Exhibit 10.39

 

*** Text omitted and filed separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80 (b) (4)

And 240.24b-2

 

DISTRIBUTION AGREEMENT

 

This DISTRIBUTION AGREEMENT (this “Agreement”) effective as of May 13, 2003 (the
“Effective Date”) is entered into between BIOSITE INCORPORATED, a Delaware
corporation (“Biosite”), with a place of business at 11030 Roselle Street,
Suite D, San Diego, California 92121, and PSS WORLD MEDICAL, INC. (“PSS”), with
a place of business at 4345 Southpoint Boulevard, Jacksonville, Florida 32216. 
The parties hereby agree as follows:

 

1.                                       APPOINTMENT AND SCOPE

 

1.1                                 APPOINTMENT.  SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO THE RESTRICTIONS SET
FORTH IN SECTIONS 1.2 AND 1.3, BIOSITE HEREBY APPOINTS PSS AS A DISTRIBUTOR OF
THE PRODUCTS LISTED IN SCHEDULE A (THE “PRODUCTS”) IN THE TERRITORY DESCRIBED IN
SCHEDULE B (THE “TERRITORY”), AND PSS HEREBY ACCEPTS SUCH APPOINTMENT, AS SET
FORTH IN CLAUSES (A) THROUGH (D) OF THIS SECTION 1.1.

 

(A)                                  FROM THE EFFECTIVE DATE UNTIL DECEMBER 31,
2003, THE APPOINTMENT FOR PRODUCTS DESCRIBED IN PART 1 OF SCHEDULE A (THE
“[***]”) SHALL BE (I) [***] FOR PHYSICIAN OFFICE PRACTICES (AS DEFINED IN
SCHEDULE B) OF LESS THAN [***] PHYSICIANS, AND (II) [***] (WITH [***] OR ITS
ASSIGNEE) FOR PHYSICIAN OFFICE PRACTICES OF [***] OR MORE PHYSICIANS;

 

(B)                                 EFFECTIVE AS OF [***] UNTIL [***], THE
APPOINTMENT FOR [***] SHALL BE (I) [***] (WITH [***] OR ITS ASSIGNEE) FOR
PHYSICIAN OFFICE PRACTICES OF [***] OR MORE PHYSICIANS TO WHICH [***] OR ITS
ASSIGNEE HAS DISTRIBUTED [***] PRIOR TO [***], AND (II) [***] FOR ALL OTHER
PHYSICIAN OFFICE PRACTICES;

 

(C)                                  EFFECTIVE AS OF [***] UNTIL [***], THE
APPOINTMENT FOR [***] SHALL BE [***](AS DESCRIBED BELOW) FOR ALL PHYSICIAN
OFFICE PRACTICES.  FOR PURPOSES OF THIS SECTION 1.1(C), “[***]” MEANS THAT
BIOSITE HAS THE RIGHT TO SELL AND DISTRIBUTE [***] DIRECTLY AND TO APPOINT A
LIMITED NUMBER OF OTHER DISTRIBUTORS TO SELL AND DISTRIBUTE [***]; AND

 

(D)                                 FROM THE EFFECTIVE DATE UNTIL [***], THE
APPOINTMENT (I) FOR THE [***] DESCRIBED IN PART 2 OF SCHEDULE A (THE “[***]”)
SHALL BE [***] FOR ALL PHYSICIAN OFFICE PRACTICES, AND (II) FOR ALL OTHER
PRODUCTS DESCRIBED IN PART 2 OF SCHEDULE A SHALL BE [***] FOR PHYSICIAN OFFICE
PRACTICES OF LESS THAN [***] PHYSICIANS.

 

1.2                                 PERFORMANCE CRITERIA.  SUBJECT TO SECTION
1.2(A), IF PSS FAILS TO ACHIEVE THE APPLICABLE MINIMUM SALES OBJECTIVES SET
FORTH IN SCHEDULE C FOR [***] OR [***] FOR ANY MEASUREMENT PERIOD SET FORTH IN
SCHEDULE C, THEN (A) THE PARTIES SHALL MEET NO LATER THAN SIXTY (60) DAYS AFTER
THE END OF THE APPLICABLE MEASUREMENT PERIOD TO DISCUSS PSS’ EFFORTS TO MEET
SUCH MINIMUM SALES OBJECTIVES, AND (B) BIOSITE SHALL HAVE THE RIGHT (IN ITS SOLE
DISCRETION) AS OF THE END OF SUCH SIXTY (60) DAY PERIOD TO [***]OF THIS
AGREEMENT, EFFECTIVE UPON WRITTEN NOTICE TO PSS.  THE PARTIES EXPRESSLY AGREE
THAT BIOSITE MAY NOT TERMINATE THIS AGREEMENT SOLELY DUE TO PSS FAILING TO
ACHIEVE SUCH MINIMUM SALES OBJECTIVES.

 

(A)                                  PSS SHALL NOT BE RESPONSIBLE FOR FAILING TO
ACHIEVE THE APPLICABLE MINIMUM SALES OBJECTIVES SET FORTH IN SCHEDULE C TO THE
EXTENT CAUSED BY (I) BIOSITE’S BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT
WITH RESPECT TO THE DELIVERY OF THE APPLICABLE PRODUCTS BY BIOSITE TO PSS, OR
(II) BIOSITE RECALLING THE APPLICABLE PRODUCTS AND NOT REPLACING SUCH RECALLED
PRODUCTS IN A PROMPT MANNER.

 

 

* Confidential Treatment Requested

 

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1.3                                 APPOINTMENT RESTRICTIONS.

 

(A)                                  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS AGREEMENT, PSS SHALL NOT HAVE THE RIGHT TO DISTRIBUTE PRODUCTS TO ANY
CUSTOMER WHICH, AS OF THE EFFECTIVE DATE, HAS PURCHASED PRODUCTS FROM BIOSITE OR
[***](BUT NOT ANY OTHER DISTRIBUTOR OF BIOSITE) OTHER THAN A CUSTOMER THAT
[***](PROVIDED THAT PRIOR TO MAKING ANY SALE OF A PRODUCT TO ANY SUCH CUSTOMER,
(I) PSS SHALL PROVIDE THE CUSTOMER’S WRITTEN STATEMENT TO BIOSITE AND (II) PSS
SHALL FIRST ALLOW BIOSITE, FOR THIRTY (30) DAYS AFTER BIOSITE RECEIVES SUCH
WRITTEN STATEMENT FROM PSS, TO CONTACT THE CUSTOMER TO DISCUSS THE CUSTOMER’S
STATEMENT).

 

(B)                                 PSS SHALL REFRAIN FROM DIRECTLY OR
INDIRECTLY (I) SEEKING CUSTOMERS FOR, ESTABLISHING ANY BRANCH FOR, OR
MAINTAINING ANY DISTRIBUTION DEPOT OR NETWORK FOR THE SALE OF, THE PRODUCTS
OUTSIDE OF THE TERRITORY, OR (II) SELLING THE PRODUCTS TO ANY PERSON OR ENTITY
OTHER THAN PHYSICIAN OFFICE PRACTICES IN THE MARKET SEGMENTS AS EXPRESSLY
DESCRIBED ABOVE.

 

(C)                                  THE TERRITORY SHALL NOT INCLUDE, AND PSS
SHALL NOT BE PERMITTED TO SELL THE PRODUCTS IN, ANY TERRITORY OR TO ANY MARKET
SEGMENT NOT EXPRESSLY DESCRIBED IN THE AGREEMENT.  PSS SHALL TAKE REASONABLE
STEPS TO LIMIT THE LIKELIHOOD THAT PSS’S CUSTOMERS IN THE TERRITORY PURCHASE
PRODUCTS FOR RESALE OUTSIDE OF THE TERRITORY.

 

(D)                                 PSS SHALL NOT HAVE THE RIGHT TO APPOINT
SUB-DISTRIBUTORS, EXCEPT AS APPROVED BY BIOSITE IN ADVANCE WRITING.  ANY
PERMITTED SUB-DISTRIBUTORS SHALL BE SUBJECT TO THE PROVISIONS OF THIS AGREEMENT.

 

1.4                                 PRODUCTS.  PSS ONLY HAS A RIGHT TO SELL AND
DISTRIBUTE THE PRODUCTS PURSUANT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT. 
PSS HAS NO RIGHT TO SELL OR DISTRIBUTE ANY OTHER BIOSITE PRODUCT UNLESS SUBJECT
TO A SEPARATE WRITTEN AGREEMENT BY THE PARTIES ON A PRODUCT BY PRODUCT BASIS.

 

1.5                                 NONCOMPETITION.  PSS SHALL NOT, DURING THE
PERIOD OF THE [***] APPOINTMENT FOR [***] UNDER SECTIONS 1.1(A) AND 1.1(B) (THE
“[***] PERIOD”), DIRECTLY OR INDIRECTLY SELL, OFFER FOR SALE, OR ACT AS SALES
AGENT FOR THE SOLICITATION OF ORDERS FOR ANY PRODUCT THAT MEASURES OR DETECTS
THE PRESENCE OR ABSENCE OF ANY [***], WITH OR WITHOUT THE [***], INCLUDING
WITHOUT LIMITATION [***].

 

1.6                                 INDEPENDENT PURCHASER STATUS.  PSS IS AN
INDEPENDENT PURCHASER AND SELLER OF THE PRODUCTS.  PSS SHALL NOT ACT AS AN AGENT
OR LEGAL REPRESENTATIVE OF BIOSITE, NOR SHALL PSS HAVE ANY RIGHT OR POWER TO ACT
FOR OR BIND BIOSITE IN ANY RESPECT OR TO PLEDGE ITS CREDIT.  PSS SHALL BE FREE
TO RESELL PRODUCTS TO CUSTOMERS IN THE TERRITORY ON SUCH TERMS AS IT MAY, IN ITS
SOLE DISCRETION, DETERMINE, INCLUDING, WITHOUT LIMITATION, PRICE, RETURNS,
CREDITS AND DISCOUNTS.

 

1.7                                 PERISHABLE PRODUCTS.  PSS ACKNOWLEDGES THAT
THE PRODUCTS ARE PERISHABLE, AND SHALL MANAGE ITS INVENTORY SUCH THAT PRODUCTS
ARE SHIPPED THROUGHOUT THE TERRITORY ON A FIRST-IN-FIRST-OUT BASIS.  PSS SHALL
BE RESPONSIBLE FOR AND SHALL BEAR THE FULL RISK WITH RESPECT TO ANY UNSOLD
QUANTITIES OF THE PRODUCTS REMAINING IN PSS’S INVENTORY BEYOND THE STATED
SHELF-LIFE THEREOF; HOWEVER, IF PSS RECEIVED FROM BIOSITE ANY SUCH UNSOLD
PERISHABLE [***] THAT HAD A POSTED EXPIRATION DATE OF [***] OR LESS FROM THE
DATE OF SHIPMENT OF SUCH [***] FROM BIOSITE TO PSS, THEN BIOSITE SHALL REPLACE
SUCH EXPIRED [***](PROVIDED THAT BIOSITE MAY FIRST REQUIRE PSS TO PROVIDE
REASONABLE EVIDENCE OF PSS’S COMPLIANCE WITH THIS SECTION 1.7).

 

2.                                       TERMS AND CONDITIONS OF SALE

 

2.1                                 PRICE.  PSS SHALL PURCHASE THE PRODUCTS FROM
BIOSITE AT THE APPLICABLE PRICES SET FORTH IN SCHEDULE A.  PRICES SHALL BE
SUBJECT TO CHANGE BY BIOSITE ON [***] PRIOR WRITTEN NOTICE TO PSS.  PSS SHALL
PAY BIOSITE FOR PURCHASES OF THE PRODUCTS WITHIN [***] FROM PSS’S RECEIPT OF
INVOICE.  PSS SHALL MAKE ALL SUCH PAYMENTS IN UNITED STATES DOLLARS TO SUCH
ACCOUNT AS BIOSITE DESIGNATES FOR SUCH PURPOSE.

 

2

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2.2                                 ANY LATE PAYMENT SHALL BE A MATERIAL BREACH
OF THIS AGREEMENT BY PSS, PROVIDED HOWEVER, AND NOTWITHSTANDING THE PROVISIONS
OF SECTION 8.2, BIOSITE SHALL NOT HAVE THE RIGHT TO TERMINATE THIS AGREEMENT FOR
A LATE PAYMENT UNLESS BIOSITE HAS FIRST PROVIDED WRITTEN NOTICE TO PSS THAT
BIOSITE INTENDS TO TERMINATE THE AGREEMENT IF PSS DOES NOT REMEDY SUCH BREACH
WITHIN [***] AFTER PSS’S RECEIPT OF SUCH NOTICE (SUCH NOTICE FROM BIOSITE SHALL
NOT BE REQUIRED IF PSS HAS MADE A LATE PAYMENT FOR THE THIRD TIME OR MORE). 
FROM TIME TO TIME DURING THE TERM OF THIS AGREEMENT, THE PARTIES SHALL MEET AND
DISCUSS IN GOOD FAITH WHETHER MARKET CONDITIONS WARRANT AN ADJUSTMENT TO THE
APPLICABLE PRICES SET FORTH IN SCHEDULE A.  FOR ANY PAST DUE AMOUNTS DUE BY PSS
TO BIOSITE UNDER THIS AGREEMENT, PSS SHALL PAY TO BIOSITE (I) A LATE CHARGE OF
[***] PER MONTH OR THE MAXIMUM RATE PERMITTED BY LAW, WHICHEVER IS LESS, ON THE
PAST DUE AMOUNTS UNTIL PAID IN FULL AND (II) ANY COSTS (INCLUDING REASONABLE
ATTORNEYS’ FEES) INCURRED BY BIOSITE IN COLLECTING OR ENFORCING ANY PAYMENT
OBLIGATIONS UNDER THIS AGREEMENT.

 

2.3                                 TAXES.  PSS SHALL PAY ALL SALES, USE AND
TRANSFER TAXES AND OTHER CHARGES ARISING OUT OF THE PURCHASE AND SALE OF THE
PRODUCTS, INCLUDING ANY STATE AND LOCAL PERSONAL PROPERTY TAXES AND ALL
INSPECTION FEES AND DUTIES, APPLICABLE TO THE SALE AND TRANSPORT OF THE PRODUCTS
BY PSS IN THE TERRITORY WHICH ARE APPLICABLE THERETO.  BIOSITE SHALL NOT BE
RESPONSIBLE FOR ANY BUSINESS, OCCUPATION, WITHHOLDING OR SIMILAR TAX, OR ANY
TAXES OF ANY KIND, RELATING TO THE PURCHASE AND SALE OF THE PRODUCTS.

 

2.4                                 TERMS OF SALES.  PRODUCTS SHALL BE SHIPPED
F.O.B. BIOSITE’S FACILITY IN SAN DIEGO, CALIFORNIA, WITH FREIGHT AND INSURANCE
PAID BY PSS.  RISK OF LOSS SHALL PASS TO PSS UPON DELIVERY TO PSS’S DESIGNATED
CARRIER OR ANOTHER COMMON CARRIER AT BIOSITE’S FACILITY IN SAN DIEGO,
CALIFORNIA.  BIOSITE SHALL NOTIFY PSS OF SCHEDULED DELIVERY DATES BY WRITTEN
ACKNOWLEDGEMENT OF PSS’S ORDER.  BIOSITE SHALL USE ITS REASONABLE COMMERCIAL
EFFORTS TO MEET REQUESTED DELIVERY DATES, PROVIDED THAT BIOSITE SHALL HAVE NO
LIABILITY FOR ANY LATE DELIVERY.  UNLESS BIOSITE OTHERWISE EXPRESSLY AGREES IN
WRITING, THE LEAD TIME FOR SHIPPING OF PRODUCTS SHALL BE NOT MORE THAN [***]
AFTER RECEIPT OF PSS’S ORDER BY BIOSITE.  NOTWITHSTANDING THE FOREGOING, BIOSITE
MAY DEFER SHIPMENT OF PRODUCTS IF AND WHILE PSS IS IN DEFAULT OF ANY OF ITS
OBLIGATIONS OWING TO BIOSITE UNDER THIS AGREEMENT, INCLUDING PSS’S OBLIGATIONS
TO PAY ANY AMOUNTS WHEN DUE.  IF PSS REQUESTS DROP SHIPMENT FOR A CUSTOMER, THE
ENTIRE COST OF THE TRANSPORTATION DESIGNATED BY PSS SHALL BE BORNE BY PSS.

 

2.5                                 ORDERS.  PSS SHALL MAKE ALL PURCHASES
HEREUNDER BY SUBMITTING FIRM WRITTEN PURCHASE ORDERS TO BIOSITE.  SUCH PURCHASE
ORDERS SHALL BE IN WRITING AND IN A FORM REASONABLY ACCEPTABLE TO BIOSITE.  IN
THE EVENT OF ANY INCONSISTENCY BETWEEN THE TERMS AND CONDITIONS OF ANY PURCHASE
ORDER AND THIS AGREEMENT, THE TERMS AND CONDITIONS OF THIS AGREEMENT SHALL
PREVAIL.  PURCHASE ORDERS SHALL NOT BE BINDING UPON BIOSITE UNLESS AND UNTIL
ACCEPTED BY BIOSITE.  WITHIN [***] AFTER RECEIPT OF A PURCHASE ORDER, BIOSITE
SHALL NOTIFY PSS IN WRITING OF ITS ACCEPTANCE OR REJECTION OF SUCH PURCHASE
ORDER AND OF THE SCHEDULED DELIVERY DATES IF THE PURCHASE ORDER IS ACCEPTED. 
BIOSITE SHALL BE DEEMED TO HAVE ACCEPTED A PURCHASE ORDER IN THE EVENT IT DOES
NOT PROVIDE WRITTEN REJECTION OF SUCH PURCHASE ORDER WITHIN THE FOREGOING
TIMEFRAME.

 

2.6                                 RETURNED GOODS.  IF PRODUCTS FAIL TO CONFORM
WITH THE SPECIFICATIONS ESTABLISHED BY BIOSITE THEREFOR, PSS SHALL, WITHIN [***]
AFTER RECEIPT OF THE PRODUCTS, RETURN SUCH NONCONFORMING PRODUCTS TO BIOSITE OR
DISPOSE LOCALLY, AS BIOSITE SO DIRECTS, AFTER OBTAINING RETURN AUTHORIZATION
FROM BIOSITE.  IN BOTH CASES ALL REASONABLE OUT-OF-POCKET EXPENSES (INCLUDING
SHIPPING OF RETURNED PRODUCTS AND REPLACEMENT PRODUCT) SHALL BE BORNE BY BIOSITE
PROVIDED THAT PSS FOLLOWS BIOSITE’S RETURN INSTRUCTIONS.  SHOULD ANY PRODUCT BE
PROPERLY RETURNED AS PROVIDED ABOVE, BIOSITE SHALL REPLACE THE RETURNED PRODUCT
AS SOON AS REASONABLY PRACTICABLE.  SUCH REPLACEMENT PRODUCT SHALL BE AT NO
ADDITIONAL COST TO PSS IF PSS HAD PREVIOUSLY PAID BIOSITE FOR THE RETURNED
PRODUCT.  NOTWITHSTANDING THE FOREGOING, BIOSITE SHALL NOT BE RESPONSIBLE FOR
ANY PRODUCTS WHICH FAIL TO PASS PSS’S QUALITY CONTROL AS A RESULT OF IMPROPER
STORAGE AND HANDLING DURING OR AFTER SHIPMENT TO PSS.  EXCLUDING BIOSITE’S
INDEMNIFICATION OBLIGATIONS UNDER SECTIONS 2.7(D) AND 6, THE REPLACEMENT OF THE
RETURNED GOODS BY BIOSITE UNDER THIS SECTION 2.6 SHALL BE PSS’S SOLE AND
EXCLUSIVE REMEDY FOR THE FAILURE OF THE PRODUCTS TO CONFORM WITH THE
SPECIFICATIONS ESTABLISHED BY BIOSITE THEREFOR.

 

2.7                                 WARRANTY, RESTRICTIONS AND LIMITATIONS.

 

(A)                                  BIOSITE WARRANTS THAT THE PRODUCTS SHALL
PERFORM AS STATED IN THE WRITTEN SPECIFICATIONS ESTABLISHED BY BIOSITE THEREFOR
AS SET FORTH IN THE THEN CURRENT PRODUCT INSERT OR OTHER WRITTEN SPECIFICATIONS
PROVIDED OR MADE AVAILABLE BY BIOSITE WITH RESPECT TO THE PRODUCTS.  BIOSITE’S
PRODUCT

 

3

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SPECIFICATIONS ARE SUBJECT TO CHANGE UPON THIRTY (30) DAYS’ NOTICE TO PSS;
PROVIDED, HOWEVER, THAT PRODUCTS SHALL PERFORM SUBSTANTIALLY AS DESCRIBED IN THE
SPECIFICATIONS AND PRODUCT INSERT OR OTHER WRITTEN SPECIFICATIONS PROVIDED OR
MADE AVAILABLE BY BIOSITE WITH RESPECT TO THE PRODUCTS AS OF THE DATE OF THIS
AGREEMENT.  THE REMEDY AND LIMITATIONS APPLICABLE TO SUCH WARRANTY SHALL BE AS
SET FORTH IN THE PRODUCT INSERT.

 

(B)                                 OTHER THAN AS EXPRESSLY SET FORTH IN
SECTION 2.7(A) ABOVE, BIOSITE DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS, IMPLIED
OR STATUTORY, INCLUDING, WITHOUT LIMITATION, NON-INFRINGEMENT OF THIRD PARTY
RIGHTS, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

 

(C)                                  PSS SHALL DISTRIBUTE PRODUCTS LABELED BY
BIOSITE TO CUSTOMERS IN THE TERRITORY SO AS TO INCLUDE ALL WARNINGS AND
INSTRUCTIONS NECESSARY FOR THE PROPER USE OF THE PRODUCTS.  PSS HEREBY
REPRESENTS AND WARRANTS THAT NEITHER PSS NOR ITS AGENTS OR EMPLOYEES WILL MAKE
ANY REPRESENTATIONS OR CLAIMS WITH RESPECT TO THE PRODUCTS WHICH ARE NOT
AUTHORIZED IN WRITING BY BIOSITE.  SUBJECT TO THE PROVISIONS OF SECTION 6.2
HEREOF, PSS SHALL DEFEND, INDEMNIFY AND HOLD BIOSITE HARMLESS FROM ALL LOSSES,
LIABILITIES, DAMAGES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND
COSTS) RESULTING FROM ANY CLAIMS, DEMANDS, ACTIONS AND OTHER PROCEEDINGS BY ANY
THIRD PARTY TO THE EXTENT RESULTING FROM (I) REPRESENTATIONS OR CLAIMS BY PSS
WITH RESPECT TO THE PRODUCTS WHICH ARE NOT AUTHORIZED BY BIOSITE; (II) PSS’S
WILLFUL ACT OR OMISSION IN CONNECTION WITH THE SALE, MARKETING, PROMOTION OR
DISTRIBUTION OF THE PRODUCTS; OR (III) ANY CLAIM OR FAILURE BY PSS TO COMPLY
WITH GOVERNMENTAL REGULATORY REQUIREMENTS RELATING TO THE PRODUCTS WHICH ARE
APPLICABLE TO DISTRIBUTORS OF PRODUCTS.

 

(D)                                 SUBJECT TO THE PROVISIONS OF SECTION 6.2
HEREOF, BIOSITE SHALL DEFEND, INDEMNIFY AND HOLD PSS HARMLESS FROM ALL LOSSES,
LIABILITIES, DAMAGES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND
COSTS) RESULTING FROM ANY CLAIMS, DEMANDS, ACTIONS AND OTHER PROCEEDINGS BY ANY
THIRD PARTY TO THE EXTENT RESULTING FROM OR ALLEGING THAT ANY PRODUCT INFRINGES
ANY PATENT, TRADEMARK, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY
RIGHT OF A THIRD PARTY, PROVIDED THAT SUCH INFRINGEMENT IS NOT A RESULT OF (I)
ANY MODIFICATION TO A PRODUCT NOT EXPRESSLY PERMITTED BY BIOSITE IN WRITING OR
(II) ANY USE OF A PRODUCT OTHER THAN PURSUANT TO PRODUCT SPECIFICATIONS AND
DOCUMENTATION.

 

2.8                                 ADMINISTRATIVE FEES.  [***]

 

3.                                       COVENANTS OF PSS

 

3.1                                 SALES PROMOTION.  PSS SHALL USE ITS BEST
EFFORTS TO PROMOTE, MARKET AND SELL THE PRODUCTS TO PHYSICIAN OFFICE PRACTICES
IN THE TERRITORY IN THE MARKET SEGMENTS EXPRESSLY DESCRIBED ABOVE.  PSS SHALL
PROVIDE COMPLETE TRAINING OF PSS’S SALES REPRESENTATIVES IN THE USE OF THE
PRODUCTS.  PSS SHALL PROVIDE TO EACH POTENTIAL CUSTOMER OF PRODUCTS A FULL
FUNCTIONAL DEMONSTRATION OF SUCH PRODUCTS.

 

3.2                                 EXPENSES.  PSS SHALL BE RESPONSIBLE FOR ALL
OF ITS AND ITS EMPLOYEES EXPENSES.  PSS AGREES THAT IT SHALL INCUR NO EXPENSE
CHARGEABLE TO BIOSITE, EXCEPT AS MAY BE SPECIFICALLY AUTHORIZED IN ADVANCE
WRITING IN EACH CASE BY BIOSITE.

 

3.3                                 PROMOTIONAL MATERIALS; PACKAGE INSERTS.  PSS
SHALL ENSURE THAT ALL ADVERTISING, PROMOTIONAL LITERATURE, PACKAGING AND PACKAGE
INSERTS COMPLY WITH APPLICABLE LAWS AND REGULATIONS.  PSS SHALL SUBMIT EACH OF
THE FOREGOING TO BIOSITE FOR REVIEW.  PSS SHALL NOT USE ANY ADVERTISING OR
PROMOTIONAL MATERIALS TO PROMOTE THE PRODUCTS OR ANY PACKAGING OR PACKAGE
INSERTS THAT HAVE NOT BEEN APPROVED IN ADVANCE WRITING BY BIOSITE, WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD.  PSS SHALL PREPARE ANY NECESSARY
TRANSLATIONS OF BIOSITE’S SALES LITERATURE, PACKAGE INSERTS AND LABELING. 

 

3.4                                 SALES AND MARKETING SUPPORT AND TRAINING. 
PSS SHALL PROVIDE BIOSITE [***] FOR ALL [***] AS OFTEN AS PSS [***] TO ITS OTHER
SUPPLIERS.  DURING THE PERIOD OF THE [***] UNDER [***], PSS SHALL ALSO PROVIDE
THE [***] DESCRIBED IN [***].

 

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3.5                                 CUSTOMER AND SALES INFORMATION.  PSS SHALL
PROVIDE BIOSITE, [***] DURING THE TERM HEREOF, WITH [***] REGARDING [***] IN THE
[***] THAT HAVE [***] FROM [***].   SUCH [***] INCLUDE, WITHOUT LIMITATION,
[***].  NOTWITHSTANDING [***] OF SUCH INFORMATION, NOTHING HEREIN SHALL PRECLUDE
[***] FROM THE RIGHT OR ABILITY TO USE SUCH INFORMATION FOR ITS LAWFUL BUSINESS
PURPOSES.

 

3.6                                 PRODUCT STORAGE AND HANDLING.  PSS SHALL
COMPLY WITH BIOSITE’S REASONABLE INSTRUCTIONS REGARDING THE STORAGE AND HANDLING
OF THE PRODUCTS, AND EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, PSS SHALL
BE SOLELY RESPONSIBLE FOR THE COST THEREOF.

 

3.7                                 REPORTS.  AT BIOSITE’S REQUEST, PSS SHALL
SUBMIT TO BIOSITE SUCH OTHER REPORTS AS ARE CUSTOMARILY PROVIDED BY PSS TO
SUPPLIERS SIMILARLY SITUATED WITH BIOSITE.

 

3.8                                 INVENTORY.  AT ALL TIMES DURING THE TERM OF
THIS AGREEMENT, PSS SHALL MAINTAIN INVENTORY OF EACH PRODUCT SUFFICIENT TO
SATISFY NOT LESS THAN PSS’S REQUIREMENTS FOR ITS REASONABLY FORECASTED SALES OF
SUCH PRODUCT.

 

3.9                                 PRODUCT INFORMATION.  DURING THE TERM OF
THIS AGREEMENT, PSS SHALL KEEP COMPLETE AND ACCURATE RECORDS TRACKING EACH [***]
ON A CUSTOMER BY CUSTOMER BASIS, BY PRODUCT SERIAL NUMBER, SUFFICIENT TO ENABLE
BIOSITE TO CONDUCT PRODUCT RECALLS, PRODUCT INVESTIGATIONS, SOFTWARE UPDATES,
CUSTOMER SUPPORT AND THE LIKE.  ADDITIONALLY, BY NO LATER THAN TWELVE (12)
MONTHS AFTER THE EFFECTIVE DATE OF THE AGREEMENT AND FOR THE REMAINING TERM OF
THE AGREEMENT, PSS SHALL KEEP COMPLETE AND ACCURATE RECORDS TRACKING EACH OTHER
PRODUCT, ON A CUSTOMER BY CUSTOMER BASIS, BY WHATEVER MEANS BIOSITE IDENTIFIES
EACH INDIVIDUAL ITEM OF PRODUCT (WHETHER BY PRODUCT SERIAL NUMBER, LOT NUMBER,
OR OTHERWISE), SUFFICIENT TO ENABLE BIOSITE TO CONDUCT PRODUCT RECALLS, PRODUCT
INVESTIGATIONS, SOFTWARE UPDATES, CUSTOMER SUPPORT AND THE LIKE.  PSS SHALL
MAINTAIN ALL RECORDS OBTAINED DURING THE TERM OF THE AGREEMENT FOR A PERIOD OF
THREE (3) YEARS AFTER TERMINATION OF THE AGREEMENT.  PSS SHALL PROVIDE ALL SUCH
INFORMATION TO BIOSITE AS SOON AS REASONABLY PRACTICABLE AFTER BIOSITE’S WRITTEN
REQUEST THEREFOR.

 

4.                                       COVENANTS OF BIOSITE

 

4.1                                 SALES AND MARKETING SUPPORT.  BIOSITE SHALL
PROVIDE TO PSS LITERATURE AND TECHNICAL INFORMATION RELATING TO THE PRODUCTS AND
THEIR PROPER USE, IN SUCH REASONABLE QUANTITIES AS TO BE AGREED UPON BY THE
PARTIES.  UNLESS OTHERWISE EXPRESSLY AGREED BY BOTH PARTIES, ALL SUCH
INFORMATION AND MATERIALS SHALL BE FURNISHED [***] TO PSS.  DURING THE EXCLUSIVE
PERIOD, SUBJECT TO PSS COMPLYING WITH ITS OBLIGATIONS UNDER THIS AGREEMENT,
BIOSITE WILL PROVIDE THE MARKETING SUPPORT DESCRIBED IN SCHEDULE E.

 

4.2                                 ASSISTANCE.  BIOSITE SHALL PROVIDE PSS WITH
REASONABLE ACCESS TO AND ASSISTANCE OF ITS TECHNICAL, SALES, AND SERVICE
PERSONNEL IN SAN DIEGO, CALIFORNIA AS BIOSITE DEEMS APPROPRIATE.  SUCH
ASSISTANCE SHALL BE WITHOUT CHARGE TO PSS EXCEPT AS MAY BE OTHERWISE MUTUALLY
AGREED.

 

4.3                                 PRICE INCENTIVE.

 

(A)                                  IF [***] HAS (I) [***] OF THE [***] FOR
[***] SET FORTH IN [***] FOR [***], AND (II) [***] FOR [***] SET FORTH IN [***]
FOR [***], THEN FOLLOWING THE [***], BIOSITE SHALL [***] AN [***] OF THE [***]
BY [***] FOR THE [***]

 

(B)                                 IF [***] HAS (I) [***] OF THE [***] FOR
[***] SET FORTH IN [***] FOR [***], AND (II) [***] FOR [***] SET FORTH IN [***]
FOR [***], THEN FOLLOWING THE END OF [***], BIOSITE SHALL [***] AN [***] OF THE
[***] BY [***] FOR THE [***].

 

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4.4                                 TECHNICAL SUPPORT.  BIOSITE SHALL PROVIDE 24
HOUR, 7-DAY/WEEK TELEPHONE BASED TECHNICAL SUPPORT FOR CUSTOMERS IN ACCORDANCE
WITH BIOSITE’S CUSTOMER SERVICE POLICIES AND PRACTICES.

 

5.                                       CONFIDENTIALITY

 

5.1                                 CONFIDENTIAL INFORMATION.  “CONFIDENTIAL
INFORMATION” SHALL MEAN, WITH RESPECT TO A PARTY, ALL INFORMATION OF ANY KIND
WHATSOEVER, AND ALL TANGIBLE AND INTANGIBLE EMBODIMENTS THEREOF OF ANY KIND
WHATSOEVER (INCLUDING WITHOUT LIMITATION, CUSTOMER INFORMATION, FINANCIAL
INFORMATION, DOCUMENTS, DRAWINGS, MACHINERY, PATENT APPLICATIONS, RECORDS,
REPORTS), WHICH IS DISCLOSED BY SUCH PARTY (THE “DISCLOSING PARTY”) TO THE OTHER
PARTY (THE “RECEIVING PARTY”).  NOTWITHSTANDING THE FOREGOING, CONFIDENTIAL
INFORMATION OF A PARTY SHALL NOT INCLUDE INFORMATION WHICH THE OTHER PARTY CAN
ESTABLISH BY WRITTEN DOCUMENTATION (A) TO HAVE BEEN PUBLICLY KNOWN PRIOR TO
DISCLOSURE OF SUCH INFORMATION BY THE DISCLOSING PARTY TO THE RECEIVING PARTY,
(B) TO HAVE BECOME PUBLICLY KNOWN, WITHOUT FAULT ON THE PART OF THE RECEIVING
PARTY, SUBSEQUENT TO DISCLOSURE OF SUCH INFORMATION BY THE DISCLOSING PARTY TO
THE RECEIVING PARTY, (C) TO HAVE BEEN RECEIVED BY THE RECEIVING PARTY AT ANY
TIME FROM A SOURCE, OTHER THAN THE DISCLOSING PARTY, RIGHTFULLY HAVING
POSSESSION OF AND THE RIGHT TO DISCLOSE SUCH INFORMATION, (D) TO HAVE BEEN
OTHERWISE KNOWN BY THE RECEIVING PARTY PRIOR TO DISCLOSURE OF SUCH INFORMATION
BY THE DISCLOSING PARTY TO THE RECEIVING PARTY, OR (E) TO HAVE BEEN
INDEPENDENTLY DEVELOPED BY EMPLOYEES OR AGENTS OF THE RECEIVING PARTY WITHOUT
ACCESS TO OR USE OF SUCH INFORMATION DISCLOSED BY THE DISCLOSING PARTY TO THE
RECEIVING PARTY.  NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH ABOVE,
“CONFIDENTIAL INFORMATION” SHALL NOT INCLUDE ANY INFORMATION PROVIDED TO BIOSITE
UNDER SECTIONS 3.5, 3.9, OR 8.3(D).

 

5.2                                 CONFIDENTIALITY OBLIGATIONS.  DURING THE
TERM OF THIS AGREEMENT, AND FOR A PERIOD OF [***] FOLLOWING THE EXPIRATION OR
EARLIER TERMINATION HEREOF, THE RECEIVING PARTY SHALL MAINTAIN IN CONFIDENCE AND
NOT USE, DISCLOSE OR GRANT THE USE OF THE CONFIDENTIAL INFORMATION EXCEPT ON A
NEED-TO-KNOW BASIS OF THOSE OF ITS DIRECTORS, OFFICERS AND EMPLOYEES TO THE
EXTENT SUCH DISCLOSURE IS REASONABLY NECESSARY IN CONNECTION WITH THE RECEIVING
PARTY’S ACTIVITIES AS EXPRESSLY AUTHORIZED BY THIS AGREEMENT.  TO THE EXTENT
THAT DISCLOSURE IS AUTHORIZED BY THIS AGREEMENT, PRIOR TO DISCLOSURE, THE
RECEIVING PARTY SHALL OBTAIN AGREEMENT OF ANY SUCH PERSON OR ENTITY TO HOLD IN
CONFIDENCE AND NOT MAKE USE OF THE CONFIDENTIAL INFORMATION FOR ANY PURPOSE
OTHER THAN THOSE PERMITTED BY THIS AGREEMENT.  THE RECEIVING PARTY SHALL NOTIFY
THE DISCLOSING PARTY PROMPTLY UPON DISCOVERY OF ANY UNAUTHORIZED USE OR
DISCLOSURE OF THE CONFIDENTIAL INFORMATION.

 

5.3                                 PERMITTED DISCLOSURES.  THE CONFIDENTIALITY
OBLIGATIONS CONTAINED IN THIS SECTION 5 SHALL NOT APPLY TO THE EXTENT THAT THE
RECEIVING PARTY IS REQUIRED TO DISCLOSE INFORMATION BY LAW, ORDER OR REGULATION
OF A GOVERNMENTAL AGENCY OR A COURT OF COMPETENT JURISDICTION, PROVIDED THAT THE
RECEIVING PARTY SHALL PROVIDE WRITTEN NOTICE THEREOF TO THE DISCLOSING PARTY AND
SUFFICIENT OPPORTUNITY TO OBJECT TO ANY SUCH DISCLOSURE OR TO REQUEST
CONFIDENTIAL TREATMENT THEREOF.

 

6.                                       INDEMNIFICATION

 

6.1                                 MUTUAL INDEMNITY.  IN ADDITION TO THE
INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 2.7, EACH PARTY (THE
“INDEMNITOR”) SHALL DEFEND, INDEMNIFY AND HOLD THE OTHER PARTY (THE
“INDEMNITEE”) HARMLESS FROM ALL LOSSES, LIABILITIES, DAMAGES AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS’ FEES AND COSTS) RESULTING FROM ANY CLAIMS,
DEMANDS, ACTIONS AND OTHER PROCEEDINGS BY ANY THIRD PARTY TO THE EXTENT
RESULTING FROM (A) ANY MATERIAL BREACH OF THIS AGREEMENT BY THE INDEMNITOR,
(B) ANY RECKLESSNESS OR INTENTIONAL ACT OR OMISSION BY OR ON BEHALF OF THE
INDEMNITOR IN THE PERFORMANCE OF ITS ACTIVITIES UNDER THIS AGREEMENT, (C) ANY
MISREPRESENTATIONS BY THE INDEMNITOR, OR (D) ANY VIOLATION BY THE INDEMNITOR (OR
ANY OF ITS EMPLOYEES OR AGENTS) OF, OR FAILURE TO ADHERE TO, ANY APPLICABLE LAW,
REGULATION OR ORDER IN ANY COUNTRY, IN EACH CASE OTHER THAN THOSE CERTAIN
LOSSES, LIABILITIES, DAMAGES AND EXPENSES ARISING OUT OF THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE INDEMNITEE.  THE OBLIGATIONS OF THE PARTIES UNDER THIS
SECTION 6.1 SHALL SURVIVE EXPIRATION OR TERMINATION OF THIS AGREEMENT.

 

6.2                                 PROCEDURE.  IF THE INDEMNITEE INTENDS TO
CLAIM INDEMNIFICATION UNDER THIS SECTION 6, IT SHALL PROMPTLY NOTIFY THE
INDEMNITOR IN WRITING OF ANY CLAIM, DEMAND, ACTION OR OTHER PROCEEDING FOR WHICH
THE INDEMNITEE INTENDS TO CLAIM SUCH INDEMNIFICATION, AND THE INDEMNITOR SHALL
HAVE THE RIGHT TO PARTICIPATE IN, AND, TO THE EXTENT THE INDEMNITOR SO DESIRES,
TO ASSUME THE DEFENSE THEREOF WITH COUNSEL MUTUALLY SATISFACTORY TO THE

 

6

--------------------------------------------------------------------------------

 

PARTIES.  THE OBLIGATIONS UNDER THIS SECTION 6 SHALL NOT APPLY TO AMOUNTS PAID
IN SETTLEMENT OF ANY CLAIM, DEMAND, ACTION OR OTHER PROCEEDING IF SUCH
SETTLEMENT IS EFFECTED WITHOUT THE CONSENT OF THE INDEMNITOR, WHICH CONSENT
SHALL NOT BE WITHHELD OR DELAYED UNREASONABLY.  THE FAILURE TO DELIVER WRITTEN
NOTICE TO THE INDEMNITOR WITHIN A REASONABLE TIME AFTER THE COMMENCEMENT OF ANY
SUCH ACTION, IF PREJUDICIAL TO ITS ABILITY TO DEFEND SUCH ACTION, SHALL RELIEVE
THE INDEMNITOR OF ANY OBLIGATION TO THE INDEMNITEE UNDER THIS SECTION 6, BUT THE
OMISSION SO TO DELIVER WRITTEN NOTICE TO THE INDEMNITOR SHALL NOT RELIEVE IT OF
ANY OBLIGATION THAT IT MAY HAVE TO ANY PARTY CLAIMING INDEMNIFICATION OTHERWISE
THAN UNDER THIS SECTION 6.  THE INDEMNITEE, ITS EMPLOYEES AND AGENTS, SHALL
REASONABLY COOPERATE WITH THE INDEMNITOR AND ITS LEGAL REPRESENTATIVES IN THE
INVESTIGATION OF ANY CLAIM, DEMAND, ACTION OR OTHER PROCEEDING COVERED BY THIS
SECTION 6.

 

6.3                                 INSURANCE.  EACH PARTY SHALL MAINTAIN
COMPREHENSIVE COMMERCIAL GENERAL LIABILITY INSURANCE, INCLUDING CONTRACTUAL
LIABILITY INSURANCE AND PRODUCT LIABILITY INSURANCE AGAINST CLAIMS REGARDING ITS
ACTIVITIES CONTEMPLATED BY THIS AGREEMENT, IN SUCH AMOUNTS AS IT CUSTOMARILY
MAINTAINS FOR SIMILAR PRODUCTS AND ACTIVITIES, WHICH WITH RESPECT TO BIOSITE
SHALL NOT BE LESS THAN [***] COMBINED SINGLE LIMIT BODILY INJURY  & PROPERTY
DAMAGE EACH OCCURRENCE [***] AGGREGATE INCLUDING COVERAGE FOR PRODUCTS AND
COMPLETED OPERATIONS, CONTRACTUAL LIABILITY INSURING THE OBLIGATIONS ASSUMED BY
BIOSITE UNDER THIS AGREEMENT, INDEPENDENT CONTRACTORS, AND PERSONAL AND
ADVERTISING INJURY COVERAGES. EACH PARTY SHALL MAINTAIN SUCH INSURANCE DURING
THE TERM OF THIS AGREEMENT AND THEREAFTER FOR SO LONG AS IT MAINTAINS INSURANCE
FOR ITSELF COVERING SUCH ACTIVITIES.  COVERAGE SHALL BE WRITTEN ON A STANDARD
ISO OCCURRENCE FORM CG00010196 OR ITS EQUIVALENT.  UPON EXECUTION OF THE
CONTRACT, AND ANNUALLY FOR THE TERM OF THIS AGREEMENT, THE PARTIES WILL PROVIDE
A RENEWAL CERTIFICATE OF INSURANCE REFLECTING SUCH POLICIES AND COVERAGES AS
OUTLINED ABOVE.  SUCH CERTIFICATE SHALL REFLECT THAT THE UNDERLYING POLICIES
HAVE BEEN ENDORSED TO PROVIDE AT LEAST 30 DAYS PRIOR WRITTEN NOTICE TO THE OTHER
PARTY OF THE CANCELLATION, NON-RENEWAL, REDUCTION OR MATERIAL CHANGE OF ANY SUCH
INSURANCE COVERAGE.

 

7.                                       TRADEMARKS, PATENTS AND COPYRIGHTS.

 

7.1                                 TRADEMARKS AND TRADE NAMES.  PSS SHALL NOT
USE OR REGISTER ANY OF BIOSITE’S TRADEMARKS, OR ANY MARK OR NAME CONFUSINGLY
SIMILAR THERETO, AS PART OF ITS CORPORATE OR BUSINESS NAME OR IN ANY MANNER,
EXCEPT THAT (A) PSS MAY IDENTIFY ITSELF AS AN AUTHORIZED DISTRIBUTOR OF BIOSITE;
AND (B) PSS MAY USE BIOSITE’S TRADEMARKS RELATING TO THE PRODUCTS FOR DISPLAY
PURPOSE IN CONNECTION WITH SOLICITATION OF ORDERS FOR PRODUCTS.  THE USE BY PSS
OF BIOSITE’S TRADEMARKS AND ALL GOODWILL ASSOCIATED THEREWITH SHALL INURE TO THE
BENEFIT OF BIOSITE.  PSS SHALL PRIOR TO USE PROVIDE TO BIOSITE EXAMPLES OF ITS
USE OF BIOSITE’S TRADEMARKS AND SHALL MODIFY SUCH USE IF REQUESTED BY BIOSITE. 
PSS SHALL NOT DO OR CAUSE TO BE DONE ANY ACT OR ANYTHING CONTESTING OR IN ANY
WAY IMPAIRING OR REDUCING BIOSITE’S RIGHT, TITLE OR INTEREST IN BIOSITE’S
TRADEMARKS.

 

7.2                                 PRODUCT MARKINGS.  PSS SHALL NOT ALTER,
REMOVE OR MODIFY ANY BIOSITE TRADEMARKS, LABELS OR MARKINGS, NOR AFFIX ANY OTHER
TRADEMARKS, LABELS OR MARKINGS TO THE PRODUCTS WITHOUT BIOSITE’S CONSENT;
PROVIDED THAT PSS MAY AFFIX LABELS OR OTHER INDICES ON PRODUCTS IT DISTRIBUTES
TO IDENTIFY IT AS THE DISTRIBUTOR OF PRODUCTS SO LONG AS SUCH LABELS TO NOT
COVER AND ARE NOT INCONSISTENT WITH BIOSITE’S TRADEMARKS, LABELS OR MARKINGS. 
NO OTHER PSS LABELS, PACKAGE INSERTS OR OTHER MATERIAL SHALL ACCOMPANY THE
PRODUCTS WITHOUT THE APPROVAL OF BIOSITE.

 

7.3                                 TRADEMARKS AND PATENTS PROTECTION.  PSS
SHALL INFORM BIOSITE AS SOON AS REASONABLY PRACTICABLE AFTER BECOMING AWARE OF
ANY INFRINGEMENTS OR RISK OF INFRINGEMENTS (A) BY A THIRD PARTY OF BIOSITE’S
INTELLECTUAL PROPERTY (INCLUDING BUT NOT LIMITED TO BRANDS, TRADEMARKS,
COPYRIGHTS, AND PATENTS), OR (B) BY BIOSITE’S PRODUCTS OF THIRD PARTY’S
INTELLECTUAL PROPERTY OR CLAIMS OF SUCH BY A THIRD PARTY.  PSS AGREES TO ASSIST
BIOSITE TO THE BEST OF ITS ABILITY TO DEFEND BIOSITE’S INTEREST PARTICULARLY TO
FOLLOW INSTRUCTIONS AND TO TAKE ANY REASONABLE MEASURES AS WILL BE ASKED BY
BIOSITE IN SUCH MATTERS.  BIOSITE WILL ASSUME THE COST OF ANY LEGAL ACTIONS IN
THE DEFENSE OF ITS INTELLECTUAL PROPERTY.

 

7.4                                 COPYRIGHTS.  PSS HEREBY ACKNOWLEDGES THAT
BIOSITE HAS CLAIMED, OR MAY CLAIM, COPYRIGHT PROTECTION WITH RESPECT TO CERTAIN
PARTS OF THE PRODUCTS AND THE LABELS, INSERTS AND OTHER MATERIALS REGARDING THE
PRODUCTS.  PSS FURTHER ACKNOWLEDGES THE VALIDITY OF BIOSITE’S RIGHT TO CLAIM
COPYRIGHT PROTECTION WITH RESPECT TO SUCH ITEMS.  PSS FURTHER ACKNOWLEDGES THAT
BIOSITE HAS ADVISED PSS THAT IT HAS THE SOLE AND EXCLUSIVE RIGHT TO CLAIM THE
COPYRIGHT PROTECTION WITH RESPECT TO ALL SUCH ITEMS.  PSS SHALL TAKE NO ACTION
OR MAKE NO OMISSION WHICH IS ANY WAY INCONSISTENT WITH BIOSITE’S CLAIM OF
COPYRIGHT PROTECTION WITH RESPECT TO SUCH ITEMS.

 

7

--------------------------------------------------------------------------------

 

8.                                       TERM AND TERMINATION

 

8.1                                 TERM.  THIS AGREEMENT SHALL BE EFFECTIVE AS
OF THE EFFECTIVE DATE AND SHALL TERMINATE ON [***], UNLESS TERMINATED EARLIER
PURSUANT TO THE PROVISIONS SET FORTH BELOW.  THE PARTIES SHALL MEET ON
APPROXIMATELY [***], TO DISCUSS WHETHER THE PARTIES DESIRE TO EXTEND THE TERM OF
THIS AGREEMENT FOR AN ADDITIONAL PERIOD OF [***], PROVIDED THAT NEITHER PARTY
SHALL BE OBLIGATED TO AGREE TO EXTEND THE TERM OF THIS AGREEMENT.  IF THE
PARTIES AGREE TO EXTEND THE TERM OF THIS AGREEMENT, SUCH AGREEMENT AND EXTENDED
TERM SHALL BE SET FORTH IN A SEPARATE WRITTEN DOCUMENT.

 

8.2                                 TERMINATION.  THIS AGREEMENT MAY BE
TERMINATED BY EITHER PARTY, IN THE EVENT THE OTHER PARTY SHALL FAIL TO PERFORM
ANY OF ITS MATERIAL OBLIGATIONS HEREUNDER AND SHOULD FAIL TO REMEDY SUCH
NON-PERFORMANCE WITHIN THIRTY (30) CALENDAR DAYS AFTER RECEIVING WRITTEN DEMAND
THEREFOR.

 

8.3                                 RIGHTS OF PARTIES ON EXPIRATION OR
TERMINATION.  THE FOLLOWING PROVISIONS SHALL APPLY ON THE EXPIRATION OR
TERMINATION OF THIS AGREEMENT.

 

(A)                                  SUBJECT TO PSS’S RIGHT TO SELL PRODUCTS
REMAINING IN INVENTORY AS SET FORTH BELOW, PSS SHALL CEASE ALL SALES AND OTHER
ACTIVITIES ON BEHALF OF BIOSITE AND SHALL RETURN TO BIOSITE AND IMMEDIATELY
CEASE ALL USE OF ANY CONFIDENTIAL INFORMATION OF BIOSITE THEN IN PSS’S
POSSESSION.

 

(B)                                 UPON ANY TERMINATION OF THIS AGREEMENT, FOR
A PERIOD OF [***] AFTER SUCH TERMINATION (THE “INITIAL SELL-OFF PERIOD”), PSS
SHALL HAVE THE RIGHT TO SELL OFF ITS REMAINING INVENTORY OF PRODUCTS (AND TO
EXERCISE SUCH RIGHTS PROVIDED FOR UNDER THIS AGREEMENT AS REASONABLY REQUIRED
FOR PSS TO SELL SUCH REMAINING STOCK).  WITHIN FIVE (5) BUSINESS DAYS AFTER THE
CONCLUSION OF THE INITIAL SELL-OFF PERIOD, PSS SHALL PROVIDE TO BIOSITE IN
WRITING A LIST OF PSS’S REMAINING INVENTORY OF THE PRODUCTS (THE “INVENTORY
NOTICE”).  BIOSITE MAY, AT ITS OPTION, BY PROVIDING WRITTEN NOTICE TO PSS WITHIN
FIVE (5) BUSINESS DAYS AFTER RECEIPT OF THE INVENTORY NOTICE, REPURCHASE PSS’S
INVENTORY OF PRODUCTS (AS SET FORTH IN THE INVENTORY NOTICE) AT THE PURCHASE
PRICE PAID BY PSS TO BIOSITE THEREFOR, PLUS REASONABLE FREIGHT, INSURANCE AND
DUTIES.  IN CASE BIOSITE IS NOT WILLING TO REPURCHASE SUCH INVENTORY OF PSS, FOR
A PERIOD OF [***] AFTER BIOSITE PROVIDES WRITTEN NOTICE TO PSS THAT BIOSITE IS
ELECTING NOT TO REPURCHASE PSS’S INVENTORY OF THE PRODUCTS (THE “FINAL SELL-OFF
PERIOD”), PSS SHALL HAVE THE RIGHT TO SELL OFF THE REMAINING INVENTORY OF
PRODUCTS AS SET FORTH IN THE INVENTORY NOTICE (AND TO EXERCISE SUCH RIGHTS
PROVIDED FOR UNDER THIS AGREEMENT AS REASONABLY REQUIRED FOR PSS TO SELL SUCH
REMAINING STOCK).  WITHIN FIVE (5) BUSINESS DAYS AFTER THE CONCLUSION OF THE
FINAL SELL-OFF PERIOD, PSS SHALL DESTROY ITS REMAINING INVENTORY OF THE PRODUCTS
AND SHALL PROVIDE WRITTEN CONFIRMATION THEREOF TO BIOSITE.

 

(C)                                  SUBJECT TO PSS’S RIGHT TO SELL PRODUCTS
REMAINING IN INVENTORY AS SET FORTH ABOVE, PSS SHALL REMOVE FROM ITS PROPERTY
AND IMMEDIATELY DISCONTINUE ALL USE, DIRECTLY OR INDIRECTLY, OF TRADEMARKS,
DESIGNS, AND MARKINGS OWNED OR LICENSED EXCLUSIVELY BY BIOSITE, OR ANY WORD,
TITLE, EXPRESSION, TRADEMARK, DESIGN, OR MARKING THAT IS CONFUSINGLY SIMILAR
THERETO.

 

(D)                                 PSS SHALL PROVIDE TO BIOSITE, WITHIN THREE
(3) BUSINESS DAYS AFTER THE CONCLUSION OF THE INITIAL SELL-OFF PERIOD, COMPLETE
AND UP-TO-DATE INFORMATION REGARDING CUSTOMERS IN THE TERRITORY THAT HAVE
PURCHASED THE PRODUCTS FROM PSS.  SUCH INFORMATION SHALL INCLUDE, WITHOUT
LIMITATION, CUSTOMER NAME, ADDRESS, TELEPHONE NUMBER, AND UNIT SALES BY EACH
CUSTOMER SORTED BY ZIP CODE.  IN THE EVENT THAT THIS AGREEMENT IS TERMINATED DUE
TO BREACH BY PSS, OR IN THE EVENT THAT THIS AGREEMENT IS NOT EXTENDED, DUE TO
PSS’S ELECTION, FOR AN ADDITIONAL PERIOD OF [***] AFTER [***] PURSUANT TO THE
TERMS AND CONDITIONS OF SECTION 8.1, THEN SUCH INFORMATION TO BE PROVIDED BY PSS
SHALL ALSO INCLUDE PRODUCT PRICE AND REVENUE BY EACH CUSTOMER SORTED BY ZIP
CODE.  ALL SUCH INFORMATION PROVIDED BY PSS UNDER THIS SECTION (D) SHALL BE
SOLELY OWNED BY BIOSITE.  NOTWITHSTANDING BIOSITE’S OWNERSHIP OF SUCH
INFORMATION, NOTHING HEREIN SHALL PRECLUDE PSS FROM THE RIGHT OR ABILITY TO USE
SUCH INFORMATION FOR ITS LAWFUL BUSINESS PURPOSES.

 

8.4                                 SOLE REMEDY.  OTHER THAN DUE TO A BREACH OF
THIS AGREEMENT BY BIOSITE, PROVISIONS PURSUANT TO SECTION 8.3(B) SHALL
CONSTITUTE PSS’S SOLE REMEDY FOR THE TERMINATION OR NON-RENEWAL OF THIS
AGREEMENT.  NOTWITHSTANDING ANY OF THE PROVISIONS OF THIS AGREEMENT, OTHER THAN
A

 

8

--------------------------------------------------------------------------------

 

PARTY’S LIABILITY IN CONNECTION WITH ANY BREACH OF SECTION 5, AND OTHER THAN A
PARTY’S INDEMNITY OBLIGATIONS UNDER SECTIONS 2.7 OR 6, NEITHER PARTY SHALL, BY
REASON OF THE TERMINATION OF THIS AGREEMENT OR OTHERWISE, BE LIABLE TO THE OTHER
PARTY FOR ANY SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES
SUCH AS, BUT NOT LIMITED TO, COMPENSATION OR DAMAGES FOR LOSS OF PRESENT OR
PROSPECTIVE PROFITS OR REVENUES, LOSS OF ACTUAL OR ANTICIPATED REVENUE ON SALES
OR ANTICIPATED SALES, OR EXPENDITURES, INVESTMENTS OR COMMITMENTS MADE IN
CONNECTION WITH THE ESTABLISHMENT, DEVELOPMENT OR MAINTENANCE OF THE
DISTRIBUTORSHIP CREATED BY THIS AGREEMENT OR IN CONNECTION WITH THE PERFORMANCE
OF OBLIGATIONS HEREUNDER, WHETHER OR NOT THE OTHER PARTY HAS BEEN NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.  NOTWITHSTANDING ANY OF THE PROVISIONS OF THIS
AGREEMENT, OTHER THAN A PARTY’S LIABILITY IN CONNECTION WITH ANY BREACH OF
SECTION 5, AND OTHER THAN A PARTY’S INDEMNITY OBLIGATIONS UNDER SECTION 2.7 OR
6, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY AND ALL CLAIMS UNDER
THIS AGREEMENT IN AN AMOUNT IN THE AGGREGATE GREATER THAN THE AMOUNTS PAID OR
PAYABLE BY PSS TO BIOSITE ON SALES OF BIOSITE’S PRODUCTS DURING THE TERM OF THIS
AGREEMENT.  THE LIMITATIONS SET FORTH HEREIN SHALL APPLY NOTWITHSTANDING THE
FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED WARRANTIES OR REMEDIES SET FORTH
IN THIS AGREEMENT.

 

9.                                       GENERAL PROVISIONS

 

9.1                                 ENTIRE AGREEMENT.  THIS AGREEMENT REPRESENTS
THE ENTIRE AGREEMENT BETWEEN THE PARTIES ON THE SUBJECT MATTER HEREOF AND
SUPERSEDES ALL PRIOR DISCUSSIONS, AGREEMENTS, AND UNDERSTANDINGS OF EVERY KIND
AND NATURE BETWEEN THEM.  NO MODIFICATION OR AMENDMENT OF THIS AGREEMENT SHALL
BE EFFECTIVE UNLESS IN WRITING AND SIGNED BY BOTH PARTIES.

 

9.2                                 NOTICES.  ALL NOTICES UNDER THIS AGREEMENT
SHALL BE IN WRITING AND ADDRESSED TO THE PARTIES AT THE FOLLOWING ADDRESSES:

 

 

If to Biosite

With copy to:

 

 

 

 

 

 

 

 

Biosite Incorporated

Gray Cary Ware & Freidenrich LLP

 

 

 

11030 Roselle Street, Suite D

4365 Executive Drive, Suite 1100

 

 

 

San Diego, California 92121

San Diego, California 92121-2133

 

 

 

Attention: President

Attention: Mark R. Wicker, Esq.

 

 

 

 

 

If to PSS:

 

 

 

 

 

 

 

 

 

PSS World Medical, Inc.

 

 

 

 

4345 Southpoint Boulevard

 

 

 

 

Jacksonville, FL 32216

 

 

 

 

Attention: President

 

 

 

or to such other address of which either party may advise the other in writing. 
Notices shall be effective on receipt.

 

9.3                                 FORCE MAJEURE.  EACH PARTY SHALL BE EXCUSED
FROM ANY DELAY OR FAILURE IN PERFORMANCE OF ANY OBLIGATION HEREUNDER (OTHER THAN
AN OBLIGATION FOR THE PAYMENT OF MONEY) CAUSED BY REASON OF ANY OCCURRENCE OR
CONTINGENCY BEYOND ITS REASONABLE CONTROL, INCLUDING, BUT NOT LIMITED TO AN ACT
OF GOD, EARTHQUAKE, LABOR DISPUTES, RIOTS, GOVERNMENT REQUIREMENTS, REGULATORY
AND ENVIRONMENTAL REQUIREMENTS, INABILITY TO SECURE MATERIALS AND TRANSPORTATION
DIFFICULTIES.  THE OBLIGATIONS AND RIGHTS OF THE PARTY SO EXCUSED SHALL BE
EXTENDED ON A DAY-TO-DAY BASIS FOR THE TIME PERIOD EQUAL TO THE PERIOD OF SUCH
EXCUSABLE DELAY.

 

9.4                                 ASSIGNMENTS.  NEITHER THIS AGREEMENT NOR ANY
RIGHT OR OBLIGATION HEREUNDER MAY BE ASSIGNED OR OTHERWISE TRANSFERRED (WHETHER
VOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE), WITHOUT THE PRIOR EXPRESS
WRITTEN CONSENT OF THE OTHER PARTY; PROVIDED, HOWEVER, THAT EITHER PARTY MAY,
WITHOUT SUCH CONSENT, ASSIGN THIS AGREEMENT AND ITS RIGHTS AND OBLIGATIONS
HEREUNDER IN CONNECTION WITH THE TRANSFER OR SALE OF ALL OR

 

9

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SUBSTANTIALLY ALL OF ITS BUSINESS, OR IN THE EVENT OF ITS MERGER, CONSOLIDATION,
CHANGE IN CONTROL OR SIMILAR TRANSACTION.  ANY PERMITTED ASSIGNEE SHALL ASSUME
ALL OBLIGATIONS OF ITS ASSIGNOR UNDER THIS AGREEMENT.  ANY PURPORTED ASSIGNMENT
OR TRANSFER IN VIOLATION OF THIS SECTION 9.4 SHALL BE VOID.

 

9.5                                 APPLICABLE LAW.  THIS AGREEMENT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS.

 

9.6                                 WAIVER.  NO TERM OR PROVISION HEREOF WILL BE
CONSIDERED WAIVED BY EITHER PARTY, AND NO BREACH EXCUSED BY EITHER PARTY, UNLESS
SUCH WAIVER OR CONSENT IS IN WRITING SIGNED ON BEHALF OF THE PARTY AGAINST WHOM
THE WAIVER IS ASSERTED.  NO CONSENT BY EITHER PARTY TO, OR WAIVER OF, A BREACH
BY EITHER PARTY, WHETHER EXPRESS OR IMPLIED, WILL CONSTITUTE A CONSENT TO,
WAIVER OF, OR EXCUSE OF ANY OTHER, DIFFERENT, OR SUBSEQUENT BREACH BY EITHER
PARTY.

 

IN WITNESS WHEREOF, BIOSITE AND PSS HAVE CAUSED THIS AGREEMENT TO BE EXECUTED BY
THEIR DULY AUTHORIZED REPRESENTATIVES, AS OF THE DATE YEAR FIRST ABOVE WRITTEN.

 

BIOSITE INCORPORATED

PSS WORLD MEDICAL, INC.

 

 

 

By:

/s/ Christopher J. Twomey

 

By:

/s/ Gary A. Corless

 

 

 

 

 

 

 

Title:

Vice President Finance, CFO

 

Title:

President

 

 

 

 

 

 

By:

/s/ John F.  Sasen, Sr.

 

 

 

 

 

 

Title:

EVP and Chief Marketing Officer

 

 

10

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SCHEDULE A

 

PRODUCTS AND PRICING

 

PART 1

 

Catalog
Number

 

Product

 

Size

 

Transfer Price

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

PART 2

 

Catalog
Number

 

Product

 

Size

 

Transfer Price

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

11

--------------------------------------------------------------------------------

 

[***]

 

 

12

--------------------------------------------------------------------------------

 

SCHEDULE B

 

PHYSICIAN OFFICE PRACTICE AND TERRITORY

 

PHYSICIAN OFFICE PRACTICE MEANS [***]

 

TERRITORY MEANS THE UNITED STATES AND PUERTO RICO.

 

13

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SCHEDULE C

 

PERFORMANCE CRITERIA

 

Minimum Sales Objectives:

 

Measurement Period

 

End User [***]

 

End User [***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

14

--------------------------------------------------------------------------------

 

SCHEDULE D

 

SUPPORT FROM PSS

 

PSS shall perform the following activities at no charge to Biosite:

 

1.             [***]

2.             [***]

 

3.             [***]

4.             [***]

 

5.             [***]

6.             [***]

 

7.             [***]

 

15

--------------------------------------------------------------------------------

 

SCHEDULE E

 

SUPPORT FROM BIOSITE

 

Biosite shall provide Product marketing support to PSS in the Territory for the
Physician Office Practices as follows:

 

1.                     [***]

 

 

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

 

[***]

 

[***]

 

 

 

[***]

 

[***]

 

 

 

[***]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[***]

 

[***]

 

[***]

 

 

 

[***]

 

[***]

 

 

 

[***]

 

[***]

 

 

 

 

2.                    [***]

3.                    [***]

4.                    [***]

5.                    [***]

6.                    [***]

7.                     [***]

8.                     [***]

9.                     [***]

10.               [*** ]

11.               [***]

 

16

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SCHEDULE F

 

PRICE INCENTIVE OBJECTIVES FOR CALENDAR YEAR 2003

 

[***]

 

[***]

[***]

 

[***]

 

17

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