EXHIBIT 10.3
Confidential Treatment. The portions of this exhibit that have been replaced
with "[*****]" have been filed separately with the Securities and Exchange
Commission and are the subject of an application for confidential treatment.
EXCLUSIVE DISTRIBUTORSHIP AGREEMENT
This Exclusive Distributorship Agreement ("Agreement"), made and effective
this 6th day of June, 1998, by and between Regeneration Technologies, Inc., Xxx
Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx ("RTI") and Bard Urological Division, X.X.
Xxxx, Inc., 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxx ("Distributor").
WHEREAS, RTI performs human tissue processing and distributes human
allograft tissue for use by physicians in implant procedures around the world;
and
WHEREAS, RTI processes and distributes a certain human allograft tissue
termed Fascia Lata; and
WHEREAS, Distributor is a manufacturer and distributor of medical devices
for use by physicians in the human genitourinary system; and
WHEREAS, RTI desires to appoint Distributor, and Distributor desires to
accept appointment, as an exclusive distributor of certain Fascia Lata products
within a defined area as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Rights Granted. RTI hereby grants to Distributor the exclusive right, on
the terms and conditions contained herein, to distribute "RTI Products"
(as set forth below), and offer training and education related to such RTI
Products, throughout the world (the "Territory"). The rights granted
hereunder are limited to the following field of use (the "Field of Use"):
Treatment of Voiding Dysfunctions or Pelvic Tissue Defects in the Human
Genitourinary System.
The exclusive right granted hereunder is contingent upon Distributor
meeting the distribution quotas set forth in the "Distribution Quota
Schedule" attached hereto. Nothing herein shall prevent or prohibit RTI
from distributing any RTI Products to any customers outside the Field of
Use.
2. RTI Products. As used in this Agreement, the term "RTI Products" shall
mean the products processed or distributed by RTI as follows: Fascia Lata
(human allograft tissue with the specifications set forth in the "Fascia
Lata Specifications" attached hereto).
3. Terms of Distribution.
A. All distributions of RTI Products to Distributor's customers shall
be made
[CONFIDENTIAL]
1
pursuant to this Agreement and except as otherwise expressly agreed
by RTI in advance, this Agreement shall control all aspects of the
dealings between RTI and Distributor with respect to the RTI
Products, and any additional or different terms in any Distributor
order are hereby rejected.
B. RTI shall ship all RTI products directly to Distributor's customers
as instructed by Distributor and RTI shall promptly invoice
Distributor for: (1) the greater of forty percent (40%) of the Net
Invoice Amount of all such shipments or the amount set forth in the
Facsia Lata Fee Schedule; and (2) the respective freight charges for
each such shipment to Distributor's customers. "Net Invoice Amount"
as used in this Section 3(B) shall mean the total amount of RTI
Product fees billed to such customers per shipment, net of freight,
and returns approved by RTI. All orders are subject to acceptance by
RTI and RTI shall diligently endeavor to fill all Distributor orders
within the limitations set forth in Section 6 (A) herein.
C. Unless otherwise mutually approved in writing by the parties, the
Fascia Lata Fee Schedule may be changed no more than once per twelve
month period and such percentage of change shall not exceed the
"Consumer Price Index" for the period since the last price change.
RTI agrees to properly pack all items for shipment. Risk of loss due
to damage or destruction of RTI Products shall be borne by
Distributor's customer. The shipper will be selected by RTI unless
Distributor requests a reasonable alternative. RTI covenants that
the fees shall at all times be less than or equal to the fees
charged by RTI to any third party for products supplied directly or
indirectly by RTI which have or may have utility in the Field of Use
("MFN Fees") and that, if the MFN Fees are charged, then this
Agreement shall be deemed automatically amended, without any further
action of the parties, to provide that the fees billed to all of the
Distributor's customers, for the period in which such third party is
charged the MFN Fees, shall be equal to the MFN Fees; provided,
however, that the MFN Fees may be increased in accordance with the
terms of this Section 9(C), but only if the resultant increased fees
are less than or equal to the MFN Fees."
D. RTI shall notify Distributor within three (3) days of RTI's receipt
of: (i) any complaint from Distributor's customers which are related
to RTI Products; or (ii) the return of any RTI Product and its
proper documentation as set forth in the "Return Instructions"
attached hereto. The intention of such provision as set forth in
Section 3(D) herein is to allow Distributor, at its option, to
respond directly to such customer.
4. Payment. RTI shall invoice Distributor for all RTI Products shipped in the
current month promptly after the close of that month's business. Included
with such invoice will be a statement itemizing the shipments as to
product type and quantities shipped by customer. Distributor shall pay all
such invoices within thirty (30) days from receipt of invoice. RTI may
impose a late payment charge of one percent (1%) per month on overdue
amounts. Failure to pay such overdue amounts within thirty (30) days
written notice from
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RTI shall, at RTI's option, be considered a material breach of this
Agreement and RTI may suspend deliveries of RTI Products or seek other
remedies available to it at law or equity.
5. Supporting Policies. Distributor shall diligently endeavor to train and
educate its customers about the RTI Products through all channels of
distribution prevailing in the Territory, in conformity with RTI's
established training and education policies and programs. Distributor will
use commercially reasonable efforts to procure orders for RTI Products
from responsible customers whom Distributor reasonably believes are
capable of properly utilizing such RTI Products.
6. RTI's General Duties.
A. RTI shall use its best efforts to supply the quantities of RTI
Products as set forth on the "Distribution Quota Schedule" attached
hereto.
B. RTI shall cause all RTI Products provided to Distributor's customers
hereunder to be irradiated within the 1.5 to 2.5 MRAD range.
C. RTI shall adhere to all state, federal and country specific laws and
regulations and RTI specifications pertaining to the donor recovery
and processing for RTI Products.
7. Distributor's General Duties.
A. Distributor's personnel and representatives shall be adequately
trained by Distributor regarding the RTI Products. Distributor shall
use commercially reasonable efforts to employ sufficient numbers of
such personnel and representatives to properly train and educate
Distributor's customers concerning the RTI Products in the
Territory.
B. Within thirty (30) days of the effective date of this Agreement,
Distributor shall provide RTI with a written, non-binding, annual
distribution forecast, broken down by quarter. Ensuing quarterly
distribution forecasts shall be provided every ninety (90) days
thereafter, for the term of this Agreement, it being the intent of
the parties to have at all times distribution forecasts for the
current quarter and three following quarters. Distributor may amend
its distribution forecasts provided such amendment is submitted to
RTI, in writing, at least one quarter m advance.
8. Distributor's Exclusivity. Distributor's exclusive rights hereunder are
contingent upon Distributor's achieving the level of distribution set
forth on the Distribution Quota Schedule provided, however, that RTI has
supplied sufficient quantities of RTI Products as set forth on the
Distribution Quota Schedule. Otherwise, in the event Distributor fails to
fulfill the distribution requirements set forth on the Distribution Quota
Schedule, RTI
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shall notify Distributor in writing of such failure within forty five (45)
days after the end of the applicable Distribution Quota period.
Distributor shall then have forty five (45) days within receipt of such
notice to rectify the shortfall by paying RTI the respective shortfall
amount or otherwise issuing a purchase order for RTI Products in the
amount of such shortfall. In the event that distributor fails to pay such
shortfall or issue such purchase order, RTI's sole and exclusive remedy
shall be to promptly render this Agreement non-exclusive or terminate it
in accordance with Section 17(i) herein. The delivery date(s) of any such
purchase order as set forth in this Section 8 shall be mutually agreed
upon in good faith between Distributor and RTI. Any make-up of the
shortfall amount shall not be applicable to any other period's
distribution quotas.
9. Training and Education Policies. RTI will cooperate with Distributor in
providing for effective training and education of RTI Products throughout
the Territory and RTI's participation in such training and education shall
be on a schedule mutually agreed to by the parties hereto. Distributor
shall promptly compensate RTI for all travel related expenses for RTI
employees, officers, or agents who participate in such training and
education. All training, education, and related materials shall be at
Distributor's expense; however, plans for such training and education and
related materials shall first be submitted to RTI for its approval.
10. Product Warranty Policies. In the event that any RTI Products are proven,
to RTI's satisfaction, to have been defective at the time of distribution,
RTI will make an appropriate adjustment in the original distribution fee
charged for such product or, at RTI's election, replace the defective
product.
11. Indemnification.
A. RTI warrants that all RTI Products supplied to Distributor's
customers hereunder shall be recovered from donors and processed in
accordance with all state, federal and country specific laws and
regulations and RTI specifications. RTI agrees to indemnify
Distributor and hold Distributor harmless from any loss or claim
arising out of defects in any of RTI Products existing at the time
such Product is distributed by RTI to Distributor's customer(s),
provided that Distributor gives RTI immediate notice of any such
loss or claim and cooperates fully with RTI in the handling thereof.
B. Distributor and RTI each agree to indemnify and hold the other
harmless from any loss or claim arising out of its negligence, the
negligence of its agents, employees or representatives, in the
processing, distribution, representation, warranty, use or other
disposition of RTI Products and from breach of any purchase order
arising hereunder or any obligation, representation, warranty and
covenant herein.
C. Each party hereby covenants to maintain, for the term herein, a
comprehensive general liability insurance policy in a minimum amount
of three million dollars ($3,000,000) per occurrence and in the
aggregate. Each party shall provide not
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less than thirty (30) days prior written notice to the other in the
event of a change in coverage or policy cancellation. Upon the
request of either party, the other party shall deliver to the
requesting party a certificate evidencing such coverage.
12. Order Processing and Rejection of RTI Products.
A. RTI will employ its best efforts to fill Distributor's orders
promptly on acceptance, subject to availability of RTI Products.
B. Subject to the Return Instructions, Distributor or Distributor's
customers shall notify RTI in writing if such customer chooses to
reject all or any part of such shipment of RTI Product or, falling
such notification, unless such RTI Product has a latent defect, the
customer shall be deemed to have accepted such shipment for all
purposes. With respect to latent defects, Distributor or
Distributor's customers shall promptly notify RTI after such
customer's discovery thereof, and such customer shall have the right
to reject such RTI Product.
13. Use of RTI Name. Distributor will not use, authorize or permit the use of,
the name "Regeneration Technologies, Inc.," "RTI" or any other trademark
or trade name owned by RTI or its corporate or business name in any way
without the prior written approval of RTI. Distributor shall not contest
the right of RTI to exclusive use of any trademark or trade name used or
claimed by RTI.
15. Use of University of Florida Name. The tradename "University of Florida
Tissue Bank, Inc." shall be included on the packaging of all RTI Products.
Distributor shall not use the name University of Florida or the University
of Florida Tissue Bank, in any way or form, on any promotion for the
distribution of Tissue, advertising, or any other form of publicity,
without the prior written consent of RTI.
16. Relationship of the Parties. The relationship between RTI and Distributor
is that of vendor and vendee. Distributor, its agents and employees shall,
under no circumstances, be deemed employees, agents or representatives of
RTI. Distributor will not modify any of RTI Products without written
permission from RTI. Neither Distributor nor RTI shall have any right to
enter into any contract or commitment in the name of, or on behalf of the
other, or to bind the other in any respect whatsoever.
17. Term and Termination. This term of this Agreement shall be for a period
often ten (10) years commencing with the effective date herein and upon
the end of such term the Agreement shall continue until terminated by
either party with at least thirty (30) days prior written notice to the
other party. This Agreement may be terminated early:
(i) by either party due to a material breach by the other party of any
of its obligations or covenants herein upon sixty (60) calendar days
written notice to the breaching party, but only if such breaching
party fails to remedy said breach within sixty (60) calendar days of
such written notice;
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(ii) by either party promptly upon the insolvency or filing for
receivership or bankruptcy by the other party.
18. Obligations on Termination. On termination of this Agreement, Distributor
shall cease to be an authorized distributor of RTI and:
A. All amounts owed by Distributor to RTI shall, without exception,
become immediately due and payable;
B. All unshipped orders may be cancelled without liability of either
party to the other;
C. Neither party shall be liable to the other because of such
termination for compensation, reimbursement or damages on account of
the loss of prospective profits or anticipated distributions, or on
account of expenditures, investments, leases or commitments in
connection with the business or goodwill of RTI or Distributor or
for any other reason whatsoever growing out of such termination.
19. Use of Name Prohibited. On termination of this Agreement, Distributor will
remove and not thereafter use any sign containing any trade name, logo or
trademark of RTI including, but not limited to, "Regeneration
Technologies, Inc.," or "RTI" and will immediately destroy all stationery,
advertising matter and other printed matter in its possession or under its
control containing such name, or any of RTI trademarks, trade names or
logos. Distributor will not at any time after such termination use or
permit any such trademark, trade name or logo to be used in any manner in
connection with any business conducted by it or in which it may have an
interest, or otherwise whatsoever as descriptive of or referring to
anything other than merchandise or products of RTI. Regardless of the
cause of termination, Distributor will immediately take all appropriate
steps to remove and cancel its listings in telephone books, and other
directories, and public records, or elsewhere that contain the RTI name,
logo or trademark. If Distributor fails to obtain such removals or
cancellations promptly, RTI may make application for such removals or
cancellations on behalf of Distributor and in Distributor's name and in
such event Distributor will render every assistance.
20. Acknowledgments. Each party acknowledges that no other representation,
statement, understanding or agreement, has been made, or exists between
the parties, except for the Confidential Information Agreement executed
between the parties on February 2, 1998, and that neither party has relied
on anything done or said or on any presumption in fact or in law, (1) with
respect to this Agreement, or to the duration, termination or renewal of
this Agreement, or with respect to the relationship between the parties,
other than as expressly set forth in this Agreement; or (2) that in any
way tends to change or modify the terms, or any of them, of this Agreement
or to prevent this Agreement becoming effective; or (3) that in any way
affects or relates to the subject matter hereof. Distributor also
acknowledges that the terms and conditions of this Agreement, and each of
them, are reasonable, fair and equitable.
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21. Right of First Negotiation. In the event RTI develops any new technology,
invention, process, or application within the Field of Use (the "New
Technology"), RTI grants to Distributor the exclusive right to negotiate
an agreement for distribution or licensing of the New Technology. Such
exclusive right shall be limited in duration to ninety (90) days from the
date RTI advises Distributor of the existence of the New Technology. If
the parties hereto fail to conclude an agreement with respect to the New
Technology within ninety (90) days following such notice, RTI will be free
to negotiate an agreement with any other party concerning the New
Technology.
22. Final Agreement. This Agreement may be modified only by a further writing
that is duly executed by both parties.
23. Assignment. Neither this Agreement nor any interest in this Agreement may
be assigned by either party without the prior written approval of the
other party and such consent shall not be unreasonably withheld.
24. No Implied Waivers. Except as expressly provided in this Agreement, waiver
by either party, or failure by either party to claim a default, of any
provision of this Agreement shall not be a waiver of any default or
subsequent default.
25. Notices. Any notice required by this Agreement or given in connection with
it, shall be in writing and shall be given to the appropriate party by
personal delivery or by certified mail, postage prepaid, or recognized
overnight delivery services.
If to RTI: Regeneration Technologies, Inc.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
If to Distributor: Bard Urological Division, X.X. Xxxx, Inc.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
With copy to: XX Xxxx, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Att: Office of General Counsel
26. Governing Law and Venue. This Agreement shall be construed and enforced in
accordance with the laws of the state of Florida. Venue for any legal
proceeding or action at law arising out of or construing this Agreement
shall lie in the state courts of Alachua County, Florida, or the United
States District Court for the Northern District of Florida, Gainesville
Division.
27. Severability. If any term of this Agreement is held by a court of
competent jurisdiction to be invalid or unenforceable, then this
Agreement, including all of the remaining terms, will remain in full force
and effect as if such invalid or unenforceable term had never been
included.
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28. Headings. Headings used in this Agreement are provided for convenience
only and shall not be used to construe meaning or intent.
29. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, and all of which shall constitute
but one and the same instrument.
30. License.
A. RTI hereby acknowledges that a reliable and continuous source of
supply of the RTI Product is imperative to Distributor's successful
distribution efforts. Therefore, as a material inducement to the
execution of this Agreement by Distributor, RTI hereby grants
Distributor an exclusive license under RTI's proprietary rights
limited to the RTI Products, and existing as of the effective date
herein, to process, have processed, use and distribute an analogue
of the RTI Product in the Territory and Field Use. Upon request from
Distributor, RTI shall assist Distributor in locating a suitable
processor for such licensed analogues. Distributor agrees, however,
to withhold the exercise of its rights under such license until the
occurrence of, and only for the duration of, the following:
(i) RTI's insolvency, or general assignment for the benefit of its
creditors; a filing for bankruptcy; a filing against it of a
petition in bankruptcy which is not dismissed before an order for
relief is entered; a petition filing in any state or federal
proceeding seeking relief from creditors; but only if any such
actions set forth in Section 30 (i) herein prevent RTI from meeting
processing and shipping obligations hereunder; or
(ii) RTI's breach of any of its duties or responsibilities hereunder
if such breach is not cured within sixty (60) days of RTI's receipt
of notice of such breach, or upon RTI's inability to supply the
quantity of RTI Products set forth in the Distribution Quota
Schedule if such inability is not cured within ninety (90) days of
written notice from Distributor.
B. In the event Distributor elects to utilize the exclusive license
granted herein, it shall notify RTI in writing within thirty (30)
days of Distributor's knowledge of an occurrence as set forth in
Section 30(A)(i) and (ii) herein. Distributor shall pay Ri] a
royalty of two percent (2%) of the net distribution fee of any
product distributed under such license. "Net distribution fee" as
used in this Section 30(B) shall mean the gross amount indicated on
invoices for such distributed products less trade and quantity
discounts; returns; and freight charges. Royalties, if any, shall be
paid to RTI in U.S. Dollars, with an accounting of how such
royalties were determined, within forty five (45) days following the
end of each calendar quarter in which Distributor utilizes such
license.
(SIGNATURES ON NEXT PAGE)
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Witnesses Regeneration Technologies, Inc.
/s/ Xxxxx X. Xxxxxx
------------------------------- -----------------------------------------
By: Xxxxx X. Xxxxxx
Title: President & CEO
-------------------------------
Bard Urological Division, X.X. Xxxx, Inc.
/s/ Xxxx Xxxxxxx
------------------------------- -----------------------------------------
By: Xxxx Xxxxxxx
Title: President
-------------------------------
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"RETURN INSTRUCTIONS"
1. Custom processed tissues will not be accepted for return by RTI.
2. Freeze Dried Tissue will be accepted for return within the first thirty
days of purchase on the following basis:
a. Upon request from customer RTI will fax customer a "Return
Authorization" form. Such form must be completed by customer and
included with return shipment.
b. Tissue must be in the same condition as when it left RTI.
c. Purchaser will pay freight from and back to RTI.
d. Purchaser will pay a twenty percent (20%) restocking fee for the
tissue(s) being returned.
3. Freeze Dried Tissue will be accepted for return after thirty days on the
following basis:
a. Tissue must be in the same condition as when it left RTI, and must
have a minimum of twelve (12) months before expiration.
b. The purchaser will pay freight from and back to RTI.
c. The purchaser will pay a forty percent (40%) restocking fee.
"TRANSFER QUOTA SCHEDULE"
1. Period I - first eighteen (18) months commencing with the effective date
of Agreement: [*****]
2. Period II - twelve (12) months commencing with the end of Period I:
[*****]
3. Period III - twelve (12) months commencing with the end of Period II:
[*****]
4. Period IV - remainder of Agreement term commencing with the end of Period
III: [*****]
[CONFIDENTIAL]
Fascia Lata Fee Schedule
Reorder# Size Fee
-------- ---- ---
483042 4cm x 2cm [*****]
483047 7cm x 4cm [*****]
483212 l2cm x 2cm [*****]
483412 l2cm x 4cm [*****]
483812 l2cm x 8cm [*****]
[CONFIDENTIAL]
