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EXHIBIT 10.2
INTERNATIONAL DISTRIBUTOR AGREEMENT
This International Distributor Agreement (the "Agreement") is entered
into in Scottsdale, Arizona, as of August 4,1997, between ORTHOPAEDIC
BIOSYSTEMS, LTD., INC., a corporation organized under the laws of Arizona,
United States of America, with principal offices at 15990 N. Greenway-Hayden
Loop, Suite 100, Scottsdale, Arizona 85260, United States of America ("OBL"),
and Mizuho Medical Co., Ltd., a company organized under the laws of Japan with
principal offices at MRK Building, 5F, 27-17,2-Chome, Hongo, Bunkyo-ku Tokyo
113, Japan ("Distributor").
In consideration of the mutual promises contained herein, the parties
agree as follows:
1. DEFINITIONS
(a) "Products" shall mean those products listed in Exhibit A
attached hereto. Products may be changed, abandoned or added by OBL, at OBL's
sole discretion, provided that OBL gives ninety (90) days' prior written notice
to Distributor. OBL shall be under no obligation to continue the production of
any Product, except as provided herein.
(b) "Territory" shall mean that geographic area identified in
Exhibit B attached hereto.
2. APPOINTMENT AND AUTHORITY OF DISTRIBUTOR
(a) Appointment. Subject to the terms and conditions set forth
herein, OBL hereby appoints Distributor as OBL's exclusive distributor for the
Products in the Territory, and Distributor hereby accepts such appointment. For
so long as Distributor is performing in compliance with this Agreement, OBL
shall not appoint any other distributor with responsibility for sale of the
Products in the Territory, provided, however, that OBL shall incur no liability
for any sales or use of Products within the Territory by others. Notwithstanding
the foregoing, OBL may sell direct within the Territory to any customer that has
been designated by OBL as a "house account" pursuant to prior notice given to
the Distributor. OBL shall not claim house account status for any account first
solicited and developed by Distributor.
(b) Territorial Responsibility. Distributor shall not promote
the Products outside the Territory or establish a facility for purposes
relating to the Products outside the Territory. Distributor shall forward to OBL
all unsolicited inquiries relating to the Products from customers or potential
customers outside the Territory.
(c) Referrals. In the event that OBL receives requests for
information relating to, or purchase orders for, the Products from customers or
potential customers within the Territory, OBL shall forward such requests or
orders to Distributor.
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(d) Subdistributors. Distributor shall not appoint
subdistributors of Products without OBL's specific consent.
(e) Conflict of Interest. Distributor warrants to OBL that
Distributor does not currently represent or promote any other soft tissue suture
anchors. During the term of this Agreement, Distributor shall not, without OBL's
prior written consent, represent, promote or otherwise try to sell within the
Territory any other soft tissue suture anchors that, in OBL's judgment, compete
with the Products covered by this Agreement.
(f) Independent Contractors. The relationship of OBL and
Distributor established by this Agreement is that of independent contractors,
and nothing contained in this Agreement shall be construed to give either party
the power to direct and control the day-to-day activities of the other or allow
one party to create or assume any obligation on behalf of the other for any
purpose whatsoever. All financial obligations associated with Distributor's
business are the sole responsibility of Distributor. All sales and other
agreements between Distributor and Distributor's customers are Distributor's
exclusive responsibility and shall have no effect on Distributor's obligations
under this Agreement.
3. TERMS OF PURCHASE Of PRODUCTS BY DISTRIBUTOR
(a) Terms and Conditions. All purchases of Products by
Distributor from OBL during the term of this Agreement shall be subject to the
terms and conditions of this Agreement.
(b) Prices. All prices of Products are F.O.B. OBL's
Scottsdale, Arizona facility or as provided by written notice to Distributor
(the "Distribution Site"). The purchase price to Distributor for each of the
Products ("Purchase Price") shall be as set forth in Exhibit A attached hereto.
The difference between Distributor's Purchase Price and Distributor's selling
price to Distributor's customers shall be Distributor's sole remuneration for
sale of the Products. OBL has the right at any time to revise the prices in
Exhibit A with thirty (30) days' advance written notice to Distributor. Such
revisions shall apply to all orders received after the effective date of
revision. Price changes shall not affect unfulfilled purchase orders accepted by
OBL prior to the effective date of the price change.
(c) Taxes. Distributor's Purchase Price does not include any
foreign, federal, state or local taxes that may be applicable to the Products.
In the event that such taxes are applicable and OBL has the legal obligation to
collect such taxes, OBL shall be entitled to add to Distributor's invoice the
amount of such taxes and Distributor shall pay such amount unless Distributor
provides OBL with a valid tax exemption certificate authorized by the
appropriate taxing authority.
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(d) Order and Acceptance. All orders for Products submitted by
Distributor shall be initiated by written purchase orders sent to OBL by mail,
telecopy, or private courier and requesting a delivery date during the term of
this Agreement; provided, however, that an order may initially be placed orally
if a confirmational written purchase order is received by OBL within five (5)
days after said oral or telecopy order. To facilitate OBL's production
scheduling, Distributor is requested to submit purchase orders to OBL at least
thirty (30) days prior to the first day of the requested month of delivery. No
order shall be binding upon OBL until accepted by OBL in writing and notice of
acceptance sent to Distributor by mail, telecopy or private courier, and OBL
shall have no liability to Distributor with respect to purchase orders that are
not accepted. No partial shipment of an order shall constitute the acceptance of
the entire order, absent the written acceptance of such entire order. OBL shall
use OBL's reasonable best efforts to deliver Products at the times specified
either in OBL's quotation or in OBL's written acceptance of Distributor's
purchase orders.
(e) Terms of Purchase Orders. Distributor's purchase orders
submitted to OBL from time to time with respect to Products to be purchased
hereunder shall be governed by the terms of this Agreement and OBL's published
Standard Terms and Conditions of Sale, if any, as in effect at the time of such
purchase, provided that, in the event of any conflict between the terms of this
Agreement and the Standard Terms and Conditions of Sale of OBL then in effect,
this Agreement shall be controlling. Nothing contained in any purchase order of
Distributor shall in any way modify such terms of purchase of OBL or add any
additional terms or conditions.
(f) Payment. Full payment of Distributor's Purchase Price for
the Products (including any freight, taxes or other applicable costs initially
paid by OBL but to be borne by Distributor) shall be in United States of America
dollars. All exchange, interest, banking, collection, and other charges shall be
at Distributor's expense. Payment terms shall be net 30 days from date of
shipment, with the exception of Exhibit C. Payment shall be made by wire
transfer, irrevocable letter of credit drawn on a U.S. bank, or other instrument
approved by OBL.
(g) Shipping. All Products delivered pursuant to the terms of
this Agreement shall be suitably packed for air freight shipment in OBL's
standard shipping cartons, marked for shipment to Distributor's address set
forth above or on Distributor's purchase order, and delivered to Distributor or
Distributor's carrier agent F.O.B. OBL's Distribution Site, at which time title
to such Products and risk of loss shall pass to Distributor. All shipments of
Products shall include a Certification by OBL that the Products meet
specifications. OBL shall deliver Products to the carrier selected by
Distributor. In the event that Distributor does not provide written notice of
such carrier, OBL shall select the carrier. All freight, insurance, and other
shipping expenses, as well as any special packing expense, shall be paid by
Distributor. Distributor shall also bear all applicable taxes, duties, and
similar charges that may be assessed against the Products after delivery to the
carrier at OBL's Distribution Site.
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(h) Deposit. Distributor agrees to pay OBL_____________ US as
a deposit for inventory to be purchased under Exhibit C upon execution of this
contract.
4. TRAINING, INSTALLATION, AND SERVICE
(a) Services by Distributor. Distributor shall have the
responsibility to deliver the Products and train the customers with respect to
the Products sold. The services shall (i) be performed only by specially and
properly trained personnel of Distributor, (ii) be of the highest quality, and
(iii) be performed promptly.
(b) Training by OBL. OBL shall provide sales and technical
training, and technical support, to Distributor's personnel at periodic
intervals, with the frequency and content of the training to be determined by
agreement between Distributor and OBL. The costs of training, including travel,
food and lodging during the training period, shall be divided equally between
OBL and Distributor. In addition to sales and technical training, OBL shall
cooperate with Distributor in establishing efficient promotional procedures and
policies. OBL shall promptly respond to Distributor's reasonable technical
questions relating to Product.
(c) Sales Meetings. Distributor agrees to send representatives
to at least one OBL sales meeting per year at a location to be determined by
OBL.
5. WARRANTY FOR PRODUCTS
(a) Standard Limited Warranty. Distributor shall pass on to
its customers OBL's standard limited warranty for Products, including
limitations set forth in Subsection 5(c) below. This warranty is contingent upon
proper use of a Product in the application for which such Product was intended
and does not cover Products that were modified without OBL's approval, that have
expired or that were subjected to unusual physical, chemical or electrical
stress.
(b) Rejection of Products.
(i) Distributor shall inspect all products promptly
upon receipt thereof and may reject any product that fails in any material way
to meet the specifications set forth in OBL's current brochure or related
literature for that product. Any product not properly rejected within thirty
(30) days of receipt of that product by Distributor (the "Rejection Period")
shall be deemed accepted. To reject a product, Distributor shall, within the
Rejection Period, notify OBL in writing of its rejection. Within seven (7) days
after rejection, Distributor shall return to OBL the rejected product, freight
prepaid, in its original shipping carton with clear written identification on
the carton that a rejected Product is contained therein. As promptly as possible
but no later than thirty (30) working days after receipt of properly rejected
products, OBL shall, at its option and expense, replace the products. OBL shall
pay the shipping charges back to
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at its option and expense, replace the products. OBL shall pay the shipping
charges back to Distribution for properly rejected products; otherwise,
Distributor shall be responsible for the shipping charges.
(ii) After the Rejection Period, Distributor may not
return a product to OBL for any reason without OBL's prior written consent.
Such consent may be withheld by OBL for any reason that OBL deems appropriate in
its sole discretion. For any product for which OBL gives such consent, OBL shall
charge twenty-five percent (25%) of Distributor's purchase price for that
product and shall credit the balance of the purchase price to Distributor's
account within thirty (30) days upon receipt of returned product. Distributor
shall be responsible for all shipping charges.
(iii) Products which are found not to conform to
OBL's specifications at an end-user's site shall be replaced by the Distributor.
OBL shall replace Distributor's inventory within thirty (30) days after receipt
of the defective product and a completed customer complaint form. The final
decision concerning product non-conformance rests solely with OBL.
(c) Limitation of Liability and Warranty. OBL'S LIABILITY
ARISING OUT OF THIS AGREEMENT AND/OR SALE OF THE PRODUCTS SHALL BE LIMITED AS
FOLLOWS: IN NO EVENT SHALL OBL BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE
GOODS BY ANYONE. IN NO EVENT SHALL OBL BE LIABLE TO DISTRIBUTOR OR ANY OTHER
ENTITY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES, HOWEVER
CAUSED, ON ANY THEORY OF LIABILITY OR BREACH OF WARRANTY, WHETHER OR NOT OBL HAS
BEEN ADVISED ON THE POSSIBILITY OF SUCH DAMAGE. EXCEPT FOR THE EXPRESS LIMITED
WARRANTY SET FORTH IN SUBSECTION 5(a) ABOVE, OBL GRANTS NO IMPLIED WARRANTIES
FOR THE PRODUCTS, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE, OR
OTHERWISE.
6. ADDITIONAL OBLIGATIONS OF DISTRIBUTOR
(a) Health and Safely Laws and Regulations. Distributor shall
comply fully, at its expense, with any and all applicable health and safety laws
and regulations of the territory.
(b) Preclinical and Clinical Trials. Distributor shall assist
and support OBL in organizing and conducting any preclinical and clinical trials
required to obtain registrations, licenses and permits required to comply with
the laws and regulations of the Territory for sale and distribution of the
Products; provided, however, that no activities in connection with organizing
and conducting such trials shall be initiated by Distributor without OBL's prior
Written approval.
(c) Registrations Licenses and Permit. Distributor agrees to
use its best efforts to investigate, obtain any required government approval
for, promote and distribute the
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Products, at its own expense, in the Territory as soon as feasible after the
date of this Agreement, using generally the same channels and methods,
exercising the same diligence and adhering to the same standards which it
employs with respect to other clinical and diagnostic products sold by
Distributor, as well as Distributor's own products. Unless prohibited by local
law, all such registrations and approvals obtained by Distributor shall be in
the name of OBL. In particular, Distributor shall, at its own expense:
(i) Exercise due diligence to promptly obtain and
maintain required government approvals to import, register and market the
Products in each jurisdiction in the Territory and to diligently proceed to
secure and maintain, as may be required from time to time, government importing,
registration and marketing approvals, customs clearances and currency
authorizations and any permits necessary in each jurisdiction in the Territory.
Distributor shall keep OBL generally informed of the regulatory requirements in
each jurisdiction in the Territory and shall submit to the government health
authorities in each jurisdiction in the Territory where sale of the Products is
planned, as required by governmental authorities, a complete application for
registration and marketing approval of the Products. Distributor shall file for
required regulatory approval for the sale of Products in the Territory as soon
as practicable. If OBL so requests, Distributor shall notify OBL each time it
submits an application for government registration and marketing approval for
the Products and shall, at OBL's request, supply OBL with copies of or access to
Distributor's filings and clinical data and shall keep OBL fully informed of the
progress of each such application. OBL and Distributor agree to disclose
promptly to the other all reports and any information which they have available
or which become available to them relating to performance of, or any significant
deleterious physiological effects caused by or related to, the Products.
(ii) Within a reasonable time after the date of this
Agreement, submit to OBL a marketing plan for the Products in each jurisdiction
in the Territory. Such plan shall be updated and delivered to OBL annually and
shall include information on competitive products; proposed labeling; estimated
sales volume; anticipated quantities of the Products to be purchased from OBL;
distribution and promotional plans; schedule for submission of applications for
government registration and marketing approval; and marketing program. All
Product labels, package inserts and claims, which are prepared for or by
Distributor, shall meet all legal requirements of the jurisdiction in which the
Products are marketed and shall be subject to OBL's prior review and approval.
(iii) Commence marketing of the Products throughout
the Territory immediately after receipt of government health registration
approvals, if applicable. Distributor shall be deemed to have commenced the
marketing of the Products only when it shall have offered the Products regularly
for sale.
(iv) Use its best efforts to distribute and sell the
Products for use only by qualified individuals, as appropriate in the Territory,
in compliance with local laws and
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regulations and good commercial practice and for uses and applications
reasonably approved by OBL for the Products.
In the event that all necessary registrations, licenses and permits required to
sell and distribute the products in the Territory for clinical use (if
applicable) are not obtained within nine (9) months after the effective date of
this Agreement, OBL may, in its sole discretion, terminate this Agreement upon
Written notice to Distributor.
(d) Purchase Commitment. Distributor hereby agrees to purchase
from OBL during the first two consecutive twelve month periods following the
effective date of this Agreement (the "Annual Purchase Commitment") the number
of Products set forth on Exhibit C. Throughout the term of this Agreement, if
Distributor fails to purchase Distributor's Annual Purchase Commitment in any
given period, then, without prejudice to OBL's other rights under this
Agreement, OBL may appoint one or more additional distributors for sale of the
Products in the Territory or terminate this Agreement immediately upon notice to
Distributor. Products returned to OBL under the provisions of Subsection 5(b)
above shall not count towards the fulfillment of Distributor's relevant Annual
Purchase Commitment. If Distributor fails to purchase at least ninety (90)
percent of its Annual Purchase Commitment in any given period, OBL may terminate
this Agreement on 45 days prior written notice.
(e) Promotion of the Products. Distributor shall use its best
efforts to promote demand for and sale of the Products by utilizing advertising
and publicity at Distributor's own expense, and shall maintain adequate sales
personnel for such purpose. All promotional materials prepared by Distributor
relating to the Products must be consistent with applicable law and promotional
materials used by OBL in connection with the Products. Distributor agrees not to
promote, or solicit orders for, the Products outside the Territory.
(f) Representations. Distributor shall not make any false or
misleading representations to customers or others regarding OBL or the Products.
Distributor and its employees and agents shall not make any representations,
warranties or guarantees with respect to the specifications, features or
capabilities of the Products that are not consistent with OBL's documentation
accompanying the Products or OBL's literature describing the Products, including
OBL's standard limited warranty and disclaimers.
(g) Inventory. Distributor shall, at Distributor's own
expense, maintain a sufficient inventory of the Products at all times during the
term of this Agreement as necessary in order to meet the requirements of any
customer or potential customer within the Territory.
(h) Customer and Sales Reporting. Distributor shall, at
Distributor's own expense and consistent with the sales policies of OBL:(i)place
the Products in Distributor's literature as soon as possible; (ii) provide
adequate contact with existing and potential customers within the Territory on a
regular basis, consistent with good business practice; (iii) assist OBL in
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assessing customer requirements for the Products, including modifications and
improvements thereto, in terms of quality, design, functional capability, and
other features; and (iv) provide OBL on a quarterly basis with a list of
customers who have used Products and a list of institutions which have purchased
Products, and (4) a summary of the number of Products held by Distributor at the
end of such quarter.
(i) Audits. OBL reserves the right to authorize a
representative of OBL, at OBL's expense, to audit Distributor's records relating
to the Products, inventories and sales. Upon prior written notice, Distributor
shall provide reasonable access to such records during normal business hours at
Distributor's business locations. Distributor shall maintain all such records at
Distributor's location for a minimum of two (2) years after termination of this
Agreement.
(j) Import and Export Requirements. Distributor shall, at
Distributor's own expense, obtain and pay for import and export licenses and
permits, pay customers charges and duty fees, and take all other actions
required to accomplish the export and import of the Products purchased by
Distributor. Distributor understands that OBL is subject to regulation by
agencies of the United States of America government, including the United States
of America Department of Commerce, which prohibit export or diversion of certain
technical products to certain countries. Distributor warrants that Distributor
will comply in all respects with the export and re-export restrictions set forth
in the export license for every Product shipped to Distributor.
(k) Assignment of Products Rights. Upon termination of this
Agreement for any reason whatsoever, Distributor agrees, to the full extent
allowed by law in each jurisdiction of the Territory, to assign, transfer,
convey and set over unto OBL, for no additional consideration, all
registrations, licenses, permits and other rights relating to sale, distribution
and use of the Products in the Territory.
(l) Limitation on Distributor's Rights to the Products.
Distributor shall have no right to copy, modify or remanufacture any Product or
part thereof. Distributor shall not make any changes, alterations, modifications
or additions to the Products without prior written approval of OBL.
7. ADDITIONAL OBLIGATIONS OF OBL.
(a) OBL's Support. OBL shall promptly provide Distributor with
OBL's core materials relating to promotion of the Products. Such core materials
shall be provided in the English language. OBL shall promptly respond to all
reasonable inquiries from Distributor concerning matters pertaining to this
Agreement. OBL shall refrain from giving quotations to exporters for Products to
be shipped to the Territory. OBL shall inform Distributor of new product
developments relating to the Products.
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8. TERM AND TERMINATION
(a) Term. This Agreement shall commence on the date hereof and
continue in full force and effect for a fixed term of five (5) years from such
date, unless terminated earlier under the provisions of this Section 8. OBL
shall also have the right to terminate this Agreement upon written notice to
Distributor as provided in Section 6 hereof.
(b) Termination for Cause. If either party defaults in the
performance of any provision of this Agreement, then the nondefaulting party may
give written notice to the defaulting party that if the default is not cured
within thirty (30) days the Agreement will be terminated. If the non-defaulting
party gives such notice and the default is not cured during such thirty (30) day
period, then the Agreement shall automatically terminate at the end of that
period.
(c) Termination for Insolvency. This Agreement shall
terminate, without notice (i) upon the institution by or against Distributor of
insolvency, receivership or bankruptcy proceedings or any other proceedings for
the settlement of Distributor's debts, (ii) upon Distributor's making an
assignment for the benefit of creditors, or (iii) upon Distributor's dissolution
or ceasing to do business.
(d) Return of Materials, Records and Intellectual Property.
All trademarks, trade names, patents, copyrights, designs, drawings, formulas or
other data, photographs, samples, literature and sales aids of every kind (the
"Intellectual Property") shall remain the property of OBL. Within thirty (30)
days after the termination of this Agreement, Distributor shall prepare all
Intellectual Property in Distributor's possession for shipment, as OBL may
direct, at OBL's expense. Distributor shall not make, use, dispose of or retain
any copies of any Intellectual Property or other confidential items or
information which may have been entrusted to Distributor during the term of this
Agreement. Effective upon the termination of this Agreement, Distributor shall
cease to use all Intellectual Property of OBL. Distributor shall promptly turn
over to OBL all customer lists and records relating to Products and OBL is
hereby granted and shall have a special property interest therein.
(e) Limitation on Liability. In the event of termination by
either party in accordance with any of the provisions of this Agreement, neither
party shall be liable to the other, because of such termination, for
compensation, reimbursement or damages on account of the loss of prospective
profits or anticipated sales or on account of expenditures, inventory,
investments, leases or commitments in connection with the business or goodwill
of OBL or Distributor. Termination shall not, however, relieve either party of
obligations incurred prior to the termination.
(f) Post-Termination Use of Materials. After termination of
this Agreement, Distributor shall not use any signs, equipment, advertising
matter or material which refer to or are related to OBL and from acts and
omissions that indicate or suggest a relationship with OBL
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and shall immediately return to OBL all OBL property, promotional material, and
proprietary information.
(g) Repurchase of Products. Upon any termination of this
Agreement, OBL may buy back, in its sole discretion, from Distributor, at landed
cost, any and all unsold, unopened OBL products in Distributor's possession that
have been purchased from OBL, which are in marketable condition and are of a
product designation currently included in the products being offered for sale by
OBL. Products no longer being offered for sale by OBL will not be repurchased.
Only current products shipped within the most recent twelve (12) month period
will be repurchased and will be subject to a restocking charge of twenty five
percent (25%) of the invoice price. The aggregate amount to be paid to
Distributor under this provision may be offset by OBL against any claims it has
against Distributor, including for payment of goods supplied under this
Agreement. Notwithstanding anything herein to the contrary, OBL shall have no
obligation to repurchase OBL products that exceed in value the aggregate
purchase price of all OBL products purchased by Distributor in the six (6) month
period preceding the date of termination.
(h) Survival of Certain Terms. The provisions of Sections 5,
6(f), 6(i), 6(l), 8, 9, 10, 11, 12 and 13 shall survive the termination of this
Agreement for any reason. All other rights and obligations of the parties shall
cease upon termination of this Agreement.
9. PROPERTY RIGHTS AND CONFIDENTIALITY
(a) Property Rights. Distributor agrees that OBL owns all
right, title, and interest in the product lines that include the Products and in
all of OBL's patents, trademarks, trade names, inventions, copyrights, know-how,
and trade secrets relating to the design, manufacture, operation or service of
the Products. The use by Distributor of any of these property rights is
authorized only for the purposes herein set forth, and upon termination of this
Agreement for any reason such authorization shall cease.
(b) Sale Conveys No Right to Manufacture or Copy. The Products
are offered for sale and are sold by OBL subject in every case to the condition
that such sales does not convey any license, expressly or by implication, to
manufacture, duplicate or otherwise copy or reproduce any of the Products.
Distributor shall take appropriate steps with Distributor's customers, as OBL
may request, to inform them of and assure compliance with the restrictions
contained in this Subsection 9(b).
(c) Confidentiality. The Distributor acknowledges that the
Products have been developed and obtained by OBL at great expense and contain
information and processes proprietary to OBL and that the product and related
packaging and literature contain trade secrets of OBL and, in general,
constitute proprietary information of OBL. The Distributor agrees not to
disclose or divulge to a third party any such information it may receive about
the Products. All
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information relating to the Products or designated as confidential by OBL and
provided to the Distributor, including but not limited to sales and financial
data, customer information, manufacturing processes and specifications for the
Products, shall be confidential information and Distributor shall not at any
time, whether directly or indirectly, use (other than in the performance of its
obligations hereunder) or disclose such information to any third party without
the prior written consent of OBL. All such information, know-how and trade
secretS shall remain the sole property of OBL. Distributor agrees to obtain from
its employees, agents or subdistributors who have access to such information
appropriate confidentiality or proprietary rights agreements. The parties agree
that the foregoing agreements and restrictions contained in this Subsection 9(c)
shall survive termination or expiration of this Agreement and, in the event of
the Distributor's breach of any of the foregoing provisions, OBL shall be
entitled to equitable and injunctive relief against the Distributor in addition
to other remedies available pursuant to this Agreement or applicable law.
10. TRADEMARKS AND TRADENAMES
(a) Use. During the term of this Agreement, Distributor shall
have the right to indicate to the public that Distributor is an authorized
distributor of OBL's Products and to advertise within the Territory such
Products under the trademarks, marks, and trade names that OBL may adopt from
time to time ("OBL's Trademarks"). Distributor shall not alter or remove any
OBL's Trademark applied to the Products or packages at the factory or at OBL's
distribution facility. Except as set forth in this Section 10, nothing contained
in this Agreement shall grant to Distributor any right, title or interest in
OBL's Trademarks. At no time during or after the term of this Agreement shall
Distributor challenge or assist others to challenge OBL's Trademarks or the
registration thereof or attempt to register any trademarks, marks or trade names
confusingly similar to those of OBL.
(b) Approval of Representations. All representations of OBL's
Trademarks that Distributor intends to use shall first be submitted to OBL for
approval, which shall not be unreasonably withheld, of design, color, and other
details or shall be exact copies of those used by OBL. If any of OBL's
Trademarks are to be used in conjunction with another trademark on or in
relation to the Products, then OBL's mark shall be presented equally legibly,
equally prominently, and of equal or greater size than the other but
nevertheless separated from the other so that each appears to be a mark in its
own right, distinct from the other mark.
11. PATENT, COPYRIGHT. AND TRADEMARK INDEMNITY
(a) Indemnification. Distributor agrees that OBL has the right
to defend, or at OBL's option to settle, and OBL agrees, at OBL's own expense,
to defend or at OBL's option to settle, any claim, suit or proceeding brought
against Distributor or Distributor's customers on the issue of infringement of
any United States America patent, copyright or trademark by the Products sold
hereunder or the use thereof, subject to the limitations hereinafter set forth.
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Distributor agrees to promptly notify OBL of any alleged infringement of
patents, copyrights or trademarks, and to fully cooperate in any investigation,
defense or settlement of such alleged infringement. OBL shall have sole control
of any such action or settlement negotiations, and OBL agrees to pay, subject to
the limitations hereinafter set forth, any final judgment entered against
Distributor or Distributor's customer on such issue in any such suit or
proceeding defended by OBL. Distributor agrees that OBL at OBL's sole option
shall be relieved of the foregoing obligations unless Distributor or
Distributor's customer notifies OBL promptly in writing of such claim, suit or
proceeding and gives OBL authority to proceed as contemplated herein, and, at
OBL's expense, gives OBL proper and full information and assistance to settle
and/or defend any such claim, suit or proceeding. OBL shall not be liable for
any costs or expenses incurred without OBL's prior written authorization.
(b) Limitation. Notwithstanding the provisions Of Subsection
11 (a) above, OBL assumes no liability for (i) infringements covering completed
equipment or any composition, assembly, circuit, combination, method or process
in which any of the Products may be used but not covering the Products when used
alone; (ii) trademark infringements involving any marking or branding not
applied by OBL or involving any marking or branding applied at the request of
Distributor; or (iii) infringements involving the modification or servicing of
the Products, or any part thereof, unless such modification or servicing was
done by OBL.
(c) Entire Liability. THE FOREGOING PROVISIONS OF THIS SECTION
11 STATE THE ENTIRE LIABILITY AND OBLIGATIONS OF OBL AND THE EXCLUSIVE REMEDY
OF DISTRIBUTOR AND DISTRIBUTOR'S CUSTOMERS, WITH RESPECT TO ANY ALLEGED
INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS OR OTHER INTELLECTUAL PROPERTY
RIGHTS BY THE PRODUCTS OR ANY PART THEREOF.
12. INDEMNIFICATION. OBL 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 processing, marketing, distribution and
sale of the Products, where and to the extent such damages have been caused by
the fault of such party or its employees or agents. The indemnifying party shall
have the right to defend or, at its option, to settle such claims, and if it
chooses to exercise such right, it shall have control over any such claim or
settlement negotiations. The indemnifying party shall be relieved of the
foregoing obligations unless the indemnified party gives prompt notice in
writing of any such claim, suit or proceeding and, at the indemnifying party's
expense, gives the indemnifying party proper and full information and assistance
to settle and/or defend any such claim, suit or proceeding.
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13. GENERAL PROVISIONS
(a) Governing Law and Jurisdiction. This Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of Arizona, United States of America, without reference to conflict of
laws principles or statutory rules of arbitration. The federal and state courts
within the State of Arizona, United States of America, shall have exclusive
jurisdiction to adjudicate any dispute arising out of this Agreement.
Distributor hereby expressly consents to (i) the personal jurisdiction of the
federal and state courts within Arizona, (ii) service of process being effected
upon Distributor by registered mail sent to the address set forth at the
beginning of this Agreement, and (iii) the uncontested enforcement of a final
judgment from such court in any other jurisdiction wherein Distributor or any of
Distributor's assets are present.
(b) Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein
and merges all prior discussions between them. No modification of or amendment
to this Agreement, nor any waiver of any rights under this Agreement, shall be
effective unless in writing signed by the party to be charged.
(c) Notices. Any notice required or permitted by this
Agreement shall be in writing (in the English language) and shall be sent by
telex, telecopier or telegram, by overnight courier, or by prepaid registered or
certified mail, return receipt requested, addressed to the other party at the
address shown at the beginning of this Agreement or at such other address for
which such party gives notice hereunder. Such notice shall be deemed to have
been given upon the earlier of receipt by the party to whom notice was sent or
three (3) days after deposit in the mail.
(d) Force Majeure. Nonperformance of either party shall be
excused to the extent that performance is rendered impossible by strike, fire,
flood, governmental acts or orders or restrictions, failure of suppliers, or any
other reason where failure to perform is beyond the reasonable control of and is
not caused by the negligence of the non-performing party.
(e) Non-assignability and Binding Effect. A mutually agreed
consideration for OBL's entering into this Agreement is the reputation, business
standing, and goodwill already honored and enjoyed by Distributor under
Distributor's present ownership, and, accordingly, Distributor agrees that
Distributor's rights and obligations under this Agreement may not be transferred
or assigned directly or indirectly without the prior written consent of OBL.
Subject to the foregoing sentence, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.
(f) Legal Expenses. The prevailing party in any legal action
brought by one party against the other and arising out of this Agreement shall
be entitled, in addition to any
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other rights and remedies that such prevailing party may have, to reimbursement
for expenses incurred by such prevailing party, including court costs and
reasonable attorneys' fees.
(g) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(h) Partial Invalidity. If any provision of this Agreement is
held to be invalid, then the remaining provisions shall nevertheless remain in
full force and effect. The parties agree to renegotiate in good faith any term
held invalid and to be bound by the mutually agreed substitute provision.
(i) Headings. The designation of a title, caption or heading
for the sections or subsections of this Agreement is for the purpose of
convenience only and are not intended to be used to limit or construe any of the
terms of this Agreement.
(j) Mutual Representations and Warranties. OBL and Distributor
each represent and warrant that this Agreement has been duly authorized and
executed and constitutes a binding obligation of it and enforceable against it
in accordance with its terms.
(k) Exhibits. All exhibits referred to in this Agreement are
attached hereto and made a part of this Agreement for all purposes.
(l) Controlling Language. This Agreement has been written,
and all discussions leading to this Agreement have been conducted, in the
English language, which both parties thoroughly understand. Each party
represents that it has read and fully understands this Agreement and further
agrees that all notices and other correspondence and communications between the
parties relating to or pursuant to this Agreement shall be made solely in the
English language.
IN WITNESS WHEREOF, the undersigned are duly authorized to execute this
Agreement on behalf of OBL and Distributor, as applicable.
ORTHOPAEDIC BIOSYSTEMS LTD., INC. MIZUHO MEDICAL CO., LTD,
("OBL") ("Distributor")
By: /s/ D. Ronald Yagoda By: /s/ Tohru Nemoto
---------------------------- ----------------------------
Print Name: D. RONALD YAGODA Print Name: TOHRU NEMOTO
Title: CHAIRMAN & CEO Title: PRESIDENT, MIZUHO MEDICAL
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