caused by an
event of force majeure pursuant to Section 24.6.
20.4 Mutual Agreement to Terminate. If Distributor and Licensor mutually agree
in writing to terminate this Agreement, Distributor and Licensor will be deemed
to have waived any required notice period.
21. POST-TERM OBLIGATIONS.
21.1 Excess Inventory. Distributor shall have a period of 180 days after the
expiration or termination of this Agreement (the "Sell-Off Period") to sell any
remaining inventory of Products. For the purposes of this Section, "inventory"
shall mean finished goods inventory, raw materials, work-in-process or finished
goods in transit to Distributor. During the Sell-Off Period, Distributor shall
continue to comply with all of the provisions of this Agreement notwithstanding
the Agreement's expiration or termination. Distributor may not acquire any
additional inventory of Products during the Sell-Off Period, except as required
to complete orders placed prior to the date of termination. Within 15 days after
the expiration of the Sell-Off Period, Distributor shall: (i) pay Licensor a
royalty fee equal to [*]% of the Gross Sales generated during the Sell-Off
Period; (ii) provide Licensor with a written report of Gross Sales covering the
Sell-Off Period; and (iii) provide Licensor with a written report that includes:
(a) a list of all of Distributor's
23
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
remaining inventory of unsold Products, including an itemized listing of each
such Products and Distributor's direct cost to acquire each such Products (or if
Distributor manufactures Products under a separate written agreement,
Distributor's direct cost to manufacture each such Products); and (b) a notation
identifying any Products that are damaged. Licensor shall have the right, but
not the obligation, to purchase all or any portion of Distributor's remaining
inventory listed in the report for an amount equal to Distributor's direct costs
to acquire, or if applicable, manufacture, the inventory. Licensor shall notify
Distributor within ten (l0) days after receipt of the report whether it desires
to purchase any or all of Distributor's remaining inventory. Any such purchase
shall be completed within 30 days after Licensor notifies Distributor of its
intent to purchase the inventory. Any remaining Products that are not sold
during the Sell-Off Period or purchased by Licensor shall be destroyed or
returned to Licensor. Licensor shall not be required to comply with any of its
obligations under this Agreement during the Sell-Off Period other than any
obligations that survive the termination or expiration of this Agreement.
Notwithstanding the foregoing, Licensor shall be obligated to repurchase
Distributor's excess inventory remaining after the Sell-Off Period in accordance
with this Section if this Agreement is terminated by Distributor due to
Licensor's uncured material breach.
21.2 Additional Obligations of Distributor. Immediately after the termination,
expiration or assignment of this Agreement, and subject only to Distributor's
limited rights provided in Section 21.1, Distributor agrees to:
(i) immediately pay Licensor