EXHIBIT (d)(7)
U.S. Service Agreement
This Agreement is made by Tutogen Medical, Inc., a Florida corporation with
offices at 925 Allwood Road, Clifton, NJ 07012, U.S.A. ("Tutogen") and Sulzer
Calcitek Inc., a Delaware corporation with offices at 1900 Aston Avenue,
Carlsbad, California, U.S.A. ("Sulzer").
W I T N E S S E T H:
WHEREAS, Tutogen collects donated allograft tissue from sources throughout
Europe and within the United States, processes such tissue itself or provides
such tissue for processing by others, and makes processed tissue available to
users through various distributors throughout the world, including the United
States;
WHEREAS, Tutogen's distribution of processed bone tissue for dental applications
in the United States is not extensive at the present time;
WHEREAS, Tutogen desires to process and distribute for itself allograft bone
tissue products for dental applications in the United States;
WHEREAS, Sulzer manufactures and sells worldwide a line of products used in
dental applications and maintains an understanding of the market for products
used in dental applications, including products manufactured from processed
allograft bone tissue; and
WHEREAS, Sulzer is willing to provide its expertise and support services to
Tutogen in consideration of Tutogen's agreement to process for itself donated
allograft bone tissue and to make the processed tissue available to users in the
US, using exclusively Sulzer's expertise and support services;
NOW, THEREFORE, in consideration of the foregoing premises and the terms and
conditions set forth below, the parties hereby agree as follows:
1. Definitions
1.1 "Affiliate" shall mean an entity that controls, is controlled by, or is
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under common control with a party. For purposes of this definition,
"control" shall mean the possession, directly or indirectly, of a majority
of the voting power of such entity (whether through ownership of securities
or partnership or other ownership interests, by contract or otherwise);
provided that, such entity shall be deemed an Affiliate only so long as
such control continues.
1.2 "Average Aging Date" shall have the meaning set forth in Section 4.2.
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1.3 "Clinical Expenses" shall have the meaning set forth in Section 5.3.
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1.4 "Contract Year" shall mean the one-year period following the Effective Date
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of this Agreement and each one-year period following each anniversary of
the Effective Date of this Agreement.
1.5 "Effective Date" shall mean the date on which this Agreement has been
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executed by an authorized officer of each party, as witnessed on the
signature page of this Agreement.
CONFIDENTIAL U.S. Service Agreement - Page 1
1.6 "FDA" shall mean the United States Food and Drug Administration.
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1.7 "Field of Use" shall mean all uses of processed allograft bone tissue in or
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adjoining the human maxilla or the human mandible.
1.8 "Permitted Successor" shall mean any individual, corporation, partnership,
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joint venture, association, trust, or any other entity or organization of
any kind or character that assumes the obligations of a party under this
Agreement as permitted according to the terms of this Agreement.
1.9 "Processed Tissues" shall mean allograft bone tissue processed by Tutogen
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or an Affiliate of Tutogen or a Permitted Successor of Tutogen, as listed
in Schedule A attached hereto. The parties shall mutually agree as to the
addition of processed tissues to Schedule A. To the extent that a
Processed Tissue is not available from Tutogen at the time of its listing
on Schedule A, the parties agree to collaborate on its final design and
development in accordance with Section 2 of the Processed Tissue
Development and License Agreement of even date between Sulzer and an
Affiliate of Tutogen.
1.10 "Regulatory Plan" shall have the meaning set forth in Section 5.2.2.
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1.11 "RTI Agreement" shall mean the Shaft Recovery and Service Reimbursement
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Agreement between Tutogen and Regeneration Technologies Inc. ("RTI"), as
successor to the University of Florida Tissue Bank, effective as of 29
September 1998, as modified by Amendment thereto dated 28 June 1999,
pursuant to which Tutogen supplies certain human donor bone tissue to RTI,
which RTI processes for use in surgical applications.
1.12 "Services" shall have the meaning set forth in Section 2.2.
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1.13 "Territory" shall mean the United States, including its territories and
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possessions.
1.14 "Third Party" shall mean a person or entity other than Tutogen, any
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Tutogen Affiliate, Sulzer, any Sulzer Affiliate or any officer, director,
or employee of Tutogen, any Tutogen Affiliate, Sulzer, or any Sulzer
Affiliate.
2. Grant of Rights
2.1 Supply of Processed Tissue. During the term of this Agreement, to the
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extent that it can do so without breaching an obligation under a pre-
existing agreement, including the RTI Agreement, Tutogen agrees to collect
donated allograft bone tissue, process such bone tissue itself using its
proprietary Tutoplast process, manufacture the Processed Tissues, and make
the Processed Tissues available in the Territory for the Field of Use using
the Services of Sulzer.
2.2 Sulzer's Services. Sulzer shall use reasonable efforts to provide the
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following services (the "Services") to Tutogen, as soon as is reasonably
possible following the Effective Date, for the purpose of making Processed
Tissues available to users in the Territory for the Field of Use:
2.2.1 providing and training field support personnel necessary to meet
and communicate with clinicians regarding the Processed Tissues
and their use; and
CONFIDENTIAL U.S. Service Agreement - Page 2
2.2.2 preparing and distributing printed materials describing and
promoting use of the Processed Tissues.
2.3 Exclusive Right. Tutogen hereby grants Sulzer the exclusive right during
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the term of this Agreement to provide the Services for the Processed
Tissues in the Territory for the Field of Use. So long as donated allograft
bone tissue continues to be available to Tutogen or any of its Affiliates
or its Permitted Successors during the term of this Agreement, including
tissues collected from sources available to Tutogen or its Affiliates as of
the Effective Date, as well as tissues collected from sources developed by
Tutogen or its Affiliates or its Permitted Successors during the term of
this Agreement, Tutogen or its Permitted Successors shall make the
Processed Tissues available to users in the Territory using exclusively the
Services of Sulzer. During the term of this Agreement, neither Tutogen, nor
any Affiliate of Tutogen, nor any Permitted Successor of Tutogen shall
permit or engage an entity other than Sulzer to provide the Services in the
Territory for the Field of Use.
2.4 Consignment Inventory. Tutogen shall have the option to consign inventory
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of the Processed Tissues to Sulzer for the benefit of Processed Tissue
users in circumstances in which users could not timely obtain the Processed
Tissues directly from Tutogen. In no event shall Sulzer acquire title to
the consigned Processed Tissues. Tutogen shall mark the consigned Processed
Tissues as the sole property of Tutogen.
2.5 Consideration. In consideration of the rights granted by Tutogen to Sulzer
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in this Section 2, Sulzer agrees to pay Tutogen US$200,000 by wire transfer
pursuant to Tutogen's written instructions within five business days
following the date on which Tutogen first delivers an order for Processed
Tissues obtained by use of the Services.
3. Sulzer's Obligations
3.1 Service Fees for Processed Tissues. Tutogen shall specify the appropriate
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fee to Processed Tissue users for Tutogen's services in making each of the
Processed Tissues available in the Territory. Based on its knowledge and
understanding of dental-related matters, Sulzer shall advise Tutogen on
appropriate fees and recommend such fees for Tutogen's services for each
Processed Tissue, including adjustments in such fees as necessary in
Sulzer's opinion. In no event shall any payment be made to Tutogen or
Sulzer for any donated human tissue.
3.2 Forecasting. Within 30 days following execution of this Agreement, Sulzer
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shall provide Tutogen with a monthly forecast of demand for the Processed
Tissues during the succeeding six-month period. Commencing with the second
calendar quarter of 2001 and continuing quarterly thereafter, Sulzer shall
provide Tutogen, no later than 15 days prior to each calendar quarter, with
a rolling monthly forecast of demand for the Processed Tissues for the
succeeding 12 months. Sulzer's forecasts shall specify the anticipated
demand by Processed Tissue and by month. Sulzer shall incur no liability
to Tutogen in the event that actual demand for the Processed Tissues
differs from Sulzer's forecasts.
CONFIDENTIAL U.S. Service Agreement - Page 3
4. Tutogen's Obligations
4.1 Processed Tissue Supply. Tutogen agrees to use reasonable efforts to
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procure donor allograft bone tissue, process the tissue using the Tutoplast
process according to Sulzer's forecasts of demand for Processed Tissues
(Section 3.2), deliver the Processed Tissues to users in a timely manner,
and invoice the users for Tutogen's services in a timely manner. In no
event shall Tutogen or an Affiliate of Tutogen or a Permitted Successor of
Tutogen during the term of this Agreement supply allograft bone tissue,
whether processed or unprocessed, to a Third Party for further distribution
in the Territory for the Field of Use; provided that, Tutogen shall be
obligated, as contemplated by Section 2.1 of this Agreement, to supply
Processed Tissues directly to users, and Tutogen shall be permitted to
deliver unprocessed allograft bone tissue pursuant to the RTI Agreement so
long as Tutogen's supply of allograft bone tissue exceeds the demand for
Processed Tissues under this Agreement.
4.2 Sulzer's Service Fee. Tutogen agrees to pay Sulzer a fee (the "Service
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Fee") for Sulzer's services as set forth in Schedule B. The Service Fee
shall be paid by Tutogen monthly no later than the Average Aging Date. The
"Average Aging Date" shall be fixed annually at the onset of each new
Contract Year and shall be the last business day of the month during which
Tutogen invoices the user for its services, plus the average aging period
for Tutogen's invoices for services during the preceding Contract Year. The
Average Aging Date shall be 90 days for the first Contract Year. The
Service Fee shall be deemed to cover all services rendered by Sulzer under
this Agreement, irrespective of whether such services are encompassed by
the Services specified in Section 2.2 above, whether they are expressly
mentioned elsewhere in this Agreement, or whether they are not mentioned.
4.3 Report. Tutogen shall prepare and deliver to Sulzer within 15 days
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following the end of each month a report detailing for each order completed
during the preceding month: the user, the number of Processed Tissue units
delivered, the fee for Tutogen's services invoiced in connection with each
such Processed Tissue unit, and the amount of Sulzer's Service Fee for each
Processed Tissue unit.
4.4 Audit. Upon reasonable notice to Tutogen, Sulzer shall have the right to
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have an independent certified public accountant, selected by Sulzer and
reasonably acceptable to Tutogen, audit during normal business hours only
such records of Tutogen as are necessary to verify the calculation of the
Service Fee; provided, however, that such audit shall not take place more
frequently than once a year and shall not cover records for more than the
preceding four (4) years. Any such audit shall be at the expense of Sulzer
unless such audit concludes that Tutogen has underpaid the Service Fee by
more than five percent, in which case such audit shall be at the expense of
Tutogen.
4.5 Processed Tissue Samples. Tutogen agrees to provide to Sulzer at no
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expense to Sulzer such samples of the Processed Tissues as Sulzer may
reasonably require to assist it in the performance of the Services.
4.6 Training. Tutogen agrees to provide training services to Sulzer, as
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reasonably requested by Sulzer, regarding the Tutoplast process and the
manufacture and use of the Processed Tissues. Tutogen and Sulzer shall
confer and agree upon
CONFIDENTIAL U.S. Service Agreement - Page 4
on the scope of and location for the training services to be provided by
Tutogen and the distribution of the expenses for such training services.
5. Regulatory Matters
5.1 Import Compliance. Tutogen agrees to comply with and maintain compliance
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with all governmental rules, regulations, statutes and other laws of any
kind necessary to import into and distribute the Processed Tissues within
the Territory.
5.2 Regulatory Responsibilities. The parties understand that as of the
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Effective Date of this Agreement, allograft processed tissues are not
regulated by the FDA as a medical device. In the event that the FDA
commences regulation of a Processed Tissue as a medical device or other
matter subsequent to the Effective Date, subject to the agreement of both
Sulzer and Tutogen within 90 days from the effective date of such FDA
regulation, Tutogen shall be responsible for applying for regulatory
approval from the FDA to make such regulated Processed Tissue available in
the Territory for the Field of Use.
5.2.1 In the event that either Sulzer or Tutogen, in its sole
discretion, does not agree to seek regulatory approval for the
newly regulated Processed Tissue, then such Processed Tissue shall
be removed from Schedule A. If Tutogen desires to seek regulatory
approval, but Sulzer does not, Tutogen shall have the right to
seek regulatory approval for such Processed Tissue at its own
expense and to make such processed tissue available to users
without obligation to Sulzer under this Agreement. If Sulzer
desires to seek regulatory approval for such Processed Tissue, but
Tutogen does not, Sulzer, subject to Tutogen's agreement to supply
the processed tissue, shall have the right to seek regulatory
approval for such processed tissue at its own expense and to make
such processed tissue available to users without obligation to
Tutogen under this Agreement.
5.2.2 In the event that Sulzer and Tutogen each agree to seek regulatory
approval for the newly regulated Processed Tissue, then the
parties shall forthwith meet and agree upon a plan pursuant to
which Tutogen will seek regulatory approval for the Processed
Tissue from the FDA. (the "Regulatory Plan"). The Regulatory Plan
shall include an agreement as to the scope, timing, and
supervisory responsibility for preclinical studies, clinical
trials, regulatory submissions, and all other matters related to
the FDA regulatory approval process for the Processed Tissue. The
parties shall meet at least once annually to review and amend the
Regulatory Plan as dictated by the current status of the clinical
and regulatory process.
5.3 Clinical Expenses. Sulzer and Tutogen shall each pay one-half of all out-
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of-pocket expenses incurred in execution of a Regulatory Plan subsequent to
the Effective Date, excluding salary, benefits, and other costs for
employees of the parties (the "Clinical Expenses").
5.3.1 In the absence of an agreement to the contrary, a party that
incurs Clinical Expenses in a calendar quarter shall invoice the
other party quarterly in arrears for one-half of such Clinical
Expenses. The invoice shall specify for each such expense the
vendor, the purpose, and the
CONFIDENTIAL U.S. Service Agreement - Page 5
date such expense was incurred and shall include a copy of
supporting documentation of the expense.
5.3.2 A party receiving an invoice for Clinical Expenses, unless the
invoice is disputed, shall either pay the invoice or setoff the
invoice with other Clinical Expenses within 45 days from the date
of the invoice.
5.4 Ownership of Approvals. Tutogen shall be the record owner of all FDA
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approvals to make regulated Processed Tissues available in the Territory
for the Field of Use.
5.5 Cooperation and Assistance. Tutogen and Sulzer agree to cooperate and
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assist one another as the other may reasonably request regarding
registration of and regulatory matters relating to the Processed Tissues.
5.6 Processed Tissue Recalls. Tutogen, as manufacturer of the Processed
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Tissues, shall be responsible for execution of and all expenses related to
any recall of Processed Tissues, including, but not limited to, retrieving
recalled Processed Tissues from users, scrapping or discarding recalled
Processed Tissues, and resupplying users with replacement Processed
Tissues.
6. Trademarks
6.1 License Grant. Tutogen grants Sulzer a nonexclusive license under
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Tutogen's trademark, Tutoplast and Tutodent (the "Trademarks"), to use the
Trademarks solely in connection with the Processed Tissues in the
performance of Sulzer's Services within the Territory for the Field of Use.
6.2 Approval of Marketing Publications. Sulzer shall provide Tutogen with
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samples of all of Sulzer's printed materials utilizing a Trademark in
advance of publication of the same. Tutogen shall be deemed to have
approved such samples for actual use unless it objects in writing within 10
business days following Sulzer's delivery of same.
6.3 New Trademarks. Subject to the approval of Tutogen, which shall not be
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withheld unreasonably, Sulzer shall have the right to adopt new trademarks
of its choosing for use in connection with the Processed Tissues.
7. Term and Termination
7.1 Term. This Agreement shall be effective on the Effective Date and shall
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remain in effect for an initial term of 10 Contract Years, unless sooner
terminated according to the terms set forth in this Agreement. At the end
of the tenth Contract Year and each succeeding anniversary of the Effective
Date, this Agreement shall renew automatically for a successive one-year
term unless one party gives the other party written notice of termination
at least 12 months in advance of the renewal date.
7.2 Material Breach. If either party is in material breach of any obligation
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in this Agreement, the non-breaching party may give written notice to the
breaching party of its intention to terminate this Agreement, and this
Agreement will terminate 60 days after the giving of such notice unless
during the 60-day period (i) the breach has been cured, or (ii) if a breach
is incapable of cure within the 60-
CONFIDENTIAL U.S. Service Agreement - Page 6
day period, the breaching party has commenced action which is calculated to
result in a cure of the breach to the reasonable satisfaction of the non-
breaching party within 120 days after the giving of notice. If at the end
of the 60-day or 120-day period following a notice of termination the
parties disagree as to whether the Agreement has terminated as provided in
this paragraph, the parties shall continue to perform under this Agreement
until an arbitration tribunal constituted as provided in this Agreement has
ruled on the matter.
7.3 Insolvency. Either party may terminate this Agreement immediately on
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delivery of written notice to the other party (i) upon the institution by
or against such other party of insolvency, receivership, or bankruptcy
proceedings or any other proceedings for the settlement of such party's
debts; provided that, with respect to involuntary proceedings, such
proceedings are not dismissed within 120 days, (ii) upon such other
party's making an assignment for the benefit of creditors, or (iii) upon
such other party's dissolution or ceasing to do business.
7.4 Termination Without Cause. Sulzer shall have the right to terminate this
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Agreement with or without cause at any time on or after 1 January 2002;
provided that, Sulzer shall have given Tutogen written notice of
termination at least 12 months in advance of the termination date. In the
event that Sulzer shall terminate this Agreement without cause as provided
in this Section 7.4, neither Sulzer nor any Affiliate of Sulzer shall for a
period of one year following the effective date of termination enter into
an agreement, either directly or indirectly, to own, operate, advise, or
have any interest in any business relating to the Processed Tissues in the
Territory for the Field of Use.
7.5 Interruption of Donor Availability. Notwithstanding the Force Majeure
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provision in Section 9.2, in the event that Tutogen is unable to supply
Processed Tissues for a continuous period of six months because Tutogen,
for whatever reason, is unable to obtain tissue donors, Sulzer shall have
the right to terminate this Agreement. In the event that Sulzer terminates
this Agreement pursuant to this Section 7.5, Tutogen shall be entitled to
retain any payments made by Sulzer.
7.6 Refund of Clinical Expenses. In the event that the Agreement terminates
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(i) by reason of Tutogen's notice of termination under Section 7.1, or (ii)
by reason of Tutogen's material breach under Section 7.2, then Tutogen
shall be obligated to reimburse Sulzer's payment of Clinical Expenses, as
determined in this Section 7.6, in obtaining or attempting to obtain
regulatory approval for Processed Tissues under Section 5. For each
Processed Tissue as to which Sulzer incurred unreimbursed Clinical
Expenses, Tutogen shall be obligated to reimburse an amount determined by
multiplying the unreimbursed Clinical Expenses paid by Sulzer for that
Processed Tissue by the Reimbursement Ratio. The "Reimbursement Ratio" is
10 yrs - (t\\exp\\ - t\\app\\) / 10 yrs,
where t\\exp\\ is the effective date of termination of the Agreement and
t\\app\\ is the date of regulatory approval for the Processed Tissue. For
example, if Sulzer obtains a regulatory approval for a Processed Tissue at
the beginning of the second Contract Year after incurring unreimbursed
Clinical Expenses in the amount of $100,000 and the Agreement terminates at
the beginning of the fifth Contract Year, the Reimbursement Ratio is
10 yrs - (3 yrs) / 10 yrs = 0.7
CONFIDENTIAL U.S. Service Agreement - Page 7
and Tutogen owes Sulzer $70,000. The reimbursed amount shall be paid in
three equal annual installments due within 60 days of the date of
termination, one year after termination, and two years after termination,
without interest.
8. Representations, Warranties, Indemnities, and Limitation of Liabilities
8.1 Tutogen. Tutogen represents and warrants to Sulzer, as follows:
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8.1.1 Tutogen has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder,
and the execution, delivery, and performance of this Agreement
have been validly authorized by Tutogen.
8.1.2 Tutogen has the right to grant to Sulzer the rights and licenses
granted in this Agreement.
8.1.3 As of the date of this Agreement, and to the best of its knowledge
and belief, neither the processing of, nor the use of, nor the
collection of fees related to the Processed Tissues in the
Territory constitutes a misuse or misappropriation of confidential
information or trade secrets or a breach of confidence, and does
not infringe or violate any valid patent, trademark, or copyright
or any other intellectual property rights of any third party.
Tutogen has disclosed to Sulzer all patents and other intellectual
property rights which, to Tutogen's knowledge, may have a material
effect on Sulzer's ability to make available the Processed
Tissues.
8.1.4 Tutogen has not received notice that the processing of, use of, or
collection of service fees related to the Processed Tissues
violates any patent rights or any other intellectual property
right or constitutes a misappropriation or misuse of trade secrets
or proprietary information.
8.1.5 Tutogen shall promptly notify Sulzer of any claim of infringement
or misappropriation relating to the Processed Tissues.
8.1.6 To the best of Tutogen's knowledge and belief, Tutogen's
procurement of donor allograft tissue complies fully with all laws
of the country in which the donor tissue is collected, including
all national, regional, and local laws.
8.1.7 To the best of Tutogen's knowledge and belief, Tutogen possesses
all governmental and other approvals required for the collection
and processing of donor allograft tissue, and Tutogen shall use
reasonable efforts to maintain all such approvals throughout the
term of this Agreement.
8.1.8 To the best of Tutogen's knowledge and belief, Tutogen's
distribution of the Processed Tissues as contemplated under this
Agreement complies fully with the United States National Organ
Transplant Act ("NOTA"), 42 U.S.C. section 274e. Tutogen shall
give Sulzer immediate notice in the event that Tutogen becomes
aware of an investigation or inquiry from any regulatory or
governmental authority of a potential violation of NOTA.
CONFIDENTIAL U.S. Service Agreement - Page 8
8.1.9 For a period of 12 months from the date of Tutogen's delivery to a
user, each Processed Tissue shall be free from defects in
material, manufacturing, and workmanship, including, but not
limited to, disease, excluding defects caused by the abuse,
misuse, neglect, or by improper testing, handling, storage, or use
by a party other than Tutogen.
8.1.10 During the term of this Agreement, except as required by law or
by a pre-existing contractual obligation of Tutogen, Tutogen will
not, directly or through an Affiliate, assign, sell, transfer,
convey, or otherwise alienate in whole or in part any right to
receive donated allograft bone tissue without the prior written
agreement of Sulzer.
8.2 Liability for Breach of Processed Tissue Warranty. If any failure to
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conform to the representation and warranty set forth in Section 8.1.9
appears within the applicable warranty period, Tutogen will, at its option
and expense, correct any such failure either by replacing the defective or
non-conforming Processed Tissue or by repairing such Processed Tissue. In
no event shall the liability of Tutogen in connection with such warranty
exceed the cost of replacing or repairing the defective Processed Tissue.
The foregoing shall constitute the exclusive remedy of Sulzer and the sole
liability of Tutogen whether in contract or in tort or otherwise relating
to a defect of a Processed Tissue.
8.3 Exclusion of Other Warranties. The representations and warranties stated
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in Section 8.1 are expressly in lieu of all other warranties, including,
but not limited to, any implied warranty of merchantability or of fitness,
and constitute the only warranties made with respect to any Processed
Tissue.
8.4 Sulzer. Sulzer represents and warrants to Tutogen, as follows:
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8.4.1 Sulzer has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder,
and the execution, delivery, and performance of this Agreement
have been validly authorized by Sulzer.
8.5 Indemnity by Tutogen.
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8.5.1 Tutogen shall defend, indemnify, and hold harmless Sulzer against
any liability or damages from any third party claims, suits,
proceedings, demands, recoveries, or expenses ("Claims") to the
extent that such Claims arise from or are based upon: (i) material
breach by Tutogen of any of its representations or warranties
contained herein; or (ii) negligence, gross negligence, or
intentionally wrongful acts or omissions on the part of Tutogen;
provided that Sulzer: (a) promptly notifies Tutogen in writing of
any such Claim which comes to its attention; (b) allows Tutogen to
control the defense or settlement of such Claim; (c) does not
enter into any settlement or compromise of such Claim without the
express authorization of Tutogen; and (d) reasonably cooperates
with Tutogen in the defense of such Claim, subject to Tutogen's
payment of all reasonable out-of-pocket expenses associated with
such cooperation by Sulzer. Sulzer shall have the right to
participate in a non-controlling fashion in such legal proceeding
at its sole expense.
CONFIDENTIAL U.S. Service Agreement - Page 9
8.5.2 No undertaking of Tutogen under this section shall extend to any
such alleged infringement or violation to the extent that it: (a)
arises from adherence to design modifications, specifications,
drawings, or written instructions which Tutogen is directed by
Sulzer to follow, but only if such alleged infringement or
violation does not reside in corresponding Processed Tissue of
Tutogen's design or selection; or (b) arises from adherence to
instructions to apply Sulzer's trademark, trade name, or other
company identification; or (c) resides in a Processed Tissue which
is not of Tutogen's origin and which is furnished by Sulzer to
Tutogen for use under this Agreement; or (d) relates to use of
Processed Tissues or other items provided by Tutogen in
combination with other Processed Tissues or items furnished either
by Tutogen or others, which combination was not installed,
recommended, or otherwise approved by Tutogen. In the foregoing
cases numbered (a) through (d), Sulzer will defend and hold
Tutogen harmless, subject to the same terms and conditions and
exceptions stated above, with respect to Tutogen's rights and
obligations under this clause.
8.6 Indemnity by Sulzer.
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8.6.1 Sulzer shall defend, indemnify, and hold harmless Tutogen against
any liability or damages from any third party claims, suits,
proceedings, demands, recoveries, or expenses ("Claims") to the
extent that such Claims arise from or are based upon: (i) material
breach by Sulzer of any of its representations or warranties
contained herein; or (ii) negligence, gross negligence, or
intentionally wrongful acts or omissions on the part of Sulzer;
provided that Tutogen: (a) promptly notifies Sulzer in writing of
any such Claim which comes to its attention; (b) allows Sulzer to
control the defense or settlement of such Claim; (c) does not
enter into any settlement or compromise of such Claim without the
express authorization of Sulzer; and (d) reasonably cooperates
with Sulzer in the defense of such Claim, subject to Sulzer's
payment of all reasonable out-of-pocket expenses associated with
such cooperation by Tutogen. Tutogen shall have the right to
participate in a non-controlling fashion in such legal proceeding
at its sole expense.
8.6.2 No undertaking of Sulzer under this section shall extend to any
such alleged infringement or violation to the extent that it: (a)
arises from adherence to design modifications, specifications,
drawings, or written instructions which Sulzer is directed by
Tutogen to follow, but only if such alleged infringement or
violation does not reside in corresponding Processed Tissue of
Sulzer's design or selection; or (b) arises from adherence to
instructions to apply Tutogen's trademark, trade name, or other
company identification; or (c) resides in a Processed Tissue which
is not of Sulzer's origin and which is furnished by Tutogen to
Sulzer for use under this Agreement; or (d) relates to use of
Processed Tissues or other items provided by Sulzer in combination
with other Processed Tissues or other items, furnished either by
Sulzer or others, which combination was not installed, recommended
or otherwise approved by Sulzer. In the foregoing cases numbered
(a) through (d), Tutogen will defend and hold Sulzer harmless,
subject to the same
CONFIDENTIAL U.S. Service Agreement - page 10
terms and conditions and exceptions stated above with respect to
Sulzer's rights and obligations under this clause.
8.7 Limitation of Liability to Third Parties. The liability of Tutogen and
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Sulzer with respect to any and all claims, actions, proceedings, or suits
by any third party alleging infringement of patents, trademarks, or
copyrights or violation of trade secrets or proprietary rights because of,
or in connection with, any items furnished pursuant to this Agreement shall
be limited to the specific undertakings contained in this Section 8.
8.8 Exclusion of Consequential Damages. Neither Tutogen nor Sulzer shall in
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any event or under any circumstances, including, but not limited to
liability, delay, or warranty, be liable to the other for special or
consequential damages, including but not limited to, loss of profit or
revenue, loss of use of production line, or claims by customers for service
interruptions. The remedies for the parties set forth in this Agreement are
exclusive.
8.9 RTI Agreement. Notwithstanding anything herein to the contrary, nothing in
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this Agreement is intended to be, or shall be construed as being, a breach,
anticipatory or otherwise, of the RTI Agreement as it existed following
amendment on 28 June 1999.
9. Miscellaneous Provisions
9.1 Entire Agreement.
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9.1.1 This Agreement, together with the Xenograft Distribution Agreement
and the Processed Tissue Development and License Agreement, all
between the parties or their Affiliates of even date, embodies the
final, complete, and exclusive understanding between the parties
and supersedes all previous agreements, understandings, or
arrangements between the parties with respect to its subject
matter.
9.1.2 No modification or waiver of any terms or conditions hereof, nor
any representations or warranties will be of any force or effect
unless such modification or waiver is in writing and signed by an
authorized officer of the party against whom enforcement is
sought.
9.2 Force Majeure. Neither party will be liable to the other for its failure
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to perform any of its obligations under this Agreement only during any
period in which such performance is delayed because of, or rendered
impracticable or impossible due to, circumstances beyond its reasonable
control, including but not limited to, strike, fire, flood, earthquake,
windstorm, governmental acts or orders or restrictions (including acts of
regulatory authorities and changes in the regulatory scheme for a Processed
Tissue), failure of suppliers, or any other reason to the extent that the
failure to perform is beyond the reasonable control and not caused by the
negligence or willful misconduct of the non-performing party, provided that
the party experiencing the delay promptly notifies the other of the delay.
9.3 Notices. All notices concerning this Agreement will be written in the
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English language and will be deemed to have been received (a) two days
after being properly sent by commercial overnight courier, or (b) one day
after being transmitted by confirmed facsimile, in each case addressed to
the address below:
CONFIDENTIAL U.S. Service Agreement - Page 11
If to Tutogen:
Tutogen Medical, Inc.
925 Allwood Road
Clifton, NJ 07012
USA
Attention: President and CEO
Telephone: 1 (973) 365-2799
Facsimile: 1 (973) 365-1690
With a copy to:
Tutogen Medical GmbH
IndustriestraBe 6,
D-91077 Neunkirchen am Brand
GERMANY
Attention: President and CEO
Telephone: 49 (9134) 99 88 110
Facsimile: 49 (9134) 99 88 119
and
Dr. Dirk Lange
Foerster + Rutow
Irrerstr. 17-19
90403 Nurnberg
GERMANY
Telephone: 49 (911) 23 569 00
Facsimile: 49 (911) 23 569 11
If to Sulzer:
Sulzer Calcitek Inc.
1900 Aston Avenue
Carlsbad, California 92008-7308
U.S.A.
Attention: President
Telephone: 1 (760) 431-9515
Facsimile: 1 (760) 431-9753
With a copy to:
Sulzer Medica USA Inc.
3 East Greenway Plaza, Suite 1600
Houston, Texas 77046
U.S.A.
Attention: General Counsel
Telephone: 1 (713) 561-6365
Facsimile: 1 (713) 561-6380
CONFIDENTIAL U.S. Service Agreement - Page 12
9.4 Governing Law. Recognizing that the laws within the United States and
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international jurisdictions vary in their content and effect with respect
to similar subject matter, and that the parties desire uniformity and
predictability in interpretation and enforcement of this Agreement and
related agreements with international scope made contemporaneously by the
parties and their Affiliates, the parties have agreed to the following
provisions regarding applicable law to govern this Agreement: All matters
affecting the interpretation, form, validity, and performance of this
Agreement shall be decided under the laws of Switzerland. The United
Nations Convention on Contracts for the International Sale of Goods of
April 11, 1980 shall not be applicable.
9.5 Partial Invalidity. In the event that any provision of this Agreement will
------------------
be unenforceable or invalid under any applicable law or be so held by
applicable court decision, such unenforceability or invalidity will not
render this Agreement unenforceable or invalid as a whole, and, in such
event, such provision will be changed and interpreted so as best to
accomplish the objectives of such unenforceable or invalid provision within
the limits of the applicable law or applicable court decisions.
9.6 Independent Contractors. Each party will act as an independent contractor
-----------------------
under the terms of this Agreement. Except as otherwise provided in this
Agreement, neither party is, nor will it be deemed to be, an employee,
agent, partner, co-venturer, or legal representative of the other for any
purpose.
9.7 Nonassignability. Neither this Agreement nor any of the rights, interests,
----------------
duties, or obligations under this Agreement shall be assigned or delegated,
in whole or in part, by operation of law or otherwise by any party without
the prior written consent of the other party, except that either party may
assign this Agreement to an Affiliate of such party; provided that, in no
event shall a party assign to an Affiliate less than the entirety of its
rights and obligations under this Agreement. Any assignment made in
violation of this Section 9.7 will be void and of no effect. Subject to
this Section 9.7, this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by and against, the parties and their
Permitted Successors.
9.8 Compliance With Laws. Notwithstanding other provisions in this Agreement
--------------------
regarding a failure to comply with laws, in performing this Agreement, each
Party shall comply with all applicable laws and government regulations at
all times, including but not limited to any applicable laws and regulations
of the United States regarding the export or re-export or release of
technology and technical data.
9.9 Arbitration.
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9.9.1 In the event the Parties are unable to resolve any dispute or
conflict arising from or relating to this Agreement within thirty
(30) days after it is formally presented for resolution by written
notice, any party may submit such conflict for resolution to the
Chief Executive Officers of the parties.
9.9.2 In the event the Chief Executive Officers of the parties are
unable to resolve such conflict within thirty (30) days after
having such conflict submitted to them for resolution, the dispute
shall be finally settled under the Rules of Conciliation and
Arbitration of the International
CONFIDENTIAL U.S. Service Agreement - Page 13
Chamber of Commerce in Paris ("Rules") by three arbitrators
appointed in accordance with the Rules.
9.9.3 The place of arbitration shall be Zurich. The procedural law of
this place shall apply where the Rules are silent.
9.9.4 The arbitral award shall be substantiated in writing. The arbitral
tribunal shall decide on the matter of costs of the arbitration.
9.9.5 The language to be used in the arbitral proceedings shall be
English.
9.10 Confidentiality. The parties acknowledge that by reason of their
---------------
relationship hereunder, each has had and will continue to have access to
certain information and materials concerning the other's business, plans,
customers, technology, and/or Processed Tissues that is considered by a
party to be confidential ("Confidential Information") and of substantial
value to that party, which value would be impaired if such information
were disclosed to third parties. To the extent that such information is
considered confidential, the disclosing party will so indicate to the
receiving party, in the case of information in documentary or other
tangible form, by labeling it conspicuously as "CONFIDENTIAL" (or words of
similar import) and in the case of information conveyed verbally, by
identifying same in writing within ten days after the first verbal
disclosure. Each party agrees that it will not use in any way other than
as expressly authorized or contemplated under this Agreement, nor disclose
to any third party, any such Confidential Information revealed to it by
the other party, and will take reasonable precautions (and will cause its
Affiliates to take reasonable precautions) to protect the confidentiality
of such information and with no less restrictive precautions than it takes
to protect its own confidential information. Each party will disclose
Confidential Information only to those of its employees who have a need to
know such information. If Confidential Information is required to be
disclosed in response to an order by a court or other government body, or
if otherwise required to be disclosed by law, or if necessary to establish
the rights of a party under this Agreement, the receiving party shall use
reasonable efforts to provide the disclosing party with advance notice of
such required disclosure to give the disclosing party sufficient time to
seek a protective order or other protective measures, if any are
available, for such Confidential Information. "Confidential Information"
does not include information, materials, technical data or know-how which:
(i) is rightfully in the possession of the receiving party at the time of
disclosure as shown by the receiving party's files and records immediately
prior to the time of disclosure; (ii) prior to or after the time of
disclosure becomes part of the public knowledge or literature, not as a
result of any inaction or action of the receiving party; (iii) is
independently developed by a party without the use of any Confidential
Information of the other parties; (iv) is obtained from any third party
who is authorized to disclose such data and information without obligation
of confidentiality, or (v) is approved for release by the disclosing
party. This Section 9.10 shall survive termination of this Agreement for a
period of two years.
9.11 Public Relations and Announcements. The parties shall agree upon and
----------------------------------
issue a press release upon the signing of this Agreement including a
summary of the relationship established under this Agreement. No party
shall issue a press release or any other published statement that refers
to another party, its Affiliates or the other party's Processed Tissues
without first obtaining the agreement of
CONFIDENTIAL U.S. Service Agreement - Page 14
such other party as to the form and content of the statement, which
approval shall be timely and not unreasonably withheld.
In witness whereof, the parties have each caused this Agreement to
be signed and delivered by their duly authorized representatives on the
dates set forth below in duplicate, each of which will be treated for all
purposes as an original.
Tutogen Medical, Inc. Sulzer Calcitek Inc.
By: /s/ Manfred Kruger By: /s/ Steven E. Hanson
------------------ --------------------
Manfred Kruger, President Steven E. Hanson, President
and Chief Executive Officer
Date: September 29, 2000 Date: September 29, 2000
------------------ ------------------
CONFIDENTIAL U.S. Service Agreement - Page 15
Schedule A - Processed Tissues
Tissue Description Particle Size (microns) Tissue Volume (cc)
- -------------------------------------------------------------------------------------------------
Cancellous Chips 250-1000 0.5
- -------------------------------------------------------------------------------------------------
Cancellous Chips 250-1000 1.0
- -------------------------------------------------------------------------------------------------
Cancellous Chips 1000-2000 0.5
- -------------------------------------------------------------------------------------------------
Cancellous Chips 1000-2000 1.0
- -------------------------------------------------------------------------------------------------
Cancellous Chips 1000-2000 2.0
- -------------------------------------------------------------------------------------------------
CONFIDENTIAL Schedule A to U.S. Service Agreement - Page 1
Schedule B
Sulzer's Service Fees
During the first Contract Year, Sulzer's Service Fee for a Processed Tissue
shall be equal to the difference between "Tutogen's Fee to Tissue User," as
hereafter defined, and the applicable Tutogen Processing Fee, as indicated in
the table that follows:
- ---------------------------------------------------------------------------------------
Processed Tissue Tutogen Processing Fee
- ---------------------------------------------------------------------------------------
Cancellous Chips, 250-1000 (micro), 0.5 cc *
- ---------------------------------------------------------------------------------------
Cancellous Chips, 250-1000 (micro), 1.0 cc *
- ---------------------------------------------------------------------------------------
Cancellous Chips, 1000-2000 (micro), 0.5 cc *
- ---------------------------------------------------------------------------------------
Cancellous Chips, 1000-2000 (micro), 1.0 cc *
- ---------------------------------------------------------------------------------------
Cancellous Chips, 1000-2000 (micro), 2.0 cc *
- ---------------------------------------------------------------------------------------
"Tutogen's Fee to Tissue User" shall be defined as the gross amount of the fee
invoiced to the user for the applicable Processed Tissue, less discounts and
allowances, returns, taxes and other levies by a governmental authority, and
unreimbursed shipping charges.
Sulzer and Tutogen shall confer and agree upon the amount of Sulzer's Service
Fee after the first Contract Year.
*CONFIDENTIAL TREATMENT REQUEST BY SHEARMAN & STERLING.
CONFIDENTIAL Schedule B to U.S. Service Agreement - Page 1