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EXHIBIT 10.94
MANUFACTURING AGREEMENT
This MANUFACTURING AGREEMENT (the "Agreement") is entered into effective
as of December 16, 1997 (the "Effective Date"), by and between COLLAGEN
CORPORATION, a Delaware corporation, with an office at 0000 Xxxxx Xxxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000 ("Collagen"), and LABORATOIRE PEROUSE IMPLANT, a company
of France, with an office at B.P. 6-Z.A. X'Xxxxxxxxxx 00000
Xxxxxx Xxxxxx ("LPI").
WHEREAS, Collagen wishes LPI to manufacture Products (as defined below)
for Collagen in accordance with specifications provided by Collagen;
WHEREAS, LPI is willing to act as Collagen's subcontractor for
manufacture of such Products:
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1: DEFINITIONS
1.1 "Affiliate" shall mean an entity that controls, is controlled by or
is under common control with such party. For purposes of this definition,
"control" shall mean the possession, directly or indirectly, of a majority of
the voting power of such entity or the power to direct or cause the direction of
the management and policies of such entity (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
1.2 "Regulatory Agency" shall mean, collectively, the U.S. Food and Drug
Administration, local regulatory administration competent for medical devices
and appointed local controlling entities ("organismes notifies") and the
European Standards and Medical Device Directives.
1.3 "Latent Defect" means any defect in a Product, not discoverable by
reasonably careful inspection using normal inspection procedures, which arises
from a defect in the manufacturing of such Product, the materials used in such
Product, or noncompliance with the Proprietary Specifications for such Product.
1.4 "Net Sales" shall mean the gross invoiced price for all Products
sold by Collagen, its Affiliates or sublicensees to third party customers, less
deductions made in the normal course of business for: (a) commercially
reasonable quantity, trade and cash discounts or rebates, recalls, credits or
allowance and adjustments separately and actually credited to customers for
rejections and returns of Products; (b) charges for freight, postage,
transportation, import or export taxes, excise taxes and other similar taxes,
insurance and other delivery costs not otherwise charged to the customer and
actually paid by Collagen; and (c) any tax or other government charges (other
than income tax) levied on the use, sale, transportation or delivery of Product
and borne by Collagen and its Affiliates.
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1.5 "Products" shall mean the products set forth in Exhibit A.
1.6 "Proprietary Specifications" shall mean the design, specifications
and drawing for the Products as provided by Collagen and to be agreed upon by
the parties and attached hereto as Exhibit A within thirty (30) days of the
Effective Date.
ARTICLE 2: SUPPLY, OWNERSHIP, AND DISTRIBUTION RIGHTS
2.1 Manufacture of Products. Commencing on the Effective Date, and for
the term of this Agreement, LPI shall manufacture Products in strict conformity
with the Proprietary Specifications for Collagen, in quantities sufficient to
meet Collagen's requirements for Products for the entire world except the United
States and Canada; provided, however, with respect to the United States and
Canada, LPI shall be obligated to manufacture for Collagen its requirements for
Products for clinical and preclinical applications and uses only. Collagen shall
be obligated to purchase its requirements for Product from LPI, except Collagen
shall have the right to purchase its requirements from a manufacturer other than
LPI: (i) such quantity of Products required by Collagen in excess of [***] in
each calendar year; or (ii) Products for incorporation into finished products
for commercial sale in the United States and Canada. Collagen shall grant to LPI
a first right of refusal to manufacture for Collagen its requirements for
Products under conditions (i) or (ii) above, provided that Collagen may, at its
discretion, require LPI to implement an alternate manufacturing facility outside
of France as a condition to LPI manufacturing Product for Collagen under
condition (i).
2.2 Intellectual Property Ownership and Distribution Rights. The
Proprietary Specifications and information contained therein shall be deemed the
confidential information of Collagen and/or its Affiliates, and LPI agrees to
use such confidential information solely in connection with performing this
agreement and exercise due care to prevent the disclosure thereof to any third
parties; provided, however, this Section 2.2 shall not apply, or shall cease to
apply, to information contained in the Proprietary Specifications to the extent
that LPI can demonstrate that such information (i) became or was publicly known
and available through no fault of LPI; (ii) was in LPI's possession prior to
disclosure by Collagen as evidenced by written instrument; (iii) comes into
LPI's possession through a third party without restrictions or breach of
confidence by such third party; or (iv) is disclosed by LPI with Collagen's
prior written authorization. Subject to the foregoing provisions of this Section
2.2 and Section 2.5, Collagen shall own all right, title and interest to any
intellectual property rights in and to the Products or the Proprietary
Specifications. Collagen's rights shall include, without limitation, the right
in its sole discretion, subject to the provisions of this Agreement, to label
and sell or otherwise distribute such Products worldwide, under Collagen's name,
logo and/or trade names.
2.3 Exclusivity. LPI hereby grants Collagen for the duration of [***],
an exclusive, worldwide, license to use, make, have made, distribute, have
distributed, import, export, have imported and exported, sell, and have sold
finished products incorporating such Products, under any intellectual property
rights LPI may have or obtain (under Section 2.5 below) with respect to the
manufacture of the Products.
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2.4 No Use of the Other Party's Name or Trademarks. Neither party shall
use the other party's name or trademarks in connection with the manufacture or
distribution of Products without the prior written consent of such other party.
2.5 Ownership of Inventions. Each party shall own any technology
associated with the Products, including any processing methods, manufacturing
methods or related know-how, that it developed prior to the Effective Date or
that it independently develops after the Effective Date. Subject to the
foregoing and Collagen's ownership rights set forth in Section 2.2, and
notwithstanding any French law to the contrary, the parties shall jointly own,
without duty to account to each other, any manufacturing technology which is
jointly developed in the course of the manufacture of Products hereunder. The
parties shall discuss in good faith the appropriate method of protecting such
jointly owned technology and of enforcing their rights in such jointly owned
technology against infringers.
ARTICLE 3: TERMS AND CONDITIONS FOR SUPPLY OF PRODUCTS
3.1 Forecasts. During the term of this Agreement, Collagen or its
subsidiaries or agents shall provide LPI annually with a rolling written
forecast (the "Long Range Forecast"), which shall extend for the shorter of
twelve (12) months or the remainder of the term of this Agreement, for the
Products to be manufactured and supplied by LPI in the forecast period. Such
Long Range Forecast shall be updated quarterly, and shall set forth Collagen's
estimated requirements and required delivery dates for the Products. Collagen
shall be required to submit purchase orders for Product in quantities no less
than the quantities forecasted for the first six (6) months of such Long Range
Forecast; the remaining portion of such Long Range Forecast shall not be binding
on Collagen. The parties agree that Collagen shall provide to LPI a non-binding
[***] forecast at the end of the Initial Term.
3.2 Orders. Collagen or its subsidiaries or agents shall initiate
purchases under this Agreement by submitting written purchase orders on a
monthly basis to LPI at least [***] prior to the required delivery date.
Purchase orders shall state unit quantities, unit descriptions, requested
delivery dates and shipping instructions. Such orders shall not be binding until
accepted by LPI. LPI shall notify Collagen in writing of the acceptance or
rejection of any purchase order submitted by Collagen within ten (10) business
days after receipt of such order. In the event that Collagen has not received
such notification from LPI with regard to any purchase order by the end of such
ten (10) business day period, LPI shall be deemed to have accepted such purchase
order.
3.3 Capacity. LPI agrees to develop manufacturing capacity sufficient to
meet the Long Range Forecast, and will use its commercially reasonable efforts
to provide increased capacity of up to [***] above such Long Range Forecast;
provided, however, that Collagen place its purchase orders in accordance with
Section 3.2. In any event, LPI agrees to develop manufacturing capacity to meet
the initial forecast set forth in Exhibit B attached hereto.
3.4 Packing, Shipping, Title, Risk of Loss. All Products shall be
shipped F.O.B. (ICC Incoterms (1990 Edition)) to Collagen's address as set forth
in purchase orders provided by
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Collagen pursuant to Section 3.2 or to such other address as may be specified by
Collagen, except that Collagen shall reimburse LPI for all shipping costs for
Products. All Products delivered under this Agreement shall be packed for
shipment in: (i) LPI's standard containers; or (ii) in container's which at
Collagen's discretion are designed and specified by, or provided by, Collagen.
All packaging expenses incurred by LPI shall be borne by LPI. Any incremental
packing expenses in addition to the costs of shipment in LPI's standard
containers which are incurred as a result of Collagen's container specifications
shall be borne by Collagen. Legal title to and risk of loss of all quantities of
Product shall remain with LPI until delivery of the Product to Collagen's
address or to other such address specified by Collagen. Upon such delivery,
title to such Products shall, without further action, be transferred to and
vested in Collagen.
3.5 Inspection and Acceptance. All units of Products delivered to
Collagen pursuant to this Agreement shall be accompanied by, and upon delivery
be deemed accepted subject to, a Certificate of Conformity issued by LPI
certifying that each such Product meets, and will continue to meet throughout
the labeled shelf-life of such Product, the Proprietary Specifications. Collagen
shall have fifteen (15) business days (the "Inspection Period") after delivery
of a Product shipment to inspect and test the Products in such shipment
according to the Proprietary Specifications. Any non-conformity with the
Proprietary Specification or Latent Defect which arises after acceptance by
Collagen shall be the responsibility of LPI, unless such non-conformity or
defect is due to improper handling or storage conditions subsequent to delivery
of the Product. LPI and Collagen agree to consult with each other to resolve the
discrepancy between each other's determinations. If such consultation does not
resolve the discrepancy within one (1) month after identification of such
discrepancy, then parties shall nominate a mutually agreeable reputable
independent laboratory to test representative samples taken from such shipment.
The expense of such tests shall be shared equally between the parties, and the
results of such tests shall be binding on the parties. LPI shall, at its
expense, replace any such shipment to the extent that it does not conform to the
Proprietary Specifications. All non-conforming or defective Products shall be
returned to LPI at the address set forth herein, accompanied or preceded by a
reasonably detailed statement of the claimed defect or non-conformity, and
packed and shipped according to instructions provided by LPI. The shipping costs
of any such returned units shall be borne by LPI, unless such Products are
determined not to be defective under the terms of this Agreement, in which case
such shipping costs shall be borne by Collagen.
ARTICLE 4: PRICE AND PAYMENT
4.1 Investments by Collagen. Collagen shall pay to LPI the following
amounts for improvements to LPI's manufacturing facilities to enable LPI to
manufacture the Products pursuant to the terms of this Agreement as follows:
(i) For LPI to build a maximum production capacity of [***] units of
Product per year, corresponding to a monthly forecast by Collagen of [***] units
of Product (including the increased capacity of [***] of the Long Range
Forecast):
- [***] upon execution of this Agreement; and
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- [***] on the date of acceptance by Collagen of the first
shipment of Product delivered by LPI to Collagen in accordance with Article 3.
In addition, provided that: (a) LPI has met the quantity, quality, and
delivery date requirements for all previous purchase orders placed by Collagen
pursuant to Section 3.2, and (b) LPI has no outstanding unfulfilled orders for
Products, Collagen shall pay LPI:
(ii) For a maximum production capacity of [***] units of Product per
year, corresponding to a monthly forecast by Collagen of [***] units of Product
(including the increased capacity of [***] of the Long Range Forecast):
- [***], on the date that the Long Range Forecast, as amended by
Collagen pursuant to Section 3.1, results in a monthly forecast of over [***]
units of Product; and
- an additional [***] within [***] thereof.
(iii) For a maximum capacity of [***] units of Product per year,
corresponding to a monthly forecast by Collagen of [***] units of Product
(including the increased capacity of [***] of the Long Range Forecast):
- [***], on the date that the Long Range Forecast, as amended by
Collagen pursuant to Section 3.1, results in a monthly forecast of over [***]
units of Product; and
- an additional [***] within [***] thereof.
4.2 Pricing. Collagen agrees to pay LPI for Products delivered under a
purchase order submitted pursuant to Section 3.2 hereto, in accordance with the
prices and volume discount schedule in Exhibit C, which prices do not include
shipping costs. All prices for Products shall be in French Francs.
4.3 Price Changes. The parties agree to negotiate in good faith new
pricing at the end of the Initial Term; provided, however, that the price shall
not increase more than [***] over the price in effect during the last year of
the Initial Term. In the event that the cost of raw materials actually paid by
LPI and required for LPI to perform its obligations hereunder increases, then
LPI may increase the price for the Products by the lesser of: (i) such
documented actual percentage increase; or (ii) [***] over the then-current
price. Such additional price increases shall apply to all purchase orders
received after the effective date of such price increases.
4.4 Performance Premium. Provided that: (i) LPI meets the quantity,
quality, and delivery date requirements for the monthly purchase order placed by
Collagen pursuant to Section 3.2, and (ii) LPI has no outstanding unfulfilled
orders for Products, Collagen agrees to pay to LPI a premium equal to [***] of
the total amount of the purchase order, exclusive of Value Added Tax ("VAT"),
made by Collagen and fulfilled by LPI during such month (the "Premium Payment").
If LPI: (A) fails to meet any quantity, quality, or delivery date requirement
for any month; or (B) has outstanding unfulfilled orders for Products as of that
month, it shall be disqualified from receiving, and Collagen shall be relieved
from its obligation
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to pay, such Premium Payment for such month. Collagen shall pay LPI the Premium
Payments due LPI under this Section 4.4 on a [***],[***].
4.5 Taxes. All prices are exclusive of any export or import taxes, VAT,
duties or tariffs, or federal, state or local tax or excise, other than taxes
based on LPI's net income. Any such amounts collected by or paid by LPI shall be
reimbursed by Collagen, and shall appear as a separate item on Collagen's
invoice; provided, however, that LPI shall not collect or pay any such tax or
excise if LPI receives a valid tax exemption certificate from Collagen prior to
shipment.
4.6 Payment. LPI shall submit an invoice to Collagen upon shipment of
the Products. The invoice shall state the amount to be paid by Collagen for all
Products in the shipment, as well as any taxes and shipping costs paid by LPI
which shall be reimbursed by Collagen in accordance with Sections 4.5 and 3.4
respectively. The full invoiced amount for each shipment of Products by LPI
shall be paid net thirty (30) days. If a Product is returned in accordance with
Section 3.5, LPI will submit a supplemental invoice reflecting relevant credits
and adjustments once the returned Product has been replaced.
ARTICLE 5: CHANGES TO PRODUCTS OR LIST OF SUPPLIED PRODUCTS
5.1 Collagen Changes. If Collagen desires to change the Proprietary
Specifications or the design of the Products, Collagen shall notify LPI in
writing of such change (the "Change Order"). The Change Order shall specify all
such changes in the same detail as the original Proprietary Specifications or
Product design. As promptly as possible, but in no event more than thirty (30)
days after receipt of the Change Order, LPI shall provide to Collagen a
statement of any estimated nonrecurring engineering costs, together with a
"not-to-exceed" upper limit for such nonrecurring engineering costs, per Product
prices and volume discounts associated with manufacturing Products pursuant to
the Change Order, and an estimate of when LPI could begin conducting any
required nonrecurring engineering work and manufacturing such Products. Within
thirty (30) days thereafter, Collagen shall notify LPI of Collagen's acceptance
or rejection of LPI's response to the Change Order. Failure of Collagen to
deliver any such acceptance or rejection within such thirty (30) day period
shall be deemed a rejection of LPI's response. If Collagen accepts LPI's
response, LPI shall conduct any nonrecurring engineering work and produce
Products as may be required by Collagen pursuant to the Change Order and this
Agreement.
5.2 LPI Changes. LPI may not change the Proprietary Specifications or
the design of the Products without the written consent of Collagen; provided,
however, that LPI shall notify Collagen in writing of any changes to the
Products which are required for safety or regulatory reasons and shall begin
implementing such changes promptly after provision of such written notice.
5.3 Addition of Supplied Products. From time to time during the Term of
this Agreement, the parties may add mutually acceptable additional products to
the list of Products in Exhibit A. In the event that Collagen proposes an
addition to Exhibit A, LPI shall respond to
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such proposal within thirty (30) days of receipt of such proposal. The price and
payment terms set forth in Section 4.1 shall apply to such additional products,
except as otherwise agreed by the parties.
ARTICLE 6: REGULATORY MATTERS
6.1 LPI Obligations. LPI hereby certifies and represents that all
Products supplied to Collagen hereunder shall be manufactured in compliance with
Article L665-3 et seq. of the French Code of Public Health ("CPH") and in
accordance with accepted Good Manufacturing Practices under the guidelines of
the appropriate Regulatory Agency. LPI will have independent internal
verification of manufacturing procedures and documents relating to the Products,
as well as the adherence of the Products with the Proprietary Specifications. In
addition, LPI shall deliver to Collagen a Product fully in accordance with the
Proprietary Specifications, and that enables Collagen to maintain its CE xxxx
for finished products incorporating such Products. In addition, LPI agrees, upon
Collagen's request, to provide to Collagen, all manufacturing and other relevant
documents that Collagen requires for obtaining and maintaining its CE xxxx. The
parties shall meet, as soon as practicable after the Effective Date, to discuss
data requirements for obtaining and maintaining the CE xxxx for finished
products incorporating Products. LPI agrees to, at all times during the Term of
this Agreement: (i) maintain its certification under the ISO/MDD requirements;
(ii) permit an initial qualification audit by Collagen of both the Products and
LPI's manufacturing facility and procedures prior to the delivery by LPI of the
first Product to Collagen hereunder; (iii) permit Collagen to perform an annual
critical supplier audit after delivery by LPI of the first Product to Collagen
hereunder; (iv) upon Collagen's request, arrange with LPI's critical suppliers
to allow Collagen to audit such suppliers to assure that no changes have been
made to the Proprietary Specifications or manufacturing process for the Products
without the prior notification and approval of Collagen; and (v) use all
reasonable efforts to promptly respond to any findings by Collagen pursuant to
such critical supplier audit, or any Regulatory Agency, and to take prompt,
corrective action as necessary; provided, however, with respect to paragraphs
(iii)-(v) above, any critical supplier audit by Collagen shall be limited to
LPI's quality system. LPI shall retain all relevant documents needed to support
its obligations in this Section 6.1 for a period of at least ten (10) years.
6.2 Collagen Obligations. Collagen shall be responsible, at its sole
expense, for: (i) obtaining approval by any Regulatory Agency for the use of the
Products in finished product; (ii) conforming with the European certification
procedure and obtaining the CE xxxx for the finished product containing the
Product; and (iii) monitoring and responding to complaints relating to the use
of the Products in finished products.
6.3 Supplier Audits. Collagen shall have the right to perform annual
critical supplier audits, as defined by element 4.6 of the ISO 9001 Guidelines,
of the LPI facility producing Products and, in cooperation with LPI, any and all
suppliers to LPI of critical materials for the manufacture of the Products.
Collagen shall also have the right to inspect all documentation pertaining to
Products shipped to Collagen. LPI will be notified in writing by Collagen of the
audit ten (10) business days prior to the visit. Collagen shall be able to audit
on ten (10) days notice if Collagen rejects [***] consecutive Product shipments.
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6.4 Recall. Collagen shall be responsible for conducting any recalls of
finished product incorporating the Product, and shall interface with customers
who lodge complaints about such finished products. Collagen shall bear all
expenses incurred in such recalls; provided, however, that if the recall relates
to a Latent Defect to the Product or a non-conformity of the Product to the
Proprietary Specifications, LPI shall be responsible for all direct expenses
incurred by Collagen in connection with such recall. Collagen shall file all
reports required by applicable laws and regulations in connection with any
consumer complaints about finished products. Notwithstanding anything to the
contrary herein, LPI shall be bound by the provisions of Article L665-6 of the
CPH and shall immediately report to Collagen any information regarding any
potential harmful effect of the finished product of which it is aware.
ARTICLE 7: INDEMNIFICATION
7.1 By LPI. LPI shall defend, indemnify and hold harmless Collagen
against all damages, costs (including reasonable attorneys' fees) or other
liability resulting from any claim, suit or proceeding brought against Collagen
by a third party arising from any alleged: (i) negligent or intentional tortious
act or omission by LPI, or its employees, agents or other representatives in
relation to this Agreement; or (ii) nonconformance of any unit of Product
manufactured by LPI with the Proprietary Specifications or defect in any
finished product resulting from the incorporation of such non-conforming
Product; or (iii) infringement or misappropriation of any patent, trade secret
or other intellectual property right owned by such third party relating to
manufacture of the Products (except to the extent that such infringement or
alleged infringement arises from LPI's compliance with specific instructions
regarding the design or manufacturing processes or materials provided by
Collagen); provided that Collagen: (A) provides LPI with prompt notification of
any such claim, suit or proceeding; (B) allows LPI to control of the defense of
such claim, suit or proceeding, provided that LPI shall not settle any such
claim, suit or proceeding without the prior written consent of Collagen; and (C)
complies with any good faith request made by LPI for assistance in such defense,
provided that LPI will reimburse Collagen for any such assistance.
7.2 By Collagen. Collagen shall defend, indemnify and hold harmless LPI
against all damages, costs (including reasonable attorneys' fees) or other
liability resulting from any claim, suit or proceeding brought by a third party
against LPI arising from any alleged: (i) negligent or intentional tortious act
or omission by Collagen, or its employees, agents or other representatives in
relation to this Agreement; (ii) any injury caused by use of a Product
manufactured by LPI hereunder, provided that (A) such Product is manufactured in
accordance with the Proprietary Specifications therefor; and (B) such injury is
not attributable to any negligent or intentional act or omission on the part of
LPI or its employees, agents or other representatives; or (iii) infringement or
misappropriation of any patent, trade secret or other intellectual property
right of such third party, if such alleged infringement arises solely from: (a)
LPI's compliance with specific instructions regarding the design or
manufacturing processes or materials provided by Collagen; or (b) the Product as
incorporated into the finished product by or for Collagen; provided that LPI:
(x) provides Collagen with prompt notification of any such claim, suit or
proceeding; (y) allows Collagen to control of the defense of such claim, suit or
proceeding, provided that Collagen shall not settle any such claim, suit or
proceeding without the prior
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written consent of LPI; and (z) complies with any good faith request made by
Collagen for assistance in such defense, provided that Collagen will reimburse
LPI for any such assistance.
7.3 No Other Remedy for Intellectual Property Infringement. COLLAGEN
AGREES THAT IT SHALL HAVE NO REMEDY AGAINST LPI FOR INFRINGEMENT OF THIRD PARTY
INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS OTHER THAN THE REMEDY SET FORTH IN
SECTION 7.1. LPI AGREES THAT IT SHALL HAVE NO REMEDY AGAINST COLLAGEN FOR
INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS, BY
LPI'S COMPLIANCE WITH INSTRUCTIONS PROVIDED BY COLLAGEN, OR BY LPI'S CONFORMANCE
WITH PROPRIETARY SPECIFICATIONS, OTHER THAN THE REMEDY SET FORTH IN SECTION 7.2.
ARTICLE 8: LIMITATION OF LIABILITY
EXCEPT FOR BREACHES OF ARTICLE 9 OR SECTION 10.1 (ii) OR AS SET
FORTH IN ARTICLES 6 OR 7, IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY FOR
ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES ARISING IN ANY WAY OUT OF THIS
AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES; PROVIDED, HOWEVER, LPI'S MAXIMUM LIABILITY TO COLLAGEN FOR ANY LOSS OF
BUSINESS OR LOSS OF PROFITS RESULTING FROM LPI'S BREACH OF THE WARRANTY MADE IN
SECTION 10.1 (ii) SHALL NOT EXCEED FIVE MILLION (5,000,000) FF, PROVIDED THAT
THIS LIMITATION SHALL IN NO WAY AFFECT LPI'S INDEMNITY OBLIGATIONS TO COLLAGEN
UNDER SECTION 7.1. THE LIMITATIONS SET FORTH IN THIS ARTICLE 8 SHALL APPLY
NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
ARTICLE 9: CONFIDENTIAL INFORMATION; CONFIDENTIALITY OF AGREEMENT
9.1 Confidential Information. "Confidential Information" shall mean any
proprietary information which is specifically designated as such, which is
disclosed by one party to the other in any form in connection with this
Agreement. The receiving party shall treat as confidential all Confidential
Information provided by the disclosing party, shall not use such Confidential
Information except as expressly set forth herein or otherwise authorized in
writing, shall implement reasonable procedures to prohibit the disclosure,
unauthorized duplication, misuse or removal of the Confidential Information and
shall not disclose such Confidential Information to any third party. Without
limiting the foregoing, each party shall use at least the same procedures and
degree of care to prevent the disclosure of Confidential Information belonging
to the other party as it uses to prevent the disclosure of its own confidential
information of like importance, and shall in any event use no less than
reasonable procedures and a reasonable degree of care.
9.2 Exceptions. Notwithstanding the above, no party hereto shall have
liability to the other party hereto with regard to any Confidential Information
disclosed to it which: (i) was generally known and available in the public
domain at the time it was disclosed, or becomes
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generally known and available in the public domain through no fault of the
receiving party; (ii) was known to the receiving party at the time of disclosure
as shown by the receiving party's files in existence at the time of disclosure;
(iii) is disclosed with the prior written approval of the disclosing party; (iv)
was independently developed by the receiving party without any use of the
Confidential Information and by employees or other agents of the receiving party
who have not been exposed to the Confidential Information, provided that the
receiving party can demonstrate such independent development by documented
evidence prepared contemporaneously with such independent development; (v)
becomes known to the receiving party from a source other than the disclosing
party without breach of this Agreement by the receiving party and in a manner
which is otherwise not in violation of the disclosing party's rights; or (vi) is
disclosed pursuant to the order or requirement of a court, administrative
agency, or other governmental body; provided, however, that the party which
complies with such order shall first provide reasonable advance notice thereof
to enable the owner of the Confidential Information ordered to be disclosed to
seek a protective order or otherwise prevent such disclosure.
9.3 Confidentiality of Agreement. Each party shall be entitled to
disclose the existence of this Agreement, but agrees that the terms and
conditions of this Agreement shall be treated as confidential and shall not be
disclosed to any third party; provided, however, that each party may disclose
the terms and conditions of this Agreement: (i) as required by any court or
other governmental body; (ii) as otherwise required by law; (iii) to legal
counsel of the parties; (iv) under nondisclosure obligations at least as
restrictive as this Section 9.3, to accountants, banks, and financing sources
and their advisors; (v) in connection with the enforcement of this Agreement or
rights under this Agreement; provided, that the parties shall endeavor to obtain
a protective order in the discovery phase (if any) of such enforcement process
covering the terms and conditions of this Agreement; or (vi) under nondisclosure
obligations at least as restrictive as this Section 9.3, in connection with an
actual or proposed merger, acquisition, or similar transaction.
ARTICLE 10: REPRESENTATIONS AND WARRANTIES
10.1 By LPI. LPI represents and warrants that:
(i) it has full right, power and authority to enter into this
Agreement and to grant the rights granted to Collagen hereunder, and it has not
entered into, and during the Term of this Agreement will not enter into, any
agreement with any third party which is or would be inconsistent with its
obligations hereunder;
(ii) the Products shall comply with the Proprietary
Specifications and shall be free from all Latent Defects;
(iii) LPI's legal staff and management are not aware of any valid
claim that the manufacturing processes that will be used by LPI to manufacture
Products hereunder will infringe any third party's intellectual property rights;
provided, however, that the parties acknowledge and agree that LPI has not and
shall not be obligated to conduct any search in connection with its
representation in this subsection 10.1(iii); and
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(iv) it is not aware of any pending or threatened litigation that
may impact its supply of Products to Collagen hereunder.
10.2 By Collagen. Collagen represents and warrants that:
(i) it has full right, power and authority to enter into this
Agreement and to carry out its obligations hereunder, and it has not entered
into, and during the term of this Agreement will not enter into, any agreement
with any third party which is or would be inconsistent with its obligations
hereunder; and
(ii) to the best of its knowledge as of the Effective Date, LPI
will not be required to infringe any third party's intellectual property rights
in order to manufacture Products in accordance with the Proprietary
Specifications.
10.3 Disclaimer of Warranties. EXCEPT FOR THE WARRANTIES EXPRESSLY SET
FORTH IN THIS AGREEMENT, LPI AND COLLAGEN MAKE NO WARRANTIES IN CONNECTION WITH
THE PRODUCTS, AND IN PARTICULAR DISCLAIM ANY IMPLIED WARRANTIES OF QUALITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. EXCEPT AS SPECIFICALLY
ASSUMED UNDER THIS AGREEMENT, BOTH PARTIES HEREBY DISCLAIM ANY IMPLIED
WARRANTIES ARISING OUT OF THEIR COURSE OF DEALING UNDER THIS AGREEMENT.
ARTICLE 11: TERM AND TERMINATION
11.1 Term. This Agreement shall become effective as of the Effective
Date and shall continue in force, unless earlier terminated in accordance with
this Section 11, for an initial period of [***] after the Effective Date (the
"Initial Term"), renewable upon mutual agreement of the parties for an
additional [***] period thereafter (the "Renewal Term"). The Initial Term and
the Renewal Term, collectively, are referred to herein as the "Term".
11.2 Termination for Cause. This Agreement may be terminated
automatically (as of right - "de plein droit") by either party upon notice by
registered letter with receipt requested to the other party in the event that
the other party: (i) breaches any material term or condition of this Agreement
and fails to remedy the breach within a cure period of fifteen (15) days, for
nonpayment of amounts due hereunder, or thirty (30) days, for other breaches,
after being given written notice thereof; or (ii) is dissolved, liquidated, or
files a petition in bankruptcy; or (iii) ceases to be actively engaged in
business for a period of six (6) months. In the event that Collagen terminates
this Agreement pursuant to Section 11.2(ii) or (iii) hereto, then upon
Collagen's request, LPI shall grant to Collagen a non-exclusive, worldwide,
right and license, with the right to sublicense, solely to such LPI
manufacturing rights, including any trade secrets relating thereto, necessary
for Collagen to manufacture the Products, subject to payment of a royalty in the
amount of [***] of Net Sales of Products made by Collagen to its third party
customers. The license granted by LPI to Collagen pursuant to this Section 11.2
may be terminated by LPI subject to a notice period (a) sufficient to enable
Collagen to find an alternative source of supply for the Products and (b) of at
least [***].
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11.3 Return of Materials. Within ten (10) days after the expiration or
termination of this Agreement, each party shall return any Confidential
Information received from the other party in tangible form.
11.4 Effect of Termination. The provisions of Sections 2.2, 2.3, 2.5,
3.5, 11.2, 11.3 and 11.4 and Articles 6, 7, 8, 9, 10, and 12, and any payment
obligations accrued during the term of this Agreement, shall survive the
termination or expiration of this Agreement; provided, however, that Section 6.3
shall cease to have effect three (3) years after Collagen's last commercial sale
of Products. LPI shall fill all purchase orders outstanding at the date of
expiration or termination of this Agreement which were submitted by Collagen
prior to such date, and which were accepted by LPI, or are deemed to have been
accepted by LPI under Section 3.2, prior to such date. LPI shall be paid by
Collagen in accordance with Section 4.4 for Products received by Collagen
pursuant to such purchase orders.
ARTICLE 12: MISCELLANEOUS
12.1 Exclusivity. The parties hereto agree that, during the Term of this
Agreement, LPI will not manufacture or sell any Products manufactured in
accordance with the Proprietary Specifications for any third party.
12.2 Governing Law. Except as expressly provided herein to the contrary,
including but not limited to the provisions of Section 2.5, this Agreement shall
be governed by and interpreted under the laws of France.
12.3 Force Majeure. If the performance of this Agreement or any
obligations hereunder is prevented, restricted or interfered with by reason of
fire or other casualty or accident, strikes or labor disputes, war or other
violence, any law, order (including but not limited to any official decision of
any Regulatory Agency ordering withdrawal or prohibiting or limiting the
marketing of Collagen finished product), proclamation, ordinance, demand or
requirement of any government agency, or any other act or condition beyond the
control of the parties hereto, the party so affected, upon giving prompt notice
to the other party, shall be excused from such performance during such
prevention, restriction or interference.
12.4 Assignment. Neither party may assign its rights or obligations
under this Agreement without the prior written consent of the other party,
except to a successor in business or an acquirer of all or substantially all of
its business or assets relating to breast implants; provided, however, that in
the event all or substantially all of LPI's assets or securities is acquired by
a third party, then Collagen or its Affiliate, may at its option, create, at its
sole expense, a second manufacturing source for up to [***] of Collagen's
requirements for Product (excluding the U.S. and Canada). In the event that
Collagen creates such second manufacturing source, LPI will transfer such
technology and know-how to Collagen or its Affiliate as necessary for Collagen
to commence operation of such second manufacturing source and grant to Collagen
a non-exclusive, worldwide, right and license, with the right to sublicense,
solely to such LPI manufacturing rights, including trade secrets relating
thereto, necessary for Collagen to manufacture the Products; provided that
Collagen shall pay to LPI a royalty in the amount of
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[***] of Net Sales of Products made by Collagen to its third party customers.
The license granted by LPI to Collagen pursuant to this Section 12.4 may be
terminated by LPI subject to a notice period (a) sufficient to enable Collagen
to find an alternative source of supply for the Products and (b) of at least
[***]. In the event that Collagen elects not to exercise its option to create
the second source pursuant to this Section 12.4, then the terms of this
Agreement shall remain in full force and effect.
12.5 Notices. All notices, requests, consents and other communications
under this Agreement shall be in writing and (i) delivery by hand, or (ii)
mailed by first class registered mail, postage prepaid, return receipt
requested, or (iii) sent via facsimile transmission, followed by first class
registered mail, postage prepaid, return receipt requested, or (iv) shipped
through a private courier system designated for expedited delivery, and shall be
addressed as follows:
To Collagen:
Collagen Corporation
00000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
U.S.A.
Attn: Director of Manufacturing Logistics
To LPI:
Laboratoire Perouse Implant
Xxxx x'xxxxxxxxx x'Xxxxxxxxxx
XX0 XXXXXX-00000 Bornel
Attn: Xxxx Perouse
or to such other address or person as the parties may from time to time
designate by written notice delivered as specified above to the other. Notices
shall be effective upon tender, if delivered by hand, seven (7) days after
mailing if mailed by first class mail or if sent by private courier, or on the
day of transmission if sent by facsimile.
12.6 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
12.7 Waiver. The failure of either party to enforce at any time the
provisions of this Agreement shall in no way be constituted to be a present or
future waiver of such provisions, and shall not in any way affect the right of
either party to enforce each and every such provision thereafter.
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12.8 Independent Contractors. The relationship of LPI and Collagen
hereunder is that of independent contractors, and nothing herein shall be
construed to: (i) give either party the right to direct or control the
day-to-day activities of the other; or (ii) constitute the parties as partners,
joint venturers, co-owners or otherwise as participants in a joint or common
undertaking.
12.9 Entire Agreement. The terms and conditions in this Agreement
(including its Exhibits) constitute the entire agreement between the parties and
supersede all previous agreements and understandings, whether oral or written,
between the parties hereto with respect to the subject matter hereof, and no
agreement or understanding varying or extending the same shall be binding upon
either party hereto unless in a written document signed by both parties. In
particular, this Agreement shall supersede all purchase order or invoice terms
submitted by a party in connection with this Agreement, to the extent that such
purchase order or invoice terms are inconsistent with the terms and conditions
of this Agreement.
12.10 Section Headings; Controlling Language Version. The section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. The
controlling language version of this Agreement shall be the English language
version of this Agreement.
12.11 Dispute Resolution. All claims, disputes, or controversies arising
under this Agreement, except under Article 9, not resolved between the parties
shall first be submitted to the principals for each party for resolution. In the
event that such principals cannot reach a resolution within thirty (30) days
after written notice of such dispute, then such dispute shall be submitted to
binding arbitration by an arbitrator appointed by the President of the
Commercial Court ("Tribunal de Commerce") of Paris upon the request of either
party. Such appointed arbitrator will have the experience and knowledge
appropriate to the nature of the dispute between the parties. Such arbitration
will take place in Paris, France and shall be conducted in English.
12.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute on instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by duly authorized officers or representatives as of the date first above
written.
COLLAGEN CORPORATION LABORATOIRE PEROUSE IMPLANT
By: /s/ Xxxx Xxxxxxxxxxx By: /s/ Xxxx Perouse
----------------------- -----------------------
Name: Xxxx Xxxxxxxxxxx Name: Xxxx Perouse
--------------------- ---------------------
Title: CEO Title:
-------------------- --------------------
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EXHIBIT A
PRODUCTS AND PROPRIETARY SPECIFICATIONS
I. Products
The finished shell for the Trilucent(TM) breast implant product marketed and
sold by Collagen.
II. Specifications
[See attached document.]
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EXHIBIT B
INITIAL FORECAST
Calendar Year Capacity (units of Product)
------------- ---------------------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
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EXHIBIT C
PRICING AND DISCOUNTS
Annual Volume Price (per unit)
------------- ----------------
[***] [***]
[***] [***]
[***] [***]
