EXHIBIT 10.6
DISTRIBUTION AGREEMENT
BETWEEN
CHUGAI DIAGNOSTICS SCIENCE CO., LTD
AND
REAADS BIO-MEDICAL PRODUCTS (UK) LTD
DISTRIBUTION AGREEMENT
BETWEEN
CHUGAI DIAGNOSTICS SCIENCE CO., LTD
AND
REAADS BIO-MEDICAL PRODUCTS (UK) LTD
CONTENTS
Clause Heading
1. INTERPRETATION
2. APPOINTMENT
3. SUPPLY OF THE PRODUCT
4. PRICE AND PAYMENT
5. THE DISTRIBUTOR'S OBLIGATIONS
6. THE SUPPLIER'S RIGHTS AND OBLIGATIONS
7. GUARANTEE
8. WARRANTY AND LIABILITY
9. INDEMNITY
10. INTELLECTUAL PROPERTY
11. CONFIDENTIALITY
12. TERMS AND TERMINATION
13. CONSEQUENCES OF TERMINATION
14. FORCEMAJEURE
15. ASSIGNMENT AND SUB-CONTRACTORS
16. MISCELLANEOUS
17. NOTICES
18. GOVERNING LAW AND JURISDICTION
THIS AGREEMENT is made the 17th day of November, 1997.
BETWEEN
(1) Chugai Diagnostics Science Co., LTD. ("the Supplier") a company
incorporated in Japan whose principal office is at 0-00-0 Xxxxxx,
Xxxxxxx-xx, Xxxxx, Xxxxx.
(2) Reaads Bio-Medical Products (UK) LTD. ("the Distributor") a company
incorporated in United Kingdom whose registered office is at 00 Xxxxxxxx,
Xxxxxxxxxxxx, Xxx 0xx, XX.
WHEREAS:
(A) The Supplier and Reaads Medical Products, Inc., a Delaware corporation
having a principal place of business at 00000 Xxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxxx 00000, XXX ("RMP"), which owns 100% share of
Distributor, entered into a Manufacturing Agreement ("the Original
Agreement") as of the day of September 1, 1994
(B) RMP manufactures the Products (as defined), and the Supplier import the
Products from RMP and sell the Products in Japan
(C) The Supplier wishes to appoint the Distributor as a distributor of certain
products within the Territory (as defined)
(D) The Distributor has agreed so to act on the terms and conditions set out
below.
NOW, THEREFORE, in consideration of the premises and mutual agreements contained
herein, the parties hereto mutually agree as follows:
1. INTERPRETATION
1.1 In this Agreement the following words and expressions shall bear the
following meaning:
"Contract Year": the 24 month period commencing on the commencement date
set out in Clause 12.1 and each subsequent one year anniversary thereof.
"Products": Products shall mean those items as specified in Schedule A
attached hereto, as amended from time to time by mutual agreement in
writing, and as described in the Patent No. 283779 filed on September 11,
1991 in United Kingdom.
"Territory": The territory to which this Agreement applies shall be
limited to United Kingdom.
"Associated Companies": Associated companies mean any corporation,
partnership or other entity directly or indirectly owned by, owning, or
under common ownership with the parties hereto at last 50% of its share
having the power to vote for the election of directors.
2. APPOINTMENT
2.1 The Supplier hereby appoints the Distributor to act as its exclusive
distributor for the distribution and resale of the Products throughout the
Territory subject to the terms of this Agreement.
2.2 The Distributor shall for the duration of this Agreement:
(a) not manufacture or distribute goods which compete with any of the
Products and for the sake of clarity competitive products will be
products with similar functions or being able to be used as substitute
or alternative to the Products;
(b) obtain the Products for resale only from the Supplier;
(c) not seek customers for nor establish any branch nor maintain a
distribution depot for the sale of the Products outside the Territory.
2.3 Without prejudice to Clause 2.1, the Supplier shall not appoint any other
person as distributor of the Products in the Territory nor supply the
Products to any other person in the Territory whether for use or resale
nor itself sell the Products in the Territory other than to the
Distributor.
3. SUPPLY OF THE PRODUCT
3.1 The Distributor shall order the Products in writing specifying order
details such as quantity/place of delivery/delivery instructions/price
code of product, etc. No order shall become binding until accepted by the
Supplier. The confirmation of the order will be made by any means
available to Supplier by fax.
3.2 The Distributor shall at quaterly intervals notify the Supplier of its
estimated requirement for the Products for the following 6 months and
shall give the written tentative order before 60 days and the written
firm order before 30 days to the Supplier.
3.3 The Supplier shall use all reasonable efforts to supply the Products to
the Distributor within 45 days of the order, FCA at Denver and in
accordance with the Distributor's orders.
3.4 Each order for the Products shall once accepted by the Supplier constitute
a separate contract and any default by the Supplier in respect of an order
shall not affect this Agreement or any other orders placed under it.
3.5 All supply of the Products to the Distributor hereunder shall be subject to
the Supplier's standard form terms and conditions of supply as amended and
notified to the Distributor from time to time. Where there is any conflict
between the terms hereof and the Supplier's standard terms and conditions
of supply the terms hereof shall prevail.
4. PRICE AND PAYMENT
4.1 The prices of the Products for the Distributor subject to any agreed
reductions or discounts shall be those specified in the Schedule
attached hereto, excluding VAT and any other sales or similar tax
which shall be added thereto if and to the extent applicable from time
to time. However the Supplier and the Distributor shall annually agree
on the increase or decrease in the prices for the Products according
to market conditions, the margins and the growth of the sector. If the
adjusted prices are not agreed, the prices shall be the prices
currently in force adjusted by the amount by which the Hyaluronic Acid
Retail price changes. The adjustment in the prices for the Products
shall come into force on 1 January each year.
4.2 All duties, taxes or other charges relating to the importation of the
Products into the Territory shall be borne and paid by the
Distributor.
4.3 The Supplier shall issue an invoice for each order for the Products to
be delivered. The original invoice shall be sent to the Distributor.
4.4 Payment for the Products shall be made within 45 days of receipt of
invoice. Any overdue amount will be charged with an interest rate
equivalent to 10% annually.
4.5 Payment shall be made in Japanese YEN((Y)) by bank transfer to the
bank account designated by Supplier.
4.6 It is understood by the parties hereto that time for payment of sums
due shall be of the essence. In addition to any other rights and
remedies the Supplier may have, where any sums have fallen due to the
Supplier and are unpaid by the Distributor.
(a) the Supplier shall be entitled to suspend further deliveries to
the Distributor until all outstanding sums are paid; and
(b) all sums involved by the Supplier to the Distributor (whether
or not outstanding) shall become immediately due and payable
in full.
4.7 If in any Contract Year the Distributor fails to purchase from the
Supplier and pay for in full at least the Quantity of Products shown
below for the Contract Year in question (The Minimum Purchase Order)
then, the Supplier shall be entitled on giving twenty days written
notice to the Distributor, to be served within three months of the
end of the Contract Year in question, to terminate this agreement
forthwith in which case the provisions of Clause 13 shall apply.
Contract Year Minimum Purchase Order per year
1st year 100kits
2nd year 200kits
In the fourth and subsequent years the Minimum Purchase Order shall be
increased by the Supplier in respect of the previous year in consultation
with the Distributor.
Any purchase amount exceeding the yearly Minimum Purchase Order can be set
off or credited by the Distributor against the Minimum Purchase Order for
the following year.
5. THE DISTRIBUTOR'S OBLIGATIONS
5.1 The Distributor shall:
(a) use its best endeavors to maximize sales of the Products in all
parts of the Products in all parts of the Territory;
(b) advertise the Products within the Territory;
(c) employ staff having adequate training in the promotion,
distribution, sale and servicing of the Products;
(d) maintain an adequate sales network and such other staff as may be
required to promote and sell the Products and ensure that
customers are given proper instructions and information
concerning the purchase and use of the Products and provide a
proper after sales maintenance, repair and guarantee service for
the Products;
(e) make no alteration, modification or addition to the Products and
make no representations nor give any warranty or guarantee on
behalf of the Supplier in relation to the Products other than one
agreed in writing with the Supplier.
(f) at its own expense ensure that all regulations and all
requirements relating to the import, promotion, distribution and
resale of the Products in the Territory are complied with.
6. THE SUPPLIER'S RIGHTS AND OBLIGATIONS
The Supplier shall provide to the Distributor reasonable quantities of up
to date information concerning the products including technical data,
drawings and catalogues to assist the Distributor in the promotion and
sale of the Products and upon request from the Distributor provide, at a
reasonable rate assistance with training the Distributor's staff to enable
them to carry out the promotion, sale and after-sales servicing of the
Products. Any material so provided by the Supplier may be used by the
Distributor only in the proper performance of its obligations hereunder.
7. GUARANTEE GRANTED BY THE DISTRIBUTOR
The Distributor and the Supplier guarantee and undertake to take all
necessary actions in order to ensure that neither it nor any of its
Associated Companies shall manufacture or distribute goods in the
Territory which compete with or might compete with the Product.
8. WARRANTY AND LIABILITY
8.1 The Supplier warrants that the Products shall be free from defects
in work and materials and shall comply with any written description
or specification given therefor by the Supplier to the Distributor.
The Supplier's entire liability (including any liability for the act
and omission of its employees agents or subcontractors) to the
Distributor in respect of any breach of its contractual obligations
arising hereunder or any representation statement tortuous act or
omission including negligence arising under or in connection with
this agreement or breach of any or all warranties given in this
Clause 8.1 shall be limited in total (no matter how many claims are
made or whatever the basis of such claim) to the replacement of the
Products, or at Supplier's discretion, repayment of the price of the
Products which are the subject of the breach, representation,
statement, tortuous act or omission. The Supplier shall indemnify
the Distributor for all costs, expenses or damages incurred by it as
a result of claim made against the Distributor by third parties for
compensation for personal injury or loss of damage to property
resulting from Products
supplied by the Supplier hereunder (in the absence of negligence or
breach of this Agreement by the Distributor) not complying with the
specifications referred to above.
8.2 The Supplier shall not be liable to the Distributor for any
indirect, special or consequential loss or damage (including loss of
profits, revenue or goodwill) suffered by the Distributor whether
such loss is caused by the Supplier's breach of its contractual
obligations or by any tortuous act or omission including negligence
or in any other way.
9. INDEMNITY
The Distributor hereby agrees to indemnify the Supplier against all proceedings,
claims, losses, costs (including professional fees), damages and expenses which
may be incurred or suffered by or threatened against the Supplier as a result of
of any use of Products by third parties, except to the extent that such
proceedings, claims, loses, costs any use, damages and expenses have resulted
from the inconformity of Products with Schedule.
10. INTELLECTUAL PROPERTY
10.1 Nothing in this Agreement shall grant the Distributor any right or
license to exploit any copyright, patent or know-how comprised in
the Products.
10.2 The Distributor shall promptly notify the Supplier of any actual or
suspected infringement by any third party of any patent, copyright,
design right or any other intellectual property right comprised in
or associated with the Products and shall assist the Supplier in
taking all such steps as may be necessary to protect or defend such
rights including taking or defending legal proceedings or applying
for a registration of such right.
10.3 Copyright in the packaging and labeling of the Products (including
without limitation those prepared by the Distributor in accordance
of Clause 5.1.e.) shall belong to the Supplier at all time
notwithstanding termination of this agreement for any reason. The
Distributor shall not alter, amend, or obscure any such packaging or
labeling without the written consent of the Supplier.
11. CONFIDENTIALITY
11.1 The Distributor shall treat as confidential any information or
know-how relating to the Products as well as any information
relating to the Supplier's business, sales, marketing methods given
by the Supplier to the Distributor and shall not use or disclose the
same for the proper and necessary purposes
of this Agreement and any such disclosure shall be made to the
Distributor's employees or to third parties under appropriate
conditions of confidence.
11.2 These obligations of confidentiality shall survive termination of
this Agreement for any reason provided always that they shall not
apply to any information which is:
(a) at the time of disclosure from the Supplier, in the public
domain; or
(b) after disclosure from the Supplier, becomes part of the public
domain, by publication or otherwise, through no fault of the
Distributor; or
(c) at the time of disclosure by the Supplier, already in the
possession of the Distributor, and such possession can be
properly demonstrated by Distributor; or
(d) is rightfully made available to Distributor from sources
independent of Supplier; or
(e) is required by law to be disclosed to any Court or other
regulatory authority.
12. TERMS AND TERMINATION
12.1 This Agreement shall commence on November 17, 1997 and unless
terminated in accordance with the terms hereof shall continue in
force for an initial period of two years and will be renewed for
further 1 year periods with mutual written consent 30 days prior to
the termination of this Agreement.
12.2 The Supplier may terminate this Agreement:
(a) as provided in Clause 4.7 if the Distributor fails to purchase
and pay for the minimum Purchase Order set out therein;
(b) by giving not less than 30 days written notice if there is any
material change in the ownership management or control of the
Distributor;
(c) upon 30 days written notice from the Supplier to the
Distributor of any default in the payment of due invoices;
(d) if the Original Agreement is terminated for whatever reason.
12.3 Either party shall be entitled to terminate this Agreement
immediately on given written notice to the other if the other:
(a) commits a breach of its obligations hereunder or contained in
any order contract made pursuant hereto which in the case of a
breach capable of remedy has been remedied within 30 days of a
notice of the breach requiring its remedy having been given by
the innocent party to the other; or
(b) holds any meeting with or makes or proposes or enters into or
has proposed to it any arrangement or composition with or for
its creditors; or
(c) is presented with a petition for bankruptcy or has a meeting
convened to consider a resolution for the making of an
administrative order against it, or its winding up, bankruptcy
or dissolution; or
(d) undertakes any action or has any action taken against it
analogous to the foregoing in any jurisdiction.
13. CONSEQUENCES OF TERMINATION
13.1 Upon termination of this Agreement by reason of the Distributor
breaches the Supplier may at its option cancel any orders for the
Products placed by the Distributor prior to termination to the
extent that delivery to the Distributor has not been made;
13.2 Upon termination of this Agreement for any other reason:
(a) for a period of 30 days after the date of termination the
Distributor shall be entitled to fulfill firm orders for the
Products places by customers and accepted by the Distributor
prior to the date of termination from stock already held by
the Distributor and to the extent that stock is not
repurchased by the Supplier for the purposes of any sales
allowed by this terms of this Agreement shall continue to
apply;
(b) all amounts invoiced to the Distributor by the Supplier
(whether before or after termination and whether they have
fallen due or not) for Products delivered shall be payable
immediately;
(c) subject to the rights specifically granted in this Clause 13,
the Distributor shall cease to promote, market or sell the
Products and shall no longer hold itself out as distributor of
the Products;
(d) the Distributor shall within 14 days after termination deliver
to the Supplier or at the Supplier's option destroy all
product samples and sales and marketing material in its
possession or control which related to the Products or which
refer to the Distributor as distributor of the Products.
14. FORCEMAJEURE
14.1 Either party shall be excused from performance of its obligations
hereunder if and to the extent that such performance is prevented
(directly or indirectly)
by reason of any strike, lock out, labor disturbance, government
action, riot, armed conflict, accident, extremes of weather or event
of nature, unavailability of raw materials or raw materials or of
normal means of transport, act of God or any other matter whatsoever
beyond the reasonable control of the party whose performance is
thereby hindered or prevented.
14.2 Nothing in Clause 14.1 shall operate to excuse the Distributor from
performance of any of its payment obligations under this Agreement
provided that where payment in accordance with the terms hereof is
prevented by an act or event beyond the reasonable control of either
party the Distributor shall make payment into a bank account opened
in the name of the Supplier of any sums due from the Distributor to
the Supplier hereunder and immediately upon the cessation of the
relevant act or event referred to above such sums shall be paid to
the Supplier.
14.3 If either party is prevented for a continuous period of 15 or total
of 30 days in any 365 day period by any reason set out in Clause
14.1 from performing its obligations hereunder to the extent that
the commercial purpose of this Agreement is frustrated then either
party may on 30 days written notice to the other terminate this
Agreement provided that the reason preventing that party's
performance still prevails as at the date of termination.
15. ASSIGNMENT AND SUB-CONTRACTORS
15.1 The Distributor shall not assign or transfer all or any of its
rights or obligations hereunder nor appoint agents, representatives
or sub-distributors without the prior written consent of the
Supplier.
15.2 The Supplier may assign its right and obligations under this
Agreement or may perform any of its obligations hereunder through an
Associates Company.
15.3 This Agreement shall be binding upon and endure to the benefit of
the successors and assigns (if any) of the parties hereto.
16. MISCELLANEOUS
16.1 Nothing contained herein shall be deemed to create any partnership
or joint venture between the parties nor any relationship of
principal and agent.
16.2 Each party hereby confirms that this Agreement sets out the entire
agreement and understanding between the parties in relation to the
subject matter hereof and that it supersedes all previous
agreements, arrangements
and understandings between them with regard to such subject matter
and that it is not entering into this Agreement in reliance upon any
representation or warranty not expressly set out herein.
16.3 No provision of this Agreement may be amended, modified, discharged
or terminated other than by the express written agreement of the
parties hereto.
16.4 No failure or delay by either party in exercising any right, power
or privilege under this Agreement shall operate as a waiver thereof
nor shall any single or partial exercise by either party of any
right, power or privilege preclude any further exercise of any other
right, power or privilege.
17. NOTICES
17.1 Any notice or other communication given or made under this Agreement
shall be in writing and may be delivered to the relevant party or
sent by facsimile transmission to the address of that party
specified in this Agreement or to that party's facsimile
transmission number thereat that party from time for this purpose
and shall be effectual notwithstanding any other of address not so
notified.
17.2 Unless the contrary shall be proved, each such notice or
communication shall be deemed to have been given or made and
delivered, if by letter on the tenth working day after posting, if
by delivery during working hours when left at the relevant address
and otherwise on the tenth working day after delivery and if by
facsimile during working hours when transmitted and otherwise on the
next working day after transmission.
18. GOVERNING LAW
This agreement shall be construed and the rights and obligations of the parties
hereto shall be determined in accordance with the laws of Japan.
19. ARBITRATION
All disputes arising out of and/or in relation to this agreement shall be
finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with the said Rules. Such arbitration shall take place in Tokyo,
Japan. The award resulting therefrom shall be final and binding on both parties,
and judgement upon the award rendered by the Arbitrators may be entered in any
court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives:
Chugai Diagnostics Science Co. LTD.
By: Xxxxxxx Xxxxx
Position: President
Date:
Reaads Bio-Medical Products (UK) LTD.
By: Xxxxxx Xxxxxxx /s/Xxxxxx Xxxxxxx
Position: Managing Director
Date:
SCHEDULE
PRODUCT
HYALURONIC ACID "CHUGAI" 96WELL (Y)33,600
