EXHIBIT 10.12
DISTRIBUTION AGREEMENT
THIS AGREEMENT ("Agreement") is made this 17th day of September, 2001,
by and between Safety Syringe Corporation, a Utah corporation and a wholly owned
subsidiary of Specialized Health Products International, Inc., having an address
at 000 Xxxx 000 Xxxxx, Xxxxxxxxx, Xxxx 00000 (hereinafter referred to as "SSC"),
and Bard Access Systems, Inc., a Utah corporation having a place of business at
0000 Xxxx Xxxxxx Xxxxxxx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 (hereinafter referred
to as "BAS").
RECITALS
WHEREAS, SSC desires to grant to BAS, and BAS desires to accept from
SSC, the non-exclusive right to promote, market, distribute and sell the
"Products" (as hereinafter defined) and all "Improvements" (as hereinafter
defined) in the "Field" (as hereinafter defined) throughout the "Territory" (as
hereinafter defined).
NOW, THEREFORE, in consideration of the terms and conditions set forth
in this Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the execution hereof, SSC and BAS hereby
agree as follows:
I. DEFINITIONS. The following terms are defined for purposes of this Agreement.
1.1. "Effective Date" shall mean the date and year first written above.
1.2. "Affiliate" shall mean any person or corporation or other business
entity controlled by, controlling, or under common control with a party to this
Agreement.
1.3. "Act" shall mean the United States Food, Drug and Cosmetic Act of
1938, as amended and all regulations promulgated pursuant thereto, and any state
and local laws and regulations thereunder promulgated and all similar laws and
regulations of any other country or relevant jurisdiction related to the
development, manufacture, sale or distribution of Products or Improvements.
1.4. "Products" shall mean single-pack safety port access infusion sets
(commonly referred to as Xxxxx needle infusion sets), incorporating the Licensed
Technology, which are manufactured by SSC.
1.5. "Improvements" shall mean any modification, enhancement, further
development and/or improvement to the Products, made or acquired at any time
during the term of this Agreement by SSC, or any Affiliate of SSC.
1.6. "Specifications" shall mean the raw material, manufacturing,
quality assurance, packaging and finished product specifications and protocols
relating to the Products previously provided, or in the case of Improvements, as
will be provided, by SSC to BAS, as the same may be modified and/or supplemented
pursuant to the provisions hereof.
1.7. "Field" shall mean hospitals and group purchasing organizations
(GPOs). The "Field" does not include alternate sites such as homecare services,
nursing homes, oncology centers, infusion centers, same day surgery centers,
physician offices and clinics, non-hospital pharmacies and pain clinics.
1.8. "Territory" shall mean the world.
1.9. "Confidential Information" shall mean any information of a
confidential and/or proprietary nature as to which BAS or an Affiliate of BAS or
SSC or an Affiliate of SSC, as the disclosing party, prior to or during the term
of this Agreement, develops or acquires any interest, including but not limited
to, all discoveries, inventions, improvements, and ideas relating to any
process, formula, machine, device, manufacture, composition of matter, plan or
design, whether patentable or not, or relating to the conduct of business by the
disclosing party (including the existence and subject matter of this Agreement)
which, prior to or during the term of this Agreement, was or is disclosed to the
other party, as the receiving party, exclusive of data or information: (i)
which, at the time of disclosure hereunder, was in the public domain or which,
subsequent to disclosure hereunder, becomes part of the public domain by any
means other than the breach by the receiving party of its obligations hereunder,
or (ii) which was known to the receiving party, at the time of disclosure
hereunder, as evidenced by the receiving party's business records maintained in
the ordinary course of business, or (iii) which is, at any time, disclosed to
the receiving party by any person or entity not a party hereto whom the
receiving party believes, after reasonable inquiry, has the right to disclose
the same, or (iv) which is developed by an employee of the receiving party who
is shown, by competent proof and by clear and convincing evidence, not to have
been privy to information disclosed by the disclosing party, or (v) which is
disclosed verbally, except where the disclosing party reduces the verbal
disclosure to writing, marks the same as confidential and proprietary and
furnishes the receiving party with the reduction to writing within thirty (30)
days of the verbal disclosure.
1.10. "Licensed Technology" shall mean any and all patents and patent
applications listed in Exhibit A attached hereto, proprietary knowledge,
formulas, specifications, techniques, processes, technical data and other
know-how, whether now existing or hereafter developed, which are used in the
design, development, manufacture, testing or use of the Products or
Improvements. "Licensed Technology" shall also include, to the extent necessary
for the manufacture of Products or Improvements, any know-how, trade secrets or
other proprietary rights described in the Manufacturing Documentation.
1.11. "Contract Year" shall mean the twelve-month period commencing on
the date of the first Commercial Sale, and each successive twelve-month period
thereafter.
1.12. "Manufacturing Sub-Contract Triggering Event" shall have the
meaning set forth in Section 9.3.
1.13. "Manufacturing Documentation" shall mean any and all
specifications, process descriptions and other technical data (including
chemical formulations, design specifications, packaging specifications and
manufacturing protocols) owned by, licensed to, or used by SSC and necessary for
the manufacture or use of the Products or Improvements. Without limiting the
generality of the foregoing, the Manufacturing Documentation shall include all
data, techniques and methods necessary to utilize the Licensed Technology. The
Manufacturing Documentation shall be updated regularly to be reasonably current,
accurate in all material respects, and sufficient in detail and content to
identify and explain the concepts and processes described therein and to allow
its use by BAS or its designee to manufacture all Products or Improvements.
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1.14. "Regulatory Approval" shall mean the notification to or
concurrence, acknowledgment, or approval of any governmental or
quasi-governmental agency or regulatory body, which notification, concurrence,
acknowledgment or approval is necessary for or useful to the manufacturing,
processing, marketing or sale of Products or Improvements anywhere in the world,
and which is made in the name of SSC or has been given/granted on behalf of SSC.
SSC will provide reasonable support to BAS in obtaining a CE xxxx.
1.15. "Commercial Sale" - means, with respect to the Products, or any
Improvement which BAS elects to distribute hereunder, the sale by BAS or any
Affiliate of BAS (or their respective distributors) to any non-Affiliate.
II. REPRESENTATIONS AND WARRANTIES
2.1. SSC Representations and Warranties. SSC hereby represents and
warrants to BAS:
(a) that SSC is the owner of, or has exclusive rights to, all
Licensed Technology, and
(b) that it will promptly file for pre-market notification, as
defined in section 510(k) of the Act, with respect to all Products and
that it will manufacture the Products under such pre-market
notifications, and
(c) that SSC is not, nor will it be, as a result of the
execution and delivery of this Agreement, or the performance of its
obligations under this Agreement, in breach of any license or other
agreement relating to the Licensed Technology, and
(d) that to the best of its knowledge all patents, registered
trademarks, know-how, service marks and copyrights, if any, included in
the Licensed Technology are valid and subsisting. To the best of its
knowledge, SSC does not infringe upon or unlawfully or wrongfully use
any patent, trademark, trade name, service xxxx, copyright or trade
secret owned or claimed by another, and
(e) that, on the Effective Date, SSC is not a party to any
lawsuit, nor is there any outstanding or threatened claim against SSC
alleging that use of the Licensed Technology infringes or otherwise
misappropriates the proprietary rights of any third party, and
(f) that SSC is not currently a party to any agreement, oral
or written, which would, in any manner, be inconsistent with the rights
herein granted to BAS, and shall not enter into any such agreement or
understanding, oral or written, during the term of this Agreement, nor,
during the term of this Agreement, directly or indirectly, will engage
in any activity which would, in any manner, be inconsistent with the
rights herein granted to BAS,
(g) that SSC is a corporation organized, validly existing and
in good standing under the laws of Utah, has all requisite corporate
power and authority to own and operate its property and to carry on its
business as now being conducted and is duly qualified and in good
standing to do business in any of those jurisdictions where it is
required to be qualified, and
(h) that the execution and delivery of this Agreement by SSC
has been duly and validly authorized by all necessary corporate action
on the part of SSC and that (assuming valid execution by BAS where
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applicable and subject to federal bankruptcy law) this Agreement is a
valid and binding obligation of SSC enforceable against it, and
(i) there are no Improvements in existence on the Effective
Date, and
(j) all Products may be lawfully sold in the Territory under
the appropriate Regulatory Approvals when received by SSC.
2.2. BAS Representations and Warranties. BAS hereby represents and
warrants to SSC:
(a) that BAS is a corporation organized, validly existing and
in good standing under the laws of Utah, has all requisite corporate
power and authority to own and operate its property and to carry on its
business as now being conducted and is duly qualified and in good
standing to do business in any of those jurisdictions where it is
required to be qualified as a result of ownership of property or
residence of any of its employees or agents, and
(b) that the execution and delivery of this Agreement by BAS
has been duly and validly authorized by all necessary corporate action
on the part of BAS and that (assuming valid execution by SSC and
subject to federal bankruptcy law) this Agreement is a valid and
binding obligation of BAS enforceable against it, and
(c) that BAS is not currently a party to any agreement or
understanding, oral or written, which would, in any manner, be
inconsistent with its obligations described herein and shall not enter
into any such agreement or understanding, oral or written, during the
term of this Agreement, nor, during the term of this Agreement,
directly or indirectly, engage in any activity which would, in any
manner, be inconsistent with its obligations described herein, and
(d) that it is registered with the Food and Drug
Administration and authorized to sell the Products.
III. DISTRIBUTION OF PRODUCTS
3.1. Appointment of BAS as Distributor. Subject to the terms and
conditions hereof, SSC hereby appoints BAS, and BAS hereby agrees to act, as a
non-exclusive distributor of Products and Improvements in the Field throughout
the Territory, for the term of this Agreement.
3.2. Early Payment. BAS hereby agrees to pay SSC sixty-seven thousand
dollars ($67,000) within three business days following the execution of this
Agreement. Such payment will be fully credited against amounts owning by BAS to
SSC as payment for Products purchased under this Agreement. In the event SSC
fails to receive 510(k) clearance for the Products prior to April 30, 2002, the
payment of sixty-seven thousand dollars ($67,000) will be promptly reimbursed to
BAS.
3.3. BAS's Responsibilities. BAS will use reasonable efforts to promote
sales and use of the Products and Improvements in the Territory. SSC hereby
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expressly acknowledges and agrees that the grant set forth in Section 3.1 shall
be deemed to include a grant to BAS of the right to sell through any Affiliate
of BAS and through distributors of BAS or any Affiliate of BAS.
3.4. Device Complaints. BAS shall maintain a system of product
complaint recording and reporting wherein it will record the details of product
complaints it receives. BAS agrees to send copies of the complaint reports
relating to substantial design, technical or quality issues to SSC. SSC shall be
responsible for supporting BAS's investigation of such complaint reports. SSC
shall, within thirty (30) days after SSC receives the initial complaint reports
from BAS, forward the findings of any investigations to BAS.
3.5. Recall. If BAS or SSC are required by any competent governmental
authority to conduct a recall of any of the Products or either party determines
in its reasonable business judgment a voluntary recall of any Product is
required (and in the instance of a voluntary recall with the consent of the
other party hereto, which neither SSC nor BAS will unreasonably withhold), then
SSC shall bear all expenses related to said recall as it pertains to the
Products.
IV. TERMS OF PURCHASE AND SALE
4.1. Purchase Orders. All sales and purchases of Products or
Improvements shall be initiated pursuant to BAS's purchase order for the same
placed with SSC. All such sales and purchases shall be governed by the terms and
provisions of this Agreement and any such purchase order, provided that in the
event there is a conflict between the terms of this Agreement and any of the
terms of such purchase order, the terms of this Agreement shall prevail.
Purchase orders shall be issued by BAS at the beginning of each calendar quarter
and shall set forth the quantity of each item ordered and the required delivery
dates. Each purchase order issued by BAS hereunder shall be accompanied by a
non-binding forecast of BAS's anticipated orders during each of the succeeding
three (3) quarters. All purchase orders issued by BAS hereunder shall be firm
and non-cancelable, unless BAS has exercised its rights pursuant to Article IX
of this Agreement.
4.2. Selling Price. (a) SSC and BAS hereby agree that: (i) the selling
prices by SSC to BAS for each unit of Product and any Improvement shall be for
each unit Product or any such Improvement, as the case may be, in
fully-finished, packaged and sterilized form in accordance with applicable
Specifications, (ii) the initial selling prices by SSC to BAS of each unit of
Product shall be as set forth on Exhibit B, which is attached hereto and
incorporated herein, which selling prices shall be firm for purchase orders
placed through the end of the second complete Contract Year, (iii) in the event
BAS desires to market any Improvement, the initial selling prices by SSC to BAS
for each unit of such Improvement shall be promptly negotiated by the parties in
good faith and shall be firm for purchase orders placed thereon through the end
of the period commencing on the date of the first Commercial Sale of such
Improvement and ending on the second anniversary of such date. All payments
shall be made in United States dollars. Notwithstanding the foregoing, on or
about the date which is six months after the date of the first Commercial Sale,
and thereafter on or about the completion of each succeeding six-month period,
the parties shall jointly discuss any necessary revisions to the selling prices
of the Products; it being understood that any adjustments to the selling prices
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shall only reflect actual changes in the the United States Consumer Price Index
for Urban Consumers, Medical Care, (1982 - 1984 = 100), as published by the
United States Department of Labor, Bureau of Labor Statistics, or any actual and
documented increases in the cost of the raw materials used in the manufacture of
the Products.
(b) Notwithstanding any provision to the contrary contained in this
Agreement, if SSC sells the Products to a third party other than BAS at a price
which is lower than the price being paid by BAS for the Products, SSC shall
supply the Products to BAS at such lower price and shall reimburse BAS for any
excess paid beginning with the date such similar product is first sold to such
third party.
4.3. Delivery. (a) Notwithstanding any provision to the contrary
contained in this Agreement, BAS shall have no obligations under this Agreement,
including without limitation to purchase any Products, until such time as SSC
has sold 1000 units of Products to third-party end users and 2 months transpire
during which at least 200 units of Products have been used on patients. The
Product units utilized during this time must have no FDA reportable customer
complaints associated with their use and there shall occur no "needlesticks" (as
defined by MDR Guidance Documents and Exemption -No.3- Needlesticks and Blood
Exposure-E1996003) due to device failure. BAS will review any complaints for
vendor approval.
(b) SSC shall use commercially reasonable efforts to manufacture and
deliver Products to BAS, but in no event will SSC be obligated to deliver more
than 30% over the forecasted volumes for a quarter, as such forecast is
determined in accordance with Section 4.1. BAS shall provide up to six (6)
months notice for increases to the forecast if the increase in volume is more
than 30% of the amount forecasted.
4.4. Payment and Shipment. Shipment shall be in accordance with BAS's
instructions. SSC shall invoice BAS for Products and Improvements at the time of
shipment. All payments shall be due net thirty (30) days after shipment. All
shipments shall be F.O.B. Salt Lake City, Utah. SSC will provide freight prepaid
by common carrier in the contiguous 48 states. All other locations and means of
delivery will be specified at the time of purchase order and all associated
shipping costs will be paid by BAS.
4.5 Minimum Purchase Requirements. (a) Subject to the provisions of
Article IX, during each Contract Year during the term of this Agreement (or, in
the case of the first Contract Year, including the period beginning from the
Effective Date through the date of the first Commercial Sale), BAS agrees to
place purchase orders with SSC for a quantity of Products and/or Improvements
not less than the quantity applicable to such Contract Year, as set forth in
Exhibit B, which is attached hereto and incorporated herein (hereinafter
referred to as the "Minimum Purchase Requirements"). Subject to the provisions
of Article IX, in the event BAS, during any Contract Year during the term of
this Agreement, fails to place purchase orders with SSC for a quantity of
Products and/or Improvements at least as great as the quantity applicable to
such Contract Year as set forth in the Minimum Purchase Requirements, if SSC is
not in breach of its obligations hereunder at the time of such failure, BAS
shall, at its option, either (i) purchase from SSC the number of units of
Products equaling the difference between the Minimum Purchase Requirements for
such Contract Year less the number of units of Products actually purchased by
BAS from SSC (the "Shortfall"), or (ii) pay to SSC an amount equal to the
Shortfall for such Contract Year multiplied by 80%-. In the event BAS satisfies
the obligations set forth in either (i) or (ii) above, then this Agreement will
continue on its terms. In the event that BAS does not elect option (i) or (ii)
above within 60 days following the completion of any Contract Year in which it
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has not purchased the Minimum Purchase Requirements, SSC as its sole and
exclusive remedy, shall have the right to terminate this Agreement and demand
payment of an amount obtained by multiplying a) the aggregate number of units
comprising the Minimum Purchase Requirements for the remaining months in the
Initial Term or any renewal term, as applicable, by b) the number which is
eighty percent (80%) of the per unit sales price of Products to BAS then in
effect.
4.6 Competitive Products. The parties agree that nothing in this
Agreement shall restrict SSC's right to manufacture, market and sell and/or
license, or BAS's right to distribute, products or technologies competitive with
the Products.
V. MANUFACTURE OF PRODUCTS
5.1. SSC hereby represents and warrants to BAS:
(a) that each of the Products and Improvements sold to BAS
hereunder shall be manufactured in accordance with the requirements of
the Quality Systems Regulations set forth in 21CFR, Parts 808, 812 and
820; and
(b) that each of the Products and Improvements sold to BAS
hereunder shall be new, free from defects in material and workmanship,
and shall comply in all respects with the applicable Specifications
therefor; and
(c) that each of the Products and Improvements sold to BAS
hereunder will not, at the time of delivery to BAS, be adulterated or
misbranded within the meaning of the Act or within the meaning of any
jurisdiction in which the definitions of misbranding and adulterating
are substantially the same as in the Act, nor, following FDA approval
of Products and Improvements, will any Product or Improvement at the
time of delivery to BAS be an article which may not, under the Act, be
introduced into interstate commerce, and
(d) that SSC holds good and marketable title to all Products
or Improvements and they shall comply with their intended use, and
(e) that all Products and Improvements shall, at the time of
delivery to BAS, have an expiration date of not less than 24 months
from the date of manufacture and shall have a remaining shelf-life of
at least 12 months. 5.2. There are no other express or implied
warranties, including any warranty of merchantability or fitness for a
particular purpose. In the event of any breach of the warranties set
forth in Section 5.1 hereof, SSC shall, at SSC's sole cost and expense,
at BAS's option, repair or replace the Products or Improvements which
are non-conforming or defective within thirty (30) days of the return
of such item(s) to SSC or shall credit BAS's account for the purchase
price paid for such item(s) by BAS upon the return thereof by BAS. All
shipping costs incurred incident to any such breach shall be borne by
SSC.
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5.3. Labeling. Product labeling shall have primary and secondary bar
coding in compliance with the Health Industry Bar Coding standards. No changes
may be made to any Product labeling or packaging without the prior written
consent of BAS.
VI. TERM AND TERMINATION
6.1. Term. (a) This Agreement shall remain in full force and effect
through the completion of the second Contract Year (the "Initial Term").
Thereafter, this Agreement shall be automatically renewed for successive
one-year terms unless terminated by BAS by providing written notice to SSC not
less than one-hundred eighty (180) days prior the expiration of the initial term
or any renewal term. In the event this Agreement is automatically renewed, the
parties shall meet, no later than 90 days prior to the completion of the Initial
Term or any renewal term, to discuss the Minimum Purchase Requirements for such
renewal term.
(b) Notwithstanding the foregoing, the Agreement may be terminated (i)
by SSC, by providing written notice to BAS not less than thirty (30) days prior
to the date of termination, upon the completion of any Contract Year if BAS has
not met the Minimum Purchase Requirements (as set forth in Section 4.5) for the
such Contract Year and BAS has not elected either option (i) or (ii) contained
in Section 4.5, (ii) by BAS, with immediate effect upon delivery of notice to
SSC, in the event (A) SSC fails to obtain 510(k) clearance for the Products
prior to April 30, 2002 or (B) SSC is required by a competent governmental
authority to conduct a recall of the Products during the first Contract Year, or
(C) prior to the date of the first Commercial Sale, BAS can not obtain a good
faith opinion of outside counsel clearing the Products of infringement of any
third party's intellectual property rights.
6.2. Breach. Except as otherwise provided in this Agreement, in the
event of a material breach or default by either of the parties hereto of any
term or provision of this Agreement on their respective parts to be observed or
performed, the party who is not in breach or default shall have the right to
give the other party notice thereof, whereupon the party receiving such notice
shall have thirty (30) days to cure or cause the cure of such breach or default,
or if the same cannot reasonably be cured within such thirty (30) days, the
party receiving such notice shall, within said period, commence or have caused
the commencement of such cure and thereafter continue to diligently prosecute or
cause the prosecution of cure of the same. If such breach or default is so
cured, this Agreement shall remain in full force and effect. If such breach or
default is not so cured, this Agreement shall immediately terminate upon notice
of termination given to the party which failed to so cure such breach or
default. A material breach or default of this Agreement shall include, without
limitation, the following occurrences:
(i) SSC delivers Product volumes, after the placement by BAS of a
purchase order, in an amount less than 80% of the forecast volumes (as
determined in accordance with Section 4.1) for three (3) consecutive months or
three (3) times within any six (6) month period; or
(ii)more than 20% of the Products delivered by SSC in two (2)
consecutive months or in three (3) deliveries of Products in any six (6) month
period, fail to conform to the Specifications.
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6.3.Effect of Termination or Expiration. Expiration or prior
termination of this Agreement, for any reason, will not release either party
from any liability which at said time it has already incurred to the other
party, nor affect in any way the survival of any rights, duties or obligations
of either party which are expressly stated elsewhere in this Agreement to
survive said expiration or prior termination. Nothing in the immediately
preceding sentence will affect, be construed or operate as a waiver of the right
of the party aggrieved by any breach of this Agreement to be compensated for any
injury or damage resulting therefrom which is incurred before or after such
expiration or termination.
6.4. Disposition of Inventory. In the event of termination or
expiration of this Agreement for any reason, SSC will have the option of
purchasing BAS's stock of the Products or Improvements, if any, in whole or in
part, by giving BAS notice that it is exercising such option within thirty (30)
days of the termination or expiration of this Agreement at the price in effect,
pursuant to Section 4.2 of this Agreement, on the date of such notice. In the
event that SSC does not elect to purchase all of BAS's stock of the Products or
Improvements, if any, BAS will be entitled to sell its stock of the Products or
Improvements, if any, for a twelve-month period following the termination or
expiration of this Agreement, or if such date is later, the date of delivery of
any Products or Improvements to BAS.
VII. REGULATORY MATTERS
7.1. SSC agrees to fully comply in all respects with the Act. SSC
agrees to provide BAS with copies of all papers, concurrence and office actions
pertaining to regulatory communications.
7.2. SSC represents and covenants that all Products and Improvements,
if any, shall have all Regulatory Approvals in compliance with the Act necessary
for SSC to manufacture and for BAS to market and sell the Products and
Improvements. Same shall have been validly issued and shall be in full force and
effect.
VIII. INTELLECTUAL PROPERTY MATTERS
8.1. Indemnity. In the event suit is filed against BAS or any Affiliate
of BAS by a third party alleging that the manufacture, import, use, offer for
sale or sale of any Product or Improvement, infringes or misappropriates the
proprietary rights of such third party, BAS shall promptly notify SSC and shall
include in its notice all facts in BAS's possession relating to the same. In
said event, SSC hereby agrees to indemnify, save and hold BAS harmless from and
against all reasonable costs, liabilities and expenses (including reasonable
attorneys' fees) incident to any such suit.
IX. MANUFACTURING SUB-CONTRACT
9.1 Manufacturing Sub-Contract. Whenever a Manufacturing Sub-Contract
Triggering Event (as such term is defined in Section 9.3) shall have occurred,
SSC agrees, at BAS's option, that either:
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(i) SSC shall enter into a manufacturing sub-contract with a
third party acceptable to BAS, under terms and conditions acceptable to BAS,
granting such third party the right to manufacture the Products for supply to
BAS in accordance with this Agreement, or
(ii)BAS shall have the right to exercise its rights under the
sub-contract granted in Section 9.2. BAS shall provide to SSC written notice
specifying the Manufacturing Sub-Contract Triggering Event which has occurred.
9.2. Grant of Manufacturing Sub-Contract. Should a Manufacturing Sub-
Contract Triggering Event (as such term is defined in Section 9.3) occur, BAS
will make reasonable efforts to resolve the manufacturing deficiencies with SSC.
If after reasonable efforts the manufacturing deficiencies continue, SSC will
grant to BAS, or a third party acceptable to BAS, a non-exclusive manufacturing
sub-contract ("Sub-Contract") for the manufacture of the Products in accordance
with SSC's obligations under this Agreement. The Sub-Contract shall expire upon
the expiration of this Agreement and shall be subject to the terms and
conditions of this Agreement.
9.3. Manufacturing Sub-Contract Triggering Event. The following shall
individually and collectively constitute a "Manufacturing Sub-Contract
Triggering Event" for purposes of this Agreement:
(i) SSC discontinues the manufacture of the Products;
(ii) SSC voluntarily liquidates its assets or dissolves its
business;
(iii) SSC delivers Product volumes, after the placement by BAS
of a purchase order, in an amount less than 80% of the forecast volumes
(as determined in accordance with Section 4.1) for three (3)
consecutive months or three (3) times within any six (6) month period;
or
(iv)more than 20% of the Products delivered in two (2)
consecutive months or in three (3) Products deliveries in any six (6)
month period fail to conform to the Specifications.
X. INDEMNIFICATION/INSURANCE.
10.1. Cross-Indemnity. SSC and BAS hereby agree to indemnify, save and
hold each other harmless from and against all suits, actions, claims, demands,
judgments, liabilities and expenses (including court costs and reasonable
attorneys fees) which arise or result from their respective misrepresentations
of any representation contained herein, or default in the observance or
performance of any term or provision hereof.
10.2. Product Liability. SSC and its Affiliates (collectively referred
to as "SSC" for the purpose of this Section 10.2) hereby agree to indemnify,
save and hold BAS and its Affiliates harmless from and against all suits,
actions, claims, demands, judgments, liabilities and expenses which arise or
result from alleged injury (including death) incident to the use of any of the
Products or Improvements and not based solely on the combination of such
Products or Improvements with other products manufactured or sold by BAS. As a
condition precedent to SSC's obligations under this Section 10.2, the party
charged in such suit shall promptly notify SSC and shall not settle same without
SSC's prior written approval. It is expressly agreed that SSC shall have the
duty to defend any action referred to in this Section 10.2 utilizing counsel
reasonably acceptable to the party charged and shall have the right, at its own
expense, to participate in any such action utilizing counsel selected by it.
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10.3. Insurance. SSC hereby covenants to obtain and maintain, during
the term of this Agreement, a comprehensive general liability insurance policy,
with products liability endorsement, for the Products or Improvements which
policy shall be a minimum amount of two million dollars (US $2,000,000) per
occurrence. Said policy shall either name BAS and its Affiliates as additional
insureds or shall provide coverage via a broad form vendor's endorsement.
Additionally, said policy shall provide for not less than thirty (30) days prior
written notice to BAS in the event of any change in coverage or policy
cancellation. SSC hereby covenants to deliver to BAS a certificate evidencing
such coverage within ten (10) days of the Effective Date.
XI. DEVELOPMENT
11.1. Improvements/Changes. SSC agrees to notify BAS promptly of the
existence of any Improvement, and further agrees to include in such notice
sufficient technical details to allow BAS to make a reasoned business judgment
concerning the Improvement. Distribution rights to any Improvements shall
automatically accrue to BAS, upon development thereof. If BAS is desirous of
exercising its rights to distribute such Improvements, it shall so notify SSC
within forty-five (45) days of receipt of notice from SSC. In such event, the
parties shall promptly commence negotiations regarding the terms and conditions
under which BAS will distribute such Improvement; it being understood and agreed
that such terms and conditions shall be consistent, where appropriate, with the
terms and conditions contained herein relating to the distribution of the
Products. In addition, if SSC finds it necessary or desirable to change the
Specifications and BAS gives its written consent to such change, SSC may do so
at its own cost or savings, provided SSC gives BAS at least sixty (60) days'
notice of such intent to change the Specifications and provided such change is
authorized pursuant to the provisions of the Act. SSC retains the right to
adjust pricing in accordance with mutually agreed upon improvements, which
increase manufacturing cost of the Product as reasonably determined by BAS and
SSC.
11.2 Regulatory Filings. In the event BAS desires to market an
Improvement, the parties hereby agree that SSC, as promptly as possible
following such a decision, shall prepare and file with FDA, in SSC's name and at
its expense, all notices and applications required in order to lawfully sell
such Improvement in the Territory.
XII. MISCELLANEOUS
12.1. Confidential Information. Each party shall hold in confidence any
Confidential Information disclosed by the other or otherwise obtained by such
party as a result of activities contemplated by this Agreement, and each party
shall protect the confidentiality thereof with the same degree of care that it
exercises with respect to its own information of a like nature, but in no event
less than reasonable care. Access to Confidential Information must be restricted
to the receiving party's employees, who, in each case, need to have access to
carry out a permitted use and are bound in writing to maintain the
confidentiality of such Confidential Information. The Confidential Information
and all copies of part or all thereof, shall be and remain the exclusive
11
property of the disclosing party, and the receiving party shall acquire only
such rights as are expressly set forth under the terms and conditions of this
Agreement and only for so long as such rights are in effect.
12.2. Survival. The following Articles or Sections shall continue in
effect notwithstanding any termination of this Agreement: Article II, Article V,
Section 6.3, Section 6.4, Article VII, Section 8.1, Article X, Section 12.1,
Section 12.5, Section 12.7 and Article XIII, and no termination of this
Agreement shall relieve any party of liability for a breach or violation of this
Agreement occurring before such termination.
12.3. No Agency. This Agreement shall not constitute BAS the agent or
legal representative of SSC for any purpose whatsoever and BAS shall not hold
itself out as an agent of SSC. This Agreement creates no relationship of joint
venturers, partners, associates, employment or principal and agent between the
parties, and both parties are acting as independent contractors. BAS is not
granted herein any right or authority to and shall not attempt to assume or
create any obligation or responsibility for or on behalf of SSC. BAS shall not
have any authority to bind SSC to any contract, whether of employment or
otherwise, and BAS shall bear all of its own expenses for its operations,
including, without limitation, the compensation of its employees and salespeople
and the maintenance of its offices, service and warehouse facilities. BAS shall
be solely responsible for its own employees and salespeople and for their acts
and the things done by them.
12.4. Amendments. This Agreement may be amended, modified or
supplemented only by a written instrument executed by the parties hereto.
12.5. Waivers. No waiver of any provision of this Agreement, or consent
to any departure from the terms hereof, shall be effective unless the same shall
be in writing and signed by the party waiving or consenting thereto. No failure
on the part of any party to exercise and no delay in exercising, any right or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or remedy by such party preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate as a waiver of any subsequent breach. All rights and remedies
hereunder are cumulative and are in addition to and not exclusive of any other
rights and remedies provided by law.
12.6. Performance. Each party hereto acknowledges that money damages
alone will not adequately compensate such party for breach of such party's
obligations under Section 12.1 and, therefore, agrees that in the event of the
breach or threatened breach of any such obligation, in addition to all other
remedies available to the other party, at law, in equity or otherwise, such
other party shall be entitled to injunctive relief compelling specific
performance of, or other compliance with, the terms of such Section.
12.7. Notices. Any notice or communication given pursuant to this
Agreement by any party to any other party shall be in writing and shall be
sufficiently given if personally delivered, sent by facsimile or other means of
confirmed electronic transmission or sent by a recognized next-day courier
service or by mail, postage prepaid to the parties at the following addresses or
to such other address as either party may hereafter designate to the others by
like notice:
12
(a) if to SSC, to:
Specialized Health Products International, Inc.
000 Xxxx 000 Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: General Counsel
Facsimile Number: (000) 000-0000
(b) if to BAS, to:
Bard Access Systems, Inc.
0000 Xxxx Xxxxxx Xxxxxxx Xxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: President
Facsimile Number: [(000) 000-0000]
with a copy to:
X. X. Xxxx, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
(000) 000-0000
Facsimile Number: (000) 000-0000
Attention: Vice President and General Counsel
12.8. Expenses. Each party hereto shall pay its own expenses in
connection with the transactions contemplated hereby, whether or not they are
completed.
12.9. Publicity. All notices to third parties and all other publicity
relating to the transactions contemplated by this Agreement shall be jointly
planned, coordinated and agreed to by the parties except to the extent
disclosures are required by law.
12.10. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all negotiations, representations, warranties, commitments, offers,
contracts and writings prior to the date hereof.
12.11. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with, the substantive laws of the state of Utah,
without giving effect to its conflicts of law rules.
12.12. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. In the event that
any provision of this Agreement shall be determined to be unenforceable by
reason of its extension for too great a period of time or over too large a
geographic area or over too great a range of activities, it shall be interpreted
to extend only over the maximum period of time, geographic area or range of
activities as to which it may be enforceable.
13
12.13. Exhibits. All Exhibits mentioned in this Agreement shall be
attached to this Agreement and shall form an integral part hereof. All
capitalized terms defined in this Agreement which are used in any Exhibit shall,
unless the context otherwise requires, have the same meaning therein as given
herein.
12.14. Counterparts. This Agreement may be executed in two (2) or more
counterparts, including facsimile counterparts, all of which shall be considered
one and the same agreement and shall become effective when two (2) or more
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.
12.15. Assignments; Successors and Assigns. Neither party shall
transfer or assign (by operation of law or otherwise) its rights or obligations
under this Agreement without the prior written consent of the other party.
Subject to the preceding sentence, this Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and their permitted
successors and assigns.
12.16. Force Majeure. Either party shall be excused from delay in
performing or from its failure to perform hereunder to the extent that such
delay or failure results from any cause or causes beyond such party's reasonable
control, including: delay by any supplier in providing materials, parts or
services; delay by any carrier; fire; flood; acts of God; labor dispute; riot;
compliance with any applicable governmental act, regulation or request; and
shortage of labor, materials or manufacturing facilities.
12.17. Captions. The Article and Section headings contained in this
Agreement have been inserted for convenience of reference only and are not and
shall not be deemed or construed as constituting a part of this Agreement.
XIII. ARBITRATION
13.1. In the event of a dispute of whatever nature arising between the
parties, including but not limited to, those arising out of or relating to this
Agreement or the construction, interpretation, performance, breach, termination,
enforceability or validity of this Agreement, the parties shall exercise good
faith efforts to resolve such dispute within a reasonable period of time. Should
the parties fail to reach agreement after thirty (30) days of good faith
negotiations, the parties agree to submit said dispute to binding arbitration.
Said arbitration shall take place in Salt Lake City, Utah, in accordance with
the rules of the American Arbitration Association. The arbitration panel shall
consist of one arbitrator selected by the American Arbitration Association
13.2. The arbitration proceedings conducted pursuant hereto shall be
confidential. Neither party shall disclose or permit the disclosure of any
information about the evidence adduced or the documents produced by the other
party in the arbitration proceedings or about the existence, contents or results
of the arbitration award without the prior written consent of such other party
except in the course of judicial, regulatory or arbitration proceeding or as may
be required by a governmental authority. Before making any disclosure permitted
by the preceding sentence, the party intending to make such disclosure shall
give the other party reasonable written notice of the intended disclosure and
afford the other party reasonable opportunity to protect its interests.
13.3. The arbitrators shall set forth in writing their findings of fact
and conclusions of law and shall render their award based thereon. Said award
shall be a final and binding judgement enforceable by a court of competent
jurisdiction.
14
13.4. The party for whom the outcome of the arbitrators' decision is
less favorable (as determined by the arbitrators) shall be responsible for
reimbursing the other party for all fees and expenses of such party that are
directly related to the arbitration proceeding (including reasonable attorneys'
fees).
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
SAFETY SYRINGE CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
BARD ACCESS SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
EXHIBIT A
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
COUNTRY SERIAL NO. FILING DATE PATENT NO. ISSUE DATE SHP DOCKET
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
United States 08/927,053 09/10/1997 5,823,997 10/28/1998 SHP002.CP9
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
EPO ** SHP002.CP9a.1
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
Japan ** SHP002.CP9a.2
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
Brazil ** SHP002.CP9a.3
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
Canada ** SHP002.CP9a.4
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
Australia ** SHP002.CP9a.5
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
Mexico ** SHP002.CP9a.6
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
China ** SHP002.CP9a.7
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
New Zealand ** SHP002.CP9a.8
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
Singapore ** SHP002.CP9a.9
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
Taiwan ** SHP002.CP9a.10
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
India ** SHP002.CP9a.11
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
Norway ** SHP002.CP9a.12
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
Czech Rep. ** SHP002.CP9a.13
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
S. Korea ** SHP002.CP9a.14
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
Israel ** SHP002.CP9a.15
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
United States 09/118,624 07/17/1998 5,980,488 11/09/1999 SHP002.C9C
--------------------- ------------------ -------------------- ------------------- ----------------- ------------------------
---------------
The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
EXHIBIT B
Minimum Purchase Requirements
-------------------------- ----------------------------
Year Units
-------------------------- ----------------------------
1st Contract Year **
-------------------------- ----------------------------
2nd Contract Year **
-------------------------- ----------------------------
Pricing Matrix
----------------------------------------- -----------------------------
Purchase Volumes Price Each ($)
----------------------------------------- -----------------------------
0 - 90,000 **
----------------------------------------- -----------------------------
90,001 - 150,000 **
----------------------------------------- -----------------------------
150,001 - 500,000 **
----------------------------------------- -----------------------------
500,001 + **
----------------------------------------- -----------------------------
---------------
The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
