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EXHIBIT 10.9
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TRANSITION AND DISTRIBUTION SERVICES AGREEMENT
Dated as of December 31, 1997
Among
XXXXXX, INC.,
LINVATEC CORPORATION
AND
CONMED CORPORATION
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TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.1. Definitions ................................................ 1
SECTION 1.2. Interpretation and Schedules ............................... 3
ARTICLE II
Appointment as Exclusive Distributor
SECTION 2.1. Appointment of Xxxxxx as Exclusive Distributor ............. 4
SECTION 2.2. Transfer Price ............................................. 4
SECTION 2.3. Repurchase of Inventory .................................... 4
SECTION 2.4. Handling of Inventory ...................................... 5
SECTION 2.5. U.S. Arthroscopy ........................................... 5
ARTICLE III
Other Services from Xxxxxx
SECTION 3.1. Marketing .................................................. 5
SECTION 3.2. Supply of Products ......................................... 5
SECTION 3.3. Product Pricing ............................................ 5
SECTION 3.4. Regulatory ................................................. 5
SECTION 3.5. Purchase of Demonstration Equipment ........................ 6
SECTION 3.7. Product Literature; Exhibits, Trade Shows, Etc.; Videotapes 6
ARTICLE IV
U.S. Transition Services
SECTION 4.1 Convention; Commissions and Administrative Fees of Group
Purchasing Contracts ....................................... 7
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ARTICLE V
Other Linvatec Obligations
SECTION 5.1. Warranties and Return ...................................... 8
SECTION 5.2. Information; Technical and Regulatory Support .............. 8
SECTION 5.3. Insurance .................................................. 8
ARTICLE VI
Miscellaneous
SECTION 6.1. Intellectual Property ...................................... 9
SECTION 6.2. Further Assurances ......................................... 9
SECTION 6.3. Indemnity .................................................. 9
SECTION 6.4. Confidentiality ............................................ 10
SECTION 6.5. Exclusive Appointment ...................................... 11
SECTION 6.6. Amendments ................................................. 11
SECTION 6.7. Notices .................................................... 11
SECTION 6.8. Counterparts ............................................... 13
SECTION 6.9. Entire Agreement ........................................... 13
SECTION 6.10. Severability ............................................... 13
SECTION 6.11. Governing Law .............................................. 13
SECTION 6.12. Assignment ................................................. 13
SECTION 6.13. Term and Termination ....................................... 13
SECTION 6.14. Performance of Xxxxxx Obligations .......................... 15
SECTION 6.15. Force Majeure .............................................. 15
SECTION 6.16. Limitation of Liability .................................... 15
SECTION 6.17. Restrictions on Solicitation and Hiring .................... 16
SECTION 6.18. Arbitration ................................................ 17
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TRANSITION AND DISTRIBUTION SERVICES AGREEMENT, dated as
of December 31, 1997 (the "Agreement"), among LINVATEC
CORPORATION, a Florida corporation ("Linvatec"), CONMED
CORPORATION, a New York corporation ("Buyer"), and XXXXXX,
INC., a Delaware corporation ("Zimmer").
WHEREAS the Xxxxxxx-Xxxxx Squibb Company ("Seller") and Buyer have
entered into a Stock and Asset Purchase Agreement dated as of November 26, 1997,
as amended by the Amendment dated as of December 31, 1997 (the "Stock Purchase
Agreement");
WHEREAS Xxxxxx and Linvatec are entering into a Distribution
Agreement dated the date hereof (the "Distribution Agreement") with respect to
the distribution of Linvatec's Hall(R) Surgical branded large bone products,
small bone/specialty products and all products manufactured by or for Linvatec
in certain markets;
WHEREAS it is a condition to the consummation of the transactions
contemplated by the Stock Purchase Agreement that the parties execute and
deliver this Agreement;
WHEREAS Linvatec wishes during the term of this Agreement (a) to
appoint Xxxxxx as the exclusive distributor of Products in certain markets
during the applicable Term and (b) to have certain other services performed by
Xxxxxx for Linvatec in connection with such distribution; and
WHEREAS Xxxxxx wishes to accept such appointment and perform such
services through its worldwide distribution network.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
Definitions
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SECTION 1.1. Definitions. (a) Capitalized terms used but not defined
herein shall have meanings set forth in the Stock Purchase Agreement.
(b) For purposes of this Agreement, the following terms shall have
the following meanings:
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person; and for the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Arthroscopy Products" means all products manufactured by or for
Linvatec at any time during the applicable Term other than the Hall(R) Surgical
branded products manufactured by or for Linvatec at any time during the
applicable Term.
"Arthroscopy U.S. Distributors" means the distributors of
Arthroscopy Products in the United States listed on Schedule 1(a).
"Direct Markets" means the countries set forth on Schedule 1(b).
"Distributors" means the Persons with which Xxxxxx has entered into
a distribution agreement with respect to the Products in the Markets.
"Global Marketing Services" means, with respect to any Product in
any Market, market research, competitive analysis, product training, new product
development and development of opinion leaders.
"Large Bone Products" means all Hall(R) Surgical branded large bone
product lines, including revision instrumentation, adaptors and couplers and
vacuum hoses manufactured by or for Linvatec at any time during the applicable
Term but not including any large bone product being manufactured by Linvatec on
behalf of Xxxxxx under the Manufacturing Agreement dated the date hereof between
Linvatec and Xxxxxx (e.g., acetabular reamers) and any other large bone product
that may be manufactured by Linvatec on behalf of Xxxxxx on an original
equipment manufacturer (OEM) basis from time to time.
"Linvatec Products" means all products manufactured by or for
Linvatec at any time during the applicable Term.
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"Local Marketing Services" means, with respect to any Market,
customer service, sales support, support of individual local surgeons,
participation or sponsorship of medical society or other medical organization
meetings and participation in medical symposia, workshops, exhibits and trade
shows, in each case consistent with Xxxxxx'x past practice in such Market. Such
services include providing the administrative and logistical support necessary
for sponsorship or participation in such meetings, exhibits and such similar
events.
"Markets" means the United States and the countries in the Direct
Markets and Transition Markets.
"Person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, governmental entity or other
entity.
"Products" means (i) with respect to the Direct Markets and United
States, the Small Bone/Specialty Products and Arthroscopy Products and (ii) with
respect to the Transition Markets, the Linvatec Products.
"Product Category" means (i) with respect to the Direct Markets and
the United States, the Small Bone/Specialty Products category and (ii) with
respect to the Transition Markets, the Large Bone Products, the Small
Bone/Specialty Products and the Arthroscopy Products categories.
"Small Bone/Specialty Products" means all Hall(R) Surgical branded
small bone and specialty product lines manufactured by or for Linvatec at any
time during the applicable Term.
"Term" means (i) with respect to Small Bone/Specialty Products in
the United States, the period from and including the date hereof to and
including the date twelve months from the date hereof, unless terminated prior
to such time pursuant to the terms set forth in Section 6.13; (ii) with respect
to (A) Small Bone/Specialty Products and Arthroscopy Products in the Direct
Markets and (B) Large Bone Products, Small Bone/Specialty Products and
Arthroscopy Products in the Transition Markets, the period from and including
the date hereof to and including the date six months from the date hereof,
unless terminated prior to such time pursuant to the terms set forth in Section
6.13; and (iii) with respect to Arthroscopy Products in the U.S., the period
from and including the date hereof to and including the date twelve months from
the date hereof, unless terminated prior to such time pursuant to the terms set
forth in Section 6.13.
"Transition Markets" means the countries set forth on Schedule 1(c).
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(b) The following terms have the meanings set forth in the Sections
listed below:
Term Section
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Actual Non-U.S. Inventory Amount 2.2(b)
Agreement Preamble
Buyer Preamble
Closing Date Non-U.S. Inventory Amount 2.2(b)
Commissions 4.1(b)
Confidential Linvatec Information 6.4(b)
Confidential Xxxxxx Information 6.4(a)
Distribution Agreement Preamble
Force Majeure Event 6.15
indemnified party 6.3(b)
Linvatec Preamble
Product Literature 3.7(a)
Seller Preamble
Stock Purchase Agreement Preamble
Third Party Claim 6.3(b)
Transfer Prices 2.2(a)
Transition Distributor Agreement 6.13(i)
Xxxxxx Preamble
SECTION 1.2. Interpretation and Schedules. (a) The headings
contained in this Agreement, in any Schedule hereto and in the table of contents
to this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. All references to the term
"including" shall be deemed to be followed by "without limitation".
(b) All Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized term used in any Schedule but not otherwise defined
therein, shall have the meaning as defined in this Agreement.
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ARTICLE II
Appointment as Exclusive Distributor
SECTION 2.1. Appointment of Xxxxxx as Exclusive Distributor. (a)
During the applicable Term, Linvatec hereby appoints Xxxxxx, and Xxxxxx hereby
accepts the appointment, as Linvatec's exclusive distributor of the Linvatec
Products in the Transition Markets of the Small Bone/Specialty Products and
Arthroscopy Products in the Direct Markets, of the Small Bone/Specialty Products
in the U.S. and of the Arthroscopy Products with respect to the accounts listed
on Schedule 2.1(a) and any new accounts developed by the Arthroscopy U.S.
Distributors in geographic proximity to their current accounts (to the extent
such new accounts are not already covered by the direct sales force of
Linvatec).
(b) It is acknowledged and agreed that Xxxxxx shall perform its
obligations as exclusive distributor of the Products in the relevant Markets, in
its sole discretion through a direct sales force, Distributors or a combination
of a direct sales force and Distributors.
SECTION 2.2. Transfer Price. (a) During the applicable Term,
Linvatec agrees to sell the Products, including any new Products, to Xxxxxx for
sale in the Markets and Xxxxxx agrees to buy the Products, including any new
Products, from Linvatec, for Xxxxxx'x own account, at the transfer prices (the
"Transfer Prices") set forth on Schedule 2.2(a).
(b) Xxxxxx shall pay Linvatec the full amount of the transfer prices
applicable to each shipment of Products ordered by Xxxxxx (other than Non-U.S.
Inventory) within 45 calendar days after receipt of the invoice. On the Closing
Date, Xxxxxx shall pay to Linvatec $15,795,000 (the "Closing Date Non-U.S.
Inventory Amount"), which represents the estimated full amount of the transfer
prices for the Non-U.S. Inventory being distributed under this Agreement and
under the Distribution Agreement. If it is determined under Section 2.3(b) of
the Stock and Asset Purchase Agreement that the Estimated Non-U.S. Inventory
Purchase Price exceeds or is less than the Non-U.S. Inventory Purchase Price,
then the difference between the Closing Date Non-U.S. Inventory Amount and the
amount of the transfer prices due under this Agreement and the Distribution
Agreement with respect to Non-U.S. Inventory as calculated based on the Non-U.S.
Inventory Purchase Price that is binding on Seller and Buyer under Section 2.3
of the Stock Purchase Agreement plus the applicable percentage xxxx-up for such
Non-U.S. Inventory included in the Transfer Prices under this Agreement and the
Distribution Agreement (such amount, the "Actual Non-U.S. Inventory Amount")
shall be paid to Xxxxxx by Linvatec (if the Closing Date Non-U.S.
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Inventory Amount exceeds the Actual Non-U.S. Inventory Amount) or paid to
Linvatec by Xxxxxx (if the Closing Date Non-U.S. Inventory Amount is less than
the Actual Non-U.S. Inventory Amount), as the case may be . The amount of any
such difference shall be paid by Xxxxxx or Linvatec, as the case may be, on the
date that the related adjustment is paid under Section 2.3(b) of the Stock and
Asset Purchase Agreement. All payments of transfers prices by Xxxxxx to Linvatec
shall be in U.S. dollars.
SECTION 2.3. Repurchase of Inventory. Upon expiration or termination
of the Term with respect to any Product Category in any Market, Linvatec shall
repurchase Xxxxxx'x inventory of Products in such Product Category in such
Market within 60 calendar days of such expiration or termination at the transfer
prices applicable to such inventory, net of reserves for obsolete and
slow-moving goods (as determined in accordance with Xxxxxx'x accounting
policies), plus freight charges and expenses (and with respect to Markets other
than the United States, duty and customs charges and expenses). Delivery of such
inventory returned to Linvatec shall be F.O.B. the storage location of such
inventory. In the event Linvatec defaults in its obligations to repurchase
Xxxxxx'x inventory of Products, without prejudice to any of Xxxxxx'x other
remedies, Xxxxxx shall be entitled to sell such inventory in any manner it deems
appropriate. In any case, after expiration or termination of the applicable
Term, Xxxxxx shall be entitled to sell any Products for which it has accepted
firm orders, consistent with past practice.
SECTION 2.4. Handling of Inventory. Xxxxxx shall not, and shall
cause the Distributors not to, alter or tamper with any labels, descriptive
marks, packing, promotional materials, bottles or containers in which or with
which the Products are supplied, or make any modification of the Products except
as required for compliance with local law or otherwise consistent with past
practice. Xxxxxx shall permit Linvatec at reasonable times to enter any one of
the warehouses at which the Products are stored for purposes of inspection,
sampling or testing of the Products.
SECTION 2.5. U.S. Arthroscopy. During the applicable Term, Xxxxxx
and Linvatec shall cooperate to continue the distribution arrangement as it
exists as of the date hereof with respect to distribution of the Arthroscopy
Products by certain Distributors in the United States or as it will exist upon
execution of a letter agreement substantially in the form attached hereto as
Exhibit 2.5 with each such Distributor; provided that Linvatec shall terminate
any direct distribution contracts between Linvatec and any of Xxxxxx'x
Distributors in the United States other than such letter agreements.
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ARTICLE III
Other Services from Xxxxxx
SECTION 3.1. Marketing. (a) It is acknowledged and agreed that in
the Markets other than the United States., Linvatec shall provide all Global
Marketing Services, and Xxxxxx shall provide all Local Marketing Services in
such Markets. Linvatec shall cooperate with Xxxxxx in connection with the Local
Marketing Services, in each case consistent with past practice. It is
acknowledged and agreed that in the United States, Linvatec shall provide for
(i) all Global Marketing Services and (ii) on a national level, participation or
sponsorship of medical society or other medical organization meetings and
participation in medical symposia, workshops, exhibits and trade shows, in each
case consistent with past practice, and Xxxxxx shall provide Local Marketing
Services, except the services referred to in Section 3.1(a)(ii), consistent with
past practice. Each party shall bear its own costs and expenses in providing
such services.
(b) Furthermore, Xxxxxx shall consult with Linvatec periodically as
reasonably requested by Linvatec regarding activities of third-party competition
and such other facts and data relating to the distribution of Products hereunder
as may reasonably be requested by Linvatec, provided that such consultation does
not unreasonably disrupt the normal operations of Xxxxxx.
SECTION 3.2. Supply of Products. Linvatec agrees to supply Xxxxxx
and the Distributors, as applicable, Products consistent with past practice.
With respect to Products delivered to the warehouses of Xxxxxx, Linvatec shall
be responsible for delivery of the Products F.O.B. the source plant of the
Products. Xxxxxx shall pay all costs and expenses associated with such delivery,
including shipping, freight, insurance, transfer taxes, duty and customs
expenses. Title and risk of loss to the Products shall pass to Xxxxxx upon
delivery to Xxxxxx at the source plant of the Products.
SECTION 3.3. Product Pricing. Xxxxxx shall determine prices for
Products in the Markets in its sole discretion.
SECTION 3.4. Regulatory. Xxxxxx and Linvatec shall cooperate (i) to
maintain and obtain any necessary registrations of the Products with local
health or other regulatory authorities of the Markets other than the U.S. that
may be required under applicable law in such Markets and (ii) to comply with all
other regulatory requirements in the such Markets. Linvatec shall be responsible
for all Product registration and regulatory compliance in the United States, CE
marking in Europe and local language
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labeling in all the Markets and such other compliance matters as are consistent
with past practice.
SECTION 3.5. Purchase of Demonstration Equipment. Linvatec shall
sell to Xxxxxx or the Distributors at standard cost demonstration Products from
time to time during the applicable Term ordered by Xxxxxx or the Distributors,
consistent with past practice.
SECTION 3.6. Repairs. (a) In the United States, Linvatec shall make
available repair services for Linvatec Products. In Markets other than the
United States, Xxxxxx will make available repair services to all customers in
such Markets for Products at Xxxxxx'x current service centers or at service
centers that Linvatec may be notified of in writing from time to time, and such
services shall be substantially similar to the repair services provided by
Xxxxxx immediately prior to the date hereof (e.g., with similar turn around
times and covering the same geographic areas); provided that Linvatec will
continue to make available repair services outside the United States in certain
Markets consistent with past practice and further provided that Linvatec shall
make repairs for Linvatec Products to the extent Linvatec establishes repair
facilities in the Markets other than the United States. Linvatec shall provide
repair services for Linvatec Products to Xxxxxx at the transfer prices set forth
on Schedule 3.6(a) for repair services in the United States and outside the
United States. During the applicable Term, Linvatec shall sell to Xxxxxx
replacement parts for Products for use in Xxxxxx'x repair services in Markets
outside the United States at the transfer prices set forth on Schedule 3.6(a)
applicable to such Product in such Market sold to Xxxxxx by Linvatec. Linvatec
shall be responsible for delivery of such parts F.O.B. the source plant of such
parts. Xxxxxx shall pay all costs and expenses associated with such delivery,
including shipping, freight, insurance, transfer taxes, duty and customs
expenses. In its sole discretion, Xxxxxx may change or add a location of a
service center, or consolidate service centers; provided, that after such change
or consolidation, repair turn around times and geographical areas covered by
Xxxxxx'x service centers are substantially the same as exist on the date hereof.
(b) During the applicable Term and for six months thereafter, in the
event Linvatec discontinues the manufacture of any of the Products, Linvatec
shall continue, for a period of time after such discontinuance consistent with
past practice, to make available to Xxxxxx repair services and replacement parts
for such discontinued Products on the terms set forth in Section 3.6 (a), to the
extent reasonably anticipated by Linvatec to be necessary to service such
discontinued Products previously supplied by Linvatec pursuant to the terms of
this Agreement.
SECTION 3.7. Product Literature; Exhibits, Trade Shows, Etc.;
Videotapes. (a) Product Literature. With respect to the Products, Linvatec shall
from
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time to time furnish to Xxxxxx, at Linvatec's expense, in reasonable quantities,
literature, catalogs and technical brochures in English (collectively, "Product
Literature") for the Markets. Xxxxxx shall arrange reprinting of local language
literature, catalogs and technical brochures, as necessary, as well as provide
local language translation services, as necessary, in each case at its own
expense. Linvatec shall cooperate with Xxxxxx with respect to such reprinting or
translation efforts. During the Term, Xxxxxx shall provide Product Literature
distribution services for the Large Bone Products and Small Bone/Specialty Bone
Products. Xxxxxx shall provide Product Literature distribution services for all
other Linvatec Products consistent with past practice, until such Product
Literature is transferred from its New Jersey location to Linvatec. After such
transfer, Linvatec will be responsible for distribution of such Product
Literature.
(b) Exhibits, Trade Shows, Etc. Linvatec shall cooperate with Xxxxxx
to provide necessary personnel for the exhibits, trade shows, meetings and other
activities in connection with Xxxxxx'x Local Marketing Services, as well as the
technical information and other services reasonably requested by Xxxxxx.
(c) Videotapes. Linvatec will provide English language videotapes
with respect to Products or the Linvatec business to Xxxxxx, consistent with
past practice.
ARTICLE IV
U.S. Transition Services
SECTION 4.1. Convention; Commissions and Administrative Fees of
Group Purchasing Contracts. In the United States, Xxxxxx shall provide the
following services:
(a) Convention. Zimmer shall provide Linvatec services and
incur out-of-pocket expenses associated therewith in connection with the
American Academy of Orthopedic Surgeons Convention necessary for
Linvatec's participation in such convention, including rental of floor
space, build-out of displays, storage and shipment of such displays and
provision of products and samples. Xxxxxx shall issue an invoice to
Linvatec for all charges, costs and out-of-pocket expenses applicable to
Linvatec associated with such convention. Within 30 calendar days of
receipt of such invoice, Linvatec shall pay Xxxxxx the full amount set
forth on such invoice;
(b) Commissions. Linvatec shall reimburse Xxxxxx in full for
all commissions on sales of Products in the U.S. by the Distributors of
Arthroscopy
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Products that are paid by Xxxxxx on behalf of Linvatec to such
Distributors (the "Commissions"). Xxxxxx shall issue an invoice to
Linvatec for all such Commissions. Within 5 business days of receipt of
such invoice, Linvatec shall pay Xxxxxx the full amount set forth on such
invoice; and
(c) Administrative Fees of Group Purchasing Contracts.
Linvatec shall reimburse Xxxxxx in full for the administration fees on
group purchasing contracts paid by Xxxxxx on behalf of Linvatec. Xxxxxx
shall issue an invoice to Linvatec for such administrative fees. Within 5
business days of receipt of such invoice, Linvatec shall pay Xxxxxx the
full amount set forth on such invoice.
ARTICLE V
Other Linvatec Obligations
SECTION 5.1. Warranties and Return. (a) Linvatec shall warrant the
Products in accordance with Linvatec's standard worldwide warranty in effect
from time to time; provided, however, that Linvatec shall not change the terms
of the Product warranties in effect at the Closing Date with respect to Products
sold in any Market if such change would render Xxxxxx unable to sell Products in
such Market in accordance with applicable law or regulation or commercial
custom. Xxxxxx will deliver, consistent with past practice, to Linvatec a
statement setting forth the types and quantities of Products sold by it in each
Market showing the serial numbers of the Products, if any, and all other
information required in order to permit Linvatec's warranty to be honored.
(b) Linvatec shall accept all returns of defective Products that are
returned in a reasonable amount of time and credit Xxxxxx for such returns.
Linvatec shall pay all costs and expenses associated with such return, including
shipping, freight, insurance, transfer taxes, duty and customs expenses.
(c) Xxxxxx shall not have any reimbursement obligation for Products
(whether sold before, on or after the Closing Date) which are returned pursuant
to a Product warranty or guarantee. If a Product returned pursuant to a Product
warranty or guarantee results in a credit against an accounts receivable
maintained by Xxxxxx with respect to a Product sold by Xxxxxx prior to the
Closing Date, Linvatec shall reimburse Xxxxxx for the price paid by Xxxxxx to
Linvatec for such Product.
(d) During the applicable Term, in the event Products sold by Xxxxxx
are returned by a customer directly to Linvatec, Linvatec shall notify Xxxxxx of
such return within 5 calendar days. After the applicable Term, Xxxxxx shall
continue to be
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responsible for all refunds or the costs of any exchange of Products sold by it
prior to the Closing Date that are not covered by a warranty or guarantee of
Linvatec.
SECTION 5.2. Information; Technical and Regulatory Support. Linvatec
shall make available on a timely basis to Xxxxxx all information that Xxxxxx
reasonably requests to perform Xxxxxx'x obligations hereunder. Linvatec shall
provide to Xxxxxx, at Linvatec's expense, such regulatory and technical
assistance as Xxxxxx may reasonably request for the promotion, sale and
servicing of the Products.
SECTION 5.3. Insurance. Linvatec shall at all times from the date
hereof to the last to end of the Terms maintain, at no cost to Xxxxxx, annual
product liability insurance covering all Products supplied by Linvatec pursuant
to the terms of this Agreement with aggregate annual coverage of at least
$25,000,000 (which policy shall name Xxxxxx as an additional insured and shall
cover all claims incurred or arising out of or relating to events that occurred
during the period from the date hereof to the last to end of the Terms).
ARTICLE VI
Miscellaneous
SECTION 6.1. Intellectual Property. During the applicable Term,
Linvatec hereby grants to Xxxxxx a nonexclusive license to use the Intellectual
Property to the extent necessary to satisfy its obligations under this
Agreement.
SECTION 6.2. Further Assurances. The parties agree to execute and
deliver all such documents and instruments and shall take all such further other
actions as may be reasonably necessary or desirable to consummate the
transactions contemplated hereby.
SECTION 6.3. Indemnity. (a) Product Liability. Linvatec shall
indemnify Xxxxxx, its Affiliates (including Seller) and each of their respective
officers, directors, employees, stockholders, agents and representatives against
and hold them harmless from any loss, liability, claim, damage or expense
(including reasonable legal fees and expenses) suffered or incurred by any such
indemnified party for any claims arising from or in connection with the design,
manufacture or use of the Products sold by Xxxxxx during the applicable Term,
including claims for injury or death to any Person or damage to property, except
to the extent that such claims and expenses result from the gross negligence of
Xxxxxx.
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(b) Procedures Relating to Indemnification for Third Party Claims.
In order for a party (the "indemnified party") to be entitled to any
indemnification provided for under Section 6.3(a) in respect of, arising out of
or involving a claim or demand made by any Person against the indemnified party
(a "Third Party Claim"), such indemnified party must notify the indemnifying
party in writing, and in reasonable detail, of the Third Party Claim within 30
calendar days after receipt by such indemnified party of written notice of the
Third Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure (except that the indemnifying party shall not be liable for any expenses
incurred during the period in which the indemnified party failed to give such
notice). Thereafter, the indemnified party shall deliver to the indemnifying
party, promptly after the indemnified party's receipt thereof, copies of all
notices and documents (including court papers) received by the indemnified party
relating to the Third Party Claim.
If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses and acknowledges its obligation to indemnify the indemnified
party therefor, to assume the defense thereof with counsel selected by the
indemnifying party; provided that such counsel is not reasonably objected to by
the indemnified party. Should the indemnifying party so elect to assume the
defense of a Third Party Claim, the indemnifying party shall not be liable to
the indemnified party for legal fees and expenses subsequently incurred by the
indemnified party for separate counsel in connection with the defense thereof.
If the indemnifying party assumes such defense, the indemnified party shall have
the right to participate in the defense thereof and to employ counsel (not
reasonably objected to by the indemnifying party), at its own expense, separate
from the counsel employed by the indemnifying party, it being understood that
the indemnifying party shall control such defense. The indemnifying party shall
be liable for the fees and expenses of counsel employed by the indemnified party
for any period during which the indemnifying party has failed to assume the
defense thereof (other than during the period prior to the time the indemnified
party shall have given notice of the Third Party Claim as provided above).
If the indemnifying party so elects to assume the defense of any
Third Party Claim, all of the indemnified parties shall cooperate with the
indemnifying party in the defense or prosecution thereof, subject to the other
party's confidentiality obligations under this Agreement. Such cooperation shall
include the retention and (upon the indemnifying party's request) the provision
to the indemnifying party of records and information which are reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Whether or not the indemnifying party
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shall have assumed the defense of a Third Party Claim, the indemnified party
shall not admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the indemnifying party's prior written
consent (which consent shall not be unreasonably withheld).
SECTION 6.4. Confidentiality. (a) Linvatec and Buyer agree that each
of them shall keep confidential and not disclose to any third party, except as
it is necessary in carrying out the purpose of this Agreement, during the period
from the date hereof and to the last to end of the Terms and for three years
thereafter the terms of this Agreement or any information of a proprietary
nature relating to the business or operations of Xxxxxx or its Affiliates,
including technology, specifications, product information, data, inventions,
processes, know-how, trade secrets and information disclosed pursuant hereto
(together, "Confidential Xxxxxx Information") furnished to Buyer or Linvatec by
Xxxxxx in connection with this Agreement, except Confidential Xxxxxx Information
that:
(i) at the time of disclosure is in the public domain or publicly
known or available (other than as a result of a disclosure directly or
indirectly by Linvatec or Buyer or any of their Affiliates in violation of
the terms of any confidentiality agreement involving Linvatec or Buyer or
any of their Affiliates on the one hand and Xxxxxx or any of its
Affiliates on the other hand);
(ii) was available to Linvatec or Buyer on a non-confidential basis
from a third party; provided that the Confidential Xxxxxx Information was
not obtained by such third party from Linvatec or Buyer or their
Affiliates; or
(iii) Linvatec or Buyer derives independently of such furnishment of
Confidential Xxxxxx Information.
In the event that Linvatec or Buyer become legally compelled (by
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or similar process or otherwise) to disclose any of the Confidential
Xxxxxx Information, Linvatec or Buyer shall provide the counsel of Xxxxxx with
prompt written notice of such requirement so that Xxxxxx may seek a protective
order or other appropriate remedy and/or waive compliance with the terms of this
agreement. In the event that such protective order or other remedy is not
obtained, or that Xxxxxx waives compliance with the provisions hereof, Linvatec
or Buyer agrees to furnish only that portion of the Confidential Xxxxxx
Information which Linvatec or Buyer is advised by opinion of counsel is legally
required and to exercise best efforts to obtain assurance that confidential
treatment will be accorded such Confidential Xxxxxx Information.
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(b) Xxxxxx agrees that it shall keep confidential and not disclose
to any third party, except as it is necessary in carrying out the purpose of
this Agreement, during the period from the date hereof and to the last to end of
the Terms and for three years thereafter the terms of this Agreement or any
information of a proprietary nature relating to Linvatec's business or
operations, including technology, specifications, product information, data,
inventions, processes, know-how, trade secrets and information disclosed
pursuant hereto (together, "Confidential Linvatec Information") furnished to
Xxxxxx by Linvatec in connection with this Agreement, except Confidential
Linvatec Information that:
(i) at the time of disclosure is in the public domain or publicly
known or available (other than as a result of a disclosure directly or
indirectly by Xxxxxx or any of its Affiliates in violation of the terms of
any confidentiality agreement involving Linvatec or Buyer or any of their
Affiliates on the one hand and Xxxxxx or any of its Affiliates on the
other hand);
(ii) was available to Xxxxxx on a non-confidential basis from a
third party; provided that the Confidential Linvatec Information was not
obtained by such third party from Xxxxxx or its Affiliates; or
(iii) Xxxxxx derives independently of such furnishment of
Confidential Linvatec Information.
In the event that Xxxxxx becomes legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process or otherwise) to disclose any of the Confidential Linvatec
Information, Xxxxxx shall provide the counsel of Linvatec with prompt written
notice of such requirement so that Linvatec may seek a protective order or other
appropriate remedy and/or waive compliance with the terms of this agreement. In
the event that such protective order or other remedy is not obtained, or that
Linvatec waives compliance with the provisions hereof, Xxxxxx agrees to furnish
only that portion of the Confidential Linvatec Information which Xxxxxx is
advised by opinion of counsel is legally required and to exercise best efforts
to obtain assurance that confidential treatment will be accorded such
Confidential Linvatec Information.
SECTION 6.5. Exclusive Appointment. During the applicable Term in
the relevant Markets, Linvatec shall not appoint any distributor or agent (or
similar entity) other than Xxxxxx or supply Products to any Person other than
Xxxxxx or the Distributors whether for use or resale.
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SECTION 6.6. Amendments. No amendment to this Agreement shall be
effective unless it shall be in writing and signed by the party against whom
enforcement is sought.
SECTION 6.7. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered personally or sent
by prepaid telex, cable or telecopy, or sent, postage prepaid, by registered,
certified or express mail (return receipt requested) or reputable overnight
courier service and shall be deemed given when so delivered by hand, telexed,
cabled or telecopied, or if mailed, 3 calendar days after mailing (one business
day in the case of express mail or overnight courier service) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to Linvatec,
Linvatec Corporation
00000 Xxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Attention: President
with a copy to:
CONMED Corporation
000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Attention: General Counsel
(ii) if to Buyer,
CONMED Corporation
000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Attention: General Counsel
(iii) if to Zimmer,
Zimmer, Inc.
000 Xxxx Xxxx Xxxxxx
00
00
Xxxxxx, XX 00000
Attention: General Counsel
with a copy to:
Xxxxxxx-Xxxxx Squibb Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
and a copy to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxxx, Esq.
SECTION 6.8. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other parties. Counterparts may be
delivered by facsimile.
SECTION 6.9. Entire Agreement. This Agreement, together with the
Stock Purchase Agreement, contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings. Nothing in this Agreement
shall be deemed to amend, modify or in any way affect the Stock Purchase
Agreement.
SECTION 6.10. Severability. If any provision of this Agreement (or
any portion thereof) or the application of any such provision (or any portion
thereof) to any Person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other Persons or circumstances.
SECTION 6.11. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such state.
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SECTION 6.12. Assignment. Neither party may assign its rights or
obligations under this Agreement to any party without the prior written consent
of the other party; provided, however, that either party may assign its rights
or obligations under this Agreement to a wholly owned subsidiary or an Affiliate
of such party.
SECTION 6.13. Term and Termination. (a) Linvatec's rights of
termination pursuant to this Section shall be exercisable (i) only with respect
to an entire Product Category and not with respect to each Product and (ii) only
with respect to an entire country and not with respect to any subdivision
thereof.
(b) During the period from and including the date hereof to and
including the date one month from the date hereof, Linvatec shall have the right
to terminate, upon 15 days prior written notice, the rights and obligations
pursuant to Articles II and III (except for those rights and obligations which
refer to periods thereafter) with respect to Small Bone/Specialty Products and
Arthroscopy Products in the Direct Markets and all Products Categories in the
Transition Markets.
(c) During the remainder of the Term applicable to the Small
Bone/Specialty Products and Arthroscopy Products in the Direct Markets and all
Products Categories in the Transition Markets referred to in this paragraph (c)
following the one month period referred to in paragraph (b) of this Section,
Linvatec shall have the right to terminate, upon 60 days prior written notice,
the rights and obligations pursuant to Articles II and III (except for those
rights and obligations which refer to periods thereafter).
(d) During the period from and including the date hereof to the end
of the Term of the Small Bone/Specialty Products in the U.S., Linvatec shall
have the right to terminate, upon 90 days prior written notice, the rights and
obligations pursuant to Articles II and III (except for those rights and
obligations which refer to periods thereafter) with respect to Small
Bone/Specialty Products in the U.S.
(e) During the period from and including the date hereof to the end
of the Term of the Arthroscopy Products in the U.S., Linvatec shall have the
right to terminate, upon 90 days prior written notice, the rights and
obligations pursuant to Articles II and III (except for those rights and
obligations which refer to periods thereafter) with respect to the Arthroscopy
Products in the U.S.
(f) Shortly before and a reasonable time after the expiration or
termination of the Term with respect to any Product Category in any Market,
Xxxxxx shall cooperate with Linvatec in connection with the transfer of the
distribution function from Xxxxxx to Linvatec or to such entities as Linvatec
shall designate in the Markets, including
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transferring (i) all artwork and sales literature used exclusively in connection
with the sale of the Products in such terminated or expired Market, (ii) the
applicable customer lists in Xxxxxx'x possession that relate solely to the sale
of Products in the Markets and (iii) the necessary licenses, permits and
registrations to Linvatec or an entity designated by Linvatec; provided,
however, Xxxxxx will not be obligated to assign all or any part of the
distributor agreements with Xxxxxx'x distributors in the U.S. and Canada.
(g) Upon the end of the Term with respect to any Product Category in
any Market, Linvatec shall purchase all demonstration Products with respect to
such Product Category in such Market then owned by Xxxxxx at net book value
(determined in accordance with Xxxxxx'x accounting policies) of such Products.
(h) At any time prior to the end of all applicable Terms, at
Linvatec's request, Xxxxxx shall transfer to Linvatec, in its then "AS IS, WHERE
IS WITH ALL FAULTS" condition, any repair equipment then used by Xxxxxx to
repair Products distributed by Xxxxxx hereunder, except repair equipment in
Japan and any other repair equipment required to fulfill Xxxxxx'x obligations
pursuant to the Distribution Agreement. Linvatec will bear the full cost of any
such transfer. Linvatec acknowledges and agrees that Xxxxxx shall have no
liability whatsoever to Linvatec arising from possession of such repair
equipment. Linvatec further acknowledges that no repair equipment may be
available for transfer at the time of Linvatec's request.
(i) Effective upon the end of the applicable Term in the Transition
Markets, Xxxxxx shall assign to Linvatec all or part of each distributor
agreement relating to the sale of Products in the Transition Markets (a
"Transition Distributor Agreement"), to the extent each such distributor
agreement relates to the distribution of Products and to the extent each such
Transition Distributor Agreement is assignable without consent of the other
party; provided that Xxxxxx shall not be required to give up any benefit
relating to distribution of products other than Products in connections
therewith. Xxxxxx and Linvatec shall jointly cooperate in attempting to obtain
the agreement of the other party to each applicable Transition Distributor
Agreement to consent to assignment, without payment of any amounts to such other
party in respect of such assignment, of all or part of the applicable Transition
Distributor Agreement to Linvatec (with respect only to agreements requiring
such consent as a condition to assignment); provided that such cooperation shall
not include any requirement of Xxxxxx to commence litigation or offer or grant
any accommodation (financial or otherwise) to any third party. Xxxxxx and
Linvatec will jointly cooperate to eliminate any liability of either Xxxxxx or
Linvatec in respect of Transition Distributor Agreements for which it is not
possible to obtain the agreement of the other party to consent to assignment
without payment of any amounts. Such cooperation by Linvatec will include (i)
enabling Xxxxxx to perform its obligations
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(relating to Products) with respect to such Transition Distributor Agreements
and (ii) repurchasing any Products previously sold to distributors.
(j) Except as otherwise set forth above, the rights and obligations
pursuant to Articles II and III shall terminate and expire on the last day of
the applicable Term except for those rights and obligations which refer to
periods thereafter.
SECTION 6.14. Performance of Xxxxxx Obligations. Linvatec
acknowledges and agrees that Xxxxxx may perform its obligations under this
Agreement through one or more of its subsidiaries, Distributors and Affiliates
of Xxxxxx, including the Seller Entities, consistent with past practice in
connection with the International Business and the Domestic Hall Surgical
Business.
SECTION 6.15. Force Majeure. In case performance of any terms or
provisions hereof shall be delayed or prevented, in whole or in part, because of
or related to compliance with any law, decree, request or order of any
governmental agency or authority, either local, state, federal or foreign, or
because of riots, war, public disturbance, strike, lockout, fire, explosion,
storm, flood, acts of God, accidents of navigation, breakdown or failure of
transportation or of transportation, manufacturing, distribution, storage or
processing facilities, or for any other reason which is not within the control
of the party whose performance is interfered with and which by the exercise of
reasonable diligence such party is unable to prevent (each, a "Force Majeure
Event"), the party so suffering may at its option suspend deliveries or receipts
or discontinue performance of services during the period such cause continues,
and no liability shall attach against either party on account thereof. If a
Force Majeure Event occurs, Linvatec may apportion its available supply of
Products among its customers on an equitable basis without incurring liability
for failure to perform this Agreement. No party shall be excused from
performance if such party fails to use reasonable diligence to remedy the
situation and remove the cause and effect of the Force Majeure Event in an
adequate manner and with reasonable dispatch; provided, however, that nothing
contained herein shall require the settlement of strikes or labor controversies
by acceding to the demands of the opposing party or parties. Notwithstanding the
foregoing, Xxxxxx shall not be relieved of the obligation to pay for Products
title to which have passed to Xxxxxx.
SECTION 6.16. Limitation of Liability. None of the parties hereto
(or its Affiliates) or its respective directors, officers, employees or agents
shall be liable to the other for indirect, consequential or punitive damages in
connection with the performance of this Agreement, even if it has been advised
of the possibility of such damages, and each party hereby waives any claim for
such damages, including any claim for property damage or lost profits, whether
arising in contract, tort or otherwise.
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SECTION 6.17. Restrictions on Solicitation and Hiring. (a) From the
date hereof to and including the second anniversary of this Agreement, in the
United States and Canada, Buyer and Linvatec shall not, directly or indirectly,
solicit for employment, solicit to be a distributor or hire (i) any employee of
Xxxxxx or its Affiliates (other than pursuant to Section 9.14 of the Stock
Purchase Agreement) or (ii) any Distributor in the U.S. and Canada, whether or
not such Person would commit a breach of his, her or its contract of service in
leaving such employment or of such Person's distribution agreement with any
Person (except that solicitations for employment by general advertisements in
periodicals of broad circulation shall not constitute a breach of this
sentence).
(b) From the date hereof to and including the second anniversary of
this Agreement, in the United States and Canada, Xxxxxx shall not, directly or
indirectly, solicit for employment, solicit to be a distributor or hire (i) any
employee of Buyer, Linvatec or its Affiliates or (ii) any of Linvatec's or
Buyer's exclusive distributors in the U.S. and Canada, whether or not such
Person would commit a breach of his, her or its contract of service in leaving
such employment or of such Person's distribution agreement with any Person
(except that solicitations for employment by general advertisements in
periodicals of broad circulation shall not constitute a breach of this
sentence).
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SECTION 6.18. Arbitration. Any dispute between the parties hereto
shall be subject to binding arbitration under the Commercial Arbitration Rules
of the American Arbitration Association in a mutually agreeable, neutral
location.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first written above.
CONMED CORPORATION,
(a signatory only with respect to Section
6.4 and 6.17)
by /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President -- Legal Affairs
LINVATEC CORPORATION,
by /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
XXXXXX, INC.,
by /s/ Xxxxx Xxxxx
-----------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
