Exhibit 10.35


 


QUALITY ASSURANCE AGREEMENT


 


entered
into between


 


CeramTec
AG, Innovative Ceramic Engineering,

Fabrikstrasse 23-29

73207 Plochingen

Germany


 


-
hereinafter referred to as “CeramTec” -


 


and


 


Tornier
SA

Chemin Doyen Gosse

F-38330 St. Ismier

France


 


-
hereinafter referred to as “TORNIER” -


 


Preamble


 


WHEREAS,
CERAMTEC owns proprietary technology regarding the reliable connection between
the ceramic Ball Head and the metal stem of an artificial hip joint prosthesis
which was developed from various CERAMTEC-patents.  In addition, CERAMTEC is the manufacturer of
BIOLOX, BIOLOX forte and ZIOLOX forte ceramic Ball Heads and BIOLOX Wear
Couples (hereinafter referred to as “CERAMIC PRODUCTS”).


 


WHEREAS,
TORNIER is engaged in the field of developing, manufacturing, and marketing of
artificial hip joint prostheses.  TORNIER
declares that it manufactures these hip joint prostheses according to the
respective state of technology.  For over
10 years, TORNIER has already been selling hip prostheses with zirconium heads.


 


WHEREAS,
the parties desire to enter into a business relation, in which CERAMTEC
supplies TORNIER with CERAMIC PRODUCTS for the use with hip joint prostheses
manufactured by TORNIER.


 


WHEREAS,
the parties intend to make all efforts to achieve a maximum of product safety
of said hip joint prostheses.


 


NOW
THEREFORE, the parties agree to as follows:


 


Article 1

Documentation of quality requirements


 


(1)           CERAMTEC will make available to TORNIER
confidential information regarding the reliable connection between a CERAMIC
HEAD and the metal stem of a hip joint 


 


1

















 


prosthesis
in order to enable TORNIER to manufacture metal stems having proper designs and
dimensions.  These information include:


 


a)                                      confidential drawings of the CERAMTEC taper designs,


 


b)                                     confidential drawings of the CERAMIC PRODUCTS (either BIOLOX, BIOLOX
forte or ZIOLOX forte as agreed),


 


c)                                      confidential proprietary technology concerning methods for the
measurement of the critical taper dimensions such as angle, roughness,
straightness, and roundness of the tapers as described in the CERAMTEC
instruction “Q.A. - Testing Procedures”.


 


-
hereinafter referred to as “DOCUMENTS” -


 


(2)           CERAMTEC shall make available the DOCUMENTS to
TORNIER after receipt of duly signed copies of this agreement and of the “SECRECY
AGREEMENT” attached hereto as (Annex 1).


 


(3)           During the term of this agreement TORNIER is
authorised to make full and royalty free use of DOCUMENTS for the purposes
stated in this agreement.


 


Article 2

Measures of continuing quality assurance


 


(1)           Prior to the beginning of the supply with CERAMIC
PRODUCTS TORNIER shall submit to CERAMTEC the first ten stems of each type of
hip joint prosthesis to be used with CERAMIC PRODUCTS in order to enable
CERAMTEC the verification of the compliance of the taper of the stem with the
requirements and specifications as contained in the DOCUMENTS.


 


If
CERAMTEC ascertains the compliance of these tapers with the requirements and
specifications it will execute TORNIER orders for CERAMIC PRODUCTS (either
BIOLOX or ZIOLOX as agreed).


 


(2)           Additionally CERAMTEC will on occasion monitor the
compliance of the tapers with the requirements and specifications by requesting
and evaluating samples.  After conclusion
of these examinations the samples will be returned to TORNIER undamaged.


 


(3)           TORNIER agrees to inform CERAMTEC of its intention
to introduce additional types of hip stems that will use CERAMIC PRODUCTS.  The use of CERAMIC PRODUCTS with these new
stems shall require TORNIER to follow the procedure outlined in subsection (1) and
(2) above.


 


2

















 


Article 3

Instruction or customers; reports


 


(1)           TORNIER undertakes to instruct its customers in the
proper use of CERAMIC PRODUCTS before or during implantation.


 


(2)           In addition, TORNIER shall inform CERAMTEC of any
incident or event caused by or in connection with the use of CERAMIC PRODUCTS.


 


Article 4

Guarantee of maximum product safety


 


To
guarantee a maximum of product safety and to avoid product liability claims of
third parties TORNIER agrees to use CERAMIC PRODUCTS only in connection with
those types of prostheses which meet the quality requirements as described in
the DOCUMENTS and which are approved by CERAMTEC for such use, and to purchase
alumine-alumine hip articulations solely from CERAMTEC.


 


Article 5

Meeting of laws and government regulations; obtaining of approvals


 


TORNIER
shall be responsible for meeting all applicable laws and government regulations
regarding to and shall obtain all approvals necessary for manufacturing and
marketing of artificial hip joint prostheses with CERAMIC PRODUCTS.  CERAMTEC agrees to supply to TORNIER such
technical information as it is necessary to obtain such approval, to the extent
that CERAMTEC is able to do so.


 


Article 6

Product liability


 


(1)           Each party shall be responsible for its own product
liability as stated in the applicable product liability acts or any other laws
regulating product liability.


 


(2)           Quality examinations and monitoring of tapers as
agreed in Article 2 subsections (1) and (2) above shall not
release TORNIER of any of its obligations regarding product safety and product
liability.


 


Article 7

Term and termination


 


(1)           This agreement has been made in writing and shall
become effective after execution by each of the parties.  The term of this Agreement shall be for two (2) years
and shall renew automatically on a yearly basis thereafter, unless terminated
by either party six (6) months prior to the end of the two (2) year
period or any subsequent contract year. 
The notice of termination must be per registered mail.  The date of the post stamp decides whether
the notice arrived in time.


 


3

















 


Each
parties’ right to terminate this agreement for important reason without notice
shall be unaffected.  Important reason
shall mean any material breach of the obligations under this agreement
including an infringement of the SECRECY AGREEMENT (Annex 1).


 


(2)           After ending of this agreement TORNIER is not
longer authorised to make use of the DOCUMENTS and the information contained
herein and shall return all DOCUMENTS to CERAMTEC without delay.


 


Article 8

Other Products


 


The
parties agree to handle the supply of other CERAMTEC products, TORNIER desires
to be delivered with in future, under the terms of this Agreement as well.  In particular, these products shall follow a
quality-assurance procedure according to Article 2.  Details shall be mutually agreed upon by the
parties in annexes to this Agreement.


 


Article 9

Miscellaneous


 


(1)           If any provisions of this Agreement are legally
invalid or unperformable either in part or in their entirety, or later become
legally invalid or unperformable, the legal validity of the remaining terms of
the Agreement shall remain unaffected. 
In such a case, each party has the right to demand that a legally valid,
performable provision shall be agreed upon that best suits the purposes pursued
with the invalid or unperformable provision.


 


(2)           In the event of any dispute between the parties
relative to this agreement, or any transactions concluded hereunder, the
parties shall attempt to arrive a settlement acceptable to both parties.  If, however, a settlement cannot be reached,
the parties agree that any legal action based upon such a dispute or any claims
arising out of this agreement shall be exclusively brought before and decided
by the courts competent for the principal place of the defending party in
application of the laws of such place of jurisdiction.


 


	
  Plochingen,
  31.3.1998

  	
   

  	
  Montbonnot,
  01.04.1998

  
	
  CeramTec
  AG

  	
   

  	
  TORNIER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  by:

  	
  /s/
  Dr. Manek Buttermilch

  	
   

  	
  by:

  	
  /s/
  Alain Tornier

  
					



 


4






 










 


SECRECY AGREEMENT


 


between


 


CeramTec
AG, Innovative Ceramic Engineering,


Fabrikstrasse
23-29

73207 Plochingen

Germany


 


-
hereinafter referred to as “CERAMTEC” -


 


and


 


Tornier
SA

Chemin Doyen Gosse

F-38330 St. Ismier

France


 


-
hereinafter referred to as “TORNIER” -


 


Preamble


 


CERAMTEC
and TORNIER desire to enter into a business relation as described in the
QUALITY ASSURANCE AGREEMENT.


 


Within
the scope of said cooperation it may be necessary for CERAMTEC or TORNIER to
disclose to each other confidential technical or business information,
specifications, drawings, samples, models, intentions, experiences, and
Know-how.  In addition, CERAMTEC will
submit to TORNIER DOCUMENTS according to Art. 1 of said QUALITY ASSURANCE AGREEMENT.


 


-
hereinafter referred to as “INFORMATION” -


 


Now,
therefore, the parties agree to as follows:


 


1.                                       Each of the parties agrees to keep all INFORMATION strictly confidential,
not to disclose it to any third party without the prior written consent of the
other party and to make use of it only for the purposes stated in the QUALITY
ASSURANCE AGREEMENT.


 


2.                                       The foregoing obligations do not apply to INFORMATION which


 


a)                                      is already known to the receiving party or in
the public domain at the time of the disclosure;


 


b)                                     becomes publicly known without a breach of the
receiving party’s obligations under this Secrecy Agreement;


 


c)                                      is independently developed by the receiving
party at the time of the disclosure;


 

















 


d)                                     is disclosed after the receiving party gave
notice in writing to the disclosing party not to leave any further INFORMATION;


 


e)                                      is approved for release by written
authorization of the disclosing party.


 


The
burden of proof of the foregoing exceptions rests on the receiving party.


 


Any
publication or disclosure of INFORMATION to a third party referring to the
foregoing exceptions requires the prior written consent of the disclosing
party.  The consent has to be granted,
when such an exception has been met.


 


3.                                       Each party agrees that it shall disclose INFORMATION only to those of its
employees, who have first agreed in written to be bound by the terms of this
Secrecy Agreement.  Any other persons,
including the affiliated companies of the parties, shall be regarded as third
parties.


 


4.                                       As far as the receiving party has been authorized by the disclosing party
to submit INFORMATION to a third party, the disclosure shall be made only after
the third party has agreed in writing to be bound by the terms of this
Agreement.


 


5.                                       Any property rights concerning INFORMATION shall remain to the disclosing
party.


 


6.                                       After the ending of the QUALITY ASSURANCE AGREEMENT the receiving party
shall immediately return to the disclosing party all documents and other
material in its possession, including all copies, incorporating the disclosing
party’s INFORMATION.


 


7.                                       This Agreement comes into effect after execution by either party.  The obligations of confidentiality set forth
in this Agreement shall expire after a period of ten (10) years after the
ending of the QUALITY ASSURANCE AGREEMENT.


 


8.                                       This Agreement shall be binding upon the legal successors of the parties.


 


	
  Plochingen,
  03.02.1998

  	
   

  	
  Montbonnot,
  01.04.1998

  
	
  CeramTec
  AG

  	
   

  	
  TORNIER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  by:

  	
  /s/
  Dr. Manek Buttermilch

  	
   

  	
  by:

  	
  /s/
  Alain Tornier