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EXHIBIT 10.92
DISTRIBUTION AGREEMENT
This Agreement is made as of June 27, 1997, between COLLAGEN
INTERNATIONAL INC., a California corporation with offices at 2500 Faber Place,
Palo Alto, California 94303 ("Collagen"), and LEDERLE (JAPAN), LTD., a Japanese
joint stock company with offices at 10-3, Kyobashi, 1-chome, Chuo-ku, Tokyo,
Japan ("Distributor").
WHEREAS, Collagen Corporation and Distributor entered into a
Distribution Agreement dated June 26, 1985 and a renewal of the Distribution
Agreement dated January 1, 1996 (the "Current Distribution Agreement") pursuant
to which Collagen Corporation granted Distributor the exclusive distribution
rights for the Products (as defined below) in the Territory (as defined below),
and
WHEREAS, pursuant to the terms of the Current Distribution Agreement
the parties have discussed the possibility of establishing a joint venture
company in Japan but Distributor has declined to participate in such a joint
venture company; and
WHEREAS, the Current Distribution Agreement is scheduled to expire on
June 30, 1997; and
WHEREAS, the parties wish to extend the grant of exclusive distribution
rights to Distributor in accordance with the terms and conditions provided
herein until June 30, 1998, unless earlier terminated in accordance with the
terms and conditions hereof,
NOW THEREFORE, in consideration of the mutual promises contained
herein, Collagen and Distributor agree as follows:
1. DEFINITIONS: As used in this Agreement:
(a) "Products" shall mean Zyderm(R) and Zyplast(R) Collagen
Implants as sold by Collagen in the United States and future
versions of Zyderm(R) and Zyplast(R) Collagen Implants which
are developed and marketed by Collagen during the term of this
Agreement for use in skin contour correction and dermal
augmentation using needle implantation.
(b) "Territory" shall mean Japan.
(c) "Best Efforts" shall mean a party's reasonable business efforts
consistent with its overall business objectives and
commensurate with products of like nature, volume and market
potential.
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2. Renewal of Appointment Distributor:
(a) Exclusive Distributor: Subject to the terms and conditions of
this Agreement, Collagen hereby renews the appointment of Distributor, and
Distributor accepts such renewed appointment, as Collagen's exclusive
distributor of the Products in the Territory.
(b) Independent Contractors: It is understood that both parties
hereto are independent contractors and are engaged in the operation of their own
businesses. Neither party hereto is to be considered the agent of the other
party for any purpose whatsoever, and neither party has any authority to enter
into any contracts or assume any obligations for the other party or make any
warranties or representations on behalf of the other party.
3. Obligations of Distributor:
(a) Marketing of Products, Etc.: Distributor agrees to use its Best
Efforts to investigate, maintain government approval for, promote and distribute
the Products, at its own expense, in the Territory using generally appropriate
channels and methods, exercising the same diligence and adhering to the same
standards which it employs with respect to its own pharmaceutical products. In
particular, Distributor shall at its own expense:
(i) Exercise due diligence promptly to initiate and carry
out clinical investigations as far as they may be required, to obtain and
maintain government approvals to import and market the Products in the Territory
and to diligently proceed to secure, as may be required from time to time,
customs clearances and currency authorizations and any permits necessary
therefore in the Territory. Distributor shall keep Collagen generally informed
of the regulatory requirements for the Territory.
(ii) Submit to Collagen regular monthly offtake forecasts for
the Products in the Territory and a complete annual marketing plan. Distributor
also agrees to update Collagen on a timely basis with information concerning
competitive products and procedures.
(iii) Use its Best Efforts to distribute and sell the Products
for use only by physicians for treatment of patients in the Territory in
compliance with local laws and regulations and good commercial practice and for
uses and applications approved by Collagen for the Products.
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(iv) Should the requirements of the Japanese Ministry of
Health and Welfare or any other relevant governmental body related to or
affecting the Products change, the parties agree to review these procedures to
ensure continued conformity.
(b) Reports: Distributor shall at its expense submit regular
monthly reports to Collagen setting forth sales of the Products by distributor
in the Territory for the previous month (including prices, unit sales and other
information as may be reasonably requested by Collagen from time to time).
(c) Protocols: Distributor undertakes to continue to comply with
the following listed protocols previously provided to Distributor:
(i) International Marketing Recall Guideline
(ii) International Marketing Shipment to Customers Guideline
(iii) International Marketing Receiving of Collagen Products
Guideline
(iv) International Marketing Report of Technical and
Medical Complaints Guideline
(d) Performance of Obligations: Distributor understands,
acknowledges, and agrees that the continued maintenance of an image of
excellence and high level of ethical marketing of the Products is essential to
the continued success of both parties hereto. Accordingly, Distributor hereby
agrees it shall, at all times: (i) conduct business in a manner that reflects
favorably at all times on the Products and the good name, goodwill, and
reputation of Collagen; (ii) avoid deceptive, misleading or unethical practices
that are or might be detrimental to Collagen, the Products, or the public,
including without limitation the making or offering of any payment to any
government official for the purpose of influencing any act or decision of such
official in furtherance of this Agreement; (iii) make no false or misleading
representations, either orally or in any written material, with regard to
Collagen or the Products; (iv) not publish or employ, or cooperate in the
publication or employment of, any misleading or deceptive advertising material
with regard to Collagen or the Products; (v) make no representations,
warranties or guarantees to customers or to the trade with respect to the
specifications, indications, capabilities, or features of the Products that are
inconsistent with the literature distributed by Collagen and (vi) not enter into
any contract or engage in any practice detrimental to the interests of Collagen
in the Products. Violation of any of the provisions in this Section 3(d) shall
constitute a material breach of this Agreement, and specifically breach of
Sections 3(d)(ii) shall cause this Agreement to be void ab initio.
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4. OBLIGATIONS OF COLLAGEN:
(a) Requirements of Distributor: Collagen shall supply Distributor's
requirements for the Products in the Territory, consistent with
commitments to its other customers and Distributor's forecasts of its
expected requirements for the Products described in Section 3 above. If
Collagen believes it will not be able to satisfy Distributor's
requirements for the Products, it shall promptly notify Distributor,
specifying the reasons for the expected delay and its duration.
(b) Marketing Support: To assist Distributor in marketing the Products in
the Territory, Collagen shall:
(i) Provide Distributor, free of charge, with information on
marketing and promotional plans of Collagen for the Products
as well as copies of all marketing, advertising, sales and
promotional literature concerning the Products.
(ii) Provide to Distributor, free of charge, training of key
personnel in reasonable amounts and upon reasonable prior
written notice at Collagen's facility in Palo Alto, California
at the request of Distributor, if such request is agreed to by
Collagen, concerning the quality control, storage,
transportation, marketing, advertising, promotion, distribution
and sale of the Products; provided that Distributor shall be
responsible for all transportation and lodging costs of
personnel attending such training.
(iii) Provide to Distributor, free of charge, certificates of
analysis concerning the Products purchased by Distributor,
certificates of free sale, trademark authorizations and any
other documents which Distributor may require for registration
purposes, at Distributor's request.
(c) Trademark License: Collagen hereby grants to Distributor for the
exclusive right and license to use Collagen's trademarks Zyderm(TM) and
Zyplast(TM) for the Products in the Territory for the term of this
Agreement, but only in connection with sales of the Products purchased
from Collagen in the Territory. Distributor shall be required to use
Collagen's trademark with respect to all sales of the Products. Such
trademark license shall continue in effect for the Territory while
Distributor retains its distribution rights in the Territory under this
Agreement. All right, title and interest to Collagen's trademark (except
the right to use such trademark set forth herein) shall remain with
Collagen. Distributor shall not have the right to use Collagen's name in
any advertising or promotion or otherwise without
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Collagen's prior written consent. Upon Distributor's request
Collagen shall at its expense file trademark registrations in
the Territory.
5. Terms and Conditions of Sale:
(a) Terms of Orders: All purchases of the Products by Distributor
from Collagen during the term of this Agreement shall be subject
to the terms and conditions of this Agreement and to Collagen's
Terms and Conditions of Sale as Collagen may establish from time
to time, provided that in the event of any conflict between the
terms of this Agreement and the Terms and Conditions of Sale of
Collagen, this Agreement shall be controlling. Any printed or
standard terms and conditions contained in Distributor's
purchase order form shall be disregarded. All purchase orders
submitted by Distributor to Collagen shall be subject to
acceptance by Collagen at its offices at Palo Alto, California,
which acceptance shall not be unreasonably held.
(b) Packaging: All quantities of the products shall be in the form
of U.S. packaging with Japanese labeling and Japanese pack
inserts, to be shrink wrapped in Fremont, California. The
product will be shipped to Japan in this fashion and re-sold by
the Distributor who will not break the shrink wrapping.
(c) Quality Control: Distributor shall check the quality of the
Products in accordance with Collagen's instructions as may be
given from time to time and shall at all times comply with
applicable governmental regulations relating to the Products
including but not limited to quality and safety regulations.
(d) Price and Payment: Collagen shall sell the Products to
Distributor for the prices in accordance with Exhibit A
hereto. All taxes, fees, duties and other charges with respect
to the sale by Collagen to Distributor of the Products
(excluding income taxes, franchise taxes and taxes based on
income) shall be paid by Distributor or reimbursed by
Distributor to Collagen. All payments shall be made within sixty
(60) days after the date of shipment of the Products to
Distributor. If Distributor fails to make any payment to
Collagen when due, Collagen may, without affecting its rights
under this Agreement, cancel or delay any future shipments of
the Products to Distributor. All payments to Collagen pursuant
to this Agreement shall be made in United States currency.
(e) Warranty: Collagen warrants that the Products sold to
Distributor will at all times comply with the requirements of
and regulations adopted pursuant to the U.S. Federal Food Drug
and Cosmetic Act.
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Collagen further represents and warrants and hereby agrees to
hold Distributor harmless from any and all liability, causes of
action, damages and/or judgments, including but not limited to
attorney's fees, costs and expenses, which may arise from or due
to Collagen's actions in not manufacturing the Products for
Distributor in accordance with applicable US Food and Drug
Administration ("FDA") rules and regulations and/or in
accordance with the IDE/PMA filed and amended by Collagen with
respect to the Products which have been approved by the FDA.
Collagen will provide, when requested by Distributor,
certification that to the best of its knowledge it is in
compliance with U.S. laws, statutes, rules, regulations and
relevant orders relating to the manufacture, use, distribution
and sale of the Products. If Distributor finds any deficiency in
quantity and/or any defect in quality of the Products delivered
hereunder, Distributor shall promptly give Collagen written
notice of such deficiency or defect, and Collagen, upon
receiving such notice shall discuss the deficiency or defect
with Distributor and will work with Distributor to insure
Collagen's obligations under this Agreement with regard to
quantity and quality of supply are being met. Distributor shall
not be obligated to pay for Products with any claimed
deficiencies or defects until such claims are resolved. In the
event Collagen agrees that such defect in quality and/or
quantity are its responsibility, Collagen shall promptly and
without charge to Distributor make up for such deficiency and/or
replace such defective Products with Products meeting
specifications for Products. Collagen shall bear the costs of
return of such defective Products to Collagen. EXCEPT AS SET
FORTH ABOVE, COLLAGEN MAKES NO WARRANTIES, EXPRESS OR IMPLIED,
WITH RESPECT TO THE PRODUCTS, INCLUDING WITHOUT LIMITATION ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
(f) Collagen will continue to furnish from time to time samples for
testing as may be requested by the Japanese authorities free of
charge.
6. CONFIDENTIAL INFORMATION: Collagen and Distributor agree that during
the term of this Agreement and any subsequent agreement under which
Distributor obtains distribution rights to the Products from Collagen or
any affiliate or subsidiary of Collagen and for a period of five years
thereafter each shall keep completely confidential and shall not publish
or otherwise divulge or use for its own benefit or for the benefit of
any third party any information of a proprietary nature furnished to it
(the "receiving party") by the other party (the "disclosing party")
without the prior written approval of the disclosing party in each
instance, except to the extent that it is necessary to divulge such
information for the purposes of this Agreement or the obtaining of
governmental approval for the investigation or marketing of the
Products. Nothing in this Section 6 shall prevent disclosure or use of
information (i) already known to the receiving party; (ii) which is or
become public knowledge; (iii) which is properly acquired by the
receiving party from a third party having the
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right to convey such information. Information of a proprietary nature
shall include but not be limited to information concerning a party's
products, proposed products, marketing plans, methods of manufacture,
customers or any other information or materials in whatever form not
generally known to the public.
7. DEFENSE OF LEGAL ACTIONS AND INDEMNIFICATION:
(a) Legal Actions: Distributor agrees that Collagen shall have the
right to defend, or at its option to settle, any claim, suit or
proceedings brought against Distributor or its customers on the
issue of infringement of any United States or foreign patent or
trademark by reason of the Products sold hereunder or the use
thereof, subject to the limitations hereinafter set forth.
Collagen shall have sole control of any such action or
settlement negotiations, and Collagen agrees to pay, subject to
the limitations hereinafter set forth, any final judgment
entered against Distributor or its customers on such issue.
Distributor agrees that Collagen at its sole option shall be
relieved of the foregoing obligations unless Distributor or its
customers notifies Collagen in writing within fifteen (15) days
after it becomes aware of any such claim, suit or proceeding and
gives Collagen authority to proceed as contemplated herein, and,
at Collagen's expense, gives Collagen proper and full
information and assistance to settle and/or defend such claim,
suit or proceeding. Notwithstanding the foregoing, Collagen
assumes no liability for any modification or combination of the
Products with other products or for any unauthorized or improper
use or application of the Products.
(b) Indemnification: Collagen and Distributor each agree to
indemnify and hold the other party harmless from and against any
and all claims made by any person or entity arising out of the
manufacturing, testing, marketing, distribution and sale of the
Products, where and to such extent the damages are alleged to
have been caused by the fault of such party or its employees or
agents. Collagen hereby indemnifies and holds Distributor
harmless from and against any and all claims made against
Distributor where and to the extent that damages are alleged to
have been caused by previously unknown or undetected adverse
effects or counterindications disclosed by Collagen in its
package insert (as updated from time to time) or in U.S.
registration applications for the Products provided to
Distributor or as Collagen may otherwise notify distributor from
time to time without any fault of Distributor.
8. TERMINATION:
(a) Term: This Agreement shall commence on July 1, 1997, and shall
continue in effect until June 30, 1998, unless earlier
terminated in accordance with Article 8(b).
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(b) Termination:
(i) Either party may, at its option, terminate this Agreement
without cause by giving to the other party not less than one
hundred and twenty (120) days prior written notice.
(ii) Either party may terminate this Agreement upon thirty (30)
days written notice in the event that the other party shall at
any time commit a breach of any of its material obligations
hereunder and shall fail to correct such breach during the
period of said notice.
(iii) This Agreement shall terminate automatically without
further notice or action by either party if the other party
shall become insolvent, shall make or seek to make an
arrangement with or an assignment for the benefit of creditors,
or if proceedings in voluntary or involuntary bankruptcy shall
be instituted by, on behalf of or against such other party, or
if a receiver or trustee of such other party's property shall be
appointed.
(c) Effect of Termination:
(i) Distributor shall terminate all distribution activities in
the Territory immediately upon expiration, non-renewal or
termination (collectively, "Termination") of this Agreement and,
except as otherwise provided herein, all rights and obligations
of the parties hereunder shall cease; provided, however, that
Termination shall not relieve the parties of any obligations,
including Distributor's obligations to pay purchase prices,
accrued prior to said Termination. The obligations of Collagen
and Distributor pursuant to Sections 6 and 7 of this Agreement
shall survive any Termination of this Agreement. Nothing herein
shall limit any remedies which a party may have for the other's
default, except as set forth in Section 9(f).
(ii) Upon Termination, Distributor shall promptly sell to
Collagen all Products then in Distributor's inventory
considered, in Collagen's sole determination, to be in good
condition for sale. The price for any products repurchased by
Collagen shall be the prices Distributor paid Collagen for the
Products.
9. General Provisions:
(a) Governing Law: This Agreement shall be governed by and
interpreted in accordance with the laws of the State of
California and the United States
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excluding the Convention on Contracts for the Sale of Goods and
that body of laws known as conflicts of law.
(b) Arbitration: Any dispute or claim arising out of or in relation
to this Agreement shall be finally settled by binding
arbitration in San Francisco, California under the Commercial
Arbitration Rules of the American Arbitration Association by one
(1) arbitrator appointed in accordance with such Rules. Judgment
on the award rendered by the arbitrator may be enforced by any
court of competent jurisdiction.
(c) Entire Agreement: This Agreement represents the entire agreement
and understanding of Collagen and Distributor with respect to
distribution of the Products, supersedes all previous agreements
and understandings related thereto and may only be amended or
modified in writing signed by authorized representatives of
Distributor and Collagen.
(d) Assignment: Neither Collagen nor Distributor shall assign any of
its rights or obligations pursuant to this Agreement except to a
successor to substantially all of its business by merger or
other form of reorganization.
(e) Notices: Any notice required or permitted to be given hereunder
shall be in writing and in English and sent by facsimile (with
confirmation sent by regular airmail) or by pre-paid registered
air mail, return receipt requested, addressed to the parties at
their respective addresses as the parties may designate in
writing. Notice, including notice of change of address, shall be
deemed served on the business day following transmission in the
case of notice sent by facsimile or seven (7) days after deposit
in the mail for notice sent by pre-paid registered airmail.
(f) Limitation of Damages: In no event shall either party be liable
to the other for incidental, consequential or punitive damages,
even if such party shall have been advised of the possibility of
the same.
(g) Force Majeure: Each of the parties hereto shall be excused from
the performance of its obligations hereunder in the event such
performance is prevented by force majeure, and such excuse shall
continue so long as the condition constituting such force
majeure continues plus thirty (30) days after the termination of
such condition. For the purposes of this Agreement, force
majeure is defined to include causes beyond the control of
Distributor of Collagen, including without limitation acts of
God, acts, regulations or laws of any government, war, civil
commotion, destruction of production facilities or materials by
fire, earthquake or storm, labor disturbances, epidemic and
failure of public utilities or common carriers.
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(h) Shareholders not Liable: Shareholders of Distributor
and Collagen shall have no responsibility or liability with respect to rights
and obligations contained in this Agreement.
(i) Headings: Headings contained herein are for convenience
only and shall not affect the interpretation of any of the provisions of this
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their authorized representatives as of the day and year first above
written.
COLLAGEN INTERNATIONAL INC. LEDERLE (JAPAN), LTD.
/s/ GARY S. PETERSMEYER /s/ JIRO HAYASHI
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Name: Gary S. Petersmeyer Name: Jiro Hayashi
Title: President/CEO Title: Senior Managing Director
/s/ JOHN SAMPSON
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Name: John Sampson
Title: Director of Distributor
Markets & Joint Ventures
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EXHIBIT A
Products Price (US$)
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