DESCRIBED IN SECTION 15.1(A)), INCLUDING, WITHOUT LIMITATION ANY PRODUCT WHICH
(I) IS SUBSTANTIALLY THE SAME AS ANY OF THE PRODUCTS OR (II) HAS SUBSTANTIALLY
THE SAME EXTERNAL APPEARANCE, BASE FUNCTION AND INTERNAL COMPONENTS OF ANY OF
THE PRODUCTS OR IS FUNCTIONALLY EQUIVALENT THERETO.
THE PARTIES ACKNOWLEDGE
THAT NO TERMINATION PURSUANT TO THIS SECTION 17.1(A) SHALL SERVE TO TERMINATE
AB'S OBLIGATION NOT TO COMPETE WITH HOEFER PURSUANT TO SECTION 3.6 OF THE
PURCHASE AGREEMENT.
For the avoidance of doubt, AB will be deemed to have materially breached this
Agreement if (x) AB or any of the other Seller Affiliates markets, distributes
and/or sells any 1-D Product (other than products described in Section 15.1(a))
which (i) is substantially the same as any of
24
the Products or (ii) has substantially the same external appearance, base
function and internal components of any of the Products or is functionally
equivalent thereto during the Tail Period after the Agreement is terminated in
accordance with Section 17.1(a) or (y) any 1-D Products (other than products
described in Section 15.1(a)) of any Qualified Company, Non-Qualified Company or
company or entity which is a party to a Collaboration are promoted, marketed,
sold or distributed in the Restricted Territory using the catalogs, web sites or
sales personnel of any Seller Affiliate during the Tail Period.
(B)
AB MAY TERMINATE THIS AGREEMENT UPON 365 DAYS PRIOR WRITTEN NOTICE IN THE
EVENT THAT AB, DURING THE RENEWAL TERM, HAS DELIVERED HOEFER FOUR (4) OR MORE
REQUESTED 1-D PRODUCT NOTICES WHICH RESULT IN FOUR (4) OR MORE REJECTED
REQUESTED 1-D PRODUCTS WHICH ARE SUBSEQUENTLY ACTUALLY SOLD BY AB OR ITS
AFFILIATES TO ITS DISTRIBUTORS OR CUSTOMERS; PROVIDED THAT AB HAS COMPLIED WITH
ITS OBLIGATIONS SET FORTH IN SECTION 8.3, INCLUDING BUT NOT LIMITED TO, ITS
OBLIGATION TO NEGOTIATE IN GOOD FAITH.
17.2
TERMINATION.
NOTWITHSTANDING SECTION 17.1
HEREOF, EITHER PARTY MAY TERMINATE THIS AGREEMENT BY WRITTEN NOTICE TO THE OTHER
PARTY IF THE OTHER PARTY FAILS TO OBSERVE OR PERFORM ANY MATERIAL TERM OR
CONDITION OF THIS AGREEMENT, AND DOES NOT CURE SUCH FAILURE WITHIN THIRTY (30)
DAYS OR, IF SUCH FAILURE IS SUSCEPTIBLE TO CURE AND THE BREACHING PARTY HAS
COMMENCED CURE EFFORTS AND PURSUES CURE OF THE BREACH IN GOOD FAITH, SIXTY (60)
DAYS, AFTER WRITTEN DEMAND BY THE FIRST PARTY STATING THE DEFAULT AND SUCH
PARTY'S INTENTION TO TERMINATE.
IN THE EVENT THAT HOEFER FAILS TO SUPPLY
PRODUCTS IN ACCORDANCE WITH THIS AGREEMENT, SUCH FAILURE SHALL BE DEEMED
MATERIAL IF HOEFER (A) FAILS TO SUPPLY 50% OR MORE OF THE AGGREGATE PRODUCTS
ORDERED BY AB UNDER POS WHICH HOEFER IS REQUIRED TO ACCEPT IN ACCORDANCE WITH
SECTION 3.3 ABOVE IN ANY CALENDAR QUARTER AND (B) HAD THE ABILITY TO SUPPLY SUCH
ORDERED PRODUCTS.
17.3
EFFECT OF TERMINATION.
UPON ANY TERMINATION OF
THIS AGREEMENT:
(A)
HOEFER SHALL ONLY BE OBLIGED TO SUPPLY AB WITH FURTHER PRODUCTS IN RESPECT
OF ORDERS ALREADY ACCEPTED BY HOEFER AND SPARE PARTS IN ACCORDANCE WITH
SECTION 10.1(I).
FURTHERMORE, AB SHALL BE FREE TO SELL REMAINING