SUPPLY AND DISTRIBUTION RIGHTS AGREEMENT

EXHIBIT 10.1

 

Confidential Treatment requested.

Confidential portions of this

document have been redacted

and have been separately filed

with the Commission

 

SUPPLY AND DISTRIBUTION RIGHTS AGREEMENT

 

THIS SUPPLY AND DISTRIBUTION RIGHTS AGREEMENT is entered into the              (17) day of October, 2005;

 

 

WHEREAS Bioniche, directly or through its Affiliates (as hereinafter defined), researches, develops, manufactures and markets biological and pharmaceutical products and devices for human use;

 

WHEREAS Bioniche or its Affiliates has developed a certain pharmaceutical product for use in the treatment of varicose veins (the “Product”, as hereinafter defined and as more particularly described in Schedule “A” hereto);

 

WHEREAS Bioniche owns one hundred percent (100 %) of Bioniche Pharma (USA) Inc., a corporation incorporated under the laws of Delaware, which holds an approved ANDA for the Product (each, as hereinafter defined) and one hundred percent (100%) of Bioniche Pharma (Canada) Limited, a corporation incorporated under the laws of Canada, which holds a license from Cumberland Pharmaceuticals, Inc. for the Trade Mark (as hereinafter defined);

 

WHEREAS AngioDynamics is a distributor of healthcare products to physicians in the North American market and has expertise in marketing and distributing products for use in the Field in the Territory (each, as hereinafter defined);

 

WHEREAS Bioniche wishes to grant to AngioDynamics (and AngioDynamics wishes to accept): (i) the exclusive right to distribute, sell, and offer for sale the Product in the Field in the Territory; (ii) the exclusive right to use the Trade Mark (as hereinafter defined) in the Territory and in the Field; and (iii) the co-exclusive right (together with Bioniche) to market and promote the Product in the Field in the Territory;

AND WHEREAS Bioniche is willing to supply AngioDynamics with the Product for distribution in the Territory on an exclusive basis for use in the Field and AngioDynamics wishes to receive the Product on such basis, the whole in accordance with the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, THIS AGREEMENT WITNESSETH THAT, IN CONSIDERATION OF THE MUTUAL COVENANTS SET FORTH HEREIN, THE PARTIES HEREBY AGREE AS FOLLOWS:

 

ARTICLE I

DEFINITIONS; GENERAL PROVISIONS

 

1.1 Definitions . For the purposes of this Agreement or any notice, consent, authorization, direction or other communication required or permitted to be given hereunder, the singular shall include the plural and vice versa and the following expressions shall have the following meanings, respectively, unless the context otherwise requires:

 

a)

“ Affiliate ” shall mean any Person which is directly or indirectly controlled by, or controls or is under common control with another Person, provided that “control” shall mean ownership as to more than fifty percent (50%) of another Person or the power to direct decisions of another Person, including, without limitation, the power to direct management and policies of another Person, whether by reason of ownership, by contract or otherwise, and shall specifically include, but shall not be limited to, Bioniche Pharma (USA) Inc., the holder of the ANDA approval for the Product (as those terms are hereinafter defined) and Bioniche Pharma (Canada) Limited, which holds a license from Cumberland Pharmaceuticals, Inc. for the Trade Mark (as hereinafter defined);

 

b)

“ Agreement ” shall mean this Supply and Distribution Rights Agreement and all instruments supplemental hereto or in amendment or confirmation hereof; “ herein ”, “ hereof ”, “ hereto ”, “ hereunder ” and similar expressions mean and refer to this Agreement and not to any particular Article, Section, Subsection or other subdivision; and “ Article ”, “ Section ”, “ Subsection ” or other subdivision of this Agreement means and refers to the specified Article, Section, Subsection or other subdivision of this Agreement;

 

c)

“ ANDA ” shall mean an abbreviated new drug application filed with the FDA with respect to the Product or, with respect to jurisdictions outside the Territory, the equivalent Governmental Body filing with respect to the Product;

 

d)

“ Business Day ” shall mean any day, other than a Saturday, Sunday or other day on which the principal commercial banks located in Toronto, Ontario, Canada or New York, New York, USA, are not open for business during normal banking hours;

 

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e)

“ Calendar Quarter ” shall mean each three-month period commencing January 1, April 1, July 1 and October 1 of each year during the Term of this Agreement;

 

f)

“ Competent Authority ” shall mean each and every Governmental Body which regulates or from which approvals are required for the marketing, distribution and/or sale of the Product within the Territory or in other jurisdictions, as applicable;

 

g)

“ Competing Product ” shall mean any sclerosing agent approved by the FDA for use in the treatment of varicose veins or other vascular indications in the Territory, other than the Product;

 

h)

“ Contract Year ” shall mean the year long period commencing July 1 and ending the following June 30 and each subsequent twelve (12) month period thereafter. However, the initial Contract Year under this Agreement shall not commence until the date of the First Commercial Sale of the Product, but in any event shall end on June 30 following the Effective Date of this Agreement. Both Bioniche and AngioDynamics understand and acknowledge that this Agreement shall commence on the Effective Date;

 

i)

“ Device ” shall have the meaning ascribed thereto in Section 321 of the United States Food, Drug and Cosmetic Act, 21 U.S.C. §321, including any subsequent amendments thereto, as well as any alternative definition as set forth by the FDA from time to time; provided that, for the purposes hereof, a “ Device ” shall not include any Device that AngioDynamics combines with or packages with a Competing Product;

 

j)

“ Dollar ” and the symbol “ $ ” shall mean lawful money of the USA;

 

k)

“ Effective Date ” shall mean the date first mentioned above;

 

l)

“ FDA ” shall mean the United States Food and Drug Administration or any successor agency thereto performing the same functions in the Territory;

 

m)

“ Field ” shall mean the distribution and sale of the Product to the following Persons whose professional practice involves the treatment of vascular disorders or conditions: (i) General Surgeons; (ii) Vascular Surgeons; (iii) General/Vascular Surgeons; (iv) Interventional Radiologists; (v) Cardiovascular Surgeons; (vi) Cardiothoracic Surgeons; and (vii) Cardiologists; in each case, for use in the treatment of varicose veins or other vascular indications, as approved from time to time by the FDA. For greater certainty, the “ Field ” shall not include distribution and sale of the Product: (a) to Group Purchasing Organizations; or (b) for use by Dermatologists, Dermatologic Surgeons, Cosmetic Dermatologists, Cosmetic Surgeons, Plastic Surgeons, or any other specialty not mentioned under items (i) to (vii) above that might practice sclerotherapy and/or deal with treatment of spider veins/reticular veins/varicose veins;

 

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n)

“ First Commercial Sale ” shall mean the first sale of Product by AngioDynamics to any third Person customer in the Field in the Territory;

 

o)

“ GMP ” or “ cGMP ” shall mean current Good Manufacturing Practices as specified by any applicable Competent Authority or as required under FDA rules and regulations, as amended from time to time;

 

p)

“ Government Approvals ” shall mean the approvals required from any Governmental Body for the marketing, distribution and/or sale of the Product in the Field within the Territory;

 

q)

“ Governmental Body ” shall mean (i) any domestic or foreign national, federal, provincial, state, municipal or other government or body, (ii) any international or multilateral body, (iii) any subdivision, ministry, department, secretariat, bureau, agency, commission, board, instrumentality or authority of any of the foregoing governments or bodies, (iv) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing governments or bodies, or (v) any domestic, foreign, international, multilateral, or multinational judicial, quasi-judicial, arbitration or administrative court, grand jury, tribunal, commission, board or panel;

 

r)

“ Improvements ” shall mean any modification to the chemical composition of the Product made by Bioniche and/or AngioDynamics or by any of their Affiliates during the term of this Agreement;

 

s)

“ Intellectual Property ” shall mean, whether or not reduced to writing, all inventions, all rights to inventions, patents, patent applications and issued patents, designs, design applications and design registrations, trade marks, trade mark applications, trade mark registrations, trade names, trade dress, servicemarks, logos (whether registered or unregistered), copyright, copyright applications and registrations, processes, licenses, Know-How, technology, data, chemical structures, formulae, customer lists, discoveries, trade secrets, proprietary information and all other rights and intellectual property now or hereafter owned, held or used by Bioniche or by AngioDynamics or by any of their respective Affiliates;

 

t)

“ Know - How ” shall mean all information, data, knowledge, discoveries and trade secrets, whether or not reduced to writing, pertinent to the Product, or to the manufacture, use or sale of the Product, now or hereafter owned by, in the possession of, known to or controlled by Bioniche or its Affiliates, including any Improvements to any of the foregoing;

 

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u)

“ Laws ” shall mean:

 

(i)

all constitutions, treaties, laws, statutes, codes, ordinances, orders, decrees, rules, regulations, and municipal by-laws, whether domestic, foreign or international, including any such constitutions, etc. of any Governmental Body;

 

(ii)

all judgments, orders, writs, injunctions, decisions, rulings, decrees and awards of any Governmental Body; and

 

(iii)

all policies, practices and guidelines of any Governmental Body; in each case binding on or affecting the Party or Person referred to in the context in which such word is used;

 

and “ Law ” shall mean any one of the foregoing;

 

v)

“ Marketing Plan ” shall mean AngioDynamics’ marketing plan for Product in the Territory in the Field, which AngioDynamics will share with Bioniche and regarding which the Parties will have quarterly conference calls upon Bioniche’s request and, if necessary, other meetings as the Parties may designate from time to time;

 

w)

“ Parties ” shall mean the parties hereto collectively; and “ Party ” shall mean any one of them;

 

x)

“ Person ” shall mean an individual, corporation, company, co-operative, partnership, organization or any similar entity;

 

y)

“ Prime Rate ” shall mean the annual rate of interest published from time to time by the Wall Street Journal as a reference rate then in effect for determining interest rates on Dollar ($) commercial loans made by major commercial banks in the Territory;

 

z)

“ Product ” shall mean the pharmaceutical product Sodium Tetradecyl Sulfate, in concentrations of 1%, 3% and any concentration subsequently approved by the FDA, manufactured by Bioniche and/or its Affiliates, together with packaging, labeling and such accessories, or in such other final form for patient use as shall have been approved by the Competent Authorities, and any Improvements thereto (including, for greater certainty, Sodium Tetradecyl Sulfate 1%, 3% and any concentration subsequently approved by the FDA sold by Bioniche and/or its Affiliates under any other trade name in the Territory). The Product as of the Effective Date is more particularly described in Schedule “A” hereto;

 

aa)

“ Second Entry Product ” shall mean any pharmaceutical product containing Sodium Tetradecyl Sulfate or Polidocanol as the active ingredient, other than the Product, which is approved by the FDA for use in the treatment of varicose veins or other vascular indications in the Territory;

 

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bb)

“ Specifications ” shall mean the specifications for the Product, as more fully described in Schedule “B” hereto, as stated in the official labeling for the Product, as sold in the Territory for use in the Field;

 

cc)

“ Term ” shall mean the term of this Agreement as defined in Section 9.1;

 

dd)

“ Territory ” shall mean the USA (as hereinafter defined), together with any areas added from time to time as may be agreed upon in writing by the Parties;

 

ee)

“ Trade Mark ” shall mean the common law and statutory rights in the trade mark Sotradecol in the Territory, including in the application, held by Bioniche or its Affiliates, as more fully described in Schedule “C” hereto, together with all registrations arising from such application from time to time; and

 

ff)

“ USA ” shall mean the United States of America and each of its territories and possessions, including but not limited to the Commonwealth of Puerto Rico.

 

1.2 Dispute Resolution; Arbitration .

 

a)

The Parties agree that in the event of any dispute, breach, controversy or claim between them arising from, concerning, or in any way relating to this Agreement, the Parties shall immediately undertake good faith efforts to amicably resolve such dispute between them. In the event such dispute cannot be so resolved following such prompt good faith discussions between the Parties, the dispute shall be referred to the Chief Executive Officer of each Party for prompt resolution. Any such dispute, claim, breach or controversy which cannot be resolved by the Chief Executive Officers of the Parties within thirty (30) days after it has been so referred to them hereunder can then be resolved through binding arbitration at the request of either Party. The use of arbitration to resolve all such unresolved disputes, claims, breaches or controversies under this Agreement shall be binding and mandatory upon the Parties for all purposes, except as specifically provided for below in this Section 1.2. This agreement to arbitrate all such unresolved disputes shall survive the termination, expiration or rescission of this Agreement. The arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association and shall be undertaken pursuant to the U.S. Federal Arbitration Act. The arbitration shall be held in Toronto, Canada, if initiated by AngioDynamics and in New York, New York, USA, if initiated by Bioniche; or such other place as the Parties may agree in writing. The language of the arbitration shall be English. The arbitration shall be conducted before a single arbitrator to be jointly designated by the Parties. If the Parties cannot mutually agree upon an arbitrator within twenty (20) Business Days after either Party has notified the other Party hereunder that it desires to arbitrate any such unresolved dispute then, and in such event, each Party shall designate, on that date, one arbitrator from the list of arbitrators maintained by the American Arbitration Association and the two arbitrators so chosen shall mutually designate a third arbitrator, or if they have been unable to do so within ten (10) Business Days after they have been so designated, application can be made by either said arbitrator to the American Arbitration Association for it to designate the third

 

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arbitrator for this arbitration as soon as possible. Each Party shall pay all costs and expenses of the arbitrator designated by that Party hereunder and shall share 50/50 all costs and expenses of any arbitrator jointly designated by them to include any third arbitrator so chosen by their arbitrators, or by the American Arbitration Association. Each Party shall be entitled to be represented by counsel of its own choosing and to be represented by that counsel in all matters before the arbitrators with each Party being solely responsible to pay all of the costs, fees and expenses of its said counsel. The decision of the arbitrator (or a majority of the arbitrators if 3 have been appointed) shall be final and binding on all Parties and shall be enforceable in a court of competent jurisdiction; provided that the arbitrator(s) shall have no authority to grant any license to either Party to the other Party’s Intellectual Property. For purposes of any such arbitration proceeding hereunder, this Agreement shall be deemed to be governed by and construed in accordance with the laws of the State of New York (without reference to the applicable choice of law rules). The relationship created by this Agreement could give rise to the need by one or both of the Parties for emergency judicial relief. Either Party shall be entitled to pursue any available remedies for emergency or preliminary injunctive relief in any court of competent jurisdiction, but immediately following the issuance of any such emergency or injunctive relief the Party obtaining such relief will consent to the stay of such judicial proceedings on the merits of both this Agreement and any related transactions pending arbitration of all of the underlying claims between the Parties in accordance with this Section 1.2.

 

b)

Bioniche agrees and consents to the jurisdiction over it in the federal and state courts in the State of New York in relation to any enforcement action brought after an arbitration pursuant to Section 1.2 (a) and any action filed for emergency or preliminary injunctive relief pursuant to Section 1.2 (a). Bioniche further agrees to accept service of process by mail or commercial carrier sent to its last known address.

 

1.3 Entire Agreement . This Agreement, together with the Schedules hereto, constitutes the entire agreement between the Parties and replaces and supersedes any prior agreement or understanding pertaining to the subject matter hereof; provided that, for greater certainty, the Confidentiality Agreement between AngioDynamics and Bioniche Pharma (Canada) Limited (an Affiliate of Bioniche) dated June 22, 2005 shall continue to govern disclosures of information between the parties thereto prior to the date hereof. No amendment of this Agreement shall be binding unless executed in writing by both Parties. Any provisions on AngioDynamics’ purchase orders that are inconsistent with or supplement any of the terms or conditions of this Agreement shall be of no force or effect unless expressly agreed to in writing by Bioniche.

 

1.4 Schedules . The following are the Schedules annexed to and incorporated in this Agreement by reference and deemed to be a part hereof:

 

 

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ARTICLE II

EXCLUSIVE RIGHTS

 

2.1 Exclusive Distributorship Rights .

 

a)

Upon and subject to the terms and conditions hereof, Bioniche and its Affiliates hereby appoint AngioDynamics, and AngioDynamics hereby accepts its appointment, as the exclusive distributor of the Product in the Field in the Territory.

 

b)

AngioDynamics will also have the right of first negotiation to become the exclusive distributor of any additional products developed by Bioniche or its Affiliates for use in the Territory and in the Field for which Bioniche or its Affiliates has the right to sell, license, transfer or otherwise assign distribution rights (the “ First Negotiation Products ”). Accordingly, during the Term of this Agreement, Bioniche or its Affiliates shall not sell, license, transfer or otherwise assign its distribution rights in the Territory in the Field to any First Negotiation Products to any third Person, without first offering such rights to AngioDynamics in accordance with the provisions of this Section 2.1(b). At any time following the sending of a notice from Bioniche to AngioDynamics under this Section 2.1(b) with respect to the potential distribution of a First Negotiation Product in the Territory in the Field, the Parties shall have sixty (60) days (the “Negotiating Period” , which can be extended for one further period of thirty (30) days, as provided below) to negotiate the substantive terms of an agreement governing the First Negotiation Product. As long as the Parties are reasonably progressing in their negotiations as to any First Negotiation Product hereunder, either Party may, in its sole and absolute discretion, elect to extend the Negotiating Period for an additional period of thirty (30) days. The Parties hereby agree to negotiate diligently and in good faith during each Negotiating Period with regard to each First Negotiation Product that is the subject of a notice under this Section 2.1(b). If after the termination of the Negotiating Period, the Parties have not been able to agree as to the terms of their arrangement regarding that First Negotiation Product, Bioniche shall be free to sell, license, transfer or otherwise assign its rights in that First Negotiation Product to a third Person free of any further rights, claims or entitlements of AngioDynamics under this Agreement, on terms and conditions that are no less favourable to Bioniche, in the aggregate, than those offered by AngioDynamics during the Negotiating Period.

 

2.2 Retained Rights . Nothing herein shall be deemed to restrict or otherwise impair or impede the right and/or ability of Bioniche and/or its Affiliates to: (i) directly or indirectly market, sell, distribute, package, label, appoint additional Persons as distributors, subcontract any

 

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such rights to or otherwise enter into any arrangement whatsoever with any Person with respect to the Product or any First Negotiation Product anywhere else in the world other than the Territory, or in the Territory outside the Field; or (ii) after the termination of an unsuccessful Negotiating Period directly market, distribute, sell, package and label any First Negotiation Product for use in the Field in the Territory; as the case may be.

 

2.3 Competing Products .

 

a)

During the Term, AngioDynamics and its Affiliates shall not, directly or indirectly, jointly or in conjunction with any other Person, whether as principal, agent, shareholder, employee, independent contractor, or in any other manner whatsoever, distribute, market or sell in the Field in the Territory, any product (other than the Product) that: (i) is a Competing Product; and (ii) is used in the Field.

 

b)

Notwithstanding the provisions of Section 2.3 (a), it is expressly understood and agreed to that AngioDynamics shall not be prohibited from: (i) distributing a First Negotiation Product for which the Parties have successfully negotiated distribution rights under Section 2.1 (b); or (ii) developing, manufacturing, selling, or distributing any Device, in the Field in the Territory, or elsewhere, whether within or without the Territory and/or Field, for the treatment of any medical condition including, but not limited to, the treatment of vascular conditions.

 

2.4 Sales within the Territory .

 

a)

AngioDynamics shall not knowingly, and shall cause its Affiliates not to knowingly, directly or indirectly, without the prior written consent of Bioniche:

 

i) supply Product: (1) outside the Territory; or (2) inside the Territory, outside the Field; or

 

ii) supply Product to any Person within the Territory for resale or use: (1) outside the Territory; or (2) outside the Field.

 

b)

Bioniche shall not knowingly, and shall cause its Affiliates not to knowingly, directly or indirectly, without the prior written consent of AngioDynamics:

 

i) supply Product inside the Territory and inside the Field to any Person other than AngioDynamics; or

 

ii) supply Product to any Person outside the Territory for resale or use within the Territory and within the Field by any Person other than AngioDynamics.

 

2.5 Referrals . AngioDynamics shall refer to Bioniche all orders or inquiries received by it in connection with the sales and distribution of Product outside the Territory, or inside the Territory but outside the Field, and Bioniche shall refer to AngioDynamics all orders or inquiries received by it in connection with the sale and distribution of Product inside the Territory, in the Field.

 

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2.6 Subcontracting . AngioDynamics shall not subcontract to, or otherwise make any provision or arrangement with any Person (excluding any Affiliate; provided that AngioDynamics shall warranty and remain responsible for the performance by its Affiliate of its obligations hereunder) for the distribution and sale of Product, without the prior written consent of Bioniche, which consent shall not be unreasonably withheld, conditioned or delayed. Bioniche shall not subcontract to, or otherwise make any provision or arrangement with any person (excluding an Affiliate; provided that Bioniche shall warranty and remain responsible for the performance by its Affiliate of its obligations hereunder) for the manufacture of Product, without the prior written consent of AngioDynamics, which consent shall not be unreasonably withheld, conditioned, or delayed.

 

2.7 Packaging . AngioDynamics shall not alter, remove or conceal Bioniche’s name, logo or drug registration number, nor the Trade Mark or any of Bioniche’s other trademarks, trade names, trade-dress, service marks or other Intellectual Property, nor any notices in relation to the foregoing which appear on any of its proprietary Products, or on its packaging with regard thereto. Product labels shall indicate that the Product is manufactured by Bioniche or a third Person manufacturer designated by Bioniche (as approved by AngioDynamics pursuant to Section 2.6 hereof, as applicable), if any. AngioDynamics may amend Product packaging and/or labels to include AngioDynamics’ name and/or logo as Product distributor with the prior written consent of Bioniche, such consent not to be unduly withheld, conditioned or delayed. Bioniche shall be deemed to have consented ten (10) Business Days after receipt of the proposed amendment, unless Bioniche shall have objected thereto within said ten (10) Business Day delay. Notwithstanding the foregoing, Bioniche’s consent shall not be required for AngioDynamics to make any changes to the Product packaging which is required by FDA regulations or any other applicable Laws.

 

2.8 Training . In the First Contract Year, Bioniche agrees to provide to AngioDynamics up to twenty four (24) hours of training for a reasonable number of AngioDynamics’ marketing and sales representatives in three (3) training sessions at reasonable locations of AngioDynamics’ choice in the Territory. The dates and locations of such training sessions shall be agreed to in advance between the Parties.

 

2.9 Additional Responsibilities . In addition to the other terms of this Agreement, AngioDynamics shall provide order entry, Product tracking, transportation of Product to customers, customer service support, and billing/collection functions. AngioDynamics shall keep Bioniche advised of general market conditions and economic developments that may affect the sale of the Product in the Territory.

 

ARTICLE III

PRODUCT PROMOTION; INTELLECTUAL PROPERTY

 

3.1 Product Promotion . AngioDynamics and Bioniche will have the co-exclusive right to promote the Product in the Field in the Territory and, without limiting its obligations under

 

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Section 6.2 hereof, AngioDynamics shall use commercially reasonable efforts to promote and market the Product in the Territory for use in the Field. AngioDynamics and Bioniche shall each bear all of their own expenses in connection with marketing and promotion hereunder. The Parties acknowledge and agree that the FDA must grant its approval to all packaging and labeling of the Product prior to the marketing thereof in the Territory.

 

3.2 Trade Mark . The Parties hereby acknowledge that no license to any Intellectual Property of the other Party or to the Trade Mark shall be granted or deemed to be granted hereunder. Subject to the terms and conditions hereof, AngioDynamics shall have the right as a distributor to use the Trade Mark in the Territory during the Term solely in connection with the distribution, sale and offer for sale of the Product in the Field. In its promotion and sale of Product in the Territory hereunder and in its use of the Trade Mark or other Intellectual Property indicated by Bioniche for use on or with the Product, AngioDynamics shall indicate at all times that it is acting in its capacity as a distributor of Bioniche and that the Trade Mark is used by Bioniche under license from a third Person. The Trade Mark shall be followed by the symbol “TM” and/or by any other marking as Bioniche may from time to time advise. AngioDynamics is, however, permitted to have the Trade Mark appear on its invoices, shipping documents and price lists, but not as trade mark and only as an indication of Product sold or the prices thereof.

 

3.3 Intellectual Property . Subject to Section 3.2 hereof, AngioDynamics acknowledges and agrees that, as between the Parties, all Intellectual Property rights in the Product are and shall remain the property of Bioniche or its Affiliates. Without limiting the generality of the foregoing, the Parties acknowledge and agree that the ANDA and the contents of any other regulatory dossier prepared with respect to the Product for filing with any Competent Authority and any Government Approval relating thereto shall be and remain the property of Bioniche or its Affiliates. Without the express written consent of Bioniche, AngioDynamics shall not, and it shall cause its Affiliates not to, directly or indirectly:

 

(i)

use the Trade Mark, the Product or any related Intellectual Property for any purpose other than marketing, selling, offering to sell, and distributing the Product in the Territory for use in the Field under the terms of this Agreement;

 

(ii)

attempt to obtain patent or other Intellectual Property protection in relation to the Product; however, it is understood that, subject to Article X hereof, AngioDynamics shall have the right to obtain patent or other Intellectual Property protection in relation to any Device which may be used to deliver the Product; and/or

 

(iii)

use or attempt to register, directly or indirectly, a trade mark identical or confusingly similar to the Trade Mark or any of Bioniche’s other trade marks used with the Product identified in writing by Bioniche to AngioDynamics.

 

3.4 Notification of Infringement . Each Party agrees to promptly notify the other Party of any conflicting use or any suspected act of infringement, passing-off or unfair competition involving the Intellectual Property of the other Party used hereunder by unauthorized Persons, or any allegations that such Intellectual Property violates the Intellectual Property rights of any

 

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third Person, of which that Party may become aware. Each Party shall have the right, at its sole discretion, to engage in any and all proceedings or actions necessary to protect its Intellectual Property or to settle any disputes involving such unauthorized acts or such allegations relating to such Intellectual Property. Each Party agrees to fully co-operate with the other Party, at the request of the other Party, to help terminate such activities by unauthorized Persons as to the Intellectual Property of the other Party, but shall not, without the express written consent of the other Party, engage in any proceedings or actions against, enter into any settlement discussions with or in any other way attempt to terminate said activities by unauthorized Persons as to the Intellectual Property of the other Party.

 

3.5 Assignment . AngioDynamics hereby assigns and agrees to assign to Bioniche its ownership rights in and to any Improvements. AngioDynamics agrees to notify Bioniche of any such Improvements and shall, when requested to do so by Bioniche, cooperate with Bioniche in the execution of documents or provide other assistance to Bioniche needed to vest Bioniche’s ownership rights to Improvements, provided that such assistance by AngioDynamics shall be at Bioniche’s sole cost and expense.

 

ARTICLE IV

MARKETING

 

4.1 Bioniche Approval . Bioniche shall have the right to review and approve all AngioDynamics marketing materials for the Product. Such approval shall not be unreasonably withheld, conditioned or delayed. Bioniche shall be deemed to have consented ten (10) Business Days after receipt of the proposed materials unless Bioniche shall have objected thereto within the ten (10) Business Day period.

 

4.2 Coordination . AngioDynamics will coordinate marketing efforts with Bioniche and will cooperate with Bioniche in the development of marketing strategies. Conference calls will be held on a quarterly basis as requested by Bioniche, and additional meetings may be held, if needed and agreed upon by the Parties.

 

ARTICLE V

STANDARDS

 

5.1 Regulatory Compliance . Bioniche will permit AngioDynamics, or its designated representative, to perform vendor audits of Bioniche’s or its Affiliates’ facilities and procedures where Product is manufactured and/or stored, no more than once in any Contract Year, under appropriate confidentiality, insurance and security arrangements and subject to reasonable advance notice and Bioniche’s or its Affiliates’ scheduling concerns. Bioniche and its Affiliates will allow AngioDynamics, or its designated representative, as part of its vendor audit, to inspect all technical documentation relating to the Product, which is necessary to demonstrate compliance with FDA regulations and other Laws. Additionally, Bioniche and its Affiliates will notify AngioDynamics of any proposed changes in raw materials, components, processes or labeling of Product, at least ninety (90) days prior to such action. Bioniche and its Affiliates further agree to notify AngioDynamics of any FDA inspections, observations, and/or other

 

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actions (including Form 483’s) Bioniche or its Affiliates receives in relation to the Product, in writing within thirty (30) days of the inspection; receipt of observations; etc.

 

5.2 ADE Reporting .

 

a)

The Parties shall keep each other informed of all reports of adverse drug/device events (hereinafter called “ ADE ”), coming to either Party’s or their Affiliates’ knowledge with regard to Product, regardless of the origin of such reports. The term “reports” shall include publications in journals or other media. However, AngioDynamics shall not be required to monitor such journals or other media. The Parties shall promptly advise each other of information on factors adversely or positively affecting Product that come to their respective attention.

 

b)

A copy of any ADE report concerning the Product that a Party or its Affiliate submits to the FDA or to the Council for International Organizations of Medical Sciences (CIOMS) shall be forwarded without delay to the other Party as soon as such reports come to either Party’s attention. Any other ADE reports shall be reported by each Party to the other on a quarterly basis. The informing Party or its Affiliate may provide in writing its professional evaluation of such reports, in particular with regard to suspected causality, either together with such reports or as soon as possible at a later date.

 

c)

Subject to fully complying with all FDA requirements as to ADE reporting, the Parties may mutually agree upon further details of ADE reporting at a later date.

 

d)

The Parties shall inform each other without delay, if any measures are necessary to remove or to minimize any risk with respect to a specific production lot or preparation of Product.

 

The Parties shall immediately consult each other with respect to any potentially serious or unexpected ADE reports regarding Product. Following such consultation, Bioniche or its Affiliates shall communicate such reports to the FDA and to any other applicable Governmental Body, as required by Law. Each Party shall immediately notify (and shall cause its Affiliates to notify) the other Party of the receipt of any information regarding any threatened or pending action by any Governmental Body which may affect the safety or efficacy claims of Product or the continued marketing of same in the Territory. Upon receipt of any such information divulged pursuant to this Section 5.2, the Parties shall consult with each other in an effort to arrive at a mutually acceptable procedure for taking appropriate action; provided, however, that nothing herein shall be construed as restricting the right of Bioniche to make a timely report of such matter to any Competent Authority or to take any further action that Bioniche deems appropriate or required by applicable Laws.

 

5.3 Compliance with Laws . Bioniche shall comply (and shall cause its Affiliates to comply) with all applicable Laws within or without the Territory in relation to the manufacture, handling and storage and sale of Product until delivery of the Product to the Point of Entry, as hereinafter defined. Following delivery of the Product to the Point of Entry, AngioDynamics shall comply

 

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(and shall cause its Affiliates to comply) with all applicable Laws in relation to the handling, storage, distribution and sale of the Product in the Territory. In addition, neither Party shall (and each Party shall cause its Affiliates not to) do anything that would disparage or adversely affect the reputation and goodwill of the other Party, or the other Party’s Affiliates, or disparage or adversely affect the reputation of the Product. Nothing in this Section 5.3 shall detract from the Parties’ respective rights or obligations under Sections 9.1 to 9.4.

 

5.4 Complaints . All AngioDynamics’ customer complaints for the Product will be processed through AngioDynamics’ complaint handling department. Once a complaint has been received, it is the responsibility of AngioDynamics to forward a copy of the complaint within five (5) Business Days to Bioniche. If Bioniche receives such a complaint from an AngioDynamics customer, Bioniche will notify AngioDynamics within five (5) Business Days and shall forward a copy of the complaint to AngioDynamics within the five (5) Business Day period. Bioniche is responsible for determining whether such a complaint is ADE reportable and submitting ADE reports to the FDA. Bioniche is then responsible for conducting the complaint investigation and forwarding its investigation results to AngioDynamics within twenty (20) Business Days of Bioniche’s initial receipt of the complaint. If additional information is required, Bioniche will send a written request for the additional information to AngioDynamics. AngioDynamics will be responsible for obtaining the additional information from the complainant. AngioDynamics is then responsible for completing the complaint file and ensuring that the appropriate customer follow-up has been completed.

 

5.5 Recalls . If, for any reason, it shall become necessary to trace back or recall any particular batch of Product, or to identify the customer or customers to whom any Product from such batch has been delivered, the Parties shall co-operate fully with each other in doing so. In the event that either Party has reason to believe that one or more lots of Product should be recalled or withdrawn from sale or distribution in the Territory, such Party shall immediately notify the other Party in writing. The decision as to whether or not to initiate a recall of any of the Products in the Territory shall be made by Bioniche; provided that nothing in this Section 5.5 shall be read as restricting AngioDynamics from initiating a recall in a response to the written requirements of a Governmental Body. If the recall is required because of a modification or withdrawal of a Governmental Approval, or a failure of the Product to conform to its particular specifications, Bioniche shall promptly reimburse AngioDynamics for any actual out-of-pocket costs and expenses AngioDynamics incurs in carrying out such recall and refund the price paid by AngioDynamics for the recalled Product. If the recall is required because of a negligent act or omission of AngioDynamics or its representatives in the handling, storage or distribution of the Product (or its use with or incorporation in any other product), then such recall shall be conducted by AngioDynamics at its sole cost and expense and AngioDynamics shall not be entitled to any such credits, replacements or refunds from Bioniche. If such recall is required because of a joint act or omission of the Parties hereunder, they shall jointly conduct the recall and the Parties shall share equally in all of the costs and expenses of such recall.

 

5.6 Insurance . During the Term, (i) AngioDynamics shall carry and keep in force product liability insurance and all risk and general liability insurance consistent with normal business practices from time to time to cover risks related to marketing, sales, storage and distribution of Product in the Territory, with minimum limits of liability of $3,000,000.00 per occurrence and

 

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$10,000,000.00 in the aggregate. AngioDynamics shall provide Bioniche with a certificate of such insurance and shall have Bioniche and its Affiliates named as an additional named insured in respect thereof, and (ii) Bioniche agrees to maintain comprehensive “occurrence” general liability insurance, including “occurrence” product liability, contractual liability insurance and advertising injury coverage consistent with normal business practices from time to time to cover risks including, but not limited to those related to researching, developing, manufacturing, marketing, storage, supply and transportation of Product by Bioniche or its Affiliates, with minimum limits of liability of $3,000,000.00 per occurrence and $10,000,000.00 in the aggregate. Bioniche shall provide AngioDynamics with a certificate of such insurance and shall have AngioDynamics and its Affiliates named as an additional named insured in respect thereof.

 

Neither Party shall amend or terminate such coverage or allow such coverage to lapse during the Term without the prior written consent of the other Party. It is understood and agreed that furnishing of such insurance coverage will not relieve either Party of its obligations under this Agreement.

 

ARTICLE VI

PERFORMANCE

 

6.1 Marketing Responsibilities . Without prejudice to its obligations under Section 6.2, AngioDynamics shall use reasonable efforts to promote and market Product in the Territory in the Field. AngioDynamics shall bear all costs and expenses incurred by it in conjunction with the discharge of its marketing and promotion obligations hereunder. Without limiting the generality of the foregoing, AngioDynamics shall:

 

a)

advertise and promote sales of the Product in the Field;

 

b)

make and maintain regular contact with customers and potential customers of the Product in the Field in the Territory, including, without limitation, relevant physician specialists and their organizations and associations; and

 

c)

maintain adequate sales and warehouse facilities for the Product being distributed in the Territory in the Field.

 

6.2 Minimum Purchase Requirements . In partial consideration for the exclusive rights in the Territory in the Field being granted it under this Agreement, AngioDynamics shall use reasonable efforts to achieve the minimum purchase requirements set forth in Schedule “D” hereto for the Product. Notwithstanding anything to the contrary herein contained, AngioDynamics shall not be responsible for failing to achieve the minimum purchase requirements established for it hereunder if such failure is directly attributable to: (i) the failure by Bioniche to deliver a sufficient quantity of the Product which satisfies the Specifications in response to purchase orders placed in accordance with Section 7.7 hereof; and/or (ii) an Event of Force Majeure, as defined in Section 7.10 hereof. If AngioDynamics does not achieve the minimum purchase requirements in any particular Contract Year (the “Deficient Contract Year”), Bioniche’s sole remedy shall be to convert the exclusive license and distributor status of AngioDynamics into a non-exclusive relationship following ninety (90) days written notice to

 

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AngioDynamics. Notwithstanding the foregoing, AngioDynamics shall be able to cure any noticed failure to meet the minimum purchase requirements by doing the following within the ninety (90) day notice period: (i) purchasing an amount of Product equal to the difference between the amount of Product actually purchased by AngioDynamics in the Deficient Contract Year and AngioDynamic