EXHIBIT 10.8
Dated this 10th day of November 1995
Innovative Technologies Ltd (1)
- and -
Xxxxxxxxxx Laboratories Incorporated (2)
PRODUCT DEVELOPMENT AND EXCLUSIVE DISTRIBUTION AGREEMENT
for Woundcare Products
Ref: LACARL03.xxx
THIS AGREEMENT is made effective this 10th day of November 1995;
BY and BETWEEN:
INNOVATIVE TECHNOLOGIES LIMITED of Road Three, Industrial
Estate, Xxxxxxxx, Xxxxxxxx XX0 0XX, Xxxxxx Xxxxxxx ('IT'); and
XXXXXXXXXX LABORATORIES INCORPORATED of XX XXX 000000,
XXXXXX, XXXXX 00000-0000 XXX. ("XXXX").
WHEREAS:
IT manufactures and sells various woundcare products including a
line of calcium alginate and other wound dressings; and
IT is willing to develop other components and/or products in the
field of woundcare for XXXX, to supply such components and/or
products to XXXX and to xxxxx XXXX an exclusive right to sell
such products under and on the terms of this Agreement and in
consideration of them; and
XXXX desires to obtain a source for the supply of calcium
alginate and other wound dressings of the type manufactured and
supplied by IT and XXXX further desires that IT develops other
woundcare components and products including based upon CARL's
own complex carbohydrates and in particular ace mannan.
IT IS AGREED as follows:-
DEFINITIONS
In this Agreement and the Recitals hereto:-
"Associate" means in relation to a company any company
individual partnership or other business enterprise:-
(a) which owns or controls directly more than ten percent
(10%) of the voting stock of such first mentioned company; or
(b) of which more than ten percent (10%) of the voting stock
is owned or controlled directly or indirectly by such first
mentioned company; or
(c) of which more than ten percent (10%) of the voting stock
is owned or controlled directly or indirectly by any company
individual partnership or other business enterprise mentioned in
(a) or (b) above.
"Average Net Selling Price" means for the Products the gross
sales for each of the Products on an arm's length basis to
CARL's third party customers, less any applicable arm's length
volume related cash discounts and rebates, taxes,
transportation charges separately billed, returns and
allowances, divided by the number of each Product sold
provided always that where any of the Products are sold to a
Subsidiary or Associate of XXXX the net invoiced value to that
Subsidiary or Associate shall be disregarded and the transfer
price shall be calculated on the amount of the net invoiced
value which would have been charged to a non-Subsidiary or
non-Associate of XXXX.
"Confidential Information" means know-how and any other
information of a confidential nature disclosed (whether in
writing, verbally or by any other means and whether directly or
indirectly) by IT to XXXX whether before or after the Effective
Date of this Agreement including, without limitation, any
information relating to IT's business affairs and mutatis
mutandis in relation to CARL's business affairs.
"Date of Commercialisation" means the date the First Product
is sold in commercial quantities in the Territory or six months
after the Date of Delivery thereof whichever shall first occur.
"Date of Delivery" means the date specified in Clause 4.4 in
respect of any Product.
"Effective Date" means the date of signature of this
Agreement.
"First Product" means that one of the Products first sold by
XXXX.
"Geographic Area" means according to the context, the
continent of North America, the continent of South America or
the country the People's Republic of China..
"Intellectual Property" means any patent, copyright, design
right, registered design, trade xxxx, or other industrial or
intellectual property right
"Initial Products" means those particular woundcare products
fabricated from the Specified Alginate and those particular
products which use as a component, components produced from the
Specified Alginate which are all specified in detail in the
first schedule to this Agreement "Schedule 1" and all of which
are Products.
"Products" means the Initial Products and the Further Products
(defined in Clause 2.2 of this Agreement) and the Additional
Products (defined in Clause 4.3 of this Agreement) developed by
IT for XXXX and delivered to it under the terms of this
Agreement.
"Line" means in relation to Products one product developed in
respect of one Project Specification including under the terms
of Clause 4 of this Agreement.
"Project Specification" shall have the meaning ascribed to it
in Clause 4.3 of this Agreement.
"Purchase Price" means the purchase price, as determined
according to Clause 5, for the Products which price includes the
cost of packaging and labelling the Products in final shipping
containers, F.O.B. port of entry and includes all export and
import duties, insurance, tariffs and customs charges directly
involved with so shipping the Products to the port of entry.
F.O.B. shall have the meaning and import the respective rights
and obligations of buyer and seller as provided in Incoterms
1990 or any subsequent revision thereto.
"Schedule" means a schedule to this Agreement.
"Second Product" means that one of the Products sold second by
XXXX.
"Specified Alginate" means that particular alginate, which has
a specific composition of matter and is manufactured using
specific processing methods, known as MF1-2A Calcium Alginate
and which is specified in detail in Schedule 1.
"Subsidiary" means in relation to a company any other company
in the world of which the first mentioned company owns (either
directly or indirectly) more than fifty percent (50%) of the
voting stock thereof or controls the composition of its Board of
Directors or a parent company or fellow subsidiary of such
companies.
"Territory" means the continents of North America and South
America and the country the People's Republic of China..
"Third Product" means that one of the Products sold third by
XXXX.
Appointment and Grant
IT hereby appoints XXXX as its exclusive distributor during the
term of this Agreement to use and sell the Products, in the
Territory, subject to and upon the terms of this Agreement.
IT also hereby grants to XXXX options to extend the Territory to
include the country of Japan subject to the payment by XXXX to
IT of an additional two hundred thousand US dollars ($200,000)
and thereafter or at the same time to extend the Territory to
include the continent of Europe subject to the payment by XXXX
to IT of an additional one million US dollars ($1,000,000) and
thereafter or at the same time to extend the Territory to
include the rest of the world which Territory would then become
world-wide subject to the payment by XXXX to IT of an additional
two hundred thousand US dollars ($200,000) such options to
subsist for the period until and including June 30th, 1995.
IT also hereby grants to XXXX the right of first refusal, for a
period of two (2) calendar months from the date of first offer
in writing by IT, to an exclusive distributorship during the
term of this Agreement to use and sell woundcare products
fabricated from the Specified Alginate in any other format
and/or in any other combination with any other component or
product (the "Further Products"), in the Territory subject to
and upon the terms of this Agreement.
The terms of such an offer pursuant to Clause 2.3 shall be set
by IT but said offer shall not be on worse terms than those
that may form the basis of a subsequent offer to a third party
should XXXX decline said offer. Upon acceptance by XXXX, the
Further Products shall be deemed to be Products.
Consideration
The consideration to be paid by XXXX to IT for the rights
granted hereunder shall be the sum of one million US dollars
(S1,000,000) (the "Licence Fee"). The Licence Fee shall be paid
as to:-
Five hundred thousand US dollars ($500,000) in cash within seven
(7) days after the Effective Date ; and
One hundred and fifty thousand US dollars ($150,000) in cash
within seven (7) days after the Date of Commercialisation of the
First Product within any one or more Geographic Area(s) of the
Territory; and
One hundred and fifty thousand US dollars ($150,000) in cash
within seven (7) days after the Date of Commercialisation of the
Second Product within any one or more Geographic Area(s) of the
Territory; and
Two hundred thousand US dollars ($200,000) in cash within seven
(7) days after the Date of Commercialisation of the Third
Product within any one or more Geographic Area(s) of the
Territory.;
provided always that all moneys payable under sub-Clauses 3.1.2
and 3.1.3 and 3.1.4 notwithstanding the terms of these
respective sub-Clauses shall become due and payable by a date
which is one year after the Effective Date of this Agreement.
PRODUCT DEVELOPMENT
In respect of any other or new woundcare product which it wishes
to commission from IT, XXXX shall submit to IT a proposal
containing a description of the product and the terms upon which
it is to be developed.
In respect of any other or new woundcare product which IT wishes
to develop for XXXX, IT shall submit to XXXX a proposal
containing a description of the product and the terms upon which
it is to be developed. XXXX shall notify IT in writing of its
interest in such proposal within ninety (90) days of receiving
that proposal. If XXXX does not wish IT to develop such product
pursuant to such proposal, IT shall be free to develop such
product as it sees fit, using its own resources.
If IT and XXXX agree to develop a product pursuant to a proposal
at Clauses 4.1 or 4.2 they shall agree the terms upon which the
product (the "Additional Products") shall be developed in the
form or substantially in the form of the second schedule to this
Agreement ("Schedule 2") (the "Project Specification"), and
shall execute the Project Specification.
On the date specified in the relevant Project Specification or
as near thereto as may be possible IT shall deliver to XXXX all
know-how in documentary form necessary for XXXX to sell the
Additional Product.
Upon the delivery as stated in Clause 4.4 (the "Date of
Delivery") the Additional Product shall be deemed to be a
Product on the terms of this Agreement.
Two Additional Products have already been identified and part
completed Project Specifications appear as the third and fourth
schedules ("Schedule 3" and "Schedule 4") to this Agreement.
Terms of Supply and Delivery
IT agrees to supply and XXXX agrees to purchase the Products
ordered by XXXX in accordance with the provisions of this
Agreement. Each order made by XXXX shall comprise a separate
contract between the parties to which the terms of this
Agreement shall apply, such orders to be placed twelve (12)
weeks before delivery.
IT shall deliver or arrange for the delivery of the Products
F.O.B. port of entry specified by XXXX in any order placed by it
for the Products, unless otherwise agreed by the parties and for
each Product purchased from IT, XXXX shall pay to IT the
Purchase Price for that Product.
XXXX shall bear all shipping, insurance and transportation
charges and other costs for delivery from the port(s) of entry
onwards and XXXX shall take all proper steps necessary or
expedient to obtain prompt importation and clearance of the
Products through the port(s) of entry into and within the
Territory and to discharge all fiscal and other obligations
arising in respect of the import and/or release of the Products
through customs or other competent authorities in the Territory;
Risk of loss of or damage to the Products shall, unless
otherwise agreed by the parties, pass to XXXX on delivery in
accordance with the provisions of Clause 5.2 and normal F.O.B.
principles shall apply accordingly.
For each product purchased from IT, XXXX shall pay the Purchase
Price as set out in the fifth schedule to this Agreement
("Schedule 5") and as subsequently revised under Clauses 5.7 and
5.8 and the Purchase Price shall be determined according to the
general principle that the Purchase Price shall (unless the
parties agree otherwise in writing) represent a sum of money
equivalent to forty per cent (40%) of CARL's Average Net Selling
Price for the Products for a period of one (1) year from the
Effective Date of this Agreement provided always that minimum
payments shall be paid in accordance with a minimum sales
schedule which will form part of the Business Plan as specified
in Clause 12.2 and in the sixth schedule to this Agreement
("Schedule 6"). It is hereby acknowledged and agreed by the
parties that XXXX is free at all times to determine its own
resale prices for the Products.
Without prejudice to the generality of Clause 5.3 above, XXXX
hereby agrees to undertake additional expenditure on promoting
the Products in the Territory, including on promotional
literature and marketing effort, to an amount equal to not less
than five per cent (5%) of CARL's Average Net Selling Price for
the Products for a period of one (1) calendar year from the
Effective Date of this Agreement.
The promotional expenditure incurred by XXXX pursuant to Clause
5.4.1 above shall be deemed to be part-payment of the Purchase
Price for the Products during the first calendar year from the
Effective Date of this Agreement.
Consequently, in consideration for and in ackowledgment of
CARL's agreeing to pay IT five per cent (5%) of the Purchase
Price for the Products in the form of additional promotional
expenditure equal to that amount in respect of the Products, as
specified in Clause 5.4.1 above, IT hereby acknowledges that the
balance of the Purchase Price payable for the Products is an
amount equal to thirty five per cent (35%), rather than the
figure of forty per cent (40%) set out in Clause 5.3 above, of
CARL's Average Net Selling Price for the Products during the
first calendar year from the Effective Date of this Agreement.
The parties hereby agree and acknowledge that the provisions of
this Clause 5.4 shall only apply for a period of one year from
the Effective Date of this Agreement.
The Purchase Price shall be reviewed and any necessary changes
made to it at the end of the first twelve (12) calendar months
following the Effective Date of this Agreement and thereafter on
each successive anniversary of the Effective Date of this
Agreement.
Notwithstanding Clauses 5.5. 5.6 and 5.7, the parties hereby
agree to discuss Purchases Prices on a case by case and on an as
needed basis prior to XXXX tendering for any sales order to
review and potentially modify Purchase Prices to take account of
any particular prevailing circumstances.
In the event of alleged shortage in the Product(s) delivered
XXXX shall endorse the carrier's receipt accordingly and shall
submit a written claim to IT within fourteen (14) days following
the date of deliveries. In the event of non-delivery a written
claim to IT shall be made by XXXX within thirty (30) days
following the presumed date of arrival. In the absence of
notice as required above, the correct quantities of the Products
shall be deemed to have been delivered in accordance with this
Agreement. XXXX shall not be entitled to refuse to accept
delivery by reason only of short delivery.
XXXX shall be invoiced for the Purchase Price of the Product(s)
on despatch of the Product(s) and terms of payment shall be the
later of forty-five (45) days from the date of such invoice, or
receipt of the Product(s).
All invoices sent and payments made shall, unless otherwise
agreed in writing by the parties hereto, be in Pounds Sterling.
Sales in currencies other than Pounds Sterling shall for the
purposes of this Clause 5 be converted to Pounds Sterling at the
average rate of exchange for the period in respect of which
Purchase Prices are paid as contained in the exchange rate table
in respect of spot Pounds Sterling exchanges as published in the
London Edition of the Financial Times.
IT shall be entitled to charge interest on overdue accounts at
the rate of three per cent (3%) above Lloyds Bank base rate at
the time payment is due. In the event that payment is overdue
on any account for a period of thirty (30) days IT reserves the
right to terminate the Agreement immediately by serving notice
to terminate pursuant to sub-Clause 18.1.3 hereof.
No deduction shall be permitted from the amount(s) due without
the prior approval of IT.
IT shall be entitled to withhold delivery of the Products under
this Agreement at any time if payments are due from XXXX
hereunder and have not been paid in accordance with Clause 5.10
hereof.
It is further agreed that during the subsistence of this
Agreement:-
XXXX shall purchase the Products or any substantially equivalent
products for resale in the Territory only from IT;
XXXX shall not itself manufacture the Products or any
substantially equivalent products in the Territory.
In the six (6) months following termination of this Agreement
XXXX shall pay to IT Purchase Prices in respect of each item of
the Products sold by XXXX at the rates applicable to those
Products pursuant to the provisions of Clauses 5.5, 5.6, 5.7 and
5.8 for the period immediately prior to the date of termination
of this Agreement.
In the event that XXXX wishes to use a Product as a component in
another product the purchase price shall be agreed on a case by
case basis failing which the Purchase Price in Clause 5.5 shall
be payable on the net invoiced value of the total product.
The purchase price for the Further Products referred to in
Clause 2.2 and for the Additional Products referred to in Clause
4.3 shall also be agreed on a case by case basis failing which
the Purchase Price in Clause 5.5 shall be payable on the net
invoiced value of the (total) product.
Packaging and Labelling
Packaging and labelling shall be as developed and agreed between
the parties hereto but it is hereby agreed that XXXX shall be
entitled to apply its own brand name and/or trademarks to the
Products. The application by XXXX of its own brand name and/or
trademarks to the Products shall not in any way give rights to
IT thereto.
In order to preserve the integrity and quality of the Product,
XXXX shall not repackage Products manufactured by IT without
IT's prior written permission.
Products Registration
XXXX shall at its own cost obtain in its own name and maintain
such permissions, licenses or registrations of the Products with
the Ministries of Health (or other relevant governmental
authorities) in the Territory as are necessary or desirable for
the sale, distribution, consumption or use of the Products in
the Territory.
IT agrees to make available to XXXX all necessary technical
information required to obtain the said registrations
permissions or licenses and XXXX xxx disclose such of the
information to the relevant permission, license or registration
authority as may be necessary to obtain or maintain any
registrations required pursuant to Clause 7.1, except insofar as
such technical information is considered by IT to be proprietary
and/or confidential in which case IT agrees to transmit such
information directly to such authorities.
CANCELLATION OF ORDERS
XXXX shall not be entitled to cancel an order (or any part of an
order) which has been accepted by IT except upon prior written
agreement by IT and upon such terms as will indemnify IT for all
costs, charges, expenses, damage or loss (including, without
limitation, loss of profit, costs of tooling and purchase of raw
materials) incurred or suffered by IT in respect of each such
order. IT is not bound to agree to any such cancellation and
may complete any contract which it had accepted for the sale of
the Products to XXXX notwithstanding any purported cancellation
from XXXX.
Inability to Supply and Sell
Notwithstanding any other provision herein to the contrary, IT
shall endeavour to supply the Products ordered by XXXX within
the time or times requested but shall not be responsible or
liable to XXXX for any failure or delay in supply of the
Products hereunder due to any cause beyond the control of IT
including (but not limited to) inability to obtain raw materials
or breakdown of or damage to machinery or equipment.
In the case of delay in supply any time fixed for the supply of
the Products hereunder shall be extended by a period equivalent
to the period of delay.
If, due to any cause beyond its control, IT is unable to meet
all orders for products placed by its customers, agents or
distributors, IT shall have the right to allocate the available
quantity of products (including Products) amongst its customers,
agents or distributors including XXXX. IT shall under no
circumstances be liable for any indirect or consequential
losses, costs or penalties incurred or suffered by XXXX as a
result of inability or failure by IT to meet any delivery dates.
Notwithstanding any other provision herein to the contrary, XXXX
shall not be liable to IT for any failure or delay in the
performance of its obligations hereunder due to any cause beyond
the control of XXXX.
Stock and Storage
XXXX shall comply in all respects with all instructions and
directions issued to it in writing from time to time by IT in
relation to the proper method of storing and handling the
Products.
XXXX shall not sell any Products which, in IT's reasonable
opinion, are unsaleable, which expression shall (without
limitation) include those Products which remain unsold after the
recommended consumption or selling date, or which have been
damaged or deteriorated, or which do not comply with the
quality standards for the time being applied by IT and notified
in writing to XXXX or by the laws of the Territory or any
applicable part thereof.
XXXX shall inform IT in a timely manner in the event of any
complaint in respect of any of the Products, and XXXX shall
provide IT with complete information including names and
addresses of complainants and all facts concerning the complaint
(including whether the complaint concerns an alleged reaction to
the Product or an alleged defect in the Product) and each party
shall give the other party all reasonable assistance if
requested in investigating the complaint or in locating and
recovering any Products alleged to be unsaleable or defective
and in preventing their sale to third parties. Any request by
either party as aforesaid shall not of itself be an admission of
liability to the other party as to the condition of the Products.
IMPROVEMENTS
If at any time during the course of this Agreement and
thereafter IT shall make, discover or acquire any improvement to
any of the Products ("Improvements") such Improvements shall be
the property of IT.
Obligations of Parties
XXXX shall, at all times during the subsistence of this
Agreement, use all reasonable endeavours within its control to
promote sales of the Products in the Territory and in particular
(but without prejudice to the generality of the foregoing) XXXX
hereby undertakes for such purposes:-
to comply with all applicable laws, rules, regulations and
orders applicable to the promotion, sale and use of the Products
in any country in which it sells the same and shall indemnify IT
against all losses, liabilities and costs which IT may incur
arising from or in connection with CARL's breach of any of its
obligations under this sub-Clause 12.1.1.
to consult with and obtain the written approval of IT before the
publishing of any claims with respect to the Products and such
approval shall not be unreasonably withheld or delayed, save
that this shall not entitle IT to exercise any control over
CARL's resale prices or conditions of sale;
to follow all technical instructions given by IT relating to the
initial inspection, use, care, storage and disposal of the
Products and instructions to customers on such matters and to
advise IT immediately in writing should XXXX at any time become
aware of anything which in its opinion may materially adversely
affect these matters or the condition or life of the Products;
to ensure that all its staff involved with the promotion,
storage, handling or sale of the Products, or with the giving of
advice or assistance to customers or potential customers for the
Products, are sufficiently trained in order to engage in such
activities;
to indicate in all correspondence and all dealings relating
directly or indirectly to the sale or other dispositions of the
Products clearly that it is acting as principal, and at no time
shall XXXX have any power or authority to bind IT or assume any
obligations of any kind implied or expressed on behalf of IT;
to keep IT informed of any matters which in CARL's opinion are
likely to be of interest, use or benefit to IT in relation to
the development, manufacture or marketing of the Products;
to promptly notify IT of any actual, threatened or suspected
infringement of the Products by any third party or any such
infringement of the Intellectual Property in the Products which
comes to CARL's notice from time to time and at the request and
expense of IT do all such things as may be reasonably required
to assist IT in taking or resisting any proceedings in relation
to any such infringement or claim, provided that this sub-Clause
12.1.7 shall not operate so as to prejudice CARL's rights to
challenge the validity or the subsistence of IT's Intellectual
Property in the Products and to that extent the obligation to
assist IT shall not apply;
to carry out reasonable checks on each consignment of the
Products received from IT and to ensure that the Products do not
deteriorate and not to sell any of the Products which it knows
or has reasonable grounds for believing to be defective; and
to use all reasonable endeavours to exhibit the Products at
exhibitions and trade fairs in the Territory.
XXXX with the assistance of IT shall (prior to the delivery of
any Product) in respect of each Line of Products prepare a
business plan setting out marketing initiatives, the date on
which the Products shall be first sold and sales targets and
submit a copy of such business plan to IT which shall be in the
form or substantially in the form of Schedule 6 (the "Business
Plan"). The Business Plan shall include in it an assessment of
the value of the total market, shall be reasonable having regard
to all the relevant circumstances and shall be agreed and
executed by IT and XXXX. IT and XXXX shall by agreement in
writing update the Business Plan annually.
IT and XXXX shall each maintain product liability insurance for
the Products of at least five million Pounds Sterling
((Pounds)5,000,000) to protect their respective interests and shall
give details of such insurance to the other upon written
request. Such product liability insurance shall be for the
benefit of both XXXX and IT and the interest of the other party
therein shall be recorded on the policy of insurance.
IT and XXXX hereby undertake not during the term of this
Agreement and for a period of two years following its
termination to solicit or contact with view to employment or
employ any employee of the other who is or had during the two
years prior to such solicitation, contact or employment been
involved with or participated in any matters relating to the
Products.
IT and XXXX hereby undertake to make every reasonable effort to
keep the other informed of all relevant laws in the territories
in which the Products are commercialised.
IT agrees to provide suitable initial training, either in the
United Kingdom or in the United States of America, in relation
to the sale, properties and uses of the Products, and in order
to ensure CARL's compliance with sub-Clauses 12.1.3 and 12.1.4
hereof to a reasonable number of employees or sub-distributors
of XXXX as soon as reasonably practicable after the Effective
Date and thereafter as appropriate from time to time. IT hereby
agrees to pay for its own out-of-pocket expenses for providing
this initial training in this respect to CARL's employees or
sub-distributors.
IT hereby undertakes to keep XXXX promptly informed of any
developments or innovations which IT may make in the area of
wound-care during the term of this Agreement unless IT is
legally contracted to a third party to keep such information
confidential.
Forecasts and Reporting
XXXX shall:-
keep full and accurate books and records relating to sales of
the Products. Such books and records shall be maintained
separately from those relating to matters not relating to this
Agreement and shall be kept for the following periods:-
books of account - the period required by law;
records relating to sale of the Products - three (3) years from
the date of supply of such Products by IT to XXXX;
records relating to the determination of CARL's actual net
selling price as provided in Clause 5.8 - three (3) years from
the date of such determination by XXXX; and
allow the authorised officers of IT or its duly appointed agents
or representatives at all reasonable times to have access to
CARL's premises or to such other place as may from time to time
be agreed between XXXX and IT for the purpose of inspecting the
said books and records and for the purpose of verifying CARL's
Average Net Selling Price for each Product.
Notwithstanding the provisions of Clause 12.2 with respect to
any Business Plan, and in respect of each six (6) month period
during the subsistence of this Agreement, the first such period
commencing on the Effective Date, XXXX shall submit to IT:-
not later than one (1) month after the end of each such period a
written report in accordance with CARL's activities in the
previous six (6) months relating to the promotion and sale of
the Products in the Territory and including:-
details of sales made by country;
a summary of any developments in the market for the Products;
a summary of current and future promotional activity;
comments and/or complaints relating to the performance of the
Products; and
not later than one (1) month prior to the start of each period a
forecast of purchases from IT for the next six (6) month period.
INFRINGEMENT
Each party hereto shall promptly give notice in writing to the
other in the event that it becomes aware of any infringement or
suspected infringement of any intellectual property rights in or
relating to the Products.
In the event of any infringement or suspected infringement under
Clause 14.1 the parties shall consult with a view to deciding
whether to take legal proceedings in respect of such
infringement or suspected infringement jointly. If one of the
parties (the first party) does not wish to take legal
proceedings jointly, it shall on receiving a full indemnity as
to all costs and expenses give to the other party (the second
party) all assistance in its power in relation to such
proceedings, and in such event any damages, profits or other
compensation shall belong exclusively to the second party.
WARRANTIES
IT warrants and represents to XXXX that to the best of its
knowledge IT owns the intellectual property rights in the
Initial Products free of any restrictions from third parties,
and that to the best of its knowledge IT may enter into this
Agreement without infringing third party rights and without
requiring consents, approvals or similar actions from any third
parties in respect of the Initial Products.
IT shall indemnify and hold XXXX harmless from all losses, costs
or damages, except financial loss such as consequential loss,
loss of time, loss of profit or similar types of indirect
losses, which XXXX xxx be held liable to pay as a result of
claims or suits arising out of any injuries to persons and/or
damage to property caused by any breach by IT of any provision
of this Agreement or by the fact that the Products were other
than in accordance with the Product Specifications if the claims
or suits incurred are not due to CARL's own or CARL's
sub-distributors warranties or negligence.
XXXX shall in turn indemnify and hold IT harmless from all
losses, costs or damages, except financial loss such as
consequential loss, loss of time, loss of profit or similar
types of indirect losses, which IT may be held liable to pay as
a result of claims or suits arising out of any injuries to
persons and/or damage to property by any breach by XXXX of any
provision of this Agreement or arising from CARL's own
warranties or negligence or if XXXX fails to comply with any
storage, handling or other such instructions in respect of the
Products issued by IT.
The indemnification which either party may receive under Clause
15.2 or Clause 15.3 shall never exceed the aggregate maximum of
the coverage of each party's product liability insurance for
the Products which is or is equivalent to or exceeds five
million Pounds Sterling ((Pounds)5,000,000).
CONFIDENTIAL INFORMATION
On 21st August, 1995, IT and XXXX signed a Secrecy Agreement, a
copy of which is attached hereto as the Schedule 7 (the "Secrecy
Agreement"). IT and XXXX hereby agree to observe and continue
to be bound by the terms of that Secrecy Agreement, both in
respect of information disclosed independently of, and in
respect of information disclosed pursuant or in relation to, the
terms of this Agreement. The parties hereby agree:
that any Proprietary Information (as defined in the Secrecy
Agreement) disclosed by one party hereto to the other party
hereto under or pursuant to this Agreement may only be used by
the recipient of such Proprietary Information for the
performance of the recipient's obligations under this Agreement;
and
that such disclosure is made under and on the terms of the
Secrecy Agreement.
Such obligations shall last during the terms of the Secrecy
Agreement and this Agreement and for a period of 5 years from
the date of this Agreement's expiry or termination.
Except as provided in Clause 16.7 below XXXX agrees and
undertakes that during the term of this Agreement and thereafter
it will keep secret and will not without the prior written
consent of IT disclose either directly or indirectly to any
third party the Confidential Information nor disclose to any
third party any of the financial or other terms and conditions
of this Agreement other than as required by regulatory agencies
or law but such information shall be transmitted only under
agreed conditions as to confidentiality, ie directly to such
authorities.
XXXX xxx to the extent reasonably necessary or desirable to
enable it to exercise the rights hereby granted or agreed to be
granted to it disclose the Confidential Information to its
employees and/or contractors provided that prior to any such
disclosure XXXX shall procure that each of the employees and/or
contractors to whom such disclosure is to be made executes a
confidentiality agreement in such form or forms as IT may from
time to time require and acknowledges that the execution of
confidentiality agreements by such employees and/or contractors
shall not relieve XXXX of any of its obligations hereunder.
During the term of this Agreement and at all times thereafter
XXXX agrees that forthwith upon request by IT and at its own
expense it will use its best endeavours to take such steps IT
may require to enforce such confidentiality agreement given by
the said employees and/or contractors of XXXX including
(without limitation) the initiation and prosecution of any legal
proceedings and the enforcement of any judgement obtained, but
this shall not preclude IT from itself taking such steps should
it elect to do so, in which case XXXX shall reimburse to IT all
reasonable costs incurred by IT in connection therewith.
Except as provided in Clause 16.7 below IT agrees and undertakes
that during the term of this Agreement and thereafter for a
period of five (5) years it will keep secret and will not
without the prior written consent of XXXX disclose either
directly or indirectly to any third party any Confidential
Information provided to it by XXXX nor disclose to any third
party any of the financial or other terms and conditions of this
Agreement.
The obligations contained in Clauses 16.3, 16.4, 16.4 and 16.6
shall not apply to any Confidential Information which:
is at the date of this Agreement or at any time after the date
of this Agreement comes into the public domain other than
through breach of this Agreement by XXXX or its employees or
contractors or by IT or its employees or contractors;
can be shown by XXXX to the reasonable satisfaction of IT to
have been known by XXXX before disclosure to IT by XXXX and vice
versa;
subsequently comes lawfully into the possession of XXXX or IT
from a third party; or
information the disclosure of which is properly required by a
court or government body with competent jurisdiction.
TERM
This Agreement shall commence on the Effective Date and subject
to termination under Clause 18 shall remain in force for a
period of ten years from the Effective Date.
Termination for cause
Notwithstanding any provision herein to the contrary, this
Agreement may be terminated with immediate effect by notice in
writing to the other (and without compensation becoming due to
the other reason only of such termination) in any of the
following events:-
if the other party fails to perform or observe any of the terms
of this Agreement or any term of a contract, and in the case of
a breach capable of remedy has not remedied the breach within
thirty (30) days after receipt of written notification requiring
it to do so;
if any action applicable or proceeding is taken in respect of
the other party for :-
a voluntary arrangement or composition of reconstruction of its
debts;
the presentation of an administration petition;
its winding up or dissolution;
the appointment of a liquidator administrator trustee receiver,
administrative receiver or a similar officer;
any similar action application or proceeding in a jurisdiction
to which it is subject; or
if the other party is unable to pay its debts within the meaning
of section 123 (1) or 268 Insolvency Xxx 0000 or any other
similar law applicable to the territory;
if XXXX fails to pay IT for any Products IT has supplied and
such payment remains overdue for a period of thirty (30) days
from the due date for payment as stated in Clause 5.13 hereof; or
if the other party undergoes a Change of Control and "Control"
for this purpose means ownership of more than half the capital,
business or assets of or the power to exercise more than half
the voting rights of or the power to appoint more than half the
members of the Board of Directors of or the right to manage the
affairs of a party and a "Change" shall take place where some
person other than the person or persons enjoying such Control at
the time of the Effective Date, acquire said party, whether
alone or acting in concert with others.
if for any period of twelve (12) months commencing on or after
the Date of Commercialisation for each Product in each
Geographic Area, the Purchase Price payments computed at the
rates set out in Clauses 5.5, 5.6 and 5.7 shall be less than the
minimum payments for such period payable in accordance with the
proviso to Clause 5.5 but in this event the termination shall be
of the exclusive nature of this Agreement only and XXXX shall
retain non-exclusive rights and this Agreement shall otherwise
remain in full force and effect.
if XXXX shall fail to purchase Products within the parameters of
the current Business Plans agreed in the terms of Clause 12.2.
if IT shall be unable to supply Products as requested by XXXX,
provided that the requests are within the parameters of the
current business plans agreed in the terms of Clause 12.2 and
provided that Clauses 9.1, 9.2 and/or 9.3 do not apply.
In the event that XXXX:-
shall not have made any sales in respect of any one Line of the
Products within twelve (12) months of the Date of Delivery in
any Geographic Area; or
shall not have achieved on the expiry of three (3) years from
the Date of Delivery sales in the third year of any one Line of
the Products as agreed by XXXX and IT and annually updated in
the Business Plan for that Line of the Products in that
Geographic Area;
IT shall have the option exercisable at any time to terminate
the exclusive right of XXXX hereunder to use or sell the
relevant Line of the Products in the said Geographic Area and IT
shall be entitled either itself, or to grant a non-exclusive
license to third parties, to manufacture that Line of the
Products and/or to sell that Line of the Products in the said
Geographic Area.
RIGHTS AND OBLIGATIONS ON TERMINATION
Upon the termination of this Agreement from any cause:-
XXXX will complete all orders from customers for the Products
which it has accepted up to date of termination;
IT will complete all orders for the Products which it has
accepted from XXXX and XXXX shall send to IT a detailed
inventory of its stock of the Products (the "Unsold Stock");
Should XXXX so elect IT will repurchase the Unsold Stock owned
by XXXX at a price equal to the cost of the same to XXXX (less
any deductions reasonably made by reason of any damage including
fair wear and tear thereto) together with the expenses
reasonably incurred by XXXX in the transport and insurance for
re-delivery of the same to IT, provided that if this Agreement
shall have been terminated as a result of the default of XXXX,
the expenses of transport and insurance shall be borne by XXXX;
XXXX will return to IT or otherwise dispose of as IT may in
writing direct and at CARL's expense all documents and records
including, without limitation, all promotional literature,
catalogues, and other documents relating to the Products or to
the business of IT, and all copies thereof, in the possession or
under the control of XXXX; and
the obligations of confidentiality in Clause 16 shall continue
in full force and effect.
XXXX shall not be entitled to any compensation or payment
whatsoever in respect of the loss of its rights under Clause
19.1 provided that nothing in this clause shall operate to
exclude or restrict any claim that XXXX xxx have for breach of
obligations under this Agreement by IT.
Termination of this Agreement (howsoever caused) shall not
affect the accrued rights or liabilities of either party to it.
LIEN AND SET-OFF
Without prejudice to any other rights and remedies which IT may
have under this Agreement, IT shall in respect of all debts owed
by XXXX to IT have a general lien on all goods and property
belonging to XXXX in IT's possession and shall be entitled upon
the expiration of fourteen (14) days' notice to XXXX to dispose
of such goods or property as IT thinks fit and to apply any
proceeds of sale thereof towards the payment of such debts.
IT shall be entitled to set off any sums owed by it to XXXX
against any sums due and payable to IT hereunder.
FORCE MAJEURE
If the performance by either party of any of its obligations
(other than the obligation to make payments hereunder) shall be
in any way prevented, interrupted or hindered in consequence of
an act of God, war, civil disturbance, strike, lock-out,
cessation of work, combination of workmen or employees,
legislation or restriction of any governmental or other
authority, breakdown or interruption of transport, force majeure
or any other circumstances beyond the control of such party the
obligations of the party concerned shall be wholly or partially
suspended during the continuance and to the extent of such
prevention, interruption or hindrance. If a force majeure
situation has continued for more than one hundred and eighty
days (180) days, either party may terminate this Agreement by
notice to the other party.
GRANT OF SUB-LICENCES and assignment
XXXX shall have no right to grant sub-licences hereunder without
the prior written approval and consent of IT.
Neither party shall assign, mortgage or charge (or purport to do
so) this Agreement or any know how or technical information
acquired under it without the prior written consent of the other
party.
Nothing in this Agreement shall prevent either party from
assigning this Agreement to a subsidiary of that party or to
another company in respect of which that party is a subsidiary
or to a company in respect of which that party and that company
are fellow subsidiaries of a third company.
Relationship of Parties
IT and XXXX agree that the relationship between them is that of
licensor/vendor and licensee/purchaser. This agreement shall
not create any agency, partnership or joint venture between XXXX
and IT. XXXX shall not assume any obligations on behalf of or
in the name of IT nor make any contracts on its behalf nor make
any promises or representations nor give any warranties or
guarantees on behalf of IT or in respect of the Products (except
as herein provided) nor bind IT in any manner whatsoever. XXXX
shall not in any way represent itself as being the agent of IT.
ENTIRE AGREEMENT, variation and conflict
This Agreement contains the entire agreement between the parties
as at the Effective Date and supersedes all prior agreements and
understandings between the parties whether oral or in writing in
relation to the subject matter herein contained except that both
parties hereto agree to observe and continue to be bound by the
terms of the Disclosure Agreement.
Valid amendments to or modifications to this Agreement shall be
made in writing and signed by both parties hereto.
In the event of any conflict between this Agreement and any
other contract, the terms of this Agreement shall prevail.
Waiver and Invalidity
The waiver by either party of any right herein contained shall
not be construed as a waiver of the same right at a future time
or as a waiver of any other right herein contained nor shall any
delay or omission on the part of either party to exercise or
avail itself of any right it may have hereunder operate as a
waiver of any breach or default by the other party.
The invalidity of any provision in this Agreement shall not
affect the continuing enforceability of the remaining provisions
of the Agreement.
Headings
The headings in this Agreement are for convenience of reference
only and shall not affect the interpretation of this Agreement.
GOVERNING Law
The formation, construction, performance, validity and all
aspects whatsoever of this Agreement and any individual contract
for the purchase of the Products by XXXX made hereunder shall be
governed by and construed in accordance with the laws of
England. XXXX hereby irrevocably submits to the non-exclusive
jurisdiction of the English courts for the determination of any
question or dispute arising in connection with this Agreement
but without prejudice to the right of IT to commence any legal
action or proceedings in the courts of any other competent
jurisdiction or arbitration in any competent forum.
Notices
Any notice or other communication required to be given hereunder
(whether required to be given in writing or otherwise) shall be
given by post, cable, telex or facsimile copy or delivered by
hand addressed to the party to receive such notice at its
address for service being its address contained in this
Agreement or such other addresses as shall have been notified to
the other for the purposes of this Agreement. Any notice so
given by post shall be deemed to have been served at the
expiration of five (5) days after it is posted and in proving
such service it shall be sufficient to prove that the envelope
containing the notice was properly addressed and posted as an
airmail or first class pre-paid letter. Any notice given by
cable, telex or facsimile copy or delivered by hand shall be
deemed to have been served at midnight (at the sender's address
for service) on the date on which it was despatched or delivered.
Restrictive Trade Practices Act
Notwithstanding any other provision of this Agreement, if there
is any provision of this Agreement by virtue of which this
Agreement, or any agreement or arrangement of which if forms
part, is or would be subject to registration under the
Restrictive Trade Practices Act 1976 and 1977 ("RTPA") then that
provision shall not take effect until the date after particulars
of this Agreement or that agreement or arrangement (as the case
may be) have been furnished to the Director General of Fair
Trading in accordance with the requirements of the RTPA.
COUNTERPARTS
This Agreement may be executed in any number of counterparts
each of which when executed and delivered shall be an original
but all the counterparts together shall constitute one and the
same instrument.
AS WITNESS the hands of the duly authorised representatives of
IT and XXXX the day and year first above written.
Signed by: D Xxxxx Xxxxxxx, )
Managing Director )
for and on behalf of Innovative Technologies Ltd.: )
Signed by: Xxxxx Record )
Vice President )
for and on behalf of Xxxxxxxxxx Laboratories Inc : )
SCHEDULE 1 - THE INITIAL PRODUCTS
A calcium alginate product in the following forms:-
[ ];
[ ]; and
[ ].
FINISHED PRODUCT SPECIFICATION - Alginate Dressing
SCOPE
The Alginate dressing must meet the requirements set forth in
this document.
PRODUCT DESCRIPTION
The Alginate dressing is used as a wound care device for the
packing of deep wounds to facilitate proper closure. The
dressing is composed of a polysaccharide complex of Mannuronic
and Guluronic acid. The Alginate dressing described can be
categorised as a high G alginate (MF1-2A), which is carded and
needled during the manufacturing process to orientate fibres.
The product supplied as illustrated within the documentation is
received in appropriate packaging and sterilised via gamma
irradiation.
FDA MASTER FILE
Per Innovative Technologies 510K.
SPECIFICATIONS
Specifications apply to all final product sizes unless
specified:-
Test Specification
Fibre Classification Conforms to British Pharmacopoeia (BP)
for type [_] Alginate Fibre
Colour White to off-white
Odour None
Appearance Sheet or rope form consisting of small carded and
needled fibres
Gel Strength
Moisture Content less than [_] %
Absorbency 2" x 2" 4" x 4" 4" x 8" 12" rope more than [_] g/in2 less
than
[_] g/in2 more than g/in2 more than [_] g/in2
Calcium Content more than [_] to [_] %
Heavy Metals Arsenic Cadmium Iron Lead more than 1 ppm more than
2 ppm more than 250 ppm more than 5 ppm
Dispersion Characteristic Conforms to BP for category '[_]'
dressings and packing
Acidity/Alkalinity Conforms to BP
Identification A. Infra-red Absorption B. Colour Test C.
Precipitate Test Conforms to BP Conforms to BP Conforms to BP
ADDITIONAL REQUIREMENTS
To continue to meet the above specifications, the product must
be stored in a cool dry area. In addition to the specifications
contained here, a final assembly package drawing will document
the form in which the product is to be delivered, ie,
dimensions, artwork, and placement, packaging, and packaging
requirements.
SUPPLIER CERTIFICATION OR QUALITY CONTROL COMPLIANCE AND
STERILITY
Refer to Quality Control requirements Document [Xxxxxxxxxx
Document] for Alginate Dressing.
SCHEDULE 2 - PROJECT SPECIFICATION
Project Number:-
[ ]
Description of Product to be Developed and Specifications:-
[ ]
Date on Which Work Started/to be Started:-
[ ]
Technical Verification & Evaluation and Preliminary Clinical
Assessment:-
[Dates] [what consists in] [by whom]
Date on Which Product to be Delivered ("the Date of Delivery"):-
[ ]
Form in Which Product to be Delivered:-
[ ]
Payment terms:-
XXXX shall make the following payments to IT on the following
dates:-
25% on the date on which the project schedule is signed ;
50% in equal monthly instalments over the estimated period of
the project;
25% 30 days after the date on which the product is delivered
together with the final report.
Special Provisions:-
[Equipment to be put at the disposal of IT and unique
requirements and payment terms if any]
[Statements of costs to be submitted by IT to XXXX , if any]
Signed by )
)
for and on behalf of Innovative Technologies Ltd )
Signed by )
)
for and on behalf of Xxxxxxxxxx Laboratories Inc. )
SCHEDULE 3 - PROJECT SPECIFICATION
Project Number:-
XXXX-95-0001
Description of Product to be Developed and Specifications:-
Wound dressing product being a dehydrated hydrogel made from
MF1-2A calcium alginate fibres with ace mannan.
Date on Which Work Started/to be Started:-
[ ]
Technical Verification & Evaluation and Preliminary Clinical
Assessment:-
[Dates] [what consists in] [by whom]
Date on Which Product to be Delivered ("the Date of Delivery"):-
[ ]
Form in Which Product to be Delivered:-
[ ]
Payment terms:-
XXXX shall make no payments to IT for this Project Specification.
Special Provisions:-
[Equipment to be put at the disposal of IT and unique
requirements and payment terms if any]
[Statements of costs to be submitted by IT to XXXX , if any]
Signed by )
)
for and on behalf of Innovative Technologies Ltd )
Signed by )
)
for and on behalf of Xxxxxxxxxx Laboratories Inc. )
SCHEDULE 4 - PROJECT SPECIFICATION
Project Number:-
XXXX-95-0002
Description of Product to be Developed and Specifications:-
Wound dressing product being a hydrocolloid containing ace
mannan.
Date on Which Work Started/to be Started:-
[ ]
Technical Verification & Evaluation and Preliminary Clinical
Assessment:-
[Dates] [what consists in] [by whom]
Date on Which Product to be Delivered ("the Date of Delivery"):-
[ ]
Form in Which Product to be Delivered:-
[ ]
Payment terms:-
XXXX shall make no payments to IT for this Project Specification.
Special Provisions:-
[Equipment to be put at the disposal of IT and unique
requirements and payment terms if any]
[Statements of costs to be submitted by IT to XXXX , if any]
Signed by )
)
for and on behalf of Innovative Technologies Ltd )
Signed by )
)
for and on behalf of Xxxxxxxxxx Laboratories Inc. )
SCHEDULE 5 - PURCHASE PRICE
PRODUCTS AND PRICING
Description Case Size Purchase Price
SCHEDULE 6 -BUSINESS PLAN
Project Number:-
[ ]
Description of the Line of Products:-
[ ]
Identification of Geographic Areas:-
[ ]
Assessment of Value of the Total Market for the Products by
Geographic Area:-
[ ]
Assessment of Minimum Sales to be Achieved by Geographic Area:-
[ ]
Net Invoiced Value of Sales to be Achieved by [ ]:-
Year 1 [date] 199[date] to date 199[date]
Year 1 [date] 199[date] to date 199[date]
Year 1 [date] 199[date] to date 199[date]
Marketing Obligations of [ ]:-
[ ]
(Special Provisions):-
[ ]
Signed by )
)
for and on behalf of Innovative Technologies Ltd )
Signed by )
)
for and on behalf of Xxxx )
SCHEDULE 7 - SECRECY AGREEMENT
Copy of signed Secrecy Agreement between the parties and dated
21st August 1995 is appended hereto.
