trademarks,
tradenames, proprietary know-how and trade secrets, irrespective of whether such
rights arise under U.S. or international intellectual property, unfair
competition or trade secret laws; or (ii) all rights held by Manufacturer in its
Confidential Information, including, but not limited to, patents, copyrights,
authors' rights, trademarks,
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tradenames, proprietary know-how and trade secrets, irrespective of whether such
rights arise under U.S. or international intellectual property, unfair
competition or trade secret laws.
(e) "Inventory" shall mean raw materials, work in process and
supplies necessary for the manufacture of Products pursuant to this Agreement.
(f)"Long-Lead Inventory" shall mean those items of Inventory
identified in writing by Manufacturer to Customer prior to beginning manufacture
of any particular type of Product that have a lead time from Manufacturer's
supplier longer than sixty (60) days.
(f) "Products" shall mean the products manufactured by
Manufacturer pursuant to this Agreement, as set forth in Exhibit A.
(g) "Purchase Order" shall mean a Customer Purchase Order in a
form provided by Customer.
(h) "Qualified Trainer" shall mean Manufacturer's designated
individual(s) who can perform training on manufacturing processes, test methods
and/or standard operating procedures as developed and approved by Customer.
(i) "Specifications" shall mean the specifications for the
Products as set forth in the Device Master Record, as provided by Customer and
accepted by Manufacturer, and as revised from time to time upon mutual agreement
of the parties.
2. MANUFACTURE AND SUPPLY OF PRODUCTS.
(a) Agreement to Manufacture. Manufacturer agrees to use
reasonable commercial efforts, pursuant to Purchase Orders or changes to
Purchase Orders issued by Customer and accepted by Manufacturer to procure
inventory, which includes raw materials, components and other supplies, and to
manufacture, test, assemble, inspect and deliver the Products pursuant to the
Specifications for each such Product. Manufacturer recognizes and agrees that
the specific manufacturing site employed for the production of the Products must
be approved and accepted by the Customer. . Manufacturer agrees to provide
adequate capacity to meet required volume as set forth in the Forecast. All
materials for use in Products, including but not limited to raw materials,
supplies, and completed Product will be stored by Manufacturer in a secure,
segregated, and controlled area to prevent theft, loss, degradation or damage of
such materials. Manufacturer shall maintain lot traceability of raw materials,
work in process and finished Product. All components used in the Products shall
be processed through Incoming Inspection. All materials and components that do
not meet the applicable Specifications shall be quarantined and investigated
through the Manufacturer's Non-Conformance Procedure. All documents specifically
used for manufacturing, inspecting, and testing Products shall be approved by
Customer. Manufacturer's personnel responsible for manufacturing, testing, and
inspecting Product shall be trained to the procedures by a Qualified Trainer.
Manufacturer's Quality Assurance personnel shall ensure Products meet
Specifications. Manufacturer agrees to manufacture Products in a Controlled
Environment Room (CER), which shall be monitored for particulate and microbial
control on a quarterly basis.
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(b) Forecasts. The Customer shall provide an annual
non-binding purchase order to the Manufacturer representing anticipated Product
purchases for the next twelve (12) months within 60 days prior to the
anniversary of this Agreement . On a monthly basis at the beginning of each
month, Customer shall provide Manufacturer with a rolling forecast in writing
("Forecast") of Customer's estimated aggregate purchase requirements of Product
for the subsequent one (1) year period. The initial three (3)months of the
Forecast with regard to Product and the initial four (4) months of Forecast with
regard to Inventory shall be binding and the remainder of each Forecast shall be
non-binding on Customer and it is agreed and acknowledged that such non-binding
portion of each Forecast is prepared in good faith to assist Manufacturer for
planning purposes and shall represent Customer's reasonable expectation of its
aggregate purchase requirements of Product for such period. If leadtimes for
Long-Lead Inventory require the Manufacturer to exceed the binding period of the
Forecast, each specific deviation will be agreed to in writing with the
Customer. Manufacturer shall use its best efforts to supply the number of
Products set forth in the Forecast, and shall maintain an additional amount of
finished Product and Inventory, each equal to eight (8%) of the one (1) year
Forecast amount for safety stock. . Manufacturer agrees to carry such Safety
Stock and shall supply to Customer Product from such Safety Stock if requested
by Customer.
(c) Purchase Orders. The Customer will provide to Manufacturer
specific Delivery Dates and quantities of Product corresponding to the binding
portion of the Forecast, which then become binding Purchase Order quantities.
Manufacturer shall supply the quantities of Product meeting the Specifications
on the date requested by Customer for delivery of such Products ("Delivery
Date") set forth in a Purchase Order; provided, however, that the Delivery Dates
conform to the Product leadtimes and Customer forecasts set forth herein.
(d) Acceptance or Rejection of Purchase Orders. Purchase
Orders that conform to binding Forecasts delivered to Manufacturer for the
relevant period shall be deemed accepted by Manufacturer upon receipt, except
that longer lead times may be required for Long-Lead Inventory. All other
Purchase Orders not rejected by Manufacturer within thirty (30) days of receipt
by Manufacturer shall be deemed accepted by Manufacturer effective upon receipt
of such Purchase Order.
(e) Engineering Changes. Customer may request at any time, in
writing, that Manufacturer incorporate an engineering change into the Product.
Such request will include a description of the proposed change sufficient to
permit Manufacturer to evaluate its feasibility. Manufacturer's evaluation shall
be in writing and shall state the impact on delivery schedule and expected cost.
Manufacturer will not be obligated to proceed with the engineering change until
the parties have agreed in good faith on the changes to the Specifications,
Delivery Dates and pricing and upon the cost changes, including reassembly,
retooling or cost of Inventory on-hand and on-order that may become obsolete.
(f) Change Notification. Manufacturer must notify Customer, in
writing, of any plans to change manufacturing processes, materials, inspection
methods, assembly location, approved suppliers or other changes for approval
and/or validation by the Customer. Notification and Customer approval must occur
prior to implementing proposed changes.
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3. COMPONENTS, TOOLING, EQUIPMENT.
(a) Approved Supplier List. Customer shall provide a Xxxx of
Materials and Approved Supplier List ("ASL") for each Product to be manufactured
hereunder. Manufacturer shall manufacture the Products using components obtained
solely from vendors included on the ASL, as it may change from time to time, as
approved by Customer. The ASL shall not be amended without prior written
approval of Customer.
(b) Customer Supplied Components. In the event Manufacturer
has a shortage of components for Products, Customer may, at its discretion,
supply components to Manufacturer at Manufacturer's expense upon the written
consent of Manufacturer and only in such amounts as are necessary for firm
orders then placed by Customer. Such components, including provision for failed
parts, shall be delivered to Manufacturer not later than four (4) weeks prior to
the scheduled Delivery Date for the related Products to Customer. Should
Customer be unable to meet Customer's requirements for delivery of Products,
Customer may at its option, request Manufacturer to either: (i) ship Products to
Customer absent the missing components on or after seven (7) days from the
scheduled Delivery Date; or (ii) hold the Products pending receipt of such
components from Customer. Under these circumstances, Customer will give written
notification to Manufacturer prior to the scheduled Delivery Date. Should
Manufacturer be required to procure components at a premium cost as the result
of an act by Manufacturer, Manufacturer shall be responsible for the premium
costs incurred, and Customer shall not be required to pay xxxx-up on the Product
Purchase Price for any additional cost incurred. If the required premium
purchases are a result of an act by Customer then Customer shall be responsible
for the premium price and the associated xxxx-ups.
(c) Tooling/Non-Recurring Expenses/Equipment. Manufacturer
shall provide tooling that is not specific to the Product at its own expense.
Customer shall pay for or obtain and consign to Manufacturer for its use any
Product-specific tooling and other reasonably necessary non-recurring expenses
specific to the Product, as described in Manufacturer's quotation, approved in
writing by Customer("Set-Up Property"). Customer shall own title to all Set-Up
Property. Manufacturer shall hold and maintain all Set-Up Property for Customer
and shall exercise reasonable care in the use and custody of such property and
shall use such property only in performing its obligations under this Agreement.
Customer will bear responsibility for repair to Set-Up Property resulting from
normal wear and tear. Manufacturer will xxxx all Set-Up Property to clearly
identify it as being the property of Customer. Manufacturer shall not grant any
security interest, incur any liens or any other encumbrances on said Set-Up
Property. Upon termination of this Agreement and upon Customer's written
request, Manufacturer will promptly return all Set-Up Property in good and
workable condition, with the exception of normal wear and tear, to a location
identified by Customer at Customer's cost. Manufacturer agrees that equipment
used to manufacture Product shall be calibrated and traceable to NIST standards,
and be validated as appropriate.
4. PRODUCT SHIPMENT AND INSPECTION.
(a) Shipments. All Products delivered pursuant to the terms of
this Agreement shall be suitably packed by Manufacturer for shipment in
accordance with Customer's Specifications and packaged in a manner to prevent
damage during shipment. Product shipments
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shall be clearly labeled with a minimum of Customer part number, lot number, and
purchase order number. Products shall be shipped to Customer's destination
specified in the applicable Purchase Order and delivered to a carrier by the
Delivery Date set forth on the Purchase Order. Shipment will be F.O.B.
Manufacturer's factory, at which time risk of loss and title will pass to
Customer. All freight, insurance, miscellaneous shipping expenses, special
packing expenses not included in the original price quotation for the Products,
will be paid by Customer, with the exception of Products that are returned to
Manufacturer by the Customer.
(b) Cancellation. Customer may not cancel any binding portion
of Purchase Order without Manufacturer's prior written approval, which will not
be unreasonably withheld. If the parties agree upon a cancellation of a Purchase
Order, Customer will pay Manufacturer for Products and Inventory as follows: (i)
100% of the purchase price for all quantities of finished Products in
Manufacturer's possession up to two (2) months of forecasted quantities of
Products, including Safety Stock amounts of Products (as provided in Section
2(b) above); and (ii) 100% of the cost of all Inventory in Manufacturer's
possession and not returnable to the vendor or usable for other customers,
whether in raw form or work in process up to three (3) months of Inventory for
forecasted Product, including Safety Stock amounts of Inventory (as provided in
Section 2(b) above) . Manufacturer will use reasonable commercial efforts,
including the mutual involvement of Customer, to return unused Inventory for a
full refund, net of restocking charges of such vendor and to cancel pending
orders. Customer will be entitled to take delivery of all Products and Inventory
to be paid for by Customer under this section, promptly following Manufacturer's
receipt of payment thereof.
(c) Product Inspection and Acceptance. The Products delivered
by Manufacturer will be inspected and tested as required by Customer within
thirty (30) days of receipt ("Acceptance Period"). If Products are found to be
defective in material, workmanship and/or fail to meet the Specifications,
Customer may reject such Products during the Acceptance Period. Products not
rejected during the Acceptance Period will be deemed accepted. Customer may
return rejected Products, only after obtaining a return material authorization
number from Manufacturer, which must be clearly displayed on the return shipping
container, and completing a written report detailing the reasons for the return
of the Products to the satisfaction of the Manufacturer. Rejected Products will
be repaired, replaced or returned for credit as agreed upon by the Customer and
Manufacturer. Manufacturer will pay for freight for Product returns.
5. PAYMENT TERMS, ADDITIONAL COSTS AND PRICE CHANGES.
(a) Payment Terms. Payment for any Products, to be paid by
Customer hereunder shall be made in lawful U.S. currency and are due thirty (30)
days from the date of invoice for Products delivered to Customer. If Customer is
late with payments, or Manufacturer has reasonable cause to believe Customer may
not be able to pay, Manufacturer may require prepayment, delay shipments, or
suspend work until assurances of payment satisfactory to Manufacturer are
received. Payment terms for services or other costs to be paid by Customer will
be determined and negotiated on an individual basis.
(b) Duties and Taxes. All prices quoted are exclusive of
federal, state and local excise, sales, use and similar duties and taxes, and
Customer shall be responsible for all such items.
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(c) Price. The price for Products during the Term and
assumptions upon which they are predicated shall be as defined in the most
current quotation.
(d) Material Fluctuations. At any time, in the event of
extraordinary increases or decreases in the amount of five percent (5%) or more
in the market price of fuels, materials, raw materials, equipment, labor and
other production costs, Manufacturer shall have the right to renegotiate in good
faith the price of Products, and if, in good faith, agreement is not achieved,
both Manufacturer and Customer shall have the right to terminate any Purchase
Order(s) affected by the Material Fluctuations.
(e) Modifications. Implementation of Manufacturer-initiated
Product engineering changes, process improvements, and procurement or alternate
sourcing activities that result in a cost reduction will be shared by the
Manufacturer and Customer, each receiving fifty percent (50%) of the
demonstrated cost reduction after implementation of the engineering changes.
Mutually agreed, non-recurring expenses associated with such cost reductions
will be retired by the party bearing such expenses prior to sharing.
(f) Market Fluctuations. At any time, in the event of
extraordinary increases or decreases in the market demand for Customer Products,
Manufacturer and Customer shall have the right to renegotiate in good faith the
price of Products manufactured for the Customer.
6. LICENSE GRANTS; OWNERSHIP RIGHTS.
(a) Nonexclusive License. During the term of this Agreement,
Manufacturer shall be deemed to have been granted by Customer a non-exclusive,
nontransferable, royalty-free license with right to use all of Customer's
Intellectual Property required to manufacture, and sell to Customer the Product
pursuant to the terms of this Agreement.
(b) Intellectual Property Rights. Each party shall retain sole
ownership of, and all rights to, any Intellectual Property of any kind
previously owned by that party. Customer shall own any and all Intellectual
Property in and to any and all improvements to Products developed during the
term of this Agreement, whether developed by Manufacturer or by Customer, or
jointly by the parties. Manufacturer shall own any and all Intellectual Property
in and to any and all improvements to its manufacturing processes that it
develops during the term of this Agreement.
(c) Trademarks. For purposes of this Section 6(c), "Trademark"
shall mean the trademarks that are associated with the Product which are
approved by Customer for use by Manufacturer in the manufacture of the Products.
In consideration of the fees set forth herein, Customer further grants to
Manufacturer a non-exclusive license to use the Trademarks on and in connection
with the manufacture of the Products, and for this purpose to affix, subject to
Customer's prior written approval, the Trademarks to or on the Products and to
or on any packaging materials used in connection with the Products. Such
trademark license shall expire or terminate upon the expiration or termination
of Manufacturer's rights to manufacture the Products. The Trademarks may only be
used in association with the manufacture of the Products pursuant to the terms
of this Agreement. Any and all uses of the Trademarks shall be subject to the
prior written approval of Customer. Manufacturer shall not remove trademark
notices from
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any Product without the prior written consent of Customer. Manufacturer shall
not use the name, Trademarks or logos associated with the Products in its
business name.
7. CONFIDENTIAL INFORMATION.
(a) Nondisclosure. Each party shall: (i) treat as confidential
all Confidential Information of the other party; (ii) not use such Confidential
Information of the other party except as set forth herein; and (iii) not
disclose such Confidential Information of the other party to any third party.
Without limiting the foregoing, each of the parties shall employ all reasonable
steps to protect the Confidential Information disclosed to it by the other party
under this Agreement from unauthorized or inadvertent disclosure or unauthorized
use, including but not limited to all steps such party would take to protect its
own proprietary information of a similar nature, but in no event less than due
care. Each party shall promptly notify the other party of any actual or
suspected misuse or unauthorized disclosure of the other party's Confidential
Information.
(b) Exceptions. Notwithstanding the above, neither party shall
have liability to the other with regard to any Confidential Information of the
other which the receiving party can prove:
(i) was in the public domain at the time it was
disclosed or has entered the public domain through no fault of the receiving
party;
(ii) was known to the receiving party, without
restriction, at the time of disclosure, as demonstrated by files in existence at
the time of disclosure;
(iii) is disclosed with the prior written approval
of the disclosing party;
(iv) was independently developed by the receiving
party without any use of the Confidential Information, as demonstrated by files
created at the time of such independent development;
(v) becomes known to the receiving party,
without restriction, from a source other than the disclosing party without
breach of this Agreement by the receiving party and otherwise not in violation
of the disclosing party's rights;
(vi) is disclosed generally to third parties by
the disclosing party without restrictions similar to those contained in this
Agreement; or
(vii) is disclosed pursuant to the order or
requirement of a court, administrative agency, or other governmental body;
provided, however, that the receiving party shall provide prompt notice thereof
to the disclosing party to enable the disclosing party to seek a protective
order or otherwise prevent or restrict such disclosure.
(vii) is disclosed, only to the degree necessary ,
pursuant to the customary and normal business dealings with third party
suppliers of materials, components or services, provided that a Confidentiality
Agreement exists between the receiving party and said third party.
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(c) Return of Confidential Information. Each party shall,
within ten (10) days of termination or expiration of this Agreement, return all
Confidential Information received from the other party.
(d) Remedies. Any breach of the restrictions contained in this
Section 7 is a breach of this Agreement, which may cause irreparable harm to the
nonbreaching party. Any such breach shall entitle the nonbreaching party to
injunctive relief in addition to all legal remedies.
8. CONFIDENTIALITY OF AGREEMENT.
Each party shall be entitled to disclose the existence of this
Agreement in a press release, provided that, such press release has been
approved in writing by the other party. The parties acknowledge and agree that
the terms and conditions of this Agreement shall be treated as Confidential
Information and shall not be disclosed in any press release nor to any third
party; provided, however, that each party may disclose the terms and conditions
of this Agreement:
(i) as required by any court or other
governmental body;
(ii) as otherwise required by law;
(iii) to legal counsel of the parties;
(iv) in confidence, to accountants, banks, and
financing sources and their advisors;
(v) in connection with the enforcement of this
Agreement or rights under this Agreement; or
(vi) in confidence, in connection with an actual
or proposed merger, acquisition or similar transaction.
9. REPRESENTATIONS AND WARRANTIES.
(a) Representations by the Customer. The Customer represents
and warrants to the Manufacturer that:
(i) The Customer is the exclusive owner or
licensee of all right, title and interest in and to all Intellectual Property
associated with the Products existing as of the date of this Agreement; and
(ii) To the Customer's knowledge, the design,
development, manufacturing, sale and distribution of the Products does not
infringe on any patent, copyright, trade secret or mask work right of any third
party.
(b) Representations by the Manufacturer. The Manufacturer
represents and warrants to the Customer that:
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(i) The Manufacturer is the exclusive owner or
licensee of all right, title and interest in and to all Intellectual Property
associated with any improvements to its manufacturing processes with respect to
the Products that it develops during the term of this Agreement;
(ii) To the Manufacturer's knowledge, any
improvements that the Manufacturer makes to its manufacturing processes with
respect to the Products during the term of this Agreement will not infringe on
any patent, copyright, trade secret or mask work right of any third party; and
(iii) All Products will conform to the
Specifications set forth herein or as may otherwise be mutually agreed upon in
writing, and will be free from defects in material and workmanship for a period
of one (1) year from date of shipment to the Customer. The Manufacturer will
replace, or at Customer's option, credit or refund to Customer the full purchase
price of all non-complying Products within ninety (90) days notice of such
noncompliance. The Manufacturer shall bear the risk of in-transit loss and
damage and shall prepay and bear the transportation charges for Products
returned under these warranty conditions. THIS IS THE SOLE AND EXCLUSIVE
WARRANTY GIVEN BY MANUFACTURER WITH RESPECT TO THE PRODUCTS. MANUFACTURER MAKES
NO OTHER WARRANTY AND HEREBY EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS OR
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED. NO IMPLIED WARRANTY OF
MERCHANTABILITY, NO IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, AND NO
IMPLIED WARRANTY ARISING BY USAGE OR TRADE, COURSE OF DEALING OR COURSE OF
PERFORMANCE IS MADE BY MANUFACTURER. NO REPRESENTATIVE OF MANUFACTURER IS
AUTHORIZED TO GIVE OR MAKE ANY OTHER REPRESENTATION OR WARRANTY OR TO MODIFY THE
FOREGOING WARRANTY IN ANY WAY.
10. INDEMNIFICATION AND LIABILITY.
(a) Indemnification by the Customer. The Customer agrees to
indemnify, defend and hold harmless the Manufacturer from any and all claims,
actions, damages, liabilities, costs and expenses, including reasonable
attorneys' fees and expenses, arising out of: (i) any claim of infringement of
any U.S. patent, copyright or other Intellectual Property right of any third
party based upon or arising out of the Customer's ownership of the Products or
the design, development and/or distribution of the Products, or (ii) any claim
or lawsuit for personal injury or death to any person as a result of the use of
any Customer medical device in which any Products are used, as long as the
Product is manufactured within established Specifications approved by Customer,
unless such injury or death is caused by Manufacturer's negligence or willful
misconduct.
(b) Indemnification by the Manufacturer. The Manufacturer
agrees to indemnify, defend and hold harmless the Customer from any and all
claims, actions, damages, liabilities, costs and expenses, including reasonable
attorneys' fees and expenses, arising out of: (i) any claim of infringement of
any U.S. patent, copyright or other Intellectual Property right of any third
party based upon or arising out of the Manufacturer's ownership of any
improvements that the Manufacturer makes to its manufacturing processes with
respect to the Products during the
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term of this Agreement, or (ii) any breach of a representation or warranty by
Manufacturer under Section 9(b) of this Agreement .
(c) Indemnification Procedure. The indemnitee shall assert any
claim for indemnification promptly and give the indemnitor full opportunity to
control the response to any third party claim or action, including without
limitation, any agreement relating to the settlement thereof. The indemnitee
also agrees to give the indemnitor proper and full information and reasonable
assistance to defend and/or settle any such third party claim or action.
Following the indemnitor's assumption of the response to and defense of any
third party claim, the indemnitee may participate, at its own expense, in such
defense and in any settlement discussions directly or through counsel of its
choice.
(d) Limitations. The foregoing states the entire liability and
obligations of, and the exclusive remedy of, the parties with respect to any
alleged or actual infringement of patents, copyrights, trade secrets, trademarks
or other intellectual property rights.
(e) No Other Liability. NOTWITHSTANDING ANYTHING TO THE
CONTRARY HEREIN, NEITHER PARTY NOR ITS AGENT(S), REPRESENTATIVES(S), OR
EMPLOYEE(S) SHALL BE LIABLE TO THE OTHER PURSUANT TO THIS AGREEMENT FOR AMOUNTS
REPRESENTING LOSS OF REVENUES, LOSS OF PROFITS, LOSS OF BUSINESS OR INDIRECT,
CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF THE OTHER PARTY, HOWEVER CAUSED
AND ON ANY THEORY OF LIABILITY, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. HOWEVER, THIS SECTION SHALL NOT LIMIT EITHER
PARTY'S OBLIGATIONS TO THE OTHER FOR ANY THIRD PARTY DAMAGES PURSUANT TO
SECTIONS 10(A) AND 10(B) ABOVE.
(f) Product Liability Insurance. The Customer and the
Manufacturer shall maintain product liability insurance in such amounts as is
advisable pursuant to ordinary good business practice for a similar company in a
similar type of business.
11. TERM AND TERMINATION.
(a) Term. This Agreement shall become effective as of the
Effective Date and shall continue for a period of three (3) years; this
Agreement shall be extended automatically at the end of the initial term or
subsequent terms for an additional one (1) year term, unless within one
hundred-eighty (180) days prior to the end of the initial term or a renewal
term, a party gives written notice to the other party of its intention to
terminate the Agreement.
(b) Termination for Convenience. This Agreement may be
terminated at any time with or without cause by either party upon the giving of
at least one hundred-twenty (120) days written notice to the other party.
(c) Termination for Cause. Either party may cancel this
Agreement at any time (with the effective date of the termination for cause to
be specified by the canceling party) if the other party breaches any term hereof
and fails to cure such breach within thirty (30) calendar days after notice of
such breach, or if the other party shall be or becomes insolvent, or if either
party makes an assignment for the benefit of creditors, or if there are
instituted by or against
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either party proceedings in bankruptcy or under any insolvency or similar law or
for reorganization, receivership or dissolution.
(d) Termination Liability. Neither party shall be liable in
any manner on account of the termination or cancellation of this Agreement. The
rights of termination and cancellation as set forth herein are absolute. Both
Customer and Manufacturer are aware of the possibility of expenditures necessary
in preparing for performance hereunder and the possible losses and damages which
may occur to each in the event of termination or cancellation. Both parties
clearly understand that neither shall be liable for damages of any kind
(including but not limited to special, incidental or consequential damages) by
reason of the termination or cancellation of this Agreement.
(e) Obligations Upon Termination. The termination or
expiration of this Agreement shall in no way relieve either party from its
obligations to pay the other any sums accrued hereunder prior to such
termination or expiration.
12. STANDBY MANUFACTURING RIGHTS.
(a) License. For the term of this Agreement, Manufacturer
hereby grants to Customer a worldwide, nonexclusive license with right to
sublicense under any patents, applications therefore and/or any information
including know-how, whether confidential or not, owned or licensable by
Manufacturer at any time during the term of this Agreement to make, have made,
use and to practice any process involved in the manufacture of the Products.
Upon Exercise of Rights pursuant to Section 12(b), the Confidential Information
of the Manufacturer that is developed solely by the Manufacturer will not be
shared with third parties without the express written consent of the
Manufacturer.
(b) Exercise of Rights. The license granted in this Section 12
shall take effect in the event of a material default of this Agreement by
Manufacturer and the following shall have occurred:
(i) Following default by Manufacturer, Customer
shall mail to Manufacturer a Notice of Exercise of Manufacturing Rights
describing the nature of Manufacturer's default. Manufacturer shall have ten
(10) days to present a plan acceptable to Customer to fully remedy the default
described in the Notice of Exercise of Manufacturing Rights, or shall provide to
Customer written notice contesting in good faith the default claimed by
Manufacturer. If Manufacturer does not respond to the Notice of Exercise of
Manufacturing Rights, then after thirty (30) days following the date of the
Notice of Exercise of Manufacturing Rights, the Manufacturing Rights shall
become effective; provided, however, that Customer shall not have Manufacturing
Rights if, during the period between delivery of such Notice and the date on
which the Manufacturing Rights would otherwise become effective, Manufacturer
cures its default.
(ii) Customer shall not unreasonably withhold
acceptance of any Manufacturer plan to cure default hereunder.
(c) Manufacturing Rights Assistance Items. Upon written
request of Customer after the Manufacturing Rights have become effective,
Manufacturer shall promptly deliver to
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Customer know-how and any other information including, but not limited to, the
following "manufacturing rights assistance items:" all engineering drawings,
manufacture documents and instructions and such other written materials
(including lists of Manufacturer's suppliers and their addresses and
Manufacturer's consent, where required, to the sale of such supplies to
Customer) that are used by Manufacturer and are necessary to enable Customer to
manufacture, assemble, test and/or maintain the Products.
(d) Termination of Rights. The Manufacturing Rights hereunder
shall terminate upon written notice of Manufacturer to Customer of the cure of
the default set forth in the Notice of Exercise of Manufacturing Rights or upon
termination of the Agreement.
13. MISCELLANEOUS.
(a) Assignment. This Agreement will be binding upon and inure
to the benefit of the parties hereto and their permitted successors and assigns.
This Agreement may not be assigned without the express written consent of the
other party, except that either party may assign or transfer this Agreement, in
whole or in part, to its parent or any of its affiliates in which it has greater
than fifty percent (50%) ownership or to any successors to substantially all of
that part of its business to which this Agreement relates.
(b) Independent Contractors. The relationship of Manufacturer
and the Customer established by this Agreement is that of independent
contractors, and nothing contained in this Agreement will be construed: (i) to
give either party the power to direct and control the day-to-day activities of
the other; (ii) to constitute the parties as partners, joint venturers,
co-owners or otherwise as participants in a joint or common undertaking; or
(iii) to allow either party to create or assume any obligation on behalf of the
other for any purpose whatsoever.
(c) Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith, in order to maintain the economic
position enjoyed by each party as close as possible to that under the provision
rendered unenforceable. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then: (i) such
provision shall be excluded from this Agreement; (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded; and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(d) Legal Expenses. The prevailing party in any legal action
brought by one party against the other and arising out of this Agreement shall
be entitled, in addition to any other rights and remedies it may have, to
reimbursement for its expenses, including court costs and reasonable attorneys'
fees.
(e) Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(f) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
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(g) Entire Agreement; Enforcement of Rights. This Agreement
sets forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the party
to be charged. The failure by either party to enforce any rights hereunder shall
not be construed as a waiver of any rights of such party.
(h) Governing Law. The validity, construction and
enforceability of this Agreement shall be governed in all respects by the law of
California applicable to agreements negotiated, executed and performed in
California, whether one or more of the parties shall be or hereafter become a
resident of another state or country, and without reference to conflict of laws
principles.
(i) Arbitration. Any dispute or claim arising out of or in
connection with this Agreement (with the exception of Sections 6, 7, and 8) will
be finally settled by binding arbitration in accordance with the then-current
Commercial Arbitration Rules of the American Arbitration Association by three
arbitrator(s) appointed in accordance with said rules. Each party shall select
one such arbitrator, and the two arbitrators so chosen shall select the third
arbitrator. The arbitrator(s) shall apply California law, without reference to
rules of conflicts of law or rules of statutory arbitration, to the resolution
of any dispute. If a claim is brought by the Manufacturer, the location of the
arbitration shall be California. If a claim is brought by the Customer, the
location of the arbitration shall be Minnesota. Judgment on the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof.
Notwithstanding the foregoing, the parties may apply to any court of competent
jurisdiction for preliminary or interim equitable relief, or to compel
arbitration in accordance with this paragraph, without breach of this
arbitration provision.
(j) Force Majeure. In the event that either party is prevented
from performing or is unable to perform any of its obligations under this
Agreement (other than a payment obligation) due to any Act of God, fire,
casualty, flood, earthquake, war, strike, lockout, epidemic, destruction of
production facilities, riot, insurrection, material unavailability or any other
cause beyond the reasonable control of the party invoking this section, and if
such party shall have used its best efforts to mitigate its effects, such party
shall give prompt written notice to the other party, its performance shall be
excused and the time for the performance shall be extended for the period of
delay or inability to perform due to such occurrences. Notwithstanding the
foregoing, if such party is not able to perform within thirty (30) days after
the event giving rise to the excuse of Force Majeure, the other party may
terminate the Agreement.
(k) Notices and Other Communications. Notice by any party
under this Agreement shall be in writing and personally delivered or given by
registered mail, overnight courier, telecopy confirmed by registered mail,
telefax or prepaid cable, addressed to the other party at its respective address
given below, or at any such other address as may be communicated to the
notifying party in writing and shall be deemed to have been served when
delivered, or if delivery is not accomplished by reason of some fault of the
addressee, when tendered:
If to CUSTOMER: If to MANUFACTURER:
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Conceptus, Incorporated Venusa, Ltd.
0000 Xxxxxx Xxxxxx 00X Xxxxxxxxxxx Xxxxx
Xxx Xxxxxx, XX 00000 Xx Xxxx, XX 00000
(l) Survival. Notwithstanding anything to the contrary in this
Agreement, the following sections shall survive termination of this Agreement:
6, 7, 8, 9, 10, and 13.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized representatives as of the Effective Date.
CONCEPTUS, INC. VENUSA, LTD.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxx Xxxxxxxx
-------------------------- --------------------------
Name: Xxxx X. Xxxxxx Name: Xxxx Xxxxxxxx
------------------------ -------------------------
(print) (print)
Title: CFO Title: VP of Sales & Marketing
----------------------- ------------------------
Date: 6/20/2003 Date: 6/20/2003
------------------------ -------------------------
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EXHIBIT A
PRODUCTS
1. COIL CATHETER SUB-ASSEMBLY. CONCEPTUS PRINT #E2339
2. ESSURE FINISHED ASSEMBLY. CONCEPTUS PRINT #ESS205
3. INNER/OUTER COIL SUBASSEMBLY. CONCEPTUS PRINT #E1833
4. DELIVERY WIRE SUBASSEMBLY. CONCEPTUS PRINT #E0650
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