Confidential treatment has been requested by OraPharma, Inc. pursuant to Rule
24b-2. All non-public information has been filed with the Securities and
Exchange Commission.
Exhibit 10.16
DISTRIBUTION AGREEMENT
This AGREEMENT (the "Agreement") dated as of August 19, 2002 (the "Effective
Date") between ▇▇▇▇▇▇ ▇▇▇▇ Corporation, a Delaware corporation, having its
principal place of business at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(hereinafter referred to as "KNC") and OraPharma, Inc, a Delaware corporation,
having its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(hereinafter referred to as "OraPharma").
Whereas, KNC develops, manufactures and sells for consideration medical devices
fabricated from bioresorbable materials into anatomically or functionally
specific three-dimensional architectures whose functional talents can be applied
to hard and soft-tissue wound healing. This technology employs proprietary
manufacturing processes that produce varieties of polymer architectures designed
for specific wound model and tissue engineering applications.
Whereas, OraPharma is a company engaged in the development, manufacture and
marketing of specialty pharmaceutical products related to the treatment of
periodontal disease.
Whereas, KNC has received Section 510(k) clearance from the U.S. Food and Drug
Administration to market Epi-Guide(R) bioresorbable periodontal matrix barrier
in the U.S. in accordance with the provisions of the U.S. Federal Food, Drug and
Cosmetic Act, and is presently marketing the Epi-Guide(R) product in the United
States.
Whereas, KNC has received pre-market approval from the U.S. Food and Drug
Administration to market Drilac(R) surgical dressing in the U.S. in accordance
with the provisions of the U.S. Federal Food, Drug and Cosmetic Act, and is
presently marketing the Drilac(R) product in the United States.
Whereas both the Epi-Guide(R) product and the Drilac(R) product have received
regulatory approval to be marketed and sold in Canada, and KNC is presently
marketing both products in Canada.
Whereas, OraPharma desires to advertise, promote, market, distribute and sell
Product (as defined below) for exclusive use in the Field (as defined below) in
the Territory (as defined below).
Whereas, KNC is willing, for the consideration and on the terms set forth
herein, to grant the distribution right, as defined below, to OraPharma for such
purposes.
Now, therefore, in consideration of the mutual covenants and promises
contained in this Agreement and other good and valuable consideration, KNC and
OraPharma agree as follows:
1. DEFINITIONS
1.1. "Confidential Information" shall mean all oral or written
information that is marked as "Confidential", that is disclosed
by either party (the "Disclosing Party") to the other party (the
"Receiving Party") that is not generally known to the public,
including but not limited to, information of a technical nature
such as trade secrets; manufacturing processes or devices;
techniques, data, formulas, inventions (whether or not
patentable), specifications and characteristics of current
products or products under development; research projects,
methods and results; matters of a business nature such as
information about costs, margins, pricing policies, markets,
sales, suppliers and customers; product, marketing or strategic
plans; financial information; personnel records and other
information of a similar nature, provided, however, that
Confidential
Information shall not include any information that (i) is or
becomes public knowledge without breach of the Receiving Party's
obligations hereunder; (ii) is rightfully acquired by the
Receiving Party from a third party without restriction on
disclosure or use; (iii) was already known to Receiving Party
prior to receipt from the Disclosing Party; (iv) was or is
disclosed by the Disclosing Party to a third party prior to or
after the date of this Agreement without restriction on
disclosure or use; or (v) is disclosed or used following the
Receiving Party's receipt of express written consent from a
representative of the Disclosing Party. The Receiving Party shall
have the burden of proof respecting any of the aforementioned
events on which the Receiving Party relies as relieving it of any
restrictions. Oral disclosures for which protection is sought
must at the outset be clearly identified by the Disclosing Party
as Confidential Information and submitted by the Disclosing Party
to the Receiving Party, marked as above within thirty (30) days
after disclosure.
1.2. "Field" shall mean the dental profession.
1.3. "Minimum Purchase Guarantee" shall have the meaning set forth in
Section 4.2.
1.4. "Product" or "Products" shall mean either one or more of the
devices meeting the specifications set forth in Schedule A
("Product Specifications") and Schedule B ("Product Drawings"),
which are attached hereto and made part of this Agreement. Such
specifications may be changed from time to time only as agreed to
in writing by the parties. Product shall be labeled for use in
the Field, and solely labeled as such with no alternate
indications for use. Product shall include any improvements,
modifications or replacements thereof, as made commercially
available by KNC in any market anywhere in the world.
1.5. "Sub-distributor" shall mean any entity designated by OraPharma
to advertise, promote, market, distribute and sell the Product
within a certain geographic area of the Territory where OraPharma
reasonably believes that circumstances require the appointment of
a Sub-distributor.
1.6. "Territory" shall mean the United States of America and Canada.
2. DISTRIBUTION GRANT AND TERM
2.1. Subject to Section 2.2 and the reservation of rights set forth in
Section 2.3 of this Agreement, KNC hereby grants to OraPharma an
exclusive (even as to KNC) distribution right to the Product for
the sole and exclusive purpose of advertising, promoting,
marketing, distributing and selling Product in the Field in the
Territory during the Term. The exclusive distribution right
granted herein shall terminate upon termination or expiration of
this Agreement in accordance with Section 2.6 or Section 15
hereof.
2.2 Until receipt of written notification from OraPharma of its
intention to fill customer orders, KNC shall continue to service
existing and new customer orders for the Product.
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2.3. Notwithstanding the distribution rights granted in Section 2.1,
KNC does not convey manufacturing rights to the Product to
OraPharma and OraPharma will exclusively purchase the Product
from KNC during the Term of the Agreement.
2.4. OraPharma may use Sub-distributors (each, a "Sub-distributor"),
provided that, the sub-distribution agreement must be at least as
restrictive as this Agreement with respect to the rights and
obligations of the Sub-distributors. OraPharma shall be
responsible for monitoring Sub-distributors, so that the terms of
this Agreement are met. OraPharma shall be liable to KNC in the
event that a Sub-distributor causes a material breach of any
provision of this Agreement. OraPharma shall provide prior
written notice of its intention to use a particular
Sub-distributor to KNC, and KNC shall have ten (10) business days
to make any reasonable business objection.
2.5. During the Term of this Agreement, OraPharma shall not sell
Product outside the Territory or sell Product to any person who,
to the best of OraPharma's knowledge, intends to resell or reship
them outside of the Territory. OraPharma agrees to refer to KNC
all inquiries received by OraPharma for the sale of Product or
reshipment of Product outside of the Territory.
2.6. This Agreement shall commence on the Effective Date and continue
until September 30, 2007 (the "Initial Term"). The Agreement
shall be renewed automatically for two successive five (5) year
terms (the "Extended Term"), with the pricing to be renegotiated;
provided however that new Minimum Purchase Guarantee shall be set
at the greater of (a) an average of actual purchases by OraPharma
over the last two years of the preceding term and (b) the Minimum
Purchase Guarantee during year 5 of the previous term, and shall
not change for the duration of that Extended Term. (As defined by
this Section 2.6, the Initial Term, the Extended Term and any
extensions thereon are herein collectively referred to as
"Term"). Upon completion of the fourth contract year of the
Initial Term, and at any time thereafter, either Party may give
notice of its intention to terminate the Agreement or,
alternatively, to remove Product or Products from Schedule A
("Termination Notice"). Such Termination Notice shall be written
and a minimum of two (2) years prior to the desired termination.
3. COMMERCIALIZATION AND SUPPLY
3.1. KNC agrees to:
(a) use commercially reasonable efforts to supply OraPharma with
OraPharma's projected requirements (pursuant to Subsection
3.2(i)) of Product;
(b) supply OraPharma with Product manufactured in material
compliance with FDA device applications for Epi-Guide and
Drilac and FDA Quality System Regulations, ISO 9001:1994, EN
46001:1994, and ISO 13485.
(c) supply OraPharma with fifty percent (50%) of OraPharma's
year one Minimum Purchase Guarantee of Product as set forth
on Schedule C hereof as soon as practical following the
execution of this Agreement;
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(d) provide OraPharma with [***] units of Epi-Guide(R) Product,
marked as "sample," at no cost to OraPharma, [***] to be
provided with the initial delivery of Product and the
balance delivered with the next purchase order;
(e) provide OraPharma with all current customer lists, packaging
material, package inserts, sales materials, and other
relevant information relating to the Product to enable the
transfer to OraPharma of KNC's current sales base for the
Product;
(f) following the written notification provided for in Section
2.2, promptly inform OraPharma of and refer to OraPharma any
orders for Product in the Territory it may receive from any
person or entity not affiliated with OraPharma;
(g) allow OraPharma to use, free of charge, any and all artwork
and/or marketing aids and materials developed by KNC and
associated with the Product;
(h) promptly provide OraPharma with relevant information,
including correspondence from US FDA, concerning adverse
reactions to the Product and safety information in
accordance with US FDA medical device reporting requirements
and keep accurate records of the same. KNC will be
responsible for all reporting to the FDA in compliance with
medical device reporting requirements (21 CFR Part 803);
(i) promptly notify OraPharma in writing of any changes to the
Product Specifications set forth in Schedule A; and
(j) provide a mutually acceptable link to OraPharma's website
from the website KNC maintains for each Product, at least as
prominent as links maintained to any other Product
distributor, and allow OraPharma to link its website to the
Product websites.
3.2. OraPharma agrees to:
(a) use commercially reasonable best efforts, consistent with
efforts for its internally developed products, to promote
and market the Product in the Territory;
(b) market and sell the Product in the Field only for the
indication approved on the Product labeling;
(c) be solely responsible for the cost and implementation of all
marketing, sales, promotional and related activities
concerning the marketing, sale and promotion of the Product
in the Territory;
(d) design and provide to KNC all product inserts, advertising,
promoting and marketing aids to be packaged with Product
that vary from the specifications set forth in Schedule B;
[***] Confidential treatment requested
4
(e) be solely responsible for the cost of any packaging redesign
(e.g., artwork, labeling, configurations), which varies from
the Product Drawings set forth in Schedule B. OraPharma will
provide at its expense, or reimburse KNC for, any inventory
requirements of packaging materials. If a packaging redesign
results in material and labor costs either higher or lower
from what is anticipated in Product Drawings set forth in
Schedule B, transfer prices of Product shall be adjusted
accordingly;
(f) include reference to KNC's role as the developer and
manufacturer of the Product on all packaging, marketing,
sales and instructional materials in a manner acceptable to,
or as specified by KNC, such approval not to be unreasonably
withheld;
(g) prior to use, provide copies to KNC of all marketing,
instructional and other materials which include reference to
the Product, its image, name or logo which may be developed
by OraPharma and intended to be used to market to the end
use customer for KNC's approval, which shall not be
unreasonably withheld or delayed. Such materials may
include, but are not limited to, packaging materials and
inserts, brochures, direct mailings, trade show visuals and
web content;
(h) consult and cooperate with KNC in the creation of
instructional materials to enable the customers of OraPharma
to use the Product safely and as intended;
(i) provide KNC with non-binding twelve (12) month forecasts of
OraPharma's requirements of Product. Such forecasts shall be
prepared in good faith and provided at the commencement of
the Agreement and on a quarterly basis, no less than thirty
(30) days prior to the beginning of each calendar quarter.
OraPharma shall have no liability hereunder for errors in
its forecasts. It is understood that KNC is not required to
produce Product inventory in excess of the forecasts,
therefore, OraPharma will commit to carry a reasonable level
of inventory to allow for normal fluctuations in sales
demand so as to allow KNC reasonable lead time to meet any
change in demand;
(j) maintain a fully qualified and effective sales organization,
including sufficiently adequately trained, experienced and
competent personnel to perform and discharge OraPharma's
obligations hereunder;
(k) develop and maintain an accurate and timely customer
complaint reporting system for the Product meeting the FDA
medical device reporting requirements (21 CFR Part 803). Any
reports generated by the system referred to in this
Subsection 3.2(k) should be forwarded to KNC as soon as
reasonably practical and in no event later than three (3)
business days following the notification of the event;
(l) promptly notify KNC in writing of any possible infringement
by any third party of any trademark, trade name or other
intellectual property right of KNC of which OraPharma
becomes aware, as well as any claim of infringement of any
5
intellectual property right against KNC or OraPharma as the
result of any of OraPharma's actions pursuant to this
Agreement; and
(m) at all times conduct its business in a manner as will
reflect favorably on KNC and the Product and will not engage
in any deceptive, misleading, illegal, or unethical business
practices.
4. PRICE AND PAYMENTS
4.1. Transfer prices for the Product shall be set during the Initial
Term of the Agreement as follows, wherein a unit comprises an
individual Epi-Guide:
Annual Total Units Purchased Transfer Price Per Unit($US)
---------------------------- ----------------------------
[***] [***]
Transfer prices for Drilac syringes will be [***] for a box of 12
syringes or [***] for a box of 10 cubes, regardless of purchase
quantity.
4.2. OraPharma agrees to purchase minimum annual quantities of
Epi-Guide Product (the "Minimum Purchase Guarantee") throughout
the Term of the Agreement. [***] The Minimum Purchase Guarantees
for the Initial Term are set forth on Schedule C. If OraPharma
fails to purchase the Minimum Purchase Guarantee, KNC will have
the right, at its discretion, to downgrade the Agreement to a
non-exclusive agreement or to terminate the Agreement, in either
case by thirty (30) day's written notice to OraPharma.
4.3. KNC shall use commercially reasonable efforts to supply OraPharma
with its requirements of Product and will promptly notify
OraPharma of a shortage of supply of Product. In the event that
KNC is unable to ship the Minimum Purchase Guarantee of Product
to OraPharma in any year, the Minimum Purchase Guarantee for the
year in which the shortage of supply occurs shall be waived and
OraPharma will only be responsible for payment on actual Product
shipped by KNC. KNC shall not be liable for any damages (actual,
indirect, or consequential) of OraPharma arising from a shortage
of supply of Product.
4.4. KNC shall ship Product to the location(s) designated by OraPharma
F.O.B. Exton, Pennsylvania. OraPharma shall pay the actual
documented cost of shipping Product to OraPharma facilities.
OraPharma shall be responsible for all insurance, custom charges
and taxes related to shipping and the distribution of the
Product.
4.5. KNC shall invoice (net 30 day terms) OraPharma for the aggregate
Product shipments and OraPharma shall pay each invoice within
such thirty (30) day period.
4.6. All payments due pursuant to this Agreement shall be paid by wire
transfer to a bank account specified by KNC in United States
Dollars.
[***] Confidential treatment requested
6
5. INSPECTION AND DISPUTE RESOLUTION RELATING TO SATISFACTION OF
PRODUCT SPECIFICATIONS
5.1. Inspection. Each shipment of Product shall be accompanied by a
certificate of conformance for the production batch. OraPharma,
or a designate acceptable to KNC, shall inspect and analyze each
shipment of Product delivered by KNC and any claims regarding
quantity or quality of same shall be made by OraPharma in writing
to KNC specifying in reasonable detail the nature and basis for
the claim and citing relevant control numbers or other
information to enable specific identification of Product in
question.
5.2. If a shipment is deficient in quality or quantity, KNC shall
promptly make up or replace the affected quantity of Product at
its expense, including cost of shipping and import. OraPharma
shall, at KNC's expense and direction, dispose of any defective
Product.
5.3. Resolution of Disputes Relating to Product Specifications. If the
parties hereto fail to agree as to whether a delivered quantity
of Product meets its agreed specifications, then the parties
shall cooperate to have the Product in dispute analyzed by a
qualified independent testing laboratory selected by KNC to which
OraPharma does not have reasonable objection. The following
provisions shall apply with respect to the results indicated by
such independent laboratory:
(a) If the Product is determined to have met its specifications,
then OraPharma shall bear the costs of the independent
laboratory testing and shall accept the shipment of such
Product.
(b) If the Product is determined not to meet its specifications,
then KNC promptly shall replace the affected quantity as
outlined in Section 5.2 and KNC shall bear the costs of the
independent laboratory testing.
6. REPORTING REQUIREMENTS
6.1. OraPharma shall deliver to KNC within twenty (20) days after the
end of each calendar quarter a written report showing its unit
and dollar sales for such calendar quarter for the Product. All
unit and dollar sales shall be segmented in each report according
to sales by OraPharma and each Sub-distributor, by Product, as
well as on a country-by-country basis. For purposes hereof, all
monetary units shall be in United States Dollars.
6.2. OraPharma shall keep and maintain complete and accurate records
relating to this Agreement, including records that ensure KNC's
ability to perform a complete lot history via lot tracing of
Product, and the reports required by this Article 6. Such records
shall be maintained by OraPharma for a period of five (5) years
from the date of any commercial transaction related to this
Agreement. OraPharma shall, upon reasonable prior written notice
from KNC, allow KNC to inspect such records.
7. INTELLECTUAL PROPERTY RIGHTS
7
7.1. Except as specifically set forth herein, KNC owns and shall
continue to own entire right, title and interest in and to the
Product and intellectual property relating thereto.
7.2. Product Marks:
(a) After the written consent of KNC, which shall be promptly
given and shall not be unreasonably refused, OraPharma and
its Sub-distributors shall have the right to develop and use
during the Term all trademarks or trade names developed by
OraPharma (collectively, "OraPharma Marks") in connection
with the marketing, distribution and sale of the Product and
will be the sole and exclusive owner of any such OraPharma
Marks and the goodwill pertaining thereto;
(b) OraPharma shall have a limited license to use the trademark
Epi-Guide(R), Drilac(R), and "OPLA" ("Marks") in connection
with the Product during the Term of this Agreement only to
the extent necessary to effect the terms of this Agreement.
KNC shall continue to be the sole and exclusive owner of the
Marks;
(c) Other than as set forth in Subsection 7.2(b) above,
OraPharma shall not use the Marks in any manner without
KNC's prior written consent. When using any of KNC's or
OraPharma's Marks, OraPharma shall comply with all
applicable laws and regulations relating to the use of
trademarks or trade names; and
(d) KNC and OraPharma acknowledge the exclusive right, title,
interest and goodwill in and to each trademark, trade name
or other intellectual property right owned by the other
party. Neither KNC nor OraPharma will, at any time or in any
way, do or cause to be done any act, or omission, or thing
to challenge, contest or in any way impair the right, title,
and interest of the other party. Except as otherwise
provided in this Agreement, KNC and OraPharma shall not in
any manner represent that either has any rights in or to any
trademark, trade name or other intellectual property right
of the other party and each acknowledges that the permitted
use of any trademark, trade name or other intellectual
property right of the other shall not create any ownership
right, title, or interest in or to any trademark, trade name
or other intellectual property right of the other party.
8. CONFIDENTIAL INFORMATION
8.1. The parties agree:
(a) To receive and hold all Confidential Information in strict
confidence and to disclose such Confidential Information
only to its employees and representatives who have a need to
know the Confidential Information. Without affecting the
generality of the foregoing, the Receiving Party will
exercise no less care to safeguard the Confidential
Information than it exercises in safeguarding its own
Confidential Information and will be responsible for any
breach of the provisions of Article 8 by its employees and
representatives
8
(including its employees who, subsequent to the first
disclosure of Confidential Information, become former
employees);
(b) That the Receiving Party shall not, directly or indirectly,
disclose or use the Confidential Information, in whole or in
part, for any purposes other than those contemplated herein.
Without affecting the generality of the foregoing, the
Receiving Party shall not, directly or indirectly, disclose
any such Confidential Information to any third party or use
the Confidential Information for the benefit of any third
party;
(c) That neither party shall, without the prior written consent
of the other party, disclose to any third party the fact
that the Confidential Information has been made available or
any of the terms, conditions or other facts with respect to
the business relationship of the parties. Any disclosure
made shall be no more extensive than is necessary to meet
the minimum requirement imposed on the party making such
disclosure;
(d) That money damages would not be a sufficient remedy for a
breach of this Article 8 and that the non-breaching party
shall be entitled to equitable relief (including, but not
limited to, an injunction or specific performance) in the
event of any breach of the provisions of this Article 8;
(e) The furnishing of Confidential Information hereunder shall
not constitute or be construed as a grant of any express or
implied license or other right, or a covenant not to ▇▇▇ or
forbearance form any other right of action by the Disclosing
Party to the Receiving Party under any of the Disclosing
Party's patents or other intellectual property rights;
(f) Upon the Disclosing Party's request, upon termination or
expiration of this Agreement, the Receiving Party shall
immediately return all written, graphic and other tangible
forms of the Confidential Information (and all copies
thereof) in the Receiving Party's possession or control
except for one copy which may be retained for legal archival
purposes; and
(g) The obligations of the Receiving Party regarding disclosure
and use of Confidential Information shall survive the
termination of this Agreement and shall continue for ten
(10) years after the date of termination of this Agreement.
9. PUBLICITY
9.1. During the Term and thereafter, except as required by applicable
law, neither party shall, without securing the prior written
consent of the other party, release publicly the terms of this
Agreement to any third party or publicly announce the terms of
this Agreement. During the Term and thereafter, either party may
use the name of the other party in press releases, shareholder
reports, quarterly and annual corporate reports, SEC filings and
public or private stock offerings and in connection with its
marketing activities related to the Product, provided however
that each party shall give the other five business days to review
and comment on written material related to the other party.
9
10. WARRANTIES AND REPRESENTATIONS
10.1. OraPharma warrants and represents that it will not, to the best
of its knowledge, sell, either directly or indirectly, or through
its Sub-distributors, any Product for use outside the scope of
this Agreement.
10.2. OraPharma warrants that it shall comply with all applicable laws
and governmental authorities and governmental approvals affecting
the use, possession, distribution, labeling, advertising and all
forms of promotion in connection with the sale and distribution
of the Product.
10.3. KNC warrants that it has received Section 510(k) clearance and
class III pre-market approvals from the U.S. Food and Drug
Administration to market Epi-Guide(R) bioresorbable periodontal
matrix barrier and Drilac(R) polylactic acid surgical dressing,
respectively, in the U.S. in accordance with the provisions of
the U.S. Federal Food, Drug and Cosmetic Act and has received
full regulatory approval to market and sell Epi-Guide(R) and
Drilac(R) in Canada.
10.4. KNC warrants that it shall provide OraPharma with Product which
meets the Product Specifications and is manufactured at
facilities registered with the FDA, to the extent required by
law, and in accordance with applicable government requirements
and all applicable laws, rules and regulations of each
governmental agency having jurisdiction over the manufacture and
sale of Product in accordance with the provisions of this
Agreement, and which is of reasonable commercial quality, fit for
the purpose intended.
10.5. KNC represents and warrants that it is the owner of all right,
title and interest to the Product, and that the use, sale, and/or
import of Product does not infringe any intellectual property
right, including but not limited to copyright, or patent of any
third party.
10.6. In the event of a warranty claim by an end-user of the Product,
such as a manufacturing defect or missing part, OraPharma is
hereby authorized to accept on KNC's behalf such Product returns,
whereby KNC will refund or credit to OraPharma the purchase price
for all defective Product, including the freight costs incurred
by OraPharma.
10.7. KNC and OraPharma each represent and warrant for itself that (i)
it has the full right, power, and authority to execute and
perform this Agreement and to grant the rights as provided
herein, and (ii) this Agreement does not conflict with or
otherwise result in a breach of any agreement to which such party
is a party or to which it is bound.
10.8. EXCEPT FOR THE WARRANTIES EXPRESSLY MADE IN THIS ARTICLE 10,
NEITHER PARTY MAKES ANY OTHER REPRESENTATION OR WARRANTY, EITHER
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY OR ANY WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.
10
11. GOVERNMENT APPROVALS
11.1. It will be the sole responsibility and right of OraPharma, at
OraPharma's sole cost and expense, to seek, prepare, file and
prosecute all governmental applications necessary to obtain
approvals to export, advertise, promote, market, distribute and
sell the Product in the Field in the Territory ("Government
Approvals"). KNC shall cooperate with OraPharma in the
prosecution of all Government Approvals.
11.2. Notwithstanding the provisions of Section 11.1, KNC owns U.S.
Food and Drug Administration clearance K940643, PMA P800012 and
Canadian approvals prosecuted by KNC and will maintain such
approvals at its sole expense.
12. RESERVATION OF RIGHTS BY KNC
12.1. KNC reserves all rights and products not expressly, specifically
and exclusively conveyed upon OraPharma hereunder.
13. ASSIGNMENT
13.1. Neither party may assign or transfer this Agreement, in whole or
in part, to a third party without the prior written consent of
the other party, which consent shall not be unreasonably
withheld.
13.2. This Agreement will bind and inure to the benefit of the
respective successors and permitted assigns, whether so expressed
or not.
14. INSURANCE
14.1. KNC and OraPharma shall each obtain and maintain at all times
during the Term, product liability insurance in the amount of at
least [***] and shall deliver to the other party a certificate
evidencing such insurance, which names the other party as an
additional insured.
15. TERMINATION
15.1. (a) KNC shall have the right, but not the obligation, to
terminate this Agreement upon sixty (60) days written notice by
certified mail to OraPharma under the following circumstances,
unless the circumstances are remedied or cured within said sixty
(60) day notice period:
(1) if any amounts due KNC are unpaid;
(2) if OraPharma declares bankruptcy, OraPharma makes an
assignment for the benefit of its creditors, if any
proceedings take place for reorganization or arrangement for
the appointment of a receiver or trustee to take possession
of OraPharma's assets, or any other proceeding under law for
the relief of creditors shall be instituted;
[***] Confidential treatment requested
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(3) if OraPharma fails to purchase Minimum Purchase Guarantees
as provided in Section 4.2.; or
(4) if OraPharma materially breaches its obligations under this
Agreement.
(b) OraPharma shall have the right, but not the obligation, to
terminate this Agreement upon sixty (60) days written notice by
certified mail to KNC under the following circumstances, unless
the circumstances are remedied or cured within said sixty (60)
day notice period:
(1) if KNC is unable to supply OraPharma with commercially
reasonable quantities of Product for a period in excess of
six months, if requested amounts do not exceed forecasted
quantities;
(2) if KNC declares bankruptcy, KNC makes an assignment for the
benefit of its creditors, if any proceedings take place for
reorganization or arrangement for the appointment of a
receiver or trustee to take possession of KNC's assets, or
any other proceeding under law for the relief of creditors
shall be instituted;
(3) if KNC materially breaches its obligations under this
Agreement; or
(4) if OraPharma is unable, after commercially reasonable
efforts, to obtain any Government Approval in all or part of
the Territory.
15.2. Upon termination of this Agreement for any reason, including the
end of the Term as defined in Section 2.6, nothing herein shall
be construed to release either party from any obligation which
matured prior to the Effective Date of termination including, but
not limited to, Minimum Purchase Guarantees as defined in Section
4.2.
15.3. Upon termination of this Agreement for any reason, including the
end of the Term as defined in Section 2.6, OraPharma shall
immediately and permanently discontinue all use of the Marks, as
well as any name, trademark, trade name slogan, title, label, or
anything else that would be likely to lead to confusion or make
it appear that OraPharma is the authorized distributor of the
Product. KNC shall have the option to purchase from OraPharma all
government or health authority approvals to market the Product
for an amount to be negotiated in good faith between KNC and
OraPharma.
15.4. Upon termination of this Agreement for any reason, including the
end of the Term as defined in Section 2.6, OraPharma shall notify
its customers and others that it has ceased to be a distributor.
KNC shall have the option exercisable by written notice to
OraPharma within thirty days of termination or expiration to
repurchase all OraPharma's stocks of Product on hand at the
effective date of termination or expiration which are in good and
saleable condition at OraPharma's landed cost thereof. Absent
receipt of such notice, and solely if the termination is pursuant
to Section 15.1(b), OraPharma shall be permitted to continue to
sell Product in the Territory until OraPharma's stocks of Product
are exhausted or the expiration of a period of six (6) months
following the effective date of termination, whichever is
earlier, during such corresponding time, Section 15.3 shall be
waived.
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16. INDEMNIFICATION
16.1. KNC agrees to indemnify, defend and hold OraPharma and any of its
officers, directors, affiliates, Sub-distributors, employees,
sales agents, successors and permitted assigns harmless from any
and all damages (including, without limitation, amounts paid by
OraPharma in judgement or in settlement with KNC's consent)
losses, claims, demands, liabilities, cost and expenses
(including, without limitation, reasonable court costs and
attorney's fees) incident or relating to, based upon or rising
out of any claim, demand, cause of action, suit or proceeding
resulting from KNC's manufacturing, testing, design, qualifying,
preparing for shipping, and packaging of Product or actions not
in accord with this Agreement, except for such claims which arise
out of or result from the negligence, gross negligence or willful
misconduct of OraPharma, or are otherwise subject to
indemnification under Section 16.2.
16.2. OraPharma agrees to indemnify, defend and hold KNC and any of its
officers, directors, affiliates, employees, sales agents,
successors and permitted assigns harmless from any and all
damages (including, without limitation, amounts paid by KNC in
judgement or in settlement with OraPharma's consent) losses,
claims, demands, liabilities, cost and expenses (including,
without limitation reasonably court costs and attorney's fees)
incident or relating to, based upon or arising out of any claim,
demand, cause of action, suit or proceeding resulting from
OraPharma's advertising, promoting, marketing, distributing and
selling of Product or actions not in accord with this Agreement,
except for such claims which arise out of or result from the
negligence, gross negligence or willful misconduct of KNC, or are
otherwise subject to indemnification under Section 16.1.
17. MISCELLANEOUS PROVISIONS
17.1. Independent Contractor. Neither party shall have the right, power
or authority to assume or create any obligations or
responsibility expressed or implied, on behalf of, or in the name
of, the other party, or to bind the other party in any manner or
to any extent whatsoever, without the prior written approval and
acceptance of the other party. Each of the parties hereto is an
independent contractor for the purposes of this Agreement and
nothing contained herein shall be deemed or construed to create
the relationship of agency, partnership or joint venture or any
other association except that of an independent contractor
relationship.
17.2. Amendment and Waiver. This Agreement may be amended, and any
provision of this Agreement may be waived, provided that any such
amendment or waiver will be binding on each party only if such
amendment or waiver is set forth in a writing executed by such
parties. Waiver of a breach of the Agreement shall not constitute
a waiver of any other subsequent breach of the Agreement. The
waiver of any provision of this Agreement shall not constitute a
continuing waiver of that provision or a waiver of any other
provision of this Agreement.
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17.3. Notices. All notices, demands and other communications to be
given or delivered under or by reason of the provisions of this
Agreement will be in writing and will be deemed to have been
given when personally delivered or mailed by overnight mail,
return receipt requested. Notices, demands and communications
will, unless another address is specified in writing, be sent to
the addresses set forth as follows:
If to OraPharma: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and CEO
OraPharma, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to KNC: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and CEO
▇▇▇▇▇▇ ▇▇▇▇ Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
17.4. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is
held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
17.5. Complete Agreement. This document and the documents referred to
herein contain the complete agreement between the parties and
supersede all prior understandings, agreements and
representations by or between the parties, written or oral, which
may have related to the subject matter hereof in any way.
17.6. Counterparts. This Agreement may be executed in one or more
counterparts all of which taken together will constitute one and
the same instrument.
17.7. Governing Law. The law of the Commonwealth of Pennsylvania will
govern, without regard to the conflicts of law provisions
thereof, all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement.
17.8. Headings. Section headings used in this Agreement are for
convenience only and form no part or in any way modify or define
the text of meaning or any provision of this Agreement.
17.9. Force Majeure. Neither party shall be liable or deemed in default
for failure to perform any duty or obligation that such party may
have under this Agreement where such failure has been directly or
indirectly caused by any act of God, fire, strike, inevitable
accident, war, or any other cause outside the reasonable control
of that party, and occurring without its fault or negligence. The
party whose performance has been so interrupted shall give the
other party prompt notice of the interruption and the cause
14
thereof, and shall use its best efforts to resume full
performance of this Agreement as soon as possible.
17.10. Damage Exclusions. EXCEPT AS OTHERWISE PROVIDED ELSEWHERE IN
THIS AGREEMENT, NONE OF THE PARTIES SHALL BE LIABLE TO THE OTHER
FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES
OR LOST SALES OR PROFITS IN CONNECTION WITH ANY MATTERS RELATING
IN ANY MANNER TO THIS AGREEMENT OR OTHERWISE RELATING TO THE
BUSINESS RELATIONSHIP OF THE PARTIES, EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES BY THE OTHER
PARTIES.
17.11. U.S. Export Restrictions. OraPharma acknowledges that KNC and
all related technical information, documents and materials are
subject to export controls under the U.S. Export Administration
Regulations. OraPharma will (i) comply strictly with all legal
requirements established under these controls, (ii) cooperate
fully with KNC in any official or unofficial audit or inspection
that relates to these controls, and (iii) not export, re-export,
direct or transfer, directly or indirectly, the Product to any
country or nation therefor that is embargoed by executive order,
unless OraPharma has obtained the prior written authorization of
KNC and the U.S. Commerce Department.
IN WITNESS WHEREOF, the parties have executed this Agreement through their duly
authorized representatives as of the date first written above.
ORAPHARMA, INC ▇▇▇▇▇▇ ▇▇▇▇ CORPORATION
By: _________________________________ By: ____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and CEO President & CEO
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Schedule A ("Product Specifications")
[***]
_______
[***] Confidential treatment requested
Schedule B ("Product Drawings")
[Picture appears here]
Schedule C ("Minimum Purchase Guarantee of Product")
Initial Term - Epi-Guide(R)Bioresorbable Barrier Matrix
[***]
Initial Term - Drilac(R)Polylactic Acid OPLA Surgical Dressing
[***]
_______
[***] Confidential treatment requested.
