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EXHIBIT 10.14
DISTRIBUTION AGREEMENT
This Distribution Agreement ("Agreement") is entered into as
of April 18, 1997 (the "Effective Date") between Interpore Orthopaedics, Inc.,
a Delaware corporation with its principal place of business at 000 Xxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 ("Manufacturer"), Steri-Oss Inc., a Delaware
corporation with its principal place of business at 00000 Xxxx Xxxx Xxxxx,
Xxxxx Xxxxx, Xxxxxxxxxx 00000 ("Distributor").
RECITALS
A. Manufacturer has developed and manufactures a proprietary bone
void filler. Certain products utilizing such technology are labeled, marketed
and distributed by Manufacturer as Interpore 200(R) Porous Hydroxyapatite Bone
Void Filler (IP 200), to be used for certain oral/maxillofacial bone grafting
indications. Such products are specified on Schedule I attached hereto and
made a part hereof (referred to herein collectively, as the "Products");
B. Distributor is engaged, among other things, in the manufacture
and distribution of dental implant products throughout the world; and
C. Manufacturer desires to appoint Distributor as its
non-exclusive distributor of the Products, and Distributor desires to accept
such appointment, in each case, upon the terms and subject to the conditions of
this Agreement.
AGREEMENT
IN CONSIDERATION for the undertakings and covenants set forth
below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Manufacturer and Distributor
agree as follows:
1. Appointment as Distributor. Manufacturer hereby grants to
Distributor, and Distributor hereby accepts such grant of, the right (the
"Distribution Rights") to warehouse, promote, market, distribute and sell the
Products, for certain oral/maxillofacial bone grafting applications under the
marks "Interpore 200(R) " or "IP 200" (the "Private Label"). The territory
("Territory") for Distributor's Distribution Rights is world-wide for
oral/maxillofacial bone grafting applications of the Products. Distributor's
Distribution Rights shall be on an exclusive basis beginning on that date which
is 180 days from the Effective Date and continuing for the term of this
Agreement. On and after that date which is 180 days from the Effective Date,
Manufacturer shall not, and shall not permit its Affiliates to, grant any
distribution or license rights in the Territory to any other person with
respect to the Products for oral/maxillofacial bone grafting applications, nor
shall it directly sell, distribute or otherwise deliver any Products to any
person, firm or entity for oral/maxillofacial bone grafting applications other
than Distributor during the term of this Agreement.
During the term of this Agreement Manufacturer agrees to
supply Distributor with Products as ordered on a continuous basis. Distributor
agrees to buy such Products from Manufacturer and use its best efforts to sell
Products in the Territory.
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Manufacturer makes no representation or warranty that
Distributor will achieve any particular level of sales of the Products within
the Territory.
The parties acknowledge that, notwithstanding any other
provision of this Section 1, Manufacturer has a relationship with Tokuyama Soda
Co., Ltd. ("Tokuyama Soda") which by its terms may entitle Tokuyama Soda to
negotiate for the consummation of an exclusive distribution agreement for
hydroxyapatite products for oral surgery/dental applications in the market
territories of Japan and Far East Asia (excluding Australia and New Zealand).
The parties acknowledge that the exclusivity of Distributor's rights pursuant
to this Section 1 are subject to and may be affected by the rights of Tokuyama
Soda only with respect to the Japanese market. Manufacturer and Distributor
agree that each of them will cooperate with the other and to act in good faith
in their dealings with Tokuyama Soda to resolve any conflicts relating to
Tokuyama Soda's rights to distribution of the Products.
2. Products and Conditions. Products shall mean the Products
listed in Schedule I. Manufacturer shall be entitled at any time to add,
replace or delete any item to the Products listed in Schedule I, provided that
any replacement of any Product shall be substantially equivalent in function to
the replaced Product and provided that it so advises Distributor in writing at
least 90 days in advance and specifies the effective date of the change made to
Schedule I, and provided further that the deletion of any product for other
than regulatory reasons shall be by the mutual agreement of the parties which
shall not be unreasonably withheld.
Any modifications, updates, developments, engineering changes
or supplements which collectively or individually affect the form, fit or
function of the Products (collectively, the "Product Changes") shall be
incorporated into the Products offered for sale by Manufacturer to Distributor
pursuant to the terms of this Agreement. Manufacturer shall be responsible for
obtaining all FDA approvals or clearances, if applicable. Manufacturer shall
disclose all proposed Product Changes to Distributor with at least 30 days
prior notice. Manufacturer also agrees to provide Distributor with price lists
and preproduction samples of the Products incorporating the Product Changes for
evaluation as reasonably may be requested by Distributor. Such Product Changes
shall be deemed to be Products hereunder and all terms and conditions contained
herein with respect to the Products (including Distributor's Distribution
Rights as set forth in Section 1) shall equally apply to such Product Changes.
Distributor shall be responsible for determination of foreign regulatory
requirements and notifications required to support distribution of Product
Changes within the Territory, if applicable.
It is understood and agreed that Manufacturer manufactures and
distributes other products containing the same or similar technology as
embodied in the Products, which other products are marketed and distributed
under names other than "Interpore 200" and "IP 200" and primarily for
applications other than oral/maxillofacial bone grafting applications.
Distributor shall have no right hereunder to distribute such other products and
this Agreement shall not affect Manufacturer's right to grant distribution
rights to others with respect to, or the rights of others to distribute, such
other products.
3. Status as Independent Contractor. Each party shall be an
independent contractor in relationship of the other party hereunder, and this
Agreement does not create in any manner or for
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any purpose whatsoever an employer-employee or a principal-agent relationship
between Manufacturer and Distributor. Neither party is authorized to enter into
agreements for or on behalf of the other party, create any obligation or
responsibility, express or implied, for or on behalf of the other party, accept
payment of any obligation due or owed to the other party, accept service of
process for the other party, or bind the other party in any manner or thing
whatsoever. Neither party shall list, print or display the other party's name
in such a manner as to indicate or imply that there is an employer-employee or
a principal-agent relationship between Manufacturer and Distributor.
Distributor, as an independent contractor, shall appoint and
supervise its own employees to carry out Distributor's obligations hereunder.
Distributor shall have sole responsibility for its employees, and all
associated risks and expense shall be borne by Distributor. Distributor shall
comply with all applicable local, state and federal laws governing the
operation of its business or the employment of its personnel, including without
limitation, federal and state tax laws, workers and unemployment compensation
laws and/or labor standards. Distributor shall ensure that its employees shall
not have any claim against Manufacturer for compensation, reimbursement or
right of contract and shall indemnify Manufacturer for all such claims and
related costs and expenses.
4. Terms of Sale.
a. The price for the Products shall be 50% of the
suggested list prices set forth on Schedule II attached hereto and made part
hereof; provided, however, on a quarterly basis, Distributor shall deliver a
report to Manufacturer setting forth the Products sold outside the United
States, accompanied by such documentation as Manufacturer may reasonably
request, and within 30 days of receipt of the report Manufacturer shall rebate
to Distributor an amount equal to 10% of the suggested list price of such
Products to reflect the price differential for products purchased for resale
outside the United States. The parties acknowledge that in certain
circumstances with respect to sales outside the United States, a larger
discount may be appropriate, and agree to negotiate in good faith toward such
larger discount where applicable. Distributor is free to determine the prices
at which it will resell the Products. Manufacturer may initiate a price change
annually for the Products payable by Distributor hereunder consistent with the
limitations set forth in this Section ("Price Changes"), which shall be set
forth in a revised price list delivered by Manufacturer to Distributor. Each
price change shall be limited to the percentage increase in the United States
Department of Labor, Bureau of Labor Statistics Consumer Price Index of Urban
Wage Earners and Clerical Workers (Revised Series), Subgroup "all items,"
entitled "Consumer Price Index of Urban Wage Earners and Clerical Workers
(Revised Series), Los Angles- Anaheim-Riverside Average (1982-1984 = 100)"
("CPI") between the Index in effect as of the date of the existing suggested
list price and the Index in effect on the date of the price change. If at any
price change date there shall not exist the Consumer Price Index of Urban Wage
Earners and Clerical Workers (Revised Series) in the same format as recited in
this Section 4a, Manufacturer shall substitute any official index published by
the Bureau of Labor Statistics, or successor or similar governmental agency, as
may then be in existence and shall be most nearly equivalent thereto. Price
Changes will be effective as of 45 days following Distributor's receipt of such
revised price list and Distributor will pay for the Products in accordance with
the Price Changes on all orders made on or after such 45 day period. Terms of
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sale are F.O.B. Interpore Orthopaedics, Inc., Irvine, California. Transfer of
title and risk of loss shall pass to Distributor when the Products are
delivered to a common carrier or, if not so delivered, when the Products are
delivered to Distributor. No shipment shall be made under extended reservation
of proprietary rights unless Manufacturer has information indicating inability
on the part of Distributor to pay invoices to Manufacturer as they become due,
in which case Manufacturer shall be entitled to make shipment under extended
reservation of proprietary rights once notice has been provided to Distributor.
Manufacturer shall have the right to request and receive from Distributor any
and all supporting documentation relating to resales of the Products outside of
the United States. Manufacturer and Manufacturer's accountants shall have the
right to audit Distributor's books and records should a dispute arise. No
payments shall be required to be made pursuant to the proviso of this Section
4a, while a dispute or audit is pending or until all information requested by
Manufacturer is delivered by Buyer.
b. All packaging and labeling will include the
identities of both Manufacturer and Distributor in such size and at such
location as may be agreed upon by Manufacturer and Distributor. Distributor
shall be eligible to utilize the "Interpore 200" or "IP 200" tradenames or any
other tradename in the marketing and distribution of the Products, pursuant to
the terms of Section 12 hereof.
c. Distributor shall pay (or reimburse Manufacturer), as
a separate item, all taxes (exclusive of income taxes) however designated, or
amounts legally levied in lieu thereof based on or measured by the amount
charged for the Products delivered to Distributor under this Agreement or on
their use, now or hereafter imposed under the authority of any federal, state
or local taxing jurisdiction. If Distributor is purchasing the Product for
resale and claiming a tax exemption in connection herewith, Distributor must
furnish Manufacturer with an applicable resale certificate.
d. All payments by Distributor to Manufacturer shall be
made in U.S. Dollars, without set-off or counterclaim and free and clear of,
and without deduction for, any taxes, levies, import duties, charges, fees,
deductions, withholdings, restrictions or conditions of any nature now or
hereafter imposed or levied by any country or any political subdivision thereof
or taxing or other authority therein, unless Distributor is compelled by law to
make such deduction or withholding. If any such obligation to make such
deduction or withholding is imposed upon Distributor with respect to any amount
payable by it hereunder, Distributor will pay to Manufacturer, on the date on
which the said amount becomes due and payable, such additional amount as shall
be necessary to enable Manufacturer to receive the same net amount it would
have received on such due date had no such obligation been imposed upon
Distributor.
e. Invoices for the Products will be issued upon
shipment. Payment for these invoices shall be made in full thirty (30) days
from the date of invoice. In the event Distributor defaults in making payment
for the Product sold to it hereunder, and such default is not cured within 30
days after written notice, Manufacturer may, without limitation to
Manufacturer's other rights and remedies, suspend further shipments to
Distributor until Manufacturer receives adequate assurances of payment.
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f. Manufacturer shall ship Products ordered hereunder
only to Distributor's primary facility. Manufacturer will use its best efforts
to meet each order for the Products placed by Distributor on or before the
requested shipment date, provided such date is at least thirty (30) days
following the date on which Manufacturer receives the order.
g. Manufacturer agrees to manufacture and sell to
Distributor the Products meeting the Specification attached hereto as Schedule
IV. Orders for Products shall be on written forms ("Purchase Orders") stating
therein the quantity and type of Products desired and the date and destination
of delivery.
h. Distributor's purchase of Products is expressly
limited to the terms and conditions set forth in this Agreement. If
Distributor's Purchase Order sets forth terms and conditions in addition to the
quantity and type of Product and the date and destination of delivery desired
or terms and conditions inconsistent herewith, such additional terms and
conditions contained therein shall be of no force or effect whatsoever between
the parties hereto.
i. Delivery of Products purchased by Distributor shall
be made to a common carrier on the date specified on Distributor's Purchase
Order, provided, however, that such date is at least 30 days from the date on
which Manufacturer receives the Purchase Order relating to that shipment.
j. Title of Products and the risk of loss thereof shall
pass to Distributor when the Products are delivered to a common carrier or, if
not so delivered, when the Products are delivered to Distributor.
k. Each shipment of Products shall be accompanied by a
Certificate, signed by a quality control representative of Manufacturer,
certifying that the Products conform to the Specification applicable to the
Products. Upon the arrival of Products at the destination designated by
Distributor in the Purchase Order, Distributor shall promptly inspect the
Products and shall give written notice to Manufacturer within 30 days after the
arrival of any claims if the Products do not conform with the Specification set
forth in this Agreement. If Distributor retains the Products in its possession
after arrival at the destination designated in its Purchase Order without
giving Manufacturer such notice within the 30-day period described above, such
failure to give timely notice shall constitute acceptance of the Products by
Distributor.
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l. Any lot of Products delivered to Distributor by
Manufacturer which does not conform to the Specification and is rejected by
Distributor pursuant to this Section 4 will be promptly replaced by
Manufacturer. If replacement is not feasible, any sums actually paid therefor
will be promptly refunded by Manufacturer. The remedy of replacement or refund
is available only if such non-conformance was not caused by Distributor's
misuse, unauthorized modifications, neglect, improper testing or improper
storage, including without limitation storage at inappropriate temperatures,
transportation, use beyond any dating provided, accident, fire or other hazard.
In no event shall Manufacturer be responsible for any loss or damage after
delivery of Products in good order and condition to Distributor, unless such
loss or damage arises as a result of failure of such Products to conform to the
Specification. Distributor shall bear all expense and costs incurred in
connection with Products rejected or returned by customers of Distributor.
Manufacturer's liability to Distributor for Products returned pursuant to this
Section 4 shall be limited to replacement or refund as specified herein.
5. Duties and Covenants of Distributor.
a. Distributor shall use its best efforts to promote,
market and sell the Products in the Territory and to develop the sales
potential for the Products throughout the Territory. Distributor shall conduct
its business in an efficient, professional and responsible manner so as to
enhance and support the reputation and goodwill of the Products in the
Territory.
b. Distributor shall maintain a Product inventory, sales
force and warehouse facilities in the Territory reasonably sufficient to
perform all of its duties hereunder.
c. Distributor shall produce the sales, marketing,
promotional and other informational material regarding the Products for use in
the Territory in reasonable quantity at its own expense. All material and
literature regarding the Products shall be approved by Manufacturer prior to
its printing, which approval shall not be unreasonably withheld. Within thirty
(30) days after the Effective Date, Manufacturer shall deliver to Distributor
all existing sales, marketing and promotional material relating to the Products
in its possession.
d. Distributor shall maintain a competent and aggressive
force of trained professional sales persons. Distributor shall train its
contractors, affiliates and employees before allowing such personnel to engage
in actual sales activities. The parties also agree that Distributor's trained
personnel may conduct training of other Distributor personnel.
e. Distributor shall be responsible for the credit of
its own dealers, customers and agents.
f. Distributor shall not change any Product in any
manner, except with the prior written consent of Manufacturer. Upon the
termination or expiration of this Agreement, Distributor shall immediately
cease the use of any of Manufacturer's trademarks, tradenames, service marks,
or brand names incorporated into the Private Label, except as provided in
Section 9 hereof.
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g. Distributor shall comply in all material respects
with all applicable laws, regulations or orders of any and all governmental
authorities within the Territory, including those applicable to any
export/import and sales activities with respect to the Product. Distributor
shall not promote Products for any uses which are not approved pursuant to the
regulatory approvals applicable to the country of sale. Distributor agrees
that it will not directly or indirectly do any act or thing which will
constitute a violation by Distributor or Manufacturer of any applicable laws or
regulations.
h. Distributor shall promptly advise Manufacturer of any
changes or amendments to any applicable governmental rules or regulations or
the issue of any new rules or regulations of any area within the Territory of
which Distributor becomes aware and which would cause the Products and/or their
manufacture, packaging or labeling not to meet applicable requirements or which
require adjustment to the Products and/or their manufacture, packaging or
labeling.
i. Distributor shall promptly investigate, respond to
and send copies of all correspondence involving any and all complaints
concerning the Products from dealers, agents, sales representatives, customers,
end-users, or patients within the Territory. Manufacturer shall provide such
assistance in the evaluation of complaints received by Distributor as may be
reasonably requested by Distributor. Distributor shall notify Manufacturer
within 25 calendar days of all complaints which are found by Distributor to be
MDR reportable, except in the case of events that require immediate remedial
action to prevent an unreasonably risk of substantial harm to the public health
or other types of events as may be designated by FDA, in which case Distributor
shall notify Manufacturer within 48 hours.
j. Distributor shall promptly respond to and follow up
on any and all inquiries and orders concerning the Products from customers or
potential customers within the Territory. In the event Distributor fails to
promptly or effectively respond to any such inquiries or orders, Manufacturer
shall have the right, to the extent Manufacturer deems advisable in order to
protect the goodwill and/or reputation of the Products or Manufacturer, to deal
directly with such customers or potential customers.
k. Distributor shall notify Manufacturer promptly after
Distributor becomes aware of any of the following: alleged infringement by
Manufacturer of the trademark, tradename, service xxxx, brand name, patent,
trade secrets or any other intellectual property rights of any third parties;
alleged infringement of Manufacturer's logo, trademark, tradename, service
xxxx, brand name, patent, trade secrets or any other intellectual property
rights of Manufacturer; any liability claims regarding the Products; any
customer complaints concerning, or adverse patient reactions to, any of the
Products; and any other matters that have had or may reasonably be expected to
have an adverse effect on the sale of the Products in the Territory.
Distributor shall forward to Manufacturer copies of all marketing information
acquired on any products in competition with any of the Products.
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l. Distributor shall furnish all reasonable assistance
as may be required, at Manufacturer's request and expense, to enable
Manufacturer to defend against any claims of third parties that may be
threatened or filed against Manufacturer or its affiliates relating to the sale
or use of any of the Products in the Territory, or that Manufacturer or its
affiliates may assert against third parties relating to the sale or use of any
of the Products in the Territory.
m. Distributor shall maintain, for period of not less
than five (5) years after the date of sale, or for such longer period as
required by applicable law, such records as are necessary to permit each
Product sold by Distributor to be traced by lot number and customer account.
n. Distributor shall assist Manufacturer, at
Manufacturer's request, in recall of any of the Products sold pursuant to this
Agreement. Manufacturer shall bear all costs of shipping the recalled Products
and any replacement or repaired Products resulting from such recall.
o. Distributor shall be responsible for obtaining all
necessary regulatory approvals, clearances, permits, licenses or other
government authorizations in order to legally distribute Products in countries
outside of the United States. Manufacturer agrees to cooperate with
Distributor and to provide all necessary information (subject to
confidentiality restrictions contained herein) necessary to obtain such
regulatory approvals, clearances, permits, licenses or other government
authorizations. Manufacturer agrees to provide to Distributor information on
existing regulatory approvals, clearances, permits, licenses or other
government authorizations of the Products with respect to countries outside of
the United States.
6. Duties and Covenants of Manufacturer
a. Manufacturer shall ensure that all Products are
traceable by lot or batch and that the Products are manufactured, packaged,
labeled and sold to Distributor in accordance with all applicable laws, rules
and regulations, including without limitation all applicable laws, rules and
regulations (and instructions) of the FDA and all state equivalents thereof,
(and ISO and CE xxxx standards) as required.
b. Manufacturer shall comply in all material respects
with all laws, regulations or orders of any and all governmental authorities
within the United States and shall use best efforts to comply in all material
respects with all laws, regulations or orders of any governmental authorities
outside the United States as to which Distributor has provided notice.
Manufacturer agrees that it will not directly or indirectly do any act or thing
which will constitute a violation by Distributor or Manufacturer of any
applicable laws or regulations.
c. Manufacturer shall notify Distributor promptly after
Manufacturer becomes aware of any matters that have had or may reasonably be
expected to have an adverse effect on the sale of the Products in the
Territory.
d. Manufacturer shall hold Distributor harmless for any
violation of state or federal law in regard to maintaining Manufacturer's
operations in full compliance with state and federal regulations.
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e. Manufacturer shall be responsible for obtaining all
FDA regulatory clearances and/or approvals for Products in the United States.
Manufacturer shall also use reasonable efforts to obtain and maintain ISO
certification and CE xxxx approval for sale of Products in certain European
countries.
f. Notwithstanding the representation set forth in
Section 8c hereof, it is acknowledged that Manufacturer has entered into
distribution agreements with distributors in the countries listed on Schedule
III, which agreements purport to grant the distributors in such countries the
exclusive rights to distribute, among other things, the Products for
oral/maxillofacial bone grafting applications. Manufacturer agrees to use
reasonable efforts as quickly as reasonably practicable to secure amendments to
such agreements which would delete the exclusivity of such distributors' rights
in such countries as soon as practicable following the date of this Agreement
(other than with respect to the rights of Tokuyama Soda in Japan). In
addition, consistent with the provisions of Section 1 hereof, Manufacturer
agrees to substitute under such agreements and to supply only materials other
than the Products to such distributors as quickly as practicable and in any
event within 180 days following the Effective Date. Manufacturer also agrees
to promptly notify each distributor who has rights in the countries listed on
Schedule III of the existence of this Agreement and notify such distributors
that their rights are not exclusive within the oral/maxillofacial market.
g. Manufacturer agrees that if it should develop a new
bone augmentation product with applications in the oral/maxillofacial bone
grafting market, it shall present such product on a confidential basis to
Distributor who shall have the right to enter into a Distribution or similar
agreement which will grant to Distributor the exclusive rights to distribute
such new product for oral/maxillofacial bone grafting applications on terms
mutually acceptable to the parties. If Distributor declines to enter into such
agreement, then for a period of six months following termination of discussions
regarding the terms of such agreement, Manufacturer shall be entitled to enter
into an agreement with a third party, granting the rights set forth in the
preceding sentence, on terms no more favorable than those rejected by
Distributor.
7. Product Warranty - Limitations of Liability. For the period
commencing with the date of shipment of the Product and continuing until the
earlier of (i) the expiration date of the Product, if any, as shown on the
Product package or (ii) 36 months following the date of shipment, Manufacturer
warrants that the Products shall be free from defects in material and
workmanship.
THE FOREGOING WARRANTY IS IN LIEU OF AND EXCLUDES ALL OTHER
WARRANTIES, WHETHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS-FOR-USE, AND OF ANY OTHER OBLIGATION
ON THE PART OF MANUFACTURER.
Manufacturer's sole obligation under this warranty shall be to
repair or replace any Product in breach of warranty and pay transportation
expenses for such replacement at no charge to Distributor. Distributor shall
bear all risk of loss or damage to returned goods while in transit. In the
event no breach of warranty is discovered by Manufacturer upon receipt of any
returned
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Product, the Product will be returned to Distributor at Distributor's expense
and Distributor will reimburse Manufacturer for the transportation charges paid
by Manufacturer because of Distributor's initial return of the Product to
Manufacturer.
THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE FROM MANUFACTURER
FOR BREACH OF ANY AND ALL WARRANTIES, IN CONTRACT, TORT OR OTHERWISE, WHETHER
TO DISTRIBUTOR OR THIRD-PARTIES SHALL BE LIMITED TO THE REMEDY PROVIDED ABOVE.
IN NO EVENT SHALL MANUFACTURER'S LIABILITY INCLUDE ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, EVEN IF MANUFACTURER SHALL HAVE KNOWLEDGE OF THE
POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE.
8. Representations. Each party to this Agreement represents to
the other as follows:
a. It is a corporation in good standing under the laws
of its jurisdiction of incorporation, with all necessary corporate power and
authority to execute, deliver and perform this Agreement.
b. Execution, delivery and performance of this Agreement
have been approved by all necessary corporate action.
c. Except as disclosed in Section 6f as it relates to
Manufacturer, it is not a party to any written or oral agreement,
understanding, arrangement or contract that conflicts with its obligations
hereunder.
9. Term and Termination.
a. This Agreement shall commence on the Effective Date
and continue, unless earlier terminated pursuant to the terms hereof, for an
initial term of four (4) years. The term of this Agreement shall thereafter be
automatically renewed for a second term of two (2) years and thereafter for a
third and successive term of one (1) year each, provided that neither party
shall have given the other party at least 90 day prior written notice of its
election to not renew the term of this Agreement.
b. Either party may give the other party written notice
of termination of this Agreement if such other party is in material breach of
any of its obligations under this Agreement. The termination shall become
effective ninety (90) days from the date such notice is given unless, within
such 90-day-period, such breach and any intervening breaches have been cured to
the reasonable satisfaction of the non-breaching party.
c. Notwithstanding the foregoing, either party may
immediately cancel any order and may immediately terminate this Agreement, in
whole or in part, (i) upon the filing of any petition in bankruptcy against the
other party which is not cured or dismissed within sixty (60) days thereafter,
(ii) if the other party is ordered or adjudged bankrupt, becomes insolvent or
goes into liquidation, or generally fails to pay debts as they become due,
(iii) upon appointment of a
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receiver or custodian of all or a part of the other party's assets by any
judicial or governmental procedure, (iv) upon admission of the other party to
the benefit of any procedure for the settlement of its debts, or (v) upon
seizure of all or a substantial part of the other party's assets by any
judicial or governmental procedure.
d. Upon any termination of this Agreement: (i)
Distributor shall forthwith discontinue selling the Product and making
representations regarding its status as a distributor for Manufacturer, and
from taking any other action or doing any other thing relating it to
Manufacturer or the Product, and shall return all information and materials in
its possession described in Section 5c hereof and (ii) all amounts owed from
Distributor to Manufacturer shall become immediately due and payable; provided,
however, that Distributor shall be entitled to continue to market and sell the
Products in Distributor's inventory until such time as it has sold all Products
which Distributor held in inventory prior to the termination hereof, provided
further that such marketing and sales shall be made pursuant to the terms
hereof.
e. Except as otherwise provided for herein, termination
of this Agreement shall not release either party hereto from any liability
which at the time of termination has already accrued to the other party hereto
or which after termination may accrue in respect of any act or omission prior
to termination of from any obligation which is expressly stated herein to
survive termination.
10. Indemnification.
a. Distributor (including any individual affiliates of
Distributor, jointly and separately) will indemnify, defend and hold harmless
Manufacturer, Manufacturer s officers, directors, employees and agents from
and against any and all losses, liabilities, damages and expenses, including,
but not limited to, court costs and actual attorneys fees (collectively,
"Losses") suffered or incurred by them as a result of (i) the breach of any of
Distributor s duties or covenants under this Agreement; (ii) any warranty made
or implied by Distributor, its employees or its agent to the extent that it
exceeds or differs from the provisions of this Agreement; and (iii) the breach
of any of the representations and warranties of Distributor set forth in this
Agreement. The foregoing indemnity shall not require payment as a condition
deprecedent to recovery and shall survive termination of this Agreement.
b. Manufacturer (including any individual affiliates of
Manufacturer, jointly and separately) will indemnify, defend and hold harmless
Distributor, Distributor s officers, directors, employees and agents from and
against any and all losses, liabilities, damages and expenses, including, but
not limited to, court costs and actual attorneys fees (collectively "Losses")
suffered or incurred by them as a result of (i) the breach of any of the
Manufacturer s duties or covenants under this Agreement, (ii) the breach of
any of the representations and warranties of Manufacturer set forth in this
Agreement, excluding that covered by the breach of Product Warranty set forth
in Section 7 hereof, (iii) any claims of (actual or alleged) infringement of
patent, trademark, trade secret or other intellectual property rights of any
third party in connection with the manufacture, sale, distribution or use of
the Products. The foregoing indemnity shall not require payment as a condition
precedent to recovery and shall survive
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termination of this Agreement, and (iv) any claims brought by Tokuyama Soda or
any person claiming through Tokuyama Soda, with respect to distribution of
Products outside of Japan.
11. Insurance
a. Without in any way limiting Manufacturer's or
Distributor's respective liability pursuant to the indemnity requirements of
Section 9 of this Agreement, Manufacturer and Distributor shall each purchase
and maintain, during the term of this Agreement, Product Liability Insurance as
follows:
(i) Limits of liability of not less than
$1,000,000 per claim or occurrence, and $ 5,000,000 each annual aggregate.
(ii) Such insurance shall include the requirement
that the insurer provide the other party with 30 days written notice prior to
the effective date of any cancellation or material change in the insurance.
(iii) Such insurance shall name the other party and
its agents and employees as additional insureds and shall provide that said
insurance is primary coverage with respect to all insureds.
(iv) In the event such insurance is on a "Claims
Made" basis, Manufacturer and Distributor, as the case may be, shall purchase
and maintain an extension of coverage or "tail" for a period of 4 years
following the termination of this Agreement.
b. The parties shall notify each other of any claim that
is made which appears to be covered by such insurance as soon as practical, but
in no event later than 15 days after either party becomes aware of such claim.
12. Proprietary Rights, Confidentiality, License.
a. Distributor acknowledges that Manufacturer is the
owner of all patents, patent applications, trade secrets and intellectual
property rights relating to the Products and all the trademarks (except the
Private Label, excluding the incorporation of any of Manufacturer's trademarks
or trade names into the Private Label) used in the promotion and sale of the
Products, and that Distributor has no rights or interest in or to such patents,
patent applications, trade secrets, intellectual property rights, trademarks
and tradenames. Distributor shall never contest the exclusive right of
Manufacturer to such patents, patent applications, trade secrets, intellectual
property rights, trademarks and tradenames. Distributor shall have no further
rights or interest in such trademarks and tradenames. All Products sold to
Distributor under this Agreement shall be marketed or resold only in the
original packages and shall not be repackaged, relabeled or otherwise marked.
b. The parties acknowledge that any and all trade
secrets, ideas, information, research, methods, improvements, patents,
copyrighted material and all other confidential information, and the good will
associated with them, owned or developed by one party (the "disclosing party")
and directly or indirectly revealed to the other party (the "receiving party")
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are, and shall remain, the sole and exclusive property of the disclosing party.
All such information and knowledge about the disclosing party, its products,
services, standards, specifications, procedures and techniques, which are not
in the public domain or generally known in the industry, and such information
and material as the disclosing party may designate in writing as confidential,
shall be deemed confidential for purposes of this Agreement. The receiving
party agrees to keep all such information confidential and to use it only for
the purpose and in the manner authorized by the disclosing party. Each party
agrees that during and after the termination of this Agreement, neither the
receiving party nor any of its agents or employees shall copy or disclose to
any other person or entity, or use for any purpose other than as contemplated
by this Agreement, any proprietary or confidential information in contravention
of this Section. At the disclosing party's request, the receiving party shall
enforce any such agreement on the disclosing party's behalf.
c. Subject to the terms and conditions of this
Agreement, Manufacturer hereby grants to Distributor an exclusive world- wide
royalty-free license to use the marks "Interpore 200" and "IP200" (the
"Licensed Marks") in the marketing and sales of the Products pursuant to this
Agreement. This license does not include the right to Sublicense and is not
assignable without he prior written consent of Manufacturer.
d. Distributor agrees to use the Licensed Marks in a
commercially acceptable and reasonable manner and style to protect and enhance
the image and reputation of the Licensed Marks and Manufacturer, and to ensure
that no such use shall reflect adversely upon the goodwill, prestige or
reputation of the Licensed Marks or Manufacturer.
(1) The cost of all advertising for products which
contain the Licensed Marks and are distributed by Distributor shall be
borne by Distributor.
(2) In the event that Manufacturer shall object to
any label, packaging or advertising as violating the provisions of
this Section 12, Manufacturer shall notify Distributor in writing of
any objection and afford Distributor sixty (60) days to introduce new
labels, packaging, marketing or advertising.
(3) Distributor shall use appropriate trademark
notices on al the labels and advertising and all other written
embodiments of the Licensed Marks, including the federal trademark
notice "(R)" in the United States.
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e. The parties acknowledge and agree that great value is
placed on the Licensed Marks and the goodwill associated therewith, that the
consuming public and the industry now associate the Licensed Marks with
products and services of consistently high quality, and that the terms and
conditions of this Agreement are necessary and reasonable to assure the
consuming public and the industry that all goods and services provided
hereunder are of the same consistently high quality as the goods and services
currently offered by Manufacturer under the Licensed Marks. Distributor shall
use the Licensed Marks only in connection with the Products. Upon
Manufacturer's reasonable request, Distributor shall furnish to Manufacturer,
at no expense to Manufacturer, one (1) sample of all items used in connection
with the Licensed Marks, including, but not limited to, a sample of each
product sold under the Licensed Marks as well as packaging, labels, stickers,
advertising, displays and promotional or marketing literature and materials.
Following its review of such items, Manufacturer agrees to return the same to
Distributor. Distributor shall use the Licensed Marks on and in connection
with the Products and the packaging, advertising and promotion thereof, in a
manner consistent with proper trademark usage.
f. Distributor shall not, during the term of this
Agreement or thereafter, contest the validity of Manufacturer's rights to the
Licensed Marks nor willingly become an adverse party to litigation in which
such rights are contested. Manufacturer shall not, during the term of this
Agreement, say, write, or do anything which would diminish the goodwill of (i)
Distributor, its officers or employees or (ii) Distributor's affiliates or
their officers or employees or (iii) the Licensed Marks. Distributor shall
not, during the term of this Agreement, say, write, or do anything that would
diminish the goodwill of (i) Manufacturer, its officers or employees, (ii)
Manufacturer's affiliates or their officers or employees, or (iii) the Licensed
Marks. Distributor agrees to promptly inform Manufacturer by written notice of
any suits or claims for infringement or similar actions alleged to have
occurred by reason of Distributor's use of the Licensed Marks, pursuant to this
Agreement. Distributor agrees that it will not settle or compromise any such
action or claim relating to the Licensed Marks or related matters without the
written consent of Manufacturer. Distributor shall promptly notify
Manufacturer of any uses of the Licensed Marks or related marks which may
constitute infringement or imitation by others of which Distributor has actual
knowledge.
13. Assignment. This Agreement may not be assigned or otherwise
transferred by either party, in whole or in part, by operation of law or
otherwise, without the prior written consent of the other party, which consent
shall not be unreasonably withheld and any such assignment or transfer without
such prior written consent shall be null and void and of no force or effect
whatsoever, provided, however, that either party may assign this Agreement
without the other party's consent in connection with the sale of substantially
all of the assets associated with such party's business.
14. Entire Agreement. This Agreement constitutes the complete,
final and exclusive statement of the terms of the understanding between the
parties concerning the purchase, sale and distribution of the Products. This
Agreement supersedes all prior agreements and understandings concerning its
subject matter and may not be amended without further written agreement of both
parties. If any provision of this Agreement should be found to be invalid or
unenforceable, all of
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the other provisions shall nonetheless remain in full force and effect to the
maximum extent permitted by law.
15. Applicable Law. This Agreement shall be construed in
accordance with, and all disputes hereunder shall be governed by, the internal
laws of the State of California.
16. Attorneys' Fees. In any action or proceeding arising
hereunder, the prevailing party shall be entitled to cover its costs and
reasonable attorneys' fees, as determined by the court.
17. Limitation on Liability. IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
HEREUNDER.
18. Arbitration. All disputes arising in connection with this
Agreement shall be finally settled by final binding arbitration. The
arbitration shall be held in Orange County California, U.S.A., and conducted in
accordance with the Commercial Rules of the American Arbitration Association.
Judgment upon the award rendered may be entered in any court having
jurisdiction or application may be made to such court for a judicial acceptance
of the award and an order of enforcement. Each party shall bear its own
expenses of the arbitration, but the arbitrator's fees and costs shall be borne
equally between the parties participating in the arbitration. The member or
members of the panel or arbitrators shall, to the extent possible, each be
familiar with the industry to which this Agreement relates.
19. Notices. Any notice required or permitted hereunder shall be
given in writing by hand delivery, by carrier guarantying overnight delivery,
by prepaid certified mail, return receipt requested, or by facsimile or similar
electronic means, addressed to the parties at their respective addresses above
(or such other addresses as they may from time to time designate) and directed
to the attention of the president of the recipient. Notice by hand delivery
shall be effective upon receipt. Notice by carrier guarantying overnight
delivery shall be effective upon the day following delivery of the notice to
such carrier. Notice by mail shall be deemed received five (5) days after
mailing. Electronic notice shall be effective upon receipt of confirmation of
transmission.
20. Controlling Forms. It is understood that Manufacturer and
Distributor may use their standard purchase order and sales agreement forms
during the performance of this Agreement and that the Products may be ordered
by such order forms or by telephone or fax. All telephone orders must be
confirmed in writing as soon after the order is placed as practicable and any
such confirming order must plainly be marked with the word, "CONFIRMATION", on
its face. Any purchase order, sales agreement or other form used by the parties
hereto shall be used for convenience only and any terms or provisions which may
be contained therein which are in addition to or inconsistent with those
contained herein shall have and be of no force and effect.
21. Waiver. Any party's failure to insist, in one or more
instances, upon the performance of any term or terms of this Agreement shall
not be construed as a waiver or relinquishment of right to such performance or
the future performance of such term of terms, and the other party's obligation
with respect thereto shall continue in full force and effect.
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22. Force Majeure. The obligations of either party to perform
under this Agreement shall be excused if such failure to perform or any delay
is caused by acts of God or the public enemy, strikes, civil commotion, riots,
war, revolution, fire, explosion, flood, compliance with or other action taken
to carry out the intent or purpose of any law or regulation, or any other cause
reasonably beyond the control of the party obligated to perform. Upon the
occurrence of such an event, the duties and obligations of the parties shall be
suspended for the duration of the event preventing proper performance under
this Agreement, provided, however, that if such suspension shall continue in
excess of sixty (60) days, the parties shall meet and attempt to arrive at a
mutually acceptable compromise within the spirit and intent of this Agreement.
23. Rights Cumulative. Each and all of the respective rights and
remedies of the parties hereunder shall be considered to be cumulative with and
in addition to any other rights or remedies which such parties may have at law
or in equity in the event of the breach of any of the terms of this Agreement.
24. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and, when executed
separately or together, shall constitute a single original instrument,
effective in the same manner as if the parties have executed one and the same
instrument.
25. Amendments. Except for changes, modifications or additions to
the Schedules hereto, no change in, modification of or addition to the terms
and conditions contained in this Agreement shall be valid unless set forth in a
written document signed by both parties, which specifically states that it
constitutes an amendment to this Agreement.
26. Publicity. Neither party will originate any publicity, new
release, or other public announcement, written or oral, whether to the public
press, to holders of publicly owned stock, or otherwise, relating to this
Agreement, to any amendment thereto or to performance hereunder or the
existence of an arrangement between the parties without the prior written
approval of the other party. Such approval will not be unreasonably withheld.
//
//
//
//
//
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IN WITNESS WHEREOF, this Agreement has been executed by the
undersigned authorized representatives of the parties as of the Effective Date
stated above.
INTERPORE ORTHOPAEDICS, INC.
a Delaware Corporation
__________________________________
Xxxxx X. Xxxxxx
President & Chief Executive Officer
STERI-OSS INC.,
a Delaware corporation
__________________________________
Xxxxxxx X. Xxxxxxxx
President
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Index to Schedules
Schedule I - Product and Price List
Schedule II - Specification
Schedule III - Countries with Existing Exclusive Distribution
Agreements
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SCHEDULE I
PRODUCT AND PRICE LIST
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SCHEDULE II
SPECIFICATION
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SCHEDULE III
COUNTRIES WITH EXISTING EXCLUSIVE DISTRIBUTION AGREEMENTS
21
