EXHIBIT 10.37
JOINT MARKETING AGREEMENT
This is a Joint Marketing Agreement dated as of April 28, 2000 (the
"Effective Date"), between Sterile Recoveries, Inc. ("SRI"), a Florida
corporation located at 28100 U.S. Highway 19 North, Suite 201, Clearwater,
Florida 33761, and Aesculap, Inc. ("Aesculap"), a California corporation located
at 1000 Gateway Blvd., So. San Francisco, CA 94080-7028 (SRI and Aesculap are
collectively, the "parties").
BACKGROUND
SRI furnishes hospitals with a comprehensive surgical procedure-based
delivery and retrieval service called Surgical Express(TM). SRI uses Surgical
Express to deliver to its customers' operating rooms all of the products that
they need for surgical procedures. As part of this service, SRI uses its
facilities, personnel, and vehicles to deliver, retrieve, and reprocess reusable
surgical products, including gowns, drapes, towels, basins, and instruments. SRI
supplements its reusable products with disposable products that its customers
also need for surgical procedures, including disposable accessory packs that are
assembled by SRI's disposable products division and delivered to the appropriate
SRI facility for inclusion on the customers' carts.
Aesculap markets and distributes to hospitals certain equipment and
instruments for use in surgical applications, including instruments used in
laparoscopic surgical procedures.
This Agreement describes terms on which Aesculap and SRI will combine
in a pack or a cart and jointly market to hospital customers located throughout
the Primary Marketing Area (as defined below) the surgical products required for
a laparoscopic surgical procedure.
OPERATIVE TERMS
The parties agree as follows:
1. DEFINITIONS
"Advertising" has the meaning set forth in Section 3.4.
"Aesculap Marks" shall have the meaning set forth in Section 4.2
"Aesculap Products" means the equipment and instruments required to
support the Laparascopic Program agreed to by both parties. The Aesculap price
list is attached as ATTACHMENT A.
"Confidential Information" has the meaning set forth in Article 9.
"Customers" means the hospitals and surgery centers that sign Customer
Agreements and participate in the Laparascopic Program.
"Customer Agreement" means an agreement between SRI and a Customer to
provide the Laparascopic Program to the Customer.
"FDA" means the United States Food and Drug Administration.
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"Intellectual Property" has the meaning set forth in Section 5.1.
"Laparoscopic Pack " means a pack that contains the products required
for a laparoscopic surgical procedure, including instruments provided by
Aesculap and other surgical products provided by SRI.
"Laparoscopic Program", also sometimes referred to as "Lap Express
Program," means the delivery and retrieval of the Laparoscopic Packs to
Customers and reprocessing of reusable surgical products, all as further
described in Section 2.1 below.
"Primary Marketing Area" means any geographic area that is within a one
hundred fifty (150) mile radius of any SRI facility.
"Recall" has the meaning set forth in Section 7.3.
"SRI Marks" has the meaning set forth in Section 4.1.
"Surgical Express(TM) Products and Services" means those products and
services provided by or through SRI as part of its Surgical Express surgical
product delivery system, as set forth and described in ATTACHMENT B.
"Territory" means the United States.
2. THE PROGRAM
2.1 LAPAROSCOPIC PROGRAM. The parties shall use reasonable efforts to
assemble a Laparoscopic Program that includes the following components:
o Combines Aesculap instruments and Surgical Express products and
services into an integrated program that (a) offers each Customer all
of the reusable and disposable products, including instruments, that it
needs for laparoscopic surgical procedures and (b) includes
arrangements to deliver, retrieve, and reprocess gowns, instruments,
and other reusable product components. The service will include
Aesculap's repair service for damaged instruments.
o Both parties use their staff and resources to market the program to
prospective customers throughout the Primary Marketing Area. A key
customer benefit will be a single per procedure price for all of the
supplies and instruments required for a laparoscopic surgical
procedure. The parties may by mutual consent expand the program within
the Territory but outside of the Primary Marketing Area.
o Customer service and supply terms are evidenced by a single standard
supply agreement with a minimum 36-month term between SRI and the
Customer. SRI will negotiate with each Customer terms that vary from
the standard agreement. Both parties shall agree in advance on the
standard form and content of the Customer Agreement as provided in
Section 2.5. Thereafter, SRI will be authorized to enter into Customer
Agreements, so long as the standard terms and conditions of those
agreements are not materially altered.
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2.2 SRI'S OBLIGATIONS. SRI shall provide Customers with Laparoscopic
Packs in accordance with the Customer Agreement, s follows:
(a) DELIVERY AND RETRIEVAL. SRI will deliver the Laparoscopic
Packs to the Customers and retrieve the used reusable surgical products
for reprocessing and sterilization.
(b) REPROCESSING. SRI will reprocess the reusable products that
are included in the Laparoscopic Packs. SRI is responsible for
sterilization validation. Aesculap Products will be reprocessed in
accordance with the cleaning, sterilization and validation protocol
provided by Aesculap.
(c) ORDER PROCESSING. SRI will provide the staff it deems
reasonably necessary to accept orders from potential customers and
negotiate the Customer Agreements.
(D) BILLING AND COLLECTION. SRI shall provide all billing and
collection services associated with the Laparoscopic Program. SRI will
bill customers for all lost or damaged products or will pay Aesculap
for replacements if SRI decides not to bill for lost or damaged
products.
2.3 AESCULAP'S OBLIGATIONS. Aesculap shall provide its instruments to
SRI for use as part of the Laparoscopic Program. The instruments will be new, in
good condition, free of defects, and perform in accordance with their
specifications. In addition, Aesculap shall provide the following:
(a) MINIMUM INSTRUMENTS. Aesculap shall provide at least three
(3) sets of instruments per procedure based on the average daily number
of procedures, unless otherwise agreed by both parties in the Customer
Agreement, plus the Safety Stock. In addition, Aesculap shall provide
as safety stock at least twenty percent (20%) of the average daily use
of its instruments. Instruments will be provided on a timely basis
according to scheduled start-up.
(b) REPAIR SERVICE. Aesculap shall also provide an instrument
repair service that includes an arrangement to furnish SRI a supply of
replacement instruments for use in Customer trays while Aesculap
processes repairs. An Aesculap representative will inspect any Aesculap
instruments in need of repair to determine if they should be repaired
locally or sent to its San Francisco or St. Louis repair centers. At
its expense, Aesculap will provide all repairs promptly and in a
thorough, workmanlike manner. Any Aesculap Products in need of repair
at a remote facility will be retrieved from the Customer and delivered
to the facility. When requested, Aesculap shall, at its expense,
provide replacement products and components for field repairs at SRI's
facilities, to maintain inventory levels required under the Customer
Agreements.
(c) REPROCESSING PROTOCOL. Aesculap shall provide SRI with the
cleaning, sterilization, and validation protocol for the Aesculap
Products, and shall also provide, when requested, training and
technical support to SRI with respect to reprocessing of the Aesculap
Products.
(d) NON-AESCULAP PRODUCTS. To the extent customers request
instruments that are not Aesculap Products and will not accept Aesculap
products to satisfy those orders, Aesculap will arrange for delivery of
those products on the same terms and conditions provided for the
Aesculap Products in this Agreement.
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2.4 JOINT MARKETING ARRANGEMENTS. The parties shall use their best
efforts to market the Laparoscopic Program to their customers and prospects
initially in the Primary Marketing Area, as a single integrated service. Efforts
outside of the Primary Marketing Area will be with mutual consent of the
parties. The parties shall jointly develop a plan to expand their respective
sales force's efforts to effectively introduce and implement the Laparoscopic
Program for additional hospitals with which they enjoy a relationship. The
parties' officers and key managers will meet frequently and on request to
discuss the progress and results of those efforts. In the event these joint
marketing efforts meet or exceed the parties' profit goals, they will consider
other business structures, such as a joint venture, to maximize the potential
for this program.
2.5 CUSTOMER AGREEMENTS; REVENUE SHARING. The parties shall evidence
supply arrangements with the Customers with Customer Agreements. The parties
will cooperate to develop a form Customer Agreement to use in selling the
Laparoscopic Program, which will describe the products and services to be
provided, delivery and payment arrangements, and other terms and conditions.
Unless they agree otherwise, the parties will equally share revenues from sales
under this Agreement. SRI may enter into Customer Agreements without approval by
Aesculap, unless the Customer Agreement materially differs from the form
agreement.
2.6 PRICING. The parties will agree regarding the prices to be charged
to each Customer pursuant to each Customer Agreement, or set a mutually
agreeable range for those prices based on minimum expectations of number of
procedures. These prices might change from one Customer to the next, depending
on market conditions and changes in the products provided as part of the
Laparoscopic Pack. Each party shall furnish the respective products and services
that are components of the Laparoscopic Program and will accept its one-half
share of the revenues as its payment for those products and services. The
parties will not add charges of any kind without the other party's prior written
consent, including charges for packaging, labeling, taxes, storage, insurance,
boxing, crating, shipping, and delivery.
2.7 NON-EXCLUSIVITY AND PREFERENCES. Each party shall cause its sales
force to offer the Laparoscopic Program as their primary choice for instruments
and equipment of that kind in the Primary Marketing Area. Each party may offer
other programs, instruments and equipment to its customers outside of the
Laparoscopic Program, provided it first uses reasonable efforts to sell the
Laparoscopic Program to these customers.
2.8 FORCE MAJEURE. Neither party will be responsible for any delay,
failure, or omission due to any cause that is beyond its reasonable control, is
not due to its own negligence, and cannot be overcome with the exercise of due
diligence, including, without limitation, war, riots, fires, floods, storms,
lightning, epidemics, earthquakes, hostilities, labor disturbances,
expropriation or confiscation of properties, interference by civil or military
authorities, or acts of God.
2.9 REVENUE. The parties agree that the parties will share equally the
revenue from the Laproscopic Program. On the 45th day after the billing of the
Laparoscopic Program, SRI shall pay to Aesculap an amount equal to fifty percent
(50%) of the amount billed, less any sales or excise taxes that SRI bills,
collects, and pays to taxing authorities. Within five (5) days after the
expiration of each calendar quarter, Aesculap shall pay to SRI an amount equal
to fifty percent (50%) of the amount of any accounts receivable that SRI has
designated as bad debt for the prior quarter. SRI shall promptly pay to Aesculap
fifty percent (50%) of all amounts that SRI receives as payments on accounts
receivable previously classified as bad debt.
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2.10 REPORTING: Each party shall provide to the other a monthly update
of market activity, potential customers, and prospect status. In addition, SRI
will provide along with the payment described in Section 2.9 above a detailed
listing by customer of the revenue and procedure counts for the previous period.
3. MARKETING LICENSES; ADVERTISING
3.1 SRI MARKETING LICENSE. Aesculap grants to SRI a non-exclusive,
non-transferable, royalty-free, fully paid-up right and license, during the term
of the Agreement, to market, advertise and promote Aesculap Products in
connection with the marketing, sale or other distribution of the Laparoscopic
Program. During the term of this Agreement, SRI shall actively promote the
Laparoscopic Program to potential customers located in the Primary Marketing
Area and advise Aesculap of all leads, inquiries and other prospects for the
sale or other disposition of Laparoscopic Program. SRI shall not take any action
that could impair or otherwise diminish the reputation of the Aesculap Products.
3.2 AESCULAP MARKETING LICENSE. SRI grants to Aesculap a non-exclusive,
non-transferable, royalty-free, fully paid-up right and license, during the term
of the Agreement, to market, advertise and promote Surgical Express Products and
Services in connection with the marketing, sale or other distribution of the
Laparoscopic Program. During the term of this Agreement, Aesculap shall actively
promote the Laparoscopic Program to prospective customers located in the Primary
Marketing Area, and advise SRI of all leads, inquiries and other prospects for
the sale or other disposition of the Laparoscopic Program. Aesculap shall not
take any action that could impair or otherwise diminish the reputation of
Surgical Express Products and Services.
3.3 MARKETING STRATEGIES/EXPENDITURES. The parties shall mutually
determine the manner and method of marketing, promoting, and distributing the
Laparoscopic Program, including without limitation advertising and promotion
strategies and marketing expenditures. Unless otherwise agreed in writing, each
party shall pay and be solely responsible for its respective marketing
expenditures incurred in connection with the promotion of the Laparoscopic
Program, including the payment of sales bonuses and commissions associated with
the Customer Agreements and the revenue provided under them.
3.4 ADVERTISING. Each party shall (a) submit to the other all
advertising, written sales promotions, press releases and other publicity
matters relating to this Agreement or the Laparoscopic Program (collectively,
"Advertising") and (b) not publish or use such Advertising without the other
party's written consent, which consent shall not be unreasonably withheld (or
revoked, as the case may be). Once approved, Advertising may be repeated without
additional approval of the other party, unless the other party revokes its
approval upon a minimum of five (5) business days' advance written notice. The
parties shall make no warranties or representations with respect to the other
party's products or services, except as expressly approved in writing by the
other party.
3.5 PROMOTIONAL MATERIALS. Each party shall furnish to the other party,
free of charge, reasonable quantities of promotional materials pertaining to the
first party's products and services under this Agreement.
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4. TRADEMARKS
4.1 SRI TRADEMARKS. To the extent reasonably required for Aesculap to
perform its obligations under this Agreement, SRI grants to Aesculap a
nonexclusive, nontransferable, nonassignable license during the term of this
Agreement to use SRI's logos, copyrights, tradenames, servicemarks and
trademarks (the "SRI Marks"). Aesculap shall use the SRI Marks only in the form
and manner specified or approved by SRI in writing. Aesculap shall not alter,
modify, dilute, or otherwise misuse the SRI Marks, and will do nothing
inconsistent with SRI's ownership of the SRI Marks. Nothing in this Agreement
conveys to Aesculap any right, title or interest in or to any SRI Mark, other
than an express right to permissively use them solely for purposes of Aesculap's
performance of its obligations under this Agreement. Aesculap shall submit to
SRI all materials and documentation that it compiles that incorporates all or
part of the SRI Marks, including any and all Advertising, for review and
approval in accordance with the procedures set forth in Section 3.4. When
reasonably requested by SRI, Aesculap shall provide SRI with copies of materials
and documentation compiled by Aesculap that incorporate all or part of the SRI
Marks for the purpose of monitoring Aesculap's compliance with the terms of this
Agreement. Aesculap shall not use the SRI Marks in any manner that, directly or
indirectly, detracts from their value and reputation.
4.2 AESCULAP TRADEMARKS. To the extent reasonably required for SRI to
perform its obligations under this Agreement, Aesculap grants to SRI a
nonexclusive, nontransferable, nonassignable license during the term of this
Agreement to use Aesculap's logos, copyrights, tradenames, servicemarks and
trademarks ( the "Aesculap Marks"). SRI shall not alter, modify, dilute, or
otherwise misuse the Aesculap Marks, and will do nothing inconsistent with
Aesculap's ownership of the Aesculap Marks. Nothing contained in this Agreement
conveys to SRI any right, title or interest in or to any Aesculap Mark other
than an express right to permissively use them solely for purposes of SRI's
performance of its obligations under this Agreement. SRI shall submit to
Aesculap all materials and documentation that it compiles that incorporates all
or part of the Aesculap Marks, including any and all Advertising, for review and
approval in accordance with the procedures set forth in Section 3.4. When
reasonably requested by Aesculap, SRI shall provide Aesculap with copies of
materials and documentation compiled by SRI that incorporate all or part of
Aesculap Marks for the purpose of monitoring SRI's compliance with this
Agreement. SRI shall not to use Aesculap Marks in any manner that, directly or
indirectly, detracts from their value and reputation.
4.3 OWNERSHIP. The logos, copyrights, tradenames, servicemarks and
trademarks related to (i) Aesculap Products are and will remain the sole
property of Aesculap and (ii) Surgical Express Products and Services are and
will remain the sole property of SRI.
4.4 RIGHTS ON TERMINATION/EXPIRATION. On termination or expiration of
this Agreement, each party shall not further use the logos, copyrights,
tradenames, servicemarks and trademarks of the other party for any purpose, or
employ or use any logo, copyright, tradename, servicemark or trademark that
suggests an existing relationship between the parties, or that is likely to
cause confusion with the logos, copyrights, tradenames, servicemarks or
trademarks of the other party.
5. WARRANTIES AND INDEMNIFICATION.
5.1 WARRANTIES. The parties will be providing products that constitute
separate components of the Laparoscopic Program. Each party desires to clearly
identify its warranty responsibilities for its products and to indemnify the
other party for liabilities that arise from its products' use by the Customers.
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These covenants are intended solely for the benefit of the other party. Nothing
in this section expands a party's warranty or indemnity responsibility to the
Customers or any other person not a party to this Agreement.
Each party warrants and represents to the other party as of the date of
this Agreement and for the term of this Agreement, as follows:
(a) It has full authority to enter into this Agreement and
carry out its obligations under this Agreement, and further that this
Agreement is not inconsistent with and will not violate any
contractual arrangement or other legal obligation of the party.
(b) It has the legally enforceable right to use all
technology associated with its products and services, whether patented
or unpatented, and that the use of this technology does not violate
any agreement, instrument or understanding, oral or written, to which
it is a party.
(c) It is the sole and exclusive owner of its products and
services, and those products and services do not incorporate or
infringe upon any copyright, patent, trademark, service mark, trade
name, idea, process, know-how, development, invention, technology, or
any other form of intellectual property (collectively "Intellectual
Property") that it does not own or license.
(d) Its products delivered to the Customers pursuant to this
Agreement will be of good, and merchantable quality, not adulterated,
and will conform to and perform in accordance with specifications, fit
for their particular purpose, and free from all defects in material
and workmanship.
(e) Its products delivered to the Customers pursuant to this
Agreement will be manufactured in compliance with applicable local,
state and federal laws and regulations, including without limitation
those of the FDA, and have all applicable 510(k) and other approvals.
(f) Its services under this Agreement will be performed with
the standards of care, skill, and diligence normally provided by
professionals or experts in the performance of those services or
similar services and in a lawful manner and in compliance with
applicable federal, state and local laws and regulations including
without limitation those of the FDA.
(g) Its conduct will preserve, protect, enhance, and maintain
the trade, business, and goodwill of the other party and not be
inimical or in any way contrary to the best interests of the other
party.
(h) Its warranty does not apply to any nonconformity or defect
caused by (1) operation of any product in excess of its rated or
specified limits or capabilities; (2) misuse, abuse or negligent
operation; or (3) unauthorized product modification.
These warranties address current and future performance and apply for
as long as the applicable products are in use. Disclaimers of any other express
or implied warranties contained in or arising under this Agreement or otherwise
will not be deemed to be a disclaimer of this warranty.
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Each party will promptly notify the other party of any of its
violations of the foregoing warranties of which it has knowledge or which are
asserted by a Customer or a third party with respect to the Laparoscopic
Program.
5.2 INDEMNIFICATION.
(a) GENERALLY. Each party shall indemnify the other party, its
successors and permitted assigns, and any of its officers, directors,
employees, representatives, and/or agents, and hold them harmless from
all costs, loss, claims, damage, expense, liabilities, and judgments
(including premiums for bonds, fees for experts and investigators, and
all legal fees, costs, and expenses incurred before a lawsuit is filed
in regulatory or trial, appellate, bankruptcy and judgment execution
proceeding) incurred by the other party because of the indemnifying
party's breach of warranty, failure to comply with this Agreement,
willful misconduct, or negligent acts or omissions.
(b) INFRINGEMENT INDEMNIFICATION. Should any aspect of a
party's products and services become the subject of an Intellectual
Property infringement claim, action, or proceeding, the party shall, at
its expense and the other party's option, (i) obtain a license that
would permit the other party and all affected Customers to exercise
those rights granted to them under this Agreement or under Customer
Agreements, as the case may be, or (ii) modify the allegedly infringing
products to render them non-infringing. In addition, the claimed
Intellectual Property infringement will be a claim subject to
indemnification under subsection (a) above.
(c) PRODUCT LIABILITY AND OTHER DAMAGE INDEMNITY. The claims
subject to indemnity under subsection (a) will include (i) a defect or
alleged defect in the products and services provided by the
indemnifying party under a Customer Agreement, including without
limitation defects relating to manufacturing, improper testing, design,
quality of service, or any breach of warranty regarding the products
and services or any component of them, (ii) misrepresentations made by
the indemnifying party in connection with the promotion, marketing,
sale, distribution, use, safety, or efficacy of the products and
services based upon information supplied by the indemnifying party,
(iii) the content of any labeling, inserts, instruction manuals, or
Advertising supplied or compiled by the indemnifying party, or (iv) any
Recall taken with respect to an indemnifying party's products and
services.
5.3 LIABILITY LIMITATION. Each party acknowledges and agrees that the
other party shall not be responsible for any indirect, incidental, consequential
or special damages of any kind (including without limitation loss of profits or
loss of use) arising from the sale or other distribution of products and
services that the party does not originate, whether asserted in contract, tort
(including negligence and strict product liability), or otherwise. Neither party
will be responsible for loss of or damage to the other party's products
following delivery to the Customer.
6. INSURANCE
Commencing with the Effective Date and until the expiration of the most
remote statute of limitations for any claim that might arise under this
Agreement, each party shall maintain at its own expense comprehensive general
liability insurance for bodily injury, death and/or property damage (including
coverages for product liability, completed operations, contractual liability and
personal injury liability) in the amount of Two Million Dollars ($2,000,000) for
any damages resulting from its acts or omissions, or its employees or agents
under this Agreement. In addition, each party shall maintain during
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this same period Workers' Compensation insurance in the amount of One Million
Dollars ($1,000,000) or such other amount(s) that are required by law, whichever
is greater, together with automobile liability insurance with minimum coverages
of $350,000 general liability and $350,000 property damage. The parties shall
cause these policies to name the other party as an additional insured. Each
party shall furnish to the other party certificates evidencing these policies on
execution of this Agreement and arrange for the other party to receive thirty
(30) days' prior notice of any termination or cancellation of any of these
policies.
7. REGULATORY MATTERS
7.1 REGULATORY COMPLIANCE. Each party shall take all necessary action
to comply with applicable FDA and other federal, state and local requirements in
connection with the manufacture, sale, distribution and provision of its
products and its furnishing of services under this Agreement. These obligations
include without limitation compliance with the applicable sections of the
Quality System Regulation (21 C.F.R. Part 820). Each party shall possess a
Quality Assurance System that adheres to applicable laws, rules, and
regulations, including without limitation the practices and regulations of the
FDA (including without limitation the applicable sections of the current Quality
System Regulations as expressed in 21 C.F.R. Part 820 and Pre-Market
Notification Procedures of 21 C.F.R. Part 807, Subpart E).
7.2 NOTIFICATION OF DEFECTS. Each party shall promptly notify the other
party via telecopy and in writing should it become aware, through a Customer
complaint or otherwise, of any defect or condition which may render all or any
component part of the Laparoscopic Program in violation of a law or regulation.
7.3 RECALLS AND FIELD CORRECTIVE ACTIONS. In the event that any defect
in a Laparoscopic Pack or any regulatory or government action requires that all
or part of the Laparoscopic Pack be recalled, destroyed, withheld from the
market, or subjected to field corrective action (a "Recall"), the party that
originated the affected product or service shall immediately notify the other
party of the same and bear the entire responsibility of the Recall, at no cost
to the other party. The other party shall reasonably assist the originating
party in carrying out the Recall at the originating party's request, cost, and
expense.
7.4 COMPLAINTS. Each party shall forward complaints regarding the
Laparoscopic Program to the other party. The party originating pertinent product
shall conduct a complete and documented investigation and shall fully resolve
such complaints in accordance with the requirements for complaint handling as
promulgated by the FDA in the then current published Quality System Requirements
(21 C.F.R. Part 820) or any other applicable law, rule, or regulation. Each
party will make reasonable efforts to assure that its complaint investigations
are performed and completed promptly within ninety (90) days from its receipt of
the complaint, and to the extent that a party will not complete its
investigation within that time period, the party shall furnish a written
explanation of the delay to the other party. If as a result of an investigation
a change in a Laparoscopic Pack is necessary, the responsible party shall
perform, document, and validate the change and provide the information to the
other party at no charge. Each party shall notify the other party immediately of
any claims that it receives of defects in its products or services that
constitute part of the Laparoscopic Pack. If party is presented with a possible
Medical Device Report ("MDR") event involving the provision of or failure to
provide a component of a Laparoscopic Pack, the party originating the applicable
product shall bear the responsibility for evaluation and, if necessary,
submission of all information required under the applicable MDR Regulation, as
set forth in 21 C.F.R. Part 803. Prior any such submission, the responsible
party shall provide the other party
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with a complete copy of the MDR and any other information to be submitted by
responsible party to the FDA, for the other party's review and approval.
7.5 AUDITS. Each party will have the right (at its own expense) to
perform a commercially reasonable audit of the other party's compliance with
applicable FDA rules and regulations (including without limitation the
applicable sections of the then-current published Quality System Requirements
(21 C.F.R. Part 820) and MDR Regulations (21 C.F.R. Part 803)) and any other
applicable laws, rules, and/or regulations with respect to a Laparoscopic Pack
and associated services during normal business hours, with reasonable prior
notice to the applicable party and subject to Article 9 (Confidentiality). At a
minimum, (i) the party's facility being audited must be operational during the
audit, (ii) the auditing party must receive access to the batch history records
of audited party's products and services used in the Laparoscopic Program, and
(iii) the auditing party must be permitted to conduct audits of the other party
which comply with the applicable sections of the then-current published Quality
System Requirements (21 C.F.R. Part 820) and any other applicable laws, rules,
and regulations. The parties shall cooperate with each other to arrange such
visits at mutually convenient times. In addition, a party's personnel may
periodically travel to the other party's facilities to observe testing and
validation activities, receive information with respect thereto (subject to
Article 9 --Confidentiality), and ensure that products and services are being
tested in accordance with established practices.
8. TERM AND TERMINATION.
8.1 TERM. This Agreement will be for an initial term of three (3) years
or until earlier terminated by a party in accordance with this section, provided
that all rights and obligations accrued by the expiration or termination date
will survive the expiration or termination of this Agreement. The term shall
renew for successive three (3) year terms thereafter unless either party
provides notice of non-renewal at least one hundred twenty (120) days prior to
the expiration of the then current term.
8.2 TERMINATION. This Agreement may be terminated by either party
immediately on notice if:
(a) A party fails to make payments when due to the terminating
party within 10 days after written notice or neglects or fails to
perform or observe any of its other material obligations under this
Agreement, unless the condition is remedied within 30 days after
written notice has been given to the party.
(b) The other party breaches in a material respect a warranty or
representation under this Agreement.
(c) The other party makes an assignment for the benefit of
creditors or a petition under the Bankruptcy Code is filed by or
against the other party (if an involuntary petition, the petition is
not dismissed within 60 days after it is filed) or a receiver is
appointed for the business of the other party.
(d) The other party ceases doing business as a going concern or
attempts to transfer or assign this Agreement in a manner that is not
permitted.
(e) The other party or its officer commits any acts that are
dishonest or fraudulent with respect to the parties' relationship under
this Agreement or that materially adversely affects
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the ability to perform of the terminating party. The terminating party
shall give 30 days' advance notice of any condition that materially
adversely affects the other party's ability to perform.
8.3 EFFECT OF TERMINATION. Upon termination or expiration, no party
shall have any further responsibilities or obligations to the other party,
except for obligations under sections 5 and 9 of this Agreement, and payments
owed to the other party for products or services furnished to the other party
during the term of this Agreement . If either party elects not to renew this
Agreement at the end of its term, SRI shall continue paying to Aesculap its
share of revenues realized from active Customer Agreements for the balance of
their respective terms and Aesculap will continue to meet its obligations under
this Agreement for such active customers for the balance of the term of the
Customer Agreement. If termination is as a result of a breach of Section 8.2
above, all further obligations to the affected party under this Agreement will
terminate.
9. CONFIDENTIALITY.
During the term of this Agreement, the parties might furnish or make
available to the other party proprietary or confidential information pertaining
to their products, services, customers, technology, and business operations that
is designated by name, trademark, or other appropriate text to be proprietary or
confidential in nature ("Restricted Information"). All Restricted Information
furnished or made available to the other party during the term of this
agreement, however and whenever acquired, will remain the property of the party
furnishing the information. Each party shall treat this information as strictly
confidential, shall use it solely for the purposes contemplated by this
agreement, and shall not reveal, divulge, disclose, or duplicate any Restricted
Information without the other party's written consent, except for the party's
employees who need to know the information for purposes of carrying out the
purposes of this agreement. However, the party receiving the Restricted
Information shall direct its employees who have access to the Restricted
Information to treat it as strictly confidential, and shall indemnify the other
party and hold it harmless from, any damage resulting from a breach of
confidentiality caused by any of its employees. Each party shall return to the
other party at the expiration of this Agreement all Restricted Information that
it received from the other party. Each party's specifications for its products
and services are its exclusive property.
10. MISCELLANEOUS.
10.1 RELATIONSHIP OF THE PARTIES. Neither party to this Agreement is
an agent, partner, or legal representative of the other for any purpose, and
neither party is authorized to assume or create, in writing or otherwise, an
obligation of any kind in the name or on behalf of the other party. This
agreement is not to be construed to create a financial interest in the other
party's business or to constitute a partnership or joint venture between the
parties. This Agreement is for the benefit of its parties only, and no third
party is a beneficiary of it.
10.2 EXECUTION. The parties may execute this agreement in counterparts.
Each executed counterpart to this agreement will constitute an original
document, and all executed counterparts, together, will constitute the same
agreement.
10.3 LEGAL. The validity, interpretation, construction and enforcement
of this Agreement are governed by the laws of the State of Florida, excluding
the laws of that State pertaining to the resolution of conflicts with laws of
other jurisdictions.
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10.4 ARBITRATION. If any dispute between the parties arises under this
Agreement, the parties shall use reasonable efforts to settle the dispute for at
least 30 days. After that period, the dispute may be submitted for arbitration,
and the arbitration will be conducted before an arbitration panel in accordance
with the Florida Arbitration Code. The arbitrator panel will consist of three
arbitrators, with one arbitrator selected by SRI, the second arbitrator selected
by Aesculap, and the third arbitrator selected by agreement of the first two
arbitrators. Every arbitrator must be independent (not an officer, director,
employee, affiliate, or shareholder of party) without any economic or financial
interest of any kind in the outcome of the arbitration or in Aesculap, SRI, or
any of their affiliates. The arbitration hearing will be held on such dates and
at such times and place in Clearwater, Florida as the arbitration panel
designates on 30 calendar days' advance notice to the parties. The decision of
the arbitration panel will be binding and conclusive as to Aesculap and SRI, and
on the pleading of any party, any court having jurisdiction may enter a judgment
of any award rendered in arbitration, which may include an award of damages.
10.5 NOTICES. Except for oral requests and notices expressly authorized
by this agreement, every notice, request, demand, consent, approval, and other
communication required or permitted under this agreement will be valid only if
it is given in writing (or sent by telecopy and promptly confirmed in writing),
conspicuously marked "FOR IMMEDIATE ATTENTION," and addressed by the sender to
the appropriate party at the address provided in the first paragraph of this
Agreement and to the person's attention set forth below:
(a) If to Aesculap:
Aesculap, Inc.
1000 Gateway Blvd.
South San Francisco, CA 94080
ATTENTION: T. Robert Perrett
(b) If to SRI:
Sterile Recoveries, Inc.
28100 U.S. Highway North
Suite 201
Clearwater, Florida 33761
ATTENTION: James T. Boosales
or to such other address as a party designates by notice to the other party. A
validly given notice, request, demand, consent, approval, or other communication
will be effective on its receipt.
10. 6 ASSIGNMENT; SUBCONTRACTING. This Agreement is not assignable by
either party without the other party's consent, which it may withhold at its
sole discretion, and any unapproved assignment will be invalid and ineffective
against the other party, except that, if a party sells, merges, or exchanges all
or substantially all of its assets or outstanding stock, the party may assign
this Agreement without the other party's written consent, so long as (a) the
acquiring entity executes an agreement agreeing to be bound by the same, (b) the
acquiring entity is not a competitor of the other party, and (c) the other party
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reasonably and in good faith believes the acquiring entity will perform all of
the predecessor's material obligations under this Agreement with similar
diligence, responsibility, and capability. Neither party may subcontract any of
its responsibilities under this Agreement to another person without the other
party's prior approval.
10.7 MISCELLANEOUS. Time is of the essence in this Agreement. This
Agreement is binding on and inures to the benefit of, the respective assignees
and the successors of each party, and all references to a party in this
Agreement includes its permitted assignees or successors. A delay, omission or
course of dealing on the part of a party in exercising any right, power or
remedy under this Agreement will not operate as a waiver of it and a single or
partial exercise of any right, waiver or remedy under this Agreement does not
preclude any further exercise of it or the exercise of any other right, power or
remedy. A waiver, amendment, or modification of this Agreement would be valid
and effective only if it is in writing and signed by both parties. This
Agreement and the Schedules record the final, complete and exclusive
understanding of the parties to it with respect to the transactions contemplated
by this Agreement (except for implied warranties arising under Florida's Uniform
Commercial Code) and supersede any prior or contemporaneous agreement,
understanding or representation, oral or written, by either of them. This
Agreement will be effective as of April 28, 2000, when executed by the parties.
STERILE RECOVERIES, INC.
By: /s/ MICHAEL LUFKIN
---------------------------
Name: MICHAEL LIFKIN
Title: VICE PRESIDENT SALES
AESCULAP, INC.
By: /s/ DIRK KUYPER
---------------------------
Name: DIRK KUYPER
Title: EXECUTIVE VICE PRESIDENT
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